ENM Holdings Limited — Proxy Solicitation & Information Statement 2007

Jun 14, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in South Sea Petroleum Holdings Limited or both, you should at once hand this circular together with the enclosed form of proxy (for Shareholders only) to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of South Sea Petroleum Holdings Limited.

SOUTH SEA PETROLEUM HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 076)

PROPOSAL INVOLVING

ISSUE OF US$200,000,000 CONVERTIBLE DEBENTURES

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening an Extraordinary General Meeting of South Sea Petroleum Holdings Limited to be held at Unit 1, G/F., The Center, 99 Queen’s Road Central, Hong Kong on 29 June 2007 at 11:00 a.m. (the “Meeting”) is set out on page 14 of this circular. Whether or not you are able to attend the Meeting, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the share registrar of the Company, Computershare Hong Kong Investor Services Limited, 46th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and, in any event, not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting if you so desire.

14 June 2007

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	The Subscription Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
4.	Reasons for the Issue of Convertible Debentures . . . . . . . . . . . . . . . . . . . .	9
5.	Information of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
6.	EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
7.	Procedures for Demanding a Poll by Shareholders. . . . . . . . . . . . . . . . . . .	10
8.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix	– General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
**Notice of **	EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

– i –

DEFINITIONS

“Company”	South Sea Petroleum Holdings Limited, a company
	incorporated in Hong Kong with limited liability and the
	securities of which are listed on the Stock Exchange
“Completion Date”	one business day following the date on which the Stock
	Exchange has granted the listing approval for the New
	Shares
“Conversion Notice”	a notice given by the Debenture Holder to the Company
	for exercise their conversion rights as per attached to the
	Debentures
“Conversion Period”	the period commencing from the day immediate after the
	Completion Date to 4:00 p.m. (Hong Kong time) on the
	Maturity Date
“Conversion Price”	being 98% of the average closing share price of five
	trading days immediately prior to the date of the
	Conversion Notice. If the conversion takes place within
	nine moths after the Stock Exchange granting approval
	for listing of, and permission to deal in, the New Shares,
	then the Conversion Price shall be 96% of the average
	closing share price of five trading days immediately prior
	to the date of the Conversion Notice
“Debentures”	an aggregate of US$200,000,000 nil interest convertible
	debentures due 2012
“Debenture Holder”	the Subscriber or any debenture transferees who hold the
	Debentures issued pursuant to the Subscription
	Agreement dated 2 June 2007
“Directors”	the board of directors of the Company
“EGM”	the extraordinary general meeting to be held on 29 June
	2007 at 11:00 a.m. at Unit 1, G/F., The Center, 99
	Queen’s Road Central, Hong Kong
“Group”	the Company and its subsidiaries
“Latest Practicable Date”	7 June 2007
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange

– 1 –

DEFINITIONS

“Maturity Date” 1 June 2012 “New Shares” a maximum of 6,000,000,000 Shares issuable upon the exercise of the conversion rights attached to the Debentures “PRC” the People’s Republic of China “Share(s)” the ordinary shares of the Company “Shareholder(s)” holder(s) of the existing shares of the Company “Stock Exchange” the Stock Exchange of Hong Kong Limited “Subscriber” Great Wall Street, Inc., a private company which subscribed an aggregate of US$200,000,000 nil interest Debentures on 2 June 2007 pursuant to the Subscription Agreement “Subscription Agreement” the agreement dated 2 June 2007 entered into between the Company and the Subscriber for an aggregate of US$200,000,000 nil interest Debentures due 2012

– 2 –

LETTER FROM THE BOARD

SOUTH SEA PETROLEUM HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 076)

Executive Directors: Registered Office: Mr. Zhou Ling (Chairman) Unit 6605, 66/F., Ms. Lee Sin Pyung (Managing Director) The Center Ms. Sit Mei 99 Queen’s Road Central Hong Kong

Independent Non-Executive Directors:

Mr. Lu Ren Jie Mr. Chai Woon Chew Mr. Ho Choi Chiu

14 June 2007

To the Shareholders

Dear Sir or Madam,

PROPOSAL INVOLVING ISSUE OF US$200,000,000 CONVERTIBLE DEBENTURES AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

On 2 June 2007, the Directors announced that the Company had entered into a Subscription Agreement with the Subscriber for an aggregate of US$200,000,000 nil interest Debentures due 2012.

The purpose of this document is to give you information relating to the Subscription Agreement, and to give you notice of the EGM at which Shareholders’ approval for the Subscription Agreement and the transaction contemplated thereunder including, inter alia, the issue of the Debentures and the issue and allotment of the New Shares will be sought. No Shareholders have a material interest in the Subscription Agreement, therefore no Shareholders will be required to abstain from voting at the EGM.

