Block XXII – Active Hydrocarbon System in Place

This block covers approximately 948,000 acres and is located onshore in the Lancones Basin of northwest Peru near the Talara Refinery. We signed this block into a license contract in November 2007. Our activity in this area is in the exploratory phase. We have reprocessed 2-D seismic data and have conducted a new geochemical survey indicating the presence of hydrocarbons. Our team has mapped large structures in the northern part of the block targeting the Paleozoic formation. In the southern section there are several previously drilled wells whose logs indicate pay in known producing formations. This area is a known and active hydrocarbon system, with nearby oil production from the Portachuelo Oil Field, the San Pedro Oil Field (offshore) and the La Isla Oil Field. Block XXII is the Company’s most highly prospective play with significant light crude oil potential, and we are currently acquiring 2-D seismic in the Block.