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<SEC-DOCUMENT>0001038838-10-000049.txt : 20100209
<SEC-HEADER>0001038838-10-000049.hdr.sgml : 20100209
<ACCEPTANCE-DATETIME>20100209170617
ACCESSION NUMBER:		0001038838-10-000049
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20091231
FILED AS OF DATE:		20100209
DATE AS OF CHANGE:		20100209

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BMB MUNAI INC
		CENTRAL INDEX KEY:			0000924805
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				300233726
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-33034
		FILM NUMBER:		10585096

	BUSINESS ADDRESS:	
		STREET 1:		C/O POULTON & YORDAN
		STREET 2:		324 SOUTH 400 WEST SUITE 250
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84101
		BUSINESS PHONE:		801-355-2227

	MAIL ADDRESS:	
		STREET 1:		C/O POULTON & YORDAN
		STREET 2:		324 SOUTH 400 WEST SUITE 250
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84101

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTERUNION FINANCIAL CORP
		DATE OF NAME CHANGE:	19960719
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
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<FILENAME>bmbq123109.htm
<DESCRIPTION>10-Q ENDED DECEMBER 31, 2009
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      Floor</font></div>
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                <td colspan="4" valign="top" width="37%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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by check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.</font></div>
        <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 396pt"></font>Yes&#160;&#160;[X]<font style="DISPLAY: inline; FONT-SIZE: 18pt">&#160;</font>No
[&#160;&#160;]</font></div>
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by check mark whether the registrant is a large accelerated filed, an
accelerated filer, or non-accelerated filer or a smaller reporting
company.&#160;&#160;See the definitions of &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">large accelerated
filer</font>,&#8221;<font style="FONT-STYLE: italic; DISPLAY: inline">&#160;</font>&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">accelerated filer</font>&#8221; and &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">smaller reporting company</font>&#8221; in
Rule 12b-2 of the Exchange Act.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>Large accelerated Filer
[&#160;&#160;]&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Accelerated
Filer&#160;&#160;[X]<font style="DISPLAY: inline; FONT-SIZE: 18pt">&#160;</font></font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font>Non-accelerated Filer
[&#160;&#160;]&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Smaller
Reporting Company [&#160;&#160;]</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>(Do not check if a smaller reporting
company)</font></div>
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by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.)</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Yes&#160;&#160;[&#160;&#160;]&#160;&#160;&#160;&#160;&#160;No&#160;&#160;[X]</font></div>
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        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
February 9, 2010, the registrant had 51,865,015 shares of common stock, par
value $0.001, issued and outstanding.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">FORM
10-Q</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">TABLE
OF CONTENTS</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></div>
                </td>
                <td valign="top" width="7%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">Page</font></font></div>
                </td>
                <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;<font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">PART
      I &#8212; FINANCIAL INFORMATION</font></font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
                <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      1. Unaudited Consolidated Financial Statements</font></div>
                </td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="58%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="left" valign="top" width="58%">
                  <div style="TEXT-INDENT: -36pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Consolidated
      Balance Sheets as of&#160;&#160;December 31, 2009 and March 31,
      2009</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3</font></div>
                </td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="58%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="left" valign="top" width="58%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Consolidated
      Statements of Operations for the Three and Nine Months Ended December 31,
      2009 and 2008</font></div>
                </td>
                <td colspan="2" valign="bottom" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4</font></div>
                </td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="58%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="bottom" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="left" valign="top" width="58%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Consolidated
      Statements of Cash Flows for the Nine Months Ended December 31, 2009 and
      2008</font></div>
                </td>
                <td colspan="2" valign="bottom" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5</font></div>
                </td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="58%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="left" valign="top" width="58%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Notes
      to Consolidated Financial Statements</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      2.&#160;&#160;Management&#8217;s Discussion and Analysis of Financial
      Condition&#160;&#160;and Results of Operations</font></div>
                </td>
                <td colspan="2" valign="bottom" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">41</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      3.&#160;&#160;Qualitative and Quantitative Disclosures About Market
      Risk</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">55</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      4.&#160;&#160;Controls and Procedures</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">56</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">PART
      II &#8212; OTHER INFORMATION</font></div>
                </td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      1.&#160;&#160;Legal Proceedings</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">57</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      1A.&#160;&#160;Risk Factors</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">57</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">58</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      4. Submission of Matters to a Vote of Security Holders</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">58</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Item
      6.&#160;&#160;Exhibits</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">59</font></div>
                </td>
              </tr><tr>
                <td colspan="2" valign="top" width="67%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="2" valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr>
                <td align="left" colspan="2" valign="top" width="67%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Signatures</font></div>
                </td>
                <td colspan="2" valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">59</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block">2<br></div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PART
I - FINANCIAL INFORMATION</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
1 - Unaudited Consolidated Financial Statements</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-VARIANT: small-caps; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONSOLIDATED
BALANCE SHEETS (UNAUDITED)</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div style="TEXT-INDENT: 0pt; DISPLAY: block">
            <div>
              <hr style="COLOR: black" align="left" noshade size="1" width="100%">
            </div><br></div>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Notes</font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;&#160;December
      31, 2009</font></div>
                  </div>
                </td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March
      31, 2009</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ASSETS</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">CURRENT
      ASSETS</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Cash
      and cash equivalents</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      7,243,988&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      6,755,545</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Trade
      accounts receivable</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5,514,368&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,081,573</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Prepaid
      expenses and other assets, net</font></div>
                </td>
                <td valign="top" width="6%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4</font></div>
                </td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,398,136&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,054,078</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      current assets</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">16,156,492&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">12,891,196&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">LONG
      TERM ASSETS</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Oil
      and gas properties, full cost method, net</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">238,622,602&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">238,728,413&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Gas
      utilization facility</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,569,738&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,470,631&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Inventories
      for oil and gas projects</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,847,712&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">14,002,146&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Prepayments
      for materials used in oil and gas projects</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">127,757&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">122,040&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Other
      fixed assets, net</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,110,263&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,629,108&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Long
      term VAT recoverable</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">8</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,749,792&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,423,940&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Convertible
      notes issue cost</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,921,984&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,490,370&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Restricted
      cash</font></div>
                </td>
                <td valign="top" width="6%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">764,060&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">588,217&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      long term assets</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">274,713,908&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">275,454,865&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">TOTAL
      ASSETS</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      290,870,400&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      288,346,061</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">LIABILITIES
      AND SHAREHOLDERS&#8217; EQUITY</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">CURRENT
      LIABILITIES</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Accounts
      payable</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">17</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;6,065,326&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;21,771,137&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Accrued
      coupon payment</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;1,391,667&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;641,667&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      Accrued liabilities and other payables</font></div>
                </td>
                <td valign="top" width="6%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,815,382&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,697,097&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      current liabilities</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">12,272,375&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">24,109,901&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">LONG
      TERM LIABILITIES</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Convertible
      notes issued, net</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">61,965,781&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">61,331,521&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Liquidation
      fund</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,596,409&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,263,994&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Deferred
      taxes</font></div>
                </td>
                <td valign="top" width="6%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">15</font></div>
                </td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,516,444&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,516,444&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      long term liabilities</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">73,078,634&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">72,111,959&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">COMMITMENTS
      AND CONTINGENCIES</font></div>
                </td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">18</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">SHAREHOLDERS&#8217;
      EQUITY</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: -18pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;Preferred
      stock - $0.001 par value; 20,000,000 shares authorized; no shares issued
      or outstanding</font></div>
                </td>
                <td valign="bottom" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 1.05pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: -18pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;Common
      stock - $0.001 par value; 500,000,000 shares authorized, 50,365,015 and
      47,378,420 shares outstanding, respectively</font></div>
                </td>
                <td valign="bottom" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">50,365&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">47,378&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Additional
      paid in capital</font></div>
                </td>
                <td valign="bottom" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,
      17</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">160,227,969&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">151,513,638&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="45%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Retained
      earnings</font></div>
                </td>
                <td valign="top" width="6%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">45,241,057&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">40,563,185&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      shareholders&#8217; equity</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">205,519,391&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">192,124,201&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">TOTAL
      LIABILITIES AND SHAREHOLDERS&#8217; EQUITY</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      290,870,400&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.3pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      288,346,061&#160;</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="WIDTH: 100%" align="left">
          <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">See notes
to the unaudited consolidated financial statements.</font></div>
          <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
        </div><br>
        <div id="GLFTR" style="TEXT-ALIGN: center; WIDTH: 99.89%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
3</font></div>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">&#160;</div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                    <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                      <div>
                        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                      </div>
                    </div>
                  </div>
                </div>
              </div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </div>
          </div>
        </div><br>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
                <td colspan="2" valign="top" width="45%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></div>
                </td>
                <td colspan="3" valign="top" width="30%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three
      months ended December 31,</font></div>
                </td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="3" valign="top" width="23%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Nine
      months ended December 31,</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Notes</font></div>
                </td>
                <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2009</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2009</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
                <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">REVENUES</font></div>
                </td>
                <td valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">12</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      13,894,712&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      4,883,790&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      41,735,735&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      62,469,174&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">COSTS
      AND OPERATING EXPENSES</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Export
      duty</font></div>
                </td>
                <td valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;2,172,559&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,912,459&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Oil
      and gas operating</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5,785,214</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;1,449,981&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,685,411&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,065,686&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">General
      and administrative</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,946,160&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;6,764,698&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10,750,099&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">17,350,218&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Consulting
      expenses</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">8,662,500&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Depletion</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,840,787&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,686,439&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,953,515&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9,105,564&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Interest
      expense</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,159,268&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,452,646&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amortization
      and depreciation</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">161,943&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">71,870&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">454,756&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">218,610&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Accretion
      expense</font></div>
                </td>
                <td valign="top" width="7%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">113,690&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">121,138&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">332,415&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">325,494&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      costs and operating expenses</font></div>
                </td>
                <td valign="top" width="7%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,007,062&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;13,266,685&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">36,628,842&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">49,640,531&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">INCOME
      / (LOSS) FROM OPERATIONS</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">887,650&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(8,382,895)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5,106,893&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">12,828,643&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">OTHER
      INCOME / (EXPENSE)</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Foreign
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                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(293,438)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">90,769&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(331,668)&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">132,344&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Disgorgement
      funds received</font></div>
                </td>
                <td valign="top" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">14</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,650,293&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Interest
      income</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">73,229&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">59,754&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">152,666&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">366,945&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Other
      (expense)/income, net</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(60,360)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;(60,610)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(250,019)&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(119,858)&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      other income/(expense)</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(280,569)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">89,913&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(429,021)&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,029,724&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">INCOME
      / (LOSS) BEFORE INCOME TAXES</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">607,081&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(8,292,982)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,677,872&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">14,858,367&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="38%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">INCOME
      TAX EXPENSE</font></div>
                </td>
                <td valign="top" width="7%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">15</font></div>
                </td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">NET
      INCOME / (LOSS)</font></div>
                </td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      607,081&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;(8,292,982)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      4,677,872&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      14,858,367&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">BASIC
      NET INCOME / (LOSS) PER COMMON SHARE</font></div>
                </td>
                <td valign="bottom" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">16</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.01&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (0.18)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.09&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.32&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="38%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">DILUTED
      NET INCOME / (LOSS) PER COMMON SHARE</font></div>
                </td>
                <td valign="bottom" width="7%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">16</font></div>
                </td>
                <td align="right" valign="bottom" width="15%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.01&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (0.18)&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.09&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="10%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.32&#160;&#160;</font></div>
                </td>
              </tr></table>
        </div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">See notes
to the unaudited consolidated financial statements.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
            </div>
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">4&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                    <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                      <div>
                        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                      </div>
                    </div>
                  </div>
                </div>
              </div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </div>
          </div>
        </div><br>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
                <td valign="top" width="41%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="3" valign="top" width="28%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the Nine Months Ended December 31,</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="41%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="5%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Notes</font></div>
                </td>
                <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2009</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CASH
      FLOWS FROM OPERATING ACTIVITIES:</font></div>
                </td>
                <td valign="bottom" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      income</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      4,677,872&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      14,858,367&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Adjustments
      to reconcile net income to net cash provided&#160;&#160;&#160;by operating
      activities:</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Depletion</font></div>
                </td>
                <td valign="top" width="5%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5</font></div>
                </td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,953,515&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9,105,564&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amortization
      and depreciation</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">454,756&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">218,610&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Interest
      expense</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,452,646&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Accretion
      expense</font></div>
                </td>
                <td valign="top" width="5%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10</font></div>
                </td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">332,415&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">325,494&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Share
      based compensation expense</font></div>
                </td>
                <td valign="top" width="5%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11</font></div>
                </td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,744,133&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">12,731,285&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Loss
      on disposal of fixed assets</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">31,192&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Changes
      in operating assets and liabilities:</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(Increase)/decrease
