Interim Results- PART 1

Enterprise Oil PLC
6 September 2000



PART 1

2000 Interim Results

Enterprise Oil, one of the world's leading independent exploration and
production companies, today announced its results for the six months ended 30
June 2000. The main points are:

* Operating profit up almost seven-fold to £477 million* (£70 million in the
corresponding period of 1999);

* Record post tax profits at the interim stage of £196 million* (1999: £36
million);

* Production of 277,056 barrels of oil equivalent per day, up 40 per cent on
the corresponding period in 1999 (197,235 boepd) - four new fields on stream
in 2000;

* Earnings per share of 39.3 pence* (1999: 6.5 pence);

* Interim dividend of 3 pence (1999: 2.8 pence) payable on 1 November 2000;

* Significant progress in new core areas of US Gulf of Mexico and Brazil;

* Further exploration and appraisal success in Norway, Ireland and the US.


* including an exceptional charge for depreciation of £42.9 million arising
from a reduction of estimated reserves of the Garden Banks 161 field in the US
Gulf of Mexico.


Announcing the results, Sir Graham Hearne, Chairman, said: 'This has been an
outstanding six months for Enterprise Oil. Post tax profits for the first half
of 2000 stood at a record £196 million, as a result not just of stronger oil
prices, but also the 40 per cent increase in production over the corresponding
period last year. A realised oil price of over $28 per barrel and output at
the group's highest level yet at 277,056 barrels of oil equivalent per day
proved a strong combination. We continue to make progress in our three
established core areas, the UK and Ireland, Norway and Denmark, and Italy and
it is particularly pleasing to report the growing significance of two emerging
core areas, the US Gulf of Mexico and Brazil.'

Pierre Jungels, Chief Executive, commented: 'I believe that the group is
well-placed to maximise the benefit of the current high oil prices whilst
developing a portfolio that can withstand the inevitable periods of lower oil
prices. We will continue to maintain our capital discipline and seek to
generate shareholder value throughout the cycle. The success of the first half
further demonstrates that Enterprise has the creativity, professionalism,
fleetness of foot, and open business practices needed to succeed in an
increasingly competitive industry environment.'

                                    ****

A copy of the Stock Exchange announcement is attached.

Copies of the Interim Statement are due to be posted to the Company's
shareholders on 8 September 2000. Copies will be available to the public at
the registered office at Grand Buildings, Trafalgar Square, London WC2N 5EJ.

For further information, please contact:

Pierre Jungels, Chief Executive                                 020 7925 4199
Andrew Shilston, Finance Director                               020 7925 4476
Patrick d'Ancona, Head of Public Relations                      020 7925 4160
Peter Reilly, Head of Investor Relations                        020 7925 4476


HIGHLIGHTS

                                           Six months ended  Six months ended
                                               30 June 2000      30 June 1999
                                                 (Unaudited)       (Unaudited)
                                                         £m                £m
------------------------------------------------------------------------------
Turnover                                                835               293
Operating profit                                        477                70

Profit before tax                                       457                58
Profit after tax                                        196                36
Profit after tax excluding exceptional item*            239                36
------------------------------------------------------------------------------
Earnings per share                                     39.3p              6.5p
Dividends per share                                     3.0p              2.8p
------------------------------------------------------------------------------
Average production (boepd)                          277,056           197,235

Average realised oil price                           £17.80             £8.36
                                                    ($28.08)          ($13.54)

Cost of sales per boe produced*                       £5.47            £5.08**

Operating expenditure per boe produced                £2.30             £2.29


* Excluding an exceptional charge for depreciation of £42.9 million arising
from a reduction in the estimated reserves of the Garden Banks 161 field in
the US Gulf of Mexico.

** Full year cost of sales figure for 1999 was £5.46 per boe produced.


CHAIRMAN 

I am pleased to report that this has been an outstanding six months for
Enterprise Oil.

Post tax profits for the first half of 2000 stood at a record £196 million, as
a result not just of stronger oil prices, but also the 40 per cent increase in
production over the corresponding period last year. A realised oil price of
over $28 per barrel and output at the group's highest level yet at 277,056
barrels of oil equivalent per day proved a strong combination. The resulting
cash flow has enabled the group to reduce gearing from 80 per cent at the end
of 1999 to 45 per cent at the end of June 2000, with expenditure held at
similar levels to last year.

