MAPLE ENERGY PLC. Placing & Admission to AIM

Transcription

1 MAPLE ENERGY PLC Placing & Admission to AIM Admission Document 6 July 2007

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3 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take or the contents of this document, you should immediately consult a person authorised under the Financial Services and Markets Act 2000 ( FSMA ) or if resident in Ireland, an independent financial adviser authorised or exempted pursuant to the Investment Intermediaries Act 1995 of Ireland or the Stock Exchange Act 1995 of Ireland in each case who specialises in advising on the acquisition of shares and other securities. This document has been drawn up as an Admission Document in accordance with the AIM Rules and it is not an offer of securities to the public for the purposes of Section 102B of FSMA. This document does not comprise a prospectus for the purposes of the PD Regulation and pursuant to Section 85 of FSMA. Accordingly, no copy of this document has been or will be approved by the Financial Services Authority. Maple Energy plc and its Directors, whose names appear on page 4 of this document, accept individual and collective responsibility for the information contained in this document and compliance with the AIM Rules. To the best of the knowledge and belief of Maple Energy plc and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and there is no omission likely to affect the import of such information. Application will be made to the London Stock Exchange for the whole of the issued and to be issued ordinary share capital of Maple Energy plc to be admitted to trading on AIM. No application has been or is being made for the Ordinary Shares to be admitted to any other investment exchange. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the official list of the United Kingdom Listing Authority. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. Each AIM Company is required pursuant to the AIM Rules for Companies to have a nominated adviser. The nominated adviser is required to make a declaration to the London Stock Exchange on admission in the form set out in Schedule Two to the AIM Rules for Nominated Advisers. The London Stock Exchange has not itself examined or approved the contents of this document. The AIM Rules are less demanding than those of the Official List. Prospective investors should read the whole text of this document and should be aware that an investment in Maple Energy plc is highly speculative and involves a high degree of risk. In particular, prospective investors should consider the section entitled Risk Factors set out in Part III of this document. All statements regarding Maple s business should be viewed in the light of those risk factors. It is expected that the Ordinary Shares will be admitted to trading on AIM and dealings will commence on 13 July MAPLE ENERGY PLC (Incorporated in Ireland under the Companies Acts 1963 to 2006 with registered no ) Placing of 26,700,000 Subscription Shares and 5,900,000 Sale Shares of $0.01 each at 84p per Ordinary Share and Admission to trading on AIM Nominated Adviser and Joint Broker CANACCORD ADAMS LIMITED Joint Broker MIRABAUD SECURITIES LIMITED Share Capital immediately following Admission and Placing Authorised Ordinary Shares Issued and fully paid following the Placing and assuming all the Subscription Shares are subscribed for and issued and the Sale Shares are acquired Number Amount Number Amount 200,000,000 $2,000,000 $0.01 each 75,281,130 $752,811.30

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5 The Placing is conditional, inter alia, on Admission taking place on or before 27 July The Ordinary Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or under the securities legislation of any state of the United States of America, South Africa, Australia, Japan or Canada. No securities commission or similar securities regulatory authority in Canada has in any way passed on the merits of the securities offered hereunder and any representation to the contrary is an offence. No document in relation to the Placing has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission, and no registration statement has been or will be filed with the Japanese Ministry of Finance in relation to the Placing of the Ordinary Shares. Accordingly, subject to certain exceptions, the Ordinary Shares may not, directly or indirectly, be offered or sold within the United States of America, South Africa, Australia, Japan or Canada or to or for the account or benefit of any national, resident or citizen of South Africa, Australia, Japan or Canada or any person located in the United States. This document does not constitute an offer for, or the solicitation of any offer to subscribe for or buy, any of the Ordinary Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction. This document does not constitute an offer for, or solicitation of any offer to subscribe or buy, any of the Ordinary Shares to any person in any jurisdiction to whom it is unlawful to make such an offer or solicitation in such jurisdiction. The distribution of this document in certain jurisdictions may be restricted by law. No action has been taken or will be taken by Maple Energy plc, by the Shareholders or by Canaccord that would permit an offer of Ordinary Shares or possession or distribution of this document where action for that purpose is required. Persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive, shares will not be offered to the public in that Member State, except: (a) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (b) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than u43,000,000 and (3) an annual net turnover of more than u50,000,000, as shown in its last annual or consolidated accounts; or (c) at any time in any other circumstances which do not require the publication by Maple Energy plc of a prospectus pursuant to Article 3 of the Prospectus Directive. The Ordinary Shares will be offered in the Republic of Peru ( Peru ) by means of a private offering and therefore have not been and will not be registered before the Securities Market Public Register (Registro Público del Mercado de Valores) kept by the Peruvian Securities and Exchange Commission (Comisión Nacional Supervisora de Empresas y Valores CONASEV). Since the Ordinary Shares will not be placed in Peru by means of a public offering as defined by the applicable laws and regulations in Peru, the offering is limited to institutional investors recognized as such by the Peruvian applicable laws and regulations. With regard to Peruvian private pension funds (Administradoras Privadas de Fondos de Pensiones AFP), the Ordinary Shares shall have been duly registered before the Superintendence of Banking, Insurance and Private Pension Funds (Superintendencia de Banca, Seguros y AFP) by the time the placement of the Ordinary Shares takes place. Canaccord, which is authorised and regulated in the United Kingdom by the Financial Services Authority, and is a member of the London Stock Exchange, is acting exclusively as the Maple Energy plc s nominated adviser and, along with Mirabaud, as the Maple Energy plc s joint broker for the purposes of the AIM Rules and for no one else in connection with Admission and will not be responsible to any person other than Maple Energy plc for providing the protections afforded to customers of Canaccord or for advising any other person on the contents of this document. Its duties as Maple Energy plc s nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to Maple Energy plc or to any Director or Shareholders or to any other subsequent purchaser of Ordinary Shares and accordingly no duty of care is accepted in relation to them. No representation or warranty, express or implied, is made by Canaccord as to, and no liability whatsoever is accepted by Canaccord in respect of, any of the contents of this document (without limiting the statutory rights of any person to whom this document is issued). i

6 Mirabaud, which is authorised and regulated in the United Kingdom by the Financial Services Authority, and is a member of the London Stock Exchange, is, along with Canaccord, acting as the Maple Energy plc s joint broker for the purposes of the AIM Rules and for no one else in connection with Admission and will not be responsible to any person other than Maple Energy plc for providing the protections afforded to customers of Mirabaud or for advising any other person on the contents of this document. No representation or warranty, express or implied, is made by Mirabaud as to, and no liability whatsoever is accepted by Mirabaud in respect of, any of the contents of this document (without limiting the statutory rights of any person to whom this document is issued). This document contains forward-looking statements, which are based on the Directors current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These forward-looking statements are subject to, inter alia, the risk factors described in Part III of this document. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables, which could cause actual results or trends to differ materially. Each forward-looking statement speaks only as of the date of the particular statement. Except as required by the AIM Rules, the London Stock Exchange or by law, Maple Energy plc disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Maple Energy plc s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Copies of this document will be available free of charge during normal business hours on any day (except Saturdays, Sundays and public holidays) at the offices of Canaccord, 7th Floor, Cardinal Place, 80 Victoria Street, London SW1E 5JL United Kingdom from the date of this document for a period of one month from Admission. ii

7 TABLE OF CONTENTS KEY INFORMATION 1 DIRECTORS, SECRETARY AND ADVISERS 4 EXPECTED TIMETABLE 6 PLACING STATISTICS 6 DEFINITIONS 7 PART I INFORMATION ON THE COMPANY Overview Corporate Structure and Re-organisation Recent Developments Description of Maple s Business Operations and Assets Work Program Summary Maple Financial Information Current Trading and Prospects Strengths and Strategy Management Reasons for Admission and Use of Proceeds Employees Overview of Peru Dividend Policy Details of the Placing Admission, Settlement and Dealings CREST Takeover Rules Corporate Governance Additional Information Overseas Shareholders 52 PART II CONCESSION AGREEMENTS 53 PART III RISK FACTORS 61 PART IV COMPETENT PERSON S REPORTS 76 PART V FINANCIAL INFORMATION 185 PART VI ADDITIONAL INFORMATION Maple Energy plc Share Capital Maple Energy plc s Subsidiaries Memorandum and Articles Directors of Maple Energy plc Directors and Other Interests Selling Shareholders Lock-in Arrangements Directors and Senior Management s Service Contracts and Letters of Appointment Directors Interests in Transactions Summary of the Principal Features of the Employee Share Incentive Arrangements Material Contracts Related Party Transactions Taxation Litigation Working Capital No Significant Change Responsibility and Consents General 348 GLOSSARY 350 iii

8 Asset L ocations Nort rthern Peru Ethanol Projec ect Maple Head Office Aguayt oin int Venture Refining ng & Marketi eting Oil Producti tion and Explorat atio ion 1 iv

9 KEY INFORMATION Overview Maple is an integrated independent energy company with assets and operations in Peru. It engages in numerous aspects of the energy industry, including (i) exploration and production of crude oil, natural gas and natural gas liquids, (ii) refining, marketing and the distribution of hydrocarbon products, (iii) gas-fired power generation and power transmission, and (iv) the development of an ethanol project. By utilising its strategic asset base, technical expertise, project management skills, and strong customer and government relationships, Maple has established itself as one of Peru s leading integrated energy companies. Maple s operations are conducted and revenues are generated through its wholly-owned subsidiaries and equity interest in Aguaytía Energy, a joint venture in which Maple owns an approximate 14.3% effective economic interest. For the year ended 31 December 2006, on a combined basis, Maple generated revenue and adjusted EBITDA of approximately $78.5 million and $8.7 million, respectively. For the year ended 31 December 2005, Maple generated combined revenue and adjusted EBITDA of approximately $75.2 million and $10.3 million, respectively. (1) Maple s proved and probable hydrocarbon reserves as at 31 December 2006, were MMboe (including reserves held through the Aguaytía Project), of which approximately 44% were hydrocarbon liquids and 56% were natural gas. Maple s average daily production during the year ended 31 December 2006 was 2,174 boepd. Operations Maple s principal operations consist of the following: Crude Oil Production. Operator and holder of 100% working interests in its crude-oil producing properties, Blocks 31-B and 31-D; Refining, Marketing and Distribution Operations. Operator of the Pucallpa Refinery and Sales Plant, which has capacity to refine up to (i) 3,400 bpd of crude oil producing Residual 5 fuel oil, (ii) 3,000 bpd of crude oil producing Residual 6 fuel oil or (iii) 4,100 bpd of natural gasolines. This plant also includes sales and distribution operations in the central Peruvian jungle, central Peruvian highlands and Lima regions; Aguaytía Energy Interest. Operator of Aguaytía Energy s gas assets and holder of an approximate 14.3% effective economic interest in Aguaytía Energy, an integrated energy company engaged in the production of Block 31-C, gas-fired power generation, power transmission, gas processing, natural gas liquids fractionation, gas and liquids transportation and the marketing of liquid petroleum gas ( LPG ) and natural gasolines; Crude Oil Development. Operator and holder of a 100% working interest in the Pacaya Field in Block 31-E, which Maple intends to reactivate, as well as the development of up to 31 additional wells in Blocks 31-B and 31-D; Ethanol Project. Project developer and major shareholder in an estimated $192.5 million ethanol project located in the Piura Region on the northwest coast of Peru. Oil and Gas Exploration. Significant exploration opportunities through: a 100% working interest in Block 31-E, containing the Santa Rosa, San Roque and Cashiboya Deep prospects; and a significant working interest in the Aguaytía Deep Prospect in Block 31-C. For more information on Maple s operations, please see Section 4 of Part I included elsewhere in this document. (1) EBITDA figures exclude $7.3 million of costs in 2005 and $0.3 million of costs in 2006 relating to the expensing of drilling operations under successful efforts accounting (see Note 16 in Section 3 of Part V of this document) and $1.4 million of restructuring costs in 2006 (see Note 3 in Section 5 of Part V of this document). 1

10 Reserves and Resources The following table sets forth a summary of Maple s estimated reserves, on a net attributable basis, as at 31 December 2006 as appraised by the Competent Person. Proved, Probable Total Reserves: Proved Proved and Probable and Possible Oil and Liquids (bbl) 4,081,471 6,009,240 7,676,649 Gas (MMcf) 38,800 45,000 49,000 The following table sets forth a summary of Maple s estimated prospective resources, on a net attributable basis, as at 31 December 2006 as appraised by the Competent Person: Total Resources: Low Estimate Best Estimate High Estimate Oil and Liquids (Mbbl) 90, ,472 1,127,085 Gas (MMcf) , ,397 Strengths Maple s key strengths consist of the following: Proven Track Record of Revenue and Cashflow Generation. Existing revenues and cashflow from sales of refined products, LPG and electricity, resulting in combined revenues and adjusted EBITDA of $78.5 million and $8.7 million for the year ended 31 December 2006, respectively, and combined revenues and adjusted EBITDA of $75.2 million and $10.3 million for the year ended 31 December 2005; (1) Risk-diversified Hydrocarbon Asset Base. Maple s oil and gas portfolio includes: multiple low-risk development, drilling and work-over opportunities on existing properties; and multiple exploration opportunities in Block 31-E and the Aguaytía Deep Prospect with best estimate prospective crude oil, natural gas and natural gas liquids ( NGLs ) resources estimated to be MMbbl and Bcf, respectively; Competitive Positioning of Operations. The location of Maple s operations and assets provide the following advantages and efficiencies: the proximity of Maple s crude oil production to its refining assets as well as readily available transport links and other infrastructure provides Maple with logistical advantages over competitors; operation of the only refinery in the central Peruvian jungle provides significant access to surrounding markets; coastal location of the Ethanol Project s facilities and favourable Peruvian climate lends support to Maple s intention to compete as a low-cost, strategically-located ethanol producer; and ability to utilise Maple s physical infrastructure which covers substantial areas in the central jungle of Peru, with extensive logistical operational experience through multiple exploration and development projects performed in this area. These include drilling, workovers, road construction, plant construction, pipeline construction, refinery expansion, seismic acquisition, geological and geochemical surveys, among others. Strong and Experienced Management Team and Significant Human Capital. Strong and experienced team with established government and industry relationships, significant in-country accomplishments, including the successful implementation of the $273 million Aguaytía Project and other national energy projects, and 13 years experience together establishing an international energy company with approximately 400 full time equivalent employees; Operational Efficiencies through Vertical Integration and Ownership. Maple s operations benefit from the following efficiencies: vertically integrated operations providing readily available monetisation routes and beneficial feedstock costs for hydrocarbon refining and enhanced netbacks for Maple; and (1) EBITDA figures exclude $7.3 million of costs in 2005 and $0.3 million of costs in 2006 relating to the expensing of drilling operations under successful efforts accounting (see Note 16 in Section 3 of Part V of this document) and $1.4 million of restructuring costs in 2006 (see Note 3 in Section 5 of Part V of this document). 2

11 ownership of workover rigs enabling Maple to minimise significant third-party contractor supply, cost and time constraints in the execution of its shallow drilling and work-over programmes. Strategy Maple s strategy is to continue to develop selective energy projects, building shareholder value through a combination of continued development of oilfields, ethanol project development, and exploration. To execute this strategy, Maple intends to: develop existing oil reserves through a series of well workovers and development drilling opportunities, including 17 shallow development wells and 15 workover wells on Block 31-B and 14 shallow development wells and 10 workover wells on Block 31-D to be financed primarily through existing cashflow from operations; discover additional oil and natural gas fields through exploration activities, including three prospects in Block 31-E and one prospect in Block 31-C; establish itself as one of Peru s leading ethanol producers through the development and completion of the Ethanol Project and other ethanol production opportunities; and pursue strategic acquisitions in Peru. Management Maple s management team is principally led by three of its founders, Mr. Jack Hanks, Mr. Rex Canon and Mr. Tony Hines, Maple s Chairman, Chief Executive Officer and Senior Vice President of Operations respectively. Messrs. Hanks, Canon and Hines, collectively, possess more than 66 years experience in the energy industry. In addition, Maple s senior technical and operational team has extensive experience in the Peruvian energy sector, possessing, in the aggregate, approximately 170 years of experience in the energy industry. Net amount raised The net proceeds of the Placing to the Company will be approximately $38.3 million, after commissions and expenses payable by Maple. Maple intends to use the net proceeds from this placing for the repayment of indebtedness, capital expenditures (including Maple s work programmes for Block 31-E and the Aguaytía Deep Prospect, and the Ethanol Project), and for general corporate purposes. Although medium-term debt is not due, it is the intention of Management to repay all of its outstanding indebtedness in order to maximise return on existing cash balances. In addition, the work programmes for Blocks 31-B and 31-D are intended to be principally financed through cashflow from operations. 3

12 DIRECTORS, SECRETARY AND ADVISERS Directors Jack W. Hanks (Chairman of the Board and Executive Director) Rex Wharton Canon (Chief Executive Officer, President and Executive Director) Carlos Antonio de la Guerra Sison (Senior Vice President and Executive Director) Nigel Bryan Christie (Independent Non-Executive Director) Gianfranco Castagnola Zúñiga (Non-Executive Director) Carlos Enrique A. Palacios Rey (Independent Non-Executive Director) The business address of each of the Directors is: Av. Víctor Andrès Belaúnde 147 Vía Principal 140, Suite 201 Edificio Real Seis San Isidro Lima Peru Registered Office 70 Sir John Rogerson s Quay Dublin 2 Ireland Head Office Av. Víctor Andrès Belaúnde 147 Vía Principal 140, Suite 201 Edificio Real Seis San Isidro Lima Peru Secretary Roxana Guzmán Nominated Adviser and Joint Broker Joint Broker Placing Agent Legal Advisers to Maple Energy plc as to English and United States Law Legal Advisers to Maple Energy plc as to Peruvian Law Legal Advisers to Maple Energy plc as to Irish Law Canaccord Adams Limited 7th Floor Cardinal Place 80 Victoria Street London SW1E 5JL Mirabaud Securities Limited 21 St. James s Square London SW1Y 4JP Banco de Crédito del Peru No 156 Calle Centenario La Molina Lima, 12 Peru Vinson & Elkins R.L.L.P. Citypoint, 33rd Floor One Ropemaker Street London EC2Y 9UE United Kingdom Muñiz, Ramírez, Pérez-Taiman & Luna-Victoria Las Begonias Piso Lima 27 Peru Matheson Ormsby Prentice 70 Sir John Rogerson s Quay Dublin 2 Ireland 4

13 Legal Advisers to Maple Energy plc as to the laws of the British Virgin Islands Legal Advisers to Maple Energy plc as to the laws of the Cayman Islands Legal Advisers to the Nominated Adviser and Broker Reporting Accountants Auditors Competent Person Registrar Public Relations Harney Westwood & Riegels Craigmuir Chambers PO Box 71 Road Town, Tortola British Virgin Islands Myers & Alberga Attorneys-at-Law Harbour Place, 2nd Floor, North Wing 103 South Church Street P.O. Box 472 GT Grand Cayman, Cayman Islands B.W.I Maclay Murray & Spens LLP One London Wall London EC2Y 5AB United Kingdom Grant Thornton UK LLP Grant Thornton House Melton Street London NW1 2EP United Kingdom Ernst & Young Av. Víctor Andrès Belaúnde 171 San Isidro Lima Peru Netherland, Sewell & Associates, Inc Thanksgiving Tower 1601 Elm Street Dallas, Texas United States of America Capita Registrars Unit 5 Manor Street Business Park Manor Street Dublin 7 Ireland Citigate Dewe Rogerson 3 London Wall Buildings London Wall London EC2M 5SY United Kingdom 5

14 EXPECTED TIMETABLE Publication of this document 6 July 2007 Admission and dealings in the Ordinary Shares expected to commence on AIM 13 July 2007 CREST accounts expected to be credited 13 July 2007 Despatch of definitive share certificates for the Placing Shares 13 July 2007 PLACING STATISTICS Placing Price 84p Number of Existing Ordinary Shares 48,581,130 Estimated net proceeds of the Placing receivable by Maple $38.3 million Number of Subscription Shares being issued pursuant to the Placing 26.7 million Number of Sale Shares being sold pursuant to the Placing 5.9 million Number of Ordinary Shares in issue immediately following the Placing 75,281,130 Subscription Shares as a percentage of the Enlarged Issued Ordinary Share Capital 35.47% Sale Shares as a percentage of the Enlarged Issued Ordinary Share Capital 7.84% Market capitalisation of Maple Energy plc following the Placing at the Placing Price million 6

15 DEFINITIONS The following definitions apply throughout this document, unless otherwise indicated: 1983 Act the Companies (Amendment) Act 1983 of Ireland 1990 Act the Companies Act 1990 of Ireland ACC Acer Act Admission Aguaytía Deep Prospect Aguaytía Energy Aguaytía Project AIM AIM Rules Articles Audit Committee BCP BCR Board Canaccord Central America Combined Code on Corporate Governance Company or Maple Companies Acts Fondo de Inversión en Infraestructura, Servicios Publicos y Recursos Naturales and its agents and managers Acer Comercial S.R.L. the Companies Act 1963 (as amended) of Ireland admission of the entire issued and to be issued ordinary share capital of Maple Energy plc to trading on AIM becoming effective pursuant to Rule 6 of the AIM Rules prospective natural gas formations and resources below the Cushabatay sand formation in Block 31-C Aguaytía Energy, LLC and its subsidiaries energy development project to explore for and produce natural gas out of Block 31-C and market electricity, dry natural gas, LPGs and natural gasolines the AIM market of the London Stock Exchange the rules for AIM companies and their nominated advisers published by the London Stock Exchange governing admission to and the operation of AIM the articles of association of Maple Energy plc, further details of which are set out in Section 4 of Part VI of this document the audit committee of the Board Banco de Crédito del Perú Central Reserve Bank of Peru the board of directors of Maple Energy plc Canaccord Adams Limited, Maple Energy plc s nominated adviser and joint broker, a member of the London Stock Exchange and authorised and regulated in the United Kingdom by the Financial Services Authority the countries in the western hemisphere, connected to North America at the southern Mexican border and extending south to Panama s southern border with South America the combined code of corporate governance dated July, 2003 Maple Energy plc and its subsidiaries the Companies Acts of Ireland 7

16 Competent Person Competent Person s Reports Country of Operation CREST Netherland, Sewell & Associates, Inc. the reports prepared by Netherland, Sewell & Associates, Inc., including the letter regarding such reports, copies of which are reproduced in Part IV of this document Perú the electronic, paperless transfer and settlement mechanism to facilitate the transfer of title to shares in uncertificated form, operated by Euroclear CREST Regulations the Companies Act 1990 (Uncertificated Securities) Regulations of Ireland (SI No. 68 of 1996) including (i) any enactment or subordinate legislation which amends or supersedes those regulations and (ii) any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force DGH Directors EBITDA Enlarged Issued Ordinary Share Capital Ethanol Project EU Euroclear Executive Directors Existing Ordinary Shares Hydrocarbons General Directorate (Dirección General de Hidrocarburos) the directors of Maple Energy plc, whose names are set out on page 4 of this document and Director means any one of them earnings before interest, taxes, depreciation and amortisation plus Maple s approximate 14.3% effective economic interest of Aguaytía Energy s net income the Ordinary Shares in issue immediately after Admission as enlarged by the issue of the Subscription Shares Maple s project to develop an ethanol production plant on the northern coast of Peru with distillation, transportation and storage facilities the European Union Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales and the operator of CREST the executive Directors of Maple Energy plc from time to time, or as at the date of this document Messrs Jack Hanks, Rex Canon and Carlos de la Guerra Sison the 48,581,130 Ordinary Shares in issue at the date of this document FSMA the Financial Services and Markets Act 2000 GDP IFRS Gross domestic product international accounting standards within the meaning of the International Accounting Standards Regulation 1606/2002 adopted by the European Council on 19 July 2002 to the extent applicable to the relevant financial statements 8

17 Irish Takeover Panel or Panel Latin America the Irish Takeover Panel, established under the Irish Takeover Panel Act, 1997 the countries of North, Central and South America, south of the United States, where the official language is Spanish or Portuguese Lock-in Agreements the conditional agreements dated various dates between (1) Maple Energy plc, (2) Canaccord, (3) Mirabaud and (4) certain shareholders of Maple Energy plc which prevent, among other things, disposal by such shareholders of Ordinary Shares in certain circumstances, further details of which are set out in Part VI included elsewhere in this document London Stock Exchange Maple BVI Maple Gas Maple Energy plc Maple Ethanol Maple Production MCL MCL Shareholders Agreement Mirabaud NOMAD Agreement Nomination Committee Non-executive Directors North America Official List Option Contract London Stock Exchange plc The Maple Gas Corporation del Perú Ltd. The Maple Gas Corporation del Perú, Sucursal Peruana Maple Energy plc incorporated in Ireland with registered number Maple Etanol S.R.L. Maple Production del Perú, Sucursal Peruana The Maple Companies, Limited the agreement between Maple Energy plc and ACC, as shareholders, and MCL relating to certain rights of the shareholders of MCL Mirabaud Securities Limited, Maple Energys plc s joint broker and a member of the London Stock Exchange authorised and regulated in the United Kingdom by the Financial Services Authority the conditional agreement between Canaccord and Maple Energy plc relating to Canaccord s appointment as nominated adviser to Maple Energy plc on Admission, details of which are set out in Section 12 of Part VI included elsewhere in this document the nomination committee of the Board the non-executive Directors of Maple Energy plc from time to time, or as at the date of this document, Messrs. Nigel B. Christie, Gianfranco Castagnola Zúñiga and Carlos Palacios Rey the United States of America, Canada and Mexico the Official List of the UK Listing Authority the agreement between Maple Energy plc, The Maple Companies, Limited, and ACC granting ACC an option to cause Maple Energy plc to purchase all, but not less than all, 9

18 of the shares of The Maple Companies, Limited held ACC at the time of exercise of such option in exchange for a number of Ordinary Shares Ordinary Shares the ordinary shares of Maple Energy plc of par value $0.01 each having the rights and restrictions set out in Section 4 of Part VI included elsewhere in this document OSINERGMIN PD Regulation Perupetro Petroperú Peruvian VAT Peruvian Nuevo Sol or S/. Placing Placing Agreement Placing Price Placing Shares Re-organisation Remuneration Committee Sale Shares SBS Share Exchange Agreement Shareholders the entity in charge of auditing activities carried out by companies in the Peruvian mining, hydrocarbon and electricity subsectors Regulation 809/2004 of the European Commission Perupetro S.A., governmental agency established to contract and manage the contracts for services, exploitation, and exploration of hydrocarbon reserves and resources in Peru Petroleos del Perú S.A., the state oil company of Peru value added tax or any similar turnover or sales tax payable in Peru the legal currency of Peru the placing of the Placing Shares at the Placing Price pursuant to the Placing Agreement the conditional agreement between Canaccord, Mirabaud, the Directors, the Selling Shareholders and Maple Energy plc relating, inter alia, to the Placing of the Subscription Shares and the Sale Shares, details of which are set out in Section 12 of Part VI included elsewhere in this document 84p per Ordinary Share, being the price at which each new Ordinary Share is to be issued under the Placing the Subscription Shares and the Sale Shares the re-organisation of Maple and its affiliates resulting in Maple Energy plc becoming the ultimate parent company of Maple and its affiliates other than ACC the remuneration committee of the Board the 5.9 million Ordinary Shares being offered for sale pursuant to the Placing Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones, the Peruvian regulatory body with responsibility for regulating Peruvian pension fund investments the share exchange agreement dated 7 February 2007 between Maple Energy plc and the former shareholders of MCL the persons who are registered as holders of the Ordinary Shares from time to time 10

19 Shareholders Agreement South America Subscription Shares subsidiary Takeover Rules or Irish Takeover Rules UK UK Listing Authority or UKLA US, USA or United States VAT the agreement between the Shareholders immediately prior to Admission and Maple Energy plc relating to certain rights between the Shareholders in respect of Maple Energy plc a continent in the western hemisphere, connected to Central America at the southern border of Panama the 26.7 million new Ordinary Shares to be issued by Maple Energy plc pursuant to the Placing shall be construed in accordance with Section 155 of the Act the Irish Takeover Panel Act, 1997, Takeover Rules, 2001 to 2006 and the Irish Takeover Panel Act, 1997, Substantial Acquisitions Rules, 2001, as amended the United Kingdom of Great Britain and Northern Ireland the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 the United States of America, its territories and possessions, any state of the US and the District of Columbia and all other areas subject to its jurisdiction United Kingdom value added tax and any other similar sales or turnover tax within the EU or elsewhere Note: In this document, the symbols and p refer to pounds and pence sterling, respectively; the symbols US$ and $ refer to United States dollars; the symbol u refers to euros; and the symbol S/ refers to Peruvian Nuevo Sol. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. Words importing the singular shall include the plural and vice versa and words importing the masculine gender shall include the feminine or neutral gender. 11

20 PART I Information on the Company 1. Overview Maple is an integrated independent energy company with assets and operations in Peru engaging in numerous aspects of the energy industry, including (i) exploration and production of crude oil, natural gas and natural gas liquids, (ii) refining, marketing and distribution of hydrocarbon products, (iii) gas-fired power generation and power transmission, and (iv) the development of an ethanol project. By utilising its strategic asset base, technical expertise, project management skills, and strong customer and government relationships, Maple has established itself as one of Peru s leading integrated energy companies. Maple s predecessor was initially established in 1986 to invest in oil and gas related entities and assets in the United States. Between 1986 and 1988, these affiliates completed nine acquisitions, including transactions relating to oil and gas production interests and gas gathering, processing and transmission systems. In addition to these acquisitions, Maple s predecessor also acquired two US-based companies whose assets included the addition of ten gas processing plants with capacity of approximately 300 MMcfd as well as approximately 1,287 km of natural gas gathering and transmission infrastructure. Following the completion of these acquisitions, Maple s predecessor processed approximately 175 MMcfd of wellhead gas at its facilities and produced approximately 140 MMcfd of residue natural gas and 15,600 bpd of natural gas liquids. In 1992, Maple s predecessor sold substantially all of its existing US-based assets and began to pursue energy projects on an international basis, including oil and natural gas opportunities and electric power projects in Peru. Maple initiated these efforts with the launching of several energy projects in Peru s central jungle, after winning an international tender held by the Government of Peru in March In conjunction with winning this tender, Maple executed two hydrocarbon concession agreements for exploration and production rights in Blocks 31-B, 31-D and 31-C with Perupetro as well as a lease with Petroperú to utilise and operate the Pucallpa Refinery and Sales Plant. In 1993, Maple began developing the Aguaytía Project, an integrated natural gas and electric power generation and transmission project. Maple was responsible for all major aspects of this project, including acquiring the exploration and production licence to Block 31-C, obtaining all material permits required to commence operations, arranging all project financing requirements, and overseeing construction and commissioning of the project. This $273 million project involved the first commercial development of a natural gas field in Peru, as well as the construction and operation of over 290 km of hydrocarbon pipelines, a gas processing plant, a fractionation facility, a power plant and the related 392 km of electricity transmission lines. The Aguaytía Project was financed principally through equity provided by a consortium of international energy companies and long-term debt. The Aguaytía Project began commercial operation in Since beginning activities in Peru in 1992, Maple s management and operational team has established a successful track record through commissioning and successfully operating various energy projects, including the development and operation of the Aguaytía Project, the operation of the Pucallpa Refinery and Sales Plant, and the successful production of crude oil, natural gas and NGLs from certain of its existing leasehold interests. Maple continues to seek opportunistic and strategic growth opportunities to expand its presence in the Peruvian energy sector as evidenced by its ongoing exploration activities and the commencement of the Ethanol Project. 12

21 2. Corporate Structure and Re-organisation 2.1 Corporate Structure The following diagram depicts Maple s current corporate structure reflecting each of Maple Energy plc s material subsidiaries and interests following the Re-organisation: Maple Energy Plc (Ireland) (Holding) ACC 89.0% MCL (BVI) (Holding) 11.0% Peruvian Branch The Maple Gas Corporation del Perú, Sucursal Peruana (Peru) (Block 31-B and 31-D and Refining and Marketing) The Maple Gas Corporation del Peru Ltd. (BVI) (Block 31-B and 31-D and Refining and Marketing) 100% 99.9% (1) 99.9% (1) Acer Commercial S.R.L. (Peru) (Marketing) Maple Ethanol S.R.L. (Peru) (Ethanol) Maple Peru Holdings Corporation (Cayman) (Holding) (2) 100% 14.4% 85.6% Maple Production del Peru Ltd. (BVI) (Block 31-E) Peruvian Branch Maple Production del Perú, Sucursal Peruana (Peru) (Exploration) 14.3% (3) Aguaytía Energy, LLC (US) (Gas, liquids and power) (1) The remaining interest, one share, is held by an affiliate, The Maple Gas Corporation del Perú Ltd. (2) Reflects the economic interest held by The Maple Gas Corporation del Peru. The voting interests are held separately by The Maple Gas Corporation del Peru Ltd (44%) and Messrs. Hanks, Canon, Hines and de la Guerra, collectively (56%). (3) Reflects the approximate effective economic interest held by Maple Peru Holdings Corporation through its majority owned subsidiary, The Maple Gas Development Corporation. For details on the principal function and corporate information relating to each entity included in the corporate organisation chart above, please see Section 3 of Part VI included elsewhere in this document. 2.2 The Re-organisation Through a series of transactions occurring between 23 October 2006 and 22 December 2006, Maple undertook a reorganisation and restructuring of the equity interests of each company affiliated with Maple Energy plc in order to achieve greater efficiencies, organization, and control. Prior to the reorganisation, Maple was organized as two separate groups of companies. To effectuate the reorganisation, a valuation was conducted to determine the relative values of different classes of equity in each of the different companies. Based on these relative valuations, a series of mergers and equity transfers was carried out in order to consolidate share ownership, where possible in The Maple Companies, Limited, under which all of the companies would be held as wholly owned, or controlled, subsidiary of The Maple Companies, Limited. Where change of control provisions prohibited such consolidations of equity ownership, such restrictions were accommodated. Certain companies were merged out of existence. 13

22 In connection with the completion of the transactions described above, a single shareholders agreement was executed, granting rights and creating obligations upon and among all of the shareholders of The Maple Companies, Limited. Following the completion of the transactions described above, Maple Energy plc became the ultimate holding company of each of the affiliated entities on 8 February 2007 by operation of a Share Exchange Agreement, pursuant to which all the then shareholders in The Maple Companies, Limited transferred a total of 1,619,371 shares of US$0.01 each in the capital of The Maple Companies, Limited in consideration for the allotment and issue to such persons by Maple Energy plc of 48,581,113 Ordinary Shares. 3. Recent Developments 3.1 Private Placement of Equity Interests in MCL and Related Agreements On 12 March 2007, Maple completed a private placement of 199,922 shares of MCL to ACC, an investment fund organised under the laws of Peru, for gross proceeds of $10 million. Of these gross proceeds, $2 million were utilised to make certain payments under the Disbursement Agreements described in Section 3.2, below. The acquired shares represent an approximate 11.0% total equity interest in MCL. Maple intends to use the proceeds from the sale of shares to implement certain aspects of its work program. In connection with the completion of the private placement and in consideration for purchasing the MCL shares, Maple Energy plc entered into an investment agreement, option contract and shareholders agreement with ACC. As described further below, these acquired MCL shares will be convertible into Ordinary Shares pursuant to the terms of the option contract. Under the terms of the investment agreement, as amended, ACC agreed to purchase the MCL shares in exchange for cash consideration and certain other rights. Principal among those other rights was the entry into the Option Contract and MCL Shareholders Agreement. In addition, Maple Energy plc agreed to provide additional consideration, in cash or shares, if Maple is required to make certain tax payments relating to taxes in 2001, 2002 and For a further discussion of these matters, please also see, Risk Factors The value protection rights, voting rights and certain other benefits provided to ACC under the terms of the Investment Agreement, MCL Shareholders Agreement and Option Contract could dilute ownership interests of Shareholders or restrict Maple s operations which could have a material adverse effect on Maple s business or financial condition included in Part III of this document. The investment agreement also permits MCL to dividend $2 million to Maple Energy plc for reimbursement of certain capital expenditures as further described in Section 3.3 below. Maple Energy plc and ACC also entered into a shareholders agreement under which certain rights were granted to ACC in connection with its acquisition of MCL shares. Specifically, ACC was granted, among other things, the right to (i) appoint one director to Maple Energy plc s board, (ii) receive information regarding Maple s financial condition and material developments, (iii) certain consent rights over fundamental business and operations decisions of Maple, (iv) an option to put the MCL shares back to Maple Energy plc if certain events occur, including certain changes in the ownership of Maple Energy plc or MCL, failure of key employees to hold certain positions in Maple Energy plc and certain changes to the composition of Maple Energy plc s board and (v) drag-along and tag-along rights applicable to any sale of MCL shares by Maple Energy plc. ACC s consent rights, valuation protection rights and put option rights will terminate upon Maple raising in excess of $30 million in the aggregate by way of public or private placement of equity securities. Maple Energy plc also entered into an option contract under which ACC is entitled to exchange its shares in MCL for Ordinary Shares. Subject to compliance with applicable laws and to any consolidation subdivision or similar reorganisation of Maple Energy plc s share capital, ACC will be entitled to transfer one MCL share for 30 Ordinary Shares. This option is exercisable at ACC s sole discretion but is subject to termination in 30 years. ACC also obtained the right to subscribe for 10% of the equity interests in the Ethanol Project on terms and conditions to be mutually agreed by Maple and ACC. Pursuant to a letter agreement between Maple and ACC, the parties will commence arms length negotiations to determine the terms under which ACC shall invest. If the parties cannot reach mutual agreement on such terms by 30 September 2007, following good faith negotiations, the letter agreement and all rights arising therefrom shall terminate. Should ACC ultimately subscribe for this equity interest, Maple intends to use such proceeds to finance costs associated with completing the Ethanol Project. 14

23 For more information on the investment agreement, MCL Shareholders Agreement and option contract, please see Section 12 of Part VI included elsewhere in this document. 3.2 IFC Investment Maple Energy plc has reached an agreement with the International Finance Corporation (the IFC ), the private sector arm of the World Bank Group, pursuant to which the IFC, subject to receiving final board approval, will have the option to subscribe for up to 5,932,477 Ordinary Shares at any time on or before 30 July 2007 at a subscription price of $ per Ordinary Share. Maple intends to use the proceeds from the IFC share subscription to carry out certain aspects of its work program for as more fully described in section 5 of this Part I. In connection with the subscription of Ordinary Shares by the IFC, Maple will be required to take certain measures and implement and establish certain policies and procedures in accordance with the social and environmental standards set forth by the IFC for the companies in which it invests. This equity investment by the IFC is subject to the satisfaction of customary closing conditions. There can be no assurance that the IFC investment will be consummated. 3.3 Pre-Admission Dividends to Maple Shareholders On 4 April 2007, the existing Board declared and agreed to pay an interim dividend to shareholders of record as of such date in the aggregate amount of $2.0 million (the Interim Dividend ) conditional on, among other things, receipt by the Board of initial accounts (the Initial Accounts ) which are to be prepared to an audit standard in accordance with the requirements of the Irish Companies Acts showing that the amount of profits and reserves of Maple Energy plc available for distribution ( Relevant Profits and Reserves ) will be sufficient to pay the Interim Dividend as prescribed by the Irish Companies Acts. The Board resolved that in the event that the Relevant Profits and Reserves as shown in the Initial Accounts are not sufficient to pay the Interim Dividend, the amount of the Interim Dividend will be reduced proportionately to equal the amount of the Relevant Profits and Reserves as shown in the Initial Accounts. In connection with the Interim Dividend, MCL has entered into disbursement agreements ( Disbursement Agreements ) with a number of shareholders of Maple Energy plc whereby MCL has agreed to make certain disbursements in fixed amounts to such shareholders, which disbursements shall be repaid by such shareholders on demand, subject to the following terms. The shareholders obligations to repay amounts owed under the Disbursement Agreements are limited to the proceeds of any dividends received from Maple Energy plc. Maple Energy plc and MCL have a right to off-set any amounts disbursed under the Disbursement Agreements against any dividends declared by Maple Energy plc until such amounts disbursed have been repaid in full. The Disbursement Agreements are not transferable or assignable. Each shareholder covenants not to transfer or dispose of its shares in Maple Energy plc without MCL s consent. 4. Description of Maple s Business Operations and Assets 4.1 Oil and Natural Gas Reserves Overview Maple has been producing hydrocarbons in Peru since it began operations in Maple has assembled, through its concession arrangements and equity interest in Aguaytía Energy, a portfolio of properties located in the Maquía, Agua Caliente, Aguaytía and Pacaya Fields. 15

24 The following table summarises Maple s direct and indirect interests in oil and natural gas properties possessing reserves: Field: Block Working Interest Role Maquía B 100% Operator Agua Caliente D 100% Operator Aguaytía (1) C 14.3% Operator (3) Pacaya (2) E 100% Operator (1) Represents the approximate effective economic interest held indirectly through Maple s cash and non-cash units in Aguaytía Energy. (2) Pacaya is currently a non-producing property. (3) Contracted operator for Aguaytía Energy s gas operations. The concession agreements in respect of the blocks described above are summarised in Part II included elsewhere in this document. The table below shows Maple s oil and gas reserves as at 31 December Reserves: Hydrocarbon Liquids Natural Gas (1) Total (in Mbbls) (in Bcf) (mboe) (2) Proven... 4, ,657.7 Probable... 1, ,978.6 Possible... 1, ,345.4 Total... 7, ,981.7 (1) Figures reflect reserves held through Maple s effective economic interest in Aguaytía Energy. (2) 5.9 mcf per barrel conversion factor for 982 BTU/cf residue gas. Source: Competent Person s Reports. The Competent Person s Reports are included in Part IV included elsewhere in this document Block 31-B (Maquía) The Maquía Field is located in Block 31-B in the Loreto Region, approximately 130 km north of the city of Pucallpa. The field is located 9 km from the Ucayali River which offers an efficient means of transportation for liquid hydrocarbons, equipment or other materials to and from the field. This field was initially discovered in 1957 and has produced approximately 16.6 million barrels of 37.8 degree API gravity, low sulphur crude oil since that time. Maple is the operator and holds a 100% working interest in the Maquía Field. The interest was acquired in 1994 pursuant to the international tender in which Maple also obtained the rights to Block 31-D, Block 31-C and the Pucallpa Refinery and Sales Plant. As of 31 December 2006, the Maquía Field was producing approximately 439 bpd from 32 active wells. Maple intends to drill up to an additional 17 shallow development wells to depths of approximately 2,000 feet. Of these additional development wells, six will target proved reserves, two will target proved and probable reserves, six will target probable reserves, and three will pursue possible reserves. Maple expects to commence these drilling activities during the third quarter of Maple will also undertake additional work-over activities, which began in 2006, and are continuing with 15 additional workovers to be performed. Of these work-over opportunities, four will target proved reserves, three will target probable reserves, and eight will target possible reserves. Maple will conduct these drilling and work-over activities with Maple-owned rigs and equipment and, in principal, with Maple personnel. All crude oil produced from Block 31-B is transported to the Puerto Oriente barge facility on the Ucayali River via a 7.4 km, five-inch diameter pipeline. The crude oil is then transported by third-party barges to the Pucallpillo barging facility, and ultimately delivered to the Pucallpa Refinery and Sales Plant via an approximate 8.0 km, eight-inch diameter pipeline. Maple s concession agreement granting it rights to the exploration, exploitation and production of hydrocarbons in Block 31-B also covers and governs similar rights to Block 31-D. Under the terms of this concession arrangement, Maple is obligated to pay a cash royalty to the Peruvian government using an escalating formula based on a basket of international crude oil prices. Maple 16

25 has recently negotiated a 50% royalty payment cap with Perupetro for Block 31-B whereby Maple s maximum royalty payment to the Peruvian government will be limited to 50% of the production value regardless of the result of the escalating formula. For more information on the terms of this royalty obligation and the risks associated therewith, please see Part II and Royalty payments under Maple s and Aguaytía Energy s concession arrangements may substantially increase and cause each entity s production to become uneconomic in Part III included elsewhere in this document. Maple s proven, probable and possible reserves in the Maquía field as at 31 December 2006 are shown below: Reserves: Crude Oil (in Mbbls) Proven... 1,835.3 Probable... 1,418.7 Possible Total... 3,711.5 Source: Competent Person s Reports. The concession agreement relating to this block benefits from legislation which freezes the corporate income tax rate at 30% for the life of the concession. For more information on Block 31-B, please see Part II and the Competent Person s Report in Part IV included elsewhere in this document Block 31-D (Agua Caliente) The Agua Caliente Field is located in Block 31-D in the Nueva Honoria Province, in the Department of Huánuco, approximately 55 km south of the city of Pucallpa. This field was discovered in 1938 and began producing commercial quantities of crude oil in the 1940s. It has produced approximately 15.4 million barrels of 44 degree API, low sulphur crude oil since that time. Maple is the operator and has a 100% working interest in the field. As described previously, the concession agreement governing this interest was executed in 1994 along with the rights to Block 31-B, Block 31-C and the Pucallpa Refinery and Sales Plant. As of 31 December 2006, the Agua Caliente Field was producing approximately 111 bpd from 16 active wells. Maple expects to drill up to an additional 14 shallow development wells to depths of approximately 1,000 feet. Of these additional prospective wellsites, five will target proved reserves, two will target proved and probable reserves, five will target probable reserves and two will prospect possible reserves. Maple anticipates this drilling activity will commence during the third quarter of Maple will also be performing workovers on 10 existing wells. These activities are currently scheduled to commence during the third quarter of 2007 (although such schedule may change), with one well pursuing proved reserves, one well targeting probable reserves and eight wells targeting possible reserves. Maple will conduct these drilling and work-over activities with Maple-owned rigs and equipment and, in principal, with Maple personnel. Block 31-D is connected to the Pucallpa Refinery and Sales Plant via a 77 km, four-inch crude oil pipeline. All production from this field is transported to the refinery via this pipeline. Maple s concession agreement governing the rights under Block 31-B also covers its rights under Block 31-D. Maple is, therefore, required to pay a cash royalty to the Peruvian government that is subject to an escalation formula. Maple recently negotiated a 30% royalty payment cap with Perupetro for Block 31-D whereby Maple s maximum royalty payment to the Peruvian government will be limited to 30% of the production value regardless of the result of the escalating formula. For more information on the terms of this royalty obligation and the risks associated therewith, please see Part II and Royalty payments under Maple s and Aguaytía Energy s concession arrangements may substantially increase and cause each entity s production to become uneconomic in Part III included elsewhere in this document. 17

26 Maple s proven, probable and possible reserves in the Agua Caliente field as at 31 December 2006 are shown below: Reserves: Crude Oil (in Mbbls) Proven Probable Possible... 1,025.1 Total... 2,021.4 Source: Competent Person s Reports. The concession agreement relating to this block benefits from legislation which freezes the corporate income tax rate at 30% for the life of the concession. For more information on Block 31-D, please see Part II and the Competent Person s Report in Part VI included elsewhere in this document Production Costs for Blocks 31-B and Block 31-D Maple is responsible for all operating costs in connection with the production of hydrocarbons from each of Block 31-B and Block 31-D. The table set forth below reflects Maple s historical operating costs, including royalty obligations, for the periods indicated: Year Ended 31 December Costs: ($ in thousands) Production Costs: Agua Caliente... 1,182 1,337 1,210 Maquía... 1,684 1,961 (1) 2,396 (1) Royalty Obligations... 1,616 3,774 (2) 6,087 (2) Total Costs... 4,482 7,072 9,693 (1) Increased annual production costs are principally related to additional workover and well services activities as compared to prior years. (2) Increase in royalty obligations largely due to increase in world oil prices Block 31-C (Aguaytía) The Aguaytía natural gas field is located in Block 31-C in the Curimana District of the Padre Abad Province, in the Department of Ucayali, approximately 75 km west of the city of Pucallpa. This field was the first commercial development of a natural gas field in Peru. It was discovered in 1961 by Mobil, but was left undeveloped due to the lack of a sufficient market for the natural gas reserves at that time. Maple has operated the field since acquiring rights to the field in These rights were subsequently assigned to Aguaytía Energy and Maple continues to serve as contract operator of the field pursuant to an operations and maintenance agreement with Aguaytía Energy. Natural gas production, however, began in 1998 in connection with Aguaytía Energy s commencement of operations of the Aguaytía Project, which principally monetised the field s production by extracting NGLs from the gas and supplying the majority of the residue natural gas to its power generation plant. The field has three producing wells, three injection wells, one water injection well and two abandoned wells. The natural gas produced from the field is processed at a 70MMcfd gas processing facility located in the field and owned by Aguaytía Energy. The facility processes the natural gas into dry residue gas and NGLs which are then transported to Aguaytía Energy s thermal power plant or fractionation facility, respectively. Any excess natural gas not required by the thermal plant is re-injected into the natural gas reservoir. For more information on Aguaytía Energy s operations and the Aguaytía Project, please see Section 4.4 of this Part I. As of 31 December 2006, the Aguaytía Field was producing 66.9 MMcfd at the wellhead from two of its seven active wells. For the year ended 31 December 2006, the Aguaytía field produced an average of MMcfd at the wellhead, of which approximately 37.0 MMcfd was sold to Aguaytía Energy s power generation plant and the majority of the balance of the residue gas reinjected into the reservoir. Also for the year ended 31 December 2006, approximately 2,211 bpd of natural gasoline and 1,121 bpd of LPGs were produced. 18

27 The concession arrangement governing the exploration and production rights to Block 31-C obligates Aguaytía Energy, as operator pursuant to the concession agreement, to make certain royalty payments to the Peruvian government with respect to the production of natural gas and NGLs. These payments are based on average basket prices of hydrocarbons, with the LPG payment also based on the actual sales price and deducting certain transportation and fractionation costs. For more information on the terms of this royalty obligation and the risks associated therewith, please see Part II and Royalty payments under Maple s and Aguaytía Energy s concession arrangements may substantially increase and cause each entity s production to become uneconomic in Part III included elsewhere in this document. Maple s proven, probable and possible reserves in the Aguaytía Field as at 31 December 2006 are shown below: Reserves: Hydrocarbon Liquids Natural Gas (1) Total (2) (Mbbls) (Bcf) (mboe) Proven... 1, ,050.4 Probable ,202.6 Possible Total... 1, ,074.7 (1) Reflects reserves held through Maple s interest in Aguaytía Energy. (2) 5.9 mcf per barrel conversion factor for 982 BTU/cf residue gas. Source: Competent Person s Reports. For more information on Block 31-C, please see the Competent Person s Reports. The concession agreement benefits from legislation which freezes the corporate income tax rate at 30% for the life of the concession. For more information on Block 31-C, please see Part II and the Competent Person s Report in Part VI included elsewhere in this document Production Costs for Block 31-C Aguaytía Energy is responsible for all operating costs in connection with the production of hydrocarbons from Block 31-C. The table set forth below reflects Aguaytía Energy s historical operating costs, including royalty obligations, for the periods indicated. Year Ended 31 December ($ in millions) Production Costs Royalty Obligations (1) 36.7 (1) Total Costs (1) Increase in royalty obligations largely due to an increase in world oil prices as compared with previous years Pacaya field (Block 31-E) The Pacaya Field is located in Block 31-E in the Loreto Region, approximately 120 km north of the city of Pucallpa. This block is situated in the Ucayali Sedimentary Basin, approximately 20 km southeast of Maple s crude oil production in Block 31-B. In addition, the field is approximately 22 km by road from Puerto Oriente on the Ucayali River, providing economical routes for the transportation of hydrocarbons, equipment, labour and other materials to and from the field. The field was initially discovered in 1958 with the drilling of the Pacaya 31-1X well, but did not begin producing until the early 1980s because of low production capacities. In 1988, production ceased due to the marginal production capacity of the wells. In March 2001, Maple obtained the concession rights to this field and Block 31-E through private negotiations with Perupetro. Under the terms of this 30-year concession arrangement, Maple is the operator and holds a 100% working interest in the field. The agreement also obligates Maple to perform minimum work commitments in Block 31-E during the next three years, including seismic testing and drilling exploration wells. In addition, Maple is obligated to annually drill exploration wells to maintain its full rights under the concession agreement. For more information on the minimum work commitments, please see Part II included elsewhere in this document. 19

28 In 2007, Maple intends to reactivate a number of wells in this field, including Pacaya wells 31, 33, 35, 37 and 38. Initial production is expected to commence by or before the end of Maple estimates that this well reactivation programme, along with the installation of any required infrastructure, will cost approximately $1.3 million. For more information on Maple s private placement, please see Section 3.1 in Part I included elsewhere in this document. Maple anticipates that all crude oil produced in this field will be transported by third-party river barges via the Ucayali River to the Pucallpa Refinery and Sales Plant. At present, it is also possible that production from this field could be delivered and sold to a third-party refinery should capacity constraints occur at the Pucallpa Refinery and Sales Plant. Transportation to this third-party refinery would also be via river barge. The concession arrangement for the Pacaya field obligates Maple to pay a flat royalty rate of 15% for all hydrocarbons produced based on a basket price of crudes to be determined at the time of first production. The Company s proven, probable and possible reserves in the Pacaya field as at 31 December 2006 are shown below: Reserves: Crude Oil (in Mbbls) Proven Probable Possible Total Source: Competent Person s Report. The concession agreement benefits from legislation which freezes the corporate income tax rate at 22% for the life of the concession. For more information on Block 31-E, please see Part II and the Competent Person s Report in Part VI included elsewhere in this document. 4.2 Oil and Natural Gas Resources Overview The following table summarises Maple s oil and natural gas exploration interests in Peru: Field: Working Interest Role Block 31-E % Operator Aguaytía Deep Prospect (1) % Operator (2) (1) Maple s calculated working interest is held through Maple s equity interests and rights in Aguaytía Energy. (2) Contracted operator for Aguaytía Energy s gas operations. The key commercial terms of the concession agreements in respect of the blocks listed above are summarised in Part IV of this document. 20

29 The following table shows a summary of the resources for three prospects in Block 31-E and the Aguaytía Deep Prospect in Block 31-C as at 31 December 2006: Net Attributable Asset: Oil and Liquids Prospective Resources (Mbbl) Low Estimate Best Estimate High Estimate Block 31-C Exploration Prospect: Aguaytía Deep ,482 14,654 Block 31-E Exploration Prospects: Cashiboya Deep... 38, , ,821 Santa Rosa... 46, , ,604 San Roque... 4,996 15,925 29,006 Gas Prospective Resources (MMcf) Block 31-C Exploration Prospect: Aguaytía Deep , ,397 Block 31-E Exploration Prospects: Cashiboya Deep Santa Rosa San Roque Source: Competent Person s Report Block 31-E Maple s principal exploration acreage lies in Block 31-E. This block is located in the east central jungle area of Peru, and situated immediately to the south of Block 31-B where Maple is currently producing oil. Block 31-E also contains the Pacaya Field discussed above. The licence to this block was awarded in 2001 and Maple holds a 100% working interest. Three exploration prospects will be targeted in Block 31-E, namely Santa Rosa, Cashiboya Deep and San Roque. Each of these prospects has multiple formations which may contain hydrocarbons. As appraised by the Competent Person, these prospects contain Unrisked Net Resources (best estimate) of 514 MMbbl of oil. To date, Maple has invested over $7 million in various exploration activities in Block 31-E. These activities have included permitting, processing and approvals, three field geological campaigns, three geochemistry programs, 712 kilometres of 2-D seismic processing, over 100 kilometres of 2-D seismic processing in depth, over 1,200 kilometres of seismic re-evaluation, rehabilitation and construction of 48 kilometres of road, two camp-sites, and the drilling of two shallow exploration wells which encountered hydrocarbons but not in commercial quantities. Maple has entered into a contract, dated 24 May 2007, to conduct a new 2-D seismic program covering 225 km in order to define an advantageous drilling site for the Cashiboya Deep Prospect, while also providing better geologic information on the Santa Rosa Prospect. This seismic program is expected to start in the third quarter of 2007 following an environmental impact study and is estimated to cost approximately $4 million. An exploration well is expected to be drilled in the Santa Rosa Prospect during the second half of 2008 or early 2009 to a depth of 14,750 feet. Maple estimates the drilling and completion costs for the first Santa Rosa Prospect well will be approximately $14 million. If successful, a confirmation well would then be drilled shortly thereafter to prove up additional reserves. If the Santa Rosa well is determined to not warrant economic development, the Company plans to commence drilling on the Cashiboya Deep Prospect. Target depth for the first well in the Cashiboya Deep Prospect is expected to be approximately 12,750 feet. Before drilling, in conjunction with the Santa Rosa prospect, an environmental impact study will be performed. If the exploratory well on Cashiboya Deep is successful, a confirmatory well would be drilled from the same platform. Maple estimates drilling and completion costs for the first well on Cashiboya Deep to be approximately $13 million. On the San Roque structure, Maple has identified three drill sites of interest. Any wells would be drilled to a maximum depth of up to 3,770 feet. However, higher density geochemical and field geological work will need to be completed prior to determining the final drill sites. 21

30 A summary of the Unrisked Net Prospective Oil Resources for the three prospects is shown below. Prospect Probability of Recoverable Oil (Decimal) Unrisked Net Prospective Oil Resources (1) Low estimate Best estimate High estimate Risked Mean After-Tax Present Worth at 10% (2) (MM$) Block 31-E Deep Cashiboya Deep Santa Rosa Shallow... San Roque Total , (1) For a definition of Unrisked Net Prospect, please see the Competent Persons Report. (2) See calculation for risked resources contained in the Competent Person s Report. The Competent Person s Report relating to Block 31-E incorporated into Part IV included elsewhere in this document Block 31-C Deep (Aguaytía) Maple has identified a potential exploration prospect, the Aguaytía Deep Prospect, which lies below the Cushabatay sand formation in Block 31-C. The Aguaytía Deep Prospect is situated in a deeper zone than the overlying Aguaytía Field which produces gas and condensate. Block 31-C is located in the Curimana District in the Ucayali Department of Peru and is situated about 75 km west of the city of Pucallpa. Maple believes it holds a 36.36% working and economic interest in the Aguaytía Deep Prospect, although one of the other members of Aguaytía Energy believes Maple s working and economic interest may be only 24.92%. An exploration well on this prospect is expected to be drilled to a depth of about 13,000 feet. The unrisked net prospective gas and condensate resources and risked mean after-tax present worth of the Aguaytía Deep Prospect as at 31 December 2006 under low, best and high estimate cases as appraised by the Competent Person is shown below: Probability of recoverable gas and condensate (decimal) Low estimate (BCF) Unrisked Net Prospective Gas Resources (1) Best estimate (BCF) High estimate (BCF) Low estimate (MMBL) Unrisked Net Prospective Condensate Resources (1) Best estimate (MMBL) High estimate (MMBL) Risked Mean After-Tax Present Worth at 10% (2) (MM$) (1) Resources are net to the working interest of percent which Maple believes it owns and holds through Maple s equity interests and rights in Aguaytía Energy. (2) Discounted cash flow shown is for gas and condensate combined. The cashflow for the electricity is based on the $0.037 per kilowatt-hour base price received for the generated power and the cashflow for the condensate is based on the $50.00 per barrel base price case. Both discounted cashflows are after consideration of the 30 percent Peruvian income tax. If the initial exploration well is successful, under the best and high estimate cases, Maple would expect to begin development of the prospect in Under both the best and high estimate cases, additional infrastructure would be required to handle the processing and transportation of gas and condensate volumes. Under the low case, Maple intends to begin production at a time when production on Block 31-C has diminished such that additional hydrocarbons from this additional source can be accommodated by existing infrastructure capacity. The concession agreement benefits from legislation which freezes the corporate income tax rate at 30% for the life of the concession. 4.3 Refining and Marketing Overview Maple refines crude oil and natural gasolines and markets refined products in the central Peruvian jungle, central Peruvian highlands and Lima regions. All of Maple s refining, marketing and distribution operations are conducted through the Pucallpa Refinery and Sales Plant, located in 22

31 Pucallpa in the central Peruvian jungle and 788 km from Lima on the east side of the Peruvian Andes. The Pucallpa Refinery and Sales Plant has daily capacity to process either (i) 3,400 barrels of crude oil producing a Residual 5 fuel oil, (ii) 3,000 barrels of crude oil producing a Residual 6 fuel oil or (iii) 4,100 barrels of natural gasoline. The facility also maintains approximately 200,000 barrels of feedstock and refined storage capacity. Maple markets a number of refined products from the Pucallpa Refinery and Sales Plant: including gasoline, diesel, kerosene, solvent, aviation fuel, naphtha, residual fuel oil and HAS (acyclic saturated hydrocarbon). Maple generated approximately $74 million and $75 million in revenues from refined product sales for the year ended 31 December 2005 and the year ended 31 December 2006, respectively. Feedstocks for the Pucallpa Refinery and Sales Plant are primarily supplied through pipelines from Aguaytía Energy s fractionation facility, the Agua Caliente field in Block 31-D and the Pucallpillo facility. Approximately 80% of refined products are despatched from the Sales Plant by third-party trucks, with remaining products transported by third-party barges on the Ucayali River to markets in the central Peruvian jungle. Maple believes the unique characteristics and location of the Pucallpa Refinery and Sales Plant provide Maple with a significant competitive advantage over potential competitors. Specifically, the Pucallpa Refinery s and Sales Plant s position as the only refinery located in the central Peruvian jungle provides it with cheaper access and transportation costs to the central Peruvian jungle market, and proximity to Maple s production operations enables Maple to efficiently obtain feedstocks for the refinery. In addition, the Pucallpa Refinery and Sales Plant s ability to alternate between crude oil and natural gas feedstocks increases efficiency and maximises profitability which provides Maple with further advantages over its competitors. The Pucallpa Refinery and Sales Plant currently enjoys tax advantages due to legal and regulatory incentives which promote investments in the jungle and provide tax exemptions. However, due to recently enacted legislation, these tax advantages will no longer exist by Each of these attributes provide Maple with a competitive advantage over other participants in this region History and Development of the Pucallpa Refinery and Sales Plant The Pucallpa Refinery and Sales Plant was designed by Sinclair International Oil Company and constructed by The Litwin Engineering Corporation in 1966 for Ganso Azul, a private company with operations in Peru. The Pucallpa Refinery started operating on 11 September 1966 and was a primary distillation unit with throughput capacity of 2,500 bpd. Through subsequent upgrades, the refinery s daily capacity has been increased to refine larger volumes of crude oil and natural gasoline. Maple initially leased the Pucallpa Refinery and Sales Plant from Petroperú, the state-owned oil company, on 29 March Under the terms of the lease, Maple has the right to operate and utilise the refining plant, storage facilities and related assets for a term of 20 years. The lease provides that Maple may extend it under similar terms and conditions. The annual lease payment by Maple under the existing lease is currently $270,000, payable in quarterly instalments Description of the Refinery and Related Assets Maple leases from Petroperú a primary distribution unit, an office and warehouse complex, residential complex with houses and dormitory, and other equipment for operations such as bulldozers and cranes. The Pucallpa Refinery and Sales Plant has a primary distillation unit with daily capacity to process either: 3,000 bpd of crude oil producing Residual No.6 fuel oil; 3,400 bpd of crude oil producing Residual No.5 fuel oil; or 4,100 bpd of natural gasoline. Raw materials, crude oil and natural gasoline are stored in independent tanks for processing in the distillation unit. The feedstocks are fed into the single distillation unit where they are fractionated into different primary products. The refined products obtained when the facility refines crude oil are: base gasoline, Naftoil, Turbo A-1, Diesel 2, Residual 5 and Residual 6. When refining natural gasoline, the facility produces: base gasoline, HAS (saturated acyclic hydrocarbons), Naftoil, Solvent 1, Solvent 3, Kerosene and Diesel 2. 23

32 Gasoline 84 is produced by applying additives to improve the octane of base gasoline produced from the natural gasolines. Crude Oil Processing OVERHEAD CONDENSER OVERHEAD ACCUMULATOR DRY GAS DISTILLATION COLUMN PUMP COOLER GAS STRIPPER COOLER PUMP NAFTOIL PREMIUM FIRED HEATER STEAM COOLER STRIPPER PUMP TREATING UNIT COOLER SOLVENT 3 STEAM PUMP STEAM PUMP TURBO A-1 PUMP CRUDE HEAT EXCHANGER TRAIN PUMP DIESEL 2 RESIDUAL 6 Natural Gasoline Processing OVERHEAD CONDENSER DRY GAS OVERHEAD ACCUMULATOR GAS PUMP COOLER DISTILLATION COLUMN HAS STRIPPER SOLVENT 1 FIRED HEATER STEAM COOLER PUMP NAFTOIL PREMIUM STRIPPER COOLER PUMP COOLER STEAM STEAM PUMP SOLVENT 3 PUMP PUMP HEAT EXCHANGER TRAIN KEROSENE NATURAL GAS Feedstock Supply PUMP DIESEL 2 The primary inputs for the refinery consist of natural gasolines from Aguaytía Energy s natural gas field and crude oil from the Maquía and Agua Caliente oil fields. Given the different product slates that are produced by these two feedstocks, Maple elects to alternate between oil and natural gasoline at regular intervals, refining crude oil for five days and natural gasolines for 25 days. This cycle is repeated on a continuous basis, subject to the available supply of each feedstock. Generally, Maple believes that natural gasoline yields a higher margin refined product mix than crude oil. 24

33 Natural Gasoline and Crude Oil Supply Maple receives all of its natural gasoline feedstock from Aguaytía Energy. Aguaytía Energy produces natural gas from reserves in Block 31-C, processes the natural gas into NGLs and dry gas, and fractionates the NGLs into LPGs and natural gasolines. The natural gasolines are then sold to Maple and transported by pipeline from the fractionation facility to the Pucallpa Refinery and Sales Plant. For the years ended 31 December 2005 and 2006, natural gasolines accounted for approximately 86% and 83%, respectively, of total volumes refined at the facility. The natural gasoline feedstock is sold to Maple pursuant to a long-term sale-purchase agreement with Aguaytía Energy. Under the terms of this agreement, Aguaytía Energy has agreed to sell all of the natural gasoline produced from the Cushabatay sand formation within Block 31-C to Maple. This agreement was entered into in July 1996 and is in effect for the duration of Aguaytía Energy s license contract for Block 31-C. Any additional natural gasolines produced as a result of exploration efforts in the Aguaytía Deep Prospect are not subject to the terms of the sale-purchase agreement. The pricing mechanism established under this agreement contemplates a formula in which Maple would pay a fraction of a refined products basket, consisting of U.S. Gulf Coast prices for jet kerosene and naphthas. The Pucallpa Refinery and Sales Plant receives its crude oil feedstock from Maple s two producing properties, the Maquía field in Block 31-B and the Agua Caliente field in Block 31-D. For the years ended 31 December 2005 and 2006, crude oil accounted for approximately 14% and 17%, respectively, of total volumes refined at the facility. The table set forth below presents the historic feedstock costs and volumes for the periods indicated. Year ended 31 December ($ in thousands) Feedstock Cost: Maquía Crude Oil... 2,941 5,100 7,735 Agua Caliente Crude Oil... 1,666 2,427 2,572 Natural Gasolines... 32,144 40,044 37,261 Total... 36,751 47,571 47,568 Year ended 31 December (in thousands of Bbls) Volume: Maquía Crude Oil Agua Caliente Crude Oil Natural Gasolines (1) Total... 1,076 1, (1) This decrease is due to reduced volumes and major maintenance outages at the Pucallpa Refinery and Sales Plant Products and Sales Volumes The table below presents a summary of Maple s total sales and total sales volumes for the periods indicated. Year ended 31 December ($ in thousands) Sales... 57,414 70,784 74,777 (in thousands of Bbls) Sales Volume... 1,032 1, Maple sells a variety of refined products to a diverse customer base situated in separate locations throughout Peru. Maple s refined products consist of Gasoline 84, kerosene, Diesel 2, Residual No. 5, Residual No. 6, Turbo A-1, Naftoil, Solvent 1, Solvent 3 and HAS. These products are sold to a base of over 90 recurring customer accounts. The top three customers of the refined products revenues generated for the year ended 31 December 2006 were Petroperú (16%), Envasadora San Gabriel S.R.L. (16%) and Herco Combustibles S.A. (3%). 25

34 The tables set forth below list Maple s product sales, by product and area, for the periods indicated, and a brief description of each product listed follows thereafter: Year ended 31 December Product: ($ in thousands) Central Jungle... Gasoline ,320 13,511 15,746 Kerosene... 1,726 1,575 1,148 Diesel ,865 17,894 18,733 Residual No , Residual No Turbo A ,537 1, Naftoil Solvente Solvente Naftoil HAS Central Jungle... 33,236 35,222 37,377 Lima and Central Highlands Gasoline Kerosene... 3, Diesel Residual No Residual No Turbo A ,020 Naftoil... 4,615 7,756 9,236 Solvente ,956 11,474 10,722 Solvente ,775 15,237 10,578 HAS ,317 Lima and Central Highlands... 24,178 35,562 37,400 Total Product Sales... 57,414 70,784 74,777 The tables set forth below list Maple s sales volume, by product and area, for the periods indicated. Year ended 31 December Product: (thousands of Bbls) Central Jungle Gasoline Kerosene Diesel Residual No Residual No Turbo A Naftoil Solvente Solvente HAS Central Jungle Sales Volume Lima and Central Highlands Gasolina Kerosene Diesel Residual No Residual No Turbo A Naftoil Solvente Solvente HAS Lima and Central Highlands Sales Volume Total Sales Volume... 1,032 1,

35 As illustrated in the table above, total sales volumes of refined products by the Sales Plant have decreased in recent years. This is largely a result of decreasing supplies of natural gasolines from Aguaytía Energy. Maple believes that its development and exploration programmes, if successful, should provide additional sources of feedstock to increase utilization rates at the refinery. Gasoline 84 For the year ended 31 December 2006, gasoline accounted for approximately 20% of the refining and marketing division s sales volume and 21% of the division s revenues. Maple is the only producer of 84 octane gasoline in the Ucayali Region. Gasoline 84 is principally sold on a wholesale basis to gasoline stations in the Ucayali region for automotive use. Increased usage in 90 octane gasoline and LPGs in the market have affected the demand for gasoline 84. Diesel 2 For the year ended 31 December 2006, diesel accounted for approximately 22% of the refining and marketing division s sales volume and 25% of the division s revenues. Diesel 2 is sold to gasoline stations and various industries primarily located in the Ucayali Region. The sale of diesel products has remained relatively consistent in recent years. Kerosene For the year ended 31 December 2006, kerosene accounted for approximately 3% of the refining and marketing division s sales volume and 3% of the division s revenues. Historically, this refined product has been sold principally as a cooking fuel. Kerosene sales have significantly declined in the past 18 months due to the feedstock being used to produce Solvent 3, a higher margin product. In addition, kerosene sales in the central Peruvian jungle and the central Peruvian highlands have been adversely impacted by the increased sales of lower priced LPG by the Aguaytía Project in the same areas. Solvents For the year ended 31 December 2006, solvents accounted for approximately 28% of the refining and marketing division s sales volume and 28% of the division s revenues. The refinery produces two separate types of solvent which are principally used for industrial paints and thinners or domestic wax-based cleaning products in the Lima market. Residual No. 5 For the year ended 31 December 2006, residual No. 5 accounted for approximately 2% of the refining and marketing division s sales volume and 2% of the division s revenues. Residual No. 5 is principally used as a heating fuel for industrial and mining furnaces, as well as for power generation. Residual No. 6 For the year ended 31 December 2006, and in particular the last 2 months of 2006, the refining operation was adjusted to start producing residual No. 6. This was possible due to extra refining capacity not being utilised as a result of the decreasing supplies of natural gasolines from Aguaytía, as mentioned above. It also increases the amount of diesel 2 which is produced from the crude stream input. Turbo A-1 For the year ended 31 December 2006, Turbo A-1 accounted for approximately 3% of the refining and marketing division s sales volume and 4% of the division s revenues. Turbo A-1 is principally sold to airlines and U.S. and Peruvian government entities in the central jungle region. Maple is the only producer of Turbo A-1 in the central Peruvian jungle. Naftoil/HAS For the year ended 31 December 2006, Naftoil/HAS accounted for approximately 22% of the refining and marketing division s sales volume and 17% of the division s revenues. Naftoil/HAS is sold to Petroperú as a feedstock for their Iquitos refinery in the northern Peruvian jungle. 27

36 4.3.6 Operating Costs and Capital Expenditures Refinery Costs and Capital Expenditures Maple is responsible for all operating costs in connection with the operation and service of the Pucallpa Refinery and Sales Plant. Other than feedstock costs, the principal operating costs comprise labour and benefits, refinery fuel use, facility costs, equipment and other costs. In the table set forth below are the historical operating costs and capital expenditures for the Pucallpa Refinery and Sales Plant: Year ended 31 December Operating Costs: ($ in thousands) Labour and Benefits (1) Refinery Fuel Use (2) ,061 1,357 Facility Costs (3) Equipment Costs (4) Other (5) Feedstock Costs (6)... 36,751 47,571 47,568 Total Operating Costs... 39,116 50,158 50,571 Capital Expenditure Total Costs... 39,286 51,211 50,645 (1) Costs associated with wages and other benefits, including health care costs, and pension and social security payments. (2) Residual or natural gas costs incurred in connection with operating the Pucallpa Refinery and Sales Plant s boiler and heater. (3) Expense related to rental payments, taxes and facility maintenance activities. (4) Costs incurred to repair, replace or maintain the Pucallpa Refinery and Sales Plant s equipment. (5) Miscellaneous costs and expenses associated with operating the facility including, for example, the cost of maintaining insurance in respect of the Pucallpa Refinery and Sales Plant. (6) The expense incurred to acquire the oil and natural gas feedstocks refined by the Pucallpa Refinery and Sales Plant. As illustrated in the table above, certain commodity and feedstock expenses have increased in recent years due to a general rise in international commodity prices and increased crude oil royalty obligations. While these feedstock expenses will fluctuate, the Pucallpa Refinery and Sales Plant has numerous fixed costs, including labour, power and rent costs. For the year ended 31 December 2006, these fixed costs accounted for approximately 3% of the facility s overall costs, while feedstock and fuel expenses accounted for approximately 97%. Additives Maple purchases two additives to increase the octane rating of the base gasolines used to produce Gasoline 84. The most significant of these additives is PT10 and the other is MMT. Maple historically received its supplies of PT10 from Protec International, but has recently entered into a new contract with China National Materials Industry Import and Export Corporation to supply PT10 on better commercial terms. Maple s MMT requirements are supplied by Afton Chemical Operation. Set forth below are the historical costs incurred to purchase the additives for the periods indicated. Year ended 31 December ($ in thousands) Lead PT ,521 4,072 MMT Total ,652 4,250 28

37 Sales, Marketing and Distribution Expenses Maple incurs the following expenses in connection with marketing its refined products: labour and benefits, facility costs, equipment and other costs. Set forth below are the historical sales and marketing costs incurred by Maple for the periods indicated: Year ended 31 December ($ in thousands) Costs: Labour and Benefits Facility Costs Equipment Costs Other Total... 1,161 1,204 1,291 Maple also expects to spend additional amounts in the future to bring the Pucallpa Refinery and Sales Plant into compliance with new legislation mandating a reduction of the sulphur content contained in diesel. Management estimates that the installed cost of the hydro-treater and other equipment required to bring the facility into compliance with these new standards will approximate $6 million, which may be funded from operating cashflow and/or debt financings, and require from 14 to 18 months to complete. The new legislation came into effect in some coastal regions on 30 June 2006, placing caps on the maximum sulphur content contained in diesel and is expected to come into effect in all other areas of Peru on 1 January The new legislation also imposes an additional tax calculated on the quantity of sulphur contained in the diesel, which tax will last until 1 January With effect from 1 January 2010, the maximum content of sulphur in diesel will be reduced to 50ppm for all of Peru. However, management believes that this deadline may be extended due to difficulties in bringing the state-owned refineries into compliance by that time and/or exemptions put in place for small refineries. For further information please see Maple expects to incur significant costs, including capital expenditures, over the next several years to comply with various environmental and health and safety regulations in Part III included elsewhere in this document. Peruvian Price Stabilisation Fund Maple is subject to a price stabilisation fund established by the Peruvian government. Specifically, the Ministry of Energy and Mines, in coordination with the Ministry of Economy and Finance established a price stabilization mechanism for certain combustibles to mitigate the high volatility in international petroleum prices in order to benefit the final customers. The fund s mechanism works through contributions and compensations to participants corresponding to refineries and combustible importers in Peru and the varying levels of price indices relating to particular products. When the price index is above a certain threshold, Maple is required to contribute to the fund, and conversely, when the price index falls below a certain level, Maple is entitled to receive a payment. For the period between 14 October (date when the fund came into force) and 31 December, 2005 Maple received a net payment of $466,025 from the fund and for the year ended 31 December 2006 Maple made a net payment of $110,236 to the fund. 4.4 Aguaytía Energy Aguaytía Energy is an integrated energy company engaged in the exploitation and production of a natural gas field for the marketing of electricity, dry natural gas, LPGs and natural gasolines. Aguaytía Energy s operations are separated into three distinct business segments: (i) production, processing and transportation of natural gas and NGLs; (ii) fractionation and liquids marketing; and (iii) power generation and power transmission. Each of these segments contributes directly to Aguaytía Energy s overall revenues, which were approximately $119.7 million and $120.7 million for the years ended 31 December 2005 and 2006 respectively. Maple holds an approximate 14.3% effective economic interest in Aguaytía Energy. Aguaytía Energy was formed in 1995 for the purpose of building and operating the overall Aguaytía Project. The concession rights to Block 31-C were obtained in 1994 in the international tender in which Maple also obtained the concession rights to Blocks 31-B and 31-D. Maple assigned these rights to Aguaytía Energy in In that same year, Maple received government 29

38 authorization for the generation of electricity and the concession for power transmission lines; the generation, authorisation and transmission line concession were later assigned to Aguaytía Energy. Operations began in 1998, following the completion of construction. Aguaytía Energy s activities involve an integrated process from production to power transmission and sales of hydrocarbon products. This process includes the following: Production, Processing and Transportation of Natural Gas: Aguaytía Energy produces natural gas and NGLs from Block 31-C and transports all production through pipelines to its natural gas processing facility where processing separates all NGLs from dry gas. The NGLs are then transported to the fractionation facility through a products pipeline, while the dry gas is transported to the power plant through a separate pipeline. Any surplus dry gas remaining after satisfying consumer demand and the power plant s requirements are reinjected into the natural gas field; Fractionation and Liquids Marketing: The fractionation plant receives NGLs from the processing facility and separates natural gasoline from LPGs. The natural gasoline is then sold to the Pucallpa Refinery and Sales Plant, while the LPGs are sold to wholesalers and distributors; and Power Generation and Power Transmission: The power plant utilises the dry gas received as fuel for the plant, which generates electric energy. The generated electricity is then delivered through transmission lines to the national grid for purchase by consumers Ownership Aguaytía Energy, LLC was incorporated as a Delaware limited liability company on 30 October 1995 with a share capital divided into cash and non-cash units. Aguaytía Energy, LLC has an issued and outstanding share capital of 181,838 units, comprised of 161,838 cash units and 20,000 non-cash units. Maple, through The Maple Gas Development Corporation ( MGDC ), an indirect and partially-owned subsidiary incorporated in the Cayman Islands, holds 20,000 non-cash units and 17,419.5 cash units thereby entitling Maple to a 20.6% voting interest in Aguaytía Energy. Whilst both cash and the non-cash units are entitled to voting rights, an adjustment is made to dividends declared by Aguaytía Energy, LLC such that the income allotted to shareholders of cash units is greater than the income allotted to shareholders of non-cash units. This difference in income is equal to the tax benefits generated by the depreciation of capital assets acquired using cash invested by shareholders of cash units. MGDC is a majority owned indirect subsidiary of Maple Energy plc. However, certain ownership interests held by third parties and the previously mentioned depreciation tax effect on the non-cash units reduce Maple s effective overall economic ownership of Aguaytía Energy from 20.6% to approximately 14.3%. Specifically, a third party owns shares in MGDC, which track the rights of cash and non-cash units in Aguaytía Energy, LLC, thereby reducing Maple s interest by 5.1% and tax benefits generated by the difference in treatment between the cash and non-cash units of Aguaytía Energy, LLC further reduce Maple s interest by approximately 1.2%. However, Maple s economic interest in Aguaytía Energy, for the purposes of the Block 31-C Deep Prospect, is not subject to such reduction. In particular, Maple s economic interest in the prospect is enhanced by Maple having the benefit of an additional 28,696 cash units of Aguaytía Energy, LLC held by another shareholder. Maple believes its 20.6% voting interest in Aguaytía Energy is therefore increased up to a 36.36% economic interest in the Block 31-C Deep Prospect. However, one of the other members of Aguaytía Energy believes that Maple s actual economic interest in Block 31-C Deep may be 24.92%. The ownership interests held by Maple in Aguaytía Energy are subject to certain change of control provisions, whereby Maple could be forced to sell its interest in Aguaytía Energy in the event that ownership thresholds by certain individuals are not maintained. For more information, please see, Risk Factors Part III Maple may be forced to sell its interest in Aguaytía Energy if certain equity interests in the Maple shareholders of Aguaytía Energy, The Maple Gas Development Corporation, are not maintained by named individuals included elsewhere in this document Natural Gas Processing, Processing and Transportation Natural gas from Block 31-C is processed at the 70 MMcfd gas processing facility located in Block 31-C and separates the NGLs from dry gas. The processing facility was designed and constructed by ABB Randall during 1996 and 1997 and began operations in The facility is operated by Maple under an operations and maintenance agreement with Aguaytía Energy. 30

39 The processing facility is connected to Aguaytía Energy s thermal power plant and fractionation facility via two pipelines. The first pipeline is a gas pipeline which transports all dry gas to Aguaytía Energy s thermal power plant, where the dry gas is used as fuel to operate the plant. This gas pipeline is 124 km in length with two sections of 12-inches and 10-inches diameter. An additional six-inch gas pipeline, 56 km in length, delivers fuel gas to the fractionation plant. The second pipeline transports NGLs, is approximately 89.4 km in length and connects the processing facility with the fractionation plant in Yarinacocha. This NGL pipeline has two sections each measuring four-inches in diameter. The processing facility does not have storage capacity for dry gas or NGLs. All NGLs are transported to Aguaytía Energy s fractionation facility and any dry gas which exceeds the power plant s requirements is reinjected into the gas reservoir in Block 31-C Fractionation and Liquids Marketing Aguaytía Energy also owns a fractionation facility which fractionates NGLs into LPGs and natural gasolines. The facility receives all of its feedstock from Aguaytía Energy s natural gas processing facility located in Block 31-C. The plant is located in Yarinacocha approximately 10 km west of the city of Pucallpa, Province of Coronel Portillo, Ucayali Region. The fractionation plant is equipped with up to 240,000 gallons of inlet NGL storage facilities, and has the ability to produce up to 1,496 barrels of LPG per day and 2,904 barrels of natural gasoline per day. Specifically, the plant utilises a fractionation tower designed to fractionate NGLs in order to obtain LPG and natural gasolines. The facility contains a total of twenty 60,000 gallon horizontal tanks, with one tank serving as an NGL inlet surge tank, three tanks which can serve as inlet NGL storage or LPG storage, and the remaining 16 tanks serving as LPG storage tanks. This facility is also operated by Maple under the operations and maintenance agreement described above. The facility transports its fractionated LPGs and natural gasoline via truck and pipeline, respectively. Specifically, the LPGs are shipped to Aguaytía Energy s customers via trucks with special tank capability. The natural gasolines are transported to the Pucallpa Refinery and Sales Plant through a 14 km four inch diameter fibreglass-pipeline and an eight km, eight inch steel pipeline Power Generation and Power Transmission Aguaytía Energy s thermal power plant is a generation facility consisting of two turbine driven generators used to generate electric energy. The installed capacity at the plant is approximately 173 MW, generated by two gas fired simple cycle turbines with power capacities of approximately 86 and 87 MW, respectively. The power plant operates using dry gas supplied from Aguaytía Energy s production activities from Block 31-C. The power plant is operated by an experienced international thermal plant operator, PIC del Peru S.A.C. Aguaytía Energy also holds rights to over 392 km of transmission lines, which are connected to the national electric power grid through four substations. These transmission lines cross the Andes and are interconnected into Peru s national grid at four locations. The operation and maintenance of the transmission lines are conducted by Red de Energía del Perú S.A., an international transmission line operator from Colombia. This entity operates the most significant transmission network in Peru and over 50% of the country s entire transmission system Sales Aguaytía Energy s sales volumes consist of LPG sales to wholesalers and distributors, natural gasoline sales to the Pucallpa Refinery and Sales Plant, and sale of electric power in the free and regulated power markets. For the years ended 31 December 2005 and 2006, respectively, Aguaytía Energy generated revenues of $119.7 million and $120.8 million, respectively. For the same periods, Aguaytía Energy s operating costs were $65.5 million and $66.7 million, respectively. For the year ended 31 December 2005 and the year ended 31 December 2006, sales of natural gasolines to the Pucallpa Refinery and Sales Plant generated revenues of approximately $36.2 million and $36.3 million, respectively, and accounted for approximately 30% of Aguaytía Energy s overall revenues in both years. For the year ended 31 December 2005 and the year ended 31 December 2006, sales of LPG to wholesalers and distributors generated revenues of approximately $20.7 million and $18.8 million, respectively, and accounted for approximately 19% and 16% of Aguaytía Energy s overall revenues, respectively. 31

40 For the year ended 31 December 2005 and the year ended 31 December 2006, sales of electric power generated revenues of approximately $62.8 million and $65.7 million, respectively, and accounted for approximately 50% of Aguaytía Energy s overall revenues for each year Capital Expenditures Aguaytía Energy is responsible for the maintenance of and certain improvements to the various assets that it owns and operates, including gas, power and transmission facilities. Set forth below are the historical capital expenditures incurred by Aguaytía Energy in connection with the operation of its assets. Year ended 31 December ($ in thousands) Processing Facility and Gas Field ,882.8 (1) Fractionation Plant Thermal Power Plant... 2, ,151.0 (2) Substations Transmission Lines... Building Offices Lima... 1,087.2 (3) 4.4 Trucks and Tanks ,467.0 (4) Pucallpa Land Software Other Equipment ,319.1 Total Capital Expenditures... 3, , ,131.1 (1) Expenditures incurred in connection with facility improvements and tubing upgrades in the gas field. (2) Costs to perform major maintenance on the thermal power plant s turbines. (3) Acquisition cost of real property and buildings. (4) Expenditures relating to the acquisition of 17 LPG truck and trailers. (5) Resulting costs from the implementation of new software. 4.5 Ethanol Project Ethanol Project Overview In 1999, Maple began evaluating sugar and ethanol projects in Peru. The expansion of global production and demand for ethanol, among other things, convinced Maple to take advantage of Peru s advantageous agricultural conditions in which to grow sugar cane. The Ethanol Project consists of 10,672 hectares purchased on 1 June Approximately 8,300 hectares are expected to be used for land for sugar cane planting, harvesting and milling, a distillery with capacity to process 30 million gallons of ethanol per year. The Ethanol Project also contemplates power generation for operations and sales into the national grid. The Company believes that completion of construction and other preparations necessary to begin operations and production of ethanol, once construction begins, will require approximately 24 months. Maple is currently the 100% owner of Maple Ethanol, its subsidiary through which it is developing the project in the north of Peru in the province of Piura, but expects to have such holding reduced in the event that ACC acquires equity interests of 10% in the Ethanol Project. The project s estimated capital expenditures are expected to be approximately $157 million, which is intended to be financed through $83 million of project finance debt and $74 million of equity, which equity portion will include Maple Ethanol s acquisition of land for which Maple attributes a $16 million value as well as the proceeds from any investment by ACC in connection with its acquisition of equity interests in the Ethanol Project. In addition, a further $25 million of estimated VAT costs and $10.5 million in estimated import duties will also be required to fully fund and complete the Ethanol Project. Maple expects investment funds to provide a portion of the required equity to finance the Ethanol Project, and such equity contributions are expected to decrease Maple s overall ownership interest in the Ethanol Project. Estimated total capital costs, VAT costs and import duties are management estimates based on numerous assumptions, including, among others, prior experience, third-party vendor or consultant estimates and estimated construction costs. Such estimates are preliminary in nature and entirely subjective, and therefore, susceptible to varying interpretations and periodic reevaluation based on actual experience and business, market and industry conditions. As such, actual costs may differ substantially from the estimates above, and 32

41 such differences may be material. There can be no assurance that the Ethanol Project will be completed, and even if such project is completed, that the costs related to its construction will be similar to those estimates presented above Industry Overview The international ethanol market began expanding in the 1970 s with Brazil s implementation of a nation-wide program to decrease the country s dependency on fossil fuels through increased use of ethanol, generally perceived as a cheaper alternative to oil. From about the year 2000, ethanol production began to increase rapidly in the United-States as a result of ethanol largely replacing MTBE as an oxygenate and is now mandated by many states to be mixed in a 10% proportion with gasoline. The European Union and most countries in Latin America and Asia are now following the trend of increasing their ethanol production. Prices in Brazil, the US and the EU generally follow different price trends because of differences in the crops used, the volumes produced and the government regulations which apply. The growth in local demand still outstrips production capacity and so international trading volumes are comparatively small Global Production of Ethanol The majority of global fuel-ethanol is produced in the Americas by Brazil and the United-States. World ethanol production (all categories, fuel, industrial and beverages) reached an all-time high of 51.3 billion litres (13.3 billion gallons) in 2006, up from the previous year s 44.3 billion litres (11.7 billion gallons). Since the year 2000, when production stood at 29.4 billion litres, global production has increased by approximately 74.5%. In 2006, Asia became the second largest producer with 12.5% of world output with Europe being third with 9% of overall global ethanol production. As such, Maple believes that the ethanol industry will remain strong supported by increasing global demand for this product. According to F.O. Licht, ethanol production in 2007 is expected to reach 62.5 billion litres, a 21.8% increase over The chart below shows historical ethanol prices in the following three major markets, Brazil, the U.S. and the EU: Ethanol Prices $ per Gallon /31/2004 1/31/2005 2/28/2005 3/31/2005 4/30/2005 5/31/2005 6/30/2005 7/31/2005 8/31/2005 9/30/ /31/ /30/ /31/2005 1/31/2006 2/28/2006 3/31/2006 4/30/2006 5/31/2006 6/30/2006 7/31/2006 8/31/2006 9/30/2006 Brazil Fuel USA Fuel/Midwest EUR All grades/west 10/31/ /30/ /31/2006 1/31/2007 2/28/2007 3/31/2007 Source: F.O. Licht European Price Report; F.O. Licht World Ethanol & Biofuels Report. Fuel ethanol production in the EU is now slowly expanding as the focus has been primarily on bio-diesel this far. Spain, France and Sweden are producing ethanol to a significant extent. Currently Germany is the second biggest producer of ethanol in the EU and is expected to be the main source of the increase in EU ethanol production. The EU directive on the subject has adopted a 5.75% target (for the amount of ethanol in gasoline) for renewable transport fuel. Production in the EU is expected to rise by 1 billion litres or 22% vs

42 4.5.4 Peruvian Ethanol Initiatives In 2003, the government enacted legislation to promote this industry, including Law No for the promotion of a biofuels market, which recommended a 7.8% ethanol content in gasoline by In April 2007 legislation came into force establishing the requirement to use 7.8% ethanol by 1 January Recent changes to the Peruvian Tax Regulations have been approved by means of Supreme Decree No EF which established a 0% import duty rate for production equipment and machinery for agriculture. 34

43 4.5.5 Ethanol Project Description 35

44 The Ethanol Project s location is on the northwest coast of Peru, in the Piura region overlooking the Chira River. On January 5, 2007, Maple entered into a contract with the Regional Government of Piura to acquire approximately 10,672 hectares of unused and non-cultivated land with rights to a water reserve. This acquisition closed on 1 June The land comes with a water reserve allocation of approximately 17,400 cubic meters of water per hectare per year, which is a sufficient quantity to grow sugar cane in this area. As part of this acquisition of land, Maple committed to promote the conversion of rice-growing areas to sugar cane planting by providing support to independent farmers with a total of at least 1,250 hectares. Maple will also pay a fixed payment to the Regional Government of Piura of U.S. $500,000 per year for 20 years following commencement of operations of the project. This obligation will be directed in priority to promote development programs in the region. In connection with the execution of the purchase agreement relating to the acquisition of the land, Maple has a financial commitment, to invest a minimum amount of $3,000 per hectare or a total of $32 million over 5 years, which is backed by a bank guarantee of 10% of the commitment amount totaling $3.2 million for which Maple has posted cash collateral in the same amount. The majority of the land will be dedicated to growing sugar cane, but the land will also contain the milling and distillery facility. The tank farm and port facilities will be located near the port of Paita which is located approximately 25 km south-west of the land. Availability of water is a key factor in the implementation of this integrated agro-industrial development project. The land that the project will be using for its development has an existing water reserve assigned sufficient for a cane plantation. A hydrology study of the Chira riverbed has confirmed the availability of water in sufficient volumes to supply the project s needs. In connection with the acquisition of the land, the Regional Government of Piura has agreed to allow the project to use the rights of a water reserve of 186 million cubic meters per year. This reserve is valid for two years. This right to use the reserve will become permanent in the form of a water use license once the project has completed certain irrigation works. The department of Piura has two major river systems, namely, the high and low Piura river valleys and the Chira valley. In its natural, original condition, the Piura River has an intermittent, high and low flow, with a totally dry condition during the drought periods normally occurring in the second half of each year. On the other hand, the Chira River has an abundant flow throughout the year. The Chira and Piura valleys are currently planted with approximately 24,000 hectares of rice, which have low economic yields. These areas could switch to sugar cane production in the medium term, providing strong growth opportunities for Maple to increase ethanol production Agricultural Development Water availability, ideal temperature conditions, and low rainfall are the trademarks of the Peruvian coast allowing for year-round harvesting of sugar cane. This unique advantage, allows for extremely high yields in the field. Rain is a major factor that prevents continuous harvesting in sugar cane producing countries and most have a rainy season that extends for seven or eight months (Caribbean and Central America) to four months (East Africa). Economically, this means that the capacity of the milling operation required in Peru is substantially less than in the Caribbean or Brazil. This difference generates an increase on the rate of return on investment in favour of Peru. Following completion of the Ethanol Project as currently planned, and largely due to the favourable climate for production of sugar cane, Maple estimates that its production costs to produce one gallon of ethanol will be approximately $0.47. This estimated production cost per gallon is a management estimate based on numerous assumptions, including, among others, the climate, production per hectare, and sucrose content of cane produced. Such estimates are preliminary in nature and entirely subjective, and therefore, susceptible to varying interpretations and periodic reevaluation based on actual experience and business, market and industry conditions. As such, actual production costs may differ substantially from the estimate above, and such difference may be material. There can be no assurance that Maple will complete the Ethanol Project, and further, that if successful in completing the project, will create production costs at the 36

45 levels described above. In establishing its production cost estimate, Maple has assumed that there will be no adverse climate change, sufficient water and labour will remain available for the project and that there will be no labour unrest or industrial disputes, political unrest in Peru towards Maple or the Ethanol Project, or any other disturbances that would materially adversely affect Maple and its operation of the Ethanol Project. The Ethanol Project is expected to be mainly self-sufficient for its supply of sugar cane to the facilities for the production of ethanol. In the second stage of development, the Company expects to use land belonging to and cultivated by nearby independent growers to grow and cultivate additional feedstock and produce ethanol. The operations of the agricultural phase of the Ethanol Project are expected to be supervised by an experienced, third-party operator. Maple has established relationships with several such operators of agricultural estates, and negotiations are under way to provide the following services to Maple: Construction: management and supervision of agricultural development; and Operations: Supervision and oversight for all the agricultural aspects of the Ethanol Project Production Process and Industrial Development The process of ethanol production consists of two distinct steps: fermentation and distillation with simple sugar (in this case, sugar cane juice) forming the basic raw material for fermentation. The Ethanol Project s industrial component will consist of an anhydrous ethanol distillery with capacity to produce 30 million gallons of ethanol per year; and certain port facilities described below. The approximate time required to construct and begin operations of the distillery, whose construction will parallel the agricultural development, is expected to be 24 months. The plant will include power generating capacity of approximately 27 MW, which will cover the needs of the mill, the field s irrigation system and provide surplus power for sale to the electricity grid. This power will be generated by using bagasse, the sugar cane s dry residue, as a fuel source. Maple is in negotiations with several experienced contractors and suppliers to provide engineering, procurement and construction ( EPC ) services for the industrial facilities Port Facilities In order to ship the distillery s production to Lima and abroad, port facilities, consisting of a tank farm, dedicated submarine pipeline and mooring berth will be built. Annual throughput and stock reserve of the port installation for a 30 million gallon per year distillery is estimated at 750,000 barrels, requiring two 60,000 barrel tanks, with a dedicated submarine pipeline to permit loading of the vessels at about 3,000 barrels per hour. The installation will be located near the port of Paita and the length of the submarine pipeline is expected to be approximately 1,600 meters long to reach 14 meters (42 ft.) of depth at the mooring berth. This depth will permit mooring of mid-range dedicated product tankers, with about twelve loadings per year of 60,000 to 65,000 barrels, in a 24 hour non-stop operation. 5. Work Program Maple intends to implement the following work program by the end of 2008, subject to results from technical analyses and the availability of necessary equipment. Maple s estimated capital expenditures for the second, third and fourth quarter of 2007 and all of 2008 in respect of each asset are also indicated below. Block 31-B ($6.2 million) 2007 Perform an environmental impact study and obtain the necessary approvals and permits for the drilling and workover program in the block; This figure reflects management s best estimate on the costs associated with completing this portion of its work program. This estimate is based on numerous assumptions. Such estimates are preliminary in nature and entirely subjective, and therefore, susceptible to varying interpretations and periodic reevaluation based on actual experience and business, market and industry conditions. As such, actual costs to complete this portion of thework program may differ substantially from the estimate described, and such differences may be material. 37

46 Completion of four work-over wells for proved reserves and three workover wells for probable reserves; and Drilling of three development wells for proved reserves Drilling of three development wells for proved reserves, two development wells for proved and probable reserves and four development wells for probable reserves. Block 31-D ($3.16 million) 2007 Perform an environmental impact study and obtain the necessary approvals and permits for the drilling and workover program in the block; Completion of one workover well for proved reserves, one workover well for probable reserves and five workover wells for possible reserves; and 2008 Drilling of three development wells for proved reserves and three workover wells for possible reserves. Block 31-E ($19.73 million) 2007 Perform an environmental impact study and obtain the necessary approvals and permits for the drilling of three wells and performing a 225 km 2-D seismic survey in the block; Conduct a 225 km 2-D seismic survey to identify the optimal drilling location for the Cashiboya Deep exploration well and provide additional data for the Santa Rosa Prospect; Perform an environmental impact study and obtain the necessary approvals and permits to reactivate the Pacaya Oil Field; Reactivate the Pacaya Oil Field Drilling of the Santa Rosa exploration well. Block 31-C (Aguaytía Deep Prospect) ($2.21 million) 2007 Perform an environmental impact study and obtain the necessary approvals and permits for the drilling of one exploration well; and 2008 Drilling of one exploration well. Ethanol Project ($40.26 million) 2007 Negotiation and signing of key EPC contracts; Completion of detailed engineering designs; Financial closing and start of ground work Commencement of cane crushing line and distillery construction; Commence port facility construction; 38

