· Chinguetti 4-4 appraisal well, the third in a series of four wells to be drilled offshore Mauritania in 2002, is expected to start drilling today.

· The East Tsagaan Els-1 exploration well, in the East Gobi Basin of Mongolia, is drilling ahead at 1,710 m.

1.1 DRILLING

1.1.1 PSC Area B, Offshore Mauritania (ROC: 2.4%)

The drillship "Deepwater Discovery" has returned to the Chinguetti structure and is expected to start drilling the Chinguetti 4-4 appraisal well today.

The Chinguetti 4-4 well will be drilled to a proposed total depth of 2,925 m, on the southern downthrown flank of the Chinguetti structure, approximately 1.5 kilometres east of the Chinguetti-1 discovery well.

1.1.2 East Gobi Basin Mongolia, East Tsagaan Els-1 (ROC: 50% and carried)

As of 26 September 2002, the East Tsagaan Els-1 exploration well, the second and last well in the current programme, was drilling ahead at a depth of 1,710 m in 8½ inch hole. The planned total depth of the deviated well is 2,140 m measured depth corresponding to 1,900 m true vertical depth (“TVD”). ROC is being carried through the cost of the well by Dongsheng Jinggong Petroleum Development Group Co Limited which is farming in and managing well operations.

Robert Gerrard
General Counsel & Company Secretary
E-mail: rgerrard@rocoil.com.au

· ROC’s recently initiated exploration and appraisal drilling programme, announced on 1 May 2002, remains essentially on track. The programme, which incorporates five countries, will see at least 8, and possibly as many as 20, exploration and appraisal wells drilled in the twelve months from August 2002. Two of the first three wells in this programme have encountered potentially commercial hydrocarbons offshore Mauritania, as evidenced by gross hydrocarbon columns of 94 metres and 133 metres.

· In addition to updating the drilling schedule, this ASX Release also presents additional insights into the geology of some of the areas targeted by the programme.

· ROC, together with four large international financial institutions, has become a shareholder in Osprey Oil and Gas Limited (“Osprey”) via a US$250,000 investment commitment. Osprey is a new, privately owned, London-based company that is focussed on upstream oil and gas opportunities in Africa. As part of this arrangement, ROC will also have the option to co-invest directly in Osprey-sourced projects, on a 50:50, unpromoted, basis. This is consistent with ROC’s strategy of remaining receptive to new venture opportunities while, at the same time, keeping its management focus firmly on current projects, particularly the 2002-03 drilling programme.

During the last week or two, ROC has made a number of presentations, based on publicly available data, albeit, in some cases, derived from fairly obscure sources. Feedback from the investment community suggests that it would welcome the dissemination of further information, over and above the regular operational “Activity Updates” which the Company releases to ASX, often on a weekly basis. In response to these enquiries, this ASX release provides details of ROC’s recent activities and forward drilling programme, including reference to the geological aspects of some of the target areas as well as comments on some of ROC’s strategic thought processes.

2. UK


2.1 Onshore (ROC: 100% and Operator)

Increased production from the Saltfleetby Gas Field, due to the recent successful workover of Saltfleetby-5; rising gas prices as the UK winter approaches; a 50% increase in the UK gas sales contract price effective 1 October 2002 and a high operating cash margin will provide the cash flow to drive the multi-well drilling programme which ROC has recently initiated (Attachment 1).

Processing of the 435 sq km of 3D seismic data, acquired by ROC onshore UK earlier this year, is expected to be completed by end-October 2002 and interpretation should be finalised by the end of the year.

The nature of the leads recognised before the 3D seismic was acquired and the initial results of the 3D processing, continue to encourage ROC to the view that it will drill several exploration wells onshore UK during 2003. The start of this drilling activity will probably move from the first to the second quarter 2003. This slight delay is due to a one or two month slippage in the seismic processing and ROC’s desire to select the drill targets from a complete prospect inventory, rather than drilling the prospects in the order in which they are identified.

2.2 UK North Sea (ROC: 12.4%)

ROC’s current understanding is that the Block 20/7a Joint Venture, in the UK North Sea, may drill an exploration well on the Squirrel Prospect some time during the first half of 2003. This prospect is approximately 20 km to the east of the Buzzard Oil Field, which was discovered in 2000. With recoverable reserves in excess of 400 million barrels, the Buzzard Oil Field is generally acknowledged as the largest oil field discovered in the UK North Sea for more than a decade.

3. EAST ASIA


3.1 Beibu Gulf, Offshore China (ROC: 40% and Operator)

The recently acquired 421 sq km 3D seismic survey is currently being processed and is expected to be interpreted by year end.

