Vanoil Energy Ltd. has commenced an international arbitration against the Government of Kenya (the "Respondent"). This action has been filed to resolve a dispute arising from the Respondent's breach of the Production Sharing Contracts (the "PSCs") for Blocks 3A and 3B.

Vanoil commenced drilling operations at the Madogashe-I drill site (Block 3A) in Kenya prior to July 31, 2013, as part of the Company's commitment specified in the amended PSCs for Blocks 3A and 3B. The Company was unable to drill, however, because drill site operations were significantly impaired by a number of incidents of local disturbance and unrest.

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