“Following record earnings and record production in 2001, SOCO will this year undertake its largest exploration drilling program to date. The rig is on location and drilling in the Cuu Long Basin offshore Vietnam will begin within days with the spudding of the first well on Block 16-1. This is the first of a minimum four well drilling program to be conducted throughout the remainder of this year and into next year in the Basin. This well is to be followed by the initial well on Block 9-2, a second well on Block 16-1 and the final committed well on Block 9-2. Both Blocks are contiguous to the Bach Ho (approximately 285,000 BOPD) and the Rang Dong (approximately 55,000 BOPD) producing fields."
"Due to a transaction earlier this year wherein SOCO farmed out one half of its interest in both Blocks in Vietnam, the Company is being carried through the drilling phase up to a maximum of US$ 50 million."
"Exploration drilling also began earlier in the year in Yemen with the Amani well drilled in the East Shabwa Development Area. The rig pulled off the well after an apparent discovery. Partners are currently working on a production test design, to be performed with a workover rig, to evaluate the potential of the Upper Biyad and Basement reservoirs."
"A four well drilling program in the Tamtsag Basin in Mongolia is expected to commence in June with the first well to be drilled as an offset to a previous discovery. The program will include both exploration and offset appraisal wells in Contract Area 19. The Company is currently producing approximately 400 BOPD in test production from other areas of Contract Area 19." "During the first four months of 2002, SOCO's crude oil production averaged 6,046 BOPD net to its working interests."
"In conclusion SOCO has embarked on an unprecedented exploration drilling program this year. While our downside risk has been mitigated by the farm-out announced earlier this year, we have upside potential far greater than at any time in the Company's history. The next twelve months will be an exciting time for the company."