The 3D seismic is designed to be integrated with an engineering review of a fast track, low cost, development concept to be applied to one or more of the five oil discoveries within the Block (Attachment 2). On this basis, the Joint Venture expects to drill between one and three back-to-back wells, including at least one exploration well, commencing some time between March and November 2003.

Commenting on ROC’s activities in the Beibu Gulf, ROC’s Chief Executive Officer, Dr John Doran stated that:

“Since China became a net oil importer in 1993 its import dependence has steadily increased as consumption outstripped domestic supply. Recent industry and media reports suggest that China is intent on addressing this situation by accessing more oil reserves, both within and beyond the country.

Because of China’s established and growing thirst for indigenous oil, ROC believes that the Beibu Gulf Joint Venture and the relevant government authorities in China, have parallel agendas aimed at thoroughly exploring, appraising and developing the potential of the Beibu Gulf Block in an effort to bring new oilfields on to production as cost efficiently and as quickly as possible.”

4. AUSTRALIA


4.1 Offshore Perth Basin (ROC: 20% to 55% and Operator)

Following the Cliff Head oil discovery at the end of last year, ROC has consolidated its position in the northern part of the offshore Perth Basin. As a result, ROC now has between 20% and 55% equity in and operatorship of, four contiguous permits covering a total area of 7 million acres/28,000 sq km which stretches for approximately 350 km along the Western Australian coastline from Cerrantes to north of Kalbarri (Attachment 3).

According to industry reports, Apache Energy Limited is scheduled to start drilling the Morangie-1 exploration well in WA-226-P in the northern part of the offshore Perth Basin in October 2002. This well will be relevant to ROC because it is located in a permit which is adjacent to ROC’s recently acquired WA-327-P (Attachment 3).

Although ROC effectively acquired its interests in WA-325-P and WA-327-P in July 2002, ROC and its co-venturers, Voyager Energy Limited and Bounty Oil and Gas NL, are already seeking to fast track their work programme via a 2,500 km 2D seismic survey which is scheduled for October-November 2002, subject to receipt of necessary government and other statutory approvals.

In a separate offshore Perth Basin development, ROC’s wholly owned subsidiary, Roc Oil (WA) Pty Limited, operator for and on behalf of both the WA-286-P and TP/15 Joint Ventures, has recently executed an Offshore Drilling Service Contract with Ensco Australia Pty Limited with regard to the jack-up rig, Ensco 53. This rig is scheduled to drill at least three, and perhaps as many as eight, wells for ROC and its co-venturers in and around the Cliff Head Oil Field starting early January 2003 (Attachments 1 and 4).

5. WEST AFRICA


5.1 Offshore Mauritania (ROC: 2.0% to 5.0%)

The main focus of ROC’s current drilling activity is the Woodside-operated Chinguetti series of wells in Block 4 where two successful wells have been drilled since the programme re-started in late July 2002, the most recent of which was the oil and gas discovery at the Banda Prospect. There are two other wells to be drilled in this programme: Chinguetti-4-4, on the southern side of the Chinguetti structure and an exploration wildcat well on the Thon Prospect, 125 kms to the north (Attachments 1 and 5).

Operational details relating to the Mauritanian wells are released to ASX on a regular basis by the Operator and other Australian-based co-venturers, including ROC. For a number of reasons, these releases generally do not address the broader geological aspects of the exploration plays being pursued by the Joint Venture. In this context, the following points may be relevant:

· The four wells drilled offshore Mauritania during the last 16 months have yielded very encouraging results. All four wells have had a large exploration element and three of them were, in fact, pure exploration wells, two of which discovered potentially commercial hydrocarbons. All four wells encountered measurable hydrocarbons, proving separate gross hydrocarbon columns of 9 metres, 90 metres, 94 metres and 133 metres. These drilling results are quite remarkable for a previously undrilled, frontier area and they certainly highlight the petroleum potential of the region. However, more time and many more wells will be required before the total regional potential can be quantified reliably.

· The results from the Chinguetti-4-2 well, the step-out exploration well on the northern side of the Chinguetti structure, are still being interpreted. Current interpretation suggests that the well drilled through two main channel sands within the previously reported 94 metre gross oil column. The majority of the net pay in the well, mainly in the lower of the two channel sequences, is interpreted as having excellent reservoir quality.

· Separately, in the lower part of the Chinguetti-4-2 well, below the oil-bearing interval, additional channel sands with a combined net thickness in the order of 25 metres were encountered. These sands also have good to excellent reservoir qualities and, although water-wet in Chinguetti-4-2, they are expected to be oil-bearing higher up the structure.

