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Orbital Engine Corporation Reports Commercial Update

7 December 1998

Orbital Engine Corporation Reports Commercial Update

    PERTH, Western Australia, Dec. 7 -- Following the recent
announcements regarding the finalization of agreements with motorcycle
companies, Orbital would like to provide a brief update on the
commercial progress of its various business units.

    MOTORCYCLE
    The company has recently announced commercial arrangements with
respectively the fastest growing motorcycle companies in Europe and China,
namely Aprilia, Italy and Sundiro of China.  Significantly, these agreements
include arrangements to supply systems and components from Orbital's joint
venture company Synerject and will see motorcycles produced and sold with
Orbital technology commencing in the next 12 months.  Aprilia currently
produces more than 300,000 motorcycles per year and Sundiro 500,000, with both
companies expanding at greater than 25% per year.  As well as these two
agreements, Orbital has active programs with four other internationally
recognized motorcycle manufacturers.  This market is a high volume market with
more than 20 million units being produced each year.

    AUTOMOTIVE 4 STROKE
    The Company continues to aggressively pursue the rapidly growing market
for direct fuel injection in conventional four-stroke automotive engines and
has engineering programs with nine mainstream automotive manufacturers.  Long
term commercial arrangements are actively being progressed in parallel with
technical programs.  Activity at DaimlerChrysler as reported in June is
ongoing having recently completed several programs.  In the coming months
Orbital will now be focusing on applications of the Orbital technology that
will yield further emissions and fuel economy advantages over competing
systems for this important customer.  Orbital does not expect that there will
be any finalization of commercial arrangements by DaimlerChrysler until
further assessments are completed.  Programs with other automotive
manufacturers will now be accelerated.

    AUTOMOTIVE 2 STROKE
    The Company's Genesis program continues to provide good in-field data
regarding the maturity of both its 2 stroke engine designs and also the direct
fuel injection system.  Over 4 million kilometers have now been accumulated on
this fleet of cars with a number now having exceeded 100,000 kilometers.
Several large car producers have recently evaluated Genesis vehicles and the
corresponding field data.  The Company is currently in negotiation with an
international automotive supplier with the aim of producing the 2 stroke
engine commercially.  This is in response to numerous inquiries regarding the
purchase of commercial quantities of engines for automotive applications.

    MARINE & RECREATION
    The extremely good reviews of the Mercury "Optimax" range of outboard
engines containing OCP technology on sale in North American, European and
Australian markets are continuing.  Indications are that the Optimax engines
are proving more reliable than competing technology.  The increase in
legislation regarding emissions controls in this market segment should see
volumes in this sector increase materially over the next few years.  Programs
with both Tohatsu and Bombardier are progressing well with the target of
releasing product well on track.