Corporate History

Following re-evaluation of the historic well and seismic data available from earlier exploration companies in Paraguay, as well as reviewing the nearby oil and gas producing areas in Bolivia, the founders selected the areas in Paraguay which they considered to possess the best potential for discovery of commercial accumulations of oil and natural gas (the “Area”).

Subsequently CDS Oil & Gas Limited was formed in August 2003 for the purpose of pursuing oil & gas exploration and development in the Area. CDS Oil & Gas Group plc was formed in March 2004 to continue to pursue the exploration and development potential for oil and gas in the Chaco Basin located in Paraguay. CDS Energy, a 98.2 per cent owned subsidiary of CDS Oil & Gas Group plc, holds Prospecting Permits or prospecting, exploration and exploitation Concession Laws in respect of three blocks of property covering 1.33 million hectares within the Central Chaco High region of the Chaco Basin (the “Project Area”).

In the period from 1947 to 2005, 20 exploration wells were drilled in the Project Area, of which 19 (95%) had hydrocarbon shows. Exploration by earlier exploration companies during the period 1947 – 1993 was not continued due to various technical and economic reasons. Subsequent work by the Company since 2003 has identified 5 oil leads and 4 natural gas leads worthy of follow up. One of the key oil Leads identified is the original Emilia exploration well drilled by Pennzoil in 1972.

In 2007, after having encountered problems and delays in pursuing the exploration program, the Company was successful in securing new investors who are convinced of the potential of the acreage and with a vision of positioning the Company as a supplier of the local and export markets for oil and natural gas and also the downstream market.