Carmanah Completes Sale of Canadian Properties.

CALGARY, Alberta--(BUSINESS WIRE)--July 31, 1996--CARMANAH RESOURCES LTD (TSE: CKM) -- Carmanah Resources Ltd. (CKM - TSE) announced today it has completed the sale of its Western Saskatchewan heavy oil properties.

Gross proceeds of $5.5 million, including adjustments, were utilized to eliminate all corporate indebtedness and to supplement working capital, which presently exceeds $11 million. These funds, together with available cash flow from Carmanah's Indonesian oil production, will be utilized to expand and accelerate planned capital programs.

Carmanah has just completed a minor workover program on two wells in the offshore Camar Field in Indonesia and is planning to install a second jet pump on the northern platform in the field to further expand its production base. Later this summer, a 3-D seismic program will be shot over Camar and the immediately adjacent area to further refine 1997 development drilling prospects, especially horizontal locations. This will be followed by an extensive 2-D program over the balance of the 750,000-acre Bawean Production Sharing Contract.

Later this year, or as soon as suitable jackup rigs become available, Carmanah plans to drill two new wells at Camar. The company also plans to re-enter and drill a sidetrack at the Bunku 1A well, not presently tied into the production platforms.

Discussions to develop and market associated and non-associated gas at Camar continue. A Plan of Development was submitted to Pertamina several months ago and, once a market is secured, Carmanah is positioned to bring the gas onstream at rates up to 20 MMCF/D in a short period of time.

Field operations are underway at Babat-Kukui, onshore Sumatra. The company is nearing completion of its first core hole in the Babat Field, with three additional coreholes scheduled. Subsequently, several conventional wells will be drilled to determine the commerciality of this project. Results of the program should be available in the early fall, 1996.

Carmanah is also completing its geological and geophysical interpretations on a major new venture project in northern Indonesia, with a view to securing a concession later this year.

Carmanah was an unsuccessful bidder in its attempt to acquire producing properties in Egypt. However, the company continues to evaluate and seek out other production acquisition opportunities in various international areas, to complement its increasingly attractive operating base in Indonesia.

Carmanah is a Calgary-based, Canadian oil and gas company. Its operations are conducted primarily in Indonesia, where it operates the Camar Field, currently producing around 4,000 BOPD. -0-

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

CONTACT: Carmanah Resources Ltd.

Mr. R. A. Gusella, 403/266-4975

403/266-5042 (Fax)

or

Carmanah Resources Ltd.

Mr. A. F. Badwi, 403/266-4975

403/266-5042 (Fax)