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     To: GALL Petroleum Development
     Attn: Mr. Tammy Hutchinson / Head of Contract and Supply
     From: Shenzhen Far East Oil Tools Ltd.
     Felix Jiang / General Manager
     Re: INVITATION TO TENDER - TENDER NO. HB-403
     Tender Title: SUPPLY OF DRILLING TOOLS
     Date: 6/20/98

Dear Sirs,

     We acknowledge receipt of your Invitation to Tender Documents for the above and we agree to maintain confidentiality in regard to the Invitation to Tender and the contents thereof.

     We confirm we intend to submit a bona fide Tender in accordance with all your requirements by the date and time stated in your letter of Invitation to Tender.

     Our details are given below:

     Name: Shenzhen Far East Oil Tools Ltd.
     Address: Chiwan Petroleum Supply Base D3 - 4,
     Chiwan, Shenzhen 518068 PRC
     Tel No.: (0755)6694302, (0755)6851355
     Fax No.: (0755)6694008
     Contact person: Felix Jiang / General Manager

     Please accept our best wishes for quick and successful completion to your planed program.

     Filex Jiang
     Genenal Manager

投标书:

     (abridged)
     Proposal NO. FAS980008

     submitted to

     GALL Petroleum Development

     12-16 Floors, Offshore Petroleum Building
     No.1, Industrial Road, Shekou
     Shenzhen, PRC

     For

     Tender No. HB-403

     By

     Shenzhen Far East Oil Tools Ltd.

     Address: Chiwan Petroleum Supply Base D3 - 4
     Chiwan, Shenzhen 518068 P.R.C.

     Tel No: (0755)6694302
     (0755)6694529
     Fax No: (0755)6694008
     E-mail: [email protected]

     Content

1. Cover Letter ……………………………… Page 1 - 2
     2. Price Schedule ……………………………… Page 3 - 11
     3. Others ……………………………… Page 12

     DATE: Jun. 30, 1998

     GALL PETROLEUM DEVELOPMENT
     12 - 16 Floors, Offshore Petroleum Building,
     No.1, Industrial Road 2, Shekou,
     Shenzhen, Guangdong Province,
     P.R. of China

     Attention: Mr. TAMMY HUTCHINSON / Head of Contract and Supply

     Subject: Tender HB-403
     For Drilling Tools / Equipment and Services

Gentlemen:

     We appreciate the opportunity to put in bid for providing drilling tools / equipment & services to your company. In the past years we have enjoyed working with all groups in China drilling area and are very hopeful that your new operation in the South China Sea will be very profitable.

     We have carefully examined your invitation letters to tender "Tender HB-403 Supply of Drilling Tools" and form of contract entitled "Contractor Service Contract" and related documents. We hereby submit our proposal No. FAS980008 to bid Tender HB-403. For Drilling Tools / Equipment and Service in accordance with the terms of Tender document.

     Shenzhen Far East Oil Tools is also liking forward to a long term profitable future in service of the oil industry in this area and therefore invested heavily in setting up a fully capable tool rental service as drilling operations expand. Most of our drilling tools are available in our Chiwan Base. Our offshore operation supervisors are very experienced. We also have complete machine shop service in Chiwan Base and it is easily and quickly to maintainance and repair for all related equipment.

     Enclosed please find 3 copies of our price schedule prepared for drilling tools / equipment and services tender No. HB-403 including also our explanation and support documents. If any points that are not clear, we will be glad to explain in more details at any time.

     Our company's information is given below:

     Company Name: Shenzhen Far East Oil Tools Ltd.
     Address: Chiwan Petroleum Supply Base D3 - 4
     Chiwan, Shenzhen, PRC
     Telephone No.: (0755)6694302 (0755)6694529
     Fax No.: (0755)6694008
     E-mail: [email protected]
     Contact Persons: Felix Jiang / General Manager
     Roky Xu / Engineer
     Lynn Guo / Assistant to General Manager

     Welcome you to our warehouse in Chiwan Base for visiting and inspecting of the equipment.

     Yours sincerely,

     Felix Jiang
     General Manager

     Price Schedule
     DRILLING TOOLS RENTAL

_______________________________________________________________________________
     |ITEM| QTY | DESCRIPTION | UNIT | REDRESS| L.I.H. |
     | | | | PRICE | CHARGE | US $ |
     | | | |US $ /DAY| US $ | |
     |____|_____|__________________________________ |_________|________|__________|
     | | |36" Security hole opener 9-1/2" OD | | | |
     | | |Body W/7.5/8"Reg | | | |
     | 1 | 1 |Pin By Box Dressed W/1 Set Cutter | 60.00 | Nil | 18,400.00|
     | | |Sale the Cutter only when used | | | |
     |____|_____|____________________________________|_________|________|__________|
     | | |Replacement cutters and Pins for 36"| | | |
     | 2 | 1set|Hole opener. | Nil | Nil | 2,000.00 |
     | | |Restocking Charge: US $2,000.00 | | | |
     |____|_____|____________________________________|_________|________|__________|

Terms & conditions:

     1. Transportation charges between Shekou and Zhanjiang will be rebilled to Gall's Accounts.
     2. Any Tools lost or damaged beyond repair, will be charged to the Gall's account at Far East's Lost in hole prices.
     3. Inspection repair and redress charge if required will be carried out when tools return to Shenzhen Far East oil Tools base. And charged to Chevron's account.
     4. Rental rates commence when equipments arrive at Zhanjiang and cease upon depart from Zhanjiang.

Remarks:

     1. We will make available both mechanical and explosive systems for cutting and retrieving up to string (7", 9-5/8", 11-7/8", 16", 20", 30") of casing.
     2. We offer a turnkey price of mechanical cutting and retrieving US $12,420.00 per well, exclusive of operator charges.
     3. We offer a turnkey price of explosive system for US $15,420.00 per well, exclusive of operator charges.

     回复-放弃投标

     To: GALL Petroleum Development
     Attn: Mr. T. Hutchinson / Head of Contract and Supply
     From: Felix Jiang / General Manager
     Shenzhen Far East Oil Tools Ltd.
     Date: 06-28-1998

     Re: Invitation to tender - Tender No. HB-404
     Tender Title: Supply of wellhead

Dear Sirs,

     We apologize you for we'll call off our intend to submit a tender to Tender No. HB-404 - SUPPLY OF WELLHEAD on account of our equipment of wellhead was sold out recently.

     We apologize again for any inconvenience.

     Sincerely yours,

     Felix Jiang
     General Manager
     Shenzhen Far East Oil Tools Ltd.
 

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