An Independent Assessment of Wessex Exploration plc

Prepared for Wessex Exploration plc and Westhouse Securities Ltd. By Daniel T Shaw of DOrange Ltd. and J David M Roberts of Woodfall Consulting Ltd.

30 November 2009

Preface
This document, prepared on behalf of Wessex Exploration plc and Westhouse Securities Ltd., is the proprietary property of DOrange Ltd. and Woodfall Consulting Ltd., which retain all copyright and other ownership rights to the contents. This document was prepared on the understanding that the content will be disclosed in the public domain. While every effort is made to ensure that information in this document is correct and up-to-date, DOrange Ltd. and Woodfall Consulting Ltd. do not accept any responsibility for the accuracy of the information obtained from Wessex Exploration plc, and do not accept any liability for any direct, indirect or consequential loss or damage of any nature, however caused, which may be sustained as a result of reliance upon such information. Wessex Exploration, Westhouse Securities Ltd. and other investors may use this document and analysis along with other expertise to decide on future investment strategy. DOrange Ltd. and Woodfall Consulting Ltd. assume no responsibility for any decisions, investments or divestments that companies or investors may make.

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Forward-Looking Information
Certain statements contained herein are forward-looking statements. Forward-looking information typically contains statements with words such as "intends," "anticipate," "estimate," "expect," "potential," "could," "plan" or similar words suggesting future outcomes. Readers are cautioned not to place undue reliance on forward-looking information because it is possible that expectations, predictions, forecasts, projections and other forms of forward-looking information will not be achieved by Wessex Exploration plc. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties. A change in any one of these factors could cause actual events or results to differ materially from those projected in the forward-looking information. Although Wessex Exploration plc believes that the expectations reflected in such forward-looking statements are reasonable, Wessex Exploration plc can give no assurance that such expectations will prove to be correct. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Wessex Exploration plc and described in the forwardlooking statements or information. The forward-looking statements are based on a number of assumptions, which may prove to be incorrect. In addition to other assumptions identified herein, Wessex Exploration plc has made assumptions regarding, among other things: market costs and other variables affecting operating costs; the ability of partners to obtain equipment, services and supplies, including labour, in a timely and cost-effective manner; the availability and costs of financing; oil and gas prices; foreign currency exchange rates and hedging risks; government regulations and royalty regimes; and the degree of risk that governmental approvals may be delayed or withheld. Other specific assumptions and key risks and uncertainties are described elsewhere in this document and in Wessex Exploration plc's other filings with the Plus Exchange. Readers should be aware that the list of assumptions, risks and uncertainties set forth herein are not exhaustive. Readers should refer to Wessex Exploration plc's documentation for a detailed discussion of these assumptions, risks and uncertainties. The forward-looking statements or information contained in this document are made as of the date hereof. DOrange Ltd. and Woodfall Consulting Ltd. undertake no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable laws or regulatory policies. Additional information relating to Wessex Exploration plc can be found at http://www.wessexexploration.com/ Additional information relating to DOrange Ltd. can be found at http://www.dorange.co.uk/ Additional information relating to Woodfall Consulting Ltd. can be found at http://www.woodfallconsulting.com/

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Contents
Preface .......................................................................................................................i
Forward-Looking Information.............................................................................................. ii

Contents ................................................................................................................... iii Introduction ............................................................................................................... 2 Southern United Kingdom......................................................................................... 3

Context ...............................................................................................................................3 Licences .............................................................................................................................3 PEDL 089 ...........................................................................................................................4 Ownership ..........................................................................................................................4 Adjacent Offshore licence P1153 .......................................................................................4 History of Appraisal ............................................................................................................4 PEDL 238 ...........................................................................................................................6 Ownership ..........................................................................................................................6 History of Appraisal ............................................................................................................6 PEDL 239 ...........................................................................................................................7 Ownership ..........................................................................................................................7 History of Appraisal ............................................................................................................7 Hydrocarbon Systems ........................................................................................................8 Forward Work Program ....................................................................................................10

Guyane ................................................................................................................... 11
Context .............................................................................................................................11 Licences ...........................................................................................................................11 Ownership ........................................................................................................................12 History of Appraisal ..........................................................................................................13 Hydrocarbon Systems ......................................................................................................14 Forward Work Program ....................................................................................................15

Juan De Nova Est ................................................................................................... 17

Context .............................................................................................................................17 Licences ...........................................................................................................................17 Ownership ........................................................................................................................18 History of Appraisal ..........................................................................................................18 Hydrocarbon Systems ......................................................................................................20 Forward Work Program ....................................................................................................21

Western Sahara (Saharawi Arab Democratic Republic) ......................................... 22

Context .............................................................................................................................22 Licences ...........................................................................................................................23 Ownership ........................................................................................................................23 History of Appraisal ..........................................................................................................24 Hydrocarbon Systems ......................................................................................................27 Forward Work Program ....................................................................................................28

Wessex Exploration plc Management..................................................................... 29

David Bramhill ..............................................................................................................29 Tim Heeley ...................................................................................................................29 Fred Dekker..................................................................................................................29

Conclusions ............................................................................................................ 30 Appendix : Official Contacts.................................................................................... 31

The Department of Energy and Climate Change (United Kingdom) ................................31 Bureau exploration production des hydrocarbures (France) (Guyane and Juan de Nova Est) ...................................................................................................................................31 SADR Petroleum Authority (Saharawi Arab Democratic Republic) ..................................31

References ............................................................................................................. 32

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Introduction
Wessex Exploration Ltd. was formed in the mid-1980s to explore the hydrocarbon potential of the Wessex and Weald Basins of southern United Kingdom. As a private limited oil and gas exploration company, it has acquired licences in other parts of the world. In October 2009, Wessex Exploration Ltd. raised circa 1.1 million after costs from private shareholders to fund advancement of its assets. In November 2009, Wessex Exploration Ltd. converted to a public limited company, changing name to Wessex Exploration plc. The company intends to quote shortly on the UK PLUS market, which is a London-based investment exchange for small and mid-cap companies regulated by the Financial Services Authority, to facilitate trading of its shares and to grow the investor base. Wessex Exploration plc has percentage interests in four areas of the world: Southern United Kingdom, French department of Guyane, French zone of exclusive economic interest Juan De Nova Est, Saharawi Arab Democratic Republic.

Progress on the licences is still in the early stage; no exploration wells have been drilled recently, and no hydrocarbon discoveries have been made. There are therefore no definitive resources to quantify. The directors of Wessex Exploration plc and its corporate adviser, Westhouse Securities Ltd., commissioned Woodfall Consulting Ltd. and DOrange Ltd. to provide independent verification for existing and future shareholders of the following: Status of Wessex Exploration plcs interest in each licence, Geological studies and reservoir evaluation work performed to date by the company and by its partners, Potential for viable petroleum systems to exist on each licence, Future commitments demanded by the terms of each licence.

In support of this work, material generated by the Wessex Exploration plc and by its exploration partners has been provided to the authors by the directors of Wessex Exploration plc. Where appropriate, the material has been augmented by information in the public domain. This independent report fulfils those objectives by assessing the above factors for each area in turn.

