2008-09-23 03:59:19 - Hong Kong, September 22, 2008 - Oil and gas company Genesis Energy Holdings Limited (HKEx: 702) today announces that in the six months to June 30, 2008, turnover from continuing operations increased 38.5% to HK$19.926 million (2007: HK$14.388 million). Loss for the period reduced significantly by 82% to HK$7.744 million (2007: Loss of HK$44.69 million). The Group did not declare an interim dividend.

The Group currently operates oil and gas businesses in Utah of the United States, and Xun Yi, Shaanxi and E Tuo Ke, Inner Mongolia in the PRC. During 2008, the Group entered into an agreement to form a joint venture with an oil company in Nevada to acquire an oil field located in the Four Corners Area of Colorado, New

Mexico, Utah and Arizona from an independent third party at a total consideration of USD750,000. The joint venture is owned as to 51% by the Group. Pursuant to the joint venture agreement, after the Group has first received all the initial capital and additional contribution with respect to the drilling of the first well, the Group and the US joint venture partner will then share 51% and 49% respectively of the net profits generated from the project. The oil field encompasses an area of approximately 6.5 sq km, with historical oil production of approximately 114,000 barrels since 1984. According to a latest reserve report prepared in August 2008, the estimated proven reserve of the oil field is approximately 700,000 barrels. As the oil field has proven historical production record, the investment risk is relatively low. Rework on the existing wells has been done and commercial production has commenced subsequently to this report.

Mr Terence Kong Siu-tim, Executive Director of Genesis Energy, noted: 'It has not been easy for the first six months of 2008. The first horizontal drilling was done in Utah in the first quarter. However, the construction and rework of the facilities have been seriously affected and delayed due to the unprecedented snowstorm in the region. Oil production has not been stable until recently in the third quarter. The first drilling in our Xun Yi Oilfield, Shaanxi, was initially scheduled in May, but unfortunately the devastating Wenchuan earthquake in May has adversely affected the entire schedule and logistics of drilling. The quake has also seriously affected and delayed the progress of the project in Inner Mongolia, in which the Group serves as operator of the E Tuo Ke Oil & Gas Field.'

The drilling of the first well in Xun Yi Oilfield started in September 2008. Despite the delay, the Group is confident that the project will become a new business model to drive its further developments in the fuel-producing Shaanxi-Gansu-Ningxia area.

Pursuant to a legally binding operating agreement with a PRC partner signed In February 2008, the Group has commissioned The College of Earth Sciences, Jilin University to conduct a new geological study of the E Tuo Ke Oil & Gas Field in order to draw up a detailed drilling scheme. The study is scheduled to be completed in September 2008. The PRC partner in Inner Mongolia will enjoy strong leverage of the Group's experience in oil and gas exploration and production, while this agreement will open up for the Group a new stream of management fee revenues. This collaboration model will bring a low risk opportunity for the Group to enjoy returns from a project of great potential.

In June 2008, the Group formed a strategic 50/50 joint venture with New Times Group Holdings Limited (HKEx: 166) for possible investments in the oil and gas sector. The first move of this joint venture was the signing of a legally binding memorandum of understanding with Empire Energy Corporation International (OTCBB: EEGC, 'Empire Energy') in July 2008 in respect of a proposed joint venture for oil and gas exploration business in Australia.

Pursuant to the memorandum of understanding, Genesis and New Times joint venture has extended to Empire Energy a secured loan for the granting of an option to enter into a joint venture agreement for the exploration and development of any oil and gas resources in an oil and gas filed in Tasmania, Australia, subject to the result of drilling of the first exploration well to be performed by Empire Energy. Empire Energy through a wholly-owned subsidiary holds a valid Tasmanian exploration license SEL 13/98, which covers 15,410 sq km and most of the prospective parts of the Tasmania Basin.

According to the seismic survey results as well as other test information, Empire Energy has recently estimated that its 14 identified structures on SEL 13/98 may hold undiscovered prospective petroleum resources of between 535 million and 2.29 billion barrels, potentially of value between USD53 billion and USD229 billion based on a crude price of USD100 per barrel. Drilling of the first exploration well by Empire Energy will start by the end of September 2008.

Mr Kong continued: 'Despite the impacts of the US subprime crisis and the tightened macro-economic control measures of mainland China on the regional economy, we will actively search for quality investment opportunities in Chinese and overseas oil and gas assets. We are committed to building our Group into one of the leading players in the oil and gas sector in the greater China region, and to delivering the best possible returns for our investors.'

About Genesis Energy
Genesis Energy Holdings Limited (HKEx: 702) is an energy company with focus on oil and gas exploitation and operations. The Group is committed to building a diversified portfolio of oil and gas assets and operations with an aim to developing into one of the leading independent oil and gas businesses in Greater China. The Group currently operates oil and gas fields in the US and PRC.

Issued by: Genesis Energy Holdings Limited
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Jenny Lee or Angus Ho
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