      in trade accounts receivable</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(2,432,795)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5,150,711&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: -9pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(Increase)/decrease
      in prepaid expenses and other assets</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(344,058)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">126,231&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Increase
      in VAT recoverable</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(325,852)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(678,104)&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(Decrease)/increase&#160;&#160;in
      current liabilities</font></div>
                </td>
                <td valign="top" width="5%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(6,614,341)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10,422,573&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      cash provided by operating activities</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9,929,483&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">52,260,731&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="41%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CASH
      FLOWS FROM INVESTING ACTIVITIES:</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Purchase
      of oil and gas properties</font></div>
                </td>
                <td valign="top" width="5%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5</font></div>
                </td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(7,050,204)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(52,562,606)&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Purchase
      of other fixed assets</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(311,679)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(4,160,814)&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Cash
      paid for convertible notes coupon, capitalized as oil and gas
      properties</font></div>
                </td>
                <td valign="bottom" width="5%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9</font></div>
                </td>
                <td align="right" valign="bottom" width="13%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,500,000)</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Increase
      in inventories and prepayments for materials used in&#160;oil and gas
      projects</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right">
                    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(403,314)&#160;</font>&#160;&#160;</div>
                  </div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(3,157,784)&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Increase
      in construction in progress</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(580,000)&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%" style="PADDING-BOTTOM: 2px">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Increase
      in restricted cash</font></div>
                </td>
                <td valign="top" width="5%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(175,843)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(114,705)&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      cash used in investing activities</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(7,941,040)&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(62,075,909)&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="41%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CASH
      FLOWS FROM FINANCING ACTIVITIES:</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 9pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Proceeds
      from exercise of common stock options and warrants</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">50,001&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 9pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Cash
      paid for convertible notes coupon</font></div>
                </td>
                <td valign="top" width="5%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9</font></div>
                </td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,500,000)</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      cash (used in)/provided by financing activities</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,500,000)</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">50,001&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="41%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NET
      CHANGE IN CASH AND CASH EQUIVALENTS</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">488,443&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(9,765,177)</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CASH
      AND CASH EQUIVALENTS at beginning of period</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">6,755,545&#160;&#160;</font></font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">17,238,837&#160;&#160;&#160;</font></font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="41%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CASH
      AND CASH EQUIVALENTS at end of period</font></div>
                </td>
                <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">$</font>&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">7,243,988&#160;&#160;</font></font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">$</font>&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">7,473,660&#160;&#160;&#160;</font></font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">See notes
to the unaudited consolidated financial statements.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
            </div>
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;5
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(CONTINUED)</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                    <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                      <div>
                        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                      </div>
                    </div>
                  </div>
                </div>
              </div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
                <td valign="bottom" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td colspan="3" valign="top" width="27%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the Nine Months Ended December 31,</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="bottom" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Notes</font></div>
                </td>
                <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2009</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 5.6pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(unaudited)</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="white">
                <td valign="top" width="40%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Non-Cash
      Investing and Financing Activities</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="40%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 446pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Asset
      retirement obligation incurred in property development, net of estimate
      revision</font></div>
                </td>
                <td valign="bottom" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 5.6pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10</font></div>
                </td>
                <td align="right" valign="bottom" width="14%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      843,485</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="40%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 446pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Coupon
      payment on convertible notes, capitalized as part of oil and gas
      properties</font></div>
                </td>
                <td valign="bottom" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 5.6pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9</font></div>
                </td>
                <td align="right" valign="bottom" width="14%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,250,000</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="40%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 446pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Accretion
      of discount on convertible notes, capitalized as part of oil and gas
      properties</font></div>
                </td>
                <td valign="bottom" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 5.6pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9</font></div>
                </td>
                <td align="right" valign="bottom" width="14%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">596,654</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="40%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amortization
      of convertible notes issue costs, capitalized as part of oil and gas
      properties</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="14%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;568,386&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="40%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Transfer
      of inventory and prepayments for materials used in oil and gas projects to
      oil and gas properties</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="14%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">477,031&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="40%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 9pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Depreciation
      on other fixed assets capitalized as oil and gas properties</font></td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
                <td align="right" valign="bottom" width="14%">
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                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">169,895&#160;&#160;&#160;</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td align="left" valign="top" width="40%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Transfers
      from oil and gas properties, construction in progress and other fixed
      assets to gas utilization facility</font></div>
                </td>
                <td valign="top" width="6%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="14%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">99,107&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right">-&#160;&#160;</div>
                </td>
              </tr><tr bgcolor="white">
                <td align="left" valign="top" width="40%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Issuance
      of common stock for the settlement of liabilities</font></div>
                </td>
                <td valign="bottom" width="6%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 5.6pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">17</font></div>
                </td>
                <td align="right" valign="bottom" width="14%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      5,973,185&#160;&#160;&#160;</font></div>
                </td>
                <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td align="right" valign="bottom" width="11%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -3.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-&#160;-</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td style="WIDTH: 23.8pt">
                  <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
                </td>
                <td>&#160;</td>
              </tr></table>
        </div>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">See notes
to the unaudited consolidated financial statements.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
            </div>
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
6</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></div>
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
1 &#8211; DESCRIPTION OF BUSINESS</font></div>
        <div align="justify">&#160;</div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
corporation now known as BMB Munai, Inc. (&#8220;BMB Munai&#8221; or the &#8220;Company&#8221;), a
Nevada corporation, was originally incorporated in Utah in July 1981. On
February 7, 1994, the corporation changed its name to InterUnion Financial
Corporation (&#8220;InterUnion&#8221;) and its domicile to Delaware. BMB Holding, Inc. (&#8220;BMB
Holding&#8221;) was incorporated on May 6, 2003 for the purpose of acquiring and
developing oil and gas fields in the Republic of Kazakhstan. On November 26,
2003, InterUnion executed an Agreement and Plan of Merger (the &#8220;Agreement&#8221;) with
BMB Holding. As a result of the merger, the shareholders of BMB Holding obtained
control of the corporation. BMB Holding was treated as the acquiror for
accounting purposes. A new board of directors was elected that was comprised
primarily of the former directors of BMB Holding and the name of the corporation
was changed to BMB Munai, Inc. BMB Munai changed its domicile from Delaware to
Nevada on December 21, 2004.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company&#8217;s consolidated financial statements presented are a continuation of BMB
Holding, and not those of InterUnion Financial Corporation, and the capital
structure of the Company is now different from that appearing in the historical
financial statements of InterUnion Financial Corporation due to the effects of
the recapitalization.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has a representative office in Almaty, Republic of
Kazakhstan.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">From
inception (May 6, 2003) through January 1, 2006 the Company had minimal
operations and was considered to be in the development stage. The Company began
generating significant revenues in January 2006 and is no longer in the
development stage.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Currently
the Company has completed twenty-four wells. As discussed in more detail in Note
2, the Company engages in exploration of its licensed territory pursuant to an
exploration license and has not yet applied for or been granted a commercial
production license.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block">
          <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
2 &#8211; SIGNIFICANT ACCOUNTING POLICIES</font></div>
          <div align="justify">&#160;</div>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Basis
of consolidation</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company&#8217;s consolidated financial statements present the consolidated results of
BMB Munai, Inc., and its wholly owned subsidiary, Emir Oil LLP (hereinafter
collectively referred to as the &#8220;Company&#8221;). All significant inter-company
balances and transactions have been eliminated from the Consolidated Financial
Statements.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">7</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font>

              <div style="TEXT-ALIGN: center; WIDTH: 100%; HEIGHT: 46px">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Use
of estimates</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
preparation of Consolidated Financial Statements in conformity with US GAAP
requires management to make estimates and assumptions that affect certain
reported amounts of assets and liabilities and the disclosures of contingent
assets and liabilities at the date of the Consolidated Financial Statements and
revenues and expenses during the reporting period. Accordingly, actual results
could differ from those estimates and affect the results reported in these
Consolidated Financial Statements.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Concentration
of Credit Risk and Accounts Receivable</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Financial
instruments that potentially subject the Company to a concentration of credit
risk consist principally of cash and accounts receivable. The Company places its
cash with high credit quality financial institutions. Substantially all of the
Company&#8217;s accounts receivable are from purchasers of oil and gas. Oil and gas
sales are generally unsecured. The Company has not had any significant credit
losses in the past and believes its accounts receivable are fully collectable.
Accordingly, no allowance for doubtful accounts has been provided.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Licences
and contracts</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Emir Oil
LLP is the operator of the Company&#8217;s oil and gas fields in Western Kazakhstan.
The Government of the Republic of Kazakhstan (the &#8220;Government&#8221;) initially issued
the license to Zhanaozen Repair and Mechanical Plant on April 30, 1999 to
explore the Aksaz, Dolinnoe and Emir oil and gas fields (the &#8220;ADE Block&#8221; or the
&#8220;ADE Fields&#8221;). On June 9, 2000, the contract for exploration of the Aksaz,
Dolinnoe and Emir oil and gas fields was entered into between the Agency of the
Republic of Kazakhstan on Investments and the Zhanaozen Repair and Mechanical
Plant. On September 23, 2002, the contract was assigned to Emir Oil LLP. On
September 10, 2004, the Government extended the term of the contract for
exploration and License from five years to seven years through July 9, 2007. On
February 27, 2007, the Ministry of Energy and Mineral Resources of the Republic
of Kazakhstan (&#8220;MEMR&#8221;) granted a second extension of the Company&#8217;s exploration
contract. Under the terms of the contract extension, the exploration period was
extended to July 2009 over the entire exploration contract territory. On
December 7, 2004, the Government assigned to Emir Oil LLP exclusive right to
explore an additional 260 square kilometers of land adjacent to the ADE Block,
which is referred to as the &#8220;Southeast Block.&#8221; The Southeast Block includes the
Kariman field and the Yessen and Borly structures and is governed by the terms
of the Company&#8217;s original contract. On June 24, 2008, the MEMR agreed to extend
the exploration stage of the Company&#8217;s contract from July 2009 to January 2013
in order to permit the Company to conduct additional exploration drilling and
testing activities within the ADE Block and the Southeast Block.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">8</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
October 15, 2008, the MEMR approved Addendum # 6 to Contract No. 482 with Emir
Oil LLP, dated June 09, 2000 extending Emir Oil LLP&#8217;s exploration territory from
460 square kilometers to a total of 850 square kilometers (approximately 210,114
acres). The additional territory is located to the north and west of the
Company&#8217;s current exploration territory, extending the exploration territory
toward the Caspian Sea and is referred to herein as the &#8220;Northwest
Block.&#8221;</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">To move
from the exploration stage to the commercial production stage, the Company must
apply for and be granted a commercial production contract. The Company is
legally entitled to apply for a commercial production contract and has an
exclusive right to negotiate this contract. The Government is obligated to
conduct these negotiations under the Law of Petroleum in Kazakhstan. If the
Company does not move from the exploration stage to the commercial production
stage, it has the right to produce and sell oil, including export oil, under the
Law of Petroleum for the term of its existing contract.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Major
Customers</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the nine months ended December 31, 2009 and 2008, sales to one customer
represented 94% and 81% of total sales, respectively.&#160;&#160;At December 31,
2009 and 2008, this customer made up 89% and 100% of accounts receivable,
respectively. While the loss of this foregoing customer could have a material
adverse effect on the Company in the short-term, the loss of this customer
should not materially adversely affect the Company in the long-term because of
the available market for the Company&#8217;s crude oil and natural gas production from
other purchasers.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Foreign
currency translation</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Transactions
denominated in foreign currencies are reported at the rates of exchange
prevailing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated to United States Dollars at the
rates of exchange prevailing at the balance sheet dates. Any gains or losses
arising from a change in exchange rates subsequent to the date of the
transaction are included as an exchange gain or loss in the Consolidated
Statements of Operations.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Share-based
compensation</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company accounts for options granted to non-employees at their fair value in
accordance with <font style="FONT-STYLE: italic; DISPLAY: inline">FASC Topic 718
&#8211; Stock Compensation</font>. Share-based compensation is determined as the fair
value of the equity instruments issued. The measurement date for these issuances
is the earlier of the date at which a commitment for performance by the
recipient to earn the equity instruments is reached or the date at which the
recipient&#8217;s performance is complete. Stock options granted to the &#8220;selling
agents&#8221; in the private equity placement transactions have been offset to the
proceeds as a cost of capital. Stock options and stocks granted to other
non-employees are recognized in the Consolidated Statements of
Operations.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">9</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has a stock option plan as described in Note 11. Compensation expense
for options and stock granted to employees is determined based on their fair
values at the time of grant, the cost of which is recognized in the Consolidated
Statements of Operations over the vesting periods of the respective
options.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Share-based
compensation incurred for the nine months ended December 31, 2009 and 2008 was
$2,744,133 and $12,731,285, respectively.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Risks
and uncertainties</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
ability of the Company to realize the carrying value of its assets is dependent
on being able to develop, transport and market oil and gas. Currently exports
from the Republic of Kazakhstan are primarily dependent on transport routes
either via rail, barge or pipeline, through Russian territory. Domestic markets
in the Republic of Kazakhstan historically and currently do not permit world
market price to be obtained. Management believes that over the life of the
project, transportation options will improve as additional pipelines and
rail-related infrastructure are built that will increase transportation capacity
to the world markets; however, there is no assurance that this will happen in
the near future.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Recognition
of revenue and cost</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Revenue
and associated costs from the sale of oil are charged to the period when
persuasive evidence of an arrangement exists, the price to the buyer is fixed or
determinable, collectability is reasonably assured, delivery of oil has occurred
or when ownership title transfers. Produced but unsold products are recorded as
inventory until sold.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the nine months ended December 31, 2009, the Company purchased light crude oil
from a third party for the purpose of blending the oil with the Company&#8217;s own
production. The cost of this purchased crude oil is recorded as part of oil and
gas operating expenses.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Export
duty</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
formula for determining the amount of the crude oil export duty is based on a
sliding scale that is tied to the world market price for oil. The amount of the
export duty can change with fluctuations in world oil prices. The export duty
fees are expensed as incurred and are classified as costs and operating
expenses.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
December 2008 the Government of the Republic of Kazakhstan issued a resolution
that cancelled the export duty effective January 26, 2009 for companies
operating under the new tax code.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">10</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Mineral
Extraction Tax</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
mineral extraction tax replaced the royalty expense the Company had paid. The
rate of this tax depends on annual production output. The new code currently
provides for a 5% mineral extraction tax rate (6% starting from 2012 and 7%
starting from 2013) on production sold to the export market, and a 2.5% tax rate
(3% in 2012 and 3.5% starting from 2013) on production sold to the domestic
market. The mineral extraction tax expense is reported as part of oil and gas
operating expense.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Rent
Export Tax</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This tax
is calculated based on the export sales price and ranges from as low as 0%, if
the price is less than $40 per barrel, to as high as 32%, if the price per
barrel exceeds $190. Rent export tax is reported as part of oil and gas
operating expense.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Income
taxes</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Provisions
for income taxes are based on taxes payable or refundable for the current year
and deferred taxes. Deferred taxes are provided on differences between the tax
bases of assets and liabilities and their reported amounts in the financial
statements, and tax carryforwards. Deferred tax assets and liabilities are
included in the financial statements at currently enacted income tax rates
applicable to the period in which the deferred tax assets and liabilities are
expected to be realized or settled. As changes in tax laws or rates are enacted,
deferred tax assets and liabilities are adjusted through the provision for
income taxes.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Fair
Values of Financial Instruments</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
carrying values reported for cash equivalents, accounts receivable, accounts
payable and accrued liabilities approximate their respective fair values in the
accompanying balance sheet due to the short-term maturity of these financial
instruments. In addition, the Company has long-term debt with financial
institutions. The carrying amount of the long-term debt approximates fair value
based on current rates for instruments with similar
characteristics.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Cash
and cash equivalents</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company considers all demand deposits, money market accounts and marketable
securities purchased with an original maturity of three months or less to be
cash and cash equivalents. The fair value of cash and cash equivalents
approximates their carrying amounts due to their short-term
maturity.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">11</div><br>
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</font></div>
          </div>
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            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
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            </div>
          </div>
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</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Prepaid
expenses and other assets</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prepaid
expenses and other assets are stated at their net realizable values after
deducting provisions for uncollectible amounts. Such provisions reflect either
specific cases or estimates based on evidence of collectability. The fair value
of prepaid expense and other asset accounts approximates their carrying amounts
due to their short-term maturity.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Prepayments
for materials used in oil and gas projects</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company periodically makes prepayments for materials used in oil and gas
projects. These prepayments are presented as long term assets due to their
transfer to oil and gas properties after materials are supplied and the
prepayments are closed.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Inventories</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Inventories
of equipment for development activities, tangible drilling materials required
for drilling operations, spare parts, diesel fuel, and various ma<a name="bonds"><!--EFPlaceholder-->
 </a>terials for use in oil field operations are
recorded at the lower of cost and net realizable value. Under the full cost
method, inventory is transferred to oil and gas properties when used in
exploration, drilling and development operations in oilfields.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Inventories
of crude oil are recorded at the lower of cost or net realizable value. Cost
comprises direct materials and, where applicable, direct labor costs and
overhead, which has been incurred in bringing the inventories to their present
location and condition. Cost is calculated using the weighted average method.
