RH PetroGas Limited provided group earnings guidance for the third quarter ended September 30, 2013. The group is expected to record a loss for the third quarter of 2013, which will result in a loss for the full financial year ending December 31, 2013. The expected loss is mainly due to the following factors: Following a review of the results of the exploration wells ­ Klaimas-1, Klabaru-1 and Klari-2 ­ drilled in the Kepala Burung Production Sharing Contract (Basin PSC), the Group has decided that these three wells are either non-commercial or non-conclusive and that no further work will be carried out on these wells.

As such, the Group will write off all the past costs incurred on these three wells as well as the estimated costs associated with plugging and abandoning these wells, amounting to a total of approximately $14.0 million. At the same time, the Group will also write back the deferred tax liabilities of approximately $6.0 million previously provided for these wells. The net impact on the Group's third quarter of 2013 results is a write-off of approximately $8.0 million.

Under the Production Sharing Contract regime for the Basin PSC, such exploration costs are recoverable from the Basin PSC oil and gas production. Following a review of the preliminary results of an audit on the Basin PSC and the Salawati Kepala Burung Production Sharing Contract (Island PSC) conducted by an external accounting firm during the third quarter of 2013, the Group has decided to make a provision of approximately $3.8 million, mainly in respect of certain inventories which have become obsolete. The Group deems it prudent to make the full provision at this time pending final resolution of the matter.