· The depositional environment of channel sands is such that individual sand packages will typically thicken or thin away from any single data point (Attachment 6). Because of this, the individual net pay intervals in such wells should always be viewed within the context of the overall extent of the channel sand sequence, which is largely reflected by the gross hydrocarbon column and the connectivity of the sands within that system (Attachment 6). When considering net reservoir thicknesses, it should also be borne in mind that sand bodies associated with salt domes, such as those encountered offshore Mauritania, may thicken down dip from the high points of the structure.

· The three wells, which have encountered substantial gross hydrocarbon columns (90 metres to 133 metres) offshore Mauritania, collectively demonstrate net reservoir pay sands which represent between 25% and to 40% of the respective gross hydrocarbon columns.

· In general terms, the thickness of the net reservoir sand in the Chinguetti-1 discovery well is the same order of magnitude as that in the Chinguetti-4-2 well, although the 3D seismic suggests that the sand thickens down dip from the discovery well.

· Evaluation of the most recent well, the Chinguetti-4-3 exploration well, drilled on the Banda Prospect is continuing. Preliminary indications suggest that the percentage of gross hydrocarbon column which is represented as net reservoir sand in the well is at the high end of the 25% to 40% range quoted above.

· There is no obvious oil-water contact in the Chinguetti-4-3 (Banda) well, where there is almost 60 metres of, essentially, non-reservoir rock between the highest known water and lowest known oil. Therefore, it is the extrapolation of pressure data obtained while logging which implies that the gross oil column in the well is in the order of 23 metres, as reported to ASX earlier this week. Until additional subsurface information is acquired, this represents the most accurate available estimate of the thickness of the oil leg at the Banda location, but this estimate may change as and when more information becomes available.

5.2 Rio Muni Basin, Equatorial Guinea (ROC: 60- 35% and Technical Manager)

Although the 2001-02 drilling results offshore Mauritania have increased West Africa’s profile within the Australian investment community, in parts of the northern hemisphere it is the Rio Muni Basin and other parts of offshore Equatorial Guinea, which have captured the industry’s and market’s attention, perhaps for the following reasons:

· Reportedly, West Africa provides 15% of the United States’ oil imports.

· The United States is believed to be the largest buyer of Equatorial Guinean oil production.

· Equatorial Guinea is, reportedly, the sub-Sahara’s fourth largest destination for US investment, with US$3.4 billion going into the oil and gas industry between 2000 and 2004.

· During 2000 the Overseas Private Investment Corporation (OPIC) approved its then largest financing in Africa for the continued development of the Alba Field, offshore Equatorial Guinea.

· In 2001, Amerada Hess Corporation (“Amerada”) paid US$3.2 billion to acquire Triton Energy Limited (“Triton”), at a time when Triton’s highest profile asset was its successful exploration and development programme in the Rio Muni Basin, offshore Equatorial Guinea.

· During 2001 and 2002, Amerada Hess continued to build on Triton’s success in the Rio Muni Basin with the result that, since late 1999, seven oil fields have been discovered within a 500 sq km area, approximately 65 km south of ROC’s acreage. Collectively, the seven fields represent recoverable reserves in excess of 500 million barrels. Production was established within 14 months of the first discovery and other, subsequent discoveries, are already being developed.

· In 2002, Marathon Oil Company paid almost US$1 billion to buy CMS Energy’s interest in the Alba Field, offshore Equatorial Guinea, and related onshore facilities.

· More specifically, earlier this year the large South African energy company, Sasol Petroleum International Limited, acquired a 20% interest in the ROC-managed H-15 and H-16 Blocks (collectively “the H Blocks”) in the Rio Muni Basin, through a farmin via ROC’s co-venturer, the Atlas Group.

When ROC acquired its interest in the H Blocks, it advised ASX, in its release dated 14 April 2000, that “in certain beneficial circumstances” its 60% interest could reduce to 35%. Recently, there has been an unconfirmed report, in at least one industry publication, to the effect that the circumstances that would cause ROC’s interest to be reduced to 35% have been triggered. At this moment in time, this is not the case. However, discussions have taken place between the relevant Government authorities and the Atlas Group, the designated operator of the H Blocks, in order to determine if the terms of the Petroleum Sharing Contract (“PSC”) can be modified. If all aspects of these discussions are successfully finalised to the satisfaction of all relevant parties, ROC will hold a 35% interest in the H Blocks which will then be subject to fiscal terms which will be more attractive than when ROC first acquired its equity and which, according to ROC’s current understanding, will be more closely aligned to the terms contained in other PSCs covering deep water areas offshore Equatorial Guinea.

