<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE
ACT OF 1934
(AMENDMENT NO. 2)
ARAN ENERGY PLC
(NAME OF SUBJECT COMPANY)
ARCO IRISH HOLDINGS INC.
ATLANTIC RICHFIELD COMPANY
(BIDDER)
ORDINARY SHARES OF IR20P EACH AND
AMERICAN DEPOSITARY SHARES, EACH REPRESENTING 30 ORDINARY SHARES
(TITLE OF CLASS OF SECURITIES)
038-528-105
(CUSIP NUMBER OF CLASS OF SECURITIES)
DIANE A. WARD
ATLANTIC RICHFIELD COMPANY
515 SOUTH FLOWER STREET
LOS ANGELES, CALIFORNIA 90071
(213) 486-2808
(NAME, ADDRESS, AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF BIDDER)
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<PAGE>
This amends and supplements the Tender Offer Statement on Schedule 14D-1 of
ARCO Irish Holdings Inc. ("ARCO Irish Holdings") and Atlantic Richfield
Company ("ARCO"), both corporations incorporated under the laws of Delaware,
initially filed with the Securities and Exchange Commission (the "Commission")
on August 25, 1995, as amended by Amendment No. 1 thereto filed on September
8, 1995 (collectively, the "Schedule 14D-1"), with respect to the Offer by N M
Rothschild & Sons Limited on behalf of ARCO Irish Holdings, a wholly owned
subsidiary of ARCO, to acquire the entire share capital of Aran Energy plc,
including all American Depositary Shares.
ITEM 10. ADDITIONAL INFORMATION.
(f) The information set forth in (1) the press release dated September 14,
1995 issued by ARCO Irish Holdings Inc. and Atlantic Richfield Company, and
(2) the Letter to Aran Shareholders dated September 14, 1995, copies of which
are attached hereto as Exhibits (a)(16.1) and (a)(16.2), is incorporated by
reference in its entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11(a) is amended by adding the following exhibit:
(a)(16.1) Text of press release dated September 14, 1995.
(a)(16.2) Text of Letter to Aran Shareholders dated September 14, 1995.
1
<PAGE>
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is
true, complete and correct.
Date: September 14, 1995 Atlantic Richfield Company
By /s/ Terry G. Dallas
_____________________________________
Vice President & Treasurer
ARCO Irish Holdings Inc.
By /s/ Terry G. Dallas
_____________________________________
Senior Vice President
2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
(a)(16.1) Text of press release dated September 14, 1995
(a)(16.2) Text of Letter to Aran Shareholders dated September 14, 1995
</TABLE>
<PAGE>
EXHIBIT (a)(16.1)
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA,
CANADA OR JAPAN
EMBARGOED UNTIL 12 NOON 14 SEPTEMBER 1995
ARCO'S ANALYSIS OF ARAN'S ASSETS AND ASSOCIATED RISKS
Bill Wade, Chairman of ARCO Irish Holdings, has written to shareholders of
Aran Energy today, detailing ARCO's analysis of Aran's assets and associated
risks.
Mr. Wade highlighted the fact that, of the IR60p cash offered for each Aran
share, IR24p (net of debt) is in respect of Aran's low risk producing assets
whose value can be readily determined. The balance of IR36p per share covers:
. the price for Aran's interest in the mature Dunlin field which is 16 years
past its peak production;
. the price for Aran's interest in the new development at Schiehallion;
. the price of Aran's high risk exploration and appraisal assets; and
. a generous premium for control
The full text of Mr. Wade's letter is attached. The document containing his
letter is being posted today.
For further enquiries:
<TABLE>
<S> <C>
ARCO
Bill Wade Telephone: (353) 1 676 6471
Terry Dallas Telephone: (44) 171 831 3113
N M ROTHSCHILD & SONS LIMITED Telephone: (44) 171 280 5000
Nicholas Wrigley
Tony Allen
Public Relations:
WHPR Telephone: (353) 1 496 0244
Brian Bell
FINANCIAL DYNAMICS
Nick Miles Telephone: (44) 171 831 3113
Marc Popiolek Telephone: (44) 171 831 3113
</TABLE>
<PAGE>
TEXT OF MR. BILL WADE'S LETTER DATED 14TH SEPTEMBER, 1995
"Since the announcement of our IR60p Offer for Aran there has been much
speculation as to your company's underlying asset value. Little comment,
however, has been made as to the costs and risks associated with realising
such value. Indeed, your own Board elected to ignore these vitally important
issues in its response to our Offer. Other than revealing what to us was
particularly disappointing news about Aran's Schiehallion reserves, your
Board's response failed to provide any meaningful new information on either
your company's asset values or the associated risks. As these are critical
issues when you consider our Offer, we have set out in this document our
analysis of them.
