M Molecular Energies provided an update relating to the Paraguay exploration well. The preparation for commencement of drilling of the Paraguay exploration well on the Tapir x1 site has continued. The present status is as follows: The mobilization to site has been completed.

The site camp for 60 persons including medical and catering facilities has been assembled. The rig up is approximately 50% complete with the mast scheduled to be erected at or around the end of next week. There are now 50 workers on site including Moleculars Drilling Manager, Company Manager, HSE Supervisor and Logistics Supervisor.

The Blowout Preventor is undergoing final testing and certification before being shipped to the site from Brazil. Currently expected to be delivered and installed week commencing 11 September. Long lead services, including logging while drilling, fishing and performance drilling tools as well as casing running equipment are now on site.

Halliburton has begun moving chemicals for drilling fluids and cementing. Continuous work is being conducted to monitor the approximately 150km of unpaved dirt roads to the remote location and this will continue throughout the drilling and demobilization period. Commencement of drilling is now scheduled to take place at some stage in the second half of September.