Exploration

The company has worked progressively over the past five years to define prospects on the three Exploration Blocks – 3105 Manambolo; 3106 Morondava; and 3107 Manandaza. Beginning in 2006, when it was determined that there was no clear understanding of the underlying regional deposition on all five of the Company’s blocks the company; contracted Weinman Geoscience in 2007 to fully review the Madagascar geology and geophysics and develop a comprehensive regional basin study; in 2008 utilized the study to reevaluatethe historic seismic data on the three blocks mapped the potential play fairways across each of the blocks and reconfigured all of the existing seismic lines; conducted a 200 km seismic program in 2009 that targeted high potential areas for further geophysical evaluation, and in 2010 conducted 880 square kilometers of GORE micro seepage survey over the identified prospect leads.

The Weinman study was able to identify lack of source, trap and/or seal in the prior efforts that explained why none of the 10 wells drilled on the three Exploration blocks, or the 60 wells drilled for exploration across Madagascar in prior years, were successful in finding commercial oil or gas reserves. The seismic program analysis identified eight leads that have defined potential reservoir structures that exceeding 1.0 billion barrels in size.

Work in 2010 focused on eight leads in the seven survey area below. The company conducted 880 square kilometers of micro seepage analysis utilizing GORE sorber modules. These surveys identified the presence of hydrocarbon five of the possible leads, which will be discussed in the individual Block pages.