47 Completion of main pumping stations and water conduction systems; and Commence construction of drip irrigation systems, land levelling and planting of cane. 6. Summary Maple Financial Information The attention of investors is drawn to the key financial information relating to Maple which is set out in Part V included elsewhere in this document. 7. Current Trading and Prospects It is the Board s intention that Maple continue to focus on (i) developing its drilling and well work-over programme in Blocks 31-B, 31-D and 31-E, (ii) exploration opportunities located in Block 31-E and the Aguaytía Deep Prospect, and (iii) establishing itself as one of Peru s leading ethanol producers by successfully completing the Ethanol Project. In addition, Maple currently intends to pursue strategic acquisition opportunities in Peru. Maple continues to produce oil and natural gas from its properties, refines and markets products derived from crude oil and natural gasolines, as well as operates the Aguaytía Project. Maple continues to pursue its Ethanol Project and has entered into an agreement to acquire a significant amount of land on which the project will be situated. This land acquisition includes certain rights to a water reserve which the Company believes will provide sufficient water for the growing of sugar cane on the property. Maple is also preparing to commence additional development and exploration-related activities. Specifically, Maple has recently entered into a contract for the provision of seismic services in Block 31-E in connection with its proposed exploration drilling work programme. The Company will also begin additional work-over programs in Blocks 31-B, 31-D and 31-E in On 12 March 2007, Maple completed a private placement of 199,922 shares of MCL to ACC, an investment fund organised under the laws of Peru, for gross proceeds of $10 million. The acquired shares represent an approximate 11.0% total equity interest in MCL. Maple intends to use a portion of the proceeds from the sale of shares to implement certain aspects of its work program. In connection with the completion of the private placement and in consideration for purchasing the MCL shares, Maple Energy plc entered into an investment agreement, option contract and shareholders agreement with ACC. In addition, ACC has the right to subscribe for 10% of the equity interests in the Ethanol Project on terms and conditions to be mutually agreed by Maple and ACC. As described in Section 12 of Part VI, these acquired MCL shares will be convertible into Ordinary Shares pursuant to the terms of the Option Contract. Maple Energy plc has reached an agreement with the IFC, pursuant to which the IFC, subject to receiving final board approval, will have the option to subscribe for up to 5,932,477 Ordinary Shares at any time on or before 30 July 2007 at a subscription price of $ per Ordinary Share. Maple intends to use the proceeds from the IFC share subscription to carry out certain aspects of its work program for as more fully described in section 5 of this Part I. In connection with the subscription of Ordinary Shares by the IFC, Maple will be required to take certain measures and implement and establish certain policies and procedures in accordance with the social and environmental standards set forth by the IFC for the companies in which it invests. This equity investment by the IFC is subject to the satisfaction of customary closing conditions. There can be no assurance that the IFC investment will be consummated. 8. Strengths and Strategy 8.1 Strengths Maple s key strengths consist of the following: Proven Track Record of Revenue and Cashflow Generation. Existing revenues and cashflow from sales of refined products, LPG and electricity, resulting in combined revenues and adjusted EBITDA of $78.5 million and $8.7 million respectively for the year ended 31 December 2006, and combined revenues and adjusted EBITDA of $75.2 million and $10.3 million for the year ended 31 December 2005; (1) (1) EBITDA figures exclude $7.3 million of costs in 2005 and $0.3 million of costs in 2006 relating to the expensing of drilling operations under successful efforts accounting (see Note 16 in Section 3 of Part V of this document) and $1.4 million of restructuring costs in 2006 (see Note 3 in Section 5 of Part V of this document). 39

48 Risk-diversified Hydrocarbon Asset Base. Maple s asset mix includes: multiple low-risk development, drilling and work-over opportunities on existing properties; and multiple exploration opportunities in Block 31-E and the Aguaytía Deep Prospect with best estimate prospective crude oil, and NGL resources and natural gas resources estimated to be MMbl and Bcf, respectively; Competitive Positioning of Operations. The location of Maple s operations and assets provide the following efficiencies: the proximity of Maple s crude oil production to its refining assets as well as readily available transport links and other infrastructure provides Maple with logistical advantages over competitors; operation of the only refinery in the central Peruvian jungle provides significant access to surrounding markets; coastal location of the Ethanol Project s facilities and favourable Peruvian climate lends support to Maple s intention to compete as a low-cost, strategically-located ethanol producer; and ability to utilise Maple s physical infrastructure which covers substantial areas in the central jungle of Peru, with extensive logistical operational experience through multiple exploration and development projects performed in this area. This includes drilling, workovers, road construction, plant construction, pipeline construction, refinery expansion, seismic acquisition, geological and geochemical surveys, among others; Strong and Experienced Management Team and Significant Human Capital. Strong and experienced team with established governmental and industry relationships, significant in-country accomplishments, including the successful implementation of the $273 million Aguaytía Project and other national energy projects, and 13 years experience in Peru together establishing an international energy company with approximately 400 full time equivalent employees currently. Operational Efficiencies through Vertical Integration and Ownership. Maple s operations benefit from the following efficiencies: 8.2 Strategy vertically integrated operations providing readily available monetisation routes and beneficial feedstock costs for hydrocarbon refining and enhanced netbacks for Maple; and ownership of work-over rigs enabling Maple to minimise significant third-party contractor supply, cost and time constraints in the execution of its shallow drilling and work-over programmes. Maple s strategy is to continue to develop selective energy projects building shareholder value through a combination of low risk continued development of oilfields, ethanol project development, and exploration. To execute this strategy, Maple intends to: develop existing oil reserves through a series of well workovers and development drilling opportunities including 17 shallow development wells and 15 workover wells on Block 31-B and 14 shallow development wells and 10 workover wells on Block 31-D to be financed primarily through existing cashflow from operations; discover additional oil and natural gas fields through exploration activities, including three prospects in Block 31-E and one prospect in Block 31-C; establish itself as one of Peru s leading ethanol producers through the development and completion of the Ethanol Project and other ethanol production opportunities; and pursue strategic acquisitions in Peru. 40

49 9. Management Maple expects that its directors and senior executives immediately following the Admission and Placing will be as set forth below. The positions held indicate offices with Maple Energy plc: Name Age Position(s) held Jack W. Hanks 60 Chairman of the Board and Executive Director Rex Wharton Canon 46 Chief Executive Officer, President and Executive Director Carlos Antonio de la Guerra Sison 65 Senior Vice President and Executive Director Nigel B. Christie 58 Independent Non-Executive Director Gianfranco Castagnola Zúñiga 46 Non-Executive Director Carlos Enrique A. Palacios Rey 59 Independent Non-Executive Director Tony Lee Hines 48 Senior Vice President Operations Raymond Joseph Cochard 61 Chief Financial Officer Rafael Guillermo Ferreyros 42 Vice President Marketing and Government Relations Nabil Katabi 37 Manager, Project Development Roxana María Guzmán 43 Legal Manager and Secretary Alfonso Morante 32 Treasurer 9.1 Directors Jack W. Hanks (Chairman of the Board and Executive Director) (Age 60) Mr. Hanks founded Maple s predecessor in the United States in 1986 and has been President or Chairman of the Board since its inception. Mr. Hanks is a member of Maple Energy plc s Nomination Committee, on which he acts as Chairman. In 1993, Maple s predecessor formed The Maple Gas Corporation del Perú Ltd to obtain certain oil, gas and refining concessions in Peru, which now form part of Maple s assets. Prior to founding Maple, Mr. Hanks was a partner in the Washington office of the law firm of Akin Gump Strauss in Washington D.C. Mr. Hanks graduated from the University of Texas at Austin, with a law degree in 1971 and a petroleum land management degree in Rex W. Canon (Chief Executive Officer, President and Executive Director) (Age 46) Mr. Canon has served as the President of Maple since 1997 and is a member of Maple Energy plc s Remuneration Committee, where he acts as chairman, and the Nomination Committee. Mr. Canon has worked for Maple or its predecessor since 1987, holding various positions, including Director of Finance, Chief Financial Officer, and Executive Vice President before being promoted to President and Chief Executive Officer in While at Maple, Mr. Canon led the team that developed the Aguaytía Project, and he is currently the Chairman of the Management Committee of Aguaytía Energy, LLC. Prior to his experience with Maple, Mr. Canon served as Controller and later as Vice President of Finance for an investment and venture capital firm. In addition, he currently serves on the Board of Directors of the Association of American Chambers of Commerce in Latin America and on the Advisory Board of the Center for Latin American Issues at George Washington University s School of Business and Public Management. He was a member of the Board of Directors of the American Chamber of Commerce of Peru from 2001 to Mr. Canon earned a Bachelor of Science in Chemical Engineering in 1982 and a Master of Business Administration in 1985 both from the University of Texas in Austin, Texas Carlos A. de la Guerra Sison (Senior Vice President and Executive Director) (Age 65) Mr. de la Guerra serves as an Executive Director of Maple as well as Senior Vice President focused on the development of Maple s ethanol business. He is a member of Maple Energy plc s Renumeration Committee. Mr. de la Guerra began working for Maple in 1994, serving as the President of Maple Gas focusing on the company s strategic direction. Prior to joining Maple, Mr. de la Guerra served as a director of a number of companies in Peru in the real estate, oil and gas and agricultural sectors where his responsibilities included directing the strategy, business and affairs of each company. From , Mr. de la Guerra was President of Petro Pacifico Drilling Co. Mr. de la Guerra is also currently the President of Inmobiliaria Caroal S.A., a real 41

50 estate development and operations firm in Peru, a position he has held since Mr. de la Guerra graduated from the Universidad Nacional de Ingeniería in Lima with a degree in civil engineering in Nigel B. Christie (Independent Non-Executive Director) (Age 58) Mr. Christie serves as an Independent Non-Executive Director of Maple Energy plc and is a member of Maple Energy plc s Audit Committee on which he acts as Chairman. Prior to joining Maple s Board, Mr. Christie served in various management positions within corporate finance departments of investment banking firms. Mr Christie began his career in 1976 at Kleinwort Benson, working in both London and New York. From 1985 to 1989, Mr. Christie was a Managing Director in the corporate finance department of S.G. Warburg, New York. Between 1989 and 1991, Mr. Christie served as Managing Director of the corporate finance department of Kidder, Peabody International where he was responsible for overseeing European mergers and acquisitions. From 1991 to 1995, Mr. Christie was a Director of MacArthur & Co. Limited, following which he worked for Columbus Asset Management between 1995 and 1999 and Value Investing Partners, Inc. between 1999 and From 2000 to the present day, Mr. Christie has been an Executive Director of RP&C International. Mr. Christie graduated from the University of St. Andrews in Scotland and attended the Program for Management Development at Harvard Business School Gianfranco Castagnola Zúñiga (Non-Executive Director) (Age 47) Mr. Castagnola serves as a Non-Executive Director of Maple Energy plc and is a member of Maple Energy plc s Audit and Nomination Committees. He is a Senior Partner and Executive President of APOYO Consultoría, President of AC Capitales SAFI and President of the Investment Committee of the Investment Fund in Infrastructure, Public Services and Natural Resources which owns 11.0% of MCL. Mr. Castagnola also serves as a director on the boards of a number of companies. Prior to joining Maple Energy plc s Board, Mr. Castagnola served as a member of the board of directors of the Central Reserve Bank of Perú and the Consolidated Reserve Fund (of the Republic of Perú). Mr. Castagnola graduated from the Universidad del Pacífico in 1981 with a Bachelors decree in Economics and graduated from Harvard University in 1986 with a Masters in Public Policy Carlos Enrique A. Palacios Rey (Independent Non-Executive Director) (Age 59) Mr. Palacios serves as a Non-Executive Director of Maple Energy plc and is a member of Maple Energy plc s Remuneration and Audit Committees. Mr. Palacios was a Vice-Chairman of Banco de Lima Sudameris between May 1991 and March 1994 and Chairman between March 1994 and September Between May 1991 and September 1999, Mr. Palacios was a Director of Lima Leasing and between May 1991 and March 2003 was a Director of Inversiones Mobilares. In addition, Mr. Palacios was a Vice-Chairman and Chairman of the executive committee of Banco Wiese Sudameris between September 1999 and April 2002 and subsequently served as Chairman between April 2002 and March 2003 and a Director between March 2003 and March Between September 1999 and March 2003, Mr. Palacios served as Chairman of Wiese Sudameris Leasing, Depósitos S.A. and Lima Sudameris Holding. Between September 2001 and March 2004, Mr. Palacios served as a Director of Cía Minera Volcan. Mr. Palacios remains the Chairman of Negocios Mancoche and Cosmos Callao to the present day. Currently Mr. Palacios is also the Chairman of the Administradora Jockey Plaza Shopping Centre, Centros Comerciales de Peru, and Franquicias Alimentarias, a Director of Cia. de Seguros Pacifico Peruano Suiza and a Director of Sindicato de Inversiones y Administracion and a Director of Nuevas Inversiones S.A. Mr. Palacios graduated from Babson College in Massachusetts with a degree in business administration and is a member of the Peruvian chapter of the Economic Council of Latin America. 9.2 Senior Management Tony L. Hines (Senior Vice President Operations) (Age 48) Mr. Hines has served as Senior Vice President of Maple since 2003, with responsibility for the management of Maple s operations. Mr Hines has worked for the Maple organisation since July 1986, holding various positions, including, Engineer and Operations Manager for the Maple s predecessor, Project Manager for the Aguaytía Project and Vice President of Operations, before being promoted to Senior Vice President of Operations in While serving as Engineer and Operations Manager for Maple s predecessor, which position he held from April 1988 to April From 1981 to 1986, Mr. Hines worked as the Drilling, Production, and Reservoir Engineer and Operations Manager at Nova Energy Corporation, where he supervised the production and drilling operations for oil and gas wells. In addition, Mr Hines also serves as a 42

51 member and secretary of the American School of Lima Foundation and from , served as a board member of the Franklin Delano Roosevelt Instituto Educacional in Lima. Mr. Hines graduated from Oklahoma State University with a degree in radiation and nuclear technology in 1980 and attended graduate school at the University of Oklahoma in Petroleum Engineering until Raymond J. Cochard (Chief Financial Officer) (Age 61) Mr. Cochard has over 27 years of international financial and administrative experience in the oil and gas industry. Mr. Cochard joined Maple in 1994 as Chief Financial Officer. He was General Manager of The Maple Gas Corporation del Perú, Sucursal Peruana from 1998 to 1999 and currently is the Adjunct General Manager and the Chief Financial Officer. From , Mr. Cochard served as the Vice President and Chief Financial Officer of Hawaiian Cement, a partnership between Lone Star Cement (Connecticut) and Adelaide Brighton Cement (Australia), where his responsibilities included accounting, finance, systems and treasury functions. Mr. Cochard earned a Master s in Business Administration in 1976 and a B.S. degree in accounting in 1974 from California State University (Bakersfield). He is a Certified Public Accountant in the State of Texas Rafael Gúillermo Ferreyros (Vice President Marketing and Government Relations) (Age 42) Mr. Ferreyros joined Maple in 1993 and has served as its General Manager since Prior to serving as Maple s General Manager, Mr. Ferreyros was Maple s Marketing Vice President, where his responsibilities included all sales and marketing strategies, as well as all pricing policies. Between 1992 and 1993 Mr. Ferreyros was Assistant Brand Manager for Colgate Palmolive in Mexico working on a special project to launch OTC products. Prior to this, Mr. Ferreyros worked as a marketing associate systems engineer for IBM between 1989 and 1992 in charge of developing system needs for various government and non-government entities. He currently serves on the board of directors of the National Society of Mining, Petroleum and Energy, which represents the major mining and energy companies in Peru. Mr. Ferreyros earned an M.B.A. from Harvard Business School in 1993 and graduated from the Universidad del Pacífico in Lima with a degree in finance and marketing in Nabil Katabi (Manager, Project Development) (Age 37) Mr. Katabi joined Maple in 1996 and was appointed Manager of Project Development in His responsibilities include the development of new projects and specifically the Ethanol Project. Prior to joining Maple, Mr. Katabi worked for Banque Indosuez in Copenhagen, Denmark, as a financial analyst in charge of the placement of international securities. Mr. Katabi graduated with a Masters in Business Administration from Columbia University in 1995 and holds a DEA ( Diplôme d études avancées ) in political science from the Sorbonne University in Paris (1997). He has a Diplôme de Commerce in International Business & Finance from the Ecole Supérieure de Commerce de Paris (1991) Roxana Guzmán (Legal Manager and Secretary) (Age 43) Ms. Guzmán joined Maple in 1994 and was appointed Legal Manager with responsibility for management of all legal issues involving Maple companies domiciled in Peru including oil & gas activities, licenses and permits, contracts, environmental, taxes, labour, administrative and civil litigation. In the last few years her responsibilities were extended to legal corporate related issues regarding Maple companies domiciled abroad from Peru. Prior to joining Maple, Ms. Guzmán worked for Occidental Petroleum Corporation of Peru as a legal adviser between 1989 and 1994, where she was responsible for negotiating and drafting contracts and for tax and import related legal issues. Ms. Guzmán graduated with a Master s in International Law from the Southern Methodist University in 1993 and graduated with full honours from the Universidad de Lima, with a degree in Law and Political Science, in Alfonso Morante (Treasurer) (Age 32) Mr. Morante joined Maple in 2001 and is in charge of the treasury, risk management and financing activities of Maple Energy plc. Prior to joining Maple, Mr. Morante worked in NBK Bank Peru in several positions including Foreign Exchange and Bond Trader, Corporate Finance Analyst and Treasury Market Risk Controller. Mr. Morante earned a Master s of Business Administration, obtaining the Valedictorian Award, from Thunderbird University (USA) and Tecnologico de Monterrey (Mexico) in 2007 and graduated from the Universidad del Pacífico in Lima, with a degree in economics in

52 10. Reasons for Admission and Use of Proceeds The Directors believe that Admission will be beneficial to Maple as it will: provide investment for the development of Maple s assets; provide access to capital markets; enable Maple to be better positioned to attract, recruit and retain key employees; and provide Maple with an acquisition currency. The proceeds of the Placing received by Maple (net of commissions and expenses payable by Maple) will be approximately $38.3 million and will be used to fund our Work Program set out in Section 5 of this Part I. 11. Employees As of 31 December 2006, Maple employed 396 full time equivalent employees, whose roles can be broken down into the following areas: Number of Department Employees Administration Production Upstream Downstream Operations Support Ethanol... 5 Total Overview of Peru Peru is a South American country, divided by the Andes Mountains into three sharply differentiated zones: a coastal area along the Pacific Ocean which extends between the borders with Chile in the south, and Ecuador in the north; a mountainous area, with peaks over 6,760 meters, lofty plateaus, and deep valleys, which lies in the centre of the country; and a heavily forested slope which leads to the Amazon plains. Peru is one of the world s largest producers of silver, copper, zinc, tin, gold and lead. Peru also has oil and gas reserves. Historically, Peru has been one of the world s largest producers of fishmeal and the Peruvian government has been taking legislative action to promote agriculture and tourism in recent years. Peru is a source of both natural gas and crude oil, although the country is still a net hydrocarbon importer. Oil output has been in steady decline since the early 1980s, resulting in Peru running an oil trade deficit since Crude oil production in 2003 averaged 91,351 bpd, compared to 195,000 bpd in Recent initiatives by the Peruvian Government have begun to enhance incentives for private sector investment in oil exploration Politics An era of growth in Peru during the mid-1990s was followed by four years of stagnation caused by external shocks and internal political turmoil. Shortly after winning an unprecedented third term in 2000, former President Fujimori fled the country following revelations of corruption. A transitional government headed by President Valentin Paniagua oversaw successful elections in April and June President Alejandro Toledo, Peru s first democratically-elected leader of indigenous origin, was inaugurated on 28 July Former leader Alan García won the presidential elections in June 2006, while the party of populist rival Ollanta Humala obtained the largest number of representatives in Congress Economics Peru s economy is one of the most dynamic in Latin America, showing particularly strong growth over the past five years. During the 1990s, the Peruvian economy was transformed by radical market-oriented reforms and privatisations, and met many conditions for long-term growth. 44

53 From 1994 until 1997, the economy recorded robust growth driven by direct foreign investment, but it stagnated from 1998 until Upon taking office in 2001, President Alejandro Toledo followed largely orthodox economic policies, and took measures to attract investment. GDP grew by 5.2% in 2002, by 3.9% in 2003, by 5.2% in 2004, by 6.4% in 2005 and by 8% in As of 31 December 2006 the stock of foreign direct investment totalled approximately $15.4 billion. Spain, the UK and the USA are the main sources of investment for Peru making up for 66% of the investment. Recent economic expansion has been driven by construction, mining, and oil and gas investment (particularly in the Camisea natural gas project), domestic demand, and exports. Inflation was 2% by year-end 2006, and there was a fiscal surplus equivalent to 2.1% of GDP in In 2006 external debt decreased to an estimate of $21.97 billion and foreign reserves reached a record $17.3 billion by the end of Prudent and responsible economic programme management has contributed to preserving Peru s sovereign risk rating among the lowest in the region. By 31 December 2006, Peru s country risk registered 131 points with respect to US Treasury bonds. Peru s economy is well managed, and better tax collection and growth are increasing revenues, with expenditures keeping pace. Private investment is rising and becoming more broad-based. The government has had success with recent international bond issuances, resulting in ratings upgrades Oil and Gas Regulation Contracting The Organic Hydrocarbon Law No ( Law ), published on 20 August 1993, created Perupetro S.A., a State company of the Energy and Mines Sector, organised as a corporation by virtue of the Business Companies Law. The Peruvian State, as owner of the hydrocarbons located in the national territory, gives Perupetro the right of ownership over those hydrocarbons once they have been extracted, so that Perupetro can enter into exploration and exploitation Licences or service contracts. Law has established different types of contracts. According to Article 10 of Law 26221, it is possible to sign a Licence Contract, a Service Contract, or any other type of contract approved by the Ministry of Energy and Mines. Any individual or legal entity, either national or foreign, that wishes to enter into hydrocarbon exploration and exploitation or exploitation contracts must have the prior written consent of Perupetro. Supreme Decree No EM approved the Regulations Governing the Qualification of Oil Companies, which established the technical, legal, economic and financial requirements to be satisfied in order to obtain the qualification that allows oil companies to enter into a contract with the Peruvian State through Perupetro. Before entering into such a contract, Perupetro has two options: either call for bids or hold direct negotiations. If several companies are interested in the relevant area, then Perupetro will call for bids in order to award the contract to the highest bidder; otherwise, if only one company has expressed an interest in the area, then Perupetro will hold direct negotiations Licence Contract By virtue of a licence contract, the ownership right to the hydrocarbons extracted is transferred by Perupetro to the contractor, and the contractor will pay a royalty to Perupetro. The royalty will be based on the revenues and expenditures generated from the contract operations. Under certain contracts, it is also possible to base the royalty on accumulated production generated from the contract area. Consequently, the contractor can directly use the hydrocarbons produced, sell them to a local refinery, or entrust third parties with the manufacture of sub products in order for the sub products to be sold directly by the contractor, or dispose of the hydrocarbons in any other manner, either locally or abroad Service Contract Perupetro may enter into a Service Contract with an oil company for the latter to exercise the right to carry out hydrocarbon exploration and exploitation operations in the contract area, receiving a monetary compensation, which will be determined based on the fiscalised production of hydrocarbons. 45

54 In this type of contract, Perupetro is the owner of the hydrocarbons extracted and, therefore, is the party that can freely export, refine or sell the hydrocarbons in the domestic market Upstream Operations Hydrocarbon exploration and exploitation activities are regulated primarily by the Hydrocarbon Exploration and Exploitation Regulations approved by Supreme Decree No EM of which the stated aim is to achieve the maximum possible efficient recovery of hydrocarbons from reserves, under conditions that permit to operate safely while protecting the environment. The above regulations are applicable to the contractors, which are in turn responsible for having their subcontractors comply with the provisions set forth in the regulations Downstream Operations Transportation Law provides that any individual or legal entity can construct, operate and maintain pipelines for the transportation of hydrocarbons and by-products. This transportation activity is regulated by the Regulations on the Transportation of Hydrocarbons by Pipeline, approved by Supreme Decree No EM, dated 15 September 1999, as subsequently amended by Supreme Decrees Nos EM and EM. According to the regulations, to engage in pipeline transportation activities it is normally necessary to enter into a concession contract, which will be entered into by the Ministry of Energy and Mines through the DGH. Refining According to the provisions set forth in Law 26221, companies can freely engage in refining operations. Thus, any individual or legal entity, either national or foreign, can install, operate and maintain petroleum refineries and processing plants for natural gas and condensate, natural asphalt, greases, lubricants and petrochemicals subject to the rules established by the Ministry of Energy and Mines. The rules established for this purpose by the Ministry of Energy and Mines are contained in the Regulations on Hydrocarbon Refining and Processing Operations, approved by Supreme Decree No EM, dated 15 November Storage Pursuant to Law 26221, there is no restriction on the construction, operation and maintenance of hydrocarbon and by-product storage facilities, subject to the companies compliance with the regulations issued by the Ministry of Energy and Mines. The legal framework for the commercial development of storage activities is contained in the Regulations on the Marketing of Liquid Fuels and Hydrocarbon By-products, approved by Supreme Decree No EM and Supreme Decree No EM, and, as regards technical and safety aspects, by the Safety Regulations for Hydrocarbon Storage, approved by Supreme Decree No EM, dated 16 November Marketing This downstream activity is regulated by the Regulations on the Marketing of Liquid Fuels and other Hydrocarbon By-products approved by Supreme Decrees No EM and No EM. These Regulations apply to the marketing of all hydrocarbons, with the exception of liquefied natural gas and natural gas, since these businesses are dealt with in specific regulations. These regulations specifically regulate the following: the requirements to set up and operate facilities for the storage, distribution, transportation and sale to the public of liquid fuels that are hydrocarbon by-products; establishment of free market conditions governing the liquid fuels derived from hydrocarbons; the relations among parties participating in hydrocarbon marketing, as well as with the State, OSINERGMIN, municipalities and private parties; quality and procedure for the volumetric measurement of liquid fuels and other hydrocarbon by-products; and safety conditions to be met by the facilities used for the storage, distribution, transportation and sale to the public of liquid fuels and other hydrocarbon by- products. 46

55 Environmental Laws Companies developing hydrocarbon activities in Peru must comply with a number of Peruvian regulations aimed to control, mitigate, rehabilitate and remediate the negative environmental impacts derived from hydrocarbon activities in order to obtain a sustainable development. Such regulations relate to environmental impact studies, maximum permissible levels applicable to air and water emissions, control of hazardous and solid wastes, noise environmental quality standards, recycling requirements, among others. The principal environmental law related to hydrocarbons is Supreme Decree EM which approved the Regulations for Environmental Protection in Hydrocarbons Activities Tax Regime As stated above, hydrocarbon activities include the exploration and exploitation of hydrocarbons, as well as their transportation, storage, refining, processing, distribution and marketing. Under the Hydrocarbon Law 26221, the License Contracts entered into with contractors for exploration and/or exploitation are subject to tax stability. The tax stability provided fixes the corporate income tax rate and regime applicable at the time the contract is signed. In addition, Peruvian tax laws provide additional benefits regarding value added tax recovery import tax exemptions, recognition of exploration costs as tax deductions and depreciation, among other things Electricity Market Regulation Peru s Electrical Concession Law, approved by Decree Law No , as amended, and its regulation, approved by Supreme Decree No EM, as amended, intend to guarantee a reliable and high-quality supply of electric power, in keeping with the needs of both society and the industry, based on the efficient use of resources and technologies available Principles Limits on Vertical Integration Peruvian Law provides that in an interconnected system the same company cannot simultaneously engage, directly or indirectly, in generation, transmission (in the main system), and distribution activities. Open Access to the Market The Electric Concession Law has established a system of concessions (temporary concessions for the study and design stages, and definitive concessions for the development and operation of a project) and authorizations for the performance of the different generating, transmission and distribution activities. A concession is required to operate hydroelectric and geothermal power generating facilities with an installed capacity of over 20 MW. An authorization is required for any thermoelectric generating activity, and for hydroelectric and geothermal generating activities when the installed capacity is under 20 MW but in excess of 500 kw. As regards transmission, a concession is required for both the main system and the secondary system. The same applies to distribution (when demand in the distribution system exceeds 500 kw). Pricing Regulations Generators can sell to non-regulated customers, consumers whose demand is 1 MW or greater and who are not distributors at freely negotiated prices. All other types of sales are considered regulated, which include the following: Sales of capacity and energy by generating companies to distribution companies, to be used for the public electricity service. Compensations to the titleholders of transmission systems. Transfers of capacity and energy between generating companies determined by COES (as defined below). Sales to the users of the public electricity service. 47

56 Economic Operation of Interconnected Systems Private Management A private committee, called COES, composed by the main generating and transmission companies, manages the interconnected systems. Within the interconnected system, the COES is in charge of scheduling the operations of the generating and transmission companies that form part of the system, guaranteeing the continuity, reliability and quality of electric power supply, at the lowest possible cost. Within this context, the COES discharges both technical functions, like scheduling the supply of energy and maintenance of generating and transmission facilities, as well as commercial functions, like appraising energy transfers on the spot market and allocating firm capacity. 13. Dividend Policy On 4 April 2007, the Board declared and agreed to pay the Interim Dividend conditional on, among other things, receipt by the Board of Initial Accounts which are prepared to an audit standard in accordance with the requirements of the Irish Companies Acts showing that the amount of Relevant Profits and Reserves of Maple Energy plc available for distribution are sufficient to pay the Interim Dividend as prescribed by the Irish Companies Acts. The Board resolved that in the event that the Relevant Profits and Reserves as shown in the Initial Accounts are not sufficient to pay the Interim Dividend, the amount of the Interim Dividend will be reduced proportionately to equal the amount of the Relevant Profits and Reserves as shown in the Initial Accounts. The Directors intend to devote the Company s cash resources to its exploration, production and development activities, refining and marketing operations, the Ethanol Project and operating certain aspects of Aguaytía Energy. Unless and until income and distributable reserves are generated, Maple Energy plc will not be in a position to pay any dividends. The Directors will consider Maple Energy plc s dividend policy further once Maple Energy plc is in a position to pay dividends. Further, Maple Energy plc anticipates that dividend payments to shareholders, if any, will be paid in US dollars. MCL has entered into Disbursement Agreements with a number of shareholders of Maple Energy plc whereby MCL has agreed to make certain disbursements in fixed amounts to such shareholders, which disbursements shall be repaid by such shareholders on demand, subject to the following terms. The shareholders obligations to repay the amounts pursuant to the disbursement agreements are limited to the proceeds of any dividends received from Maple Energy plc. Maple Energy plc and MCL have a right to off-set any amounts disbursed under the Disbursement Agreements against any dividends declared by Maple Energy plc until such amounts disbursed have been repaid in full. The Disbursement Agreements are not transferable or assignable. Each shareholder covenants not to transfer or dispose of its shares in Maple Energy plc without MCL s consent. 14. Details of the Placing Maple Energy plc, the Selling Shareholders, the Directors, Canaccord and Mirabaud have entered into the Placing Agreement pursuant to which Canaccord and Mirabaud have agreed, as agents for Maple Energy plc, to use its reasonable endeavours to procure subscribers for the Subscription Shares and as agents for the Selling Shareholders to procure purchasers of the Sale Shares. The Placing Agreement is conditional, inter alia, on Admission occurring by no later than 27 July Canaccord and Mirabaud have appointed BCP as a placing agent in Peru pursuant to an agency side letter entered into between them and BCP s wholly-owned subsidiary, Credibolsa SAB. The Placing will raise approximately $38.3 million (net of expenses) for the Company. On Admission Maple Energy plc will have 75,281,130 Ordinary Shares in issue and a market capitalisation of $ million at the Placing Price. Except for any dividend paid in relation to the Interim Dividend, the Subscription Shares will be issued credited as fully paid and will, when issued, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, paid or made after the date of issue. The Subscription Shares and Sale Shares represent approximately per cent and 7.84 per cent respectively of the Enlarged Issued Ordinary Share Capital. 48

57 Please note that the above figures are based on the assumption that all the Subscription Shares are subscribed for and issued and all the Sale Shares are sold. Further details of the Placing Agreement are set out in Section 12.2 of Part VI of this Document. 15. Admission, Settlement and Dealings Application will be made to the London Stock Exchange for the Ordinary Shares in issue and to be issued pursuant to the Placing to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings will commence on 13 July No temporary documents of title will be issued. All documents sent by or to a placee, or at his direction, will be sent through the post at the placee s risk. Pending the despatch of definitive share certificates, instruments of transfer will be certified against the register of members of the Maple Energy plc. 16. CREST CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by way of a written instrument. The Ordinary Shares will be admitted to CREST. Accordingly, settlement of transactions in the Ordinary Shares following Admission will continue to take place within the CREST system if the relevant Shareholder so wishes. The Articles provide for the transfer of shares in dematerialised form by way of a relevant system such as CREST. CREST is a voluntary system and Shareholders who wish to receive and/or retain share certificates may do so. 17. Takeover Rules Maple will be subject to the Irish Takeover Panel Rules and mandatory bid, squeeze-out and buy-out rules will apply Mandatory Bid The Irish Takeover Panel Rules will apply to Maple Energy plc. Under the Irish Takeover Panel Rules, if an acquisition of Ordinary Shares were to increase the aggregate holding of the acquirer and its concert parties to Ordinary Shares carrying 30% or more of the voting rights in Maple Energy plc, the acquirer and, depending on the circumstances, its concert parties would be required (except with the consent of the Irish Takeover Panel) to make an offer for the outstanding shares at a price not less than the highest price paid for the Ordinary Shares by the acquirer or its concert parties during the previous 12 months. This requirement would also be triggered by an acquisition of shares by a person holding (together with its concert parties) shares carrying between 30% and 50% of the voting rights in Maple Energy plc if the effect of such acquisition were to increase that person s percentage of the voting rights by 0.05% Squeeze-Out Under the Companies Acts, if an offeror were to acquire 80% of the Ordinary Shares within four months of making its offer, it could then compulsorily acquire the remaining 20%. It would do so by sending a notice to outstanding shareholders telling them that it will compulsorily acquire their shares and then, unless the High Court of Ireland determine otherwise, one month later it would execute a transfer of the outstanding shares in its favour and pay the consideration to Maple Energy plc, which would hold the consideration on trust for the outstanding shareholders. Where the offeror already owns more than 20% of Maple Energy plc at the time that the offeror makes an offer for the balance of the shares, then the compulsory acquisition rights only apply if the offeror acquires at least 80% of the remaining shares which also represent at least 75% in number of the holders of the accepting shareholders Buy-Out The Companies Acts also give minority shareholders in Maple Energy plc a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all of the Ordinary Shares in Maple Energy plc and at any time before the end of the period within which the offer could be accepted, the offeror held or had agreed to acquire not less than 49

58 80 percent of the Ordinary Shares, any holder of shares to which the offer related who had not accepted the offer could by written communication to the offeror require it to acquire those shares. The offeror would be required to give any shareholder notice of his rights to be bought out within one month of that notice arising Irish Merger Control Legislation Under Irish merger control legislation, any person or entity proposing to acquire direct or indirect control of Maple Energy plc through the acquisition of Ordinary Shares or otherwise must, subject to various exceptions and if various financial thresholds are met or exceeded, provide advance notice of such acquisitions to the Irish Competition Authority. Failure to notify properly is an offence under Irish law. The Competition Act, 2002 of Ireland, as amended, defines control as existing if, by reason of securities, contracts or any other means, decisive influence is capable of being exercised with regard to the activities of a company. Under Irish law, any transaction subject to the mandatory notification obligation set out in the legislation (or any transaction which has been voluntarily notified to the Irish Competition Authority) will be void, if put into effect before the approval of the Irish Competition Authority is obtained or before the prescribed statutory period following notification of such transaction lapses without the Irish Competition authority having made an order Disclosure Requirements and Notification of Interests in Shares Under Irish company law, where any person acquires an interest in 5% or more of the issued voting share capital of any class of an Irish public limited company, such person must notify the company in the prescribed manner and normally within five business days, of his interest and of certain information relating to that interest. Notification must also be made of any change in the percentage level of a person s interest above 5% and any reduction to his or her interest to less than 5%. Any interest, whether direct or through a spouse, minor child or company which the person in question is deemed to control or, in certain circumstances, other persons with whom he is acting in concert, would be regarded as an interest in shares for this purpose. Failure to notify punctually and properly is an offence under Irish company law. Additionally, Irish law provides that no right or interest whatsoever in respect of any of the relevant shares will be enforceable, whether directly or indirectly, by action or legal proceeding by the person having such an interest should they fail to notify the company of such interest. Application may be made to the Irish High Court to remove this restriction, and if the court is satisfied that the failure to notify was accidental or due to inadvertence or that it is just and equitable to grant relief then the Court may grant such relief as it sees fit. The company is obliged to keep a register showing all notifications received and to keep it open for inspection by the public. Under the Maple Energy plc Articles, Shareholders holding 3% or more of the issued share capital of Maple Energy plc at any time are required to notify their interests in Maple Energy plc to Maple Energy plc on the business day following such shareholder increasing or decreasing such holding through any single percentage. 18. Corporate Governance Maple Energy plc will not be subject to the Combined Code on Corporate Governance applicable to companies listed on the London Stock Exchange. Maple Energy plc does, however, intend, in so far as is practicable and desirable given the size and nature of Maple Energy plc and the constitution of the Board, to comply with the Corporate Governance Guidelines for AIM Companies (the QCA Guidelines ) as published by the Quoted Companies Alliance (the QCA ). The QCA Guidelines were devised by the QCA, in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. An alternative code was proposed because the QCA considered the Combined Code on Corporate Governance to be inappropriate to many AIM companies. The QCA Guidelines state that the purpose of good corporate governance is to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term. The guidelines set out a code of best practice for AIM companies. Those guidelines require, among other things, that: (a) certain matters be specifically reserved for the board s decision; 50

59 (b) the board should be supplied in a timely manner with information (including regular management financial information) in a form and of a quality appropriate to enable it to discharge its duties; (c) the board should, at least annually, conduct a review of the effectiveness of Maple s system of internal controls and should report to shareholders that they have done so; (d) the roles of chairman and chief executive should not be exercised by the same individual or there should be a clear explanation of how other board procedures provide protection against the risks of concentration of power within the company; (e) a company should have at least two independent non-executive directors of the board and should not be dominated by one person or group of people; (f) all directors should be submitted for re-election at regular intervals subject to continued satisfactory performance; (g) the board should establish audit, remuneration and nomination committees; and (h) there should be a dialogue with shareholders based on a mutual understanding of objectives. The Board consists of three Executive Directors and three Non-executive Directors being Jack W. Hanks, the Chairman of the Board and an Executive Director, Rex W. Canon, the Chief Executive Officer and an Executive Director, Carlos A, de la Guerra Sison, the Senior Vice President and an Executive Director, Nigel B. Christie, an Independent Non-Executive Director, Gianfranco Castagnola Zúñiga, a Non-Executive Director and Carlos Enrique A. Palacios Rey, an Independent Non-Executive Director. Major corporate decisions of the Company are subject to Board approval. These matters include approval of the Company s general commercial strategy, trading and capital budgets, financial statements, Board membership, significant acquisitions and disposals, major capital expenditures and risk management and treasury policies. In accordance with the QCA Guidelines, the Board will establish audit, remuneration and nomination committees, as described below, and will utilise other committees as necessary in order to ensure effective governance. The initial members of the audit committee will be Nigel B. Christie, Gianfranco Castagnola Zúñiga and Carlos Enrique A. Palacios Rey, and it will be chaired by Nigel B. Christie. The audit committee s responsibilities include, among other things, reviewing financial statements, accounting policies, internal controls and overseeing the relationship with external auditors. The initial members of the remuneration committee will be Rex Canon, Carlos Enrique A. Palacios Rey and Carlos de la Guerra Sison, and it will be chaired by Rex Canon. The remuneration committee s responsibilities include, among other things, determining the policy on remuneration provided, however, that no director shall be directly involved in any decisions as to their own remuneration. The initial members of the nomination committee will be Jack Hanks, Rex Canon, and Gianfranco Castagnola Zúñiga and it will be chaired by Jack Hanks. The nomination committee s responsibilities include, among other things, reviewing the composition of the Board and making recommendations to the Board with regard to any changes. Maple Energy plc has adopted a model code for directors dealings that is appropriate for an AIM company. Maple Energy plc intends to comply with Rule 21 of the AIM Rules relating to director s dealings and will take all reasonable steps to ensure compliance by the Directors and Maple s applicable employees and their relative associates. Taxation The attention of investors is drawn to Section 14 of Part VI of this document. 19. Additional Information Your attention is drawn to Part II of this document, which contains summaries of the concession agreements in respect of each of the blocks, Part III of this document, which contains risk factors relating to any investment in the Company, Part IV of this document which contains the Competent Person s Reports in respect of the Company s oil and gas assets and reserves and Part V of this document which contains financial information on Maple, as well as further additional information on Maple in Part VI of this document. 51

60 20. Overseas Shareholders If you are in any doubt as to your taxation position, or if you are resident in any jurisdiction other than the United Kingdom, you are advised to consult a professional adviser immediately. 52

61 PART II Concession Agreements 1. License Contract for Exploitation of Hydrocarbons in Block 31-B and 31-D (the 31-B and 31-D Licence ) 1.1 General 1.2 Term The 31-B and 31-D Licence is dated March 30, 1994 and is between Perupetro and Maple Gas, with the participation of Maple Resources Corporation (the Corporate Guarantor ) and the Central Reserve Bank of Peru (the BCR ). The 31-B and 31-D Licence authorizes Maple Gas to conduct all activities and operations concerned with the exploration, exploitation, recovery and production of hydrocarbons, as well as the transportation and storage of hydrocarbons, extracted from Blocks 31-B and 31-D (the Contract Area ). Pursuant to Peruvian law, hydrocarbons in situ are the property of Peru. However, Maple Gas shall hold ownership rights over any hydrocarbons it extracts from the Contract Area, in consideration for the payment of a cash royalty to Perupetro. The 31-B and 31-D Licence is for an initial term of twenty (20) years, which is extendable to thirty (30) years for oil and up to forty (40) years, for the exploitation of non-associated natural gas, if Maple Gas so reasonably requests. 1.3 Supervisory Committee The performance of operations under the 31-B and 31-D Licence is managed by the supervisory committee which consists of three (3) members representing Maple Gas and three (3) members representing Perupetro. The supervisory committee has, amongst other things, the following duties: (a) (b) (c) to exchange and discuss information relating to 31-B and 31-D Licence operations; carry out technical and accounting supervision of 31-B and 31-D Licence operations; and oversee compliance with all obligations related thereto. 1.4 Royalty Maple Gas must pay cash royalties on a fortnightly basis in each calendar month. This royalty payment must be made in U.S. Dollars and paid by the second business day following the expiration of the applicable fortnight. If Maple Gas fails to make either part or full payment of the royalty, Perupetro may immediately withhold production volumes which are necessary to cover the outstanding royalty amount due plus any applicable interest. The royalty, with respect to liquid hydrocarbons, is calculated by multiplying the amount of the fortnightly production by the appropriate royalty percentage and by the international basket price using the table below: Value of crude petroleum basket $/barrel Percentage of Royalty per field % % % The crude basket is made up of an average of the value of WTI Midland, Forties, and BQ of Nigeria posted crudes in Platt s Oilgram Price Report. For intermediate values of the crude basket the percentage of royalty is calculated by linear interpolation between these values. Where the value of the crude petroleum basket exceeds $35.00 per barrel, the calculation of the royalty percentage will be determined using the following formula: Y = * X Where, X = absolute value of the basket of crudes and Y = the royalty percentage. 53

62 The royalty, with respect to natural gas, is calculated by multiplying the amount of the fortnightly production by the appropriate royalty percentage and by a price based on 10% of the residual basket price: Value of residual petroleum No. 6 basket $/barrel Percentage of Royalty per field % % % The residual basket is made up of 90% of the value of Residual Petroleum No. 6, 1.0% maximum sulphur plus 10% of the value of Residual Fuel Oil No 6, 0.7% maximum sulphur posted in Platt s Oilgram Price Report under U.S. Gulf Coast Waterborne. Where the value of the residual petroleum No. 6 basket exceeds $24.50 per barrel, the calculation of the royalty percentage will be determined using the following formula: Y = * X Where, X = absolute value of the basket of residual petroleum No.6 and Y = the royalty percentage. Maple Gas and Perupetro have amended the royalty regime. Ongoing royalties will be subject to a cap of 30% and 50% for crude oil production in the Agua Caliente field and Maquía fields respectively. 1.5 Default If either Perupetro or Maple Gas defaults on the payment of an outstanding amount, such outstanding amount shall be subject to the following interest rates: (a) for accounts denominated and payable in Peruvian Neuvo Sol, the maximum effective rate quoted by the BCR for credit terms of up to three hundred and sixty days, and in force during the outstanding payment period; or (b) for accounts denominated in U.S. Dollars and payable in national currency or U.S. Dollars, the preferential interest rate or prime rate quoted by The Chase Manhattan Bank, N.A. (currently JPMorganChase), New York, during the outstanding payment period plus three (3) percentage points. 1.6 Taxes Maple Gas is subject to the common tax regime. The Peruvian State guarantees the benefit of tax stability for the operations carried out under the 31-B and 31-D Licence. Maple Gas is, therefore, subject to the tax regime in force as of March 30, 1994, which guarantees a tax rate of 30%. 1.7 Foreign Exchange Pursuant to the guarantee of Maple Gas s foreign exchange rights granted by BCR, Maple Gas has the freedom to acquire, exchange, maintain and dispose of local or foreign currency with absolute freedom. 1.8 Assignment Maple Gas is entitled to assign, in whole or in part, its interest under the 31-B and 31-D Licence provided that it notifies Perupetro of the financial and technical capability of the proposed assignee to perform operations under 31-B and 31-D Licence and Perupetro consents to the assignment. 1.9 Abandonment Obligations and Environmental Liabilities Maple Gas is under an obligation to comply with the environmental and abandonment obligations set out in the environmental laws of Peru, the 31-B and 31-D Licence and its PAMA environmental plan, failure of which may result in OSINERGMIN imposing sanctions on Maple Gas or the termination of the 31-B and 31-D Licence. Abandonment obligations only arise in respect of wells drilled by Maple Gas. 54

63 1.10 Relinquishment Rights If any field stops producing petroleum for a period of 120 or more consecutive days, field ownership will revert to Perupetro, with Maple Gas retaining no abandonment obligations. Maple Gas is entitled to relinquish certain areas of Block 31-B or Block 31-D to Perupetro, upon 30 days written notice, without penalty or charge Governing Law and Dispute Resolution The 31-B and 31-D Licence is governed by Peruvian law. Any dispute that is not settled by mutual agreement between the parties shall be submitted to arbitration under the Rules of Procedure of the Inter-American Commercial Arbitration Commission effective as of March 30, Both Perupetro and Maple Gas have waived filing appeals before judicial courts in order to challenge the arbitral award (except for lack of due process) and have waived any diplomatic claim Termination The 31-B and 31-D Licence is terminable in the following instances: (a) by the express agreement of Perupetro and Maple Gas; (b) upon expiration of the contractual term; (c) if Maple Gas or its parent company are declared bankrupt in Peru or abroad, except where Perupetro and Maple Gas agree otherwise; or (d) in the event that the guaranty furnished by the Corporate Guarantor ceases to be effective. Upon expiration of the 31-B and 31-D Licence, Maple Gas shall transfer title to Perupetro, at no charge or cost, of all camps, buildings, and other permanent facilities located within the Contract Area. 2. License Contract for the Exploration and Exploitation of Hydrocarbons in Block 31-E (the 31-E Licence ) 2.1 General The 31-E Licence is dated March 6, 2001 and is between Perupetro and Maple Production, with the participation of Maple Gas and the BCR. The 31-E Licence authorises Maple Production to conduct all activities and operations concerned with the exploration, exploitation, recovery and production of hydrocarbons extracted from Block 31-E (the Contract Area ). Pursuant to Peruvian law, hydrocarbons in situ are the property of the State. However, Maple Production shall hold ownership rights over any hydrocarbons it extracts from the Contract Area, in consideration for the payment of a cash royalty to Perupetro. 2.2 Term The 31-E Licence is for an initial term of thirty (30) years, which is extendable to forty (40) years, for the exploitation of non-associated natural gas, if Maple Production so reasonably requests. On April 5, 2006, the 31-E Licence was amended to divide the exploration phase into the following 4 periods: (a) the first period comprising 24 months from the date of signature of the 31-E Licence; (b) the second period comprising 26 months from the end of the first period; (c) the third period comprising 17 months from the end of the second period; and (d) the fourth period comprising 17 months from the end of the third period. Accordingly, the term for the exploitation phase shall equal the remainder of years from expiration of the exploration phase to the end of the thirty (30) year term. 55

64 2.3 Minimum Work Program In accordance with the amendment dated April 5, 2006, the minimum work program for each of the four exploration phase periods was established as follows: (a) first period: integral seismic evaluation and one exploration well; (b) second period: one exploration well or 126 work units; (c) third period: one exploration well or 126 work units; and (d) fourth period: one exploration well or 126 work units. Work units are defined in an annex to the contract which includes other exploration activities such as performing various kinds of seismic. 2.4 Guaranties In accordance with the amendment dated April 5, 2006, guaranties for the works committed for each of the four exploration phase periods are as follows: (a) first period: bank guaranty for $250,000; (b) second period: bank guaranty for $200,000; (c) third period: bank guaranty for $150,000; and (d) fourth period: bank guaranty for $150, Royalty Maple Production shall pay a cash royalty calculated on the value of the production of fiscalised hydrocarbons extracted from the Contract Area. The percentages of royalties payable in respect of produced crude petroleum was amended on February 11, 2003 to provide for a 30% royalty discount (applicable for 5 years) should Maple Production make a discovery of crude petroleum within 4 years of the amendment. However, once Maple declares a commercial discovery it must elect one of the following methodologies to determine its future royalty payments: (a) Scales of Production Methodology The royalty percentage for liquid hydrocarbons and natural gas, for each valuation period, would be applied according to the following table: Fiscalised Production (Mbd) Royalty Percentage 5 5% % % When the total average of liquid hydrocarbons and natural gas liquids is less than or equal to 5 Mbd, a royalty percentage of 5% will be applied. When said average is equal to or higher than 100 Mbd, a royalty percentage of 20% will be applied and an appropriate royalty percentage shall be obtained by applying the linear interpolation method for production rates between the 5 Mbpd and 100 Mbpd. The total royalty payable shall equal the sum of the total production of petroleum, natural gas liquids and condensates, in the valuation period, multiplied by the appropriate royalty percentage. Natural gas barrels will be equivalent to the total volume of natural gas expressed in standard cubic feet divided by a factor of (b) Economic Result Methodology The royalty percentage shall be calculated by adding a variable royalty, to be determined according to an R factor to an existing fixed 5% royalty percentage. The R factor shall be determined according to the revenue and the expenditure of Maple Production. The price of each hydrocarbon shall be determined according to a crude petroleum basket, a condensates basket and a natural gas liquids basket. The products that shall form part of each basket shall be determined by Perupetro and Maple Production 90 days in advance of the date of initial commercial extraction. 56

65 In accordance with the amendment dated April 5, 2006, it was agreed that production from wells which existed in Block 31-E fields prior to entry into the 31-E Licence will be subject to a flat 15% royalty percentage. The value of the Pacaya crude is based on the average of the value of Caño Limón, Mesa30 and Forcados posted in Platt s Oilgram Price Report. Payment of royalties shall be made in U.S. Dollars by the second business day following the end of the applicable valuation period. If Maple Production fails to make part or full payment of the royalty, Perupetro may immediately withhold production volumes which are necessary to cover the outstanding royalty amount due plus any applicable interest. 2.6 Taxes Maple Production is subject to the common tax regime. The Peruvian government guarantees the benefit of tax stability for the operations carried out under the 31-E License. Maple Production is, therefore, subject to the tax regime in force as of March 6, 2001, which guarantees a tax rate of 22%. 2.7 Foreign Exchange Pursuant to the guarantee of Maples Production s foreign exchange rights granted by BCR, Maple Production has the freedom to acquire, exchange, maintain and dispose of local or foreign currency with absolute freedom. 2.8 Assignment Maple Production is entitled to assign, in whole or in part, its interest in the 31-E License, provided that it notifies Perupetro of the financial and technical capability of the proposed assignee to perform operations under the 31-E Licence and Perupetro consents to the assignment. 2.9 Abandonment Obligations and Environmental Liabilities Maple Production as is under an obligation to comply with the environmental and abandonment obligations set out in the environmental laws of Peru and the 31-E Licence, failure of which may result in OSINERGMIN imposing sanctions on Maple Gas or the termination of the 31-E Licence. Abandonment obligations only arise in respect of wells drilled by Maple Production Relinquishment Rights Provided Maple Production has completed its minimum work obligations under the exploration phase to the reasonable satisfaction of Perupetro, Maple Production is entitled to relinquish certain areas of Block 31-E to Perupetro, upon 30 days written notice, without penalty or charge Governing Law and Dispute Resolution The 31-E Licence is governed by Peruvian law. Any dispute that is not settled by mutual agreement between Perupetro and Maple Production shall be submitted to international arbitration under the rules of the International Chamber of Commerce. The parties have waived the filing of any appeals intended to challenge the arbitral award (except for lack of due process) and any diplomatic claim Termination The 31-E Licence is terminable in the following instances: (a) by the express agreement of Perupetro and Maple Production; (b) upon expiration of the contractual term; or (c) if Maple Production or its parent company are declared bankrupt in Peru or abroad, except where Perupetro and Maple Producton agree otherwise. Upon expiration of the 31-E Licence, Maple Production shall transfer title to Perupetro, at no charge or cost, of all camps, buildings, and other permanent facilities needed for the oil exploitation. 57

66 3. License Contract for the Exploitation of Hydrocarbons in Block 31-C (the 31-C Licence ) 3.1 General The 31-C Licence is dated March 30, 1994 and is between Perupetro and Aguaytía Energy del Peru S.R.L. ( Aguaytía Peru ), with the participation of Aguaytía Energy, LLC and Perú Energy Holdings, LLC (the Corporate Guarantors ) and the BCR. The 31-C Licence authorizes Aguaytía Peru to conduct all activities concerned with the exploration, recovery and production of hydrocarbons, as well as the transportation and storage of hydrocarbons, extracted from Block 31-C (the Contract Area ). Pursuant to Peruvian law, hydrocarbons in situ are the property of Peru. However, Aguaytía Peru shall hold ownership rights over any hydrocarbons it extracts from the Contract Area, in consideration for the payment of a cash royalty to Perupetro. 3.2 Term The 31-C Licence is for an initial term of thirty (30) years, which is extendable to forty (40) years, for the exploitation of non-associated natural gas if Aguaytía Peru so reasonably requests. 3.3 Supervisory Committee The performance of operations under the 31-C Licence is managed by the supervisory committee which consists of three (3) members representing Aguaytía Peru and three (3) members representing Perupetro. The supervisory committee has, amongst other things, the following duties: (a) to exchange and discuss information relating to 31-C Licence operations; (b) carry out technical and accounting supervision of 31-C Licence operations; and (c) oversee compliance with all obligations related thereto. 3.4 Royalty Aguaytía Peru must pay cash royalties on a fortnightly basis in each calendar month. This royalty payment must be made in U.S. Dollars and paid by the second business day following the expiration of the applicable fortnight. If Aguaytía Peru fails to make either part or full payment of the royalty, Perupetro may immediately withhold production volumes which are necessary to cover the outstanding royalty amount due, plus any applicable interest. The royalty, with respect to liquid hydrocarbons, is calculated by multiplying the amount of the fortnightly production by the appropriate percentage using the table below: Value of crude petroleum basket $/barrel Percentage of Royalty per field % % % The crude basket is made up of an average of the value of WTI Midland, Forties, and BQ of Nigeria posted crudes in Platt s Oilgram Price Report. For intermediate values of the crude basket the percentage of royalty is calculated by linear interpolation between these values. Where the value of the crude petroleum basket exceeds $35.00 per barrel, the calculation of the royalty percentage will be determined by the following formula: Y = * X Where, X = absolute value of the basket of crudes and Y = the royalty percentage. The price used for calculating the royalty with respect to the production of LPG is based on the actual sales price of LPG less the cost of fractionation and transportation. The price used for calculating the royalty with respect to the production of natural gasoline is based on the price of the crude petroleum basket. 58

67 The royalty, with respect to natural gas, is calculated by multiplying the amount of the fortnightly production by the appropriate royalty percentage and by a price based on 10% of the residual basket price: Value of residual petroleum No. 6 basket $/barrel Percentage of Royalty per field % % % The residual basket is made up of 90% of the value of Residual Petroleum No. 6, 1.0% maximum sulphur and 10% of the value of Residual Petroleum No. 6, 0.7% maximum sulphur posted in Platt s Oilgram Price Report under U.S. Gulf Coast Waterborne. Where the value of the residual petroleum No. 6 basket exceeds $24.50 per barrel, the calculation of the royalty percentage will be determined using the following formula: Y = * X Where, X = absolute value of the basket of residual petroleum No. 6 and Y = the royalty percentage. Furthermore, if the volume of fiscalised natural gas each fortnight exceeds the equivalent of 12,500 MMBTU per day, a discount of 23% will be applied to the applicable royalty payment for those amounts over the 12,500 MMBTUs per day, subject to a minimum royalty of 12.5%. 3.5 Taxes Aguaytía Peru is subject to the common tax regime. The Peruvian government guarantees the benefit of tax stability for the operations carried out under the 31-C Licence. Aguaytía Peru is, therefore, subject to the tax regime in force as of March 30, 1994, which guarantees a rate of 30%. 3.6 Assignment Aguaytía Peru is entitled to assign, in whole or in part, its interest under the 31-C Licence provided that it notifies Perupetro of the financial and technical capability of the proposed assignee to perform operations under 31-C Licence and Perupetro consents to the assignment. 3.7 Abandonment Obligations and Environmental Liabilities Aguaytía Peru is under an obligation to comply with the environmental and abandonment obligations set out in the environmental laws of Peru and the 31-C Licence, failure of which may result in OSINERGMIN imposing sanctions on Aguaytía Peru or the termination of the 31-C Licence. Abandonment obligations only arise in respect of wells drilled by Aguaytía Peru. 3.8 Relinquishment Rights If the field stops producing petroleum for a period of 120 or more consecutive days, field ownership will revert to Perupetro, with Aguaytía Peru retaining no abandonment obligations. Aguaytía Peru is entitled to relinquish certain areas of Block 31-C to Perupetro, upon 30 days written notice, without penalty or charge. 3.9 Governing Law and Dispute Resolution The 31-C Licence is governed by Peruvian law. Any dispute that is not settled by mutual agreement between the parties shall be submitted to arbitration under the Rules of Procedure of the Inter-American Commercial Arbitration Commission effective as of March 30, Both Perupetro and Aguaytía Peru have waived filing appeals before judicial courts in order to challenge the arbitral award (except for lack of due process) and have waived any diplomatic claim. 59

68 3.10 Termination The 31-C Licence is terminable in the following instances: (a) by the express agreement of Perupetro and Aguaytía Peru; (b) upon expiration of the contractual term; (c) if Aguaytía Peru or its parent company are declared bankrupt in Peru or abroad, except where Perupetro and Aguaytía Peru agree otherwise; or (d) in the event that the guaranty furnished by the Corporate Guarantors ceases to be effective. Upon expiration of the 31-C Licence, Aguaytía Peru shall transfer title to Perupetro, at no cost or charge to Perupetro, of all camps, buildings, and other permanent facilities located within the Contract Area. 60

69 PART III Risk Factors An Investment In Maple Is Highly Speculative And Involves A High Degree Of Risk. An investment in the Ordinary Shares is suitable only for individuals who are financially able to withstand a complete loss of their investment. The business activities in which Maple are engaged are highly speculative. Therefore, in addition to the other relevant information set out in this document, the following specific factors should be considered carefully in evaluating whether to make an investment in Maple.The following risks could materially and adversely affect Maple s business, financial condition or results of operations. If any of the events described below were to occur, the trading price of the Ordinary Shares could decline and investors could lose part or all of any investment in Maple. Prospective investors should consider carefully whether investment in the Ordinary Shares is suitable for them in light of the risks associated with such investment, including the risks specified in this document, and their personal circumstances. Investors are advised to consult an independent financial adviser authorised under FSMA and who specialises in advising on the acquisition of shares and other securities before making a decision to invest. The risks described below do not necessarily comprise all those faced by Maple and are not presented in any assumed order of priority. Risks related to Maple s Business Maple s development operations require substantial capital expenditures. Maple may be unable to obtain needed capital or financing on satisfactory terms or otherwise, which could materially adversely affect the business, prospects and financial condition of Maple. The industry in which Maple operates is capital intensive. Maple makes and expects to continue to make substantial capital expenditures relating to the development, production and exploration of reserves in Block 31-B, Block 31-D, Block 31-E and the Aguaytía Deep Prospect, capital improvement of its existing facilities (including upgrades relating to the Pucallpa Refinery and Sales Plant) and for other strategic growth projects such as the Ethanol Project. These expenditures will reduce Maple s cash available for operations. To date, Maple has financed capital expenditures primarily with proceeds from cash flow from operations and bank borrowings. Maple intends to finance future capital expenditures with cash flow from operations, financing arrangements, and in the case of the Ethanol Project, a combination of debt and equity from banks and equity partners, respectively. If Maple s revenues decrease as a result of lower commodity prices, operating difficulties, declines in production or sales or for any other reason, Maple may have limited ability to obtain the capital necessary to sustain operations at current levels or pursue certain projects or activities described above or other growth projects. If additional capital is needed, Maple may not be able to obtain debt or equity financing on favourable terms, or at all. If cash generated by operations or available under the debt instruments is not sufficient to meet capital requirements, the failure to obtain additional financing could result in a curtailment of Maple s operations relating to the execution of Maple s business strategy, which in turn could lead to a possible decline in overall revenues. The majority of Maple s and Aguaytía Energy s assets are operated under lease agreements or concession arrangements and any termination, expiration or suspension of these agreements would have a material adverse impact on Maple s business and results of operations. Each of Maple s and Aguaytía Energy s principal assets is subject to a lease or concession agreement with the government of Peru, one of its agencies or the state-owned energy company. Specifically, the Pucallpa Refinery and Sales Plant is operated through a lease with Petroperú for a 20 year term, ending in 2014, which can be extended. In addition, each of Maple s and Aguaytía Energy s production and exploration rights for Block 31-B, Block 31-D, Block 31-E and Block 31-C, respectively, are governed by concessions awarded by the Peruvian government. These concessions are also subject to expiration based on the terms of the agreements with Blocks 31-B & 31-D coming due in 2014 extendable to 2024, Block 31-C coming due in 2024 extendable to 2034 and Block 31-E coming due in 2031 extendable to It is also possible that the Peruvian government may unilaterally terminate any of these lease or concession arrangements, despite the lack of authority to do so under the terms of such agreements. Any failure to extend these agreements, or the termination of such arrangements could have a material adverse impact on Maple s business and results of operations. 61

70 Royalty payments under Maple s and Aguaytía Energy s concession arrangements may substantially increase and cause each entity s production operations to become uneconomic. Each of Maple and Aguaytía Energy are required to make royalty payments with respect to production from each of their producing blocks. These royalty payments are adjustable and are principally altered based on baskets of international hydrocarbon prices. Therefore, as these baskets of international hydrocarbon prices increase, the royalty payments due under the various concession arrangements will also increase. It is conceivable, depending on how significant the increase in oil prices, that the royalty obligations will become too punitive and therefore cause Maple or Aguaytía Energy to suspend production operations. Maple and the Peruvian government recently established a maximum percentage royalty payment under the Block 31-B and 31-D Licence. Notwithstanding Maple s recent success in negotiation such maximum obligations on Block 31-B and 31-D, there can be no assurance that any such existing or future agreement will eliminate the risk of potentially punitive royalties imposed by the Peruvian government on any of Maple s license blocks. Any cessation of production or increasing royalty payments by Maple or Aguaytía Energy may have a material adverse impact on Maple s business or results of operations. The Ethanol Project may not be completed or result in revenue or cash flow increases, may be subject to significant cost overruns and is subject to financing, regulatory, environmental, political, legal and economic risks, which could adversely affect Maple s business, operating results, cash flows and financial condition. Maple plans to grow its business through the Ethanol Project. This project involves, among other things, numerous financing, regulatory, environmental, political, legal and economic uncertainties beyond our control, which could cause delays in construction or require the expenditure of significant amounts of capital, which we may finance with additional indebtedness or by issuing additional equity securities. As a result, this project may not be completed at the budgeted cost, on schedule or at all. Any failure by Maple to complete the Ethanol Project in accordance with the terms, estimated costs and time schedules as described in Section 4.5 of Part 1 of this document could have a material adverse affect on Maple s business, results of operations and financial condition. Maple may be forced to sell its interest in Aguaytía Energy if certain equity interests in the Maple shareholder of Aguaytía Energy, The Maple Gas Development Corporation, are not maintained by named individuals. Maple holds its interest in Aguaytía Energy through The Maple Gas Development Corporation, a Cayman Islands company, which is indirectly controlled by Rex Canon, Tony Hines, Jack Hanks and Carlos de la Guerra. Pursuant to the terms of the limited liability company agreement governing Aguaytía Energy, in order to prevent Aguaytía Energy s other shareholders from having an exercisable option to acquire the interest that Maple holds in Aguaytía Energy, Rex Canon, Tony Hines, Jack Hanks and Carlos de la Guerra must maintain, directly or indirectly, at least (i) 51% of the issued and outstanding voting equity interests of The Maple Gas Development Corporation (or 25% of such issued and outstanding equity interest if no single person, other than such individuals, owns more than 5% of the balance of such equity interests) and (ii) 25% of the rights to distribution in respect of the issued and outstanding equity interests of The Maple Gas Development Corporation. These shareholders, however, have structured their holdings such that their ownership in The Maple Gas Development Corporation will not fall below the thresholds described above to trigger any rights by third parties to acquire Maple s interest in Aguaytía Energy immediately following the consummation of this offering. Thus, should these individuals cease to maintain such shareholding, for example by diluting their shareholdings sufficiently upon a fundraising or rights offering in Maple or any of Maple s applicable subsidiaries, the interest of The Maple Gas Development Corporation in Aguaytía Energy may be acquired for a fair market value by Aguaytía Energy s other shareholders which would materially adversely affect the business, financial condition and results of operations of Maple. Oil and natural gas prices fluctuate widely, and lower prices for an extended period of time are likely to have a material adverse impact on the Maple s business. Maple s revenues, profitability and future growth are materially impacted by prevailing prices for hydrocarbons. Specifically, Maple s earnings and cash flows from operations depend on the margin above fixed and variable expenses (including the cost of refinery feedstocks) at which it is able to sell refined products. In addition, lower prices and in some instances higher prices may reduce the amount of crude oil and natural gas that Maple and Aguaytía Energy can economically produce. In the case of high oil prices the escalating nature of Maple s royalty obligations subject to adjustment based on increasing international 62

71 crude oil prices, may create circumstances under which the royalty payments due exceed the revenues from production. Prices for hydrocarbons may fluctuate widely in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and a variety of additional factors that are beyond Maple s control, such as: the domestic and foreign supply of oil and natural gas; demand for crude oil and refined products, especially in the U.S., China and India; the price and level of foreign imports; the level of consumer product demand; local factors, including market conditions and weather conditions; overall domestic and global economic and political condition particularly in significant oil producing regions such as the Middle East, West Africa and Latin America; domestic governmental regulations and taxation; accidents, interruptions in transportation, or other events that can cause unscheduled shutdowns or otherwise adversely affect Maple s equipment, plants or machinery, or those of its suppliers or customers; the impact of energy Organisation of Petroleum Exporting Countries to agree to and maintain oil price and production controls; the proximity and capacity of oil and natural gas pipelines and other transportation facilities; the price, development, marketing and availability of alternative fuels, including ethanol; the effects of terrorist acts; and the nature of Maple s refinery business which requires it to store quantities of refinery feedstocks and refined product inventories; if the market value of Maple s refinery feedstocks or refined products were to significantly decline such decline could materially adversely affect Maple s business and results of operations. In addition, the volatility in costs of fuel and other utility services, principally electricity, used by the Pucallpa Refinery and Sales Plant and Aguaytía Energy s gas processing and fractionation facilities affects operating costs. Fuel and utility prices have been, and will continue to be, affected by factors outside Maple s control, such as supply and demand for fuel and utility services in both local and regional markets. The dangers inherent in Maple s operations could cause disruptions at any of our facilities or in other areas of operations and could expose Maple to potentially significant losses, costs or liabilities. Maple s operations are subject to significant hazards and risks inherent in exploration and production, transportation, processing, and refining and marketing operations. These hazards and risks include, but are not limited to, the following: natural disasters; fires; explosions; pipeline ruptures and spills; third-party interference, including civil strikes; disruptions of electricity deliveries; and mechanical failure of equipment at Maple s facilities, Aguaytía Energy s facilities, proposed Ethanol Project facilities or third-party facilities. Any of the foregoing could result in production and distribution difficulties and disruptions, environmental pollution, personal injury or wrongful death claims and other damage to Maple s properties, the properties of others and Maple s business operations. There is also a risk of mechanical failure and equipment shutdowns both in general and following unforeseen events. Furthermore, in such situations, undamaged assets or operations may be dependent on or interact with damaged sections of Maple s assets or operations and, accordingly, are also subject to being shut down. 63

72 If Maple is unable to complete a proposed internal reorganisation of certain of its Peruvian subsidiaries in a timely manner, or at all, or realise the financial and accounting benefits of such reorganisation, Maple s financial condition may be adversely affected. Maple intends to complete an internal reorganisation of certain of its Peruvian subsidiaries during 2007 to effectively and advantageously manage the accounting between several of its ongoing projects. Specifically, Maple intends to reorganise entities and modify its Block 31-E License Contract in order to offset expenses incurred with its Block 31-E operations against revenues generated from Maple s refinery and sales activities. There can be no assurance that Maple will be successful in effecting the proposed restructuring or implementing the advantageous changes resulting from such reorganisation. If Maple is unable to complete this reorganisation in a timely manner, or at all, these benefits will not be realised which could have a material adverse affect on Maple s financial condition. In addition, if legislative, regulatory or other administrative pronouncements impede Maple s ability to implement the perceived accounting advantages that the restructuring may provide, Maple s financial condition and results of operations may be materially adversely affected. Maple benefits from maintaining good relations with the Peruvian government and national energy companies in Peru. Maple has established good relations with the Peruvian government and national energy companies. The continued success of Maple s business and the effective operation of its assets is dependent, to some extent upon such continued good relations and co-operation. For example, Maple recently was successful in completing negotiations with the national government of Peru relating to, among other things, capping Maple s royalty obligations. In July 2006, following a public auction process, Maple was awarded the rights to acquire 10,672 hectares of land for the development of an ethanol project by the regional government in the Piura region. A water reserve attached to this land was confirmed by DS AG. On January 5, 2007, Maple paid to the regional government 50% of the purchase price of the land. The remaining instalment will be paid at the final signing of the sale-purchase contract which is expected to occur before the completion of the second quarter of If Maple, the Peruvian government and national energy companies are not able to co-operate with one another it could have an adverse impact on Maple s business and operations and the prospects of Maple and the value of its shares. Unless Maple replaces its reserves, it s reserves and production will decline, which would adversely affect Maple s cash flow from operations. Producing natural gas and oil reservoirs generally are characterised by declining production rates that vary depending upon reservoir characteristics and other factors. Maple and Aguaytía Energy have experienced declines in production of natural gas liquids extracted from Block 31-C and crude oil from Block 31-B and Block 31-D. In addition, since the Pucallpa Refinery and Sales Plant receives all of its feedstock from Maple and Aguaytía Energy, the refinery s operation will also be adversely affected if the production declines such that an insufficient amount of feedstock is delivered to the refinery. Thus, Maple s future hydrocarbon reserves and production and, therefore, its cash flow and income are highly dependent on the success in efficiently developing and exploiting existing reserves and resources. Maple and Aguaytía Energy may not be able to develop, find or acquire additional reserves to replace their current and future production at acceptable costs, which would materially adversely affect their business, financial condition and results of operations. Throughput at the Pucallpa Refinery and Sales Plant has been decreasing since 2003, and is expected to continue to decrease, as a result of lower volumes of natural gasolines being produced by Aguaytía. Throughput at the Pucallpa Refinery and Sales Plant has fallen from 3,093 bpd in 2003 to 2,780 bpd in 2005 and is expected to continue to fall by between 5% and 10% per annum. This decrease in throughput is primarily caused by reductions in pressure in the Block 31-C reservoir thereby resulting in lower volumes of natural gasolines being produced by Aguaytía. Given that sales and marketing costs and certain of the Pucallpa Refinery and Sales Plant s operating costs are fixed, a fall in throughput will have an adverse impact on Maple going forward. Any significant decrease in the throughput volumes at the Pucallpa Refinery and Sales Plant could have a material adverse impact on Maple s business or results of operations. Maple s and Aguaytía Energy s reserves and resources are based on many assumptions that may prove to be inaccurate and any material inaccuracies in these reserve and resource estimates or underlying assumptions will materially affect the quantities and present value of such reserves and resources. No one can measure underground accumulations of hydrocarbons in an exact way. Reserve engineering requires subjective estimates of underground accumulations of commodities and assumptions concerning 64

73 future commodity prices, production levels, and operating and development costs. As a result, estimated quantities of reserves and resources and projections of future production rates and the timing of development expenditures may prove to be inaccurate. Maple s independent petroleum engineers, Netherland, Sewell & Associates, Inc., have prepared estimates of Maple s and Aguaytía Energy s reserves and resources. Some of Maple s reserve and resource estimates are made without the benefit of a lengthy production history, including Block 31-E, and are therefore less reliable than estimates based on a lengthy production history. Also, Maple makes certain assumptions regarding future hydrocarbon prices, production levels, and operating and development costs that may prove incorrect. Any significant variance from these assumptions by actual figures could greatly affect Maple s estimates of reserves and resources, the economically recoverable quantities of hydrocarbons attributable to any particular group of properties, the classifications of reserves based on risk of recovery, and estimates of future net cash flows. Shortages of drilling rigs, equipment and crews could delay Maple s operations and reduce cash available for operations. Maple intends to drill multiple new wells and workover numerous existing wells in the next two years. Higher commodity prices generally increase the demand for drilling rigs, equipment and crews and can lead to shortages of, and increasing costs for, drilling equipment, services and personnel. Shortages of, or increasing costs for, experienced drilling crews and oil field equipment and services could restrict Maple s ability to drill the wells and conduct the operations, which it may currently have planned. Any delay in the drilling of new wells or significant increase in drilling costs could reduce Maple s revenues and cash available for operations. Locations that Maple decides to drill may not yield oil and natural gas in commercially viable quantities. The cost of drilling, completing and operating a well is often uncertain, and cost factors can adversely affect the economics of a well. Maple s efforts will be uneconomic if Maple drills dry holes or wells that are productive but do not produce enough oil or natural gas to be commercially viable after drilling, operating and other costs. For example, in 2003 and in 2005, Maple drilled two exploratory wells in Block 31-E which did not produce commercial quantities of hydrocarbons. Aggregate costs associated with drilling these wells approximated $7.5 million. If Maple drills future wells that do not produce commercial quantities of hydrocarbons, its results of operations will be materially adversely impacted. Some of Maple s concessions are in areas that have been partially depleted or drained by offset wells. Maple s key project areas are located in the previously drilled areas in the Maquía, Agua Caliente, Pacaya and Aguaytía fields in Block 31-B, Block 31-D, Block 31-E and Block 31-C, respectively. As a result, some of Maple s concessions have already been partially depleted or drained. This may inhibit Maple s ability to find economically recoverable quantities of hydrocarbons in these areas. Maple and Aguaytía Energy s identified drilling location inventories are scheduled out over several years, making it susceptible to uncertainties that could materially alter the occurrence or timing of their drilling, resulting in lower cash from operations, which may impact Maple and Aguaytía Energy s net profit and results of operations. Maple s management has specifically identified and scheduled drilling locations as an estimation of future multi-year drilling activities on its existing acreage. This programme is described in Part 1 of this document. As of 31 December 2006, Maple had identified 12 proved undeveloped drilling locations and over 22 additional drilling locations. These identified drilling locations represent a significant part of Maple s growth strategy. Maple s ability to drill and develop these locations depends on a number of factors, including the availability of capital, seasonal conditions, regulatory approvals, crude oil prices, equipment and transportation costs and drilling results. Maple s final determination on whether to drill any of these drilling locations will be dependent upon the factors described above as well as, to some degree, the results of Maple s drilling activities with respect to probable drilling locations. Because of these uncertainties, Maple does not know if the numerous drilling locations identified will be drilled within the expected timeframe or will ever be drilled or if Maple will be able to produce crude oil from these or any other potential drilling locations. As such, the actual drilling activities may materially differ from those presently identified, which could adversely affect Maple s business and results of operations. 65

74 Drilling for and producing hydrocarbons are high-risk activities with many uncertainties that could adversely affect Maple s financial condition or results of operations. Maple s drilling activities are subject to many risks, including the risk that we will not discover commercially productive reservoirs. In addition, Maple s drilling and producing operations may be curtailed, delayed or cancelled as a result of other factors, including: the high cost, shortages or delivery delays of equipment and services; unexpected operational events; adverse weather conditions; facility or equipment malfunctions; concession problems; pipeline ruptures or spills; compliance with environmental and other governmental requirements; unusual or unexpected geological formations; loss of drilling fluid circulation; formations with abnormal pressures; fires; blowouts, craterings and explosions; and uncontrollable flows of oil, natural gas or well fluids. Any of these events can cause substantial losses, including personal injury or loss of life, damage to or destruction of property, natural resources and equipment, pollution, environmental contamination, loss of wells and regulatory penalties. Maple and Aguaytía Energy s respective businesses include transportation facilities and any limitation in the availability of those facilities would interfere with their ability to market the commodities they produce and could reduce their revenues and cash available for operations, respectively. Maple and Aguaytía Energy hold the rights to pipeline facilities under concession agreements with the government of Peru. Specifically, Aguaytía Energy utilises pipelines to transport natural gas and natural gas liquids from its production area in Block 31-C. Maple also transports commodities through pipelines and/or river barges, principally connected to the Pucallpa Refinery and Sales Plant and the production Blocks 31-B & D. The marketability of oil and natural gas production and refined products depends in part on the availability, proximity and capacity of pipeline systems and other economical methods of transportation. The amount of oil and natural gas that can be produced and sold is subject to curtailment in certain circumstances, such as pipeline interruptions due to scheduled and unscheduled maintenance, excessive pressure, physical damage to the transportation system or interruptions in other transportation s means, such as trucking or barging activities. The curtailments arising from these and similar circumstances may last from a few days to several months. In many cases, Maple and Aguaytía Energy are provided only with limited, if any, notice as to when these circumstances will arise and their duration. Any significant curtailment in pipeline capacity or other transportation means could reduce Maple s and Aguaytía Energy s revenues and cash available for operations. The operation of power generation plants involves significant risks that could result in unplanned power outages or reduced output, which would adversely affect Maple s results of operations, financial condition or cash flows. Aguaytía Energy is subject to risks associated with its operation of a power generation plant, any of which could adversely affect its revenues, costs, results of operations, financial condition or cash flows. These risks include: operating performance below expected levels of output or efficiency; failure of equipment or processes, operator or maintenance errors or other events resulting in power outages or reduced output; availability of natural gas from Aguaytía Energy s production from Block 31-C; 66

75 disruptions in the transmission of power; and catastrophic events such as earthquakes, fires, explosions, terrorist attacks or other similar occurrences to Aguaytía Energy facilities or to facilities upon which Aguaytía Energy depends. Unplanned outages of generating units, including extensions of scheduled outages, due to mechanical failures or other problems occur from time to time and are an inherent risk of our business. For example, an unforeseen blade failure on one of the units occurred in March 2006 which caused an unscheduled outage of the unit to change some rows of vanes in the unit. Unplanned outages, such as the one described above, typically increase Aguaytía Energy s operation and maintenance expenses. In addition, an unplanned outage may reduce revenues as a result of selling less power or require Aguaytía Energy to incur significant costs as a result of running a higher cost unit or obtaining replacement power from third parties in the spot market to satisfy firm power sales obligations. If any of Aguaytía Energy s power assets were to experience an unexpected failure or unplanned outage, it may have a material adverse effect on its revenues from operations or costs of operations. Aguaytía Energy s revenues and results of operations from the sale of electric power and generation capacity may be impacted by market risks that are beyond our control. The Company sells electric power and generation capacity in the Peruvian market. Unlike most other commodities, electricity cannot be stored and therefore must be produced concurrently with its use. As a result, wholesale spot power markets are subject to significant price fluctuations over relatively short periods of time and can be unpredictable. Power prices may also fluctuate substantially due to other factors, such as: oversupply or undersupply of generation capacity; changes in power transmission or fuel transportation capacity constraints or inefficiencies; electric supply disruptions, including plant outages and transmission disruptions; seasonality; demand changes due to changes in the macro-economic environment; hydrology conditions; availability and market prices for natural gas, crude oil and refined products; changes in power demand; additional supplies of power from existing competitors or new market entrants as a result of the development of new generation plants, expansion of existing plants or additional transmission capacity; availability of competitively priced alternative power sources; and power market and environmental regulation and legislation. There may be periods when Aguaytía Energy will not be able to meet its commitments under certain Power Purchase Agreements ( PPAs ) at a reasonable cost or at all. Aguaytía Energy has entered into certain PPAs under which it has agreed to provide power at certain times and at a certain price. Because the obligations under most of these agreements are not contingent on a unit being available to generate power, Aguaytía Energy is generally required to deliver the contract quantity of power to the buyer, even in the event of a plant outage or a reduction in the available capacity of the unit. In the event of being unable to produce and deliver enough power to comply with the PPAs, Aguaytía Energy will be at risk of buying expensive energy in the spot market to cover the PPA contracts at a price that could exceed its cost of production and could exceed its sale price, therefore adversely impacting Maple s cash flows. The current legislation does not contemplate obligations for generators to sign PPAs with electric distributors and some distributors do not have enough PPAs in place to cover their demand and they are taking energy out of the grid from generators and paying only the regulated prices fixed by OSINERGMIN, even though these prices may eventually be lower than market price (i.e. during dry seasons). In the event that outtages occur and demand for power exceeds supply and should power distributors continue to be under no obligation to sign definitive PPAs, these circumstances could affect the revenue stream of Aguaytía Energy. 67

76 Pricing and marketing fluctuations in the international price of ethanol may reduce the Ethanol Project s profit margins. Ethanol is currently marketed both as an oxygenate to reduce vehicle emissions from gasoline and as an octane enhancer to improve the octane rating of gasoline with which it is blended. One of the key elements of the Ethanol Project is the signing of a comprehensive marketing agreement for the commercialisation of all the ethanol produced by Maple out of its Peruvian plant. Maple has held talks with some of the largest trading houses in the industry, however, Maple cannot assure you that any such agreement shall be reached. Any fluctuations in the demand or pricing of ethanol may adversely affect the Ethanol Projects profit margins, and accordingly Maple s results of operations. Seasonal weather conditions may adversely affect Maple and Aguaytía Energy s ability to conduct its business activities in certain areas of operations. Maple s and Aguaytía Energy s operations are adversely affected by seasonal weather conditions, primarily in the jungle region and during the wet season from December to April. The ability to effectively continue production activities, transport commodities and hydrology issues relating to Aguaytía Energy s power operations are all, from time to time, adversely impacted by weather conditions. For example, Maple and Aguaytía Energy experience difficulties in their operations and transportation plans during seasons of increased rainfall which create muddy conditions and poor road conditions. Maple and Aguaytía Energy may be unable to compete effectively with larger companies, which may adversely affect their revenues and results of operations. The energy industry is intensely competitive, and Maple and Aguaytía Energy compete with other companies that have greater resources, including Repsol and Petroperú. Because of their geographic diversity, larger and more complex assets, integrated operations and greater resources, some of these competitors may be better able to compete on the basis of price and to bear the economic risks inherent in all phases of the energy industry. Further, Maple s and Aguaytía Energy s ability to implement their business strategy, including the Ethanol Project, will be dependent upon their ability to evaluate and select suitable opportunities and consummate transactions in a highly competitive environment. Maple and Aguaytía Energy s inability to compete effectively with larger companies could have a material adverse impact on their respective business activities, financial condition and results of operations. Maple s existing and future debt instruments may have substantial restrictions and financial covenants and it may have difficulty obtaining additional credit, which could adversely affect its operations and limit its ability to pursue certain transactions, including the Ethanol Project, while adversely affecting its liquidity. Maple will depend on its debt instruments for future working capital needs and to fund strategic opportunities and expansion projects. For example, Maple intends to arrange a significant portion of the financing required for the Ethanol Project through debt. Certain of these debt instruments restrict or are expected to restrict ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations. Maple is also required to comply with certain financial covenants and ratios under its existing agreements, and will be subject to further restrictions on debt agreements it expects to enter into in the future. Maple s ability to comply with these restrictions and covenants in the future is uncertain and will be affected by the levels of cash flow from Maple s operations and events or circumstances beyond its control. Maple s failure to comply with any of the restrictions and covenants under the debt instruments could result in a default under the agreements, which could cause indebtedness to be immediately due and payable. Refinancing may not be possible and additional financing may not be available on commercially acceptable terms, or at all. If Maple cannot borrow or incur additional indebtedness as needed it would need to cease or curtail its operations. Because Maple and Aguaytía Energy handle crude oil, natural gas and other petroleum products, Maple and Aguaytía Energy may incur significant costs and liabilities in the future resulting from a failure to comply with new or existing environmental regulations or a release of hazardous substances into the environment. The operations of Maple and Aguaytía Energy s wells, gathering systems, pipelines, refinery and other facilities are subject to stringent and complex national, state and local environmental laws and regulations. These include, but are not limited to: General Environmental Law (Law No 28611); Regulations for Environmental Protection in Hydrocarbon Activities (Supreme Decree No EM); Directorial 68

77 Resolution No EM: Maximum permissible levels for the discharge of liquid effluents derived from the exploitation and marketing of liquid hydrocarbons and by-products; General Law on Solid Wastes (Law No 27314); Regulations under General Law on Solid Wastes (Supreme Decree No PCM); General Water Law (Law 17752); Regulations for Noise Environmental Quality Standards (Supreme Decree No PCM), and any amendments to the regulations described above. Failure to comply with these laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements, and the issuance of orders enjoining future operations. For example, Maple is expected to be in non-compliance with certain sulphur emission regulations that will become effective at the end of Failure to comply with this legislation could have a material adverse effect on Maple s business and financial condition. In addition, certain environmental statutes, including the General Environmental Law, the General Water Law, the General Law on Solid Wastes and the Resolution No OS/CD which approved the scale of penalties and fines to be imposed by OSINERGMIN to the hydrocarbon and electricity subsectors impose strict, joint and several liability for costs required to clean up and restore sites where hazardous substances have been disposed of or otherwise released. There is an inherent risk that Maple and Aguaytía Energy may incur environmental costs and liabilities due to the nature of the business and the substances handled. For example, an accidental release from one of Maple or and Aguaytía Energy s wells or gathering pipelines could subject it to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighbouring landowners and other third parties for personal injury and property damage, and fines or penalties for related violations of environmental laws or regulations. Moreover, the possibility exists that stricter laws, regulations or enforcement policies could significantly increase Maple and Aguaytía Energy s compliance costs and the cost of any remediation that may become necessary. Maple and Aguaytía Energy may not be able to recover these costs from insurance. Maple and Aguaytía Energy are subject to complex national, local and other laws and regulations that could affect the cost, manner or feasibility of doing business. Maple and Aguaytía Energy s operations are regulated extensively. Environmental and other governmental laws and regulations have increased the costs to operate the business and conduct the operations. Under these laws and regulations, Maple and Aguaytía Energy could also be liable for personal injuries, property damage and other damages. Failure to comply with these laws and regulations may result in the suspension or termination of operations and subject Maple and Aguaytía Energy to administrative, civil and criminal penalties. Moreover, public interest in environmental protection has increased in recent years, and environmental organisations have opposed, with some success, certain drilling projects. Maple and Aguaytía Energy s operations require numerous permits and authorisations under various laws and regulations, including environmental and health and safety laws and regulations. These authorisations and permits are subject to revocation, renewal or modification and can require operational changes, which may involve significant costs, to limit impacts or potential impacts on the environment and/or health and safety. A violation of these authorisation or permit conditions or other legal or regulatory requirements could result in substantial fines, criminal sanctions, permit revocations, injunctions and/or refinery shutdowns. In addition, major modifications of operations could require modifications to Maple and Aguaytía Energy s existing permits or expensive upgrades to the existing pollution control equipment, which could have a material adverse effect on Maple and Aguaytía Energy s business, financial condition or results of operations. Maple expects to incur significant costs, including capital expenditures, over the next several years to comply with various environmental and health and safety regulations. In addition, new environmental and safety laws and regulations, new interpretations of existing laws and regulations, increased governmental enforcement or other developments could require Maple to make additional unforeseen expenditures. Many of these laws and regulations are becoming increasingly stringent, and the cost of compliance with these requirements can be expected to increase over time. For example, Maple expects that compliance with the new sulphur emission regulations, which are scheduled to come into force by December 2009, may require capital expenditure of about $6,000,000. Furthermore, should Petroperú default on its obligation to pay for the necessary alterations which alterations were due to be carried out by Petroperú at the time of entry into the Lease Agreement or thereon in relation to the Pucallpa Refinery and Sales Plant, Maple at its own cost may be required to carry out the necessary alterations, including but not limited to, installing up to thirteen floating roofs and tanks in the Pucallpa Refinery and Sales Plant, at a cost of approximately $30,000 per tank, as well as an additional storage unit 69

78 costing approximately $500,000. In addition, OSINERGMIN may sanction Maple for operating the Pucallpa Refinery and Sales Plant without such needed alterations including the floating roofs and additional storage unit which could result in additional fines and penalties. Maple is not able to predict the impact of new or changed laws or regulations or changes in the ways that such laws or regulations are administered, interpreted or enforced. The requirements to be met, as well as the technology and length of time available to meet those requirements, continue to develop and change. To the extent that the costs associated with meeting any of these requirements are substantial and not adequately provided for, there could be a material adverse effect on Maple s business, financial condition and results of operations. Maple s and Aguaytía Energy s insurance policies do not cover all losses, costs or liabilities that they may experience. Maple and Aguaytía Energy each maintain insurance policies against various losses and liabilities arising from their operations; however, insurance against all operational risks is not available to them, including external costs on Block 31-B and Block 31-D. Additionally, Maple and Aguaytía Energy may elect not to obtain insurance, including, for the avoidance of doubt, keyman insurance, if they believe that the cost of available insurance is excessive relative to the perceived risks presented. Losses could therefore occur for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. In addition, Maple s and Aguaytía Energy s ability to obtain and maintain adequate insurance may be affected by conditions in the insurance market over which it has no control. The occurrence of an event that is not fully covered by insurance could have a material adverse impact on Maple s and Aguaytía Energy s business activities, financial condition and results of operations, respectively. Maple has been assessed with additional tax liabilities which if not resolved favourably for the Company could have a material adverse impact on its cash flow available for operations and financial condition. The Peruvian tax authority, SUNAT, has issued an assessment for additional tax based on its audit of Maple for the 2001 financial year. Following the assessment, Maple filed a counterclaim which is currently pending determination by SUNAT. Should the counter-claim be determined adversely to Maple, the Company shall have the right to appeal to an administrative tax court. The additional assessment relates to (i) a bad debt charge deducted against taxable revenues from the 2001 financial year which SUNAT believes should have been deducted against taxable revenues from the 1996 financial year and (ii) interest expenses which were deducted against taxable revenues from the 2001 financial year. The current assessment is for an additional tax liability of $1.8 million, although with interest and penalties such additional liability could increase significantly. In addition, under the terms of an Investment Agreement, as described in Section in Part VI included elsewhere in this document, Maple will also be required to compensate ACC in an amount, in cash or shares, equal to 10.99% of any payments made to the Peruvian government in relation to certain alleged tax liabilities. If Maple is required to make any payments for these taxes or any other related penalties to the Peruvian government and ACC, the financial condition and results of operations of Maple could be materially adversely affected. Maple is exposed to the credit risks of key customers, and any material non-payment or non-performance by key customers could adversely affect Maple. Maple is subject to risks of loss resulting from non-payment or non-performance by its customers. Any failure by Maple to collect payments from its key customers could materially adversely affect Maple s business, results of operations and prospects, as well as the value of its Ordinary Shares. If Maple loses any of its key personnel, Maple s ability to manage the business and continue the growth could be negatively impacted. Maple s success depends in large part on the ability of its executive management team, particularly Messrs. Canon and Hines, to deal effectively with complex risks and relationships and execute Maple s business development plan. The members of the management team contribute to Maple s ability to obtain, generate and manage opportunities. Maple s prospects also depend upon the continued service of its senior technical employees and consultants. In Peru, the identity and efforts of the local representatives, in particular their relationships with governmental agencies can be critical factors in its local success. There can be no assurance that Maple s present key personnel and Directors will remain with the Company, and the departure of any such key person or Director may materially affect the Company s business and operations and the value of its Ordinary Shares. A shortage of skilled labour may make it difficult for Maple to maintain labour productivity, and competitive costs could adversely affect its profitability. 70

79 Maple s operations require skilled and experienced labourers with proficiency in multiple tasks. Any shortage of experienced labour could have an adverse impact on its subsidiaries labour productivity and costs and its ability to expand production in the event there is an increase in the demand for its products and services, which could adversely affect Maple s profitability and financial condition. Risks related to the Economic and Political Situation In Peru Maple and Aguaytía Energy may sell all of their commodities in the Peruvian market, and although these prices have improved recently, such prices have historically been lower than the import parity prices and may become subject to governmentally-imposed price controls. Historically, commodity prices in the Peruvian market have been below import parity prices. Maple and Aguaytía Energy cannot assure investors that the Peruvian government will not implement price controls in the future for political or other reasons, or that the Peruvian market for oil, natural gas and refined products will become equal to that of the international market. The political situation in Peru could adversely affect Maple and Aguaytía Energy and their businesses could be harmed if governmental instability recurs. Political conditions in Peru have been relatively volatile in recent history. This instability negatively impacted Peru s business and investment climate. Future changes in the government, major policy shifts or lack of consensus between Peru s Congress and the current administration could disrupt or reverse economic and regulatory reforms. Any deterioration of Peru s investment climate could adversely affect the business, results of operations and prospects of Maple and Aguaytía Energy, and the value of the Ordinary Shares. Economic instability in Peru could adversely affect Maple s and Aguaytía Energy s business. In recent years, the Peruvian economy has undergone a transformation into a market-oriented economy. Prior to this transformation, the Peruvian economy has been hampered by periods of significant instability, and experienced at various times: significant declines in gross domestic product; hyperinflation; an unstable currency; high government debt relative to gross domestic product; elimination of tax benefit legislation; a weak banking system providing limited liquidity to Peruvian enterprises; high levels of loss-making enterprises that continued to operate due to the lack of effective bankruptcy proceedings; significant use of barter transactions and illiquid promissory notes to settle commercial transactions; widespread tax evasion; growth of a black and grey market economy; pervasive capital flight; high levels of corruption and the penetration of organised crime into the economy; significant increases in unemployment and underemployment; and the impoverishment of a large portion of the Peruvian population. Operating in such an environment may make it more difficult for Maple and Aguaytía Energy to operate their businesses and finance their activities. Maple cannot assure investors that recent positive trends in the Peruvian economy, such as the increase in gross domestic product, will continue or will not be abruptly reversed by actions such as the elimination of tax exoneration of other taxes or contributions. Moreover, the recent fluctuations in international oil and natural gas prices, or other factors, could adversely affect Peru s economy and the business, results of operation and prospects of Maple, and the value of the Ordinary Shares. In addition, financial problems 71

80 or an increase in the perceived risks associated with investing in emerging economies could dampen foreign investment in Peru and adversely affect the Peruvian economy. Any such problems could have an adverse effect on the international financial and commodities markets, the global economy world oil prices and direct foreign investment in Peru. Any significant impairments limit Maple s access to capital and could disrupt the operation of its business and adversely affect its ability to execute its business strategy. Terrorist attacks, civil strikes in Peru and threats of war or actual war may negatively affect Maple s and Aguaytía Energy s operations, financial condition, results of operations and prospects. Terrorist attacks across the world and civil strikes in Peru, as well as events occurring in response to or in connection with them, may adversely affect Maple s operations, financial condition, results of operations and prospects. Energy-related assets (which could include refineries and terminals such as Maple s and Aguaytía Energy s or pipelines such as the ones on which it depends for its crude oil supply and refined product distribution) may be at greater risk of future terrorist attacks than other possible targets. In addition, any terrorist attack could have an adverse impact on energy prices, including prices for Maple and Aguaytía Energy s crude oil, natural gas and refined products, and an adverse impact on the margins. In addition, disruption or significant increases in energy prices could result in governmentimposed price controls. Maple faces foreign exchange risks that could adversely affect its operating results. Although some costs, cash flows and equity are subject to changes in the exchange rates of the Peruvian Nuevo Sol, some of the product sales are settled in US dollars. Maple seeks to minimise local currency exposure by matching local and foreign currency assets and liabilities. The Company has not historically held or been required to hold a substantial amount of funds in Peruvian Nuevo Sol; however, this might not always be the case in the future. To the extent that Maple is required to hold currency positions in Peruvian Nuevo Sol, there is a risk from foreign exchange fluctuations. If the exchange rate of the Peruvian Nuevo Sol fluctuates substantially, or the rate of inflation in Peru materially increases, historic financial statements of Maple may not accurately reflect the U.S. dollars value of its assets or operations. Maple cannot assure prospective investors that the Peruvian Nuevo Sol will not depreciate against the U.S. dollar. Further, to the extent the Peruvian Nuevo Sol are freely exchangeable into U.S. dollars, Maple cannot assure investors that such currencies will continue to be freely exchangeable or that Maple will be able to exchange sufficient amounts of such currencies into U.S. dollars to meet any foreign currency obligations. Such foreign exchange risk could adversely affect the business, results of operations and prospects of Maple, and the value of its Ordinary Shares. Maple is only able to conduct banking transactions with a limited number of creditworthy Peruvian banks as the Peruvian banking system remains underdeveloped. Peru s banking and other financial systems are not well developed or regulated and Peruvian legislation relating to banks and bank accounts is subject to varying interpretations and inconsistent applications. There are currently a limited number of creditworthy Peruvian banks that Maple can conduct banking relations with. Another prolonged or more serious economic crisis or the bankruptcy of one or more of the banks which receive or hold Maple s funds could adversely affect Maple s business, results of operations and prospects and the value of its Ordinary Shares. Peru s physical infrastructure is in poor condition and is limited, which could disrupt normal business activities. Peru s physical infrastructure has not been adequately funded and maintained. Particularly affected are the road networks, power generation and transmission, communication systems and building stock. The poor state of certain of Peru s physical infrastructure can disrupt the transportation of goods and supplies and commodities Maple sells, add costs to doing business in Peru and interrupt business operations. Such disruptions, additional costs or business interruption could adversely affect the business, results of operations and prospects of Maple, and the value of its Ordinary Shares. In addition, infrastructure located in Maple s principal areas of operations is limited with access to locations typically restricted to one road or other transportation route. For example, the transportation route from the Pucallpa Refinery and Sales Plant to Lima is limited to one main highway. As such, the risk that Maple s operations would be adversely impacted is increased since the number of transportation routes is severely limited. 72

