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Our operations may be adversely affected by political and economic circumstances in the countries in which we operate.
Our oil and gas exploration, development and production activities are subject to political and economic uncertainties (including
but not limited to changes, sometimes frequent or marked, in energy policies or the personnel administering them), expropriation of
property, cancellation or modification of contract rights, changes in laws and policies governing operations of foreign-based
companies, unilateral renegotiation of contracts by governmental entities, redefinition of international boundaries or boundary
disputes, foreign exchange restrictions, currency fluctuations, royalty and tax increases and other risks arising out of governmental
sovereignty over the areas in which our operations are conducted, as well as risks of loss due to civil strife, acts of war, acts of
terrorism, piracy, disease, guerrilla activities, insurrection and other political risks, including tension and confrontations among
political parties. Some of these risks may be higher in the developing countries in which we conduct our activities, namely, Angola
and Gabon.
Our operations are exposed to risks of war, local economic conditions, political disruption, civil disturbance and governmental
policies that may:
•
disrupt our operations;
•
restrict the movement of funds or limit repatriation of profits;
•
in the case of our non-U.S. operations, lead to U.S. government or international sanctions; and
•
limit access to markets for periods of time.
Disruptions may occur in the future, and losses caused by these disruptions may occur that will not be covered by insurance.
Consequently, our exploration, development and production activities may be substantially affected by factors which could have a
material adverse effect on our financial condition and results of operations. Furthermore, in the event of a dispute arising from non-
U.S. operations, we may be subject to the exclusive jurisdiction of courts outside the U.S. or may not be successful in subjecting non-
U.S. persons to the jurisdiction of courts in the U.S., which could adversely affect the outcome of such dispute.
Our operations may also be adversely affected by laws and policies of the jurisdictions, including Angola, Gabon, the United
States, the Cayman Islands and other jurisdictions, in which we do business, that affect foreign trade and taxation. Changes in any of
these laws or policies or the implementation thereof, could have a material adverse effect on our results of operations and financial
position, as well as on the market price of our common stock.
The oil and gas industry, including the acquisition of exploration acreage worldwide, is intensely competitive.
The international oil and gas industry is highly competitive in all aspects, including the exploration for, and the development of,
new sources of oil and gas. We operate in a highly competitive environment for acquiring exploration acreage and hiring and retaining
trained personnel. Many of our competitors possess and employ financial, technical and personnel resources substantially greater than
us, which can be particularly important in the areas in which we operate. These companies may be able to pay more for productive or
prospective properties and prospects and to evaluate, bid for and purchase a greater number of properties and prospects than our
financial or personnel resources permit. Furthermore, these companies may also be better able to withstand the financial pressures of
unsuccessful drill attempts, delays, sustained periods of volatility in financial markets and generally adverse global and industry-wide
economic conditions, and may be better able to absorb the burdens resulting from changes in relevant laws and regulations, which
would adversely affect our competitive position. Our ability to acquire additional exploration prospects and to find and develop
reserves in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in a highly
competitive environment. Also, there is substantial competition for available capital for investment in the oil and gas industry. As a
result of these and other factors, we may not be able to compete successfully in an intensely competitive industry, which could have a
material adverse effect on our results of operations and financial condition, as well as on the market price of our common stock.
