Shona Energy Company (Feb. 2006) has been awarded the Oil and Gas Concession for Block 102 located in northern Peru adjacent to the Ecuador border. Block 102 represents a mandatory relinquishment of 313,000 acres in 1989 from Block 1-AB, which was held by OXY. Oil was discovered by OXY in 1972 on Blk 1-AB with a total of 18 fields found to date. Field size ranges from 10 to 175 MMBBLS and over 600 MMBO have been produced from this block. It is estimated that over 140MM BOE recoverable reserves remain on Block 1-AB. Approximately 30% of Peru’s daily oil production comes from Block 1-AB. A pipeline with approximately 220,000 BOPD capacity transverses Block 102 connecting Block 1-AB to the Repsol La Pampilla refinery located on the Pacific Ocean in Lima. Currently only 20 – 30% of the capacity is being utilized in this pipeline. Shona acquired 221 km of 2D seismic in mid-2007 which confirms several prospects. Shona has initiated an environmental impact study for drilling in 2009.

Esperanza Block:

Shona Energy Company, Inc. has signed (Feb. 2007) a Participation Agreement with Geoproduction Oil and Gas Company LLC and Ray Oil Tools, for the development of the Esperanza Block in the Lower Magdalena Basin of Northwestern Colombia. Discovered by Exxon (Esso SA) in the 1970s, the Esperanza Block covers 45,975 hectares or approximately 114,000 acres and includes areas formerly designated as the Jobo, Tablon, Castor, Coral and Sucre Gas Fields, that have produced approximately 70 BCF of natural gas in the aggregate. Geoproduction, a Louisiana based company with a branch office in Bogota and Ray Oil Tools a Louisiana based corporation, were awarded The Esperanza Contract in August 2004 by Colombia's Agencie Nacional de Hidrocarbures (ANH). Geoproduction engineers have estimated the remaining reserves in the three sectors may contain 221 BCF of proved recoverable reserves, and 140 BCF of additional probable, plus possible, reserves. This is also a unique window of opportunity to establish a solid exploration foothold in Colombia, as more and more companies are going there in response to the government's new petroleum laws and regulations as well as in response to the vastly improved economic and political environment established under the leadership of President Alvaro Uribe. Shona acquired 40km² of 3D seismic that has identified a number of undrilled structural traps. Shona plans to drill its first well in June 2008.