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LETTER FROM THE BOARD

2. THE SUBSCRIPTION AGREEMENT

Date of Subscription Agreement

2 June 2007

Parties

• The Company

• Subscriber

Great Wall Street, Inc., a private company, mainly engaged in the business of investing in high-tech and energy industries, securities, government bonds and other financial instruments. Mr. Ethan Chan owns 55% of Great Wall Street, Inc, and he is the only major shareholder who owns more than 5% of the equity interest in Great Wall Street, Inc. Great Wall Street, Inc., Mr. Ethan Chan, other shareholders of Great Wall Street, Inc. and their respective associates do not hold any Shares of the Company.

The Company confirms that, to the best of the directors’ knowledge, information and belief, having made all reasonable enquiry, Great Wall Street, Inc., its ultimate beneficial owners and Mr. Ethan Chan are third party independent of the Group and connected persons (as defined under the Listing Rules) of the Group.

Principal amount

US$200,000,000

Maturity Date

1 June 2012

Interest

Nil

Conditions of the Subscription Agreements

The Subscription Agreement is conditional upon:

• (1) the Shareholders’ approval obtained from the EGM regarding the Subscription Agreement and the transaction contemplated thereunder, inter alia, the issue of the Debentures and the issue and allotment of the New Shares;

• (2) the Listing Committee of the Stock Exchange granting approval for listing of, and permission to deal in, the New Shares.

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LETTER FROM THE BOARD

Completion of the Subscription Agreement

Subject to the approval given by the Shareholders at the EGM, the completion of the Subscription Agreement shall take place one business day after the Stock Exchange shall have granted the listing approval to the Company. Pursuant to the Subscription Agreement, no long stop date is set as a condition precedent.

Conversion

Debenture Holder shall have the right to convert the principal amount of the Debentures in whole or in part in multiples of HK$10,000 into the New Shares at the prescribed Conversion Price within the Conversion Period when the conditions of the Subscription Agreement are fulfilled. The New Shares will rank pari passu in all respects with the existing Shares in issue.

Conversion Price

The Conversion Price shall be 98% of the average closing share price of five trading days immediately prior to the date of the Conversion Notice. If the conversion takes place within nine months after the Stock Exchange granting approval for listing of, and permission to deal in, the New Shares, then the Conversion Price shall be 96% of the average closing share price of five trading days immediately prior to the date of the Conversion Notice.

The closing price of the Shares of the Company as the Latest Practicable Date is HK$0.415.

Effect of Conversion and Substantial Shareholder

Under the Subscription Agreement, a maximum of 6,000,000,000 New Shares will be issued and allotted, which represent 120.66% of the existing issued share capital of the Company as of the date of the Subscription Agreement, and 54.68% of the issued Shares as enlarged by the issuance of a maximum of 6,000,000,000 New Shares. Pursuant to the Subscription Agreement, none of the Debenture Holders shall be allowed to own, directly or indirectly, 5% or more of Shares in the Company’s issued share capital from time to time, under any circumstances. If any Debenture Holder’s Shares in the Company shall have exceeded 5% of the Company’s issued share capital as enlarged by the issue of the New Shares after any conversion of New Shares, they are obligated to sell their Shares to independent third parties or sell the Shares in the open market before they convert any New Shares, to maintain their shareholding level always below 5% in the Shares of the Company after conversion. In each conversion, Debenture Holder is required to provide an undertaking letter to the Company informing the Company of their shareholding immediate before and after such conversion, and undertaking that they will be holding less than 5% of the Company’s Shares after such conversion. Therefore no substantial shareholder, as defined under the Listing Rules, will be introduced to the Company as a result of the conversion of the New Shares.

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LETTER FROM THE BOARD

Shareholding Structure of the Company Before and After the Exercise of Conversion Rights Attached to the Debentures

Immediately before the Debentures be converted into any New Shares Number of Shares % Palmsville Equities Inc. (Note 1) 32,000,000 0.65 Public: 1. Debenture Holders 0 0 2. Other Public 4,940,294,399 99.35 Total 4,972,294,399 100.00	Assuming the conversion rights attached to US$200,000,000 Debentures are fully exercised Number of Shares % 32,000,000 0.29 6,000,000,000 54.68 (Note 2) 4,940,294,399 45.31 10,972,294,399 100.00	Assuming the conversion rights attached to US$200,000,000 Debentures are fully exercised Number of Shares % 32,000,000 0.29 6,000,000,000 54.68 (Note 2) 4,940,294,399 45.31 10,972,294,399 100.00
		100.00

• Note 1: Palmsville Equities Inc. is a company beneficially owned by Mr. Zhou Ling, the Chairman of the Company.

