Shakal Carefully observing the latest developments in Iraq, PETOIL negotiated and, in January 2003, signed a Production Sharing Agreement (PSA) with the Sulaimaniyah Governorate representing the Interim Joint Regional Administration of Northern Iraq.In April 2004, PETOIL transferred 50% of its participating interest in the PSA to Prime Natural Resources, a Houston based US company. The agreement area initially covered almost all PUK controlled areas. However, after several revisions, that area was finally reduced in March 2008 to an exploration block of 640 sq km covering the Shakal structure located near the city of Kifri, to the south of Sulaimaniyah. The participating interest of PETOIL in the project also decreased to 9%, due to Government carve-outs and an assignment to the Australian company Oil Search. Geological field surveys, environmental baseline study and a 300 km 2D seismic survey have been completed and the first exploratory well was spudded in October 2008. The drilling rig currently in use is owned by PPR Drilling Co. Ltd., a joint venture established between PETOIL, Prime Natural Resources and Romfor, a drilling contractor. Bina Bawi In March 2006 PETOIL, through its wholly owned affiliate A&T Petroleum Co. Ltd., entered into another PSA covering Bina Bawi structure in the NW of Erbil. A&T initially had a 50% interest in the Bina Bawi Exploration and Production Sharing Agreement (EPSA). Hawler Energy Ltd, a wholly owned subsidiary of Prime Natural Resources held the remaining 50% interest. A geological field study, a gravity and magnetic survey and an environmental baseline study have been carried out over the agreement area. First exploratory well was spudded in August 25, 2007 and was drilled to a TD of 3350 m. The well encountered significant oil and gas shows that required extensive testing. The second exploratory well BB-2 was drilled to test the shallow oil shows encountered in the first well, but was plugged and abandoned due to technical reasons. In March 2008, a new Production Sharing Contract was negotiated and entered into, to bring the terms and conditions of the EPSA in line with the new KRG Petroleum Law. Currently, Petoil is the operator of the Bina Bawi Block and holds 20% of the rights and obligations of the Contractor, the other contractor parties being Hawler Energy, Ltd. and Oil Search (Iraq) Limited. A total of 242 km 2D seismic was acquired in the contract area in April-May of 2008. The parties intend to drill and test two more exploration wells in 2009.

Shakal Carefully observing the latest developments in Iraq, PETOIL negotiated and, in January 2003, signed a Production Sharing Agreement (PSA) with the Sulaimaniyah Governorate representing the Interim Joint Regional Administration of Northern Iraq.In April 2004, PETOIL transferred 50% of its participating interest in the PSA to Prime Natural Resources, a Houston based US company. The agreement area initially covered almost all PUK controlled areas. However, after several revisions, that area was finally reduced in March 2008 to an exploration block of 640 sq km covering the Shakal structure located near the city of Kifri, to the south of Sulaimaniyah. The participating interest of PETOIL in the project also decreased to 9%, due to Government carve-outs and an assignment to the Australian company Oil Search. Geological field surveys, environmental baseline study and a 300 km 2D seismic survey have been completed and the first exploratory well was spudded in October 2008. The drilling rig currently in use is owned by PPR Drilling Co. Ltd., a joint venture established between PETOIL, Prime Natural Resources and Romfor, a drilling contractor. Bina Bawi In March 2006 PETOIL, through its wholly owned affiliate A&T Petroleum Co. Ltd., entered into another PSA covering Bina Bawi structure in the NW of Erbil. A&T initially had a 50% interest in the Bina Bawi Exploration and Production Sharing Agreement (EPSA). Hawler Energy Ltd, a wholly owned subsidiary of Prime Natural Resources held the remaining 50% interest. A geological field study, a gravity and magnetic survey and an environmental baseline study have been carried out over the agreement area. First exploratory well was spudded in August 25, 2007 and was drilled to a TD of 3350 m. The well encountered significant oil and gas shows that required extensive testing. The second exploratory well BB-2 was drilled to test the shallow oil shows encountered in the first well, but was plugged and abandoned due to technical reasons. In March 2008, a new Production Sharing Contract was negotiated and entered into, to bring the terms and conditions of the EPSA in line with the new KRG Petroleum Law. Currently, Petoil is the operator of the Bina Bawi Block and holds 20% of the rights and obligations of the Contractor, the other contractor parties being Hawler Energy, Ltd. and Oil Search (Iraq) Limited. A total of 242 km 2D seismic was acquired in the contract area in April-May of 2008. The parties intend to drill and test two more exploration wells in 2009.

