namibian acreage, page-20

From PCL's 3rd quarter activities report announced today:

Offshore Namibia is an under-explored region between the prolific oil producing basins of Angola and Nigeria to the north and the oil & gas discoveries of the Orange Basin to the south.

Pancontinental has a two-year Reconnaissance Licence (RL) over 30,000 km² of the Walvis Basin, offshore northern Namibia, granted in February 2007.

The company has made an initial evaluation of seismic and well data over the area. Interpretation of these data approached completion during the Quarter and planning commenced to convert the RL to a full Petroleum Agreement (PA) and Exploration Licence (EL).

The very large area held under the RL offers a significant opportunity to explore for oil and gas on the southern West African margin. Some of the geological 'plays' identified during the evaluation of the RL are similar to successful oil- producing plays elsewhere in West Africa.

Any PA and EL is subject to negotiations with the Ministry of Mines and Energy of Namibia. Pancontinental plans to commence such negotiations in the forthcoming Quarter.

Pancontinental entered discussions during the Quarter with Key Petroleum Ltd to share any PA and EL ensuing from the RL. Subsequent to the end of the Quarter, a Participation Agreement was signed by Pancontinental and Key.