The Company has proposed to the Government of the Sultanate of Oman (the “Government”) the development in Oman of a USD $1.6 billion real-estate and tourism project (the “Omagine Project”). In May 2008, the Omagine Project was formally approved by the Government for development on a one million square meter site provided by the Government. The Company’s management has raised $110 million of capital for the project from investors in Oman, including the office of Royal Court Affairs which represents the personal interests of His Majesty Sultan Qaboos bin Said, the ruler of Oman. The Company’s financial advisor is Bank Muscat, the largest financial institution in Oman. Management’s internal financial model for the Omagine Project predicts approximately USD $600 million of free cash flow over the five year period subsequent to signing the “Development Agreement” with the Government of which 50.5% will flow to the Company. On February 17, 2009 the Company's attorneys delivered an updated draft Development Agreement to the Government, incorporating all of the commercial and other terms as agreed with and approved by the Government and accepted by the Company (the “February 2009 Draft Agreement”). The Government subsequently confirmed in writing to the Company that March 16, 2009 was the date that they would meet with the Company to discuss and conclude the Development Agreement (the "Final Meeting"), which the Government described as the "wrap-up" meeting for the Omagine Development Agreement. The Government also informed the Company's attorneys that it planned to conduct internal meetings (the "Government Internal Meetings") among the relevant Ministries (Tourism, Legal Affairs and Finance) in preparation for the Final Meeting with a view toward expediting the review process required at the Final Meeting. As of the date hereof, the Government has postponed the Final Meeting; however in their review process the Company received a letter from the Government on March 30, 2009 requesting a separate Annexure (“Annex A”) to the Standard DA (“SDA”) containing the commercial terms for the Omagine Project and a separate document with any comments or additions on the SDA. Complying with this request did not change anything in our proposed February 2009 Draft DA. This was an enormous task which was completed and delivered to the Government on April 30, 2009.

Management believes that the Government's bureaucratic process has now run its course, and management is unwavering in its belief that the Company's persistent insistence upon the clarity of the language of the development agreement will be of enormous financial value to all parties once the actual development of the Omagine Project is underway. As of the date hereof the Government has re-started the Government Internal Meetings regarding Omagine and we expect very few, if any, controversial items to emerge. Although the Company expects some inconsequential re-drafting of the February 2009 Draft Agreement to be required, management is highly confident that the Government Internal Meetings will result in a draft development agreement acceptable to all parties.

The Company presently anticipates that, either the conclusion of the Government's review process in the Government Internal Meetings, or the Final Meeting, if required, will result in a fully settled and agreed document ready for printing and signature soon thereafter.

The Project Company

The Company is a real-estate development, entertainment and hospitality company focusing on development opportunities in the Middle East and North Africa (MENA) resulting from the aggressive growth strategies adopted by governments in the hyper-wealthy MENA region. These governments are seeking to diversify their economies through mega-projects that create tourist destination hot spots.

The Omagine Project will be developed by Omagine SAOC (the “Project Company”), an Omani company presently under formation. The “Founder Shareholders” of the Project Company are the Company, Consolidated Contractors International Company, SA (“CCIC”), a USD $5 billion company with worldwide operations and approximately 150,000 employees (see: www.ccc.gr), and Omani Shareholders.The Company has signed a memorandum of understanding ("MOU") with each of (i) Newco, an Omani company formed by leading Omani businessmen, (ii) a prominent Omani person ("MNK") and (iii) the office of Royal Court Affairs ("RCA") which represents the personal interests of His Majesty Sultan Qaboos bin Said, the ruler of the Sultanate of Oman. Newco, MNK and RCA are the Omani Shareholders. The Project Company will design, develop, own and operate the entire Omagine Project.

As presently contemplated the Company will own 50.5% of the Project Company and CCIC will own 12%. The remaining 37.5% of the Project Company will be owned by highly prominent Omani Shareholders, including His Majesty the Sultan. The Project Company will be capitalized at approximately USD $110 million and will have the financial capacity to begin development of the Omagine Project almost immediately after the signing of the Development Agreement with the Government. Bank Muscat has agreed to arrange the necessary construction and other financing for the Project Company.

