SOVEREIGN OIL AND GAS COMPANY

Whether it is assisting a developing country to become a major oil producing nation or helping an African independent oil company develop an offshore oil and gas field, Sovereign has established a strong track record on behalf of its partners and investors. The Company’s current focus areas include Africa, South America, the Middle East, the Caspian littoral states and Southeast Asia. Sovereign specializes in upstream project development, providing its investors access to very high drilling success rates with comparatively low overall financial risk exposure.

The Sovereign team produces high-return, investment-ready international exploration and production projects, creating value from the negotiating table to the burner tip.

Sovereign bridges the gap between petroleum asset owners in the developing world and traditional oil companies seeking high potential investment-ready projects. Sovereign invests its capital and human resources in upstream projects on a risk basis to provide technical, legal, and financial solutions to petroleum asset owners and to deliver high quality ready-to-drill projects to oil industry investors.

Sovereign’s IT hardware includes:

Sovereign is compliant with General Accepted Accounting Principles (GAAP) and Sovereign’s internal accounts and financial transactions are documented in such a way that Sovereign’s outside tax accountants can accurately prepare and support the tax returns and provide auditable accounts. Sovereign provides quarterly compiled financial statements to its investors prepared by its outside accounting firm. Sovereign’s independent legal firms (Haynes and Boone, LLP) and outside accounting firm helps Sovereign to remain compliant with state and federal tax regulations. In addition to these controls, Sovereign has implemented an internal program to maintain compliance with the Foreign Corrupt Practices Act (FCPA).

Sovereign’s financial reporting and best practices management has allowed Sovereign to operate consistently within or below budget and to provide outstanding return on investment ratios to its investors.

Sovereign’s CEO has caused more than 80 wells to be drilled in West Africa in the past fifteen years, and has led investments totaling nearly US$4 billion into the region. This activity includes the discovery and development of the Lion and Panthere Fields in Côte d’Ivoire and the Zafiro Field in Equatorial Guinea. The total reserves for these fields exceed 1.3 billion barrels of oil equivalent, and peak production surpassed 350,000 barrels of oil equivalent per day.

Sovereign has managed eight major upstream projects in the Gulf of Guinea (West Africa) since 2000, and is presently participating in three offshore field appraisal-delineation drilling projects in Nigeria and two exploration blocks, one in Nigeria and one in Equatorial Guinea.

COMPANY OWNERSHIP STRUCTURE

Sovereign operates as Sovereign Oil & Gas Company II, LLC, a Texas Limited Liability Company.

 SOVEREIGN PHYSICAL PROPERTY

Sovereign occupies the top floor of a modern office tower in the Greenway Plaza area of central Houston, Texas. The Sovereign office space comprises over 13,000 square feet with an option on an additional 4,000 square feet, and includes state-of-the-art computer technology, world-wide video and telecommunications capability, and large digital technical databases of the world’s major petroleum basins.

Sovereign’s lease on its existing office space extends to April, 2008, when it is renewable for a period of five years.

SOVEREIGN ACCOUNTING AND LEGAL INTERNAL CONTROLS

Sovereign has implemented internal controls and processes to protect the investment of its partners and to assure compliance with state, federal, and international regulations in the countries where it does business. Because Sovereign works closely with US and foreign public companies, its internal controls and financial reporting is consistent with standards of public companies operating in the international oil and gas industry.

Sovereign presently manages its legal requirements with the assistance of three outside law firms, Haynes and Boone, LLP, for contractual and business related matters; Ogletree, Deakins, Nash PC for labor and human resource related matters; and Grundy & Associates for oil and gas contracting matters.

SOVEREIGN TECHNICAL CAPABILITIES

The average upstream industry experience of Sovereign technical staff is 30 years. In order to qualify as a Sovereign geoscientist a candidate must be able to document that he or she has found in excess of one billion barrels of oil equivalent reserves. Sovereign engineering staff must demonstrate major international upstream project experience in operations, drilling, reservoir, facilities, planning & economics, and production projects.

Sovereign believes that its success depends on attracting and retaining the best industry talent in its employee group. Sovereign is able to attract and retain the top talent of the international upstream industry by means of its innovative profit sharing programs with its Key Employee Group. In addition, Sovereign compensates its employees very competitively as compared to our peer group of independent oil companies. Sovereign also provides an outstanding benefits program and a performance-based bonus compensation plan.

Sovereign’s technical capabilities include:

• Basin Analysis
• Country Risk and Fiscal Regime Analysis
• Contract Application and Negotiations
• Exploration & Development Program Design and Management
• Leading-edge Geological and Geophysical Technologies
• Interpretation and Risked Reserve Estimation
• Full-cycle Economics
• Prospectus Preparation and Marketing
• Host country legal and regulatory expertise
• Project Operations Support