Engen Resources Limited

Two-Year Report for Promote Licence P1236

November 2006

Engen Resources Limited Two-Year Report for Promote Licence P1236, Block 43/26b; the Kumatage Field

Introduction

The Kumatage Field lies in 175 feet of water and some 8-10km northeast of the Ravenspurn North Field within UK Block 43/26b. The reservoir is in the

Lower Leman Sandstones within the Permian Rotliegend Group.

Map Showing Location of Kumatage Field, Block 43/26b

The discovery well 43/26b-10 drilled in 1998 to test a low relief horst structure mapped at base Zechstein produced sweet dry gas but failed to

flow at commercial rates.

Earlier Top Leman Sandstone Depth Structure Map

(Based on 2D Seismic) Stratigraphic Column for well 43/26b-10

Evaluation

Cross Section A-A

Stratigraphic Column for Well 43/26b-10

Evaluation

An extensive database was gathered by Focus and Ingen including:

• WesternGeco 1997 OBC 3D Seismic 375 sqkm • 56 Regional Exploration, Appraisal and Production Wells consisting of

logs, cores tests & production data

• Costs for wells, completions, hydraulic fracs, testing, infrastructure & tariffs

• Geophysics, Geology, Petrophysics, Sedimentology, Petro-acoustics, Productivity, Hydraulic Fracture, Simulation & Economic Studies

The studies completed by Focus and Ingen included:

• Full Subsurface Block 43/26b & 42/30b Study by PGL • Sedimentological Kumatage Study • Regional Deliverability Report by Focus

• Competent Persons Report of the above by RML • Sedimentological Regional Study for 3rd Party

• Hydraulic Fracture review for 3rd Party • Economics by Ingen and subsequently Engen

• Regional SPE and Geological Papers

The subsurface evaluation conducted by PGL had the following scope:

• Detailed well to seismic ties and correlation of the reservoir intervals • Structure mapping and depth conversion

TD in Bunter

Kumatage

Seismic Coverage

Well Database

Silverpit Mudstone

Silverpit Mudstone

Carboniferous

Unit A, absent from syn-

depositional Carboniferous highs,

extends further north than Unit B

Unit B, pervasive from Kumatage to south and west, absent in

northern block 43/21

• Seismic amplitude analysis and relation to reservoir to reservoir properties through seismic modelling

• Petrophysical evaluation and rock property analysis to support seismic modelling

• Engineering analysis of the RFT and test results of well 43/26b-10 • Prospect evaluation and volumetrics

The following summary illustrates the findings of the study.

Reservoir Geology 43/26b-10 penetrated a section of the Lower Leman sandstones which are

laterally equivalent to the main gas bearing reservoirs in the Ravenspurn North field. In the nearby 43/26b-9 well an additional sand unit (Unit A) is

identified. Units A and B are separated by a persistent shale representing a transgression of the Silverpit lake. Unit A is identified in the Ravenspurn area and it is believed that Unit A is infilling topography on the Hercynian

unconformity surface. Lower Leman – Naming Convention

Petrophysics

Petrophysical Analysis 43/26b-10

Kumatage and Regional Core Data

43/26b-10 well poro-perm data looks anomalous in comparison to neighbouring wells.

Comparison of Poro-perm Data

Kumatage – RFT

• The RFT pressures acquired in the 48/26b-10 well show a variety of

pressures and most are lower than the regional water gradient. Some

points are higher, all are poor quality.

• The Ravenspurn North GWC at 10250 ft tvd ss is shallower than the

GDT in Kumatage of 10385 tf tvd ss. The shallowest spill point in

Kumatage is 10400 ft tvd ss

• Johnston has deepest known GWC in area at nearly 10700 ft tvd ss

Kumatage Well 43/26b-10 Test Analysis

• Unfortunately 43/26b-10 was not flowed for a long enough period to

establish radial flow

• Permeability and skin values have been estimated but the analysis

match is not good and without radial flow the numbers would be non-unique

• Well tested at very low rate

• Extrapolated pressure was less than regional water gradient

suggesting depletion or unreliable test data. Ravenspurn North would be the more likely field to be in connection albeit with low connectivity

• It was concluded that the test data is not interpretable

Volumetrics

The following volumes (bcf) have been calculated for the Kumatage structure and neighbouring prospect:

P90 P50 P10 CoS Kumatage Unit B 86 149 256 100%

Kumatage Unit A 47 107 177 30%

Prospect 2 12 26 54 22%

NW Extension

ML GRV

Max GRV

Prospect 2

Min GRV

Max GRV ML GRV

Kumatage

References

1. Block 43/26b Kumatage Prospect Evaluation, PGL, November 2005