We continue to make progress in our three established core areas, the UK and
Ireland, Norway and Denmark, and Italy, and it is particularly pleasing to
report the growing significance of two emerging core areas, the US Gulf of
Mexico and Brazil. In the US Gulf of Mexico, the appraisal of the Llano
discovery was successful, we have purchased R&B Falcon Corp's exploration and
production assets mainly comprising the Boomvang development, and we have
gained access to new exploration acreage. In Brazil we are establishing
ourselves with the joint development of the Bijupira and Salema fields, and
potentially highly valuable exploration acreage. 

The Board has declared an interim dividend of 3 pence, payable on 1 November
2000 to shareholders on the register at close of business on 22 September
2000.

It seems prudent after two years of highly volatile crude prices to use the
current high price to restore our financial strength. It is likely that levels
of gearing at the end of 2000, allowing for redemption of the outstanding US
preference shares, will return to about the level existing at the end of 1997
before the collapse in the oil price and a heavy investment cycle. We will, of
course, not over-react in the face of current high oil prices. We will
continue to consider an attractive range of investment opportunities available
to us, measured against current yardsticks, and evaluate these against further
debt reduction to allow for the possibility of weaker prices. The key overall
objective will remain the creation of shareholder value.


Sir Graham Hearne
Chairman


CHIEF EXECUTIVE

The first half of 2000 was highly successful for Enterprise Oil. We delivered
production growth of 40 per cent over the corresponding period in 1999, as our
investment programme, maintained despite the low oil prices of 1998-99, began
to bear fruit; we made significant progress in the emerging core areas of
Brazil and the US Gulf of Mexico; and we had further success with the drill
bit. In addition, record cash flows and post tax profits have allowed us to
significantly strengthen the balance sheet. Indeed, excluding an exceptional
item, the group reported a post tax profit of £239 million.

Enterprise's management remains committed to delivering both growth and
demonstrable financial performance through maintaining capital discipline and
financial flexibility to sustain investment levels. This year we have made
considerable progress in assuring the group's long-term growth, whilst
delivering success in more immediate areas.

The group continued to focus on its cost targets. Cost of sales per barrel in
the first half of 2000, excluding an exceptional item, remains within our
£5.50 target at £5.47. Exploration write-off was 63 per cent, and return on
fixed assets (ROFA) was 32.5 per cent on an annualised basis.

The significant cash flow generated in the first six months of the year,
reflecting both  the increase in the group's production and the current oil
price environment, enabled us to reduce net debt. Gearing at the end of the
first half of 2000 stood at 45 per cent, as against 80 per cent at the end of
last year. Additionally, we intend to redeem our US cumulative dollar
preference shares next month in order to reduce the cost of capital.

As we have maintained, however, we will always seek to take opportunities that
fit into our strategy and provide attractive returns. The results of this
approach can be seen in the progress made in two of the group's emerging core
areas.

In Brazil, progress has been made on the Bijupira-Salema project, our operated
venture in the Campos Basin. With exploration due to begin in our BC2 block
later this year, and the confirmation of the group's farm-in to BCe-2,
momentum in this highly promising region is building.

In the US Gulf of Mexico, the purchase of R&B Falcon Corp's exploration and
production assets, including the Boomvang development, as well as the
acquisition of new exploration acreage have contributed significantly to our
aim of establishing the US as one of the group's core areas of activity. These
successes in the Gulf were, however, partly offset by disappointment on the
Garden Banks 161 field where performance sufficiently failed to meet
expectations that we felt it prudent to write off the carrying value of our
investment of £43 million.

This write-down, whilst disappointing, demonstrates the importance of a broad
portfolio that can absorb the inevitable variations in asset performance. That
set-back was more than compensated for by high levels of production from
Jotun, and Pierce. Elsewhere, the Valhall Waterflood project and the Skene
field are set to contribute to Enterprise's output in the medium term. 

