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Orchard Petroleum Limited
ABN 25 061 655 463
31 January 2005
Joint ASX and Media Announcement
Orchard Takes Over Jack Hamar 1-1 as Operator
Acquires added 25% interest in “deep rights” at Lease Block A
Orchard Petroleum Limited (ASX; OPL) (Orchard) and Orchard Petroleum Inc. (OP Inc), a
wholly owned subsidiary of Orchard, are pleased to announce that OP Inc has signed a Letter of
Intent with Nahabedian Exploration Group (NEG) to acquire NEG’s 25% working interest in
Jack Hamar 1-1 and the deep rights to the Southeast Lost Hills Lease Block A, the 2,560 acres
surrounding the Jack Hamar 1-1 discovery.
OP Inc will end up with a 50% working interest in the deep rights in Lease Block A, an
increase of 25% in the primary location of the Monterey Formation and the recent Jack Hamar
well.
OP Inc has also become the Operator of the deep rights in Block A that covers the full extent
of the Monterey Formation across the lease and, as a consequence, takes over as Operator of the
Jack Hamar 1-1 well.
NEG retains its 25% working interest and Operatorship in the “shallow rights” across Block A.
There is no change in the working interest or Operator status in Block B, south of Block A,
where a three well program was announced earlier this month.
OP Inc has agreed to pay NEG a series of payments based on drilling activity, royalty and
production in addition to a reimbursement of costs in the Jack Hamar 1-1 well. Payments are to
be spread over a 10-year period. OP Inc retains a quitclaim right to NEG if it elects not to
continue drilling.
OP Inc also holds a right of first refusal from NEG to purchase Block A and Block B interests if
NEG elects to sell for a cash payment.
Steve Graves, Chairman, said: “Orchard is very pleased with the increased working interest in
the highly attractive Jack Hamar prospect at Southeast Lost Hills. As Operator of the near by
Sledge Hamar project which is a very similar type development project, Orchard can take
advantage of the already added experts, technical support groups and consultants it has put
together in developing a similar hydrocarbon formation”.
“We all feel very confident in running the development of Jack Hamar and the surrounding
acreage. There are many benefits to applying our new team of experts to both the Jack Hamar
project at Southeast Lost Hills and the Sledge Hamar project at Southeast Belridge”.
Orchard Petroleum Limited
ABN 25 061 655 463
Steve Graves further said : “While this ownership change has caused some delay in testing Jack
Hamar 1-1, we are confident that the initial phase of testing will occur in February once a new
operating agreement between partners is put in place”.
Participants in Southeast Lost Hills Deep Rights in Lease Block A are:
OP Inc (Operator) 50%
Matris Exploration Company 25%
Nuenco NL 25%
For further information please contact Mr Steve Graves on 0011 1805 4694656.
Join Orchard’s e-news list at www.orchardpetroleum.com
The geological information included in this announcement is based on information
provided by Mr Edward Duncan, a qualified geologist employed as a technical consultant
to the Company. Mr Duncan has practiced as a geologist in the petroleum industry for
over 20 years. Mr Duncan has consented to the inclusion of the geological information in
this announcement in the form and context in which it appears.