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Southern United Kingdom

Context The United Kingdom (UK) has a well established licensing system. The tax regime has changed many times often because of newly elected governments and responses to economic crises. However, historically the changes have not adversely affected companies that had made commitments to developments; rather the changes redefined the tax framework for upcoming developments. Once a company like Wessex Exploration plc has found reserves and initiated an extraction project, the tax system is rarely adjusted to undermine the project economics. Precedents have been set in this geographic area, which show the challenges for oil and gas development. For appraisal work, planning is a hurdle, especially when not on Forestry Commission land; the key is talking to land owners. For development work, the challenges and solutions are similar, but of greater magnitude. However, the nearby BP Wytch Farm development has shown what can be achieved in this region, with exemplary environmental credentials. The discovery of commercial oil at Wytch Farm by British Gas in the early 1980s sparked an upsurge of interest in southern Englands hydrocarbon potential. A regional study encompassing geological information from outcrops near Exmouth in the west to the English Channel near Dover in the east, and from the Channel basin in the south northwards to where the Mesozoic beds pinch out near London was conducted. All the available well data at the time were included, and all formations, especially the reservoir units, were sampled and described. The intent of the regional study was to understand the genesis and evolution of the province, and the potential for hydrocarbon generation, migration, and trapping. A later regional study focused on the Wessex Basin area around Wytch Farm. This study led to Wessex Exploration Ltd.s application for acreage in the 9th Landward Bid Round, which resulted in the award of Petroleum Exploration Development Licence (PEDL) 089 in 2000. Licences

Wessex Exploration plc currently has interests in three licences in the southern UK: PEDL 089, PEDL 238, and PEDL 239.

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PEDL 089
Ownership

The UK Government Department of Trade and Industry (DTI), now the Department of Energy and Climate Change (DECC), awarded the PEDL 089 licence in 2000 in the UK 9th Onshore Licensing Round. PEDL 089 has multiple blocks and part blocks, and is split into two sub-licences. The pertinent portion of PEDL 089 comprised: Northern Petroleum (GB) Ltd. Encore Oil Wessex Exploration Ltd. GB Petroleum plc Osceola Hydrocarbons Ltd. 10 percent (Operator) 20 percent 55 percent 10 percent 5 percent

The PEDL 089 licence extends through to September 2011. It is partway through its Second Term, so it will expire in 2011 unless a Field Development Plan has been approved by then. If it does not expire, it can continue to the end of its Third Term, which ends in 2031. An application has been lodged with DECC to change the working equity in PEDL 089. In October 2009, Osceola Hydrocarbons sold its minority interest to Wessex Exploration Ltd. Northern Petroleum and EnCore Oil have withdrawn from the licence and operatorship has reverted to Wessex Exploration plc. NWE Mirrabooka (UK) Pty Ltd. has paid for a gravity gradiometer survey over the licence, and will complete further proposed work over the licence in order to earn 60 percent equity in the licences, and to take over the operatorship. NWE Mirrabooka (UK) Pty Ltd. is the whollyowned UK subsidiary of Norwest Energy NL, based in Perth, Western Australia and listed on the Australian Stock Exchange. The revised licence ownership, pending approval by DECC, is: NWE Mirrabooka (UK) Pty Ltd. Wessex Exploration plc GB Petroleum plc
Adjacent Offshore licence P1153

60 percent (Operator) 30 percent 10 percent

Wessex Exploration Ltd. was a 55 percent stakeholder in offshore licence P1153, which is adjacent to, and to the south of, PEDL 089. However, the licence expired in October 2009, and has been relinquished. Norwest Energy has publicly stated in its Second Quarter report to the Australian Stock Exchange that its UK subsidiary NWE Mirrabooka (UK) Pty Ltd. intends to reapply for the P1153 licence rights on behalf of the joint venture (which includes Wessex Exploration plc) when DECC offers the next UK offshore licensing round, which is expected to be launched in 2010.
History of Appraisal

Since October 2008, aerial gravity surveys have been applied by Norwest Energy in all of the southern England licences in which Wessex Exploration plc has an interest. This technique is described more fully under licence PEDL 239. Seismic 2-D lines have been gathered over the region on a number of occasions. Figure 1 supplied by Wessex Exploration plc illustrates the coverage in the PEDL 089 licence and surrounding area, some of which straddles PEDL 238 and PEDL 239. Further integration of the onshore and offshore seismic lines is required to improve the resolution of the seismic data in this area. -4-

Figure 1

Well coverage is also pertinent not just to PEDL 089 but also the other Wessex basin licences in which Wessex Exploration plc has an interest. Information from the following exploration wells is available to Wessex: Number
Onshore L98/06- 5 L98/07- 1 L98/08- 3 L98/08- 5 L97/10-19 L98/08-1 L98/08-2 L98/08-4 L98/09- 2 L98/06-1 L98/06-2 L98/06-3 L98/06-4 Offshore 98/7-2

Name
HURN 1 BRANSGORE 1 LYMINGTON 1 BOULDNOR COPSE 1 LYTCHETT 1 WILMINGHAM 1 NORTON 1 CHESSELL 1 ARRETON 2 WYTCH FARM F1 WYTCH FARM F2 WYTCH FARM K1 WYTCH FARM K2

Operator
BP BP Brabant Northern Petroleum BP Sun Clyde Petroleum Brabant British Gas BP BP BP BP BP

Spud Date
June 1986 October 1986 January 1992 September 2005 April 1991 November 1984 January 1989 December 1995 March 1974 June 1980 December 1981 November 1985 January 1986 September 1987

From a combination of all the data, two potential leads have been identified: one wholly within PEDL 089 and one straddling PEDL 089 and P1153. These leads will be the focus of ongoing evaluation work.

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PEDL 238
Ownership

The UK Government Department of Business, Enterprise and Regulatory Reform (BERR), now DECC, awarded the PEDL 238 licence in May 2008 in the UK 13th Onshore Licensing Round to a consortium comprising: NWE Southern Cross Osceola Hydrocarbons Ltd. 50 percent (Operator) 50 percent

NWE Southern Crosss equity was reassigned to NWE Mirrabooka (UK) Pty Ltd. (Norwest Energy) when the remainder of the UK assets in the former NWE Southern Cross was sold to Silverstone Energy in June 2009. In October 2009, Osceola Hydrocarbons Ltd. sold its interest in PEDL 238 to Wessex Exploration Ltd. The PEDL 238 licencees, pending approval by DECC, are therefore: NWE Mirrabooka (UK) Pty Ltd. Wessex Exploration plc. 50 percent (Operator) 50 percent

The commitment for the first phase of the licence is to shoot 10km of 2D seismic by June 2013, and to drill an exploration well in the following year.
History of Appraisal

The operator Norwest Energy purchased a number of existing seismic lines before making the application. Since the licence was awarded, no new dataset has been physically acquired by Norwest Energy, but the company has bought an additional substantial amount of existing 2-D seismic data over the licence, and recently gained access to the 3-D seismic dataset over the Wytch Farm field. In December 2008, Norwest Energy announced that it had successfully completed acquisition and interpretation of a high resolution ground gravity survey on the PEDL 238 licence. Ground based gravity techniques are much more cost-effective for small onshore areas, especially where the high population density would mean that gathering seismic information would take longer (because of the need for environmental permitting) and cost considerably more. Moreover the seismic lines would not necessarily be in optimal places or at regular separation distances, because of man-made surface infrastructure. Public opinion is less favourable to seismic acquisition, while processing and interpretation of data from complex, faulted areas like the Wessex basin can be challenging. Readings were primarily taken from the eastern part of the licence in the Bournemouth area. The aim of the ground survey was to produce an ultra-accurate gravity map, with the expectation of identifying basement-involved structures at depths of 1800 to 2000m. For the survey 441 detailed gravity readings were taken over a three week period. Preliminary results were promising, with 3 potential structures being identified. British Geological Survey (BGS) gravity data on a grid spacing of approximately 1 km was also incorporated to give wider regional control for Norwest Energys high resolution work. The BGS has also taken offshore readings at 200m intervals on a rough grid of traverses 5 to 8 km apart. Figure 2, provided by Norwest Energy to Wessex Exploration Ltd., shows the data points available from the 2008 high resolution study and the BGS onshore and offshore data points, with extent of PEDL 238 outlined.