81 Peru s developing legal system creates a number of uncertainties for Maple s business. The following aspects of Peru s legal system create uncertainty with respect to many of the legal and business decisions that are made by Maple. Many of these risks do not exist in countries with more developed legal systems: inconsistencies among laws, presidential decrees and ministerial orders and among local and national legislation and regulations; changes to existing Peruvian law as currently in effect that make it more difficult for Maple to conduct its business or prevent it from completing certain transactions; substantial gaps in the regulatory structure created by the delay or absence of implementing regulations for certain legislation; the lack of judicial and administrative guidance on interpreting applicable rules and the limited precedential value of judicial decisions; and bankruptcy procedures that are not well developed and are subject to abuse. Peru has an understaffed and underfunded judiciary, with limited experience in interpreting and applying market-oriented legislation, whose independence may be subject to undue influence including bribery and fraud. The independence of the Peruvian judicial system and its immunity from economic, political and nationalistic influences in Peru remain largely untested. Judges and courts are generally inexperienced in the area of business and corporate law. In addition, most court decisions are not readily available to the public. Enforcement of court judgments can in practice take a long time in Peru. All of these factors make judicial decisions in Peru difficult to predict and effective redress uncertain. Additionally, court claims are often used in furtherance of political aims or are not always enforced or followed by law enforcement agencies. Maple may be subject to such claims and may not be able to receive a fair hearing or be able to recover costs incurred defending politically motivated claims. The enforcement of Maple s contracts, depends on the proper application of the relevant laws by Peruvian courts. If such contracts cannot be enforced, Maple may be unable to assert its rights thereunder affecting the value of the warranties that are secured in such contracts. The matters described above could adversely affect the business, results of operations and prospects of Maple, and the value of its Ordinary Shares. Peruvian legislation may not adequately protect against expropriation and nationalisation. The Peruvian government has enacted legislation to protect foreign investment and other property against expropriation and nationalisation. However, there is no assurance that such protections would be enforced. This uncertainty is due to several factors, including: the potential lack of political will to enforce legislation to protect property against expropriation and nationalisation, particularly depending on the political climate and political party in power; the lack of independent judiciary and sufficient mechanisms to enforce judgments; and potential for corruption among government officials. Expropriation or nationalisation of Maple s business would be detrimental to its operations and have an adverse effect upon their businesses, results of operations and prospects, and the value of Maple s Ordinary Shares. Risks related to the Social Environment in Peru Crime and corruption could disrupt Maple s ability to conduct its business and could adversely affect its financial condition and results of operations. The political and economic changes in Peru since the early 1990s have resulted in reduced policing of society and increased lawlessness. Organised criminal activity has reportedly increased particularly in large metropolitan centres. In addition, the press have reported official corruption in Peru, including the bribing of officials for the purpose of initiating investigations by government agencies, and instances in which government officials have engaged in selective investigations and prosecutions to further commercial interests of the government and individual officials. Additionally, published reports indicate that Peruvian media publish slanted articles in return for payment. Maple s business, results of operations and prospects and the value of its Ordinary Shares could be adversely affected by illegal activities, corruption or claims implicating it in illegal activities or corruption. 73

82 Social instability in Peru could lead to increased support for renewed centralised authority and a rise in nationalism or violence, which could restrict Maple s ability to conduct its business effectively. Social instability in Peru, coupled with difficult economic conditions in certain regions, has led to increased support for centralised authority and a rise in nationalism. The failure of the government and many private enterprises to pay full salaries on a regular basis and the failure of salaries and benefits generally to keep pace with the rapidly increasing costs of living have led in the past, and could lead in the future, to labour and social unrest and increased support for a renewal of centralised authority, increased nationalism, with restrictions on foreign involvement in the economy of Peru, and increased violence. These sentiments could lead to restrictions on foreign ownership of Peruvian companies in the energy industry or large-scale nationalization or expropriation of foreign-owned assets or businesses. Any such development could adversely affect Maple and Aguaytía Energy s businesses, results of operations and prospects and the value of the Ordinary Shares. Risks associated with the Ordinary Shares The value protection rights, voting rights and certain other benefits provided to ACC under the terms of the Investment Agreement, MCL Shareholders Agreement and Option Contract could dilute ownership interests of Shareholders or restrict Maple s operations which could have a material adverse effect on Maple s business or financial condition. As part of Maple s private placement of equity interests in MCL to ACC, Maple Energy plc granted certain rights, protections and other interests to ACC which, upon the occurrence of certain circumstances or determinations, could have a material adverse impact on the Company s operations and/or dilute ownership interests of Shareholders. Specifically, Maple Energy plc agreed to provide ACC with certain valuation protection rights in the event that certain events take place. The occurrence of these events or required payments in relation to certain tax liabilities, would result in a cash payment or the issuance of additional shares to ACC to compensate them for the decrease in value arising from the event s occurrence. The maximum payment to ACC that is required under these events is 10.9% of the payments made to the Peruvian government, in cash or shares, in connection with any payments relating to certain alleged tax liabilities of Maple. In the event that Maple Energy plc issues additional shares to ACC pursuant to ACC s rights under the private placement, ownership interests of Shareholders will be diluted and such dilution could be in a material amount. Maple Energy plc also entered into an option contract with ACC which entitles ACC to cause Maple Energy plc to purchase all of the MCL shares owned by ACC in exchange for Ordinary Shares multiplied by a factor of 30. This option may be exercised at any time by ACC s at its sole discretion, provided however, that such option will terminate 30 years from March 20, In addition, if Maple Energy plc issues additional Ordinary Shares after 31 July 2007, ACC shall have the right to acquire additional interests in MCL to maintain its proportionate ownership in Maple Energy plc following the exercise of the option as described above. Upon exercise of this option, ACC shall receive Ordinary Shares which will dilute the ownership interests of Shareholders. In addition, ACC has an irrevocable right and option to cause Maple Energy plc to purchase all of its shares in MCL for a period of 4 years from the date of ACC s equity investment should (i) Jack Hanks, Tony Hines, Rex Canon and Carlos de la Guerra Sison (the Controlling Shareholders ) cease to collectively hold 25% in the aggregate of the voting rights of Maple Energy plc, (ii) Maple Energy plc ceases to hold more than 50% of the outstanding shares in MCL and (iii) (A) anyone other than Rex Canon, Guillermo Ferreyros, Carlos de la Guerra Sison, Ray Cochard or Tony Hines (the Key Employees ) serve as the President or Chief Executive Officer of Maple Energy plc or (B) the Controlling Shareholders and/or the Key Employees no longer constitute 50% or more of the Board or the board of directors of MCL. The purchase price payable for any shares sold pursuant to this option shall be calculated by reference to the price paid to the Controlling Shareholders in any such transaction which resulted in them violating any of (i), (ii), or (iii) described above. These rights will all fall away upon Maple s raising in excess of $30 million through equity financings. ACC also possesses certain consent rights over certain actions of MCL and its subsidiaries. These consent rights obligate Maple to obtain ACC s approval prior to undertaking certain activities, including fundamental business changes, disposal of more than 50% of an entity s assets, encumbrance of assets or liquidation. These rights will all fall away upon Maple s raising in excess of $30 million through equity or farm-in financings. These consent rights could prevent some undertaking by Maple which may have an adverse impact on Maple s business and financial condition. 74

83 There is a risk of share price volatility and limited liquidity associated with the Ordinary Shares. The share price of publicly traded emerging companies can be highly volatile. The price at which the Ordinary Shares will be quoted and the price investors may realise for their Ordinary Shares will be influenced by a large number of factors, some specific to Maple and its operations and some which may affect Maple s quoted sector, or quoted companies generally. These factors could include the performance of Maple s development and production programmes, large purchases or sales of the Ordinary Shares, currency fluctuations, oil and natural gas prices and general economic conditions. Maple Energy plc s Admission to AIM should not be taken to imply that there would be a liquid market for the Ordinary Shares. It is likely to be more difficult for an investor to realise its investment on AIM than to realise an investment in a company whose shares are quoted on the Official List of the UKLA. The market price of the Ordinary Shares may not reflect the underlying value of Maple s net assets. The price at which investors may dispose of their Ordinary Shares may be influenced by a number of factors, some of which may pertain to Maple, and others of which are extraneous. Investors may realise less than the original amount invested. Maple Energy plc may issue additional shares without shareholder approval, which would dilute existing ownership interests. Maple Energy plc may issue additional shares without the approval of its shareholders. The issuance of additional shares or other equity securities may have the following effects: the proportionate ownership interest of shareholders in Maple Energy plc may decrease; the relative voting strength of each previously outstanding ordinary shares may be diminished; and the market price of the shares may decline. In recent years, the securities market has experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to the operating performance of those companies. Future market fluctuations may result in a lower price of Maple Energy plc units. Substantial Shareholders will own a significant proportion of Maple Energy plc which may enable them to exercise significant control over all matters requiring the approval of shareholders. Upon completion of the Placing, certain Shareholders will own a significant proportion of the share capital of Maple Energy plc, which proportion may be increased as a result of the exercise of options. As a result these shareholders or beneficial owners, including Messrs, Rex Canon, Tony Hines, Jack Hanks and Carlos Antonio de la Guerra Sison, will be able to exercise significant control over all matters requiring shareholders approval, which could delay or prevent any number of possible transactions or events to occur, including acquisitions or mergers. The ability of such shareholders to prevent or delay such transactions could cause the price of Ordinary Shares to decline. THE ABOVE RISK FACTORS DO NOT NECESSARILY COMPRISE ALL THOSE RISKS ASSOCIATED WITH AN INVESTMENT IN THE COMPANY AND MAPLE ENCOURAGES INVESTORS TO ALSO REVIEW THE RISK FACTORS IN THE COMPETENT PERSON S REPORTS IN PART IV OF THIS DOCUMENT. 75

84 PART IV COMPETENT PERSON S REPORTS Table of Contents 1. Executive Summary Definitions Glossary of terms used Summary: assets Summary: reserves Summary: resources Estimate of Oil Reserves in Agua Caliente and Maquia, Blocks 31-D and 31-B Summary of oil reserves General information Agua Caliente Field, Block 31-D Maquia Field, Block 31-B Estimate of Gas and Liquids Reserves in Aguaytía Field, Block 31-C Summary projection of reserves General information Estimate of Oil Reserves and Future Revenue in Pacaya Field, Block 31-E Summary of oil reserves and future net revenue General information Economics (a) Economic summary oil reserves and present worth 78 (b) Summary of projections of reserves and revenue by reserve category 79 (c) Before income tax reserves, economics and basic data Assessment of Exploration Risk and Hydrocarbon Potential, Block 31-E Summary of prospective oil resources and present worth General information Cashiboya Deep Prospect Santa Rosa Prospect San Roque Prospect Assessment of Exploration Risk and Hydrocarbon Potential Aguaytía Deep Prospect, Block 31-C Summary of prospective resources and present worth General information Economics (a) Economic summary 203 (b) Summary projections of resources and revenue by resource case

85 1. Executive Summary February 21, 2007 The Directors Maple Energy plc Av. Víctor Andrés Belaúnde 147, Vía Principal 140 Torre Real Seis - Oficina 201 San Isidro, Lima 27, Peru Gentlemen: The Directors Canaccord Adams Limited 7 th Floor Cardinal Place 80 Victoria Street London SW1E 5JL United Kingdom In accordance with your request, we have performed technical assessments, as of December 31, 2006, of the holdings of The Maple Companies, Limited in Blocks 31-B, 31-C, 31-D, and 31-E in the Ucayali Basin of Peru. The Maple Companies, Limited is a wholly owned subsidiary of the parent company Maple Energy plc, which was formed on February 8, The reserves and resources presented in this report have been prepared in accordance with the petroleum reserves definitions adopted by the Society of Petroleum Engineers (SPE) and World Petroleum Council (WPC) in 1997 and the resources definitions adopted by the SPE, WPC, and American Association of Petroleum Geologists in As described in the accompanying Tables 1.1 through 1.3, our evaluations consisted of the following: Estimates of the proved, probable, and possible oil reserves for Agua Caliente and Maquia Fields located in Block 31-D and Block 31-B, respectively, as presented in our report dated January 23, Estimates of the proved, probable, and possible gas and fractionation plant natural gasoline and liquefied petroleum gas reserves for Aguaytía Field located in Block 31-C, as presented in our report dated January 22, Estimates of the probability of recoverable hydrocarbon occurrence, unrisked net prospective hydrocarbon resources, and risked after-tax present worth for the Aguaytía Deep exploration prospect located in Block 31-C, as presented in our report dated January 29, Estimates of the proved, probable, and possible oil reserves and future revenue for Pacaya Field located in Block 31-E, as presented in our report dated January 18, Estimates of the probability of recoverable oil occurrence, unrisked net prospective oil resources, and risked after-tax present worth for exploration prospects on Block 31-E, as presented in our report dated January 19, Included in each of the above referenced reports are explanations of the data utilized for each evaluation; descriptions of the reserves or resources and our evaluation methodology; descriptions of the interests in the subject properties; explanations of pricing, costs, and fiscal terms where applicable; and statements of reserves, resources, and present value where applicable. We hereby assert that there has been no material change in any of the data used in these evaluations that would cause us to materially alter the estimates set forth therein. The estimates of reserves shown in this report are for proved developed producing, proved developed non-producing, proved undeveloped, probable, and possible reserves. The prospective resources shown in this report are for exploration prospects; they have been estimated using probabilistic methods and are dependent upon a commercial discovery being made. For the low estimate resources, there is at least a 90 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts. The best estimate resources correspond to a measure of the central tendency of the uncertainty distribution, represented herein as the mean value. For the high estimate resources, there is at least a 10 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts. Definitions of all categories are presented following this letter. (Section 1.1) Following the definitions is a glossary of terms used herein and in the referenced reports (Section 1.2). 1 For the purposes of this report, we did not perform any field inspection of the properties. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties. The reserves and resources included in this report are estimates only and should not be construed as exact quantities. They may or may not be recovered; if they are recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts. Because of governmental policies and uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while preparing this report. Also, estimates of reserves may increase or decrease as a result of future operations. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be political, socioeconomic, legal, or accounting, rather than engineering and geologic. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geologic data; therefore, our conclusions necessarily represent only informed professional judgment. Netherland, Sewell & Associates, Inc. (NSAI) was established in 1961 and has offices in Dallas and Houston, Texas. NSAI performs consulting petroleum engineering services under Texas Board of Professional Engineers Registration No. F and has conducted reserve certifications, technical studies, economic evaluations, and advisory work throughout the world. Qualifications of C.H. (Scott) Rees III and John G. Hattner, the principals on this evaluation, are included immediately following this letter. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties and are not employed on a contingent basis. The contractual rights to the properties have not been examined by NSAI, nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from The Maple Companies, Limited; its subsidiaries; public data sources; and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting geologic, field performance, and work data are on file in our office. Very truly yours, NETHERLAND, SEWELL & ASSOCIATES, INC. /s/ Frederic D. Sewell, P.E. By: Frederic D. Sewell, P.E. Chairman and Chief Executive Officer /s/ C.H. (Scott) Rees III, P.E. /s/ John G. Hattner, P.G. By: By: C.H. (Scott) Rees III, P.E. President and Chief Operating Officer John G. Hattner, P.G. Senior Vice President Date Signed: February 21, 2007 Date Signed: February 21, 2007 Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document. 2 77

86 CERTIFICATION OF QUALIFICATION I, C.H. (Scott) Rees III, Certified Petroleum Engineer, 4500 Thanksgiving Tower, 1601 Elm Street, Dallas, Texas, hereby certify: That I am an employee of Netherland, Sewell & Associates, Inc. in the position of President and Chief Operating Officer. That I do not have, nor do I expect to receive, any direct or indirect interest in the securities of Maple Energy plc or its subsidiaries. That I attended University of Florida and graduated in 1981 with a Bachelor of Science Degree in Mechanical Engineering; that I am a Certified Petroleum Engineer in the State of Texas, United States of America; and that I have in excess of 25 years experience in petroleum engineering studies and evaluations. By: /s/ C.H. (Scott) Rees III, P.E. C.H. (Scott) Rees III, P.E. Texas Registration No Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document. 3 CERTIFICATION OF QUALIFICATION I, John G. Hattner, Certified Petroleum Geologist and Certified Petroleum Geophysicist, 4500 Thanksgiving Tower, 1601 Elm Street, Dallas, Texas, hereby certify: That I am an employee of Netherland, Sewell & Associates, Inc. in the position of Senior Vice President. That I do not have, nor do I expect to receive, any direct or indirect interest in the securities of Maple Energy plc or its subsidiaries. That I attended Saint Mary s College of California and graduated in 1989 with a Master of Business Administration Degree; that I attended Florida State University and graduated in 1980 with a Master of Science Degree in Geological Oceanography; that I attended University of Miami, Florida, and graduated in 1976 with a Bachelor of Science Degree in Geology; that I am a Certified Petroleum Geologist and Geophysicist in the State of Texas, United States of America; and that I have in excess of 25 years experience in geological and geophysical studies and evaluations. By: /s/ John G. Hattner, P.G. John G. Hattner, P.G. Texas Registration No. 559 Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document. 4 78

87 1.1 Definitions PETROLEUM RESERVES DEFINITIONS Approved by the Society of Petroleum Engineers and World Petroleum Council, March 1997 Reserves derived under these definitions rely on the integrity, skill, and judgment of the evaluator and are affected by the geological complexity, stage of development, degree of depletion of the reservoirs, and amount of available data. Use of these definitions should sharpen the distinction between the various classifications and provide more consistent reserves reporting. DEFINITIONS Reserves are those quantities of petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward. All reserve estimates involve some degree of uncertainty. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty in their recoverability. The intent of the Society of Petroleum Engineers (SPE) and World Petroleum Council (WPC, formerly World Petroleum Congresses) in approving additional classifications beyond proved reserves is to facilitate consistency among professionals using such terms. In presenting these definitions, neither organization is recommending public disclosure of reserves classified as unproved. Public disclosure of the quantities classified as unproved reserves is left to the discretion of the countries or companies involved. Estimation of reserves is done under conditions of uncertainty. The method of estimation is called deterministic if a single best estimate of reserves is made based on known geological, engineering, and economic data. The method of estimation is called probabilistic when the known geological, engineering, and economic data are used to generate a range of estimates and their associated probabilities. Identifying reserves as proved, probable, and possible has been the most frequent classification method and gives an indication of the probability of recovery. Because of potential differences in uncertainty, caution should be exercised when aggregating reserves of different classifications. Reserves estimates will generally be revised as additional geologic or engineering data becomes available or as economic conditions change. Reserves do not include quantities of petroleum being held in inventory, and may be reduced for usage or processing losses if required for financial reporting. Reserves may be attributed to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance, cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids. Other improved recovery methods may be developed in the future as petroleum technology continues to evolve. PROVED RESERVES Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulations. Proved reserves can be categorized as developed or undeveloped. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. Establishment of current economic conditions should include relevant historical petroleum prices and associated costs and may involve an averaging period that is consistent with the purpose of the reserve estimate, appropriate contract obligations, corporate procedures, and government regulations involved in reporting these reserves. In general, reserves are considered proved if the commercial producibility of the reservoir is supported by actual production or formation tests. In this context, the term proved refers to the actual quantities of 5 petroleum reserves and not just the productivity of the well or reservoir. In certain cases, proved reserves may be assigned on the basis of well logs and/or core analysis that indicate the subject reservoir is hydrocarbon bearing and is analogous to reservoirs in the same area that are producing or have demonstrated the ability to produce on formation tests. The area of the reservoir considered as proved includes (1) the area delineated by drilling and defined by fluid contacts, if any, and (2) the undrilled portions of the reservoir that can reasonably be judged as commercially productive on the basis of available geological and engineering data. In the absence of data on fluid contacts, the lowest known occurrence of hydrocarbons controls the proved limit unless otherwise indicated by definitive geological, engineering or performance data. Reserves may be classified as proved if facilities to process and transport those reserves to market are operational at the time of the estimate or there is a reasonable expectation that such facilities will be installed. Reserves in undeveloped locations may be classified as proved undeveloped provided (1) the locations are direct offsets to wells that have indicated commercial production in the objective formation, (2) it is reasonably certain such locations are within the known proved productive limits of the objective formation, (3) the locations conform to existing well spacing regulations where applicable, and (4) it is reasonably certain the locations will be developed. Reserves from other locations are categorized as proved undeveloped only where interpretations of geological and engineering data from wells indicate with reasonable certainty that the objective formation is laterally continuous and contains commercially recoverable petroleum at locations beyond direct offsets. Reserves which are to be produced through the application of established improved recovery methods are included in the proved classification when (1) successful testing by a pilot project or favorable response of an installed program in the same or an analogous reservoir with similar rock and fluid properties provides support for the analysis on which the project was based, and, (2) it is reasonably certain that the project will proceed. Reserves to be recovered by improved recovery methods that have yet to be established through commercially successful applications are included in the proved classification only (1) after a favorable production response from the subject reservoir from either (a) a representative pilot or (b) an installed program where the response provides support for the analysis on which the project is based and (2) it is reasonably certain the project will proceed. UNPROVED RESERVES Unproved reserves are based on geologic and/or engineering data similar to that used in estimates of proved reserves; but technical, contractual, economic, or regulatory uncertainties preclude such reserves being classified as proved. Unproved reserves may be further classified as probable reserves and possible reserves. Unproved reserves may be estimated assuming future economic conditions different from those prevailing at the time of the estimate. The effect of possible future improvements in economic conditions and technological developments can be expressed by allocating appropriate quantities of reserves to the probable and possible classifications. Probable Reserves Probable reserves are those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves. In general, probable reserves may include (1) reserves anticipated to be proved by normal step-out drilling where sub-surface control is inadequate to classify these reserves as proved, (2) reserves in formations that appear to be productive based on well log characteristics but lack core data or definitive tests and which are not analogous to producing or proved reservoirs in the area, (3) incremental reserves attributable to infill drilling that could have been classified as proved if closer statutory spacing had been approved at the time of the estimate, (4) reserves attributable to improved recovery methods that have been established by repeated commercially successful applications when (a) a project or pilot is planned but not in operation and (b) rock, fluid, and reservoir characteristics appear favorable for commercial application, (5) reserves in an area of the formation that appears to be separated from the proved area by faulting and the geologic interpretation indicates the subject area is structurally higher than the proved area, (6) reserves attributable to a future workover, treatment, re-treatment, change of equipment, or 6 79

88 other mechanical procedures, where such procedure has not been proved successful in wells which exhibit similar behavior in analogous reservoirs, and (7) incremental reserves in proved reservoirs where an alternative interpretation of performance or volumetric data indicates more reserves than can be classified as proved. Possible Reserves Possible reserves are those unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus possible reserves. In general, possible reserves may include (1) reserves which, based on geological interpretations, could possibly exist beyond areas classified as probable, (2) reserves in formations that appear to be petroleum bearing based on log and core analysis but may not be productive at commercial rates, (3) incremental reserves attributed to infill drilling that are subject to technical uncertainty, (4) reserves attributed to improved recovery methods when (a) a project or pilot is planned but not in operation and (b) rock, fluid, and reservoir characteristics are such that a reasonable doubt exists that the project will be commercial, and (5) reserves in an area of the formation that appears to be separated from the proved area by faulting and geological interpretation indicates the subject area is structurally lower than the proved area. RESERVE STATUS CATEGORIES Reserve status categories define the development and producing status of wells and reservoirs. Developed: Developed reserves are expected to be recovered from existing wells including reserves behind pipe. Improved recovery reserves are considered developed only after the necessary equipment has been installed, or when the costs to do so are relatively minor. Developed reserves may be sub-categorized as producing or non-producing. Producing: Reserves subcategorized as producing are expected to be recovered from completion intervals which are open and producing at the time of the estimate. Improved recovery reserves are considered producing only after the improved recovery project is in operation. Non-producing: Reserves subcategorized as non-producing include shut-in and behind-pipe reserves. Shut-in reserves are expected to be recovered from (1) completion intervals which are open at the time of the estimate but which have not started producing, (2) wells which were shut-in for market conditions or pipeline connections, or (3) wells not capable of production for mechanical reasons. Behind-pipe reserves are expected to be recovered from zones in existing wells, which will require additional completion work or future recompletion prior to the start of production. Undeveloped Reserves: Undeveloped reserves are expected to be recovered: (1) from new wells on undrilled acreage, (2) from deepening existing wells to a different reservoir, or (3) where a relatively large expenditure is required to (a) recomplete an existing well or (b) install production or transportation facilities for primary or improved recovery projects. Approved by the Board of Directors, Society of Petroleum Engineers (SPE) Inc., and the Executive Board, World Petroleum Council (WPC), March (Reprinted with permission.) 7 PETROLEUM RESOURCES CLASSIFICATION SYSTEM AND DEFINITIONS Approved by the Society of Petroleum Engineers, World Petroleum Council, and American Association of Petroleum Geologists, February 2000 Estimates derived under these definitions rely on the integrity, skill, and judgement of the evaluator and are affected by the geological complexity, stage of exploration or development, degree of depletion of the reservoirs, and amount of available data. Use of the definitions should sharpen the distinction between various classi-fications and provide more consistent resources reporting. DEFINITIONS The resource classification system is summarized in Figure 1 and the relevant definitions are given below. Elsewhere, resources have been defined as including all quantities of petroleum which are estimated to be initially-in-place; however, some users consider only the estimated recoverable portion to constitute a resource. In these definitions, the quantities estimated to be initially-in-place are defined as Total Petroleum-initially-in-place, Discovered Petroleum-initially-in-place and Undiscovered Petroleum-initiallyin-place, and the recoverable portions are defined separately as Reserves, Contingent Resources and Prospective Resources. In any event, it should be understood that reserves constitute a subset of resources, being those quantities that are discovered (i.e. in known accumulations), recoverable, commercial and remaining. Total Petroleum-Initially-in-Place. Total Petroleum-initially-in-place is that quantity of petroleum which is estimated to exist originally in naturally occurring accumulations. Total Petroleum-initially-inplace is, therefore, that quantity of petroleum which is estimated, on a given date, to be contained in known accumulations, plus those quantities already produced therefrom, plus those estimated quantities in accumulations yet to be discovered. Total Petroleum-initially-in-place may be subdivided into Discovered Petroleum-initially-in-place and Undiscovered Petroleum-initially-in-place, with Discovered Petroleum-initially-in-place being limited to known accumulations. It is recognized that all Petroleum-initially-in-place quantities may constitute potentially recoverable resources since the estimation of the proportion which may be recoverable can be subject to significant uncertainty and will change with variations in commercial circumstances, technological developments and data availability. A portion of those quantities classified as Unrecoverable may become recoverable resources in the future as commercial circumstances change, technological developments occur, or additional data are acquired. Discovered Petroleum-Initially-in-Place. Discovered Petroleum-initially-in-place is that quantity of petroleum which is estimated, on a given date, to be contained in known accumulations, plus those quantities already produced therefrom. Discovered Petroleum-initially-in-place may be subdivided into Commercial and Sub-commercial categories, with the estimated potentially recoverable portion being classified as Reserves and Contingent Resources respectively, as defined below. Reserves. Reserves are defined as those quantities of petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward. Reference should be made to the full SPE/WPC Petroleum Reserves Definitions for the complete definitions and guidelines. Estimated recoverable quantities from known accumulations which do not fulfil the requirement of commerciality should be classified as Contingent Resources, as defined below. The definition of commerciality for an accumulation will vary according to local conditions and circumstances and is left to the discretion of the country or company concerned. However, reserves must still be categorized according to the specific criteria of the SPE/WPC definitions and therefore proved reserves will be limited to those quantities that are commercial under current economic conditions, while probable and possible reserves may be based on future economic conditions. In general, quantities should not be classified as reserves unless there is an expectation that the accumulation will be developed and placed on production within a reasonable timeframe. In certain circumstances, reserves may be assigned even though development may not occur for some time. An example of this would be where fields are dedicated to a long-term supply contract and will only be developed as and when they are required to satisfy that contract. Contingent Resources. Contingent Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from known accumulations, but which are not currently considered to be commercially recoverable. 8 80

89 It is recognized that some ambiguity may exist between the definitions of contingent resources and unproved reserves. This is a reflection of variations in current industry practice. It is recommended that if the degree of commitment is not such that the accumulation is expected to be developed and placed on production within a reasonable timeframe, the estimated recoverable volumes for the accumulation be classified as contingent resources. Contingent Resources may include, for example, accumulations for which there is currently no viable market, or where commercial recovery is dependent on the development of new technology, or where evaluation of the accumulation is still at an early stage. Undiscovered Petroleum-Initially-in-Place. Undiscovered Petroleum-initially-in-place is that quantity of petroleum which is estimated, on a given date, to be contained in accumulations yet to be discovered. The estimated potentially recoverable portion of Undiscovered Petroleum-initially-in-place is classified as Prospective Resources, as defined below. Prospective Resources. Prospective Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations. Estimated Ultimate Recovery. Estimated Ultimate Recovery (EUR) is not a resource category as such, but a term which may be applied to an individual accumulation of any status/maturity (discovered or undiscovered). Estimated Ultimate Recovery is defined as those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from an accumulation, plus those quantities already produced therefrom. Aggregation. Petroleum quantities classified as Reserves, Contingent Resources or Prospective Resources should not be aggregated with each other without due consideration of the significant differences in the criteria associated with their classification. In particular, there may be a significant risk that accumulations containing Contingent Resources or Prospective Resources will not achieve commercial production. Range of Uncertainty. The Range of Uncertainty, as shown in Figure 1, reflects a reasonable range of estimated potentially recoverable volumes for an individual accumulation. Any estimation of resource quantities for an accumulation is subject to both technical and commercial uncertainties, and should, in general, be quoted as a range. In the case of reserves, and where appropriate, this range of uncertainty can be reflected in estimates for Proved Reserves (1P), Proved plus Probable Reserves (2P) and Proved plus Probable plus Possible Reserves (3P) scenarios. For other resource categories, the terms Low Estimate, Best Estimate and High Estimate are recommended. The term Best Estimate is used here as a generic expression for the estimate considered to be the closest to the quantity that will actually be recovered from the accumulation between the date of the estimate and the time of abandonment. If probabilistic methods are used, this term would generally be a measure of central tendency of the uncertainty distribution (most likely/mode, median/p50 or mean). The terms Low Estimate and High Estimate should provide a reasonable assessment of the range of uncertainty in the Best Estimate. For undiscovered accumulations (Prospective Resources) the range will, in general, be substantially greater than the ranges for discovered accumulations. In all cases, however, the actual range will be dependent on the amount and quality of data (both technical and commercial) which is available for that accumulation. As more data become available for a specific accumulation (e.g. additional wells, reservoir performance data) the range of uncertainty in EUR for that accumulation should be reduced. 9 RESOURCES CLASSIFICATION SYSTEM Graphical Representation Figure 1 is a graphical representation of the definitions. The horizontal axis represents the range of uncertainty in the estimated potentially recoverable volume for an accumulation, whereas the vertical axis represents the level of status/maturity of the accumulation. Many organizations choose to further sub-divide each resource category using the vertical axis to classify accumulations on the basis of the commercial decisions required to move an accumulation towards production. As indicated in Figure 1, the Low, Best and High Estimates of potentially recoverable volumes should reflect some comparability with the reserves categories of Proved, Proved plus Probable and Proved plus Probable plus Possible, respectively. While there may be a significant risk that sub-commercial or undiscovered accumulations will not achieve commercial production, it is useful to consider the range of potentially recoverable volumes independently of such a risk. If probabilistic methods are used, these estimated quantities should be based on methodologies analogous to those applicable to the definitions of reserves; therefore, in general, there should be at least a 90% probability that, assuming the accumulation is developed, the quantities actually recovered will equal or exceed the Low Estimate. In addition, an equivalent probability value of 10% should, in general, be used for the High Estimate. Where deterministic methods are used, a similar analogy to the reserves definitions should be followed. As one possible example, consider an accumulation that is currently not commercial due solely to the lack of a market. The estimated recoverable volumes are classified as Contingent Resources, with Low, Best and High estimates. Where a market is subsequently developed, and in the absence of any new technical data, the accumulation moves up into the Reserves category and the Proved Reserves estimate would be expected to approximate the previous Low Estimate. Approved by the Board of Directors, Society of Petroleum Engineers (SPE) Inc., the Executive Board, World Petroleum Council (WPC, formerly World Petroleum Congresses), and the Executive Committee, American Association of Petroleum Geologists (AAPG), February (Reprinted with permission.) 10 81

90 1.2 Glossary of terms used GLOSSARY OF TERMS USED $ United States dollars 1P proved 2P proved plus probable 3P proved plus probable plus possible AAPG American Association of Petroleum Geologists Aguaytía Energy Aguaytía Energy del Peru S.R. Ltda. BBL barrel BBL/MMCF barrels per million cubic feet BCF billion standard cubic feet best estimate the estimate considered to be the closest to the quantity that will actually be recovered from the accumulation between the date of the estimate and the time of abandonment; a measure of the central tendency of the uncertainty distribution BOE barrels of oil equivalent BOPD barrels of oil per day BOPM barrels of oil per month BWPD barrels of water per day DD & A depletion, depreciation, and amortization of capital (used in income tax calculations) EUR estimated ultimate recovery gross 100 percent of the reserves and/or resources attributable to the license GWC gas-water contact high estimate at least a 10 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts LKO lowest known oil low estimate at least a 90 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts LPG liquefied petroleum gas M$ thousands of United States dollars Maple The Maple Companies, Limited Maple Development The Maple Gas Development Corporation Maple Exploration Maple Exploration Ltd. Maple Gas The Maple Gas Corporation del Perú, Sucursal Peruana Maple Production Maple Production del Perú Ltd. MBBL thousand barrels MCF thousand standard cubic feet MM$ millions of United States dollars MMBBL million barrels 11 MMBTU million British thermal units MMCFD million cubic feet per day MSTB thousand stock tank barrels MW megawatt net those reserves and/or resources attributable to Company, inclusive of government royalty payments NSAI Netherland, Sewell & Associates, Inc. OGIP original gas-in-place OOIP original oil-in-place operator name of the company that operates the asset OWC oil-water contact Perupetro Perupetro S.A. PetroPerú Petroleos del Perú S.A. P G probability of geologic success present worth future net revenue discounted at a prescribed annual rate prospective resources those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations (see 2000 SPE/WPC/AAPG definitions) PSDM pre-stack depth migration PVT pressure-volume-temperature PW present worth RB/STB reservoir barrels per stock tank barrel reserves those quantities of petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward (see 1997 SPE definitions) risk factor chance or probability of discovering hydrocarbons in sufficient quantity for them to be tested to the surface; this, then, is the chance or probability of the prospective resource maturing into a contingent resource risked the volume or value after the application of the risk factor or probability of success S/P secondary-to-primary SPE Society of Petroleum Engineers TVD true vertical depth TVDSS true vertical depth subsea unrisked the volume or value prior to the application of the risk factor or probability of success Veritas Veritas GeoServices WPC World Petroleum Council WTI West Texas Intermediate 12 82

91 Table 1.2 SUMMARY OF RESERVES BY STATUS THE MAPLE COMPANIES, LIMITED UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Oil and Gas Reserves Asset Oil and Liquids Reserves (BBL) Proved Gross Proved and Probable Proved, Probable, and Possible Proved Net Attributable Proved and Probable Proved, Probable, and Possible Block 31-B, Maquia Field 1,835,309 3,254,028 3,711,566 1,835,309 3,254,028 3,711,566 Maple Gas Block 31-C, Aguaytía Field (1) 10,304,100 11,364,900 12,369,600 1,474,100 1,625,900 1,769,600 Aguaytía Energy Block 31-D, Agua Caliente Field 690, ,388 2,021, , ,388 2,021,521 Maple Gas Block 31-E, Pacaya Field 81, , ,962 81, , ,962 Maple Production Total Oil and Liquids 12,911,471 15,748,240 18,276,649 4,081,471 6,009,240 7,676,649 Gas Reserves (MCF) Block 31-B, Maquia Field Maple Gas Block 31-C, Aguaytía Field (2) 271,400, ,500, ,500,000 38,800,000 45,000,000 49,000,000 Aguaytía Energy Block 31-D, Agua Caliente Field Maple Gas Block 31-E, Pacaya Field Maple Production Total Gas 271,400, ,500, ,500,000 38,800,000 45,000,000 49,000,000 Operator 14 (1) (2) These reserves are for fractionation plant liquids, including both natural gasoline and liquefied petroleum gas. These reserves represent full wellstream volumes produced at the wellhead, net of reinjection; future fuel requirements, plant shrinkage, and nonhydrocarbon impurities have not been deducted. 1.4 Summary: reserves All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 1.3 Summary: assets Asset 1. Block 31-B, Maquia Field Ucayali Province, Loreto Region 2. Block 31-C, Aguaytía Field Padre Abad Province, Ucayali Region 3. Block 31-C, Aguaytía Deep Prospect Padre Abad Province, Ucayali Region 4. Block 31-D, Agua Caliente Field Nueva Honoria Province, Huánuco Region 5. Block 31-E, Pacaya Field Ucayali Province, Loreto Region 6. Block 31-E, Exploration Prospects Ucayali Province, Loreto Region Table 1.1 SUMMARY TABLE OF ASSETS THE MAPLE COMPANIES, LIMITED UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Operator The Maple Gas Corporation del Perú, Sucursal Peruana Aguaytía Energy del Peru S.R. Ltda. Interest (Percent) Status License Expiration Date License Area (acres) Comments 100 Production March 31, ,375 Producing oil field with development opportunities Production March 31, ,076 Power project including liquids recovery and gas reinjection. Maple Exploration Ltd Exploration March 31, ,076 Exploration drilling planned to occur in The Maple Gas Corporation del Perú, Sucursal Peruana Maple Production del Perú Ltd. Maple Production del Perú Ltd. 100 Production March 31, ,118 Producing oil field with development opportunities. 100 Production (Inactive) December 31, ,277 Inactive field with redevelopment opportunities. 100 Exploration December 31, ,277 Exploration drilling planned to occur in All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

92 2. Estimate of Oil Reserves in Agua Caliente and Maquia Blocks 31-D and 31-B January 23, 2007 The Directors The Maple Companies, Limited Av. Víctor Andrés Belaúnde 147, Vía Principal 140 Torre Real Seis - Oficina 201 San Isidro, Lima 27 Peru The Directors Canaccord Adams Limited Cardinal Place, 7 th Floor 80 Victoria Street London, SW1E 5JL United Kingdom Gentlemen: In accordance with your request, we have estimated the proved, probable, and possible oil reserves, as of December 31, 2006, to The Maple Companies, Limited (Maple) interest in Agua Caliente and Maquia Fields located in the Ucayali Basin of Peru. Agua Caliente Field is located in Block 31-D, Nueva Honoria Province, Huánuco Region, Peru. Maquia Field is located in Block 31-B, Ucayali Province, Loreto Region, Peru. Maple Gas Corporation del Perú, Sucursal Peruana (Maple Gas) was awarded the concessions for Agua Caliente and Maquia Fields in 1993 and began operating these fields in Maple Gas is a wholly owned subsidiary of Maple. As requested, our study was limited to an examination of the oil reserves and included only a cursory review of the capital costs and operating expenses required to recover such reserves. Maple is currently renegotiating the royalty payment structure under the license contract for Blocks 31-B and 31-D to establish a maximum royalty percentage for each of the blocks. The amendment to the license contract, which sets forth this new royalty payment structure, has been approved by the Board of Directors of Perupetro S.A., the Ministry of Energy and Mines of Peru, and the Ministry of Economy and Finance of Peru, and is awaiting final signature and publication. It is our understanding that Maple expects this amendment to be executed by the end of January Based on the near completion of these negotiations, we have incorporated a maximum royalty of 30 percent for Agua Caliente Field and a maximum royalty of 50 percent for Maquia Field. As presented in the accompanying Table 2.1, we estimate the oil reserves to the Maple interest in Agua Caliente and Maquia Fields, as of December 31, 2006, to be: Oil Reserves (1) (Barrels) Category Gross Net Proved Developed Producing 1,475,053 1,475,053 Non-Producing 203, ,500 Proved Undeveloped 846, ,892 Total Proved 2,525,445 2,525,445 Probable 1,724,971 1,724,971 Possible 1,482,671 1,482,671 (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. The oil reserves shown include crude oil only. Oil volumes are expressed in barrels that are equivalent to 42 United States gallons. These properties have never produced commercial volumes of gas. The estimates shown in this report are for proved developed producing, proved developed non-producing, proved undeveloped, probable, and possible reserves. Reserve categorization conveys the relative degree of certainty; the estimates of reserves included herein have not been adjusted for risk. Definitions of reserve categories are presented in section 1.1. This report includes a location map and summary graphs showing gross historical and projected oil production. Included for each field are a discussion, a geologic column and type log, depth structure and net oil pay isopach maps, oil reserves summaries by reservoir, a schedule of drilling and workovers, and a summary projection of reserves. It is our understanding that the operations of the Pucallpa Refinery, where the crude oil from these fields is refined, and the Pucallpa Product Distribution Center, where the resulting products are sold, are not 16 Oil and Gas Prospective Resources Asset Oil and Liquids Prospective Resources (BBL) Table 1.3 SUMMARY OF RESOURCES BY STATUS THE MAPLE COMPANIES, LIMITED UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Gross Low Estimate Best Estimate High Estimate Low Estimate Net Attributable Best Estimate High Estimate Risk Factor (1) Block 31-C Exploration Prospect Aguaytía Deep 25,900 12,326,800 40,301,300 9,400 4,482,000 14,653,600 32% Maple Exploration Block 31-E Exploration Prospects Cashiboya Deep 38,707, ,451, ,821,000 38,707, ,451, ,821,000 12% Maple Production Santa Rosa 46,990, ,614, ,604,000 46,990, ,614, ,604,000 41% Maple Production San Roque 4,996,000 15,925,000 29,006,000 4,996,000 15,925,000 29,006,000 7% Maple Production Operator Gas Prospective Resources (MCF) Block 31-C Exploration Prospect Aguaytía Deep 1,300, ,469, ,903, , ,978, ,396,900 32% Maple Exploration Block 31-E Exploration Prospects Cashiboya Deep Maple Production Santa Rosa Maple Production San Roque Maple Production Summary: resources (1) Chance or probability of discovering hydrocarbons in sufficient quantity for them to be tested to the surface. This, then, is the chance or probability of the prospective resource maturing into a contingent resource. All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 84

93 included in the concession agreements. However, the refinery lease is valid for the entire concession term. It is also our understanding that there are numerous marketing and refinery considerations in addition to normal field operating costs that could affect the profitability of the oil fields. A cursory review of the economics indicates that both fields are currently profitable and are projected to be profitable throughout the lives of the reserves estimated herein. It has been determined that these reserves are economically viable to produce to a final rate of 60 barrels of oil per month (BOPM) per well. The current concession term for each field expires on March 31, 2024; therefore, all forecasts are terminated either on this date or at the economic limit of 60 BOPM per well, whichever occurs first. For the purposes of this report, we did not perform any field inspection of the properties, nor did we examine the mechanical operation or condition of the wells and their related facilities. We have not investigated possible environmental liability related to the properties. The reserves shown in this report are estimates only and should not be construed as exact quantities. The reserves may or may not be recovered, and, because of governmental policies and uncertainties of supply and demand, the actual production rates may vary from assumptions made while preparing this report. Also, estimates of reserves may increase or decrease as a result of future operations. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be political, socioeconomic, legal, or accounting, rather than engineering and geologic. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geologic data; therefore, our conclusions necessarily represent only informed professional judgment. The contractual rights to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from The Maple Companies, Limited; its subsidiaries; public data sources; and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting geologic, field performance, and work data are on file in our office. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Very truly yours, NETHERLAND, SEWELL & ASSOCIATES, INC. /s/ Frederic D. Sewell, P.E. By: Frederic D. Sewell, P.E. Chairman and Chief Executive Officer /s/ C.H. (Scott) Rees III, P.E. /s/ John G. Hattner, P.G. By: By: C.H. (Scott) Rees III, P.E. President and Chief Operating Officer John G. Hattner, P.G. Senior Vice President Date Signed: January 23, 2007 Date Signed: January 23, 2007 EMP:JAC Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSA) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NASI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document Summary of oil reserves SUMMARY OF OIL RESERVES (1) THE MAPLE COMPANIES, LIMITED INTEREST AGUA CALIENTE AND MAQUIA FIELDS BLOCKS 31-D AND 31-B, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Agua Caliente Field Maquia Field Total Gross Oil Reserves (Barrels) Proved Developed Producing 350,727 1,124,326 1,475,053 Proved Developed Non-Producing 40, , ,500 Proved Undeveloped 298, , ,892 Total Proved 690,136 1,835,309 2,525,445 Probable 306,252 1,418,719 1,724,971 Possible 1,025, ,538 1,482,671 Net Oil Reserves (Barrels) Proved Developed Producing 350,727 1,124,326 1,475,053 Proved Developed Non-Producing 40, , ,500 Proved Undeveloped 298, , ,892 Total Proved 690,136 1,835,309 2,525,445 Probable 306,252 1,418,719 1,724,971 Possible 1,025, ,538 1,482,671 Note: Reserve categorization conveys the relative degree of certainty; the estimates of reserves included herein have not been adjusted for risk. (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

94 2.2 General information

95

96 2.3 Agua Caliente Field, Block 31-D DISCUSSION AGUA CALIENTE FIELD BLOCK 31-D, UCAYALI BASIN, PERU OVERVIEW Agua Caliente Field is located in Block 31-D of the Nueva Honoria Province, Huánuco Region, Peru, approximately 35 miles south-southwest of the city of Pucallpa, as shown on the location map on Page 19. Average production for the field in December 2006 was approximately 111 barrels of oil per day from 16 active wells. Cumulative production for the field, as of December 31, 2006, is estimated to be 15.4 million barrels (MMBBL) of oil. Agua Caliente Field was discovered by Sinclair Oil in 1938 with the drilling of the AC-01 well that tested oil from the Cushabatay and Raya Reservoirs. Since that time, 35 additional wells have been drilled, of which 31 are still productive. Waterflood operations were initiated in the Aguanuya Reservoir in late 1996 with water injection into the AC-30 well. Waterflood operations were expanded in the next few years with conversion of the AC-3, AC-6, AC-22, AC-25, AC-29, and AC-32 wells to water injection. Approximately 75 percent of the cumulative production from Agua Caliente Field is from the Cushabatay Reservoir, and 25 percent is from the Aguanuya Reservoir. Gross historical and projected oil production for the combined Cushabatay and Aguanuya Reservoirs is shown on the graph on Page 21. For this evaluation, we reviewed the technical data relating to Agua Caliente Field provided by The Maple Gas Corporation del Perú, Sucursal Peruana (Maple Gas), a wholly owned subsidiary of The Maple Companies, Limited (Maple). These data include, but are not limited to, well logs, monthly operations reports, individual well monthly and cumulative production reports, structure maps with well locations, Maple s geologic and engineering field studies, and field development plans. As requested, our study was limited to an examination of the oil reserves and included only a cursory review of the capital costs and operating expenses required to recover such reserves. All prices and costs referenced herein are expressed in United States dollars ($). GEOLOGY Agua Caliente Field is a thrust-related anticline elongated northwest-southeast (approximately 7.5 by 4.6 miles) and is located in the central part of the Ucayali Basin. Production in the basin is predominantly from Upper and Lower Cretaceous age formations, as shown on the geologic column on Page 26. Production in Agua Caliente Field is from the Lower Cretaceous Cushabatay and Raya Reservoirs. The Raya Reservoir is subdivided into the Aguanuya, Esperanza, and Paco Members, with only the Esperanza being non-productive. The Raya productive sands are finer-grained and have more interbedded shale than the Cushabatay sands. Structural closure is provided by gentle four-way dip closure not exceeding 10 degrees. The Cushabatay, Aguanuya, and Paco depth structure maps shown on Pages 27 through 29 were developed from well control data and migrated 2-D seismic data. The original oil-water contact (OWC) shown for the Cushabatay Reservoir was estimated based on log analysis of the AC-29 well. Production data from the AC-4 well indicate that the current OWC is further upstructure. The lowest known oil (LKO) shown for the Aguanuya Reservoir was estimated from both log analysis and production data. Based on production data, the LKO is estimated to be 546 feet true vertical depth (TVD) above sea level, which is approximately 5 feet below the LKO of 551 feet TVD above sea level based on the AC-29 well. However, additional drilling could define an original OWC that is below the estimated LKO shown in this report. The net oil pay interval above the estimated original OWC covers approximately 938 productive acres in the Cushabatay Reservoir. The net oil pay interval above the estimated LKO covers approximately 721 productive acres in the Aguanuya Reservoir. Determining net pay is complicated by the age and type of logs available for each well and the low contrast between the oil and water resistivities in the reservoirs. Our determination of original net sand is based on micrologs and sonic logs, with net-to-gross sand ratios of approximately 0.70 and 0.50 for the Cushabatay and Aguanuya Reservoirs, respectively. A net oil pay isopach map was generated for the Aguanuya Reservoir using the average net-to-gross ratio of 0.50 and is shown on Page 30. ORIGINAL OIL-IN-PLACE AND OIL RESERVES Original oil-in-place (OOIP) estimates for both the Cushabatay and Aguanuya Reservoirs are based on volumetric calculations using the information above and the parameters shown on Pages 31 and 32. The 23 Cushabatay sands have excellent reservoir characteristics with an average porosity of 22 percent and an average initial water saturation of 35 percent based on log analysis. Based on calculations utilizing these parameters and the calculated net oil pay volume above the estimated OWC, we estimate the OOIP of the Cushabatay Reservoir to be 55.6 MMBBL. Based on historical performance data and permeability values in the range of 100 to 2,000 millidarcies, water drive is expected to be the dominant drive mechanism, with oil recoveries ranging from 15 to 25 percent for the Cushabatay Reservoir. The Aguanuya sands have an average porosity of 20 percent and an average initial water saturation of 35 percent based on log analysis. Based on calculations utilizing these parameters and the calculated net oil pay volume above the estimated LKO, we estimate the OOIP of the Aguanuya sands to be 15.9 MMBBL. Based on historical performance data and relatively lower permeability values ranging from 50 to 200 millidarcies, the expected drive mechanism for the Aguanuya Reservoir is a combination of pressure depletion and slight water drive. Oil recoveries are estimated to range from 25 to 40 percent based on the estimated LKO. Additional drilling could define a LKO or OWC that may be deeper than the estimated LKO used in these calculations. Proved developed producing reserve estimates are based on the performance of individual wells in the field. The individual well forecasts are terminated either at the economic limit of 60 barrels of oil per month (BOPM) or at the end of the concession life, whichever occurs first. The economic limit of 60 BOPM per well was determined during our cursory economic review using an average lease operating expense for the past 12 months, which was provided by Maple; operating expenses are discussed in the next section of this discussion. Electronic historical production data by well were available beginning in July Prior to that, hand-plotted historical production graphs were available by well beginning in In addition to proved developed producing reserves, reserves have been estimated for drilling and workover opportunities in the proved, probable, and possible reserve categories. A schedule of the planned drilling and workover activity by year can be found on Page 33. A workover is scheduled in the second quarter of 2007 to return the AC-33 well to production from the Aguanuya Reservoir. We have categorized the reserves associated with this workover as proved developed non-producing with an estimated ultimate recovery (EUR) of 40.5 thousand barrels (MBBL) of oil based on prior well performance and analogy to offset wells. Proved undeveloped reserves are estimated for 7 drilling locations, 6 in the Aguanuya Reservoir and 1 in the Paco Reservoir. The Aguanuya locations are north, southwest, west, and northwest extensions of the reservoir limits within the main northwest fault block. Locations 5 and 6, 2 of the northern locations, also have additional probable reserves estimated for them. Each drilling location for the Aguanuya has an EUR of 60 MBBL of oil based on analogy to offset wells. The Paco drilling location has an EUR of 50 MBBL of oil and is a southeastern offset to the AC-26 well, which has an EUR of 61 MBBL of oil. The first Aguanuya location is scheduled to be drilled in the third quarter of 2008, with subsequent wells being drilled in 2-month intervals. Additional data for the Paco Reservoir are very limited. Probable reserves are estimated for 7 drilling locations, 6 in the Aguanuya Reservoir and 1 in the Paco Reservoir, and for a workover on the AC-1A well in the Aguanuya. Of the Aguanuya locations, 5 represent north, northeast, southwest, and northwest extensions of the reservoir limits within the main fault block, and 1 represents a northeastern extension of the southeastern fault block. As discussed above, 2 of these locations have both proved undeveloped and probable reserves estimated for them. The probable locations for the Aguanuya have an EUR of 60 MBBL of oil for each drilling location. The Paco probable drilling location is a northern extension of the reservoir and has an EUR of 50 MBBL of oil. The AC-1A workover is scheduled to return this well to production from the Aguanuya with an EUR of 40 MBBL of oil based on analogy to offset wells. The first location is scheduled to be drilled in mid-2009, with subsequent wells being drilled every other month. The AC-1A workover is scheduled for the third quarter of Possible reserves are estimated for 2 Aguanuya drilling locations; for workovers to be performed on the AC-1, AC-8, AC-9, AC-10, AC-12, AC-13, AC-33, and AC-36 wells in the Cushabatay Reservoir; and for increased recovery from the Aguanuya waterflood. The drilling locations represent further extension in both the northwestern and southeastern fault blocks and have an EUR of 60 MBBL of oil for each drilling location. These locations are classified as possible reserves because they are more than one location away from an existing productive well. Both locations are scheduled to be drilled in the third quarter of All 8 workovers are scheduled to return the wells to production from the Cushabatay Reservoir; the reserves are estimated based on analogy to offset wells. These reserves are classified as possible because 24 88

97 of the risk that the Cushabatay Reservoir is watered out at these locations. These workovers are scheduled for the third quarter of 2007 through the first quarter of All workovers vary in the degree of difficulty involved in returning the wells to production. The waterflood reserves are estimated by increasing the overall recovery factor from 34 to 38 percent. This increase equates to 700 MBBL of additional oil reserves and a secondary-to-primary ratio of Based on the Aguanuya production, no waterflood response has been identified to date. OPERATING AND CAPITAL COSTS The average lease operating expenses for Agua Caliente Field over the past 12 months have been $100,000 per month. These costs are divided into fixed overhead costs of $28,000 per month, variable field operating costs of $40,000 per month, and variable per-well costs of $2,000 per month for the 16 active producers. Lease and well operating costs include general and administrative overhead costs along with estimates of other costs to be incurred at the field level. Lease and well operating costs are held constant throughout the lives of the properties. It is estimated that overall lease operating expenses will increase by 50 percent over the next 4 years because of the proposed workover and drillwell activity. This estimated increase includes a 5 percent increase for costs related to proved reserves, a 5 percent increase for costs related to probable reserves, and a 40 percent increase for costs related to possible reserves. Development of the possible reserves incurs the majority of the cost increase because of the additional anticipated water production associated with these reserves. Our cursory economic review of capital costs used Maple s estimate of $300,000 for each drilling location. Several price case scenarios were calculated to determine the price at which the various drilling locations would become uneconomic. In general, most of the locations were economic at prices at or above $25.00 per barrel. These scenarios are based on a maximum royalty of 30 percent, as further described below. A higher royalty percentage would require a higher oil price for these locations to be economic. For the workovers, Maple s capital cost estimates of either $25,000 or $40,000 per workover were used. The capital costs vary depending on the expected complexity of each workover. FISCAL TERMS Under Peruvian hydrocarbon law, the contractor has rights to 100 percent of the hydrocarbons produced in exchange for a royalty payment equal to a contractual percentage of the proceeds. Maple is currently renegotiating the royalty payment structure under the license contract for Blocks 31-B and 31-D to establish a maximum royalty payment for each of the blocks. The amendment to the license contract, which sets forth this new royalty payment structure, has been approved by the Board of Directors of Perupetro S.A., the Ministry of Energy and Mines of Peru, and the Ministry of Economy and Finance of Peru, and is awaiting final signature and publication. It is our understanding that Maple expects this amendment to be executed by the end of January If the amendment is approved, the maximum royalty payment for Block 31-D will be set at 30 percent. Based on the near completion of these negotiations, we have incorporated this maximum royalty payment into our evaluation. Maple uses a sliding scale royalty up to the 30 percent maximum for payment to the Peruvian government. The equation for calculating the sliding scale royalty for oil prices below $36.92 per barrel is shown below: Royalty = [( Price) X ]/100 Our estimates of the gross (100 percent) and net oil reserves to the Maple interest in Agua Caliente Field, as of December 31, 2006, are shown in the table below; a summary projection of reserves by year is presented in the table on Page 34. Oil Reserves (1) (Barrels) Category Gross Net Proved Developed Producing 350, ,727 Non-Producing 40,500 40,500 Proved Undeveloped 298, ,909 Total Proved 690, ,136 Probable 306, ,252 Possible 1,025,133 1,025,133 (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. 25 NETHERLAND, SEWELL & ASSOCIATES, INC. Geologic Column and Type Log Agua Caliente Field Area Ucayali Basin, Peru IPURORO FM. MIOCENE PEBAS CHAMBIRA FM. FORMATION OLIGOCENE POZO FORMATION EOCENE YAHUARANGO FORMATION PALEOCENE CASABLANCA FM. HUCHPAYACU FM. CACHIYACU FM. UPPER VIVIAN FORMATION CHONTA FORMATION AGUA CALIENTE FM. RAYA FM. GROUP LWR. CUSHABATAY FORMATION CRETACEOUS SARAYAQUILLO JURASSIC FORMATION Age Rock Unit Agua Caliente RECENT- UCAYALI PLIOCENE FORMATION SP SN JURASSIC- TRIASSIC PUCARA GROUP MITU PINQUEN FM. PERMIAN COPACABANA GROUP UPPER TARMA GROUP CARB. LWR. AMBO GROUP DEVONIAN SILURIAN ORDOVICIAN CABANILLAS GROUP ENE FORMATION CONTAYA FM. PRE-CAMBRIAN BASEMENT Oil Productive Zone All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. Log Depth Cushabatay Aguanuya Raya Fm. Group Esperanza Paco

98 Estimated original OWC 446 feet TVD above sea level Estimated original OWC 446 feet TVD above sea level Estimated original OWC 446 feet TVD Producing or produced from Cushabatay Reservoir. above sea level Agua Caliente Field Ucayali Basin, Peru Depth Structure Map Cushabatay Reservoir Contour Interval: 10 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 27 Estimated LKO 546 feet TVD above sea level Estimated LKO 546 feet TVD above sea level Estimated LKO 546 feet TVD above sea level Producing or produced from Aguanuya Reservoir. Agua Caliente Field Ucayali Basin, Peru Depth Structure Map Aguanuya Reservoir Contour Interval: 10 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

99 Estimated LKO 891 feet TVD above sea level Producing or produced from Paco Reservoir. Agua Caliente Field Ucayali Basin, Peru Depth Structure Map Paco Reservoir Contour Interval: 5 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 29 Producing or produced from Aguanuya Reservoir. Zero line based on estimated LKO of 546 feet TVD above sea level. Agua Caliente Field Ucayali Basin, Peru Net Oil Pay Isopach Map Aguanuya Reservoir Contour Interval: 2 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

100 OIL RESERVES SUMMARY AGUA CALIENTE FIELD CUSHABATAY RESERVOIR AS OF DECEMBER 31, 2006 Reservoir Parameters Average Porosity (percent) 22 Average Water Saturation (percent) 35 Average Permeability (millidarcies) 1,000 Oil Properties Oil Gravity ( API) 44.0 Formation Volume Factor (RB/STB) 1.07 Original Oil-in-Place (BBL/acre-foot) 1,036 Reservoir Volume Oil-Water Contact (feet above sea level) 446 Area (acres) 938 Average Gross Thickness (feet) 81.6 Average Net Thickness (feet) 57.2 Total Net Volume (acre-feet/1,000) 53.7 Original Oil-in-Place (MMBBL) 55.6 Reserves (Cushabatay Reservoir) Category Gross Remaining Oil Reserves (MBBL) Gross Estimated Ultimate Oil Recovery (MBBL) Recovery Factor (Percent) Proved 0 11, Proved + Probable 0 11, Proved + Probable + Possible , All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 31 OIL RESERVES SUMMARY AGUA CALIENTE FIELD AGUANUYA RESERVOIR AS OF DECEMBER 31, 2006 Reservoir Parameters Average Porosity (percent) 20 Average Water Saturation (percent) 35 Average Permeability (millidarcies) 100 Oil Properties Oil Gravity ( API) 44.0 Formation Volume Factor (RB/STB) 1.07 Original Oil-in-Place (BBL/acre-foot) 943 Reservoir Volume Lowest Known Oil (feet above sea level) 546 Area (acres) 721 Average Gross Thickness (feet) 46.8 Average Net Thickness (feet) 23.4 Total Net Volume (acre-feet/1,000) 16.9 Original Oil-in-Place (MMBBL) 15.9 Reserves (Aquanuya Reservoir) Category Gross Remaining Oil Reserves (MBBL) Gross Estimated Ultimate Oil Recovery (MBBL) Recovery Factor (Percent) Proved , Proved + Probable , Proved + Probable + Possible 1, , All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

101 DRILLING AND WORKOVER SCHEDULE AGUA CALIENTE FIELD BLOCK 31-D, UCAYALI BASIN, PERU Drilling Schedule by Reserve Category Year Proved Probable Possible (1) 4 (1) Totals (1) Two locations are counted in each category because they have both proved and probable reserves. Workover Schedule by Reserve Category Year Proved Probable Possible Totals All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 33 SUMMARY PROJECTION OF RESERVES THE MAPLE COMPANIES, LIMITED INTEREST AGUA CALIENTE FIELD BLOCK 31-D, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Period Ending Oil Reserves 1 (Barrels) Proved Probable Possible Gross (100 Percent) Net Gross (100 Percent) Net Gross (100 Percent) Net ,454 42,454 2,922 2,922 5,175 5, ,695 46,695 5,402 5,402 31,276 31, ,645 67,645 9,385 9,385 38,131 38, ,012 66,012 31,001 31,001 62,308 62, ,100 60,100 30,804 30,804 85,447 85, ,300 55,300 28,265 28,265 97,381 97, ,767 50,767 25,931 25,931 94,747 94, ,309 46,309 23,792 23,792 88,176 88, ,772 42,772 21,833 21,833 80,997 80, ,858 38,858 20,033 20,033 74,405 74, ,292 35,292 18,384 18,384 68,350 68, ,194 31,194 16,872 16,872 62,137 62, ,568 27,568 13,796 13,796 56,110 56, ,794 22,794 15,078 15,078 51,382 51, ,577 19,577 14,738 14,738 44,744 44, ,683 17,683 13,561 13,561 40,830 40, ,479 16,479 12,475 12,475 37,564 37, ,637 2,637 1,980 1,980 5,973 5,973 Subtotal 690, , , ,252 1,025,133 1,025,133 Cum Prod 15,224, Ultimate 15,914, ,252 1,025,133 Note: Reserve categorization conveys the relative degree of certainty; the estimates of reserves included herein have not been adjusted for risk. (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

102 2.4 Maquia Field, Block 31-B DISCUSSION MAQUIA FIELD BLOCK 31-B, UCAYALI BASIN, PERU OVERVIEW Maquia Field is located in Block 31-B of the Ucayali Province, Loreto Region, Peru, approximately 78 miles north-northwest of the city of Pucallpa, as shown on the location map on Page 19. Average production for the field in December 2006 was approximately 439 barrels of oil per day from 32 active wells. Cumulative production for the field, as of December 31, 2006, is estimated to be 16.6 million barrels (MMBBL) of oil. Maquia Field was discovered by El Oriente Oil Company in March 1957 with the drilling of the MQ-1 well that tested oil from the Vivian, Cachiyacu, and Casa Blanca Reservoirs. Perupetro S.A. drilled 30 additional wells during the 1970s and 1980s in the main area of the field. In 1986, the MQ-30 well was drilled and resulted in the discovery of a productive fault block southeast of the main field area. As a result, 9 additional wells were drilled in this southeastern fault block. Further development of the northwest fault block took place in 1996 by The Maple Gas Corporation del Perú, Sucursal Peruana (Maple Gas), a wholly owned subsidiary of The Maple Companies, Limited (Maple), with the successful completion of the MQ-45 well in the Cachiyacu Reservoir. Waterflood operations were initiated in the Cachiyacu Reservoir in mid-1999, and current water injection wells include the MQ-1, MQ-4, MQ-24, MQ-28, MQ-34, and MQ-40. Production response to the waterflood started in late 2004 and has continued to date. Approximately 70 percent of the cumulative production from Maquia Field is from the Vivian Reservoir. The Casa Blanca and Cachiyacu Reservoirs account for 13 and 17 percent of the cumulative production from Maquia Field, respectively. Gross historical and projected oil production for the combined Vivian, Cachiyacu, and Casa Blanca Reservoirs is shown on the graph on Page 22. For this evaluation, we reviewed the technical data relating to Maquia Field provided by Maple. These data include, but are not limited to, well logs, monthly operations reports, individual well monthly and cumulative production reports, structure maps with well locations, Maple s geologic and engineering field studies, and field development plans. As requested, our study was limited to an examination of the oil reserves and included only a cursory review of the capital costs and operating expenses required to recover such reserves. All prices and costs referenced herein are expressed in United States dollars ($). GEOLOGY Maquia Field is a faulted anticline elongated northwest-southeast (approximately 2.5 by 1.6 miles) and is located on the northeastern flank of the Ucayali Basin. Production in the basin is predominantly from Upper and Lower Cretaceous age formations, as shown on the geologic column on Page 39. Production in Maquia Field is from the Upper Cretaceous Vivian, Cachiyacu, and Casa Blanca Reservoirs. These reservoirs are sands consisting primarily of fine-grained to coarse-grained quartz. Structural closure is provided by four-way dip closure. The Vivian, Cachiyacu, and Casa Blanca Reservoir depth structure maps shown on Pages 40 through 42 were developed from well control data and migrated 2-D seismic data. The original oil-water contact (OWC) estimates shown for the Casa Blanca and Vivian were based on log analysis of the MQ-34 well. Production data from the MQ-30 and MQ-42 wells within the Vivian and the MQ-15 and MQ-42 wells within the Casa Blanca indicate that the current OWCs are further upstructure for both reservoirs within each fault block. The lowest known oil (LKO) shown for the Cachiyacu Reservoir was estimated from both log analysis and production data. Based on production data, the LKO is estimated to be 1,548 feet true vertical depth subsea (TVDSS), which is approximately 16 feet below the LKO of 1,532 feet TVDSS based on log data from the MQ-34 well. However, additional drilling could define an original OWC that is below the estimated LKO shown in this report. The net oil pay interval above the estimated OWC for the Vivian Reservoir covers approximately 536 productive acres, and the net oil pay interval above the estimated OWC for the Casa Blanca Reservoir covers approximately 205 productive acres. The net oil pay interval above the estimated LKO covers approximately 789 productive acres in the Cachiyacu Reservoir. Determining net pay is complicated by the age and type of logs available for each well and the low contrast between the oil and water resistivities in the reservoirs. Our determination of original net sand is based on micrologs and sonic logs, with 35 net-to-gross sand ratios of approximately 0.75, 0.50, and 0.75 for the Vivian, Cachiyacu, and Casa Blanca Reservoirs, respectively. A net oil pay isopach map was generated for the Cachiyacu Reservoir using the average net-to-gross ratio of 0.50 and is shown on Page 43. ORIGINAL OIL-IN-PLACE AND OIL RESERVES Original oil-in-place (OOIP) estimates for the Vivian, Cachiyacu, and Casa Blanca Reservoirs are based on volumetric calculations using the information above and the parameters shown on Pages 44 through 46. The Vivian sands have excellent reservoir characteristics with an average porosity of 30 percent and an average initial water saturation of 30 percent based on log analysis. Based on calculations utilizing these parameters and the calculated net oil pay volume above the estimated OWC, we estimate the OOIP of the Vivian Reservoir to be 30.7 MMBBL. Based on historical performance data and permeability values ranging from 100 to 2,000 millidarcies, water drive is expected to be the dominant drive mechanism, with oil recoveries ranging from 35 to 40 percent for the Vivian Reservoir. The Cachiyacu sands have an average porosity of 25 percent and an average initial water saturation of 45 percent based on log analysis. Based on calculations utilizing these parameters and the calculated net oil pay volume above the estimated LKO, we estimate the OOIP of the Cachiyacu Reservoir to be 12.7 MMBBL. Based on historical performance data and lower permeability values ranging from 100 to 200 millidarcies, the expected drive mechanism for the Cachiyacu Reservoir is a combination of pressure depletion and slight water drive. Oil recoveries are estimated to range from 35 to 50 percent based on the estimated LKO. Additional drilling could define a LKO or OWC that may be deeper than the estimated LKO used in these calculations. The Casa Blanca sands are similar to the Vivian Reservoir and have an average porosity of 30 percent and an average initial water saturation of 30 percent based on log analysis. Based on calculations utilizing these parameters and the calculated net oil pay volume above the estimated OWC, we estimate the OOIP of the Casa Blanca Reservoir to be 6.4 MMBBL. Based on historical performance data and permeability values ranging from 100 to 1,000 millidarcies, water drive is expected to be the dominant drive mechanism, with oil recoveries ranging from 30 to 40 percent for the Casa Blanca Reservoir. Proved developed producing reserve estimates are based on the performance of individual wells in the field. The individual well forecasts are terminated either at the economic limit of 60 barrels of oil per month (BOPM) or at the end of the concession life, whichever occurs first. The economic limit of 60 BOPM was determined during our cursory economic review using an average lease operating expense for the past 12 months, which was provided by Maple; operating expenses are discussed in the next section of this discussion. As discussed above, production has responded well to the waterflood that was initiated in For the wells that are responding to the waterflood, the forecast is held constant for 6 months before reverting to the previous natural decline rate. This forecast is based on several of the earliest responding wells, which have since gone on decline. Electronic historical production data by well were available beginning in January Prior to that, hand-plotted historical production graphs were available by well beginning in In addition to proved developed producing reserves, reserves have been estimated for drilling and workover opportunities in the proved, probable, and possible reserve categories. A schedule of the planned drilling and workover activity by year can be found on Page 47. Proved developed non-producing reserves are estimated for 4 workovers. All proved developed non-producing reserves are assigned to the Cachiyacu Reservoir for wells MQ-10, MQ-11, MQ-15, and MQ-19. All workovers vary in the degree of difficulty involved in returning the wells to production from the Cachiyacu Reservoir. The proved developed non-producing reserve estimates are based on prior well performance and analogy to offset wells. Estimated ultimate recovery (EUR) for each of these workovers varies from 14.5 to 55.0 thousand barrels (MBBL) of oil. These workovers are planned for the first and second quarter of Based on the performance of the most recently drilled well, MQ-45, drilling potential exists in Maquia Field for both infill development wells and extension of the productive limits of the Cachiyacu Reservoir. Proved undeveloped reserves are estimated for 8 drilling locations. Of these drilling locations, 5 are north, west, and northwest extensions of the Cachiyacu Reservoir s limits in the main northwest fault block. Locations 6 and 7 are northwest extensions that also have additional probable reserves estimated for them. Infill drilling opportunities exist for 3 additional locations in relatively undrained portions of the Cachiyacu Reservoir in the southeastern fault block. The locations have an EUR of 80 MBBL of oil each and are estimated based on analogy to offset wells. The first well is scheduled to be drilled late in the third quarter of 2007, with subsequent wells being drilled in 2-month intervals

103 Probable reserves are estimated for 8 drilling locations. As discussed above, 2 of these locations have both proved undeveloped and probable reserves estimated for them. All locations represent north and northwest extensions of the Cachiyacu Reservoir s limits in the main northwest fault block. Each location has an EUR of 80 MBBL of oil. The first well is scheduled to be drilled in mid-2008, with subsequent wells being drilled in 2-month intervals. Additionally, probable reserves for the Vivian Reservoir are estimated for workovers on the MQ-31, MQ-35, and MQ-36 wells. These reserve estimates are based on prior well performance, and the EURs vary from 32 to 162 MBBL of oil. In all 3 cases, the wells were abandoned in the Vivian Reservoir while still producing at economic rates. These workovers are scheduled to be performed in mid Probable reserves are also estimated for increased recovery from the Cachiyacu waterflood in addition to the reserves estimated in the proved developed producing category. An overall secondary-to-primary (S/P) ratio of 0.55 is used for the waterflood forecast. This S/P ratio was determined from the average of the 3 earliest responding wells, MQ-2, MQ-23, and MQ-26; all have since gone on decline. A forecast of the Cachiyacu Reservoir primary production yields an EUR of 2,370 MBBL of oil. By applying the S/P ratio of 0.55 and subtracting the proved developed producing reserves, probable reserves are estimated to be 711 MBBL of oil. Possible reserves are estimated for 3 drilling locations representing further northwest extension of the Cachiyacu Reservoir in the main northwest fault block. These locations have an EUR of 80 MBBL of oil each and are classified as possible reserves because they are more than one location away from an existing productive well. All 3 locations are scheduled to be drilled in Additionally, possible reserves are estimated for workovers scheduled for the MQ-6, MQ-9, MQ-12, MQ-16, MQ-21, MQ-29, MQ-31, and MQ-35 wells. These workovers are scheduled to return 6 wells to production from the Vivian Reservoir and 2 wells to production from the Casa Blanca Reservoir. These reserves are estimated based on prior well performance and analogy to offset wells, with EURs varying from 15 to 40 MBBL of oil. These reserves are classified as possible because of the risk that the Vivian and Casa Blanca Reservoirs are watered out at these locations. These workovers are scheduled to take place in 2009 and All workovers vary in the degree of difficulty involved in returning the wells to production. OPERATING AND CAPITAL COSTS The average lease operating expenses for Maquia Field over the past 12 months have been $110,000 per month. These costs are divided into fixed overhead costs of $22,000 per month, variable field operating costs of $40,000 per month, and variable per-well costs of $1,500 per month for the 32 active producers. Lease and well operating costs include general and administrative overhead costs along with estimates of other costs to be incurred at the field level. It is estimated that overall lease operating expenses will increase by 50 percent over the next 4 years because of the proposed workover and drillwell activity. This estimated increase includes a 5 percent increase for costs related to proved reserves, a 5 percent increase for costs related to probable reserves, and a 40 percent increase for costs related to possible reserves. Development of the possible reserves incurs the majority of the cost increase because of the additional anticipated water production associated with these reserves. Our cursory economic review of capital costs used Maple s estimate of $410,000 for each drilling location. Several price case scenarios were calculated to determine the price at which the various drilling locations would become uneconomic. In general, most of the locations were economic at prices at or above $20.00 per barrel. These scenarios are based on a maximum royalty of 50 percent, as further described below. A higher royalty percentage would require a higher oil price for these locations to be economic. The workovers used Maple s capital cost estimate of either $25,000 or $40,000 per workover. The capital costs vary depending on the expected complexity of each workover. FISCAL TERMS Under Peruvian hydrocarbon law, the contractor has rights to 100 percent of the hydrocarbons produced in exchange for a royalty payment equal to a contractual percentage of the proceeds. Maple is currently renegotiating the royalty payment structure under the license contract for Blocks 31-B and 31-D to establish a maximum royalty payment for each of the blocks. The amendment to the license contract, which sets forth this new royalty payment structure, has been approved by the Board of Directors of Perupetro S.A., the Ministry of Energy and Mines of Peru, and the Ministry of Economy and Finance of Peru, and is awaiting final signature and publication. It is our understanding that Maple expects this amendment to be executed by the end of January If the amendment is approved, the maximum royalty payment for Block 31-B will be set at 50 percent. Based on the near completion of these negotiations, we have incorporated this maximum royalty payment into our evaluation. 37 Maple uses a sliding scale royalty up to the 50 percent maximum for payment to the Peruvian government. The equation for calculating the sliding scale royalty for oil prices below $36.92 per barrel is shown below: Royalty = [( Price) X ]/100 Our estimates of the gross (100 percent) and net oil reserves to the Maple interest in Maquia Field, as of December 1, 2006, are shown in the table below; a summary projection of reserves by year is presented in the table on Page 48. Oil Reserves (1) (Barrels) Category Gross Net Proved Developed Producing 1,124,326 1,124,326 Non-Producing 163, ,000 Proved Undeveloped 547, ,983 Total Proved 1,835,309 1,835,309 Probable 1,418,719 1,418,719 Possible 457, ,538 (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same

104 NETHERLAND, SEWELL & ASSOCIATES, INC. Geologic Column and Type Log Maquia Field Area Ucayali Basin, Peru Age Rock Unit MIOCENE OLIGOCENE IPURORO FM. CHAMBIRA FORMATION PEBAS FM. POZO FORMATION SP GR MQ-19 ILD SFL EOCENE YAHUARANGO FORMATION All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. Log Depth PALEOCENE CASABLANCA FM. HUCHPAYACU FM. CACHIYACU FM. UPPER CRETACEOUS ORIENTE GR. LWR. JURASSIC RECENT- UCAYALI PLIOCENE FORMATION JURASSIC- TRIASSIC PERMIAN CARB. UPPER LWR. DEVONIAN SILURIAN ORDOVICIAN VIVIAN FORMATION Vivian Cachiyacu Huchpayacu Casablanca CHONTA FORMATION AGUA CALIENTE FM. RAYA FM. CUSHABATAY FORMATION SARAYAQUILLO FORMATION PUCARA GROUP MITU PINQUEN FM. COPACABANA GROUP TARMA GROUP AMBO GROUP CABANILLAS GROUP ENE FORMATION CONTAYA FM. PRE-CAMBRIAN BASEMENT Oil Productive Zone 39 Estimated original OWC 1,617 feet TVDSS Estimated original OWC 1,617 feet TVDSS Producing or produced from Vivian Reservoir. Maquia Field Ucayali Basin, Peru Depth Structure Map Vivian Reservoir Contour Interval: 10 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

105 Estimated LKO 1,548 feet TVDSS Estimated LKO 1,548 feet TVDSS Producing or produced from Cachiyacu Reservoir. Maquia Field Ucayali Basin, Peru Depth Structure Map Cachiyacu Reservoir (Delta Sand) Contour Interval: 10 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 41 Estimated original OWC 1,188 feet TVDSS Estimated original OWC 1,188 feet TVDSS Producing or produced from Casa Blanca Reservoir. Maquia Field Ucayali Basin, Peru Depth Structure Map Casa Blanca Reservoir Contour Interval: 10 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

106 Producing or produced from Cachiyacu Reservoir. Zero line based on estimated LKO of 1,548 feet TVDSS. Maquia Field Ucayali Basin, Peru Net Oil Pay Isopach Map Cachiyacu Reservoir (Beta, Gamma, and Delta Sands) Contour Interval: 2 feet Scale in Meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 43 OIL RESERVES SUMMARY MAQUIA FIELD VIVIAN RESERVOIR AS OF DECEMBER 31, 2006 Reservoir Parameters Average Porosity (percent) 30 Average Water Saturation (percent) 30 Average Permeability (millidarcies) 1,000 Oil Properties Oil Gravity ( API) 37.8 Formation Volume Factor (RB/STB) 1.07 Original Oil-in-Place (BBL/acre-foot) 1,523 Reservoir Volume Oil-Water Contact (feet TVDSS) 1,617 Area (acres) 536 Average Gross Thickness (feet) 50.1 Average Net Thickness (feet) 37.6 Total Net Volume (acre-feet/1,000) 20.2 Original Oil-in-Place (MMBBL) 30.7 Reserves (Vivian Reservoir) Category Gross Remaining Oil Reserves (MBBL) Gross Estimated Ultimate Oil Recovery (MBBL) Recovery Factor (Percent) Proved 10 11, Proved + Probable 10 11, Proved + Probable + Possible , All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

107 OIL RESERVES SUMMARY MAQUIA FIELD CACHIYACU RESERVOIR AS OF DECEMBER 31, 2006 Reservoir Parameters Average Porosity (percent) 25 Average Water Saturation (percent) 45 Average Permeability (millidarcies) 150 Oil Properties Oil Gravity ( API) 37.8 Formation Volume Factor (RB/STB) 1.07 Original Oil-in-Place (BBL/acre-foot) 997 Reservoir Volume Lowest Known Oil (feet TVDSS) 1,548 Area (acres) 789 Average Gross Thickness (feet) 32.1 Average Net Thickness (feet) 16.1 Total Net Volume (acre-feet/1,000) 12.7 Original Oil-in-Place (MMBBL) 12.7 Reserves (Cachiyacu Reservoir) Category Gross Remaining Oil Reserves (MBBL) Gross Estimated Ultimate Oil Recovery (MBBL) Recovery Factor (Percent) Proved 1,813 4, Proved + Probable 3,237 6, Proved + Probable + Possible 3,466 6, All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 45 OIL RESERVES SUMMARY MAQUIA FIELD CASA BLANCA RESERVOIR AS OF DECEMBER 31, 2006 Reservoir Parameters Average Porosity (percent) 30 Average Water Saturation (percent) 30 Average Permeability (millidarcies) 500 Oil Properties Oil Gravity ( API) 37.8 Formation Volume Factor (RB/STB) 1.07 Original Oil-in-Place (BBL/acre-foot) 1,523 Reservoir Volume Oil-Water Contact (feet TVDSS) 1,188 Area (acres) 205 Average Gross Thickness (feet) 27.3 Average Net Thickness (feet) 20.4 Total Net Volume (acre-feet/1,000) 4.2 Original Oil-in-Place (MMBBL) 6.4 Reserves (Casa Blanca Reservoir) Category Gross Remaining Oil Reserves (MBBL) Gross Estimated Ultimate Oil Recovery (MBBL) Recovery Factor (Percent) Proved 10 2, Proved + Probable 10 2, Proved + Probable + Possible 90 2, All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

108 DRILLING AND WORKOVER SCHEDULE MAQUIA FIELD BLOCK 31-B, UCAYALI BASIN, PERU Drilling Schedule by Reserve Category Year Proved Probable Possible (1) 6 (1) Totals (1) Two locations are counted in each category because they have both proved and probable reserves. Workover Schedule by Reserve Category Year Proved Probable Possible Totals All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 47 SUMMARY PROJECTION OF RESERVES THE MAPLE COMPANIES, LIMITED INTEREST MAQUIA FIELD BLOCK 31-B, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Period Ending Oil Reserves (1) (Barrels) Proved Probable Possible Gross (100 Percent) Net Gross (100 Percent) Net Gross (100 Percent) Net , ,712 16,531 16, , ,013 98,684 98, , , , ,017 33,834 33, , , , ,508 73,001 73, , , , ,094 61,401 61, , , , ,704 49,711 49, , , , ,197 40,918 40, , , , ,917 32,098 32, ,464 96,464 88,888 88,888 28,686 28, ,533 84,533 78,345 78,345 25,640 25, ,975 74,975 69,100 69,100 22,924 22, ,951 65,951 60,490 60,490 20,498 20, ,368 57,368 53,145 53,145 18,334 18, ,157 51,157 46,999 46,999 16,328 16, ,254 43,254 41,586 41,586 14,064 14, ,719 37,719 36,814 36,814 11,684 11, ,020 31,020 33,201 33,201 7,371 7, ,463 4,463 5,499 5,499 1,046 1,046 Subtotal 1,835,309 1,835,309 1,418,719 1,418, , ,538 Cum Prod 16,639, Ultimate 18,474,556 1,418, ,538 Note: Reserve categorization conveys the relative degree of certainty; the estimates of reserves included herein have not been adjusted for risk. (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

109 3 Estimate of Gas and Liquids Reserves in Aguaytía Field, Block 31-C January 22, 2007 The Directors The Directors The Maple Companies, Limited Canaccord Adams Limited Av. Víctor Andrés Belaúnde 147, Vía Principal th Floor Torre Real Seis Oficina 201 Cardinal Place San Isidro, Lima Victoria Street Peru London SW1E 5JL United Kingdom Gentlemen: In accordance with your request, we have estimated the proved, probable, and possible gas and fractionation plant natural gasoline and liquefied petroleum gas (LPG) reserves, as of December 31, 2006, to The Maple Companies, Limited (Maple) interest in the Aguaytía gas field located in the Ucayali Basin of Peru. These reserves are limited to the existing productive reservoir only and do not include any prospective resources for deeper reservoirs. Aguaytía Field is located in Block 31-C in the Padre Abad Province, Ucayali Region of Peru. Commissioning of the production facilities, injection facilities, fractionation plant, and power generation plant occurred in March and April The first full month of production and reinjection of residue gas occurred in May 1998, and significant power generation started in July Our study indicates the original gas-in-place to be in the range of 568 to 629 billion standard cubic feet (BCF). As presented in the accompanying Tables 3.1 and 3.2, we estimate the reserves to the Maple interest in Aguaytía Field, as of December 31, 2006, to be: Fractionation Plant Liquids Reserves (MBBL) Gas Reserves (1) (BCF) Natural Gasoline LPG Category Gross Net (2) Gross Net (2) Gross Net (2) Proved , , Probable Possible (1) These reserves represent full wellstream volumes produced at the wellhead, net of reinjection; future fuel requirements, plant shrinkage, and nonhydrocarbon impurities have not been deducted. (2) Net reserves shown are to the Maple interest and have not been reduced by any royalty payments; under Peruvian law, royalty payments are a percentage of revenue, not produced volumes. Gas volumes are expressed in BCF as determined at 60 degrees Fahrenheit and a pressure base of 14.7 psi absolute. The natural gasoline volumes shown include condensate and natural gasoline (pentanes plus). The LPG volumes shown include liquid propane and butane. Natural gasoline and LPG volumes are expressed in thousands of barrels (MBBL); a barrel is equivalent to 42 United States gallons. The estimates shown in this report are for proved, probable, and possible reserves. Reserve categorization conveys the relative degree of certainty; the estimates of reserves included herein have not been adjusted for risk. Definitions of reserve categories are presented in section 1.1. This report includes a discussion of the field along with various maps and exhibits. As requested, our study was limited to the examination of the gas, natural gasoline, and LPG reserves for Aguaytía Field and did not include an assessment of the capital costs or operating costs required to recover such reserves. The income for the field is derived from the sale of the produced natural gasoline and LPG volumes and from the sale of electricity generated using the dry residue gas as fuel gas. Based on a cursory review of the economics of the project, it is our understanding that the field is currently profitable and is projected to be profitable during the life of the reserves included herein. For the purposes of this report, we did not perform any field inspection of the properties, nor did we examine the mechanical operation or condition of the wells and their related facilities. We have not investigated possible environmental liability related to the properties. The reserves shown in this report are estimates only and should not be construed as exact quantities. The reserves may or may not be recovered, and, because of governmental policies and uncertainties of supply and demand, the actual production rates may vary from assumptions made while preparing this report. 49 Our reserve estimates for these properties are based on calculations of reservoir volume, well tests, analogy with offset or area wells, and a compositional reservoir simulation model constructed in The reservoir simulation model has been history-matched to all production and pressure data through December Based on the 2006 production history, the model has been revised to allow more reinjected gas breakthrough, resulting in less liquids production. However, there are no performance data available at this time regarding liquids production below the dew point pressure. As such, it may be necessary to revise the liquids reserve estimates again as additional performance data below the dew point pressure become available. Also, estimates of reserves may increase or decrease as a result of future operations. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be political, socioeconomic, legal, or accounting, rather than engineering and geologic. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geologic data; therefore, our conclusions necessarily represent only informed professional judgment. The contractual rights to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from The Maple Companies, Limited; its subsidiaries; Aguaytía Energy del Perú S.R. Ltda.; Petroleos del Perú S.A.; and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting geologic, field performance, and work data are on file in our office. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Very truly yours, NETHERLAND, SEWELL & ASSOCIATES, INC. /s/ Frederic D. Sewell, P.E. By: Frederic D. Sewell, P.E. Chairman and Chief Executive Officer /s/ C.H. (Scott) Rees III, P.E. /s/ John G. Hattner, P.G. By: By: C.H. (Scott) Rees III, P.E. John G. Hattner, P.G. President and Chief Operating Officer Senior Vice President Date Signed: January 22, 2007 Date Signed: January 22, 2007 MBB:CMS Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document

110 SUMMARY PROJECTION OF NET RESERVES THE MAPLE COMPANIES, LIMITED INTEREST AGUAYTÍA FIELD, BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Proved Probable Possible Power Plant Gas (BCF) Frac Plant Liquids (MBBL) Gas (BCF) Frac Plant Liquids (MBBL) Gas (BCF) Frac Plant Liquids (MBBL) Period Ending Dispatch (%) Wellhead (1) Net of Reinjection Net of F&S, Reinjection Natural Gasoline LPG Wellhead (1) Net of Reinjection Net of F&S, Reinjection Natural Gasoline LPG Wellhead (1) Net of Reinjection Net of F&S, Reinjection Natural Gasoline LPG Subtotal Cum Prod , Ultimate , , Notes: In order to maintain deliverability in later years, compression, workovers, or additional drilling may be required depending on reservoir drive mechanism. Reserve categorization conveys the relative degree of certainty; the estimates of reserves included herein have not been adjusted for risk. (1) Based on full wellstream capacity at the wellhead of 70 MMCFD. Reinjection volumes are based on remaining gas after deducting power plant gas usage (47.8 MMCFD required for 100 percent dispatch) and fuel and shrinkage of 7 MMCFD. Future fuel requirements, plant shrinkage, and non-hydrocarbon impurities have not been deducted from the gas volumes shown unless indicated as such. Table 3.2 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF GROSS (100 PERCENT) RESERVES THE MAPLE COMPANIES, LIMITED INTEREST AGUAYTÍA FIELD, BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, Summary projection of reserves Proved Probable Possible Power Plant Gas (BCF) Frac Plant Liquids (MBBL) Gas (BCF) Frac Plant Liquids (MBBL) Gas (BCF) Frac Plant Liquids (MBBL) Period Ending Dispatch (%) Wellhead (1) Net of Reinjection Net of F&S, Reinjection Natural Gasoline LPG Wellhead (1) Net of Reinjection Net of F&S, Reinjection Natural Gasoline LPG Wellhead (1) Net of Reinjection Net of F&S, Reinjection Natural Gasoline LPG Subtotal , , Cum Prod , , Ultimate , , Notes: In order to maintain deliverability in later years, compression, workovers, or additional drilling may be required depending on reservoir drive mechanism. Reserve categorization conveys the relative degree of certainty; the estimates of reserves included herein have not been adjusted for risk. (1) Based on full wellstream capacity at the wellhead of 70 MMCFD. Reinjection volumes are based on remaining gas after deducting power plant gas usage (47.8 MMCFD required for 100 percent dispatch) and fuel and shrinkage of 7 MMCFD. Future fuel requirements, plant shrinkage, and non-hydrocarbon impurities have not been deducted from the gas volumes shown unless indicated as such. Table 3.1 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

111 3.2 General information DISCUSSION AGUAYTÍA FIELD BLOCK 31-C, UCAYALI BASIN, PERU OVERVIEW Aguaytía Field is located in Block 31-C in the Padre Abad Province, Ucayali Region of Peru, 50 miles west of the city of Pucallpa, as shown on the field location map on Page 56. The Block 31-C license was awarded to The Maple Gas Corporation del Perú, Sucursal Peruana (Maple Gas) effective March 30, The term is for 30 years with an option to extend to 40 years and does not require additional future work to maintain the license. Per the license terms, royalties are payable to the Peruvian government. Aguaytía Energy del Perú S.R. Ltda. (Aguaytía Energy) operates Aguaytía Field, the fractionation plant, and the power plant for the joint venture partners including Maple Gas, Duke Energy, and Conduit Capital Partners. Aguaytía Energy completed surface facilities that include a field gathering system, a fractionation plant to recover natural gasoline and liquefied petroleum gas (LPG), and a megawatt electric power generation plant with power lines to connect to Peru s electric power grid. Commissioning of the system was completed in March and April The Maple Gas Development Corporation, a Maple Gas subsidiary, represents a percent interest in the Aguaytía joint venture. Of this percentage, The Maple Companies, Limited owns a net indirect interest in Block 31-C of percent that equates to a net indirect economic interest of approximately percent, which has been used to estimate the net reserves. There has been no reserve reduction for royalty payments to the Peruvian government. Under Peruvian law, the reserves are owned 100 percent by the concession operator upon production from the subsurface; the royalty is an expense payable to the government upon production. Aguaytía Field was discovered by Mobil Oil Company in December 1961 with the drilling of well 1X. The well tested natural gas and condensate from the Cushabatay Formation on the northeast portion of the Aguaytía Anticline. Subsequent drilling by Mobil Oil Company and Petroleos del Perú S.A. (PetroPerú) included three additional wells, two productive of gas and condensate and one non-productive of hydrocarbons. In 1997, Aguaytía Energy drilled five successful development wells as part of the Aguaytía Gas Project. These wells further delineated the structure, reconfirmed the approximate gas-water contact, and provided additional modern log data to define the productive gas intervals. Wells 2X, 5, and 6 are currently producing while wells 3X, 7, and 8 are being used to reinject residue gas. Cumulative gas production net of reinjection through December 31, 2006, is billion standard cubic feet (BCF), with current gas production rates from the three active wells totaling approximately 70 million cubic feet per day (MMCFD). For this evaluation, technical information on the field was reviewed and collected from Aguaytía Energy and PetroPerú. These data include but are not limited to: (1) well logs, (2) daily operations reports and individual well cumulative production reports, (3) annual bottomhole pressure surveys, (4) limited petrophysical data, (5) PetroPerú s seismic structure maps, (6) PetroPerú s geologic and engineering field studies, (7) migrated 2-D seismic data across the field, (8) reservoir fluid compositional data, and (9) Aguaytía Energy s field development plans including power plant dispatch for net gas production. It is our understanding that these comprise the pertinent data available from Aguaytía Energy and PetroPerú; future studies may include new well or seismic data acquired as well as available performance data. GEOLOGY Aguaytía Field is a thrust-related anticline elongated north-northeast by south-southwest, located on the western flank of the Ucayali Basin. Structural closure is provided to the east by a reverse fault and to the west by the steeply dipping west flank. Production in the basin is from the Upper and Lower Cretaceous age formations, as shown on the type log on Page 57, with production in Aguaytía Field from the lowest Cretaceous Cushabatay Sand. The Cushabatay is a thick (over 700 feet) sand section consisting of coarse-grained orthoquartzites at the base grading to fine-grained orthoquartzites at the top. The depth structure map shown on Page 58 was developed from well control data, migrated 2-D seismic data, and seismic time maps. The migrated seismic lines available for our evaluation are shown as solid lines on the structure map. Seismic line G is shown on Page 59 as an example. Fluid contacts were 53 determined based on log interpretation and were verified by several production tests in the existing wells. All zones in the northeast structure tested gas above the gas-water contact (GWC) estimated at 7,638 feet subsea. The resulting gross interval above the GWC, covering approximately 4,500 productive acres, is shown on the gross rock volume map on Page 60. For estimates of possible original gas-in-place (OGIP) and reserves, we used a GWC of 7,650 feet subsea. Net pay determination is complicated by the age and type of logs available for each well. For the older wells, 1X and 2X, original net sand is based on micrologs and sonic logs resulting in net-to-gross sand ratios of approximately However, after calibrating the older logs with the recently acquired modern logs, net-to-gross ratios can be increased to approximately For the newer wells, net sand is based on induction and compensated neutron-density logs, resulting in net-to-gross sand ratios ranging from 0.68 to Net pay isopach maps were generated for the proved, probable, and possible reserve cases based on net-to-gross ratios of 0.65, 0.76, and 0.76, respectively. Net pay determinations and fluid contacts are shown on the petrophysical summary on Page 61. ORIGINAL GAS-IN-PLACE AND GAS RESERVES Full wellstream OGIP estimates are based on volumetric calculations using the parameters discussed above. The average porosity for the Cushabatay Sand is 15.5 percent based on the sonic logs, neutron-density logs, and limited core data. The average initial water saturation is 35 percent based on log analysis. The retrograde gas-condensate reservoir is at normal pressure and contains some nitrogen and carbon dioxide. Based on calculations utilizing these parameters and planimetered net bulk gas volumes from the net pay isopach maps discussed above, we originally estimated the Aguaytía Field to contain proved, probable, and possible full wellstream OGIP volumes of 503, 589, and 629 BCF, respectively, prior to initiation of production. A compositional, full-field reservoir simulation model was completed in 2004 and is discussed in more detail later. This model estimates 568 BCF OGIP and has been history matched to the available field performance data. As such, that is the basis for our current proved OGIP estimate (equivalent to a proved net-to-gross ratio of 0.73). The simulation model has also been used to evaluate future gas recovery from Aguaytía Field and is used as a guide in estimating the proved (1P) gross ultimate gas reserves of BCF and recovery factor of 65 percent. Proved plus probable (2P) and proved plus probable plus possible (3P) reserves have been estimated and are still based upon the higher volumetric estimates of OGIP from our original evaluation and higher assumed recovery factors. The 2P gross ultimate gas reserves are estimated to be BCF based on an OGIP of 589 BCF and a recovery factor of 70 percent. The 3P gross ultimate gas reserves are estimated to be BCF based on the 3P OGIP of 629 BCF and a recovery factor of 70 percent. During 2006, net production (accounting for reinjection) totaled 15.8 BCF of gas. A graph of the historical and projected gas production is shown on Page 62. Pressure tests conducted in January 2006 showed an average datum reservoir pressure of 3,410 psig. The pressure data indicate the presence of aquifer support; however, it is too early to determine the relative contribution from water drive as compared to depletion drive. Further production and pressure data along with a monitoring of the GWC movement (with TDT logs, production data, etc.) will result in a more accurate estimate of the drive mechanism and recovery factor. LIQUIDS RESERVES A pressure-volume-temperature (PVT) study was performed on the liquids and gas samples collected during the production test on well 2X during July Data from this study along with actual field data since production inception and the results from the compositional simulation model form the basis for determining liquids reserves. As shown on Page 63, the laboratory study for the 2X reservoir fluid reports a dew point pressure of 3,469 psig, which is 261 psig below the original reservoir pressure. The liquids yield curves for propane, butane, and pentanes plus (natural gasoline and condensate) have been adjusted from those reported in the original PVT study to match the leaner liquids yields observed from actual field production. Compared to yields determined from the original PVT study, actual propane and butane yields are approximately 25 percent lower, and the pentanes plus yields are approximately 10 percent lower. These differences could be attributed to sampling errors on the original 2X well or due to the existence of a compositional gradient in the reservoir. Approximately 50 percent of the field production comes from well 5, which is approximately 300 feet upstructure from the 2X well. This structural difference could account for the leaner wellstream composition and has been incorporated into the