ROC is currently considering its forward drilling strategy for the H Blocks. An exploration well may be drilled prior to end 2004, although the precise timing and the selection of which of the several industry reports suggest that exploration drilling activities may also take place in one or more nearby areas during 2003.

Commenting on ROC’s interest offshore Equatorial Guinea, the Company’s Chief Executive Officer, Dr John Doran, stated that:

“Along with offshore Mauritania, that part of the Rio Muni Basin, which is offshore Equatorial Guinea, may be regarded as one of two new “hotspots” to emerge during the last several years in the deep waters off Africa’s Atlantic coast line and ROC considers it a privilege to be the only company with a presence in both areas.

ROC’s interest in Equatorial Guinea represents a significant investment in excess of US$10 million, a substantial portion which was spent on a 1,400 sq km, high resolution, 3D seismic survey acquired during 2001. This seismic survey has been processed and largely interpreted and, as a result, the prospectivity of the area has been upgraded considerably.”



5.3 New Venture Focussed on Africa


Because of ROC’s recent run of successful exploration drilling results offshore Mauritania, Western Australia and China, the Company is keen to concentrate its expertise and energy on existing projects, particularly the 2002-03 multi-well drilling programme that has just started.

However, ROC is also conscious that it should continue to be receptive to appropriate new venture opportunities. With this in mind, ROC has entered into a Participation Agreement (“the Agreement”) with Osprey Oil & Gas Limited (“Osprey”), a new, privately-owned, upstream oil and gas company, based in London.

Osprey is dedicated to activity in Africa and is managed by founder directors John Bentley and Jim Rutland who were formerly Managing Director and Finance Director, respectively, of Energy Africa Limited, which has experienced considerable success in Africa.

Under the terms of the Agreement, ROC has the right to jointly appraise potential acquisitions identified by Osprey and to directly co-invest with Osprey on an unpromoted, 50:50 basis in appropriate opportunities.

As part of this process, ROC has also become a direct shareholder in Osprey, acquiring a 15% shareholding for an investment of US$250,000. ROC’s Chief Executive Officer, Dr John Doran has been appointed as a non-executive director of Osprey.

Osprey’s other founder shareholders comprise the company’s management and a group of four large financial institutions, all of which have a strong African presence and a commitment to developing further business in that continent:

· International Finance Corporation (“IFC”) is the private sector development arm of the World Bank Group. IFC’s mission is to promote sustainable private sector investment in developing countries, thereby helping to reduce poverty and improve people’s lives. Since its founding in 1956, IFC has committed more than US$34 billion of its own funds and arranged US$21 billion in syndications in 140 developing countries. IFC’s committed portfolio at the end of the 2002 Financial Year was US$15.1 billion with an additional US$6.5 billion held for participants in loan syndications.

· African Merchant Bank, the investment banking division of Belgolaise Bank, which is the only European bank entirely dedicated to Africa and one of the foremost international banking institutions on the continent, through a wide reaching network of 17 affiliated banks. Belgolaise Bank is wholly owned by the FORTIS Group, one of the largest banking and insurance groups in Europe with total assets of €483 billion at year end 2001.

· RMB Resources, is the resource sector finance arm of Rand Merchant Bank, a major South African merchant bank and a member of the FirstRand group of companies, which is listed on the Johannesburg Stock Exchange. The Group’s assets under management total R473 billion and headline earnings for the year ended 30 June 2002 amounted to R4,721 million.

· Standard Bank London Limited is the principal international merchant and investment banking arm of Standard Bank Group Limited, one of the largest banking groups in Africa, with assets in excess of US$40 billion and employing over 35,000 people.

Commenting on ROC’s relationship with Osprey, Dr John Doran stated that:

“ROC’s view, that time is the most precious of all commodities, has been accentuated by its current high level of activity. This thought influenced ROC’s decision to form a corporate link with Osprey via a direct shareholding in that company, a non-executive seat on the Board, an option over 50% of new projects sourced by Osprey and a co-investor relationship with the four other founder corporate shareholders, all of whom are large financial institutions focussed on Africa.

The concept has taken approximately 12 months to come to fruition, but the timing is fortuitous for ROC because, during the intervening period, a number of projects within ROC’s established portfolio, including some in Africa, have made the transition from exploration to appraisal and the Company’s activities have increased accordingly - which makes the basic time-efficient rationale behind the ROC-Osprey relationship all the more compelling.”

Robert Gerrard
General Counsel & Company Secretary
E-mail: rgerrard@rocoil.com.au

· Preliminary wireline log interpretation indicates that the Chinguetti-4-3 exploration well at the Banda Prospect, offshore Mauritania, has intersected a gross hydrocarbon interval of 133 metres, comprising a gross gas column of 110 metres and a gross oil column of 23 metres.