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Figure 2

A second phase of data acquisition, which involved taking several hundred more measurements to infill the existing information, was recently completed. The specialist high resolution gravity study work is being planned, conducted, and analysed by a former university professor of geophysics. PEDL 239
Ownership

BERR (now DECC), awarded the PEDL 239 licence in May 2008 in the UK 13th Onshore Licensing Round to a consortium comprising: NWE Southern Cross Osceola Hydrocarbons Ltd. 75 percent (Operator) 25 percent

As described earlier, NWE Southern Cross has subsequently been transformed into NWE Mirrabooka (UK) Pty Ltd. In October 2009, Osceola Hydrocarbons Ltd. sold its interest in PEDL 239 to Wessex Exploration Ltd. The PEDL 239 licencees, pending approval by DECC, are therefore: NWE Mirrabooka (UK) Pty Ltd. Wessex Exploration plc. 75 percent (Operator) 25 percent

The commitment for the first phase of the licence is to shoot 50km of 2-D seismic by June 2012, or to drop the licence. If the licence is retained, a well must be drilled within the following 2 years.
History of Appraisal

In January 2009 Norwest Energy contracted Bell Geospace to complete an extensive full tensor gravity gradient survey over the PEDL 239 Licence area. Norwest Energy has stated to the Australian stock market airborne full tensor gradiometry (FTG) can measure the variation of gravity in three dimensions, rather than the single dimension measured by a ground gravity meter. This results in a finer resolution and a more detailed assessment of the subsurface geology, especially in areas with structurally complex geology. As it is an airborne technology, an FTG gravity survey is more cost-effective when covering very large areas. Airborne FTG can cost two or three times more than high-resolution ground gravity surveys. However, both -7-

airborne and ground gravity surveys are much cheaper than acquiring new seismic data or drilling a new well. The main objective of the survey was to measure geophysical characteristics of the rocks above the basement. The operator has stated that the FTG results indicate that such potential reservoirs and seals have been structurally deformed into possible traps beneath and adjacent to the Isle of Wight. From the Chessel-1, Wilmingham-1, and Norton-1 well information the Sherwood Sandstone was identified as potential reservoir. There are secondary targets in the Middle Jurassic carbonate sequences and possibly Upper Jurassic units too. As previously mentioned, the operator has access to limited amounts of 2-D seismic information. A number of potential structures have been identified, including the Calbourne lead, which is defined on 4 seismic lines and interpreted by Norwest Energy as a dip closure, part of a ramp structure. The FTG data has facilitated greater visualisation than the relatively poor quality seismic. In the Norwest Energy Second Quarter 2009 report to the Australian Stock Exchange, the company states that the seismic driven fault and structural interpretations and the detailed FTG regional images conform well. The operators technical team is currently integrating the FTG results with the seismic data in order to compile a detailed structure map of the basement surface. Hydrocarbon Systems The petroleum geology of the southern Wessex basin has been the subject of many scientific papers, books, and symposia. The clear focus of these studies is Wytch Farm, which is officially the UKs largest onshore oilfield by a considerable margin, although spatially it extends a considerable distance under the sea into Poole Harbour. Underhill & Stoneley in a synopsis paper (see reference 1) summarise the regional hydrocarbon potential thus: For any area to become a successful hydrocarbon province, a number of factors must be satisfied. There must be one or more suitable reservoirs capped by coherent seals. There must be a candidate source rock with sufficiently high total organic carbon content. Well-defined trap configurations must exist, be they obvious structural closures or more subtle stratigraphic features. Even given all the of the above, an area would remain unprospective without source rock maturation due to burial, the existence of suitable migration routes from source to trap and, most importantly, appropriate timing of reservoir-bearing trap formation relative to hydrocarbon migration. Finally, preservation of any accumulation must be maintained. That the Wessex Basin contains producing oilfields attests to the fact that all the factors controlling hydrocarbon prospectivity have been met, at least locally. To date, Wytch Farm has produced more than 400 million barrels of oil. Initial production was from the Lower Jurassic Bridport Sands, but the main reservoir has been the Sherwood Sandstone (see reference 2) at a depth of 1585m. Oil is also produced from the Frome Limestone, which is a clay rich, shelly limestone 750m below surface. Also in the region, to the west of Wytch Farm, a nodding donkey on the cliffs above Kimmeridge Bay has been producing oil from Middle Jurassic Cornbrash for 50 years, while the Bridport Sands comprising Wareham field to the north of Wytch Farm contain an estimated 6 million barrels of oil. The Wessex Basin lithology column with approximate depths is shown in Figure 3 (source: DTI Monograph of 2003).

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Figure 3

A present-day cross section from South to North through Wytch Farm to illustrate the main controls on hydrocarbon maturation and migration in the area (see reference 3) is shown in Figure 4. The primary source rock is widely agreed to be the Lower Lias, where under the English Channel, south of the Purbeck-Isle of Wight fault system, it was buried deeply enough for maturation prior to the tectonic structural uplift in the Tertiary. The oil charging all the reservoirs is believed to have leaked across the Purbeck fault and migrated into sandstone structural traps within tilted fault blocks. The only exception to this theory is the Kimmeridge oilfield, which is in the hanging wall of the Purbeck fault.

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Figure 4

For the leads in PEDL 089 and PEDL 238 to be viable reservoirs, the most likely charge mechanism is that which filled Wytch Farm, possibly spill from the Sherwood Sands. For this to happen, the traps and seals would need to predate migration, and would need to have stayed intact during the Tertiary tectonic inversion. An alternate possible reservoir genesis is for traps to form in younger rocks during the tectonic uplift and to be charged by re-migrating oil. Analysis of the timing of deposition, charging, and structural changes leads many authors to conclude that the Wytch Farm play fairway extends to the east of Bournemouth Bay, but not into the Solent. Furthermore, the structural complexity of the pre-Tertiary suggests that the chance of commercial success of each lead identified by Wessex Exploration plc and respective partners is independent of other leads. For PEDL 239, a different mechanism, that of direct charge through synchronous leakage across the Isle of Wight fault (an extension of the Purbeck fault) into equivalent Triassic and Jurassic sands is proposed. This mechanism is not yet proven. Forward Work Program No drilling is anticipated in any of the licences in 2010. The main thrust of the work is to continue to process, evaluate, refine, and integrate existing datasets in order to advance leads into full prospects. The permit application process in order to shoot the 2-D seismic required to comply with the terms of the licence will need to be started. The costs attributable to Wessex Exploration plc to fund its share of the interpretative work being led by the operator are anticipated by the company to be of the order of UKP 60,000 per year for each of the three licences. In PEDL 238, the Phase 2 high resolution gravity results are now being combined with existing points, and also integrated with existing seismic data, to confirm the petroleum potential of the permit. The operator has stated that it expects to provide a report on this interpretation by the end of 2009. Based on this report it is planned to shoot 2D seismic over the permit during the latter half of 2010, or early 2011. For PEDL 239, the operator has stated that it intends to purchase additional marine seismic data from Brixham Bay in order to progress the structural interpretation of the Isle of Wight. - 10 -

