Tanganyika Oil To Develop Oudeh Project in Syria

Tanganyika Oil Company has provided to the Government of the Syrian Republic and the Syrian Petroleum Company a US $2 million letter of guarantee pursuant to work commitments to be carried out on the Oudeh project. The Oudeh Block encompasses 192 square kilometers located in the main producing region of northeastern Syria. The Block is within a major oil trend which extends from the Persian Gulf, Kuwait and through Iraq, Iran and into Syria.

In order to facilitate the letter of guarantee, Mr. Adolf H. Lundin advanced to the Company a loan in the amount of US $2 million loan. The loan is for a term of two years, bearing interest at the rate of 10% per annum. At the option of the Company, the loan may be paid out at any time without penalty. The Company has agreed to issue to Mr. Lundin a bonus of common shares equal to 20% of the amount of the loan at a deemed price of Cdn $1.50 per share, which is the market price of the common shares of the Company on the date prior to the closing date of the loan.