· The discovery is in 306 m of water, 60 km from shore. Further evaluation and appraisal drilling will be required to fully determine the nature and commercial potential of the Banda discovery.

1.1 Chinguetti-4-3, Offshore Mauritania (ROC: 2.7%)

The Operator of the Mauritania PSC A Joint Venture, Woodside Mauritania Pty Limited, has advised that:

· The Chinguetti-4-3 exploration well, which is drilling the Banda Prospect, is currently concluding the running of wireline logs at a total depth of 2,609 m.

· Preliminary evaluation of the wireline log data indicates that the well has intersected a number of hydrocarbon-bearing sandstones in the primary Tertiary reservoir objective over a gross interval of 133 m. This interval comprises a gross gas column of 110 m immediately overlying a gross oil column of 23 m. Samples of gas and oil have been recovered from both columns.

Following the completion of the logging programme and consistent with the Joint Venture’s previous procedures in the area, the Chinguetti-4-3 (Banda) discovery well will be plugged and abandoned as planned.

The oil and gas bearing sandstones are part of the same sand system which is the oil reservoir at Chinguettti-1 and which was recognised as the well’s primary reservoir objective prior to drilling, although the style of hydrocarbon trap at Banda is different from that at the Chinguetti discovery.

The Banda structure is quite large and lies in 306 m of water, about 60 km off the Mauritanian coastline. The discovery is positioned between the 2001 Chinguetti oil discovery, approximately 20 km to the southwest, and Mauritania’s capital, Nouakchott, 75 km to the northeast (Attachment 1).

Commenting on the discovery, ROC’s Chief Executive Officer, Dr John Doran stated that:

“The discovery of a significant hydrocarbon accumulation at Banda, in a structural setting which is different from last year’s Chinguetti discovery, is encouraging. It is increasingly hard to avoid the view that the drilling successes which the Joint Venture has experienced in the last 15 months represent the birth of a new petroleum province. However, only time and a lot more wells, will tell whether the encouragement provided by the drilling programme to date is justified.”

Robert Gerrard
General Counsel & Company Secretary
E-mail: rgerrard@rocoil.com.au

· Gas production from the Saltfleetby Gas Field, onshore UK, has increased by more than 15% to 34 MMSCF/D, the highest field rate since late 2001. The increase is due to the recent successful workover of Saltfleetby-5 in the main Westphalian reservoir.

· Oil production from Keddington-1, onshore UK, continues to increase and is currently running at approximately 60 BOPD, following the recent successful workover of the well.

· Chinguetti 4-3, the exploration well drilling the Banda Prospect, offshore Mauritania, was tripping for a new bit prior to drilling ahead at 2,434 m as of midnight 17 September 2002.

· The East Tsagaan Els-1 exploration well, in the East Gobi Basin of Mongolia, is drilling ahead at 1,342 m.

1.1 WORK OVER

1.1.1 Saltfleetby Gas Field (ROC: 100% and Operator)

Production from the Saltfleetby Gas Field has increased by about 5 MMSCF/D (17%) to 34 MMSCF/D and the field is now producing at a higher rate than at any time since late 2001. The additional production is attributable to Saltfleeby-5, which was recompleted in the main Westphalian reservoir in late August 2002. The increase is timely with generally increasing gas prices going into the UK winter and higher gas sales contract prices which will increase by approximately 50% from 1 October 2002.

1.1.2 Keddington Oil/Gas Field (ROC: 100% and Operator)

Oil production from Keddington-1 continues to increase subsequent to the well being brought back onto production following a successful workover completed in July 2002. Since ROC’s release to ASX dated 8 August 2002, the oil production rate at Keddington-1 has increased from about 30 BOPD to 60 BOPD. The area immediately around the Keddington Oil/Gas Field area has not been fully evaluated, which was one of the reasons it was included in the 3D seismic survey which ROC recently completed in this part of the South Humber Basin. In this context, the continuing and increasing oil production at Keddington-1 may provide further insights to the untapped potential of the area.

2. EXPLORATION

2.1 DRILLING

2.1.1 PSC Area A, Chinguetti-4-3 (Banda Prospect) (ROC: 2.7%)

As at midnight on 17 September 2002, the Chinguetti-4-3 exploration well was tripping for a new bit prior to drilling ahead at 2,434 m in 12¼ inch hole. The forecast total depth for the well is 2,560 m and the well is targeting the same channel sand complex that is known to contain oil at the Chinguetti Oil Field.

