Fuel-x International Inc.

Fuel-x International Inc.

October 12, 2005 09:30 ET

Fuel-x International Inc. Announces First Oil and Gas Transactions

CALGARY, ALBERTA--(CCNMatthews - Oct. 12, 2005) - Fuel-x International Inc. ("Fuel-x") (the "Company") is pleased to announce that effective October 1, 2005 it has completed two farm-in agreements with PEARL Energy Limited to acquire working interests in two production sharing contracts ("PSC") located in Indonesia. The farm-ins are subject to approval by the Indonesian oil and gas authorities.

The first farm-in relates to the acquisition of a 30% working interest of the oil producing Tungkal PSC which is located onshore Sumatra Island, Indonesia and is currently producing approximately 2,100 gross barrels of oil per day. The second farm-in allows Fuel-x to acquire a 50% working interest in the offshore Sebuku PSC located in the Makassar Straits, offshore the island of Kalimantan Indonesia, near the Bontang LNG facility.

"These two transactions are important milestones in building a portfolio of international oil and gas exploration and production assets" stated Mr. Andre Arrata, Managing Director of Fuel-x. "Completing the farm-in agreements demonstrates the strength of our existing international oil and gas relationships and our ability to locate and acquire high quality assets"

Details of Tungkal Farm-in:

Under the terms of the Tungkal farm-in agreement, Fuel-x will pay an aggregate purchase consideration of US$13,500,000, and will be responsible for 100% of the well costs for an exploration well to be drilled in the Tungkal PSC contract area, up to a maximum amount of US$1,500,000. The Company's 30% interest in the Tungkal PSC will be held through Fuel-X Tungkal Limited a wholly owned subsidiary incorporated under the laws of Cyprus.

The Tungkal PSC contract area is located onshore Sumatra, Indonesia, and covers approximately 2,288 sq km. The primary asset in the Tungkal PSC is the Mengoepeh oil field, which began production in December 2004 and reached a production level of 2,100 barrels of oil per day at the end of the second quarter 2005. Construction of the permanent production facilities is underway and is slated for completion by the end of 2005. A development well program is underway with seven additional wells scheduled in the next three to four months. Subject to rig availability two exploration wells at the Cerah and Berkas oil prospects are planned to be drilled during 2006

As of 31 December 2004, the gross estimated proved plus probable oil reserves in the Mengoepeh field were 6.02 million barrels as certified by third-party expert, Netherland, Sewell & Associates Inc.

Details of Sebuku Farm-in

Under the terms of the Sebuku farm-in agreement, Fuel-x will be responsible for 100% of the drilling costs for three (3) exploration/appraisal wells in the Sebuku PSC contract area, up to a maximum aggregate amount of US$12,000,000. The Sebuku PSC lies in the Makassar Straits to the east of Kalimantan and covers an area of approximately 5,850 sq km. The block contains an existing gas discovery, which will be delineated by the first well. The second two wells will be on prospects anticipated to be gas bearing. Efforts to secure a gas sales contact are ongoing. The Company's interest in the Sebuku PSC will be held through Fuel-X Sebuku Limited a wholly owned subsidiary incorporated under the laws of Cyprus.

About Fuel-x International Inc. and PEARL Energy Limited:

Fuel-x International Inc., headquartered in Calgary, Alberta, Canada is a private junior international oil and gas exploration and production company founded in April 2005. Company management and directors have significant experience in international oil and gas activities in over 80 countries. The Company has currently focused its activities in Southeast Asia and is planning to expand into a second core area within the next 18 months.

PEARL Energy Limited, is a Singapore-based oil and gas company engaged in the exploration, development and production of oil and gas exclusively in Southeast Asia. The company is publicly listed on the Singapore Stock Exchange under the symbol PRL. Since PEARL's first asset purchase in 2002, it has built up a portfolio of exploration, development and production assets in nine contract areas covering approximately 33,000 sq km of gross acreage in Indonesia, Thailand and the Philippines. PEARL's current production is approximately 13,000 BOEPD net to the company.

Contact Information

  • Fuel-x International Inc.
    Andre Arrata
    Managing Director
    (403) 532 1883
    (403) 532 1893 (FAX)
    Email: andre@fuel-x.ca