Discoveries in Norway and the further successful appraisal of Llano and
Corrib, together with increased activity on the Clair project, also point to
longer term potential within the group's portfolio. This should be further
enhanced with the bulk of exploration activity to come in the second half,
including wells in the UK, Norway, Italy, US Gulf of Mexico, Greece, and
Brazil.

I believe that the group is well-placed to maximise the benefit of the current
high oil prices whilst developing a portfolio that can withstand the
inevitable periods of lower oil prices. We will continue to maintain our
capital discipline and seek to generate shareholder value throughout the
cycle. 

The success of the first half further demonstrates that Enterprise has the
attributes described in our 1999 annual report, the creativity,
professionalism, fleetness of foot, and the open business practices needed to
succeed in an increasingly competitive industry environment. I thank the
Enterprise team for its efforts, and look forward to reporting further
successes at year-end. 


Pierre Jungels
Chief Executive


Financial Review

The group's strong financial performance reflects continued high oil prices
and record levels of production together with ongoing cost and capital
discipline.

Summary

                                  First half        First half    Second half
                                  (Unaudited)       (Unaudited)    (Unaudited)
                                        2000              1999           1999
                                          £m                £m             £m
------------------------------------------------------------------------------
Turnover                                 835               293            557
Operating profit                         477                70            253
Profit before tax                        457                58            231
Profit after tax                         196                36            142
Profit after tax and excluding 
  exceptional item*                      239                36            142
Operating cash flow                      601               156            358
Average oil price                     £17.80             £8.36         £13.94

* The exceptional item relates to the results for 30 June 2000.


The result for the first six months of 2000 is a record performance for the
group. The consistent high oil price in the period together with record levels
of production resulted in a near three-fold increase in turnover compared with
the first six months of 1999. Operating profit was £477 million, £407 million
higher than the first half 1999.  The £43 million exceptional charge is in
respect of accelerated depreciation arising from a downward revision in the
reserves of the Garden Banks 161 field in the US Gulf of Mexico, as discussed
in the Review of First Half Operations. 

ROFA was 32.5 per cent on an annualised basis compared with 3.0 per cent for
the first half of 1999 and 11.7 per cent for the full year 1999.

Profit before tax of £457 million has increased by £399 million compared with
the first half 1999 result. The effective tax rate increased from 39 per cent
in the first half of 1999 to 57 per cent in the first half of 2000 reflecting
the effect of the high average oil price on Petroleum Revenue Tax (PRT)
provisioning, and higher taxable profits in the UK and Norway.

Profit after tax was £196 million (1999 first half £36 million).

In the first half of 2000 the group generated cash flow from operating
activities of £601 million, £445 million higher than in the first half of
1999. The high operating cash flow together with ongoing capital discipline
means the group has reduced net debt significantly whilst being able to
participate in new investment opportunities. Gearing fell from 80 per cent at
the end of 1999 to 45 per cent at the half year.

Turnover

Turnover for the first six months of 2000 was £835 million, an increase of
£542 million over the same period in 1999. Of this increase 77 per cent was
due to higher sterling oil price realisations. Turnover in the second half of
1999 was £557 million. The average realised oil price for the period was
£17.80 ($28.08) per boe compared with £8.36 ($13.54) and £13.94 ($22.58) for
the first and second halves of 1999 respectively.

Production in the first half of 2000 of 277,056 barrels of oil equivalent per
day (boepd) was 40 per cent higher than the same period last year and 20 per
cent higher than that achieved in the second half of 1999. This largely
reflected a full period's contribution from the Pierce field in the UK and the
Jotun field in Norway which started production in February and October 1999
respectively.

Operating profit

Cost of sales in the first six months of 2000 was £319 million including the
exceptional item. On a like for like basis cost of sales in the first half of
2000 was £276 million compared with £189 million in the first half of 1999 and
£246 million in the second half of 1999. The increase in the current period
largely reflects the significantly increased levels of production.

On a per barrel basis, cost of sales excluding the exceptional item was £5.47
in the first six months of 2000 (first half 1999 £5.28). This reflects the
increased production from the Jotun field in Norway which has a higher than
average depreciation rate per barrel resulting from the high cost of the FPSO
vessel. 

