Highlights

Calvalley has established a strong record of reserves growth from its initial Exploration and Production Project, at Block 9 in the Masila Basin of the Republic of Yemen. The Project is based on a Production Sharing Agreement ("PSA") which was signed with the Government of Yemen. Since initiating commercial production in 2006, the Company has had consistently positive cash flows without the requirement for any debt financing which has provided a growth momentum that continues to carry Calvalley forward as a corporation.

Highlights

Calvalley was focused on relieving the key bottlenecks to increasing production levels. Existing agreements restricted the production levels which could be achieved at Hiswah and caused the Company to keep production shut-in at Al Roidhat. Key terms of agreements were negotiated during 2009 which will allow the Company to direct its focus toward production and reserves increases.

Highlights

Management of Calvalley targeted three core areas for improvement in 2008: reserve growth, production throughput and the development of an exploration strategy to realize both the full upside potential of Block 9 in Yemen and to enter into new projects in the Middle East and North Africa.

Highlights

2007 included various initiatives by Calvalley to enhance exploration of Block 9 in the Republic of Yemen. Major initiatives included the acquisition of new seismic and the reprocessing of all of the existing seismic on Block 9 to provide a comprehensive picture of the regional geology on the block. This process positioned Calvalley to reignite the exploration program during the fourth quarter of 2007.

Highlights

During 2006, Calvalley continued to build on its successful track record in exploration and development on Block 9 in the Republic of Yemen. The Company made significant progress towards increasing production rates (resulting in its first crude oil sales), development drilling in the Hiswah field, design and construction of central production facilities, regulatory approval for construction of the main transmission pipeline, and seismic acquisition programs on new leads and prospects.