112 simulation model; however, the liquids reserves determination is based on the leaner composition representing the average reservoir fluid. When the leaner gas composition is analyzed using equation of state fluid modeling, as used in the reservoir simulation model, the dew point is reduced to 3,205 psig. Based on the recent historical data, liquids yield curves with a 3,350 psig dew point are used for the proved, probable, and possible liquids reserves. The liquids content of the produced wellstream was 0.56, 0.48, and 1.82 gallons per thousand cubic feet of propane, butane, and pentanes plus, respectively. To estimate the total produced liquids in the wellstream over the life of the field, we used the gas production flowstream shown in Table 3.1 (including estimates of reinjection), an abandonment reservoir pressure equal to 60 to 70 percent of the original reservoir pressure, and estimates of lean gas breakthrough for each reserve category. Additional gas reinjection and/or stronger aquifer support will increase the total produced liquids available for recovery. Recoverable liquids reserves were estimated using LPG recovery efficiencies of 87, 93, and 99 percent for the propane, butane, and pentanes plus, respectively. Liquids production for 2006 totaled 805 thousand stock tank barrels (MSTB) of natural gasoline and 409 MSTB of LPG. A graph of the historical and projected liquids production is shown on Page 64. SIMULATION MODEL In order to better understand issues regarding future lean gas breakthrough, aquifer support, and liquids recovery, a 3-D, full-field, compositional reservoir simulation model of Aguaytía Field has been constructed utilizing ECLIPSE software. This model has been calibrated to historical production and pressure data as well as the injection and production profile information by flow layer gathered in mid The results from this model, originally completed in June 2004 and updated in December 2006, have been used as an aid in developing the reserve estimates included herein. The Aguaytía simulation model was initialized at an OGIP of approximately 568 BCF, which is slightly less than the original volumetric-based 2P OGIP of 589 BCF. Actual condensate recoveries have started to decline and this behavior has been matched in the model by the breakthrough of lean injected gas at the producers. Over time, given the power dispatch schedule included in this report, the reservoir pressure will drop below the dew point and more significant volumes of reinjected gas will break through at the producers, both of which will result in lower liquids yields. This model is currently being used to better understand the major factors affecting liquids and gas recovery; however, future performance data may necessitate additional history match changes that could have a significant impact on liquids reserves. WELL DELIVERABILITY AND RESERVOIR MANAGEMENT PLANS The total current field deliverability from wells 2X, 5, and 6 is in excess of the existing facility limits of approximately 70 MMCFD. This high deliverability is consistent with the potential tests conducted on wells 2X and 3X in Well 3X tested at a rate of 15.7 MMCFD from 22 feet of perforations, with a resulting absolute open flow potential of 44 MMCFD. Well 2X tested at a rate of 9.6 MMCFD from 10 feet of perforations, with a resulting absolute open flow potential of 18.5 MMCFD. AguaytíaEnergy commissioned surface facilities in 1998 that include a field gathering system, a fractionation plant using a cryogenic turbo-expander process with ethane reinjection, and a megawatt power generation plant with power lines to connect to Peru s electric power grid. The average wellhead gas production rate was increased by Aguaytía Energy on May 1, 2002, from 58 to approximately 70 MMCFD. This increase includes 5 MMCFD produced for natural gasoline recovery but reinjected without LPG recovery. Wells 2X, 5, and 6 are producing to provide gas for the fractionation plant and fuel for the power generation plant. When the power generation plant is not dispatched to provide electricity to the power grid, the gas volumes are reinjected into three gas injection wells (3X, 7, and 8) after extracting the liquids. Aguaytía Energy s estimate of electrical dispatch is approximately 89 percent in 2007, resulting in the net production of approximately 71 percent of the total wellhead produced volume; its complete forecast of power plant dispatch percentages is shown on Table 3.1. Based on future well and reservoir performance, wells may be worked over to change completed intervals and tubing sizes and additional wells may be drilled as necessary to further delineate the structure, add deliverability, increase sweep efficiency, or test deeper horizons. 55 AGUAYTÍA 56 Aguaytía Field 104

113 Gas Productive Aguaytía Field 105

114 Aguaytía 1X Aguaytía Field Aguaytía Field Aguaytía Field 106

115 PETROPHYSICAL SUMMARY AGUAYTÍA FIELD CUSHABATAY RESERVOIR Structural Top Measured Depth (ft) Subsea Depth (ft) Fluid Contacts Measured Depth (ft) Subsea Depth (ft) Gross Interval Above -7,638 GWC (ft) Net Pay Analysis Well Log Date Logs Available KB (1) (ft) Type h (ft) Net-to-Gross Ratio 1X 07/61 E,M,S 966 8,297 7,323 LKG 8,613 7, (estimated) HKW 8,642 7,668 2X 11/67 E,M,S 764 8,245 7,481 LKG 8,385 7, HKW 8,445 7,681 3X 08/86 SP, GR, 1,061 8,412 7,351 LKG 8,649 7, I, M, N/D HKW 8,728 7,667 4X 01/87 SP, GR, I, 1,069 8,901 7,600 HKW 8,900 7, N/D 5 04/97 CH 824 8,001 7,177 No Resistivity Log /97 SP, GR, 1,179 8,565 7,386 LKG 8,808 7, I, N/D HKW 8,821 7, /97 SP, GR, 852 8,290 7,438 LKG 8,440 7, I, N/D HKW 8,552 7, /97 SP, GR, 704 8,202 7,498 LKG 8,342 7, I, N/D HKW 8,373 7, /97 SP, GR, 698 8,316 7,618 LKG 8,332 7, I, N/D HKW 8,340 7, (1) Elevations were remeasured in 1997 using GPS survey measurements. Loq types: Other Abbreviations: E = Electrical N/D = Compensated Neutron/Density GWC = Gas-water contact M = Microlog CH = Cased Hole LKG = Low known gas S = Sonic SP = Spontaneous Potential HKW = High known water 1 = Induction GR = Gamma Ray All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 107

116

117 4. Estimate of Oil Reserves and Future Revenue in Pacaya Field Block 31-E January 18, 2007 The Directors The Directors The Maple Companies, Limited Canaccord Adams Limited Av. Víctor Andrés Belaúnde 147, Vía Principal th Floor Torre Real Seis Oficina 201 Cardinal Place San Isidro, Lima Victoria Street Peru London SW1E 5JL United Kingdom Gentlemen: In accordance with your request, we have estimated the proved, probable, and possible oil reserves and future revenue, as of December 31, 2006, to The Maple Companies, Limited (Maple) interest in Pacaya Field located in Block 31-E in the Ucayali Basin of Peru, as listed in the accompanying tabulations. The license contract for Block 31-E was awarded in early 2001 to Maple Production del Perú, Sucursal Peruana, the Peruvian branch of Maple Production del Perú Ltd. (Maple Production); Maple Production is a wholly owned subsidiary of Maple. Subject to this contract, which was renegotiated in 2005, Maple has the opportunity to redevelop the inactive Pacaya Field and return it to production. This report has been prepared using constant price and cost parameters specified by Maple, as discussed in subsequent paragraphs of this letter. As presented in the accompanying Table 4.1, we estimate the oil reserves and future net revenue to the Maple interest in Pacaya Field, as of December 31, 2006, to be: Category Gross (Barrels) Oil Reserves (1) After-Tax Future Net Revenue ($) Net (Barrels) Total Present Worth at 10% Proved Developed Non-Producing 81,926 81, , ,260 Probable 50,998 50,998 1,318, ,059 Possible 41,038 41, , ,242 (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. The oil reserves shown include crude oil and condensate. Oil volumes are expressed in barrels that are equivalent to 42 United States gallons. These properties have never produced commercial volumes of gas. Revenue estimates are expressed in United States dollars ($). The estimates shown in this report are for proved developed non-producing, probable, and possible reserves. Our study indicates that there are no proved developed producing or proved undeveloped reserves for these properties at this time. This report does not include any value that could be attributed to interests in undeveloped acreage beyond those tracts for which undeveloped reserves have been estimated. Reserve categorization conveys the relative degree of certainty; the estimates of reserves and future revenue included herein have not been adjusted for risk. Definitions of reserve categories are presented in section 1.1. This report includes a discussion of the field along with various maps and exhibits. Also included are economic summaries showing present worth, both before and after Peruvian income taxes, for each reserve category. In addition to the base price case of $50.00 per barrel, price sensitivities are included for $40.00 per barrel, $60.00 per barrel, and $70.00 per barrel price cases. Before-tax summary projections of reserves and revenue by reserve category along with one-line summaries of reserves, economics, and basic data by lease are included for the base price case. Future gross revenue to the Maple interest is before deducting government royalty payments as set forth in the license contract. Future net revenue is after deductions for royalty expense payments, future capital costs, and operating expenses; future net after-tax revenue is after consideration of Peruvian income taxes at a rate of 22 percent. The future net revenue has been discounted at an annual rate of 10 percent to determine its present worth. The present worth is shown to indicate the effect of time on the value of money and should not be construed as being the fair market value of the properties. For the purposes of this report, we did not perform any field inspection of the properties, nor did we examine the mechanical operation or condition of the wells and their related facilities. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties. 65 As requested, this report has been prepared using oil prices specified by Maple. The oil price used for the base case is based on a West Texas Intermediate posted price of $50.00 per barrel and is adjusted for estimated quality, transportation fees, and a regional price differential. Oil prices are held constant throughout the lives of the properties. Lease and well operating costs of $4,000 per well per month, approximately $140,000 per year, are based on operating expense estimates of Maple and our experience with similar properties. These costs include general and administrative overhead costs along with other costs estimated to be incurred at the field level. Lease and well operating costs are held constant throughout the lives of the properties. Capital costs are included for field reactivation including recompletions, pipelines, production facilities, and production equipment. These costs are based on the capital expenditure estimates of Maple and our experience with similar properties. The reserves shown in this report are estimates only and should not be construed as exact quantities. The reserves may or may not be recovered; if they are recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts. Because of governmental policies and uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while preparing this report. Also, estimates of reserves may increase or decrease as a result of future operations. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be political, socioeconomic, legal, or accounting, rather than engineering and geologic. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geologic data; therefore, our conclusions necessarily represent only informed professional judgment. The contractual rights to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from The Maple Companies, Limited; its subsidiaries; public data sources; and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting geologic, field performance, and work data are on file in our office. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Very truly yours, NETHERLAND, SEWELL & ASSOCIATES, INC. /s/ Frederic D. Sewell, P.E. By: Frederic D. Sewell, P.E. Chairman and Chief Executive Officer /s/ C.H. (Scott) Rees III, P.E. /s/ John G. Hattner, P.G. By: By: C.H. (Scott) Rees III, P.E. President and Chief Operating Officer John G. Hattner, P.G. Senior Vice President Date Signed: January 18, 2007 Date Signed: January 18, 2007 CHR: SDB Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document

118 4.1 Summary of oil reserves and future net revenue SUMMARY OF OIL RESERVES AND FUTURE NET REVENUE THE MAPLE COMPANIES, LIMITED INTEREST PACAYA FIELD - BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE - $50.00 PER BARREL Pacaya Field Gross Oil Reserves (Barrels) Proved Developed Non-Producing 81,926 Probable 50,998 Possible 41,038 Net Oil Reserves (Barrels) Proved Developed Non-Producing 81,926 Probable 50,998 Possible 41,038 BEFORE INCOME TAX Future Net Revenue ($) Proved Developed Non-Producing 1,058,400 Probable 1,690,400 Possible 1,136,700 Present Worth Discounted at 10% ($) Proved Developed Non-Producing 710,500 Probable 1,186,700 Possible 773,400 AFTER INCOME TAX Future Net Revenue ($) Proved Developed Non-Producing 825,552 Probable 1,318,512 Possible 886,626 Present Worth Discounted at 10% ($) Proved Developed Non-Producing 504,260 Probable 924,059 Possible 595,242 Note: Reserve categorization conveys the relative degree of certainty; the estimates of reserves and future revenue included herein have not been adjusted for risk. Table 4.1 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions General information DISCUSSION PACAYA FIELD BLOCK 31-E, UCAYALI BASIN, PERU OVERVIEW Pacaya Field is located in Block 31-E of the Ucayali Province, Loreto Region, Peru, 105 kilometers north-northwest of the city of Pucallpa, as shown on the location map on Page 72. Cumulative oil production for the field is approximately 53 thousand barrels of oil; last production occurred in November The license contract for Block 31-E was awarded in early 2001 to Maple Production del Perú, Sucursal Peruana, the Peruvian branch of Maple Production del Perú Ltd. (Maple Production); Maple Production is a wholly owned subsidiary of The Maple Companies, Limited (Maple). Subject to this contract, which was renegotiated in 2005, Maple has the opportunity to redevelop the inactive Pacaya Field and return it to production. Although Maple production tested 3 wells in mid-2004, there are currently no wells producing in the field. Pacaya Field was discovered in June 1958 by Petroleos del Perú S.A. (PetroPerú) with the drilling of the Pacaya 31-1X. This well tested 25 barrels of oil per day (BOPD) from the Beta member of the Cachiyacu Formation and was abandoned without a long-term test in September In November 1982 the Pacaya 31-31X was drilled and completed; this well produced a maximum of 196 BOPD from the Beta members of the Cachiyacu Formation. In August 1983 the 31-31X was shut in because of increasing water production at a rate of 89 BOPD and 82 barrels of water per day (BWPD). The well was then completed in the Gamma members of the Cachiyacu Formation in September 1983 and produced at a maximum rate of 225 BOPD before being shut in because of pump failure in November 1988; the last 10 days of production averaged 47 BOPD and 309 BWPD. The Pacaya 33, 35, 37, and 38 wells were drilled between April 1985 and March 1986 in an attempt to extend the productive reservoir limits. The Pacaya 35 and 37 produced a total of only 9 thousand barrels of oil from the Gamma member of the Cachiyacu Formation. Both wells produced at rates greater than 60 BOPD and appear to have declined quickly during their short production history. The Pacaya 33 and 38 both tested water in the Gamma. In the summer of 2004, Maple conducted an evaluation program in the field, testing 3 wells, to confirm the field s productivity. During this program, Pacaya 31 tested, through swabbing, at rates exceeding 50 BOPD and 300 BWPD from the Gamma; Pacaya 33 tested primarily water from a commingled completion of Gamma and Casa Blanca; and Pacaya 35 tested, also through swabbing, at rates of 20 BOPD and 90 BWPD from the Gamma and tested only water from the Casa Blanca. For this evaluation, we reviewed technical data that was provided by Maple and supplemented by public data and the nonconfidential files of Netherland, Sewell & Associates, Inc. These data include, but are not limited to: well logs, individual well monthly and cumulative production reports, well test reports, completion reports, geologic and engineering field studies prepared by Maple and PetroPerú, and field development plans. GEOLOGY Pacaya Field is approximately 22 kilometers to the southeast of Maquia Field, which has produced 16.6 million barrels of oil to date from the Upper Cretaceous Casa Blanca, Cachiyacu, and Vivian Formations. The Pacaya Field anticline is a similar northwest-southeast trending anticline and is defined by surface geology, seismic data, and the 6 Pacaya wells, as shown on the structure map on Page 73. The Casa Blanca, Cachiyacu, and Vivian Formations in the Pacaya Field have tested both fresh and low-salinity water, along with some oil shows. Log analysis suggests that the overlying, very permeable Casa Blanca Formation and the underlying, very permeable Vivian Formation contain primarily fresh water, indicating that these formations have been flushed by ground water. The variable salinity of the formation water recovered on tests and through production makes accurate oil saturation calculations difficult. Production has only occurred from the Gamma and Beta members of the Cachiyacu Formation, which are shown on the geologic column on Page 74. This reservoir consists of fine- to coarse-grained sands with porosity ranging from 18 to 26 percent. The Gamma member is productive in the Pacaya 31, 35, and 37 wells. The Beta is productive from the Pacaya 31 well. All of these wells had increasing water cut over time. The lowest known oil from both oil zones is 741 feet subsea, although the Pacaya 38 tested mostly

119 water from 739 feet subsea in the Gamma. The currently non-productive Delta member of the Cachiyacu Formation has porosity ranging from 10 to 24 percent and tested mostly water, with a show of oil in the Pacaya 33, 35, and 38 wells. The Delta sand in the Pacaya 31 log data looks favorable when compared to the Gamma and Beta producing intervals in the same well and is updip to the 3 water tests. RESERVES A graph showing gross historical and projected oil production for Pacaya Field is shown on Page 75. There are currently no proved developed producing or proved undeveloped reserves in this field. Proved developed non-producing reserves are estimated for the Gamma and Beta members of the Cachiyacu Formation in the Pacaya 31 well, the Gamma member in the Pacaya 35 well, and the Gamma member in the Pacaya 37 well. The wells will require reentry and workover to reestablish production. The proved developed non-producing reserves are estimated based on volumetric analysis combined with performance data prior to the development of mechanical problems. Probable reserves are estimated for the Delta member of the Cachiyacu Formation in the Pacaya 31 well based on log analysis. This zone is forecast to be completed and commingled two years after returning the Gamma and Beta members to production. Incremental probable reserves are also estimated for the Gamma member in Pacaya 31 based on log analysis. Possible reserves are estimated for the Pacaya 35 well in the Gamma member of the Cachiyacu Formation and the Pacaya 37 well in the Beta member. The possible reserves for the Gamma member in Pacaya 35 are based on reperforating and possible stimulation to attempt to increase rates. Possible reserves for the Beta member of the Cachiyacu Formation in the Pacaya 37 well are based on log and volumetric analysis and structural position. Maple does not have any near-term plans targeting the Casa Blanca Formation, and reserves have not been included because of the recent water tests in Pacaya 33 and 35. However, the fluorescence of the cores and the log response indicate this reservoir may still have potential; there is a chance the water production could be caused by behind pipe channeling. Unfortunately the log interpretation is not definitive and is complicated by the presence of fresh formation water. The reserves for these wells, summarized by formation, are shown in the following table: Gross Remaining Oil Reserves by Well (MBBL) Formation Category Casa Blanca n/a Epsilon n/a Delta Probable 13 Gamma Proved Probable 38 Possible 18 Beta Proved 36 Possible 23 ECONOMICS Development Plan Based on its 2004 evaluation program, Maple plans to declare a Commercial Discovery under the contract and officially establish a development plan for the remaining wells. In this report we have included capital costs for workovers and field development in the second half of 2007; first production is expected in the fourth quarter of 2007, after regulatory approvals are obtained. All prices and costs referenced herein are expressed in United States dollars ($). 69 The capital costs included herein are based on Maple s estimates of the costs to reactivate the field and are summarized below. In addition, we have included capital costs of $50,000 per workover for future recompletions to additional zones after depletion of initial zones. Reserve Category Capital Costs ($) Activity Pacaya 31 Reactivate well, install rod pump Proved 40,000 Pacaya 33 Convert to water injection Proved 30,000 Pacaya 35 Reactivate well, install rod pump Proved 40,000 Pacaya 37 Reactivate well, install rod pump Proved 40,000 Pacaya 38 Reactivate well, install rod pump 40,000 Pipeline for oil transport Proved 216,546 Install production batteries, LAC unit, camp Proved 400,000 Install water injection facilities, upgrade roads Proved 200,000 Miscellaneous supervision, permitting, etc. Proved 293,454 Total Initial Development Costs 1,300,000 Pricing and Operating Costs The oil price used for the base case presented in this report is based on a West Texas Intermediate (WTI) posted price of $50.00 per barrel and is adjusted for estimated quality, transportation fees, and a regional price differential. In addition, price sensitivities are included for $40.00 per barrel, $60.00 per barrel, and $70.00 per barrel cases. A graph showing the present worth versus discount rate for each reserve category is shown on Page 76. The sensitivity of the project economics to price variations is shown on Page 77. Oil prices are held constant throughout the lives of the properties. Maple plans to produce, transport, and sell the approximately 30 gravity sweet crude oil to its refinery in Pucallpa. The total deduction from the oil price, shown in the following table, is based on Maple s estimate of the deductions relative to WTI posted prices. Deduction Barging to Pucallpa 2.00 Differential to WTI Posting 5.50 Total Deduction 7.50 Amount ($/Barrel) Lease and well operating costs of $4,000 per well per month, totaling approximately $140,000 per year in the proved category, are based on operating expense estimates of Maple and our experience with similar properties. Lease and well operating costs include general and administrative overhead costs along with other costs estimated to be incurred at the field level. Lease and well operating costs are held constant throughout the lives of the properties. Fiscal Terms Maple Production del Perú, Sucursal Peruana, the Peruvian branch of Maple Production, signed the license contract for Block 31-E with the Peruvian government on March 6, 2001, giving them 100 percent ownership in the block. Maple Production is a wholly owned subsidiary of Maple. Including subsequent amendments, the minimum work program has four phases. In Phase 1, in the first two years, Maple was committed to reevaluate 800 kilometers of seismic data, reprocess at least 500 kilometers of the existing seismic data, and drill one exploration well. During Phase 2 over the next two years, Maple was committed to drilling a second exploration well. It is our understanding that all work commitments under Phases 1 and 2 have been completed. Phases 3 and 4 require one well to be drilled in each phase, with 17 months to complete in Phase 3 and 18 months to complete in Phase 4. Following the initial seven years, Maple must drill one exploration well per year or relinquish all acreage outside of a 5-kilometer radius from the defined limits of the discovered fields. The total concession term is for 30 years, inclusive of the initial exploration phases. Given the administrative exemption allowed for the time required for government permitting (estimated to be 22 months), it is expected that the concession term will be through December 31, The economics included herein are based on the flat 15 percent royalty rate to which Maple and the Peruvian government have agreed for the reactivation of Pacaya Field. Under Peruvian hydrocarbon law, the contractor has rights to 100 percent of the hydrocarbons produced in exchange for a royalty payment equal to a contractual percentage of the proceeds. These royalty payments are shown as deductions from revenue and not as a reduction in net volumes attributable to Maple

120 112 Royalty = 5% + 15% x (Rate 5,000)/95, Future revenue is shown in the economics for both before and after Peruvian tax payments. For the after-tax calculations, a 22 percent Peruvian tax rate was used. For tax purposes, 75 percent of the drilling costs were expensed and 25 percent were depreciated using 5-year straight line depreciation. All remaining costs were depreciated using 5-year straight line depreciation. At the time Maple makes a Declaration of Discovery of Commercial Hydrocarbons for a successful exploration prospect, it will have the right to elect to use the production-based sliding scale royalty for that development. (1) 5 ⱕ 5,000 > 5,000 and < 100,000 ⱖ100,000 (1) Royalty (%) Oil Producing Rate (BOPD) Under this concession agreement, for exploration discoveries Maple has two sliding scale royalty options for royalty payments to the Peruvian government. These are based either on R-Factor calculations or on total block production rates, as shown below: BLOCK 31-E CASHIBOYA 1 NORTE INUYA 1 PACAYA OIL FIELD AMAQUIRIA CACHIYACU UCAYALI BASIN Pucallpa ORIENTE BASIN BLOCK 31-E located in Block 31-E showing Location Map 250 Scale In Kilometers Peru, South America 0 MADRE DE DIOS BASIN M OQU E G U A BASIN PERU SOUTH AMERICA - INDEX - All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. MAQUIA 1 PISCO BASIN Lima SECHURA BASIN S AL A VER R Y BASIN TALARA BASIN NETHERLAND, SEWELL & ASSOCIATES, INC.

121 Highest Known Water = -749 (#35 production) Lowest Known Oil = -754 (#37 test) Legend -Abandoned with Oil Show -Abandoned Oil Well -Dry Hole (Symbols Specific to Zone) Pacaya Field Ucayali Basin, Peru Depth Structure Map Top Gamma Member Cachiyacu Formation Contour Interval: 2 meters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 73 NETHERLAND, SEWELL & ASSOCIATES, INC. Geologic Column and Type Log Pacaya Field Ucayali Basin, Peru Age Rock Unit IPURORO FM. MIOCENE PEBAS CHAMBIRA FM. FORMATION OLIGOCENE POZO FORMATION Casa Blanca Fm. EOCENE YAHUARANGO FORMATION PALEOCENE CASA BLANCA FM. HUCHPAYACU FM. CACHIYACU FM. UPPER VIVIAN FORMATION CHONTA FORMATION AGUA CALIENTE FM. RAYA FM. LWR. CUSHABATAY FORMATION CRETACEOUS Cachiyacu Fm. ORIENTE GR. Epsilon Mbr. SARAYAQUILLO JURASSIC FORMATION Delta Mbr. RECENT- UCAYALI PLIOCENE FORMATION JURASSIC- TRIASSIC PERMIAN PUCARA GROUP MITU PINQUEN FM. COPACABANA GROUP Gamma Mbr. Beta Mbr. Vivian Fm. UPPER TARMA GROUP CARB. LWR. AMBO GROUP DEVONIAN CABANILLAS GROUP SILURIAN ORDOVICIAN CONTAYA FM. PRE-CAMBRIAN BASEMENT Oil Productive in Field Oil Prospective in Field All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

122 75 PRESENT WORTH vs. DISCOUNT RATE THE MAPLE COMPANIES, LIMITED INTEREST PACAYA FIELD BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE $50.00 PER BARREL After-Tax Present Worth (M$) Proved Developed Discount Rate (%) Non-Producing Probable Possible (138.0) (230.0) (288.4) ,200 2,000 1,800 1,600 1,400 1,200 1, After-Tax Present Worth (M$) Proved + Probable + Possible (3P) Proved + Probable (2P) Proved Discount Rate (%) All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

123 ECONOMIC SUMMARY THE MAPLE COMPANIES, LIMITED INTEREST PACAYA FIELD BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 $50 per Barrel (Base) Price Case $40 per Barrel Price Case $60 per Barrel Price Case $70 per Barrel Price Case Prvd Devel Non-Prodg Probable Possible Prvd Devel Non-Prodg Probable Possible Prvd Devel Non-Prodg Probable Possible Prvd Devel Non-Prodg Probable Possible Oil Reserves (MBBL) Gross Net Economics (a) Economic summary oil reserves and present worth BEFORE INCOME TAX Present Worth (M$) Discounted at: 10% , , , , , , , % , , , , , , % , , , % % % % AFTER INCOME TAX Present Worth (M$) Discounted at: 10% , , , % , , % , , % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. PRICE SENSITIVITY DATA THE MAPLE COMPANIES, LIMITED INTEREST PACAYA FIELD BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Price Case After-Tax Present Worth Discounted at 10% (M$) Proved Developed Non-Producing Probable Possible $40.00 per Barrel $50.00 per Barrel (Base) $60.00 per Barrel , $70.00 per Barrel 1, , ,000 3,500 3,000 2,500 2,000 1,500 1, Proved + Probable + Possible (3P) Proved + Probable (2P) Proved After-Tax Present (M$) Oil Price ($/Barrel) All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

124 SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST PROBABLE RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING GROSS OIL/COND NET OIL/COND GROSS REVENUE ROYALTY NET CAP OPERATING EXPENSE INVSTMT EXPENSE BEFORE TAX DD & A AFTER TAX CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE NET REVENUE MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL CUM P.W % 80 $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. (b) Summary projections of reserves and revenue by reserve category SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST PACAYA FIELD BLOCK 31-E PROVED DEVELOPED NON-PRODUCING RESERVES UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW,$M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

125 THE MAPLE COMPANIES, LIMITED INTEREST NET OIL/ COND SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PROVED DEVELOPED NON-PRODUCING RESERVES BEFORE TAX DD & A AFTER TAX CUM CUM NET P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET P.W. REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% PERIOD ENDING GROSS OIL/COND GROSS REVENUE ROYALTY EXPENSE NET CAP INVSTMT OPERATING EXPENSE MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST POSSIBLE RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING GROSS OIL/COND NET OIL/COND GROSS REVENUE ROYALTY NET CAP OPERATING EXPENSE INVSTMT EXPENSE BEFORE TAX DD & A AFTER TAX CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE NET REVENUE MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL CUM P.W % 81 $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % 52.3 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 117

126 SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST POSSIBLE RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST NET OIL/ COND PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PROBABLE RESERVES BEFORE TAX DD & A AFTER TAX CUM CUM P.W. 6-YR EXPENSED TAXABLE TAX INCOME NET P.W % DEPR 5-YR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% PERIOD GROSS GROSS ROYALTY NET CAP OPERATING NET ENDING OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 118

127 SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST PROBABLE RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX NET CUM CUM PERIOD GROSS OIL/ ENDING OIL/COND COND REVENUE GROSS NET CAP EXPENSE INVSTMT OPERATING NET P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 6-YR TAXABLE TAX CAPEX INCOME CARRYFWD INCOME NET P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST PROVED DEVELOPED NON-PRODUCING RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX NET CUM CUM PERIOD GROSS OIL/ ENDING OIL/COND COND REVENUE GROSS NET CAP EXPENSE INVSTMT OPERATING NET P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 6-YR TAXABLE TAX CAPEX INCOME CARRYFWD INCOME NET P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 119

128 SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST PROVED DEVELOPED NON-PRODUCING RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % 1.0 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 88 SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST POSSIBLE RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 120

129 SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST POSSIBLE RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX NET CUM CUM PERIOD GROSS OIL/ ENDING OIL/COND COND REVENUE GROSS NET CAP EXPENSE INVSTMT OPERATING NET P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 6-YR TAXABLE TAX CAPEX INCOME CARRYFWD INCOME NET P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST PROBABLE RESERVES PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR 5-YR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 121

130 THE MAPLE COMPANIES, LIMITED INTEREST RESERVES AND ECONOMICS AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU ACCT NUMBER FIELD, COUNTY LEASE NAME GROSS OIL/COND NET OIL/COND PROVED DEVELOPED NON-PRODUCING RESERVES GROSS GAS NET GAS OIL REVENUE GAS REVENUE TOTAL TAXES NET CAP COST OPRTNG EXPNSE NET REVENUE MBBL MBBL MMCF MMCF M$ M$ M$ M$ M$ M$ M$ PERU PACAYA FIELD CAPEX-2005 INFRA PACAYA 31-X (B) PACAYA 31-X (G) PACAYA 33-P (C) PACAYA 35-P (G) PACAYA 37-P (G) PACAYA 38-P (EDG) FIELD TOTAL TOTAL ALL LEASES IN THIS SUMMARY CUM P.W % LIFE YRS 92 $50.00 PER BARREL (BASE) PRICE CASE All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU (c) Before income tax reserves, economics and basic data PROVED DEVELOPED NON-PRODUCING RESERVES GROSS REVENUE PERIOD ENDING GROSS OIL/COND NET OIL/ COND GROSS GAS NET GAS INCL OIL PROD+ADVAL GAS TAXES TOTAL PROD+AV TAXES NET CAP COST OPERATING EXPENSE NET REVENUE CUM P.W % MBBL MBBL MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL OF 8.1 YRS CUM PROD ULTIMATE $50.00 PER BARREL (BASE) PRICE CASE PRESENT WORTH PROFILE FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ 1.8 FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

131 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PROBABLE RESERVES GROSS REVENUE INCL PROD+ADVAL TAXES PERIOD ENDING GROSS OIL/COND NET OIL/COND GROSS GAS NET GAS OIL GAS TOTAL PROD+AV TAXES NET CAP COST OPERATING EXPENSE NET REVENUE CUM P.W % MBBL MBBL MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL OF 12.0 YRS CUM PROD ULTIMATE $50.00 PER BARREL (BASE) PRICE CASE PRESENT WORTH PROFILE FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST BASIC DATA AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PROVED DEVELOPED NON-PRODUCING RESERVES PROP NUMBER FIELD, COUNTY LEASE NAME #OF WELLS GROSS ULTIMATE WORKING INTEREST REVENUE INTEREST OIL/COND $/BBL GAS $/MCF GROSS OPERTNG EXPENSE M$/M OIL GAS OIL/COND GAS START END START END START END START END START END MBBL MMCF PERU PACAYA FIELD CAPEX-2005 INFRA PACAYA 31-X (B) PACAYA 31-X (G) PACAYA 33-P (C) PACAYA 35-P (G) PACAYA 37-P (G) PACAYA 38-P (EDG) FIELD TOTAL TOTAL ALL LEASES IN THE SUMMARY $50.00 PER BARREL (BASE) PRICE CASE All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 123

132 THE MAPLE COMPANIES, LIMITED INTEREST BASIC DATA AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PROBABLE RESERVES PROP NUMBER # OF WELLS GROSSULTIMATE WORKING INTEREST REVENUE INTEREST OIL/COND $/BBL GAS $/MCF GROSS OPERTNG EXPENSE M$/M FIELD, COUNTY LEASE NAME OIL GAS OIL/COND GAS START END START END START END STRT END START END MBBL MMCF PERU PACAYA FIELD PACAYA 31-X (D) PACAYA 31-X (G) FIELD TOTAL TOTAL ALL LEASES IN THIS SUMMARY $50.00 PER BARREL (BASE) PRICE CASE THE MAPLE COMPANIES, LIMITED INTEREST RESERVES AND ECONOMICS AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU PROBABLE RESERVES ACCT NUMBER FIELD, COUNTY LEASE NAME GROSS OIL/COND NET OIL/COND GROSS GAS NET GAS OIL REVENUE GAS REVENUE TOTAL TAXES NET CAP COST OPRTNG EXPNSE NET REVENUE MBBL MBBL MMCF MMCF M$ M$ M$ M$ M$ M$ M$ CUM P.W % LIFE YRS PACAYA FIELD PERU PACAYA 31-X (D) PACAYA 31-X (G) FIELD TOTAL TOTAL ALL LEASES IN THIS SUMMARY $50.00 PER BARREL (BASE) PRICE CASE All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 124

133 THE MAPLE COMPANIES, LIMITED INTEREST RESERVES AND ECONOMICS AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU POSSIBLE RESERVES ACCT NUMBER FIELD, COUNTY LEASE NAME GROSS OIL/COND NET OIL/COND GROSS GAS NET GAS OIL REVENUE GAS REVENUE TOTAL TAXES NET CAP COST OPRTNG EXPNSE NET REVENUE MBBL MBBL MMCF MMCF M$ M$ M$ M$ M$ M$ M$ PERU PACAYA FIELD PACAYA 35-P (G) PACAYA 37-P (B) FIELD TOTAL TOTAL ALL LEASES IN THIS SUMMARY CUM P.W % LIFE YRS $50.00 PER BARREL (BASE) PRICE CASE 98 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU POSSIBLE RESERVES PERIOD ENDING GROSS REVENUE NET GROSS OIL/ GROSS NET INCL PROD+ADVAL TAXES PROD+AV NET CAP OPERATING NET CUM P.W. OIL/COND COND GAS GAS OIL GAS TOTAL TAXES COST EXPENSE REVENUE % MBBL MBBL MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL OF 7.4 YRS CUM PROD ULTIMATE $50.00 PER BARREL (BASE) PRICE CASE PRESENT WORTH PROFILE FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ FOR PCT, PRESENT WORTH M$ All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 125

134 5. Assessment of Exploration Risk and Hydrocarbon Potential, Block 31-E January 19, 2007 The Directors The Maple Companies, Limited Av. Víctor Andrés Belaúnde 147, Vía Principal 140 Torre Real Seis Oficina 201 San Isidro, Lima 27, Peru The Directors Canaccord Adams Limited 7 th Floor Cardinal Place 80 Victoria Street London SW1E 5JL United Kingdom Gentlemen: In accordance with your request, we have conducted an assessment of the exploration risk and hydrocarbon potential, as of December 31, 2006, for Block 31-E located in the Ucayali Basin, onshore Peru. The license contract for Block 31-E was awarded in early 2001 to Maple Production del Perú, Sucursal Peruana, the Peruvian branch of Maple Production del Perú Ltd. (Maple Production); Maple Production is a wholly owned subsidiary of The Maple Companies, Limited (Maple). Maple has identified 3 exploration prospects on this block, the Cashiboya Deep and Santa Rosa Prospects in deep zones and the shallow San Roque Prospect. The prospective resources included in this report indicate exploration opportunities and development potential in the event a commercial discovery is made and should not be construed as reserves. A geologic risk assessment was performed for these properties, as discussed in subsequent paragraphs. These estimates of prospective resources have been prepared in accordance with the 2000 petroleum resource definitions approved by the Society of Petroleum Engineers, World Petroleum Council, and American Association of Petroleum Geologists. This report has been prepared using constant price and cost parameters specified by Maple, as discussed in subsequent paragraphs of this letter. As presented in the accompanying Table 5.1, we estimate the probability of recoverable oil occurrence, unrisked net prospective oil resources, and risked after-tax present worth for the 3 prospects, as of December 31, 2006, to be: Prospect Probability of Recoverable Oil (Decimal) Low Estimate Unrisked Net Prospective Oil Resources (1) (MMBBL) Best Estimate High Estimate Risked Mean After-Tax (2) Present Worth at 10% (MM$) Deep Cashiboya Deep Santa Rosa Shallow San Roque (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. (2) Discounted cash flow shown is based on the best estimate case using the $50.00 per barrel base price case and is after consideration of Peruvian income taxes at a rate of 22 percent. The oil resources shown include crude oil only. Oil volumes are expressed in millions of barrels (MMBBL); a barrel is equivalent to 42 United States gallons. Revenue estimates are expressed in millions of United States dollars (MM$). The prospective resources shown in this report have been estimated using probabilistic methods and are dependent upon a commercial discovery being made. For the low estimate resources, there is at least a 90 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts. The best estimate resources correspond to a measure of the central tendency of the uncertainty distribution, represented herein as the mean value. For the high estimate resources, there is at least a 10 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts. Definitions of resource categories are set out in section 1.1. A geologic risk assessment was conducted for each prospect. Risked prospective resources address the probability or chance of success for the discovery of recoverable hydrocarbons, and risk analysis is conducted independently of probabilistic estimations of hydrocarbon volumes without regard to commerciality. Principal risk elements of the petroleum system include (1) trap and seal characteristics; 100 THE MAPLE COMPANIES, LIMITED INTEREST BASIC DATA AS OF PACAYA FIELD BLOCK 31-E UCAYALI BASIN, PERU POSSIBLE RESERVES PROP NUMBER #OF WELLS GROSS ULTIMATE WORKING INTEREST REVENUE INTEREST OIL/COND $/BBL GAS $/MCF GROSS OPERTNG EXPENSE M$/M FIELD, COUNTY LEASE NAME OIL GAS OIL/CON GAS START END START END START END START END START END MBBLD MMCF PERU PACAYA FIELD PACAYA 35-P (G) PACAYA 37-P (B) FIELD TOTAL TOTAL ALL LEASES IN THIS SUMMARY $50.00 PER BARREL (BASE) PRICE CASE 99 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 126

135 (2) reservoir presence and architecture; (3) source rock capacity, quality, and maturity; and (4) timing, migration, and preservation of hydrocarbons in relation to trap and seal formation. Prospect risk assessment is a highly subjective process dependent upon the experience and judgment of the evaluators and is subject to revisions with further data acquisition or interpretations. Our views of the primary risk elements for each play type are qualitatively described and quantified herein. Unrisked prospective resources are estimated ranges of in-place and recoverable oil and gas volumes if hydrocarbons are discovered. Each prospect was evaluated to determine probabilistic ranges of in-place and recoverable hydrocarbons and was risked as an independent entity without dependency between potential prospect drilling outcomes. The development infrastructure and data obtained from early discoveries may alter prospect risk, prospect size, and future economics of subsequent developments. This report includes a discussion of the project along with various maps and exhibits. Included for each prospect are economic summaries showing present worth, both before and after Peruvian income taxes, for each resource case. In addition to the base price case of $50.00 per barrel, price sensitivities for each resource case are included for $40.00 per barrel, $60.00 per barrel, and $70.00 per barrel price cases. Future gross revenue to the Maple interest is before deducting government royalty payments as set forth in the license contract. Future net revenue is after deductions for royalty expense payments, future capital costs, and operating expenses; future net after-tax revenue is after consideration of Peruvian income taxes at a rate of 22 percent. The future net revenue has been discounted at an annual rate of 10 percent to determine its present worth. The present worth is shown to indicate the effect of time on the value of money and should not be construed as being the fair market value of the properties. For the purposes of this report, we did not perform any field inspection of the properties. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties. As requested, this report has been prepared using oil prices specified by Maple. Oil prices used for the base case are based on a West Texas Intermediate posted price of $50.00 per barrel and are adjusted by prospect for estimated quality, transportation fees, and regional price differentials. Oil prices are held constant throughout the lives of the properties. Lease and well operating costs are based on operating expense estimates of Maple and our experience with similar properties. These costs have been divided into fixed field-level operating costs of $100,000 per month per discovery, fixed overhead costs of $25,000 per month per discovery, and variable per-well costs of $10,000 per month for Cashiboya Deep and Santa Rosa and $5,000 per month for San Roque. These costs include general and administrative overhead costs along with other costs estimated to be incurred at the field level. Lease and well operating costs are held constant throughout the lives of the properties. Capital costs are included for new wells, pipelines, production facilities, and production equipment. These costs are based on the capital expenditure estimates of Maple and our experience with similar projects. It should be understood that the prospective resources discussed and shown herein are those undiscovered, highly speculative resources estimated beyond proved, probable, and possible reserves or contingent resources where geological and geophysical data suggest the potential for discovery of hydrocarbons but where the level of proof is insufficient for classification as reserves or contingent resources. The unrisked prospective resources are those volumes that could reasonably be expected to be recovered upon the successful exploration and development of these prospects. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be political, socioeconomic, legal, or accounting, rather than engineering and geologic. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geologic data; therefore, our conclusions necessarily represent only informed professional judgment. 101 The contractual rights to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from The Maple Companies, Limited; its subsidiaries; and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting geologic, field performance, and work data are on file in our office. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Very truly yours, NETHERLAND, SEWELL & ASSOCIATES, INC. /s/ Frederic D. Sewell, P.E. By: Frederic D. Sewell, P.E. Chairman and Chief Executive Officer /s/ C.H. (Scott) Rees III, P.E. /s/ John G. Hattner, P.G. By: By: C.H. (Scott) Rees III, P.E. President and Chief Operating Officer John G. Hattner, P.G. Senior Vice President Date Signed: January 19, 2007 Date Signed: January 19, 2007 CHR:SDB Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document

136 5.1 Summary of prospective oil resources and present worth SUMMARY OF PROSPECTIVE OIL RESOURCES AND PRESENT WORTH THE MAPLE COMPANIES, LIMITED INTEREST BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE $50.00 PER BARREL Cashiboya Deep Probability of Recoverable Oil (Decimal) Santa Rosa San Roque Unrisked Gross Prospective Oil Resources (MMBBL) Low Estimate (P90) Best Estimate (Mean) High Estimate (P10) Unrisked Net Prospective Oil Resources (MMBBL) Low Estimate (P90) Best Estimate (Mean) High Estimate (P10) BEFORE INCOME TAX UNRISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) Best Estimate (Mean) 2, , High Estimate (P10) 6, , BEFORE INCOME TAX RISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) Best Estimate (Mean) High Estimate (P10) , AFTER INCOME TAX UNRISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) Best Estimate (Mean) 2, , High Estimate (P10) 5, , AFTER INCOME TAX RISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) Best Estimate (Mean) High Estimate (P10) , Note: Reserve categorization conveys the relative degree of certainty; the estimates of reserves and future revenue included herein have not been adjusted for risk. Table 5.1 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions General information DISCUSSION BLOCK 31-E UCAYALI BASIN, ONSHORE PERU OVERVIEW This report presents our assessment of the hydrocarbon potential and exploration risk for Block 31-E in the Ucayali Basin, onshore Peru, as of December 31, Block 31-E is an exploration block located in the east central jungle area of Peru, 850 kilometers northeast of Lima and 100 kilometers downriver (north) of the city of Pucallpa in the Ucayali Province, as shown on the location map on Page 116. The license contract for Block 31-E was awarded on March 6, 2001, to Maple Production del Perú, Sucursal Peruana, the Peruvian branch of Maple Production del Perú Ltd. (Maple Production); Maple Production is a wholly owned subsidiary of The Maple Companies, Limited (Maple). Block 31-E is located immediately south of Block 31-B, which is operated by Maple Gas Corporation del Perú, Sucursal Peruana, also a wholly owned subsidiary of Maple; oil production has been established on Block 31-B in the Casa Blanca, Cachiyacu, and Vivian Formations at Maquia Field. Some limited production was established from the Cachiyacu sands at Pacaya Field just south of the northern Block 31-E boundary. Maple has identified 3 exploration prospects on this block, the Cashiboya Deep and Santa Rosa Prospects in deep zones and the shallow San Roque Prospect (the deep and shallow zones refer to drilling depth, not location within the stratigraphic column). These prospects target the Cretaceous Casa Blanca, Cachiyacu, Vivian, Agua Caliente, Raya, and Cushabatay Formations. As shown on the geologic column and type log on Page 117, the Cretaceous interval in this area can have a gross thickness of over 1,000 meters. While the project area is underexplored, the data available for review over the 3 prospects show similarities to the data reviewed for Maquia Field. The Ucayali sedimentary basin is one of many basins along the eastern flank of the Andean mountain chain. The Cretaceous, Jurassic, Triassic, and Paleozoic reservoirs in these basins have produced at several giant oil and gas fields. Among these are, to the north, the Fluriel Field in Venezuela, the Caño Limón and Cusiana Fields in Colombia, and the Shushufindi Field in Ecuador; to the south, the San Alberto and San Antonio Fields in Bolivia; and in the southern portion of the Ucayali Basin, the Camisea Field. Exploration in this area began in 1956, and 9 exploration wells have been drilled to date. These wells were concentrated on the lower Tertiary and Cretaceous intervals in a series of compressional anticlines along the eastern limits of the main Ucayali Basin. The structures in the area are defined by regional 2-D seismic data, surface geology, and the earlier exploration well data. The 9 exploration wells resulted in 2 productive structures (Maquia and Pacaya Fields), 4 wells with oil shows, and 3 dry holes; one of the dry holes is immediately south of Block 31-E, one is the shallow San Roque-1 on the block, and one is the shallow Cashiboya Norte-1 on the block. Several active oil seeps exist within Block 31-E; 35 API gravity oil was recovered from a seep located in a streambed in the area of the San Roque Prospect. In addition, the Cretaceous sand reservoirs of the Cushabatay and Raya Formations produce oil in the Agua Caliente Field approximately 150 kilometers south of Block 31-E, and produce gas and condensate from the Cushabatay Reservoir in the Aguaytía Field approximately 100 kilometers to the southwest of Block 31-E. The locations of these fields are shown on the basin map on Page 118. The Cashiboya Deep, Santa Rosa, and San Roque proposed exploration wells will test the hydrocarbon potential of 3 prospects identified on Block 31-E. San Roque Prospect, defined by available seismic data, is an anticlinal structure similar to that of Maquia and Pacaya Fields, as shown on the Top Cretaceous depth structure map on Page 119. This shallow structure was generated by a large reverse fault, the Cashiboya thrust fault. However, the structures along strike to the southeast of Maquia Field are separated from Maquia by a northeast-striking splay fault off of the Cashiboya west-thrusting reverse fault. San Roque Prospect is bounded by a backthrust to the east, as is Maquia Field. San Roque Prospect currently consists of 3 geochemical anomalies totaling 1,500 acres for the Casa Blanca and Vivian Formations. The San Roque-1 well, drilled in 2003 to a depth of 283 meters, was only drilled deep enough to penetrate the upper Cretaceous intervals, finding thick water-bearing sand packages. Pacaya Field, located between Maquia Field and the San Roque Prospect, produced oil from the Cretaceous-age Cachiyacu Reservoir. Pacaya, like Maquia, is located in the footwall block of the Cashiboya splay thrust. The Cashiboya Norte-1 well drilled on the northern flank of the Cashiboya Norte structure is a dry hole with shows; however, the Cashiboya-1x well drilled at the top of the structure was a dry hole. The discoveries in the area tend to be small accumulations at the structural culmination, suggesting limited

137 migration into the structures, limited trapping potential of the small backthrusts to the east of the producing fields, or late structural formation after the principal oil generation event. It should be noted, however, that the principal source rocks of the basin are currently in the prime oil generation window downdip to the west of Block 31-E. The San Roque exploration well, targeting the entire Cretaceous interval, is expected to be drilled to approximately 1,100 meters. Cashiboya Deep Prospect is located to the west of San Roque Prospect and Pacaya Field. The play is a footwall trap to the west of the Cashiboya thrust fault, as shown on the Base Cretaceous depth structure map on Page 120, located between the productive fields and the San Roque Prospect to the east and the generative kitchen to the west. No wells have been drilled in the basin to date to test this play, which requires an updip fault seal. The proposed target reservoirs are the same Cretaceous Formation sands as proposed for the shallower prospect, with the primary targets being the Casa Blanca, Cachiyacu, and Vivian Sands expected at a depth of 2,000 meters and the Aqua Caliente and Cushabatay expected at a depth of approximately 3,000 meters. A seismic line illustrating the structural components of the 2 prospects is shown on Page 121. Santa Rosa Prospect is located west of Cashiboya Deep Prospect. The play is an anticlinal closure at the deepest Cretaceous level between the source kitchen and the Cashiboya thrust fault. This is an old structure, and to date no wells have tested this play type. This structure appears to be an early structure since closure is greatest at base Cretaceous levels and is limited to a few tens of meters at uppermost Cretaceous intervals. The proposed target reservoirs are the same Cretaceous Formation sands as proposed for Cashiboya Deep. Total well depth is expected to be approximately 4,000 meters. A seismic line illustrating this play is shown on Page 122. For this appraisal, we performed a risk assessment of the probability for discovery of recoverable hydrocarbons, conducted a probabilistic analysis of the potential reservoir volumes and recoverable hydrocarbons, and prepared unrisked and risked economic cash flow sensitivities. Our review of the potential for hydrocarbon accumulation in Block 31-E consisted of a review and interpretation of all the seismic data, a review of the overall basin and area geology, and a study of the producing fields in the Ucayali Basin. The seismic data review initially included all available 2-D seismic line time sections in Block 31-E, and all prospects were based on our interpretation of this data. In January 2005 we received the new pre-stack depth migration (PSDM) lines and prepared a new interpretation for the Santa Rosa Prospect based on this data. The PSDM lines were processed for Santa Rosa only and not for the Cashiboya Deep Prospect, which is still based on the original time-migrated section. DEFINITIONS OF POTENTIAL RESOURCES The prospective resources in this report have been categorized using the 2000 definitions for petroleum resources as adopted by the Society of Petroleum Engineers (SPE), World Petroleum Council (WPC), and American Association of Petroleum Geologists. The prospective resources were determined based on probabilistic methods with the low estimate, best estimate, and high estimate resources corresponding to the P90, Mean, and P10 cases, respectively. Unrisked prospective oil resources were estimated based on the successful development of certain prospects located within Block 31-E. The prospective oil resources are those volumes that could reasonably be expected to be recovered upon the successful exploration and development of these areas. The 2000 definitions for petroleum resources and the 1997 definitions for oil and gas reserves adopted by the SPE and WPC are presented in section 1.1. It should be understood that the prospective resource volumes discussed and shown herein are those undiscovered, highly speculative resources estimated beyond proved, probable, and possible reserves where geologic and geophysical data suggest the potential for discovery of additional reserves, but where the level of proof is insufficient for classification as reserves. RISK ASSESSMENT Prospect risk is used to assess the overall hydrocarbon system and is applied independently of the probabilistic simulation to derive the risked resource estimates. We analyzed the geologic risk associated with the prospects using a prospect evaluation technique modeled after industry standard practices (Otis and Schneidermann, 1997). This technique uses a 4-component equation to measure probability of geologic success (P G ) without regard to economic viability. The 4 components are source evaluation, timing/migration, trap integrity, and reservoir quality. A study of seismic data, well logs, analogous field data, and published literature provided additional data and supplemented the risk analysis. By carefully examining the subcategories under each of these components and assigning a confidence ranking, a 105 numerical risk value can be assigned. The product of the individual risk factors yields the P G value. For instance, a P G of 0.10 suggests that a prospect has a1in10chance of discovering hydrocarbons. It should be noted that the calculation of geologic risk is a highly subjective process dependent upon the experience and judgment of the individuals performing the assessment. We view the overall probability of success for discovering productive hydrocarbons in Cashiboya Deep Prospect as 12 percent (P G of 0.12, approximately 1:8), in Santa Rosa Prospect as 41 percent (P G of 0.41, approximately 2:5), and in San Roque Prospect as 7 percent (P G of 0.07, approximately 1:15). With the potential size of these 3 prospects and the moderate exploration risk, this is a very promising area. The parameters for each of the 4 risk components are shown on Page 123 and are discussed below. Data and Data Quality Maple has purchased and provided 11 2-D seismic lines over the area, and it has reviewed approximately 20 others for integration into its geologic model. On January 15 and 16, 2001, we visited the data room in Lima along with Maple personnel and reviewed all seismic lines in Block 31-E and the adjacent Block 31-B. We tied the limited well control into a subsurface interpretation and created a map of the top Cretaceous structure covering both the San Roque/Cashiboya Norte and Cashiboya Deep opportunities. The regional review by Maple identified 2 potential structural traps in Block 31-E, the San Roque/ Cashiboya Norte structure and the Cashiboya Deep trap, which were verified by our interpretation. Maple provided 11 well logs that were used to document the occurrence of reservoir-quality sands in the target Cretaceous intervals. Additional mapping along with seismic interpretation and depth-time processing allowed the identification of the Santa Rosa Prospect. We reviewed and agreed with the prospect interpretation. In addition, surface geochemical sampling after the drilling of the San Roque-1 well indicates several anomalies. Recent pre-stack depth migration by Veritas GeoServices (Veritas) of several hundred kilometers of seismic data in the prospective area has been incorporated in the Santa Rosa Prospect generation. Source Evaluation The Pucara, Ene, and Chonta Formations are evident in the well control within the project area or basin, and their laterally equivalent formations are documented throughout the literature as being the source rocks for most of the oil and gas production from Cretaceous reservoirs in Latin America. Good geochemical data exist documenting the source rock potential for the Pucara and Chonta Formations in the basin. Therefore, the maturity and capacity for hydrocarbon charge for the source rocks here is considered very low risk. The probability of source rock existing is estimated to be very high at 95 percent for each of the prospects. Timing and Migration The 2-D seismic data available for review demonstrate structural existence and that most faults extend much shallower than the prospective Cretaceous reservoir interval up to the surface. These faults provide possible migration conduits from the deeper source rocks into the Cretaceous reservoirs. The key question is whether any hydrocarbons that may have migrated into the Cretaceous in Block 31-E were trapped and then subsequently breached by faulting, or remained in the currently existing structures. This area may also have been on the migration route out of the basin without the existence of trapping structures when hydrocarbon generation was initiated. An alternative interpretation is that the structures were formed contemporaneously with oil generation and migration. The discoveries in the area tend to be small accumulations at the structural culminations, suggesting limited migration into the structures and/or late structural formation after principal oil generation. In consideration of all these factors, with strong influence by the existence of the Maquia oil field, the probability of timing and migration working to preserve hydrocarbons in potential traps is estimated to be very high at 95 percent for each of the deep prospects and 75 percent for the shallow San Roque Prospect. The risk for these prospects is therefore shifted to the element of trap integrity since current oil and gas generation should be occurring in the basin. Trap Integrity Because of postdepositional tectonic activity, structural trapping characteristics are important for Cretaceous-age reservoirs in the analogous fields. The exploration success for the entire eastern jungle area of Peru is 20 percent, which is solely dependent on drilling structural traps (usually hanging wall

138 anticlines) generally based upon poor quality 2-D seismic data. The prospects reviewed are only constrained by limited 2-D seismic coverage; therefore, the faults and structural traps interpreted from these data may have a slightly different pattern than currently mapped when additional data, either reprocessed existing 2-D lines or additional lines, are incorporated into the interpretation. Nonetheless, structures similar to those in the productive trend have been identified based on the existing 2-D seismic data. The San Roque-1 well was drilled to 283 meters in 2003 and observed no hydrocarbons in the Casa Blanca, Cachiyacu, and Vivian Formations. The deeper Lower Cretaceous intervals were not reached. The lack of success in this structure increases the trap risk. Maple has conducted several geochemistry programs, which indicate the overall San Roque structure is more faulted than originally mapped. The geochemistry program also indicates anomalous areas with potential over the structure. We have limited our analysis to the 3 most contiguous anomalies and planimetered the areas of potential closure, and have estimated a probability of trapping success of 10 percent. The Cashiboya Deep Prospect is considered to have higher risk of trap integrity, since the structure is fault bounded. Cashiboya Deep Prospect requires lateral fault seal to trap hydrocarbons migrating out of the basin center located to the west. The higher degree of risk is assigned because of the high net-to-gross sand section of the Cretaceous formations. Sandy reservoir sections such as these are difficult to seal in a footwall position if juxtaposed against similar overthrust sections. The overthrust section, which is laterally equivalent to the potential Cashiboya Deep Cretaceous reservoirs, may be either fractured basement (at maximum fault displacement) or the sandy Cretaceous intervals, both of which may have poor sealing properties. Additional information from producing fields at Maquia and Pacaya, immediately to the east of the prospect in the hanging wall, and from oil seeps clearly shows that migration has occurred across the fault, thereby confirming increased seal risk. In our view this is the highest geological risk factor for the Cashiboya Deep Prospect. The probability for existing trap integrity is considered to be 15 percent for Cashiboya Deep. Santa Rosa Prospect is comprised of a structural play trending northwest to southeast located west of the Cashiboya Thrust Fault. The play consists of a structural flexture in the Cretaceous and older section with 4-way closure mapped at the Santa Rosa, San Pablo, and San Jose Prospects. These structures are potentially joined into 2 structures for the high estimate case, shown as the Santa Rosa Prospect on the map on Page 120. Based on time migration, these prospects indicate a closure in the 20 to 30 meter range; using the Veritas depth migration algorithms, this closure may increase up to 75 to 80 meters in the Lower Cretaceous and 30 to 50 meters at Upper Cretaceous levels. The structures appear to be pre-tertiary in age and have an ideal location on the potential migration route updip of the basin kitchen located to the west. The Santa Rosa play is considered the lowest risk based on the existence of 4-way closure. The probability of trap integrity is expected to be 50 percent. Reservoir Quality There are few well penetrations of the total Cretaceous section in the region and only 4 wells within the concession. We believe that reservoir-quality sands will exist as they do at Maquia Field since other Cretaceous-aged reservoir fields in the basin, as well as fields along the entire eastern flank of the Andes, produce from these zones and have similar reservoir characteristics. The amount of net reservoir sand is the question, not sand presence. The geologic risk assessment for Cretaceous reservoir quality in the project area is considered to be very low, with a 95 percent chance of success in the shallow prospect and a 90 percent chance of success in the deep prospects. 107 Overall Risk Assessment A review of the exploration drilling in the basin was conducted to ensure that our overall prospect risk assessment was reasonable when compared to the historical exploration success. Overall, a total of 40 prospects have been drilled in the Ucayali Basin with 8 discoveries, a success rate of 20 percent. With a total of 60 million acres in the basin, that equates to less than 1.5 million acres explored per drilled prospect. Exploration by area within the basin is shown in the following table: Drilled Prospects Discoveries Parcent Success Area of Basin Oil Gas Total Discoveries Northeast Maquia, Pacaya Contaya Arch Basin - Jurassic West Central Agua Caliente, Aguaytía Southwest Central Shauinto Uneconomic Southern San Martin, Pagorene, Cashiriari, Mapaya Total Basin The probability of success for a discovery in this project area, from the multiplication of the component risk factors discussed above, has been estimated as 12 percent for Cashiboya Deep, 41 percent for Santa Rosa, and 7 percent for San Roque. These probabilities compare favorably to the basin statistics, as Santa Rosa is considered moderate to better-than-average risk because it appears to be an analogous 4-way closure structure to the producing Maquia Field. The Cashiboya Deep probability of success is considered higher risk than average based on the dependency on lateral fault seal for trap development versus the typical anticlinal trap evidenced by other successful exploration prospects. As a point of reference, historical exploration success in the continental United States for 2-D seismic prospects averaged approximately 18 percent in the 1970s and 1980s. PROBABILISTIC ASSESSMENT OF RESOURCE POTENTIAL Unrisked volumetric estimates of original oil-in-place and estimated ultimate recoverable oil, given a successful discovery, have been calculated probabilistically using a Monte Carlo simulation of input variables for all 3 prospects. Probability distributions have been assigned in order to capture the range of uncertainty in reservoir parameters and fluid contacts for calculation of in-place oil and estimated recoverable oil. Reservoir parameters used include area, average net reservoir thickness, porosity, hydrocarbon saturation, formation volume factor, and recovery factor. The reservoir parameters were combined to derive 3 Monte Carlo input variables to generate probability distributions of original oil-in-place. The 3 input variables used are area, average net thickness, and bulk volume oil (porosity x oil saturation). Recovery factor is then used as a variable in the Monte Carlo simulation to derive probabilistic estimates of ultimate oil recovery. The probability distribution assigned to each input variable was either lognormal, normal, or triangular depending on the qualitative assessment of data amount, data quality, and uncertainty related to each parameter. An output probability distribution of unrisked stock tank original oil-in-place and recoverable oil was calculated using the input distributions. We performed the Monte Carlo simulation using the Decisioneering Crystal Ball software (Excel add-in). A Monte Carlo simulation is an iterative technique that randomly samples each parameter within a prescribed uncertainty range and distribution. Crystal Ball then combines these random values in user-defined formulas to create a cumulative probability distribution curve. The formulas used in this study are: 7,758 x Area x Net Thickness x Bulk Volume Oil x (1/Formation Volume Factor) = Stock Tank Original Oil-in-Place and Stock Tank Original Oil-in-Place x Recovery Factor = Recoverable Oil Resources The cumulative probability distribution curve indicates the likelihood that the in-place or recoverable hydrocarbons will be greater than the value shown on the distribution curves. For example, the P

139 estimate indicates a 90 percent likelihood that actual results will be greater than the estimate, if a discovery is made. The data available for evaluating the ranges for each input parameter are limited to the 40 wells and field studies done over the last 60-plus years. Some of the early well data is of poor quality and sometimes not available, and some of the more recent data is not publicly available. All of the available data were reviewed before determining the input parameters, but a significant amount of judgment was used in incorporating this data into our final input parameters. The results of the simulation are shown on the cumulative probability distribution curves on Pages 124 and 125. The range and distribution of the independent variables used in our probabilistic resource assessment are summarized for each exploration prospect on Page 126 and discussed in the following paragraphs. Area We assigned a conservative, lognormal distribution to the values of area to reflect the normal range of trap size in a basin because of the lack of statistically significant data to further define the distribution. For the shallow prospect, we defined the P95 value as the low value of area (in acres) and the P5 value as the high value. For the deeper prospects we mapped potential areas to the spill point and used P1 or P5 values as the high value and P95 or P90 as the low values. As stated earlier, the discoveries in the basin have tended to be small accumulations at the structural culminations, with the available data for percentage of structural closure area oil fill ranging from 1 percent in Pacaya to 23 percent in Aguaytía. For example, the structural closure area for Aguaytía is 20,000 acres but only the crestal 4,500 acres, or 23 percent, is productive. For Cashiboya Deep, the total structural closure is approximately 11,500 acres to the spill point at a time of 2.48 seconds on the time structure map on the top of the Cretaceous. The primary issue is the percent fill to spill point. Because of the untested concept of a footwall trap with lateral fault sealing, this trap has no good analogy in the basin; therefore, the high value of 11,500 acres, assuming 100 percent fill, was assigned a probability of 1 percent. The low value is estimated at 650 acres based on structural fill to a time of 2.25 seconds, which is equivalent to approximately 6 percent fill, consistent with the 7 percent seen at Maquia. The area of the prospect is projected onto the Base Cretaceous depth structure map on Page 120. For Santa Rosa, the total structural closure is approximately 12,000 acres to the spill point at a depth of 3,625 meters on the depth structure map on the base of the Cretaceous. The primary issue is also the percent fill to spill point. For this prospect, the high value of 12,000 acres, assuming 100 percent fill, was assigned a probability of 5 percent. The low value is estimated at 3,000 acres based on structural fill to a depth of 3,600 meters for the northern structure and central horst block of the southern structure, which is equivalent to approximately 22 percent fill. For San Roque, the total structural closure is approximately 27,000 acres to the spill point. However, the San Roque-1 well drilled on top of the structure was wet and subsequent geochemistry analysis indicated more complex faulting across the structure. The geochemistry data indicates smaller structural traps ranging from 127 to 625 acres, with the total area for all traps of 2,200 acres. However, post Cashiboya-1x and San Roque-1 it was determined that many of the geochemical anomalies are too small to drill; therefore, only the 3 most contiguous anomalies are still included. The 3 anomalies we risked have input parameters for area of 300 acres for the low estimate, or P95 value, and 1,500 acres for the high estimate, or P5 value. The low estimate is based on the smallest trap and the high estimate is based on all 3 traps being oil productive. Net Pay Thickness For net pay thickness, we assigned a conservative, lognormal distribution to these values to reflect the normal range of net thickness in an oil and gas basin because of the lack of statistically significant data to further define the distribution. In general, we defined the P90 values for net pay thickness as the low value (in meters) for prospective reservoirs and the P10 values as the high value. Based on the analogous log data, the amount of net sand in the Cretaceous interval is expected to be very high; however, the amount of net sand containing oil is uncertain. For example, Maquia Field has a total net sand of greater than 400 meters but the average net pay thickness only averages 35 meters. The productive oil and gas fields have had a total average net pay thickness across the field of approximately 10 meters in Pacaya, 35 meters in Maquia, 40 meters in Agua Caliente, and 75 meters in Aguaytía. For Cashiboya Deep, our input parameters for net pay thickness are 25 meters for the low estimate and 300 meters for the high estimate. The low estimate is based on the average seen in the 3 productive oil fields, with the high estimate based on the chance of finding a full Cushabatay section trapped against the 109 fault or finding several zones oil productive. We assigned a probability value of P1 for this high estimate case for this prospect. Cashiboya Deep Prospect has no good analogies in the basin and is less limited by the current analog data. For Santa Rosa, our input parameters for net pay thickness are 10 meters for the low estimate and 50 meters for the high estimate. The low estimate is based on the average of a single zone seen in the 3 productive oil fields, with the high estimate based on the potential to have either 2 zones of equal thickness or fill to spill point. Santa Rosa Prospect has no good analogies in the basin. The Aguaytía gas field is the closest analogy with a total gas column of over 150 meters and an average net pay of 75 meters; however, it is a thrust fault-generated anticlinal structure. For San Roque, our input parameters for net pay thickness were highly influenced by the characteristics of the local Maquia Field and the disappointing results of the San Roque-1 well. Our input parameters for net pay thickness are 10 meters for the low estimate and 20 meters for the high estimate. The low estimate is based on approximately 50 percent of that seen at Maquia and Agua Caliente Fields. This takes into consideration the potential for the small faulting inferred by the geochemistry to be less likely to trap significant thicknesses of oil in a single zone. The high estimate is based on the potential to find 2 zones of 10-meter thickness, and is slightly below the average seen at the 3 productive oil fields. Bulk Oil Volume We defined the P90 values for bulk oil volume as the low value for a given reservoir and the P10 values as the high value observed on the analogous log data. We assigned a normal distribution to these values. From log and core data it was determined that the petrophysical parameters are relatively consistent throughout the basin. The low and high porosity input are 15 and 30 percent, and the low and high oil saturation inputs are 60 and 80 percent. For bulk oil volume we used 9 percent (15 percent porosity x 60 percent oil saturation) for the low value and 24 percent (30 percent porosity x 80 percent oil saturation) for the high value. We expect good reservoir quality to be found at the shallow and deep prospects, and used the same input parameters for all prospects. Recovery Factor We defined recovery factor using triangular distribution with a minimum value of 25 percent, a most-likely value of 35 percent, and a maximum value of 45 percent. Although we expect any discoveries to have moderate-to-strong aquifer support, based on the good reservoir quality and high net sand thickness, the low estimate for recovery factor is based on a discovery with minimal aquifer support and/or limited reservoir quality. The most-likely and maximum estimates are based on this expected moderate-to-strong aquifer support or, if aquifer support is limited, artificial pressure maintenance through water injection. Average total field recovery factors reported in the discovered oil fields are 16 percent in Pacaya Field, approximately 35 percent in Maquia, and 13 to 30 percent for Agua Caliente. Recovery factors by reservoir within these fields are more difficult to verify and/or determine because of the varying oil-in-place calculations and completion techniques. Unrisked Undiscovered Oil-in-Place The range of estimates for unrisked undiscovered oil-in-place for each prospect, as determined using probabilistic analysis with the input parameters of area, net pay, bulk oil volume, and a 1.1 formation volume factor, are shown below and on Page 126. It should be understood that the unrisked undiscovered oil-in-place volumes discussed and shown herein are the range of potential volumes if a successful discovery well is drilled. Prospect Unrisked Undiscovered Oil-in-Place (MMBBL) Low Estimate Best Estimate High Estimate Cashiboya Deep ,825 Santa Rosa ,357 San Roque Unrisked Gross Prospective Oil Resources The range of estimates for unrisked gross potential oil resources for each prospect, as determined using probabilistic analysis with the oil-in-place input parameters and the recovery factor input parameters, are

140 shown in the following table and on Page 126. As with the unrisked undiscovered oil-in-place, the unrisked gross oil resources are based on the range of these potential volumes if a successful discovery well is drilled. Unrisked Gross Prospective Oil Resources (MMBBL) Prospect Low Estimate Best Estimate High Estimate Cashiboya Deep Santa Rosa San Roque ECONOMICS Economic sensitivities were prepared using the low estimate, best estimate, and high estimate resource cases from the probabilistic models discussed above. These economic sensitivities are unrisked and assume successful exploration, appraisal, and development of the discovered resources. A development plan incorporating the expected number of wells, initial oil rate and expected production profile for each well, size of in-field gathering system and facilities, and size of pipelines and barging facilities was prepared for each resource case. In addition to the base price and cost parameters, four additional price sensitivities for each resource case were also prepared. Development Plan The main reservoir parameters necessary for the development plans are the total area and net pay thickness expected with each case. These parameters were estimated using the results of the probabilistic model and were used to estimate the number of wells necessary to develop the resources as well as the range of expected production rates. Our estimates of area, net pay thickness, expected well count, well productivity rates, and total field peak rates are shown in the following table: Prospect/Case Area (acres) Net Pay (meters) Wells Peak Rate per Well (BOPD) Peak Rate for Field (BOPD) Cashiboya Deep Low Estimate ,000 13,000 Best Estimate 2, ,600 88,400 High Estimate 4, , ,900 Santa Rosa Low Estimate 3, ,000 Best Estimate 6, ,300 High Estimate 8, , ,800 San Roque Low Estimate ,700 Best Estimate ,500 High Estimate 1, ,600 Well spacing is expected to range between 40 and 80 acres per well depending on the depth of the pay zones, the number of zones, the expected production from each zone, and economics. Maquia and Agua Caliente Fields have been developed with an average spacing of 20 and 26 acres per well, respectively. These fields were most likely drilled on relatively close spacing because of the number of zones to be produced and the relatively shallow depth. For the purposes of this report we estimate that, if exploration and appraisal is successful, San Roque would be developed on 40-acre spacing and Santa Rosa and Cashiboya Deep would be developed on 80-acre spacing. Once additional data have been gathered through the initial exploration, appraisal, and early production, economic and resource sensitivities could be prepared to determine if additional downspacing is warranted. Initial production rates for the primary target reservoirs are expected to be very good. As shown on Page 127, per-well statistics from Maquia and Agua Caliente Fields show some initial well production rates over 1,500 barrels of oil per day (BOPD) with an average of all wells of approximately 500 BOPD per well for the primary pay zones. Based on the limited core information of wells in the area, permeabilities of the primary reservoirs can range from 10 to 6,700 millidarcies, averaging over millidarcies, which would indicate that production rates could exceed 1,500 BOPD with sufficient reservoir thickness. Based on this analogy data, we used a productivity index of 35 BOPD per meter of net pay for each resource case, resulting in the initial production rates per well as shown in the previous table. For each well s production profile the initial rate is held constant for a plateau period of approximately 30 percent of total well ultimate recovery before declining at an average rate of approximately 25 percent per year for the San Roque and 15 percent per year for the 2 deep prospects. For the Cashiboya Deep best and high estimate cases, the plateau period was increased to 40 percent of each well s ultimate recovery. The total production profile used in the economics is based on the individual well profiles combined with the overall drilling schedule for the resource case and is shown by resource case and prospect on Pages 128 and 129. For the economics included herein, the initial exploration well is forecasted to be drilled in late 2008 for Santa Rosa, 2009 for Cashiboya Deep, and 2011 for San Roque. If successful in Santa Rosa, the exploration well will be followed with an appraisal well in late If successful in Cashiboya Deep, the exploration well will be followed with an appraisal well in Given success, the development drilling will start in 2011 for Santa Rosa and 2012 for Cashiboya Deep and San Roque. It is expected that for the shallow prospect the drilling and testing time period (mobilization through demobilization) will be approximately 25 days per well. For the 2 deep prospects, the drilling time will be approximately 45 days per well. The drilling schedule used in the economics, showing wells drilled per year including the initial exploration and appraisal wells, is as follows: Year Low Estimate Cashiboya Deep Santa Rosa San Roque Best Estimate High Estimate Low Estimate Best Estimate High Estimate Low Estimate Best Estimate Total High Estimate Construction of the field facilities along with the barge terminal at Puerto Oriente and the pipeline between the fields and the barge terminal are forecasted to begin at the same time as development drilling, with first oil production within 1 year after construction initiation. Oil will be transported via pipeline to the Puerto Oriente barge terminal and then barged and sold into the Northern Peruvian Pipeline, which is illustrated on the map on Page 116. For those cases where total peak production rate exceeds 35,000 BOPD, it is forecasted that a concession pipeline will be constructed to eliminate the barging to the Northern Peruvian Pipeline with first production through this pipeline starting in

141 Pricing and Operating Costs Oil prices for the base case presented in this report are based on a West Texas Intermediate posted price of $50.00 per barrel and are adjusted for estimated quality, transportation fees, and regional price differentials. Based on analogy to the oil production at Maquia Field (38 API gravity sweet crude) and Aqua Caliente Field (44 API gravity sweet crude), a successful discovery on Block 31-E is expected to also find high gravity sweet crude oil. In addition, price sensitivities for each resource case are included for $40.00 per barrel, $60.00 per barrel, and $70.00 per barrel price cases. Oil prices are held constant throughout the lives of the properties. The total deduction from the oil price is shown in the following table: Deduction Amount ($/Barrel) Barging to Pipeline 3.00 Pipeline to Coast 2.00 Terminal Fees 0.50 Transportation Peru to U.S. Gulf Coast) 2.50 Quality - Total Deduction 8.00 For the San Roque low estimate cases, all with expected production rates below 10,000 BOPD, barging costs are reduced to $2.00 per barrel to reflect the expected expenses necessary for these lower volumes. For the Cashiboya Deep and Santa Rosa best and high estimate cases, the barging costs are eliminated once the pipeline from the concession to the North Peruvian Pipeline, included in the total case investment, is in operation. Previous analyses have determined that at production plateau rates above 35,000 BOPD it is economically advantageous to construct the concession pipeline versus continued barging. Lease and well operating costs are based on operating expense estimates of Maple and our experience with similar properties. These costs have been divided into fixed field-level operating costs of $100,000 per month per discovery, fixed overhead costs of $25,000 per month per discovery, and variable per-well costs of $10,000 per month for Cashiboya Deep and Santa Rosa and $5,000 per month for San Roque. Lease and well operating costs include general and administrative overhead costs along with other costs estimated to be incurred at the field level. Lease and well operating costs are held constant throughout the lives of the properties. A summary of the monthly operating costs estimated for each case is shown on Page 130. Capital Costs To date, Maple has invested $6.5 million for seismic reprocessing and reinterpretation, geochemistry, and drilling; these costs are not included in this report. The capital costs included in this report are for new wells, gathering and principal pipelines, production facilities, and production equipment. These costs are based on the capital expenditure estimates of Maple and our experience with similar projects. As summarized on Page 130, these costs are divided into two phases, exploration and development. The exploration phase includes the drilling of the exploration well and a single appraisal well. For the shallow San Roque Prospect, the cost of this phase is approximately $4.35 million. For the deeper Cashiboya Deep and Santa Rosa Prospects, the cost of this phase is approximately $29.35 million and $28.35 million, respectively. The Cashiboya Deep exploration phase includes $4.0 million of additional seismic acquisition and processing. Once development is sanctioned, the drilling and completion costs, excluding surface facilities, for development wells are estimated at approximately $1.2 million for the shallow San Roque Prospect. The development well costs for the deeper Cashiboya Deep and Santa Rosa Prospects are estimated to be $6.5 million and $6.7 million per well, respectively. In each case, investment is included for the fields surface gathering lines, tanks, separators, and other facilities. Also included are costs for the approximately 40-kilometer pipeline between the field and barging facilities, plus a barging facility upgrade, with the investment cost dependent on the expected production throughput. For the Cashiboya Deep and Santa Rosa best and high estimate cases, a significant investment is also included for the approximately 315-kilometer concession pipeline between the barging facilities and the Northern Peruvian Pipeline. In these cases, it would be economically advantageous to construct the concession pipeline to eliminate the per-barrel barging fees. 113 Fiscal Terms Maple Production del Perú, Sucursal Peruana, the Peruvian branch of Maple Production, signed the license contract for Block 31-E with the Peruvian government on March 6, 2001, giving them 100 percent ownership in the block. Maple Production is a wholly owned subsidiary of Maple. Including subsequent amendments, the minimum work program has four phases. In Phase 1, in the first two years, Maple was committed to reevaluate 800 kilometers of seismic data, reprocess at least 500 kilometers of the existing seismic data, and drill one exploration well. During Phase 2 over the next two years, Maple was committed to drilling a second exploration well. It is our understanding that all work commitments under Phases 1 and 2 have been completed. Phases 3 and 4 require one well to be drilled in each phase, with 17 months to complete in Phase 3 and 18 months to complete in Phase 4. Following the initial seven years, Maple must drill one exploration well per year or relinquish all acreage outside of a 5-kilometer radius from the defined limits of the discovered fields. The total concession term is for 30 years, inclusive of the initial exploration phases. Given the administrative exemption allowed for the time required for government permitting (estimated to be 22 months), it is expected that the concession term will be through December 31, The economics included herein use a sliding scale royalty for payments to the Peruvian government once production is commenced. Under Peruvian hydrocarbon law, the contractor has rights to 100 percent of the hydrocarbons produced in exchange for a royalty payment equal to a contractual percentage of the proceeds. Under this concession agreement, Maple has two sliding scale royalty options for royalty payments to the Peruvian government; these are based either on R-Factor calculations or on total block production rates, as shown below: Oil Producing Rate Royalty (BOPD) (%) 5,000 5 > 5,000 and < 100,000 (1) 100, (1) Royalty = 5% +15% x (Rate 5,000)/95,000 Due to uncertainty as to which prospects would be successful and the dependence of royalty rates on total block production, we have used a simplified royalty scheme for the economics presented herein. We have used the conservative approach of using a flat royalty for each prospect for life based on the maximum expected production rate under the low, best, and high estimate cases. For Cashiboya Deep, flat royalty percentages of 7, 19, and 20 were estimated for the low, best, and high estimate cases, respectively. For Santa Rosa, flat royalty percentages of 7, 16, and 20 were estimated for the low, best, and high estimate cases, respectively. For San Roque, flat royalty percentages of 5, 6, and 8 were estimated for the low, best, and high estimate cases, respectively. These royalty payments are shown as deductions from revenue and not as a reduction in net volumes attributable to Maple. Future revenue is shown in the economics for both before and after Peruvian tax payments. For the after-tax calculations, a 22 percent Peruvian tax rate was used. For tax purposes, 75 percent of the drilling costs were expensed and 25 percent were depreciated using 5-year straight line depreciation. The costs associated with the concession pipeline were depreciated using 6-year straight line depreciation, starting in the first full year of operation. All remaining costs were depreciated using 5-year straight line depreciation. Summary The unrisked economics were used with the estimated exploration and appraisal costs and the probability of geologic success (P G ) to determine certain risked economic indices. Risked economics are determined using a decision tree analysis that uses the following equation to calculate risked present worth (PW) for each prospect. Risked Present Worth = [(P G x Unrisked PW)] [(1 P G ) x (Dry Hole PW)] The estimated capital costs for the exploration and appraisal wells are $29.35 million for Cashiboya Deep, $28.35 million for Santa Rosa, and $4.35 million for San Roque. The after-tax present worth, discounted at 10 percent, of these capital costs are $17.4 million for Cashiboya Deep, $17.9 million for Santa Rosa, and $2.1 million for San Roque

142 Our estimates of the unrisked net prospective oil resources and the risked mean case after-tax present worth for the $50.00 per barrel base price case for the 3 prospects, as of December 31, 2006, are shown in the following table: Prospect Probability of Recoverable Oil Decimal Low Estimate Unrisked Net Prospective Oil Resources (1) (MMBBL) Best Estimate High Estimate Risked Mean After-Tax (2) Percent-Worth at 10% (MM$) Cashiboya Deep Santa Rosa San Roque (1) Because Maple owns a 100 percent interest in these properties, gross and net volumes are the same. (2) Discounted cash flow shown is based on the best estimate resource case using the $50.00 per barrel base price case and is after consideration of Peruvian income taxes at a rate of 22 percent. Additional economic parameters for each of the resource cases and for each price case are shown on the Economic Summary table for each prospect. Graphs showing the present worth versus discount rate for each prospect and resource case are shown on Pages 131 and 132. Given a successful discovery, each resource case generates attractive economics with internal rate of returns exceeding 35 percent. The sensitivity of the project economics to price variations is shown on Pages 133 and

143

144

145

146 RISK ASSESSMENT SUMMARY BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Risk Factor/Elements Cashiboya Deep Source Evaluation Capacity of Hydrocarbon Charge Source Rock Maturity Other Santa Rosa San Roque Timing/Migration Migration Pathways Timing Preservation/Segregation Other Trap Integrity Seals (vertical and horizontal) Trap Characteristics Trap Definition Other Reservoir Quality Presence Architecture Pore System Characteristics Other Overall Probability of Success (P G ) Risk Assessment Key: < 0.30 Risk factor contains unfavorable elements One or more questionable or neutral elements 0.50 Elements unknown or no definitive data (neutral) One or more elements encouraging to favorable some neutral > 0.70 All elements well documented with encouraging to favorable parameters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 123 CUMULATIVE PROBABILITY DISTRIBUTION CURVES BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

147 Input Parameters Used in Probabilistic Model: SUMMARY OF UNRISKED PROBABILISTIC RESOURCE ANALYSIS BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Area (acres) Net Thickness (meters) Bulk Oil Volume (%) Oil Recovery Factor (%) Distrib Low High Distrib Low High Distrib Low High Distrib Most Prospect Type Prob Value Prob Value Type Prob Value Prob Value Type (P90) (P10) Type Min Likely Max Cashiboya Deep LogN P P1 11,500 LogN P90 25 P1 300 Normal 9 24 Triangle Santa Rosa LogN P90 3,000 P5 12,000 LogN P90 10 P10 50 Normal 9 24 Triangle San Roque LogN P P5 1,500 LogN P90 10 P10 20 Normal 9 24 Triangle Results of Probabilistic Analysis: Unrisked Undiscovered Oil-in-Place (MMBBL) Best (Mean) Low (P90) High (P10) Unrisked Gross Prospective Oil Resources (MMBBL) Best (Mean) Low (P90) High (P10) Prospect Cashiboya Deep , Santa Rosa , San Roque All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. CUMULATIVE PROBABILITY DISTRIBUTION CURVES BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

148 ANALOGOUS FIELD PER-WELL STATISTICS INITIAL POTENTIAL AND ESTIMATED ULTIMATE RECOVERY AGUA CALIENTE AND MAQUIA FIELDS All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 127 UNRISKED NET PROJECTED OIL PRODUCTION THE MAPLE COMPANIES, LIMITED INTEREST BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE $50.00 PER BARREL All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

149 SUMMARY OF CAPITAL AND OPERATING EXPENSES BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Low Est (P90) Cashiboya Deep Santa Rosa San Roque Best Est High Est Low Est Best Est High Est Low Est Best Est (Mean) (P10) (P90) (Mean) (P10) (P90) (Mean) Number of Wells Producers (incl Expl/Appr) Water Injection Gas Injection Capital Expenses (M$) Exploration Phase Seismic 4,000 4,000 4, Exploration Well 11,950 11,950 11,950 13,450 13,450 13,450 2,000 2,000 2,000 Appraisal Well 23,900 47,800 47,800 40,350 80,700 94, ,000 4,000 EIA, Support Facilities 1,450 1,450 1,650 1,450 1,450 1, Subtotal 41,300 65,200 65,400 55,250 95, ,250 2,350 4,350 6,550 Development Phase Development Wells 62, , , , , ,300 9,320 19,805 29,125 Field Facilities and Pipelines 53, , ,991 72, , ,678 4,430 16,680 32,390 Camps, Roads, Social Costs 3,600 4,600 4,600 4,100 5,600 6,100 2,600 3,100 3,100 Pipeline Field to Barge Facility 4,813 11,939 16,586 7,150 12,735 17,920 3,721 6,706 8,362 Storage and Barge Facility 9,980 33,950 67,850 10,980 28,220 53,120 3,340 9,030 13,810 Project Supervision 15,000 15,000 15,000 15,000 15,000 15,000 4,000 6,000 12,000 Transport/Import Duties, Loan Costs 31,145 76, ,634 66, , ,158 4,864 10,733 17,216 Subtotal 180, , , , ,381 1,237,276 32,275 72, ,003 Pipeline Concession 0 253, , , , Total Capital Expenses 221, ,307 1,176, ,930 1,178,403 1,685,692 34,625 76, ,553 Operating Expenses (M$/year) Fixed Overhead Costs (25 M$/mo) Fixed Field Costs (100 M$/mo) 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Variable Per-Well Costs (1) 1,560 4,080 6,120 4,800 9,240 12, ,140 2,280 Total Operating Expenses 3,060 5,580 7,620 6,300 10,740 14,340 2,040 2,640 3,780 High Est (P10) 130 (1) 10M$/wel/mo for the deep Cashiboya Deep and Santa Rosa Prospects and 5 M$/well/mo for the shallow San Roque Prospect. All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. UNRISKED NET PROJECTED OIL PRODUCTION THE MAPLE COMPANIES, LIMITED INTEREST BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE $50.00 PER BARREL All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

150 PRESENT WORTH vs. DISCOUNT RATE THE MAPLE COMPANIES, LIMITED INTEREST BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE - $50.00 PER BARREL 131 PRESENT WORTH vs. DISCOUNT RATE THE MAPLE COMPANIES, LIMITED INTEREST BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE - $50.00 PER BARREL

151 PRICE SENSITIVITY DATA THE MAPLE COMPANIES, LIMITED INTEREST BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31, PRICE SENSITIVITY DATA THE MAPLE COMPANIES, LIMITED INTEREST BLOCK 31-E, UCAYALI BASIN, PERU AS OF DECEMBER 31,

152 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD&A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. Low Est (P90) Unrisked Prospective Oil Resources (MBBL) ECONOMIC SUMMARY AS OF DECEMBER 31, 2006 THE MAPLE COMPANIES, LIMITED INTEREST CASHIBOYA DEEP PROSPECT BLOCK 31-E, UCAYALI BASIN, PERU $50 per Barrel (Base) Price Case $40 per Barrel Price Case $60 per Barrel Price Case $70 per Barrel Price Case Best Est (Mean) High Est (P10) Low-Side (P90) (Mean) Gross 38, , , , , , , , , , , ,821.0 Net 38, , , , , , , , , , , ,821.0 BEFORE INCOME TAX UNRISKED Present Worth (M$) Discounted at: 10% 378, ,932, ,675, , ,167, ,033, , ,697, ,318, , ,462, ,961, % 223, ,781, ,059, , ,298, ,036, , ,264, ,083, , ,747, ,107, % 133, ,112, ,541, , , ,883, , ,426, ,199, , ,741, ,857, % 14, , , , , , , , , , , % 4, , , , , , , , , , , % 7, , , , , , , , , , , , % 7, , , , , , , , , , ,718.0 High-Side (P10) Low-Side (P90) (Mean) High-Side (P10) Low-Side (P90) (Mean) High-Side (P10) BEFORE INCOME TAX RISKED Present Worth (M$) Discounted at: 10% 25, , , , , , , , , , , ,175, % 9, , , , , , , , , , , % , , , , , , , , , , , % 8, , , , , , , , , , , , % 7, , , , , , , , , , , , % 5, , , , , , , , , , , % 4, , , , , , , , , , , , Cashiboya Deep Prospect AFTER INCOME TAX UNRISKED Present Worth (M$) Discounted at: 10% 289, ,263, ,175, , ,667, ,894, , ,859, ,455, , ,455, ,736, % 172, ,399, ,212, , ,015, ,397, , ,783, ,027, , ,167, ,842, % 105, , ,073, , , ,532, , ,154, ,613, , ,411, ,153, % 15, , , , , , , , , , , , % 1, , , , , , , , , , , , % , , , , , , , , , , , % , , , , , , , , , , ,902.5 AFTER INCOME TAX RISKED Present Worth (M$) Discounted at: 10% 19, , , , , , , , , , , , % 7, , , , , , , , , , , % , , , , , , , , , , , % 5, , , , , , , , , , , , % 5, , , , , , , , , , , , % 3, , , , , , , , , , , , % 2, , , , , , , , , , , ,651.6 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 144

153 SUMMARY PROJECTION OF RESERVES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD&A AFTER TAX GROSS NET OIL/COND OIL/COND REVENUE GROSS ROYALTY NET CAP EXPENSE INVSTMT OPERATING NET CUM P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 6-YR EXPENSED CAPEX TAXABLE TAX INCOME CARRYFWD INCOME NET CUM P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD&A AFTER TAX GROSS NET OIL/COND OIL/COND REVENUE GROSS ROYALTY NET CAP EXPENSE INVSTMT OPERATING NET CUM P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 6-YR EXPENSED CAPEX TAXABLE TAX INCOME CARRYFWD INCOME NET CUM P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 145

154 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD&A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD&A AFTER TAX GROSS NET OIL/COND OIL/COND REVENUE GROSS ROYALTY NET CAP EXPENSE INVSTMT OPERATING NET CUM P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 6-YR EXPENSED CAPEX TAXABLE TAX INCOME CARRYFWD INCOME NET CUM P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % 2103 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 146

155 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % 47 60% % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS ROYALTY NET CAP OPERATING NET P.W. 6-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR 5-YR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 147

156 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU GROSS NET OIL/ GROSS ROYALTY NET CAP OIL/COND COND REVENUE EXPENSE INVSTMT BEFORE TAX DD & A AFTER TAX CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE PERIOD ENDING OPERATING EXPENSE NET REVENUE MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % CUM P.W % 144 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS ROYALTY NET CAP OPERATING NET P.W. 6-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR 5-YR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 148

157 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS ROYALTY NET CAP OPERATING NET P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS ROYALTY NET CAP OPERATING NET P.W. 6-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR 5-YR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 149

158 Low Est (P90) ECONOMIC SUMMARY AS OF DECEMBER 31, 2006 THE MAPLE COMPANIES, LIMITED INTEREST SANTA ROSA PROSPECT BLOCK 31-E, UCAYALI BASIN, PERU $50 per Barrel (Base) Price Case $40 per Barrel Price Case $60 per Barrel Price Case $70 per Barrel Price Case Best Est High Est Low-Side High-Side Low-Side High-Side Low-Side (Mean) (P10) (P90) (Mean) (P10) (P90) (Mean) (P10) (P90) (Mean) Unrisked Prospective Oil Resources (MBBL) Gross 46, , , , , , , , , , , ,604.0 Net 46, , , , , , , , , , , ,604.0 BEFORE INCOME TAX UNRISKED Present Worth (M$) Discounted at: 10% 372, ,079, ,445, , ,443, ,217, , ,716, ,673, , ,353, ,900, % 205, ,232, ,651, , , ,878, , ,640, ,425, , ,049, ,199, % 110, , ,621, , , ,118, , ,016, ,125, , ,287, ,628, % 8, , , , , , , , , , , , % 21, , , , , , , , , , , , % 18, , , , , , , , , , , , % 14, , , , , , , , , , , ,122.0 High-Side (P10) BEFORE INCOME TAX RISKED Present Worth (M$) Discounted at: 10% 139, , ,809, , , ,305, , ,100, ,312, , ,361, ,815, % 71, , ,074, , , , , , ,392, , , ,709, % 34, , , , , , , , , , , ,066, % 11, , , , , , , , , , , , % 14, , , , , , , , , , , , % 12, , , , , , , , , , , , % 9, , , , , , , , , , , , AFTER INCOME TAX UNRISKED Present Worth (M$) Discounted at: 10% 278, ,596, ,432, , ,099, ,473, , ,093, ,389, , ,589, ,346, % 149, , ,100, , , ,480, , ,293, ,719, , ,619, ,338, % 76, , ,336, , , , , , ,753, , ,051, ,171, % 13, , , , , , , , , , , , % 19, , , , , , , , , , , , % 15, , , , , , , , , , , , % 11, , , , , , , , , , , , Santa Rosa Prospect AFTER INCOME TAX RISKED Present Worth (M$) Discounted at: 10% 103, , ,396, , , ,003, , , ,789, , ,051, ,181, % 51, , , , , , , , ,105, , , ,359, % 22, , , , , , , , , , , , % 11, , , , , , , , , , , , % 12, , , , , , , , , , , , % 10, , , , , , , , , , , , % 7, , , , , , , , , , , ,361.4 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) CASHIBOYA DEEP PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS ROYALTY NET CAP OPERATING NET P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 150

159 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS ROYALTY NET CAP OPERATING NET P.W. 6-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR 5-YR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 151

160 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 152

161 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 153

162 SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 154

163 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - LOW EST (P90) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF THE MAPLE COMPANIES, LIMITED INTEREST UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET OIL/ GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 155

164 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - HIGH EST (P10) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - BEST EST (MEAN) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 156

165 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - LOW EST (P90) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS OIL/COND OIL/COND REVENUE ROYALTY NET CAP EXPENSE INVSTMT OPERATING NET CUM P.W. 5-YR EXPENSE REVENUE 10.00% DEPR DEPR 6-YR EXPENSED TAXABLE TAX CAPEX INCOME CARRYFWD INCOME NET CUM P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 5.5 San Roque Prospect Low Est (P90) ECONOMIC SUMMARY - AS OF DECEMBER 31, 2006 THE MAPLE COMPANIES, LIMITED INTEREST SAN ROQUE PROSPECT - BLOCK 31-E, UCAYALI BASIN, PERU $50 per Barrel (Base) Price Case $40 per Barrel Price Case $60 per Barrel Price Case $70 per Barrel Price Case Best Est High Est Low-Side High-Side Low-Side High-Side Low-Side (Mean) (P10) (P90) (Mean) (P10) (P90) (Mean) (P10) (P90) (Mean) Unrisked Prospective Oil Resources (MBBL) Gross 4, , , , , , , , , , , ,006.0 Net 4, , , , , , , , , , , ,006.0 BEFORE INCOME TAX - UNRISKED Present Worth (M$) Discounted at: 10% 52, , , , , , , , , , , , % 32, , , , , , , , , , , , % 20, , , , , , , , , , , , % 3, , , , , , , , , , , , % , , , , , , , , , , % , , , , , % , ,782.0 BEFORE INCOME TAX - RISKED Present Worth (M$) Discounted at: 10% 1, , , , , , , , , , , % , , , , , , , , , , % , , , , , , , , , % , , , , % % % AFTER INCOME TAX - UNRISKED Present Worth (M$) Discounted at: 10% 39, , , , , , , , , , , , % 24, , , , , , , , , , , , % 15, , , , , , , , , , , , % 2, , , , , , , , , , , % , , , , , , , , , % , , , , , % ,102.6 AFTER INCOME TAX - RISKED Present Worth (M$) Discounted at: 10% , , , , , , , , , , % , , , , , , , , , % , , , , , , , , % , , , , % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 157 High-Side (P10) 161

166 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - HIGH EST (P10) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - BEST EST (MEAN) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % 4 100% All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 158

167 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - BEST EST (MEAN) SANTA ROSA PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % 83 80% % % 536 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - LOW EST (P90) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS OIL/COND OIL/COND REVENUE ROYALTY NET CAP EXPENSE INVSTMT OPERATING NET CUM P.W. 5-YR EXPENSE REVENUE 10.00% DEPR DEPR 6-YR EXPENSED TAXABLE TAX CAPEX INCOME CARRYFWD INCOME NET CUM P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % 689 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 159

168 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - LOW EST (P90) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING GROSS OIL/COND NET OIL/COND GROSS ROYALTY NET CAP REVENUE EXPENSE INVSTMT OPERATING EXPENSE BEFORE TAX DD & A AFTER TAX NET REVENUE CUM P.W % 5-YR DEPR 6-YR EXPENSED TAXABLE DEPR CAPEX INCOME TAX CARRYFWD INCOME TAXES NET REVENUE MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL CUM P.W % 168 $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % 78 80% % % 463 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES - HIGH EST (P10) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS OIL/COND OIL/COND REVENUE ROYALTY NET CAP EXPENSE INVSTMT OPERATING NET CUM P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 6-YR EXPENSED TAXABLE TAX CAPEX INCOME CARRYFWD INCOME NET CUM P.W. TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % 442 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 160

169 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 161

170 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES BEST EST (MEAN) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES LOW EST (P90) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 162

171 6. Assessment of Exploration Risk and Hydrocarbon Potential, Aguaytía Deep Prospect, Block 31-C January 29, 2007 The Directors The Maple Companies, Limited Av. Víctor Andrés Belaúnde 147, Vía Principal 140 Torre Real Seis Oficina 201 San Isidro, Lima 27 Peru The Directors Canaccord Adams Limited Cardinal Place 7 th Floor 80 Victoria Street London, SW1E 5JL United Kingdom Gentlemen: In accordance with your request, we have conducted an assessment of the exploration risk and hydrocarbon potential, as of December 31, 2006, for the Aguaytía Deep Prospect located in Block 31-C in the Ucayali Basin, onshore Peru. The license contract for Block 31-C was awarded to The Maple Gas Corporation del Perú, Sucursal Peruana in early The deep exploration rights were subsequently transferred to Maple Exploration Ltd. (Maple Exploration). Maple Exploration is a wholly owned subsidiary of The Maple Companies, Limited (Maple). Maple has identified an exploration prospect on this block, the Aguaytía Deep Prospect, in a deeper zone than the overlying Aguaytía Field which produces gas and condensate. The prospective resources included in this report indicate exploration opportunities and development potential in the event a commercial discovery is made and should not be construed as reserves. A geologic risk assessment was performed for these properties, as discussed in subsequent paragraphs. These estimates of prospective resources have been prepared in accordance with the 2000 petroleum resource definitions approved by the Society of Petroleum Engineers, World Petroleum Council, and American Association of Petroleum Geologists. This report has been prepared using constant price and cost parameters specified by Maple, as discussed in subsequent paragraphs of this letter. As presented in the accompanying Table 6.1, we estimate the probability of recoverable gas and condensate occurrence, unrisked net prospective gas and condensate resources, and risked after-tax present worth for the prospect, as of December 31, 2006, to be: Probability of Recoverable Gas and Condensate (Decimal) Low Estimate Unrisked Net Prospective Resources (1) Risked Mean After-Tax (2) Gas (BCF) Condensate (MMBBL) Best Estimate High Estimate Low Estimate Best Estimate High Estimate Present Worth at 10% (MM$) (1) Resources are net to the Maple working interest of percent. (2) Discounted cash flow shown is based on the best estimate resource case, using the base price case of $0.037 per kilowatt-hour received for electricity and $50.00 per barrel, and is after consideration of Peruvian income taxes at a rate of 30 percent. Gas volumes are expressed in billions of cubic feet (BCF) at standard temperature and pressure bases. Condensate volumes are expressed in millions of barrels (MMBBL); a barrel is equivalent to 42 United States gallons. Revenue estimates are expressed in millions of United States dollars (MM$). The prospective resources shown in this report have been estimated using probabilistic methods and are dependent upon a commercial discovery being made. For the low estimate resources, there is at least a 90 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts. The best estimate resources correspond to a measure of the central tendency of the uncertainty distribution, represented herein as the mean value. For the high estimate resources, there is at least a 10 percent probability that the quantities of oil and gas actually recovered will equal or exceed the estimated amounts. Definitions of resource categories are presented in section 1.1. A geologic risk assessment was conducted for the prospect. Risked prospective resources address the probability or chance of success for the discovery of recoverable hydrocarbons, and risk analysis is conducted independently of probabilistic estimations of hydrocarbon volumes without regard to commerciality. Principal risk elements of the petroleum system include (1) trap and seal characteristics; (2) reservoir presence and architecture; (3) source rock capacity, quality, and maturity; and (4) timing, 174 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES HIGH EST (P10) SAN ROQUE PROSPECT EXPLORATION BLOCK 31-E UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 6-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. OIL/COND OIL/COND REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 163