Net realizable value represents the estimated selling price less all estimated
costs to completion and costs to be incurred in marketing, selling and
distribution.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company periodically assesses its inventories for obsolete or slow moving stock
and records an appropriate provision, if there is any. The Company has assessed
inventory at December 31, 2009 and no provision for obsolete inventory has been
provided.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Oil
and gas properties</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company uses the full cost method of accounting for oil and gas properties.
Under this method, all costs associated with acquisition, exploration, and
development of oil and gas properties are capitalized. Costs capitalized include
acquisition costs, geological and geophysical expenditures, and costs of
drilling and equipping productive and non-productive wells. Drilling costs
include directly related overhead costs. These costs do not include any costs
related to production, general corporate overhead or similar activities. Under
this method of accounting,</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">12</div><br>
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</font></div>
          </div>
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            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
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</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">the cost
of both successful and unsuccessful exploration and development activities are
capitalized as property and equipment. Proceeds from the sale or disposition of
oil and gas properties are accounted for as a reduction to capitalized costs
unless a significant portion of the Company&#8217;s proved reserve are sold (greater
than 25 percent), in which case a gain or loss is recognized.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Capitalized
costs less accumulated depletion and related deferred income taxes shall not
exceed an amount (the full cost ceiling) equal to the sum of:</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">a) the
present value of estimated future net revenues computed by applying current
prices of oil and gas reserves to estimated future production of proved oil and
gas reserves, less estimated future expenditures (based on current costs) to be
incurred in developing and producing the proved reserves computed using a
discount factor of ten percent and assuming continuation of existing economic
conditions;</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">b) plus
the cost of properties not being amortized;</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">c) plus
the lower of cost or estimated fair value of unproven properties included in the
costs being amortized;</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">d) less
income tax effects related to differences between the book and tax basis of the
properties.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Given the
volatility of oil and gas prices, it is reasonably possible that the estimate of
discounted future net cash flows from proved oil and gas reserves could change.
If oil and gas prices decline, even if only for a short period of time, it is
possible that impairments of oil and gas properties could occur. In addition, it
is reasonably possible that impairments could occur if costs are incurred in
excess of any increases in the cost ceiling, revisions to proved oil and gas
reserves occur, or if properties are sold for proceeds less than the discounted
present value of the related proved oil and gas reserves.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All
geological and geophysical studies, with respect to the licensed territory, have
been capitalized as part of the oil and gas properties.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company&#8217;s oil and gas properties primarily include the value of the license and
other capitalized costs.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All
capitalized costs of oil and gas properties, including the estimated future
costs to develop proved reserves and estimated future costs to plug and abandon
wells and costs of site restoration, less the estimated salvage value of
equipment associated with the oil and gas properties, are amortized on the
unit-of-production method using estimates of proved reserves as determined by
independent engineers.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">13</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Liquidation
fund</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Liquidation
fund (site restoration and abandonment liability) is related primarily to the
conservation and liquidation of the Company&#8217;s wells and similar activities
related to its oil and gas properties, including site restoration. Management
assessed an obligation related to these costs with sufficient certainty based on
internally generated engineering estimates, current statutory requirements and
industry practices. The Company recognized the estimated fair value of this
liability. These estimated costs were recorded as an increase in the cost of oil
and gas assets with a corresponding increase in the liquidation fund which is
presented as a long-term liability. The oil and gas assets related to
liquidation fund are depreciated on the unit-of-production basis separately for
each field. An accretion expense, resulting from the changes in the liability
due to passage of time by applying an interest method of allocation to the
amount of the liability, is recorded as accretion expenses in the Consolidated
Statement of Operations.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
adequacies of the liquidation fund are periodically reviewed in the light of
current laws and regulations, and adjustments made as necessary.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Other
fixed assets</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Other
fixed assets are valued at historical cost adjusted for impairment loss less
accumulated depreciation. Historical cost includes all direct costs associated
with the acquisition of the fixed assets.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Depreciation
of other fixed assets is calculated using the straight-line method based upon
the following estimated useful lives:</font></div>
        <div align="center">
          <table cellpadding="0" cellspacing="0" width="50%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
                <td valign="top" width="48%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
                <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="48%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Buildings
      and improvements</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7-10
      years</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="48%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Machinery
      and equipment</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6-10
      years</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="48%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Vehicles</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3-5
      years</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="48%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Office
      equipment</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3-5
      years</font></div>
                </td>
              </tr><tr bgcolor="#cceeff">
                <td valign="top" width="48%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Software</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3-4
      years</font></div>
                </td>
              </tr><tr bgcolor="white">
                <td valign="top" width="48%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Furniture
      and fixtures</font></div>
                </td>
                <td valign="top" width="12%">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2-7
      years</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Maintenance
and repairs are charged to expense as incurred. Renewals and betterments are
capitalized as leasehold improvements, which are amortized on a straight-line
basis over the shorter of their estimated useful lives or the term of the
lease.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Other
fixed assets of the Company are evaluated annually for impairment. If the sum of
expected undiscounted cash flows is less than net book value, unamortized costs
of other fixed assets will be reduced to a fair value.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">14</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Convertible
notes payable issue costs</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company recognizes convertible notes payable issue costs on the balance sheet as
deferred charges, and amortizes the balance over the term of the related debt.
The Company classifies cash payments for bond issue costs as a financing
activity.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Restricted
cash</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Restricted
cash includes funds deposited in a Kazakhstan bank and is restricted to meet
possible environmental obligations according to the regulations of the Republic
of Kazakhstan.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Functional
currency</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company makes its principal investing and financing transactions in U.S. Dollars
and the United States Dollar is therefore its functional currency.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Income
per common share</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Basic
income per common share is computed by dividing net income by the
weighted-average number of common shares outstanding during the period. Diluted
income per share reflects the potential dilution that could occur if all
contracts to issue common stock were converted into common stock, except for
those that are anti-dilutive.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">New
accounting policies</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
May&#160;2008, the FASB issued guidance on accounting for convertible debt
instruments that may be settled in cash upon conversion. The guidance clarifies
that convertible debt instruments that may be settled in cash upon conversion
(including partial cash settlement), which is not addressed by prior
guidance.&#160;&#160;Additionally, the guidance specifies that issuers of such
instruments should separately account for the liability and equity components in
a manner that will reflect the entity&#8217;s nonconvertible debt borrowing rate when
interest cost is recognized in subsequent periods. The Company adopted this
standard on April 1, 2009.&#160;&#160;The adoption of this standard did not have
a material impact on consolidated financial position or results of
operations.</font><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">15</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
          <div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt">In June 2008, the FASB issued
guidance on determining whether instruments granted in share-based payment
transactions are participating securities.&#160;&#160;The guidance applies to
the calculation of earnings per share for share-based payment awards with rights
to dividends or dividend equivalents. It states that unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend
equivalents&#160;&#160;(whether&#160;&#160;paid&#160;&#160;or&#160;&#160;unpaid)&#160;&#160;are&#160;&#160;participating&#160;&#160;securities&#160;and&#160;shall&#160;be
included in the computation of EPS pursuant to the two-class method. The Company
adopted this guidance on April 1, 2009 and has included certain share-based
payment awards in its calculation of basic weighted average shares in the EPS
calculation.&#160;&#160;Accordingly, all prior-period EPS data presented has
been adjusted retrospectively to conform to the provisions of this guidance.
Management has determined that the adoption of this guidance does not have a
material impact on the Company&#8217;s&#160;&#160;financial position and results of
operations, although prior-period EPS data is affected.</div>
          <div style="TEXT-ALIGN: justify; MARGIN-LEFT: 0pt">&#160;</div>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In June
2009, the FASB established the FASB Accounting Standards Codification
(Codification), which officially commenced July 1, 2009, to become the source of
authoritative US GAAP recognized by the FASB to be applied by nongovernmental
entities.&#160;&#160;Rules and interpretive releases of the SEC under authority
of federal securities laws are also sources of authoritative US GAAP for SEC
registrants.&#160;&#160;Generally, the Codification is not expected to change US
GAAP.&#160;&#160;All other accounting literature excluded from the Codification
will be considered nonauthoritative.&#160;&#160;The Codification is effective
for financial statements issued for interim and annual periods ending after
September 15, 2009.&#160;&#160;The Company adopted the new standards for its
quarter ending December 31, 2009.&#160;&#160;All references to authoritative
accounting literature are now referenced in accordance with the
Codification.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In May
2009, the FASB issued new standards which establish the accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued. In particular, the new standards set forth the
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial statements (through the date that the
financial statements are issued or are available to be issued). The guidance
also sets forth the circumstances under which an entity should recognize events
or transactions occurring after the balance sheet date in its financial
statements; and the disclosures that an entity should make about events or
transactions that occurred after the balance sheet date. The Company adopted the
new standards as of June 30, 2009. The Company has evaluated subsequent events
after the balance sheet date of December 31, 2009 through the time of filing
with the Securities and Exchange Commission (SEC) on February 9, 2010 which is
the date the financial statements were issued.</font><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
        </div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">16</div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><br>
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</font></div>
              <div style="TEXT-ALIGN: center; WIDTH: 100%">
                <hr style="COLOR: black" noshade size="2">
              </div>
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            </div>
          </div>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
          <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
          <div style="TEXT-INDENT: 0pt; DISPLAY: block">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
          <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
          <div style="TEXT-INDENT: 0pt; DISPLAY: block">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Recent
accounting pronouncements</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
          </div>
          <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
December&#160;2008, the SEC announced that it had approved revisions to
modernize the oil and gas reserve reporting disclosures. The new disclosure
requirements include provisions that:</font></div>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
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<tr valign="top">
                <td align="right" style="WIDTH: 67px">
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;&#160;&#160;</font></font></div>
                </td>
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                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Introduce
      a new definition of oil and gas producing activities. This new definition
      allows companies to include in their reserve base volumes from
      unconventional resources. Such unconventional resources include bitumen
      extracted from oil sands and oil and gas extracted from coal beds and
      shale formations.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td align="right" style="WIDTH: 66px">
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;&#160;&#160;</font></font></div>
                </td>
                <td width="915">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Report
      oil and gas reserves using an unweighted average price using the prior
      12-month period, based on the closing prices on the first day of each
      month, rather than year-end prices. The SEC indicated that they will
      continue to communicate with the FASB staff to align their accounting
      standards with these rules. The FASB currently requires a single-day,
      year-end price for accounting
purposes.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td align="right" style="WIDTH: 65px">
                  <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;&#160;&#160;</font></div>
                </td>
                <td width="916">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Permit
      companies to disclose their probable and possible reserves on a voluntary
      basis. In the past, proved reserves were the only reserves allowed in the
      disclosures.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td align="right" style="WIDTH: 64px">
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
                </td>
                <td width="917">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Requires
      companies to provide additional disclosure regarding the aging of proved
      undeveloped reserves.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td align="right" style="WIDTH: 64px">
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
                </td>
                <td width="917">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Permit
      the use of reliable technologies to determine proved reserves if those
      technologies have been demonstrated empirically to lead to reliable
      conclusions about reserves volumes.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td align="right" style="WIDTH: 64px">
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
                </td>
                <td width="917">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Replace
      the existing &#8220;certainty&#8221; test for areas beyond one offsetting drilling
      unit from a productive well with a &#8220;reasonable certainty&#8221;
      test.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
                <td align="right" style="WIDTH: 63px">
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
                </td>
                <td width="918">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Require
      additional disclosures regarding the qualifications of the chief technical
      person who oversees the company&#8217;s overall reserve estimation process.
      Additionally, disclosures regarding internal controls over reserve
      estimation, as well as a report addressing the independence and
      qualifications of its reserves preparer or auditor will be
      mandatory.</font></div>
                </td>
              </tr></table>
        </div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company will begin complying with the disclosure requirements in its annual
report on Form 10-K for the year ending March&#160;31, 2010. The new rules may
not be applied to disclosures in quarterly reports prior to the first annual
report in which the revised disclosures are required.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The SEC
is coordinating with the FASB to obtain the revision necessary to US GAAP
concerning financial accounting and reporting by oil and gas producing companies
and disclosures about oil and gas producing activities to provide consistency
with the new rules.&#160;&#160;During September 2009, the FASB issued an
exposure draft of a proposed Accounting Standards Update, &#8220;Oil and Gas Reserves
Estimation and Disclosures&#8221;. The proposed Update would amend existing standards
to align the reserves calculation and disclosure requirements under US GAAP with
the requirements in the SEC rules. As proposed, the&#160;Update would be
effective for annual reporting periods ending on or after December 31, 2009, and
would be applied prospectively as a change in estimate. The Company is currently
in the process of evaluating the new requirements.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">17</div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      </div>
      <div style="TEXT-ALIGN: center">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
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            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
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            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
        </div>
      </div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div style="TEXT-INDENT: 0pt; DISPLAY: block">
            <div>
              <hr style="COLOR: black" align="left" noshade size="1" width="100%">
            </div>
          </div>
        </div>
      </div>
    </div>
    <div style="TEXT-ALIGN: center">
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">Accounting for
Transfers of Financial Assets</font> - In June 2009, the FASB issued accounting
guidance which will require more information about transfers of financial
assets, including securitization transactions, and where entities have
continuing exposure to the risks related to transferred financial assets. It
eliminates the concept of a &#8220;qualifying special-purpose entity&#8221;, changes the
requirements for derecognizing financial assets, and requires additional
disclosures.&#160;&#160;This guidance will be effective at the beginning of the
first fiscal year beginning after November 15, 2009. Early application is not
permitted.</font></div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-ALIGN: left; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-WEIGHT: bold">Disclosures about
Fair Value Measurements</font> &#8211;&#160;In January 2010, the FASB issued guidance
which requires an entity to disclose the following:</font></div>
      <div style="TEXT-ALIGN: center">
        <ul>
          <li>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">Separately disclose the amounts of significant transfers in and
  out of Level 1 and Level 2 fair value measurements and describe reasons for
  the transfers.</div>
          </li>
          <li>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Present
  separately information about purchases, sales, issuances and settlements, on a
  gross basis, rather than on one net number, in the reconciliation for fair
  value measurements using significant unobservable inputs (Level
  3).</font></div>
            </div>
          </li>
          <li>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Provide
  fair value measurement disclosures for each class of assets and
  liabilities.</font></div>
              </div>
            </div>
          </li>
          <li>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
                  <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Provide
  disclosures about the valuation techniques and inputs used to measure fair
  value for both recurring and nonrecurring fair value measurements for fair
  value measurements that fall in either Level 2 or Level
  3.</font></div>
                </div>
              </div>
            </div>
          </li>
        </ul>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This
guidance is effective for interim and annual reporting periods beginning after
December 15, 2009, except for the disclosures about purchases, sales, issuance
and settlement on the forward of activity in Level 3 fair value
measurements.&#160;&#160;Those disclosures are effective for fiscal years
beginning after December 15, 2010. The Company is currently in the process of
evaluating the new requirements.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
3 &#8211; CASH AND CASH EQUIVALENTS</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009 and March 31, 2009, cash and cash equivalents
included:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="46%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March
      31, 2009</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">U.S.
