2011 Third Quarter Report

The Company has launched a major exploration initiative throughout its East Africa portfolio which includes at least 7 seismic acquisition programs (totaling just under 7,000 kilometers), 6 Full Tensor Gravity ("FTG") surveys, extensive environmental studies, acquisition of high resolution gravity and magnetic data, as well as geochemical surveys. Over the next 15 months, multiple exploratory wells are planned to test the numerous prospects identified throughout the blocks.

AOC, with partner Tullow, have acquired more than 50,000 line kilometers of FTG in Blocks 10BB, 10BA, 13T, 12A, 10A, and South Omo of Kenya and Ethiopia. The use of this new technology, developed by the US military, provides much greater resolution than traditional gravity and magnetic reconnaissance methods. This enhanced resolution allows operators to more precisely define prospective areas prior to acquiring seismic data. . FTG seismic surveys are being acquired in a timeframe of months, at 5- 10% of the cost of a loose grid of 2D seismic data. This is allowing operators to focus their seismic programs towards prospect-delineation sooner, and get to drillable prospects faster and more cost-effectively. Tullow has successfully used FTG to provide a structural model of fault blocks in the Albert Graben.

KENYA

The Company and Tullow, its operating partner in each of the Kenyan Blocks other than Block 9, are actively exploring for oil as described below.

Block 10BB

The Company and Tullow have integrated and interpreted all newly acquired (610 km) and vintage 2D seismic data. A number of prospects have been identified and are being high graded for the planned drill program. The Ngamia (Camel) prospect (previously named Fise-1) has been selected by the joint venture for the initial well in Block 10BB. The prospect will test the oil potential in Miocene age sandstones within a three way dip closure against the West Lokichar rift fault. Ngamia is directly analogous to successful oil accumulations drilled by Tullow and partners early in the exploration efforts in the Lake Albert graben of Uganda. The contract for the drilling rig has been awarded to Weatherford International. The Ngamia well is expected to spud in December of 2011. The Company and its partner recently completed a FTG survey to further define prospective areas of the block that lack 2D seismic data.

Block 10BA

The Company and Tullow recently completed a FTG survey over most of Block 10BA, covering all of Lake Turkana and most of the adjacent onshore areas. A seismic acquisition contract has been awarded to the Bureau of Geophysical Prospecting ("BGP") for 1350 km of 2D data to be acquired in both the offshore lake environment and nearshore transitional areas adjacent to Lake Turkana. The offshore data will be acquired using state of the art Ocean Bottom Cable ("OBC"), whereby the recording receivers will be positioned on the bottom of the lakebed. Pre-seismic environmental studies have been completed and the seismic survey is expected to commence in the first quarter of 2012.

Block 10A

The Company and Tullow have integrated and interpreted all newly acquired (750 km) and vintage 2D seismic data. A number of prospects have been identified and are being high graded for the planned drilling program. The Paipai-1 prospect has been selected by the joint venture for the initial well in Block 10A. The prospect will test the oil potential in Cretaceous age sandstones within a four way dip closure downthrown to the Lag Bagal fault, the northern bounding fault on the Anza Trough. Preparations for drilling, including purchase of materials, execution of drilling related contracts, civil works, and environmental permits are either completed or underway. The Block 10A well is expected to spud in the second quarter of 2012 using the same Weatherford rig as will be used in Block 10BB.

Block 13T

The Company and Tullow have awarded contracts for both a FTG survey and seismic acquisition. The FTG survey was completed early in the fourth quarter of 2011. The recording of approximately 600 km of 2D seismic data by BGP is planned to commence late in the fourth quarter of 2011. Environmental impact studies have been completed and government permits have been obtained. Interpretation of reprocessed vintage seismic data has revealed a string of interesting structures on trend with the Ngamia feature of Block 10BB. The seismic program will focus on further delineation of these leads to mature them to drillable prospect status and will explore a newly identified rift basin in the western portion of the block.

Block 12A

The Company and Tullow have awarded contracts for both a FTG survey and seismic acquisition. The FTG survey has recently been completed. The recording of at least 520 km of 2D seismic data by BGP is planned to commence in the second quarter of 2012. Environmental impact studies and Government permitting will precede the seismic survey.