Exploration and appraisal spend for the period was £33 million (£53 million
and £47 million for the first and second halves of 1999 respectively).
Exploration and appraisal costs written off as a percentage of expenditure
were 63 per cent in 2000 compared with 51 per cent in the first half last
year. The continued low level of write-off reflects reduced spend, exploration
success and expenditure on the appraisal of recent discoveries in Norway and
the US Gulf of Mexico.

First half 2000 administrative and selling expenses increased by £3 million to
£18 million when compared with the same period last year and was £2 million
lower than that achieved in the second half of 1999.  On a per barrel basis,
first half 2000 administrative and selling expenses were 36p per barrel
compared with 42p per barrel for the same period last year and 49p per barrel
for the second half of 1999.

The operating profit for the first half of 2000 was £477 million compared with
a profit of £70 million in the first half of 1999 and £253 million in the
second half of 1999.

Profit before tax

Profit before tax in the first half of 2000 was £457 million, an increase of
£399 million over the same period last year and almost twice that of the
result in the second half of 1999.

The net interest charge, after capitalisation, in the first six months of 2000
was £22 million compared with £13 million in the first half of 1999 and £23
million in the second half of that year. Net interest costs of £34 million,
before capitalisation and unwinding of discounts on long term provisions, for
the first half of 2000 decreased due to lower average net debt levels (first
half of 1999 £40 million, second half 1999 £40 million). Capitalisation also
fell following the completion of a number of development projects in 1999.

Taxation

The tax charge for the period was £261 million, significantly higher than the
first and second halves of 1999 which were £23 million and £89 million
respectively. The UK PRT charge was £52 million (first half 1999 £12 million,
second half 1999 £39 million). The provision for future PRT is based on the
average oil price in the period and consequently the high price in the first
half of 2000 led to a significant charge being made for PRT. UK corporation
tax increased from a charge of £2 million in the first half 1999 and £58
million in the second half 1999 to £74 million in the first half of 2000,
reflecting higher UK taxable profits. 

The availability of brought forward losses, the high current development spend
and increases to planned future development spend led to very low levels of
Norwegian tax in 1999. The utilisation of tax losses in that year together
with increased production and higher oil price realisations has led to a
significant increase in the Norwegian tax charge in the first half of 2000 to
£133 million.

The effective tax rate for the period was 57 per cent compared with 39 per
cent in the previous two half years. The effect of a move to full provisioning
for deferred taxes would have been to increase the effective tax rate to
approximately 60 per cent. 

Profit after tax

The profit after tax in the first six months of 2000 was £196 million compared
with £36 million and £142 million in the first and second halves of 1999
respectively.

ROFA was 32.5 per cent on an annualised basis compared with 3.0 per cent for
the first half 1999 and 11.7 per cent for 1999 as a whole. 

Return on fixed assets (ROFA) calculation

                                  First half        First half    Second half
                                        2000              1999           1999
                                  (Unaudited)       (Unaudited)    (Unaudited)
                                          £m                £m             £m
------------------------------------------------------------------------------
Operating cash flow                    601.0             156.3          358.1
Depreciation                          (191.4)            (90.7)        (113.1)
Depreciation of capitalised interest    14.4              10.1           11.0
Exploration and appraisal write-off    (20.7)            (27.0)         (37.0)
Cash taxes                             (57.8)            (20.3)         (17.8)
Gains and losses on asset disposals      1.0               0.7            1.5
------------------------------------------------------------------------------
                                       346.5              29.1          202.7
Average capital invested in oil 
  and gas assets                     2,134.9           1,966.1        1,975.5
ROFA on an annualised basis             32.5%              3.0%          20.5%


Capital expenditure

Capital expenditure, including capitalised interest and acquisitions, was £261
million in 2000 (1999 first half £265 million, second half 1999 £227 million).
Production and development expenditure, including capitalised interest but
excluding acquisitions, was £137 million (1999 first half £211 million, 1999
second half £172 million). This decrease largely reflects the completion of
the Jotun field in Norway in 1999 and the inclusion in 1999 of unification
costs on the Monte Alpi field in Italy.