This analysis highlights that, of the IR60p cash offered for each of your Aran
shares, IR24p is in respect of Aran's low risk core producing assets whose
value can be readily determined. The balance of some IR36p, representing no
less than 60% of the total consideration, comprises the premium ARCO is
prepared to pay to acquire Aran and the price for Aran's interest in the
Dunlin field, the new development at Schiehallion and Aran's high risk
exploration and appraisal assets.
Exploration and appraisal assets have value but are high risk. They are costly
to explore and appraise and, even if successful and proceed to development,
are subject to the uncertainties of field performance and oil market
conditions. ARCO has the financial and technical resources to take on these
risks. Our Offer provides you with the opportunity to receive full value for
Aran's high risk assets.
We believe our analysis substantiates our view from the beginning that this
Offer is both full and generous. Nothing your Board has disclosed since
contradicts that view, and I would remind you that prior to the announcement
of our Offer the market valued Aran at IR42.5 per Aran share; our Offer is a
41% premium to that price.
I strongly urge you to accept our Offer.
Yours sincerely,
Bill Wade
Chairman"
<PAGE>
EXHIBIT (a)(16.2)
ARCO IRISH HOLDINGS [LOGO]
ARCO'S ANALYSIS OF
ARAN'S ASSETS AND ASSOCIATED RISKS
[Graphic of oil barrel showing IR24p (net of debt) attributable to Aran's low
risk assets (Alba & Parliament, Gryphon & Satellites; US proved reserves; Celtic
Sea Royalty) and IR36p (including premium for control) attributable to Aran's
medium to high risk assets (UK, US and Irish Acreage; Connemara; Schiehallion;
Dunlin)].
ARCO'S CASH OFFER -- IR60p PER SHARE
A FULL AND GENEROUS OFFER
ACCEPTANCES SHOULD BE RECEIVED BY
23 SEPTEMBER 1995
<PAGE>
A FULL AND GENEROUS OFFER
CAPITAL:
Premium over Aran share price before the Offer 41%
Premium over Aran 4 year share price high before the Offer 28%
OFFER PREMIUM:
[OFFER PREMIUM CHART APPEARS HERE]
CHART DEPICTING THE PRICE MOVEMENT OF THE STOCK IN IR PENCE BEGINNING AUGUST
1991 AND CONTINUING THROUGH AUGUST 1995. IN ADDITION THE GRAPH REFLECTS THE 4
YEAR HIGH (1R47p) AND THE PRICE BEFORE OFFER (IR42.5p) AND OFFER PRICE (IR60p).
RISK MONEY:
60%, or IR36p, of ARCO's cash Offer is for assets to which significant risk is
attached. This is a generous offer, which allows Aran shareholders to
capitalise on their investment now rather than wait for future potential that
may never materialise.
INCOME:
Your Board is now holding out a further prospect of a first dividend but it
remains subject to conditions. By contrast, when our Offer succeeds you will
have the opportunity to generate income on the cash you receive.
-------------------------------------------------------------------------------
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in doubt about this Offer you should consult an independent
financial adviser who, in the case of UK shareholders, is authorised
under the Financial Services Act 1986.
If you have sold or otherwise transferred all your Aran shares or Aran
ADSs, please pass this document as soon as possible to the purchaser
or transferee, or to the bank, stockbroker or other agent through whom
the sale or transfer was effected, for onward transmission to the
purchaser or transferee. However, this document should not be
forwarded or transmitted in or into Australia, Canada or Japan.
No person has been authorised to give any information or to make any
representation on behalf of ARCO or ARCO Irish Holdings not contained
in this document, the Offer Document, or the Acceptance Forms and, if
given or made, any such information or representation must not be
relied upon as having been authorised. Neither the delivery of this
document, the Offer Document or the Acceptance Forms nor any purchase
pursuant to the Offer shall, under any circumstances, create any
implication that there has been no change in the affairs of ARCO or
ARCO Irish Holdings or Aran since the date as of which information is
furnished or the date of this document.
