excellent annoucement why the sell down

9 August 2006
ROC OIL COMPANY LIMITED ("ROC")
STOCK EXCHANGE RELEASE
RROOCC CCOOMMPPLLEETTEESS PPUURRCCHHAASSEE OOFF AAPPAACCHHEE CCHHIINNAA
Consistent with ROC’s previous Stock Exchange Releases on 27 June 2006 and 31 July 2006 the Company completed the purchase of 100% of the shares of Apache China Corporation LDC ("Apache China") on 8 August 2006.
Apache China’s sole asset is a 24.5% operated interest in the Production Sharing Contract pertaining to the Zhao Dong Block ("the Block"), Bohai Bay, offshore China. As previously advised the purchase price of US$260 million (A$350 million at current exchange rates) plus a working capital adjustment of US$15 million (A$20 million at current exchange rates) is financed 100% by a 12 month loan provided by the Commonwealth Bank of Australia. The effective date of the transaction was 1 July 2006.
The Block is part of a prolific producing petroleum province and is currently producing approximately 30,000 barrels of oil per day ("BOPD") (ROC net working interest*: 7,300 BOPD) from two fields. Proved and probable remaining recoverable oil reserves are estimated to be 61 million barrels of oil ("MMBO") (ROC net working interest*: 15 MMBO).
As a result of this transaction ROC’s production and operating profile has significantly increased. In less than six months ROC’s net oil production has increased from less than 50 BOPD to more than 12,000 BOPD. ROC now operates on behalf of joint ventures offshore China and offshore Western Australia more than 40,000 BOPD. In a China context this makes ROC the third largest foreign operator of oil production in that country.
In conjunction with closing the acquisition, and in addition to oil price hedging previously reported on 31 July 2006, ROC has executed further Brent oil price swaps for 1.31 MMBO for the period 1 July 2008 to 30 June 2011 at a weighted average price of US$72.16 per barrel. These swaps together with the oil price swaps previously reported represent approximately 23% of ROC’s forecast total 2P oil production for the period 1 July 2006 to 30 June 2011.
Commenting on the transaction ROC’s Chief Executive Officer, John Doran, stated that:
"Leaving aside all the usual platitudes about the transformational impact of this purchase, perhaps the key point for shareholders and potential investors to note is that this deal is a direct consequence of ROC’s strategic emphasis on its operating capacity both in Australia and overseas, together with a strong and extensive network of international contacts".
* Interest is held through ROC's wholly owned subsidiary "Apache China"
Michelle Manook
General Manager – Corporate Affairs
For further information please contact:
Dr John Doran on
Tel: +61-2-8356-2000
Fax: +61-2-9380-2635
Email: [email protected]
Or visit ROC’s website: www.rocoil.com.au
Roc Oil Company Limited (ACN 075 965 856)
Level 14, 1 Market Street, Sydney NSW 2000, Australia. Telephone: +61 2 8356 2000 Facsimile: +61 2 9380 2066
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