The Company is aware that if it is to meet its short term targets over the coming few months then it will require
a higher level of cash input than has been received to date. In addition balloon payments of
.7 million on the
Tykhe rig loan are due for settlement in December and loans associated with the Uzbekistan NU116 well,
drilled in late 2009, are due for settlement with $4.1 million due in January and $3.4 million in February
2012.When the rail terminal at Shalkar has been completed then the associated increase in production levels to
4,000 bopd and increased oil sales will generate sufficient levels of cash. While management is confident that
this increased production will commence on December 1, 2011 this may not be the case and could be subject to
unforeseen delays. In the absence of any other action a delay of one month would mean that the Company
could have a problem in settling the loans as scheduled. The Company intends to resolve this situation through
the placement of appropriate debt arrangements and a rollover of some or all of the existing debt.
Amongst the forms of debt facility being actively pursued is one that the Company has made use of previously
and that is in the form of a loan secured against company owned drilling equipment. Another type of
arrangement being considered is in the form of a credit line from a bank but even though the Company has
received indicative terms from the bank with regard to a line of credit it is anticipated that it will take several
months to complete. With regard to the drilling equipment loan the Company is looking to raise a sum
equivalent to cover two months delay of the increased oil production and it is anticipated that this should be
completed and in place by the end of November.