-------------------------------------------------------------------------------
<PAGE>
ARCO IRISH HOLDINGS [LOGO]
515 South Flower Street
Los Angeles, CA 90071
USA
14 September 1995
Dear Sir or Madam,
Since the announcement of our IR60p Offer for Aran there has been much
speculation as to your company's underlying asset value. Little comment,
however, has been made as to the costs and risks associated with realising
such value. Indeed, your own Board elected to ignore these vitally important
issues in its response to our Offer. Other than revealing what to us was
particularly disappointing news about Aran's Schiehallion reserves, your
Board's response failed to provide any meaningful new information on either
your company's asset values or the associated risks. As these are critical
issues when you consider our Offer, we have set out in this document our
analysis of them.
This analysis highlights that, of the IR60p cash offered for each of your Aran
shares, IR24p is in respect of Aran's low risk core producing assets whose
value can be readily determined. The balance of some IR36p, representing no
less than 60% of the total consideration, comprises the premium ARCO is
prepared to pay to acquire Aran and the price for Aran's interest in the
Dunlin field, the new development at Schiehallion and Aran's high risk
exploration and appraisal assets.
Exploration and appraisal assets have value but are high risk. They are costly
to explore and appraise and, even if successful and proceed to development,
are subject to the uncertainties of field performance and oil market
conditions. ARCO has the financial and technical resources to take on these
risks. Our Offer provides you with the opportunity to receive full value for
Aran's high risk assets.
We believe our analysis substantiates our view from the beginning that this
Offer is both full and generous. Nothing your Board has disclosed since
contradicts that view, and I would remind you that prior to the announcement
of our Offer the market valued Aran at IR42.5p per Aran share; our Offer is a
41% premium to that price.
I strongly urge you to accept our Offer.
Yours sincerely
/s/ Bill Wade
Bill Wade
Chairman
<PAGE>
ARCO'S ANALYSIS OF
ARAN'S ASSETS AND ASSOCIATED RISKS
[Graphic of oil barrel showing IR24p (net of debt) attributable to Aran's low
risk assets (Alba & Parliament, Gryphon & Satellites; US proved reserves; Celtic
Sea Royalty and IR36p (including premium for control) attributable to Aran's
medium to high risk assets (UK, US and Irish Acreage; Connemara;
Schiehallion; Dunlin)].
THE BENEFITS OF ARCO'S OFFER ARE COMPELLING
IR60p REPRESENTS FULL VALUE FOR ARAN'S ASSETS,
TOGETHER WITH A GENEROUS PREMIUM FOR CONTROL
2
<PAGE>
ARCO's analysis of Aran's assets and associated risks
Aran's Board has tried to persuade you of the value of Aran's assets but has
not told you anything about the costs or risks involved in realising their
value. Aran shareholders should appreciate that a large portion of Aran's
assets are recognised to be medium to high risk; risk in these terms relates
to the likelihood of value ultimately being realised from these assets.
Aran's core producing assets - low risk
<TABLE>
<S> <C>
Alba and its satellite The value of these oil producing assets and satellite
Parliament, fields has been clearly demonstrated by recent auction
Gryphon and sales of interests in these fields. These result in a
its satellites value, net of Aran's debt, of IR17.3p per share.
US proved reserves These are US proved reserves on which Aran has
calculated a net present value of IR5.8p per share in a
recent SEC filing.
Celtic Sea royalty Aran owns 74.7% of an overriding royalty in the Kinsale
Head and Ballycotton fields. Aran has calculated a net
present value of IR1.1p per share to this asset in a
recent SEC filing.
IT IS HARD TO SEE HOW ARAN COULD REASONABLY
ATTRIBUTE A HIGHER VALUE (NET OF ARAN'S DEBT)
FOR THESE CORE PRODUCING ASSETS THAN IR24p PER
SHARE.
</TABLE>
Aran's other assets - medium to high risk
<TABLE>
<S> <C>
Dunlin This is a mature oil field, which is 16 years past its
year of peak production. Whilst the field is still in
production and earns tariff income from the nearby
Osprey field, its economic future is shrouded by
uncertainties. Not the least of these relate to the
liabilities attaching to the issue of abandonment and
whether or not the Sullom Voe terminal, which takes the
field's oil, will operate in the next century.
ARCO REGARDS DUNLIN AS BEING EXPOSED TO ABOVE
AVERAGE RISK FOR A PRODUCING FIELD DUE TO THESE
UNCERTAINTIES.