172 migration, and preservation of hydrocarbons in relation to trap and seal formation. Prospect risk assessment is a highly subjective process dependent upon the experience and judgment of the evaluators and is subject to revisions with further data acquisition or interpretations. Our views of the primary risk elements for each play type are qualitatively described and quantified herein. Unrisked prospective resources are estimated ranges of in-place and recoverable oil and gas volumes if hydrocarbons are discovered. This report includes a discussion of the project along with various maps and exhibits. Also included is an economic summary showing present worth, both before and after Peruvian income taxes, for each resource case. In addition to the base price case of $50.00 per barrel, price sensitivities for each resource case are included for $40.00 per barrel, $60.00 per barrel, and $70.00 per barrel price cases. Gross resource volumes represent 100 percent of the produced hydrocarbons; net resource volumes represent those resources that are net to the Maple working interest. Future gross revenue to the Maple interest is before deducting government royalty payments as set forth in the license contract. Future net revenue is after deductions for royalty expense payments, future capital costs, and operating expenses; future net after-tax revenue is after consideration of Peruvian income taxes at a rate of 30 percent. The future net revenue has been discounted at an annual rate of 10 percent to determine its present worth. The present worth is shown to indicate the effect of time on the value of money and should not be construed as being the fair market value of the properties. For the purposes of this report, we did not perform any field inspection of the properties. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties. As requested, this report has been prepared using gas and condensate prices specified by Maple. Gas volumes will be used as fuel supply for power generation; the electricity price used for all cases is $0.037 per kilowatt-hour. The condensate price used for the base case is based on a West Texas Intermediate posted price of $50.00 per barrel and is adjusted for estimated quality, transportation fees, and regional price differentials. All prices are held constant throughout the lives of the properties. Lease and well operating costs are based on operating expense estimates of Maple and our experience with similar properties. These costs have been divided into fixed overhead costs, variable field-level operating costs, and variable per-well costs. These costs include general and administrative overhead costs along with other costs estimated to be incurred at the field level. The field-level operating costs varied by case due to the difference in number of wells and facility sizes. Lease and well operating costs are held constant throughout the lives of the properties. Capital costs are included for new wells, pipelines, production facilities, and production equipment. These costs are based on the capital expenditure estimates of Maple and our experience with similar projects. It should be understood that the prospective resources discussed and shown herein are those undiscovered, highly speculative resources estimated beyond proved, probable, and possible reserves or contingent resources where geologic and geophysical data suggest the potential for discovery of hydrocarbons but where the level of proof is insufficient for classification as reserves or contingent resources. The unrisked prospective resources are those volumes that could reasonably be expected to be recovered upon the successful exploration and development of these prospects. In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be political, socioeconomic, legal, or accounting, rather than engineering and geologic. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geologic data; therefore, our conclusions necessarily represent only informed professional judgment. 175 The contractual rights to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from The Maple Companies, Limited; its subsidiaries; public data sources; and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting geologic, field performance, and work data are on file in our office. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties and are not employed on a contingent basis. Very truly yours, NETHERLAND, SEWELL & ASSOCIATES, INC. /s/ Frederic D. Sewell, P.E. By: Frederic D. Sewell, P.E. Chairman and Chief Executive Officer /s/ C.H. (Scott) Rees III, P.E. /s/ John G. Hattner, P.G. By: By: C.H. (Scott) Rees III, P.E. President and Chief Operating Officer John G. Hattner, P.G. Senior Vice President Date Signed: January 29, 2007 Date Signed: January 29, 2007 EMP:JAC Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates, Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document

173 6.1 Summary of prospective resources and present worth SUMMARY OF PROSPECTIVE RESOURCES AND PRESENT WORTH THE MAPLE COMPANIES, LIMITED INTEREST AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE $50.00 PER BARREL Aguaytía Deep Probability of Recoverable Gas and Condensate (Decimal) 0.32 Unrisked Gross Prospective Gas Resources (BCF) Low Estimate (P90) 1.30 Best Estimate (Mean) High Estimate (P10) Unrisked Gross Prospective Condensate Resources (MMBBL) Low Estimate (P90) 0.03 Best Estimate (Mean) High Estimate (P10) Unrisked Net Prospective Gas Resources (BCF) Low Estimate (P90) 0.47 Best Estimate (Mean) High Estimate (P10) Unrisked Net Prospective Condensate Resources (MMBBL) Low Estimate (P90) 0.01 Best Estimate (Mean) 4.48 High Estimate (P10) BEFORE INCOME TAX UNRISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) (1.46) Best Estimate (Mean) High Estimate (P10) BEFORE INCOME TAX RISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) (0.91) Best Estimate (Mean) 5.43 High Estimate (P10) AFTER INCOME TAX UNRISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) (1.52) Best Estimate (Mean) High Estimate (P10) AFTER INCOME TAX RISKED Present Worth Discounted at 10% (MM$) Low Estimate (P90) (0.83) Best Estimate (Mean) 2.53 High Estimate (P10) Table 6.1 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions General information DISCUSSION DEEP PROSPECT, BLOCK 31-C AGUAYTÍA UCAYALI BASIN, PERU OVERVIEW This report presents our assessment of the hydrocarbon potential and exploration risk for the Aguaytía Deep Prospect located in Block 31-C in the Padre Abad Province of the Ucayali Region of Peru, as of December 31, Block 31-C is located approximately 50 miles west of the city of Pucallpa, as shown on the location map on Page 188. The license contract for Block 31-C was awarded to The Maple Gas Corporation del Perú, Sucursal Peruana (Maple Gas) effective March 30, The deep exploration rights were subsequently transferred to Maple Exploration, Ltd. (Maple Exploration). Maple Exploration is a wholly owned subsidiary of The Maple Companies, Limited (Maple). Maple has identified 1 exploration prospect on this block, the Aguaytía Deep Prospect, in a deeper zone than the overlying Aguaytía Field which produces both gas and condensate. This prospect targets the Jurassic-Triassic Pucara Formation. As shown on the geologic column and type log on Page 189, the Pucara interval in this area can have a gross thickness of over 950 feet. While the project area is underexplored, the data available for review over the prospect show similarities to the data reviewed for Aguaytía Field. The Ucayali sedimentary basin is one of many basins along the eastern flank of the Andean mountain chain. The Cretaceous, Jurassic, Triassic, and Paleozoic reservoirs in these basins have produced at several giant oil and gas fields. Among these are, to the north, Fluriel Oil Field in Venezuela, Caño Limón and Cusiana Oil Fields in Colombia, and Shushufindi Oil Field in Ecuador; to the south, San Alberto and San Antonio Gas Fields in Bolivia; and in the southern portion of the Ucayali Basin, Camisea Field. Exploration in this area began in 1961 when Mobil Corporation discovered and tested the Aguaytía anticline with the drilling of the Aguaytía 1X well to a depth of approximately 9,000 feet. Gas was discovered in the 1X well in the Aguanuya and Cushabatay Formations of the lower Cretaceous interval. However, the well was not drilled deep enough to test the Pucara Formation. Mobil Corporation drilled the Aguaytía 2X well in 1967 on the flank of the anticline to define the extent of the Cushabatay Reservoir. Petroleos del Peru S.A. conducted an extensive 2-D seismic survey over the structure and drilled 2 additional wells, the 3X and 4XD, in the mid-1980s. The 3X well was originally designed to drill and test the deeper Pucara and other formations but was stopped after drilling the Cushabatay Formation because of budgetary concerns. The Cretaceous sand reservoirs of the Cushabatay Formation produce gas and condensate in Aguaytía Field. The location of this field is shown on the location map on Page 188. In the central part of the Ucayali Basin, approximately 25 miles south of Aguaytía Field, additional gas in small quantities was discovered along the same trend in the San Alejandro 1X well, drilled by Pan Energy E&P Ltd., in the Pucara, Ene, and Copacabana Formations. The San Alejandro 1X well confirmed the existence of Pucara sand formations with sufficient reservoir qualities and good gas shows. The Ene and Copacabana Formations also had gas shows, but did not demonstrate reservoir characteristics worthy of exploration to those depths at this time. Aguaytía Deep Prospect, defined by available seismic data, is an anticlinal structure similar to but larger at the Base Cretaceous level than the shallower Aguaytía Field, as shown on the Base Cretaceous time structure map on Page 190. The shallow and deeper structures were generated by a large reverse fault, with the deeper structural crest slightly offset to the west of the shallower field. The reverse fault and associated anticlinal structure are clearly illustrated on the seismic cross section shown on Page 193. Total well depth is expected to be approximately 13,000 feet. For this appraisal, we performed a risk assessment of the probability for discovery of recoverable hydrocarbons, conducted a probabilistic analysis of the potential reservoir volumes and recoverable hydrocarbons, and prepared unrisked and risked economic cash flow sensitivities. Our review of the potential for hydrocarbon accumulation in Aguaytía Deep Prospect consisted of a review and interpretation of all the seismic data, a review of the overall basin and area geology, and a study of the producing fields in the Ucayali Basin. DEFINITIONS OF POTENTIAL RESOURCES The prospective resources in this report have been categorized using the 2000 definitions for petroleum resources as adopted by the Society of Petroleum Engineers (SPE), World Petroleum Council (WPC),

174 and American Association of Petroleum Geologists. The prospective resources were determined based on probabilistic methods with the low estimate, best estimate, and high estimate resources corresponding to the P90, Mean, and P10 cases, respectively. Unrisked prospective gas and condensate resources were estimated based on the successful development of certain prospects located within the Aguaytía anticline. The prospective gas and condensate resources are those volumes that could reasonably be expected to be recovered upon the successful exploration and development of these areas. The 2000 definitions for petroleum resources and the 1997 definitions for oil and gas reserves adopted by the SPE and WPC are presented in section 1.1. It should be understood that the prospective resource volumes discussed and shown herein are those undiscovered, highly speculative resources estimated beyond proved, probable, and possible reserves where geologic and geophysical data suggest the potential for discovery of additional reserves, but where the level of proof is insufficient for classification as reserves. RISK ASSESSMENT Prospect risk is used to assess the overall hydrocarbon system and is applied independently of the probabilistic simulation to derive the risked resource estimates. We analyzed the geologic risk associated with the prospect using a prospect evaluation technique modeled after industry standard practices (Otis and Schneidermann, 1997). This technique uses a 4-component equation to measure probability of geologic success (P G ) without regard to economic viability. The 4 components are source evaluation, timing/migration, trap integrity, and reservoir quality. A study of seismic data, well logs, analogous field data, and published literature provided additional data and supplemented the risk analysis. By carefully examining the subcategories under each of these components and assigning a confidence ranking, a numerical risk value can be assigned. The product of the individual risk factors yields the P G value. For instance, a P G of 0.10 suggests that a prospect has a1in10chance of discovering hydrocarbons. It should be noted that the calculation of geologic risk is a highly subjective process dependent upon the experience and judgment of the individuals performing the assessment. We view the overall probability of success for discovering productive hydrocarbons in Aguaytía Deep Prospect as 32 percent (P G of 0.32, approximately 1:3). With the potential size of this prospect and the moderate exploration risk, this is a promising area. The parameters for each of the 4 risk components are shown on Page 192 and are discussed below. Data and Data Quality Maple has purchased and provided 2-D seismic lines over the area. These data were reviewed and interpreted to create the Base Cretaceous time structure map shown on Page 190. Maple provided well logs that were used to document the reservoir-quality sands in the target intervals. Source Evaluation The Pucara, Ene, and Copacabana Formations are evident in the well control within the project area or basin, and their laterally equivalent formations are documented throughout the literature as being the source rock for most of the oil and gas production from Cretaceous reservoirs in Latin America. Good geochemical data exist documenting the source rock potential for the Pucara and Ene Formations in the basin. Since the overlying Aguaytía Field exists, the maturity and capacity for hydrocarbon charge for the source rocks here are considered very low risk. The probability of source rock existing is estimated to be very high at 95 percent for the prospect. Timing and Migration The 2-D seismic data available for review demonstrate structural existence and that faults extend much shallower than the Cretaceous reservoir interval up to the surface. These faults provide possible migration conduits from the deeper source rocks into the Pucara reservoir. The key question is whether any hydrocarbons that may have migrated into the Pucara in Block 31-C were trapped and then subsequently breached by faulting and migrated into the overlying Cushabatay structure. In consideration of the existence of the overlying Aguaytía Field, the probability of timing and migration working to preserve hydrocarbons is estimated to be very high at 95 percent for the prospect. The risk for the prospect is therefore shifted to the element of trap integrity since current oil and gas generation should be occurring in the basin. Trap Integrity Because of post-depositional tectonic activity, structural trapping characteristics are important for Cretaceous-age reservoirs in the analogous fields. The exploration success for the entire eastern jungle 179 area of Peru is 20 percent, which is solely dependent on drilling structural traps (usually hanging wall anticlines) generally based upon poor quality 2-D seismic data. The prospect reviewed here is constrained by 2-D seismic coverage; therefore, the faults and structures interpreted from these data may have a slightly different pattern than currently mapped when additional data, either reprocessed existing 2-D lines or additional lines, are incorporated into the interpretation. The Base Cretaceous structure shows a broader anticlinal feature than the overlying Cushabatay structure of Aguaytía Field. Just above the Base Cretaceous pick, as shown on the seismic cross section on Page 191, a thickening of the section into the boundary fault suggests shale or salt presence which would increase the probability of trap integrity. The probability of structural trapping is estimated at 50 percent for this prospect. Reservoir Quality There are a few well penetrations of the pre-cretaceous section in the region; however, no wells penetrate this section within the concession. We believe that reservoir-quality sands will exist as they do at other wells in the basin, including Camisea Field to the south. The amount of net reservoir sand is the question, not sand presence. The geologic risk assessment for Pucara reservoir quality in the project area is considered to be low, with a 70 percent chance of success. Overall Risk Assessment A review of the exploration drilling in the basin was conducted to ensure that our overall prospect risk assessment was reasonable when compared to the historical exploration success. Overall, a total of 40 prospects have been drilled in the Ucayali Basin with 8 discoveries, a success rate of 20 percent. With a total of 60 million acres in the basin, that equates to less than 1.5 million acres explored per drilled prospect. Exploration by area within the basin is shown in the following table: Drilled Prospects Discoveries Percent Oil Gas Total Success Discoveries Area of Basin Northeast Maquia, Pacaya Contaya Arch Basin Jurassic West Central Agua Caliente, Aguaytía Southwest Central Shauinto (Uneconomic) Southern San Martin, Pagorene, Cashiriari, Mapaya Total Basin A total of 6 analogous wells have been drilled in the basin with 2 discoveries, a 33 percent success rate. The analogous wells drilled in the basin are summarized in the following table: Analogous Wells Drilled Prospects Discoveries Percent Oil Gas Total Success Discoveries Aguaytía 1X Aguaytía San Alejandra 1X Pucara, Ene, and Copacabana gas shows La Colpa Chio X Pisqui Tahuaya Totals The probability of success for a discovery, from the multiplication of the component risk factors discussed above, has been estimated as 32 percent for Aguaytía Deep Prospect. This probability compares favorably to the basin statistics, as Aguaytía Deep Prospect is considered moderate to better-than-average risk because it appears to be an analogous 4-way closure structure to the overlying, producing Aguaytía Field. As a point of reference, historical exploration success in the continental United States for 2-D seismic prospects averaged approximately 18 percent in the 1970s and 1980s. PROBABILISTIC ASSESSMENT OF RESOURCE POTENTIAL Unrisked volumetric estimates of original gas- and condensate-in-place and estimated ultimate recoverable gas and condensate, given a successful discovery, have been calculated probabilistically using a Monte Carlo simulation of input variables for the prospect. Probability distributions have been assigned in order to capture the range of uncertainty in reservoir parameters and fluid content for calculation of in-place gas and condensate and estimated ultimate recoverable gas and condensate

175 Reservoir parameters used include area, average net reservoir thickness, porosity, hydrocarbon saturation, formation volume factor, and recovery factor. The reservoir parameters were combined to derive 3 Monte Carlo input variables to generate probability distributions of original gas- and condensate-in-place. The 3 input variables used are area, average net thickness, and bulk volume gas (porosity x gas saturation). Recovery factor and condensate-gas ratio are then used as variables in the Monte Carlo simulation to derive probabilistic estimates of ultimate gas and condensate recovery. The probability distribution assigned to each input variable was either lognormal, normal, or triangular depending on the qualitative assessment of data amount, data quality, and uncertainty related to each parameter. An output probability distribution of unrisked stock tank original gas-in-place and recoverable gas and condensate volumes were calculated using the input distributions. We performed the Monte Carlo simulation using the Decisioneering Crystal Ball software (Excel add-in). A Monte Carlo simulation is an iterative technique that randomly samples each parameter within a prescribed uncertainty range and distribution. Crystal Ball then combines these random values in user-defined formulas to create a cumulative probability distribution curve. The formulas used in this study are: 43,560 x Area x Net Thickness x Bulk Volume Gas x (1/Formation Volume Factor) = Original Gas-in-Place and Original Gas-in-Place x Recovery Factor = Recoverable Gas Resources plus Average Condensate-Gas Ratio x Recoverable Gas Resources = Recoverable Condensate Resources The cumulative probability distribution curve indicates the likelihood that the in-place or recoverable hydrocarbons will be greater than the value shown on the distribution curves. For example, the P90 estimate indicates a 90 percent likelihood that actual results will be greater than the estimate, if a discovery is made. The data available for evaluating the ranges for each input parameter are limited to the 40 wells drilled and the field studies conducted over the last 60-plus years. Some of the early well data are of poor quality and sometimes not available, and some of the more recent data are not publicly available. All of the available data were reviewed before determining the input parameters, but a significant amount of judgment was used in incorporating these data into our final input parameters. The results of the simulation are shown on the cumulative probability distribution curves on Page 193. The range and distribution of the independent variables used in our probabilistic resource assessment are summarized for the exploration prospect on Page 194 and discussed in the following paragraphs. Area We assigned a conservative, lognormal distribution to the values of area to reflect the normal range of trap size in a basin because of the lack of statistically significant data to further define the distribution. We mapped potential areas to the spill point and used P10 as the high value and P90 as the low value. The discoveries in the basin have tended to be small accumulations at the structural culminations, with the available data for percentage of structural closure area fill ranging from 1 percent in Pacaya to 23 percent in Aguaytía. For example, the structural closure area for Aguaytía is 20,000 acres but only the crestal 4,500 acres are productive, which is approximately 23 percent of the entire structural closure area. For Aguaytía Deep Prospect, the total structural closure is approximately 18,500 acres to the spill point at a time of 2.43 seconds on the time structure map on the Base Cretaceous. The primary issue is the percent fill to spill point. The low value is estimated at 1,500 acres based on structural fill to a time of 2.20 seconds, which is equivalent to the 4-way closure without using fault seal on approximately a 6 percent fill. The P50 value is estimated at approximately 5,200 acres, which is similar to the 4,500 acres of productive area at Aguaytía Field. Net Pay Thickness For net pay thickness, we assigned a conservative, lognormal distribution to these values to reflect the normal range of net thickness in an oil and gas basin because of the lack of statistically significant data to further define the distribution. In general, we defined the P90 value for net pay thickness as the low value 181 (in feet) for the prospective reservoir and the P10 value as the high value. Based on the analogous log data, the amount of net sand in the Pucara interval is expected to be high; however, the amount of net sand containing gas is uncertain. For example, the San Alejandro 1X well found over 900 feet of total net sand, but only the top 170 feet had gas shows. Aguaytía Field has a total net sand of greater than 190 feet but the average net pay thickness only averages 125 feet. For Aguaytía Deep Prospect, our input parameters for net pay thickness are 50 feet for the low estimate and 190 feet for the high estimate. The low estimate is based on approximately 40 percent of that seen at Aguaytía Field, with the high estimate based on the average net thickness of 170 feet seen in the San Alejandro 1X well. Bulk Gas Volume We defined the P90 value for bulk gas volume as the low value for the given reservoir and the P10 value as the high value observed on the analogous log data. We assigned a normal distribution to these values. From log and core data it was determined that the petrophysical parameters are relatively consistent throughout the basin. The low and high porosity inputs are 6 and 13 percent, respectively, and the low and high gas saturation inputs are 50 and 75 percent, respectively. For bulk gas volume we used 3 percent (6 percent porosity x 50 percent gas saturation) for the low value and 9.75 percent (13 percent porosity x 75 percent gas saturation) for the high value. We expect reservoir quality to be only fair in this deep prospect. Recovery Factor We defined recovery factor using triangular distribution with a minimum value of 45 percent, a most-likely value of 55 percent, and a maximum value of 65 percent. We expect pressure depletion to be the main drive mechanism due to the fair reservoir quality. By comparison, the average total field recovery factor expected for Aguaytía Field is in the range of 60 to 70 percent. This range was used for the maximum value in this evaluation since the reservoir qualities are much better for Aguaytía Field than what are expected for Aguaytía Deep Prospect. Condensate-Gas Ratio We defined the P90 value for condensate-gas ratio as the low value for the given reservoir and the P10 value as the high value. We assigned a lognormal distribution to these values because of the lack of statistically significant data to further define the distribution at this depth. From analogous log data it was determined that the depth of the Pucara interval is expected to be in the range of 11,000 to 13,000 feet. Based on this depth, the pressure and temperature values are expected to be higher than that experienced at the shallower Aguaytía and Camisea Fields. Consequently, the condensate-gas ratio is expected to be lower. Aguaytía and Camisea Fields have condensate-gas ratios that range from 40 to 45 barrels per million cubic feet (BBL/MMCF) and 55 to 65 BBL/MMCF, respectively. Therefore, we used 20 BBL/MMCF for the low value and 65 BBL/MMCF for the high value. Unrisked Undiscovered Gas- and Condensate-in-Place The range of estimates for unrisked undiscovered gas- and condensate-in-place for the prospect, as determined using probabilistic analysis with the input parameters of area, net pay, bulk gas volume, formation volume factor, and condensate-gas ratio, are shown below and on Page 194. It should be understood that the unrisked undiscovered gas- and condensate-in-place volumes discussed and shown herein are the range of potential volumes if a successful discovery well is drilled. Product Low Estimate Aguaytía Deep Prospect Best Estimate High Estimate Unrisked Undiscovered Gas-in-Place (BCF) ,367.0 Unrisked Undiscovered Condensate-in-Place (MMBBL)

176 Unrisked Gross Prospective Gas and Condensate Resources The range of estimates for unrisked gross prospective gas and condensate resources, as determined using probabilistic analysis with the gas-in-place input parameters, the condensate-gas ratio parameters, and the recovery factor input parameters, are shown in the following table and on Page 194. As with the unrisked undiscovered gas- and condensate-in-place, the unrisked gross gas and condensate resources are based on the range of these prospective volumes if a successful discovery well is drilled. Product Low Estimate Aguaytía Deep Prospect Best Estimate High Estimate Unrisked Gross Prospective Gas Resources (BCF) Unrisked Gross Prospective Condensate Resources (MMBBL) ECONOMICS Economic sensitivities were prepared using the low estimate, best estimate, and high estimate resource cases from the probabilistic models discussed above. These economic sensitivities are unrisked and assume successful exploration, appraisal, and development of the discovered resources. A development plan was prepared for each resource case that incorporated the expected number of wells, initial gas and condensate rates, and expected production profile for each well. In addition to the base price and cost parameters, 4 additional price sensitivities for each resource case were also prepared. Development Plan The main purpose of this development is to produce, process, and sell the condensate and use a portion of the produced gas to generate electricity. A separate development plan has been designed for each resource case, given the wide range of gas resource size. Each development case is described below. The gross and net production profiles for all resource cases are shown on Pages 195 and 196. High Estimate Case Development Plan This development plan consists of building a gas plant with full reinjection compression, capable of handling a maximum flow rate of 86 million cubic feet per day (MMCFD); a fractionation plant capable of processing 6,700 barrels of oil per day (BOPD); a 96 megawatt (MW) simple cycle turbine power plant that will consume 28 MMCFD; installation of a new 6-inch liquids pipeline that will run from the gas plant to the Neshuya Station; and compression installation both at the power plant inlet and at the Neshuya Station. The total field production is forecast to increase to a peak rate of 86 MMCFD in July 2011 and remain constant at this rate until the field goes on decline starting in January The full wellstream production will be processed at the gas plant where the liquids will be dropped out and processed in the fractionation plant. Residual gas of 28 MMCFD will then be sent to the power plant to generate electricity and the remaining gas, 52 MMCFD, will be reinjected into the Cushabatay Reservoir within Aguaytía Field. A 6 percent shrinkage factor is assumed in this process. Starting in 2018, a portion of the reinjection gas will be sent to the existing Aguaytía power plant to offset the declining Aguaytía Field production. Best Estimate Case Development Plan The development plan for the best estimate case is similar to that of the high estimate case. The plan consists of building a 36 MMCFD capacity gas plant with full reinjection compression; a 96 MW simple cycle turbine power plant that will consume 28 MMCFD; and compression installation both at the power plant inlet and at the Neshuya Station. The existing liquids pipeline and Aguaytía fractionation plant can handle the expected condensate rates for this case; therefore, the installation of a new 6-inch liquids pipeline from the gas plant to the Neshuya Station is not required. The total field production is forecast to increase to a rate of 36 MMCFD in July 2011 and remain constant at that rate until capacity becomes available at the Aguaytía power plant beginning in All production will be handled at the new facilities during the first 7 years using the same processing method explained above for the high estimate case. The 36 MMCFD full wellstream production will be processed at the gas plant where the liquids will be dropped out and sent to the Aguaytía fractionation plant. Residual gas of 28 MMCFD will be sent to the power plant to generate electricity, and the remaining 6 MMCFD will be reinjected into the Cushabatay Reservoir. A 6 percent shrinkage factor is assumed in this process. Starting in 2018, a portion of the reinjection gas will be sent to the Aguaytía power plant to offset the declining Aguaytía Field production. Starting in 2020, the production is increased yearly, by drilling additional wells, to account for increased capacity at the Aguaytía power plant. A peak rate of 50 MMCFD is achieved in 2025 before the field starts to go on decline in Low Estimate Case Development Plan No new infrastructure is required for the development plan of the low estimate case. If the exploration well encounters the reservoir parameters forecast for this case, the well will be put on production in 2018 when capacity becomes available in the existing Aguaytía Field facilities. The unrisked prospective resource estimates for this case are 31 BCF of gas and 0.6 MMBBL of condensate. Due to the negative economics of this case, no additional wells will be drilled to capture the remaining resources. The main reservoir parameters necessary for the development plans are the total area, gross gas resources, and gross condensate resources expected with each case. Another important parameter needed for the number of wells was the expected well spacing. Maple has indicated they plan to drill horizontal wells on 320-acre spacing. For the purposes of this report, we estimate that, if exploration is successful, Aguaytía Deep Prospect would be developed on 320-acre spacing. Once additional data have been gathered through the initial exploration and early production, economic and resource sensitivities could be prepared to determine if additional downspacing is warranted. These parameters were estimated using the results of the probabilistic model and were used to estimate the number of wells necessary to develop the resources as well as the range of expected production rates. Our estimates of area, expected well count, estimated ultimate recovery (EUR), well productivity rates, and total field peak rates are shown in the following tables: Case Area (acres) Wells Gas EUR per Well (BCF) Peak Gas Rate (MMCFD) per Well for Field Low Estimate 1, Best Estimate 8, High Estimate 14, Case Area (acres) Wells Condensate EUR per Well (MBBL) Condensate Rate (BOPD) per Well for Field Low Estimate 1, Best Estimate 8, ,900 High Estimate 14, , ,700 Initial production rates for the primary target reservoir are expected to be good. They range from 3.5 MMCFD for the low estimate case up to 15.0 MMCFD for the high estimate case, with 10.0 MMCFD for the best estimate case. Due to the expected reservoir depth and qualities, a hyperbolic flow rate is expected. Drawing on our experience with similar reservoirs in other areas of the world, we developed a type curve with an initial decline rate of 65 to 70 percent, an n factor equal to 1.0, and a final decline of 5 percent. The rates in the best and high estimate cases were restricted to 5 MMCFD for development planning purposes. This restriction allowed for a period of constant flow rate at 5 MMCFD before going on decline. For the economics included herein, the initial exploration well is forecast to be drilled in late 2007 for Aguaytía Deep Prospect. If successful, this well will be followed with a development program starting in late 2010 for the best estimate and high estimate cases. In the low estimate case, production of the exploration well would commence in 2018 when capacity would become available at the Aguaytía Field facilities. It is expected that the drilling and testing time period (mobilization through demobilization) will be approximately 45 days per well. The drilling schedule used in the economics, showing wells drilled per year including the initial exploration well, is as follows:

177 Year Low Estimate Best Estimate High Estimate Year Low Estimate Best Estimate Total High Estimate Pricing and Operating Costs Condensate prices used for the base case presented in this report are based on a West Texas Intermediate posted price of $50.00 per barrel. In addition, price sensitivities for each resource case are included for $40.00 per barrel, $60.00 per barrel, and $70.00 per barrel cases. All prices are adjusted for estimated quality, transportation fees, and regional price differentials. The resulting actual prices used for each case are shown in the table on Page 197. The electricity price was held constant for all resource cases at $0.037 per kilowatt-hour as provided by Maple. A resulting electricity revenue stream has been calculated based on this price and the gas available to generate power. This revenue stream has been replicated in the economics software by back-calculating an effective gas price as compared to the full wellstream gas produced. This effective price varied over time based on the percentage of full wellstream gas being utilized for electricity generation. The effective gas prices used for each resource case are shown in the table on Page 198. Lease and well operating costs are based on operating expense estimates of Maple and our experience with similar properties. These costs have been divided into fixed overhead costs, variable field-level operating costs, and variable per-well costs. Lease and well operating costs include general and administrative overhead costs along with other costs estimated to be incurred at the field level. The field-level operating costs varied by case due to the difference both in the number of wells and the volume of liquids produced. Lease and well operating costs are held constant throughout the lives of the properties. A summary of the monthly operating costs estimated for each case is shown on Page 199. Capital Costs The capital costs included in this report are for new wells and their associated gathering and production equipment. These costs are based on the capital expenditure estimates of Maple and our experience with similar projects. As summarized on Page 199, these costs are divided into two phases, exploration and development. The exploration phase includes the deepening of an existing Aguaytía inactive gas injection well. For Aguaytía Deep Prospect, the gross cost of this phase is approximately $5.0 million ($1.818 million net to Maple). The development well gross cost for the prospect is estimated to be $7.36 million ($2.676 million net) per well. In each case, capital costs are included for the field s surface gathering lines, tanks, separators, and other facilities. Fiscal Terms Maple Gas signed the license contract for Aguaytía Deep Prospect with the Peruvian government in 1994, giving them 100 percent ownership in the deep horizons of Block 31-C. The deep exploration rights were subsequently transferred to Maple Exploration, a wholly owned subsidiary of Maple. In subsequent years, Maple has negotiated its ownership with Duke Energy and Conduit Capital Partners and currently maintains a percent ownership in the deep horizons of Block 31-C. There is no minimum work plan under the current agreement. The total concession term is 40 years, inclusive of the initial exploration phases. The economics included herein use a sliding scale royalty for payments to the Peruvian government once production is commenced. Under Peruvian hydrocarbon law, the contractor has rights to 100 percent of 185 the hydrocarbons produced in exchange for a royalty payment equal to a contractual percentage of the proceeds. Under this concession agreement, Maple has a different sliding scale royalty for both the gas and condensate, as shown below: Gas Price (2) ($/BOE) Gas Royalty (1) Condensate Royalty Royalty % Crude Oil Price ($/BBL) Royalty % 3.50 and below and below Above (3) above (4) (1) This royalty represents the base royalty calculation and must be adjusted based on production rate. (2) Gas price is a combination of weighted average value of the prospect life, in units of million British thermal units (MMBTU), and current gas price. Barrels of oil equivalent (BOE) is a ratio of 6 MCF of gas to 1 barrel of oil. (3) Royalty percentage = ( x Price) (4) Royalty percentage = ( x Price) The gas prices were determined using the United States Gulf Coast Waterborne spot price assessment. The base case gas price was calculated using the equation below and a West Texas Intermediate (WTI) posted price of $50.00 per barrel. Price sensitivities were also included for $40.00 per barrel, $60.00 per barrel, and $70.00 per barrel cases. Gas Price for Royalty (in $ per BOE) = ( x WTI Posted Price) The gas royalty calculation is very complicated under the current concession agreement. The gas royalty and price value is a weighted average for the life of the prospect. The gas volume, measured in MMBTU, is fiscalized in 2 15-day periods each month and is then used to volume-weight the value to determine the value of the average to-date price. From this price, the royalty percentage is calculated using the above gas royalty equations. Once the royalty percentage is calculated, a 23 percent discount factor is applied to the calculated royalty percentage for any average daily volume above 12,500 MMBTU per day for that 15-day period. If 12,500 MMBTU per day is not produced for any day during the 15-day period, the difference is carried over to the next month and added to the production rate above 12,500 MMBTU before the 23 percent discount is applied. Once the royalty gas volume, in MMBTU, has been calculated, it is then multiplied by 10 percent of the cumulative lifetime MMBTU weighted average basket value. Due to the complexity of this concession agreement and uncertainty of the total production, we have used a simplified gas royalty scheme for the economics presented herein. We have taken the conservative approach of using an average gas royalty that takes into account a small portion of the 23 percent discount. The average gas royalty was calculated for each specific price case and was increased gradually throughout the life of the project. The ranges of average gas royalties for each price case are presented on Page 200. The condensate royalty is held constant throughout the lives of the properties due to the price being held constant. The condensate royalty for each specified price case is also presented on Page 200. Future revenue is shown in the economics both before and after Peruvian tax payments. For the after-tax calculations, a 30 percent Peruvian tax rate was used. For tax purposes, 75 percent of the drilling costs were expensed and 25 percent were depreciated using 5-year straight line depreciation. The costs associated with the power plant were depreciated using 7-year straight line depreciation, starting in the first full year of operation. All remaining costs were depreciated using 5-year straight line depreciation. Summary The unrisked economics were used with the estimated exploration and development costs and the probability of geologic success (P G ) to determine certain risked economic indices. Risked economics are determined using a decision tree analysis that uses the following equation to calculate risked present worth (PW) for each prospect. Risked Present Worth = [(P G x Unrisked PW)] [(1 P G ) x (Dry Hole PW)] The estimated gross capital costs are $5.00 million ($1.818 million net) for the exploration well and $7.36 million ($2.676 million net) for each development well. The corresponding before-tax present worth, discounted at 10 percent to the date of expenditure, of these gross capital costs is $4.50 million ($1.64 million net)

178 Our estimates of the unrisked net prospective gas and condensate resources and the risked mean case after-tax present worth for the $50.00 per barrel base price case, as of December 31, 2006, are shown in the following table: Probability of Recoverable Gas and Condensate (Decimal) Low Estimate Unrisked Net Prospective Resources (1) Risked Mean After-Tax (2) Gas (BCF) Condensate (MMBBL) Best Estimate High Estimate Low Estimate Best Estimate High Estimate Present Worth at 10% (MM$) (1) Resources are net to the Maple working interest of percent. (2) Discounted cash flow shown is based on the best estimate resource case, using the base price case of $0.037 per kilowatt-hour received for electricity and $50.00 per barrel, and is after consideration of Peruvian income taxes at a rate of 30 percent. A graph showing the present worth versus discount rate for each resource case is shown on Page 201. The sensitivity of the project economics to price variations is shown on Page 202. Additional economic parameters for each of the resource cases and for each price case are shown on the Economic Summary table on Page

179

180 191 RISK ASSESSMENT SUMMARY AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Risk Factor/Elements Aguaytía Deep Source Evaluation 0.95 Capacity of Hydrocarbon Charge Source Rock Maturity Other Timing/Migration 0.95 Migration Pathways Timing Preservation/Segregation Other Trap Integrity 0.50 Seals (vertical and horizontal) Trap Characteristics Trap Definition Other Reservoir Quality 0.70 Presence Architecture Pore System Characteristics Other Overall Probability of Success (P G ) 0.32 Risk Assessment Key: < 0.30 Risk factor contains unfavorable elements One or more questionable or neutral elements 0.50 Elements unknown or no definitive data (neutral) One or more elements encouraging to favorable some neutral > 0.70 All elements well documented with encouraging to favorable parameters All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

181 CUMULATIVE PROBABILITY DISTRIBUTION CURVES AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 193 SUMMARY OF UNRISKED PROBABILISTIC RESOURCE ANALYSIS AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Input Parameters Used in Probabilistic Model: Distribution Low High Parameter Type Probability Value Probability Value Area (acres) Lognormal P90 1, P10 18, Net Thickness (feet) Lognormal P P Bulk Gas Volume (%) Normal P P Gas Recovery Factor (%) Triangle Min Max Condensate-Gas Ratio (BBL/MMCF) Lognormal P P Results of Probabilistic Analysis: Prospect Unrisked Undiscovered Gas-in-Place (BCF) ,367.0 Unrisked Gross Prospective Gas Resources (BCF) Unrisked Undiscovered Condensate-in-Place (MMBBL) Unrisked Gross Prospective Condensate Resources (MMBBL) Low (P90) Best (Mean) High (P10) All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

182 UNRISKED GROSS PROJECTED GAS AND CONDENSATE PRODUCTION AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 195 UNRISKED NET PROJECTED GAS AND CONDENSATE PRODUCTION AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, ,500 2,000 1,500 High Estimate 1, ,000 30,000 25,000 High Estimate 20,000 15,000 10,000 Best Estimate Net Projected Gas (MMCFD) Net Projected Condensate (BOPD) Best Estimate Low Estimate 5,000 Low Estimate All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

183 SUMMARY OF CONDENSATE PRICES AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Year $40.00-per-Barrel Case Condensate Prices Net of Differentials ($/BBL) $50.00-per-Barrel Case $60.00-per-Barrel Case $70.00-per-Barrel Case All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 197 SUMMARY OF EFFECTIVE GAS PRICES AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Year Low Estimate (P90) Effective Gas Price (Electricity Generation) ($/MCF) Best Estimate (Mean) High Estimate (P10) All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

184 SUMMARY OF CAPITAL AND OPERATING EXPENSES AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Low Estimate (P90) Gross (100%) Costs Maple Exploration Net Costs Best Estimate (Mean) High Estimate (P10) Low Estimate (P90) Best Estimate (Mean) High Estimate (P10) Number of Wells Exploration Wells Development Wells Dry Holes Capital Expenses (M$) Exploration Phase Exploration Well 5,000 5,000 5,000 1,818 1,818 1,818 EIA Subtotal 5,100 5,300 5,300 1,854 1,927 1,927 Development Phase Development Wells 0 206, , , ,100 Field Facilities and Pipelines 0 9,000 14, ,272 5,181 New Gas Plant with Reinjection Compression 0 35,000 70, ,726 25,452 New Fractionation Plant , ,636 New Power Plant 0 45,000 45, ,362 16,362 Project Supervision 0 4,000 4, ,454 1,454 Subtotal 0 299, , , ,186 Total Capital Expenses 5, , ,110 1, , ,113 Operating Expenses (M$/year) Fixed Overhead Costs Variable Field Costs (1) 0 1,270 1, Variable Per-Well Costs (2) 60 1,680 2, Total Operating Expenses 110 3,000 4, ,091 1,454 (1) Field costs vary because of the difference in liquid volume produced with each case. Low estimate case costs are captured in the variable per-well costs. (2) 5 M$/well/mo for each case. All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 199 SUMMARY OF GAS AND CONDENSATE ROYALTIES AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 Year $40.00-per-Barrel Case $50.00-per-Barrel Case Gas Royalty (Percent) $60.00-per-Barrel Case $70.00-per-Barrel Case Year $40.00-per-Barrel Case Condensate Royalty (Percent) $50.00-per-Barrel Case $60.00-per-Barrel Case $70.00-per-Barrel Case All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions

185 120 High Estim ate (P10) PRESENT WORTH VERSUS DISCOUNT RATE THE MAPLE COMPANIES, LIMITED INTEREST AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, 2006 BASE PRICE CASE $50.00 PER BARREL After-Tax Present Worth (MM$) PRICE SENSITIVITY DATA THE MAPLE COMPANIES, LIMITED INTEREST AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU AS OF DECEMBER 31, Best Estim ate (Mean) Low Estim ate (P90) Discount Rate (% ) 201 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 177

186 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES LOW ESTIMATE (P90) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU (b) Summary projections of resources and revenue by resource case GROSS OIL/ COND NET OIL/ COND GROSS GAS BEFORE TAX DD & A AFTER TAX PERIOD NET GROSS ENDING GAS REVENUE ROYALTY NET CAP EXPENSE INVSTMT OPERATING NET CUM P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 7-YR TAXABLE TAX CAPEX INCOME CARRYFWD INCOME NET TAXES REVENUE MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ CUM P.W % SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW,$M PCT PW,$M 15% % % % % % % % % % 1381 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions Economics (a) Economic summary Low Estimate (P90) ECONOMIC SUMMARY AS OF DECEMBER 31, 2006 THE MAPLE COMPANIES, LIMITED INTEREST AGUAYTÍA DEEP PROSPECT BLOCK 31-C, UCAYALI BASIN, PERU $50.00-per-Barrel (Base) Price Case $40.00-per-Barrel Price Case $60.00-per-Barrel Price Case $70.00-per-Barrel Price Case Best High Low Best High Low Best High Low Best Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate Estimate (Mean) (P10) (P90) (Mean) (P10) (P90) (Mean) (P10) (P90) (Mean) Unrisked Prospective Gas Resources (MMCF) Gross 1, , , , , , , , , , , ,903.4 Net , , , , , , , ,396.9 Unrisked Prospective Condensate Resources (MBBL) Gross , , , , , , , ,301.3 Net 9.4 4, , , , , , , ,653.6 BEFORE INCOME TAX UNRISKED Present Worth (M$) Discounted at: 10% (1,456.0) 20, ,319.7 (1,455.5) 17, ,584.4 (1,458.3) 24, ,328.0 (1,461.8) 26, , % (1,445.2) 13, ,596.6 (1,451.0) 9, ,670.2 (1,439.7) 18, ,536.3 (1,434.6) 22, , % (1,441.5) 10, ,390.7 (1,449.4) 5, ,677.0 (1,433.4) 15, ,105.0 (1,425.5) 20, , % (1,393.8) (7,993.2) (5,249.9) (1,395.2) (9,667.5) (10,332.1) (1,392.5) (6,306.4) (167.8) (1,391.2) (4,620.7) 4, % (1,272.6) (9,325.0) (11,072.6) (1,272.9) (10,087.7) (13,320.4) (1,272.3) (8,557.7) (8,824.8) (1,272.0) (7,791.2) (6,580.2) 80% (1,163.1) (8,306.2) (10,894.5) (1,163.1) (8,716.4) (12,066.2) (1,163.0) (7,894.5) (9,722.3) (1,162.8) (7,482.9) (8,552.0) 100% (1,070.7) (7,051.8) (9,610.5) (1,070.7) (7,295.9) (10,289.0) (1,070.7) (6,806.6) (8,932.2) (1,070.7) (6,561.5) (8,254.8) BEFORE INCOME TAX RISKED Present Worth (M$) Discounted at: 10% (907.8) 5, ,229.5 (907.6) 4, ,194.2 (908.5) 6, ,392.1 (909.7) 7, , % (733.4) 3, ,793.5 (735.3) 1, ,697.0 (731.7) 4, ,574.2 (730.1) 6, , % (631.0) 2, ,686.6 (633.5) ,658.2 (628.4) 4, ,715.1 (625.8) 5, , % (477.1) (3,073.1) (2,195.2) (477.6) (3,608.8) (3,821.5) (476.7) (2,533.3) (568.9) (476.3) (1,993.9) 1, % (414.4) (3,296.3) (3,855.5) (414.5) (3,540.3) (4,574.8) (414.3) (3,050.7) (3,136.2) (414.2) (2,805.5) (2,417.9) 80% (374.2) (2,858.8) (3,687.0) (374.2) (2,990.0) (4,062.0) (374.1) (2,727.0) (3,311.9) (374.1) (2,595.3) (2,937.4) 100% (343.2) (2,391.8) (3,210.6) (343.2) (2,469.9) (3,427.7) (343.2) (2,313.4) (2,993.6) (343.2) (2,234.9) (2,776.8) AFTER INCOME TAX UNRISKED Present Worth (M$) Discounted at: 10% (1,521.7) 11, ,367.3 (1,521.4) 8, ,023.8 (1,523.3) 13, ,627.0 (1,525.8) 14, , % (1,583.6) (2,303.7) 13,280.3 (1,583.4) (4,169.6) 5,729.2 (1,584.5) (711.1) 19,477.7 (1,585.9) , % (1,604.7) (8,622.9) (2,029.7) (1,604.6) (9,965.6) (7,312.5) (1,605.2) (7,473.0) 2,338.6 (1,606.1) (6,678.3) 5, % (1,552.9) (13,453.4) (16,483.5) (1,552.9) (13,958.9) (18,298.9) (1,553.0) (13,016.5) (14,968.1) (1,553.1) (12,712.1) (13,824.9) 60% (1,463.0) (11,662.3) (15,330.7) (1,463.0) (11,911.4) (16,180.7) (1,463.1) (11,446.2) (14,622.4) (1,463.1) (11,294.7) (14,091.3) 80% (1,381.4) (9,547.3) (12,754.8) (1,381.4) (9,687.3) (13,216.6) (1,381.4) (9,425.4) (12,369.4) (1,381.4) (9,339.6) (12,081.6) 100% (1,311.0) (7,817.5) (10,474.8) (1,311.0) (7,903.2) (10,749.8) (1,311.0) (7,742.7) (10,244.3) (1,311.0) (7,689.9) (10,072.6) AFTER INCOME TAX RISKED Present Worth (M$) Discounted at: 10% (831.6) 2, ,204.7 (831.5) 1, ,574.8 (832.1) 3, ,167.8 (832.9) 3, , % (718.1) (1,577.6) 3,409.3 (718.1) (2,174.7) (718.4) (1,067.9) 5,392.5 (718.9) (717.2) 6, % (645.9) (3,475.8) (1,365.9) (645.8) (3,905.4) (3,056.4) (646.0) (3,107.8) 31.9 (646.3) (2,853.5) 1, % (521.2) (4,707.0) (5,676.6) (521.2) (4,868.8) (6,257.6) (521.2) (4,567.2) (5,191.7) (521.3) (4,469.8) (4,825.9) 60% (473.8) (3,975.5) (5,149.4) (473.8) (4,055.2) (5,421.4) (473.8) (3,906.4) (4,922.7) (473.8) (3,857.9) (4,752.8) 80% (443.6) (3,211.7) (4,238.1) (443.6) (3,256.5) (4,385.9) (443.6) (3,172.7) (4,114.8) (443.6) (3,145.3) (4,022.7) 100% (420.0) (2,607.1) (3,457.4) (420.0) (2,634.5) (3,545.4) (420.0) (2,583.2) (3,383.7) (420.0) (2,566.3) (3,328.7) All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 178 High Estimate (P10) 203

187 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES HIGH ESTIMATE (P10) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU GROSS OIL/ COND NET OIL/ COND BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW,$M PCT PW,$M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES BEST ESTIMATE (MEAN) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU GROSS OIL/ COND NET OIL/ COND BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $50.00 PER BARREL (BASE) PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW,$M PCT PW,$M 15% % % % % % % % % % % % 7818 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 179

188 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES BEST ESTIMATE (MEAN) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU GROSS OIL/ COND NET OIL/ COND BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW,$M PCT PW,$M 15% % % % % % % % % % % % 7903 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES LOW ESTIMATE (P90) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU GROSS OIL/ COND NET OIL/ COND BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET ENDING GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW,$M PCT PW,$M 15% % % % % % % % % % % % 1311 CUM P.W % 207 All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 180

189 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES LOW ESTIMATE (P90) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS NET GROSS ROYALTY NET CAP OPERATING NET P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES HIGH ESTIMATE (P10) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU GROSS OIL/ COND NET OIL/ COND BEFORE TAX DD & A AFTER TAX PERIOD GROSS NET GROSS ROYALTY NET CAP OPERATING NET CUM P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET CUM P.W. ENDING GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $40.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW,$M PCT PW,$M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 181

190 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES HIGH ESTIMATE (P10) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS NET GROSS ROYALTY NET CAP OPERATING NET P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES BEST ESTIMATE (MEAN) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET GROSS OIL/ OIL/COND COND GROSS NET GROSS GAS GAS REVENUE ROYALTY NET CAP EXPENSE INVSTMT OPERATING CUM NET P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 7-YR EXPENSED TAXABLE TAX CAPEX INCOME CARRYFWD INCOME CUM NET P.W. TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $60.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 182

191 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES BEST ESTIMATE (MEAN) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET CUM CUM GROSS OIL/ GROSS NET GROSS ROYALTY NET CAP OPERATING NET P.W. 5-YR 7-YR EXPENSED TAXABLE TAX INCOME NET P.W. OIL/COND COND GAS GAS REVENUE EXPENSE INVSTMT EXPENSE REVENUE 10.00% DEPR DEPR CAPEX INCOME CARRYFWD TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES LOW ESTIMATE (P90) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET GROSS OIL/ OIL/COND COND GROSS NET GROSS GAS GAS REVENUE ROYALTY NET CAP EXPENSE INVSTMT OPERATING CUM NET P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 7-YR EXPENSED TAXABLE TAX CAPEX INCOME CARRYFWD INCOME CUM NET P.W. TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 183

192 THE MAPLE COMPANIES, LIMITED INTEREST SUMMARY PROJECTION OF RESOURCES AND REVENUE AS OF UNRISKED PROSPECTIVE RESOURCES HIGH ESTIMATE (P10) AGUAYTÍA DEEP PROSPECT EXPLORATION BLOCK 31-C UCAYALI BASIN, PERU PERIOD ENDING BEFORE TAX DD & A AFTER TAX NET GROSS OIL/ OIL/COND COND GROSS NET GROSS GAS GAS REVENUE ROYALTY NET CAP EXPENSE INVSTMT OPERATING CUM NET P.W. EXPENSE REVENUE 10.00% DEPR 5-YR DEPR 7-YR EXPENSED TAXABLE TAX CAPEX INCOME CARRYFWD INCOME CUM NET P.W. TAXES REVENUE 10.00% MB MB MMCF MMCF M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ M$ SUBTOTAL REMAING TOTAL $70.00 PER BARREL PRICE CASE BEFORE TAX PRESENT WORTH PROFILE AFTER TAX PRESENT WORTH PROFILE PCT PW, $M PCT PW, $M 15% % % % % % % % % % % % All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions. 184

193 Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 PART V Financial Information Historical Financial Information on Maple Energy plc Accountant s Report on Maple Energy plc Combined Historical Financial Information on The Maple Companies Group for the two years ended 31 December 2005 Accountant s Report on The Maple Companies Group Consolidated Historical Financial Information on The Maple Companies, Limited for the year ended 31 December 2006 Accountant s Report on The Maple Companies, Limited Pro forma Net Asset Statement Accountant s Report on Pro forma Net Asset Statement Peru GAAP Audited Consolidated Financial Statements of The Maple Companies, Limited and subsidiaries for the year ended 31 December 2006 The Peru GAAP financial statements of The Maple Companies, Limited set out in Part V Section 9 are included in this document in addition to the IFRS historic financial information for the same period as the Peru GAAP financial statements have already been disclosed to potential investors in Peru. 185

194 SECTION 1 HISTORICAL FINANCIAL INFORMATION ON MAPLE ENERGY PLC 1. BASIS OF PREPARATION Maple Energy plc ( the Company ) has not yet completed its first accounting period and no statutory financial statements have been prepared, audited or filed since incorporation. The financial information set out below is based on the transactions of the Company from incorporation on 18 October 2006 to 31 December 2006 and has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ( IFRS ). The Company intends to adopt a year end of 31 December for financial accounting purposes. The Directors of the Company are responsible for the historical financial information of Maple Energy plc included in this AIM Admission Document. 2. INCOME STATEMENT As at 31 December 2006, the Company had not carried out any trading activity and had undertaken no transactions other than the issue of Ordinary Shares on incorporation. Therefore, no income statement has been presented as there were no transactions to reflect during the period from incorporation to 31 December BALANCE SHEET The Company s balance sheet as at 31 December 2006 consisted of cash of US$0.10 and share capital of US$0.10. Given the immaterial nature of these items, no balance sheet has been presented. 4. STATEMENT OF CHANGES IN EQUITY On incorporation, 10 Ordinary Shares of US$0.01 each were issued, resulting in shareholders equity of US$0.10 on incorporation. No further changes in equity occurred during the period between incorporation and 31 December As a result, no statement of change in equity has been presented. 5. CASH FLOW STATEMENT No cash flow statement has been presented, as the Company did not have any cash transactions during the period from incorporation to 31 December NOTES TO THE FINANCIAL INFORMATION 6.1 Corporate information The Company was incorporated on 18 October 2006 under the name Maple Dime PLC. On 23 October 2006 the Company changed its name to Maple Energy plc. It is registered as a limited liability, public company in the Republic of Ireland under company number Its registered address is 70 Sir John Rogerson s Quay, Dublin 2, Ireland. The principal activity of the Company is that of a holding company. 6.2 Accounting Policies Basis of accounting The historical financial information has been prepared under the historical cost convention and in accordance with IFRS, being the accounting basis that the directors intend to adopt for the preparation of the Company s next set of published annual financial statements. Foreign currency translation The Group considers its functional and presentational currency to be US dollars, being the currency in which the transactions of the Company are primarily denominated and which reflects the economic substance of the underlying events. 186

195 Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rate of exchange ruling at the balance sheet date. Non-monetary assets and liabilities that are measured at their historical cost in a foreign currency are translated into the functional currency using the rates of exchange as at the dates of the initial transactions. Foreign exchange gains and losses arising from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of income. 6.3 Share Capital As at 31 December 2006 the Company had an authorised share capital of US$1,000,000 comprising 100,000,000 Ordinary Shares of US$0.01 each, and an allotted and issued share capital of US$0.10, comprising 10 Ordinary Shares of US$0.01 each. The authorised share capital of US$1,000,000 was created on incorporation and the allotted and issued share capital of US$0.10 was issued on incorporation; there were no further share transactions entered into by the Company between its date of incorporation and 31 December The Ordinary Shares have equal voting and distribution rights. 6.4 Post balance sheet events Change in share capital On 26 January 2007, the Company increased its authorised share capital from US$1,000,000 to US$2,000,000, through the creation of an additional 100,000,000 Ordinary Shares of US$0.01 each. As a result, at the date of this document the Company has an authorised share capital of 200,000,000 Ordinary Shares of US$0.01 each. On 7 February 2007 the Company allotted and issued an additional 7 Ordinary Shares of US$0.01 each. On 8 February 2007, the Company allotted and issued an additional 48,581,113 Ordinary Shares under the terms of the share exchange agreement described below. As a result, at the date of this document the Company has an allotted and issued share capital of US$485,811.30, comprising 48,581,130 Ordinary Shares of US$0.01 each. Share exchange agreement On 7 February 2007, the Company entered into a share exchange agreement with the shareholders of The Maple Companies, Limited, a company registered in the British Virgin Islands, whereby on 8 February 2007 the Company acquired 1,619,371 ordinary shares in The Maple Companies, Limited (representing 100% of the issued share capital of The Maple Companies, Limited), in exchange for 48,581,113 Ordinary Shares in the Company. Investment agreement On 20 March 2007, the Company entered into an agreement with The Maple Companies, Limited and Fondo de Inversion en Infraestructura, Servicios Publicos y Recursos Naturales ( ACC ), whereby The Maple Companies, Limited issued 199,922 ordinary shares in itself to ACC as consideration for an investment of US$10,000,000 in The Maple Companies, Limited by ACC. As a result of this transaction, as at the date of this document Maple Energy plc owns % of The Maple Companies, Limited. As part of this transaction, ACC was granted a 30-year option whereby it has the right to exchange each share it holds in The Maple Companies, Limited for 30 Ordinary Shares of Maple Energy plc. ACC was also granted the right to sell its shares in The Maple Companies, Limited to Maple Energy plc in the event of certain change of control events. In addition, the Company agreed to compensate ACC by the payment of cash or the issue of additional shares in the event of: (i) certain financing arrangements with respect to an ethanol project not being entered into within 18 months of the investment (which would result in US$1,000,000 compensation being paid); or (ii) additional tax payments needing to be made with respect to outstanding tax claims on The Maple Companies, Limited and its subsidiary undertakings (which would result in compensation of % of the additional tax payment). 187

196 Ethanol Project Investment On 8 June 2007, ACC and Maple entered into a letter agreement whereby ACC obtained the right to subscribe for up to 10% of the equity interests in the Ethanol Project on terms and conditions to be mutually agreed by Maple and ACC. Pursuant to a letter agreement between Maple and ACC, the parties will commence arms length negotiations to determine the terms under which ACC shall invest. If the parties cannot reach mutual agreement on such terms by 30 September 2007, following good faith negotiations, the letter agreement and all rights arising therefrom shall terminate. IFC Equity Investment Option Maple Energy plc has reached an agreement with the International Finance Corporation ( IFC ), pursuant to which the IFC, subject to receiving final board approval, will have the option to subscribe for up to 5,932,477 Ordinary Shares at any time on or before 30 July 2007 at a subscription price of $ per Ordinary Share. Pre-Admission Dividends to Shareholders On 4 April 2007, the Board of the Company declared and agreed to pay an interim dividend in the aggregate amount of US$2.0 million conditional on, among other things, receipt by the Board of initial accounts prepared to an audit standard in accordance with the requirements of the Irish Companies Acts showing that the amount of profits and reserves of the Company available for distribution is sufficient to pay the interim dividend. The Board resolved that in the event that the relevant profits and reserves are not sufficient to pay the interim dividend, the amount of the interim dividend is to be reduced proportionately to equal the amount of the relevant profits and reserves as shown in the initial accounts. Issue of share options On 22 May 2007 the Company adopted a share option plan. On 24 May 2007 the Company granted 2,728,940 options to officers of the Company. The options vest over three years at one-third each year and can be exercised over a period of 36 months from the date of vesting. The exercise price is 120% of the price at which the Company undertakes an initial public offering. 188

197 SECTION 2 ACCOUNTANT S REPORT ON MAPLE ENERGY PLC Grant Thornton Corporate Finance Grant Thornton UK LLP Chartered Accountants UK member of Grant Thornton International Grant Thornton House Melton Street London NW1 2EP T +44 (0) F +44 (0) DX 2100 EUSTON Grant Thornton UK LLP is a limited liability partnership registered in England and Wales: No.OC Registered office: Grant Thornton House, Melton Street, Euston Square, London NW1 2EP. A list of members is available from our registered office. Grant Thornton UK LLP is authorised and regulated by the Financial Services Authority for investment business. The Directors Maple Energy plc 70 Sir John Rogerson s Quay Dublin 2 Ireland 6 July 2007 Dear Sirs MAPLE ENERGY PLC We report on the financial information of Maple Energy plc set out in Part V Section 1 (the Financial Information). This Financial Information has been prepared for inclusion in the AIM admission document dated 6 July 2007 of Maple Energy plc (the Admission Document) on the basis of the accounting policies set out in the Financial Information. RESPONSIBILITIES This report is required by Paragraph (a) of Schedule Two of the AIM Rules for Companies and is given for the purpose of complying with that regulation and for no other purpose. Save for any responsibility arising under Paragraph (a) of Schedule Two of the AIM Rules for Companies to any person as and to the extent provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any responsibility to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Paragraph (a) of Schedule two of the AIM Rules for Companies. The Directors of Maple Energy plc are responsible for preparing the Financial Information on the basis of preparation set out in Note 1 to the Financial Information, in accordance with the accounting policies set out in Note 6.2 to the Financial Information and in accordance with International Financial Reporting Standards as adopted by the European Union. It is our responsibility to form an opinion as to whether the Financial Information gives a true and fair view, for the purposes of the Admission Document, and to report our opinion to you. BASIS OF OPINION We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the Financial Information. It also included an assessment of the significant estimates and judgements made by those responsible for the preparation of the Financial Information and whether the accounting policies are appropriate to Maple s Energy plc s circumstances, consistently applied and adequately disclosed. We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Financial Information is free from material misstatement, whether caused by fraud or other irregularity or error. 189

198 Our work has not been carried out in accordance with auditing standards generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. OPINION In our opinion, the Financial Information gives, for the purposes of the Admission Document dated 6 July 2007, a true and fair view of the state of affairs of Maple Energy plc as at the dates stated and of its profits, cash flows and changes in equity for the period then ended in accordance with the basis of preparation set out in Note 1 and the accounting policies set out in Note 6.2. DECLARATION For the purposes of Paragraph (a) of Schedule Two of the AIM Rules for Companies we are responsible for this report as part of the Admission Document and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Admission Document in compliance with Schedule Two of the AIM Rules for Companies. Yours faithfully GRANT THORNTON UK LLP 190

199 SECTION 3 COMBINED HISTORICAL FINANCIAL INFORMATION ON THE MAPLE COMPANIES GROUP FOR THE TWO YEARS ENDED 31 DECEMBER 2005 Combined Income Statements 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Note Revenue 6 75,154 60,614 Cost of sales 7 (52,775) (38,863) Gross profit 22,379 21,751 Operating expenses General and administrative expenses 8 (9,031) (8,901) Exploration expenses 16 (7,260) Selling expenses 9 (4,065) (3,436) Workers profit sharing 14 (667) (640) Other, net 11 (363) (92) Total operating expenses (21,386) (13,069) Operating income 993 8,682 Other income/(expenses) Share of profit of associate 17 1,444 1,381 Finance income Finance costs 13 (1,741) (1,795) Total other income/(expenses) (168) (53) Income before income tax 825 8,629 Income tax 14 (3,228) (3,476) Net income/(loss) for the period (2,403) 5,

200 Combined Balance Sheets As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Note ASSETS Non-current assets Property, plant and equipment 15 2,918 3,027 Intangible assets ,684 Investment in associate 17 12,193 12,396 Value added tax credit Due from shareholders 18 1,671 1,589 17,820 22,157 Current assets Income tax credit 549 Prepaid taxes and expenses Inventories 20 7,872 5,090 Due from shareholders 18 1, Trade and other receivables 21 3,032 2,013 Cash and cash equivalents 22 1,908 2,042 15,061 10,125 Total assets 32,881 32,282 EQUITY AND LIABILITIES Equity 23 Issued capital 3,060 2,023 Treasury shares (125) (100) Retained earnings 8,265 12,919 Total equity 11,200 14,842 Non-current liabilities Long-term debt 24 4,645 6,109 Deferred income tax and workers profit sharing liability ,914 6,386 Current liabilities Trade accounts payable 25 7,448 4,671 Overdrafts and bank loans 26 3,841 1,806 Other current liabilities 27 3,251 2,802 Income taxes payable 322 Current portion of long-term debt 24 2,227 1,453 16,767 11,054 Total liabilities 21,681 17,440 Total equity and liabilities 32,881 32,

201 Combined Statement of Changes in Equity Issued capital US$ 000 Treasury shares US$ 000 Retained earnings US$ 000 Total US$ 000 Balance as at 1 January ,434 (100) 12,372 13,706 Paid-in capital Dividends (4,606) (4,606) Net income 5,153 5,153 Balance as at 31 December ,023 (100) 12,919 14,842 Paid-in capital 1,037 1,037 Acquisition of treasury shares (25) (25) Dividends (2,251) (2,251) Net income (2,403) (2,403) Balance as at 31 December ,060 (125) 8,265 11,

202 Combined Statements of Cash Flows 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Cash flows from operating activities Cash receipts from customers 74,260 59,512 Payments to suppliers and third parties (57,747) (44,007) Payments to employees (8,956) (9,552) Cash generated from operations 7,557 5,953 Income tax paid (3,704) (3,753) Interest paid (1,725) (1,826) Net cash from operating activities 2, Cash flows from investing activities Exploration expenditures (2,922) (1,542) Purchase of plant and equipment (466) (1,184) Interest received Dividends received 1,479 1,789 Net cash used in investing activities (1,792) (827) Cash flows from financing activities Proceeds from bank loans 5,342 2,000 Payments of bank loans (3,303) (698) Proceeds from long-term debt 5,550 Payments of long-term debt (690) (4,945) Capital contributions 1, Change in bank overdrafts (4) 4 Purchase of treasury shares (25) Increase in amounts due from shareholders (624) (227) Change in restricted cash and guarantee deposits 308 (17) Dividends paid (2,202) (4,483) Net cash from/(used in) financing activities (161) (2,227) Net increase/(decrease) in cash and cash equivalents 175 (2,680) Cash and cash equivalents at beginning of period 1,486 4,166 Cash and cash equivalents at end of period 1,661 1,486 Non-cash flow transactions: Assets acquired under finance lease contracts

203 Notes to the Combined Historical Financial Information 1. Basis of preparation The combined historical financial information of (i) The Maple Companies, Limited, (ii) The Maple Gas Corporation del Perú Ltd, (iii) Maple Production del Perú Ltd, (iv) The Maple Royalty Company, Limited, (v) Maple Exploration Limited, (vi) Maple Oil Company Limited, (vii) The Maple Gas Development Corporation, (viii) Maple Perú Holdings Corporation, (ix) Maple Etanol SRL and (x) Acer Comercial SRL (together, The Maple Companies Group ) has been prepared in accordance with the historical cost convention. The companies comprising The Maple Companies Group did not historically form a single legal group of companies and consequently no consolidated financial statements for The Maple Companies Group were historically prepared. However, all of the companies which comprise The Maple Companies Group have been under common management and control throughout the two years to 31 December The historical financial information presented for The Maple Companies Group therefore comprises a combination of the historical financial information for each of the companies within The Maple Companies Group, using the individual financial statements of these companies for each of the two years ended 31 December 2005, taking into consideration accounting conventions commonly used in the preparation of historical financial information for investment circulars set out in the Annexure to Standards of Investment Reporting 2000: Investment reporting standards applicable to public reporting engagements on historical financial information issued by the Auditing Practices Board in the United Kingdom. The combined financial information has been prepared by combining the relevant businesses and companies as if they had been owned or controlled within a single group structure throughout the two year period. All transactions between the entities comprising The Maple Companies Group have been eliminated in the preparation of the combined financial information. The individual financial statements of the companies constituting The Maple Companies Group used for the preparation of the combined financial information were originally prepared under Peruvian GAAP and have been restated in accordance with International Financial Reporting Standards as adopted by the European Union ( IFRS ). IFRS standards effective for accounting periods commencing on or after 1 January 2005 have been applied to all periods presented as if these had always been in existence. The combined financial information presented in this Part V Section 3 comprises the combined income statements, balance sheets, cash flows and statements of changes in equity of business activities which form The Maple Companies Group at the date of this admission document. Subsequent to 31 December 2005 but prior to the Initial Public Offering, The Maple Companies Group undertook a restructuring which resulted in, inter alia, the elimination of The Maple Royalty Company, Limited, Maple Exploration Limited and Maple Oil Company Limited and the transfer of their business interests and activities to other entities within The Maple Companies Group. The results and activities of The Maple Royalty Company, Limited, Maple Exploration Limited and Maple Oil Company Limited have therefore been included in this combined financial information throughout the two year period. As The Maple Companies Group has not in the past formed a single legal group of companies, it is not meaningful to provide details of the share capital or reserves of The Maple Companies Group by each class of share in each company. Disclosures with respect to movements in individual classes of share capital and dividends per share have been restricted accordingly. The Directors of Maple Energy plc are responsible for the preparation of the combined historical financial information. The combined historical financial information in this Admission Document does not represent published annual financial statements as defined by IFRS. Consequently, no disclosures required under IFRS 1 First-time Adoption of International Financial Reporting Standards have been given in this combined historical financial information. 2. Corporate information The Maple Companies, Limited is a limited liability company incorporated in the British Virgin Islands in 1997 to act as a holding company and to coordinate the policies and administration of 195

204 its related entities. The address of its registered office is Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands. Following a reorganisation that occurred in November 2006, The Maple Companies, Limited became the holding company for all of the entities comprising The Maple Companies Group. No disclosures have been made of the registered offices of the other companies within The Maple Companies Group as this information is not meaningful in the context of the combined financial information. The Maple Companies Group s principal place of business is Victor Andrés Belaunde 147, Vía Principal 140, Building Real 6, Office 201, San Isidro, Lima, Perú. The Maple Companies Group holds License Contracts for the exploration and exploitation of hydrocarbons in blocks 31-B, 31-D and 31-E in the Republic of Perú (see note 4) and also operates a hydrocarbons refinery in Perú. Effective 2 March 2006, The Maple Companies Group held a voting interest of 20.6% in Aguaytía Energy, LLC (hereafter Aguaytía ), an entity that has controlling interests in four trading companies which operate in the Peruvian energy and electrical sectors (see note 17). Prior to 2 March 2006, The Maple Companies Group held a voting interest of 15.5% in Aguaytía. The activities of the entities comprising The Maple Companies Group and their countries of incorporation (or registration for branches) are as follows: Exploitation, refining and commercialisation of hydrocarbons (Blocks 31-B and 31-D) The Maple Gas Corporation del Perú, Sucursal Peruana (Perú branch of The Maple Gas Corporation del Perú Ltd.) Exploration of hydrocarbons (Block 31-E) Maple Production del Perú, Sucursal Peruana (Perú branch of Maple Production del Perú Ltd) Technical evaluation of hydrocarbons (other blocks) Maple Oil Company Limited (British Virgin Islands) Commercialisation of natural gasoline and solvents Acer Comercial S.R.L. (Perú) Holding companies The Maple Gas Corporation del Perú Ltd. (British Virgin Islands) Maple Production del Perú Ltd. (British Virgin Islands) The Maple Gas Development Corporation (Cayman Islands) Maple Perú Holdings Corporation (Cayman Islands) The Maple Companies, Limited (British Virgin Islands) The Maple Royalty Company, Limited (British Virgin Islands) Production and commercialisation of Ethanol (currently in the development stage) Maple Etanol S.R.L. (Perú) Dormant Maple Exploration Limited (British Virgin Islands) 3. Accounting policies The principal accounting policies applied in the preparation of this combined historical financial information are set out below: 3.1 Key accounting judgements and sources of estimation uncertainty The combined financial information is presented in U.S. dollars, except where otherwise indicated. 196

205 The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Actual outcomes could differ from those estimates. The most significant accounting estimates made by management relate to the useful lives of plant and equipment, the impairment of financial assets and long-lived assets. In addition, note 28 describes a contingent tax liability of circa US$2.2 million plus interest and penalties arising from a tax assessment relating to the 2001 tax year. Management was required to consider whether it was appropriate to recognise a liability for this matter in the historical financial information. No such liability has been recognised in the historical financial information. In making its judgement that an outflow of economic benefits is not probable, management have considered advice received from its legal advisors as to the likelihood of success in defending the action. 3.2 Combination Entities combined The entities included in the combined financial information are set out in Note 2. Inter-company transactions, balances and unrealised gains on transactions between these entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies adopted by the various entities in their individual financial statements have been changed where necessary to ensure consistency with the policies adopted by The Maple Companies Group. Associates Associates are all entities over which The Maple Companies Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates, initially recognised at cost, are subsequently measured using the equity method of accounting, based on the percentage of economic interest held rather than the percentage of voting interest. The cost of an acquisition is measured as the cash paid and the fair value of other assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. The acquired identifiable assets, liabilities and contingent liabilities are measured at their fair values at the date of acquisition. The excess of the cost of acquisition over the fair value of The Maple Companies Group s share of the identifiable net assets acquired is recorded as goodwill within the Investment in Associate balance. If the cost of acquisition is less than the fair value of the net assets acquired, the difference is recognised directly in the statement of income. The Maple Companies Group s share of its associates post-acquisition results after tax is recognised in the statement of income and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment, as are distributions received and any impairment in the value of the investment. When The Maple Companies Group s share of losses in an associate equals or exceeds its interest in the associate The Maple Companies Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between The Maple Companies Group and its associates are eliminated to the extent of The Maple Companies Group s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of associates to bring the accounting policies used into line with those of The Maple Companies Group. 197

206 3.3 Segment reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular geographic area, that is subject to risks and returns that are different from those in other geographic areas. 3.4 Foreign currency translation Functional and presentational currency The Maple Companies Group considers its functional and presentational currency to be the United States Dollar (U.S. Dollar), being the currency in which the transactions of The Maple Companies Group are primarily denominated and/or which reflects the economic substance of the underlying events. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rate of exchange ruling at the balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated into the functional currency using the rate of exchange as at the date of the initial transaction. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the combined statement of income. 3.5 Plant and equipment Plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment provisions. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation and the initial estimate of any decommissioning obligation. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Expenditure on major maintenance refits or repairs comprises the cost of replacement assets or parts of assets, inspection costs and overhaul costs. Where an asset or part of an asset is replaced and it is probable that future economic benefits associated with the item will flow to The Maple Companies Group, the expenditure is capitalised. Minor maintenance costs are expensed as incurred. Oil wells and oil & gas plant and equipment are depreciated to their residual value using a unit-of-production method, based on proven developed reserves. Other facilities and equipment are depreciated on a straight-line basis so as to allocate the cost of each asset less its residual value over their expected useful lives. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. The useful lives of The Maple Companies Group s facilities and equipment are as follows: Years Installations 33 Vehicles 5 Furniture and fixtures 10 Computer equipment 4 Improvements to capital plant leased by The Maple Companies Group are depreciated straight-line over the remaining lease term. The expected useful lives of plant and equipment are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively. The carrying value of plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any gain or loss arising on 198

207 derecognising the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the combined statement of income in the period in which the item is derecognised. 3.6 Leases Finance leases, which transfer to The Maple Companies Group substantially all the risks and benefits of ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and a reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated over their estimated useful life. Leases which do not meet the definition of a finance lease are classified as operating leases. Operating lease payments are recognised as an expense in the combined statement of income on a straight-line basis over the lease term. 3.7 Successful efforts policy Exploration and development costs Oil exploration and development expenditure is accounted for using the successful efforts method of accounting. Geological and geophysical exploration costs are charged against income as incurred. Costs directly associated with an exploration well or wells in an Exploration Drilling programme for an Area of Interest, are capitalised as an intangible asset until the drilling of the well or wells is complete and the results have been evaluated. These costs include employee remuneration, materials and fuel used, rig costs, delay rentals and payments made to contractors. If hydrocarbons are not found, the exploration expenditure is written off as a dry hole. If hydrocarbons are found and, subject to further appraisal activity, which may include the drilling of further wells (exploration or exploratorytype stratigraphic test wells), are likely to be capable of commercial development, the costs continue to be carried as an asset. All such carried costs are subject to technical, commercial and management review at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. When proved reserves of oil and natural gas are determined and development is sanctioned, the relevant expenditure is transferred to property, plant and equipment. Area of Interest One of more blocks or a portion of one or more blocks, which have been designated by Maple as an Area of Interest, based on geological criteria. Depreciation and amortisation Exploration and production assets are depreciated from the commencement of production in the field concerned, using the unit of production method based on the proved developed reserves of the field. Changes in these estimates are dealt with prospectively. 3.8 Software Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over an estimated useful life of four years. Costs associated with maintaining computer software programs are recognised as an expense as incurred. 3.9 Impairment of long-lived assets The Maple Companies Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, The Maple Companies Group makes an estimate of the asset s recoverable amount. An asset s recoverable amount is the higher of an asset s or cash-generating unit s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written 199

208 down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses are recognised in the combined statement of income. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If indication of this exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life Inventories Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: Raw materials: at purchase cost using the average cost method. Finished goods and work in progress: at cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. Supplies: at purchase cost using the average cost method. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale Financial assets Financial assets within the scope of IAS 39: Financial instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Maple Companies Group determines the classification of its financial assets on initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. During the years ended 31 December 2005 and 2004, The Maple Companies Group did not have financial assets at fair value through profit or loss, held-to-maturity investments, or available-for-sale financial assets Financial Liabilities Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial liabilities categorised as at fair value through profit and loss are recorded initially at fair value and all transaction costs are recognised immediately in the income statement. All other financial liabilities are recorded initially at fair value, net of direct issue costs. Financial liabilities categorised as at fair value through profit and loss are remeasured at each reporting date at fair value, with changes in fair value being recognised in the income statement. All other financial liabilities are recorded at amortised cost using the effective interest method, with interest related charges recognised as an expense in finance cost in the income statement. Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged to the income statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. 200

209 3.13 Derecognition of financial assets and liabilities A financial asset is derecognised where: The rights to receive cash flows from the asset have expired; The Maple Companies Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a pass-through arrangement; or The Maple Companies Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) if the entity has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires Trade and other receivables Trade receivables are recognised and carried at the original invoice amount less an allowance for any uncollectible amounts. This allowance is estimated for those accounts where recovery is no longer probable and is determined based on management s judgment and evaluation of the difference between the carrying value of the asset and the present value of estimated future cash flows. Bad debts are written off when identified. Where the time value of money is material, receivables are carried at amortised cost Cash and cash equivalents Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to insignificant risk of changes in value, and have a maturity of three months or less from the date of acquisition Trade and other payables Trade and other payables are carried at the settlement value Provisions Provisions are recognised when The Maple Companies Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to any provision is presented in the combined statement of income. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events or where the amount of the obligation cannot be measured with reasonable reliability. Contingent assets are not recognised, but are disclosed where an inflow of economic benefits is probable Decommissioning Liabilities for decommissioning costs are recognised when The Maple Companies Group has an obligation to dismantle and remove a facility or an item of plant and to restore the site in which it is located and when a reasonable estimate of that liability can be made. The amount recognised is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. A corresponding amount within plant and equipment equivalent to the decommissioning provision is booked and depreciated as part of the capital costs of the facility or item of plant. Any change in the present value of the estimated expenditure is reflected as an adjustment to the provision and the corresponding asset. See note 28 to the combined financial information Income tax and workers profit sharing Current income tax and current workers profit sharing Current income tax assets and liabilities for the current and prior years are measured at the amount expected to be 201

210 recovered from or paid to the taxation authorities. Income tax is computed based on the individual financial statements of each of The Maple Companies Group entities. Workers profit sharing is computed on the same basis as used to calculate current income tax. Deferred income tax and deferred workers profit sharing Deferred income tax and deferred workers profit sharing is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except for taxable temporary differences associated with investments in related entities and in associates, where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences and carry-forwards of unused tax credits and unused tax losses, to the extent that it is probable that taxable profits will be available against which the deductible temporary differences or carry-forwards of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to offset current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority Revenue recognition Revenue is measured at the fair value of the consideration receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, customs duties and sales taxes. The following recognition criteria must also be met before revenue is recognised: Sales of goods Revenue arising from the sale of hydrocarbons and other items is recognised when title passes to the customer, the significant risks and rewards of ownership have passed to the customer and the value can be reliably measured. Services rendered Revenue from operation and maintenance services rendered to Aguaytía and services rendered to other parties are recognised as the services are performed Other income Interest income is recognised as earned and is accrued based on the net carrying amount of the financial asset using the effective interest rate method. Dividend income from investments is recognised when the right to receive the payment is established Finance costs Finance costs are recognised in the combined statement of income in the period in which they are incurred. Borrowing costs are not capitalised within property, plant and equipment Dividend distribution Dividend distributions to shareholders are recognised as a liability in The Maple Companies Group s financial statements in the period in which the dividends are approved by The Maple Companies Group s shareholders. 202

211 3.24 New standards and interpretations The International Accounting Standards Board and the International Financial Reporting Interpretations Committee have issued various standards and interpretations with an effective date after the date of this financial information. The most relevant for The Maple Companies Group are IFRS 7: Financial Instruments: Disclosures (effective 1 January 2007) and IFRS 8: Operating Segments (effective 1 January 2009). Upon adoption of IFRS 7, The Maple Companies Group will disclose additional information about its financial instruments, their significance and the nature and extent of risks to which they give rise. More specifically, The Maple Companies Group will be required to disclose the fair value of its financial instruments and its risk exposure in greater detail. There will be no effect on reported income or net assets. Upon adoption of IFRS 8, The Maple Companies Group will disclose segmental information based on segments used internally by management when evaluating performance and deciding how to allocate resources to operations. The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the financial statements in the period of initial application. 4. Licence Contracts for the Exploration and Exploitation of Hydrocarbons 4.1 The Maple Gas Corporation del Perú, Sucursal Peruana On 30 March 1994 The Maple Gas Corporation del Perú, Sucursal Peruana ( Maple Gas ), signed a Licence Contract for the Exploitation of Hydrocarbons in blocks 31-B and 31-D, located in the Peruvian jungle. The most significant clauses of the Licence Contract are as follows: (a) (b) (c) (d) (e) Term of the Licence Contract The term of the Licence Contract is 20 years from the subscription date (30 March 1994) and can be extended to a maximum total term of 30 years. Minimum work programme Maple Gas was committed, amongst other obligations, to carry out a minimum work programme beginning at the signing date of the contract. The minimum work programme, which has been completed, included, amongst other things, the drilling and work over of wells, and installation of facilities in production areas. Royalties According to Law Organic Law on Hydrocarbons and Royalty and Retributions regulations approved by Supreme Decree EM, Maple Gas pays a royalty in cash, applying a percentage to the value of hydrocarbons produced. The royalty percentage depends on the value of the crude oil. Taxation For the activities in Blocks 31-B and 31-D, Maple Gas is subject to the common tax regulations in force at the date of the signing of the Licence Contract (30 March 1994), as well as the specific regulations included in Law 26221, Organic Law on Hydrocarbons and its amendments. Financial rights The Central Bank of Perú, on behalf of the Peruvian State, guarantees Maple Gas the availability and remittance abroad of foreign currency by virtue of the provisions set forth in Law

212 4.2 Maple Production del Perú, Sucursal Peruana On 6 March 2001, Maple Production del Perú, Sucursal Peruana ( Maple Production ), signed a Licence Contract for the Exploration and Exploitation of Hydrocarbons in block 31-E, located in the Peruvian jungle. The most significant clauses of the Licence Contract are as follows: (a) Term of the Licence Contract The term of the Licence Contract for the exploitation of oil and natural gas is 30 years and 40 years, respectively, from the signing date (6 March 2001). (b) Minimum work programme Maple Production is committed, amongst other obligations, to carrying out a minimum work programme in a period of 50 months, beginning at the signing date of the Licence Contract. On 5 April 2006, Maple Production signed an addendum to the Licence Contract extending the exploration period to 84 months, with the minimum work programme divided into four periods. The first two periods, which have been completed, included the drilling of two wells and performing a seismic evaluation. The last two periods of the minimum work programme will last 34 months from 10 April 2006 have not yet been completed. (c) Royalties According to Law 26221, Organic Law on Hydrocarbons and the Royalty and Retributions regulations approved by Supreme Decree EM, Maple Production is to pay a royalty in cash, applying a percentage to the value of hydrocarbons produced. The percentage varies from 5 to 20% depending on the production of crude oil, as defined in the addendum to the Licence Contract. (d) Taxation Maple Production is subject to the common tax regulations in force at the date of the signing of the Licence Contract (6 March 2001), as well as the specific regulations included in Law 26221, Organic Law on Hydrocarbons and its amendments. (e) Financial rights The Central Bank of Peru, on behalf of the Peruvian State, guarantees Maple Production the availability and remittance abroad of foreign currency by virtue of the provisions set forth in Law Segment information The Maple Companies Group s primary format for segment reporting is business segments and the secondary format is geographical segments. The risks and returns of The Maple Companies Group s operations are primarily determined by the nature of the different activities that The Maple Companies Group engages in, rather than the geographical location of these operations. This is reflected by The Maple Companies Group s organisational structure and The Maple Companies Group s internal financial reporting systems. The Maple Companies Group has two reportable operating segments: Exploration and Production and Refining and Marketing. Exploration and Production activities include oil exploration and field development and production, together with pipeline transportation. The activities of Refining and Marketing include the refining of crude oil and natural gasolines and petrochemicals manufacturing and marketing. Sales between segments are realised on normal commercial terms and conditions, which are determined based on the international market price of crude oil. Segment revenues, expenses and results include transfers between business segments. These transactions and any unrealised profits and losses are eliminated on combination. The Maple Companies Group s geographical segments are primarily based in Perú. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. 204

213 5.1 Primary reporting format Business segments Exploration and production US$ 000 Refining and marketing US$ 000 Other and corporate US$ 000 Combination adjustments and eliminations US$ 000 Total US$ 000 Year ended 31 December 2005 Revenue Sales to external customers 74,022 1,132 75,154 Inter-segment sales 8,211 (8,211) Total 8,211 74,022 1,132 (8,211) 75,154 Results Operating income/(loss) (8,339) 11,088 (1,749) (7) 993 Net finance costs (400) (404) 4,693 (5,501) (1,612) Share of profit of associate 1,444 1,444 Profit/(loss) before income tax (8,739) 10,684 4,388 (5,508) 825 Income tax expense (3,228) Net profit/(loss) for the year (2,403) Assets and liabilities Segment assets 9,666 19,962 41,754 (50,694) 20,688 Investment in associate 12,193 12,193 9,666 19,962 53,947 (50,694) 32,881 Segment liabilities 8,339 22,247 14,362 (23,267) 21,681 Other segment information Capital expenditure Intangible assets 2, ,922 Plant and equipment , ,388 Depreciation Amortisation Exploration expenditure write-off 7,260 7,

214 Exploration and production US$ 000 Refining and marketing US$ 000 Other and corporate US$ 000 Combination adjustments and eliminations US$ 000 Total US$ 000 Year ended 31 December 2004 Revenue Sales to external customers 59,522 1,092 60,614 Inter-segment sales 4,855 (4,855) Total 4,855 59,522 1,092 (4,855) 60,614 Results Operating income/(loss) (1,316) 11,342 (1,344) 8,682 Net finance costs (355) (520) 5,133 (5,692) (1,434) Share of profit of associate 1,381 1,381 Profit/(loss) before income tax (1,671) 10,822 5,170 (5,692) 8,629 Income tax expense (3,476) Net profit/(loss) for the year 5,153 Assets and liabilities Segment assets 12,185 13,505 39,439 (45,243) 19,886 Investment in associate 12,396 12,396 12,185 13,505 51,835 (45,243) 32,282 Segment liabilities 7,243 17,198 13,755 (20,756) 17,440 Other segment information Capital expenditure Intangible assets 1, ,542 Property, plant and equipment ,213 2, ,755 Depreciation Amortisation Exploration expenditure write-offs 206

215 5.2 Secondary reporting format Geographical segments The Maple Companies Group s two business segments operate in two different geographical areas, Perú and the British Virgin Islands. All of The Maple Companies Group s sales and capital expenditures are in Perú. Total assets, based on where the assets are located, were as follows: As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Perú 32,385 31,782 British Virgin Islands ,684 32, Revenue 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Sales of goods 73,964 59,416 Services to associate, note 29(a) 1,131 1,092 Services to other parties ,154 60, Cost of sales 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Raw materials 36,208 25,757 Royalties, note 28 3,774 1,616 Personnel expenses, note 10 3,970 3,740 Value added tax not recoverable 4,378 3,669 Supplies and equipment costs 1,673 1,802 Sundry production costs Rentals Third party services Depreciation, note Maintenance and repairs Other ,775 38,

216 8. General and administrative expenses 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Personnel expenses, note 10 4,355 4,625 Dallas service fees 1,751 1,599 Professional fees and commissions Insurance Rentals Sundry production costs Depreciation, note Advertising costs Maintenance and repairs Freight expenses Communication costs Amortisation of software, note 16 Other ,031 8, Selling expenses 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Freight expenses 2,784 1,895 Personnel expenses, note Depreciation, note Allowance for doubtful accounts, note Other ,065 3, Personnel expense 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Wages and salaries 5,612 5,280 Bonuses 1,264 1,633 Employee social benefits Other social expenses 1,613 1,687 Workers profit share ,702 9,735 The distribution of personnel expenses was as follows: 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Cost of sales, note 7 3,970 3,740 General and administrative expenses, note 8 4,355 4,625 Selling expenses, note Workers profit share ,702 9,

217 11. Other, net 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Recovery of allowance for doubtful accounts, note Income tax withheld on dividend income (78) (10) Settlement with Chase Manhattan Bank (525) Write-off of investments (142) (355) Other, net (363) (92) In 1994, The Chase Manhattan Bank, N.A. ( Chase ) provided The Maple Companies Group with financial advisory services in connection with a gas and electricity development project in Peru ( Aguaytía project ). As part of the compensation for its advisory services, Chase was to be offered an equity interest in the entity within The Maple Companies Group which held The Maple Companies Group s equity interest in Aguaytía. In subsequent discussions between the parties, uncertainties emerged as to whether Chase was entitled to such an equity interest. As a result, in June 2005, Chase renounced any right it may have had to an equity interest in exchange for a payment of US$525,000 by The Maple Companies Group. 12. Finance income 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Interest on loans Interest on deposits 4 6 Other Finance costs 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Interest on loans Bank fees Tax on financial transactions Interest on discounted documents Interest on SUNAT/SENATI debt, note Interest on bank overdrafts Other ,741 1,

218 14. Income tax and workers profit sharing (a) Income tax and workers profit sharing regulations The Maple Companies Group entities incorporated in the Cayman Islands and the British Virgin Islands are not subject to income tax in those jurisdictions. Peruvian entities (including the Peruvian branches of companies incorporated in the Cayman Islands and the British Virgin Islands) are subject to the Peruvian Tax System. The tax regimes applicable to the Peruvian related entities as follows: Peruvian related entity Tax regime applicable Income tax rate The Maple Gas Corporation del Perú, Sucursal Peruana Acer Comercial S.R.L. and Maple Etanol S.R.L. Maple Production del Perú, Sucursal Peruana Exploitation activities of hydrocarbons in Blocks 31-B and 31-D are subject to the common Peruvian tax regulations in force as at 30 March 1994 (date of the signing of the License Contract). Refining and commercialisation activities of hydrocarbons are subject the current Peruvian tax regime. 30% of taxable income 30% 2005 and 2004 Current Peruvian tax regime 30% 2005 and 2004 Exploration activities in Block 31-E are subject to the common Peruvian tax regulations in force as at 6 March 2001 (date of the signing of the License Contract). 20% plus 2% of taxable income Dividends to non-domiciled companies and individuals are subject to a 4.1 percent withholding tax. According to Peruvian regulations, oil & gas companies that have more than 20 employees must pay 10% of their taxable income as a profit share to their employees. The Maple Gas Corporation del Perú, Sucursal Peruana, was the only company within The Maple Companies Group with more than 20 employees during the period covered by this combined financial information. This profit share expense is deductible for income tax purposes. (b) Income tax and workers profit sharing expense/(profit) 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Income tax Current 3,230 3,400 Deferred (2) 76 3,228 3,476 Workers profit sharing Current Deferred (5) (16)

219 (c) The movement in deferred income tax and deferred workers profit sharing was as follows: Balance as at 1 January 2004 US$ 000 Combined statement of income Income tax US$ 000 Workers profit sharing US$ 000 Balance as at 31 December 2004 US$ 000 Deferred asset Other Deferred liability Exploration and development costs (207) (144) 11 (340) Finance lease (12) 4 2 (6) (219) (140) 13 (346) Deferred liability, net (217) (76) 16 (277) Balance as at 31 December 2004 US$ 000 Combined statement of income Income tax US$ 000 Workers profit sharing US$ 000 Balance as at 31 December 2005 US$ 000 Deferred asset Other 69 (14) 55 Deferred liability Exploration and development costs (340) 13 5 (322) Finance lease (6) 3 1 (2) (346) 16 6 (324) Deferred liability, net (277) 2 6 (269) 211

220 (d) A reconciliation between workers profit sharing and income tax expenses, and the product of accounting profit multiplied by the legal combined rate for and the years ended 31 December 2005 and 2004 is as follows: 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Income before income tax 825 8,629 Add back: workers profit sharing Income before workers profit sharing and income tax 1,492 9,269 Less: non-taxable items 8, Income subject to tax 10,364 10,247 Legal combined rate (*) 36.1% 36.2% At combined rate 3,745 3,712 Permanent items Effect of change in tax rate (3) Effective workers profit sharing and income tax expense 3,895 4,116 (*) The income subject to tax includes income from Acer Comercial S.R.L. which was calculated with the rate of 30% effective from In addition, it includes income arising from the refining and commercialisation activities of Maple Gas Corporation del Perú, Sucursal Peruana, that generates an income tax and workers profit sharing expense calculated at a combined rate of 39.6% effective from In 2005, the Group expensed exploration costs of US$7,260,000 related to Block 31-E, in accordance with the successful efforts method of accounting. Deferred tax assets of US$1,597,000 have not been recognised in respect of this expense as they have arisen in a subsidiary that is in a pre-operating stage and it is not probable that taxable profit will be available in the future. 15. Property, plant and equipment Installations US$ 000 Oil wells and equipment US$ 000 Computer equipment US$ 000 Vehicles US$ 000 Other US$ 000 Total US$ 000 At 1 January 2005, net of accumulated depreciation 62 1, ,027 Adjustments and reclassifications (1) (1) Additions Transfers (583) Retirements (9) (4) (2) (15) Depreciation charge (16) (271) (101) (154) (17) (559) At 31 December 2005, net of accumulated depreciation 258 1, ,918 Net book value at 1 January 2005 Cost 91 6, , ,895 Accumulated depreciation (29) (4,413) (549) (651) (226) (5,868) Net carrying amount 62 1, ,027 Net book value at 31 December 2005 Cost 303 6, , ,345 Accumulated depreciation (45) (4,684) (650) (805) (243) (6,427) Net carrying amount 258 1, ,

221 Installations US$ 000 Oil wells and equipment US$ 000 Computer equipment US$ 000 Vehicles US$ 000 Other US$ 000 Total US$ 000 At 1 January 2004, net of accumulated depreciation 82 1, ,358 Adjustments and reclassifications (90) (125) Additions ,213 Transfers 74 (74) Retirements (30) (30) Depreciation charge (4) (237) (113) (130) (30) (514) At 31 December 2004, net of accumulated depreciation 62 1, ,027 Net book value at 1 January 2004 Cost 107 5, , ,712 Accumulated depreciation (25) (4,176) (436) (521) (196) (5,354) Net carrying amount 82 1, ,358 Net book value at 31 December 2004 Cost 91 6, , ,895 Accumulated depreciation (29) (4,413) (549) (651) (226) (5,868) Net carrying amount 62 1, ,027 Fully depreciated assets amounted to US$1,953,000 as at 31 December 2005 (US$1,831,000 as at 31 December 2004). Currently, these assets are being used by The Maple Companies Group. As at 31 December 2005 and 2004 work in progress amounted to US$20,000 and US$499,000 respectively. As at 31 December 2005 and 2004 the net book value of assets under finance leases were as follows: As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Vehicles Computer equipment Other equipment The distribution of annual depreciation was as follows: 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Cost of sales, note General and administrative expenses, note Selling expenses, note Inventory

222 16. Intangibles, net Exploration costs US$ 000 Software US$ 000 Total US$ 000 At 1 January 2005, net of accumulated amortisation 4,684 4,684 Additions 2, ,922 Write-off of exploration expenditures (7,260) (7,260) At 31 December 2005, net of accumulated amortisation Net book value at 1 January 2005 Cost 4, ,128 Accumulated amortisation (444) (444) Net carrying amount 4,684 4,684 Net book value at 31 December 2005 Cost Accumulated amortisation (444) (444) Net carrying amount Exploration costs US$ 000 Software US$ 000 Total US$ 000 At 1 January 2004, net of accumulated amortisation 3,250 3,250 Additions 1, ,542 Retirements (108) (108) At 31 December 2004, net of accumulated amortisation 4,684 4,684 Net book value at 1 January 2004 Cost 3, Accumulated amortisation (336) (336) Net carrying amount 3,250 3,250 Net book value at 31 December 2004 Cost 4, ,128 Accumulated amortisation (444) (444) Net carrying amount 4,684 4,684 Exploration costs at each of the balance sheet dates relate to expenditure on Block 31-E. These costs relate primarily to the drilling of two wells within one area of interest within Block 31-E. Commercially viable quantities of hydrocarbons were not discovered in either well and the associated costs totalling US$7,260,000 were written off following the completion of the second well in 2005 in line with Maple s successful efforts accounting policy. The remaining capitalised exploration costs at 31 December 2005 relate to preparatory costs incurred in relation to a second area of interest in Block 31-E. 17. Investment in associate Years ended 31 December 2005 and 2004 As at 31 December 2005 and 2004, The Maple Gas Development Corporation ( MGDC ), one of the entities comprising The Maple Companies Group, held 8,182.5 cash units and 20,000 non-cash units in Aguaytía Energy LLC (hereafter, Aguaytía ), a private entity registered in Delaware, United States of America, that is not listed on any public exchange. These Aguaytía units represented a 15.5% voting interest in Aguaytía and, based on agreements entered into with Aguaytía s Members, represented an economic interest in Aguaytía of approximately 14.3%. As at 31 December 2005 and 2004, the rights to the economic interest associated with 8, of these cash units in Aguaytía and 5,046 of these non-cash units in Aguaytía, including all dividends 214

223 and cash flows receivable from Aguaytía associated with those units, were beneficially held by parties other than The Maple Companies Group. Consequently, in accordance with IAS 39 Financial instruments: Recognition and measurement, The Maple Companies Group has not recognised these investments to the extent The Maple Companies Group was never the beneficial owner of these investments or has transferred substantially all the risks and rewards of ownership of such investments. The Maple Companies Group has used the equity accounting method to record its interest in the 0.34 cash units and 14,954 non-cash units in Aguaytía that have been recognised. The Maple Companies Group s interest in Aguaytía during these periods represented an effective economic interest of approximately 7.2%. Although its voting interest in Aguaytía was less than 20% during these periods, The Maple Companies Group has used the equity method of accounting as it had significant influence over Aguaytía through participation in the decisions related to financial and operational policies which was evidenced by, inter alia: its representation on the Management Committee of Aguaytía its participation in the policy-making process, including participation in decisions about dividends significant inter-company transactions unrestricted access to the interim and annual financial information of Aguaytía. The movement in The Maple Companies Group s investment in its associate is set out below: 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Beginning of the period 12,396 12,804 Share of profit of associate 1,444 1,381 Declared dividends (1,647) (1,789) End of the period 12,193 12,396 Aguaytía is a significant investment for The Maple Companies Group. Aguaytía is a limited liability company incorporated in the State of Delaware, United States of America. Through its four Peruvian trading subsidiaries (Aguaytía Energy del Peru S.R.L., Termoselva S.R.L., Eteselva S.R.L., and Gas Integral S.R.L.), Aguaytía carries out the following activities within Peru: Exploitation of a natural gas deposit, located in the central jungle of Perú. Processing of natural gas to obtain natural gas liquids. Fractionation of natural gas liquids into liquefied petroleum gas and natural gasoline, with all of the natural gasoline sold to The Maple Companies Group. Liquefied petroleum gas transportation and distribution. Electric power generation and transmission. Transactions with Aguaytía are disclosed in note 29 of this combined financial information. 215

