Ann

Update on operations - continuation of Trading Halt

ARC ENERGY NL 2002-07-08 ASX-SIGNAL-G

HOMEX - Perth

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The Company provides the following update on the progress of the
Hovea 2 well and a request for the continuation of the current
trading halt.

UPDATE ON OPERATIONS

The current interpretation of the well results is that the vertical
well did not encounter the Dongara/Wagina section in the Hovea 1
fault block accumulation. Gas shows have been encountered in the
secondary objective, the Irwin River Coal Measures and the
significance of these shows will be evaluated by wireline logs once
total depth is reached.

After completion of the logging and evaluation program as planned, a
decision will be made on the forward program. Depending on the
results of the evaluation, the well may be plugged back and
sidetracked to a location updip from the Hovea 1 well.
The detailed forward plan will be finalised once the vertical well
has been logged and evaluated over the next few days.

TRADING HALT

In order to ensure that ARC directors are fully able to comply with
their continuous disclosure obligations and that there is a fully
informed market in the Company's shares, the current trading halt
will be continued until prior to the opening of ASX for trading
tomorrow, 9 July. If definitive well results will not be available
prior to commencement of trading on 9 July 2002, the Company may
request a suspension of its shares for a further period until
complete information is available.


E Streitberg
MANAGING DIRECTOR