Summary of Drilling Activities

Drilling of SW Kanun-1, Kocahuyuk-1, Zeynel-22 and Arpatepe-4 wells were completed during the 3Q of 2011. Arpatepe-6 and Arpatepe-5 appraisal wells have been spudded on September 29, 2011 and December 20, 2011, respectively.

License ARI/GYP-AME/3215-3170

Zeynel-22 production well was drilled in the SW part of the Zeynel Field on November 16, 2011. It was put on production immediately after as an artesian flowing well. Although initial production rates were as high as 15 bbl/hour, it declined to 1.7 bbl/h in about two week time. Then, sucker rod pump was installed on December 21, 2011. Current production from the well is 130 bbl gross with 70% water cut.

License AR/AME-GYP-TLN/3118

After the 3D seismic data acquisition and interpretation of the Arpatepe Field, a new appraisal well (Arpatepe-4) has been spudded on June 19, 2011 approximately 1.5 km west of the Arpatepe-1 discovery well. Drilling was completed at the depth of 8215 ft (2504 m) in Bedinan Formation on August 27, 2011, and workover operations are being continued until November 11, 2011. 3 intervals were perforated in the well, and oil mixed with formation water were recovered from the upper two intervals. The well then was temporarily abandoned being subject to further testing.

Consequently, Arpatepe-6&5 appraisal wells have been spudded over the Arpatepe structure on September 29, 2011, and December 29, 2011 respectively. As of December 31, 2011 drilling of both wells are being continued.

License AR/GYP-AME/4244

Post-well evaluation studies after drilling of Sahabe-2 exploration well was continued which had been P&A as an oil show well on April 4, 2011.

A new exploration well is planned during the 1Q of 2012.

License AR/AME-GYP-MER/3999

Evalution studies have been continued following the drilling of Copkoy-3 exploration well was temporarily abandoned as gas show well in Oligo-Miocene aged Danismen Formation.

License AR/AME-GYP/2674

Production in Altinakar-1 well which tested 14 API gravity oil in Mardin Group on February 02, 2011 have been continued.

G&G evaluation work with respect to Altinakar structure has been completed and deepening of the well to test the potential of Bedinan Formation is proposed. Drilling operation is expected to resume during the first quarter of 2012.

License AR/MEL-GYP-SEC/4206-4208, 4214-4218

Drilling of SW Kanun-1 exploration well in License No. 4218 was completed at the depth of 9202,8 ft (2805 m) in Bedinan Formation on October 17, 2011. The well was P&A as a dry well.

License AR/GYP/4773

Data collection and initial interpretation work has been continued in this license which was awarded to GYP in December 2010.

The license is located in Petroleum District XIV, neighboring the long time productive Bulgurdag Oil Field which is also operated by GYP.

The first exploration well in the license is planned during the last quarter of 2012.

License AR/GYP/4886, 4887

These licenses are located in Petroleum District XI. and were awarded to GYP on May 29, 2011. They are positioned on the northern flank of Mardin High which is a well-known paleo-structure developed in southeastern Turkey since Cretaceous time.

Currently available G&G data are being evaluated.

License AR/GYP/4919

G&G data collection has been continued in this license which was awarded to GYP on August 2, 2011. The license is located next to Turkish-Iraqi border in Petroleum District IX.

The first exploration well in the license is planned in April 2012.

License AR/GYP/4888

G&G data collection and evaluation work have also been continued in this license which was awarded to GYP on August 23, 2011. It is situated to the east of GYP operated Zeynel Oil Field in Petroleum District XII.

The first exploration in the license is planned in May 2012.

Workover Activities

Already producing horizons of Lower Sayindere, Karabogaz and Karababa Formations in Zeynel-9 production well was cement plugged due to 99% water cut, and a new horizon detected in the Upper Sayindere Formation was re-perforated. After acidizing, the well has been put on production with a 13 bbl/d with zero water cut.

Similar operations are planned in other wells in the Zeynel Field in year 2012.

Seismic Activities

Arpatepe 3D Seismic Processing

PSDM processing of 252 km2 3D seismic survey shot in Arpatepe License of AR/AME-GYP-TLN/3118 in November 2010 has been completed at the end of September 2011 and data interpretation work has recently been completed in December 2011.