SADR LICENSE OFFERING On 17 May, 2005, the Saharawi Arab Democratic Republic (SADR) formally announced an offshore oil and gas license offering (see link on home page for Western Sahara). Twelve offshore blocks were offered for bidding under Production Sharing Contract (PSC) terms. Deadline for bidding was 31 October, 2005. Maghreb Exploration, together with two other British companies, Nighthawk Energy and Osceola Hydrocarbons, were on 17 March, 2006 awarded the very large onshore Bojador block. In March, 2007, Nighthawk Energy assigned all of its interest in the Bojador Block to Osceola, and soon afterwards, a deal was agreed whereby Comet Petroleum, 100% holder of the offshore Guelta Block, agreed to a cross-assignment of interests with the Bojador Block group. The resulting equity holders in both the Guelta and Bojador Blocks is as folows: Maghreb Exploration (Operator)     10% Comet Petroleum                              50% Osceola Hydrocarbons                    40% The assignment and cross assignment have been approved by the SADR authorities.

AAIUN BASIN The Aaiun Basin in the Western Sahara is a large Mesozoic and Tertiary age basin, over 800 kms long and up to 300 kms wide, and lying both onshore and offshore. The Aaiun Basin has a total area of 235,000 square kms, including the offshore area out to the continental shelf break. A further 80,000 square kilometers of continental slope down to the abyssal plain are also underlain by sedimentary rocks prospective for hydrocarbons. The biggest phase of hydrocarbon exploration in the Aaiun Basin was mostly onshore in the early sixties. A total of 70 wells were drilled by 14 different operators in the basin (one exploratory well per 3,300 square kms). Towards the end of this phase, five offshore wells were drilled by Gulf, Conoco and Enpasa. Other than a few marginal shows in one onshore well drilled by Gulf (well A1-47, located on the Bojador Block), and some oil in Jurassic rocks in the Cap Juby structure (drilled by Esso) offshore from Tarfaya in Morocco, very little encouragement for hydrocarbon exploration was generated from the drilling in the initial phase. The onshore and offshore drilling, as well as seismic, in the Mesozoic Aaiun Basin has proven the occurrence of all the elements of a petroleum system. The existence of good reservoir rocks, potential mature source rocks, and structure creating traps are relatively well documented, but other elements such as hydrocarbon generation, migration timing and pathways, and actual entrapment, are still poorly defined.