Sale of Saltfleetby Gas Field

Roc Oil Company Limited
21 December 2004






21 December 2004


                        ROC OIL COMPANY LIMITED ('ROC')
                              STOCK EXCHANGE RELEASE

 ROC AGREES TO SELL SUBSIDIARY WHICH OWNS SALTFLEETBY GAS FIELD FOR £44 MILLION
  THROUGH A TRANSACTION WHICH IS EXPECTED TO GENERATE £28.5 MILLION AFTER TAX
                                PROFIT FOR 2005

KEY POINT

ROC has entered into agreements with WINGAS GmbH ('WINGAS') for the sale of 100%
of the share capital of one of its wholly-owned subsidiaries, the principal
asset of which is the PEDL 005 licence which contains the Saltfleetby Gas Field,
onshore UK. WINGAS is a joint venture between Wintershall AG, the largest German
producer of oil and gas and OAO Gazprom, Russia's largest gas company. Upon
completion, ROC will receive a cash consideration of £44 million. The net ROC
after tax profit on the transaction is expected to be in the order of £28.5
million. Following completion, expected during January 2005, ROC will have in
the order of £71 million in cash, equivalent to approximately £0.40 per share
and no debt.

1. BACKGROUND

The Saltfleetby Gas Field is Britain's largest onshore gas field. Since ROC
brought the field on to production at the end of 1999 it has produced 54 billion
cubic feet of gas ('BCF'), initially at a collective rate in excess of 50
million cubic feet per day ('MMSCFD') from four wells. Currently, the field is
producing approximately 15 MMSCFD from three wells. Since start-up the field has
also produced almost a million barrels of condensate ('MMBC') and current
condensate production is about 240 BCPD.

Prior to first production the field's recoverable proved and probable (2P) gas
reserves were independently estimated to be 43 BCF. During the last 5 years it
has become increasingly apparent that this initial estimate was conservative. It
has now been independently calculated that the original 2P recoverable gas
reserves were approximately 90 BCF of which 36 BCF are yet to be produced.
Original condensate reserves were 1.26 MMBC of which about 0.33 MMBC are yet to
be produced.

The field is largely developed but in order to access all of the remaining
recoverable reserves, ROC would be required to further invest in the development
of the field by drilling and completing additional wells.

2. WINGAS

WINGAS is a joint venture of Wintershall AG (65%), the largest German producer
of oil and gas, and the Russian company, OAO Gazprom (35%), one of the largest
gas companies in the world. The joint venture company has been active in the gas
supply industry since 1990 and supplies natural gas to public utilities, major
industrial enterprises and regional gas distribution companies in Germany and
other European countries. In addition, WINGAS markets transport and storage
capacities, as well as optical fibre capacity and is also active in the
procurement of natural gas and the operation of pipelines and storage
facilities.

The German-Russian joint venture has a modern infrastructure with a network of
more than 2,000 kilometres of pipeline in Germany that connects the huge gas
reserves in Siberia with the growing markets in Western Europe and which also
provides WINGAS with access to the developing European spot markets. With its
natural gas reservoir at Rehden, which has a working gas volume in excess of
four billion cubic metres, WINGAS possesses about one-fifth of the total gas
storage capacity available in Germany.

WINGAS has used the opportunities arising from the liberalisation of the
European natural gas market as the basis for further growth. The company has now
secured a market share of more than 7% in Belgium. WINGAS has also started
supplying initial customers in France and Austria. It has also stepped up its
natural gas marketing activities in the United Kingdom by establishing the new
joint venture HydroWingas with the Norwegian company Norsk Hydro.

3. PROPOSED SALE

ROC has entered into agreements for the sale to WINGAS of 100% of the share
capital of one of ROC's wholly-owned subsidiaries, the principal asset of which
is the PEDL 005 licence which contains the Saltfleetby Gas Field. Subject to an
effective date working capital adjustment, WINGAS will pay a £44 million cash
consideration to ROC.

The transaction is subject to satisfaction of normal industry terms and
conditions precedent including the approval of the UK Department of Trade and
Industry and the German merger authorities. The effective date of the sale will
be 31 December 2004. ROC's expectation is that the conditions precedent will be
fulfilled in a routine manner during early 2005.

4. FUTURE ACTIVITIES IN PEDL 005

Subject to the completion of the sale, WINGAS has advised ROC that it intends to
continue to produce gas at Saltfleetby through most of 2005 in accordance with
the existing gas sales contract between ROC and RWE Npower plc. In this event,
there will not be any near term operational changes at the Saltfleetby Gas
Field. ROC has agreed to provide transitional services for the continuing
operation and administration of the Saltfleetby Gas Field. ROC will retain its
existing workforce to enable it to provide such services.

Both WINGAS and ROC have also agreed that ROC will be able to continue to
produce oil to its own account from the Keddington Field, located in PEDL 005,
which produces approximately 50 barrels of oil per day from two wells. ROC will
also retain all its other UK assets, including its interests in the UK North Sea
where the Blane Field is being reviewed with the aim of establishing first
production during the second half of 2006.