224 The following table sets out summarised financial information of Aguaytía, after adjustments to harmonise Aguaytia s accounting policies to those of The Maple Companies Group: As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Balance sheet Current assets 32,828 32,449 Non-current assets 221, ,695 Current liabilities (22,821) (21,510) Non-current liabilities (68,654) (74,037) Net assets 162, ,597 Revenue and profit Revenue 111,019 96,572 Profit 19,923 19, Due from shareholders As at 31 December 2005 and 2004, The Maple Companies Group had made advances to the following shareholders: As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 The Maple Gas Corporation 1,388 1,272 TH International Holdings American Resource Holdings Midland International Holdings Carlos de la Guerra Rex W. Canon Others ,825 2,202 Of which: Current portion 1, Non-current portion 1,671 1,589 The Maple Gas Corporation and Midland International Holdings are companies controlled by Jack Hanks. TH International Holdings is a company controlled by Tony Hines. American Resource Holdings is a company controlled by Rex Canon. These individuals, together with Carlos de la Guerra, are related parties in that they are key managers and owners of The Maple Companies Group. The amounts due from The Maple Gas Corporation at each balance sheet date were due on 30 April 2007 and accrued interest at 6% per annum on the principal outstanding. The amounts due from Midland International Holdings, TH International Holdings and American Resource Holdings at each balance sheet date were due on demand and accrued interest at 6% per annum on the principal outstanding. At 31 December 2005, US$222,000 of the amount due from Carlos de la Guerra (31 December 2004: US$211,000) was due on 30 April 2007 with interest interest accruing at 6% per annum on the principal outstanding. The remaining amounts due from Carlos de la Guerra at each balance sheet date were due on demand. The amounts due from Rex Canon at each balance sheet date were due on 30 April 2007 and accrued interest at a range of between 4% to 5% per annum on the principal outstanding. The loans to Midland International Holdings, American Resource Holdings and TH International Holdings were granted to fund investments by those companies in The Maple Royalty Company, Limited, one of the entities comprising The Maple Companies Group. As part of the restructuring that occurred after the balance sheet date (see note 32), on 30 November 2006 The Maple 216

225 Companies Group issued shares to the owners of those companies in exchange for the shares of those companies. The amounts due to The Maple Companies Group from these companies were effectively eliminated against the value of the shares issued by The Maple Companies Group to the owners of those companies. 19. Prepaid taxes and expenses As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Value added tax credit Pre-paid insurance Other , Of which: Current portion (546) (367) Non-current portion The Value added tax credit arose on the acquisition of goods and services related to exploration activities in block 31-E. 20. Inventories As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Finished products 2,501 1,650 Products in process 4,096 1,986 Raw materials Supplies Inventory in transit 105 7,872 5,090 At 31 December 2005, the Maple Companies Group held inventories which were pledged as security for loans with various Peruvian banks with a value of US$6,175,000 (2004: US$3,297,000). See note 26 for further details. 21. Trade and other receivables As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Trade receivables 2,007 1,728 Receivables due from associate, note Other receivables 1, ,288 2,468 Allowance for doubtful accounts (256) (455) 3,032 2,013 Trade receivables are non-interest bearing and are generally collected in 45 days or less. 217

226 Movements in the allowance for trade receivables are shown below: 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Beginning balance Allowance, note Recoveries, note 11 (191) (22) Write-off (3) (10) Exchange difference (8) 11 Ending balance Cash and cash equivalents As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Cash at bank and in hand 1,273 1,486 Time deposits Trust fund account 388 Cash for the purpose of the combined statement of cash flows 1,661 1,486 Guarantee deposits ,908 2,042 Cash at bank earns no interest unless held in trust fund, time deposit or guarantee deposit accounts. In December 2004, Maple signed a trust fund contract, to guarantee its obligations with Banco de Crédito del Perú, in connection with a loan of US$5,500,000 (see note 24). As at 31 December 2005, The Maple Companies Group maintained deposits of US$247,000 (2004: US$555,000), as collateral for bank guarantees for contracts with third parties. These deposits earn interest at an average annual rate of between 1.00% and 4.00% and mature in 360 days. 23. Shareholders equity Issued share capital represents the aggregated share capital of the individual companies comprising The Maple Companies Group, after elimination of inter-group balances. The individual companies comprising The Maple Companies Group each have one or more classes of share capital; therefore, the aggregated share capital also comprises more than one class of share capital. As set out in the Basis of Preparation (note 1), it is not meaningful in the context of this combined financial information to set out the disclosures normally required by IFRS with respect to classes of share capital, including movements in the amounts of each class of capital, movements in the number of shares of each class of share capital issued and share class rights. As discussed in the Post-balance sheet events note (note 32), a reorganisation took place whereby the companies comprising The Maple Companies Group were restructured into a legal sub-group headed by The Maple Companies, Limited. The Maple Companies, Limited, has one class of shares, being common shares, which have equal voting rights and equal rights to participate in dividends and distributions upon liquidation. As at December 31, 2006 the common shares of The Maple Companies, Limited had no characteristics that would cause them to be classified as debt within the meaning of IAS 32 Financial Instruments: Disclosure and Presentation. 218

227 24. Long-term debt Payments Quarterly Annual interest rate Final maturity As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Banco de Crédito del Perú Three-month Libor plus 4.5% ,200 2,750 SUNAT and SENATI Monthly 15.0% annual ,486 1,743 Bank Boston Quarterly Three-month Libor plus 4.5% 2,750 Lease agreements Monthly ,872 7,562 Of which: Current portion 2,227 1,453 Non-current portion 4,645 6,109 The maturity of long-term debt is set out in note 31. Banco de Crédito and Bank Boston In December 2004, The Maple Gas Corporation del Perú, Sucursal Peruana entered into a loan agreement with Banco del Crédito del Perú (BCP) and Bank Boston for US$5,500,000, with the proceeds primarily used to repay a loan from Scotiabank (formerly Banco Wiese Sudameris). This loan is guaranteed with a stand-by letter of Acer Comercial S.R.L. in favour of each bank and a trust fund of cash flows over: proceeds from the difference between the amount paid by The Maple Gas Corporation del Perú, Sucursal Peruana to Acer Comercial S.R.L. and the amount paid by Acer Comercial S.R.L. to Aguaytía Energy del Perú S.R.L relating to purchases of natural gasolines. proceeds from sales from The Maple Gas Corporation del Perú, Sucursal Peruana to PetroPerú and other clients, which represent at least 10% of its annual sales. proceeds from the income, benefits, distributions and dividends or any amount due to The Maple Gas Corporation del Perú, Ltd. as a result of its interest in Aguaytía Energy, LLC, except from the portion attributable to Scotiabank Perú S.A.A. which is retained in case of default on the loan. cash flows related to an insurance policy endorsed to the trustee under the trust fund contract. In March 2005, Bank Boston merged with BCP and the Bank Boston loan debt was assumed by BCP. Under the terms of the loan agreement with BCP, The Maple Gas Corporation del Perú, Sucursal Peruana is required on a quarterly basis to comply with the following covenants: Total debt to annualised EBITDA must be less than 2.5. EBIT to financial expense must be greater than 3.0. Debt service coverage must be greater than 1.1. On 16 February 2006, The Maple Gas Corporation del Perú, Sucursal Peruana signed another loan agreement with BCP for an amount up to US$3,500,000. This loan is subject to the same conditions and covenants as for the loan received in December 2004, including the trust fund arrangements. On 28 February 2006 this loan became effective for an amount of US$3,399,000, used to fund The Maple Companies Group s increased investment in Aguaytía. SUNAT/SENATI The SUNAT/SENATI balance relates to an arrangement entered into with the Peruvian tax authorities to pay an old tax liability over a 10 year period. This liability, denominated in Nuevos Soles ( NS, Peruvian currency) rather than US dollars, was originally for NS 7,430,000, accrues interest at a fixed rate of 15% per annum, and is being paid by equal monthly instalments (including interest) of circa NS120,000 (circa NS1,440,000 per annum). 219

228 Lease agreements The lease agreements balance relates to finance leases over vehicles and equipment with three Peruvian financial entities. These leases mature between October 2006 and May 2008 and are secured against the assets under the finance leases. Future minimum lease payments under the finance leases are set out below: As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Minimum future lease payments payable within 1 year to 5 years Less: finance charges (10) (26) Net obligations Trade accounts payable As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Due to third parties 1,700 1,091 Due to associate, note 29 5,748 3,580 7,448 4,671 Trade accounts payable mainly originate from the acquisition of natural gasoline, materials, supplies and spare parts. Trade payables are non-interest bearing and are normally settled on 60-day terms. 26. Overdrafts and bank loans As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Overdrafts 4 Scotiabank 1, Banco Financiero 1,241 1,152 Banco de Comercio 600 Banco de Crédito del Perú Banco Sudamericano 300 Bank Boston (Peru) 250 Other 3,841 1,806 As at 31 December 2005, The Maple Companies Group had bank loans for working capital purposes with an annual weighted average interest rate of 8.88% (2004: 8.23%). At each balance sheet date, the following inventories were pledged as security for bank loans: As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Banco Financiero 2,024 1,047 Scotiabank 3,199 2,250 Banco de Comercio 727 Banco Sudamericano 225 6,175 3,

229 27. Other current liabilities 12 months to 31 December 2005 US$ months to 31 December 2004 US$ 000 Remuneration payable 1,200 1,123 Taxes payable Dividends payable Interest payable 20 4 Severance indemnities Guarantee deposits Notes payable Other liabilities ,251 2, Commitments and Contingencies Income tax Following a review of The Maple Gas Corporation del Perú, Sucursal Peruana s ( the Branch ) 2001 income tax return, on 9 December 2003 the Peruvian Tax Administration issued an additional tax assessment to the Branch for US$2,222,729, including interest to 27 November On 7 January 2004, the Branch filed an appeal with the Tax Administration. This tax dispute remained unresolved as at 31 December The main issues arising under the assessments were the following: (a) Interest expense (assessment of US$627,000 of tax and US$1,157,000 of interest and surcharges accrued as at 31 December 2005): The Tax Administration has disallowed interest expenses related to loans granted to the Branch in prior years. The Branch is robustly contesting this assessment. (b) Bad debt provision (assessment of US$780,000 of tax and US$1,439,000 of interest and surcharges accrued as at 31 December 2005): The Tax Administration has disallowed a bad debt provision booked by the Branch, relating to an unpaid receivable arising from the assignment of Block 31-C to Aguaytía in Again, the Branch is robustly contesting the Tax Administration s assessment. The tax authorities are legally entitled to review and, if necessary, adjust the income tax calculated by Peruvian related entities during the four years subsequent to the year of the related tax return filing. The income tax and value added tax returns of the following years are pending review by the tax authorities: Entity Open years Maple Production del Perú, Sucursal Peruana The Maple Gas Corporation del Perú, Sucursal Peruana Acer Comercial S.R.L Maple Etanol S.R.L Due to various possible interpretations of current legislation, it is not possible to determine whether or not future reviews will result in tax liabilities for the Group. In the event that additional taxes become payable, and interest and surcharges result from tax authority reviews, they will be charged to expense in the period in which the determination is made. However, in the opinion of management and their legal advisors, any additional tax assessment would not be material to the combined financial information, except for the areas mentioned in the paragraphs above with respect to the Branch s 2001 income tax return. Environmental matters The Maple Gas Corporation del Perú, Sucursal Peruana, and Maple Production del Perú, Sucursal Peruana, are subject to the Code for the Environment and Natural Resources. This code requires companies to prepare an Environmental Impact Assessment (EIA) approved by a competent authority prior to carrying out drilling or exploration work. To comply with the code, The Maple Gas Corporation del Perú, Sucursal Peruana, and Maple Production del Perú, Sucursal Peruana, have filed EIAs, which were duly approved in 1996 and 2003, respectively. 221

230 In addition, according to the Licence Contract for Block 31-B and 31-D mentioned in note 4 and to the Refinery and Sales Plant Lease Contract mentioned below, The Maple Gas Corporation del Perú, Sucursal Peruana, is not responsible for environmental damage caused before the beginning of its operations. As at 31 December 2005 and 2004 management consider that all the Peruvian entities within The Maple Companies Group are in compliance with current environmental regulations and no provisions are required with respect to environmental matters. Operating Lease Contract of refinery and sales plant and administrative facilities On 29 March and 21 April 1994, The Maple Gas Corporation del Perú, Sucursal Peruana, signed an operating lease contract with Petroperú S.A. for a refinery and sales plant located in Pucallpa, Perú and a further operating lease contract covering the buildings and equipment at the refinery and sales office. The total annual rent for both contracts amounts to approximately US$584,000. The lease expires in 2014 but is renewable. Management intends to renew the lease. In 1994, The Maple Companies Group signed operating lease contracts for their previous administrative facilities in Lima with two entities managed by one of its shareholders. These leases expired in March On 15 November 2004, The Maple Gas Corporation del Perú, Sucursal Peruana entered into an operating lease with Inversiones Centenario S.A.A. for its current administrative facilities in Lima. The monthly rent amounts to US$24,138, which increases at a rate of 2.5% per annum, beginning on 15 November The lease expires in The minimum future lease payments were as follows: Minimum future lease payments payable within Office lease US$ 000 As at 31 December 2005 Refinery and sales plant US$ 000 Office lease US$ 000 As at 31 December 2004 Refinery and sales plant US$ year to 5 years 1,310 2, ,335 Over 5 years 1,396 7,771 8,355 Total 3,023 10, ,274 Decommissioning of oil production facilities According to the Licence Contract for Exploitation of Hydrocarbons for Blocks 31-B and 31-D, and the Licence Contract for the Exploration and Exploitation of Block 31-E, at the end of the term of the licence contracts, The Maple Companies Group is required to deliver to the Peruvian State, without any cost or charge and in good condition, all the wells, camps, pipelines, constructions and other facilities located in the licence areas. Therefore, no obligation exists for the decommissioning of oil wells and production facilities at the end of the licence period. Royalties As a result of the licence contract for Blocks 31-B and 31-D, The Maple Gas Corporation del Perú, Sucursal Peruana is required to pay royalties in cash twice a month, applying specific percentages to the value of hydrocarbons produced. The royalty expense was US$3,774,000 in 2005 and US$1,616,000 in Minimum work programme As discussed in note 4.2, The Maple Companies Group has a commitment to perform a minimum work programme on Block 31-E. Legal claims (a) Payment claimed by Energy Services S.A. In 2000, The Maple Gas Corporation del Perú, Sucursal Peruana, was defendant in an action initiated by Energy Services S.A. for U$248,832 (including interest to 15 May 2000), related to the acquisition and installation of a pipeline. The Maple Gas Corporation del Perú, Sucursal Peruana, filed a counter-claim against Energy Services S.A. requesting the payment of approximately US$265,000 for various balances. 222

231 (b) On 11 April 2006, a Court found in favour of Energy Services S.A. and ordered The Maple Gas Corporation del Perú, Sucursal Peruana to pay US$170,148 plus interest. The Court ordered US$200,000 to be segregated from the Company s bank accounts, which is presented as a restricted fund in the combined balance sheet. On 23 May 2006, The Maple Companies Group appealed this decision and in January 2007, The Superior Court declared null the verdict of the lower court, on the basis that there had been a violation of The Maple Companies Group s right to due process, and ordered the judge to issue a new judgement, taking into consideration the arguments of The Maple Companies Group. The revised verdict is still pending. Based on the opinion of The Maple Companies Group s legal advisors, management consider that the new judgement will be favourable, and no provision for any liability has been made in this combined financial information. Air accident In November 2004, The Maple Gas Corporation del Perú, Sucursal Peruana, was defendant in an action initiated by the relatives of an individual who passed away in an air accident. The demand was for US$1,000,000. In January 2005, The Maple Gas Corporation del Perú, Sucursal Peruana, filed motions to dismiss the action on the grounds that it was not responsible for the air accident and any associated indemnity was the responsibility of two insurance companies. In addition, The Maple Gas Corporation del Perú, Sucursal Peruana, filed a demand against the aircraft operator and the insurance companies. In November 2005, The Maple Gas Corporation del Perú, Sucursal Peruana, and the plaintiff reached a settlement wherein The Maple Gas Corporation del Perú, Sucursal Peruana agreed to pay US$150,000 and the case was closed. The Maple Companies Group has no further liability. Commitment to purchase natural gasolines from Aguaytía As discussed in the note on related parties (note 29), under an agreement dated 24 July 1996 The Maple Companies Group has a commitment to acquire all of the natural gasolines produced from the Cushabatay sand formation by Aguaytía over the life of Aguaytía s Block 31-C licence contract (30 years from 30 March 1994, extendable to 40 years) at a price derived from market prices. 29. Related parties disclosures Transactions with Aguaytía The Maple Companies Group had the following transactions with Aguaytía during the years ended 31 December 2005 and 2004: (a) The Maple Gas Corporation del Perú, Sucursal Peruana, is party to an operation and maintenance agreement with Aguaytía Energy del Perú S.R.L. by means of which Aguaytía compensates The Maple Gas Corporation del Perú, Sucursal Peruana each month for its costs incurred in maintaining and operating Aguaytía s gas assets. In addition, based on an amendment to this contract, Aguaytía Energy del Perú S.R.L. pays general & administrative costs of US$275,000 per year and a productivity bonus of US$75,000 per year. Total revenues related to this service contract amounted to approximately US$1,131,000 in 2005 (US$1,092,000 in 2004) and are recorded within revenue in the combined statements of income. (b) Acer Comercial S.R.L. has the right and is obliged to purchase natural gasoline from Aguaytía Energy del Peru S.R.L. During the year ended 31 December 2005, Acer Comercial S.R.L. purchased natural gasoline amounting to approximately US$36,217,000 (2004: US$27,326,000). These purchases were made at a price derived from a formula based on normal market prices and are recorded within cost of sales in the combined statements of income. (c) Cash dividends received from Aguaytía Energy LLC amounted to US$2,989,000 in 2005 (2004: US$3,549,000). As discussed in note 17, one of the companies comprising The Maple Companies Group, The Maple Gas Development Corporation, has issued financial instruments to outside parties 223

232 entitling them to all cash flows received from Aguaytía Energy LLC associated with certain units in Aguaytía Energy LLC held by The Maple Gas Development Corporation and has derecognised the Aguaytía units concerned. The Maple Companies Group is obliged to distribute such cash flows to these outside parties as they are received. In accordance with IAS 39: Financial instruments: Recognition and measurement, The Maple Companies Group has not recognised cash flows received and paid associated with these units, amounting to US$1,552,000 in 2005 (2004: US$1,893,000). As a result of the above and other minor transactions, The Maple Companies Group has the following accounts receivable and payable with Aguaytía. As at 31 December 2005 US$ 000 As at 31 December 2004 US$ 000 Accounts receivable Aguaytía Energy del Perú S.R.L., note Accounts payable Aguaytía Energy del Perú S.R.L, note 25 5,748 3,580 Outstanding balances at the year-end are interest free and settlement occurs in cash. Accounts payable are guaranteed by stand-by letters of credit from Peruvian banks signed by The Maple Gas Corporation del Perú, Sucursal Peruana in favour of Aguaytía which guarantees the compliance of the payment obligation held by Acer Comercial S.R.L. included in the Contract to Purchase Natural Gasoline signed on 24 July These stand-by letters of credit are renewed every 6 months and amounted to approximately US$3,283,000 as at 31 December 2005 (US$2,385,000 as at 31 December 2004). Transactions with other related parties The Maple Companies Group had the following transactions with other related parties during the years ended 31 December 2005 and 2004: (a) (b) (c) As at 31 December 2005 The Maple Gas Corporation del Perú, Sucursal Peruana, had outstanding loans to employees amounting to US$194,000 (2004: US$190,000). These loans do not bear interest and do not have specific maturities. The Maple Companies Group has made loans to shareholders amounting to US$2,930,000, as at 31 December 2005 (2004: $2,825,000), respectively. Included in these amounts are advances to key management, as described in note 18. As explained in note 28, The Maple Companies Group had operating lease contracts for its former administrative facilities with two entities managed by one of its shareholders, which expired in March, Payments made in 2005 and 2004 amounted to US$62,000 and US$143,000, respectively. (d) In the year ended 31 December 2005 The Maple Companies Group paid $1,671,000 (2004: US$1,599,000) to The Maple Gas Corporation, a US company based in Dallas, Texas and controlled by Jack Hanks. The amounts paid to The Maple Gas Corporation were for direct and indirect support of the Perú operations and for expenses of the Dallas office, including remuneration, consulting fees, rent and office expenses. The Dallas office is used by other employees assigned to Perú when they are in Dallas. As at 31 December 2005 and 2004, The Maple Companies Group has not made any provision for doubtful debts relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Remuneration of key management Compensation of key management personnel amounted to US$1,721,000 in 2005 (2004: US$2,080,000) which correspond to short-term employee benefits. Neither post-retirement and termination benefits, nor share-based payments, were paid to key management. 224

233 30. Financial risk management objectives and policies The Maple Companies Group s principal financial instruments comprise bank loans, cash and short-term deposits. The Maple Companies Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The Maple Companies Group has not entered into any derivative transactions other than an interest rate swap. The main risks arising from The Maple Companies Group s financial instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit risk. Management reviews and agrees policies for managing each of these risks, which are summarised below. Cash flow interest rate risk The Maple Companies Group s exposure to the risk of changes in market interest rates relates primarily to the Group s long-term debt obligations with floating interest rates. The Maple Companies Group s policy is to periodically negotiate its interest rates with local banks and, on 8 February 2005, it entered into an interest rate swap in which The Maple Companies Group agreed to exchange, at specified intervals, the difference between 3.99% fixed and 3-month Libor interest rates based on the outstanding notional principal amount of the US$5,500,000 loan from Banco de Crédito del Perú. This swap matures on 21 December 2009 and the net loss of US$28,000 for the year ended 31 December 2005, was recorded within finance costs in the combined statement of income. Foreign currency risk As a result of its operations in Perú, The Maple Companies Group s balance sheet can be affected by movements in the US$/Nuevos Soles exchange rate. The Maple Companies Group seeks to mitigate the effect of its currency exposure by carrying out almost all of its transactions in U.S. dollars; as a result, its exposure to foreign currency risk is minimal. As at 31 December 2005, the assets and liabilities in Nuevos Soles were: NS 000 Assets Trade and other receivables 4,679 Cash and cash equivalents 1,424 6,103 Liabilities Long-term debt 5,095 Trade accounts payable 1,694 Other current liabilities 1,882 8,671 Net liability position 2,568 As at 31 December 2005, the gain from exchange differences, recognised in the income statement amounted to US$1,000 (2004: US$11,000). Credit risk The Maple Companies Group trades only with recognised, creditworthy third parties. It is its policy that all customers who wish to trade on credit terms are subject to credit verification procedures and collateral is required in most cases. In addition, receivable balances are monitored on an ongoing basis with the result that its exposure to bad debts is not significant. With respect to credit risk arising from cash and cash equivalents, The Maple Companies Group s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents. 225

234 With respect to credit risk arising from shareholders loans, the maximum exposures equal the individual loan carrying amounts set out in note 18. Liquidity risk The Maple Companies Group s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans. The Maple Companies Group s policy is to enter into loans with a medium-term maturity. 31. Financial instruments Fair value The carrying amount of The Maple Companies Group s current financial assets and liabilities approximates to their fair values due to their current maturity. The fair value of the long-term debt has been calculated by discounting the expected future cash flows, based on The Maple Companies Group s current incremental borrowing rates for similar types and maturities of borrowing. This debt accrues interest at floating rates, so the fair value of the long-term debt is estimated not to be materially different from its carrying value. The fair value of the interest rate swap at 31 December 2005 was not material. Interest rate risk The following table sets out the carrying amount, by maturity, of The Maple Companies Group s financial instruments that are exposed to interest rate risk: Within 1 year 1 2 years 2 3 years 3 4 years 4 5 years More than 5 years As at 31 December 2005 FINANCIAL ASSETS Floating rate Cash assets FINANCIAL LIABILITIES Fixed rate Long-term debt SUNAT and SENATI Floating rate Bank loans Scotiabank 1,700 Banco Financiero 1,241 Banco de Comercio 600 Banco Sudamericano 300 Long-term debt Banco de Crédito del Perú 1,900 1,100 1,100 1,100 Lease agreements

235 Within 1 year 1 2 years 2 3 years 3 4 years 4 5 years More than 5 years As at 31 December 2004 FINANCIAL ASSETS Floating rate Cash assets FINANCIAL LIABILITIES Fixed rate Long-term debt SUNAT and SENATI Floating rate Bank loans Scotiabank 400 Banco Financiero 1,152 Bank Boston 250 Long-term debt Banco de Crédito del Perú Bank Boston Lease agreements Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The other financial instruments of The Maple Companies Group that are not included in the above tables are non-interest bearing and are not subject to interest rate risk. 32. Post balance sheet events On 30 November 2006, The Maple Companies Group undertook a restructuring whereby the entities and/or the activities and assets and liabilities of the entities comprising The Maple Companies Group were reorganised so that they formed a legal sub-group under The Maple Companies, Limited. As part of this restructuring, The Maple Companies, Limited, issued new shares to certain parties holding beneficial interests in units of Aguaytía, effectively in exchange for a beneficial interest in those Aguaytía units. As a result of these transactions, The Maple Companies Group effectively increased its beneficial interest in Aguaytía from 10.4% at 31 December 2005 to approximately 14.3%. Significant post-balance sheet events occuring after 31 December 2006 have been disclosed in the consolidated historical financial information of The Maple Companies, Limited for the year ended 31 December 2006 set out in Part V Section 5. As a result, they have not been repeated in this Part V Section

236 SECTION 4 ACCOUNTANT S REPORT ON THE MAPLE COMPANIES GROUP Grant Thornton Corporate Finance Grant Thornton UK LLP Chartered Accountants UK member of Grant Thornton International Grant Thornton House Melton Street London NW1 2EP T +44 (0) F +44 (0) DX 2100 EUSTON Grant Thornton UK LLP is a limited liability partnership registered in England and Wales: No.OC Registered office: Grant Thornton House, Melton Street, Euston Square, London NW1 2EP. A list of members is available from our registered office. Grant Thornton UK LLP is authorised and regulated by the Financial Services Authority for investment business. The Directors Maple Energy plc 70 Sir John Rogerson s Quay Dublin 2 Ireland 6 July 2007 Dear Sirs The Maple Companies Group (comprising The Maple Gas Corporation del Perú Ltd, The Maple Companies, Limited, Maple Production del Perú Ltd, The Maple Royalty Company Limited, Maple Exploration Limited, Maple Oil Company Limited, The Maple Gas Development Corporation, Maple Perú Holdings Corporation, Maple Etanol SRL and Acer Comercial SRL) We report on the combined financial information of The Maple Companies Group set out in Part V Section 3 (the Financial Information). This Financial Information has been prepared for inclusion in the AIM admission document dated 6 July 2007 of Maple Energy plc (the Admission Document) on the basis of the accounting policies set out in the Financial Information. RESPONSIBILITIES This report is required by Paragraph (a) of Schedule Two of the AIM Rules for Companies and is given for the purpose of complying with that regulation and for no other purpose. Save for any responsibility arising under Paragraph (a) of Schedule Two of the AIM Rules for Companies to any person as and to the extent provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any responsibility to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Paragraph (a) of Schedule Two of the AIM Rules for Companies. The Directors of Maple Energy plc are responsible for preparing the Financial Information on the basis of preparation set out in Note 1 to the Financial Information, in accordance with the accounting policies set out in Note 3 to the Financial Information and in accordance with International Financial Reporting Standards as adopted by the European Union. It is our responsibility to form an opinion as to whether the Financial Information gives a true and fair view, for the purposes of the Admission Document, and to report our opinion to you. BASIS OF OPINION We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the Financial Information. It also included an assessment of the significant estimates and judgements made by those responsible for the preparation of the Financial Information and whether the accounting policies are appropriate to The Maple Companies Group s circumstances, consistently applied and adequately disclosed. 228

237 We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Financial Information is free from material misstatement, whether caused by fraud or other irregularity or error. Our work has not been carried out in accordance with auditing standards generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. OPINION In our opinion, the Financial Information gives, for the purposes of the Admission Document dated 6 July 2007, a true and fair view of the state of affairs of The Maple Companies Group as at the dates stated and of its profits, cash flows and changes in equity for the periods then ended in accordance with the basis of preparation set out in Note 1 and the accounting policies set out in Note 3. DECLARATION For the purposes of Paragraph (a) of Schedule Two of the AIM Rules for Companies we are responsible for this report as part of the Admission Document and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Admission Document in compliance with Schedule Two of the AIM Rules for Companies. Yours faithfully GRANT THORNTON UK LLP 229

238 SECTION 5 CONSOLIDATED HISTORICAL FINANCIAL INFORMATION ON THE MAPLE COMPANIES, LIMITED FOR THE YEAR ENDED 31 DECEMBER 2006 Consolidated Income Statement 12 months to 31 December 2006 Note US$ 000 Revenue 6 56,712 Cost of sales 7 (50,370) Gross profit 6,342 Operating expenses General and administrative expenses 7 (2,789) Exploration expenses (343) Selling expenses 7 (2,146) Workers profit sharing Total operating expenses (5,233) Operating income 1,109 Other income/(expenses) Share of profit of associate Finance income Finance costs 9 (704) Total other income/(expenses) (126) Income before income tax 983 Income tax 10 (635) Net income for the period 348 Attributable to Equity holders of the Parent 99 Minority interests

239 Consolidated Balance Sheet As at 31 December 2006 Note US$ 000 ASSETS Non-current assets Property, plant and equipment 11 8,712 Intangible assets 12 63,259 Investment in associate 13 24,124 96,095 Current assets Income tax credit 629 Prepaid taxes and expenses 15 2,223 Inventories 16 8,360 Due from shareholders 14 1,118 Trade and other receivables 17 1,983 Cash and cash equivalents 18 2,301 16,614 Total assets 112,709 EQUITY AND LIABILITIES 19 Equity Issued capital 16 Additional capital 69,504 Retained earnings (5,714) Total equity attributable to equity holders of the parent 63,806 Non-current liabilities Long-term debt 20 6,739 Provision for tax contingencies 23 3,062 Deferred taxation and workers profit sharing liabilities 10 20,064 29,865 Current liabilities Trade accounts payable 21 9,375 Interest bearing loans and borrowings 22 6,997 Other current liabilities 23 2,666 19,038 Total liabilities 48,903 Total equity and liabilities 112,

240 Consolidated Statement of Changes in Shareholders Equity Attributable to the equity holders of the Parent Issued capital Additional capital Retained earnings Total Minority interests Total equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Balance as at 1 January (4,847) (4,811) 3,153 (1,658) Net income (4,748) (4,712) 3,402 (1,310) Acquisition of minority interests 5 3,397 3,402 (3,402) Acquisition of Maple BVI 2 66,529 66,531 66,531 Other adjustments (449) (449) (449) Dividends paid (966) (966) (966) Balance as at 31 December ,504 (5,714) 63,806 63,

241 Consolidated Statement of Cash Flows 12 months to 31 December Cash flows from operating activities 2006 US$ 000 Cash receipts from customers 56,715 Payments to suppliers and third parties (51,482) Payments to employees (1,471) Cash generated from operations 3,762 Income tax paid (1,210) Interest paid (540) Net cash from operating activities 2,012 Cash flows from investing activities Exploration expenditures (417) Purchase of plant and equipment (89) Interest received 213 Dividends received 444 Net cash from investing activities 151 Cash flows from financing activities Proceeds from bank loans 2,526 Payments of bank loans (2,446) Payments of long-term debt (671) Increase in amounts due from shareholders (20) Change in restricted cash and guarantee deposits (637) Dividends paid (966) Net cash used in financing activities (2,214) Net decrease in cash and cash equivalents (51) Cash from Maple BVI acquisition 1,584 Cash and cash equivalents at beginning of period 130 Cash and cash equivalents at end of period 18 1,663 As part of the business acquisition explained in Note 3, The Maple Companies, Limited, acquired the assets and liabilities of Maple BVI with a provisional fair value of US$100.9 million and US$52.7 million respectively, in consideration for the issue of 197,533 shares. 233

242 Notes to the Consolidated Financial Information 1. Corporate information The Maple Companies, Limited (hereafter TMC ) is a limited company which was incorporated in the British Virgin Islands in 1997 to act as a holding company and to coordinate the policies and administration of its subsidiaries (together, the Group ). The address of its registered office is Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands. The Group s principal place of business is Victor Andrés Belaunde 147, Via Principal 140, Building Real 6, Office 201, San Isidro, Lima, Peru. TMC, through its subsidiaries, holds License Contracts for the exploration and exploitation of hydrocarbons in blocks 31-B, 31-D and 31-E in the Republic of Peru (see note 4) and also operates a hydrocarbons refinery in Peru. In addition, the Group holds an indirect economic interest of approximately 14% in Aguaytía Energy, LLC (hereafter Aguaytía ), an entity that has controlling interests in four companies which operate in the Peruvian energy and electrical sectors. The activities of TMC s subsidiaries and their countries of incorporation are set out below. Equity participation as at 31 December 2006 Exploitation, refining and commercialisation of hydrocarbons (Blocks 31-B and 31-D) The Maple Gas Corporation del Perú, Ltd. (British Virgin Islands) 100% Exploration of hydrocarbons (Block 31-E) Maple Production del Perú, Ltd. (British Virgin Islands) 100% Commercialisation of natural gasoline and solvents Acer Comercial S.R.L. (Peru) 100% Production and Commercialisation of Ethanol (development stage) Maple Etanol S.R.L. (Peru) 100% TMC also has an interest of 45% in Agricola Cerro Colorado, an entity engaged in agricultural activities. This investment has been fully written-off as at 31 December As discussed in note 2.4, on 30 November 2006 TMC acquired The Maple Gas Corporation del Perú Ltd. (Maple BVI), a company under common management control with TMC, together with all minority interests in Maple BVI s subsidiaries. In acquiring the Maple BVI group, TMC also effectively acquired its interest in Aguaytía. On the same date, TMC also acquired the outstanding minority interests in its then-existing subsidiary undertakings. On the completion of these transactions, which were carried out in a series of steps, TMC held 100% of the equity of each of the subsidiary undertakings comprising the Group. 2. Summary of significant accounting policies The principal accounting policies applied in the preparation of this consolidated financial information are set out below. The consolidated financial information is presented in U.S. Dollars, except where otherwise indicated. 2.1 Basis of Preparation The consolidated historical financial information of TMC and its subsidiary undertakings for the year ended 31 December 2006 has been prepared under the historical cost convention and in accordance with the recognition and measurement principles contained within International Financial Reporting Standards (IFRS), as adopted by the European Union. Prior to a group reorganisation which occurred on 30 November 2006 (see note 3), the companies comprising the Group did not historically form a single, legal group of companies. As a result, for the purposes of this Admission Document the Group has presented its historical financial information for the years ended 31 December 2005 and 2004 in the form of combined financial information on the basis set out in Part V Section

243 Given historical financial information on the Group for the years ended 31 December 2005 and 2004 has been presented on a combined basis elsewhere in this Admission Document, and given the consolidated financial information of TMC for those years would not include all of the present Group s trading activity, management have not presented comparative figures to the consolidated financial information of TMC in this Part V Section 5, as would be required under IFRS. In all other respects, the Group has complied with the disclosure requirements of IFRS. The historical financial information in this Admission Document does not represent published annual financial statements as defined by IFRS. Consequently, no disclosures required under IFRS 1 First Time Adoption of International Financial Reporting Standards have been given in this consolidated historical financial information. 2.2 Significant estimates and judgements In preparing this historical financial information, management was obliged to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from those estimates. The most significant accounting estimates in this historical financial information relate to: the provisional fair values attributed to the shares issued by TMC as consideration for its acquisition of the Maple BVI group during the year see note 3 the provisional fair values attributed to the identified assets (including intangible assets), liabilities and contingent liabilities of the Maple BVI group acquired during the year (including the Maple BVI group s investment inaguaytía) see note 3 the impairment testing of the goodwill arising on the acquisition of Maple BVI see note 12 Details of the key terms of the licence contracts for the exploration and exploitation of hydrocarbons, which constitute the major component of the contractual rights included within intangible assets, are contained within note 4. Note 24 contains details of the commitments and contingencies to which the Group is exposed at the balance sheet date. In preparing this historical financial information, management was required to assess whether it was appropriate to recognise an amount for the contingent tax liability discussed in that note, over and above the amount recognised due to the requirement to attribute a provisional fair value to contingent liabilities under IFRS acquisition accounting. No such additional liability has been recognised in this historical financial information as management consider that an outflow of economic benefits is not probable. 2.3 Basis of consolidation The entities included in the consolidated financial information as at 31 December of each year are set out in note 1. The financial statements of the subsidiaries are prepared for the same reporting year as TMC, using consistent accounting policies. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Subsidiaries are fully consolidated from the date of acquisition, being the date on which TMC obtains control, and continue to be consolidated until the date such control ceases. Minority interests represent the portion of profit or loss and net assets not held by TMC and are presented separately in the income statement and within equity in the consolidated balance sheet, separately from parent shareholders equity. 2.4 Business Combination The acquisition of The Maple Gas Corporation del Perú Ltd. (Maple BVI) and its related entities on 30 November 2006 has been accounted for using acquisition accounting as defined under IFRS. This involves recognising the identifiable assets and liabilities of the acquired business at fair value. 235

244 Although TMC and Maple BVI were companies under common control, TMC used the purchase method of accounting to record the business acquisition, as the company s Management considers this to represent the underlying substance of the transaction from TMC s perspective: the acquisition was designed to facilitate the process of listing the Group on the Alternative Investment Market in London. In order for this process to occur, TMC issued shares in itself in exchange for the assets, liabilities and minority interest acquired. The difference between the fair value of the assets and liabilities acquired and the nominal value of the shares issued has been credited to additional capital. Management has identified TMC as the acquirer of Maple BVI. This was on the grounds that under the terms of the reorganisation plan, TMC issued shares in itself to the shareholders of Maple BVI and its subsidiaries in exchange for their shares in Maple BVI and its subsidiaries and that the fair value of the TMC group was greater than the fair value of the Maple BVI group at the date of the transaction. Goodwill acquired in a business combination is initially measured at cost, in this case being the excess of the cost of the business combination over TMC s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities. Following its initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to cash-generating units, or groups of cash-generating units, which are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the group are assigned to those units or group of units. Each unit or group of units to which the goodwill is allocated: represents the lowest level within the group at which the goodwill is monitored for internal management purposes; and is not larger than a segment based on either the primary or the secondary reporting format determined in accordance with IAS 14 Segment Reporting. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised. The consolidated financial information includes the results of Maple BVI and its related entities for the one-month period from the date of acquisition which occurred on 30 November Segment reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular geographic area that is subject to risks and rewards that are different from those of segments operating in other geographic areas. 2.6 Foreign currency translation Functional and presentational currency TMC considers its functional and presentational currency to be the United States Dollar (U.S. Dollar), because it reflects the economic substance of the underlying events and the circumstances relevant to the Group, as this is the currency in which its main operations and transactions are established and conducted. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rate of exchange ruling at the consolidated balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated into the functional currency using the rates of exchange as at the dates of the initial transactions. Foreign 236

245 exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of income. Consolidation In the consolidated financial statements, all separate financial statements of subsidiaries originally presented in a currency different from the Group s presentational currency have been converted into US Dollars. Assets and liabilities have been translated into US Dollars at the closing rate at the balance sheet date. Income and expenditure have been converted into dollars using an average rate for the period. Any differences arising from this procedure are taken to a currency translation reserve in equity. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into US Dollars at the closing rate, on the date of the acquisition. 2.7 Property, plant and equipment Plant and equipment is stated at cost, less accumulated depreciation and any accumulated impairment in value. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, and the initial estimate of any decommissioning obligation, if any. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Expenditure on major maintenance refits or repairs comprises the cost of replacement assets or parts of assets, inspection costs and overhaul costs. Where an asset or part of an asset that was separately depreciated and is now written off is replaced and it is probable that future economic benefits associated with the item will flow to the Group, the expenditure is capitalised. Minor maintenance costs are expensed as incurred. Oil wells and oil & gas plant and equipment are depreciated to their residual value using a unit-of-production method, based on proven developed reserves. Other facilities and equipment are depreciated on a straight- line basis so as to allocate the cost of each asset less its residual value over its expected useful life. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. The useful lives of the Group s facilities and equipment are as follows: Years Installations 33 Vehicles 5 Furniture and fixtures 10 Computer equipment 4 The expected useful lives of property, plant and equipment are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively. The carrying value of property, plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any gain or loss arising on derecognising the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the consolidated statement of income in the period in which the item is derecognised. 2.8 Leases Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated over the shorter of their estimated useful life and the lease term. 237

246 Leases which do not meet the definition of a finance lease are classified as operating leases. Operating lease payments are recognised as an expense in the consolidated statement of income on a straight-line basis over the lease term. 2.9 Successful efforts policy Exploration and development costs Oil exploration and development expenditure is accounted for using the successful efforts method of accounting. Geological and geophysical exploration costs are charged against income as incurred. Costs directly associated with an exploration well or wells in an Exploration Drilling programme for an Area of Interest, are capitalised as an intangible asset until the drilling of the well or wells is complete and the results have been evaluated. These costs include employee remuneration, materials and fuel used, rig costs, delay rentals and payments made to contractors. If hydrocarbons are not found, the exploration expenditure is written off as a dry hole. If hydrocarbons are found and, subject to further appraisal activity, which may include the drilling of further wells (exploration or exploratorytype stratigraphic test wells), are likely to be capable of commercial development, the costs continue to be carried as an asset. All such carried costs are subject to technical, commercial and management review at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. When proven reserves of oil and natural gas are determined and development is sanctioned, the relevant expenditure is transferred to property, plant and equipment. Area of Interest One or more blocks or a portion of one or more blocks, which have been designated by TMC as an Area of Interest, based on geological criteria. Depreciation and amortisation Exploration and production assets are depreciated from the commencement of production in the fields concerned, using the unit of production method based on the proven developed reserves of those fields. Changes in these estimates are dealt with prospectively Software Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over an estimated useful life of four years. Costs associated with maintaining computer software programs are recognised as an expense as incurred Intangible assets acquired as part of a business combination An intangible asset acquired in a business combination is accounted for at its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the Group. Where an intangible asset might be separable, but only together with a related tangible or intangible asset, the group of assets is recognised as a single asset separately from goodwill where the individual fair values of the assets in the group are not reliably measurable. Where the individual fair values of complementary assets are reliably measurable, the Group recognises them as a single asset provided the individual assets have similar useful lives. These intangibles are carried at cost less subsequent amortisation and impairment. Amortisation is calculated using the units-of-production method based on proven reserves Investment in associates Associates are all entities over which the Group has significant influence but not control, generally constituting a shareholding of between 20% and 50% of the voting rights. Investments in associates, initially recognised at cost, are accounted for by the equity method of accounting using the percentage of economic interest instead of the percentage of voting interest. The cost of an acquisition is measured as the cash paid and the fair value of other assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, 238

247 plus costs directly attributable to the acquisition. The acquired identifiable assets, liabilities and contingent liabilities are measured at their fair values at the date of acquisition. The excess of the cost of acquisition over the fair value of the Group s share of the identifiable net assets acquired is recorded as goodwill within the Investment in Associate caption. If the cost of acquisition is less than the fair value of the net assets acquired, the difference is recognised directly in the consolidated statement of income. The Group s share of its associates post-acquisition profits and losses is recognised in the consolidated statement of income, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of associates to bring the accounting policies used into line with those of the Group Impairment of long-lived assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset s recoverable amount. An asset s recoverable amount is the higher of an asset s or cash-generating unit s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the consolidated statement of income. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment loss may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. This reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life Financial assets Financial assets in the scope of IAS 39: Financial Instruments: Recognition and Measurement are classified as both financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, where applicable, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. As at 31 December 2006, the Group does not have financial assets at fair value through profit or loss, held-to-maturity investments, or available-for-sale financial assets Financial liabilities Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. Financial 239

248 liabilities categorised as at fair value through profit and loss are recorded initially at fair value, all transaction costs are recognised immediately in the income statement. All other financial liabilities are recorded initially at fair value, net of direct issue costs. Financial liabilities categorised as at fair value through profit and loss are remeasured at each reporting date at fair value, with changes in fair value being recognised in the income statement. All other financial liabilities are recorded at amortised cost using the effective interest method, with interest related charges recognised as an expense in finance cost in the income statement. Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged to the income statement on an accruals basis using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument Derecognition of financial assets and liabilities Financial assets A financial asset is derecognised where: The rights to receive cash flows from the asset have expired; The Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a pass-through arrangement; or The Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) if the entity has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires Inventories Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and conditions are accounted for as follows: Raw materials: at purchase cost using the average method. Finished goods and work in progress: at cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. Supplies: at purchase cost using the average method. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale Trade and other receivables Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. This allowance is estimated for those accounts which recovery is no longer probable and it is determined based on Management s judgment and evaluation of the age of the debt, and any other relevant information. Bad debts are written off when identified Cash and cash equivalents For the purposes of the consolidated statements of cash flows, cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to insignificant risk of changes in value, and have a maturity of three months or less from the date of acquisition. They are stated net of outstanding bank overdrafts. 240

249 2.20 Trade and other payables Trade and other payables are carried at the of settlement value Borrowings Borrowings are initially recognised at cost, being the fair value of the proceeds received net of issue costs associated with the borrowing. After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses arising on the repurchase, settlement or cancellation of borrowings are recognised respectively in finance income and finance costs. Borrowing costs are not capitalised Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated statement of income, net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events or where the amount of the obligation cannot be measured with reasonable reliability. Contingent assets are not recognised, but are disclosed where an inflow of economic benefits is probable Decommissioning Liabilities for decommissioning costs are recognised when the Group has an obligation to dismantle and remove a facility or an item of plant and to restore the site in which is located, and when a reasonable estimate of that liability can be made. The amount recognised is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. A corresponding item of plant and equipment with a value equivalent to that of the provision is created. This is subsequently depreciated as part of the capital costs of the facility or item of plant. Any change in the present value of the estimated expenditure is reflected as an adjustment to the provision and the corresponding property, plant and equipment. See note 28 to the consolidated financial statements Income tax and workers profit sharing Current income tax and current workers profit sharing Current income tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities. Income tax is computed based on the individual financial statements of TMC and each of its Subsidiaries. Workers profit sharing is computed on the same basis as that used to calculate the current income tax. Deferred income tax and deferred workers profit sharing Deferred income tax and deferred workers profit sharing are provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for reporting purposes. Deferred tax liabilities are recognised for all taxable temporary differences, except for taxable temporary differences associated with investments in subsidiaries and in associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax liabilities arising on the initial recognition of goodwill or from the initial recognition of an asset or liability in a transaction which affects neither the accounting profit nor the taxable profit or loss is not recognised. 241

250 Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each consolidated balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority Recognition of revenues Revenue arising from the sale of goods is recognised when the significant risks and rewards of ownership have passed to the buyer and it can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, customs duties and sales taxes. The following recognition criteria must also be met before revenue is recognised: Sales of goods Revenues associated with the sale of oil, petroleum and other items are recognised when title passes to the customer. Services rendered Revenues from operation and maintenance services rendered to Aguaytía and services rendered to other parties are recognised when accrued on a monthly basis, based on the related contracts Other income Interest income Interest income is recognised as the interest accrues (using the effective interest rate) to the net carrying amount of the financial asset. Dividend income Dividend income from investments is recognised when the shareholders right to receive the payment is established Finance costs Finance costs are recognised in the consolidated income statement in the period in which they are incurred Equity Issued capital is determined using the nominal value of the shares that have been issued. Additional capital includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from additional capital, net of any related income tax benefits. Retained earnings include all current and prior period results as disclosed in the income statement Dividend distributions Dividend distributions to TMC s shareholders are recognised as a liability in the financial statements in the period in which the dividends are approved by the shareholders. Dividends are charged directly to equity and are shown as a distribution to equity holders within the statement of changes in equity New standards and interpretations During the year, the International Accounting Standards Board and the International Financial Reporting Interpretations Committee have issued various standards and 242

251 interpretations with an effective date after the date of this financial information. The most relevant for TMC is IFRS 7: Financial Instruments: Disclosures (effective 1 January 2007). IFRS 7 has been adopted early by TMC in the financial information to 31 December The most significant changes which arise as a result of the early adoption of this standard are disclosed in notes 26 and 27. TMC has opted not to early adopt IFRS 8 Segmental Reporting, which has not yet been endorsed by the European Union, and continues to disclose its segmental reporting in accordance with IAS Business acquisition On 30 November 2006, TMC acquired 100% of the voting shares of The Maple Gas Corporation del Perú Ltd. (hereafter, Maple BVI ), an unlisted company based in the British Virgin Islands. Although TMC and Maple BVI were companies under common control, TMC has used acquisition accounting to record the business combination, as management considers this best reflects the underlying substance of the transaction from TMC s perspective: the combination was undertaken to assist TMC in undertaking an Initial Public Offering (via a new holding company) and also enables the overall group to benefit from potential synergies not available to separate groups under common control. Maple BVI is involved in the exploration and exploitation of hydrocarbons in the Peruvian jungle and acts as the holding company of the group s investment in Aguaytía Energy LLC, held via interests in two intermediate holding companies, Maple Peru Holdings Corporation and Maple Gas Development Corporation. The provisional fair values of the identifiable assets and liabilities of Maple BVI as at the date of acquisition and the corresponding carrying amounts before the acquisition were: Fair value recognised on acquisition US$ 000 Carrying value US$ 000 Property, plant and equipment 8,679 3,471 Intangible assets 45, Investment in associate 24,203 24,780 Due from shareholders 1,075 1,075 Prepaid taxes and expenses 1,291 1,291 Inventories 7,212 6,530 Receivables from related parties 7,155 7,155 Trade and other receivables 4,516 4,516 Cash and cash equivalents 1,584 1, ,949 51,091 Long-term debt 9,446 9,446 Deferred taxation liabilities 20, Trade accounts payable 9,605 9,605 Overdrafts and bank loans 4,862 4,862 Loans due to related parties 1,465 1,465 Other liabilities 6,867 3,804 52,733 29,726 Net assets 48,216 21,365 Goodwill arising on acquisition 18,315 66,531 21,365 The total cost of the combination was US$66,530,000. The consideration comprised an issue of 197,533 shares by TMC. Since there is no published price for the shares issued, TMC has considered the interest in the fair value of the Maple BVI group to be the fair value of the shares issued. There were no significant costs that management can directly attribute to the acquisition of Maple BVI. 243

252 Property, plant and equipment The fair value of wells was determined based on discounted future cash flows of the reserves. Deferred income tax and workers profit sharing effects have been taken into account on the fair value adjustment using a combined rate of 39.58%. The fair value adjustment on wells was amortised during December 2006 using the unit-ofproduction method. Intangible assets Intangible assets that can be separately identified in accordance with IAS 38 Intangible Assets, include the Refinery Contract, customer contracts, trademarks, licence contracts for the exploration and exploitation of hydrocarbons and supply agreements for the supply of natural gasoline to the Refinery. Following the receipt of independent external advice, it has been assumed that 65% of the excess of fair value over book value of Maple BVI s refinery business can be attributed to such intangibles. This value has been assigned on a provisional basis, and will be adjusted after the completion of a detailed study of the fair values of each intangible included in this amount. TMC expects to complete this study during the second half of Deferred income tax and workers profit sharing effects have been taken into account on the fair value adjustments using a combined rate of 39.58%. This intangible was amortised during December 2006 using the unit-of-production method, with the same factor as for wells. Investment in associate (Aguaytía) The provisional fair value of the investment in Aguaytía results from applying the Group s percentage economic interest of approximately 14% to the total fair value of Aguaytía s business, determined based on discounted future cash flow projections of Aguaytía s dividends. No deferred income tax has been recognised on this fair value adjustment since the dividends are not taxable in any jurisdiction (Peru or abroad). Inventories The provisional fair value of inventory has been based on an estimate of the net realisable value for finished products and products in process, crude oil, raw materials and supplies, less an estimated profit margin for sales effort. Deferred income tax and workers profit sharing liability on the fair value adjustment has been taken into account, using a combined rate of 39.58%. Contingencies Maple BVI has tax, labour and environmental contingencies which have been analysed by Maple s external legal advisors and by management. The existence of contingent liabilities was considered in the acquisition of Maple BVI. Although the contingent liabilities were considered possible or remote, as required by IFRS, and only for purposes of allocating the costs of this business combination, the group recognised the following contingencies: Community of Canaan (as part of the carrying value) Tax contingencies (as a fair value adjustment) US$113,000 US$3,062,000 For purposes of allocating the cost of the business combination, TMC has provisionally recognised the fair value of its tax contingencies at US$3,062,000 (being 50% of the total remote or possible tax contingencies), despite the fact that Maple BVI has not recognised any liability for the contingency in its own books. Goodwill Goodwill arising on the acquisition has been provisionally estimated at US$18,315,000 and relates to expected tax synergies which arise through the business combination, the expertise and experience of Maple s workforce and senior management, and intangibles which cannot reliably be measured. 244

253 From the date of acquisition, Maple BVI reduced the net profit of the Group by US$294,092. If the combination of Maple BVI had occurred on the first day of the financial year (1 January 2006), the Group revenues for the year would have been US$78,493,000 and Group profits attributable to equity holders of the parent would have been US$636,000. Set out below is a pro forma income statement showing the pro forma results of the Group had the combination occurred on the first day of the financial year. For the purposes of this pro forma income statement, the effects of amortising fair value adjustments have been excluded. US$000 Sales 78,493 Cost of sales (55,027) Gross margin 23,466 Operating expenses General and administrative expenses (10,356) Exploration expenses (343) Selling expenses (5,747) Workers profit sharing (655) Restructuring costs (1,462) Other, net (607) Total operating expenses (19,170) Operating income 4,296 Other income/expenses Share of profit of associate 1,533 Finance income 83 Finance costs (2,526) Total other income/(expenses) (910) Income before income tax 3,386 Income tax (2,750) Net income Licence Contracts for the Exploration and Exploitation of Hydrocarbons 4.1 The Maple Gas Corporation del Perú, Sucursal Peruana On 30 March 1994 The Maple Gas Corporation del Perú, Sucursal Peruana ( Maple Gas ), signed a Licence Contract for the Exploitation of Hydrocarbons in blocks 31-B and 31-D, located in the Peruvian jungle. The most significant clauses of the Licence Contract are as follows: (a) (b) (c) (d) Term of the Licence Contract The term of the Licence Contract is 20 years from the subscription date (30 March 1994) and can be extended to a maximum total term of 30 years. Minimum work programme Maple Gas was committed, amongst other obligations, to carry out a minimum work programme beginning at the signing date of the contract. The minimum work programme, which has been completed, included, amongst other things, the drilling and work over of wells, and installation of facilities in production areas. Royalties According to Law Organic Law on Hydrocarbons and Royalty and Retributions regulations approved by Supreme Decree EM, Maple Gas pays a royalty in cash, applying a percentage to the value of hydrocarbons produced. The royalty percentage depends on the value of the crude oil. Taxation For the activities in Blocks 31-B and 31-D, Maple Gas is subject to the common tax regulations in force at the date of the signing of the Licence Contract (30 March 1994), 245

254 as well as the specific regulations included in Law 26221, Organic Law on Hydrocarbons and its amendments. (e) Financial rights The Central Bank of Perú, on behalf of the Peruvian State, guarantees Maple Gas the availability and remittance abroad of foreign currency by virtue of the provisions set forth in Law Maple Production del Perú, Sucursal Peruana On 6 March 2001, Maple Production del Perú, Sucursal Peruana ( Maple Production ), signed a Licence Contract for the Exploration and Exploitation of Hydrocarbons in block 31-E, located in the Peruvian jungle. The most significant clauses of the Licence Contract are as follows: (a) Term of the Licence Contract The term of the Licence Contract for the exploitation of oil and natural gas is 30 years and 40 years, respectively, from the signing date (6 March 2001). (b) Minimum work programme Maple Production is committed, amongst other obligations, to carrying out a minimum work programme in a period of 50 months, beginning at the signing date of the Licence Contract. On 5 April 2006, Maple Production signed an addendum to the Licence Contract extending the exploration period to 84 months, with the minimum work programme divided into four periods. The first two periods, which have been completed, included the drilling of two wells and performing a seismic evaluation. The last two periods of the minimum work programme will last 34 months from 10 April 2006 have not yet been completed. (c) Royalties According to Law 26221, Organic Law on Hydrocarbons and the Royalty and Retributions regulations approved by Supreme Decree EM, Maple Production is to pay a royalty in cash, applying a percentage to the value of hydrocarbons produced. The percentage varies from 5 to 20% depending on the production of crude oil, as defined in the addendum to the Licence Contract. (d) Taxation Maple Production is subject to the common tax regulations in force at the date of the signing of the Licence Contract (6 March 2001), as well as the specific regulations included in Law 26221, Organic Law on Hydrocarbons and its amendments. (e) Financial rights The Central Bank of Peru, on behalf of the Peruvian State, guarantees Maple Production the availability and remittance abroad of foreign currency by virtue of the provisions set forth in Law Segment information The Group s primary format for segment reporting is business segments and the secondary format is geographical segments. The risks and returns of the Group s operations are primarily determined by the nature of the different activities that the Group engages in, rather than the geographical location of these operations. This is reflected by the Group s organisational structure and the Group s internal financial reporting systems. The Group has two reportable operating segments: Exploration and Production and Refining and Marketing. Exploration and Production activities include oil exploration and field development and production, together with pipeline transportation. The activities of Refining and Marketing include refining of crude oil and natural gasoline and petrochemicals manufacturing and marketing. Sales between segments are realised on normal commercial terms and conditions, which are determined based on the international market price of crude oil. Segment revenue, segment 246

255 expense and segment result include transfers between business segments. These transactions and any unrealised profits and losses are eliminated on consolidation. The Group s geographical segments are primarily based in Peru. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. Primary reporting format Business segments Exploration and production US$ 000 Refining and marketing US$ 000 Other and corporate US$ 000 Consolidation adjustments and eliminations US$ 000 Total Group US$ 000 Year ended 31 December 2006 Revenue Sales to external customers 56, ,712 Inter-segment sales 471 (471) Total , (471) 56,712 Results Operating income/(loss) (1,001) 2,454 (431) 87 1,109 Net finance costs and other income/ (expenses), net (106) (199) 1,395 (1,581) (491) Share of profit of associate Profit/(loss) before income tax (1,107) 2,255 1,329 (1,494) 983 Income tax expense (635) Net profit for the period 348 Assets and liabilities Segment assets 21,810 72,304 19,146 (42,990) 70,270 Goodwill 3,833 14,482 18,315 Investment in associate 24,124 24,124 25,643 86,786 43,270 (42,990) 112,709 Segment liabilities 18,245 56,246 23,002 (48,590) 48,903 Other segment information Capital expenditure Intangible assets Plant and equipment Depreciation Amortisation Secondary reporting format Geographical segments The Group s two business segments operate in two different geographical areas, even though they are managed from Peru. The home country of the Group is the British Virgin Islands. The areas of operation are principally the exploration, exploitation, refining and marketing of natural gasoline, oil and its derivatives. Sales and capital expenditure All the Group s sales and capital expenditures are in Peru. 247

256 Total assets Total assets are allocated based on where the assets are located: As at 31 December 2006 US$ 000 Peru 112,189 British Virgin Islands , Revenue 12 months to 31 December 2006 US$ 000 Sales of goods 56,532 Services provided to associate, note 25 (a) 177 Services provided to other parties 3 56, Cost of sales, general and administrative and selling expenses 12 months to 31 December 2006 US$ 000 Natural gasoline, note 25 (b) 36,206 Raw materials 13,135 Freight expenses 1,574 Professional fees and commissions 1,231 Personnel expenses 1,127 Royalties, note Amortisation, note Supplies and production equipment costs 266 Value added tax not recoverable 259 Sundry production costs 213 Depreciation, note Allowance for doubtful accounts, note Inventories variation (535) Other expenses 662 Total 55,305 Classified as: Cost of sales 50,370 Administrative expenses 2,789 Selling expenses 2,146 55,305 Personnel expense 12 months to 31 December 2006 US$ 000 Wages and salaries 462 Employee social benefits 385 Bonuses 148 Vacations 44 Other social expenses 88 1,

257 The distribution of personnel expenses was as follows: 12 months to 31 December 2006 US$ 000 Cost of sales 411 General and administrative expenses 596 Selling expenses 120 1, Finance income 12 months to 31 December 2006 US$ 000 Interest on trade accounts receivable, see Note Interest on deposits Finance costs 12 months to 31 December 2006 US$ 000 Interest on trade accounts payable, see Note Interest on loans 257 Tax on financial transactions 120 Bank fees 27 Exchange difference Income tax and workers profit sharing (a) Income tax and workers profit sharing regulations Maple and its Subsidiaries incorporated in British Virgin Islands are not subject to income tax. Peruvian Subsidiaries are subject to the Peruvian Tax System. The tax regimes applicable to the Peruvian Subsidiaries are the following: Peruvian related entity Tax regime applicable Income tax rate The Maple Gas Exploitation activities of hydrocarbons in Blocks 31-B 30% of taxable income Corporation del Perú, Sucursal Peruana and 31-D are subject to the common Peruvian tax regulations in force as at 30 March 1994 (date of the signing of the License Contract). Refining and commercialisation activities of hydrocarbons are subject the current Peruvian tax regime. Acer Comercial S.R.L. and Maple Etanol S.R.L. Current Peruvian tax regime 30% of taxable income Maple Production del Perú, Sucursal Peruana Exploration activities in Block 31-E are subject to the common Peruvian tax regulations in force as at 6 March 2001 (the date of the signing of the License Contract). 20% plus 2% of taxable income According to Peruvian regulations, oil & gas companies that have more than 20 employees must pay a profit sharing equivalent to 10 percent of taxable income. The Maple Gas Corporation del Peru, Sucursal Peruana, is the only entity in the Group with more than 20 employees. 249

258 (b) Income tax and workers profit sharing expense/(profit) 12 months to 31 December 2006 US$ 000 Income tax Current 920 Deferred (285) 635 Workers profit sharing Current 55 Deferred (100) (45) (c) The movement in the deferred income tax and workers profit sharing liability is as follows Balance as at 1 January 2006 US$ 000 Acquisition of Maple BVI US$ 000 Income tax and workers profit sharing US$ 000 Balance as at 31 December 2006 US$ 000 Deferred asset Other (9) 88 Deferred liability Exploration and development costs (64) (3) (67) Contractual rights and others (17,632) 190 (17,442) Oil wells (2,276) 21 (2,255) Capital lease (304) 22 (282) Inventories (270) 164 (106) (20,546) 394 (20,152) Deferred asset (liability), net 39 (20,488) 385 (20,064) (d) The following table provides a reconciliation between income tax expense and the product of accounting profit multiplied by the tax rate for the years ended 31 December 2006: 2006 US$ 000 Income before income tax 983 Add Non-taxable items 980 Income subject to tax 1,963 Legal consolidated rate 30% At consolidated rate 589 Permanent items 46 Effective current tax expense

259 11. Plant and equipment, net Installations US$ 000 Oil wells and equipment US$ 000 Computer equipment US$ 000 Vehicles US$ 000 Other US$ 000 Total US$ 000 At 1 January 2006, net of accumulated depreciation Acquisition from Maple BVI 261 7, ,679 Additions Adjustments 31 (1) 30 Depreciation charge for the period (24) (78) (8) (18) (3) (131) At 31 December 2006, net of accumulated depreciation 237 7, ,712 Net book value at 1 January 2006 Cost Accumulated depreciation (58) (7) (7) (4) (76) Net carrying amount Net book value at 31 December 2006 Cost 261 7, ,843 Accumulated depreciation (24) (78) (8) (18) (3) (131) Net carrying amount 237 7, ,712 Fully depreciated assets amounted to US$59,000 as at 31 December Currently, these assets are being used by the Group. As at 31 December 2006, work in progress amounted to US$164,000. As at 31 December 2006, the net book value of assets under finance leases was as follows (see minimum future lease payments in note 20): As at 31 December 2006 US$ 000 Vehicles 275 Computer equipment 30 Other equipment The distribution of annual depreciation was as follows: 2006 US$ 000 Cost of sales 76 General and administrative expenses 44 Selling expenses 4 Total charged to income statement (note 7) 124 Capitalised within intangibles (exploration costs) 7 Total depreciation charged for the year

260 12. Intangibles, net Exploration costs US$ 000 Software and others US$ 000 Contractual rights and other US$ 000 Goodwill US$ 000 Total US$ 000 At 1 January 2006, net of accumulated amortisation Acquisition from Maple BVI 89 45,145 18,315 63,549 Additions Write-off of exploration expenditures (343) (343) Amortisation charge for the period (12) (480) (492) At 31 December 2006, net of accumulated amortisation ,665 18,315 63,259 Net book value at 1 January 2006 Cost Accumulated amortisation Net carrying amount Net book value at 31 December 2006 Cost ,145 18,315 63,751 Accumulated amortisation (12) (480) (492) Net carrying amount ,665 18,315 63,259 Contractual rights and other intangibles correspond to the fair value of the identifiable intangibles relating to the acquisition of Maple BVI and its related entities (see notes 3 & 4). This amount has been determined on a provisional basis and is mangement s best estimate as at the date of approval of this financial information. Impairment testing of goodwill Goodwill on the acquisition of Maple BVI has been allocated to the following cash- generating units: US$ 000 Exploration and Production 3,348 Refining and Marketing 14,967 18,315 The recoverable amount of the cash generating units has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by senior management covering the Period The period considered in assessing the value in use of each cash generating unit is greater than five years owing to the long term nature of the oil and gas industry. The capital intensive nature of the exploration process ensures that only those locations with sufficient reserves to cover the costs are developed. As a result, the benefits of successful sites are typically recognised over a period in excess of 15 years. The pre-tax discount rate applied to cash flow projections is 10.9%. Key assumptions used in calculations The calculation of value in use for the cash generating units is most sensitive to the following assumptions: Production volumes West Texas Intermediate (WTI) Price Oil royalty costs; and Natural gasoline costs Production volumes Sales volumes were derived from the estimated proved and probable production in Blocks 31-B and 31-D; these volumes are expected to increase as a result of 252

261 work-overs, new development wells and water injection. The model makes assumptions as to the timing and quantum of capital expenditures needed to implement the required work programme. WTI price Product prices were based on estimated future WTI prices per barrel plus or minus a price differential adjustment specific to every product, determined on the basis of the historical correlation of the netbacks by product to WTI. Future WTI prices were based on quoted futures prices up to 2015, less a financing cost, and US$50 per barrel thereafter. Oil royalty costs The royalty cost was based on a formula to obtain the basket oil price, which takes into account the newly agreed royalty caps, applied to an assumed oil basket price. The basket price has been estimated based on its historical correlation with WTI prices. Natural gasoline costs The largest component of cost of sales is the natural gasolines purchased from Aguaytía. The cost in the model is derived from assumptions for Nafta and Jet Kero prices, according to the formula in the contract with Aguaytía. Nafta and Jet Kero prices are, in turn, based on the assumed WTI prices plus an assumed price differential to WTI. The price differential to WTI has been assumed on the basis of the historical correlation between Nafta and Jet Kero prices to WTI. Sensitivity to changes in assumptions As the provisional fair values of the net assets and goodwill acquired on the acquisition of Maple BVI are based on an estimate of the value of the Maple BVI business, the recoverability of the carrying amount of goodwill is sensitive to any adverse changes in the assumptions underlying the valuation. 13. Investment in associate Aguaytía Energy LLC is a limited liability company incorporated in the State of Delaware, United States of America. Through its four Peruvian subsidiaries, Aguaytía carries out the following activities within Peru: Exploitation of a natural gas deposit, located in the central jungle of Peru Processing of natural gas to obtain natural gas liquids Fractionation of natural gas liquids into liquefied petroleum gas and natural gasoline with the natural gasoline sold to the Group Liquefied petroleum gas transportation and distribution Electric power generation and transmission TMC has a beneficial interest in 9,448 cash units and 18,640 non-cash units in Aguaytía, representing an economic interest of approximately 14.3%. These units are held via an investment in Maple Peru Holdings Corporation, a holding company in which the Group has a 44% voting interest, and were acquired as part of the acquisition of Maple BVI. Maple has used the equity accounting method to record its interest in Maple Peru Holdings Corporation and thus, ultimately, its interest in the 9,448 cash units and 18,640 non-cash units in Aguaytía. The movement in the investment in associate balance for the year ended 31 December 2006 is set out in the following table: US$ 000 Acquisition of investment at 30 November 2006, at fair value 24,203 Share of profit for December Dividends in December 2006 (444) As at 31 December ,

262 The following table illustrates the summarised financial information of Aguaytía as at 31 December 2006 and for the year then ended, after adjustments to harmonise Aguaytía s accounting policies to those of TMC: US$ 000 Balance sheet: Current assets 44,803 Non-current assets 203,365 Current liabilities (15,574) Non-current liabilities (61,661) Net assets 170,933 Revenue and profit Revenue 120,757 Profit for the year ,899 Profit for December , Due from shareholders As at 31 December 2006, the Company has made advances to the following individual shareholders: As at 31 December 2006 US$ 000 The Maple Gas Corporation 660 Carlos de la Guerra 271 Rex W. Canon 87 Edgardo Castro 42 Eduardo Maldonado 41 Tony Hines 10 Petrus Fernandini 5 Gonzalo Escajadillo 2 1,118 Included within the balance due from The Maple Gas Corporation are three promissory notes for US$313,920, US$144,534 and US$38,080, respectively. Included within the balance due from Carlos de la Guerra is a promissory note for US$182,409. Promissory Note of US$313,920 with Maple Gas Corporation (MGC) Provided that Maple BVI receives payment of the US$313,920 in full from MGC on or before 29 April 2007, Maple BVI agrees to forgive all interest accruing on this promissory note. If Maple BVI has not received the US$313,920 in full on or before 29 April 2007 but has received it before 29 April 2008, the interest will be calculated at 5% per annum on the unpaid balance from 30 April 2007 through to the date of the full and final payment. If MGC fails to pay the balance on or before 29 April 2008, the following will be payable: (i) the US$313,920, (ii) all interest that accrued from 30 April 2002 until the date of this Agreement upon the original amount of US$313,920, (iii) all interest that accrued from the date of the agreement until 30 April 2007 upon the unpaid balance of the US$313,920, and (iv) interest calculated at 5% per annum of the unpaid balance of the US$313,920 from 30 April 2007 until the date of final payment in full. MGC has not paid this note as of the date of this report. Promissory notes of US$144,534 and US$38,080 with MGC, and of US$182,409 with Carlos de la Guerra Provided that Maple BVI receives payment in full of the Principal Amount from MGC and Carlos de la Guerra respectively on or before 29 April 2007, Maple BVI agrees to forgive all interest accruing on the Promissory Note. If Maple BVI does not receive payment in full on or before April 29, 2007 but receives it on or before 29 April 2008, Maple BVI agrees to accept an amount of interest of 5% on the unpaid balance of the Principal Amount from 30 April 2007 through to the date of full and final payment. If MGC or Carlos de la Guerra fails to pay on or 254

263 before 29 April 2008, the following will be payable: (i) the unpaid balance of the Principal Amount, (ii) all interest that accrued from 30 April 2002 until the date of this Agreement upon the unpaid balance of the Principal Amount, (iii) all interest that accrued from the date of this agreement until 30 April 2007 upon the unpaid balance of the Principal Amount and (iv) interest calculated at 5% per annum of the unpaid balance of the Principal Amount from 30 April 2007 through to the date of full and final payment. MGC and Carlos de la Guerra have not paid their notes as of the date of this document. Other loans Other loans outstanding as at 31 December 2006 do not accrue interest, and are expected to be repaid during the second semester of The directors believe that the carrying value of these loans and receivables is a reasonable approximation of their fair values. 15. Prepaid taxes and expenses As at 31 December 2006 US$ 000 Value added tax receivable 911 Pre-paid insurance 317 Other prepayments 995 2, Inventories As at 31 December 2006 US$ 000 Finished products 3,313 Products in process 3,699 Raw materials 596 Supplies 752 8,360 There were no write-downs of inventories recognised as an expense during 2006 or reversals in write-downs in this period. As at 31 December 2006, Maple BVI has pledged US$6,788,000 of its inventory in favour of Peruvian banks as collateral against borrowings received, see note Trade and other receivables, net As at 31 December 2006 US$ 000 Trade accounts receivable from third parties 1,270 Loans to Agrícola Cerro Colorado, note Receivables from Aguaytía, note Receivables from Petroanderra S.A. 107 Other receivables 485 2,498 Allowance for bad and doubtful accounts (515) 1,983 Trade receivables are non-interest bearing (except for the receivables with Maple BVI, see Note 25) and are generally collected in 45 days or less. 255

264 The movements in the allowance for trade receivables during the period is shown below: 2006 US$ 000 Balance as at 1 January Acquisition of Maple BVI Group 323 Allowance for bad and doubtful debts charged to income statement 42 Exchange difference 1 Balance as at 31 December Cash and cash equivalents As at 31 December 2006 US$ 000 Cash at bank and in hand 1,659 Trust fund account 4 Cash for the purpose of the consolidated statement of cash flows 1,663 Guarantee deposits 438 Restricted fund (see legal claims in note 24) 200 2,301 Maple BVI maintains a trust fund contract with Acer Comercial S.R.L. as trustee, to guarantee its obligations with Banco de Crédito del Perú, in connection with a loan contract for US$5,500,000, see note 20. Cash at bank earns no interest. As at 31 December 2006 and 2005, Maple BVI and Maple Production maintained deposits which mainly guarantee the compliance of contracts signed with third parties. These deposits earn interest at an annual average rate between 1% and 4%, respectively, and mature in 360 days. 19. Equity (a) Capital stock As at 31 December 2006, the authorised capital stock of TMC comprised 16,000,000 shares of common stock, of which 1,619,371 shares were issued and outstanding, each having a par value of US$0.01. All outstanding shares of capital stock are fully paid. The movement in the number of shares in issue during 2006 was as follows: Number of shares As at 1 January ,500 Stock split (100:1) 940, ,000 Redemption of shares (19) Shares issued for the acquisition of the Maple BVI group 197,533 Shares issued for the acquisition of minority interests in the TMC group 471,857 As at 31 December ,619,371 Common shares of TMC have one vote each, are subject to redemption, purchase or acquisition, and have the same rights with regard to dividends and distributions upon liquidation. (b) Additional capital This reserve relates to the premium received on shares issued over and above the nominal value of those shares. 256

265 (c) Dividend distribution During 2006, the Group declared and paid dividends to its shareholders. Dividends per share were US$0.596 in Dividends to non-domiciled companies and individuals are subject to a 4.1% withholding tax. 20. Long-term debt Final maturity 2006 US$ 000 Payments Annual interest rate Banco de Crédito del Perú Quarterly Three-month Libor plus 4.5% ,300 Banco de Crédito del Perú Quarterly Three-month Libor plus 4.5% ,889 SUNAT and SENATI Monthly 15.0% annual ,369 Banco Financiero Annual 10.5% annual ,114 Banco de Comercio Annual 12.0% annual ,000 Lease agreements Monthly 235 9,907 Less: Current portion (3,168) Non-current portion 6,739 The maturity of long-term debt is set out in note 27. Banco de Crédito del Peru In December 2004, the Peru branch of Maple BVI (Maple Gas) signed a mid-term loan contract with Banco del Crédito del Perú for US$5,500,000, which as at 31 December 2006 had an outstanding balance of US$3,300,000. On 29 September 2005 and 16 February 2006, Maple Gas signed addendums to this contract, following which they received additional loans amounting to US$3,399,000, which as at 31 December 2006 had an outstanding balance of US$2,889,000. These loans are guaranteed by a stand-by letter from Acer Comercial S.R.L. in favour of the bank and a trust fund of cash flows over: Proceeds from the difference between the amount paid by Maple Gas to Acer Comercial S.R.L. and the amount paid by the latter to Aguaytía Energy del Perú S.R.L. Proceeds from sales by Maple Gas to Petroperu and other clients, which represent at least 10% of its annual sales. Proceeds from the income, benefits, distributions and dividends or any amount due to Maple BVI from Maple Gas Development Corporation or Maple Peru Holding Corporation as a result of its interest in Aguaytía Energy, LLC, except for any portion attributable to Scotiabank Perú S.A.A. Cash flows relating to an insurance policy endorsed to the trustee under the trust fund contract. Under the terms of the loan agreement with Banco Credito del Peru (BCP), Maple Gas is required on a quarterly basis to comply with the following financial ratios: Total debt to annualised EBITDA must be less than 2.5. EBIT to financial expense must be greater than 3.0. Debt service coverage must be greater than 1.1. As at 30 June 2006, prior to the acquisition of Maple BVI by TMC, Maple Gas breached its Debt Service Coverage Ratio. As a result Banco de Crédito del Perú was entitled to demand immediate repayment of the debt. The bank was notified about the covenant breach and agreed to waive the default as at 30 June Maple Gas complied with its covenant commitments as at 31 December SUNAT / SENATI The SUNAT/SENATI balance relates to an arrangement entered into with the Peruvian tax authorities to pay an old tax liability over a 10 year period. This liability, denominated in 257

266 Nuevos Soles (NS, Peruvian currency) rather than U.S. dollars, was originally for NS7.43 million, accrues interest at a fixed rate of 15% annually, and is being paid by equal monthly instalments (including interest) of approximately NS120,000 (approximately NS1.44 million annually). Banco Financiero and Banco de Comercio These loan contracts were obtained for working capital purposes. No specific guarantees have been granted for these loans. There are no specific covenants associated with these facilities. Lease agreements This balance comprises finance lease contracts over vehicles and equipment. These leases mature in stages over the period to May 2008 and are secured against the assets under the finance leases. Future minimum lease payments under finance leases as at 31 December 2006 are set out below: Minimum future lease payments US$ 000 Finance charges US$ 000 Net obligation US$ 000 Payable within 1 year 141 (13) to 5 years 118 (11) (24) Trade accounts payable As at 31 December 2006 US$ 000 Due to Aguaytía, note 25 6,176 Due to third parties 3,199 9,375 Trade accounts payable mainly originate from the acquisition of natural gasoline, materials, supplies and spare parts. Trade payables are normally settled on 60-day terms and may bear interest. 22. Interest-bearing loans and borrowings As at 31 December 2006 US$ 000 Overdrafts 311 Bank loans Scotiabank Perú S.A.A. 1,830 Banco de Crédito del Perú 700 Banco Financiero 537 Banco de Comercio 201 Other 250 3,829 Current portion of long-term loans 3,168 Total interest bearing loans and borrowings 6,997 As at 31 December 2006, bank loans had been obtained for working capital purposes and accrued interest calculated at an annual weighted average interest rate of 9%. As at 31 December 2006, the other loans balance of US$250,000 had a current maturity and accrued interest at a rate of 10% per annum. 258

267 The Group s inventories have been pledged at 31 December 2006 to guarantee certain of the loans at that date, as set out in the following table: As at 31 December 2006 US$ 000 Scotiabank Perú S.A.A. 3,549 Banco Financiero 1,799 Banco de Comercio 1,440 6, Other current liabilities As at 31 December 2006 US$ 000 Provision for tax contingencies 3,062 Remuneration payable 1,173 Taxes payable 569 Accounts payable to Petroanderra 192 Advances from clients 179 Provision for contingencies 113 Accounts payable to Scotiabank 103 Interest payable 53 Other liabilities 284 5,728 Non current portion (3,062) Current portion 2,666 As part of its acquisition accounting of Maple BVI, TMC allocated a fair value to its tax contingencies of US$ 3,062,277, despite management considering this contingency to be not probable. This fair value reflects the fact that an external investor would view the contingency as a potential risk which they would seek to take into account when valuing the consideration to be offered for Maple BVI. 24. Commitments and Contingencies Following a review of The Maple Gas Corporation del Perú, Sucursal Peruana s ( the Branch ) 2001 income tax return, on 9 December 2003 the Peruvian Tax Administration issued an additional tax assessment to the Branch for US$2,222,729, including interest to 27 November On 7 January 2004, the Branch filed an appeal with the Tax Administration. This tax dispute remained unresolved as at 31 December The main issues arising under the assessments were the following: (a) (b) Interest expense (assessment of US$627,000 of tax and US$1,480,000 of interest and surcharges accrued as at 31 December 2006): The Tax Administration has disallowed interest expenses related to loans granted to the Branch in prior years. The Branch is robustly contesting this assessment. Bad debt provision (assessment of US$780,000 of tax and US$1,841,000 of interest and surcharges accrued as at 31 December 2006): The Tax Administration has disallowed a bad debt provision booked by the Branch, relating to an unpaid receivable arising from the assignment of Block 31-C to Aguaytía in Again, the Branch is robustly contesting the Tax Administration s assessment. 259

268 The tax authorities are legally entitled to review and, if necessary, adjust the income tax calculated by Peruvian related entities during the four years subsequent to the year of the related tax return filing. The income tax and value added tax returns of the following years are pending review by the tax authorities: Entity Open years Maple Production del Perú, Sucursal Peruana The Maple Gas Corporation del Perú, Sucursal Peruana Acer Comercial S.R.L Maple Etanol S.R.L Environmental matters Maple Gas and Maple Production are subject to the Code for the Environment and Natural Resources. This code requires the companies to prepare an Environmental Impact Assessment (EIA) approved by a competent authority. In connection with the Code and its rulings, Maple Gas and Maple Production filed the corresponding EIAs, which were duly approved in 1996 and 2003, respectively. In addition, according to the License Contract mentioned in note 4 and to the Refinery and Sales Plant Lease Contract mentioned below, Maple Gas is not responsible for environmental damage caused before the beginning of its operations. As at 31 December 2006, management believes that the Group is in compliance with the current environmental regulations and no provisions are required with respect to environmental matters. Operating Lease Contract of refinery and sales plant and administrative facilities On 29 March and 21 April 2004, Maple Gas signed an operating lease contract with Petroperú S.A. for the Refinery and Sales plant in Pucallpa (Peruvian jungle) and an operating lease contract for the buildings and equipment in the same location. The annual rent amounts to U$583,798. The lease expires in 2014, but is renewable. Management intends to renew the lease. On 15 November , Maple Gas signed an operating lease contract for its administrative facilities located in Lima with Inversiones Centenario S.A.A.. The monthly rent amounts to US$24,138, which increases at a rate of 2.5% per annum, beginning on 15 November The lease expires in The minimum future lease payments are as follows: Office lease US$ 000 Refinery and sales plant US$ 000 Minimum future lease payments payable within 1 year to 5 years 1,541 2,335 Thereafter 1,204 7,188 Total 3,107 10,107 Decommissioning of oil production facilities Under its licence contracts for Blocks 31-B, 31-D and 31-E, at the end of the licence terms the Group is to deliver to the Peruvian State in good condition, all the wells, camps, pipelines, constructions and other facilities located in the licence areas. Accordingly, no obligation exists for the decommissioning of oil wells and production facilities or the refinery at the end of the license periods. Royalties The Group is required to pay royalties in cash on a fortnightly basis, applying specific percentages to the value of the hydrocarbons produced. The royalty expense was US$509,000 in Minimum work program As discussed in note 4, Maple Production has a commitment to perform a minimum work program on Block 31-E. 260

269 Legal claims (a) Payment claimed by Energy Services S.A. In 2000, The Maple Gas Corporation del Perú, Sucursal Peruana, was defendant in an action initiated by Energy Services S.A. for U$248,832 (including interest to 15 May 2000), related to the acquisition and installation of a pipeline. The Maple Gas Corporation del Perú, Sucursal Peruana, filed a counter-claim against Energy Services S.A. requesting the payment of approximately US$265,000 for various balances. On 11 April 2006, a Court found in favour of Energy Services S.A. and ordered The Maple Gas Corporation del Perú, Sucursal Peruana to pay US$170,148 plus interest. The Court ordered US$200,000 to be segregated from the Company s bank accounts, which is presented as a restricted fund in the combined balance sheet. On 23 May 2006, The Maple Companies Group appealed this decision and in January 2007, The Superior Court declared null the verdict of the lower court, on the basis that there had been a violation of The Maple Companies Group s right to due process, and ordered the judge to issue a new judgement, taking into consideration the arguments of The Maple Companies Group. The revised verdict is still pending. Based on the opinion of The Maple Companies Group s legal advisors, management consider that the new judgement will be favourable, and no provision for any liability has been made in this combined financial information. (b) Osinergmin Maple Gas is in dispute with Osinergmin, the Supervisory Organism for Energy and Mining, in connection with a fuel supply service provided at the Pucallpa airport. This dispute originated in Osinergmin claims that Maple Gas did not comply with the Regulation for Commercialisation of Fuels in that they used a truck to supply fuel which did not meet specifications. Osinergmin can impose a fine for up to approximately US$1 million for the period Maple Gas has been supplying fuel in the Pucallpa airport. In management s opinion, Maple was in full compliance with the regulations for supplying fuel. (c) Claim from Refinery workers On 17 November 2006, Maple Gas received notice from a group of 15 refinery workers asking for the reimbursement of their salaries for the work performed on holidays. The claim relates to remuneration not paid for work performed on the employees official holidays since they joined Maple Gas. The amount of the contingency is circa US$250,000. Management and its legal advisors consider that this claim will not result in a significant contingency on the basis that Maple compensated the days worked with time off in lieu, as permitted by current Peruvian labour regulations. Consequently, no provision was recorded at 31 December 2006 in connection with this contingency. (d) Other contingencies The Group is involved in other claims of a diverse nature. Management believes that any possible loss which may result from these claims will not have a materially adverse effect on the Company s financial position or reported results. Commitments to purchase natural gasoline from Aguaytía As discussed in note 25, under an agreement dated 24 July 1996, the Group has a commitment to acquire at a price derived from market prices all of the natural gasoline produced from the Cushabatay sand formation by Aguaytía over the life of Aguaytía s Block 31-C license contract (30 years from 30 Mar , extendable to 40 years). 261

270 25. Related parties disclosures Transactions with Aguaytía The Group had the following transactions with Aguaytía during the year ended 31 December 2006: (a) The Maple Gas Corporation del Perú, Sucursal Peruana, is party to an operation and maintenance agreement with Aguaytía Energy del Perú S.R.L. by means of which Aguaytía compensates The Maple Gas Corporation del Perú, Sucursal Peruana each month for its costs incurred in maintaining and operating Aguaytía s gas assets. In addition, based on an amendment to this contract, Aguaytía Energy del Perú S.R.L. pays general & administrative costs of US$275,000 per year and a productivity bonus of US$75,000 per year. Total revenues related to this service contract amounted to approximately US$176,000 for December 2006 and is recorded within revenue in the combined statements of income. (b) Acer Comercial S.R.L. has the right and is obliged to purchase natural gasoline from Aguaytía Energy del Peru S.R.L. During the year ended 31 December 2006, Acer Comercial S.R.L. purchased natural gasoline amounting to approximately US$36,509,000. These purchases were made at a price derived from a formula based on normal market prices and are recorded within cost of sales in the income statement. Payables with Aguaytía accrue interest at an annual rate of prime rate plus 2%. The associated interest expense for 2006 was US$274,000. (c) Cash dividends received from Aguaytía Energy, LLC amounted to US$644,000 in Out of this total, US$278,000 was assigned to a third party investor. Transactions with Maple BVI (until 30 November 2006) The Group had the following transactions with Maple BVI and its Peruvian Branch, Maple Gas, during the first 11 months of the year, until its acquisition on 30 November 2006: (a) On 15 January 2006, Maple Gas signed a Purchase and Sale Agreement of Solvent 1 and 3 with Acer Comercial S.R.L. (Acer) a subsidiary of TMC. These transactions accrue interest at market rates as published by the Superintendence of Banks and Insurances. Sales made to Acer from January to November 2006 were US$12,784,000. Receivables from Maple Gas yield interest at an annual interest rate of prime rate plus 2%. Interest income for 2006 was US$207,000. (b) Pursuant to a Purchase and Sale Agreement signed with Acer on 5 December 1997, Acer must sell Maple Gas the natural gasoline acquired from Aguaytía. Sales of natural gasoline to Maple Gas were US$34,738,000 from January to 30 November As a result of the above and other minor transactions, the Group has the following accounts receivable and payable with Aguaytía and Maple Gas: As at 31 December 2006 US$ 000 Accounts receivable Aguaytía Energy del Perú S.R.L., note Accounts payable Aguaytía Energy del Perú S.R.L., note 21 6,176 All outstanding balances at the year-end are interest free and will be settled in cash. Accounts receivable are unsecured. Accounts payable are guaranteed by stand-by letters of credit from Peruvian banks signed by Maple Gas in favour of Aguaytía which guarantees the compliance of the payment obligation held by Acer. These stand-by letters of credit are renewed every 6 months and amounted to approximately US$3,725,000 as at 31 December

271 Transactions with other related parties The Group had the following transactions with other related parties during the year ended 31 December 2006: (a) Maple Gas has granted loans to employees amounting to US$239,000 as at 31 December These loans do not bear interest and do no have specific maturities. (b) Maple has made loans to shareholders amounting to US$1,117,000 as at 31 December Included in these amounts are advances to key management totalling approximately US$410,000. (c) As at 31 December 2005, the TMC Group had loans from Maple Gas totalling US$3,601,000. These intercompany loans were eliminated in 2006 on the acquisition of Maple BVI. (d) Maple maintains a valuation allowance of US$472,000 as at 31 December 2006 against a loan granted to Agricola Cerro Colorado in the past. In 2006, except for allowance against the loan to Agricola Cerro Colorado mentioned above, the Group has not made any provision for doubtful debts relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Remuneration of key management Compensation of key management personnel amounted to US$184,000 in December 2006, comprising short-term employee benefits. No post-retirement or termination benefits, nor sharebased payments were paid to key management. 26. Financial risk management objectives and policies The Group s principal financial instruments comprise bank loans, and cash and short-term deposits. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main risks arising from the Group s financial instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit risk. Management reviews and agrees policies for managing each of these risks, which are summarised below. Cash flow interest rate risk The Group s exposure to risk associated with changes in market interest rates relates primarily to the Group s long-term debt obligations with floating interest rates. The Group s policy is to periodically negotiate its interest rates with local banks and, on 8 February 2005, it entered into an interest rate swap in which the Group agreed to exchange, at specified intervals, the difference between 3.99% fixed and three-month Libor interest rates based on the outstanding notional principal amount of the US$5,500,000 loan from Banco de Crédito del Perú. This swap matures on 21 December 2009 and the net loss of US$43,000 for the year to 31 December 2006 was recorded within finance costs in the consolidated income statement. The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables constant, of the Group s profit before tax (through the impact on floating rate borrowings). There is no additional impact on the Group s equity. Increase/decrease in basis points Effect on profit before tax US$ U.S. Dollar + 20 (63) U.S. Dollar Foreign currency risk As a result of its operations in Peru, the Group s balance sheet can be affected by movements in the US$/Nuevos Soles exchange rate. The Group seeks to mitigate the effect of its currency exposure by carrying out almost all of its transactions in U.S. Dollars; as a result, the Group s 263

272 exposure to foreign currency risk is minimal. As at 31 December 2006, the assets and liabilities in Nuevos Soles, were: NS 000 Assets Trade and other receivables 14,319 Cash and cash equivalents 1,729 16,048 Liabilities Long-term debt 4,373 Trade accounts payable 12,623 Other current liabilities 2,804 19,800 Net liability position 3,752 As at 31 December 2006, the loss from exchange differences recognised in the consolidated statement of income, amounted to US$25,000. The following table demonstrates the sensitivity of the Group s profit before tax to a reasonably possible change in the U.S. Dollar exchange rate, with all other variables held constant. Increase/decrease in dollar rate Effect on profit before tax US$ U.S. Dollar + 5% 3 5% (3) Credit risk The Group only trades with recognised, creditworthy third parties. It is the Group s policy that all customers who wish to trade on credit terms are subject to credit verification procedures and collateral is required in most cases. In addition, receivable balances are monitored on an ongoing basis with the result that the Group s exposure to bad debts is not significant. With respect to credit risk arising from cash and cash equivalents, the Group s exposure arises from the risk of default of the counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalent in the balance sheet. Liquidity risk The Group s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans. The Group s policy is to have medium-term maturity loans. The table below summarises the maturity profile of the Group s financial liabilities as at 31 December 2006 based on contractual undiscounted payments. On demand US$ 000 Less than 3 months US$ to 12 months US$ to 5 years US$ 000 Over 5 years US$ 000 Total US$ 000 Year ended 31 December 2006 Interest bearing loans and borrowings 2,669 1,439 2,889 6,739 13,736 Other liabilities 1, ,066 3,062 5,728 Trade and other payables 9, , Financial instruments Fair value The carrying amount of the Group s current financial assets and liabilities approximates to their fair value due to their current maturity. The fair value of the long-term debt has been calculated by discounting the expected future cash flows, based on the Group s current incremental borrowing rates for similar types and maturities 264

273 of borrowing. This debt accrues interest at floating rates, so the fair value of this long-term debt is estimated not to be materially different from its carrying value. The Group has an open interest rate swap position as at the year end, the fair value of which is not material. Due to its immaterial nature, the swap has not been included within the Group s assets and liabilities. Interest rate risk The following table sets out the carrying amount, by maturity, of the Group s financial instruments that are exposed to interest rate risk: Within 1 year US$ years US$ years US$ years US$ years US$ 000 Total US$ 000 As at 31 December 2006 Fixed rate Bank overdrafts Long-term debt SUNAT and SENATI ,369 Floating rate Cash assets Bank loans Scotiabank Perú S.A.A. 1,830 1,830 Banco de Credito del Peru Banco Financiero Banco de Comercio Other Long-term debt Banco de Crédito del Peru 1,780 1,780 1, ,190 Banco Financiero 1,114 1,114 Banco de Comercio 1,000 1,000 Lease agreements Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The other financial instruments of the Group that are not included in the above tables are non-interest bearing and are not subject to interest rate risk. 28. Subsequent events Share exchange agreement On 7 February 2007, TMC entered into a share exchange agreement with the shareholders of Maple Energy plc, whereby on 8 February 2007 Maple Energy plc acquired 1,619,371 ordinary shares in TMC (representing 100% of the issued share capital of TMC), in exchange for 48,581,113 Ordinary Shares in Maple Energy plc. As a result, Maple Energy plc became the parent of TMC. Investment Agreement On 12 March 2007, Maple Energy and Maple signed an investment agreement with Infraestructura, Servicios Públicos y Recursos Naturales, an investment fund organised under the laws of Peru (the Purchaser). On 23 March 2007 (the Closing Date), TMC issued 199,922 shares of common stock to the Purchaser, such shares representing % of the total equity interests of Maple, for an investment of US$10 million. Ethanol project On 5 January 2007, Maple Etanol S.R.L. (Maple Etanol) signed a contract with the Peruvian government to acquire untilled lands for the cultivation of sugar cane and to develop an industrial project for producing automotive ethanol. By means of this contract, Maple Etanol acquired land for US$640,000, and committed to the following: To invest US$32,029,000 over a five-year term. 265

274 To pay to a local region, US$500,000 a year for 20 years, resulting in a total payment of US$10 million, with the initial payment due at the end of the first year of commercial operation. To obtain a bank guarantee in favour of the Peruvian state for US$3,202,000, equivalent to 10% of total investment commitment, to guarantee compliance with the investment commitments. The required bank guarantee will reduce as Maple Etanol carries out the committed investment. 29. Reconciliation from Peru GAAP to IFRS The table below reconciles the consolidated net assets of TMC as at 31 December 2006 and its profit for the year to 31 December 2006 from Peru GAAP to IFRS: 2006 US$ 000 Net assets per Peru GAAP (see Part V Section 9) 120,312 Write-off of historic exploration costs under the successful efforts policy (7,603) Net assets per IFRS 112, US$ 000 Net income per Peru GAAP (see Part V Section 9) 691 Write-off of exploration costs in the year under the successful efforts policy (343) Net income per IFRS 348 The adjustments to net assets from Peru GAAP to IFRS represent the impact of changing from full cost accounting under Peru GAAP to successful efforts accounting under IFRS. 266

275 SECTION 6 ACCOUNTANT S REPORT ON THE MAPLE COMPANIES, LIMITED Grant Thornton Corporate Finance Grant Thornton UK LLP Chartered Accountants UK member of Grant Thornton International Grant Thornton House Melton Street London NW1 2EP T +44 (0) F +44 (0) DX 2100 EUSTON Grant Thornton UK LLP is a limited liability partnership registered in England and Wales: No.OC Registered office: Grant Thornton House, Melton Street, Euston Square, London NW1 2EP. A list of members is available from our registered office. Grant Thornton UK LLP is authorised and regulated by the Financial Services Authority for investment business. The Directors Maple Energy plc 70 Sir John Rogerson s Quay Dublin 2 Ireland 6 July 2007 Dear Sirs THE MAPLE COMPANIES, LIMITED We report on the financial information of The Maple Companies, Limited set out in Part V Section 5 (the Financial Information). This Financial Information has been prepared for inclusion in the AIM admission document dated 6 July 2007 of Maple Energy plc (the Admission Document) on the basis of the accounting policies set out in the Financial Information. RESPONSIBILITIES This report is required by Paragraph (a) of Schedule Two of the AIM Rules for Companies and is given for the purpose of complying with that regulation and for no other purpose. Save for any responsibility arising under Paragraph (a) of Schedule Two of the AIM Rules for Companies to any person as and to the extent provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any responsibility to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Paragraph (a) of Schedule Two of the AIM Rules for Companies. The Directors of Maple Energy plc are responsible for preparing the Financial Information on the basis of preparation set out in Note 2.1 to the Financial Information, in accordance with the accounting policies set out in Note 2 to the Financial Information and in accordance with International Financial Reporting Standards as adopted by the European Union. It is our responsibility to form an opinion as to whether the Financial Information gives a true and fair view, for the purposes of the Admission Document, and to report our opinion to you. BASIS OF OPINION We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the Financial Information. It also included an assessment of the significant estimates and judgements made by those responsible for the preparation of the Financial Information and whether the accounting policies are appropriate to The Maple Companies, Limited s circumstances, consistently applied and adequately disclosed. We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Financial Information is free from material misstatement, whether caused by fraud or other irregularity or error. 267

276 Our work has not been carried out in accordance with auditing standards generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. OPINION In our opinion, the Financial Information gives, for the purposes of the Admission Document dated 6 July 2007, a true and fair view of the state of affairs of The Maple Companies, Limited as at the date stated and of its profit, cash flows and changes in equity for the period then ended in accordance with the basis of preparation set out in Note 2.1 and the accounting policies set out in Note 2. DECLARATION For the purposes of Paragraph (a) of Schedule Two of the AIM Rules for Companies we are responsible for this report as part of the Admission Document and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Admission Document in compliance with Schedule Two of the AIM Rules for Companies. Yours faithfully GRANT THORNTON UK LLP 268

