APPRAISAL & DEVELOPMENT

The Sfax Offshore Permit is located in the Pelagian Basin in the northern portion of the Gulf of Gabes, southeast of the city of Sfax and just south of the Kerkennah Islands. The Permit contains 3 oil discoveries known as Salloum, Jawhara and Ras El Besh. Ashtart Field (350 MMBO Estimated Ultimate Recovery) lies just off the southeastern boundary of the Permit. Water depths within the permit range from sea level to a maximum of approximately 80 meters.

The primary proven reservoir in the area is the Lower Eocene El Garia nummulitic limestone. The El Garia is the primary reservoir in the Ashtart Field. Ashtart which was discovered in 1971 by Total contains reserves of >350 MMBOE, is considered the second largest oil field in Tunisia. The El Garia is also the primary reservoir in the giant Bouri Field, offshore Libya, considered the largest oil field in the Mediterranean offshore containing in excess of 5 billion barrels of oil in place.

The El Garia nummulitic limestone has also been proven productive within the Sfax Offshore Permit. In 1995, ARCO drilled the Ras El Besh Well #1 (REB1) which had hydrocarbon shows in the El Garia but was not tested. In 1997, ARCO drilled the Ras El Besh Well #2 (REB2) which tested 612 BOPD in the El Garia. In general, the reservoir characteristics of the El Garia include well log and core porosities that range from 12 percent to 25 percent with corresponding core permeabilities that range from < 1 md to over 500 md.

The Upper Senonian Abiod fractured chalky limestones, as well as the Coniacian Douleb and Turonian Bireno bioclastic and oolitic carbonates are prolific gas producing reservoirs further to the east of Ashtart Field in the Miskar (gas) Field. The Miskar Field (discovered in 1974 by Serept) is estimated to contain a minimum reserve of 3 TCF of gas and gas equivalent condensate. This reservoir is also productive from four smaller oil fields in the Sfax area onshore. These include Gremda, Guebiba, Mahares and Rhemoura Fields, which have a combined current estimated ultimate recovery of 22 MMBO.

The Bireno Formation like the El Garia, has been proven productive and of reservoir quality within the Sfax Offshore Permit. In the southern portion of the Permit, the Jawhara #1(JAW1) well tested two intervals of the Bireno formation. This well was drilled by Total in 1976 to a depth of 3,243 meters and encountered shows between 2,400-2,500 meters. During a cased-hole drill-stem test, the well tested at rates in excess of 1,200 BOPD. On the far west side of the Permit, British Gas found oil in the wildcat Salloum 1 (SAM1) in November 1991, at an offshore location northeast of Sfax, only 2km from the coast. That area is now included within the Sfax Offshore Exploration Permit. The well tested at a flow rate of 1,800 BOPD of 41 API oil & 385 MCFGPD after acidizing, at a depth of 3,200m from a pay zone in the Upper Cretaceous Douleb/Bireno carbonates.