NEW HOPE-1 GEOLOGICAL PROGNOSIS

The New Hope-1 (NH-1) well is proposed as a vertical exploratory well in the Maranco PSA, onshore NW
Belize, to be located at UTM coordinates 316,500 meters East and 1,959,300 meters North (NAD 27, zone
16). The objectives of the NH-1 wildcat well are to evaluate the presence of oil in the Yalbac Y1 and Yalbac
Y2 dolomite reservoir intervals. NH-1 is located regionally down-dip and some 10.5 kilometres to the
northwest of Gulf Oils Hill Bank-1 well drilled in 1956 near the western shore of New River Lagoon.
Residual oil shows were reported in the HB-1 well which was located on the up-thrown side of a recently
activated regional fault closure. Most, if not all wells drilled in northern Belize have tested fault-dependant
structural closures so the 4-way closure New Hope prospect is an exciting target to investigate, away from
any fault.

Seismic prognosis:

The prospect is contained within a subtle four way dip closed structure mapped by 3D seismic data (Indian
Church Survey) with a maximum relief of 65 feet at the centre of a 865 acres prospect. It is hoped that
stacked dolomite reservoirs are trapping commercial oil. The data quality of the reprocessed 3D is good.
This prospect has a maximum closure of 865 acres at the mid-Yalbac Y2 level. There is only a structural
nose and no closure at the Margaret Creek level.

The mid-Y2 structure is well constrained by the seismic data. The main risk at New Hope was whether the
time structure map was being influenced by near surface thickness changes in Red Bank clays that may
overlay the prospect. This was fully examined with the available seismic elevation and velocity data and a
field surface geology inspection of the area also indicated the absence of Red Bank clays. Since this is a
subtle 7 milliseconds (two-ways travel time), low relief feature equivalent to 65 feet (using a sound wave
velocity of 18,000 feet per second), it limits the thickness of oil accumulation for each dolomite interval to a
maximum of 65 feet column. Based on the known stratigraphic thicknesses of the Yalbac dolomites, this is
an attractive prospect in the Y1 and Y2 intervals.

A well drilled on this prospect will intersect the Y2 at -2350 feet subsea. Since the maximum structural relief
is only 65 feet it is hoped that multiple/staked dolomitic reservoir would have trapped oil in the Y1 and Y2
units. However exciting these might be, we do not know if this structure was formed at the time of oil
migration. Therefore migration timing is the highest risk factor and contributes to a 15 to 20% chance of
success.
NH-1 Prognosis:

The Barton Creek limestone is expected to occur from the surface down to 1200 feet with possible loss
circulation zones or fresh water artesian flows. The formation consists of partly karsified, brecciated
limestones with some chert, clay beds and occasional gypsum. The first anhydrite encountered would mark
the top of the Yalbac Y1 unit. An intermediate 9 & 5/8casing will be set to isolate the Barton Creek with a
shoe safely cemented in anhydrites at around 1,300 feet or 100 feet below the Yalbac top.

The first target will be multiple Yalbac Y1 dolomite reservoirs separated and sealed by Yalbac Y1
anhydrites, and the second target will be multiple Yalbac Y2 dolomite reservoirs sealed by Yalbac Y1
anhydrites. The Yalbac Y1 anhydrites and dolomites are expected from 1,200 feet down to 2,400 feet (KB).
The Xan field in Guatemala produces from an interval in Coban B equivalent to one of the dolomite
reservoirs of the Yalbac Y1 unit and is a combination structural/stratigraphic trap. There is much H2S in a
dolomite reservoir found near TD in the San Pablo-1 well indicating that oil has has migrated through the
upper Yalbac Y1 section. The Y1 unit in NW Belize is 70/30 alternations of anhydrite and dolomite and it
contains up to a combined 450 feet of porous dolomites averaging 18 % porosity (and including 110 feet at
23% porosity) as evidenced by modern log suite s in the Quam Hill-1 and Canal Bank-1 wells. However,
due to the post-Yalbac unconformity some of the uppermost reservoirs may be missing in the NH-1 area. A
total thickness of 350 feet for combined potential reservoirs is still expected in the Yalbac Y1 at the New
Hope location.
The second target will be multiple Y2 dolomite reservoirs sealed by Yalbac Y1 and Y2 anhydrites. The
Yalbac Y2 anhydrites and dolomites are expected from 2,400 feet down to 3,000 feet (KB). There is ample
evidence showing hydrocarbon migration in NW Belize at the middle Yalbac Y2 level. The Yalbac-1,
Yalbac-2 and Yalbac-3 wells contain 80 to 100 feet of asphalt/tar trapped in the uppermost Y2 dolomite
reservoir in what appears to be a shallow breached, up-dip/up-thrown fault trap closure. Additionally the
migration of oil in the mid-Yalbac Y2 has been evidenced with oil shows present in the Quam Hill#1 and
Canal Bank#1 exploration wells. The Y2 unit in NW Belize is 50/50 alternations of anhydrite and dolomite
and it contains porous dolomite layers which range from 40 feet to 100 feet in thickness. The Y2 unit is
expected to contain a combined 300 feet of dolomite reservoirs averaging 14% porosity including 40 feet at
22% porosity as evidenced on modern E-logs from the QH-1, CB-1, Y-2 and Y-3 wells. Porosity
development (and permeability) can be very negatively affected by late anhydrite precipitation as seen in
many wells of northern Belize but oil entrapment is expected to prevent this from happening. Total depth
will be within the uppermost part of the Yalbac Y3 anhydrites at approximately 3,200 feet.

Open-Hole DST Program:

Open Hole DST has proved to be an effective tool in testing dolomite reservoirs in the Spanish Lookout and
Xan fields and at Canal Bank#1. An unknown number of Drill stem tests are planned depending on lithology
and hydrocarbon shows in the 8 hole. Casing will be run depending on oil shows and additional well
tests will be performed in cased hole with a Maranco workover rig.