In keeping with Joint Venture protocol, hydrocarbon shows will only be reported after wireline logs have been run and evaluated.

The Banda prospect is in 306 m water depth, approximately 21 kms east of the Chinguetti Oil Field.

2.1.2 East Gobi Basin Mongolia, East Tsagaan Els-1 (ROC: 50% and carried)

As of 17 September 2002, the East Tsagaan Els-1 exploration well, the second and last well in the current programme, was drilling ahead at a depth of 1,342 m in 8½ inch hole. The planned total depth of the deviated well is 2,140 m measured depth corresponding to 1,900 m true vertical depth (“TVD”) with a top of the target zones expected to be encountered below 1,300 m TVD. ROC is being carried through the cost of the well by Dongsheng Jinggong Petroleum Development Group Co Limited which is farming in and managing well operations.

Robert Gerrard
General Counsel & Company Secretary
E-mail: rgerrard@rocoil.com.au

· Chinguetti 4-2 exploration step-out well, offshore Mauritania suspended. Rig moving to Banda prospect location

· East Tsagaan Els-1 sets intermediate casing

· 421 sq km 3D seismic survey, offshore China, completed

1.1 DRILLING

1.1.1 PSC Areas A and B, Offshore Mauritania (ROC: 2.7% and 2.4% respectively)

Woodside Mauritania Pty Ltd ("Woodside"), Operator of the Mauritania PSC A and B Joint Ventures, issued a report on 10 September 2002, the essence of which was as follows:

· The drillship "Deepwater Discovery" was on location at the Banda prospect in Area A and was preparing to spud the Chinguetti 4-3 (Banda) exploration well.

· Since the last report, the Chinguetti 4-2 well in Area B has been suspended due to the mechanical failure of test equipment during preparations to test the second of two zones in the well. The Mauritania PSC B Joint Venture will consider its plans to continue the evaluation of the Chinguetti 4-2 well while the Chinguetti 4-3 (Banda) well is completed.

· Current operations are preparing for well spud.

Under the well naming convention adopted by the Mauritanian government, all wells drilled will follow the naming convention of "Chinguetti - Block No. - Well No.". In order to avoid confusion, the prospect name will be appended to the end of the well name in parentheses, for example Chinguetti 4-3 (Banda).

1.1.2 East Gobi Basin, Mongolia (ROC: 50% and carried)

As at 9 September 2002, the East Tsagaan Els-1 exploration well, the second and last well in the current programme, had reached intermediate casing depth of 1,005 m and 9 5/8" casing had been set and cemented.

The planned Total Depth of the deviated well is 2,140 m measured depth corresponding to 1,900 m true vertical depth ("TDV") with the top of the target zone expected below 1,300 m TVD.

ROC will be carried through the costs of the well by Dongsheng Jinggong Petroleum Development Group Co Limited, which is farming in and managing well operations.

1.2 SEISMIC

1.2.1 Block 22/12 Beibu Gulf, Offshore China (ROC: 40% and Operator)

The 421 sq km 3D seismic survey, which started recording on 28 July 2002, was completed on 3 September 2002. The data is now being processed. The survey covered both exploration leads and existing discoveries and is expected to provide the basis for the drilling of one or more wells during 2003.

Robert Gerrard
General Counsel & Company Secretary
E-mail: rgerrard@rocoil.com.au

· Today, ROC released its financial results for 1H02 which are summarised and commented upon below.

· There are no surprises in the results; they are consistent with information previously provided in ROC’s summary release to ASX dated 27 August 2002.

· During 1H02, ROC sold its minority interests in a developed field and a long term production tested, but undeveloped, field in the UK North Sea. These sales were part of ROC’s continuing strategy of monetising peripheral assets, including those that produce, in order to maximise the Company’s cash position ahead of a large, five country, exploration and appraisal drilling programme which has just commenced.



HIGHLIGHTS


$95.6 million in cash and receivables from asset sales

ROC holds $95.6 million in cash and receivables from asset sales, as at 30 June 2002; up $32.6 million (52%) from $63.0 million cash as at 30 June 2001. This cash is unencumbered because all the Company’s borrowings are effectively secured against the Saltfleetby Gas Field.


Modest debt level continues to be reduced

ROC’s already modest debt level continues to be reduced, with external borrowings of US$26.8 million as at 30 June 2002; a US$3.7 million (12%) improvement on the US$30.5 million borrowings as at 30 June 2001.


The Saltfleetby Gas Field continues to perform strongly

The Saltfleetby Gas Field, onshore UK, continues to perform strongly and, subsequent to half year end, the field produced its one billionth cubic metre (35.3 BCF) of gas, about 33 months after coming on to production.


