Operations

Stratic has continued to grow a strong portfolio of near term appraisal and development opportunities. The Company’s business is grouped into two key geographical areas:

The North Sea

Stratic holds interests in six discoveries: Bowmore, Breagh, Cairngorm, Crawford and West Don in the UK sector, and Horizon West in the Dutch sector. West Don, Crawford and Horizon West are considered to be fully appraised and are now under or actively being considered for development. The first development well on West Don is planned for mid 2008.

On Bowmore, Breagh and Cairngorm, proved and probable reserves have not yet been recorded. Each of these discoveries has been advanced in 2007 and will be the subject of further appraisal activity in 2008 and 2009.

Italy

The Longanesi gas discovery (formerly known as Abbadesse) in the 100% owned San Marco
and Casale Cocchi permits, and adjacent ENI San Potito permit, in the eastern Po Valley is currently in the final stages of development planning. Substantial progress has been made in the last year, with Stratic and ENI agreeing commercial terms for a single, unitised development which has allowed the development planning to commence.

Italy provides many opportunities to pick up exploration acreage on reasonable terms, with the potential of high value reserve additions demonstrated by the success of Longanesi.

Other areas

Stratic also owns interests in acreage in Syria, Turkey, Morocco and Slovenia.

Stratic has a 35% interest and operates Block XVII in Syria, some 150 kms east of Damascus. This block sits on the flank of the petroliferous Palmyride fold belt with. A well location has been approved by Stratic and its partners for drilling late in 2008.

In Turkey, Stratic has a 12.25% interest in eight contiguous blocks in the Black Sea on which nine gas discoveries have been made. Phase 1 of the development, comprising the Ayazli, East Ayazli and Akkaya fields, is onstream with production currently running at approximately 20-30 mmcfd.

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