Indusmin signs Gas Sales Agreements

Indusmin Energy Corporation ("Indusmin") is pleased to announce that it has entered into preliminary Gas Sales agreements (PGSA) with two major gas traders in Ukraine.

Within the framework of the Collaboration and Mutual Assistance Agreement by and between Indusmin and UKRPROMENERGO" Enterprise of Ukrainian League of Industrialists and Entrepreneurs (ULIE), Kiev, Ukraine, a PGSA was signed by the parties thereto on December 4, 2002, for selling up to 12 million cubic meters of gas monthly. The price for each 1000 cubic meters of gas is to be based on the current price as monthly fixed by NAK Naftogaz of Ukraine" according to the changing market conditions with the traders discount of 12-15%. In the signed GSPOI, the parties foresee prepayment for the gas as the subject of preference. UKRPROMENERGO" Enterprise enjoys proper political support and solid market position as one of the few gas traders in Ukraine trading exclusively for cash with the cumulative last three year sales of about 500 million cubic meters of gas for up to US$ 30 million turnover in the same period. UKRPROMENERGO" Enterprise currently is the gas trading arm of the Russian LUKOIL in Ukraine.

Another PGSA with OJSC ZABEZPECHENNIA", Kiev, Ukraine, was entered into on November 29, 2002 for selling up to 12 million cubic meters of gas monthly priced at a minimum of US$ 55.00 per 1000 cubic meters, with 100% prepayment. OJSC ZABEZPECHENNIA" is a stable Ukrainian gas trader with a considerable share of the market (150 to 250 million cubic meters of gas annually). Their total sales in the period of 2000-2002 reached a level of 600 million cubic meters or almost US$ 35 million.

Our agreements are not restricted to gas sales only; but also to complete cooperation between the parties to further the development of our gas resources. Our intention is to use the great synergy and experience that these two companies have in Ukraine to secure proper marketing of our gas and concurrently to strengthen our bargaining position in acquiring surface equipment and tendering for others jobs that are currently in our work program " said Carlos Munoz, Chairman and President, Indusmin Energy Corp.