Acquisition of Jupiter Petroleum Limited

In January 2011, the Company entered into a conditional sale and purchase agreement (Share Purchase Agreement) to acquire Jupiter Petroleum Limited (“Jupiter”) which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

The acquisition of these interests will enable Global to participate in the prospective and active exploration province of offshore Namibia and position itself as an African focused oil and gas explorer.

Corporate Structure

Jupiter is a private limited company incorporated in the United Kingdom on 20 July 2005, which holds prospective oil and gas exploration interests in offshore Namibia (Namibian Project) and in offshore Juan de Nova, a French dependency in the Mozambique Channel (Juan de Nova Project).

Jupiter's interests in the Namibian Project and Juan de Nova Project exist pursuant to a mixture of licences and joint bidding or operating agreements and related documents held or entered into by its wholly owned subsidiaries, and are therefore partly contractual in nature, rather than absolute and sole legal title.

Jupiter is owned by Mr Peter Taylor and Mr Peter Blakey who each own 40,000 shares, being 50% of the issued share capital of Jupiter.

Jupiter is the holding company for the Jupiter Group which is comprised of the following wholly-owned Subsidiaries:

1. Jupiter Petroleum (Namibia) Limited which was incorporated in the British Virgin Islands on 9 April 2010 (Jupiter Namibia); and
2. Jupiter Petroleum Juan de Nova Limited which was incorporated in the British Virgin Islands on 5 October 2006 (Jupiter Juan de Nova).

Material Terms of the Acquisition

Share Purchase Agreement

Pursuant to the Share Purchase Agreement, the Company has agreed to purchase 100% of the issued share capital of Jupiter, in consideration for issuing 25,000,000 shares in the Company on completion.

The Company has loaned A$251,000 to Jupiter to assist in meeting bank guarantee requirements and other license payments for the Namibian petroleum licence whilst the Company performed an initial assessment of Jupiter and its assets and undertook preliminary due diligence.

Prior to completion and upon receipt of suitable documentation, the Company will also reimburse the Vendors for any actual costs incurred in connection with obtaining the licence and other reasonable costs in connection with the agreement, anticipated to be in the order of £250,000 (A$400,000). In accordance with the terms of the loan agreement between the Company and Jupiter, these amounts will be fully repayable to the Company in the event that the transaction does not complete.

In order to ensure that Jupiter can commit to and meet the work program for the Namibian Project, it may be necessary for the Company to loan additional funds to Jupiter prior to completion. This will potentially include the acquisition of data and will enable Jupiter to secure and schedule technical services and studies for the initial exploration period. Any additional funds loaned to Jupiter will be on the same terms and conditions as the original loan and will be fully repayable to the Company in the event that the transaction does not complete.

Conditions Precedent

The Share Purchase Agreement is subject to the following conditions precedent:

1. The Company completing due diligence investigations, including confirmation of title of the Licence and Juan de Nova Est Permit, and due diligence on the Petroleum Agreement, Jupiter and its subsidiaries.
2. The Company and/or the Vendors obtaining all consents, approvals, waivers or authorisations from any governmental authority or third parties necessary to give effect to the transaction. The Company announced on 8 June 2011 that it had received notification from the Namibian Competition Commission approving the acquisition of Jupiter for the purposes of the Namibian Project.
3. The independent expert concluding that the transaction is fair and reasonable to the Company's shareholders.
4. The independent directors of the Company making an announcement containing a statement that, having consulted with the Company's nominated adviser, they consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.
5. The Company's shareholders passing a resolution as required under the Listing Rules, the Company's constitution and the Corporations Act to give effect to the transaction.

If the conditions precedent are not satisfied by 31 August 2011 (extended from 30 June 2011) or a later date as agreed by the parties to the Share Purchase Agreement, then the acquisition of Jupiter will not proceed and the Share Purchase Agreement will terminate.

Warranties

Both the Company and the Vendors have provided normal commercial warranties in relation to the acquisition.

Namibian Project

The Namibian Project consists of an 85% participating interest in Petroleum Exploration Licence No. 0029 (Licence) covering Offshore Blocks 1910B and 2010A in the Republic of Namibia issued on 3 December 2010. The Licence covers 11,730 square kilometres and is located in offshore Namibia in water depths ranging from 1,200 metres to 3,000 metres.

A reconnaissance grid of 1995 2D seismic data over both blocks is available for purchase and following completion of the acquisition of Jupiter, is expected to be one of the first steps taken by the Company in advancing the project. Preliminary examination suggests the presence of large structural highs and the presence of a significant Early Cretaceous and possibly older section beneath the main highs. Although only a few wells have been drilled in the area, they have established the presence of oil and gas-prone source rocks, good potential reservoirs and migrated hydrocarbons in the region, making this an attractive frontier play.