Guyane
Context Guyane (sometimes called French Guiana or Guyane franaise) is an overseas department (French: dpartement d'outre-mer or DOM) of France, located on the northern coast of South America. Like the other DOMs, Guyane is also an overseas region of France, one of the 26 regions of France. Exploration licensing is managed by the General Directorate for Energy and Raw Material Resources Direction Gnrale de l'nergie et des Matire Primaires (DGEMP) and the Directorate for Energy and Raw Materials Direction des Ressources nergtiques et Minrales (DIREM). Licences Exclusive exploration rights to the Permis de Guyane Maritime licence was awarded 29 May 2001 to Planet Oil Ltd., a British company and wholly-owned subsidiary of Hardman Resources. The initial exploration licence awarded by the French government had a five year validity, and covered almost all of the Guyane offshore waters, from the 19 km coastal limit to the 3,000m water depth contour. The licence had two five-year renewal option opportunities. In January 2006 Hardman Resources applied for a five year renewal of the permit, and relinquished 46 percent of the original 65,016 sq km acreage. The current licence totals 35,221 sq km; the perimeter of the licence is outlined in black on Figure 5. Figure 6 is a cross section roughly coinciding with line A-A in Figure 5 (source: Tullow Oil. Full map and section provided to Wessex Exploration Ltd. Partial section included in Tullow Oil Overview presentation to market in June 2009). The licence renewal was not straightforward, because the partners did not meet one of the conditional terms for the first phase, namely the drilling of an exploration well. While the application for the second phase was being considered, Tullow Oil acquired the entire stock of Hardman Resources. Renewal was awarded 02 July 2007 to Hardman Petroleum France SAS, a subsidiary of Tullow Oil. The current phase of the exploration licence is valid until June 1, 2011. Partners are committed to drill a minimum of one well before the end of this exploration licence phase.

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Figure 5

Figure 6

Ownership In return for preparing farm-out documentation and organising a farm-out Wessex International Ltd., the consultancy run by Mr Dekker (who is now Managing Director of Wessex Exploration plc), was awarded in 1999 a 5 percent stake in the Guyane Maritime licence. Hardman Resources commissioned a seismic shoot, the proportional cost of which Wessex - 12 -

International Ltd could not fund. In 2002, Hardman Resources therefore carried Wessex International in exchange for the latters equity being halved to 2.5 percent. When further cash calls were made, Wessex International approached Northern Petroleum plc. The result was that Wessex International assigned its interests to Northpet Investments, a 50:50 joint venture set up between Northern Petroleum and Wessex Exploration Ltd. to partner Hardman Resources. The effective stake in the Guyane Maritime licence held by Wessex Exploration plc is therefore 1.25 percent. At the end of 2007, Gaz de France conducted a Control Source Electromagnetic (CSEM) survey over the Matamata structure in order to earn the option to a 20 percent interest in the licence. Gaz de France considered the results inconclusive and therefore chose not to exercise the option. Tullow has reached agreement to farm down a 33 percent interest in the Guyane Maritime licence to Shell Exploration and Production France SAS (Shell). Tullow retains a 64.5 percent operated interest in the block where a 3,000 square kilometre 3D seismic programme commenced in mid-September. The sale to Shell, which also includes an option to acquire a further 12 percent at a later date, is subject to formal approval from the relevant French authorities. It is anticipated that agreement will be reached to farm down further equity in this highly prospective block to another party before year-end. Northpet Investments still retains a 2.5 percent interest in the Guyane Maritime licence, the equity of which in November 2009 is as follows: Hardman Petroleum France SAS (Tullow Oil) 64.5 percent (Operator) Shell Exploration & Production France SAS (Shell) 33 percent Northpet Investments Ltd 2.5 percent History of Appraisal Guyane is sparsely explored to date. Only two wells have been drilled in its offshore waters, both more than 30 years ago: Sinnamary-1 was drilled by Elf AP in 1975. It reached a depth of 2104m in a granite basement. The water depth was 48m; the well is in the area which was relinquished in 2006 at the end of the first exploration phase. FG2-1 was drilled by EssoRep in 1978 on very limited seismic information to try to hit a Cretaceous reef target. The water depth was 823m and the well tagged a Cretaceous basalt basement at 3941m. Tullow has a detailed final report on FG2-1, but no samples or pressure measurements were taken.

Neither well intersected hydrocarbons. The regional setting of the Guyana Basin spans international boundaries, from Guyane westwards through Suriname to Guyana. Petroleum exploration wells and one Deep Sea Drilling Project well have been drilled in Suriname and Guyana waters, as illustrated in Figure 7, taken from Staatsolie Maatschappij Suriname N.V., the state oil company of Suriname (see reference 4). Tullow Oil has conducted analyses on 11 of these wells as part of its basin modelling work. While many of the wells have exhibited oil or gas shows, none has yet proved up commercial hydrocarbons. However heavy oil is produced from Palaeocene sands from the Tambaredjo and Calcutta fields, two Suriname coastal fields with 900 and 150 million barrels of oil in place respectively. Further along the continental margin to the east, oil has been discovered in wells in northern Brazilian waters, but limited well data has been made available to the Guyane Maritime partners.

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Figure 7

During the first phase of the exploration licence, Hardman Resources scanned 3,000 km of existing 2-D seismic. It also acquired 9,320 km of new 2-D seismic in 2002 and 2005 over the Demerara Plateau and Eastern Slope respectively. The latter program included shooting 360 sq km of 3-D seismic over a deep water turbidite fan lead in the south-eastern part of the permit. Also, the partners can take advantage of seismic information contained in scientific research papers on the regions evolution and development, such as that published by Greenroyd et al in 2008 (see reference 5). In December 2007, as mentioned earlier, Gaz de France acquired a CSEM survey at its own cost, in order to gain an option to earn a 20 percent interest in the licence. Although the data were reviewed by the company and by two independent organisations, the results were inconclusive. Gaz de France subsequently exercised its exit option. Hydrocarbon Systems The Guyana offshore basin is an Atlantic passive continental margin. Since the early days of plate tectonic theory numerous research papers have postulated that the Guyane-Northeast Brazil margin was conjugate to the West African margin comprising Guinea, Sierra Leone, Liberia, Ivory Coast and Ghana. The margin has developed in two main stages (see reference 6). In Jurassic and early Cretaceous times, the north-western part of the margin, together with the Suriname margin (Demerara Rise), is thought to represent the southern extremity of the Central Atlantic rift and Ocean. In mid-Cretaceous (middle Albian) times, shearing between Africa and South America led to the opening of the E-W-trending Equatorial Atlantic Ocean. It has been reported in the literature for some time that the Guyana Basin has all the elements to become a major hydrocarbon province (see reference 7). The wells that have been drilled to date have exhibited shows, but none has yet found the combination of source, reservoir rock, - 14 -

