Maracas Association Contract, Cesar Basin, Colombia
A Farm-out Opportunity in Exploration and Production

TEXICAN Oil plc is pleased to announce the farm-out of 50% of their interest. This represents an attractive investment opportunity in the exploration and production sector of the Colombian oil and gas industry. TEXICAN has been active in Colombia since 1996 and owns a portfolio of operated production, development and exploration assets.

Key attributes of TEXICAN include:

-Experience in the Country: TEXICAN is well established in Colombia and has developed an effective operation and exploration capability. A comprehensive understanding of the Colombian business environment and a strong relationship with Ecopetrol and the Government has been developed over the 3 years of operation.

-High quality assets with growth potential and production to start in 1999: An average net production of gas, before royalty, of 3 MMSCFD is anticipated to rise to over 15 MMSCFD by year 2000 based on the current work program.

-Significant reserve base with development and exploration potential: At 1st January 1999, TEXICAN had net proven and probable commercial reserves of 56 BCF, and possible commercial reserves of 120 BCF. There is further upside to build on this reserve base from both the development assets and an inventory of substantial prospects. A drilling programme planned in the near future will search oil reserves in deep targets already tested during testing of the Compae-1 well.

-Future Cash Flows: TEXICAN has under development a strong cash flow plan due to initiation of production. Depreciation at year-end 1998 and subsequent years of approximately $10 million provide an opportunity to further strengthen TEXICAN’s cash flow position.

-Access to local market: The field may have direct access to the city of El Paso through a 13 Kms connection. Power generating facilities are planned in Maracas due to the strong demand of the local market for electricity.

-Lack of disruption due to security and environmental issues: TEXICAN has demonstrated an ability to manage operations in a low key, safe and environmentally sound manner through its use of skilled local staff and community relations.

-Experienced workforce and business infrastructure: TEXICAN’s operations are run under its subsidiary TICAN established in Bogota with a workforce of national staff. This workforce operates to international operational standards and is able to manage further development of the business. The TEXICAN and TICAN offices, which contain modern communication and computer systems, are located in the commercial district of Santafe of Bogota.

-Technical database: In addition to possessing a complete database of the TEXICAN operated areas, TEXICAN has developed a comprehensive database of most of the hydrocarbon plays of Colombia.

-Interested parties are requested to return a signed copy of the Confidentiality Agreement (”CA”) which accompanies this document. Following receipt of the executed CA, a copy of TEXICAN Information Memorandum will be forwarded during January 1999.