In July 2012, the Company signed a definitive agreement for the purchase of a partial working interest at a cost of $10.0 million in a concession in a West African country new to the Company. The acquisition, which has been approved by the Company’s Board of Directors, is expected to close prior to the end of the third quarter of 2012, and is subject to customary closing conditions, including approval of the agreement by the government of the West African country.

In July 2012, the Company elected to shut-in two producing wells in the Ebouri field as a precaution after detecting the presence of hydrogen sulfide (H2S) on the Ebouri platform. The contamination is isolated to two wells in the Ebouri field and the Company continues to maintain production from the entire Etame complex including one well at Ebouri at approximately 19,000 barrels per day. Investigations are underway to ascertain the root cause of the H2S and develop a plan to produce the remaining reserves in a timely manner. Until the investigative work is done, the Company is unable to provide a time estimate of when (or if) production will resume from the two shut-in wells, nor is the Company able to determine if additional capital expenditures and higher operating costs will be required to produce the impacted reserves.