migration path, trap and seal that are required for a commercial hydrocarbon reservoir. The partners in Guyane Maritime licence, which lies at the eastern extent of the Guyana Basin, have put considerable effort into basin modelling, in order to understand the play fairway. Key to this work has been identification of source material, the burial depth of the organic rich sediments, and the geothermal gradient. The modelling suggests that the Cenomanian-Turonian black shales encountered in FG2-1 and elsewhere in the region are the primary kitchen, and that the geothermal gradient and burial history is sufficient for generation of oil. Initial excitement in the licence followed the mapping of an extensive 4-way dip anticline in 800 to 1600m of water on the Demerara Plateau. The Matamata prospect is in the same mid-Albian fluvio-deltaic depositional environment as the down-dip FG2-1 well. The good porosity, high net-to-gross reservoir quality found in FG2-1 is mapped to extend to the more distal parts of the delta where current modelling indicates that Matamata lies. The operator predicts that the thick Cenomanian shales sequence above the sands will form a competent seal, and also provide the source for charging the structure. The primary, linked risks are the quantity of associated organic source material and the hydrocarbon migration path. Other leads in older horizons have been identified on the Demerara Plateau; again the key uncertainty is whether there is a suitable source layer for charging the mapped structures. Moving further east, Tullow has mapped 2 channel sand leads (Sanguinus and Saimari in Figure 5 and Figure 6) in the Central Area, between the Demerara Plateau and Eastern Slope. The operator believes that these leads are analogous to its Espoir field in the Cte dIvoire. Imaging is limited with only 2-D seismic, and with the very limited dataset no source material has yet been proven on the west side of the Atlantic (though equivalent formations are present and act as sources on the conjugate African margin). Understanding of the older leads on the Demerara Plateau and the Central Area leads is less advanced than the Matamata prospect and the Eastern Slope play, and consequently these areas are not the primary focus of reservoir evaluation at present. Tullow Oils drilling success in the West African Transform Margin region led them to conduct a complete re-evaluation of the deepwater Eastern Slope acreage in the eastern portion of the Guyane Maritime licence during 2008. In addition to the potential billion barrel Matamata prospect, previously mapped in the shallower north-western part of the block, geophysicists have identified a number of high-impact, high-risk leads in the south-east, analogous to its Jubilee field offshore Ghana (see reference 8). Two large stratigraphic play systems a large Palaeocene channel/fan system and large Cenomanian/Turonian fan system have been mapped along the Eastern Slope in water depths greater than 1500m. The fan/channel complexes appear to comprise a series of stacked depositional systems, and from the existing orthogonal 2-D seismic data, a number of leads have been mapped. The need for the 3-D survey is therefore to properly image these systems, to advance the identified leads to prospect status, and to confirm the trapping mechanism. Forward Work Program The work commitment for the second exploration licence period is for partners to drill at least one well, and to acquire 1,000 km of 2-D seismic and 1,000 sq km of 3-D seismic data. Tullow is proposing instead to acquire 2,500 sq km of 3-D seismic in 2009 in varying water depths, focusing on the more sparsely surveyed eastern portion of the licence, which it believes will fulfil the seismic commitments, with drilling to follow once the results have been processed and interpreted. Northern Petroleum plc, 50 percent owner of Northpet Investments, announced to the London stock market on 25 September 2009 that 3-D seismic operations had commenced in the Guyane Maritime licence. Local conditions will restrict the acquisition period; field work - 15 -

will need to be completed before the end of December 2009. The estimated share of the cost of the seismic to Wessex Exploration plc is circa US $ 500,000, of which $ US 266,000 was paid upfront. In 2010, the data will be processed and interpreted with the intent of high grading the prospect inventory. Before the expiry of the second 5-year term, the operator is committed to drilling at least one well. The expectation of the Wessex Exploration plc. directors is that the exploration drilling program will be conducted in the first half of 2011. Wells in deepwater locations will require a high-specification semi-submersible rig or a drill ship, and consequently are likely to attract a spread rate over US $ 1 million per day. The operator has recent and ongoing experience of drilling costs for such wells on which to base estimates.

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Juan De Nova Est

Context Juan de Nova Island is located at 17 03 S and 42 45 E, in the narrowest part of the Mozambique Channel, 150 km from the north-western coast of Madagascar (or approximately one third of the distance between Madagascar and Mozambique). The United Nations considers Juan de Nova a French possession under dispute; the atoll is about 6kms long, and is under the jurisdiction of the sub-prefecture based in Runion Island. The French declared a 200 nautical mile Exclusive Economic Zone around Juan de Nova in February 1978, according to the principles of the United Nations Convention on the Law of the Sea (UNCLOS). However, to date there is no bilateral agreement on the boundary of this EEZ (i.e. a median line) between Madagascar and France. Moreover, there has been political turmoil on Madagascar for much of 2009, as an uprising led by Andry Rajoelina gained popular support and succeeded in toppling the president in a military coup in March. The coup was condemned by France and the United States, and as a result Madagascar has been suspended from the African Union. Wessex does not see this as a risk to their licence; they state that while they were the colonial power in Madagascar, the French established a civil service that is independent of government with substantial body of law, so even under the current circumstances there would be no reason to changes to contracts and petroleum laws. Licences In common with Guyane, licensing is administered by the French DGEMP and DIREM. The Juan de Nova Est licence was awarded 22 December 2008. The licence covers an area of 9,100 sq km in the Mozambique Channel, to the north-west of Madagascar, as shown in Figure 8 (see reference 9).

Figure 8

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The exploration licence has an initial 5-year duration, sub-divided into three phases: Phase 1: (18 months) Relevant geological studies Reprocessing of 500 km of 2-D line seismic Submission of a status report to the French licence authorities Minimum expenditure : Euro 420,000 Phase 2: (18 months) Continuing geological studies Acquisition of 1,000 km of 2-D line seismic Submission of a status report to the French licence authorities Minimum expenditure : Euro 1,700,000 Phase 3: (24 months) Continuing geological studies Acquisition of 1,000 km of 2-D line seismic, and possible 3-D. Seismic data reprocessing and/or special processing Exploratory drilling o One firm well to basement (estimated depth about 4,000 meters) o One contingent well Submission of a final status report to the French licence authorities Minimum expenditure : Euro 12,000,000 Ownership At the time of licence award in December 2008, the relative equity of the partners was: Nighthawk Energy plc Osceola Hydrocarbons Ltd. Jupiter Petroleum (Juan de Nova) Ltd. Wessex Exploration Ltd. 30 percent (Operator) 30 percent 30 percent 10 percent (Technical operator)

Since then, Nighthawk Energy plc has assigned its interests to Wessex Exploration Ltd., and Osceola Hydrocarbons Ltd.s stake was transferred to Wessex Exploration Ltd. in October 2009. The resultant ownership of the Juan de Nova Est licence is: Wessex Exploration plc Jupiter Petroleum (Juan de Nova) Ltd. 70 percent (Operator) 30 percent

