Offshore staff

INDONESIA -- Cooper Energy subsidiary South Madura Exploration Co. has farmed out 15% of its interest in the South Madura PSC offshore Indonesia to Nations Petroleum. The farm-out will result in Cooper Energy receiving a partial reimbursement of back costs on the PSC, funding for the Kurnia-1 well, and funding for the 2007 2D seismic work program.

Company interest following the farm out will leave SMEC as operator with 30%, Nations Petroleum with 60%, and PT Eksindo with 10% interest.

The farm-out is subject to the approval of the Indonesian Government.

The first well to be drilled in the contract area of the PSC is Kurnia-1, which lies in the south of the South Madura PSC and contains two target horizons. The upper horizon at 1,260 m (4,134 ft) is the Ngrayong sandstone, which is expected to contain gas. The lower horizon at 3,020 m (9,908 ft) is the Kujung carbonate platform, which is expected to hold oil. Both targets are four-way dip closures with areal closure of about 120 sq km (46 sq mi).

As operator of the PSC, SMEC has identified a number of rigs that would be suitable to drill the well both from a technical and timing point of view and has issued tender documents. A decision is expected soon.

2/21/2007