During 2010, Calvalley successfully achieved a number of key accomplishments which are setting the stage for significant growth potential:

• Construction of the TOF at Block 51, which will be commissioned in the second quarter of 2011, will allow the Company to produce and sell a blend of all Block 9 crude oil production at the high value Masila Blend price.
• The Ras Nowmah-2 appraisal well confirmed the quality and highly productive nature of the field by producing 30° API crude oil at a stabilized rate of 3,000 bbls/day with only a 9.5% pressure drawdown and no formation water present.
• Due to both the discovery success at Ras Nowmah and to the successful implementation of the pressure maintenance program at the Hiswah Field, the Company's reserves grew at impressive rates. Proved plus Probable ("2P") reserves increased to 31.8 mmbbls at December 31, 2010 compared to 26.5 mmbbls at December 31, 2009 representing a 20% increase.

CALVALLEY IS POSITIONED

2010 HAS BEEN A MILESTONE YEAR IN BUILDING A PLATFORM FOR GROWTH

Since initiating commercial production in 2006, Calvalley has established a strong foundation for growth with effective long-range planning which prioritized exploration success, focused on significant reserves additions and established key scalable infrastructure. This enabled the Company to maintain limited but stable production which has funded all capital activities without the need for debt financing.

CATALYSTS

FOR GROWTH

As Calvalley begins operation of the TOF, it is initiating an active program of development and appraisal drilling that will unlock the full production and reserves potential of Block 9 in the Masila Basin. And, with the Company having established an improved export outlet via the Masila Export Pipeline System, the TOF will enable the Company to market its blend of crude oil production at an improved price, equivalent to the traditional 26� API Masila Blend.

Combined with the recent exploration success at Ras Nowmah, the acquisition and analysis of 340 kilometers of 2D seismic data has yielded two additional exploration prospects for a total of six. Additionally, the 31.8 mmbbls of 2P reserves, as verified in Calvalley's Reserves Report as at December 31, 2010, has confirmed the Company's position for continued production growth which will translate into increased shareholder value.