Wessex Exploration plc is currently seeking a farm-in partner to share risk and cost in this licence. History of Appraisal For such a vast basin, information is sparse. Rusk, Bertagne and Associates together with TGSNopec have produced a commercial review (see reference 10) of the hydrocarbon potential of the coastal and offshore sectors of Mozambique, southern Tanzania, northern and western Madagascar and the Comoros Islands. It covers an area of approximately 1.3 million sq km, approximately 1.5 times greater in area than the North Sea. Wessex Exploration plc has viewed the report content, but has concluded that information that is directly pertinent to the northern Morondava Basin is limited. During 1996, Madagascar held a formal bid round. Fugro-Robertson were contracted by Office des Mines Nationales et des Industries Stratgiques (OMNIS), the state-owned agency that was - 18 -

commissioned to manage, to develop and to promote the national petroleum and mineral resources in Madagascar, to compile supporting data packages for this bid round. Their report reviews the well and seismic databases held by OMNIS and all available published literature giving a regional overview of the geological development and petroleum potential of the five sedimentary basins of Madagascar, including the northern Morondava Basin. This data package contains 19 exploratory wells, including information on geochemistry and well velocity surveys, and 60 seismic lines. However, only three short seismic lines fall on the Juan de Nova Est permit. The Fugro package has been reviewed by Wessex Exploration plc with a view to purchase. Heavy oil deposits at Bemolanga and Tsimiroro were discovered in the 1930s approximately 200 km to the east of the Juan de Nova Est licence in the onshore Madagascar, northern part of the northern Morondava Basin. From 1965 to 1975, several exploratory wells were drilled in all the Madagascar basins. Several of these wells had oil and gas shows. Since that time, exploration drilling has been rare. The most successful well in the North Morondava Basin was drilled in 1987 by PetroCanada. This well produced 15.8 million scf/d of gas and condensate from two Cretaceous intervals at a depth of about 2,000 meters. In total 21 wells with vertical depth greater than 1500m were drilled in the northern Morondava Basin in the period from the early fifties until the last well to be drilled, Manadaza South 1, which Shell drilled in 1993. Of the deep wells, only three are located offshore in the general area of the Juan de Nova Est Licence, and the closest of these, the Chesterfield 1 well drilled by Agip in 1970, is still some 120 km from the shallow water part of the Juan de Nova Est Licence. Wessex Exploration plc has limited details from relevant historic wells. The 1987 Amoco-drilled Manambolo-1 well, from which some liquids were recovered on test, has core samples available for analysis, from which Wessex Exploration plc has tested the total organic content of the shales. Wessex Exploration plc has purchased SEASAT interpretations conducted by the Fugro-NPA Group on possible offshore oil seeps. The SEASAT offshore oil seep map, show in Figure 9, presents information from satellite radar for the waters off Northern Madagascar (the study areas are contained within the red rectangles), with the Juan de Nova Est licence highlighted in cerise. Possible oil seeps detected by the satellite radar are shown as green dots.

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Figure 9

Hydrocarbon Systems Rusk, Bertagne and Associates synopsis (op. cit.) of existing research states that from a regional perspective, in late Palaeozoic times, East Africa experienced rifting, which resulted in Karoo continental deposition. During Jurassic transgressions, sequences that were increasingly marine in nature were laid down. From the mid-Jurassic until the early Aptian, the Madagascar-IndiaAntarctica plate separated from Africa, moving incrementally southward along the Davie Fracture/Shear Zone. The present island of Madagascar is in fact a micro-continent which was attached to east Africa along the Kenya and Tanzania coasts. The detachment of India from the larger plate as the current plate boundary was initiated stalled further movement of Madagascar relative to the African mainland. Marine deposition continued during the rifting period and apart from a brief a hiatus in the Aptian stage, this deposition has persisted until the present. The Juan de Nova Est licence lies in the northern Morondava basin. Studies by Wessex Exploration plc has led them to believe that the Juan de Nova Est portion of the Morondava Basin contains two geological provinces. The deep water part of the area (greater than 1,000m water depth) was originally part of the rift basin between Madagascar and the African mainland, and is now a passive margin. In contrast, the shallower continental shelf area offshore Madagascar, totaling about 3,000 square kilometers in Juan de Nova Est waters, is underlain by a different basin with late Paleozoic (Karoo) and early Mesozoic rocks. Wessex Exploration has conducted a widespread review of the available information in order to compile a farm-out brochure. This brochure, in draft form at present, highlights information relevant to petroleum studies. Unlike Guyane Maritime or the Wessex Basin, the paucity of geological research and petroleum exploration to date means that the elements of a petroleum system source rock and maturation history, reservoir rock, trap, seal, and migration path are unclear, and not proven for the Juan de Nova Est licence.

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Forward Work Program Over the coming 12 months, the work program that Wessex Exploration intends to pursue has four primary strands: 1. To complete the initial phase of purchasing seismic and well information, 2. To incorporate this information into the regional model, 3. To comply with the terms of Phase 1 of the exploration licence, 4. To prepare a farm out brochure with the intention of securing a farm-in by another company by mid-2010.

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Western Sahara (Saharawi Arab Democratic Republic)

Context The United Nations considers the status of Western Sahara as a Non-Self-Governing Territory. The Frente Popular para la Liberacin de Saguia el-Hamra y de Ro de Oro (Frente POLISARIO) proclaimed the Saharawi Arab Democratic Republic (SADR) in Bir Lahlou on 27 February 1976 as having jurisdiction over Western Sahara. At the same time, in Moroccocontrolled Laayoune, a newly constituted djemaa voted for the integration of the Territory of Western Sahara into Morocco. Security Council resolution 690 of 29 April 1991 established the United Nations Mission for the Referendum in Western Sahara (MINURSO) in accordance with settlement proposals accepted on 30 August 1988 by Morocco and the Frente POLISARIO. The Secretary-General's implementation plan, approved by the Security Council, provided for a transitional period during which the Special Representative of the Secretary-General would have sole and exclusive responsibility over all matters relating to a referendum in which the people of Western Sahara would choose between independence and integration with Morocco. The Special Representative would be assisted in his tasks by a deputy special representative and by an integrated group of United Nations civilian, military and police personnel. Following the agreement between the Government of Morocco and the Frente POLISARIO, MINURSO was deployed in September 1991 to monitor the ceasefire and to organize and conduct a referendum, which would allow the people of Western Sahara to decide the Territory's future status On 22 January 2009, the Frente POLISARIO declared an exclusive economic zone for Western Sahara, which extends 200 nautical miles from the coast of the Territory of Western Sahara. Upon signing the declaration, the Secretary-General of the Frente POLISARIO, Mohamed Abdelaziz, said in a public statement that the declaration was based on the right of the people of Western Sahara to self-determination and to permanent sovereignty over their natural resources, and he called on the European Union to suspend its 2005 fisheries agreement with Morocco. Exploration activities have been conducted in the Western Sahara. The legality of exploration contracts has been examined by the United Nations: contracts for oil reconnaissance and evaluation do not entail exploitation or the physical removal of the mineral resources, and no benefits have as of yet accrued. The conclusion is, therefore, that, while the specific contracts which are the subject of the Security Councils request are not in themselves illegal, if further exploration and exploitation activities were to proceed in disregard of the interests and wishes of the people of Western Sahara, they would be in violation of the principles of international law applicable to mineral resource activities in Non-Self-Governing Territories (see reference 11). Until the sovereignty of the Western Sahara is resolved, any licences in the area can only be for exploration. On 12 February 2009, the following statement was made in the UK parliament: The status of Western Sahara remains unresolved pending the efforts of the UN Secretary-General and his staff to achieve a negotiated, lasting solution between the parties to the dispute, providing for the self-determination of the people of Western Sahara.