• Note 2: Pursuant to the Subscription Agreement, none of the Debenture Holder shall be allowed to own, directly or indirectly, 5% or more of Shares in the Company’s issued share capital from time to time, under any circumstances.

• Note 3: There is no outstanding convertible notes, options, warrants or similar rights to subscribe equity securities of the Company.

Dilution Effect on Shareholders

In light of the material dilution effect on the existing Shareholders’ interest in the Company as a result of the full conversion of the Debentures, the Company will disclose by way of an announcement all relevant details of the conversion of the Debentures in the following manner:

• (i) the Company will make a monthly announcement (the “Monthly Announcement”) on the website of the Stock Exchange. Such announcement will be made on or before the fifth business day following the end of each calendar month and will include the following details in a table form:

• a. whether there is any conversion of the Debentures during the relevant month. If there is a conversion, details thereof including the conversion date, number of New Shares issued, Conversion Price for each conversion. If there is no conversion during the relevant month, a negative statement to that effect;

• b. the amount of outstanding Debentures after the conversion, if any;

– 6 –

LETTER FROM THE BOARD

• c. the total number of Shares issued pursuant to other transactions during the relevant month, including Shares issued pursuant to exercise of options under any share option scheme(s) of the Company; and

• d. the total issued share capital of the Company as at the commencement and the last day of the relevant month.

• (ii) in addition to the Monthly Announcement, if the cumulative amount of the New Shares issued pursuant to the conversion of the Debentures reaches 5% of the issued share capital of the Company as disclosed in the last Monthly Announcement or any subsequent announcement made by the Company in respect of the Debentures (as the case may be) (and thereafter in a multiple of such 5% threshold), the Company will make an announcement on the website of the Stock Exchange including details as stated in (i) above for the period commencing from the date of the last Monthly Announcement or any subsequent announcement made by the Company in respect of the Debentures (as the case may be) up to the date on which the total amount of Shares issued pursuant to the conversion amounted to 5% of the issued share capital of the Company as disclosed in the last Monthly Announcement or any subsequent announcement made by the Company in respect of the Debentures (as the case may be).

Voting Rights of Debenture Holder

Debenture Holder does not have any voting rights in Shareholders’ meetings of the Company.

Payment Terms of Debentures

Pursuant to the Subscription Agreement, no early redemption is allowed. Should Debenture Holder intend to have the Debentures redeemed by the Company on the Maturity Date, Debenture Holder shall give a notice to the Company on or before 1 December 2011, i.e. being six months prior to the Maturity Date, regarding their intention to convert or redeem their outstanding Debentures. If Debenture Holder intends to redeem the outstanding Debentures but fails to give such notice to the Company, the Company reserves the right to pay back the principal amount after the Maturity Date within a period not more than six months from the Maturity Date.

If there is still outstanding balance of the principal after a maximum of 6,000,000,000 New Shares have been fully issued and allotted, the Company will return the outstanding balance to the Debenture Holders at principal value in no more than six months from the date that a maximum of 6,000,000,000 New Shares have been fully issued and allotted.

– 7 –

LETTER FROM THE BOARD

Transfer of Debentures

The Debentures will not be listed on the Stock Exchange or any other stock exchanges outside Hong Kong. It may only be assigned or transferred to associates of the Subscriber or such other transferees approved in advance by the Company. The Company will disclose to the Stock Exchange should any Debentures are transferred to any connected persons (as defined under the Listing Rules) of the Group immediately upon the Company becoming aware of such transfer.

Undertaking of the Directors

The Directors have undertaken to the Stock Exchange that the Company will disclose to the Stock Exchange any dealings in the Debentures made by any connected persons of the Group (as defined under the Listing Rules) immediately upon the Company becoming aware of such dealing.

History of Fund Raising Activities for the Past Twelve Months

		Gross proceeds
Date of		arising from the	Intended use of	Actual Use of
Announcement	Activity	activities	proceeds	proceeds
28 February	Issue of	US$100,000,000	The net proceeds of	Around
2007	Convertible		US$55 million are	US$1,304,500 has
	Debentures		intended to be used	been used in
			in the exploration of	exploration of crude
			crude oil and gas at	oil and gas at
			Agusan-Davao	Agusan-Davao
			Basin in Davao	Basin in Davao
			province, the	province, the
			Philippines, and the	Philippines, and
			US$45 million to be	around
			used for increasing	US$3,630,000 has
			production of crude	been used in the
			oil at Bula Block	increasing
			Oilfields in	production of crude
			Indonesia.	oil at Bula Block
				Oilfields in
				Indonesia. The
				remaining part of
				the fund will be
				fully used as
				intended.

