Introduction
SacOil Holdings Limited, which is 56.7% owned by Encha Capital, concluded a farm-in agreement on 10 May 2010 ("the Agreement") in terms of which SacOil will, subject to the conditions precedent set out below, acquire a 55% participating interest in the Chaal Permit Area ("the Acquisition"). The Chaal Permit Area is potentially one of Tunisia`s most significant future gas resources.

The Chaal Permit Area
Chaal is a potential world class gas condensate discovery located onshore central Tunisia some 25 kms to the west of Tunisia`s second largest city, Sfax. Candax Energy Inc. ("Candax") together with its partners and the Tunisian Government are actively pursuing the deep gas resources at Chaal and in the Triassic reservoirs lying beneath the producing fields in the south of the country.