POTWAR BASIN

Central Gas Basin

Lower Indus Basin

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The Potwar Basin lies at the northern extremity of the Upper Indus Basin and is the oldest producing basin in Pakistan. The Basin is predominately oil-prone. Eocene and Palaeocene carbonates are the most productive reservoirs with Paleocene, Permian, Jurassic and Cambrian clastic reservoirs producing in different fields. More recent discoveries are from Cretaceous and Jurassic clastics and carbonates.

Exploration Licence

BLOCK NO. 3272-12 (KARSAL)

Frontier's Interest 37.5% (Other Interests: PEL 37.5%, GPX 25%)

The Karsal Block covers 178,931 acres and is situated in the oil prone Potwar Basin. The block contains the Karsal Field that is adjacent to the Balkassar Field in the adjoining block to the east. The Balkassar Field has produced about 35 MMbbls of oil from Eocene age carbonate reservoirs. Karsal, on the other hand, has produced only a total of about 150,000 bbls oil from two wells that were drilled in the early 1950's. The Company believes that the Karsal Block holds considerable exploration and appraisal upside potential since the wells drilled in the block were drilled without the benefit of seismic and modern acidising technology. In addition, the deeper proven Jurassic and Permian were never tested and nor were the deeper Cambrian Khewra targets penetrated.

The exploration program for the Karsal Block has so far comprised the interpretation and integration of all of the available geological and geophysical data with a view to identifying drillable leads and prospects. Based on the results of the mapping, an additional 153 kilometers of 2D seismic was recently acquired in the block using a vibroseis source with the objective of further delineating the mapped leads. The data is currently being processed.

The work commitment includes a contingent well to be drilled to a depth of approximately 11,480 feet. The licence has a term of five years and expires in June 2010.