Schiehallion ARCO has taken an optimistic view of the commercial
prospects of the field, but was disappointed that
Aran's own estimate of its share of reserves was only
22.2 million barrels. These net reserves are less than
ARCO had hoped and lower than the estimate of 26.5
million barrels made by Wood Mackenzie, a respected
source of published data in the oil industry. Wood
Mackenzie valued their higher estimate of reserves of
26.5 million barrels at IR13.2p per share.
</TABLE>
3
<PAGE>
In order to determine value shareholders now
need to know:
. WHAT ARE THE COSTS OF THE DEVELOPMENT?
. HOW MUCH IS ARAN'S SHARE OF THOSE COSTS
-HOW WILL ARAN FINANCE ITS SHARE?
. HOW MUCH WILL THE OIL COST TO PRODUCE?
. GIVEN THE QUALITY OF THE CRUDE OIL, WHAT
PRICE DISCOUNT WILL IT SUFFER AGAINST BRENT
CRUDE?
<TABLE>
<S> <C>
Solan and Solan and Strathmore are oil discoveries that lie to
Strathmore the south of Schiehallion. Aran has an interest of 10%
in Solan and 11.3% in Strathmore. Aran's comments
regarding Solan and Strathmore as remaining under
consideration for development should afford
shareholders little comfort given that they were
discovered 4-5 years ago and both were recently the
subject of disappointing appraisal wells as confirmed
in the Oil and Gas Journal on 21 August 1995. Quoting
the established Scotland based firm, Mackay
Consultants, the journal says that:
"We understand the Strathmore
appraisal . . . . was abandoned untested
having intercepted only poor quality oil
shows";
". . . . abandoned the Solan
appraisal . . . . as a dry hole."
The journal went on to report that Amerada, the
operator of both appraisal programmes, would
not comment on the well results other than to
say they showed the reservoirs to be complex.
THE VALUE OF THESE "DISCOVERIES" AND THE RISKS
ASSOCIATED WITH EXPLORING IN THIS AREA SPEAK
FOR THEMSELVES.
West of Shetland In addition to Schiehallion, Aran rightly identifies
acreage that its exploration acreage in the West of Shetland is
a major attraction to ARCO.
Whilst it is a promising petroleum province,
there are considerable risks attached to
exploiting it:
. most current activity is at water depths of
greater than 1,000 feet and the sea current
and climatic conditions are very much harsher
than those of the North Sea;
. since 1972, over 110 exploration wells have
been drilled at a cost of over (Pounds)1
billion with only 2 announced developments;
</TABLE>
4
<PAGE>
. nearly 30 appraisal wells have been drilled,
but public and scout data imply that less
than one in three have been successful;
. in spite of the fact that the first major oil
discovery in the area, Clair, was made in
1977 no sustained oil or gas production has
been achieved so far from the area. Today
Foinaven is the only field in this region
that has been approved for development. Aran
has no interest in this field; and
. there is no established infrastructure, and
uncertainty remains over which terminal,
Flotta or Sullom Voe, would be used longer
term should development prospects ultimately
justify such a decision.
ARAN SHARES THESE RISKS. IN 1995, ARAN HAS
PARTICIPATED IN THE DRILLING OF 1 EXPLORATION
AND 3 APPRAISAL WELLS. ALL HAVE BEEN PLUGGED
AND ABANDONED FOLLOWING DISAPPOINTING RESULTS.
ARCO's comments on an extract from Aran's
document dated 8 September 1995:
[Reproduction of map of Aran interests West of Shetland
reproduced from page six of Aran's letter to
shareholders dated September 8, 1995.]
CAN ARAN AFFORD ITS EXPOSURE TO THIS REGION
WHEN THERE IS NO CERTAINTY OF SUCCESS?
5
<PAGE>
<TABLE>
<S> <C>
Connemara Connemara is a complex reservoir lying in 1,200 feet of
water in the Atlantic Ocean approximately 100 miles off
the west coast of Ireland. There are major technical,
safety and environmental issues involved in appraising
and developing the field, and commercial viability is
far from assured.
The extent of the challenge is reflected in
your Board's comments since the field was first
discovered in 1979, during which time little
has been achieved (see page 8).
Your Board has criticised ARCO for suggesting
that further appraisal work is required. ARCO
believes that Aran's 3D seismic survey is over
12 years old. An extended well test is expected
to cost over $20 million. Given this cost, ARCO
believes it prudent to update this seismic
survey before conducting this well test.
