Hong Kong, July 8, 2008 - Oil and gas company Genesis Energy Holdings Limited (HKEx: 702) announces that on May 22, 2008, the Group formed a joint venture (the “JV”) with an oil exploration company in Nevada, U.S. (the “U.S. Party”) to acquire an oil field located in the Four Corners Area of Colorado, New Mexico, Utah and Arizona (the “Four Corners” from an independent third party at a total consideration of USD750,000. The JV is owned as to 51% by Genesis Energy and 49% by the U.S. Party. On July 4, 2008, Genesis Energy entered into a JV Agreement with the U.S. Party for the purpose of the oil field acquisition.

Pursuant to the JV Agreement, 100% of the net profits shall be allocated to Genesis Energy until the Group has received the amount equal to the sum of the initial capital contribution of USD750,000 made by the Group for the Acquisition.

Genesis Energy will also make additional contribution with respect to the first well to be drilled by the JV. After the Group has recovered the initial capital contribution, 90% of the net profits shall be allocated to Genesis Energy until the Group has received the amount equal to the total sum of the aforesaid initial well contribution. After the Group has received all the initial capital and initial well contribution it made, the Group and the U.S. Party will share 51% and 49% of the net profits generated from the oil exploitation project respectively.

The oil field in Four Corners encompasses an area of approximately 6.5 square km, with historical oil production of approximately 114,000 barrels since 1984.

Mr Terence Kong, Executive Director of Genesis Energy, said: “This new JV is currently engaged in exploitation works in the acquired oil field. Based on the technical due diligence review conducted last month, the estimated proven developed reserve of the said oil field is approximately 76,000 barrels. Our geologist believes the geological reserve of the said oil field would be exceeding 700,000 barrels”

Mr Kong added: “As the oil field in Four Corners has proven historical record, the investment risk is relatively low. We expect to have our capital investment recovered in 12 to 15 months. The horizontal drilling technique we used in Grassy Trails has been proven to be an effective way to enhance productivity. We intend to apply the drilling technology and experience we gained from Grassy Trails in this new project to boost up the production capacity.”

Genesis Energy’s upstream investments have met with success and started to deliver results. In January 2007, the Group became the first listed Chinese company to acquire an oil and gas asset in the US. The 26-sq-km Grassy Trails oil field in Utah, the US, achieved its first delivery of crude oil in September 2007. In February 2008, the Group successfully completed the first horizontal drilling on Federal 12-13, which is expected to produce an additional 200 barrels per day. The Grassy Trails oil field is now already cashflow positive.

About Genesis Energy
Genesis Energy Holdings Limited (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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