Indusmin Receives Five-Year Extension of Licenses in Armenia

Indusmin Energy completed an agreement with Armenian American Exploration Inc. ("AAEC"), of Solana Beach, California, on April 30, whereby Indusmin Energy Corp has acquired total interest in blocks 1 and 2, Republic of Armenia, to Indusmin, in return for a non-disclosed override over twenty years. The Armenian Energy Minister, Mr. Armen Movsisyan has agreed to the assignment and has granted a five year license extension to the existing licenses. After significant due diligence on the existing data on Block 1 and 2, Indusmin has elected to relinquish all of Block 1 in order to focus the initial activity on block 2.

"With this deal, the company is acquiring a vast geological and geophysical database about Armenia's Oil and Gas resources; in particular for blocks 2 and 3. At this stage there exists more technical information for the Oktemberyan prospects than those in the Near Yerevan Basin, and with a major gas pipeline twenty kilometers to the north, it is likely that this area will be first priority for exploration work. On the other hand, there is a drilling rig and considerable amounts of additional equipment already in the country. The rig and camp are available for start working as soon as needed," stated Carlos Munoz President and CEO.

Block 2 extends across the basins with the greatest potential for finding commercial deposits of oil and gas in the Republic of Armenia, these being:

1) The Armavir Basin, a sub-basin of the Ararat Intermontane Depression, located some thirty kilometers due west of the capital city of Yerevan.

Numerous gas shows and some minor oil shows in several boreholes have been found. Several prospects have been identified -- the Karmir prospect, close to the Oktemberyan-13E and 7P wells, with 10 BCF (billion cubic feet) of recoverable reserves; South Artamet and North Artamet prospects with reserves of 30 and 50 BCF respectively. There are also other prospects, including one where a major surface geo-chemical anomaly exists.

2)The Near Yerevan Basin, part of the Central Depression, located due east of Yerevan. Ten kilometers due east of Yerevan, oil was recovered from the Paleocene in the Shorakhpur-1P well in 1987. Azat-1, drilled by AAEC in 1998 on a separate structure further east, encountered oil traces at a similar geological level. Two prospects, Shorakhpur and Nubarashen, are estimated to each contain twenty million barrels of recoverable oil.

"The Ministry of Energy of the Republic of Armenia has great hopes for block 2, especially since the addition of important information obtained from the activities of AAEC and others since 1991. We hope that the successful application of the mutually agreed work program will lead to a commercial discovery. We are further encouraged because of the excellent relations between the Ministry of Energy and Indusmin Corporation. The deal regarding block 2 is just the starting point in the planned major cooperation between us," Dr. Andranik Aghabalyan (Head of Department of Fuel and Energy Underground Resources, Ministry of Energy, Republic of Armenia).