2. LIQUIDITY

Our revenues, cash flow, profitability, oil and natural gas reserve values and future rates of growth are substantially dependent upon prevailing prices for oil and natural gas. Our ability to borrow funds and to obtain additional capital on attractive terms is also substantially dependent on oil and natural gas prices.  After a period of low commodity prices, oil and gas prices have stabilized at levels which are currently adequate to generate cash from operating activities for our continuing operations. In addition to the impact of oil and gas prices on our access to capital markets, the availability of capital resources on attractive terms may be limited due to the geographic location of our primary producing assets.  We may drill two or three development wells in 2018.  Any drilling program we enter into would require approval of our partners and the government of Gabon.  We expect any capital expenditures made during 2018 will be funded by cash on hand, cash flow from operations and cash raised from debt and/or equity issuances.  We believe that at current prices, cash generated from continuing operations together with cash on hand at December 31, 2017 are adequate to support our operations and cash requirements during 2018 and through March 31, 2019.