Energulf Resources

The Lotshi Block covers approximately 500 square km of the "Les Zones du Bassin Côtier" (ZBC) in the onshore coastal salt basin of western Democratic Republic of Congo (DRC). The block is contiguous to the highly prospective Cabinda area of Angola and is on trend with the M’Boundi giant field in Republic of Congo and situated in a similar geological rift graben. The Lotshi Block is also in relatively close proximity to the offshore Cabinda, Malongo and Takula giant field complexes. Immediately adjacent to the ZBC and contiguous to the Lotshi block, in onshore Cabinda, are several undeveloped shallow oil discoveries in blocks held by Sonangol and ROC. The ZBC also includes the East-Mibale, Laiwenda-Kinkasi and Muana-Banana fields operated by Perenco. The block is also contiguous to a bitumen mining license on the eastern boundary of the block, where there are also known surface oil seeps.

Pursuant to a memorandum of understanding with the Democratic Republic of Congo, EnerGulf’s wholly owned subsidiary, EnerGulf Africa Ltd., was granted by the Ministry of Energy, a Hydrocarbon Exploration and Production Sharing Contract (“PSC”) covering the Lotshi Block and rights to other areas in the "Les Zones du Bassin Côtier" (ZBC). Under the terms of the PSC grant, EnerGulf has paid the required signature bonus to the DRC government of US$500,000 for a 83% to 90% interest in the 5 year exploration license. The first year work requirement is US$3,500,000 and the cost of the minimum work commitment over the remaining four years is US$30,000,000. EnerGulf is the operator of the block and will carry COHYDRO, the national oil company of the DRC, for a 10% interest in the block. In March 2008 the PSC covering the Lotshi Block was ratified by Presidential Decree. As per the PSC, the Company has incorporated a Congolese subsidiary, EnerGulf Congo SARL located in Kinshasa, to administer various EnerGulf activities in the DRC. Dr. Albert Ongendangenda joined the Company as Director General of EnerGulf Congo SARL.