Colombia Operations

In May 2011, Stetson signed a Hydrocarbon Exploration and Production Contract (E&P Contract) with the Agencia Nacional de Hydrocarburos of Colombia (ANH) for LLA-11 (Llanos Block). The Llanos Block in the Llanos Basin was successfully won by the Company during a bid round held on June 22, 2010, in Cartagena, Colombia. The Company has granted a 90% private interest in the Block to a wholly-owned subsidiary of Sagres Energy Inc. in consideration for the Company retaining a 10% carried interest during the first exploration phase.