      Dollars</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -2.55pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      6,595,597&#160;&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      6,030,173&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="46%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Foreign
      currency</font></div>
              </td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -2.55pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">648,391&#160;&#160;</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">725,372&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -2.55pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      7,243,988&#160;&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.1pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      6,755,545&#160;&#160;</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009 and March 31, 2009, cash and cash equivalents included
$1,321,741 and $2,371,558 placed in money market funds having 30 day simple
yields of 0.01% and 0.13%, respectively.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">18</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
      <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
4 &#8211; PREPAID EXPENSES AND OTHER ASSETS</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prepaid
expenses and other assets as of December 31, 2009 and March 31, 2009, were as
follows:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.6pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March
      31, 2009</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Advances
      for services</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      1,809,004</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      2,740,915&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="46%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Other</font></div>
              </td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,589,132</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">313,163&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      3,398,136</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      3,054,078&#160;&#160;&#160;</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
5 &#8211; OIL AND GAS PROPERTIES</font></div>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Oil and
gas properties using the full cost method as of December 31, 2009 and March 31,
2009, were as follows:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="46%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
                <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right">
                <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.6pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March
      31, 2009</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Cost
      of drilling wells</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      96,278,242&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      96,203,705&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Professional
      services received in exploration and development </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">activities</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">60,997,714&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">55,424,910&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Material
      and fuel used in exploration and development activities</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">52,018,937&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">51,273,747&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Subsoil
      use rights</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">20,788,119&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">20,788,119&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Geological
      and geophysical</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,883,856&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,870,516&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Deferred
      tax</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,219,219&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,219,219&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Capitalized
      interest, accreted discount and amortised bond issue costs on convertible
      notes issued</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,633,181&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,633,181&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Infrastructure
      development costs</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,403,456&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,245,298&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="46%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Other
      capitalized costs</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">16,579,851&#160;</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">15,296,176&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="46%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Accumulated
      depletion</font></div>
              </td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(31,179,973)</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(23,226,458)&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="46%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">$
      238,622,602&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">$
      238,728,413&#160;&#160;&#160;&#160;</font></font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
purchase of Emir Oil LLP was accounted for as a non-taxable business
combination. Since goodwill was not recognized in this stock-based subsidiary
acquisition involving oil and gas properties, a recognition of a deferred tax
liability related to the acquisition increases the financial reporting basis of
the oil and gas properties.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
6 &#8211; GAS UTILIZATION FACILITY</font></div>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has entered into an Agreement on Joint Business </font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(the
&#8220;Agreement&#8221;) with Ecotechnic Chemicals AG incorporated in Switzerland, for
construction of a facility to utilize the associated gas from the Company&#8217;s
fields (the &#8220;Facility&#8221;).</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">19</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Facility was completed on January 1, 2009. All costs associated with the
completion of the Facility, which includes amounts previously classified as
construction in progress, have been reported as Gas Utilization Facility on the
balance sheet.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the nine months ended December 31, 2009, the Company made payment to Ecotechnic
Chemicals AG in the amount of $75,000 and contributed property totalling $24,107
to the completion of the Facility.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">No
depreciation expense was recognized for Gas Utilization Facility during the nine
months ended December 31, 2009 because during this period it operated in the
test mode.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
7 &#8211; INVENTORIES FOR OIL AND GAS PROJECTS</font></div>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009 and March 31, 2009 inventories included:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="47%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March
      31, 2009</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="47%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="47%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Construction
      material</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      12,842,270</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      12,962,397&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="47%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Spare
      parts</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">87,922</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">84,524&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="47%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Crude
      oil produced</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5,322</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5,029&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="47%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Other</font></div>
              </td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">912,198</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">950,196&#160;&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="47%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      13,847,712</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      14,002,146&#160;&#160;&#160;</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
8 &#8211;&#160;LONG TERM VAT RECOVERABLE</font></div>
      </div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: center">
        <table border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="TEXT-ALIGN: center; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top" style="TEXT-ALIGN: center;">
              <td style="WIDTH: 23.8pt">
                <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
              </td>
              <td style="TEXT-ALIGN: center">
                <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
      of December 31, 2009 and March 31, 2009, the Company had long term VAT
      recoverable in the amount of $2,749,792 and $2,423,940, respectively. The
      VAT recoverable is a Tenge denominated asset due from the Republic of
      Kazakhstan. The VAT recoverable consists of VAT paid on local expenditures
      and imported goods. VAT charged to the Company is recoverable in future
      periods as either cash refunds or offsets against the Company&#8217;s fiscal
      obligations, including future income tax liabilities. Management cannot
      estimate which part of this asset will be realized in the current year
      because, in order to return funds or offset this tax with other taxes, a
      tax examination must be performed by local Kazakhstan tax authorities.
      During the nine months ended December 31, 2009, the Company received
      refunds of VAT in the amount of $910,057.</font></div>
                <div align="justify">&#160;</div>
              </td>
            </tr></table>
      </div>20<br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
      9 &#8211;&#160;CONVERTIBLE NOTES PAYABLE</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On July
16, 2007 the Company completed the private placement of $60 million in principal
amount of 5.0% convertible senior notes due 2012 (&#8220;Notes&#8221;) to non-U.S. persons
outside of the United States in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;) and in compliance with
the laws and regulations applicable in each country where the placement took
place.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Notes
carry a 5% coupon and have a yield to maturity of 6.25%. Interest is paid at a
rate of 5.0% per annum on the principal amount, payable semiannually in arrears
on January 13 and July 13 of each year.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Notes
are convertible into the Company&#8217;s common shares. The initial conversion price
was set at $7.2094 per share, subject to customary adjustments in certain
circumstances, including but not limited to, changes of control and certain
future equity financings. If the conversion price is adjusted pursuant to the
conversion provisions, the conversion price shall not be adjusted below $6.95,
provided that if the conversion price is adjusted due to (1) the payment of a
dividend; (2) a bonus issue; (3) a consolidation or subdivision of the shares;
(4) the issuance of shares, share-related securities, rights in respect of
shares or rights in respect of share-related securities to all or substantially
all of the shareholders as a class; (5) the issuance of other securities to
substantially all shareholders as a class; or (6) other arrangements to acquire
securities, then the minimum conversion price will be adjusted at the same time
by the same proportion.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">A change
of control event occurs if an offer in respect of the Company&#8217;s common shares,
for which the consideration is or can be received wholly or substantially in
cash, has become or been declared unconditional in all respects and the Company
becomes aware that the right to cast more than 50% of the votes which may
ordinarily be cast on a poll at a general meeting of the shareholders has or
will become unconditionally vested in the offeror and/or any associate(s) of the
offeror, or an event occurs which has a like or similar effect. If a change of
control event occurs, the conversion price in respect of a conversion date that
occurs after the date on which notice of such change in control event is given
by the Company, but on or prior to the 60th day following the date of such
notice, shall become the product of (1) the conversion price that would
otherwise apply on such conversion date in the absence of a change of control
event and (2) the percentage determined in accordance with the
following:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">Conversion Date</font></font></div>
              </td>
              <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">Percentage</font></font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">On
      or before July 13, 2008</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">81.6</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      but on or before July 13, 2009</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">86.2</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      but on or before July 13, 2010</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">90.9</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      but on or before July 13, 2011</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">95.5</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      and until Maturity Date</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">100.0</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block">21<br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">If a
holder of notes shall convert its notes following the date on which notice of a
change in control event is given by us but on or prior to the 60th day following
the date of such notice, then we shall pay to such holder the following U.S.
Dollar amounts per U.S. Dollar of notes held by the holder that are to be so
converted.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">Conversion Date</font></font></div>
              </td>
              <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline">Amount</font></font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">On
      or before July 13, 2008</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$0.12239</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      but on or before July 13, 2009</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$0.07246</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      but on or before July 13, 2010</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$0.02250</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      but on or before July 13, 2011</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$0</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Thereafter,
      and until Maturity Date</font></div>
              </td>
              <td align="right" valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$0</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Notes
are callable after three years at a price equal to 104% of the principal amount
thereof plus any accrued and unpaid interest to the date fixed for redemption,
subject to the share price trading at least 30% above the conversion price.
Holders of the Notes will have the right to require the Company to redeem all or
a portion of their Notes on July 13, 2010 at a price equal to 104% of the
principal amount thereof plus any accrued and unpaid interest to the date fixed
for redemption. Unless previously redeemed, converted or purchased and
cancelled, the Notes will be redeemed by the Company at a price equal to 107.2%
of the principal amount thereof on July 13, 2012. The Notes constitute direct,
unsubordinated and unsecured, interest bearing obligations of the
Company.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The net
proceeds from the issuance of the Notes have been used for further exploration
of the Company&#8217;s oil and gas drilling and production activities in western
Kazakhstan.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company granted a registration right to the Noteholders. The Company agreed to
file, pursue to effectiveness and maintain effective a registration statement in
respect of the Notes and the underlying shares of common stock issuable upon the
conversion of the Notes (collectively, the &#8220;Covered Securities&#8221;), until such
time as all Covered Securities:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 62px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;&#160;&#160;</font></font></div>
              </td>
              <td width="919">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">have
      been effectively registered under the Securities Act and disposed of in
      accordance with the registration statement relating
    thereto;</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 61px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
              </td>
              <td width="920">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">may
      be resold without restriction pursuant to Rule 144 under the Securities
      Act or any successor provision
thereto;</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 60px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
              </td>
              <td width="921">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(A)
      are not subject to the restrictions imposed by Rule 903(b)(3)(iii) under
      the Securities Act or any successor provision thereto and (B) may be
      resold pursuant to Rule 144 under the Securities Act or any successor
      provision thereto without being subject to the restrictions imposed by
      paragraphs (e), (f) and (h) of Rule 144 under the Securities Act or any
      successor provisions thereto; <font style="DISPLAY: inline; TEXT-DECORATION: underline">provided</font> that
      the requirements set forth in paragraph (c) of Rule 144 under the
      Securities Act or any successor provision thereto are met as of such date;
      or</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 60px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
              </td>
              <td width="921">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">have
      been publicly sold pursuant to Rule 144 under the Securities Act or any
      successor provision thereto.</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: center">22<br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="WIDTH: 100%" align="left">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                  <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                    <div>
                      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
      <div>&#160;</div>
      <div id="HDR">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
October 19, 2007 the Company filed with the U.S. Securities and Exchange
Commission (&#8220;SEC&#8221;) a registration statement on Form S-3, as amended on October
25, 2007 and January 23, 2008, (the &#8220;Shelf Registration Statement&#8221;) registering
the Covered Securities for resale. The Shelf Registration Statement was declared
effective by the SEC on January 25, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009 and March 31, 2009, the convertible notes payable amount is
presented as follows:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;&#160;&#160;March
      31, 2009</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="16%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="38%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Convertible
      notes redemption value</font></div>
              </td>
              <td align="right" valign="bottom" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      64,323,785&#160;</font></div>
              </td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      64,323,785<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="38%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Unamortized
      discount</font></div>
              </td>
              <td align="right" valign="bottom" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(2,358,004)</font></div>
              </td>
              <td valign="bottom" width="1%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(2,992,264)</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="38%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="16%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">$
      61,965,781&#160;</font></font></div>
              </td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">$
      61,331,521&#160;</font></font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009 and March 31, 2009, the Company has accrued interest of
$1,391,667 and $641,667, respectively, relating to the convertible notes
outstanding. The Company has also amortized the discount on the convertible
notes (difference between the redemption amount and the carrying amount as of
the date of issue) in the amount of $1,965,781 and $1,331,521 as of December 31,
2009 and March 31, 2009, respectively. The carrying value of convertible notes
will be accreted to the redemption value of $64,323,785.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
      10 &#8211;&#160;LIQUIDATION FUND</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">A
reconciliation on the Liquidation Fund (Asset Retirement Obligation) at December
31, 2009 and March 31, 2009 is as follows:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="49%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 3.65pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="49%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="49%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">At
      March 31, 2009</font></div>
              </td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;&#160;&#160;$
      4,263,994&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="49%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Accrual
      of liability</font></div>
              </td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font>-<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="49%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 36pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Accretion
      expenses</font></div>
              </td>
              <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;332,415<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="49%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">At
      December 31, 2009</font></div>
              </td>
              <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      4,596,409&#160;</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Management
believes that the liquidation fund should be accrued for future abandonment
costs of 24 wells located in the Dolinnoe, Aksaz, Emir and Kariman oil fields.
Management believes that these obligations are likely to be settled at the end
of the production phase at these oil fields.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">23</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">At
December 31, 2009, undiscounted expected future cash flows that will be required
to satisfy the Company&#8217;s obligation by 2013 for the Dolinnoe, Aksaz, Emir and
Kariman fields, respectively, are $6,204,545. After application of a 10%
discount rate, the present value of the Company&#8217;s liability at December 31, 2009
and March 31, 2009 was $4,596,409 and $4,263,994, respectively.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></div>
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
11 &#8211;&#160;SHARE AND ADDITIONAL PAID IN CAPITAL</font></div>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Share-Based
Compensation</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On July
17, 2008 the shareholders of the Company approved the BMB Munai, Inc. 2009
Equity Incentive Plan (&#8220;2009 Plan&#8221;) to provide a means whereby the Company could
attract and retain employees, directors, officers and others upon whom the
responsibility for the successful operations of the Company rests through the
issuance of equity awards. 5,000,000 common shares are reserved for issuance
under the 2009 Plan. Under the terms of the 2009 Plan the board of directors
determines the terms of the awards made under the 2009 Plan, within the limits
set forth in the 2009 Plan guidelines.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Common
Stock Grants</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On March
30, 2007, the Company granted common stock to officers, employees and outside
consultants of the Company under the Plan. The total number of restricted common
shares granted was 950,000. The restricted stock grants were valued at $5.38 per
share. The restricted stock grants were awarded on the same terms and subject to
the same vesting requirements. Previous vesting conditions stated that the
restricted stock grants will vest to the grantees at such time as either of the
following events occurs (the "Vesting Events"): i) the Company enters commercial
production and is granted a commercial production license from the Republic of
Kazakhstan; or ii) the occurrence of an Extraordinary Event. An &#8220;Extraordinary
Event&#8221; is defined in the restricted stock agreement as any consolidation or
merger of the Company or any of its subsidiaries with another person, or any
acquisition of the Company or any of its subsidiaries by any person or group of
persons, acting in concert, equal to thirty percent (30%) or more of the
outstanding stock of the Company or any of its subsidiaries, or the sale of all
or substantially all of the assets of the Company or any of its subsidiaries. In
the event of an Extraordinary Event, the grants shall be deemed full vested one
day prior to the effective date of the Extraordinary Event. The board of
directors shall determine conclusively whether or not an Extraordinary Event has
occurred and the grantees have agreed to be bound by the determination of the
board of directors. The grantees have the right to vote the shares, receive
dividends and enjoy all other rights of ownership over the entire grant amount
from the grant date, except for the right to transfer, assign, pledge, encumber,
dispose of or otherwise directly or indirectly profit or share in any profit
derived from a transaction in the <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">shares
prior to the occurrence of a Vesting Event. Shares will only vest to the grantee
if the grantee is employed by the Company at the time a Vesting Event occurs. If
a Vesting Event has not occurred at the time a grantee's employment with the
Company ceases, for any reason, the entire grant amount shall be forfeited back
to the Company. At the time the grants were made, it was anticipated that the
grants would vest no later than July 9, 2009, the date the exploration stage of
the Company&#8217;s exploration contract was scheduled to terminate. At the
recommendation of the Compensation Committee, on September 11, 2008, the board
of directors of the Company approved a change to the vesting conditions of the
stock grants. The grants vested as of July 9, 2009.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">24</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Non-cash
compensation expense in the amount of $567,889 was recognized in the
Consolidated Statement of Operations and Consolidated Balance Sheet for the nine
months ended December 31, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009, there was no unrecognized non-cash compensation expense
related to non-vested share-based compensation arrangements granted under the
Plan.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On June
24, 2008, the Company was granted an extension of its existing exploration
contract from July 2009 to January 2013. In connection therewith, the Company
became obligated to issue 1,750,000 common shares to a consultant as the success
fee for assisting the Company to obtain the extension. The shares are valued at
$6.13 per share, which was the closing market price of Company&#8217;s shares on June
24, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
September 16, 2008 this consulting agreement between the Company and the
consultant discussed in the preceding paragraph was revised and parties agreed
to decrease number of shares issued for services provided by 500,000 shares. The
non-cash compensation expenses for consulting services were reversed in the
amount of $3,065,000 (500,000 shares valued at $6.13 per share which was the
closing market price of Company&#8217;s shares on June 24, 2008) for the three months
ended December 31, 2008.</font><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">25</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On July
17, 2008 at the recommendation of the compensation committee of the board of
directors, the Company&#8217;s board of directors approved, subject to certain vesting
requirements, restricted stock awards to certain executive officers, directors,
employees and outside consultants of the Company pursuant to the BMB Munai, Inc.
