Legacy Oil & Gas Interests

The Company’s portfolio of oil and gas interests are either minority stakes or non-operated assets and it is the Board’s intention to dispose of these interests in an orderly manner over time. The Board does not expect that any further significant funds will be committed to the oil and gas assets unless required, in the opinion of the Directors, to preserve their value, and therefore shareholder value, ahead of any realisation.

(a) Mesopotamia Petroleum Company (MPC)

The Company holds a 32.67 per cent stake in an associated company, MPC, of which Stephen Remp is currently Chairman. In February 2009 MPC signed a JV agreement with IDC, the Iraqi state-owned drilling company, to create IOSCO. We announced on 8 July that IDC had ended the IOSCO JV as MPC had failed to meet a funding deadline. The MPC Board remains as committed as ever to building a presence in Iraq and since that date has been pursuing the re-instatement of the JV. The Board of MPC believe that the market opportunity for delivering shareholder value in Iraq, through the establishment of an oil service JV that is focused on drilling high productivity wells and increasing Iraq’s oil production, remains highly attractive.

IDC’s decision to end the JV obviously had a negative impact on MPC’s fundraising process but considerable efforts are continuing to be made by MPC, which is advised by JP Morgan Cazenove, to secure the funding, conditional on the re-instatement of the JV. Discussions with potential investors and IDC are on-going.

In addition, a number of new and promising opportunities have been brought to MPC and are currently being evaluated. Reaching a satisfactory conclusion may take longer than we might hope but the Board believes it will be time well spent. Further updates will be issued as and when developments materialise.

(b) Lansdowne Oil & Gas plc

The Company currently holds a 32.95 per cent interest in Lansdowne which is itself AIM listed. In 2007 The Company granted an option over its interest in Lansdowne to LC Capital Master Fund (“LC”), and any disposal of our current holding will have to be arranged in conjunction with LC and as a result no decision has been made by the Board that this interest is for sale, at present.

(c) Eagle HC Limited

Eagle is owned 100 per cent by The Company and has royalty interests in a number of North Sea blocks. Whilst none of the blocks are currently producing, two have had hydrocarbon discoveries drilled on them.

(d) Other Oil & Gas interests

The Company holds a small royalty interest onshore Bulgaria, over acreage shortly due to commence production, and an interest in acreage offshore Montenegro, which is currently the subject of a dispute with the Montenegrin authorities. It is expected that as the Bulgarian acreage moves into production and the royalty starts to generate cash flow that there will be buyers for the royalty. It is unlikely that we will find a buyer for our interests in Montenegro unless and until the dispute is successfully resolved.