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Licences

Figure 10

The Saharawi Arab Democratic Republic has awarded exploration licences in the first exploration licence round in March 2006. Maghreb Exploration Ltd., a wholly owned subsidiary of Wessex Exploration plc, was awarded operatorship of an exploration licence over the onshore Bojador block (39,983 sq km). At the time of award, Maghreb Exploration Ltd. led a consortium comprising themselves, Osceola Hydrocarbons, and Nighthawk Energy. Nighthawk Energy sold its equity to Osceola Hydrocarbons in February 2007, before its flotation on the Alternative Investment Market (AIM). In early 2007, Comet Petroleum, 100 percent holder of the offshore Guelta block (15,760 km2), agreed to cross-assignment of interests with the Bojador block group. This transaction has been approved by the SADR authorities. Tower Resources plc. acquired Comet Petroleum in June 2008. Maghreb Exploration Ltd. has also made an application with Tower Resources in the second SADR licence round for the offshore Imlili block. Imlili (16,965 km2) is a shallow water block located east of Guelta, and west of the onshore Bojador. Ownership Wessex Exploration plc and Tower Resources each owns 50 percent rights to the onshore exploration licence Bojador and the offshore exploration licence Guelta. Tower Resources plc Wessex Exploration plc 50 percent 50 percent (through Maghreb Exploration Ltd).

Wessex Exploration plc (through Maghreb Exploration Ltd.) is the operator of both the Bojador and the Guelta licences.

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Upon UN recognition of sovereignty and tax law conditions, the licences will convert to Production Sharing Agreements (PSA). History of Appraisal Soon after the discoveries of the Algerian gas fields of Hassi Messaoud and Hassi R'mel in 1956, Spain commenced exploration of its own Spanish Sahara colony. The territory was divided into over 100 square licences and offered to international oil companies. By 1964, 57 wells had been drilled on 42 of these licences, by operators such as Richfield, Continental, Phillips, and Union Oil California (for whom Mr Dekker worked). No commercial volumes of hydrocarbons were found, and drilling activity slowed in the early 1970s. Only 3 wells have been drilled since Spain withdrew from its former colony in 1975, the last of these wells being in 1988. The focus of exploration has been the Aaiun Basin, one of a number of mature passive margin basins that lie along the edge of north-western Africa. It is approximately 1100km in length, running from the Cap Blanc Fracture Zone in northern Mauritania to where the South Atlas Fault meets the intersection of the North Canary Island Fracture Zone. It is divided into two sub-basins with different characteristics by the Dakhla Fracture Zone. The primary structural features of the region are shown in Figure 11 (taken from the SADR 2006 Onshore Oil & Gas Licence Offering).

Figure 11

Most of the early exploration was onshore. Of the 75 wells drilled in the Aaiun Basin between 1959 and 1988, 61 were onshore, and 14 were in the shallow offshore waters. No petroleum company has yet drilled in the deeper water beyond the continental shelf, but there have been two deepwater boreholes drilled as part of the research-focused Deep Sea Drilling Project (see references 12 and 13). Although profitable deposits remained elusive, a number of wells had oil shows. Technology, and in particular, remote sensing techniques such as seismic, have advanced greatly since the 1960s, and for such a large region, historic exploration is sparse. In the MSGBC (MauritaniaSenegal-Gambia-Bissau-Conarky) Basin to the south, discoveries have been made, including the Miocene-age Chinguetti field, which was brought onstream by Woodside Petroleum in February 2006. Pelican, an Upper Cretaceous gas discovery in Block 7 made by Dana - 24 -

Petroleum in 2003 and reported to be in the order of 1 Tcf, is the most northerly of these discoveries. To the north, in Morocco oil and gas production takes place in the Essaouira Basin. According to the Office National de Recherches et dExploitations Ptrolires (ONAREP) (see reference 14) the Essaouira Basin is a passive margin coastal basin developed on a block faulted Paleozoic basement. It identifies two petroleum systems: 1. Silurian source rocks are charging, with wet gas, Triassic-Lower Liassic siliciclastic reservoirs (Meskala-Zelten), possibly Paleozoic clastic and carbonate reservoirs (shows encountered by some Meskala wells), and Jurassic reservoirs both clastics and carbonates (Jeer, Kechoula gas fields). 2. Jurassic source rocks (Domerian and/or Oxfordian) are charging Argovian sandy dolomitic reservoirs (Sidi Rhalem oil field). Figure 12, taken from the SADR Oil and Gas exploration website, indicates offshore wells along the NW Africa continental margin where hydrocarbons have been detected. The Cap Juby Field is the nearest oil discovery. The MO-2 discovery well was drilled by Esso in 1969. Although the well flowed 10 to 12o API oil at a rate of 2,377 bpd from an Upper Jurassic limestone, a later appraisal well on the flank of the structure encountered a small amount of much lighter 38o API oil from an older Jurassic limestone reservoir.

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Figure 12

Under a technical cooperation agreement, Fusion Oil and Gas compiled a report on the SADR regional hydrocarbon potential in August 2003. The report content covered the knowledge at that time of the geology of the region, the available geoscience database plus an inventory of the wells drilled, and the petroleum potential of the SADR. Bidders in the first licence round, including Wessex Exploration plc., had access to this report. The whereabouts of much of the information from the early drilling phase is unknown. No geochemical information is available, since little geochemical analysis was conducted in the 1960s. Mr Dekker located drill cuttings from some onshore wells in a university core store, and for a minimal cost, analysis of the total organic content (TOC) of shales was recorded, The TOC was high enough in some samples to offer potential as a source. On a recent visit to a contractor, a box of uncatalogued well data from that period was discovered, and will shortly be evaluated. In addition to well information, geophysical surveys have been conducted in the region, the results from which are available for purchase. The most recent offshore 2-D seismic dataset - 26 -

was acquired by TGS-Nopec in 2002, whereas onshore, ONAREP shot 2000km of 2-D seimic in 1988. Gravity and magnetic surveys have also been gathered. Hydrocarbon Systems No specific system has been commercially proven in the SADR. The Fusion Oil and Gas report concluded that although the quantity and quality of geoscience information is limited it is probable that, all the key elements (reservoir, source, seal and trap) critical to exploration success are likely to be both present and effective within certain areas. Gas shows and good quality Cretaceous reservoirs were reported in several wells onshore. The petroleum provinces vary to the north and south of the Dakhla Fracture Zone, but in general it is the later Mesozoic period and early Tertiary that offers the most potential for hydrocarbons. A stylised cross section of northern portion of the Aaiun basin, depicting potential reservoirs, sources, and seals, is shown in Figure 13

Figure 13

Marine sedimentation in a variety of different depositional environments took place within the Jurassic and Cretaceous period. These included deltaic and alluvial fans, and deep water channelised turbidites, which may have adequate reservoir quality. Organic rich marls and shales were also deposited in these periods, which have subsequently been buried by Tertiary sedimentation to a depth at which conditions should be suitable for hydrocarbon generation. Finally, seismic information offshore has indicated potential structural hydrocarbon traps, for instance the slope anticline", which is a large-scale prominent anticlinal trend, developed along the slope, and the associated tilted fault block complex.