5. IMPACT ON ROC

The sale is expected to generate a net after tax profit for ROC in the order of
£28.5 million which will be to be booked in Financial Year 2005 if as expected
the conditions precedent for completion of the sale are satisfied in early 2005.

Upon completion of the sale and receipt of the sale proceeds ROC will have cash
and receivables in the order of £71 million (equivalent to £0.40/share) and no
debt.

The funds received from the sale will be used to finance ROC's current and
imminent activities which may include part of ROC's share of the development of
the Chinguetti Oil Field, offshore Mauritania and the Cliff Head Oil Field,
offshore Western Australia, as well as carefully selected new venture
activities.

As a result of the sale, ROC's 2P reserves will be reduced by approximately 6
million barrels of oil equivalent ('MMBOE') representing almost one third of the
Company's currently booked 2P reserves. ROC expects, however, that the reduction
in reserves will be more than offset by the 2P reserves that ROC will book if
the Cliff Head Oil Field, offshore Western Australia, is subject to a Final
Investment Decision at the end of January as presently scheduled. ROC's
production will reduce by about 2,750 BOED to 50 BOPD. This reduction in
production is also expected to be more than offset in just over a year's time if
the Chinguetti Oil Field in Mauritania and the Cliff Head Oil Field are brought
onto production as currently scheduled with ROC's net initial production from
these two fields expected to total more than 7,500 BOPD.

ROC also has an active new venture programme which may, partially or completely,
offset the reduction in reserves and production that will result from the sale
of the Saltfleetby Gas Field.

The proposed sale will not influence ROC's current drilling programme in the UK
which remains focused on testing large, high risk, gas prospects as illustrated
by the well currently drilling at Errington in Northumberland and other wells
which are scheduled for drilling and/or fraccing elsewhere in eastern England
during 2005.

Neither will the sale affect ROC's participation in the Blane and Enoch fields
in the UK North Sea where the company is continuing to work with the Operator
and its co-venturers with a view to moving these fields towards first oil
production during mid/late 2006.

6. CEO'S COMMENTS

Commenting upon the transaction with WINGAS, ROC's Chief Executive Officer, Dr
John Doran, stated that:

'The development and production of the Saltfleetby Gas Field has been a
wonderful - and very profitable - experience for ROC. The proposed sale provides
ROC with an opportunity to immediately realise, on a no risk basis, a value for
the field that, on a forward price curve basis, would take a very long time to
replicate in terms of net operating cash flow from pure gas and condensate
production.

As the Saltfleetby Gas Field moved into the mature phase of its productive life
ROC has focused increasingly on how best to maximise the value of the field.
During 2004, it became increasingly clear that any value maximisation exercise
would be enhanced if it contained an element of gas storage. However, after
reviewing gas storage in a UK context, ROC decided that it did not want to
become a gas storage company because its upstream skill set and corporate
strategy were inappropriate for life as an owner and operator of a gas storage
facility.

In the context of small independent oil companies, ROC's balance sheet has been
historically strong. With the proceeds of this sale it will now be quite
exceptional. Fortunately, the Board and Senior Management Team at ROC have seen
enough industry downturns to ensure that the money will not burn a hole in its
corporate pocket but will rather be deployed judiciously on current and new
ventures as and when appropriate.

The sale is a good example of ROC's sensibly contrary strategy and the Company's
approach of actively managing its portfolio of assets. It takes a certain amount
of corporate confidence - and a very compelling offer - to sell virtually all of
a company's, albeit modest, production and one third of its equally modest
reserves. If we thought we couldn't replicate a Saltfleetby-type experience in
the future we wouldn't be selling it now. A number of ROC's directors have been
here before in previous corporate lives, including agreeing to sell the former
Command Petroleum's 20% stake in the South East Gobe discovery in the highlands
of Papua New Guinea for A$20 million in the early '90s. That move effectively
recapitalised that company and allowed it to invest approximately A$1 million
into work that led to the acquisition of the Ravva Oil and Gas Field offshore
India which went on to totally transform Command.

Given the difference in size of the WINGAS co-venturers and ROC and the
different positions they occupy within the oil and gas business it is a tribute
to all parties that the documents have been finalised within a relatively short
period.'


Dr John Doran                         For further information please
Chief Executive Officer               contact:
                                      Dr John Doran
                                      Tel:    [phone]
                                      Mobile: [phone]
                                      Fax:    [phone]
                                      Email:  [e-mail]
                                      Or visit ROC's website:
                                      www.rocoil.com.au

                                      Nick Lambert
                                      Bell Pottinger Corporate & Financial
                                      Tel:    [phone]
                                      Mobile: [phone]

                                      Dr Kevin Hird
                                      General Manager Business Development
                                      Tel:    [phone]
                                      Mobile: [phone]
                                      Fax:    [phone]
                                      Email:  [e-mail]



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