$22.07/BOE before tax cash margin on production, equivalent to 78% of sales revenue

1H02 cash operating costs averaged $6.28/BOE, compared to an average sales price of $28.35/BOE, which represents a cash margin of $22.07/BOE or 78% of field sales revenue. Even with the weaker UK gas prices experienced during the period, Satlfleetby’s realised gas price of $4.75/MCF compares very well with typical Australian, year round, gas sales prices of between $2.50/MCF and $3.00/MCF.


$5.0 million profit before tax

$5.0 million profit before tax; down $11.0 million (69%) from the comparable $16.0 million profit for the corresponding period last year.


$5.8 million after tax loss

$5.8 million after tax loss; down $15.8 million (158%) on the comparable $10.0 million after tax profit for the corresponding period last year. This loss primarily reflects a one-off, non-cash provision for a new UK tax effect and provision for potential capital gains tax from UK asset sales.


$2.7 million underlying profit after tax and adjustments

$2.7 million underlying profit after tax after adjustments for one-off UK tax changes, provision for potential capital gains tax on asset sales, net foreign currency losses and exploration expenditure expensed.


$26.8 million of sales revenue

Sales revenue of $26.8 million; down $24.3 million (47%) from the $51.1 million comparable revenue for the corresponding period last year.


$19.2 million net operating cash flow

$19.2 million net operating cash flow; down $22.5 million (54%) from the $41.7 million comparable cash flow for the corresponding period last year.


0.9 MMBOE of production

Production of 0.9 million barrels of oil equivalent (MMBOE), over 90% gas, down 0.5 MMBOE (34%) from the 1.4 MMBOE produced in the corresponding period last year. This result is mainly due to natural production decline at the Saltfleetby Gas Field, the sale of the Company’s interest in the Kyle Oil and Gas Field in the UK North Sea and temporary constraints affecting third-party facilities receiving gas from the Saltfleetby Gas Field.


$14.1 million EBITDA

$14.1 million EBITDA; down $18.2 million (56%) from the $32.3 million comparable EBITDA for the corresponding period last year.

CEO’S COMMENTS

Commenting on the results, ROC’s Chief Executive Officer, Dr John Doran, stated:

· The results released today are consistent with ROC’s release to ASX dated 27 August 2002.

· The results reflect ROC’s strategic view that, in today’s international oil and gas industry and the more general global business climate, it is an advantage for an independent oil company to have cash in the bank – particularly when it is embarking on a major exploration and appraisal drilling programme. This is why ROC has monetised a number of its peripheral assets, including some producing properties. As a result, the Company has maximised its cash position ahead of a burst of exploration and appraisal activity which will not only follow up its recent drilling successes offshore Mauritania, Western Australia and China but also evaluate the potential of the area around the Saltfleetby Gas Field in the UK.

· After considerable thought, ROC concluded that the UK North Sea assets which it sold during the report period, were peripheral to its core strategy. This was because ROC had a modest equity in those assets and little/no influence over high cost operations which had little obvious upside growth potential. As ROC grew its cash position, including receivables from asset sales, to $95.6 million it also reduced, its already modest, external borrowing to US$26.8 million, all of which is, for all practical purposes, comfortably secured against the Saltfleetby Gas Field, thereby leaving ROC’s cash reserve unencumbered. Because of this rebalancing of ROC’s tangible asset base, the Company is in an excellent position to proceed towards its next growth phase.

· The manner in which ROC’s project portfolio has evolved during the last twelve or more months - especially with regard to the Company’s encouraging drilling record during that period - has resulted in a decision to channel corporate energy and funds into the current multi-well drilling programme that will see between 7 and 19 exploration and appraisal wells drilled in five different countries during the next 12 months.

· Already a significant measure of drilling success has been achieved. Most recently, the Chinguetti 4-2 exploration step out well, offshore Mauritania, encountered a 94 metre gross oil column and flowed oil at a rate of 1,560 BOPD, constrained by sand influx; an event which often implies excellent reservoir quality. The scheduled completion of the Mauritanian drilling activity by year-end will provide ROC shareholders with an almost seamless transition into the 3 to 8 well drilling programme which ROC is scheduled to operate in the offshore Perth Basin in four months time.

· If the current drilling campaign continues to generate good results, ROC should experience more upside growth than if the peripheral assets, which were sold during the report period, had been retained. The ultimate benefits of this strategy will depend upon the success or failure of the exploration and appraisal drilling programme. Arguably, that is an appropriate position for a young and growing exploration and production company to adopt in order to create maximum value for shareholders.