2004 Stock Incentive Plan (the &#8220;2004 Plan&#8221;). The total number of shares granted
was 1,330,000. Grants were made to 14 people, 12 of whom are non-U.S. persons.
The restricted stock grants were made without registration pursuant to
Regulation S of the Securities Act Rules and/or Section 4(2) under the
Securities Act of 1933. The restricted stock grants will vest to the grantees at
such time as either of the following events occurs (the &#8220;Vesting Events&#8221;): i)
the one-year anniversary of </font>the grant date; or ii) the occurrence of an
Extraordinary Event. An &#8220;Extraordinary Event&#8221; is defined in the restricted stock
agreement as any consolidation or merger of the Company or any of its
subsidiaries with another person, or any acquisition of the Company or any of
its subsidiaries by any person or group of persons, acting in concert, equal to
thirty percent (30%) or more of the outstanding stock of the Company or any of
its subsidiaries, or the sale of all or substantially all of the assets of the
Company or any of its subsidiaries. In the event of an Extraordinary Event, the
grants shall be deemed full vested one day prior to the effective date of the
Extraordinary Event. The board of directors shall determine conclusively whether
or not an Extraordinary Event has occurred and the grantees have agreed to be
bound by the determination of the board of directors. The shares representing
the restricted stock grants shall be issued as soon as practicable, will be
deemed outstanding from the date of grant, and will be held in escrow by the
Company subject to the occurrence of a Vesting Event. The grantees will have the
right to vote the shares, receive dividends and enjoy all other rights of
ownership over the entire grant amount from the grant date, except for the right
to transfer, assign, pledge, encumber, dispose of or otherwise directly or
indirectly profit or share in any profit derived from a transaction in the
shares prior to the occurrence of a Vesting Event. Shares will only vest to the
grantee if the grantee is employed by the Company at the time a Vesting Event
occurs. If a Vesting Event has not occurred at the time a grantee&#8217;s employment
with the Company ceases, for any reason, the entire grant amount shall be
forfeited back to the Company. The grants vested as of July 17,
2009.</div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Non-cash
compensation expense in the amount of $2,176,244 was recognized in the
Consolidated Statement of Operations and Consolidated Balance Sheet for the nine
months ended December 31, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009, there was no unrecognized non-cash compensation expense
related to non-vested share-based compensation arrangements granted under the
Plan.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Stock
Options</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On June
20, 2006 the Company granted stock options to directors of the Company under the
Plan. The total number of options was 200,000. The options are exercisable at a
price of $7.00 per share. All of the options vested immediately upon grant.
Compensation expense for options granted is determined based on their fair value
at the time of grant, the cost of which in the amount of $545,346 was recognized
in the Consolidated Statements of Operations and Consolidated Balance Sheet for
the year ended March 31, 2007. These granted stock options expired unexercised
on June 20, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">26</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
November 12, 2004, the Company granted stock options to its former corporate
secretary for past services rendered. These options grant the employee the right
to purchase up to 60,000 shares of the Company&#8217;s common stock at an exercise
price of $4.00 per share. The options vested immediately and expire five years
from the date of grant. In April 2006, options to acquire 7,200 common shares
were exercised. In January 2008, options to acquire 3,000 common shares were
exercised. Remaining granted stock options expired unexercised on November 14,
2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Stock
options outstanding and exercisable as of December 31, 2009, were as
follows:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Number
      of Shares</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted
      Average <br>Exercise </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Price</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="16%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">As
      of March 31, 2009</font></div>
              </td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">1,170,583&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      5.33</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="44%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="16%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Granted</font></div>
              </td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Exercised</font></div>
              </td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="16%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="44%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Expired</font></div>
              </td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(249,800)</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="16%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      6.40</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="44%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">As
      of December 31, 2009</font></div>
              </td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">920,783&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="16%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      5.04</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Additional
information regarding outstanding options as of December 31, 2009, was as
follows:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td colspan="7" valign="top" width="48%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Options
      Outstanding</font></div>
              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="3" valign="top" width="24%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Options
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Exercise
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              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Options</font></div>
              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted
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              </td>
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              <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted
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              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Options</font></div>
              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Weighted
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              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
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              </td>
              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">920,783</font></div>
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              <td valign="top" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
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              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5.00</font></div>
              </td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">920,783</font></div>
              </td>
              <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      5.04</font></div>
              </td>
            </tr></table>
      </div>
      <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></div>
      <div>&#160;</div>
      <div><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></div>
      <div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block">
          <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
12 &#8211;&#160;REVENUES</font></div>
        </div>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company exports oil for sale to the world markets via the Aktau sea port. Sales
prices at the port locations are based on the average quoted Brent crude oil
price from Platt&#8217;s Crude Oil Marketwire for the three days following the bill of
lading date less discount for transportation expenses, freight charges and other
expenses borne by the customer.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">27</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
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Company recognized revenue from sales as follows:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -5.4pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three
      months ended</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Nine
      months ended</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Export
      sales</font></div>
              </td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      13,182,284</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      2,490,840</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      40,596,215</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      59,406,817<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="14%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 8.7pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Domestic
      sales</font></div>
              </td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">712,428</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,392,950</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,139,520</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,062,357<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      13,894,712</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;$4,883,790</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      41,735,735</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      62,469,174<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
      13 &#8211; EXPORT DUTY</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On April
18, 2008 the government of the Republic of Kazakhstan introduced an export duty
on several products (including crude oil). The Company became subject to the
duty beginning in June 2008. The formula for determining the amount of the crude
oil export duty was based on a sliding scale that is tied to several factors,
including the world market price for oil.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0.15pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
discussed in Note 2, in December 2008 the government of the Republic of
Kazakhstan issued a resolution that cancelled the export duty effective January
26, 2009 for companies operating under the new tax code.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0.15pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
January 1, 2009, the Company became subject to the new tax code.&#160;&#160;As a
result, the export duty for the nine months ended December 31, 2009 was
$0.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
      14 &#8211; DISGORGEMENT FUNDS RECEIVED</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In June
2008 the Company received a letter from a shareholder of the Company stating
that the shareholder was returning realized profits from their trades of shares
of the Company&#8217;s common stock during the nine month period preceding May 22,
2008 (the &#8220;Timeframe&#8221;). The shareholder also stated in the letter that during
this Timeframe the shareholder was subject to Section 16 of the United States
Security Exchange Act of 1934 (the &#8220;Exchange Act&#8221;) because they owned more than
10% of the shares of Company common stock. As such, the shareholder decided to
voluntarily comply with Section 16(b) of the Exchange Act by returning the
realized profits to the Company in the amount of $1,650,293, (the &#8220;Disgorgement
Amount&#8221;) which is net of amounts paid for brokerage commissions on each of the
executed trades during the Timeframe. The Company had received the Disgorgement
Amount in full before June 30, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">28</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
      <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
15 &#8211; INCOME TAXES</font></div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company&#8217;s consolidated pre-tax income is comprised primarily from operations in
the Republic of Kazakhstan. Pre-tax losses from United States operations are
also included in consolidated pre-tax income.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">According
to the Exploration Contract in the Republic of Kazakhstan, for income tax
purposes the Company can capitalize the exploration and development costs and
deduct all revenues received during the exploration stage to calculate taxable
income. As long as the Company&#8217;s capital expenditures exceed generated revenues,
the Company will not be subject to Kazakhstan income tax.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
discussed in Note 2, Licenses and contracts, the Company was granted an
Exploration contract extension.&#160;&#160;According to the terms of the
Exploration contract, the Company will continue to operate in the exploration
phase until January 2013.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Earnings
of the Company&#8217;s foreign subsidiaries, since acquisition, have been
undistributed. Those earnings are considered to be indefinitely reinvested and,
accordingly, no U.S. federal and state income taxes have been provided thereon.
Upon distribution of those earnings, in the form of dividends or otherwise, the
Company would be subject to both U.S. income taxes (subject to an adjustment for
foreign tax credits) and withholding taxes payable to the Republic of
Kazakhstan. Determination of the amount of unrecognized deferred U.S. income tax
liability is not practical because of the complexities associated with its
hypothetical calculation; however, unrecognized foreign tax credits may be
available to reduce a portion of the U.S. tax liability.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Effective
January 1, 2009, the Republic of Kazakhstan adopted a new tax code, which
decreased the corporate income rate for legal entities to 20%.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">No
provision for income taxes has been recorded by the Company for the nine months
ended December 31, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">29</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
      <div>&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
      16 &#8211;&#160;EARNINGS PER SHARE
INFORMATION</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
calculation of the basic and diluted earnings per share is based on the
following data:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="middle" width="25%" style="TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 24.2pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three
      months ended</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="top" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Nine
      months ended</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">31,
      2008</font></div>
              </td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">31,
      2009</font></div>
              </td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">31,
      2008</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      income/(loss)</font></div>
              </td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      607,081<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (8,292,982)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      4,677,872</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      14,858,367</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="bottom" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 8.7pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Basic
      weighted-average common shares outstanding</font></div>
              </td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;50,365,015<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;47,378,420<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;49,420,165</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;46,607,184</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="bottom" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Effect
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              </td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td align="left" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Warrants</font></div>
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              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,881</font></div>
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              <td align="left" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Stock
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              </td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,832</font></div>
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              <td align="left" valign="bottom" width="28%" style="PADDING-LEFT: 0pt; MARGIN-LEFT: 446pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;
      Unvested share grants</font></div>
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              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Dilutive
      weighted average common shares outstanding</font></div>
              </td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">50,365,015<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">47,378,420<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;&#160;</font></font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">49,420,165</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">46,621,897</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Basic
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              </td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.01<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (0.18)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.09</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
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              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="28%" style="PADDING-BOTTOM: 4px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Diluted
      income/(loss) per common share</font></div>
              </td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -1.65pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.01<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;</font></font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (0.18)</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
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              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 4px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
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            </tr><tr bgcolor="white">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company has adopted guidance from FASC Topic 260, relating to determining
whether instruments granted in share-based payment transactions are
participating securities, on April 1, 2009. Accordingly the Company included
certain unvested share grants defined as &#8220;participating&#8221; in the basic weighted
average common shares outstanding for the three and nine months ended December
31, 2009 and 2008, respectively. Prior period comparative data has been
retrospectively presented to reflect the adoption of this standard.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
diluted weighted average common shares outstanding for the three and nine months
ended December 31, 2009 does not include the effect of potential conversion of
certain warrants and stock options as their effects are
anti-dilutive.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
dilutive weighted average common shares outstanding for the three and nine
months ended December 31, 2009 and 2008, respectively, does not include the
effect of the potential conversion of the Notes because the average market share
price for three and nine months ended December 31, 2009 was lower than potential
conversion price of the convertible notes for this period.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">30</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
diluted weighted average common shares outstanding for the three and nine months
ended December 31, 2009 does not include the effect of the potential conversion
of the Notes because conversion of the Notes is not contingent upon any market
event. Rather, the Notes are convertible to common stock upon the first to occur
of (a) the tenth New York business day following the Shelf Registration
Statement Effective Date and (b) 13 July 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
17 &#8211; RELATED PARTY TRANSACTIONS</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company leases ground fuel tanks and other oil fuel storage facilities and
warehouses from Term Oil LLC. The lease expenses for the nine months ended
December 31, 2009 and 2008, totaled to $72,070 and $196,128, respectively. Also
the Company had advances paid to Term Oil LLC in the amount of $125,519 and
$15,006 as of December 31, 2009 and March 31, 2009, respectively. A Company
shareholder is an owner of Term Oil LLC.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On June
26, 2009 the Company entered into a Debt Purchase Agreement (the &#8220;Agreement&#8221;)
with Simage Limited, a British Virgin Islands international business corporation
(&#8220;Simage&#8221;). Simage is a company owned by Toleush Tolmakov, a BMB shareholder and
the General Director of Emir Oil, LLP, a wholly-owned subsidiary of the Company
(&#8220;Emir&#8221;).</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prior to
the date of the Agreement, Simage had acquired by assignment, certain accounts
receivable owed by Emir to third-party creditors of Emir in the amount of
$5,973,190 (the &#8220;Obligations&#8221;). Pursuant to the terms of the Agreement, Simage
assigned to the Company all rights, title and interests in and to the
Obligations in exchange for the issuance of 2,986,595 shares of common stock of
the Company.&#160;&#160;The market value of the shares of common stock issued to
Simage, at the agreement date, was $3,076,193.&#160;&#160;The market value was
based on $1.03 per share, which was the closing market price of the Company&#8217;s
shares on June 26, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As a
result of this Agreement, the Company has effectively been released of accounts
payable obligations amounting to $5,973,190. The Company has treated this
Agreement as a related party transaction, due to the fact that Simage is owned
by a Company shareholder. Therefore, the difference between the settled amount
of accounts payable and the value of the common stock issued, which amounts to
$2,896,997, has been treated as a capital contribution by the shareholder and
recognized as an addition to additional-paid-in-capital rather than a gain on
settlement of debt.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">31</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div><br>
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        </div>
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          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div style="MARGIN-LEFT: 0pt">
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
18 &#8211; COMMITMENTS AND CONTINGENCIES</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Consulting
Agreement</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
October 15, 2008 the MEMR increased Emir Oil LLP&#8217;s contract territory from 460
square kilometers to 850 square kilometers. In connection with this extension,
and any other territory extensions or acquisitions, the Consultant will be paid
a share payment in restricted common stock for resources and reserves associated
with any acquisition. The value of any acquisition property will be determined
by reference to a 3D seismic study and a resource/reserve report by a qualified
independent petroleum engineer acceptable to the Company. The acquisition value
(&#8220;Acquisition Value&#8221;) will be equal to the total barrels of resources and
reserves, as defined and determined by the engineering report multiplied by the
following values:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Resources
at $.50 per barrel;</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Probable
reserves at $1.00 per barrel; and</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Proved
reserve at $2.00 per barrel.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0.3pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
number of shares to be issued to the Consultant shall be the Acquisition Value
divided by the higher of $6.50 or the average closing price of the Company&#8217;s
trading shares for the five trading days prior to the issuance of the
reserve/resource report, provided that in no event shall the total number of
shares issuable to the Consultant exceed more than a total of 4,000,000 shares.