It is believed that the regional basin or basins were formed in response to thermal subsidence following the rifting preceding the separation of Africa from South America.

The Jupiter blocks lie adjacent to acreage held by Arcadia Petroleum Limited (Refer to Figure 1), whose partner Tower Resources recently announced encouraging estimates (from a Competent Person's Report) for finding hydrocarbons in one or more of their prospects.

To the north east of the Jupiter blocks, a well drilled last year by Sintezneftgaz (Nakor Investments) reportedly found a substantial gas column whilst Chariot Oil and Gas has recently announced the identification of new structures and increases in its estimates of gross unrisked mean prospective resources in its licences in offshore Namibia. Chariot has shot 3D seismic and also has a Competent Person's Report.

The Jupiter blocks represent one of the last remaining opportunities to participate in this prospective and active exploration province in this part of offshore Namibia.

The Licence is held jointly by Jupiter Namibia, the National Petroleum Corporation of Namibia (Pty) Ltd (NAMCOR) and Bronze Investments Pty Ltd (Bronze). In addition to the Licence, Jupiter Namibia, NAMCOR and Bronze are parties to:

1. a Petroleum Agreement dated 3 December 2010 between them and The Government of the Republic of Namibia (Petroleum Agreement); and
2. a Joint Operating Agreement dated 6 December 2010 between them, pursuant to which they have agreed to hold their interests as a participating interest of 85% for Jupiter Namibia, and carried interests (carried through exploration) of 10% for NAMCOR and 5% for Bronze (JOA).

In accordance with the terms of the Petroleum Agreement and JOA, the following minimum work and expenditure programme must be undertaken and funded by Jupiter:

1. Initial Exploration Period (First Four Years of Licence):
   
   Undertake geological, geochemical, geophysical and related studies and review all existing gravity and magnetic data, and other available information, including the purchase of existing relevant and reasonable quality seismic data and acquire, process and interpret a minimum of 1,000 kilometres of 2D seismic data. Minimum exploration expenditure for the Initial Exploration Period is US$1 million.
2. First Renewal of Exploration Period (Two Years):
   
   The drilling of one exploration well. Minimum exploration expenditure for the First Renewal Exploration Period is US$20 million.
3. Second Renewal Period (Two Years):
   
   Acquisition, processing and interpretation of additional seismic data (if necessary) and the drilling of one exploration well.
   
   Minimum exploration expenditure for the Second Renewal Exploration Period is US$20 million, or US$21 million if new seismic is required.

Juan de Nova Project

Jupiter Juan de Nova has a 30% interest in the Juan de Nova Est Permit which was issued by the French Government in December 2008. The Permit covers approximately 9,010 square kilometres and is situated to the east of the small island of Juan de Nova in the Mozambique Channel, immediately to the west of Madagascar (Refer to Figure 2 below).

The permit lies within the exclusive economic zone surrounding Juan de Nova which is under French control. The remainder of the exclusive economic zone is covered by a permit operated by Roc Oil (Madagascar) Pty Ltd which is immediately to the west of Juan de Nova Est.

Water depths range from 200 metres to approximately 1,500 metres, with at least half of the permit lying in shallow water on the continental shelf of the island of Madagascar. The shallow water shelf area is probably underlain by late Paleozic and early Mesozoic rocks, mainly sandstone and shales with interbedded volcanics, whilst the deeper water areas are probably underlain by younger rocks of late Mesozoic and Tertiary age, whose lithology is unknown.

No systematic petroleum exploration has taken place around Juan de Nova and this area is considered to be a frontier province.

Wessex Exploration PLC is the operator and 70% interest holder in the Juan de Nova Est Permit. The current term of the exploration permit runs to 31 December 2013 with three phases of exploration and a production period of 25 years for any discovery made. The work obligations for the current term of the exploration permit include geologic studies, seismic acquisition and reprocessing and a commitment to drill one well with a contingency for a second well. The total financial commitment for this period is €8.38 million.

Wessex has engaged an agent to assist in finding a partner who is willing to earn into the Juan de Nova Est Permit by funding exploration activities. Jupiter’s interest in the Juan de Nova Est Permit would be part of any farmout arrangement.

Preliminary work undertaken on the permit to date has included an assessment of the available data and an extensive review of literature on the North Morondava Basin in which the permit lies.

Figure 1: Jupiter Petroleum Limited's Namibia Project Location Map

Figure 2: Jupiter Petroleum Limited's Juan de Nova Project Location Map