Shakal Carefully observing the latest developments in Iraq, PETOIL negotiated and, in January 2003, signed a Production Sharing Agreement (PSA) with the Sulaimaniyah Governorate representing the Interim Joint Regional Administration of Northern Iraq.In April 2004, PETOIL transferred 50% of its participating interest in the PSA to Prime Natural Resources, a Houston based US company. The agreement area initially covered almost all PUK controlled areas. However, after several revisions, that area was finally reduced in March 2008 to an exploration block of 640 sq km covering the Shakal structure located near the city of Kifri, to the south of Sulaimaniyah. The participating interest of PETOIL in the project also decreased to 9%, due to Government carve-outs and an assignment to the Australian company Oil Search. Geological field surveys, environmental baseline study and a 300 km 2D seismic survey have been completed and the first exploratory well was spudded in October 2008. The drilling rig currently in use is owned by PPR Drilling Co. Ltd., a joint venture established between PETOIL, Prime Natural Resources and Romfor, a drilling contractor. Bina Bawi In March 2006 PETOIL, through its wholly owned affiliate A&T Petroleum Co. Ltd., entered into another PSA covering Bina Bawi structure in the NW of Erbil. A&T initially had a 50% interest in the Bina Bawi Exploration and Production Sharing Agreement (EPSA). Hawler Energy Ltd, a wholly owned subsidiary of Prime Natural Resources held the remaining 50% interest. A geological field study, a gravity and magnetic survey and an environmental baseline study have been carried out over the agreement area. First exploratory well was spudded in August 25, 2007 and was drilled to a TD of 3350 m. The well encountered significant oil and gas shows that required extensive testing. The second exploratory well BB-2 was drilled to test the shallow oil shows encountered in the first well, but was plugged and abandoned due to technical reasons. In March 2008, a new Production Sharing Contract was negotiated and entered into, to bring the terms and conditions of the EPSA in line with the new KRG Petroleum Law. Currently, Petoil is the operator of the Bina Bawi Block and holds 20% of the rights and obligations of the Contractor, the other contractor parties being Hawler Energy, Ltd. and Oil Search (Iraq) Limited. A total of 242 km 2D seismic was acquired in the contract area in April-May of 2008. The parties intend to drill and test two more exploration wells in 2009.

Shakal Carefully observing the latest developments in Iraq, PETOIL negotiated and, in January 2003, signed a Production Sharing Agreement (PSA) with the Sulaimaniyah Governorate representing the Interim Joint Regional Administration of Northern Iraq.In April 2004, PETOIL transferred 50% of its participating interest in the PSA to Prime Natural Resources, a Houston based US company. The agreement area initially covered almost all PUK controlled areas. However, after several revisions, that area was finally reduced in March 2008 to an exploration block of 640 sq km covering the Shakal structure located near the city of Kifri, to the south of Sulaimaniyah. The participating interest of PETOIL in the project also decreased to 9%, due to Government carve-outs and an assignment to the Australian company Oil Search. Geological field surveys, environmental baseline study and a 300 km 2D seismic survey have been completed and the first exploratory well was spudded in October 2008. The drilling rig currently in use is owned by PPR Drilling Co. Ltd., a joint venture established between PETOIL, Prime Natural Resources and Romfor, a drilling contractor. Bina Bawi In March 2006 PETOIL, through its wholly owned affiliate A&T Petroleum Co. Ltd., entered into another PSA covering Bina Bawi structure in the NW of Erbil. A&T initially had a 50% interest in the Bina Bawi Exploration and Production Sharing Agreement (EPSA). Hawler Energy Ltd, a wholly owned subsidiary of Prime Natural Resources held the remaining 50% interest. A geological field study, a gravity and magnetic survey and an environmental baseline study have been carried out over the agreement area. First exploratory well was spudded in August 25, 2007 and was drilled to a TD of 3350 m. The well encountered significant oil and gas shows that required extensive testing. The second exploratory well BB-2 was drilled to test the shallow oil shows encountered in the first well, but was plugged and abandoned due to technical reasons. In March 2008, a new Production Sharing Contract was negotiated and entered into, to bring the terms and conditions of the EPSA in line with the new KRG Petroleum Law. Currently, Petoil is the operator of the Bina Bawi Block and holds 20% of the rights and obligations of the Contractor, the other contractor parties being Hawler Energy, Ltd. and Oil Search (Iraq) Limited. A total of 242 km 2D seismic was acquired in the contract area in April-May of 2008. The parties intend to drill and test two more exploration wells in 2009.

