Forum Energy plc, the AIM-quoted energy group with gas, oil and coal assets in the Philippines, has acquired interests in nine offshore oil fields and additional exploration prospects.

It has acquired the new assets through the takeover of Basic Petroleum and Mining Inc (BPMI, formerly held by Philippines-based Basic Consolidated Inc.

Forum Chief Executive David Robinson said: “This acquisition represents an exceptional opportunity for us to increase shareholder value. We are starting with around 40 barrels of output a day, but with considerable potential to boost production.”

The newly-acquired assets cover nine offshore fields west of the Philippines, comprising: Nido (8.47%), Matinloc and Pandan (12.41%), North Matinloc (19.46%), Libro (28.6%), Tara (10%), Bonita (7.03%), West Linapacan (9.1%), Galoc (2.28%) and a 27.7% interest in SC41 situated within the Sulu Sea and covering some 4,820 square km, an area with proven hydrocarbon potential. Project work will be managed by Forum’s team in Manila.

The Nido and Matinloc fields have been producing since the early 1980s in 40 metres of water, achieving peak production of 50,000 barrels per day (b/d) together and currently producing about 1,000 b/d. Remaining proved and probable reserves in the two fields, and nearby Galoc (currently under development), have been independently estimated at more than 8.6 million barrels, with considerable upside potential both in these fields and the others where interests have now been acquired.

Forum will pay US$5 million over the next 12 months in a combination of cash and shares to acquire 100% of BPMI. Further cash payments of up to $2 million will become available if the acquired interests produce more than 5.4 million barrels of oil. BCI may also progressively receive cost recovery of up to $10 million, but not until Forum has recovered 100% of its invested capital.

Forum’s existing assets, all in the Philippines, include the highly promising Sampaguita gas discovery within the GSEC101 (Reed Bank) offshore licence area, and the SC40 (Cebu) licence with known onshore and offshore gas and oil discoveries, where the Libertad gas field was recently declared commercial. Forum also holds two coal operating contracts on Cebu Island with estimated proven and probable reserves of 4.9 million tonnes.

For further information, contact:
David Robinson, Chief Executive, Forum Energy plc: +44 (0) 1932 445 344
Adam Westcott, Noble & Company Ltd: +44 (0) 131 225 9677
Ian Foster, First City Financial Public Relations: +44 (0) 20 7436 7486 or +44 (0) 7739 185 050

Full Stock Exchange announcement follows:
Completion of Acquisition and Issue of Equity

Forum Energy Plc (‘Forum’ or ‘the Company’), the AIM quoted oil, gas and coal company with assets in the Philippines, is pleased to announce that all the conditions relating to its acquisition of Basic Petroleum and Minerals Inc (‘BPMI’), the wholly-owned subsidiary of Basic Consolidated, Inc. (‘BCI’), have been met.

On 30 March 2006 the Department of Energy of the Government of the Philippines approved the assignment of the participating interests of BCI to its subsidiary BPMI, this being the final condition relating to Forum’s acquisition of BPMI. As announced on 29 March 2006, the shareholders of BCI have previously approved the acquisition by Forum of BPMI.

The acquisition of the entire issued share capital of BPMI, in exchange for a mixture of cash and ordinary shares in Forum, can now be completed.

This acquisition will provide Forum with initial net production of approximately 40 barrels of oil per day, and varying interests in nine oil fields offering additional production and reserve potential.

The terms of the agreement are set out in the announcement made by Forum on 15 February 2006 and can be summarised as follows:

• Forum will pay US$5 million to BCI over the next 12 months, made up of US$2.2 million in cash payments and the issue of 1,333,759 new ordinary shares of 10p in Forum (equating to US$2.8 million);
• Further cash payments to BCI of up to US$2 million will be made if the acquired interests produce more than 5.4 million barrels of oil; and
• BCI, the current owner of BPMI, may also ultimately receive up to US$10 million of cost recovery amounts that are associated with the interests, but not until after Forum has recovered 100% of its invested capital.

As part of the consideration for the acquisition, the Company is required to issue a total of 1,333,759 new ordinary shares of 10p in the Company to BCI. These shares are subject to lock-in arrangements as follows:

• 1,047,953 new ordinary shares of Forum issued to BCI will be subject to a 12 month holding period from 3 April 2006;
• 285,806 new ordinary shares of Forum issued to BCI will be subject to an 18 month holding period from 3 April 2006, subject to the conditions of certain service contracts.

The new ordinary shares were allotted on 3 April 2006 and application has been made for the admission of the new ordinary shares to trading on AIM. Dealings are expected to commence in the new ordinary shares on 10 April 2006.

Following the admission of the new ordinary shares to AIM on 10 April 2006, BCI will be interested in a total of 1,333,759 ordinary shares of 10p each in the Company, representing 4.67% of the issued share capital of the Company.