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LETTER FROM THE BOARD

		Gross proceeds
Date of		arising from the	Intended use of	Actual Use of
Announcement	Activity	activities	proceeds	proceeds
2 February 2007	Issue of	HK$40,000,000	To be used in	Fully used in
	Convertible		increasing	increasing
	Debentures		production of crude	production of crude
			oil in Bula Block	oil in Bula Block
			Oilfields on the	Oilfields on the
			island of Seram in	island of Seram in
			Indonesia.	Indonesia.

3. USE OF PROCEEDS

The Company intends to use the net proceed (approximately US$199.93 million after deducting the necessary expenses) of around US$169.93 million for oil business, of which US$57.93 million is intended for the increase in production and US$56 million is intended to be used in exploration of Indonesian oilfields, another US$56 million will be reserved for any potential acquisition of more oilfield, which the Company does not have any identified target for the time being. The remaining US$30 million is intended for the exploration and mining production in Szechuan, the PRC as disclosed in the announcement of 17 April 2007. The valuation report and the due diligence report of the mines in Szechuan is in progress.

Except approximately HK$500,000 necessary printing cost, administrative cost and legal expenses, no other expenses will be incurred from the issue of the Debentures.

4. REASONS FOR THE ISSUE OF CONVERTIBLE DEBENTURES

The Company intends to increase the production in the Indonesian oilfields, including acquisition of more oilfields. The Company also intends to engage in exploration and mining production in Szechuan, the PRC. The projects will require substantial capital investment.

The Subscription Agreement was reached after arm’s length negotiations between the Company and the Subscriber. Although the conversion of the Debentures has a potential material dilution effect on interest of the existing Shareholders, the Directors (including the independent non-executive directors of the Company) consider: (A) that the Subscription Agreement provides substantial amount of working capital to the Company without interest cost, and (B) when the Debentures are converted into shares, the liability of the Company is converted into equity investment. Therefore, the Directors (including the independent non-executive directors of the Company) consider the terms of the Subscription Agreement are appropriate, fair and reasonable as far as the Company and its Shareholders are concerned, and the Subscription Agreement is in the interest of the Company and its Shareholders as a whole.

An application for the listing of and permission to deal in the New Shares will be made to the Stock Exchange.

– 9 –

LETTER FROM THE BOARD

5. INFORMATION OF THE GROUP

The principal activities of the Company are investment holding, and through its subsidiaries, the Company develops, explores and produces crude oil, and provides electronics manufacturing services in the United Kingdom.

6. EGM

There is set out on page 14 of this document a notice convening the EGM to be held on 29 June 2007 at Unit 1, G/F., The Center, 99 Queen’s Road Central, Hong Kong, at which a resolution in respect of the Subscription Agreement will be proposed to the Shareholders to consider and, if thought fit, approve.

7. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

Pursuant to the articles of association of the Company, a poll may be demanded at any general meeting by:

• (1) the chairman of the meeting; or

• (2) at least five members present in person or by proxy and entitled to vote; or

• (3) any member of members present in person or by proxy and representing in the aggregate not less than one tenth of the total voting rights of all members having the right to attend and vote at the meeting; or

• (4) any member or members present in person or by proxy and holdings shares conferring a right to attend and vote at the meeting on which there have been paid up sums in the aggregate equal to not less than one-tenth of the total sum paid up on all shares conferring that right.

A person entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.

8. RECOMMENDATION

The Directors are of the opinion that the issue of the Debentures will provide substantial amount of working capital for the oilfields work commitments, while the nil interest of the Debentures will not burden the Company with the financial expenses. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

By order of the Board

South Sea Petroleum Holdings Limited Zhou Ling

Chairman

– 10 –

GENERAL INFORMATION

APPENDIX

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement contained herein misleading.

DISCLOSURE OF INTERESTS

(a) Disclosure of Interests by the Directors

• (i) As at the Latest Practicable Date, the interests of each of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or (b) which were required pursuant to Section 352 of the SFO to be entered in the register maintained by the Company referred to therein, or (c) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies were as follows:

Directors’ long position in Shares of the Company

				Approximate
				Percentage to
	**Number of **	**Shares beneficially **	held and	the issued share
		nature of interest		capital of the
	Directly	Through		Company as at
	beneficially	controlled	Total	the Latest
Name of Director	owned	corporation	shareholding	Practicable Date
Mr. Zhou Ling	–	32,000,000	32,000,000	0.64%

Note: 32,000,000 Shares in the Company are held by Palmsville Equity, Inc, a company beneficially owned by Mr. Zhou Ling, the Chairman of the Company.