The $ 1.6 + Billion Omagine Project

The Company's planned Omagine Project is an integration of cultural, heritage, educational, entertainment and residential components. The development site (the “Omagine Site”) is an amazingly pristine coastal stretch of beachfront approx. 20 kilometers northwest of Muscat and only 4 kilometers from Oman’s International Airport. The one million (1,000,000) square meter Omagine Site (equal to approx. 245 acres) has one kilometer of beach frontage – but will be developed to have over seven km. of water frontage – of which 1.8 km. will be beach-front. The Omagine Project also includes several hundred thousand square meters of residential housing units that will be developed and sold by the Project Company. Significant commercial, retail and hospitality elements are also included. The Omagine Project is expected to take between 4 to 5 years to complete.

Management is aware that due to market conditions the value of the Omagine Site has increased sharply over the past 2 years and, provided such values are sustained, this increased value will have a materially positive effect on the Project Company’s future cash flows as well as its financing activities. The Omagine Project’s construction and capital cost is presently estimated at approximately U.S. $1.6 billion.

The Project Company’s financial model which has been reviewed by Bank Muscat presently predicts an internal rate of return ("IRR") for the Omagine Project in excess of 20% and net positive cash flow in excess of approximately USD $600 million (the "Projected Cash Flow") over the five year period immediately subsequent to the signing of the Development Agreement.

Pursuant to the terms agreed in writing with the Government, the Omani shareholders and CCIC, the Project Company will be owned fifty and one-half percent (50.5%) percent by the Company (the “Company Equity”) and the Company Equity will remain the majority equity stake in the Project Company and the Government will not own any equity of the Project Company.

In order to move into the actual development stage of the Omagine Project, the Founder Shareholders must now organize the Project Company and the Government and the Project Company must then sign the Development Agreement.As recently reported, the Company believes that no outstanding issues exist prior to the signing of the Development Agreement and all parties, including the Omani Shareholders, are desirous of signing the Development Agreement as soon as possible. The Company anticipates that the Development Agreement will be signed early in the third quarter of 2009.

Subsequent to the signing of the Development Agreement, the Omagine Site's value will be definitively determined by a qualified independent real-estate appraiser and such appraisal will be used by Bank Muscat to optimize the Project Company's financing alternatives with Bank Muscat and other financial institutions.

Please be advised that the foregoing assumptions and this discussion are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which involve uncertainties and other factors which could cause the outcomes described herein to differ from future Company achievements as expressed or implied by such forward-looking statements.

OMANI GOVERNMENT APPROVAL

In May 2008 the Company announced that it received an official letter from the Government of Oman formally approving the terms by which the Omagine Project will be developed (the “Approval Letter”). As required by the Approval Letter, the Company formally notified the Government in writing on May 31, 2008 of its approval and acceptance of the Approval Letter and furnished the Government with various confirmations relating to the Omani and other shareholders of the Project Company and elements of the Omagine Project.

It was previously agreed that Omagine SAOC (the Project Company) would be formed in Oman immediately after the Development Agreement had been signed. All parties agreed that the Company and CCIC would sign the Development Agreement on behalf of Omagine SAOC (under formation) but the Government has now requested that we form the Project Company with the Omani Shareholders and CCIC prior to the signing of the Development Agreement. The Company has no objection to this and is presently in the process of forming the Project Company so that the Project Company is legally in existence in Oman and ready to sign the Development Agreement.

The Company believes that no outstanding issues exist in the Draft Agreement and all parties, including the Government and the Omani Shareholders, are desirous of signing the Development Agreement expeditiously. As stated above the only new requirement imposed by the Government was that the Company form the Project Company with the Omani Shareholders and CCIC prior to the signing of the Development Agreement and the performance of that task is underway.

The date of such signing is entirely in the hands of the Government. Based on recent letters received from the Government and on conversations with the Omani Shareholders, Government officials and the Company's attorneys, the Company understands that the Government is anxious to conclude this matter and that a signing date for the Omagine Development Agreement will be indicated following the conclusion of the Government Internal Meetings.

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