Project Update

Sound Oil PLC
18 March 2008

18 March 2008
                                 Sound Oil plc

              Citarum Production Sharing Contract, Java, Indonesia

Sound Oil plc announces that it has served default notices, through its
subsidiary Mitra Energia Citarum Ltd ("Mitra"), to its partners in the Citarum
Production Sharing Contract ("PSC") in respect of unpaid cash calls totaling
US$5.9 million. The defaulting parties are the Operator, Bumi Parahyangan 
Ranhill Energia Citarum Pte. Ltd.("BPREC") and Bumi Parahyangan Energi Pte. 
Ltd. ("BPE").

BPREC has a 60% participating interest in the PSC and is in default for
US$4,398,148. BPE has a 20% participating interest and is in default for
US$1,466,049. Mitra has a 20% participating interest.

The default took effect at midnight 17th March 2008. If after 60 days the
defaulting parties have not cured their default in all respects, they will
forfeit their participating interest to the non-defaulting party. Since BPREC is
the Operator and is in default, Mitra as the only non-defaulting party has
assumed the interim Operatorship function under the terms of the Joint Operating
Agreement. During the default period, the defaulting parties have no vote at the
Operating Committee and no right to attend Operating Committee meetings. Mitra
as the non-defaulting party is required to pay all outstanding cash calls and as
the interim Operator, to settle outstanding invoices with contractors and other
third parties. In order to cure their default, the defaulting parties are
required to pay to the non-defaulting party their share of any such outstanding
cash calls. All such reimbursements are subject to interest at the monthly LIBOR
dollar rate plus 5%.

Commenting on the above Gerry Orbell, Sound Oil Chairman said:

"Sound has been very sympathetic and understanding to the difficulties faced by
its partners in paying their share of the Citarum cash calls. The majority of
these calls relate to contractors who are claiming money for services supplied
in drilling last year's Pasundan well. We undertook this serious action of
default only after other alternatives which had been under negotiation were not
realized, and when it was evident that the approved seismic work programme for
2008 was not occurring because of unpaid cash calls by the defaulting parties.
We intend to work with partners and contractors to resolve this situation
amicably while at the same time protecting our shareholders' interests through
our rights of first refusal under the Joint Operating Agreement, in respect of
any transfer of BPREC's and/or BPE's participating interest. As a result of the
potential increased financial exposure relating to this default, Sound is making
a strategic review of its assets".

Notes to the press release:

a) The Citarum Production Sharing Contract is an exploration area of over 4000
sq km, situated to the south and east of Jakarta, Java. The Pasundan 1 well was
drilled between 9th May and 27th September 2007.

b) The Citarum PSC was awarded on 7th October 2005 to Bumi Parahyangan Ranhill
Energia Citarum Pte Ltd ("BPREC") 100%. This company was originally owned by
West Java Energy Pte Ltd. 60% (a Ranhill Bhd 100% subsidiary); by Mitra 20% (a
Sound Oil 100% subsidiary); and by BPE 20%. In February 2008 BPMIGAS approved
the withdrawal of BPE and Mitra from BPREC. BPE and Mitra now hold a direct
participating interest in the PSC of 20% each and BPREC holds the 60% balance.
BPREC is now entirely owned by West Java an affiliate of Ranhill Berhad. BPE and
Mitra do not retain any residual rights or liabilities in BPREC.

For further information please contact:

Sound Oil                                                
Gerry Orbell, Chairman                                  07903 861 145

Smith & Williamson Corporate Finance Limited            020 7131 4000
Azhic Basirov
David Jones

Buchanan Communications                                 020 7466 5000
Tim Thompson
Nick Melson



                      This information is provided by RNS
            The company news service from the London Stock Exchange