What Merrill Lynch said about SPC

SINGAPORE (XFN-ASIA) - Singapore Petroleum Co Ltd (SPC) may further
ease
after Merrill Lynch cut its profit forecast for the company for this
year
through 2007 after recoverable oil reserves at the firm's Oyong
project
came in lower than expected.

Cue Energy Resources, which holds a 15 pct stake in the Sampang
production sharing contract in which SPC has a 40 pct interest and
Santos
Ltd the other 45 pct, has released its 2005 annual report which
revealed
some negative news regarding the Oyong development project in the
production contract.

Cue said drilling of the Oyong development wells has showed
"unexpected sealing faults that divide the reservoir into several
interpreted fault bounded compartments."

As a result, the contract partners have found that the northern
parts
of the field has oil while the southern part of the field is dry.
Fortunately, the gas column is present in all fault compartments,
which
was as expected.

Merrill Lynch cut its 2005 profit forecast for SPC to 346.7 mln
sgd
from 352 mln previously and for 2006 to 350.4 mln sgd from 378.8 mln
earlier. The profit estimate for 2007 was adjusted to 261.7 mln sgd
from
272.7 mln.

SPC yesterday closed down 0.40 sgd at 4.88.