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Cairo :

Eng. Sameh Fahmy

Minister of Petroleum

Ministry of Petroleum

Nasr City

Subject :



Request for the approval of the Minister of Petroleum to convert the oil discoveries of Lagia 6 and Lagia 7 wells to a Development Lease " Lagia Development Lease" in Central Sinai Concession area issued by Law No. 11 of 1997.



Dear Sir,



The Egyptian General Petroleum Corporation ("EGPC") and Alliance Egyptian National Exploration Company ("As operator on behalf of contractor") Pursuant to Article Ill (d) of the concession agreement for Petroleum Exploration and Exploitation in Central Sinai Area, issued by Law No. 11 of 1997 (hereinafter referred to as "Central Sinai Concession Agreement"), respectfully. Request your approval to convert eight (8) complete Development blocks (1" x 1") and seven (7) sub blocks to a Development lease as shown in the attached map which include lagia 6 and lagia 7 wells.



The proven and recoverable oil reserve of this Discovery is 5 million barrel of oil in addition to probable reserves are estimated to 34 million barrel of oil from the Nukhul formation with using the enhanced oil production.



The total area of the lease, which will be named "Lagia development lease" is approximately (30) Km . The co-ordinates of the corner points of the area are indicated on the attached map.



EGPC and CONTRACTOR have mutually agreed that the date of commercial discovery is the same as the date of signing this lease.EGPC and CONTRACTOR have mutually agreed on the Preliminary Development Plan and the following:-



1- In the event of no production of oil in regular shipment is established in any development block within four (4) years from the date of commercial discovery such development block shall immediately relinquished.



Each development block being partly within the radius of drainage of any producing well shall be considered as participating in the production.



2- After the revision period referred to in item (1) above, the remaining area shall be reviewed periodically every two (2) years to relinquish any non productive or non participating blocks in the production.



3- Contractor shall solely bear ten (10) percent of the cost of drilling any dry well presented in the Preliminary Development Plan submitted by contractor and drilled after the date of issue of the Development Lease, cost of drilling dry well is defined as the actual drilling cost incurred from the spud date of the well to the rig release date. Dry well is defined as any well which was plugged and abandoned for any reason (other than mechanical problems) immediately after drilling and was not used at any time to produce or help to produce petroleum.On receiving your approval of this joint application, development Operations will promptly be initiated by the operating company upon its formation in accordance with the provision and conditions of Central Sinai Concession agreement and the Proposed Development Plan.



Yours Truly







______________________________________



Mr. Magdy Bassaly

General Manager

Alliance Egyptian Naitonal Exploration Company

"An operator on behalf of contractor"







______________________________________



Eng. Abdel-Alim Taha Chief Executive Officer

Egyptian General Petroleum Corporation







_____________________________________



Approved by :

Eng. Sameh Fahmy Minister of Petroleum





Date: 12/1/2010| | Lagia Development Lease

| | (Low No. 11 of 1997)

| |

| | For ALLIANCE EGYPTIAN NATIONAL

| | EXPLORATION COMPANY

| | As operator on behalf of contractor

| | MAGDY BASSALY

|-----IMAGE-----| GENERAL MANAGER [---SIGNATURE--]

| |

| |

| | For Egyptian General Petroleum

| | Corporation:

| | ENG, Abd El Alim Taha

| | Chief Executive Officer [--SIGNATURE--]

| |

| |





No Lat Long |

1 29°19' 00" 32° 54' 00” |

2 29°17' 00” 32° 54' 00” |

3 29°17 00” 32° 55' 00” |

4 29°15' 00” 32° 55' 00” |

5 29°15' 00" Intersection |

With Shoreline|

OF East Bank |

of GOS |APPROVED BY:

5 29°19' 00" Intersection |ENG. SAMEH FAHMY

With Shoreline|MINISTER OF PETROLEUM______

OF East Bank |

of GOS | Date: 12.1.2010



Lagia Development Lease

AREA : APROX. 30 Km2