Shakal Carefully observing the latest developments in Iraq, PETOIL negotiated and, in January 2003, signed a Production Sharing Agreement (PSA) with the Sulaimaniyah Governorate representing the Interim Joint Regional Administration of Northern Iraq.In April 2004, PETOIL transferred 50% of its participating interest in the PSA to Prime Natural Resources, a Houston based US company. The agreement area initially covered almost all PUK controlled areas. However, after several revisions, that area was finally reduced in March 2008 to an exploration block of 640 sq km covering the Shakal structure located near the city of Kifri, to the south of Sulaimaniyah. The participating interest of PETOIL in the project also decreased to 9%, due to Government carve-outs and an assignment to the Australian company Oil Search. Geological field surveys, environmental baseline study and a 300 km 2D seismic survey have been completed and the first exploratory well was spudded in October 2008. The drilling rig currently in use is owned by PPR Drilling Co. Ltd., a joint venture established between PETOIL, Prime Natural Resources and Romfor, a drilling contractor. Bina Bawi In March 2006 PETOIL, through its wholly owned affiliate A&T Petroleum Co. Ltd., entered into another PSA covering Bina Bawi structure in the NW of Erbil. A&T initially had a 50% interest in the Bina Bawi Exploration and Production Sharing Agreement (EPSA). Hawler Energy Ltd, a wholly owned subsidiary of Prime Natural Resources held the remaining 50% interest. A geological field study, a gravity and magnetic survey and an environmental baseline study have been carried out over the agreement area. First exploratory well was spudded in August 25, 2007 and was drilled to a TD of 3350 m. The well encountered significant oil and gas shows that required extensive testing. The second exploratory well BB-2 was drilled to test the shallow oil shows encountered in the first well, but was plugged and abandoned due to technical reasons. In March 2008, a new Production Sharing Contract was negotiated and entered into, to bring the terms and conditions of the EPSA in line with the new KRG Petroleum Law. Currently, Petoil is the operator of the Bina Bawi Block and holds 20% of the rights and obligations of the Contractor, the other contractor parties being Hawler Energy, Ltd. and Oil Search (Iraq) Limited. A total of 242 km 2D seismic was acquired in the contract area in April-May of 2008. The parties intend to drill and test two more exploration wells in 2009.

Shakal Carefully observing the latest developments in Iraq, PETOIL negotiated and, in January 2003, signed a Production Sharing Agreement (PSA) with the Sulaimaniyah Governorate representing the Interim Joint Regional Administration of Northern Iraq.In April 2004, PETOIL transferred 50% of its participating interest in the PSA to Prime Natural Resources, a Houston based US company. The agreement area initially covered almost all PUK controlled areas. However, after several revisions, that area was finally reduced in March 2008 to an exploration block of 640 sq km covering the Shakal structure located near the city of Kifri, to the south of Sulaimaniyah. The participating interest of PETOIL in the project also decreased to 9%, due to Government carve-outs and an assignment to the Australian company Oil Search. Geological field surveys, environmental baseline study and a 300 km 2D seismic survey have been completed and the first exploratory well was spudded in October 2008. The drilling rig currently in use is owned by PPR Drilling Co. Ltd., a joint venture established between PETOIL, Prime Natural Resources and Romfor, a drilling contractor. Bina Bawi In March 2006 PETOIL, through its wholly owned affiliate A&T Petroleum Co. Ltd., entered into another PSA covering Bina Bawi structure in the NW of Erbil. A&T initially had a 50% interest in the Bina Bawi Exploration and Production Sharing Agreement (EPSA). Hawler Energy Ltd, a wholly owned subsidiary of Prime Natural Resources held the remaining 50% interest. A geological field study, a gravity and magnetic survey and an environmental baseline study have been carried out over the agreement area. First exploratory well was spudded in August 25, 2007 and was drilled to a TD of 3350 m. The well encountered significant oil and gas shows that required extensive testing. The second exploratory well BB-2 was drilled to test the shallow oil shows encountered in the first well, but was plugged and abandoned due to technical reasons. In March 2008, a new Production Sharing Contract was negotiated and entered into, to bring the terms and conditions of the EPSA in line with the new KRG Petroleum Law. Currently, Petoil is the operator of the Bina Bawi Block and holds 20% of the rights and obligations of the Contractor, the other contractor parties being Hawler Energy, Ltd. and Oil Search (Iraq) Limited. A total of 242 km 2D seismic was acquired in the contract area in April-May of 2008. The parties intend to drill and test two more exploration wells in 2009.