• (ii) save as disclosed herein, as at the Latest Practicable Date none of the Directors and the chief executive of the Company had any interest or short positions in the shares or underlying shares or interest in debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO) or which were required, pursuant

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GENERAL INFORMATION

APPENDIX

to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange;

• (iii) as at the Latest Practicable Date, none of the Directors had any interest or short positions in the shares or underlying shares which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO;

• (iv) as at the Latest Practicable Date, none of the Directors is materially interested in any contract or arrangement subsisting at the date of this circular which is significant in relation to the business of the Group; and

• (v) as at the Latest Practicable Date, none of the Directors had entered, or proposed to enter into a service contract with any member of the Group which is not determinable by the Group within one year without payment of compensation, other than statutory compensation.

(b) Disclosure of Interest by the Substantial Shareholders

• (i) So far as known to the Directors and the chief executive of the Company, as at the Latest Practicable Date, the persons (other than the Directors or chief executive of the Company) having interests or short positions in the Shares and underlying Shares which were notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO were as follows:

Substantial Shareholders’ long position in the Shares:

				Approximate
				Percentage to
	**Number of **	**Shares beneficially **	held and	the issued share
		nature of interest		capital of the
	Directly	Through		Company as at
Name of	beneficially	controlled	Total	the Latest
Shareholder	owned	corporation	shareholding	Practicable Date
Palmsville Equity,
Inc.	–	32,000,000	32,000,000	0.64%

• (ii) save as disclosed above, there was no person known to the Directors or the chief executive of the Company, other than the Directors or the chief executive of the Company, who, as at the Latest Practicable Date, had an interest or a short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO; and

– 12 –

GENERAL INFORMATION

APPENDIX

• (iii) as at the Latest Practicable Date, there was no person known to the Directors or the chief executive of the Company, other than the Directors or the chief executive of the Company, who, as at the Latest Practicable Date, was, directly or indirectly, interested in 10% or more of the nominal value of the issued share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group, or any options in respect of such capital.

DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the directors of the Company (including their respective associates) are considered to have interests in businesses which compete or are likely to compete, either directly or indirectly, with the businesses of the Group pursuant to the Listing Rules.

LITIGATION

Neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and, so far as the Directors are aware, no litigation or arbitration of material importance is pending or threatened against the Company or any of its subsidiaries.

GENERAL

• (a) The registered office of the Company is Unit 6605, 66/F., The Center, 99 Queen’s Road Central, Hong Kong.

• (b) The secretary of the Company is Ms. Lam Lee Yu, a qualified chartered secretary who is an associate member of the Hong Kong Institute of Chartered Secretaries and the Institute of Chartered Secretaries and Administrators.

• (c) The qualified accountant of the Company is Mr. William Ho, a fellow of Hong Kong Institute of Certified Public Accountants.

• (d) The share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited located at 46/F., Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (e) The English text of this circular shall prevail over the Chinese text.

– 13 –

NOTICE OF EGM

SOUTH SEA PETROLEUM HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 076)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of South Sea Petroleum Holdings Limited (the “Company”) will be held at 11:00 a.m. on 29 June 2007 at Unit 1, G/F., The Center, 99 Queen’s Road Central, Hong Kong for the purpose of considering and if thought fit, passing, with or without modifications, the following resolution which will be proposed as ordinary resolution:

ORDINARY RESOLUTION

“ THAT :

• (a) the Subscription Agreement (as defined in the circular of the Company dated 14 June 2007 (the “Circular”) dispatched to shareholders of the Company) dated 2 June 2007 in relation to the issue of US$200,000,000 nil interest convertible debentures due 1 June 2012 be and is hereby approved, confirmed and ratified; and

• (b) the directors of the Company be and are hereby authorized to take all steps necessary or expedient in their opinion to implement and/or given effect to the terms of the Subscription Agreement including (without limitation) the issue of a maximum of 6,000,000,000 New Shares (as defined in the Circular).”

By Order of the Board Lam Lee Yu Company Secretary

Hong Kong, 14 June 2007

Notes:

• (i) A member entitled to attend and vote at the above Meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

• (ii) Where there are joint holders of any share of the Company, any one of such joint holders may vote at the Meeting, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holders be present at the Meeting personally or by proxy, that one of the said persons so present whose name stands first on the Register of Members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

• (iii) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be lodged with the Company’s Share Registrar, Computershare Hong Kong Investor Services Limited at 46/F., Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not less than 48 hours before the time appointed for holding the Meeting.

– 14 –