Third Quarter Report

Exploration Drilling

In Block 9, Kenya, the CNOOC-operated Bogal-1 oil exploration well was spud on October 28, 2009. The well is expected to reach total depth of 5,500 meters within approximately 6 months. Block 9 covers an area of 27,778 square kilometers in the centre of the Anza Basin. The Anza Basin is a NW-SE trending rift basin along trend with the prolific Mesozoic play of southern Sudan. The basin is over 580 kilometers long and 150 kilometers wide with a potential prospective area in excess of 50,000 square kilometers. The basin is filled in places with more than 6,000 meters of Mesozoic and Cenozoic sediments and locally by Plio-Pleistocene basalts. Bouger and residual gravity anomalies have highlighted several sub-basins separated by intra-basin highs. Historic wells drilled in the block have proven the existence of natural gas and possibly oil.

Additional drilling activity in the Kenya Blocks and the Ethiopian Blocks will await completion of seismic acquisition, processing, and interpretation.

Seismic Program

In Ethiopia, in the Adigala Block, 500 kilometres of 2D seismic has been acquired. Processing and interpretation of the Adigala seismic is ongoing.

Upon completion of the seismic acquisition in Adigala, the Company is planning to commence seismic acquisition in the Ogaden region of Ethiopia. In Blocks 7/8, AOC plans to acquire approximately 150 kilometres of 2D seismic data. In Blocks 2/6, the Company plans to acquire approximately 350 kilometres.

In Block 10A, Kenya, the Company plans to acquire approximately 750 kilometres of 2D seismic data during 2010. In Block 10BB, Kenya, the Company plans to acquire approximately 600 kilometres of 2D seismic data during 2010. Seismic data related to Block 9 was previously acquired and has led to identification of various leads and prospects.

In the Nogal Block in Puntland, Somalia, AOC acquired more than 4,000 kilometres of existing good quality 2D data which was recorded in the late 1980's. This has enabled the Company to work up an inventory of drilling prospects from which the first exploration well locations will be selected.

During 2008, in the Dharoor Block of Puntland, Somalia, the acquisition of 782 kilometres of good quality 2D seismic (comprised of 15 grid lines) was completed. The Company has combined 555 kilometres of previously acquired data into the seismic database and is currently being mapped to finalize exploration well locations.