MOG Reports on E&P Activities for Italian Concessions

MOG expects the Ministry of Economic Development to issue the Guendalina production concession by year-end 2009. As a result of this and given the latest timetable provided by ENI SpA ("ENI"), MOG expects ENI to start field development activities in January 2010.

Construction and installation of the production platform is scheduled to be completed in 2010; while the drilling of two development wells is planned in the first half of 2011, with gas production and associated revenues expected to commence prior to the end of June 2011.

ENI is currently reviewing the required development capital expenditure for the project and has informed MOG that it expects an increase in costs compared to previous estimates provided by ENI. The increased project costs are mainly attributable to: (1) recently introduced additional HSE regulatory requirements, requiring the upgrade of the development facilities, and (2) a requirement issued by the Ministry of Environment to install a monitoring system capable of measuring any potential subsidence associated with gas production at the Guendalina field.

On the basis of data provided by ENI and MOG's analysis of the Guendalina project, the Company continues to believe the field will be economic and value accretive to MOG. MOG expects to finance the increase in required capital expenditure through a corresponding increase in its dedicated credit facility. The Company is engaged in discussions with its bankers in this respect and a further announcement will be made in due course.

Based on studies performed by ENI, the aggregate gas production from the field is expected to be around 20 MMcf/d (100% basis). MOG has a 20% interest in the Guendalina gas field which has independently certified 2P gas reserves of 22 Bcf (100% basis).

MOG will provide a further update once the production concession is formally awarded and published in the Ministry's official bulletin.



S.S. Bernardo permit -- exploration well Monte Grosso 2 ("MG2")
(MOG 22.89% and Operator; ENI 63.34%; Total 13.77%)

MOG and its JV partners, ENI and Total, have decided to postpone the drilling schedule for the MG2 exploration well, to 2011. This decision was taken as a consequence of the on-going non availability of the EMSCO 3 rig and given that the JV partners are still waiting for the issuance of final drilling approval from the Basilicata regional authority.

During 2010, MOG plans to execute routine site maintenance works and, pending resolution of the above mentioned issues, prepare the site for a well spud in 2011.

Background on the S.S. Bernardo Permit, MG2 Exploration Well:

The Monte Grosso prospect is located next to, and on trend with, the main onshore oil production region in Western Europe, where the Val d'Agri field (ENI, Shell) is producing approximately 100,000 bbls/d and the Tempa Rossa field (Total, Shell, Exxon) is presently under development.

MOG estimates that the most likely expected prospective oil resources on the Monte Grosso prospect are 64 MMbbls net to the Company (280 MMbbls gross oil prospective resources).

The exploration target is about 6,400 meters deep and the planned well target depth is 6,800 meters.

S. Andrea Concession -- start up of Anzano gas field development
(MOG 40% and Operator; Edison 50%; Petrorep 10%)

The Anzano 1 production well is located inside the S. Andrea on-shore production concession and is expected to commence gas production by the first quarter of 2010.

The development of the Anzano field is part of the Company's on-going gas production and reserve enhancement strategy.

Development activity commenced on 17 November 2009 and should be completed by the end of the first quarter of 2010. The works consists mainly of the layout of a gas pipeline to connect the well to existing gas producing infrastructure.

The development expenditure net to MOG amounts to approximately €200,000. The economics of this small project are particularly attractive because of the utilization of the existing production plant of the other producing gas fields within the concession.

Under the field development plan, gross gas production at Anzano 1 is targeted progressively to increase to a peak of 7,000 - 8,000 scm/day (2,800 to 3,200 scm/d net to MOG). The well is expected to produce approximately 1.0 MMscm per annum net to MOG.

5.0 MMscm (0.2 Bcf) of 2P reserves net to MOG have been independently certified on this field inside the Pliocene shaly sand reservoir, at a depth of 1,110 meters.

Exploration portfolio review and rationalization

MOG recently completed a full review of its existing exploration portfolio. The review was performed to identify exploration permits with high-risk and limited resource potential, so as to rank the exploration portfolio in order of priority in time, management commitment and capital allocation. Based on the results of this review, the Company intends to relinquish or release a total of eight exploration permits in Italy and Tunisia.

Sergio Morandi, the Company's CEO, stated, "Guendalina and Ombrina Mare continue to produce excellent milestones that are propelling us towards our goal of becoming a medium sized oil and gas producer. In addition, the expected award by year-end 2009 of the Guendalina production concession allows the Company to consolidate the development timetable and the forecast start-up of field production. The field's gas production will allow MOG to triple its current annual rate of net gas production.

"The commencement of development works at the Anzano gas field demonstrates management's focus on enhancing production from its existing portfolio of onshore concessions and the optimal utilisation of existing gas production plants and other infrastructure.

"The ongoing rationalisation of the Company's exploration portfolio is designed to ensure that MOG's capital and technical expertise is directed primarily towards its key projects and forms part of management's ongoing cost reduction efforts."