· The Saltfleetby Gas Field continues to perform strongly. On 4 September 2002, the field produced its billionth cubic meter of gas, equivalent to 35.3 BCF. This translates into an average daily production rate of 35.5 MMSCF/D since production started in December 1999. A successful workover of Saltfleetby-5 during August 2002 is further good news which is expected to boost the field’s current 30 MMSCF/D production by more than 10%, in time for the seasonally stronger UK winter gas prices. Ahead of the anticipated strengthening in UK spot gas prices, an improvement in ROC’s contracted sales gas price has been negotiated. As a result, ROC’s contracted gas sales price will increase by about 50% from 1 October 2002.

· One of the rarely highlighted strengths of the Saltfleetby Gas Field is its relatively low cash operating cost, a consequence of its onshore location, proximity to infrastructure and reservoir productivity. In an industry characterised by product price fluctuations which are sometimes volatile, low operating costs and high cash margins represent a valuable benefit.

· Potentially one of the most significant events during 1H02 was ROC’s entry into China. Subsequently, ROC was appointment as Operator of Block 22/12 in the Beibu Gulf and increased its equity in the permit to 40%. Although these events do not impact in any obvious manner on the financial results for the period under review, the speed with which ROC, its co-venturers and the relevant government authorities have progressed this exploration and appraisal project augers well for the future. A scenario is being developed whereby a successful 2003 drilling programme in China could lead to a potential fast-track, low cost, development that could leapfrog its way to the front of ROC’s list of potentially commercial field developments.

To view the full Financial Report for the Financial Half Year ended 30 June 2002, click here.
To view the Appendix 4B - Half Yearly Report for the Half Year ended 30 June 2002, click here.

Dr John Doran
Chief Executive Officer
E-mail: jdoran@rocoil.com.au

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· Successful workover of Saltfleetby-5, onshore UK, expected to boost field production by more than 10%

· Chinguetti 4-2 exploration step-out well, offshore Mauritania, flows oil up to 1,560 BOPD and 650 MSCFD gas, constrained by sand production from the reservoir

· East Tsagaan Els-1 drilling ahead at 790 m in 12¼ inch hole

· 421 sq km 3D seismic survey, offshore China, more than 90% complete

1.1 WORKOVER

1.1.1 Saltfleetby Gas Field (ROC: 100% and Operator)

A workover, using coiled tubing equipment, has been successfully completed in the main Westphalian reservoir section at the Saltfleetby-5 well. The well, originally drilled in 2000, had not been previously completed in the main Westphalian reservoir sequence although it had produced 1.5 BCF gas from a separate, lower, Namurian reservoir prior to water influx at that level.

The well was perforated over a 155 m, near horizontal section, in the main reservoir and early production rates up to 9 MMSCFD on restricted choke were recorded. These rates are consistent with the pre-drill expectation that a successful workover of Saltfleetby-5 could boost current field production of about 30 MMSCFD, by more than 10%, in time for the seasonally stronger UK winter gas prices. However, more production is required before long term well performance can be reliably extrapolated.

2. EXPLORATION

2.1 DRILLING

2.1.1 PSC Area B, Offshore Mauritania (ROC: 2.4%)

Woodside Mauritania Pty Ltd, Operator of the Mauritania PSC B Joint Venture, has reported that as of 3 September 2002 a production test of the Chinguetti 4-2 step-out exploration well had been completed over the first of two zones within the primary reservoir interval.

The oil rate was constrained by sand influx but a maximum rate of 1,560 BOPD and 650 MSCFD through a 30/64 inch choke was recorded.

Sand inflow from reservoirs can be controlled. In the case of a development, appropriately designed and completed production wells should be capable of achieving significantly higher flow rates.

2.1.2 East Gobi Basin, Mongolia (ROC: 50% and carried)

As at 2 September 2002 the East Tsagaan Els-1 exploration well, the second and last well in the current programme, was drilling ahead at a depth of 790 metres in 12¼ inch hole.

The planned Total Depth of the deviated well is 2,140 m measured depth corresponding to 1,900 m true vertical depth ("TVD") with the top of the target zone expected below 1,300 m TVD.

ROC will be carried through the costs of the well by Dongsheng Jinggong Petroleum Development Group Co Limited, which is farming in and managing well operations.

2.2 SEISMIC

2.2.1 Block 22/12 Beibu Gulf, Offshore China (ROC: 40% and Operator)

The 421 sq km 3D seismic survey, which started recording on 28 July 2002, is more than 90% complete. The survey covers both exploration leads and existing discoveries and is expected to provide the basis for the drilling of one or more wells during 2003.

Robert Gerrard
General Counsel & Company Secretary
E-mail: rgerrard@rocoil.com.au