Nautical Petroleum

Capex

Future Plans

The first Nautical operated well in the 2008 campaign will be on the Selkie prospect and will be drilled during Q2. Nautical holds a 60% interest and may look to farm down further prior to drilling.

This will be followed by a well on the Catcher prospect under the operatorship of Oilexco scheduled for the Summer.

The second planned Nautical operated well in 2008 will be on the Hydra prospect in block 3/27a. This is currently planned to spud in the fourth quarter and has also been the subject of further farm out discussions.

Nautical will participate in new 3D seismic acquisition over the Mariner discovery aimed at improved imaging of the Heimdal reservoir and locating the optimum well position for the planned horizontal test well.

A 2D seismic programme is also planned to the west of the Kraken discovery over blocks 8/5 and 9/1.

Following full evaluation and assessment of the Kraken 9/2b-2 well, the Company will be planning a horizontal/high angle well to test the production potential of the Heimdal resource.

Nautical will also be seeking to further strengthen our portfolio through successful applications in the upcoming 25th Seaward Licensing Round. The Company will continue to apply our successful policy of selective applications with aligned partners.

The Future

The Company has continued to be guided by the key strategies defined on formation and has passed significant milestones during the review period towards their prime goals of oil flow and revenue.

The Company adopted an ‘outsource model’ from inception and has, thus far, limited full time specialist employees. As a general policy, this will continue to apply. However, the nature, scale and spread of the activity programme, and the demands of the company's future path to production, will require the Company to selectively supplement their limited full time specialist management resources.

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