HispanicBusiness

In January 2012, we place the Orito-193 well on production at over 800 bopd of 26 degree API oil in the Villeta Formation, the secondary reservoir target in the field. Based on the Orito-193 result, we identified six existing wells that can be re-completed for production in the Villeta Formation. We plan to finish the six-well recompletion program in the third quarter of 2012. In the fourth quarter of 2011, we suspended our drilling program on the Block pending the receipt of new environment permits. We expect to recommence our development drilling program early in 2013.

Neiva, Upper Magdalena Basin, Colombia

Late in the third quarter, we suspended our drilling program on the Block pending the receipt of new environment permits. We expect to receive new permits in 2013, at which time we plan to recommence our development drilling program.

Block 126, Peru

The testing of the La Colpa 2X well was completed in April 2012 and non-commercial volumes of hydrocarbon were encountered. Log analysis and sample evaluation had suggested potential for hydrocarbons in several zones; namely the presence of 18 feet of net potential oil pay in the Tarma sandstone and 72 feet of net potential oil pay in three intervals of the Copacabana reservoir in several porous carbonate intervals. Despite encountering oil and gas shows in the samples while drilling, it appears the entire Copacabana section has been flushed with fresh water leaving only residual hydrocarbon saturations. Unusually low salinities in the formation waters complicated log analysis as fresh water generates a similar high resistivity log signature to that of hydrocarbons. It is encouraging that these Copacabana limestone reservoirs demonstrated excellent deliverability, with flow rates of up to almost 4,000 barrels of fluid per day.

Following La Colpa 2X, we plan to move equipment to drill our Sheshea-1X prospect on the Block. The Sheshea prospect is an independent prospect and a different play-type from La Colpa. We are also targeting multiple reservoir formations in Sheshea. We expect to begin drilling operations from this well in July, subject to weather conditions.

Blocks 114 and 131, Peru

Petrominerales holds a 30 percent working interest in Blocks 114 and 131. On Block 131, the operator has identified two drillable prospects. The Environmental Impact Assessment ("EIA") for drilling was submitted in June 2011 and the first well is planned April 2013. On Block 114, the next exploration phase includes the acquisition of 325 kilometres of 2D seismic by July 2013. To date, four drillable prospects and six leads have been identified on this Block. The operator applied for and was granted force majeure status over the block in December 2011 due to unusually high river levels and heavy rainfall which has flooded out a portion of this block making seismic acquisition impossible. The river levels have subsided and the block is now out of force majeure and we expect the seismic program to recommence in June. The operator is responsible for our share of the costs under the current seismic exploration phase, as well as our share of costs for the first exploration well on each block.

Block 161 and 141, Peru

Block 161, situated in east central Peru, is 1.2 million acres in size and Petrominerales has an 80 percent working interest. We submitted an EIA that covers our planned 353 kilometre 2D seismic program and we are waiting on the ministry of environment's approval. We are also awaiting feedback on our first round of community workshops. Block 141, situated in southern Peru, is 1.3 million acres in size and Petrominerales has an 80 percent working interest. Currently, the Block is in force majeure due to new government regulations requiring additional community consultations. As a result, our current commitment to complete a 300 kilometre 2D seismic program by July 2012 has been suspended pending completion of these additional consultations.