Forum Energy plc announces today the signing by its majority-owned company, Forum Exploration, Inc., of a Gas Sale and Purchase Agreement (GSPA) with Desco, Inc., a leading provider of petroleum and geothermal products and services in the Philippines, for the development of the Libertad gas field for power generation.

Under the GSPA, which is still subject to approval by the Department of Energy (DOE), Desco will install within the year 1.0 to 1.5 MW power generating units in Bogo, northern Cebu using GE Jenbacher gas engines. Forum will sell the gas to Desco at an agreed rate of US$1.50 per million BTU (British Thermal Units) for the first 0.70 billion cubic feet of gas (BCF) extracted and utilized, and US$1.60 per million BTU for any gas produced beyond 0.70 BCF.

The Libertad gas field lies within Service Contract 40 (SC40) where Forum holds a 66.7% interest and is situated close to existing infrastructure networks, including the local electricity grid network. In November 2005, Libertad was declared commercial by Forum and the DOE. However, in order for an arms length gas price to be determined, the DOE proscribed Forum to offer the field’s development to the open market. Forum has since received proposals from a number of companies with Desco’s offer being considered to bring the most value out of the gas resource.

Forum Energy Chief Executive Dr. Walter W. Brown said: “We are pleased to have completed this initial step that would eventually lead to the fulfillment of our commitment to the government to produce the Libertad gas field and contribute to the development of indigenous energy resources in the country.”

For further information please contact:

Andrew Mullins, Executive Director, Forum Energy Plc
+44 (0)1932 445 344

James Bromhead / Brian Stockbridge Noble & Company Ltd (Nominated Adviser)
+44 (0)20 7763 2200