Chairman's AGM Statement

LEPCO PLC
29 July 1999


Chairman' s AGM Announcement

In the Statement issued with our results on 29 June, the
Board commented that the collapse in world crude prices in
1998 and the first part of this year, is continuing to have
a major impact on our industry and on opportunities for this
Company.

I wish to use the opportunity of the AGM to update both
shareholders and the market as to the progress being made by
the Board and management in developing the Group's business
following the Forties disposal and in the new economic
environment for the industry.  We are accordingly
immediately issuing this statement to the Stock Exchange.

The management and Board are continuing to progress the
development of the Group's business strategy.  We set out in
our results announcement that the Board believes there is a
clear opportunity to build on the Group's established
position as one of the UK's remaining independents by
building a production-led business principally focussed in
the North Sea and Western Europe.   As the oil price
recovery continues, there are an increasing number of
interesting deal opportunities becoming available and we are
also continuing to consider a number of corporate
approaches.

Even though the Group has sufficient cash balances to meet
its commitments for a number of years, the Board believes
that it is in the best interest of shareholders for matters
to be progressed as rapidly as possible.

On 29 June we also announced that we had agreed in principle
to acquire an interest in a producing gas field in the Dutch
North Sea.  I am able to report that discussions are
continuing on this transaction and look forward to keeping
you informed of developments.

I am pleased to announce today that we have reached
substantive agreement with Mustang Oil Limited (the current
operator of the Group's UK Southern Gas Basin licence
interests) to reorganise our portfolio of gas basin
interests.  The agreement will result in LEPCO acquiring
effectively all of the equity in licence P.775 (subject to
small carried interests) and being appointed as operator of
that licence in return for transferring our interests in
four 14th Round licences (P.838, P.846, P.847 and P.848) to
Mustang.  The transaction and LEPCO's appointment as
operator, is subject to the consent of the Secretary of
State for Trade and Industry and completion of certain
contractual matters.

Licence P.775 covers acreage on block 47/9c including a
discovery and is immediately adjacent to the Mercury gas
field currently being developed by BG.

Once completed, this reorganisation, together with LEPCO's
appointment as operator, will be a useful development
allowing the group to concentrate its Southern Gas Basin
activity on appraising the commercial viability of this
discovery.

I look forward to keeping shareholders informed of progress
and developments.  To this end, the Directors anticipate
making a further announcement with the Group's Interim
Results to 30 June 1999 and will subsequently hold an
information meeting to update shareholders on progress.