See Note 11 for shares issued to date.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0.3pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Historical
Investments by the Government of the Republic of Kazakhstan</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Government of the Republic of Kazakhstan made historical investments in the ADE
Block and the Southeast Block of $5,994,200 and $5,350,680, respectively. When
and if, the Company applies for and, when and if, it is granted commercial
production rights for the ADE Block and Southeast Block, the Company will be
required to begin repaying these historical investments to the Government. The
terms of repayment will be negotiated at the time the Company is granted
commercial production rights.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Capital
Commitments</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Prior to
the extension of the exploration period granted to Emir Oil LLP in June 2008,
the terms of its subsurface exploration contract required Emir Oil to spend a
total of $48.8 million in exploration activities on the ADE Block and Southeast
Block through July 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">32</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div style="MARGIN-LEFT: 0pt">
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
connection with the extensions granted in June and October 2008, the Company&#8217;s
capital expenditure requirements have been revised. To retain its rights under
the contract, the Company must spend $21.5 million between January 10, 2010 and
January 9, 2011, $27.3 million between January 10, 2011 and January 9, 2012 and
$14.9 million between January 10, 2012 and January 9, 2013.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Through
December 31, 2009 the Company had spent a total of $280.7 million in exploration
activity.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
addition to the minimum capital expenditure requirement, the Company must also
comply with the other terms of the work program associated with the contract,
which includes the drilling of at least ten new wells by January 9, 2013. The
failure to meet the minimum capital expenditures or to comply with the terms of
the work program could result in the loss of the subsurface exploration
contract. The recent addenda to our exploration contract which granted us with
the extension of the exploration period and rights to the Northwest Block also
require us to:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 64px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
              </td>
              <td width="917">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">make
      additional payments to the liquidation fund, stipulated by the
      Contract;</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 64px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
              </td>
              <td width="917">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">make
      a one-time payment in the amount of $200,000 to the Astana Fund by the end
      of 2010; and</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 63px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
              </td>
              <td width="918">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">make
      annual payments to social projects of the Mangistau Oblast in the amounts
      of $100,000 from 2010 to 2012.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Capital
Lease Agreement</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
December 2009 the Company entered into a capital lease agreement with a vehicle
leasing company for the lease of oil trucks in the amount of $1,100,000. The
agreement is effective upon receiving oil trucks by the Company. As of December
31, 2009 the Company had not received the trucks. The Company expects to receive
the trucks in the fourth quarter, at which time the capital lease will be
recorded.&#160;The agreement calls for average monthly payments of $67,025
during the first year and average monthly payments of $23,900 during the second
and third year. </font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Executive
contracts</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
December 31, 2009, the Company entered into new employment agreements with the
following executive officers of the Company, Gamal Kulumbetov, Askar Tashtitov,
Evgeniy Ler and Anuarbek Baimoldin. The following table discloses the corporate
office and annual salary set forth in the employment agreement of each officer.
Each of these individuals was serving in such capacity prior to entering the
employment agreements.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Each of
the employment agreements, provides that an &#8220;extraordinary event&#8221; is defined as
any consolidation or merger of the Company or any of its subsidiaries with
another person, or any acquisition of the Company or any of its subsidiaries by
any person or group of persons, acting in concert, equal to fifty percent (50%)
or more of the outstanding stock of the Company or any of its subsidiaries, or
the sale of forty percent (40%) or more of the assets of the Company or any of
its subsidiaries, or if one or more persons, acting alone or as a group,
acquires fifty <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">percent
(50%) or more of the total voting power of the Company. In addition to these
provisions, the employment agreement of Mr. Tashtitov provides that the
following events also constitute an extraordinary event: i) that a disposition
by the Chairman of the Company&#8217;s board of directors or by the General Director
of the Company&#8217;s subsidiary, of seventy five (75%) or more of the shares either
individual currently owns, including stock attributed to either of them by
Internal Revenue Code Section 318; or ii) should the Company terminate the
registration of any of its securities under Section 12 of the Exchange Act of
1934, voluntarily ceases, or shall terminate its obligation to file reports with
United States Securities Commission pursuant to Section 13 of the Exchange Act
of 1934.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">33</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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</font></div>
        </div>
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          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div style="MARGIN-LEFT: 0pt">
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Upon
termination of an employment agreement, the Company will make a termination
payment to the officer in lieu of all other amounts and in settlement and
complete release of all claims employee may have against the Company. In the
event of termination for good reason by the officer, the Company will pay the <a name="eolPage5"><!--EFPlaceholder-->
</a>officer the remainder of his salary for
the calendar month in which the termination is effective and for six consecutive
calendar months thereafter. The officer shall also be entitled to any portion of
incentive compensation for the year, prorated to the date of termination.
Notwithstanding the foregoing, if the officer obtains other employment prior to
the end of the six month period, salary payments by the Company after he begins
employment with a new employer shall be reduced by the amount of the cash
compensation received from the new employer. If the officer is terminated for
cause, he will receive salary only through the date of termination and will not
be entitled to any incentive compensation for the year in which his employment
is terminated. If the termination is the result of a disability, the Company
will pay salary for the rest of the month during which termination is effective
and for the shorter of six consecutive months thereafter or until disability
insurance benefits commence. If employment is terminated as a result of the
death of the officer, his heirs shall be entitled to salary through the month in
which his death occurs and to incentive compensation prorated through the month
of his death. The employment agreements of Mr. Kulumbetov, Mr. Ler and Mr.
Baimoldin provide that if the employment agreement is terminated as a result of
an extraordinary event, the officer shall be entitled to severance pay as
follows.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Completed
Years of Employment:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td align="left" valign="top" width="37%" style="BORDER-BOTTOM: black 2px solid; BORDER-TOP: black 0.5pt solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Service
      with the Employer</font></div>
              </td>
              <td valign="top" width="35%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: right; BORDER-TOP: black 0.5pt solid">
                <div style="TEXT-ALIGN: right; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Severance
      Amount&#160;&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="37%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less
      than one (1) year</font></div>
              </td>
              <td align="right" valign="top" width="35%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10%
      of Basic Compensation Salary</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="37%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">At
      least one (1) year but less than two (2) years</font></div>
              </td>
              <td align="right" valign="top" width="35%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">150%
      of Basic Compensation Salary</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="37%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">More
      than two years</font></div>
              </td>
              <td align="right" valign="top" width="35%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;299%
      of Basic Compensation Salary</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
employment agreement of Mr. Tashtitov provides that in the event his employment
agreement is terminated due to an extraordinary event, he will be entitled to
receive a severance payment from the Company of $3,000,000.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">34</div>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">&#160;</div>
        </div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div>
        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
employment agreements also contain confidentiality, non-competition and
non-interference provisions.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All
benefits terminate on the date of termination. The officer shall be entitled to
accrued benefits, but is not entitled to compensation for unused vacation,
holiday, sick leave or other leave.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
employment agreements also contain confidentiality, non-competition and
non-interference provisions.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Consulting
Agreement with Boris Cherdabayev</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
December 31, 2009 the Company entered into a Consulting Agreement with Boris
Cherdabayev, the Chairman of the Company&#8217;s board of directors. The Consulting
Agreement becomes effective on January 1, 2010. Pursuant to the Consulting
Agreement, in addition to his services as Chairman of the board of directors,
Mr. Cherdabayev will provide such consulting and other services as may
reasonably be requested by Company management.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
initial term of the Consulting Agreement is five years unless earlier terminated
as provided in the Consulting Agreement. The initial term will automatically
renew for additional one-year terms unless and until terminated. The Consulting
Agreement may be terminated for Mr. Cherdabayev&#8217;s death or disability and by the
Company for cause. The Company may also terminate the Consulting Agreement other
than for cause, but will be required to pay the full fee required under the
Consulting Agreement.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Pursuant
to the Consulting Agreement, Mr. Cherdabayev will continue to be paid $192,000
per year. This base consulting fee will be net of Social Tax and Social
Insurance Tax in the Republic of Kazakhstan, which shall be paid by the Company.
Mr. Cherdabayev will be responsible for Personal Income Tax and Pension Fund
Tax. The success of projects involving Mr. Cherdabayev shall be reviewed on an
annual basis to determine whether the initial base consulting should be
increased.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Consulting Agreement provides for an extraordinary event payment equal to the
greater of $5,000,000 or the base compensation fee for the remaining initial
term of the Consulting Agreement. The Consulting Agreement defines an
extraordinary event as any consolidation or merger of the Company or any of its
subsidiaries with another person, or any acquisition of the Company or any of
its subsidiaries by any person or group of persons, acting in concert, equal to
fifty percent (50%) or more of <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">the
outstanding stock of the Company or any of its subsidiaries, or the sale of
forty percent (40%) or more of the assets of the Company or any of its
subsidiaries, or if one or more persons, acting alone or as a group, acquires
fifty percent (50%) or more of the total voting power of the
Company.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">35</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">&#160;</div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div><br>
          <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">&#160;</div>
            <div id="HDR">
              <div style="WIDTH: 100%" align="left">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">
                  <div>
                    <hr style="COLOR: black" align="left" noshade size="1" width="100%">
                  </div>
                </div>
              </div>
            </div>
          </div><br></div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Litigation</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
December 2003, a complaint was filed in the 15th Judicial Court in and for Palm
Beach County, Florida, naming, among others, the Company and former directors,
Georges Benarroch and Alexandre Agaian, as defendants. The plaintiffs, Brian
Savage, Thomas Sinclair and Sokol Holdings, Inc. allege claims of breach of
contract, unjust enrichment, breach of fiduciary duty, conversion and violation
of a Florida trade secret statute in connection with a business plan for the
development of the Aksaz, Dolinnoe and Emir oil and gas fields owned by Emir
Oil, LLP. The parties mutually agreed to dismiss this lawsuit without
prejudice.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In April
2005, Sokol Holdings, Inc., also filed a complaint in United States District
Court, Southern District of New York alleging that BMB Munai, Inc., Boris
Cherdabayev, and former BMB directors Alexandre Agaian, Bakhytbek Baiseitov,
Mirgali Kunayev and Georges Benarroch wrongfully induced Toleush Tolmakov to
breach a contract under which Mr. Tolmakov had agreed to sell to Sokol 70% of
his 90% interest in Emir Oil LLP.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
October and November 2005, Sokol Holdings filed amendments to its complaint in
the U.S. District Court in New York to add Brian Savage and Thomas Sinclair as
plaintiffs and to add Credifinance Capital, Inc., and Credifinance Securities,
Ltd. (collectively &#8220;Credifinance&#8221;) as defendants in the matter. The amended
complaints alleged: i) tortious interference with contract, specific
performance, breach of contract, unjust enrichment, unfair
competition-misappropriation of labors and expenditures against all defendants;
ii) breach of fiduciary duty, tortious interference with fiduciary duty and
aiding and abetting breach of fiduciary duty by Mr. Agaian, Mr. Benarroch and
Credifinance; and iii) breach of fiduciary duty by Mr. Cherdabayev, Mr. Kunayev
and Mr. Baiseitov, in connection with a business plan for the development of the
Aksaz, Dolinnoe and Emir oil and gas fields owned by Emir Oil, LLP. The
plaintiffs have not named Toleush Tolmakov as a defendant in the action nor have
the plaintiffs ever brought claims against Mr. Tolmakov to establish the
existence or breach of any legally binding agreement between the plaintiffs and
Mr. Tolmakov. The plaintiffs seek damages in an amount to be determined at
trial, punitive damages, specific performance and such other relief as the Court
finds just and reasonable.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company moved for dismissal of the amended complaint or for a stay pending
arbitration in Kazakhstan. That motion was denied, without prejudice to renewing
it, to enable defendants to produce documents to plaintiffs relating to the
issues raised <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">in the
motion. Following completion of document production, the motion was renewed.
Briefing on the motion was completed on August 24, 2006. On June 14, 2007, the
court ruled on the Company&#8217;s motion. The court (a) denied the motion to dismiss
on the ground that Kazakhstan is a more convenient forum; (b) denied the motion
to dismiss in favor of litigation in New York state court; (c) denied the motion
to stay pending arbitration in Kazakhstan; and (d) denied the motion to dismiss
on the ground that Mr. Tolmakov is an indispensable party. The court also (a)
denied the motion (by defendants other than the Company) to dismiss for lack of
personal jurisdiction and (b) granted the motion (by defendants other than the
Company) to dismiss several claims for relief alleging breach of fiduciary duty,
tortious interference with fiduciary duty and aiding and abetting breach of
fiduciary duty. The court dismissed as moot the Company&#8217;s cross-motion to stay
discovery and instructed the parties to comply with the Magistrate Judge&#8217;s
discovery schedule.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">36</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div>
                <hr style="COLOR: black" align="left" noshade size="1" width="100%">
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company appealed the court&#8217;s refusal to stay the litigation pending arbitration
in Kazakhstan. On September 28, 2008, the Court of Appeals issued a decision in
which it (a) reversed the district court's refusal to stay the claim for
specific performance pending arbitration and (b) affirmed the balance of the
district court's order.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
December 2008, the Company changed its legal counsel to represent all defendants
in the lawsuit from Bracewell &amp; Giuliani LLP in New York, New York to
Manning, Curtis, Bradshaw &amp; Bednar LLC in Salt Lake City, Utah.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
December 12, 2008, plaintiffs sought leave to file a Third Amended Complaint to
add claims for (a) breach of fiduciary duty against defendants Cherdabayev,
Kunayev, Baiseitov, Agaian, Benarroch and Credifinance based on these
defendants&#8217; alleged role as promoters of Sokol, (b) fraud against all
defendants; and (c) promissory estoppel against defendants Cherdabayev, Kunayev
and Baiseitov.&#160;&#160;Defendants opposed the Motion for Leave to
Amend.&#160;&#160;On October 27, 2009, the District Court upheld the Magistrate
Judge's denial of Plaintiffs' Motion to Amend to the extent that Defendants
objected to the same.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Fact
discovery has been completed. With respect to expert discovery, Plaintiffs
initially designated one expert to testify on damages and Defendants designated
one expert to testify on the law of Kazakhstan.&#160;&#160;Plaintiffs' expert on
damages claims damages of between $6.7 million and $10.9 million, plus
interest.&#160;&#160;Defendants deposed Plaintiffs' damages expert and then
submitted reports from two of their own damages experts in opposition to
Plaintiffs' damages claims.&#160;&#160;Defendants' primary damages expert
identified errors in the Plaintiffs' report that undermine their claimed
damages. Defendants also submitted the report of another of defendants&#8217; experts,
a petroleum engineer, on the quality of the reserve estimates available in
August 2003, when the original transaction occurred and upon which Plaintiffs&#8217;
expert based his calculations of damages.&#160;&#160;The report of the petroleum
engineer points out that the <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">limited
testing and production from the ADE fields made any reserves estimate highly
uncertain.&#160;&#160;Plaintiffs submitted a rebuttal expert report on the law
of Kazakhstan.&#160;&#160;All experts have been deposed and expert discovery on
the existing claims is now complete.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">37</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div>
                <hr style="COLOR: black" align="left" noshade size="1" width="100%">
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Company filed its Motion for Summary Judgment on all claims on November&#160;10,
2009.&#160;&#160;Briefing of that motion is now complete.&#160;&#160;The Court
has not yet set a hearing on Defendants' motion or otherwise ruled on
it.&#160;&#160;No trial date has been established, in the event all or part of
Defendants' summary judgment motion is not granted.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Other
than the foregoing, to the knowledge of management, there is no other material
litigation or governmental agency proceeding pending or threatened against the
Company or our management.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 36px">
                <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
              </td>
              <td width="945">
                <div align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Economic
      Environment</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In recent
years, Kazakhstan has undergone substantial political and economic change. As an
emerging market, Kazakhstan does not possess a well-developed business
infrastructure, which generally exists in a more mature free market economy. As
a result, operations carried out in Kazakhstan can involve significant risks,
which are not typically associated with those in developed markets. Instability
in the market reform process could subject the Company to unpredictable changes
in the basic business infrastructure in which it currently operates.