277 SECTION 7 PRO FORMA NET ASSET STATEMENT Set out below is an unaudited pro forma statement of net assets of Maple as at 31 December The unaudited pro forma statement of net assets is prepared for illustrative purposes only to show the effect of the Placing and the business combination of The Maple Companies, Limited and Maple Energy plc as if they had occurred on 31 December Because of the nature of pro forma information, this information addresses a hypothetical situation and does not therefore represent the actual financial position or results of Maple. The pro forma statement of net assets has been prepared on the basis set out in the notes below. Maple Energy plc as at 31 December 2006 US 000 The Maple Companies, Limited as at 31 December 2006 US 000 IPO proceeds US 000 (Note 1) (Note 2) (Note 3) Pro forma net assets US 000 Non-current assets Property, plant and equipment 8,712 8,712 Intangible assets 63,259 63,259 Investment in associate 24,124 24,124 96,095 96,095 Current assets Income tax credit Prepaid taxes and expenses 2,223 (720) 1,503 Inventories 8,360 8,360 Due from shareholders 1,118 1,118 Trade and other receivables 1,983 1,983 Cash and cash equivalents 2,301 40,469 42,770 16,614 39,749 56,363 Total assets 112,709 39, ,458 Non-current liabilities Long-term debt (6,739) (6,739) Provision for tax contingencies (3,062) (3,062) Deferred income tax and workers profit sharing liability (20,064) (20,064) (29,865) (29,865) Current liabilities Trade accounts payable (9,375) (9,375) Interest-bearing loans and borrowings (6,997) (6,997) Other current liabilities (2,666) (2,666) (19,038) (19,038) Total liabilities (48,903) (48,903) Net assets 63,806 39, ,555 Notes: (1) The net assets of Maple Energy plc as at 31 December 2006 have been extracted without material adjustment from the Historical Financial Information of Maple Energy plc set out in Part V Section 1 of this document. (2) The net assets of The Maple Companies, Limited as at 31 December 2006 have been extracted without material adjustment from the consolidated Historical Financial Information of The Maple Companies, Limited set out in Part V Section 5 of this document. (3) The cash relating to the IPO proceeds of US$ million reflects the gross proceeds of the Placing receivable by Maple of US$ million (being 26,700,000 Subscription Shares at a Placing Price of 0.84 each and an exchange rate of US$2.0123: 1) less the total transaction costs of US$6.845 million net of transaction costs of US$2.182 million already booked as at 31 December 2006, of which US$0.720 million were capitalised within pre-paid expenses as at that date. (4) The pro forma statement of net assets of Maple does not take into account any trading or working capital movements arising in Maple Energy plc or The Maple Companies, Limited and its subsidiaries since 31 December (5) As at the date of this document, circa % of the net assets of The Maple Companies, Limited are attributable to minority interests and % are attributable to the shareholders of Maple Energy plc. (6) No adjustment has been made for any event save as disclosed above. 269

278 SECTION 8 ACCOUNTANT S REPORT ON PRO FORMA NET ASSET STATEMENT Grant Thornton Corporate Finance Grant Thornton UK LLP Chartered Accountants UK member of Grant Thornton International Grant Thornton House Melton Street London NW1 2EP T +44 (0) F +44 (0) DX 2100 EUSTON Grant Thornton UK LLP is a limited liability partnership registered in England and Wales: No.OC Registered office: Grant Thornton House, Melton Street, Euston Square, London NW1 2EP. A list of members is available from our registered office. Grant Thornton UK LLP is authorised and regulated by the Financial Services Authority for investment business. The Directors Maple Energy plc 70 Sir John Rogerson s Quay Dublin 2 Ireland 6 July 2007 Dear Sirs MAPLE ENERGY PLC We report on the pro forma net asset statement (the Pro forma financial information ) set out in Part V Section 7 of the AIM admission document of Maple Energy plc dated 6 July 2007 (the Admission Document ), which has been prepared on the basis described in the notes to the Pro forma financial information, for illustrative purposes only, to provide information about how the Placing and acquisition of The Maple Companies, Limited by Maple Energy plc might have affected the financial information presented on the basis of the accounting policies to be adopted by Maple Energy plc in preparing its financial statements for the period ended 31 December RESPONSIBILITIES This report is required as agreed between us in writing and is given for the purpose of complying with that requirement and for no other purpose. Save for any responsibility that we have expressly agreed in writing to assume, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report. It is the responsibility of the Directors of Maple Energy plc to prepare the pro forma financial information as though it had been prepared in accordance with paragraph 20.2 of Annex I of the Prospectus Regulation attached to the AIM Rules for Companies. It is our responsibility to form an opinion as though it had been required by paragraph 7 of Annex II of the PD Regulation attached to the AIM Rules for Companies as to the proper compilation of the Pro forma financial information and to report that opinion to you. In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro forma financial information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue. BASIS OF OPINION We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the directors of Maple Energy plc. 270

279 We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of Maple Energy plc. Our work has not been carried out in accordance with auditing standards generally accepted in the United States of America or the Republic of Peru and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices. OPINION In our opinion: a) the Pro forma financial information has been properly compiled on the basis stated; and b) such basis is consistent with the accounting policies of Maple Energy plc. DECLARATION For the purposes of Paragraph (a) of Schedule Two of the AIM Rules for Companies we are responsible for this report as part of the Admission Document and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the AIM admission document in compliance with Paragraph (a) of Schedule Two of the AIM Rules for Companies. Yours faithfully GRANT THORNTON UK LLP 271

280 SECTION 9 PERU GAAP AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE MAPLE COMPANIES, LIMITED AND SUBSIDIARIES FOR THE TWO YEARS ENDED 31 DECEMBER 2006 The Maple Companies, Limited and Subsidiaries Consolidated Financial Statements as of December 31, 2006 and

281 The Maple Companies, Limited and Subsidiaries Consolidated Financial Statements as of December 31, 2006 and 2005 Content Report of Independent Auditors Consolidated Financial Statements Consolidated Statements of Income Consolidated Balance Sheets Consolidated Statements of Changes in Shareholders Equity Consolidated Statements of Cash Flows Notes to the Consolidated Financial Statements 273

282 Medina, Zaldivar, Paredes & Asociados Sociedad Civil Report of Independent Auditors To the Shareholders of The Maple Companies, Limited We have audited the accompanying balance sheets of The Maple Companies, Limited (a company incorporated in British Virgin Islands) and Subsidiaries (together the Group ) which comprise the consolidated balance sheets as of December 31, 2006 and 2005, and the consolidated statements of income, changes in shareholders equity and cash flows for the years then ended, as well as the summary of significant accounting policies and other explanatory notes. Management s responsibility for the financial statements The Group s management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with generally accepted accounting principles in Peru. This responsibility includes: designing, implementing and maintaining an internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in Peru. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence supporting the amounts and disclosures in the financial statements. Selected procedures depend on the auditor s judgment, including the assessments of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of financial statements, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing and opinion on the effectiveness of the entity s internal control. An audit also includes assessing the appropriateness of the accounting principles used and the reasonableness of significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that the supporting audit evidence obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of The Maple Companies, Limited and Subsidiaries as of December 31, 2006 and 2005, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with Generally Accepted Accounting Principles in Peru. Lima, Peru May 4, 2007 Countersigned by: Víctor Burga C.P.C. Register No Miembro de Ernst & Young Global Inscrita en la partida del Registro de Personas Juridicas de Lima y Callao 274

283 The Maple Companies, Limited and Subsidiaries Consolidated Statements of Income For the years ended December 31, 2006 and 2005 (All amounts in U.S. dollars unless otherwise stated) Note Sales 6 56,711,716 40,427,498 Cost of sales 7 (50,370,114) (36,219,380) Gross margin 6,341,602 4,208,118 Operating expenses General and administrative expenses 8 (2,732,820) (389,108) Selling expenses 9 (2,146,204) Total operating expenses (4,879,024) (389,108) Operating income 1,462,578 3,819,010 Other income (expenses), net Share of profit in associate ,148 Finance income , ,165 Finance costs 12 (704,189) (234,530) Other, net 13 (56,191) (345,718) Total other income (expenses), net (181,725) (414,083) Income before workers profit sharing and income tax 1,280,853 3,404,927 Workers profit sharing 14 44,825 Income tax 14 (635,126) (1,231,979) Net income 690,552 2,172,948 Attributable to Equity holders of the Parent 324,385 1,405,165 Minority interests 366, , ,552 2,172,948 The notes 1 to 32 are an integral part of these consolidated financial statements. 275

284 The Maple Companies, Limited and Subsidiaries Consolidated Balance Sheets As of December 31, 2006 and 2005 (All amounts in U.S. dollars unless otherwise stated) Note Assets Non-current assets Plant and equipment, net 15 7,807,791 44,519 Intangible assets 16 71,766,244 7,394,394 Investment in associate 17 24,124,460 Deferred income tax asset 14 39,876 Due from shareholders ,471 Value added tax credit , ,698,495 9,128,059 Current assets Income tax credit 628, ,010 Due from shareholders 18 1,117,785 Prepaid taxes and expenses 19 1,502,799 Inventories 20 8,360, ,278 Trade and other receivables, net 21 2,702,577 5,893,058 Cash and cash equivalents 22 2,300, ,900 16,613,190 6,525,246 Total assets 120,311,685 15,653,305 Shareholders equity 23 Equity attributable to the shareholders of the Parent Issued capital 16,193 36,500 Additional capital 69,504,306 Retained earnings 1,888,909 2,530,228 71,409,408 2,566,728 Minority interest 3,036,275 Total shareholders equity 71,409,408 5,603,003 Liabilities Non-current liabilities Long-term debt 24 6,738,960 8,677 Other non-current liabilities 27 3,062,277 Deferred income tax and workers profit sharing liability 14 20,063,766 29,865,003 8,677 Current liabilities Trade accounts payable 25 9,374,516 5,871,465 Overdrafts and bank loans 26 3,828,480 Loans due to related parties 29 3,601,413 Other current liabilities 27 2,665, ,355 Current portion of long-term debt 24 3,168,435 9,392 19,037,274 10,041,625 Total liabilities 48,902,277 10,050,302 Total liabilities and shareholders equity 120,311,685 15,653,305 The notes 1 to 32 are an integral part of these consolidated financial statements. 276

285 The Maple Companies, Limited and Subsidiaries Consolidated Statement of Changes in Shareholders Equity For the years ended December 31, 2006 and 2005 (All amounts in U.S. dollars unless otherwise stated) Issued capital Attributable to the equity holders of the Parent Additional capital Retained earnings Total Minority interests Total equity Balance as of January 1, ,500 1,560,660 1,597,160 2,017,701 3,614,861 Paid-in capital 1,057,217 1,057,217 Net income 1,405,165 1,405, ,783 2,172,948 Declared dividends (435,597) (435,597) (806,426) (1,242,023) Balance as of December 31, ,500 2,530,228 2,566,728 3,036,275 5,603,003 Acquisition of Maple BVI group (20,307) 69,504,306 69,483,999 (3,402,442) 66,081,557 Declared dividends (965,704) (965,704) (965,704) Net income 324, , , ,552 Balance as of December 31, ,193 69,504,306 1,888,909 71,409,408 71,409,408 The notes 1 to 32 are an integral part of these consolidated financial statements. 277

286 The Maple Companies, Limited and Subsidiaries Consolidated Statements of Cash Flows For the years ended December 2006 and 2005 (All amounts in U.S. dollars unless otherwise stated) Operating activities Collection from customers 56,714,801 38,824,897 Interest received 213, ,357 Dividends received 443,620 Payments to suppliers and third parties (51,482,095) (32,950,544) Payments to employees (1,470,481) (6,802) Income tax paid (1,209,969) (1,830,166) Interest paid (540,581) (161,854) Net cash provided by operating activities 2,668,802 4,034,888 Investing activities Exploration expenditures and other (417,329) (2,710,119) Purchase of plant and equipment (88,784) (11,404) Net cash used in investing activities (506,113) (2,721,523) Financing activities Proceeds from bank loans 2,526,121 Increase of due from shareholders (20,225) (346,473) Change in restricted cash and in guarantee deposits (637,416) Dividends paid to holders of the parent (965,704) (435,597) Dividends paid to minority shareholders (806,426) Payments of long-term debt (671,048) (8,757) Payments of bank loans (2,445,306) Net cash used in financing activities (2,213,578) (1,597,253) Net decrease in cash and cash equivalents during the year (50,889) (283,888) Cash provided by Maple BVI adquisition 1,584,157 Cash and cash equivalents at beginning of year 129, ,788 Cash and cash equivalents at end of year 1,663, ,900 See note 3 for non-cash investing and financing activities arising from the acquisition of Maple BVI and its subsidiaries. The notes 1 to 32 are an integral part of these consolidated financial statements. 278

287 The Maple Companies, Limited and Subsidiaries Notes to the Consolidated Financial Statements As of December 31, 2006 and Corporate information The Maple Companies, Limited (hereafter Maple ) is a limited company incorporated in British Virgin Islands in 1997 to act as a holding company and to coordinate the policies and administration of its Subsidiaries. The address of its registered office is Craigmuir Chambers, P.O. Box 71, Road Town, Tortola, British Virgin Islands. On November 30, 2006, the capital structure of the entities affiliated to the Maple group was restructured by entering in a series of transactions contemplated in an Omnibus Contribution and Exchange Agreement and Plan of Reorganization (hereafter, the Agreement). At the completion of these transactions, each final shareholder obtained an equity interest in Maple. The purpose of this restructuring was, among other, to implement a more efficient holding structure and to facilitate the future raising of capital by Maple, which is presently intended to be accomplished through an anticipated equity offering on the AIM market of the London Stock Exchange through an Irish holding company. The internal restructuring included several steps that were carried out on November 30, Maple, through its subsidiaries, has signed License Contracts for the exploration and exploitation of hydrocarbons in blocks 31-B, 31-D and 31-E, located in the Peruvian jungle In addition, Maple holds an indirect voting interest of 10.7% in Aguaytía Energy, LLC (hereafter Aguaytía ), an entity that has controlling interests in four companies which operate in the Peruvian energy and electrical sectors. The consolidated financial statements include the financial statements of the following subsidiaries: Equity participation as of December 31, Exploitation, refining and commercialization of hydrocarbons (Blocks 31-B and 31-D) The Maple Gas Corporation del Perú, Ltd. (British Virgin Islands) 100% Exploration of hydrocarbons (Block 31-E) Maple Production del Perú, Ltd. (British Virgin Islands) 100% 38% Maple Oil (British Virgin Islands) Merged in November % Commercialization of natural gasoline and solvents Acer Comercial S.R.L. (Peru) 100% 69.98% Holding companies Maple Royalties (British Virgins Islands) Merged in November % Production and Commercialization of Ethanol (development stage) Maple Etanol S.R.L. (Peru) 100% 75% Also, Maple has an interest of 45% in Agricola Cerro Colorado, an entity engaged in agricultural activities. This investment has been fully written-off as of December 31, 2006 and Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below: 2.1 Basis of preparation The consolidated financial statements include the financial statements of the companies indicated in note 1, which have been prepared in accordance with generally accepted accounting principles in Peru (Peruvian GAAP) and under the historical cost convention. The consolidated financial statements are presented in U.S. dollars, except when otherwise indicated. The preparation of financial statements in conformity with Peruvian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets 279

288 and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from those estimates. The most significant accounting estimates are referred to the impairment of goodwill, and the useful lives of plant and equipment and intangibles. 2.2 Basis of consolidation The entities included in the consolidated financial information as of December 31 of each year are set out in note 1. The financial statements of the subsidiaries are prepared for the same reporting year as Maple, using consistent accounting policies. Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of Subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Subsidiaries are fully consolidated from the date of acquisition, being the date on which Maple obtains control, and continue to be consolidated until the date such control ceases. Minority interests represent the portion of profit or loss and net assets not held by Maple and are presented separately in the income statement and within equity in the consolidated balance sheet, separately from parent shareholders equity. Acquisitions of minority interests are accounted for using the parent extension method, whereby, the difference between the consideration and the book value of the share of the net assets acquired is recognized as goodwill. 2.3 Business Combination The acquisition of The Maple Gas Corporation del Perú Ltd. and its related entities on November 30, 2006 has been accounted for using the purchase method of accounting. This involves recognizing identifiable assets and liabilities of the acquired business at fair value. Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Maple s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or group of units. Each unit or group of units to which the goodwill is so allocated: represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and is not larger than a segment based on either the Group s primary or the Group s secondary reporting format determined in accordance with IAS 14 Segment Reporting. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognized. The consolidated financial statements include the results of The Maple Gas Corporation del Perú Ltd. and its related entities for the one-month period from its acquisition occurred on November 30, Segment reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and return that are different from those of segments operating in other economic environments. 280

289 2.5 Foreign currency translation Functional and presentation currency The Group considers its functional and presentation currency to be the United States dollar (U.S. Dollar), because it reflects the economic substance of the underlying events and the circumstances relevant to the Group; insofar as its main operations and/or transactions are established and liquidated in U.S. Dollars. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rate of exchange ruling at the consolidated balance sheet date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated into the functional currency using the rates of exchange as at the dates of the initial transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of income. 2.6 Plant and equipment Plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment in value. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, and the initial estimate of any decommissioning obligation, if any. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Expenditure on major maintenance refits or repairs comprises the cost of replacement assets or parts of assets, inspection costs and overhaul costs. Where an asset or part of an asset that was separately depreciated and is now written off is replaced and it is probable that future economic benefits associated with the item will flow to the Group, the expenditure is capitalized. Minor maintenance costs are expensed as incurred. Oil wells and oil & gas plant and equipment are depreciated using a unit-of-production method, based on proven developed reserves. Other facilities and equipment are depreciated on a straight- line basis over their expected useful lives. The useful lives of the Group s facilities and equipment are as follows: Years Installations 33 Vehicles 5 Furniture and fixtures 10 Computer equipment 4 The expected useful lives of plant and equipment are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively. The carrying value of plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. An item of plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any gain or loss arising on derecognizing the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the consolidated statement of income in the period in which the item is derecognized. 2.7 Leases Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalized leased assets are depreciated over their estimated useful life. 281

290 Operating lease payments are recognized as an expense in the consolidated statement of income on a straight-line basis over the lease term. 2.8 Exploration and development costs Oil exploration and development expenditure is accounted for using the full cost method of accounting. According to this method, exploration and development costs are capitalized. These costs are amortized under the units-of production method upon determination of proved reserves. 2.9 Software Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over an estimated useful life of four years. Costs associated with developing and maintaining computer software programs are recognized as an expense as incurred Contractual rights and others It corresponds to the provisional fair value allocated to the rights on the refinery contract signed with Perupetro S.A., to the name and logo of Maple, and to other intangibles, as a result of the acquisition explained in note 3. These intangibles are amortized using the units-of-production method based on proven reserves Investment in associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates, initially recognized at cost, are accounted for by the equity method of accounting using the percentage of economic interest instead of the percentage of voting interest. The cost of an acquisition is measured as the cash paid and the fair value of other assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. The acquired identifiable assets, liabilities and contingent liabilities are measured at their fair values at the date of acquisition. The excess of the cost of acquisition over the fair value of the Group s share of the identifiable net assets acquired is recorded as goodwill within the Investment in Associate caption. If the cost of acquisition is less than the fair value of the net assets acquired, the difference is recognized directly in the consolidated statement of income. The Group s share of its associates post-acquisition profits and losses is recognized in the consolidated statement of income, and its share of post-acquisition movements in reserves is recognized in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of associates to bring the accounting policies used into line with those of the Group Impairment of long-lived assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset s recoverable amount. An asset s recoverable amount is the higher of an asset s or cash-generating unit s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax 282

291 discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognized in the consolidated statement of income. An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment loss may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognized. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life Financial assets Financial assets in the scope of IAS 39: Financial Instruments: Recognition and Measurement are classified as both financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets, as appropriate. When financial assets are recognized initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. As of December 31, 2006 and 2005, the Group does not have financial assets at fair value through profit or loss, held-to-maturity investments, or available-for-sale financial assets Financial liabilities Financial liabilities are recognized when the Group becomes a party to the contractual agreements of the instrument Derecognition of financial assets and liabilities Financial assets A financial asset is derecognized where: The rights to receive cash flows from the asset have expired; The Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a pass-through arrangement; or The Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) if the entity has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Financial liabilities A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires Inventories Inventories are valued at the lower of cost and net realizable value. Costs incurred in bringing each product to its present location and conditions are accounted for as follows: Raw materials: at purchase cost using the average method. Finished goods and work in progress: at cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. Supplies: at purchase cost using the average method. 283

292 Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale Trade and other receivables Trade receivables are recognized and carried at original invoice amount less an allowance for any uncollectible amounts. This allowance is estimated for those accounts which recovery is no longer probable and it is determined based on Management s judgment and evaluation of debt s aging and other relevant information. Bad debts are written off when identified Cash and cash equivalents For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined below, net of outstanding bank overdrafts. Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions, and short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to insignificant risk of changes in value, and have a maturity of three months or less from the date of acquisition Trade and other payables Trade and other payables are carried at payment of settlement amounts Borrowings Borrowings are initially recognized at cost, being the fair value of the proceeds received net of issue costs associated with the borrowing. After initial recognition, borrowings are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses arising on the repurchase, settlement or cancellation of borrowings are recognized respectively in finance income and finance costs Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated statement of income, net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a borrowing cost. A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events or where the amount of the obligation cannot be measured with reasonable reliability. Contingent assets are not recognized, but are disclosed where an inflow of economic benefits is probable Decommissioning Liabilities for decommissioning costs are recognized when the Group has an obligation to dismantle and remove a facility or an item of plant and to restore the site in which is located, and when a reasonable estimate of that liability can be made. The amount recognized is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. A corresponding item of plant and equipment of an amount equivalent to the provision is created. This is subsequently depreciated as part of the capital costs of the facility or item of plant. Any change in the present value of the estimated expenditure is reflected as an adjustment to the provision and the corresponding property, plant and equipment. See note 28 to the consolidated financial statements. 284

293 2.23 Income tax and workers profit sharing Current income tax and current workers profit sharing Current income tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities. Income tax is computed based on individual financial statements of Maple and each of its Subsidiaries. Workers profit sharing is computed on the same basis as used to calculate the current income tax. Deferred income tax and deferred workers profit sharing Deferred income tax and deferred workers profit sharing is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for reporting purposes. Deferred tax liabilities are recognized for all taxable temporary differences, except for taxable temporary differences associated with investments in Subsidiaries and in associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at each consolidated balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority Recognition of revenues Revenue arising from the sale of goods is recognized when the significant risks and rewards of ownership have passed to the buyer and it can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, customs duties and sales taxes. The following recognition criteria must also be met before revenue is recognized: Sales of goods Revenues associated with the sale of oil, petroleum and other items are recognized when title passes to the customer. Services rendered Revenue from operation and maintenance services rendered to Aguaytía and services rendered to other parties are recognized when accrued on a monthly basis, based on the related contracts. Interest income Interest income is recognized as the interest accrues (using the effective interest rate) to the net carrying amount of the financial asset. Dividend income Dividend income from investments is recognized when the shareholders right to receive the payment is established Finance costs Finance costs are recognized in the consolidated statement of income in the period in which they are incurred Dividend distributions Dividend distributions to the Maple s shareholders are recognized as a liability in the Group s financial statements in the period in which the dividends are approved by the Maple s shareholders. 285

294 2.27 New standards and interpretations There are various IFRS and IFRIC issued at international level that will be in force beginning year 2007; however, these have not been yet approved in Peru by the Peruvian Accounting Standards Board. These standards refer to: IFRS 7 Financial Instruments: Disclosures, IFRS 8 Operative Segments and IFRIC 1 to 12. The Group s Management do not anticipate that the adoption of these standards and interpretations will not have a material impact on the financial statements in the period of initial application. 3. Business acquisition On November 30, 2006, Maple acquired the 100% of the voting shares of The Maple Gas Corporation del Perú Ltd. (hereafter, Maple BVI), an unlisted company based in the British Virgin Islands. Despite Maple and Maple BVI were companies under common control, Maple used the purchase method of accounting to record the business acquisition, since Management considers that such transaction has substance from the perspective of Maple (to facilitate the access of the Group to the listing in the Alternative Investment Market in London, see note 1). Maple BVI is involved in the exploration and exploitation of hydrocarbons in the Peruvian jungle and acts as the holding company of the shares in Aguaytía, through Maple Peru Holdings Corporation and Maple Gas Development Corporation (MGDC). The fair value of the identifiable assets and liabilities of Maple BVI as at the date of acquisition and the corresponding carrying amounts before the acquisition were: Fair value recognized on acquisition Carrying value Plant and equipment, net 7,775,142 2,757,405 Intangible assets, net 46,138,891 1,593,564 Investment in associate 24,202,934 24,780,371 Due from shareholders 1,075,306 1,075,306 Prepaid taxes and expenses 1,291,118 1,291,118 Inventories 7,211,449 6,529,675 Receivables from related parties 7,155,218 7,155,218 Trade and other receivables, net 4,515,714 4,515,714 Cash and cash equivalents 1,584,157 1,584, ,949,929 51,282,528 Long-term debt 9,446,207 9,446,207 Deferred income tax and workers profit sharing liability 20,489, ,289 Trade accounts payable 9,604,672 9,604,672 Overdrafts and bank loans 4,861,832 4,861,832 Loans due to related parties 1,465,000 1,465,000 Other liabilities 6,866,523 3,804,246 52,733,938 29,783,246 Net assets 48,215,991 21,499,282 Goodwill arising on acquisition 18,314,559 66,530,550 21,499,282 The total cost of the combination was US$66,530,550 and comprised an issue of 1,609,871 shares with a fair value of US$ each. Since there is no a published price for the shares issued, Maple has considered the interest in the fair value of the acquiree obtained as the fair value of the shares issued. There were no significant costs that Management can directly attribute to the acquisition of Maple BVI. The fair value adjustment of the intangibles has been determined on a provisional basis. Maple has engaged to an independent party to make a specific identification of the intangibles acquired as of November 30, This report is expected to be received during the second semester of

295 The goodwill of US$18,314,559 comprises the fair value of expected synergies arising from the acquisition, customer list and other intangibles, which are not separately recognized. These intangibles are not separable and therefore do not meet the criteria for recognition as intangibles assets under IAS 38 Intangible Assets. From the date of acquisition, Maple BVI reduced the net profit of the Group by US$294,881. If the combination of Maple BVI had been occurred on the first day of the financial year (1 January 2006), the Group revenues for the year would have been US$78,493,317 and Group profits attributable to equity holders of the parent would have been US$1,518,707. Set out below is the combined Statement of Income for the year 2006: US$ Sales 78,493,317 Cost of sales (55,026,961) Gross margin 23,466,356 Operating expenses General and administrative expenses (10,431,115) Selling expenses (5,747,206) Total operating expenses (16,178,321) Operating income 7,288,035 Other income (expenses), net Share of profit in associate 2,125,614 Finance income 82,996 Finance costs (2,526,140) Restructuring costs (1,461,654) Other, net (606,998) Total other income (expenses), net (2,386,182) Income before workers profit sharing and income tax 4,901,853 Workers profit sharing (655,163) Income tax (2,727,983) Net income 1,518, License Contracts for the Exploration and Exploitation of Hydrocarbons 4.1 The Maple Gas Corporation del Perú, Sucursal Peruana On March 30, 1994 The Maple Gas Corporation del Perú, Sucursal Peruana ( Maple Gas ), signed a License Contract for the Exploitation of Hydrocarbons in blocks 31-B and 31-D, located in the Peruvian jungle. The most significant clauses of the License Contract are as follows: (a) Term of the License Contract The term of the License Contract is 20 years since the subscription date (March 30, 1994) and can be extended to a maximum term of 30 years. (b) Minimum work program Maple Gas was committed, among other obligations, to carry out a minimum work program beginning at the signing date of the contract. The minimum work program, which has been completed, included, among other things, the drilling and cleaning of wells, and installation of facilities in production areas. (c) Royalties According to Law 26221, Organic Law on Hydrocarbons, and the Royalty and Retributions regulations approved by Supreme Decree EM, Maple Gas pays a royalty in cash, applying a percentage to the valorization of the production of hydrocarbons. The percentage varies depending on the production of crude oil, as defined in the License Contract. 287

296 (d) Tributes Maple Gas, only for the activities in Blocks 31-B and 31-D, is subject to the common tax regulations in force at the date of the signing of the License Contract (March 30, 1994), as well as the specific regulations included in Law 26221, Organic Law on Hydrocarbons and its amendments. (e) Financial rights The Central Bank of Peru, on behalf of the Peruvian State, guarantees to Maple Gas the availability and remittance abroad of foreign currency by virtue of the provisions set forth in Law Maple Production del Perú, Sucursal Peruana On March 6, 2001, Maple Production del Perú, Sucursal Peruana ( Maple Production ), signed a License Contract for the Exploration and Exploitation of Hydrocarbons in block 31-E, located in the Peruvian jungle. The most significant clauses of the License Contract are as follows: (a) Term of the License Contract The term of the License Contract for the exploitation of oil and natural gas is 30 years and 40 years, respectively, since the signing date (March 6, 2001). (b) Minimum work program Maple Production was committed, among other obligations, to carry out a minimum work program in a period of 50 months, beginning at the signing date of the License Contract. On April 5, 2006, Maple Production signed an addendum to the License Contract extending the exploration period to 84 months; thus, the minimum work program was divided in four periods. The first two periods, which have been completed, included, among other things, the drilling of two wells and performing a seismic evaluation. The last two periods of the minimum work program will last 34 months from April 10, 2006 and the work is yet to be completed. (c) Royalties According to Law 26221, Organic Law on Hydrocarbons, and the Royalty and Retributions regulations approved by Supreme Decree EM, Maple Production shall pay a royalty in cash, applying a percentage to the valorization of the production of hydrocarbons. The percentage varies from 5 to 20% depending on the production of crude oil, as defined in the addendum to the License Contract. (d) Tributes Maple Production is subject to the common tax regulations in force at the date of the signing of the License Contract (March 6, 2001), as well as the specific regulations included in Law 26221, Organic Law on Hydrocarbons and its amendments. (e) Financial rights The Central Bank of Peru, on behalf of the Peruvian State, guarantees to Maple Production the availability and remittance abroad of foreign currency by virtue of the provisions in Law Segment information The Group s primary format for segment reporting is business segments and the secondary format is geographical segments. The risks and returns of the Group s operations are primarily determined by the nature of the different activities that the Group engages in, rather than the geographical location of these operations. This is reflected by the Group s organizational structure and the Group s internal financial reporting systems. The Group has three reportable operating segments: Exploration and Production, Refining and Marketing, and Other. Exploration and Production activities include oil exploration and field development and production, together with pipeline transportation. The activities of Refining and Marketing include refining of crude oil and natural gasoline and petrochemicals manufacturing and marketing. The Other segment includes corporate and other businesses, including the investment in the associate. 288

297 The accounting policies of operating segments are the same as those described under the heading Accounting Policies. Sales between segments are realized on normal commercial terms and conditions, which are determined based on the international market price of crude oil. Segment revenue, segment expense and segment result include transfers between business segments. These transactions and any unrealized profits and losses are eliminated on combination. The Group s geographical segments are primarily based in Peru. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. Primary reporting format Business segments Exploration and production Refining and marketing Other and corporate Consolidation adjustments and eliminations Total Group Year ended December 31, 2006 Revenue Sales to external customers 56,534, ,776 56,711,716 Inter-segments sales 471,329 (471,329) Total 471,329 56,534, ,776 (471,329) 56,711,716 Results Operating income (loss) (658,967) 2,466,122 (431,407) 86,830 1,462,578 Net finance costs and other income (expenses), net (105,863) (198,696) 1,338,966 (1,581,280) (546,873) Share of profit in associate 365, ,148 Profit (loss) before income tax and workers profit sharing (764,830) 2,267,426 1,272,707 (1,494,450) 1,280,853 Workers profit sharing 44,825 Income tax expense (635,126) Net profit for the period 690,552 Assets and liabilities Segment assets 33,245,582 86,785,654 19,145,516 (42,989,527) 96,187,225 Investment in associate 24,124,460 24,124,460 33,245,582 86,785,654 43,269,976 (42,989,527) 120,311,685 Segment liabilities 21,306,942 53,183,394 23,001,543 (48,589,602) 48,902,277 Other segment information Capital expenditure Intangible assets 18,045,253 34,806, ,000 53,451,685 Plant and equipment 6,576,714 1,229,136 1,941 7,807,791 24,621,967 36,035, ,941 61,259,476 Depreciation 78,595 51, ,754 Amortization 19, , ,

298 Exploration and production Refining and marketing Other and corporate Consolidation adjustments and eliminations Total Group Year ended 31 December 2005 Revenue Sales to external customers 40,427,498 40,427,498 Results Operating income (loss) (150,565) 4,187,663 (218,088) 3,819,010 Net finance costs and other income (expenses), net (19,262) (72,748) 1,523,781 (1,845,854) (414,083) Profit before income tax and workers profit sharing (169,827) 4,114,915 1,305,693 (1,845,854) 3,404,927 Workers profit sharing Income tax expense (1,231,979) Net profit for the year 2,172,948 Assets and liabilities Segment assets 14,307,235 6,616,717 7,657,898 (12,928,545) 15,653,305 Segment liabilities 3,648,483 6,438, ,255 (394,978) 10,050,302 Other segment information Capital expenditure Intangible assets 7,394,394 7,394,394 Plant and equipment 36,298 7,205 1,016 44,519 7,430,692 7,205 1,016 7,438,913 Depreciation 7,144 2, ,338 Secondary reporting format Geographical segments The Group s three business segments operate in two different geographical areas, even though they are managed from Peru. The home country of Maple is the British Virgin Islands. The areas of operation are principally the exploration, exploitation, refining and marketing of natural gasoline, oil and its derivatives. Sales and capital expenditure All the Group s sales and capital expenditures are in Peru. Total assets Total assets are allocated based on where the assets are located: Peru 119,791,804 15,629,876 British Virgin Islands 519,881 23, ,311,685 15,653,

299 6. Sales Sales of goods 56,531,943 40,427,498 Services to associate, note 29 (a) 176,776 Services to other parties 2,997 56,711,716 40,427, Cost of sales Natural gasoline, note 29 (b) 36,205,915 36,219,380 Raw materials 13,135,263 Royalties, note ,924 Personnel expenses, note ,715 Supplies and production equipment costs 265,555 Sundry production costs 89,639 Depreciation, note 15 75,739 Rentals 52,896 Maintenance and repairs 33,380 Third party services 32,584 Amortization of exploration costs, note 16 7,127 Other 87,430 Inventories variation (535,053) 50,370,114 36,219, General and administrative expenses Professional fees and commissions 1,231, ,712 Personnel expenses, note ,894 20,227 Amortization of software, contractual rights and other, note ,802 Sundry production costs 122,896 44,294 Dallas office maintenance expenses 75, ,320 Insurance 47,731 Depreciation, note 15 43,641 10,338 Rentals 31,379 Communications costs 18, Advertising costs 18,447 Freight expenses 7,220 1,770 Maintenance and repairs 6,809 Other 41, ,732, , Selling expenses Freight expenses 1,567,129 Value added tax not recoverable 259,345 Personnel expenses, note ,149 Allowance for doubtful accounts, note 21 42,231 Depreciation, note 15 3,894 Other 153,456 2,146,

300 10. Personnel expense Wages and salaries 461,940 13,821 Employee social benefits 384,856 1,336 Bonuses 148,005 2,365 Vacations 44,471 1,168 Other social expenses 87,486 1,537 1,126,758 20,227 The distribution of personnel expenses was as follows: Cost of sales, note 7 410,715 General and administrative expenses, note 8 595,894 20,227 Selling expenses, note 9 120,149 1,126,758 20, Finance income Interest on trade accounts receivables 207, ,556 Interest on deposits 6, Interest on loans 32,170 Exchange difference 6, , , Finance costs Interest on trade accounts payable 274, ,771 Interest on loans 241,184 20,083 Tax on financial transactions 119,594 43,196 Bank fees 27,246 21,747 Exchange difference 25,456 Other 16,419 7, , , Other, net Income tax withheld on dividend income (75,680) Write-off of investments (230,566) Other, net (56,191) (39,472) (56,191) (345,718) 292

301 14. Income tax and workers profit sharing (a) Income tax and workers profit sharing regulations Maple and its Subsidiaries incorporated in British Virgin Islands are not subject to income tax. Peruvian Subsidiaries are subject to the Peruvian Tax System. The tax regimes applicable to the Peruvian Subsidiaries are the following: Peruvian related entity Tax regime applicable Income tax rate The Maple Gas Corporation del Perú, Sucursal Peruana Exploitation activities of hydrocarbons in Blocks 31-B and 31-D are subject to the common Peruvian tax regulations in force as of March 30, 1994 (date of the signing of the License Contract). Refining and commercialization activities of hydrocarbons are subject the current Peruvian tax regime. 30% of taxable income Acer Comercial S.R.L. and Maple Etanol S.R.L. Maple Production del Perú, Sucursal Peruana Current Peruvian tax regime Exploration activities in Block 31-E are subject to the common Peruvian tax regulations in force as of March 6, 2001 (date of the signing of the License Contract). 30% of taxable income 20% plus 2% of taxable income According to Peruvian regulations, oil & gas companies that have more than 20 employees must pay a profit sharing equivalent to 10 percent of taxable income. The Maple Gas Corporation del Peru, Sucursal Peruana, is the only entity having more than 20 employees. (b) Income tax and workers profit sharing expense (profit) Income tax Current 921,039 1,218,013 Deferred (285,913) 13, ,126 1,231,979 Workers profit sharing Current 55,324 Deferred (100,149) (44,825) 293

302 (c) The movement of the deferred income tax and workers profit sharing liability is as follows Balance as of January 1, 2005 Income tax Balance as of December 31, 2005 Acquisition of Maple BVI Income tax and workers profit sharing Balance as of December 31, 2006 Deferred asset Other 53,842 (13,966) 39,876 58,614 (9,108) 89,382 Deferred liability Exploration and development costs (355,786) (1,848) (357,634) Contractual rights and others (17,632,377) 189,920 (17,442,457) Oil wells (1,986,171) 21,394 (1,964,777) Capital lease (304,117) 21,506 (282,611) Inventories (269,867) 164,198 (105,669) (20,548,318) 395,170 (20,153,148) Deferred asset (liability), net 53,842 (13,966) 39,876 (20,489,704) 386,062 (20,063,766) (d) A reconciliation between workers profit sharing and income tax expenses, and the product of accounting profit multiplied by the tax rate for the years ended December 31, 2006 and 2005 is as follows: Income before workers profit sharing and income tax 1,280,853 3,402,061 Add Non-taxable income 682, ,169 Income subject to tax 1,963,273 4,095,230 Legal consolidated rate 30% 30% At consolidated rate 588,982 1,228,569 Permanent items 46,144 3,410 Effective income tax expense 635,126 1,231,

303 15. Plant and equipment, net Oil wells and equipment Computer equipment Vehicles Other Total Installations At January 1, 2006, net of accumulated depreciation 18,010 3,144 21,910 1,455 44,519 Acquisition from Maple BVI 260,972 6,770, , , ,128 7,775,142 Additions 5,694 32,874 24,564 25,652 88,784 Adjustments 31,242 (1,142) 30,100 Depreciation charge for the period (23,821) (77,684) (8,001) (18,475) (2,773) (130,754) At December 31, 2006, net of accumulated depreciation 237,151 6,747, , , ,320 7,807,791 Accumulated depreciation At January 1, 2006 Cost 75,695 10,194 28,577 5, ,049 Accumulated depreciation (57,685) (7,050) (6,667) (4,128) (75,530) Net carrying amount 18,010 3,144 21,910 1,455 44,519 At December 31, 2006 Cost 260,972 6,825, , , ,093 7,938,545 Accumulated depreciation (23,821) (77,684) (8,001) (18,475) (2,773) (130,754) Net carrying amount 237,151 6,747, , , ,320 7,807,791 Oil wells and equipment Computer equipment Vehicles Other Total Installations At January 1, 2005, net of accumulated depreciation 9,606 3,514 27,625 5,276 46,021 Adjustments 1,186 (3,754) (2,568) Additions 10,008 1,396 11,404 Depreciation charge for the year (1,604) (1,556) (5,715) (1,463) (10,338) At December 31, 2005, net of accumulated depreciation 18,010 3,144 21,910 1,455 44,519 Accumulated depreciation At January 1, 2005 Cost 66,086 9,033 28,577 7, ,554 Accumulated depreciation (56,480) (5,519) (952) (2,582) (65,533) Net carrying amount 9,606 3,514 27,625 5,276 46,021 At December 31, 2005 Cost 19,614 4,700 27,625 2,918 54,857 Accumulated depreciation (1,604) (1,556) (5,715) (1,463) (10,338) Net carrying amount 18,010 3,144 21,910 1,455 44,519 Fully depreciated assets amount to US$59,578 as of December 31, 2006 and 2005, respectively. Currently, these assets are being used by the Group. As of December 31, 2006, work in progress amounted to US$164,345 and nil for December 31,

304 As of December 31, 2006 and 2005, the net book value of assets under finance leases was as follows (see minimum future lease payments in note 24): Vehicles 274,899 21,909 Computer equipment 29,678 Other equipment 102, ,975 21,909 The distribution of annual depreciation was as follows: Cost of sales, note 7 75,739 General and administrative expenses, note 8 43,641 10,338 Intangibles (exploration costs) 7,480 Selling expenses, note 9 3, ,754 10, Intangibles, net Exploration costs Software and others Contractual rights and other Goodwill Total At January 1, 2006, net of accumulated amortization 7,394,394 7,394,394 Acquisition from Maple BVI 904,809 88,755 45,145,327 18,314,559 64,453,450 Additions 393,659 23, ,329 Amortization charge for the period (7,127) (12,000) (479,802) (498,929) At December 31, 2006, net of accumulated amortization 8,685, ,425 44,665,525 18,314,559 71,766,244 At January 1, 2006 Cost 7,394,394 7,394,394 Accumulated amortization Net carrying amount 7,394,394 7,394,394 At December 31, 2006 Cost 8,692, ,425 45,145,327 18,314,559 72,265,173 Accumulated amortization (7,127) (12,000) (479,802) (498,929) Net carrying amount 8,685, ,425 44,665,525 18,314,559 71,766,244 Contractual rights and other intangibles correspond to the fair value of the identifiable intangibles related to the acquisition of Maple BVI and its related entities see note 3. This amount has been determined on a provisional basis and is the best estimate of management as of the date of this report. 296

305 Exploration costs Software and others Total At January 1, 2005, net of accumulated amortization 4,684,275 4,684,275 Additions 2,710,119 2,710,119 At December 31, 2005, net of accumulated amortization 7,394,394 7,394,394 At January 1, 2005 Cost 4,684,275 4,684,275 Accumulated amortization Net carrying amount 4,684,275 4,684,275 At December 31, 2005 Cost 7,394,394 7,394,394 Accumulated amortization Net carrying amount 7,394,394 7,394,394 Impairment testing of goodwill Goodwill acquired through combination has been allocated to the following reportable segments: Exploration and Production; and Refining and Marketing. Carrying amount of goodwill allocated to each of the cash-generating units: US$ Exploration and Production 3,832,693 Refining and Marketing 14,481,866 18,314,559 The recoverable amount of the cash generating units has been determined based on a value in use calculation using cash flow projections based on financial budgets approved by senior management covering the Period The pre-tax discount rate applied to cash flow projections is 10.9%. Key assumptions used in calculations The calculation of value in use for the cash generating units is most sensitive to the following assumptions: Production volumes WTI Price Oil royalty costs; and Natural gasoline costs Production volumes Sales volumes are derived from the estimated proved and probable production (2P) in the reports for Contract 31-B and Contract 31-D provided by Netherland Sewells; these volumes are expected to increase as a result of work-overs, new development wells and water injection. The model makes assumptions as to the timing and quantum of capital expenditures needed to implement the required work program. WTI price All different product prices are construed based on the future WTI price per barrel plus or minus a price differential adjustment specific to every product, determined on the basis of the historical correlation of the netbacks by product to WTI. Oil royalty costs The royalty calculation is based on a formula to obtain the basket oil price, which already takes into account the new royalty caps, applied to an assumed oil basket price. The basket oil prices has been estimated based on its historical correlation with WTI prices. 297

306 Natural gasoline costs The largest component of cost of sales are natural gasoline purchased from Aguaytía. The cost in the model is derived from assumptions for Nafta and Jet Kero prices, according to the formula in the contract with Aguaytía. Nafta and Jet Kero prices are, in turn, based on the assumed WTI prices plus an assumed price differential to WTI. The price differential to WTI has been assumed on the basis of the historical correlation between Nafta and Jet Kero prices to WTI. Sensitivity to changes in assumptions With regard to the assessment of value in use of the cash generating units of US$85,283,587, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the units to materially exceed its recoverable amount. 17. Investment in associate Aguaytía Energy, LLC is a significant investment for Maple. Aguaytía is a limited liability company incorporated in the State of Delaware, United States of America. It is a private entity that is not listed on any public exchange. Through its four Peruvian subsidiaries (Aguaytía Energy del Peru S.R.L., Termoselva S.R.L., Eteselva S.R.L., and Gas Integral S.R.L.), Aguaytía carries out the following activities within Peru: Exploitation of Aguaytía natural gas deposit, located in the central jungle of Peru. Processing of natural gas to obtain natural gas liquids ( NGLs ). Fractionation of NGLs into liquefied petroleum gas ( LPG ) and natural gasoline. This later product is sold to its related party, Acer Comercial S.R.L. LPG transportation and distribution. Electric power generation and transmission. Maple has 17,419 cash units and 20,000 non-cash units in Aguaytía, representing a voting interest of 10.7% and an economic interest of 19.08%. The detail of the units in Aguaytía by beneficiary follows: Ultimate beneficiary Cash units Non-cash units Scotiabank S.A.A. 7,971 1,360 Maple 9,448 18,640 17,419 20,000 As further explained in note 28, Maple has granted to Scotiabank Perú S.A.A. the rights on the economic interest associated with 7,971 cash units and 1,360 non-cash units in Aguaytía. In accordance with IAS 39, Maple has treated these transactions as a transfer of the investment in Aguaytía, and has derecognized such investment to the extent Maple has transferred substantially all the risks and rewards of ownership of such investment and is committed to transfer the full amount of dividends received from Aguaytía. Maple has used the equity accounting method for recording the 9,448 cash units and 18,640 non-cash units in Aguaytía that have not been derecognized, representing an effective economic interest of approximately 14.06% in the units held by Maple as of December 31, Although its voting interest in Aguaytía is less than 20 percent, Maple has used the equity method of accounting as it has the ability and has exercised significant influence (participation in the decisions related to financial and operational policies) over Aguaytía, which is evidenced by inter alia: its voting rights and by its representation in the Management Committee of Aguaytía; the participation in the policy-making process, including participation in decisions about dividends; significant intercompany transactions (see note 29); and unrestrictive access to the interim and annual financial information. 298

307 Following the movement of this caption for the year ended December 31, 2006: Acquisition of investment at November 30, 2006, at fair value 24,202,932 Share of profit for December ,148 Declared dividends in December 2006 (443,620) End of year 24,124,460 The following table illustrates summarized financial information of Aguaytía (in thousands of U.S. dollars) as of December 31, 2006 and for the year then ended Balance sheet: Current assets 44,803 Non-current assets 203,365 Current liabilities (15,574) Non-current liabilities (61,661) Net assets 170,933 Revenue and profit Revenue 120,757 Profit for the year ,116 Profit for December , Due from shareholders As of December 31, 2006 and 2005, the Company has made advances to the following individual shareholders: The Maple Gas Corporation Promissory note by an original amount of US$913, ,920 Promissory note by an original amount of US$144, ,534 Promissory note by an original amount of US$38,080 38,080 Other loans 163,000 TH International Holdings 331,278 American Resources 283,017 Midland International Holdings 244,369 Carlos de la Guerra Promissory note by an original amount of US$182, ,409 Other loan 89,162 72,952 Rex W. Canon 86,821 Edgardo Castro 42,068 Eduardo Maldonado 40,336 17,871 Tony Hines 10,268 Petrus Fernandini 4,954 4,954 Gonzalo Escajadillo 2,233 3,030 1,117, ,471 Promissory Note of US$313,920 with Maple Gas Corporation (MGC) Provided that Maple BVI receives from MGC payment in full of the US$313,920 on or before April 29, 2007, Maple BVI agrees to forgive all interest accruing on the promissory note of an original amount of US$913,920. If Maple BVI has not received the US$313,920 in full on or before April 29, 2007 but has received it before April 29, 2008, the interest will be calculated at 5% per annum on the unpaid balance from April 30, 2007 through the date of the final payment in full. If MGC fails to pay on or before April 29, 2008, the following will be payable: (i) the US$313,920, (ii) all interest that accrued from April 30, 2002 until the date of this Agreement upon the original amount of US$313,920, (iii) all interest that accrued from the date of this agreement until April 30, 2007 upon the unpaid balance of the US$313,920, and (iv) and amount of interest 299

308 calculated at 5% per annum of the unpaid balance of the US$313,920 from April 30, 2007 through the date of final payment in full. MGC has not paid this note as of the date of this report. Promissory notes of US$144,534 and US$38,080 with MGC, and of US$182,409 with Carlos de la Guerra Provided that Maple BVI receives from MGC or Carlos de la Guerra payment in full of the Principal Amount on or before April 29, 2007, Maple BVI agrees to forgive all interest accruing on the Promissory Note. In Maple BVI does not receive payment in full on or before April 29, 2007 but receives it on or before April 29, 2008, Maple BVI agrees to accept an amount of interest of 5% of the unpaid balance of the Principal Amount from April 30, 2007 through the date of final payment in full. If MGC or Carlos de la Guerra fails to pay on or before April 29, 2008, the following will be payable: (i) the unpaid balance of the Principal Amount, (ii) all interest that accrued from April 30, 2002 until the date of this Agreement upon the unpaid balance of the Principal Amount, (iii) all interest that accrued from the date of this agreement until April 30, 2007 upon the unpaid balance of the Principal Amount and (iv) and amount of interest calculated at 5% per annum of the unpaid balance of the Principal Amount from April 30, 2007 through the date of final payment in full. MGC and Carlos de la Guerra have not paid their notes as of the date of this report. Other loans Other loans outstanding as of December 31, 2006 do not accrue interest, and are expected to be repaid with the funds to be obtained from the Initial Public Offering of Maple Energy PLC during the second semester of Prepaid taxes and expenses Value added tax credit 910, ,799 Pre-paid insurance 316,683 Other 275,501 1,502, ,799 Less Current portion (1,502,799) Non-current portion 691, Inventories Finished products 3,312,801 47,075 Products in process 3,699,620 Raw materials 596,285 Supplies 751, ,203 8,360, ,278 The carrying amount of inventories (finished products and products in process) kept at fair value less costs to sell is US$3,137,045 as of December 31, As of December 31, 2006, Maple Gas has pledged its inventory for US$6,787,960, and nil for 2005, in favor of Peruvian banks as collateral of borrowings received, see note

309 21. Trade and other receivables, net Trade accounts receivables with third parties 1,270,455 Trade accounts receivable with Maple Gas, note 29 5,793,373 Receivables from Maple Energy Plc, note ,919 Loans to Agrícola Cerro Colorado, note , ,827 Receivables from Aguaytía, note ,454 Receivables from Petroanderra S.A. 106,627 Other receivables 484,809 99,685 3,218,278 6,041,885 Allowance for trade doubtful accounts (515,701) (148,827) 2,702,577 5,893,058 Trade receivables are non-interest bearing and are generally collected in 45 days or less. Movements in the allowance for trade receivables are shown below: Beginning balance 148, ,827 Acquisition of Maple BVI Group 323,187 Allowance, note 9 42,231 Exchange difference 1,456 Ending balance 515, , Cash and cash equivalents Cash at bank and in hand 1,658, ,132 Trust fund account 4,543 2,768 Cash for the purpose of the consolidated statement of cash flows 1,663, ,900 Guarantee deposits 437,416 Restricted fund (see legal claims in note 28) 200,000 2,300, ,900 Maple Gas maintains a trust fund contract with Acer Comercial S.R.L. and Maple BVI, as trustees, to guarantee its obligations with Banco de Crédito del Perú, in connection with the mid-term loan contract by US$5,500,000, see note 24. Cash at banks earn no interest. As of December 31, 2006 and 2005, Maple Gas and Maple Production maintain deposits which mainly guarantee the compliance of contracts signed with third parties. These deposits earn interest at an annual average rate between 1.00% and 4.00%, respectively, and mature in 360 days. 23. Shareholders equity (a) Capital stock As of December 31, 2006, the authorized capital stock of Maple consists on 16,000,000 shares of which Maple has issued and outstanding 1,619,371 shares of common stock, each having a par value of US$0.01. All outstanding shares of capital stock are validly issued and fully paid. 301

310 The movement of the shares during years 2006 and 2005 is as follows: At the beginning of year 9,500 9,500 Issuance of shares October ,899,981 November ,949 December ,675,836 Cancellation of shares October 2006 (959,500) Transfer of shares December 2006 (1,379,395) At year-end 1,619,371 9,500 Common shares of The Maple Companies, Limited have one vote each, are subject to redemption, purchase or acquisition, and have the same rights with regard to dividends and distributions upon liquidation. See potential commitments to issue additional shares in note 32 under Investment Agreement with Infraestructura, Servicios Públicos y Recursos Naturales. (b) Additional capital In corresponds to the difference between fair value of the net assets acquired from Maple BVI and the nominal value of the Maple s shares issued on the restructuring. (c) Dividends distribution During 2006 and 2005, Maple declared and paid dividends to equity holders of Maple. Dividends per share were US$0.35 in 2006 and US$45.85 in Dividends distributed to companies non-domiciled in Peru and to individuals are subject to an income tax of 4.1%. 24. Long-term debt Payments Annual interest rate Final maturity Banco de Crédito del Perú Quarterly Three-month Libor plus 4.5% ,300,000 Banco de Crédito del Perú Quarterly Three-month Libor plus 4.5% ,889,425 SUNAT and SENATI Monthly 15.0% annual ,369,074 Banco Financiero Annual 10.5% annual ,114,167 Banco de Comercio Annual 12.0% annual ,000,000 Lease agreements Monthly 234,729 18,069 9,907,395 18,069 Current portion (3,168,435) (9,392) Non-current portion 6,738,960 8,677 The maturity of long-term debt is set out in note 31. Banco de Crédito del Peru In December 2004, Maple Gas signed a mid-term loan contract with Banco del Crédito del Perú for US$5,500,000, being the balance of US$3,300,000 as of December 31, On September 29, 2005 and February 16, 2006, Maple Gas signed an addendum to such contract, receiving additional loans of US$3,399,323 (a balance of US$2,889,425 as of December 31, 2006). These loans are guaranteed with a stand-by letter of Acer Comercial S.R.L. in favor of each bank and a trust fund of cash flows over: Proceeds from the difference between the amount paid by Maple Gas to Acer Comercial S.R.L. and the amount paid by the last one to Aguaytía Energy del Perú S.R.L. Proceeds from sales from Maple Gas to PETROPERU and other clients, which represent at least 10% of its annual sales. 302

311 Proceeds from the income, benefits, distributions and dividends or any amount that corresponds to Maple Gas BVI from Maple Gas Development Corporation attributable to their interest in Aguaytía Energy, LLC, except from the portion attributable to Scotiabank Perú S.A.A., which would be retained in case of default of the requirements of the mid-term loan contract. Proceeds from the income, benefits, distributions and dividends or any amount that corresponds to Maple Peru Holding Corporation from Maple Gas Development Corporation attributable to their interest in Aguaytía Energy, LLC, except from the portion attributable to Scotiabank Perú S.A.A., which would be retained in case of default of the requirements of the mid-term loan contract. Cash flows related to an insurance policy endorsed to the trustee under the trust fund contract. In addition, Maple Gas requires compliance with the following financial indicators which are calculated by Banco de Crédito del Perú using the financial statements at the end of each quarter: (i) indebtedness ratio should be less than 2.5; (ii) interest coverage ratio should be greater than 3.0; and (iii) debt service coverage ratio should be greater than 1.1. In management s opinion, Maple Gas has complied with all its contractual commitments on these loans as of December 31, SUNAT / SENATI The SUNAT / SENATI balance relates to an arrangement entered into with the Peruvian tax authorities to pay an old tax liability over a 10 year period. This liability, denominated in Nuevos Soles (Peruvian currency) rather than U.S. dollars, was originally for S/7.43 million, accrues interest at a fixed rate of 15% annually, and is being paid by equal monthly installments (including interest) of approximately S/120,000 (approximately S/1.44 million annually). Banco Financiero and Banco de Comercio These loan contracts were obtained for working capital purposes. No specific guarantees have been granted for these loans. There are no specific covenants. Lease agreements The balance includes finance lease contracts over vehicles and equipment with three Peruvian financial entities. These leases mature between October 2006 and May 2008 and they are guaranteed with the assets under the finance leases. Future minimum lease payments under finance leases are set out below: Minimum future lease payments payable within year 140,889 10,339 2 to 5 years 118,339 8, ,228 19,287 Less finance charges (24,499) (1,218) Net obligations 234,729 18, Trade accounts payable Due to Aguaytía, note 29 6,175,808 5,748,504 Due to third parties 3,198, ,961 9,374,516 5,871,465 Trade accounts payable mainly originate from the acquisition of natural gasoline, materials, supplies and spare parts. Trade payables are non-interest bearing and are normally settled on 60-day terms. 303

312 26. Overdrafts and bank loans Overdrafts 311,402 Bank loans Scotiabank Perú S.A.A. 1,830,000 Banco de Crédito del Perú 700,000 Banco Financiero 537,078 Banco de Comercio 200,000 Other 250,000 3,828,480 As of December 31, 2006 and 2005, bank loans have been obtained for working capital purposes and accrue interest calculated at an annual weighted average interest rate of 9%. As of December 31, 2006, the balance of other loans amounting to US$250,000 is made up of loans obtained through a broker, for the purpose of financing certain costs related to the shares offering of Maple Energy PLC. This loan has a current maturity, accrues a 10% annual interest rate and has no specific guarantees or conditions for its use. The Group s inventories have been pledged at each year-end as a guarantee of the loans maintained at those dates, as follows: Scotiabank Perú S.A.A. 3,548,650 Banco Financiero 1,798,854 Banco de Comercio 1,440,455 6,787, Other current liabilities Provision for tax contingencies 3,062,277 Remuneration payable 1,173,176 28,518 Taxes payable 568,659 70,649 Accounts payable to Petroanderra 191,621 Advances from clients 179,519 Provision for contingencies 113,240 Accounts payable to Scotiabank 102,633 Interest payable 53,025 Notes payable 254,985 Other liabilities 283, ,203 5,728, ,355 Non-current portion (3,062,277) 2,665, ,355 For purposes of allocating the cost of the business combination explained in note 3, Maple has recognized the fair value of its tax contingencies by US$ 3,062,277, despite the fact that Maple Gas has not recognized any liability for that contingency. This fair value reflects the estimation of the market expectation about any uncertainty surrounding the possibility that an outflow of resources embodied in economic benefits will be required to settle this possible or present obligation, but do not reflect the management s view that Maple Gas does not have solid arguments to support its position before the tax authorities. 28. Commitments and Contingencies Income tax The tax authorities are legally entitled to review and, if necessary, adjust the income tax calculated by Peruvian Subsidiaries during the four years subsequent to the year of the related tax return 304

313 filing. The income tax and value added tax returns of the following years are pending review by the tax authorities: Entity Open years Maple Production del Perú, Sucursal Peruana The Maple Gas Corporation del Perú, Sucursal Peruana Acer Comercial S.R.L Maple Etanol S.R.L Due to various possible interpretations of current legislation, it is not possible to determine whether or not future reviews will result in tax liabilities for the Group. In the event that additional taxes payable, interest and surcharges result from tax authority reviews, they will be charged to expense in the period assessed and paid. However, in Management s and legal advisory opinion, any additional tax assessment would not be significant to the consolidated financial information as of December 31, 2006 and 2005, except for as mentioned in the next paragraph. The 2001 income tax return of Maple Gas has been reviewed by the Tax Administration. As a consequence, on December 9, 2003, Maple Gas received assessments related to a supposed omission on an income tax payment of US$2,222,729, including interest as of November 27, On January 7, 2004, Maple Gas filed a tax claim against those assessments, which Resolution is pending as of December 31, The main issues of the tax assessments are the following: (a) Interest expense (contingency of US$626,751 of tax and US$1,479,616 of interest accrued as of December 31, 2006): The Tax Administration has assessed the interest expenses related to the loans granted by the International Bank of Miami and Scotiabank (formerly Banco Wiese) to Maple Gas in prior years, on the basis that there was no support to the business need for the loans and their relationship to the business activities of Maple Gas. In addition, the Tax Administration considers that these loans would have been used to finance inter-company loans. In the tax claim, Maple Gas has fully supported that between 1994 and 2001 it has generated enough operating cash flows to finance any remittance of funds to other Subsidiaries. In the opinion of Maple Gas management and its legal advisors, there are enough supporting documents to substantiate the business relationship of these loans and its use in the business activities. (b) Bad debt provision (contingency of US$780,000 of tax and US$1,841,401 of interest accrued as of December 31, 2006): In 1996, Maple Gas recorded an account receivable of US$5,600,000 from Maple Gas Development Corporation as a consequence of the assignment of Block 31-C to Aguaytía, and the lack of recognition by it of all the exploration expenses incurred in this Block by Maple Gas. Maple Gas Development Corporation should pay this receivable by installments, the first one of US$2,600,000 due on 2000, with the dividends to be received from the Aguaytía project. As there were no dividends from the Aguaytía project, Maple Gas Development Corporation was unable to pay, and as per the income tax regulations, Maple Gas provided for and expensed the US$2,600,000 referred to the first installment. The Tax Administration has assessed that the receivable should have been recorded with Aguaytía rather than with Maple Gas Development Corporation. In the opinion of Maple Gas management and its legal advisors, there are enough legal and factual arguments to support the position of Maple Gas. For open tax years 2002, 2003, 2004, 2005 and 2006, we are not aware of any material tax contingencies which in our opinion and that of our external tax advisors will require of a provision for tax contingencies. Environmental matters Maple Gas and Maple Production are subject to the Code for the Environment and Natural Resources. Such code requires the companies to prepare an Environmental Impact Assessment (EIA) approved by a competent authority. In connection with such Code and its rulings, Maple Gas and Maple Production filed the corresponding EIAs, which were duly approved in 1996 and 2003, respectively. In addition, according to the License Contract mentioned in note 4 and to the Refinery and Sales Plant Lease Contract mentioned below, Maple Gas is not responsible for environmental damages caused before the beginning of its operations. As of December 31, 2006 and 2005, Management 305

314 believes that all the Peruvian Subsidiaries are in compliance with the current environmental regulations and therefore, no provisions are required with respect to environmental matters. Operating Lease Contract of refinery and sales plant and administrative facilities On March 29 and April, 21, 2004, Maple Gas signed with Petroperú S.A. an operating lease contract of the Refinery and Sales plant in Pucallpa (Peruvian jungle) and an operating lease contract of the buildings and equipments in such location. The annual rent amounts to U$583,798. The lease expires in year 2014, but is renewable. Management intends to renew the lease. On November 15, 2004, Maple Gas signed with Inversiones Centenario S.A.A. an operating lease contract for its administrative facilities located in Lima. The monthly rent amounts to US$24,138, which increases in 2.5% annually beginning on November 15, The lease expires in year The minimum future lease payments are as follows: Minimum future lease payments payable within Office lease Refinery and sales plant 1 year 361, ,798 2 to 5 years 1,541,221 2,335,192 Thereafter 1,203,518 7,187,603 Total 3,106,652 10,106,593 Decommissioning of oil production facilities According to the clause 22.5 of the License Contract for Exploitation of Hydrocarbons for Blocks 31-B and 31- D, and clause 22.7 of the License Contract for the Exploration and Exploitation of Block 31-E, at the end of the term of the License Contracts, Maple Gas shall deliver to the Peruvian State, without any cost and charge, and in good condition, all the wells, camps, pipelines, constructions and other facilities located in the area of the License Contracts. Accordingly, no obligation exists for the decommissioning of oil wells and production facilities at the end of the License period. Royalties As a result of the License Contract signed with Perupetro S.A., Maple Gas is required to pay royalties in cash on a semi-monthly basis, applying specific percentages to the valorization of the production of hydrocarbons. The royalty expense was US$508,924 in Minimum work program As discussed in note 3.2, Maple Production has a commitment to perform a minimum work program on Block 31-E. Legal claims (a) Payment claimed by Energy Services S.A. In 2000, Maple Gas was defendant in an action initiated by Energy Services S.A. for U$248,832 (including interest expenses as of May 15, 2000), related to the acquisition and installation of a pipeline. Maple Gas filed a counter-claim against Energy Services S.A. requesting the payment of approximately US$265,000 for various concepts. Maple Gas expected to get into an agreement in the Proving Audience held on June 10, 2005; however there was no reconciliation between the parties. On April 11, 2006, the Court ruled in favor of Energy Services S.A. and ordered Maple Gas to pay US$170,148 plus interests. As a result, Energy Services S.A. retained US$200,000 from the Maple Gas s bank accounts, amount presented as a restricted fund in these consolidated balance sheets. On November 6, 2006 The Superior Court declared invalid the verdict given by the Court on April 11, 2006, and ordered The Judge to issue a new verdict. In accordance with the Maple Gas s legal advisors opinion, it is possible that the new verdict to be issued by the Judge will be favorable to Maple Gas. Thus, no provision for any liability has been made in these consolidated financial statements. 306

315 (b) Osinergmin Maple Gas has a dispute with Osinergmin, the Supervisory Organism for Energy and Mining, in connection with a fuel supply service provided in the Pucallpa airport. This dispute comes from Osinergmin claims that Maple Gas did not comply with the Regulation for Commercialization of Fuels duly approved by Supreme Decree No EM, to the extent the truck used to supply fuel does not qualify as a Supplying Plant in the Pucallpa airport. In addition, in October 2006, Osinergmin raised some observations to the supplying truck, which have been appropriately resolved. Maple Gas has not received a final pronouncement from Osinergmin yet. Osinergmin can impose a fine for up to approximately US$1 million for the period Maple Gas has been supplying fuel in the Pucallpa airport. In management and legal advisors opinion, there are sound grounds to support that Maple is in compliance with the regulations for supplying fuel. (c) Claim from Refinery s workers On November 17, 2006, Maple Gas received a communication from a group of 15 refinery workers asking for the reimbursement of their salaries for the work performed on holidays. The supposed contingency is referred to the remuneration not paid corresponding to the shifts on holidays, with a top of 12 holidays per year, since they joined Maple Gas. The amount of the contingency can fluctuate between US$200,000 and US$250,000. Management and its legal advisors consider that this claim will not result in a significant contingency considering that the days worked on holidays were compensated with free days, as permitted by the current labor regulations. Consequently, no provision was recorded at December 31, 2006 in connection with this contingency. (d) Other contingencies The Group is involved in other claims of a diverse nature. Management believes that any possible loss, which may result from these claims, will not have a materially adverse effect on the Company s financial position or result of operations. Commitments associated with cash units and non-cash units in Aguaytía MGDC has issued 5,000 Series A Preferred Shares to Scotiabank Perú S.A.A.; these non-voting shares entitle Scotiabank Perú S.A.A. to the economic benefits associated with, and only with, 7,893 cash units owned by MGDC in Aguaytía Energy, LLC. In addition, Scotiabank S.A.A has 680 shares of MGDC which entitles to, and only to, the economic benefits associated with, and only with 78 cash units and 1,360 non-cash units in Aguaytía Energy, LLC. Based on the above, the Group has assigned to Scotiabank Perú S.A.A. US$278,591 in 2006, in connection with the economic benefits associated with the dividends declared by Aguaytía Energy, LLC in this year. Commitments to purchase natural gasoline from Aguaytía As discussed in note 29, under an agreement dated July 24, 1996, Maple has a commitment to acquire at a price derived from market prices all of the natural gasoline produced by Aguaytía over the life of Aguaytía s Block 31-C license contract (30 years from Mar 30, 1994, extendable to 40 years). 29. Related parties disclosures Transactions with Aguaytía The Group had the following transactions with Aguaytía during the years ended December 31, 2006 and 2005: (a) Maple Gas signed an operation and maintenance agreement with Aguaytía Energy del Peru S.R.L. by means of which this entity would reimburse to Maple Gas, on a monthly basis, total costs incurred in compliance with this contract. In addition, based on an amendment 307

316 to this contract, Aguaytía Energy del Peru S.R.L. shall pay general and administrative costs of US$275,000 per year and a productivity bonus of US$75,000 per year. Revenues related to this service contract amounted to approximately US$176,776 for December 2006 and are recorded in the Sales caption of the consolidated statements of income. (b) Acer Comercial S.R.L. has the right and is obliged to purchase natural gasoline from Aguaytía Energy del Peru S.R.L. pursuant to a Contract to Purchase Natural Gasoline signed on July 24, During the years ended December 31, 2006 and 2005, Acer Comercial S.R.L. purchased natural gasoline amounting to approximately US$36,509,307 and US$36,216,916, respectively. These purchases are made at a price derived from a formula based on normal market prices. See cost of natural gasoline sold in the Cost of Sales caption, note 7. (c) Cash dividends received from Aguaytía Energy, LLC amounted to US$644,770 in Out of this total, US$366,179 remained in Maple and the remaining of US$278,591 was assigned to Scotiabank Perú S.A.A., see note 28. Transactions with Maple Gas (until November 30, 2006) The Company had the following transactions with Maple BVI and its Peruvian Branch until November 30, 2006, date of the business combination explained in note 3: (a) On January 15, 2006, Maple Gas signed with Acer Comercial S.R.L. (Acer) a Purchase and Sale Agreement of Solvent 1 and 3, by means of which Maple Gas must sell to Acer such products at prices, conditions and terms established in the Agreement before mentioned. This agreement is valid for one year from the date of signing, and can be extended for one additional year (currently, it has been extended until January 16, 2008). These transactions accrue interest at market rates as published by the Superintendence of Banks and Insurances. Sales made to Acer from January to November 2006 were US$12,784,056 and were eliminated as part of the consolidation. (b) Pursuant to a Purchase and Sale Agreement signed with Acer on December 5, 1997, Acer must sell to Maple Gas the natural gasoline acquired from Aguaytía. Sales of natural gasoline to Maple Gas were US$34,738,480 from January to November 30, 2006 and US$40,427,498 during As a result of the above and other minor transactions, the Group has the following accounts receivable and payable with Aguaytía and Maple Gas: Accounts receivable Aguaytía Energy del Perú S.R.L., note ,454 Maple Gas Corporation Ltd., Sucursal Peruana 5,793,373 Total accounts receivable 164,454 5,793,373 Accounts payable Aguaytía Energy del Perú S.R.L., note 25 6,175,808 5,748,504 Outstanding balances at the year-end, interest free and settlement occurs in cash. Accounts receivable are unsecured. Accounts payable are guaranteed by stand-by letters signed by Maple Gas in favor of Aguaytía which guarantees the compliance of the payment obligation held by Acer Comercial S.R.L. included in the Contract to Purchase Natural Gasoline. These stand-by letters are contracted with Peruvian banks, renewed every 6 months and amount to approximately US$3,725,141 and US$3,283,296 as of December 31, 2006 and 2005, respectively. Transactions with other related parties The Group had the following transactions with other related parties during the years ended December 31, 2006 and 2005: (a) Maple Gas has granted loans to employees amounting to a US$239,312 as of December 31, These loans do not bear interest and do no have specific maturities. (b) Maple has receivables to shareholders amounting to US$1,117,785 and US$957,471 as of December 31, 2006 and 2005, respectively. Included in these amounts are advances to key management. 308

317 (c) As of December 31, 2005, Maple received loans from Maple Gas by US$3,601,413. These intercompany loans were eliminated in 2006 as part of the restructuring explained in note 1. (d) Maple maintains a valuation allowance of US$472,014 as of December 31, 2006 (US$148,827 as of December 31, 2005) in connection with loans granted to Agricola Cerro Colorado in the past. For the years 2006 and 2005, except for allowance of Agricola Cerro Colorado above mentioned, the Group has not made any provision for doubtful debts relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Remuneration of key management Compensation of key management personnel amounted to US$184,000 in December 2006, and nil for 2005, which correspond to short-term employee benefits. Neither post-retirement and termination benefits, nor share-based payments are paid to key management. 30. Financial risk management objectives and policies The Group s principal financial instruments comprise bank loans, and cash and short-term deposits. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main risks arising from the Group s financial instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit risk. Management reviews and agrees policies for managing each of these risks, which are summarized below. Cash flow interest rate risk The Group s exposure to the risk for changes in market interest rates relates primarily to the Group s long-term debt obligations with floating interest rate. The Group s policy is to periodically negotiate with local banks its interest cost and, beginning February 8, 2005, it has entered into an interest rate swap, in which the Group agrees to exchange, at specified intervals, the difference between 3.99% fixed and three-month Libor interest rates based on the outstanding notional principal amount of the US$5,500,000 loan from Banco de Crédito del Perú. This swap matures on December 21, 2009 and the related net loss amounted to US$43,327 for the year 2006, which was recorded within finance costs caption of the consolidated statements of income. Foreign currency risk As a result of its operations in Peru, the Group s balance sheet can be affected by movements in the US$/Nuevos Soles exchange rate. The Group seeks to mitigate the effect of its currency exposure by carrying out almost all of its transactions in U.S. dollars; as a result, the Group s exposure to foreign currency risk is minimal. As of December 31, 2006, the assets and liabilities in Nuevos Soles, were: S/ Assets Trade and other receivables 14,319,254 Cash and cash equivalents 1,728,911 16,048,165 Liabilities Long-term debt 4,372,821 Trade accounts payable 12,622,577 Other current liabilities 2,804,520 19,799,918 Net liability position 3,751,753 As of December 31, 2006 and 2005, the loss (gain) from exchange differences recognized in the consolidated statement of income, amounted to US$25,456 and US$6,808, respectively. 309

318 Credit risk The Group trades only with recognized, creditworthy third parties. It is the Group s policy that all customers who wish to trade on credit terms are subject to credit verification procedures and collateral are required in most cases. In addition, receivable balances are monitored on an ongoing basis with the result that the Group s exposure to bad debts is not significant. With respect to credit risk arising from cash and cash equivalents, the Group s exposure to credit risks arises from default of the counterparty, with a maximum exposure equal to the carrying amount of this instrument. Liquidity risk The Group s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans. The Group s policy is to have medium-term maturity loans. 31. Financial instruments Fair value The carrying amount of the Group s current financial assets and liabilities approximates to their fair value due to their current maturity. The fair value of the long-term debt has been calculated by discounting the expected future cash flows, based on the Group s current incremental borrowing rates for similar types and maturities of borrowing. This debt accrues interest at floating rates, so the fair value of the long-term debt is estimated not to be materially different from its carrying value. The fair value of the interest rate swap at December 31, 2006 was not material. Interest rate risk The following table sets out the carrying amount, by maturity, of the Group s financial instruments that are exposed to interest rate risk: As of December 31, 2006 Within 1 year 1 2 years 2 3 years 3 4 years 4 5 years Fixed rate Bank overdrafts 311, ,402 Long-term debt SUNAT and SENATI 262, , , ,714 37,080 1,369,074 Floating rate Cash assets 4, , ,959 Bank loans Scotiabank Perú S.A.A. 1,830,000 1,830,000 Banco de Credito del Peru 700, ,000 Banco Financiero 537, ,078 Banco de Comercio 200, ,000 Other 250, ,000 Long-term debt Banco de Crédito del Peru 1,779,865 1,779,865 1,779, , ,965 6,189,425 Banco Financiero 1,114,167 1,114,167 Banco de Comercio 1,000,000 1,000,000 Lease agreements 126,069 74,787 33, ,729 Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The other financial instruments of the Group that are not included in the above tables are non-interest bearing and are not subject to interest rate risk. It is not relevant similar information as of December 31, 2005 due to the Group did not have significant financial obligations at those dates. 32. Subsequent events Exchange agreement with Maple Energy The Board of Directors of Maple Energy Public Limited Company (Maple Energy) held on February 7, 2007 agreed to accept the proposal of the shareholders of Maple to exchange its Total 310

319 1,619,371 shares of US$0.01 each in the capital stock of Maple, for 48,581,113 ordinary shares of US$0.01 each in the capital stock of Maple Energy. As a result, effective such date, Maple Energy is the parent of Maple Companies. During 2006, Maple made payments on behalf of Maple Energy by US$719,919 in connection with the public listing and offering of Maple Energy in the Alternative Investment Market in London. This amount is presented as an account receivable as of December 31, Investment Agreement with Infraestructura, Servicios Públicos y Recursos Naturales On March 12, 2007, Maple Energy and Maple signed an investment agreement with Infraestructura, Servicios Públicos y Recursos Naturales, an investment fund organized under the laws of Peru (the Purchaser). On March 23, 2007 (the Closing Date), upon the terms and conditions of this agreement, Maple issued and sold to the Purchaser 199,922 newly issued shares of common stock, par value of $0.01 per share, such shares representing % of the total equity interests of Maple, for an aggregate purchase price of US$10 million. Maple Energy has committed to the following: Following the Closing Date, Maple shall declare and pay a special dividend to Maple Energy in the amount of US$2 million. As of the date of this report, it is pending such dividends declaration. If the execution of definitive financing documents for the ethanol project is not achieved within 18 months after the Closing Date, Maple Enery shall compensate the Purchaser, as selected by Maple Energy, after consultation with the Purchaser: (i) making a payment of US$1 million, (ii) if shares of Maple Energy are publicly traded at the time of such payment, an amount in shares of Maple that is equivalent to the number of shares of Maple Energy having a then market value equal to US$1 million or, (iii) if Maple Energy s shares are not then publicly traded, a number of shares of Maple that represents the difference between (a) the number of shares of Maple the Purchaser received at Closing Date and (b) the number of shares the Purchaser would have received at Closing Date had the value of Maple been US$80 million. With respect to any payment that Maple BVI may be required to make to Peruvian tax authorities pursuant to any contingencies related to certain tax claims or potential tax claims for the years 2001, 2002 and 2003 (Tax Claim Payment), Maple Energy shall compensate the Purchaser by one of the following, as selected by Maple Energy, after consultation with the Purchaser: (i) making payment equal to % multiplied by the amount of the Tax Claim Payment (Pro Rata Tax Claim Amount); (ii) if shares of Maple Energy are publicly traded at the time of such Tax Claim Payment, an amount in shares of Maple that is equivalent to the number of shares of Maple Energy having a then market equal to the Pro Rata Tax Claim Amount or, (iii) if Maple Energy s shares are not then publicly traded, a number of shares Maple that represents the difference between (a) the number of shares of Maple the Purchaser received at Closing Date and (b) the number of shares the Purchaser would have received at Closing Date had the value of Maple been US$81 million less the Tax Claim Payment. Ethanol project On January 5, 2007, Maple Etanol S.R.L. (Maple Etanol) signed a contract with the Peruvian government to acquire untilled lands for the cultivation of sugar cane and to develop an industrial project for producing automotive ethanol. By means of this contract, Maple Etanol acquired 10,676 hectares and 4,637 m2 by a total amount of US$640,588, and is committed to the following: To invest US$32,029,391 in a five-year term, counting as from the date of delivery of the lands to Maple Etanol. This investment will be subject to an audit carried out by the Peruvian government. To pay in favor of the Piura region, during 20 years, an annual donation of US$500,000, resulting in a total payment of US$10 million. The initial payment will be made at the end of the first year of commercial operation. 311

320 To grant a bank security in favor of the Peruvian state by US$3,202,939, equivalent to 10% of total investment commitment. This bank security guarantees the compliance of the investment commitment and the annual donation above mentioned, and will be proportionally reduced as Maple Etanol carries out the committed investment. The bank security will be reduced to US$500,000 once Maple Etanol finishes with the committed investment of US$32,029,391, and shall be kept at such amount until Maple Etanol complies with the committed donations. Merger of Maple BVI and Maple Production As part of the restructuring of the group, Management has the intention to merge the operations of Maple Production into those of Maple BVI. This merger has not formally agreed by the shareholders of both entities; however, it is expected that it takes place during the second semester of

321 PART VI Additional Information 1. Maple Energy plc Maple Energy plc was incorporated and registered in the Republic of Ireland on 18 October 2006 under the Companies Acts as a limited company with registered number , changing its name to Maple Energy plc on 23 October The liability of the members is limited. Maple Energy plc has no commercial name other than its registered name. The registered office is 70 Sir John Rogerson s Quay, Dublin 2, Ireland. The principal place of business of Maple Energy plc is Av. Víctor Andrés Belaunde 147, Vía Principal 140, Oficina 201 Edificio Real Seis, San Isidro, Lima, Peru telephone number: The principal activities of Maple are as described in Part I of this document. Save as disclosed in Part I of this document, there are no exceptional factors, which have influenced Maple s activities. The principal legislation under which Maple Energy plc operates is the Companies Acts and the regulations thereunder and the Ordinary Shares are created under the Companies Acts. Maple Energy plc is the holding company of a number of subsidiaries. Details of these subsidiaries are set out in Section 3 of this Part VI. 2. Share Capital The authorised, issued and fully paid up share capital of Maple Energy plc as at the date of this document is as follows: Authorised Issued Ordinary Shares of Number Amount $0.01 each Number Amount 200,000,000 $2,000,000 48,581,130 $485, The authorised, issued and fully paid up share capital of Maple Energy plc, as it is expected to be immediately following Admission, will be as follows: Authorised Issued Number Amount Ordinary Shares of $0.01 each Number Amount 200,000,000 $2,000,000 75,281,130 $752, In the three years preceding 24 June 2007 (being the latest practicable date prior to the publication of this document) the following alterations in Maple Energy plc s issued share capital have occurred: Maple Energy plc was incorporated on 18 October 2006 with an authorised share capital of $1,000,000 divided into 100,000,000 Ordinary Shares of $0.01 each and an issued share capital of $0.10 divided into 10 Ordinary Shares of $0.01 each. Since incorporation, the following alterations to Maple Energy plc s share capital have taken place: (a) on 26 January 2007, by resolution duly passed by the shareholders of Maple Energy plc, the authorised share capital of Maple Energy plc was increased from $1,000,000 divided into 100,000,000 Ordinary Shares of $0.01 each to $2,000,000 divided into 200,000,000 Ordinary Shares of $0.01 each; (b) on 7 February 2007, Maple Energy plc allotted and issued 7 Ordinary Shares to certain persons as nominees for certain of the then shareholders in MCL. (c) on 8 February 2007, the entire issued share capital of Maple Energy plc at that point, comprising 17 Ordinary Shares, was transferred to the then shareholders of MCL, such that each then shareholder in MCL was transferred one Ordinary Share. (d) on 8 February 2007, pursuant to the terms of the Share Exchange Agreement, Maple Energy plc allotted and issued 48,581,113 Ordinary Shares to the then shareholders of MCL. Accordingly, as at the date of this document, the authorised share capital of Maple Energy plc is $2,000,000 divided into 200,000,000 Ordinary Shares and the issued share capital of Maple Energy plc is $485, divided into 48,581,130 Ordinary Shares. 313

322 The Subscription Shares will be issued on 13 July 2007 credited as fully paid up and free from all liens, charges, encumbrances and other third party rights and will rank in full for all dividends and other distributions declared, and paid by Maple Energy plc after Admission save in respect of the Interim Dividend described in paragraph 3.3 of Part I of this document. The Subscription Shares will be created under the Companies Acts. The International Security Identification Number of the Ordinary Shares is IE00B1FRPX03. Save as disclosed in the foregoing sub-paragraphs of this Section 2 and in Sections 4 and 12 below: (a) (b) no share or loan capital of Maple Energy plc is under option or has been agreed, conditionally or unconditionally, to be put under option; and other than upon the exercise of options granted pursuant to the rules of the Maple Energy Plc Share Option Plan 2007 as described in Section 11 of this Part VI there is no present intention to issue any of the authorised but unissued share capital of Maple Energy plc. The Ordinary Shares are all in registered form are denominated in $ and are freely transferable. There have been no public takeover bids by third parties in respect of the share capital of Maple in the last financial year and between 1 January and 5 July 2007 (being the latest practicable date before the publication of this document). 3. Maple Energy plc s Subsidiaries Maple Energy plc has the following subsidiaries. Their principal activities, registered offices, place of incorporation and the proportion of their share capital held (directly or indirectly) by MCL are shown below: Name Jurisdiction Percentage Ownership Principal Function The Maple Companies, Limited BVI 89 Acquire, hold, invest in, deal in, manage, and dispose of ownership interests in other companies or limited liability entities Acer Comercial S.R.L. Peru 100 Without limitation: purchase, sale, transportation, storage, marketing, supply and distribution of hydrocarbons Maple Etanol S.R.L. Peru 100 Production, distribution and sale of ethanol and related products The Maple Gas Corporation del Perú Ltd. Maple Production del Perú Ltd. The Maple Gas Corporation del Perú, Sucursal Peruana BVI 100 Engage in any act or activity that is not prohibited under any law for the time being in force in the British Virgin Islands BVI 100 Engage in any act or activity that is not prohibited under any law for the time being in force in the British Virgin Islands Peruvian branch of BVI subsidiary 100 Carry out hydrocarbons and byproducts exploration, exploitation, pipeline transportation, storage, processing, refining, distribution and marketing and operate gas stations and service stations 314

323 Name Jurisdiction Percentage Ownership Principal Function Maple Production del Perú, Sucursal Peruana Maple Perú Holdings Corporation The Maple Gas Development Corporation Peruvian branch of BVI subsidiary Cayman Islands Cayman Islands 100 Carry out hydrocarbons and by-products exploration, exploitation, pipeline transportation, storage, processing, refining, distribution and marketing and operate gas stations and service stations 100 economic interest; 44 voting rights 72 economic interest; 93 voting rights Holding Company to own shares in The Maple Gas Development Corporation Holding Company to own shares in Aguaytía Energy, LLC 4. Memorandum and Articles 4.1 Memorandum The Memorandum of Association of Maple Energy plc provides that the principal objects of Maple Energy plc are to act as a holding company and to explore, survey, prospect and search for oil, petroleum, natural gas, minerals, ores stones and other natural resources of all kinds, to drill for, extract, gain, pump, analyse, refine, treat, store, transport, buy, sell and otherwise deal in the same or any of them and any products or substances produced therefrom, to purchase, take on lease or in exchange, or acquire by licence, permit, concession, grant or otherwise, any lands, mines, mineral rights or deposits, whether the same be on-shore or off-shore, easements, rights and privileges which Maple Energy plc may from time to time think desirable for its business. The objects of Maple Energy plc are set out in full in clauses 2 and 3 of the Memorandum of Association of Maple Energy plc. 4.2 Articles: Material Provisions The current Articles, which were adopted on 26 January 2007, include the following material provisions: Rights of Shares on Issue Maple Energy plc may by ordinary resolution increase its share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe. Without prejudice to any special rights conferred on the holders of any existing shares or class of shares and subject to the provisions of the Companies Acts and the Articles, any share may be issued with such rights or restrictions (whether as regards dividends, return of capital, voting or otherwise) as Maple Energy plc may from time to time by ordinary resolution determine Power to Allot Shares Subject to the Companies Acts, any resolution of Maple Energy plc in a general meeting and as provided for in the Articles, the shares shall be at the disposal of the Directors, and they may (subject to the provisions of the Companies Acts) allot, grant options over or otherwise dispose of them to such persons on such terms and conditions and at such times as they may consider to be in the best interests of Maple Energy plc and its shareholders, but so that no share shall be issued at a discount, and so that in the case of shares offered to the public for subscription, the amount payable on application on each share shall not be less than 25% of the nominal value of the share and the whole of any premium on it Voting Rights Votes at general meetings may be given either personally or by proxy. Subject to any rights or restrictions attached to any class of shares and subject to the Articles, on a show of hands every member present in person and every proxy shall have one vote (but no individual shall have more than one vote), and on a poll every member shall have one vote for every share carrying rights of which he is the holder. On a poll a member entitled to more than one vote need not cast all his votes or cast all the votes he uses in the same way. Following Admission, major shareholders will have no different voting rights to any other shareholder. 315

324 4.2.4 General Meetings Maple Energy plc shall hold in each year a general meeting as its annual general meeting in addition to any other meeting in that year and shall specify the meeting as such in the notices calling it. Not more than fifteen months shall elapse between the date of one annual general meeting and that of the next. Subject to the Companies Acts allowing a general meeting to be called by shorter notice, an annual general meeting and an extraordinary general meeting called for the passing of a special resolution shall be called by at least 21 clear days notice and in any other case by at least 14 clear days notice. Any notice convening a general meeting shall specify the time and place of the meeting and, in the case of special business, the general nature of that business. Subject to any restrictions imposed on any shares, the notice shall be given to all the members and to the Directors and the auditors. The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings of the meeting. The Board may impose requirements on any person wishing to attend any meeting for the purpose of establishing their entitlement to so attend. The chairman shall take such action as he thinks fit to promote the orderly conduct of the general meeting. All business that is transacted at an extraordinary general meeting shall be deemed special. All business that is transacted at an annual general meeting shall also be deemed special, with the exception of (i) declaring a dividend; (ii) the consideration of the accounts, balance sheets and reports of the Directors and auditors; (iii) the appointment of Directors in the place of those retiring; (iv) the fixing of the remuneration of the Directors; (v) the re-appointment of the retiring auditors; and (iv) the fixing of the remuneration of the auditors. No business other than the appointment of the chairman shall be transacted at any general meeting unless two persons, each being a member or a proxy for a member in each case entitled to attend and to vote on the business to be transacted is present at the time when the meeting proceeds to business Transfer of Shares The shares of any member may be transferred by instrument in writing in any usual or common form or any other form which the Directors may approve. The instrument of transfer of any share shall be executed by or on behalf of the transferor and, in cases where the share is not fully paid, by or on behalf of the transferee. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members. The Directors may recognise a renunciation of the allotment of any shares by the allottee in favour of some other person at any time after the allotment of the share but before the allottee has been entered into the register. The Directors in their absolute discretion may decline to register any transfer, or renunciation of a renounceable letter of allotment, or a share which s not fully paid provided that the Directors shall not refuse to register any transfer or renunciation of partly paid shares which are listed or dealt in on any relevant market on the grounds that they are partly paid shares in circumstances where such refusal would prevent dealings in such shares from taking place on an open and proper basis. The Directors may decline to recognise any instrument of transfer, or renunciation of a renounceable letter of allotment, of any shares unless: (i) it is in respect of a share which is fully paid up; (ii) it is lodged at the registered office or at such other place as the Directors may appoint and is accompanied by the certificate of the shares to which it relates (except in the case of a transfer by a Stock Exchange Nominee (as defined in the Articles) where no certificate has been issued in respect of the shares in question or in the case of a renunciation) and such other evidence as the Directors may reasonably require to prove the title of the transferor or person renouncing and the due execution of the transfer or renunciation by him or, if the transfer or renunciation is executed by some other person on his behalf, the authority of that person to do so; (iii) it is in respect of one class of share only; and (iv) it is in favour of not more than 4 persons jointly. The Directors may permit any class of shares to be held in uncertificated form and title to those shares to be transferred by means of a relevant system. The Directors may refuse to register a transfer of an uncertificated share only in such circumstances as may be permitted or required by the CREST Regulations. The provisions of the Articles shall not apply to any uncertificated shares to the extent that such provisions are inconsistent with: (i) the holding of the shares in uncertificated form; (ii) the transfer of title to shares by means of a relevant system; or (iii) any provisions of the CREST Regulations. 316

325 4.2.6 Dividend Rights Subject to the provisions of the Companies Acts and the Articles, Maple Energy plc may by ordinary declare dividends in accordance with the respective rights of the members, but no dividend shall exceed the amount recommended by the Directors. The Directors may declare and pay such interim dividends as appear to them to be justified by the profits of Maple Energy plc available for distribution. If the share capital is divided into different classes, the Directors may declare and pay interim dividends on shares which confer deferred or non-preferred rights with regard to dividend as well as on shares which confer preferential rights with regard to dividend, but subject always to any restrictions for the time being in force relating to the application, or the priority of application, of Maple Energy plc s profits available for distribution or to the declaration or (as the case may be) the payment of dividends by Maple Energy plc. No dividend or other moneys payable in respect of a share shall bear interest against Maple Energy plc unless otherwise provided by the rights attached to the share. The Directors may deduct from any dividend or other moneys payable to any member in respect of a share all sums of moneys (if any) presently payable by him to Maple Energy plc in relation to shares of Maple Energy plc. All dividends, interest or other sums payable which remains unclaimed for one year after having been declared may be invested or otherwise made use of by the Directors for the benefit of Maple Energy plc until claimed. If the Directors so resolve, all dividends or interest which have remained unclaimed for 12 years after having been declared shall be forfeited and cease to remain owing by Maple Energy plc Rights on Winding Up If Maple Energy plc is wound up and the assets available for distribution among the members are insufficient to repay the whole of the paid up share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively. If in a winding up the assets available for distribution among the members is more than sufficient to repay the whole of the share capital paid up at the commencement of the winding up, the excess shall be distributed among the members in proportion to the capital at the commencement of the winding up paid up on the shares held by the respectively save where shares have been issued upon special terms and conditions. If Maple Energy plc is wound up, the liquidator may, with the authority of a special resolution of Maple Energy plc divide among the members in specie or kind the whole or any part of the assets of Maple Energy plc whether they shall consist of property of the same kind or not or, with the like authority, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as, with the like authority, he determines, but so that no member shall be compelled to accept any assets upon which there is a liability Variation of Rights Whenever the share capital is divided into different classes of shares, the rights attached to any class may be varied or abrogated with the consent in writing of the holders of three-fourths in nominal value of the issued shares of that class, or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class, and may be so varied or abrogated either whilst Maple Energy plc is a going concern or during or in contemplation of a winding-up. The rights conferred upon the holders of the shares of any class shall not, unless otherwise expressly provided by the Articles of the terms of the issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith or subordinate thereto or by the purchase or redemption by Maple Energy plc of any of its shares Purchase of Own Shares Subject to the provisions of the Companies Acts, the requirements of the London Stock Exchange and to any rights conferred on the holders of any class of shares, Maple Energy plc may purchase all or any of its own shares of any class, including any redeemable shares, provided always that where at the time at which Maple Energy plc in general meeting authorises any such purchase 317

326 Maple Energy plc has in issue any class of securities which are convertible not, exchangeable for or carry a right to subscribe for equity shares of the class authorised to be purchased and are listed on AIM, then unless the trust deed constituting, or the terms of issue of, such securities provide for the purchase by Maple Energy plc of its own equity shares, no such purchase shall be permitted without the prior consent in writing of the holders of three fourths in nominal value, or the prior sanction of a special resolution passed at a separate general meeting of the holders, of each such class of securities. Maple Energy plc shall not exercise any authority granted under Section 215 of the 1990 Act to make market purchases of its own shares unless the authority required by such section shall have been granted by a special resolution of Maple Energy plc. Neither Maple Energy plc nor the Directors shall be required to select the shares to be purchased rateably or in any other particular manner as between the holders of shares of the same class or as between them and the holders of shares of any other class or in accordance with the rights as to dividends or capital conferred by any class of shares. Subject to the provisions of the Companies Acts, Maple Energy plc may cancel any shares so purchased or may hold them as treasury shares and re-issue any such treasury shares as shares of any class or classes or cancel them Disapplication of pre-emption rights With effect from Admission and subject to the Directors being generally authorised pursuant to Section 20 of the 1983 Act, the Directors are empowered (for so long as any such empowerment shall remain in full force and effect) to allot equity securities (as defined by Section 23 of the 1983 Act) for cash pursuant to the authority conferred by the said Section 20 as if sub-section (1) of the said Section 23 did not apply to any such allotment provided that this power shall be limited to: (a) the allotment of equity securities (including, without limitation any shares purchased by Maple Energy plc pursuant to the provisions of the 1990 Act and held as treasury shares) in connection with any offer of securities, open for a period fixed by the Directors, by way of rights, open offer or otherwise in favour of the holders of Ordinary Shares and/or any person having a right to subscribe for or convert securities into Ordinary Shares in the capital of Maple Energy plc (including, without limitation, any person entitled to options under any of Maple Energy plc s share option schemes for the time being) and subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to legal or practical problems under the law of, or the requirement of any recognised body or stock exchange in any territory; (b) the allotment of equity securities pursuant to any option, warrant or similar arrangement entered into by Maple Energy plc or any of its subsidiary undertakings; and (c) (in addition to the authority referred to in sub-paragraphs (a) and (b) above), the allotment of equity securities (including, without limitation, any shares purchased by Maple Energy plc pursuant to the provisions of the 1990 Act and held as treasury shares) up to a maximum aggregate nominal value of 20% of the issued capital of Maple Energy plc immediately following Admission or, in respect of any renewal of this authority, at the close of business on the date on which such renewal shall be granted. The authority conferred on the Directors to allot equity securities for cash as if sub-section (1) of the said Section 23 did not apply to any such allotment shall, unless previously renewed, revoked or varied by special resolution of Maple Energy plc in general meeting, expire on the close of business on the day of the next annual general meeting of Maple Energy plc, save that Maple Energy plc may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry, and the Directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired. For the avoidance of doubt, the authority conferred on the Directors described in this Section does not include the authority separately conferred on them to allot equity securities for cash as if sub-section (1) of the said Section 23 did not apply to any such allotment in order to satisfy any allotment of Ordinary Shares which is required to be made by Maple Energy plc pursuant to the terms of the Option Contract or pursuant to the IFC s option to subscribe for Ordinary Shares Authority to issue shares With effect from Admission, the Directors shall, for the purposes of Section 20 of the 1983 Act, be generally and unconditionally authorised to exercise all powers of Maple Energy plc to allot and issue relevant securities (as defined by the said Section 20) up to a maximum aggregate nominal 318

327 amount which is equal to one third of the allotted and fully paid share capital of Maple Energy plc immediately following Admission and to allot and issue any shares purchased by Maple Energy plc pursuant to the provisions of Part Xl of the 1990 Act and held as treasury shares. The authority conferred on the Directors under Section 20 of the 1983 Act by the Articles referred to in the paragraph above shall expire on 25 January 2012 unless previously renewed, varied or revoked by Maple Energy plc in general meeting, provided that, Maple Energy plc may make an offer or agreement before the expiration of this authority which would or might require relevant securities to be allotted after the expiration of this authority and the Directors may allot relevant securities in pursuance of any such offer or agreement. For the avoidance of doubt, the authority conferred on the Directors described in this Section does not include the authority separately conferred on them to allot and issue relevant securities (as defined by the said Section 20) in order to satisfy any allotment of Ordinary Shares which is required to be made by Maple Energy plc pursuant to the terms of the Option Contract Untraced Shareholders Maple Energy plc shall be entitled to sell to any person, at the best price reasonably obtainable, any share of any shareholder if and provided that: (a) (b) (c) (d) during the period of 12 years prior to the date of the publication of the advertisements referred to in sub-paragraph (b) below, no cheque or warrant sent by Maple Energy plc through the post in a pre-paid letter addressed to the relevant shareholder at his address in the register of members of Maple Energy plc or the last known address given by the relevant shareholder as that to which cheques and warrants are to be sent instead of being cashed and no indication in respect of such shares shall have been received by Maple Energy plc and the relevant shareholder or the person entitled by transmission (provided that during such 12 year period, at least three dividends shall become payable in respect of such share); Maple Energy plc shall have given notice of its intention to sell such share by advertisement in a leading daily newspaper with national circulation in the Republic of Ireland and in a newspaper circulating in the area which the address referred to in sub-paragraph (a) above is located (which advertisements, if not published on the same day, shall have been published within 30 days of each other); during the further period of 3 months after the date of the advertisements and prior to the exercise of the power of sale, Maple Energy plc shall not have received any communications in respect of such share from the relevant shareholder or the person entitled by transmission; and Maple Energy plc shall have given notice in writing to the appropriate section of the London Stock Exchange of its intention to sell such share, if shares of the class concerned are listed or dealt with on any regulated market of that Exchange. Maple Energy plc shall account to the relevant shareholder or the person entitled to such share for the net proceeds of such sale by carrying all monies in respect thereof to a separate account and shall be a permanent debt of Maple Energy plc. Monies carried to such separate account may be either employed in the business of the Company or invested in such investment as the Directors may from time to time think fit. No interest shall be payable to such shareholder or other person in respect of such monies and Maple Energy plc shall not be required to account for any money earned on them Capitalisation and Share Premiums. The Directors may with the authority of an ordinary resolution of Maple Energy plc passed upon the recommendation of the Directors: (a) resolve to capitalise any amount standing to the credit of the profit and loss account not required for paying any preferential dividend (whether or not they are available for distribution) or any sum standing to the credit of any reserve or fund of Maple Energy plc which is available for distribution or standing to the credit of the share premium account, capital redemption reserve or capital conversion reserve fund, or any other undistributable reserve of Maple Energy plc; 319

