COSL Signs Well Workover Rig Service Agreement with ConocoPhillips China

The agreement calls for COSL to build a well workover rig for the Peng Lai 19-3 block. COSL will lease the rig to ConocoPhillips China and will also provide rig maintenance services. ConocoPhillips China will finance the depreciation charges (basic day rates) for the rig over a period of six years.

The service contract, which was obtained through an open bid, includes the building, installation, adjustments and three years of well workover rig maintenance. The well workover rig is expected to be delivered date on January 1, 2004. Installation and adjustments and well workover services are expected to commence on February 1, 2004.

The contract is for three years.

Mr. Yuan Guangyu, Chief Operating Officer and President of COSL and Mr. Jim Knudsen, President of ConocoPhillips China represented their respective companies at the signing ceremony. Mr. Yuan Guangyu during the signing ceremony expressed, This contract is very important for COSL, as this is the first time for us to purchase, build, install and provide related maintenance services on a well workover rig for a company involved in a production sharing oilfield.

We are very happy to have the opportunity to provide well workover rig maintenance services to ConocoPhillips. The signing of this agreement is an opportunity for COSL to provide quality, efficient, safe and environmentally friendly services for our customers on a whole new level.