Investor Update
Government Relations: Licenses in Good Standing
Background
MADAGASCAR OIL
In December 2010, the Company's Tsimiroro block and exploration block licences came under threat. MOIL
declared force majeure in March 2011 and began arbitration proceedings in April 2011.
Tsimiroro
In June 2011, OMNIS and the Ministry of Mines & Hydrocarbons acknowledged that the Tsimiroro Production
Sharing Contract (PSC) was valid and that its validity had never been in question.
In approving the 2012-2013 work programme, OMNIS and the Ministry acknowledged that MOIL would be
exercising its option to a 2 year extension, effectively extending the contract term to August 2014, plus an
additional 6 month extension if needed to account for the force majeure delay.
Exploration Blocks
In April 2012, OMNIS confirmed the validity of the PSC's for Blocks 3105, 3106, and 3107, recognised and adopted
the work programme for the remainder of the exploration term to December 2014, plus an additional 15 month
extension to account for the force majeure delay, which effectively extends the exploration period to March 2016.
Bemolanga
Total E&P, MOIL, and OMNIS are in discussions regarding a proposed contract amendment and extension allowing
for a seismic programme to better assess prospects for drilling a well on a conventional target. The current phase
expires in June 2012.
VAT Dispute
The Company continues its appeal of a long standing dispute with the government for approximately US$ 4 million
value added tax on foreign services, plus US$ 2.8 million of interest and penalties relating to the 2007 and 2008 tax
years. In January 2012, the Company filed an appeal with the Council of State, the judiciary body that hears final
appeals of tax matters, in order to protect its legal rights.
14 May 2012
Investor Update
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