ANNOUNCEMENT

The director/ceo of PT Indospec Energy, a limited liability company duly established under the laws of the Republic of Indonesia (“the Company”) is pleased to announce that on 14 August 2007 , the company entered into a legally binding Joint Study Agreement with PT Pertamina EP (“PEP”), an Indonesian state-own oil company, to form a Pilot Project Agreement an implementation of Chemical Enhanced Oil Recovery in Limau Oilfields in South Sumatra, Indonesia covering block Q-51, Q-22 and P Block. The initial term of Agreement shall be covered ASP Chemical flood on Pilot design and project basis and full scale term on KSO basis. The block was brought back to Pertamina since the daily production was dropped from 8000 barrel per day to 4000 barrell per day in 2005.

BACKGROUND

In 2005 to 2006 the Company has developed Block Q-51 for comprehensive study for the Implementation of Alkali Surfactant Polymer Flooding since the RF for water flood closed to zero and field expected to suspend, the result of ASP chemicals design was found could recovered the abandon oil in reservoir minimum 17 to 22 % from OOIP.

In 2007 Pertamina used this data and formula and presented to BP MIGAS to get an approval for their CEOR program. To execute this project PERTAMINA and BPMIGAS formed a steering and working committee including the Company as one of the working members.

PROJECT PROGRESS

At the end of February 2008 Steering and Working Committee QC visited certain facilities and laboratories owned by the Company's affiliates in Golden Colorado USA and closely watched several on-going projects in Wyoming USA such as Fabricator Company and ASP project bench mark Thomson Creak field. The Company expected to start Plant Construction facility at the end of this year and will start ASP Pilot Injection the second quarter 2009, before taking a full scale project in 2010.

The Company will make further progress information or announcement base on any disclose and available information under the Law of the Republic of Indonesia .