Ann: Extension of Puntland PSA's , page-2

Well Guys,

This is a good as we could of hoped for in the PSA renewal process, The Puntland Goverment have had enough of Africa Oils games, Hard dates have been set and agreed to by AOI, if AOI fail to meet deadline dates, they be out on their ear, having already spent 10s of millions on Puntland, I doubt they will risk being turfed out now.

Under the amended PSAs Africa Oil is obligated to spud a minimum of one exploratory well in the Dharoor
Valley Exploration Area by 27 July 27 2011. A second exploratory well is required to be spudded in the
Nugaal Valley Exploration Area or, at the option of Africa Oil, in the Dharoor Valley Exploration Area, by
27 September 2011. Red Emperor has an option but not obligation to participate in the second well.

Rig molbilization will have to occur very shortly, if AOI are to meet the drill spud deadlines dates under the under the new PSA, it is highly doubtful, that AOI could get away with only one Drill Rig unless they molbilize very shortly ie, Feb, Mar.
As stated by AOI are already in advanced negotiations with a Drilling Contractor to meet these obligations.

Keith Hill, President and CEO of Africa Oil commented on these developments as follows: We look
forward to the upcoming wells in the rift basins of Puntland which we believe could hold similar potential
to the geologically related basins in Yemen which contain more than 6 billion barrels of discovered
reserves. We appreciate the cooperation and efforts from the government in granting this extension and
are in advanced negotiations with a drilling contractor to meet these obligations. We also would like to
welcome our new partner Red Emperor to the joint venture.

So it would suggest AOI need to mobilze very shortly, or contract 2 drilling rigs to meet these deadline dates, which I dont think AOI would desire to do.

Looks like we will be drilling both Puntland and Georgia no later than 2nd, quarter 2011.

Cheers
jamit01