Fortune Oil & Gas completes negotiations on securing FSO/Tanker for Camar Field

Fortune Oil & Gas Inc. has successfully completed negotiations with respect to securing an FSO/Tanker (Floating Storage and Offloading tanker) for its Camar Field operations in Indonesia.

The Company has entered into two Agreements, which allow the Tanker to be immediately dispatched to Indonesia. The Company has entered into a purchase arrangement requiring the Company to complete on the purchase by May 1, 2001. The Tanker will be placed at the Camar Field initially under a Charter Agreement. David Nunn, President of Fortune stated, "Now that we have secured an FSO Tanker we are prepared to commence with production startup procedures without delay. The field is in a state of production readiness and with the arrival of Fortune's FSO Tanker at the Camar Field it will allow production to commence."

Mr. Nunn also stated, "With Tankers being in such high demand, the Charter rates are excessively high at this time. The ship market currently demands a rate in the range of US$9000/day to US$12,000/day requiring a firm two or three year obligation. Faced with this massive financial commitment, we felt that it was financially beneficial to the Company to acquire it's own FSO/Tanker. While the search for a suitable tanker, negotiation and closing of the agreement delayed the startup of production at the Camar Field, the benefits to Fortune's overall profitability far outweigh this short delay. We felt that in the interests of the Company and it's shareholders, we had no reasonable alternative."

The Company has formed a 100% owned subsidiary, Fortune Shipping Limited, to deal with all of Fortune's operational aspects related to the vessel. (*)