The Management Board would like to draw your attention to the following:

1. The report estimates the prospective resources of the OTG Contract at over 1.9bn boe (barrels of oil equivalent), i.e. doubles the productive geological potential of the Contract as compared to the report published in January 2008.

2. The quantity of resources, which accounts for all five parameters that according to international standards are taken into account when risking prospects, was increased from 174 million boe to 450 million boe, which confirms that the OTG Contract is one of the largest prospecting concessions in Kazakhstan, both in view of its geological potential and also-more importantly-the value of hydrocarbons present in the area.

3. The report takes a thorough account of the results of recent seismic research, interpretations of those results, and presents the results of the key wells implemented by PETROLINVEST in Kazakhstan over the last 3 years:

   1. K-3 on the Koblandy structure where drilling is completed and where natural gas and crude oil flows were found to confirm the presence of hydrocarbon reserves in the Koblandy structure.

   2. Shyrak-1, currently drilled to a depth of 1,231.5 metres, where there were gas shows during drilling and possible bitumen or oil traces.

4. The results of the drilling of K-3, despite non-completion of production testing, allowed McDaniel to re-evaluate the Geological Chance of Success (of discovering crude oil) radically from 18% (Koblandy structure in January 2008) to 32%-45% (currently).

5. The effects of interpretation of seismic research also allowed to identify new prospects within the OTG Contract area:

   1. Ayganym - 240 million barrels of prospective resources

   2. Tamdy - 180 million barrels of prospective resources

   3. Utektas - 244.5 million barrels of prospective resources

   4. Damba - 108.5 million barrels of prospective resources.

   The Management Board would like to point out that the geological potential of each of the newly-identified structures is a few times greater than the geological potential estimated for the Russian companies that were sold through sales agreements reported by the Company in current report no. 53/2009.

The Management Board of the Company has the following strategic plans connected with the OTG Contract:

1. With the use of funds provided under the agreement with GEM Global Yield Fund, and also with the use of the funds that the Company intends to obtain from the European Bank for Reconstruction and Development and a group of financial investors with whom negotiations are well under way, the Company intends to conduct works necessary to run a full production test on the Koblandy structure within the next few months and to finish drilling, test and run a production test on the Shyrak structure.

2. Taking advantage of the results of the work already completed and the considerable increase of the prospective potential, the Company intends to intensify negotiations with strategic partners to allow them to participate in financing future investments on the OTG Contract through farm-outs concluded with respect to individual wells and/or prospects or equity investments.

3. The strategy for the other contracts/concessions owned by PETROLINVEST Group will be defined once appropriate McDaniel reports are obtained for them, which is expected to happen within the next three weeks.

Download current report no. 59/2009

Download report's attachement