328 (b) appropriate the sum resolved to be capitalised to the holders of Ordinary Shares in proportion to the nominal amount of the shares (whether or not fully paid) held by them respectively which would entitle them to participate in the distribution of that sum, if the shares were fully paid and the sum were then distributable and were distributed by way of dividend and apply such sum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid or any share held by them respectively, or in paying up in full ownership shares or debentures of Maple Energy plc of a nominal amount equal to that sum, and allot the shares or debentures credited as fully paid to those holders of Ordinary Shares or as they may direct, in those proportions, or partly in one way and partly in the other, provided that: (i) the share premium account, the capital redemption reserve, the capital conversion reserve fund and any profits which are not available for distribution may only be applied in paying up unissued shares to be issued to the holders of Ordinary Shares credited as fully paid; and (ii) in a case where the sum is applied in paying amounts for the time being unpaid on any shares of Maple Energy plc or in paying up in the form of debentures of Maple Energy plc, the amount of the net assets of Maple Energy plc at that time is not less than the aggregate of the called up share capital of Maple Energy plc and its undistributable reserve as shown in the latest audited accounts for Maple Energy plc or such other accounts as may be relevant and would not be reduced below that aggregate by the payment thereof Proxies Each member entitled to attend and vote at a general meeting may appoint a proxy to attend, speak and vote on his behalf. The instrument appointing a proxy shall be in writing in any usual form or in any other form which the Directors may approve and shall be executed by or on behalf of the appointor. A proxy need not be a member of Maple Energy plc. The instrument appointing a proxy and the power of attorney or other authority if any, under which it is executed, or a copy of such authority certified by a notary or in some other way approved by the Directors, shall be deposited at Maple Energy plc s registered office or such other place or one of such places (if any) as may be specified for that purpose in or by way of note to the notice convening the meeting or any instrument of proxy sent out by Maple Energy plc in relation to the meeting, not less than 48 hours before the time appointed for the holding of the meeting or adjourned meeting or (in the case of a poll taken on a date after the date of the meeting or adjourned meeting at which the poll was demanded) for the taking of the poll at which the instrument for proxy is to be used and in default shall not be treated as valid; provided that: (a) in the case of a meeting which is adjourned to a date which is after but less than seven days after the date of the meeting which was adjourned or in the case of a poll which is to be taken on a date which is after but less than 7 days after the date of the meeting were adjourned, the meeting at which the poll was demanded, it shall be sufficient that the instrument of proxy and any such authority and certification thereof as aforesaid is lodged with the company secretary at the commencement of the adjourned meeting (or as the case may be) of the taking of the poll; and (b) an instrument of proxy relating to more than one meeting (including any adjournment thereof) having been once so delivered for the purpose of any meeting shall not require to be delivered again for the purpose of any subsequent meeting which it relates. Deposit of an instrument of proxy in respect of the meeting shall not preclude a member from attending the meeting or any adjournment thereof. The instrument appointing a proxy shall be valid, unless the contrary is stated therein, as well for any adjournment of the meeting as for the meeting to which it relates. The Directors may allow a proxy to be appointed by electronic communication or by other data transmission process, subject to any limitation, conditions or restrictions that they decide. Such appointment shall be delivered to Maple Energy plc in a manner specified by the Directors. The Directors may require any evidence they think appropriate to satisfy themselves that electronic appointment is genuine and may prescribe the method of determining the time and the address at which any such electronic appointment is to be treated as received by Maple Energy plc. 320

329 Demand for a Poll at a General Meeting Subject to the provisions of the Companies Acts, a poll may be demanded: (a) by the chairman of the meeting; (b) by at least three members present (in person or by proxy) having the right to vote at the meeting; (c) by any member or members present (in person or by proxy) representing not less than one-tenth of the total rights of all the members having the right to vote at the meeting; or (d) by a member or members present (in person or by proxy) holding shares in Maple Energy plc conferring the right to vote at the meeting being shared on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right. The chairman of the meeting may also demand a poll before a resolution is put to the vote on a show of hands Disclosure of Interests A Director who is in any way, whether directly or indirectly, interested in any contract, arrangement, transaction or proposal with Maple Energy plc must declare the nature of his interest at the meeting of the Directors at which the question of entering into the contract, arrangement, transaction or proposal is first considered, or, if the Director was not at the date of that meeting interested therein, at the next meeting of the Directors held after he became so interested, and, in a case where the Director becomes interested in a contract, arrangement, transaction or proposal after it is made, at the first meeting of the Directors held after he becomes so interested Power of a Company to Investigate Interests in Shares If in their absolute discretion the Directors consider it to in the interests of Maple Energy plc to do so, they may by notice require any holder of a share, or any other person appearing to be interested or to have been interested in such share, to disclose to Maple Energy plc in writing within such period as may be specified in such notice (which shall not be less than 28 clear days from the date of issue of such notice) such information as the Directors shall require relating to the ownership of or any interest in such share and as lies within the knowledge of such holder or any other person including any information which Maple Energy plc is entitled to seek pursuant to Section 81 of the 1990 Act. If a member, or a person appearing to be interested in shares held by a member, has been duly served with a notice under Section 81 of the 1990 Act and is in default for the period of 14 days in supplying to Maple Energy plc the required information, the Board may on expiry of the 14 day period by notice (a restriction notice ) to the member, direct that in respect of the shares in relation to which the default occurred (the default shares ) and for so long as such restriction notice remains in force: (a) the member is not entitled to vote, either personally or by proxy, at a general meeting or a meeting of the holders of any class of shares of Maple Energy plc or to exercise any right to attend general meetings or meetings of the holders of any class of shares of Maple Energy plc; (b) where the default shares represent at least 0.25% of the issued shares of a class, the restriction notice may additionally direct: (i) except in a winding up of Maple Energy plc, that any dividend or other money or shares issued in lieu of dividend which would otherwise be payable or issued in respect of each of the default shares shall (in whole or part) be retained by Maple Energy plc until such time as the restriction notice ceases to have effect (without any liability to pay interest thereon); and/or (ii) that no transfer of the default shares which is not an approved transfer for the purposes of the Articles shall be registered unless the member is not himself in default as regards supplying the information required and the transfer is of part only of the member s holding and, when presented for registration, is accompanied by a certificate by the member in a form satisfactory to the Board to the effect that, after due and careful enquiry, the member is satisfied that none of the shares the subject of the transfer is a default share. 321

330 Electronic Communications The Directors may allow a proxy to be appointed by electronic communication or by other data transmission process, subject to any limitation, conditions or restrictions that they decide. Maple Energy plc may pay any dividend, interest or other moneys payable in cash in respect of shares by a method of electronic media, as the Directors consider this appropriate. Where under the Articles a document requires to be signed by a member or other person then, if in the form of an electronic communication, it must to be valid incorporate the electronic signature or personal identification details (which may be details previously allocated by Maple Energy plc) of that member or other person, in such form as the Directors may approve, or be accompanied by such other evidence as the Directors may require to satisfy themselves that the document is genuine Interests in a Company Shareholders holding 3% or more of the issued share capital of Maple Energy plc at any time are required to notify their interests in Maple Energy plc to Maple Energy plc on the business day following such shareholder increasing or decreasing such holding through any single percentage. 4.3 Articles: Other Provisions In addition to the provisions in the Articles set out above, which relate principally to the Ordinary Shares, the Articles also include the following provisions: Directors Under the Articles, unless otherwise determined by Maple Energy plc in general meeting, Maple Energy plc must have at least two Directors and not more than nine Directors (not counting alternate directors) Powers of Directors The business of Maple Energy plc is managed by, or under the direction of, the Directors, who may exercise all powers of Maple Energy plc Retirement and Re-election of Directors At every annual general meeting of Maple Energy plc one third of the Directors who are subject to retirement by rotation or, if their number is not three or a multiple of three, the nearest number to one third shall retire from office. Each such Director shall be eligible for re-appointment with the exception of any Director who has agreed to retire at an annual general meeting (whether in accordance with the terms of his appointment or otherwise) unless the Directors have agreed that he shall be eligible for re-appointment. Maple Energy plc at the meeting at which a Director retires may by ordinary resolution, fill the office being vacated by appointing the retiring Director (if eligible for re-appointment) or some other person eligible for appointment. No person other than a Director retiring at the meeting shall be appointed or re-appointed a Director at any general meeting unless he is recommended by the Directors or, not less than seven nor more than 42 days before the date appointed for the meeting, notice executed by a member qualified to vote at the meeting has been given to Maple Energy plc of the intention to propose that person for appointment, together with notice executed by that person of his willingness to be appointed. A Director is not required to retire at any time on account of age Director s Indemnity and Insurance In accordance with the Articles and to the extent permitted by law but without prejudice to any indemnity to which the person concerned may otherwise be entitled, every Director, secretary and other officer of Maple Energy plc and its subsidiaries is entitled to be indemnified by Maple Energy plc against all costs, charges, losses, expenses and liabilities incurred by him in the execution or discharge of his duties or in relation thereto including any liability incurred by him in defending any proceedings, civil or criminal, which relate to any thing done or omitted to be done or alleged to have been done or omitted by him as an officer or employee of Maple Energy plc and in which: (i) judgment is given in his favour; (ii) the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part; or (iii) he is acquitted or in 322

331 connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted to him by the court. The Directors have the power to purchase and maintain insurance for the benefit of any person who is or was at any time a Director, secretary or other officer or employee or auditor of Maple Energy plc or of any holding company of Maple Energy plc or of any subsidiary of Maple Energy plc or of such holding company, or who is or was at any time a trustee of any pension or retirement benefit scheme for the benefit of any employees or ex-employees of Maple Energy plc or of any such other company as aforesaid, including insurance against any liability incurred by any such person in respect of any act or omission in the actual or purported execution or discharge of his duties or in the exercise or purported exercise of his powers or otherwise in connection with his duties, powers or offices in relation to Maple Energy plc or any such other company as aforesaid or any such pension or retirement benefit scheme Restrictions on Director s Voting Save as otherwise provided by the Articles, a Director shall not vote at a meeting of the Directors or a committee of Directors on any resolution concerning a matter in which he has an interest which (together with any interest of any person connected with him within the meaning of the Articles is to his knowledge material (otherwise than by virtue of his interests in shares or debentures or other securities of or otherwise in or through Maple Energy plc). A Director shall not be counted in the quorum present at a meeting in relation to any such resolution on which he is not entitled to vote. A Director shall be entitled to vote (and to be counted in the quorum) in respect of any resolution concerning certain matters, including: (a) the giving of any security, guarantee or indemnity to him in respect of money lent or obligations incurred by him or any other person at the request of or for the benefit of Maple Energy plc or any of its subsidiaries; and (b) the giving of any security, guarantee or indemnity in respect of a debt or obligation of Maple Energy plc or any of its subsidiaries for which he himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the giving of security Borrowing Powers Subject to the Companies Acts, the Board may exercise all the powers of Maple Energy plc to borrow or raise money and to mortgage or charge its undertaking, property and assets and uncalled capital or any part thereof and to issue debentures, debenture stock and other securities, whether outright or as collateral security for any debt, liability or obligation of Maple Energy plc or of any third party, without any limitation as to amount Lien Maple Energy plc shall have a first and paramount lien upon any share (not being a fully paid up share) for all monies (whether presently payable or not), payable at a fixed time or called in respect of the share. Maple Energy plc s lien shall extend to all monies payable in respect of it Destruction of Records Maple Energy plc shall be entitled to destroy (i) all registered instruments of transfer after the expiration of six years from the date of registration; (ii) all dividend mandates and notifications of change of name and or address after the expiration of two years from the date of recording; (iii) all cancelled share certificates after the expiration of 1 year after cancellation and (iv) all other documents on the basis of which any entry in the register of members is made, at any time after the expiry of six years from the date on which an entry in the register was first made in respect of it. 4.4 Irish Company Law Share Capital Under Irish law, a company may issue shares at a premium, i.e. at a price higher than their nominal value. A premium obtained from the issue of shares is not, however, part of a company s trading profit. Instead it is treated like the capital of the company and it is transferred to a designated account known as the share premium account. Section 62 of the Act provides that the rules governing the maintenance of capital apply to the share premium account in the same way as they apply to the paid up share capital of the company. The section goes on to permit four applications of the share premium account: 323

332 (a) paying up unissued shares of the company and issuing them to members of the company as fully paid up bonus shares; (b) writing off the preliminary expenses of the company; (c) writing off the preliminary expenses of, or the commission paid on, any issue of shares or debentures in the company; and (d) providing for the premium payable on redemption of any redeemable preference shares pursuant to Section 220 of the 1990 Act Meeting of Shareholders Every shareholder who appears on the register of members is entitled to attend meetings of the company unless the terms of issue of his share and the company s constitutional documents provide otherwise. Such shareholders are also entitled to vote on any questions which are to be decided by the meeting. With the exception of the Annual General Meeting ( AGM ), which is a statutory requirement, the holding of members meetings is largely at the discretion of the company Financial Assistance to Purchase Shares of a Company or its Holding Company Section 60 ( Section 60 ) of the Act provides that it is unlawful for an Irish incorporated company to give, whether direct or indirect and whether by means of a loan, guarantee, the provision of security or otherwise, financial assistance for the purpose of or in connection with a purchase or subscription for the company s shares or the shares of its holding company. This prohibition can apply in certain circumstances where the financial assistance is provided by a subsidiary of the company. There are certain exemptions to the basic prohibition, to the extent that the company s net assets are not thereby reduced, including (i) the payment by the company of a dividend, (ii) the discharge by the company of a liability lawfully incurred by it, (iii) the provision of finance or delivery of security to discharge or effect what is commonly known as refinancing of an existing loan or other liability or security in relation to that existing loan where the incurring of the existing loan or liability or the delivery of the existing security occurred under the authority of a special resolution of the company, (iv) the making by the company of loans to persons, other than directors, bona fide in the employment of the company with a view to enabling persons to subscribe for shares in the company, (v) the incurring of expenses by the company for the purpose of facilitating the admission of any shares in the company to, or the continuance of a facility afforded to the company for the trading of such shares on a regulated market (as defined in Article 1(13) of European Council Directive 93/22/EC) or other securities market and (vi) in connection with the allotment of shares by the company, the payment by the company of commissions not exceeding 10% of the money received in respect of such allotment to intermediaries and the payment by the company of professional fees Dividends and Distributions Section 45(1) of the 1983 Act prohibits an Irish company from making a distribution save out of profits available for the purpose. The term distribution is defined as meaning every description of distribution of a company s assets to members of the company whether in cash or otherwise. Section 45(2) of the 1983 Act defines profits available for distribution as meaning a company s accumulated realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated realised losses, so far as not previously written off in a reduction or re-organisation of capital duly made Protection of Minorities Derivative actions before the Irish courts are generally available to shareholders in Irish companies in the following circumstances: (a) where an act has been perpetrated which is either outside the company s corporate power or is an illegal act; (b) where a greater percentage of the company s shareholders was required to approve a particular act than actually approved it; (c) where the shareholder s personal rights are infringed; (d) where a fraud has been perpetrated upon a minority by those in control; or (e) where the justice of the case requires a minority to be permitted to institute proceedings. 324

333 Any member of a company who complains that the affairs of the company are being conducted and the powers of the directors of the company are being exercised in a manner oppressive to him or any of the members (including himself), or in disregard of his or their interests as members, they may apply to the High Court of Ireland for an order under Section 205 of the Act. Where it is demonstrated to the Court s satisfaction that relief under this section should be available, the Court is empowered to make such order as it thinks fit, including any of the following courses of action: (a) that the oppressor buy the complaining shareholder s shares; (b) that the complaining shareholder buy the oppressor s shares; (c) that the company buy either party s shares; (d) that the company s memorandum and/or articles of association are amended to provide as the court directs; or (e) that the company be wound up. Irish law also provides that the company may be wound up by the High Court of Ireland if the Court is of the opinion that it is just and equitable to do so. Shareholders may also apply to the Court for relief in the following instances: (a) on the alteration of the objects clause in the memorandum of association; (b) on the alteration of the articles of association, whether in respect of any individual shareholders rights or class rights; (c) on a reduction of capital; (d) on the provision of financial assistance in connection with the purchase of the company s own shares; (e) on the entering into of a guarantee or the provision of security in connection with a loan, quasi-loan or credit transaction in favour of directors of the company or the company s holding company or persons connected with such directors; (f) in a scheme of arrangement; (g) in a reconstruction on a voluntary liquidation; and (h) on the compulsory acquisition of shares Management Every director of a company must exercise his powers and discharge his duties honestly and in good faith with a view to the best interests of the company and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances Accounting and Auditing Requirements The 1990 Act requires all companies to keep proper books of account, giving a true and fair view of the state of the company s affairs and explaining its transactions. Books of account must be kept on a continuous and consistent basis. The books of account must contain: (a) entries from day to day of all sums of money received and expended by the company; (b) a record of the assets and liabilities of the company; (c) if the company s business involves dealing in goods: (i) a record of all goods purchased and of all goods sold; and (ii) a statement of stock held by the company at the end of each financial year and all records of stocktakings; and (d) if the company s business involves the provision of services, a record of the services provided and of all the invoices relating thereto. The books of account may be kept at the company s registered office, or at such other place as the directors think fit. If the books are kept at a place outside the Republic of Ireland details of the accounts and returns must be sent to a place within the Republic of Ireland at least every six months to enable the financial position of the company to be discerned, and to enable the company s annual accounts and annual return to be prepared. 325

334 Directors of the company are required to lay the following accounts and reports before the AGM of the company s members: (a) a profit and loss account; (b) a balance sheet as at the date to which the profit and loss account is made up; (c) a directors report, attached to the balance sheet, detailing the state of the company s affairs; and (d) an auditors report on the accounts examined by them and on the balance sheet, profit and loss account, directors report and any group accounts laid before the AGM. Specified accounting principles are to be observed in the preparation of the annual accounts, the accounts are required to follow specified formats and must disclose certain information by way of note to the accounts. Copies of the annual accounts must be signed by the directors and sent to every member and debenture holder of the company not less than 21 days before the AGM. Every member is entitled to copies of the preceding year s annual account without charge Auditors Every company, with limited exceptions, is required to appoint an auditor or auditors at its AGM, to hold office from the conclusion of that AGM until the conclusion of the next AGM. The appointment of auditors is principally a matter for the shareholders in a general meeting. Not all appointments of auditors need be made at the AGM. The first auditors of the company may be appointed by the directors at any time before the first AGM, and if they fail to do so, the company in a general meeting may make the appointment. The Act prescribes that a retiring auditor shall automatically be re-appointed without any resolution being passed, unless one of the following conditions is satisfied: (a) he is not qualified for re-appointment; (b) a resolution has been passed at that meeting appointing somebody instead of him; (c) notice of a resolution to appoint somebody else instead of him has been given, but the proposed resolution cannot be passed because of the death, insanity or disqualification of the replacement; (d) a resolution has been passed at that meeting providing expressly that he shall not be reappointed; or (e) he has given notice in writing of his unwillingness to be re-appointed. An auditor may be removed by ordinary resolution of the company in a general meeting and another auditor, nominated by any member of the company may be appointed instead. Extended notice of the intended resolution must be given to the members, save where the resolution refers to the first auditor in which case only 14 days notice need be given. When the company receives notice of the proposed removal, it must send a copy of the resolution to the auditor proposed to be removed Loans to Directors Irish company law restricts the making of loans, the entering into of credit transactions (where the company is the creditor) and the entering into of guarantees or the provision of security by companies to and with their directors in certain circumstances. Certain exemptions are available Inspection of Corporate Records A company must allow its register of members to be open for inspection for at least two hours per day to any member free of charge and to any other person upon payment of such reasonable fee which may not exceed u0.06. The register may not be closed for more than 30 days in each year Changes to the Articles and Variation of Class Rights An Irish company may alter its articles of association by passing a special resolution, which is a resolution passed by at least 75% of the members present (whether in person or by proxy) in a general meeting of the company, where each of those present and voting in favour of the special resolution is entitled to vote at a general meeting. The right of the members to amend the articles of association is restricted where the amendments are contrary to law or where an additional 326

335 liability is imposed on the members. The rights attaching to any class of shares in a company under its articles of association may be varied or abrogated with the consent in writing of the holders of 75% in nominal value of the issued shares in that class, or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of that class, and may be so varied or abrogated either whilst the company is a going concern or during or in contemplation of a winding-up. 5. Directors of Maple Energy plc The Directors, their respective functions within Maple Energy plc and brief biographies are set out in Part I of this document. During the five years immediately prior to the date of this document, other than members of Maple Energy plc, the Directors have held or currently hold the following directorships and/or are or were partners of the following partnerships: Director Rex Canon Jack Hanks Carlos Antonio de la Guerra Sison Nigel B. Christie Gianfranco Castagnola Zúñiga Carlos Enrique Palacios Rey Current directorships/ partnerships Aguaytía Energy, LLC Agricola Cerro Colorado S.A.C. Maple Resources Corporation The Maple Gas Corporation Carpenter Creek LLC Cia Inmobiliaria Caroal Cia Inmobiliaria Lossana Cia Inmobiliaria Gacial Agricola Cerro Prieto Sociedad Agricola Moche Norte PetroAnderra S.A. Negociacion Agricola Tomabal RP&C International Limited Lottery Dynamics Corp. Integrated Group Assets, Inc. Catcando Properties Limited APOYO Consultoría AC Capitales SAFI Investment Committee, Investment Fund in Infrastructure, Public Services and Natural Resources Cementos Pacasmayo S.A.A. SAGA Falabella S.A. Austral Group S.A.A. Red Eléctrica del Sur S.A. Ferrovías Central Andino S.A. Italo Peruvian Chamber of Commerce Scotiabank Perú S.A.A. Cia de Seguros Pacifico Peruano Suiza Administradora Jockey Plaza Shopping Centre Centros Comerciales del Peru Negocios Mancoche Cosmos Callao Franquicias Alimentarias Sindicato de Inversiones y Administracion Nuevas Inversiones S.A. Save as disclosed in this document, none of the Directors has: Former directorships/ partnerships in previous five years The Maple Gas Corporation American Resource Holdings Ltd. Peru Energy Holdings Corporation JRE Holdings Inc. JRE Finance Company IAQUA.COM Inc Peru Energy Holdings Corporation IAQUA.COM Inc Petro Pacifico Drilling GMB N/A N/A Cía Minera Volcan Inversiones Mobiliarias Lima Sudameris Holding Depósitos S.A. Wiese Sudameris Leasing Banco Wiese Sudameris (a) (b) any unspent convictions in relation to indictable offences; ever been declared bankrupt or been the subject of an individual voluntary arrangement; 327

336 (c) (d) (e) (f) ever been a director of a company which, while he was a director or within 12 months of his ceasing to be a director, had a receiver appointed or entered into compulsory liquidation, creditors voluntary liquidation, administration, company voluntary arrangement or any composition or arrangement with its creditors generally or with any class of its creditors; ever been a partner within a partnership which, while he was a partner or within 12 months of his ceasing to be a partner, entered into compulsory liquidation, administration or a partnership voluntary arrangement; owned any asset which has been placed in receivership or been a partner in a partnership whose assets have been placed in receivership while he was a partner or within the 12 months preceding such event; or been the subject of any public criticism by statutory or regulatory authorities (including recognised professional bodies) nor has any of them ever been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company. Jack Hanks and Rex Canon owned equity in and served as directors of IAQUA.com which filed for Chapter 11 Petition of Bankruptcy in the US Bankruptcy Court, Northern District of Texas on 11 September 2001 which was subsequently converted to Chapter 7 on 2 February The Petition has not been discharged, but there has been no action in the proceeding since November Directors and Other Interests As at 5 July 2007 (being the latest practicable date prior to the publication of this document), insofar as is known to Maple Energy plc, the interests of each Director and those of any person connected with that Director, within the meaning of Section 26 of the Companies Act 1990 ( Connected Person ) in the issued share capital of Maple Energy plc which (i) are required to be notified to Maple Energy plc pursuant to Sections 53 and 64 of the Companies Act 1990 or (ii) are required pursuant to Section 59 of the Companies Act 1990 to be entered in the register referred to therein or (iii) are interests of a Connected Person which would, if the Connected Person were a Director, be required to be disclosed under (i) or (ii) above and the existence of which is known or could with reasonable diligence be ascertained by that Director, are as follows: Director Beneficial Ownership prior to Admission Percentage of Number of Shares share capital (2) Beneficial Ownership after Admission (1) Number of Shares Percentage of share capital (3) Rex Canon... 9,842, % 8,662, % Jack Hanks , % 460, % Interline Enterprise S.L.U. (4)... 11,317, % 10,137, % The Maple Gas Corporation (5).. 8,783, % 6,423, % Gianfranco Castagnola Zúñiga (6)(7)... 5,997, % 5,997, % Petro Anderra S.A. (8) , % 165, % (1) Assuming full subscription of the Subscription Shares and sale of the Sale Shares. (2) These percentages are calculated on the basis that ACC has exercised its option to exchange each of the 199,922 shares it holds in MCL for 30 Ordinary Shares. (3) This percentage is calculated on the basis that (i) ACC has exercised its option to exchange each of the 199,922 shares it holds in MCL for 30 Ordinary Shares and (ii) the IFC has exercised its right to subscribe for 5,932,477 Ordinary Shares. (4) Carlos Antonio de la Guerra Sison is beneficially entitled to the entire issued share capital of Interline Enterprise S.L.U. thereby giving him beneficial ownership of 11,317,170 Ordinary Shares held indirectly through Interline Enterprise S.L.U. prior to Admission. (5) Jack Hanks is beneficially entitled to the entire issued share capital of The Maple Gas Corporation thereby giving him beneficial ownership of 9,243,203 Ordinary Shares (comprised of 460,020 Ordinary Shares held directly and 8,783,183 Ordinary Shares held indirectly through The Maple Gas Corporation) prior to Admission. (6) Consists of the Ordinary Shares held by ACC and its affiliated entities should ACC exercise its right to exchange each of the shares it currently holds in MCL for 30 Ordinary Shares. Mr. Castagnola Zúñiga serves as President of AC Capitales SAFI S.A., who act as agent and manager to ACC. Mr. Castagnola Zúñiga disclaims beneficial ownership of all the Ordinary Shares shown. (7) Assuming ACC exercises its option to exchange each of the 199,922 shares it holds in MCL for 30 Ordinary Shares either prior to or on Admission. (8) Carlos Antonio de la Guerra Sison is legally and beneficially entitled to 37.7% of the Ordinary Shares held by PetroAnderra S.A. thereby giving him beneficial ownership of 62,318 Ordinary Shares held indirectly through PetroAnderra S.A. prior to Admission. Carlos Antonio de la Guerra Sison therefore has beneficial ownership of 11,379,488 Ordinary Shares (comprised of 11,317,170 Ordinary Shares held indirectly through Interline Enterprise S.L.U. and 62,318 Ordinary Shares held indirectly through PetroAnderra S.A.). 328

337 All the interests are or will be beneficial. The interests of the Directors under the 1990 Act in options granted by Maple Energy plc, which are known to the Directors or which could with reasonable due diligence be ascertained by them, all of which are beneficial, as at the date of this document are set out in Section 11 of this Part VI. In addition to the interests of the Directors set out in this Section 6, as at 24 June 2007 (being the latest practicable date prior to the publication of this document), insofar as is known to Maple Energy plc, the following persons are interested, directly or indirectly in 3% or more of the issued ordinary share capital of Maple Energy plc: Name Beneficial Ownership prior to Admission Percentage of Number of Shares Share Capital (3) Beneficial Ownership after Admission (1) Shares Percentage of Share Capital (4) Interline Enterprise S.L.U. (2)... 11,317, % 10,137, % Tony Hines... 10,027, % 8,847, % Rex Canon... 9,842, % 8,662, % The Maple Gas Corporation (5).. 9,243, % 6,883, % Gianfranco Castagnola Zúñiga (6)... 5,997,660 (7) 11.00% (7) 5,997,660 (7) 6.88% IFC (8)... 5,932, % Hawn Financial Place Corp.... 3,516, % 3,516, % (1) Assuming full subscription of the Subscription Shares and sale of the Sale Shares. (2) Carlos Antonio de la Guerra Sison is (i) beneficially entitled to the entire issued share capital of Interline Enterprise S.L.U. and (ii) legally and beneficially entitled to 37.7% of the Ordinary Shares held by PetroAnderra S.A., thereby giving him beneficial ownership of 11,379,488 Ordinary Shares (comprised of 11,317,170 Ordinary Shares held indirectly through Interline Enterprise S.L.U. and 62,318 Ordinary Shares held indirectly through PetroAnderra S.A.) prior to Admission. (3) These percentages are calculated on the basis that ACC has exercised its option to exchange each of the 199,922 shares it holds in MCL for 30 Ordinary Shares. They do not take into account the right of the IFC to subscribe for 5,932,477 Ordinary Shares. (4) This percentage is calculated on the basis that (i) ACC has exercised its option to exchange each of the 199,922 shares it holds in MCL for 30 Ordinary Shares and (ii) the IFC has exercised its right to subscribe for 5,932,477 Ordinary Shares. (5) Beneficial ownership of these shares prior to Admission is held by Jack Hanks through (i) indirect ownership of 8,783,183 Ordinary Shares held through The Maple Gas Corporation and (ii) direct ownership of 460,020 Ordinary Shares. (6) Consists of the Ordinary Shares held by ACC and its affiliated entities should ACC exercise its right to exchange each of the shares it currently holds in MCL for 30 Ordinary Shares. Mr. Castagnola Zúñiga serves as President of AC Capitales SAFI S.A., who act as agent and manager to ACC. Mr. Castagnola Zúñiga disclaims beneficial ownership of all the Ordinary Shares shown. (7) These figures assume that ACC exercises its option to exchange each of the 199,922 shares it holds in MCL for 30 Ordinary Shares either prior to or on Admission (8) Consists of the Ordinary Shares held by the IFC should the IFC exercise its right to subscribe for 5,932,477 Ordinary Shares. Save as disclosed above: (a) (b) none of the Directors nor any member of their respective immediate families nor any person connected with the Directors (within the meaning of Section 29 of the 1990 Act) has any interest, whether beneficial or otherwise, in the share or loan capital of Maple Energy plc; and none of the Directors or any member of the Directors families (as defined in the AIM Rules) is interested in any related financial product (as defined in the AIM Rules) whose value in whole or in part is determined directly or indirectly by reference to the price of the Ordinary Shares, including a contract for difference or a fixed odds bet. Except as disclosed in this document, there are no outstanding loans or guarantees provided by Maple Energy plc for the benefit of the Directors nor are there any outstanding loans or guarantees provided by any of the Directors for the benefit of Maple Energy plc. Save as disclosed above, there are no persons, so far as Maple Energy plc is aware, who will immediately following Admission be interested, directly or indirectly, in three per cent or more of Maple Energy plc s issued share capital, nor, so far as the Directors are aware, are there any person or persons who are or, following Admission will or are likely to be, directly or indirectly, jointly or severally, able to exercise control over Maple Energy plc. There are no arrangements known to Maple Energy plc and the Directors the operation of which may at a subsequent date result in a change of control of Maple Energy plc. The persons, including 329

338 the Directors, referred to in this Section 6, do not have voting rights in respect of the share capital of Maple Energy plc (issued or to be issued) which differ from those of any other Shareholder. 7. Selling Shareholders It is expected that Ordinary Shares, up to the stated maximum amounts, will be sold in the Placing by the following shareholders: Selling Shareholder Number of Sale Shares Rex Canon... 1,180,000 Interline Enterprise S.L.U. (1)... 1,180,000 The Maple Gas Corporation (2)... 2,360,000 Tony Hines... 1,180,000 (1) Carlos Antonio de la Guerra Sison is beneficially entitled to the entire issued share capital of Interline Enterprise S.L.U. thereby giving him beneficial ownership of 11,317,170 Ordinary Shares held indirectly through Interline Enterprise S.L.U. prior to Admission. (2) Jack Hanks is beneficially entitled to the entire issued share capital of The Maple Gas Corporation thereby giving him beneficial ownership of 9,243,203 Ordinary Shares (comprised of 460,020 Ordinary Shares held directly and 8,783,183 Ordinary Shares held indirectly through The Maple Gas Corporation) prior to Admission. The Selling Shareholders referred to above have agreed to sell a portion of their Ordinary Shares pursuant to the Placing Agreement. For further information on the terms and conditions of the Placing Agreement, please see Section 12.2 of this Part VI. 8. Lock-in Arrangements The following lock-in and orderly market arrangements will be entered into: Each of the Shareholders who shall hold more than 2.5% of the issued and outstanding share capital of Maple Energy plc prior to admission, on a fully diluted basis and assuming ACC has exercised its option to exchange shares in MCL for Ordinary Shares under the Option Contract pre-admission has undertaken to Canaccord and Mirabaud, save as agreed by Canaccord and Mirabaud and otherwise in certain circumstances, not to dispose of (and to procure that no connected person will dispose of) any interest in Ordinary Shares held by him (or any such connected person) for a period of 12 months from Admission. Furthermore, each of these Shareholders has undertaken to maintain an orderly market in trading in the Ordinary Shares for a further period of 6 months and Messrs. Hanks, Canon, Hines and de la Guerra Sison have undertaken to maintain a 25% interest, whether direct or indirect, in the Ordinary Shares for a period of 30 months from Admission. For further information on the terms and conditions of the lock-in arrangements, please see Section 12.4 of this Part VI. 9. Directors and Senior Management s Service Contracts and Letters of Appointment 9.1 Service Contracts Service contracts or letters of appointment have been entered into between the Company and certain members of the administrative, management or supervisory bodies of the Company, all of which are summarised below: Rex Canon In May 2007, Rex Canon became party to an executive employment agreement with a Peruvian subsidiary of Maple Energy plc, pursuant to which he is paid a base annual salary of $300,000 and is entitled to share options, at the discretion of the Board, and an annual bonus of up to one-third of his annual salary. In addition, Mr. Canon receives a number of additional benefits, including tax equalization rights, housing and air travel allowance, a company car and education costs for dependents. Mr. Canon is covered by director s and officer s insurance and also benefits from long-term disability and life assurance, and both he and his dependents benefit from international health insurance. The employment agreement lasts for a term of 3 years and includes a provision for severance pay equal to one year s base salary, where Mr. Canon s employment is terminated without cause. 330

339 9.1.2 Carlos de la Guerra Sison In May 2007, Carlos de la Guerra Sison became party to an executive employment agreement with a Peruvian subsidiary of Maple Energy plc, pursuant to which he is paid a base annual salary of $300,000 and is entitled to share options, at the discretion of the Board, and an annual bonus of up to one-third of his annual salary. Mr. de la Guerra receives a number of additional benefits including a Company car and international healthcare insurance for him and his spouse. Mr. de la Guerra Sison is covered by director s and officer s insurance and also benefits from long-term disability and life assurance. The employment agreement lasts for a term of 3 years and includes a provision for severance pay equal to one year s base salary, where Mr. de la Guerra s employment is terminated without cause Tony Hines In May 2007, Tony Hines became party to an executive employment agreement with a Peruvian subsidiary of Maple Energy plc, pursuant to which he is paid a base annual salary of $300,000 and is entitled to share options, at the discretion of the Board, and an annual bonus of up to one-third of his annual salary. In addition, Mr. Hines receives a number of additional benefits including tax equalization rights, housing and air travel allowance, a company car and education costs for dependents. Mr. Hines is covered by director s and officer s insurance and also benefits from long-term disability and life assurance, and both he and his dependents benefit from international health insurance. The employment agreement lasts for a term of 3 years and includes a provision for severance pay equal to one year s base salary, where Mr. Hines s employment is terminated without cause Ray Cochard In May 2007, Ray Cochard became party to an executive employment agreement with a Peruvian subsidiary of Maple Energy plc, pursuant to which he is paid a base annual salary of $225,000 and is entitled to share options, at the discretion of the Board, and an annual bonus of up to one-third of his annual salary. In addition, Mr. Cochard receives a number of additional benefits including tax equalization rights, housing and air travel allowance, a company car and education costs for dependents. Mr. Cochard is covered by director s and officer s insurance and also benefits from long-term disability and life assurance, and both he and his dependents benefit from international health insurance. The employment agreement lasts for a term of 3 years and includes a provision for severance pay equal to one year s base salary, where Mr. Cochard s employment is terminated without cause Guillermo Ferreyros In May 2007, Guillermo Ferreyros became party to an executive employment agreement with a Peruvian subsidiary of Maple Energy plc, pursuant to which he is paid a base annual salary of $200,000 and is entitled to share options, at the discretion of the Board, and an annual bonus of up to one-third of his annual salary. In addition, Mr. Ferreyros receives a number of additional benefits including tax equalization rights, an air travel allowance and a company car. Mr. Ferreyros is covered by director s and officer s insurance and also benefits from long-term disability and life assurance, and both he and his dependents benefit from international health insurance. The employment agreement lasts for a term of 3 years and includes a provision for severance pay equal to one year s base salary, where Mr. Ferreyros s employment is terminated without cause Jack Hanks On 1 March 2007, The Maple Gas Corporation, an entity owned by Mr. Jack Hanks, and Maple BVI entered into a Service Agreement pursuant to which The Maple Gas Corporation provides Maple BVI and/or Maple Gas with certain services. Under the terms of this arrangement, which will expire on 28 February 2011, Maple BVI and/or Maple Gas will pay to The Maple Gas Corporation $ 420,000 per year, payable monthly. For the years ended 31 December 2004, 2005 and 2006, The Maple Gas Corporation received payments of $1,599,163, $1,751,240, and $1,473,040 respectively for management fees, services and office costs relating to The Maple Gas Corporation s Dallas office. 331

340 9.2 Letters of Appointment Letters of appointment have been entered into between Maple Energy plc and the Directors, all of which are summarised below: Jack Hanks Jack Hanks has a letter of appointment dated 18 May 2007, which provides for him to act as an Executive Director of Maple Energy plc. The appointment began on 7 February 2007 and will continue for a period of 3 years, unless otherwise terminated Nigel B. Christie Nigel B. Christie has a letter of appointment dated 23 May 2007, which provides for him to act as a Non-Executive Director of Maple Energy plc for a fee of $50,000 per annum, to be paid monthly. In addition, Mr Christie will be paid a further $22,000 per year for serving on committees of the Board, including chairman of Maple Energy plc s Audit Committee. The appointment began on 8 May 2007 and will continue for a period of 3 years, unless otherwise terminated Gianfranco Castagnola Zúñiga Gianfranco Castagnola Zúñiga has a letter of appointment dated 23 May 2007, which provides for him to act as a Non-Executive Director of Maple Energy plc. The appointment began on 18 April 2007 and will continue for a period of 3 years, unless otherwise terminated Carlos Enrique A. Palacios Rey Carlos Enrique A. Palacios Rey has a letter of appointment dated 23 May 2007, which provides for him to act as a Non-Executive Director of Maple Energy plc for a fee of $50,000 per annum, to be paid monthly. The appointment began on 8 May 2007 and will continue for a period of 3 years, unless otherwise terminated. It is estimated that for the year ended 31 December 2007, the aggregate remuneration (including salaries, fees, pension contributions, bonus payments, consultancy fees and benefits in kind) of the Directors will be approximately $1.8 million. 10. Directors Interests in Transactions Save as disclosed above or in Section 13 Related Party Transactions, no Director has or has had any interest, direct or indirect, in any transaction which is or was unusual in its nature or conditions or significant to the business of Maple Energy plc and which was effected in the current or immediately preceding financial year or during an earlier period and which remains in any respect outstanding or unperformed. 11. Summary of the Principal Features of the Employee Share Incentive Arrangements The Directors may grant options over Ordinary Shares to employees or officers or Directors of Maple in accordance with the terms of an Employee Share Option Plan (the Plan ) which was adopted by Maple Energy plc on 22 May The principal features of the Plan are as follows: Eligibility and Grant of Options Employees, officers or Directors of Maple may be invited to participate in the Plan and be granted options under the Plan subject to the nomination by the Directors in their discretion. Limitations The number of Ordinary Shares that can be issued under the Plan, when added with any Shares already issued or to be issued under subsisting options granted under the Plan (or any other employee share plan which may be adopted by the Company), may not exceed 5% of the issued and outstanding ordinary share capital (assuming exercise of ACC s option) of Maple Energy plc on a fully diluted basis as at the date the Plan is adopted. The Plan will in any event terminate 10 years after the date it was adopted by Maple Energy plc. Exercise of options Options granted to participants will, unless otherwise determined by the Directors in their discretion, vest in three instalments over a period of three years, each instalment representing one 332

341 third of the total options granted. The first instalment of one third of the total options will vest 12 months from the grant date and remains exercisable for three years. The second instalment of the total options vests 2 years from the grant date and remains exercisable for three years. The third instalment of the total options vests 3 years from the grant date and remains exercisable for three years. Participants must be continuously employed throughout the period from the grant date to the final date an option may be exercisable for options to remain exercisable. Under the terms of the plan, options may vest or lapse upon a participants departure or termination from Maple Energy plc, as the case may be, depending upon the circumstances and events surrounding such participant s departure. For example, any participant that is fired for cause will have all unvested options immediately lapse and vested options have a 6 month exercise period, whereas those participants that are terminated without cause will have all of his options vest immediately and remain exercisable for a stated time period. The exercise of options may be subject to the satisfaction of such conditions as may be set out in the rules of the Plan from time to time, or under the terms of specific grants to participants. Options may be exercisable earlier where there may be a change of control or a sale of all or substantially all of the assets of Maple Energy plc, or where a person becomes bound or entitled to acquire shares in Maple Energy plc under Section 204 of the Companies Act, 1963 of Ireland, as amended, or if a Court sanctions a compromise or arrangement in connection with the Plan for the reconstruction of Maple Energy plc or its amalgamation with another company under Section 204 of the Companies Act, 1963 of Ireland, as amended, or if Maple Energy plc passes a resolution for voluntary winding up or an order is made for the compulsory winding up of Maple Energy plc. Where a company obtains control of Maple Energy plc by making a general offer to acquire the whole of the issued share capital of Maple Energy plc, or under a compromise or arrangement sanctioned by the Court, or becomes bound or entitled to acquire the shares of Maple Energy plc under Section 204 of the Companies Act, 1963 of Ireland, as amended, participants may be granted new options over shares in the acquiring company in exchange for the existing options which shall be subject to the same terms as the previous options. Options will be exercisable at the times and in the circumstances set out above by participants submitting to Maple Energy plc an exercise notice and a remittance for the total exercise price. Exercise price The price at which Ordinary Shares may be acquired under an option granted to a participant under the Plan will be 120% of the price of the shares on admission to listing, provided that the price shall not be less than the market value of the Ordinary Shares as at the grant date. New and Bonus issues of securities The exercise of options may be met either by the issue of new Ordinary Shares or by the transfer of existing Ordinary Shares. Where there may be a variation in the share capital of Maple Energy plc, which would include any capitalisation or rights issues, or the subdivision, consolidation or reduction in capital, the Directors may make adjustments to options. Amendments The Directors may make amendments to the provisions of the Plan in their absolute discretion but no amendment may be made which would materially affect any option which has been granted to a participant (unless consent from the participant is obtained) or which would increase the overall limit on the ordinary share capital of Maple Energy plc. 333

342 Exercise Period (2) Director/Employee Number of Options Price (p) (1) From To Jack Hanks ,850 * May 2008 May 2011 Rex Canon ,850 * May 2008 May 2011 Carlos Antonio de la Guerra Sison. 363,850 * May 2008 May 2011 Tony Hines ,850 * May 2008 May 2011 Ray Cochard ,850 * May 2008 May 2011 Guillermo Ferreyros ,850 * May 2008 May 2011 Nabil Katabi ,315 * May 2008 May 2011 Roxana Guzman ,315 * May 2008 May 2011 Alfonso Morante ,158 * May 2008 May 2011 (1) The exercise price for each option granted is equal to the subscription price of the Ordinary Shares multiplied by 1.2. (2) These options shall vest in three instalments over a period of three years, each instalment representing one-third of the total options granted. The exercise period in the table reflects that certain exercise period for the first instalment of each participant s options. Subsequent exercise periods will occur each subsequent May in the aforementioned amounts and will remain open for a three year term. 12. Material Contracts The following contracts have been entered into by Maple and are, or may be, material to the Company. For a discussion of the various Concession Agreements to which Maple is a party, please refer to Part II included elsewhere in this document NOMAD Agreement A nominated adviser agreement dated 6 July 2007 between Canaccord, and Maple Energy plc pursuant to which Maple Energy plc has conditionally appointed Canaccord to act as its nominated adviser and broker for the purposes of the AIM Rules. Maple Energy plc has agreed to pay Canaccord a fee of 50,000 per annum for its services under the agreement, together with all reasonable expenses and VAT. The agreement contains certain undertakings given by Maple Energy plc to Canaccord. The agreement may be terminated by either party giving the other three months written notice or on less or no notice on the occurrence of certain defaults. The Agreement contains an indemnity given by Maple Energy plc in favour of Canaccord in relation to certain matters Broker Agreement A broker agreement dated 6 July 2007 between Mirabaud and Maple Energy plc pursuant to which Maple Energy plc has conditionally appointed Mirabaud as its joint broker for the purposes of the AIM Rules. Maple Energy plc has agreed to pay Mirabaud a fee of 35,000 per annum for its services under the agreement, together with all reasonable fees, expenses and VAT. The agreement may be terminated by either party giving the other three months written notice or on less or no notice on the occurrence of certain defaults Placing Agreement An agreement dated 6 July 2007 between Canaccord and Mirabaud as joint Broker, Maple Energy plc, the Directors, and the Selling Shareholders pursuant to which Canaccord and Mirabaud have agreed as agent for Maple Energy plc to use their respective reasonable endeavours to procure subscribers for the Subscription Shares and as agent for the Selling Shareholders to procure purchasers of the Sale Shares at the Placing Price. The Placing Agreement is conditional, inter alia, on Admission occurring by no later than 3:00 p.m. on 27 July 2007 or such later time as Maple Energy plc, Canaccord and Mirabaud may agree, being in any event no later than 27 July The Placing Agreement contains an indemnity given by Maple Energy plc and the Selling Shareholders in respect of certain matters and various warranties given by Maple Energy plc, the Selling Shareholders and the Directors (as to the accuracy of the information in this document and Maple s business) in favour of Canaccord and Mirabaud. The liability of the Directors and the Selling Shareholders under the Placing Agreement is subject to certain temporal and financial limits. Canaccord and Mirabaud may terminate the Placing Agreement in certain circumstances prior to Admission, including (inter alia) circumstances where there is a material breach of warranty or a material breach of the Placing Agreement or in the case of a material adverse change in the condition, earnings, business affairs or business prospects of Maple. Under the Placing 334

343 Agreement, Maple Energy plc has agreed to pay to Canaccord a corporate finance fee of 250,000 and Mirabaud a commission of six per cent on the value of funds received from Placees pursuant to the Placing of the Subscription Shares. The Selling Shareholders have also agreed to pay Mirabaud a commission of six per cent of the value of funds received from Placees in respect of the placing of Sale Shares. The Company and the Selling Shareholders will also be responsible for certain costs and expenses incurred by Canaccord and Mirabaud and VAT thereon, where appropriate. The Selling Shareholders will be responsible for any Irish stamp duty in respect of the placing of the Sale Shares. The Placing Agreement also includes undertakings given to Canaccord and Mirabaud by the Non-executive Directors pursuant to which the Directors have agreed to lock-in arrangements in relation to their Ordinary Shares pursuant to which they have undertaken not to sell, transfer or otherwise dispose of any Ordinary Shares held by them, their associates or connected persons for a period commencing on Admission and ending on the first anniversary of Admission. In addition the Directors have undertaken to effect any disposal of Ordinary Shares in the period of 6 months following the initial lock-in period in such orderly manner as Canaccord and Mirabaud shall reasonably require, with a view to the maintenance of an orderly market in the shares of Maple Energy plc (having regard to the likely impact of any disposal on the price of the shares of Maple Energy plc). The lock-ins cease to apply in certain limited circumstances being: (a) any disposal pursuant to acceptance of an offer to Maple Energy plc or to all or any of the shareholders of Maple Energy plc which provides for the acquisition by a third party offeror for all of the ordinary shares of Maple Energy plc at any time (a Takeover Offer ); (b) pursuant to a general offer made by Maple Energy plc to purchase its own shares; (c) the execution of an irrevocable commitment to accept a Takeover Offer; (d) a disposal pursuant to a compromise or arrangement sanctioned under the Companies Act 1963 of Ireland; (e) any disposal pursuant to an intervening court order; (f) any disposal by any personal representative of a shareholder who dies before the undertaking has expired (for individual shareholders); (g) any disposal on bankruptcy of a shareholder; or (h) any disposal made with the prior written consent of Canaccord and Mirabaud. Canaccord and Mirabaud have appointed BCP as a placing agent in Peru pursuant to an agency side letter entered into between them and BCP s wholly-owned subsidiary, Credibolsa SAB Lock-In Agreements An agreement dated 6 July 2007 between Canaccord and Mirabaud, as joint brokers, the Company and Shareholders holding more than 2.5% of the issued and outstanding Ordinary Shares immediately prior to the Admission and Placing (the Locked Shareholders ) on a fully diluted basis and assuming that ACC has exercised its option to exchange shares in MCL for Ordinary Shares under the Option Contract. In addition, ACC has entered into an agreement dated 6 July 2007 with the Company, Canaccord and Mirabaud in similar terms, conditioned on the exercise price of its rights under the Option Contract described in Section of the Part VI. The terms of the Lock-In Deed are conditional on the conditions contained in the Placing Agreement being satisfied or waived before 27 July Under the terms of the Lock-In Deed, each Locked Shareholder undertakes that neither he nor any person connected to him (as defined in the AIM Rules) shall sell, transfer or otherwise dispose of any Ordinary Shares held by him for a period commencing on Admission and ending on the date following 12 months thereafter. Furthermore, each Locked Shareholder undertakes not to dispose of any Ordinary Shares, or enter into any agreement for the disposal of Ordinary Shares, for a further period of 6 months without giving Canaccord and Mirabaud 5 days notice of such intention and effecting such disposal through Canaccord and Mirabaud. Messrs Hanks, Canon, Hines and de la Guerra have entered into an agreement dated 6 July 2007 with the Company, Canaccord and Mirabaud in similar terms pursuant to which they also 335

344 undertake to maintain a 25% interest, either directly or indirectly, in the Ordinary Shares for a period of 30 months following Admission. However, the lock-in restrictions cease to apply in certain limited circumstances being: (a) any disposal pursuant to acceptance of an offer to the Company or to all or any of the shareholders of the Company which provides for the acquisition by a third party offeror for all of the ordinary shares of the Company at any time which the Board shall have recommended the Shareholders to accept (a Takeover Offer ); (b) the execution of an irrevocable commitment to accept a Takeover Offer; (c) a disposal pursuant to a compromise or arrangement sanctioned under the Companies Act 1963 of Ireland; (d) pursuant to a general offer made by Maple Energy plc to purchase its own shares; (e) a disposal to a spouse or to the trustees of a trust where the beneficiaries are the transferor s spouse or minor children; (f) any disposal pursuant to an intervening court order; (g) any disposal on the death or bankruptcy of the transferor; or (h) any disposal made with the prior written consent of Canaccord and Mirabaud MCL Shareholders Agreement A contract dated 20 March 2007 between Maple Energy plc and ACC (the MCL Shareholders ), as the shareholders of MCL, and MCL pursuant to which ACC is granted various rights and protections in relation to its investment of $10,000,000 into MCL in consideration for the acquisition of 199,922 shares of common stock with par value $0.01 each. From and after Admission, Maple Energy plc shall provide ACC with certain information, including annual financial statements and notices of events that could cause a material adverse effect on the business of Maple and its affiliates. MCL shall also form a business review committee to enable the MCL Shareholders to review the annual investment plan and business strategy of MCL provided that at least one member of the review committee is appointed by ACC. Until such time as Maple raises capital in excess of $30,000,000, either by way of equity fund-raising or farm-in, ACC has consent rights over certain actions of MCL and its subsidiaries, which consent must not be unreasonably withheld. For example, the fundamental business of MCL or its subsidiaries may not be changed and neither Maple Energy plc or any of its subsidiaries may encumber their assets, dispose of more than 50% of their assets or initiate liquidation proceedings without the consent of ACC. Furthermore, Maple Energy plc may not grant stock options to employees of Maple without the consent of ACC unless such stock options are approved by the Board, represent no more than 5% of the then issued and outstanding share capital of Maple Energy plc (on a diluted basis assuming that the ACC Option is exercised), have an exercise price of no less than 120% of the market price of the Ordinary Shares and expire no more than 36 months after vesting. ACC is also granted a put-option to cause Maple Energy plc to purchase all of the shares in MCL held by ACC if (i) the Controlling Shareholders, and connected entities thereto, hold less than 25% of the issued and outstanding shares of Maple Energy plc, (ii) Maple Energy plc no longer holds more than 50% of the issued and outstanding shares of MCL and (iii) either (a) none of the Key Employees is the President or CEO of Maple Energy plc or (b) the Controlling Shareholders and/or the Key Employees no longer constitute 50% of the board of directors of Maple Energy plc and/or MCL. However, Maple Energy plc s obligations to purchase such shares shall expire when Maple raises equity capital in excess of $30,000,000. Until such time as Maple raises capital in excess of $30,000,000, either by way of equity fund-raising or farm-in, ACC is also granted a protection measure which ensures that the value of its shareholding in Maple Energy plc, as a result of exercising the ACC Option, is preserved should (i) either Maple Energy plc or MCL issue new shares to an investor or (ii) prior to Admission or within 6 months thereafter, one or more Shareholders (as at the date of the MCL Shareholders Agreement) disposes of the Ordinary Shares held by it for a consideration in excess of $5,000,000. The MCL Shareholders Agreement also includes drag-along and tag-along rights applicable to ACC where Maple Energy plc elects to transfer any of its shares in MCL and right of pre-emption in favour of the MCL Shareholders upon a further issuance of shares by MCL. 336

345 12.6 Lease Agreement for the Pucallpa Refinery and Sales Plant A contract dated March 29, 1994 between Petroperú and Maple Gas pursuant to which Petroperú granted a lease of the Pucallpa Refinery and Sales Plant to Maple Gas in return for quarterly rental payments. The Lease is for a term of 20 years, although such term may be extended by Maple on similar terms and conditions; provided that Maple Gas is not in breach of any terms of the lease and the Licence for the Exploitation of Hydrocarbons in Blocks 31-B and 31-D orthe Licence for the Exploitation of Hydrocarbons in Block 31-C remains in force. The quarterly rental amount is approximately U.S.$67,500. Maple Gas may not assign its interest under the lease without the prior written consent of Perupetro, except to an affiliate in which case 30 days prior notice must be given to Petroperú. The lease will terminate if the Licence for the Exploitation of Hydrocarbons in Blocks 31-B and 31-D and the Licence for the Exploitation of Hydrocarbons in Block 31-C is terminated. The lease may be terminated by Maple Gas if at any time, and for justifiable reasons, the lease becomes financially impractical to Maple Gas and may be terminated by Petroperú if Maple Gas is in continuing default on a rental payment for a period of 15 days after receiving notice of failure to pay or Maple Gas fails to comply with its obligations for a reason other than force majeure. The lease is governed by the laws of Peru Agreement on the Lease of Real Property and Assets Owned by Petroperú A contract dated April 21, 1994 between Petroperú and Maple Gas pursuant to which Petroperú grants a lease of certain properties and assets to Maple Gas in return for monthly rental payments. The lease was originally for a term of 6 months although the parties are in the process of negotiating a new lease agreement effective until April 21, The monthly rental amount is approximately U.S.$16,265, for equipment and furniture, and U.S.$14,853 for land and buildings. Maple Gas may not assign its interest under the lease without the prior written consent of Perupetro except to an affiliate in which case 30 days prior notice must be given. The lease will terminate if the Licence for the Exploitation of Hydrocarbons in Blocks 31-B and 31-D, the Licence Contract for the Exploitation of Hydrocarbons in Block 31-C and the Lease Agreement for the Pucallpa Refinery and Sales Plant are terminated. The lease is also terminable by Petroperú if Maple Gas is in continuing default on a rental payment for a period of 15 days after receiving notice of non-compliance, if Maple Gas sub-leases the properties or assets without the prior consent of Petroperú or if copies of the necessary insurance policies are not delivered to Petroperú. The Lease is governed by the laws of Peru Feedstock Sales Contract On 23 February 2007, Maple Gas and CNMIIEC entered into a sales contract, pursuant to which Maple Gas agreed to purchase 1,000 metric tons of N-methylaniline at an aggregate purchase price of $2,673,000. The agreement is in force for an initial term of 12 months from 1 March 2007 to 2 March 2008 and is automatically renewable for a further 12 month term unless terminated upon mutual agreement on 90 days notice. Either party is entitled to terminate the agreement upon 5 days written notice Natural Gasoline Sales Agreement Acer and Aguaytía Energy are party to a natural gasoline sales agreement dated 24 July 1996 (as amended), pursuant to which Acer purchases from Aguaytía Energy all of the natural gasoline extracted from Block 31-C. Acer pays Aguaytía Energy a monthly price per barrel on natural gasolines delivered in any calendar month which is calculated by reference to weighted averages of quoted prices for naphtha and Jet/Kero 54. This agreement will remain in force so long as the 31-C Licence is effective, subject to certain terms as set forth in the contract Natural Gasoline Purchase Agreement On 1 January 2001, Acer and Maple Gas entered into a natural gasoline purchase agreement, pursuant to which Acer sells to Maple Gas the natural gasoline it purchases from Aguaytía Energy. The price paid by Maple Gas to Acer is equal to the price paid by Acer to Aguaytía Energy plus a per barrel spread in US$ as agreed between the parties HAS Supply Agreement On 2 April 2007, Maple Gas and Petroperú entered into a supply agreement, pursuant to which Maple Gas sells to Petroperú HAS through monthly deliveries. Petroperú agrees to pay Maple Gas 337

346 a price per shipment calculated by reference to quoted prices for West Texas Intermediate oil and an agreed differential. The agreement shall expire on the sooner of 2 August 2007 and the date of delivery of 24,000 barrels Natural Gasoline Supply Agreement On 31 August 2004, Maple Gas and Petroperú entered into a natural gasoline supply agreement, pursuant to which Maple Gas supplies Petroperú with 432,000 barrels of natural gasoline between August 2004 and July 2007 in quantities of 12,000 barrels per month. Petroperú agrees to pay Maple Gas a price calculated by reference to quoted prices for West Texas Intermediate oil and an agreed differential. The agreement shall expire on the sooner of 31 August 2007 and the date of delivery of all 432,000 barrels Ethanol Land Acquisition By means of Regional Council Agreement No /GRP-CR dated 7 July 2006, the Regional Government of Piura (the Regional Government ) approved Maple Ethanol s plan to develop the Ethanol Project on land located on a plateau overlooking the River Chira. On 5 January 2007, the Regional Government, the Chira Piura - Special Project (the Seller ) and Maple Ethanol entered into a sales agreement pursuant to which the Seller agreed to sell certain real estate to Maple Ethanol, provided that Maple Ethanol fulfils certain conditions precedent and pays the Seller the sum of $640, in two equal instalments. Among other things, Maple Ethanol is under an obligation to invest no less than $32,029, in respect of the real estate acquired and provide an irrevocable and unconditional bank guarantee equal to 10% (or $3,202,939.11) of the investment commitment. This acquisition closed on 1 June Loan Agreement for U.S.$ 3,500,000 with BCP A contract dated February 16, 2006 between Maple Gas and BCP, as lender, for a borrowing facility of up to U.S.$3,500,000 divided into two instalments. The first instalment being a loan for up to U.S.$300,000 to be used for the acquisition of a number of class B ordinary shares of The Maple Gas Development Corporation (which represent a certain amount of equity capital in Aguaytía Energy) and the second instalment being a loan for U.S.$3,200,000 to be used for an additional acquisition of equity capital in Aguaytía Energy. Repayment of the facility is secured by a promissory note, to be executed upon an event of default or an event of acceleration, a Trust Agreement dated December 21, 2004 and a non-revocable guarantee by Acer of the obligations of Maple Gas. The maturity date of the facility is March 2, The facility agreement includes an optional prepayment right, exercisable on at least 10 days prior written notice, of no less than U.S.$500,000 and a penalty of 1% of the prepaid amount. The unpaid principal amount of any borrowings and interest shall, however, become payable immediately upon an event of acceleration or an event of default which includes The Maple Gas Corporation del Perú Ltd. undergoing a change of control or The Maple Gas Corporation del Perú Ltd., Maple Peru Holdings Corporation, The Maple Gas Development Corporation or Acer undergoing a corporate re-organisation without the prior written consent of the Lender. The facility agreement is governed by the laws of Peru Loan Agreements for U.S.$5,500,000 with BCP On December 21, 2004, Maple Gas entered into (i) a loan agreement of up to US$2,750,000 with BCP and (ii) a loan agreement of up to US$2,750,000 with an additional financial institution. These loans were entered into for the purpose of repaying Maple Gas prior loans with BCP. BCP was subsequently assigned all of the rights and obligations under the loan agreement for which it was not the initial lender. Each loan agreement contains identical terms and conditions, the material provisions of which are set forth immediately below. Repayment of each facility is secured by a promissory note, to be executed upon an event of default or an event of acceleration, a Trust of Funds Agreement dated December 21, 2004 and a non-revocable guarantee by Acer of the obligations of Maple Gas. The maturity date of the facility is December 21, Each facility agreement includes an optional prepayment right, exercisable on at least 10 days prior written notice, of no less than U.S.$1,000,000 and a penalty of 1% of the prepaid amount. The unpaid principal amount of any borrowings and interest shall, however, become payable 338

347 immediately upon an event of acceleration or an event of default which includes The Maple Gas Corporation del Perú Ltd. undergoing a change of control or The Maple Gas Corporation del Perú Ltd., The Maple Gas Development Corporation or Acer undergoing a corporate re-organisation without the prior written consent of the Lender. The agreements are governed by the laws of Peru Securitised Bond Offering Aguaytía Energy del Perú S.R.L. ( Aguaytía ) issued, by way of public offer, securitised bonds in an amount of approximately $80 million. These bonds were issued in three tranches between February and July, 2004, and are backed by promissory notes held by Banco Wiese Sudameris against Aguaytía and its subsidiaries Termoselva S.R.L. and Eteselva S.R.L. These promissory notes are held in a securitisation trust, the trustee of which is the issuer of the securitised bonds, Wiese Sudameris Sociedad Titulizadora S.A. The funds obtained in the placement of the securitised bonds were used to pay the balance of the $80 million syndicated loan that Aguaytía, Termoselva S.R.L. and Eteselva S.R.L. had with BCP, Banco Wiese Sudameris, Citibank, N.A., Sucursal de Lima and Banco Sudamericano. The securitised bonds are rated AAA, carry an average coupon of 5.25% and are payable in 32 quarterly payments Amended and Restated Limited Liability Company Agreement of Aguaytía Energy A contract dated November 30, 1994 between The Maple Gas Development Corporation, P.I.D.C. Aguaytía, Energy, LLC, EPED Aguaytía Company, IGC Aguaytía Partners, L.L.C., Scudder Latin American Power I-P L.D.C., PMDC Aguaytía, Ltd. and The Maple Gas Corporation, as an organisational member, pursuant to which the corporate existence of Aguaytía Energy is governed. The L.L.C. Agreement terminates on December 31, The principal business purpose of Aguaytía Energy is to invest in and manage the development of the Aguaytía Project through a subsidiary entity, Aguaytía Energy del Perú S.R.L. Aguaytía Energy is managed by a Management Committee comprised of four representatives, one from each remaining party to the L.L.C. Agreement with the representative from The Maple Gas Development Corporation serving as chairman. Decisions of the Management Committee are decided by poll vote on the basis of the percentage unit-holding of each party. Additional units issued by the Management Committee are subject to a pre-emptive purchase right in favour of the parties. Should a party elect not to acquire such additional units, the other parties have the right to acquire the units, thereby potentially diluting a party s interest in Aguaytía Energy. The interest that Maple has in Aguaytía Energy is subject to a right of buy-out by the other parties should Jack Hanks, Rex Canon, Tony Hines and Carlos de la Guerra Sison cease to collectively hold a 51% equity voting interest and a 25% economic interest in distributions of The Maple Gas Development Corporation. These shareholders, however, have structured their holdings such that their ownership in The Maple Gas Development Corporation will not fall below the thresholds described above to trigger any rights by third parties to acquire Maple s interest in Aguaytía Energy immediately following the consummation of this offering. The Maple Gas Development Corporation shall not and shall cause its affiliates to not compete with Aguaytía Energy or Aguaytía Energy del Perú S.R.L. with respect to the sale of natural gas to power generation facilities or the marketing of natural gas in the Pucallpa area by Aguaytía Energy del Perú S.R.L., except that Maple may sell refined products in the Pucallpa area to the extent such refined products are refined at the facilities of Maple in the Pucallpa area from hydrocarbon production in the Ucayali Basin. The L.L.C. Agreement can be terminated upon the unanimous consent of the Management Committee and is governed by the laws of Delaware Gas Project Operation and Maintenance Agreement Maple Gas and Aguaytía Energy are party to a Gas Project Operation and Maintenance Agreement dated 24 July 1996 (as amended) which lasts for a term of 20 years. The Agreement authorises Maple Gas to operate and maintain the development of the Aguaytía gas field awarded under the 31-C Licence and operate the gas processing installations, pipelines and fractionation and storage installations for gas. In consideration for the operation and maintenance services provided by Maple Gas, Aguaytía Energy pays Maple Gas an annual fee of $275,000, in equal monthly instalments, an annual productivity bonus of $75,000 and reimburses Maple Gas for all costs incurred. The Agreement is governed by the laws of New York Share Exchange Agreement In connection with the Re-organisation, all the shareholders of The Maple Companies, Limited entered into the Share Exchange Agreement dated 7 February 2007 under which all shareholders 339

348 of The Maple Companies, Limited agreed to sell collectively a total of 1,619,371 shares of $0.01 each to Maple Energy plc in exchange for the allotment and issue by Maple Energy plc of 48,581,113 Ordinary Shares in the capital of Maple Energy plc. The shareholders of The Maple Companies, Limited provided limited title warranties in favour of Maple Energy plc under the Share Exchange Agreement Shareholders Agreement A contract dated 7 February 2007 between the Shareholders immediately prior to Admission, MCL and Maple Energy plc which terminates upon Admission. The Shareholders Agreement imposes restrictions on the ability of certain Shareholders from transferring or otherwise disposing of their Shares. In particular, the Shareholders Agreement provides that Maple Energy plc has a right of first refusal where certain Shareholders propose to transfer all or any portion of their Shares to a non-affiliated entity Investment Agreement On March 12, 2007, Maple Energy plc, MCL, and ACC entered into an Investment Agreement ( Investment Agreement ) whereby in consideration of the terms and agreements set forth in the Investment Agreement, ACC agreed to purchase 199,922 newly issued shares of common stock of MCL representing % of the total equity interests in MCL for an aggregate purchase price of $10,000,000. The Investment Agreement provides that the number of shares issued in exchange for the $10,000,000 investment made by ACC may be adjusted upward if a local Perú operating branch of an MCL subsidiary is required to make a payment in relation to certain specified potential tax liabilities (the Revaluation Event ). The maximum payment that could be required under the Revaluation Event is equal to % multiplied by the potential tax liability and the maximum number of shares that could be issued is that number of shares that will be equal in value to % multiplied by the potential tax liability. In connection with the investment of ACC, MCL and Maple Energy plc each made certain representations and warranties with respect to (a) the organization, corporate authority, and authorization of each of Maple Energy plc and MCL to enter into and perform under the Investment agreement, (b) the enforceability of the Investment Agreement, (c) absence of violations of any organizational documents, violations of laws, or breaches of any material contracts, (d) absence of liens, undisclosed liabilities, or material litigation, (e) accuracy of disclosures, (f) holding of material permits, licenses, and concessions, (g) compliance with tax and social security requirements, (h) the capital structure of certain non-operating subsidiaries of MCL, (i) the arm s-length nature of inter-company transactions, and (j) the good faith preparation of financial models, (k) the sufficiency and reasonableness of information used to make investment estimates, and (l) the reasonableness of expectations to become listed on the Alternative Investment Market ( AIM ) of the London Stock Exchange during Exceptions to certain representations were disclosed in an accompanying disclosure schedule. The parties to the Investment Agreement covenanted and agreed to the payment of a special dividend payable solely to Maple Energy plc, as MCL s sole shareholder prior to the investment by ACC, of US$2,000,000 for certain capital expenditures made with respect to the properties of certain of MCL s subsidiaries during the two years preceding ACC s investment Option Contract On March 20, 2007 Maple Energy plc, MCL, and ACC entered into a Stock Option Agreement (the Option Agreement ) whereby Maple Energy plc agreed to grant to ACC an option to cause Maple Energy plc to purchase all, but not less than all, of the shares of MCL held by ACC in exchange for a number of ordinary shares of Maple Energy plc equal to the number of shares of MCL held by ACC multiplied by a factor of 30. ACC agreed to pay all expenses, taxes, and charges arising in connection with the preparation, execution, and delivery of the exercise notice for such option. ACC acknowledged and agreed that if the option is exercised, ACC agreed to be bound by, and shall not sell or otherwise transfer the shares held by it in contravention of, any lock-up restrictions to which the Controlling Shareholders of Maple Energy plc may agree with respect to their shares in Maple Energy plc in connection with a listing on AIM or some other capital market. If on or after 1 August 2007, Maple proposes to issue additional shares or sell treasury shares, then ACC has a right to purchase for cash shares in MCL in order to maintain the same percentage interest in Maple Energy plc as the option is convertible into prior to such issuance. 340

349 12.23 Notice and Consent On April 4, 2007, Maple Energy plc and ACC entered into a letter agreement (the Notice and Consent Agreement ) whereby Maple Energy plc gave notice to ACC of and ACC consented to certain transactions involving the disbursement of money from MCL directly to the shareholders of Maple Energy plc through non-interest-bearing, non-recourse obligations from such shareholders that could be repaid only to the extent of dividends declared in favour of these shareholders by Maple Energy plc, subject to rights of set-off. Such disbursements are to be made in connection with satisfaction of a special dividend that was contemplated and agreed to by ACC, Maple Energy plc, and MCL in an Investment Agreement dated March 12, 2007 between Maple Energy plc, MCL, and ACC in order to provide liquidity to shareholders pending the declaration, disbursement, and distribution of the above-mentioned special dividend. Maple Energy plc agreed to pay any material administrative costs or fees incurred by MCL in relation to the collection or settlement of such disbursements Disbursement Agreements between Maple Energy plc and the Existing Shareholders prior to Admission MCL has entered into disbursement agreements (the Disbursement Agreements ) with a number of shareholders of Maple Energy plc whereby MCL has agreed to make certain disbursements in fixed amounts to such shareholders, which disbursements shall be repaid by such shareholders on demand, subject to the following terms. The shareholders obligations to repay the disbursement agreements are limited to the proceeds of any dividends received from Maple Energy plc. Maple Energy plc and MCL have a right to off-set any amounts disbursed under the Disbursement Agreements against any dividends declared by Maple Energy plc until such amounts disbursed have been repaid in full. The Disbursement Agreements are not transferable or assignable. Each shareholder covenants not to transfer or dispose of its shares in Maple Energy plc without MCL s consent Santa Rosa 2-D Seismic Survey Contract On 24 May 2007, a subsidiary of Maple Energy plc and Veritas DGC Land Inc., Sucursal del Peru ( Veritas ) entered into a 2-D seismic survey contract in respect of Block 31-E. Under the terms of the agreement, Veritas will perform seismic services on approximately 225 km of land in Block 31-E. Maple expects that it will pay to Veritas approximately $4 million in fees, costs and related expenses associated with Veritas performing all of its services under the contract. Unless terminated earlier for cause, including, for example, upon an event of insolvency of, or a material breach of the agreement by, either party, the agreement shall expire on 31 December However, Maple Energy plc s subsidiary has the right to terminate the agreement at its own convenience upon 15 days notice, provided that 80% of the survey work has been undertaken and the resulting geophysical data acquired Ethanol Project Investment On 8 June 2007, ACC and Maple entered into a letter agreement whereby ACC obtained the right to subscribe for 10% of the equity interests in the Ethanol Project on terms and conditions to be mutually agreed by Maple and ACC. Pursuant to a letter agreement between Maple and ACC, the parties will commence arms length negotiations to determine the terms under which ACC shall invest. If the parties cannot reach mutual agreement on such terms by 30 September 2007, following good faith negotiations, the letter agreement and all rights arising therefrom shall terminate. Should ACC ultimately subscribe for this equity interest, Maple intends to use such proceeds to finance costs associated with completing the Ethanol Project IFC Equity Investment Agreement In June 2007, Maple Energy plc entered into an agreement with the IFC, pursuant to which the IFC, subject to receiving final board approval, will have the option to subscribe for up to 5,932,477 Ordinary Shares at any time on or before 30 July 2007 at a subscription price of $ per Ordinary Share. Maple intends to use the proceeds from the IFC share subscription to carry out certain aspects of its work program for as more fully described in section 5 of Part I included elsewhere in this document. In connection with the subscription of Ordinary Shares by the IFC, Maple will be required to take certain measures and implement and establish certain policies and procedures in accordance with the social and environmental standards set forth by the 341

350 IFC for the companies in which it invests. This equity investment by the IFC is subject to the satisfaction of customary closing conditions. There can be no assurance that the IFC investment will be consummated. 13. Related Party Transactions 13.1 Loans to Employees Maple Gas has granted loans to certain employees for payment of cash calls for capital expenditures of Maple Production del Perú Ltd. The amounts outstanding, as at 30 April 2007, are: César Valderrama Morón... $11,454 Ray Cochard... $26,001 Edgardo Castro... $11,221 These loans shall mature on 31 December The following additional loans, which are expected to be repaid during 2007, were outstanding as of 30 April, 2007: Petrus Fernandini... $4,954 Edgardo Castro... $10,000 Rex W. Canon... $76, Promissory Notes Maple BVI has granted promissory notes to certain directors of Maple Energy plc. The following promissory notes were issued: (i) a note for $182,409 issued to Carlos Antonio de la Guerra Sison on 30 April 2002 with a current maturity date of 28 April 2008, and outstanding balance (as at 23 May 2007) of $183,009, (ii) notes for $144,534, $913,920 and $38,080 issued to The Maple Gas Corporation, which is beneficially owned by Mr. Jack Hanks, on 30 April 2002 all with current maturity dates of 29 April, 2008, and outstanding balances (as at 23 May 2007) of $145,009, $314,952, and $38,205. In addition, since September, 2006 additional amounts are payable by Mr. Jack Hanks and The Maple Gas Corporation of $8,000 in connection with an expense advance and $30,000 for certain other advances, respectively Forgiveness Agreements On 17 November 2006, Maple BVI entered into note forgiveness agreements in respect of the outstanding notes described in Section 13.2 above. Pursuant to these agreements, Maple BVI has (i) forgiven the repayment of accrued interest on such notes provided that the notes are duly repaid on time and (ii), agreed to accept a reduced amount of accrued interest where such notes are repaid within a year of their original maturity date Service Agreement On 1 March 2007, The Maple Gas Corporation, an entity owned by Mr. Jack Hanks, and Maple BVI entered into a Service Agreement pursuant to which The Maple Gas Corporation provides Maple BVI and/or Maple Gas with certain services. Under the terms of this arrangement, which will expire on 28 February 2011, Maple BVI and/or Maple Gas will pay to The Maple Gas Corporation $ 420,000 per year, payable monthly. For the years ended 31 December 2004, 2005 and 2006, The Maple Gas Corporation received payments of $1,599,163, $1,751,240, and $1,473,040 respectively for management fees, services and office costs relating to The Maple Gas Corporation and its Dallas office. During the three year period ended 31 December 2006, Acer, a subsidiary of Maple Energy plc, advanced funds to each of its shareholders, including Mr. de la Guerra and The Maple Companies, Limited, an entity owned at that time by Messrs. Hanks (indirectly), Canon, Hines and Ferreyros. These advances were repaid through dividends declared and paid by Acer during each year. At the date of restructuring, 30 November 2006, and as of 30 April 2007, the amounts outstanding under these advances were $29,162 in respect of Mr. de la Guerra and $87,475 in respect of the loan to The Maple Companies, Limited. Outstanding loans to the other shareholders of Acer as of 30 April 2007 were $8,363. No further dividends were declared after the restructuring Executive Remuneration Lease Agreements with Inmobiliaria Lossana S.A. and Compañía Inmobiliaria Caroal S.A. The Maple Gas Corporation del Perú, Sucursal Peruana leased its office and parking space in Lima, Perú from Inmobiliaria Lossana S.A. and Compañía Inmobiliaria Caroal S.A. from 1994 to 342

351 February Mr. Carlos de la Guerra Sison has an interest in both Inmobiliaria Lossana S.A. and Compañía Inmobiliaria Caroal S.A. The offices and parking space were leased at market value Assignment Agreement On 1 March 2007, The Maple Gas Corporation assigned to Maple BVI all rights in the name Maple and a logo for use in various jurisdictions, for a purchase price of $410,000. This assignment is irrevocable and does not expire as a result of the expiration of any time periods. Previously, on 17 November 2006, these same rights had been assigned by The Maple Gas Corporation to Maple BVI for use in Peru for a purchase price of $600,000. For information on additional related party transactions, such as (i) the equity investment by ACC in March 2007 of shares in MCL and (ii) the dividend declaration by Maple Energy plc and the associated payment arrangements between Maple Energy plc and the Shareholders immediately prior to Admission, please refer to Section 12 of this Part VI and Section 3 of Part I included elsewhere in this document. 14. Taxation The following summary, which is intended as a general guide only, outlines certain aspects of legislation and Revenue practice in Ireland and the United Kingdom regarding the purchase, ownership and disposition of Ordinary Shares. It is not a complete description of all the possible tax consequences of such purchase, ownership or disposition. It relates only to the position of Shareholders who are resident or ordinarily resident in Ireland or the United Kingdom for tax purposes and who hold Ordinary Shares as a capital asset and not for the purpose of a trade. This summary does not address the position of certain classes of Shareholders such as dealers in securities, to whom special rules apply. This summary is based on the laws as in force and as applied in practice on the date of this document and is subject to changes to those laws and practices subsequent to the date of this document and on the current Double Taxation Agreement in place between Ireland and the United Kingdom. This summary is not exhaustive and you should consult your own advisers as to the tax consequences of the acquisition, ownership and disposition of Ordinary Shares in light of your particular circumstances, including, in particular, the effect of any state, regional or local tax laws Irish Taxation Withholding Tax Withholding tax at the standard rate of income tax (currently 20%) applies to dividend payments and other profit distributions by an Irish resident company. The following categories of Irish resident Shareholders are exempt from withholding if they make to Maple Energy plc, in advance of payment of any relevant distribution, an appropriate declaration of entitlement to exemption: an Irish resident company; an Irish pension fund or Irish charity approved by the Irish Revenue Commissioners; a qualifying fund manager or qualifying savings manager; a Personal Retirement Savings Account ( PRSA ) administrator who is receiving the relevant distribution as income arising in respect of PRSA assets; a qualifying employee share ownership trust; a collective investment undertaking; a designated broker receiving the distribution for a special portfolio investment account; a person who is entitled to exemption from income tax under Schedule F on dividends in respect of an investment in whole or in part of payments received in respect of a civil action or from the Personal Injuries Assessment Board for damages in respect of mental or physical infirmity; certain qualifying trusts established for the benefit of an incapacitated individual and/or persons in receipt of income from such a qualifying trust; a person entitled to exemption to income tax under Schedule F by virtue of Section 192(2) Taxes Consolidation Act ( TCA ) 1997; and a unit trust to which Section 731(5) (a) TCA 1997 applies. 343

352 The following categories of non-resident Shareholders are exempt from withholding tax if they make to Maple Energy plc, in advance of payment of any dividend, an appropriate declaration of entitlement to exemption: persons (other than a company) who (i) are neither resident nor ordinarily resident in Ireland and (ii) are resident for tax purposes in (a) a country which has in force a tax treaty with Ireland (a tax treaty country ) or (b) an EU Member State other than Ireland; companies not resident in Ireland which are resident in an EU Member State or a tax treaty country, by virtue of the law of a tax treaty partner country or an EU Member State, and are not controlled, directly or indirectly, by Irish residents; companies not resident in Ireland which are directly or indirectly controlled by a person or persons who are, by virtue of the law of a tax treaty partner country or an EU Member State, resident for tax purposes in a tax treaty country or an EU Member State other than Ireland and who are not controlled directly or indirectly by persons who are not resident for tax purposes in a tax treaty country or EU Member State; companies not resident in Ireland the principal class of shares of which is substantially and regularly traded on a recognised stock exchange in a tax treaty country or an EU Member State other than Ireland or on an approved stock exchange; or companies not resident in Ireland that are 75% subsidiaries of a single company, or are wholly-owned by two or more companies, in either case the principal class(es) of shares of which is/are substantially and regularly traded on a recognised stock exchange in a tax treaty country or an EU Member State other than Ireland or on an approved stock exchange. In the case of a non-resident Shareholder resident in an EU Member State or tax treaty country, the declaration must be accompanied by a current certificate of residence from the revenue authorities in the Shareholder s country of residence. In addition, in the case of non-resident companies controlled by residents of an EU Member State other than Ireland or of a tax treaty country or whose shares are substantially and regularly traded on a stock exchange in an EU Member State other than Ireland or a tax treaty country, certain certification by their auditors is required. The declaration also must contain an undertaking by the non-resident or nonordinarily resident person that he or she will advise the relevant person accordingly if he or she ceases to be non-resident or non-ordinary resident. No declaration is required where the stockholder is a 5% parent company in another EU Member State pursuant to the Parent/ Subsidiary directive. Neither is a declaration required on the payment by a company resident in Ireland to another company so resident where the company making the dividend is a 51% subsidiary of that other company. Dividends paid to a UK company that do not fall within the above exemptions, will be subject to withholding tax. The Ireland/UK Tax Treaty reduces this withholding tax to: 5% of the gross amount of the dividends if the beneficial owner is a company which controls directly or indirectly 10% or more of the voting power in the company paying the dividends; in all other cases 15% of the gross amount of the dividends. This summary does not address the position for intermediaries and qualifying intermediaries, as defined in the Finance Act Taxation of Dividends Irish tax resident Shareholders who are individuals will be subject to income tax and levies and, depending on their circumstances, social insurance on the aggregate of the net dividend received and the withholding tax deducted. The withholding tax deducted will be available for offset against the individual s income tax liability. A Shareholder may claim to have the withholding tax refunded to him to the extent it exceeds his income tax liability. An Irish tax resident Shareholder which is a company will generally not be subject to Irish corporation tax on dividends received from Maple Energy plc and tax will not be withheld at source by Maple Energy plc provided the appropriate declaration is made. A company which is a close company, as defined under Irish legislation, may be subject to a corporation tax surcharge on such dividend income to the extent that it is not distributed. 344

353 Capital Gains Tax The Ordinary Shares constitute chargeable assets for Irish capital gains tax purposes and, accordingly, Shareholders who are resident or ordinarily resident in Ireland, depending on their circumstances, may be liable to Irish tax on capital gains on a disposal of Ordinary Shares. A Shareholder who is neither resident nor ordinarily resident in Ireland should not be liable to Irish capital gains tax on a disposal of Ordinary Shares unless the Ordinary Shares (i) are or were held for the purposes of a trade carried on by the shareholder in Ireland or (ii) derive the greater part of their value from Irish land or exploration rights and are unquoted. An Irish resident individual who is a shareholder and who ceases to be an Irish resident for a period of less than five years and who disposes of Ordinary Shares during that period, may be liable, on a return to Ireland, to capital gains tax on any gain realised Stamp Duty Irish stamp duty, which is a tax on certain documents, is payable on all transfers of shares of an Irish registered company (other than those that occur, in certain circumstances, between associated companies or between spouses) wherever a document of transfer is executed. Where an operator instruction is generated, within the CREST system, the transfer shall be deemed to be within the charge to Irish stamp duty. Where the transfer is attributable to an arm s length sale, stamp duty will be charged at a rate of one per cent (the ad valorem rate), rounded down to the nearest u1, of the amount or value of the purchase price. In the case of a transfer by way of gift (other than an exempt transfer to a spouse), or for a consideration less than the market value of the share transferred, stamp duty will be charged at the ad valorem rate on such market value. Where the consideration for the sale is expressed in a currency other than euro, the duty will be charged on the euro equivalent calculated at the rate of exchange prevailing at the date of execution of the transfer. The transfer of shares where no beneficial interest passes (e.g. a transfer of shares from a beneficial owner to his nominee) is exempt from stamp duty. There is no longer a requirement for a transaction certificate to be included in the transfer document in order to avail of the exemption. The person accountable for payment of stamp duty is the transferee or in the case of a transfer by way of a gift or for a consideration less than the market value, all parties to the transfer. Stamp duty is normally payable within 30 days after the date of execution of the transfer. Late or inadequate payment of stamp duty will result in liability for interest, penalties and surcharges. Under an arrangement between Ireland and the United Kingdom, credit is given in Ireland for UK stamp duty payable on the transfer of Ordinary Shares where the instrument of transfer is stampable in both jurisdictions (see below as regards UK stamp duty). Irish stamp duty on CREST operator instructions is collected through the CREST system and passed directly by CREST to the Irish Revenue Commissioner Capital Acquisitions Tax Capital acquisitions tax ( CAT ) covers both gift tax and inheritance tax. A CAT liability arises where the disposer or beneficiary is resident or ordinarily resident (unless not domiciled in which case must be resident for 5 consecutive years immediately preceding the year of assessment and resident/ordinarily resident in that year) in Ireland or where the subject matter of the gift or inheritance is Irish property. Registered shares are located in the country of the register. Accordingly, the Ordinary Shares are located in Ireland and a CAT liability may arise on a gift or inheritance of Ordinary Shares, notwithstanding that the gift or inheritance is between two non Irish resident and non ordinarily resident individuals. CAT is applied at rate of 20% on taxable gifts and inheritances UK Taxation The statements below are based on current UK tax law and what is understood to be current HM Revenue and Customs published practice. They are intended as a general guide only, for Shareholders who are resident and ordinarily resident in the UK for UK tax purposes (except insofar as express reference is made to the treatment of non-uk residents) and who hold their Ordinary Shares as investments and not as trading stock and who are the beneficial owners of those Ordinary Shares. Certain categories of Shareholder may be subject to special rules and this summary does not apply to such Shareholders, or to Shareholders who either directly or indirectly 345

354 control, alone or together with one or more associated or connected persons, 10.0% or more of the voting power or equity investment in Maple Energy plc. Shareholders who are in any doubt about their tax position, or who are resident, or otherwise subject to taxation, in a jurisdiction outside the UK, should consult their own professional advisers Dividends (a) A Shareholder who is an individual and who is resident or ordinarily resident in the UK for tax purposes or who, although neither resident nor ordinarily resident in the UK, carries on a trade, vocation or profession in the UK through a branch or agency, to which the holding of Ordinary Shares is attributable (a UK Individual Holder ) will generally be subject to UK income tax on dividends received from Maple Energy plc. (b) To the extent that a dividend received from Maple Energy plc represents income of a UK Individual Holder who is subject to UK income tax at the higher rate, it will be subject to income tax at the dividend upper rate (currently 32.5%). To the extent that a dividend received from Maple Energy plc represents income of a UK Individual Holder who is subject to UK income tax at a rate other than the higher rate, it will be subject to UK income tax at the dividend ordinary rate (currently 10%). UK Individual Holders should note that, as matter of current law, no tax credit would be available to them in respect of dividends received from Maple Energy plc. It should be noted that changes have been proposed in the Finance Bill 2007 which would in limited circumstances allow a tax credit to be claimed by a UK resident shareholder on overseas dividends. These changes are not yet finalised or enacted and should take effect from 6 April (c) A Shareholder which is a company and which is resident in the UK for tax purposes or which, although not resident in the UK, carries on a trade in the UK though a permanent establishment to which the holding of Ordinary Shares is attributable will generally be subject to UK corporation tax (currently 30%) on the gross amount of any dividends received from Maple Energy plc Dividends Non-UK Resident Shareholders Shareholders who are not resident or ordinarily resident in the UK for tax purposes and who do not carry on a trade profession or vocation in the UK through a branch, agency or permanent establishment will not be liable to UK tax in respect of dividends received from Maple Energy plc. Shareholders who are not resident in the UK for tax purposes should consult their own tax advisers concerning their tax liabilities on dividends received from Maple Energy plc The attention of individuals ordinarily resident in the UK for tax purposes is drawn to the provisions of Chapter III of Part XVII of the United Kingdom Income and Corporation Taxes Act 1988 (transfer of assets abroad), which may render them liable to UK income tax in respect of the undistributed income of Maple. As the application of those provisions to an individual Shareholder may depend upon the personal circumstances of that Shareholder (including the Shareholder s purpose in acquiring the Ordinary Shares), such Shareholders are advised to consult their own advisers with regards to the potential application of those provisions to their particular circumstances Stamp Duty and Stamp Duty Reserve Tax No UK stamp duty or stamp duty reserve tax ( SDRT ) will be payable by placees on the issue of the Ordinary Shares pursuant to the placing. However, stamp duty at the rate of 0.5% will be due in respect of any agreement to sell the Ordinary Shares and UK stamp duty (at the rate of 0.5%) may be due on any instrument transferring Ordinary Shares which is executed in the UK or relating to any property situate, or matter or thing done or to be done in the UK Capital Gains A disposal of Ordinary Shares by a Shareholder who is either resident or, in the case of an individual, ordinarily resident, for tax purposes in the UK, or a Shareholder that is not UK tax resident but carries on a trade, profession or vocation in the UK through a branch, agency or permanent establishment and has used, held or acquired the Ordinary Shares for the purposes of such trade, profession or vocation or such branch, agency or permanent establishment may, depending on the Shareholder s circumstances and subject to any available exemptions or relief, give rise to a chargeable gain or allowable loss for the purposes of the UK taxation of chargeable gains. 346

355 15. Litigation 15.1 The Peruvian tax authority, SUNAT, has issued an assessment for additional tax based on its audit of Maple for the 2001 financial year. The largest heads of assessment focus on non-deductible interest, a bad debt write-off and non-deductible transportation costs. SUNAT is challenging (i) the deduction of $2,089,000 of interest expenses and $1,144,000 of transportation expenses on the basis of lack of proof linking the expenses to taxable earnings and (ii) the deduction of $2,600,000 of bad debt on the basis that the debt write-off relates to an inter-company loan made in 1996 and should therefore have been deducted in In total, SUNAT s assessment results in a liability for additional tax to Maple of $1,855,000, although with penalties and interest on overdue tax, the additional liability could total over $4,000,000. Maple is, however, in the process of defending its calculations in the 2001 tax return Maple has submitted a claim for reimbursement in connection with certain expenses incurred in connection with the Pucallpa Refinery and Sales Plant. In order to achieve and maintain operating standards established by OSINERGMIN, Maple has carried out a number of improvements to the Pucallpa Refinery and Sales Plant at its own cost without obtaining the consent of Petroperú. Maple asserts that Petroperú should refund the cost of some of the improvements to Maple on the basis that the improvements were required by law at the time of entering into the lease agreement and, under the terms of the lease agreement, Petroperú misrepresented that the condition of the Pucallpa Refinery and Sales Plant was in full compliance with applicable law at that time and that the consent was not required. Petroperú has responded to Maple stating that any alterations made without their consent would not be considered improvements and would not be refunded. Petroperú and Maple have agreed to submit this dispute to arbitration although such proceedings have not yet commenced On 4 August 2006, OSINERGMIN sent a letter notifying Maple Gas of the requirement, imposed by Supreme Decree No EM, that the Pucallpa Refinery and Sales Plant install floating roofs over tanks storing class I fuel. Maple Gas responded to this letter and raised concerns with OSINERGMIN s notification. In particular, Maple Gas stated that, pursuant to Supreme Decreee No EM, it was not required to install the floating roofs as the supervising authority at the time of issuance of the Decree had determined that the installation of floating roofs over tanks storing class I fuel was not required, following completion of a fiscalisation study of the Pucallpa Refinery and Sales Plant. Maple Gas has also met with Petroperu to discuss the possibility of installing floating roofs and deducting the cost of such installation from the rental sums it pays to Petroperu under the terms of the Lease Agreement for the Pucallpa Refinery and Sales Plant. Maple expects to reach an agreement with Petroperu regarding this matter. However, the possibility that OSINERGMIN may impose sanctions on Maple Gas for its failure to install floating roofs still remains. 16. Working Capital In the opinion of the Directors, having made due and careful enquiry, the working capital available to Maple is sufficient for Maple s present requirements, that is for at least the next 12 months from the date of Admission. 17. No Significant Change Save as disclosed in this document there has been no significant or material change in the financial or trading position of Maple Energy plc since 31 December 2006, the date to which the last audited financial information of Maple Energy plc (as set out in Part V of this document) was prepared. Save as discussed in this document there has been no significant or material change in the financial or trading position of Maple since 31 December 2006, the date to which the last audited consolidated financial information of Maple (as set out in Part V, included elsewhere in this document) was prepared. 18. Responsibility and Consents Grant Thornton UK LLP of Grant Thornton House, Melton Street, London, NW1 2EP accept responsibility for the information in its reports set out in Part V of this document and believe, having taken all reasonable care to ensure that such is the case, that the information contained in its reports set out in Part V of this document is, to the best of its knowledge, in accordance with 347

356 the facts and contains no omission likely to affect its import and has given and not withdrawn its written consent to the inclusion in this document of its name, reports in Part V and references to them in the form and context in which they appear. Canaccord Adams Limited of 7 th Floor, Cardinal Place, 80 Victoria Street, London, SW1E 5JL, has given and not withdrawn its written consent to the inclusion in this document of its name and the references to it in the form and context in which they appear. Canaccord, which is regulated by the Financial Services Authority, has not authorised the contents of any part of this document for the purposes of Annex I Section 1.2 of the PD Regulation. Mirabaud Securities Limited of 21 St. James s Square, London, SW1Y 4JP, has given and not withdrawn its written consent to the inclusion in this document of its name and the references to it in the form and context in which they appear. Netherland, Sewell & Associates, Inc. of 4500 Thanksgiving Tower, 1601 Elm Street, Dallas, Texas , United States of America accept responsibility for the information in its report set out in Part IV of this document and believe, having taken all reasonable care to ensure that such is the case, that the information contained in its reports set out in Part IV of this document is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import and has given and not withdrawn its written consent to the issue of this document with its name included in it and the references to it in the form and context in which they appear. 19. General Save as disclosed in this document, no person (other than professional advisers named in this document and trade suppliers) has: (a) (b) received, directly or indirectly, from Maple Energy plc within the 12 months preceding the application for Admission; or entered into contractual arrangements (not otherwise disclosed in this document) to receive, directly or indirectly, from Maple Energy plc on or after Admission any of the following: (i) fees totalling 10,000 or more; (ii) securities in Maple Energy plc where these have a value of 10,000 or more calculated by reference to the Placing Price; or (iii) any other benefit with the value of 10,000 or more at the date of Admission. The total costs and expenses of the Placing which are payable by Maple Energy plc are estimated to amount to $6.8 million (excluding VAT), out of which Canaccord, Mirabaud and BCP, collectively, will receive a commission of approximately $3.3 million in respect of the placing of the Subscription Shares. Accordingly, the net proceeds of the Placing to be received by Maple Energy plc (assuming full subscription of the Subscription Shares and after deduction of expenses, but excluding the commission payable to Canaccord and Mirabaud from the placing of the Subscription Shares) are estimated at $41.6 million. Canaccord is registered in England and Wales as a private company limited by shares under the Companies Act 1985, as amended, with registered number and is a member of the London Stock Exchange and is authorised and regulated in the United Kingdom by the Financial Services Authority. Mirabaud is registered in England and Wales as a private company limited by shares under the Companies Act 1985, as amended, with registered number and is a member of the London Stock Exchange and is authorised and regulated in the United Kingdom by the Financial Services Authority. The financial information set out in Part V of this document does not constitute statutory accounts within the meaning of section 19 of the Companies (Amendment) Act 1986 of Ireland. Other than Maple Energy plc s application for the Ordinary Shares to be admitted to trading on AIM, no application for admission to any other recognised investment exchange has been made. 348

357 Medina, Zaldivar, Paredes & Asociados (the Peruvian member firm of Ernst & Young) of Av. Victor Andrés Belaúnde 171, San Isidro, Lima, Perú are a member of Colegio de Contadores Públicos de Lima (the Lima Charter of Certified Public Accountants), the Public Company Accounting Oversight Board - PCAOB, Instituto Peruano de Derecho Tributario - IPIDET (the Peruvian Institute of Tax Laws), Asociación Fiscal Internacional (the International Tax Association) and Instituto Peruano de Investigación y Derecho Tributario (the Peruvian Institute for Research and Tax Laws) were the auditors of MCL and its subsidiaries for the period covered by the financial information of Maple and its affiliates in Part V of this document. Save as disclosed herein, Maple is not dependent on patents or licences, industrial, commercial or financial contracts or new manufacturing processes that are material to Maple s business. Copies of this document will be available to the public free of charge from the registered office of Maple Energy plc and from the offices of Canaccord at 7th Floor, Cardinal Place, 80 Victoria Street, London SW1E 5JL, United Kingdom during normal business hours on any week day, Saturdays, Sundays and public holidays excepted, from the date of this document until the date one month following Admission. 349

358 GLOSSARY 2-D two dimensions 3-D three dimensions API Basin Bcf BCFD BOE boepd bpd BTU cf Formation GOC LPG Mbbl(s) Mbd MBoe md Migration MMbbl MMBoe MMBTU MMcf MMcfd MTBE NGL American Petroleum Institute an area which in a past geological era has been depressed, acquiring deposits of sedimentary rocks such as sands, silts or limestones billion of cubic feet billion cubic feet per day barrels of oil equivalent barrels of oil equivalent per day barrels of oil per day British Thermal Unit cubic feet a rock deposit or structure of homogeneous origin and appearance gas/oil contact thousand liquefied petroleum gas thousand barrels of oil million barrels per day thousand barrels of oil equivalent millidarcy (measure of permeability) the movement of hydrocarbons from their source rock into reservoirs million barrels of oil million barrels of oil equivalent million British thermal units million cubic feet million cubic feet per day methyl tertiary butyl ether natural gas liquid 350

359 OWC Permeability Porosity Possible Reserves Prospective Resources Proved or Proven Reserves Probable Reserves Reservoir Seismic Survey Stimulation Methods tcf Workover 6 July 2007 oil/water contact the degree to which a body of rock will permit a fluid to flow through it the percentage of pore volume or void space, or that volume within rock that can contain fluids has the definition ascribed to it in the Competent Person s Report in Part IV of this document has the definition ascribed to it in the Competent Person s Report in Part IV of this document has the definition ascribed to it in the Competent Person s Report in Part IV of this document has the definition ascribed to it in the Competent Person s Report in Part IV of this document a subsurface body of rock having sufficient porosity and permeability to store and transmit fluids a survey conducted to map the depths and contours of various prospective rock strata by timing the reflections from strata-tops of sound waves released on the surface or down a borehole such as acidising or fracturing or explosions designed to break up low permeability reservoir rock in the vicinity of a well so that oil can flow freely into the bore trillion cubic feet (1000 billion) a maintenance operation on a well usually to replace equipment or to stimulate production 351

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