Block 9

The Company holds 100% interest in Block 9 and has recently completed the acquisition of 750 km of 2D seismic data. The survey was focused on delineating a drillable prospect in the oil-prone Kaisut sub-basin in the northwestern portion of the block. Newly acquired data is of excellent quality and a number of interesting leads have been identified. Under the terms of the PSA, there is a one well drilling commitment before the end of 2013. The Company has completed a study associated with potential commercialization of gas resources in the 2010 Bogal discovery which could lead to a Bogal re-entry, and testing program. The Company plans to pursue a partner on Block 9 that brings gas development and marketing experience to the joint venture.

ETHIOPIA

South Omo Block

The Company and its operating partner on the Block, Tullow, have recently completed a FTG survey across most of the southern portion of the South Omo Block. The results of the survey were encouraging and have been used to lay out the current 2D seismic survey. A contract with BGP for the acquisition of approximately 1018 km of 2D seismic data has been executed. The seismic recording has recently commenced and is expected to be completed by the end of the first quarter of 2012. Environmental impact studies and government permitting preceded the seismic survey. One exploration well is planned for the second half of 2012.

Ogaden Blocks 7/8

The Company and its partners have integrated and interpreted all newly acquired (430 km) and vintage 2D seismic data over the two blocks. The joint venture is currently focused on developing a better understanding of the large El Kuran oil and gas accumulation in Block 8, discovered in the early 1970's. The Company has completed a reservoir characterization study and drilling engineering review over the El Kuran structure. A revised analysis of the well data has confirmed the presence of light oil in the Jurassic limestones. Preparations for drilling, including purchase of materials, execution of drilling related contracts, civil works, and environmental permits have commenced. Spud of the El Kuran well is not anticipated until late in 2012, at the earliest.

Ogaden Blocks 2/6

Ogaden Blocks 2/6 have been relinquished and Ministerial approval to waive remaining commitments has been obtained. The Company has written off all incurred oil and gas expenditures relating to Blocks 2/6.

Adigala Block

The Company and its partner have completed the first exploration period of three years and have exceeded the contractual work obligations. The Ministry of Mines approved the Company and its partners' entry into the next exploration period on the Adigala Block with amended minimum work commitments. Under the amended work commitments, the Company and its partners are obligated to complete certain geological and geophysical ("G&G") operations, including acquisition of 7,500 square kilometers of full tensor gravity. The partnership expects to begin the full tensor gravity survey late in December of 2011.

Rift Valley Block

The Company completed the acquisition of high resolution gravity and magnetic data over the Rift Valley Block in April 2011. Final processing and interpretation was completed during the third quarter of 2011 which has indicated that a deep sedimentary basin with potential for hydrocarbon charge is located in the southern portion of the block. The block is on trend with highly prospective blocks in the Tertiary rift valley such as Ethiopian South Omo block, and Kenyan blocks 10BA, 10BB, 13T, and 12A. Additionally, the Company mobilized geochemical specialists to collect fluid samples to detect potential oil seeps at the surface and/or margins of the rift lakes, within block. A total of 17 samples were collected of which 3 revealed hydrocarbon signatures.

PUNTLAND (SOMALIA)

Dharoor and Nugaal Valley Blocks

The Company is currently in final preparations to commence a two well drilling campaign in the Dharoor Valley Block, with the first well (Shabeel-1) planned to spud in December of 2011. Drilling locations have been selected over two robust prospects targeting gross best estimated prospective resources of over 300 million barrels each, based on internal estimates. A contract has been awarded to Sakson Drilling and Oil Services who will provide a 1500 horse-power, top drive equipped rig. All drilling related third party service contracts have been executed. The Company has completed sourcing drilling related materials and the majority of materials are on site or on route to the drilling site. Site preparation including the drill site, air strip and ingress route construction have been completed. Water wells are currently being drilled to provide source water for drilling operations.

MALI

Blocks 7 and 11

The Company and its partner, Heritage Oil and Gas Ltd. ("Heritage") have recently completed the acquisition of 848 km of 2D seismic in Block 11 and 243 km in Block 7. Both blocks are located in the Gao Graben which is on trend and adjacent to significant recent gas discoveries. The Company's share of costs for initial seismic and the drilling of the first exploratory well are fully carried by its single partner, Heritage.