HOWEVER, THE ISSUES FOR ARAN SHAREHOLDERS ARE
WHETHER ARAN HAS EITHER THE TECHNICAL OR THE
FINANCIAL RESOURCES TO EXPLOIT CONNEMARA AND
HOW ARAN IS PROPOSING TO FUND THE EXTENDED WELL
TEST.
Aran's other Whilst there is always value and potential in
exploration acreage exploration acreage, such acreage is speculative and
can bring with it substantial financial obligations and
no certainty of success. Aran will have to meet
financial obligations for the drilling of the two
exploration wells in the Liverpool Bay and the well in
the Gulf of Mexico, each of which Aran intends to drill
shortly.
WHAT IS THE EXTENT OF ARAN'S TOTAL FINANCIAL
OBLIGATIONS FOR ITS EXPLORATION ACTIVITIES?
HOW WILL ARAN FINANCE ITS OBLIGATIONS?
DOES ARAN HAVE THE FINANCIAL RESOURCES TO
EXPLOIT ITS ACREAGE AT THE SAME TIME AS MEETING
ITS COMMITMENTS ELSEWHERE?
</TABLE>
THE ARCO OFFER PROVIDES
FULL VALUE FOR ARAN'S ASSETS,
TOGETHER WITH A GENEROUS PREMIUM FOR CONTROL
A FULL AND GENEROUS OFFER
6
<PAGE>
APPENDIX
1. Introduction
This document should be read in conjunction with the Offer Document dated 25
August 1995 ("the Offer Document"). The definitions in the Offer Document
also apply to this document, save where the context requires otherwise. Save
as disclosed herein, the directors of ARCO Irish Holdings and the members of
the bid committee of ARCO are not aware of any material changes to the
information set out in the Offer Document.
2. Responsibility
The directors of ARCO Irish Holdings, whose names are set in paragraph 2 of
Appendix 2 of the Offer Document and the members of the bid committee of
ARCO, whose names are set out in Appendix 4 of the aforementioned Offer
Document, accept responsibility for the information contained in this
document, save that the only responsibility accepted by them in respect of
the information contained in this document relating to the Aran Group which
has been compiled from publicly available Aran Group documents, has been to
ensure that such information has been correctly compiled and is correctly
and fairly reproduced and presented. Save as aforesaid, to the best of the
knowledge and belief of the directors of ARCO Irish Holdings and the bid
committee of ARCO (who have taken all reasonable care to ensure that such is
the case), the information contained in this document is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
3. Bases of calculations and sources of information
(a) The value of the issued capital of Aran at the Offer price is based on
261,741,729 Aran shares (including Aran shares represented by Aran ADSs)
in issue, as disclosed by Aran on 11 September 1995 in accordance with
Rule 10 of the City Code.
(b) The share price before the Offer and the share price high in Dublin of
Aran for the four years before the Offer is derived from the Irish Stock
Exchange Daily Official List.
(c) Applicable exchange rates as derived from the Financial Times dated 24
August 1995 as set out in the Offer Document:
IR(Pounds)1 = Stg (Pounds)1.022
IR(Pounds)1 = $1.5771
(d) The value of IR24p on page 2 attributed to the low risk assets, net of
debt, has been calculated as follows:
<TABLE>
<CAPTION>
IR(Pounds)'m IRp per share*
<S> <C> <C>
Alba & Parliament
Aran's 5% interest based on the Oryx sale to
Union Texas 55.2
Gryphon & satellites
Aran's 15% interest based on the Clyde sale to
Cairn 52.5
-----
107.7
Less Debt. The net debt at 30th June 1995 per
Aran interim statement (62.3)
-----
45.4 17.3
US proved reserves 15.1 5.8
Celtic Sea Royalty 2.8 1.1
----
24.2
====
</TABLE>
*Based on 261,741,729 shares, in issue, sourced per 3(a) above.
(e) The source of the recent transactions relating to Alba and Gryphon
fields mentioned on page 3 is set out in paragraph 14(f) in Appendix 4
of the Offer Document.
(f) The source of the net present values of Aran's US proved reserves and
Celtic Sea royalty on page 3 are taken from Aran's Form 20-F filed with
the SEC for the year ended 31 December 1994. The present values
represent the standardised measure of net cash flows calculated in
accordance with Statement of Financial Accounting Standards 69 and are
based on the reserve definition used by the Financial Standards
Accounting Board. The calculations use certain assumptions regarding
future price changes, the exclusion of probable and possible reserves,
the timing of future production, and the timing and amount of future
development and production costs. Reserve information for the Celtic Sea
royalty is presented without deduction of any amounts attributable to
government or other royalties. Reserve information for the US properties
is presented after deduction for amounts attributable to government and
other royalties.
