Greymouth Makes Superior Fletcher Energy Offer

PEAK PETROLEUM

Media statement - February 27, 2001

GREYMOUTH TEAM MAKES SUPERIOR
PROPOSAL TO ACQUIRE FLETCHER ENERGY

Greymouth Petroleum, in association with major Fletcher Energy shareholders and backed by leading financial investors, today announced a rival proposal to acquire Fletcher Energy through a consortium company, Peak Petroleum Company of New Zealand.

Peak Petroleum proposes a minimum cash component of US $3.70 per share, topping the earlier Shell bid of US $3.34.

Peak will also offer Fletcher Energy shareholders the right to a guaranteed allotment of shares in Peak. In other respects the structure of the Peak proposal mirrors the Shell bid.

Peak Petroleum, which will own and operate the New Zealand and Brunei assets of Fletcher, will seek listing on New Zealand and overseas stock exchanges.

The principal New Zealand consortium members are an FR Partners private capital group, and the Guinness Peat Group and who together are committing over half of the equity capital required for the bid. Other consortium members include leading New Zealand and overseas institutional investors in Fletcher Energy.

Greymouth has asked Fletcher Challenge directors to give Peak Petroleum immediate access to commence due diligence and to postpone the March 6th Shareholders meeting to March 23rd so that an unconditional Peak offer can be put in front of shareholders.

Greymouth has entered into an agreement for the sale of Fletcher Canada & Argentina properties to Penn West Petroleum Limited at a premium to the US$600 million contained in the Shell bid. Penn West is also participating as a member of the consortium backing the new proposal.
The Peak Petroleum proposal has been structured so that it does not affect the proposed restructuring of the Fletcher Challenge Group.

Mr Mark Dunphy, Chairman of Greymouth and Peak says, “This is a friendly proposal. We are asking Fletcher Challenge directors to work co-operatively with us, in the interests of Fletcher Energy shareholders so that a superior offer for their shares can be put in front of shareholders at the same time the Shell bid is voted on”.

“The Peak Petroleum proposal enables Fletcher shareholders to say ‘no’ to the much lower and inadequate Shell deal”, said Mr Dunphy. “A number of major shareholders in Fletcher Energy have accepted the logic and investment potential of retaining the Fletcher assets in a listed, independent, New Zealand-focussed oil and gas company, rather than having these assets disappear into overseas hands at a significantly discounted price”.

For further information, please phone:
Mr Mark Dunphy of Greymouth on +649 366 3634
or Mr Bryan Clake, Vice President of Penn West in New Zealand on +649 366 3634
or Mr Bill Andrew, President of Penn West in Calgary on +1403 777 2502

Issued by Allan Boyle Associates Ltd - Contact: Cedric Allan, telephone + 649 303-1633

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