Second half exploration and appraisal expenditure in 2000 is expected to be
higher than the first half at approximately £75 million, with drilling
activities planned in UK, Ireland, Norway, Italy, Greece, Brazil and the US
Gulf of Mexico. Production and development capital expenditure for the full
year is expected to be approximately £350 million, including capitalised
interest but excluding acquisitions.

Cash flow and financing

Operating cash flow after tax and finance costs was £503 million compared with
£94 million in the first half 1999 and £298 million in the second half 1999.
The increase reflects the significantly higher sterling oil price realisations
and increased production. Interest cover for finance costs, including
preference share dividends, was 17 times compared with 6 times for 1999 as a
whole.

Net cash payments on capital items decreased by 40 per cent compared with the
first half of 1999 and 34 per cent compared with the second half 1999 as a
number of development projects were completed in the year.   Net debt at the
end of June 2000 was £579 million compared with £935 million at the end of
June 1999 and £861 million at the end of 1999. Gearing was 45 per cent, down
from 97 per cent at the end of June 1999 and 80 per cent at the end of 1999. 

The group had available funds, including committed facilities, of over £900
million at 30 June 2000. In August 2000, Enterprise syndicated a £350 million
committed bank facility to refinance a previous facility nearing maturity. 
The group's credit ratings from Standard and Poor's and Moody's are unchanged
from the end of 1999 at BBB+ and Baa1 respectively.

In the light of the group's improved financial ratios the Board has decided to
exercise the company's option to redeem the $127.5 million series B preference
shares currently in issue.  The redemption will be completed shortly and will
result in a reduced cost of capital.


Review of First Half Operations

The group's strong financial results are underpinned by an impressive
operational performance. Record levels of production and a creative business
approach have contributed to the delivery of our strategy.

An overview of the year's operational highlights to date includes:

Production

Production in the first half of 2000 reached the highest level yet for the
group at 277,056 boepd, an increase of 40 per cent on the corresponding period
last year (197,235 boepd). This increase stemmed largely from the Pierce field
in the UK, operated by Enterprise, and Jotun in Norway. Production from the
Garden Banks 161 and Banff fields remained lower than anticipated. Oil and
natural gas liquids (NGLs) contributed 87 per cent of this period's
production, gas 13 per cent.

Four new fields have started production in 2000. The Bell, Bittern and
Enterprise-operated Cook fields located in the UK North Sea all began
producing by the end of April, while in Norway a Statfjord satellite, Sygna,
also came on stream in August.

Bell, a small gas field in the Southern North Sea (Enterprise, 15.4 per cent),
began producing at a rate of around 85 million standard cubic feet of gas per
day (scfd). The Bittern field (Enterprise, 14.6 per cent) came on stream in
April with initial output from one well of 10,000 boepd. To date, the field
has achieved peak rates of over 60,000 boepd through four wells. The
Enterprise operated Cook field (Enterprise, 25.8 per cent) achieved production
ten weeks ahead of schedule and has achieved rates of 16,000 boepd since.

A further addition to the production portfolio is Gyrfalcon, a gas field
acquired in the US Gulf of Mexico at the end of June, which is producing
through a single well tied back to Shell's nearby Boxer platform. Production
currently stands at rates of around 7 million scfd. 

On the group's operated Nelson platform in the UK, a milestone has been
achieved on the health and safety front, with the field passing one year
without a lost time incident in June. The group remains committed to a
continued focus on improving its health, safety and environmental performance.

Pierce, Enterprise's second operated field development, continues to give a
superior performance. Following a de-bottlenecking process in February 2000
the field's production capacity was increased, and it is currently producing
at rates of around 60,000 barrels of oil per day. 

The Jotun field in Norway has similarly achieved an excellent operational
record and reached production rates as high as 140,000 barrels of oil per day,
considerably in excess of  those originally forecast of 89,000 bopd.

Production from the Banff field has not met expectations, particularly during
adverse weather conditions. Discussions between the field operator Conoco and
the Floating Production Storage and Offloading (FPSO) vessel owner, PGS, are
continuing to resolve the situation as soon as possible.