Uncertainties regarding the political, legal, tax or regulatory environment,
including the potential for adverse changes in any of these factors could affect
the Company&#8217;s ability to operate commercially. Management is unable to estimate
what changes may occur or the resulting effect of such changes on the Company&#8217;s
financial condition or future results of operations.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Legislation
and regulations regarding taxation, foreign currency translation, and licensing
of foreign currency loans in the Republic of Kazakhstan continue to evolve as
the central government manages the transformation from a command to a
market-oriented economy. The various legislation and regulations are not always
clearly written and their interpretation is subject to the opinions of the local
tax inspectors. Instances of inconsistent opinions between local, regional and
national tax authorities are not unusual.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
19 &#8211; FINANCIAL INSTRUMENTS</font></div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of
December 31, 2009 and March 31, 2009 cash and cash equivalents included deposits
in Kazakhstan banks in the amount $4,667,899 and $2,606,004, respectively, and
deposits in U.S. banks in the amount of $2,576,092 and $4,149,541, respectively.
Kazakhstan banks are not covered by FDIC insurance, nor <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">does the
Republic of Kazakhstan have an insurance program similar to FDIC. Therefore, the
full amount of our deposits in Kazakhstan banks was uninsured as of December 31,
2009 and March 31, 2009. The Company&#8217;s deposits in U.S. banks are also in
non-FDIC insured accounts which means they too are not insured to the $250,000
FDIC insurance limit. To mitigate this risk, the Company has placed all of its
U.S. deposits in a money market account that invests in U.S. government backed
securities. As of December 31, 2009 and March 31, 2009 the Company made advance
payments to Kazakhstan companies and government bodies in the amount of
$6,160,592 and $5,432,972, respectively. As of December 31, 2009 and March 31,
2009 restricted cash reflected in the long-term assets consisted of $764,060 and
$588,217, respectively, deposited in a Kazakhstan bank and restricted to meet
possible environmental obligations according to the regulations of Kazakhstan.
Furthermore, the primary asset of the Company is Emir Oil LLP; an entity formed
under the laws of the Republic of Kazakhstan.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">38</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
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</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="WIDTH: 100%" align="left">
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font></div>
            <div style="TEXT-INDENT: 0pt; DISPLAY: block">
              <div>
                <hr style="COLOR: black" align="left" noshade size="1" width="100%">
              </div>
            </div>
          </div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTE
20 &#8211; SUBSEQUENT EVENTS</font></div>
        <div align="justify">&#160;</div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
preparing these consolidated financial statements for the period ended
December&#160;31, 2009, the Company has evaluated subsequent events through
February&#160;9, 2010. Except as noted below, the Company determined that there
are no other subsequent events requiring disclosure.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
January 1, 2010 the Company entered into Restricted Stock Grant Agreements with
certain executive officers, directors, employees and outside consultants of the
Company. The stock grants were approved by the Company board of directors and
recommended by the compensation committee of the Company&#8217;s board of directors.
The total number of shares granted was 1,500,000.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">All of
the restricted stock grants were awarded on the same terms and subject to the
same vesting requirements. The restricted stock grants will vest to the grantees
at such time as either of the following events occurs (the &#8220;Vesting Events&#8221;): i)
the one-year anniversary of the grant date; or ii) the occurrence of an
Extraordinary Event. An &#8220;Extraordinary Event&#8221; is defined in the restricted stock
agreement as any consolidation or merger of the Company or any of its
subsidiaries with another person, or any acquisition of the Company or any of
its subsidiaries by any person or group of persons, acting in concert, equal to
fifty percent (50%) or more of the outstanding stock of the Employer or any of
its subsidiaries, or the sale of forty percent (40%) or more of the assets of
the Employer or any of its subsidiaries, or one (1) person or more than one
person acting as a group, acquires fifty percent (50%) or more of the total
voting power of the stock of the Employer. In the event of an Extraordinary
Event, the grants shall be deemed fully vested one day prior to the effective
date of the Extraordinary Event. The board of directors shall determine
conclusively whether or not an Extraordinary Event has occurred and the grantees
have agreed to be bound by the determination of the board of
directors.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">39</div><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
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            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
        </div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">DECEMBER
31, 2009</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
      <div>
        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
      </div>
      <div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
shares representing the restricted stock grants (the &#8220;Restricted Shares&#8221;) shall
be issued as soon as practicable, will be deemed outstanding from the date of
grant, and will be held in escrow by the Company subject to the occurrence of a
Vesting Event. The time between the date of grant and the occurrence of a
Vesting Event is referred to as the &#8220;Restricted Period.&#8221; The grantees may not
sell, transfer, assign, pledge or otherwise encumber or dispose of the
Restricted Shares during the Restricted Period. During the Restricted Period,
the grantees will have the right to vote the Restricted Shares, receive
dividends paid or made with respect to the Restricted Shares, provided however,
that dividends paid on unvested Restricted Shares will be held in the custody of
the Company and shall be subject to the same restrictions that apply to the
Restricted Shares. The Restricted Shares will only vest to the grantee if the
grantee is employed by the Company at the time a Vesting Event occurs. If a
Vesting Event has not occurred at the time a grantee&#8217;s employment with the
Company ceases, for any reason, the entire grant amount shall be forfeited back
to the Company.</font></div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 27pt; MARGIN-RIGHT: 0pt">40</div>
        <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      </div>
      <div>&#160;</div><br>
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</font></div>
        </div>
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          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
2.&#160;&#160;Management&#8217;s Discussion and Analysis of Financial Condition and
Results of Operations</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
following discussion is intended to assist you in understanding our results of
operations and our present financial condition. Our Consolidated Financial
Statements and the accompanying notes included in this Form 10-Q contain
additional information that should be referred to when reviewing this material
and this document should be read in conjunction with the Form 10-K of the
Company for the year ended March 31, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Cautionary Note Regarding
Forward-Looking Statements</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This
report includes forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Rule 175 promulgated thereunder, that involve
inherent risks and uncertainties.&#160;&#160;Words such as &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">expect</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">anticipate</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">intend</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">plan</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">believe</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">estimate</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">seek</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">could</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">should</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">predict</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">continue</font>,&#8221; &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">future</font>,&#8221; &#8220;<fon
t style="FONT-STYLE: italic; DISPLAY: inline">may</font>&#8221; and variations of such
words and similar expressions are intended to identify such forward-looking
statements.&#160;&#160;Forward-looking statements involve known and unknown
risks, uncertainties, assumptions, estimates and other factors that could cause
actual results, performance or events to differ materially from any results,
performance or events expressed or implied by such forward-looking
statements.&#160;&#160;All forward-looking statements are qualified in their
entirety by reference to the factors discussed in this report and identified
from time to time in our filings with the SEC including, among others, the
following risk factors:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
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<tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
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              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
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      reserve estimates;</font></div>
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            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">inability
      to enter a production contract with the Republic of
      Kazakhstan;</font></div>
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            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">drilled
      prospects may not yield oil or natural gas in commercial
      quantities;</font></div>
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            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
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              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">substantial
      losses or liability claims as a result of operations;</font></div>
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            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
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                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">insufficient
      funds to meet our liquidity needs or to repay debts as they come
      due;</font></div>
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              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">complex
      laws that could affect the cost of doing business;</font></div>
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            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
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              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">substantial
      liabilities to comply with environmental laws and
    regulations;</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">the
      need to replenish older depleting oil and natural gas reserves with new
      oil and natural gas reserves;</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">inadequate
      infrastructure in the region where our properties are
    located;</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">unavailability
      or high cost of drilling rigs, equipment, supplies, personnel and oil
      field services;</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">unavailability
      or high price of transportation systems;</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">competition
      in the oil and gas industry; and</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">adverse
      government actions, imposition of new, or increases in existing, taxes and
      duties, political risks, expropriation of assets and risks of civil war,
      primarily in the Republic of
Kazakhstan.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The above factors may affect future
results, performance, events and the accuracy of any forward-looking
statement.&#160;&#160;This list is illustrative but not exhaustive. In addition,
new risks and uncertainties may arise from time to time. Accordingly, readers
should not place undue reliance on any forward-looking statement.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">41</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
        </div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Any
forward-looking statement speaks only as of the date on which it is made and is
expressly qualified by these cautionary statements.&#160;&#160;Except as may be
required by law, we undertake no obligation to publicly update or revise any
forward-looking statement for any reason or to update the reasons actual results
could differ materially from those anticipated in such forward-looking
statements, even if new information becomes available in the
future.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Overview</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">BMB
Munai, Inc. is organized under the laws of the State of
Nevada.&#160;&#160;&#160;Our business activities focus on oil and natural gas
exploration and production in the Republic of Kazakhstan (sometimes also
referred to herein as the &#8220;ROK&#8221; or &#8220;Kazakhstan&#8221;). We hold an exploration
contract that allows us to conduct exploratory drilling and oil production in
the Mangistau Province in the southwestern region of
Kazakhstan.&#160;&#160;&#160;Since the date of execution of the original
exploration contract, we have successfully negotiated several amendments to the
contract that have extended the term of our exploration contract to January 2013
and extended the territory of the contract area to approximately 850 square
kilometers, which is comprised of the &#8220;ADE Block&#8221;, the &#8220;Southeast Block&#8221; and the
&#8220;Northwest Block&#8221;.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Exploration
Stage Activities</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Under the
statutory scheme in Kazakhstan, prospective oil fields are developed in two
stages. The first stage is exploration stage.&#160;&#160;During this stage the
primary focus is on the search for commercial discoveries, i.e., discoveries of
sufficient quantities of oil and gas to make it commercially feasible to pursue
execution of, or transition to, the second stage, which is a commercial
production contract with the government.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Minimum
Work Program Requirements</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In order
to be assured that adequate exploration activities are undertaken during
exploration stage, the Ministry of Energy and Mineral Resources of the ROK
(&#8220;MEMR&#8221;) establishes an annual mandatory minimum work program to be accomplished
in each year of the exploration contract. Under the minimum work program the
contractor is required to invest a minimum dollar amount in exploration
activities within the contract territory, which may include geophysical studies,
construction of field infrastructure or drilling activities. During the
exploration stage, the contractor is also required to drill sufficient wells in
each field to establish the existence of commercially producible reserves in any
field for which it seeks a commercial production license. Failure to complete
the minimum annual work program requirements could preclude the contractor from
receiving a longer-term production contract, could result in penalties and fines
or even in the loss of the contractor&#8217;s license.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
contract we hold follows the above format.&#160;&#160;Our annual work program
year ends on January 9 each year.&#160;&#160;From the beginning of the
exploration stage of our contract through January 9, 2010, our minimum mandatory
expenditure requirement totaled $59,090,000.&#160;&#160;During that time period,
we expended $280,660,000 in exploration <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">activities,
including the drilling of 24 wells.&#160;&#160;Our minimum annual expenditure
requirements are: $21,520,000 from January 2010 to January 2011; $27,300,000
from January 2011 to January 2012; and $14,880,000 from January 2012 to January
2013.</font></font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">42</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We began
drilling in the fields of the ADE block in 2004.&#160;&#160;Since 2005 we have
been drilling in the Southwest Block in the Kariman field.&#160;&#160;Our
drilling activities have consisted in drilling an array of exploratory wells to
delineate reservoir structures and developmental wells intended to provide
income to the Company.&#160;&#160;During fiscal 2009 we completed a very active
three-year drilling program. During this time we drilled 17 wells to an average
depth of 3,800 meters.&#160;&#160;Beginning in December of 2008 we began to
phase out our new well drilling activities and we have released four large
drilling rigs since that date as current drilling projects were
completed.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Our
strategy for the current fiscal year is to establish a sound financial basis to
support our development of a long-term and profitable oil and gas exploration
and production business. We intend to do this by focusing our attention during
the fiscal year on the following objectives:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Reduce
      current accounts payable;</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Conduct
      field operations focused on maximizing production and field delineation;
      and</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Commence
      investigation of the Northwest
Block.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Drilling
Operations, Well Performance and Production</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As noted
above, we have shifted our operational focus from growth through drilling to
working closely with our existing wellstock to enhance production from existing
wells.&#160; In particular, we have successfully tested and are actively
implementing a strategy of installing centrifugal submersible pumps at the
Kariman field.&#160; This strategy has resulted in stabilization of production
rates from certain Kariman wells.&#160; We are in the process of researching
various available options for increasing production from our other
fields.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the fiscal quarter ended December 31, 2009, our average daily crude oil
production was 2,900 barrels per day.&#160; We expect our production to remain
stable should our strategy of working with the centrifugal submersible pumps
prove to be a long-lasting success.&#160; However, we do recognize that in order
to significantly increase our production we will need to engage in additional
exploration activities.&#160;Further exploration, including 3D seismic,
re-opening of existing wells and drilling of new wells, will depend on our
ability to obtain significant additional funding.&#160; Given the unfavorable
global economic outlook, the current status of the financial sector and our own
current financial situation, it may be very difficult for us to obtain
additional funding.</font></div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><br>43</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Results of
Operations</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-STYLE: italic; DISPLAY: inline">Three months ended
December</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#160;</font><font style="FONT-STYLE: italic; DISPLAY: inline">31, 2009, compared to the three
months ended December 31, 2008.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Revenue
and Production</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The following table summarizes
production volumes, average sales prices and operating revenue for our oil and
natural gas operations for the three months ended December 31, 2009 and the
three months ended December 31, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
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<tr bgcolor="#cceeff">
              <td valign="top" width="33%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td valign="top" width="5%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td valign="top" width="14%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td colspan="2" valign="top" width="14%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></td>
              <td colspan="2" valign="top" width="4%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td colspan="4" valign="top" width="29%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;
      <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three
      months ended</font> </font>

                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">to
      the three months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the three</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the three</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">%</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">months
      </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ended</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">months
      </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ended</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%" style="TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Increase</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%" style="TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Increase</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Decrease)</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Decrease)</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Production
      volumes:</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas (Mcf)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas liquids (Bbls)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Oil
      and condensate (Bbls)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">266,838</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">226,654</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">40,184</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">18%</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Barrels
      of Oil equivalent (BOE)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">266,838</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">226,654</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">40,184</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">18%</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Sales
      volumes:</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas (Mcf)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas liquids (Bbls)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%">&#160;</td>
              <td colspan="2" valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Oil
      and condensate (Bbls)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">279,605</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">209,758</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">69,847</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">33%</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Barrels
      of Oil equivalent (BOE)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">279,605</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">209,758</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">69,847</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">33%</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Average Sales Price
      </font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas ($ per Mcf)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas liquids ($ per Bbl)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Oil
      and condensate ($ per Bbl)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      49.69</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;23.28</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      26.41</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">113%</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Barrels
      of Oil equivalent ($ per BOE)</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      49.69</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      23.28</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      26.41</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">113%</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Operating
      Revenue:</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Natural
      gas</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Natural
      gas liquids</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="14%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="15%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Oil
      and condensate</font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      13,894,712</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      4,883,790</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      9,010,922</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">185%</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Gain
