PRESS RELEASE

THE GOBE LANDOWNERS ISSUES: CREDITORS, EQUITY DIVIDENDS, ROYALTIES AND MOA PAYMENTS

This notice is intended for the Gobe landowners and in response to the front page Post Courier report on Tuesday, 25 April 2011. In the recent weeks, the Gobe landowners have conducted meetings with the Department of Petroleum and Energy (DPE) and MRDC on several outstanding issues. They have also issued several demands and ultimatum to the State and MRDC; including threats to shut down the Gobe oil field operations.

The three key pressing issues that the Gobe landowners want MRDC to address are:

i. Payments for the Gobe creditors;

ii. Payment of the Gobe royalties and equity dividends; and

iii. Release of Gobe MOA funds.

i. Payment for the Gobe creditors

I would like to remind the Gobe landowners of a Public Notice jointly authorized by the Secretaries for Treasury and DPE, Chairman of PRG and myself in the daily newspapers. MRDC is maintaining the position we took at that time.

Whilst MRDC acknowledges that the issue of Creditors is a sensitive matter, legally MRDC is not obligated to apply trust monies or funds to settle debts owed by the ILGs, their Chairmen, members of the Executives of the ILGs and any other beneficiaries.

MRDC will only make payments to the ILGs as per the Oil and Gas Act. It is up to the ILGs to then disburse those funds to their beneficiaries, and where the Constitution of the relevant ILG allows for it, to authorize for payment of other persons and creditors.

MRDC cannot and will not breach the law and the terms of the Trust Deed to directly settle any creditors.

ii. Delayed payment of Gobe royalty and equity dividend

All the Royalty payments for the Gobe oil project and the PRG declared dividends are at the moment held in trust by the MRDC. The money is ready to be paid immediately to the beneficiaries.

The only reason, why the payment has not been made is because of the Gobe Alternate Dispute Resolution (ADR) process. The ADR process has been completed two years ago but MRDC is still waiting for the final findings to be released and decisions to be taken by the court and further directions be issued by DYE.

The ADR process was to identify and establish the true Gobe landowners and genuine beneficiaries. Until the finding is released and the court makes a ruling, MRDC will not pre-empt the outcome of the ADR process by making payments to landowners that are yet to be

established by the court.

iii. Outstanding Gobe MOA payment

MRDC was given the mandate and the task to manage and deliver outstanding MOA projects in Kutubu, Moran, Gobe and Hides Gas to Electrification Project by the National Executive Counsel through its NEC Decision # 20/2009.

MRDC has put a lot of effort in developing a system that is incompliance with the Public Finance Management Act and Central Supplies and Tenders Board requirements in preparation for implementing the MOA program. However, as of today MRDC is yet to receive the outstanding MOA funds for implementation.

Conclusion

It is not MRDC's view to unduly and intentionally hold back funds that rightfully belong to project area beneficiaries. It is MRDC's duty to ensure that the payments are made through a proper and legal process.

I also take this opportunity to inform the beneficiaries and the general public that for the first time ever annual reports for the Mining and Petroleum Resource landowner companies (including PRG) managed by MRDC has been produced. The annual reports include
audits by Deloittes (an international accounting firm) for each company's financial affairs, investments and the general operations. The annual reports are public documents which are available to all stakeholders.

The annual report will be furnished every year for all subsidiaries managed by MRDC starting 2008. Unlike previously, there will be greater transparency and accountability with respect to the operations of the petroleum resource companies.

Finally, let us observe the law and let the due process take its course. MRDC is doing its best within its jurisdiction to resolve the outstanding administrative and bureaucratic issues so that landowners can get their legal entitlements in due course.

Mr. Augustine S Mano

MANAGING DIRECTOR