FCL Energy High Grades Canadian Portfolio

STOCK EXCHANGE LISTINGS: NEW ZEALAND (FEG), AUSTRALIA (FLCES), NEW YORK (FEG).

Fletcher Challenge Energy High Grades Canadian
Portfolio for Fast Return on Investment

7 July 2000, Calgary – Fletcher Challenge Energy has acquired 124,800 gross acres in the Saskatchewan District as part of a programme to improve the quality of its portfolio in Canada. Of that, 38,400 acres are undeveloped. Fletcher Challenge Energy’s working interest in the lands is approximately 85%, which brings the net acreage (developed and undeveloped) to 106,000 acres.

The properties were purchased from UPRI for C$23.25 million, and are located in the North of the Saskatchewan District. Included are five developed areas with infrastructure complementary to assets already owned and operated by Fletcher Challenge Energy in the area.

Current gas production is approximately five million cubic feet per day and 250 barrels of oil per day. Extensive seismic survey information came with the purchase as well as 37,000 net acres of undeveloped land.

“This acquisition comes on the back of the substantial completion of the 2000 asset divestment programme and is part of a rigorous and consistent portfolio management process that Fletcher Challenge Energy is using across our Canada, New Zealand and Brunei businesses. We believe this acquisition will help to rejuvenate our Canadian portfolio and are confident we will get a fast payback from the properties, given the current high oil and gas price environment and our plans to accelerate development of these properties”, said Mark Taylor, President, Fletcher Challenge Energy Canada.

Fletcher Challenge Energy has already started developing these properties with drilling beginning at Baldwinton. The company plans to drill 12 heavy oil wells by early July with the aim of having production coming on stream in August.

ENDS

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