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Forward Work Program Limited exploration activity is possible until the political situation surrounding Western Sahara is resolved. The companys stated forward plan is to continue low key activities, namely: 1. liaise with the Sahawari authorities, with whom it has an excellent rapport, on issues such as the Imlili block licence application, 2. source good value data where available, 3. conduct limited work on building up understanding of the prospectivity within and outside the two licences, 4. begin initial discussions with potential farm-out partners. The only commitments associated with these licences is an assurance agreement, which commits Wessex Exploration plc to paying a total of US $ 20,000 administration fee and US $ 10,000 social works fee fund each year, representing fees for its 50 percent stake in the two licences in which it has equity. Wessex Exploration Ltd. has made such payments regularly into an Algerian bank account in the name of the Saharawi Arab Democratic Republic.

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Wessex Exploration plc Management

The management team of Wessex Exploration plc includes the Chairman David Bramhill, the Managing Director Frederik Dekker, and the Commercial Director Tim Heeley. They have considerable experience which significantly mitigates some of the risks inherent in the Wessex Exploration plc business.
David Bramhill

Non-executive Chairman David Bramhill is respected in the investment world as a successful entrepreneur, having raised previously finance and launched Nighthawk Energy plc, for whom he is also the Managing Director, onto the stock exchange. Mr Bramhill has over 35 years' of experience in the natural resources industry. He has directed and managed several energy companies and was the former managing director of Oil Quest Resources plc. He had previously consulted in an engineering capacity for over 20 years on behalf of Rotork plc on projects for Shell, ExxonMobil, Petrofina, BP and numerous other international energy companies.
Tim Heeley

Non-Executive Commercial Director Timothy Heeley has 4 years of equity and debt experience in the City, most recently as Head of Oil and Gas Research at stockbroker Daniel Stewart & Co. Previously he was Senior Manager of Standard Bank's Oil and Gas team and Senior Oil and Gas Analyst at Panmure Gordon. Prior to working in the City, Tim enjoyed an eight year career in the E&P sector as a project development engineer working with such companies as Shell, BP, Exxon and BG on numerous international hydrocarbon projects. Tim is a Chartered Energy Engineer, a member of the Energy Institute and the Society of Petroleum Engineers, and a Fellow of the Geological Society.
Fred Dekker

Managing Director Frederik E. Dekker has over 45 years exploration experience. With a background as a geologist, he has extensive experience in the setting up and running of small exploration operations in various countries worldwide for Union Oil (later Unocal). After leaving Unocal, his private company Wessex International Ltd provided consultancy services to operators such as Hardman Resources. In all roles, Mr Dekker has built strong working relationships with the local government officials, and the legal, environmental and regulatory regimes. Significant achievements in his career include initiating inter-country dialogue on mineral rights, leading to the establishment of internationally recognised median lines, for example, between Thailand and Vietnam. That skill is a mitigating factor for the country risks inherent with licences in disputed areas such as Juan de Nova Est and Western Sahara. Mr Dekker has a good knowledge of a wide range of sedimentary basins worldwide. His knowledge and understanding of the Wessex Exploration plc licences are key to the value of the company. The Wessex Exploration plc management team uses professional services to support its business transactions, including Westhouse Securities Ltd. of London, nominated corporate adviser (NOMAD) Capita Registrars of Beckenham, company share administration Jordans Ltd. of Bristol, compliance with company law Osborne Clarke of Bristol, solicitors Nexia Smith & Williamson of London, auditors Yellow Jersey PR Ltd. of London, public relations - 29 -

Conclusions
Wessex Exploration plc is active in four areas of the world southern United Kingdom, Guyane, East Africa and the Western Sahara. In each area, Wessex Exploration plc has a stake in relatively large licences. Risks associated with the four areas can be generalised into two categories: Southern United Kingdom (Wessex Basin) and Guyane (Guyane Maritime): In these licences, the respective operators are larger companies that are listed on the main exchanges of the Australian and UK stock markets respectively. Data acquisition has been conducted recently, and the quantity and quality of information for the play is fair. The regulatory environment is established and political risk is low. The work program is targeted at improving the visualisation of the subsurface to define identified leads and prospects. The primary risk category once that is achieved is whether the identified structures have been charged with hydrocarbons, and whether a trap and seal was established early enough to secure the migrated hydrocarbons in place. This will only be verified by drilling. However, there is good evidence that the elements of a petroleum system are present in each. East Africa (Juan de Nova Est) and the Western Sahara (SADR): These licences are in parts of the world where regulatory uncertainty and political risk are higher. Wessex Exploration plc is the operator and holds at least 50 percent of the equity of each licence. The company has established good working relationships with the relevant government authorities. Little recent exploration has been conducted in these areas, and no commercial hydrocarbon development has yet taken place in the region. The work program to date has been the location and review of relevant literature, and the identification and acquisition of old well and seismic data. No drilling is currently planned. The presence of viable petroleum systems in these licences is not proven. Mr Dekker has many years of exploration management experience. He has conducted extensive scientific research, both commercially and privately, in the regions in which Wessex Exploration plc holds licences. He has accumulated considerable knowledge of petroleum legal and regulatory systems, and has expertise in resolution of international border disputes pertaining to hydrocarbon exploration. In our opinion, the key risk to the success of Wessex Exploration plc would be the loss of Mr Dekker; his continued activity in and commitment to Wessex Exploration plc is critical to the value of the company. The risk can be mitigated to some extent by formal knowledge management systems and/or by recruiting an understudy. For small exploration companies, management of limited capital is an important activity. The medium term (beyond 12 months) exploration program that is required to meet the commitments of the exploration licences is estimated to attract a cost that is beyond the capital initially raised before the launch of Wessex Exploration plc on the PLUS market. Because no revenue from production will be received, the company will have to find a means of funding the data acquisition and analysis program. In two regions southern England and Juan de Nova Est the licence partners intend to attract farm-in partners in the coming months to defray the costs. Before exploration drilling takes place, an alternative form of financing will need to be arranged. Any small exploration company faces the downside risk that the licences might not prove to contain economically attractive resources. Wessex Exploration plc has spread this risk across four diverse regions. If commercially viable hydrocarbon deposits are discovered in just one of the licences, the upside potential appears attractive.

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Appendix : Official Contacts

The Department of Energy and Climate Change (United Kingdom) Contacts for Licensing, Exploration and Development Licence administration Mike Hawkins tel.: 0300 068 6038 fax: 0300 068 5003 e-mail: mike.hawkins@decc.gsi.gov.uk Bureau exploration production des hydrocarbures (France) (Guyane and Juan de Nova Est) DGEC/Direction de lnergie/SD2/ Bureau 2A 41 boulevard Vincent Auriol 75703 Paris cedex 13 Charles Lamiraux - exploration hydrocarbures et stockages souterrains charles.lamiraux@industrie.gouv.fr Carole Mercier - chef du bureau - carole.mercier@industrie.gouv.fr SADR Petroleum Authority (Saharawi Arab Democratic Republic) Kamal Fadel kfadel@sadroilandgas.com

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References
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