(g) The source of Aran's estimate of 22.2 million barrels at Schiehallion on
page 3 is drawn from Aran's defence Circular dated 8 September 1995.
(h) The source of the Wood MacKenzie estimates on page 3 regarding
Schiehallion is their North Sea Service report dated May 1995.
(i) The statements made regarding Connemara by the Board of Aran as set out
on page 8 of this document are drawn from the respective Aran annual
reports published in the year stated in respect of the previous
financial year.
4. Documents available for inspection
The documents listed in paragraph 16 of Appendix 4 of the Offer Document,
including the Schedule 14D-1 filed with the SEC on 25 August 1995, will be
available for inspection at the offices of A & L Goodbody, 1 Earlsfort
Centre, Hatch Street, Dublin 2 and at the offices of Clifford Chance at 200
Aldersgate Street, London EC1A 4JJ, during normal business hours on any
weekday (Saturdays and public holidays excepted) whilst the Offer remains
open for acceptance.
N M Rothschild & Sons Limited, which is regulated by The Securities and Futures
Authority Limited in the UK, is acting for ARCO and ARCO Irish Holdings in
connection with the Offer and no one else and will not be responsible to anyone
other than ARCO and ARCO Irish Holdings for providing the protections afforded
to customers of N M Rothschild & Sons Limited or for providing advice in
relation to the Offer. N M Rothschild & Sons Limited is acting through
Rothschild Inc. for the purposes of making the Offer in the United States.
7
<PAGE>
ARAN'S RECORD
-Connemara
YEAR
PUBLISHED
EXTRACTS FROM ARAN'S ANNUAL REPORTS:
1983 "In offshore exploration during 1982 your Company continued to
devote major effort to the exploration of Block 26/28 in the
Porcupine Basin"
1984 "The discovery was confirmed by a well in 1980, but subsequent
drilling showed IT NOT TO HAVE BEEN AS EXTENSIVE IN WHAT WERE
FIRST THOUGHT TO BE ITS MAIN ZONES."
1985 "Drilling took place to test a new structure in our Porcupine
discovery Block 26/28; THIS DID NOT LOCATE AN ADDITIONAL OIL-
BEARING ZONE AS HAD BEEN HOPED."
1990 "Major advances have been made in the technology and cost-
effectiveness of deep-water oil production during the past few
years, and if these can be utilised in the field it could have
a substantial impact upon Aran's reserve base and production
stream. It is intended that THE NECESSARY FEASIBILITY STUDIES
BE COMPLETED DURING 1990, AND IF THESE ARE SUCCESSFUL A LONG-
TERM PRODUCTION TEST MAY BE CONDUCTED IN 1991."
1991 "In Ireland, a feasibility study for an extended production
test of the Connemara oil field is nearing completion. If, as
hoped, the study has a positive outcome, we would expect TO
MOVE FORWARD WITH THE TEST AND THEREAFTER WOULD SEEK TO
DEVELOP THE FIELD IN CONJUNCTION WITH OTHER PARTICIPANTS SO AS
TO RESTRICT ARAN'S EXPOSURE TO CAPITAL EXPENDITURE."
1992 "...and during 1991 completed a study which showed that
DEVELOPMENT BY A FLOATING PRODUCTION SYSTEM WAS TECHNICALLY
FEASIBLE BUT NOT COMMERCIALLY JUSTIFIABLE at the prevailing
level of oil prices. The Company continues to keep this
potentially commercial field under technical and economic
review."
1994 "The success of floating production systems in the North Sea
area has given RENEWED ENCOURAGEMENT THAT PRODUCTION FROM THIS
FIELD MAY BECOME commercially feasible."
1995 "We are also PLANNING AN EXTENDED WELL TEST for next year
(1996), whereby the reservoir can be flow-tested over a period
of weeks and its characteristics more accurately assessed. If
the results are satisfactory we hope to initiate a phased
development of the field, POSSIBLY IN CONJUNCTION WITH
CONTRACTOR ALLIANCES OR OTHER PARTNERSHIP ARRANGEMENTS."
Certain of the above text has been reproduced in bold by ARCO for the purpose
of emphasis.
8
<PAGE>
Printed by RR Donnelley Financial, 14773P
