Carpathian entered into the Breclav joint venture as a 17.64% contributing partner in October 2001 with the first exploration well, Postorna 1, discovering a new oil pool.

Immediately on receiving the results of Postorna 1, the directors of COC initiated a series of actions to wrest control of the Breclav licence from the joint venture, which were successfully blocked by Canadian-based operator Geocan.

In a separate proceeding the Czech Ministry of the Environment expressed the opinion "a settlement of ownership relations of COC towards its foreign partners shall be necessary for further proceedings."

Last week the Ministry of Environment (MOE) called all parties to a meeting in Prague last week (9th June, 2003). After hearing submissions from both sides of the dispute, Ministry officials gave the parties until 23rd June, 2003 to settle their differences and reach agreement on co-operative development of the Postorna oil field. Carpathian said it was encouraged by the results of the meeting and looks forward to a favourable outcome of the dispute.