In the US Gulf of Mexico, Garden Banks 161 has not performed as expected, and
following a thorough technical review, the group has reduced its reserve
estimate. As a result, a provision of £43 million against the balance sheet
carrying value has been recorded. 

Developments

The group has made progress in key projects in all its core areas of activity
during the first half of 2000, and continues to seek development
opportunities, both through the drill bit and asset purchases, that will
enhance its portfolio and ensure the group's future. The group currently has
interests in nine projects, of which three are under development and six
awaiting development.

In the UK, the Skene field (Enterprise, 15.9 per cent) received development
approval from the Department of Trade and Industry in July. The field, located
in Block 9/19, is expected to produce up to 180 million cubic feet of gas per
day and 25,000 barrels of associated liquids per day when production begins in
early 2002. 

Also in the UK, work continues to progress the Clair project (Enterprise, 18.7
per cent) and it is expected that a front-end engineering and design contract
will be awarded in September 2000. Co-venturers have targeted mid 2001 for
project sanction, subject to achieving reduced development costs and other
targets.

Work continues to bring the Corrib project (Enterprise, 45 per cent) offshore
Ireland closer to sanction. A land-fall in County Mayo on the west coast of
Ireland has been selected and the co-venturers are examining the onshore
transportation options.The feasibility studies on the sub-sea system and
terminal facilities have been completed, and work is now commencing on
front-end engineering and contract preparation for the project.

Plans to develop the Waterflood project on the Valhall field (Enterprise, 28
per cent) were submitted to the Norwegian government in June following the
government's decision earlier this year to abolish royalties on the field.
First oil from the project is anticipated in 2003.

In Italy, the group is currently awaiting formal completion of the
authorisation process which will allow the operator ENI to begin construction
of the pipeline from the Val d'Agri oil centre to Taranto. First oil from
phase one of production is anticipated in the second quarter of 2001, and the
facilities are progressing well. In addition, the operator ENI has presented
its draft project execution plan to the Tempa Rossa field co-venturers in the
next step towards the group preparing for project sanction.

The group continued to grow the business in the US Gulf of Mexico having
acquired in late June a 50 per cent interest in the Boomvang development and
the Gyrfalcon gas field, the latter of which Enterprise owns 100 per cent and
operates. Boomvang is expected to begin producing in the first half of 2002.
Gyrfalcon is currently producing at rates of 7 million scfd.

Enterprise is the first foreign company to operate a development project in
the Campos Basin, Brazil, with the Bijupira and Salema fields. Conceptual
engineering studies are now completed and front end engineering work underway.
Project sanction is anticipated early next year. 

Exploration and Appraisal

The group remains committed to its international exploration and appraisal
programme. Exploring for hydrocarbons is one of the foundations of the
business and during the first half of 2000, the group spent £33 million on
exploration and appraisal work. Five of the six wells drilled during the first
half have been successful, with an additional two wells of the three completed
since 30 June also achieving success. 

US Gulf of Mexico - Llano (Enterprise, 30 per cent)

After a long and complex drilling campaign the Llano 3 appraisal well in the
US Gulf of Mexico was suspended successfully in August. The well encountered
hydrocarbons in the lower Pliocene and Miocene sands. The results of the well,
the cores, fluid samples and logs gathered, together with extensive newly
reprocessed seismic data, will be evaluated to determine the way forward for
this discovery.

Norway - Svale (Enterprise, 10 per cent)

The Svale discovery well in May encountered oil in Jurassic sandstones and
provided firm evidence of a significant oil and gas accumulation in the Norne
area. The well, 6608/10-6, has been temporarily plugged and abandoned and it
is expected to be tested later in the year or early in 2001. The results of
the well are being evaluated with a view to further appraisal and possible
development via the Norne facilities.

Snadd (Enterprise, 25 per cent)

The Snadd gas discovery well in Block 6507/5 was completed in June, 17
kilometres south of the Skarv find, and encountered gas in Upper Cretaceous
sandstones. It is a further step in determining the overall potential of the
Skarv area in which the group holds a significant presence. The co-venturers
are analysing the well results to establish future plans for the area.

