Petrofalcon

completed

Petrofalcon Corporation is engaged in the exploration and production of oil and gas in Venezuela. Petrofalcon’s only assets is its wholly owned Venezuela Subsidiary Vinccler Oil and Gas, C.A. (Vinccler or the company). Petrofalcon and Vinccler are seeking financing for the continued development of the East Falcon Unit, which is operated by Vinccler under a Second Round Operating Service Agreement entered into with the state-owned Petróleos de Venezuela Sociedad Anónima (PDVA). The project involves expanding production from the Cumarebo and La Vela fields in the East Falcon Unit and includes the drilling of development and exploration wells, the installation of gathering systems, and the construction of new production facilities in La Vela. An important facet of the project will be increased production of gas to alleviate the current shortage in western Venezuela. The gas produced by Vincler will be delivered into the Interconexion Centro-Occidente (ICO) pipeline which is currently being constructed in stages by PDVSA. Vinccler will only use the western segment (approximately 110 km) of the ICO pipeline – this segment is schedule for completion in mid 2005.