Gulfsands portfolio comprises oil and gas exploration, development and production projects in Syria, oil and gas exploration, development and production in the Gulf of Mexico, USA and upstream and midstream oil and gas business development activities in Iraq.

SYRIA, BLOCK 26

Gulfsands owns a 50% working interest in, and is the operator of the Contractor Group ("Contractor"), for Block 26 in north-east Syria under a Production Sharing Contract ("PSC"). The block covers approximately 8,250 km2 (approximately 2.11 million acres) and encompasses several pre-existing fields which currently produce over 100,000 bopd of medium gravity 20-26° API crude oil, primarily from mid-Cretaceous aged carbonate reservoirs. These fields, which are not included within the PSC, are operated by third parties including the Syrian Petroleum Company. Gulfsands retains the deep exploration rights (below the base of the Triassic aged section) beneath these fields.

Gulfsands has made two discoveries on Block 26: Khurbet East (June 2007) and Yousefieh (November 2008). Approval to develop Khurbet East was granted by the authorities in February 2008 and production commenced in July 2008 through the Khurbet East Early Production Facility ("EPF"). First production of the Khurbet East 25o API crude oil was achieved only thirteen months after initial discovery.

The initial nameplate processing capacity of the Khurbet East EPF was 10,000 barrels of oil per day ("bopd"), but due to the exceptional production performance of the Field, an expansion of the processing capacity was undertaken in early 2009 and installation was completed in July 2009. By October 2009, daily gross oil production from the Khurbet East Field reached 17,000 bopd, with an API gravity of approximately 25°, and gross cumulative production from the Field exceeded 5 million barrels of oil.

Proven and probable reserves attributable to Gulfsands at 31 December 2008 from Block 26 were 35.2 mmbbl (working interest), 14.3 mmbbl (entitlement).

Two appraisal wells (Yousefieh-2 and Yousefieh-3) were drilled on the Yousefieh discovery during 2009, and the Group expects to obtain approval for commercial development of this discovery shortly. The Yousefieh discovery is located very near to existing infrastructure, with the Yousefieh-1 discovery well located approximately 3 kilometres from the Khurbet East EPF. Gulfsands recently acquired an additional 850 km² of 3D seismic data in the Greater Khurbet East area in order to follow up on the Khurbet East and Yousefieh discoveries.

The current exploration period for Block 26 expires in August 2010 but may be extended at the Contractor's option for a further two years. The minimum work commitments for the current exploration period have already been satisfied. The development and production period for Khurbet East expires in February 2033 (25 years after commercial approval) but may be extended at the Contractor's option for a further 10 years.

The Company has also formed a strategic partnership with Cham Holding, a prominent local industrial group, for the purpose of acquiring additional oil and gas projects in Syria and Iraq.

IRAQ, MAYSAN / MISAN GAS PROJECT

Gulfsands has been conducting business development activities in Iraq since 2003 and has formed a subsidiary for its operations in Iraq as well as opened an office in Baghdad.

In January 2005 the Group signed a Memorandum of Understanding with the Ministry of Oil in Iraq for the Maysan Gas Project in Southern Iraq, following completion of a feasibility study in August 2004, and is currently finalising details of a definitive contract. The project involves the engineering, procurement, construction and operation of a gas gathering system, gas liquids plant and power plant that will gather, process and transmit natural gas currently being flared as a waste by-product of oil production, and will produce electricity to supply the local grid. The project has regional importance not only because of the acute need for power in the area but also because the present practice of gas flaring results in significant environmental damage to the region.

Gulfsands is actively engaged in discussions with respect to financing and potential equity partners.

The Group's primary medium term objective in Iraq is to secure oil and gas exploration and developments projects, and discussions have taken place with certain third parties with this intent. The Group has no reserves in Iraq at present.

USA, GULF OF MEXICO

In the USA Gulf of Mexico, Gulfsands owns interests in 39 blocks comprising approximately 180,000 gross acres in shallow water offshore Texas and Louisiana, which include 27 oil and gas fields that are either in production or are shut-in due to hurricane damage. All of these fields are operated by third parties. The Group also has an interest in one onshore oil field in Texas.

Production is still recovering after damage, primarily to third party infrastructure, caused by Hurricanes Ike and Gustav in Q3 2008. Proven and probable reserves at 31 December 2008 were 5.1 mmboe (working interest), 3.9 mmboe (net revenue interest), of which some 46% was oil and 54% gas.