Ireland - Corrib (Enterprise, 45 per cent)

The Corrib project continues to move towards project sanction around the turn
of the year with the drilling of two further appraisal wells in 2000. The
first of these wells, 18/20-3, tested at rates of up to 60 million scfd, and
has been suspended as a potential production well. The second well, 18/20-4,
reached the reservoir in July and has confirmed a gas column of over 1,000
feet, the longest yet encountered in Ireland. The well is currently testing at
rates of up to 32 million scfd. It will also be suspended as a potential
production well.

Portfolio Development

Enterprise continues to strengthen its portfolio. The group remains alert to
business opportunities and is ready to take immediate advantage when the right
opportunity presents itself.

UK

Final equity stakes have been agreed for the Nelson field with effect from 1
April 2000. Nelson co-venturers will have fixed interests for the remainder of
field life. This means there will be no further redetermination of interests,
which can be both costly and protracted. It will also allow optimisation of
the infill drilling programme on the field. 

Faroes

In August the group, in conjunction with Statoil as operator, Veba and
Phillips, was awarded stakes in two licences, 20 per cent and 15 per cent
respectively, offshore the Faroes as part of the Faroe Islands First Licensing
Round. The licences, 003 and 006, the latter of which is jointly operated by
Anadarko and Statoil, cover 13 blocks and part blocks and an area of 1,768
square kilometres. Enterprise's experience of operating in the Atlantic Margin
area will allow it to contribute significantly in this new and exciting
region.

Norway 

The group continued its success in Norway with the award of three out of the
four licences for which it applied in the country's 16th Licensing Round. This
is Enterprise's strongest performance to date. In addition two farm-in
agreements have been signed with Norsk Hydro and one farm-out agreement with
Pelican.

Italy

Two major farm-in agreements have been signed with ENI.

The first, in the Lombardy Basin in northern Italy, was completed in August
and provides Enterprise with interests in five licences operated by ENI, the
first well on which is due to spud later this year with a second planned to
follow by the end of 2002. These licences are Missaglia, Fiume Sesia,
Basiglio, Barbianello (all Enterprise, 30 per cent) and Montechiaro
(Enterprise, 25 per cent).

A second farm-in, to the Calabrian offshore gas province in southern Italy,
was also completed in August 2000. The group gained interests of 25 per cent
in three licences and one application off the east coast. Two wells will be
drilled in this area in late 2000, both operated by ENI.

US Gulf of Mexico

Enterprise's acquisition of all of R&B Falcon Corp's exploration and
production interests including interests in the Boomvang development and the
Gyrfalcon gas field have bolstered its US portfolio significantly. Enterprise
also gains 19 deepwater blocks in the Gulf as part of this transaction.

The group has farmed into a 25 per cent interest in a further 12 exploration
blocks operated by Texaco. An exploration well, Catahoula, operated by Texaco,
will be drilled on this acreage later in the year. The group further increased
its exploration acreage with the award of nine new leases in the OCS Gulf of
Mexico Lease Sale 175 in March 2000. In addition, the group was awarded four
blocks in the Western Gulf of Mexico lease sale in August. These blocks,
located near Boomvang, increase Enterprise's presence in the area.

Brazil

Success in Brazil has been further strengthened with an agreement to farm into
a 25 per cent interest in the BCe-2 block in the Ceara Basin offshore the
north-east of the country. This deepwater block will provide the group with
exposure to frontier acreage on which seismic acquisition and a drilling
programme are planned for completion prior to August 2001. 

Iran

The group continues to review opportunities in the Middle East, and in
particular Iran, where it is actively pursuing projects that will fit its
financial criteria and offer the potential to establish a significant presence
in the region. Accordingly, an office has been opened in Tehran.

KMOC

Enterprise renewed its technical services agreement with Khanty Mansiysk Oil
Corporation (KMOC), and also increased its holding in the company from 7.5 to
11.9 per cent through the exercise of an option acquired as a result of
financial and technical support. KMOC has completed 22 wells out of its 40
well drilling programme for 2000, with a further six wells in progress. KMOC's
net daily production currently stands at around 11,500 bopd, an 85 per cent
increase on its production at the end of 1999. 



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