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Investment Considerations

The important considerations for investors directly investing in oil and gas production in the offshore Gulf of Mexico are set forth below. These considerations do not include the track record of the Company, but they do assess the important fundamental issues concerning the anticipated risk and rate of return an investor can expect when investing with British Acadian.

Economics of Production Purchases.

 The Company will continue to employ the in-depth technical analyses and purchasing strategies that have been successful in the past. Firstly it will attempt to purchase proved producing and non-producing (behind pipe) reserves at a cost equivalent to the net present value of those reserves discounted at between 10 and 15 percent. This will ensure that the investor receives a reasonably secure project rate of return of 10 to 15 percent, with payout in normally 3 to 5 years.

Of paramount importance to the overall rate of return of any property is the ability of the Company to purchase properties with upside potential from low risk proved undeveloped, possible reserves and low risk drilling prospects. In the experience of the Company, the development of these reserves will substantially increase projected rates of return.

Comparison of Typical Rates of Return with Other Investment Opportunities.

On the assumption that the Company can continue to achieve the returns it has managed for the last fifteen years, comparison can be made between the Company’s success and other investment opportunities of comparable risk. In the oil and gas business, as with other investments, returns decrease with decreasing risk, and it is the job of the Company to be able to weigh these variables for the benefit of the investor. To date its record has shown the ability of the Company to increase investor rates of return to those normally associated with venture capital returns and above.



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