Zhao Dong Development Project

Roc Oil Company Limited
27 February 2007


27 February 2007

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

                    ZHAO DONG DEVELOPMENT PROJECTS APPROVED

KEY POINTS

The Zhao Dong Joint Venture and relevant Government authorities in China have
recently provided a number of key approvals covering ROC's operations in the
Bohai Bay. Approvals received cover a number of activities which represent more
than US$500 million of proposed development expenditure relating to the
expansion of existing facilities, the installation of new facilities and the
drilling of more than 120 development wells between now and 2011. In summary:

  • The production constraints announced in October 2006 and revised in
    January 2007, have been removed. As a consequence, production for 2007 from
    the Zhao Dong C and D oil fields is forecast to be about 9 MMBO,
    approximately 25,000 BOPD (ROC net: 6,125 BOPD).

  • The US$373 million Incremental Development Plan ('IDP') for the C and D
    oil fields has been approved.

  • The US$169 million 2007 Work Programme and Budget for the C and D fields
    has been approved, including the drilling of 15 wells which represent the
    first phase of the IDP.

  • The US$150 million development programme for the C4 Oil Field has been
    approved.

  • As part of the IDP, the undeveloped Extended Reach Area ('ERA'), in the
    northeastern part of the C Field, will be targeted over the next five years
    by at least 35 wells.

1. Background

ROC, on behalf of its wholly-owned subsidiary, Roc Oil (Bohai) Company, which
holds a 24.5% operated interest in the Zhao Dong Block in Bohai Bay, offshore
China, is pleased to advise that a number of important Government and Joint
Venture approvals have been received.

2. C and D Fields: 2007 Production Rates

The oil production constraints announced 10 October 2006 and revised in January
2007, have been lifted.

A well optimisation programme has commenced for the C and D oil fields which
together with development drilling is designed to achieve a total gross oil
production of approximately 9 MMBO for 2007, equivalent to a daily gross average
production rate of about 25,000 BOPD. This target is relatively ambitious given
the production constraints under which the fields operated for the first five
weeks of 2007, but it still compares favourably to 2006 production of 8.7 MMBO,
approximately 23,800 BOPD (ROC net: 5,835 BOPD).

3. C and D Fields: IDP

Government and Joint Venture approvals have been received to proceed with the
IDP for the C and D oil fields. The first phase of this five year programme will
begin immediately with the implementation of the 2007 Work Programme and Budget
(see below). Total costs for the IDP, including work to be undertaken as part of
the 2007 approved budget, are anticipated to be approximately US$373 million
(ROC net: US$91 million) of which US$331 million relates to drilling with the
balance for construction of facilities.

The IDP requires the construction and installation of a second drilling platform
and a second fluid processing and storage facility, both of which will be
located adjacent to the existing Zhao Dong platforms.

The IDP includes the drilling of approximately 100 wells of which 15 will be
drilled as part of the 2007 budget for the C and D fields and at least 35 will
be drilled into the ERA (see below).

4. C and D Fields: 2007 Budget

The Joint Venture has approved a 2007 Work Programme and Budget of US$169
million (ROC net US$41.4 million) for the C and D oil fields. This budget
includes US$54 million for the drilling of 15 wells as part of the IDP,
comprising 9 oil producers and 6 water injectors. Drilling is scheduled to
commence during April 2007. Approximately US$43 million of the 2007 approved
budget is for the expansion of the existing facilities, which is also part of
the IDP.
5. C4 Field: Development Programme

Approval has also been received for the C4 Oil Field development (ROC: 11.575%
operated unitised interest). The total budget for the project is US$150 million
(ROC: US$17.4 million) including approximately US$88 million for drilling and
US$52 million for facilities.

The approved C4 Budget for 2007 is US$56 million (ROC net US$6.5 million) the
bulk of which will relate to new facilities design and procurement. The
development of the C4 field contemplates drilling 24 wells, comprising 15 oil
producers and 9 water injectors from two conductor pods. A third, separate, pod
will also be installed to serve as a pipeline terminal which will be tied back
to the existing Zhao Dong platforms via a 4.5 km pipeline.

The current target for first oil from the C4/ERA is end 2008.

6. C Field: Extended Reach Area Drilling Programme

A key part of the IDP is the drilling of at least 35 wells from the future C4
facilities into the undeveloped ERA in the northeast of the C Field (Attachment
1) which contains a significant part of the possible reserves in the Zhao Dong
Block.

7. Drilling Rig Availability

To ensure timely execution of the C4 drilling activities, the C4 Unit Operating
Committee has authorised ROC to enter into a pre-identified rig contract which
is expected to allow C4 development drilling to commence in mid-2008 and to
continue to 2011.

The IDP wells to be drilled in the C and D fields will be drilled by the
existing rig located on the C-D Drilling Platform. Development drilling using
this rig has been an integral part of the Joint Venture's activities since the
initial Zhao Dong field development.

8. New Co-Venturer

Sinochem Corporation ('Sinochem'), one of the major Chinese state-owned oil
companies, recently announced that it has purchased New XCL-China, LLC, whose
sole asset is a 24.5% interest in the Zhao Dong Block. In its release, Sinochem
also states that 'The Acquisition represents Sinochem's entry into the domestic
petroleum E&P industry in China, and complements our international petroleum
production portfolio. From the perspective of Sinochem's global petroleum
picture, it is of unique significance....'

ROC already works closely with two other state-owned Chinese oil companies,
CNOOC Limited and PetroChina, and looks forward to working with its new partner
in the Zhao Dong Block.

9. Chief Executive Officer Comments

Commenting on the developments referred to above, Dr John Doran, ROC's CEO,
stated that:

'The recent Government and Joint Venture approvals is good news for ROC's 19,000
shareholders.

The approvals set the scene for a very active and productive five year
multi-field development growth phase; well beyond the predictive horizon which
most Australian independents normally contemplate.

When ROC agreed to acquire its interest in the Zhao Dong Block in mid-2006, it
said that the rationale was two-fold: access to the proved and probable reserves
and realisation of the upside potential. The scale of the planned activities and
the magnitude of the related expenditures announced today, mean that both goals
will be well and truly addressed during the next five years.

The timing of the Zhao Dong approvals fits very neatly into ROC's company-wide
development schedule coming, as it does, a few months before production is due
to begin at the Blane and Enoch oil fields in the North Sea and a few weeks
after the Company announced that it is moving its fields in the Beibu Gulf,
offshore southern China, towards development.

Importantly, the approvals also highlight the very good working relationship
which has been established, in a relatively short time, between ROC and
PetroChina, China's largest oil company, which, with a 51% interest, is the
majority equity holder in the Zhao Dong Block.'


John Doran
Chief Executive Officer

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

                                                                   Dr Kevin Hird
                                            General Manager Business Development
                                                       Tel:  [phone]
                                                       Fax:  [phone]
                                                     Email:  [e-mail]
 
                                                                    Nick Lambert
                                            Bell Pottinger Corporate & Financial
                                                       Tel:  [phone]



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