09:20     SHANDONG MOLONG<08261>-Announcement&Resumption of Trading           

    This announcement is for information purposes only and does not           
    constitute an invitation or offer to acquire, purchase or subscribe       
    for securities.                                                           
                                                                              
    The Stock Exchange of Hong Kong Limited takes no responsibility for       
    the contents of this announcement, makes no representation as to its      
    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 announcement.               
                                                                              
    Shandong Molong Petroleum Machinery Company Limited                       
    (a Sino-foreign joint stock limited company incorporated in the           
    People's Republic of China with limited liability)                        
    (Stock Code: 8261)                                                        
                                                                              
    PLACING OF 108,000,000 NEW H SHARES                                       
                                                                              
    Sole Bookrunner and Lead Manager                                          
    Guotai Junan Securities (Hong Kong) Limited                               
                                                                              
    Joint Financial Advisers                                                  
    Guotai Junan Capital Limited                                              
    Deloitte & Touche Corporate Finance Ltd.                                  
                                                                              
    On 26 April 2005, the Company entered into the Placing                    
    Agreement with the Lead Manager in relation to the Placing, pursuant      
    to which, the Lead Manager has agreed to place 108,000,000 new H          
    Shares, on a fully underwritten basis, at the Placing Price. The          
    Placing Shares represent approximately 20.0% of the existing issued       
    share capital of the Company and approximately 16.7% of the issued        
    share capital of the Company, as enlarged by the issue of the Placing     
    Shares. The Placing Price of HK$0.92 per H Share represents (a) a         
    discount of 8.0% to the closing price of HK$1.0 per H Share as quoted     
    on GEM on 25 April 2005, being the trading day immediately preceding      
    the date of the Placing Agreement; and (b) a discount of                  
    approximately 6.9% to the average closing price of HK$0.988 per H         
    Share for the 5 trading days as quoted on GEM immediately preceding       
    the date of the Placing Agreement.                                        
                                                                              
    The Placing Shares will be subscribed by more than six independent        
    professional and institutional investors and are fully underwritten       
    by the Lead Manager.                                                      
                                                                              
    The net proceeds of the Placing, after deducting the related              
    commission and expenses, will be approximately HK$94.8 million. The       
    Company intends to use all of the net proceeds from the Placing for       
    the purchase of a full set of new production facilities for producing     
    casing and related accessories. The net Placing Price is                  
    approximately HK$0.878 per H Share.                                       
                                                                              
    The Placing Shares will                                                   
    be issued under the specific mandate granted to the Directors at the      
    special general meeting of the Company and the separate Class             
    Meetings held on 14 February 2005. The Company has obtained the           
    approval of the CSRC on 18 April 2005 for the issue of not more than      
    108,000,000 Placing Shares.                                               
                                                                              
    The Company has applied for a suspension of trading of its H Shares       
    on GEM from 9:30 a.m. on 26 April 2005 pending the publication of         
    this announcement. Application has been made to the Stock Exchange        
    for a resumption of trading of the H Shares on GEM with effect from       
    9:30 a.m. on 28 April 2005.                                               
                                                                              
    By Order of the Board                                                     
    Shandong Molong Petroleum Machinery Company Limited                       
    Zhang En Rong                                                             
    Chairman                                                                  
                                                                              
    Shandong, the PRC, 27 April 2005                                          
                                                                              
    As at the date of this announcement, the executive Directors of the       
    Company are Zhang En Rong, Lin Fu Long, Zhang Yun San, Xie Xin Cang;      
    the non-executive Directors are Chen Jian Xiong and Wang Ping; and        
    the independent non-executive Directors are Qin Yue Chang, Yan Yi         
    Zhuang and Loke Yu alias Loke Hoi Lam.                                    
                                                                              
    The above announcement is a summary only. For the full version of         
    this announcement, please refer to the `Latest Company Announcements'     
    page on the GEM website at www.hkgem.com.