NGPT

The NGPT Field is held through a combined licence that runs until April, 2024. The Field extends over an area of 215km2 and is located in the Timan-Pechora region, 17 kilometres from Ukhta, a major town in the Republic of Komi. The field is situated approximately 1,200 km from Moscow. Its surrounding areas have well established infrastructure, allowing all year access for field operations. Power lines and a major highway pass through the NGPT Field territory. Most importantly, the branch of the Transneft pipeline, between Ukhta and Moscow, passes directly over the Field. Additional transportation routes include a railway system, with the nearest terminal located close to Ukhta.

In November 2006, NGPT was granted an additional exploration licence covering the Timanskiy Area to the west of the NGPT Field.

Between September 2004 and June 2006 reserves estimates for the NGPT Field have been increased from previous estimates of around 35.2 MMbbls (C1+C2, according to the Russian classification), to approximately 191 MMbbls of Proven and Probable (SPE classification, source: Miller and Lents, CPR). The current estimate of Original Oil in Place is approximately 1,100 MMbbls on a P50 basis, (SPE classification, source: Miller and Lents, CPR).

Since the acquisition of the NGPT Field in 2003, the Company has drilled 27 exploration and appraisal wells in order to further delineate the Field and has started a pilot project which should enable Timan to obtain further hydrodynamic data and evaluate oil properties. In 2007, Timan has completed the drilling of 21 production and 4 water injection wells to a planned depth of 115 meters penetrating the oil bearing sandstones of Reservoir I.

The Company has also invested extensively in the development of field infrastructure and equipment. Timan now owns 4 Atlas-Copco drilling rigs, field vehicles, power supply equipment, compressors; pumps and oil tanks. The Company has recently commenced the construction of an onsite oil treatment plant with a capacity of 3,100 barrels per day.

KNG

The KNG Field is Timan’s other primary asset and is owned through an exploration license which runs until 31 March 2008. The Field is situated in the Pechora region of the Republic of Komi, 57 km north-east from the main regional town of Pechora. It has access to a utility corridor, including the Moscow-Vorkuta rail road, the “Usa-Ukhta-Yaroslvl” crude pipeline and electric power lines although road transportation could be utilised.

Since the acquisition of KNG in March 2005, Timan has acquired new data from surveys and re-interpreted data from eight old exploration wells and field seismic data. On the basis of this work, estimates of Original Oil in Place in the KNG Field have increased to approximately 895 MMbbls on a P50 basis and estimates of Contingent resources (on a best estimate basis) have increased to approximately 147 MMbbls (source: Miller and Lents, CPR, June 2006).

Following positive re-evaluation of the historical data on the KNG Field, the Company believes that, subject to positive results from an appraisal programme on the KNG Field and once a development programme has been outlined, there exists the potential for the re-classification of Contingent Resources to Proved, Probable and Possible Reserves.

The Company has drilled one well on the Field already and has commenced drilling of the second well, which is expected to be completed in June 2007.

GEOTERM

Geoterm is an 80% operating subsidiary of the Group and has its offices in Makhachkala in the Dagestan Republic of Russia. Its principal assets are the Sulak No 4 and Izberbash No 2 exploration licences located in two shallow water areas of the Caspian Sea basin.

The region has well established oil infrastructure. The Azerbaijan - Northern Caucasian – Novorossiysk branch of the Transneft pipeline passes along the shore next to the Izberbash No 2 Block. Both blocks are situated in close proximity to Makhachkala, the capital of Dagestan Republic, which has its own marine oil terminal. Rail infrastructure also passes alongshore the nearby the Sulak No 4 and Izberbash No 2 blocks.

At least nine prospective leads have been identified on the Izberbash Block No 2 totalling 500 MMbbls of oil potential, undiscounted for risk (source: Miller and Lents, CPR, June 2006).

In 2007 Russian independent consultant Neftegazconsult has provided further interpretation of seismic data of Izberbash Block No 2 and evaluated its resources applying risk factors. The final CPR including prospect risk assessments is expected to be provided by Miller and Lents later this year. This additional seismic data should allow the Company to proceed with a full exploration and development strategy for this licence.

The seismic programme on Sulak Block No 4 is progressing as planned with the current aim to collect 650 kms of 2D seismic data. The data will be evaluated with the intention of developing a portfolio of prospects on Sulak Block No 4 by the end of 2007.