      on hedging and derivatives <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div>
              </td>
              <td valign="top" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="14%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td colspan="2" valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div>&#160;</div>
      <div>&#160;</div>
      <div style="TEXT-ALIGN: left">
        <div style="TEXT-ALIGN: left; TEXT-INDENT: -9pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(1) At
times, we may produce more barrels than we sell in a given period. The average
sales price is calculated based on the average sales price per barrel sold, not
per barrel produced.</font></div>
        <div style="TEXT-ALIGN: left; TEXT-INDENT: -9pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt">(2)
<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We
did not engage in hedging transactions, including derivatives during the three
months ended December 31, 2009, or the three months ended December 31,
2008.</font></div>
      </div>
      <div>&#160;</div>44<br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-STYLE: italic; DISPLAY: inline">Revenues</font>. We generate revenue
under our exploration contract from the sale of oil recovered during test
production.&#160;&#160;During the three months ended December 31, 2009 our oil
production increased 18% compared to the three months ended December 31,
2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>During the three months ended December
31, 2009 we realized revenue from oil sales of $13,894,712 compared to
$4,883,790 during the three months ended December 31, 2008.&#160;&#160;The
significant contributing factors to the 185% increase in revenue were a 113%
increase in the price per barrel we received for oil sales because of increased
world oil prices and increased sales to the export market coupled with a 33%
increase in sales volume as a result of increased production and purchases of
oil from a third party.&#160;&#160;During the three months ended December 31,
2009 and 2008 we exported 89% and 39% of our oil, respectively, to the world
markets and realized the world market price for those sales. Revenue from oil
sold to the world markets made up 95% and 51% of total revenue, respectively,
during the three months ended December 31, 2009 and 2008. We anticipate
production to remain fairly constant and currently anticipate revenues will be
flat quarter-on-quarter in upcoming quarters.</font><br>&#160;</div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As
discussed above, our revenue is sensitive to changes in prices received for our
oil.&#160;&#160;Political instability, the economy, changes in legislation and
taxation, reductions in the amount of oil we are allowed to export to the world
markets, weather and other factors outside our control may also have an impact
on both supply and demand and on revenue.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Costs
and Operating Expenses</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The following table presents details of
our costs and expenses for the three months ended December 31, 2009 and
2008:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="27%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="22%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the three months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="23%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the three months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Expenses:</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="22%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="23%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Export
      duty</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      2,172,559</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Oil
      and gas operating<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5,785,214</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,449,981</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;General
      and administrative</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,946,160</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,764,698</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Depletion<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,840,787</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,686,439</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Interest
      expense</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,159,268</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Accretion
      expenses</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">113,690</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">121,138</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="27%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Amortization
      and depreciation</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="22%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">161,943</font></div>
              </td>
              <td valign="middle" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">71,870</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="22%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      13,007,062</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      13,266,685</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Expenses
      ($ per BOE):</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="22%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="23%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Oil
      and gas operating<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">20.69</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6.91</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="27%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Depletion
      <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10.16</font></div>
              </td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="middle" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">12.81</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="27%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="22%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="23%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr></table>
      </div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(1)
Includes transportation cost, production cost and ad valorem taxes.</font></div>
        <div align="justify">(2) <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Represents
depletion of oil and gas properties only.</font></div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">45<br>
        <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
            <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
            <div style="TEXT-ALIGN: center; WIDTH: 100%">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          </div>
        </div><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Export Duty.&#160;&#160;</font>On
April 18, 2008 the government of the Republic of Kazakhstan introduced an export
duty on several products (including crude oil).&#160;&#160;We became subject to
the duty in June 2008.&#160;&#160;In December 2008 the government of the
Republic of Kazakhstan repealed the export duty effective January 26,
2009.&#160;&#160;We are now subject to a new tax code that went into effect on
January 1, 2009, as discussed in more detail below.&#160;&#160;As a result of
the export duty being repealed, we paid no export duty during the three months
ended December 31, 2009 compared to $2,172,559 during three months ended
December 31, 2008.&#160;&#160;Export duty was not recorded as part of oil and
gas operating expense and was not included in oil and gas operating expense per
BOE calculation.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Oil and Gas Operating
Expenses</font>.&#160;&#160;During the three months ended December 31, 2009 we
incurred $5,785,214 in oil and gas operating expenses compared to $1,449,981
during the three months ended December 31, 2008.&#160;&#160;This increase is
primarily the result of increased production expense, transportation expense and
the imposition of a new rent export tax.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Oil and
gas operating expenses for the three months ended December 31, 2009 and 2008
consist of the following expenses:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="bottom" width="20%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="7" valign="top" width="53%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the three months ended December 31,</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="20%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;2009</font></div>
              </td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="top" width="25%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="bottom" width="20%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font></div>
              </td>
              <td valign="middle" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Per
      BOE</font></div>
              </td>
              <td valign="middle" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font></div>
              </td>
              <td valign="middle" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Per
      BOE</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Oil
      and Gas Operating Expenses:</font></div>
              </td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Production</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      634,270</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      2.27</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      158,018</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.75</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Transportation</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,186,552</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4.24</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,143,580</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">5.45</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Royalty</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">148,383</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">0.71</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Rent
      export tax</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,966,025</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10.61</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Mineral
      extraction tax</font></div>
              </td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">998,367</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3.57</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      5,785,214</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      20.69</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      1,449,981</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      6.91</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The 301%
increase in production expense during the three months ended December 31, 2009
was due to the purchase of light crude oil for blending purposes from a third
party in the amount of $411,771.&#160;&#160;This expense was coupled with a
$64,481 or 41% increase in payroll and related payments to production personnel
during the same period. The increase in payroll and related payments to
production personnel was due to bonuses to production personnel during the three
months ended December 31, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Transportation
expenses increased by $42,972 or 4% as a result of the increased volume of oil
we produced and transported.&#160;&#160;We anticipate transportation expenses
will continue to fluctuate in proportion to production volume.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">A mineral
extraction tax replaced the royalty we were paying under the prior version of
the tax code.&#160;&#160;The rate of this tax depends upon annual production
output.&#160;&#160;The new code currently provides for a 5% mineral extraction
tax rate (6% starting from 2012 and 7% starting from 2013) on production sold to
the export market, and a 2.5% tax rate (3% in 2012 and 3.5% starting from 2013)
on production sold to the domestic market. <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the three months ended December 31, 2009, mineral extraction tax paid to the
government amounted to $998,367.&#160;&#160;During the quarter ended December
31, 2008, royalty payments were $148,383.</font></font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">46</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Rent
export tax is calculated based on the export sales price and ranges from as low
as 0% if the export sales price is less than $40 per barrel to as high as 32% if
the price per barrel exceeds $190.&#160;&#160;During the three months ended
December 31, 2009 rent export tax paid to the government amounted to $<font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font>2,966,025.&#160;&#160;We
were not subject to the rent export tax during the three months ended December
31, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We
calculate oil and gas operating expense per BOE based on the volume of oil
actually sold rather than production volume because not all volume produced
during the period is sold during the period. The related production costs are
expensed only for the units sold, not produced.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Expense
per BOE is a function of total expense divided by the number of barrels of oil
we sell.&#160;&#160;During the three months ended December 31, 2008 we sold
209,758 barrels of oil, during the three months ended December 31, 2009 we sold
279,605 barrels of oil. The 33% increase in sales volume coupled with the 299%
increase in oil and gas operating expenses resulted in a $13.78, or 199%,
increase in oil and gas operating expense per BOE.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-STYLE: italic; DISPLAY: inline">General and Administrative
Expenses</font>.&#160;&#160;General and administrative expenses during the three
months ended December 31, 2009 were $2,946,160 compared to $6,764,698 during the
three months ended December 31, 2008.&#160;&#160;This represents a 56%
decrease.&#160;&#160;This decrease in general and administrative expenses was
the result of:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td align="left" valign="middle" width="5%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;</font></div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#9679;</font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      100% decrease in non-cash compensation expense coupled
    with;</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#9679;</font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      77% decrease in other taxes;</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#9679;</font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      65% decrease in professional services resulting from decrease in legal
      fees incurred in our ongoing litigation;</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;</font></div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#9679;</font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      34% decrease in rent expenses;</font></div>
              </td>
            </tr><tr>
              <td valign="middle" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#9679;</font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      10% decrease in payroll expenses; and</font></div>
              </td>
            </tr><tr>
              <td valign="middle" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#9679;</font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      90% decrease in environmental payments for flaring of unused natural gas
      resulting from production.&#160;&#160;The amount of environmental payments
      totaled $32,264 and $<font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;</font>337,493 during the
      three months ended December 31, 2009 and 2008,
    respectively.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the three months ended December 31, 2009 we did not recognize non-cash
compensation expense resulting from restricted stock grants previously made to
employees. By comparison, during the three months ended December 31, 2008 we
recognized non-cash compensation expense in the amount of $2,421,726 for
restricted stock grants previously made to employees and outside
consultants.</font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">47</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Depletion</font>.&#160;&#160;Depletion
expense for the three months ended December 31, 2009 increased by $154,348
compared to the three months ended December 31, 2008 as a result of the 33%
increase in sales volume during the three months ended December 31,
2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Amortization and
Depreciation</font>. Amortization and depreciation expense for the three months
ended December 31, 2009 increased by a 125% compared to the three months ended
December 31, 2008.&#160;&#160;The increase resulted from purchases of fixed
assets.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-STYLE: italic; DISPLAY: inline">Interest
Expense</font>.&#160;&#160;During the three months ended December 31, 2009 we
incurred interest expense of $1,159,268 compared to interest expense of $0
during the same period 2008. We have&#160;not&#160;drilled any&#160;new wells
since the end of the 2008 calendar year, therefore, all interest expense
incurred in connection with our convertible notes&#160;since that time has been
expensed. During the three months ended December 31, 2008, we were actively
drilling wells. As a result, the interest expense associated with our
convertible notes&#160;was capitalized as part of oil and gas
properties.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Income/(Loss) from
Operations</font>.<font style="FONT-STYLE: italic; DISPLAY: inline">&#160;</font> During the three
months ended December 31, 2009 we realized income from operations of $887,650
compared to loss from operations of $8,382,895 during the three months ended
December 31, 2008.&#160;&#160;This increase in income from operations during the
three months ended December 31, 2009 is the result of the 185% increase in
revenue coupled with a 2% decrease in total costs and operating
expenses.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Total Other
(Expense)/Income</font>.<font style="FONT-STYLE: italic; DISPLAY: inline">&#160;</font>During the three months
ended December 31, 2009 we realized total other loss of $280,569 compared to
total other income of $89,913 during the three months ended December 31,
2008.&#160;&#160;The 412% decrease in other income between the respective
quarters is largely attributable to a $293,438 foreign exchange loss we realized
during the quarter ended December 31, 2009 resulting from the weakening of the
Kazakh Tenge against the U.S. Dollar.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
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reasons, during the three months ended December 31, 2009 we realized net income
of $607,081 or $0.01 per share compared to net loss of $8,292,982 or loss $0.18
per share for the three months ended December 31, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Results
of Operations</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Nine
months ended December 31, 2009, compared to the nine months ended December 31,
2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="FONT-STYLE: italic; DISPLAY: inline">48</font></div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Revenue
and Production</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The following table summarizes
production volumes, average sales prices and operating revenue for our oil and
natural gas operations for the nine months ended December 31, 2009 and the nine
months ended December 31, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="28%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td valign="top" width="4%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td valign="top" width="12%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td colspan="2" valign="top" width="12%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;</font></td>
              <td colspan="2" valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
              <td colspan="3" valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">&#160;
      <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Nine
      months ended</font> </font>

                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">to
      the nine months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the nine</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the nine</font></div>
              </td>
              <td colspan="2" valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">%</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">months
      </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ended</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">months
      </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ended</font></div>
              </td>
              <td colspan="2" valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Increase</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Increase</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
              <td colspan="2" valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Decrease)</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Decrease)</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Production
      volumes:</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas (Mcf)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas liquids (Bbls)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Oil
      and condensate (Bbls)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">751,648</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">866,021</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(114,373)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(13%)</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Barrels
      of Oil equivalent (BOE)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">751,648</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">866,021</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(114,373)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(13%)</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Sales
      volumes:</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas (Mcf)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas liquids (Bbls)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      <font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Oil
      and condensate (Bbls)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">785,044</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">847,036</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(61,992)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(7%)</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Barrels
      of Oil equivalent (BOE)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">785,044</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">847,036</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(61,992)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(7%)</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Average Sales Price
      </font><font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas ($ per Mcf)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Natural
      gas liquids ($ per Bbl)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Oil
      and condensate ($ per Bbl)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      53.16</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      73.75</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (20.59)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(28%)</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;Barrels
      of Oil equivalent ($ per BOE)</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      53.16</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      73.75</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (20.59)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(28%)</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Operating
      Revenue:</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Natural
      gas</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Natural
      gas liquids</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="2" valign="bottom" width="12%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="TEXT-ALIGN: right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      -</font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Oil
      and condensate</font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      41,735,735</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      62,469,174</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$(20,733,439)</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(33%)</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="28%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Gain
      on hedging and derivatives <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div>
              </td>
              <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" colspan="2" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td colspan="2" valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div style="TEXT-ALIGN: left">
          <div style="TEXT-ALIGN: left; TEXT-INDENT: -9pt; MARGIN-LEFT: 9pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;(1)
At times, we may produce more barrels than we sell in a given period. The
average sales price is calculated based on the average sales price per barrel
sold, not per barrel produced.<br></font>(2) <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We did
not engage in hedging transactions, including derivatives during the three
months ended December 31, 2009, or the three months ended December 31,
2008.</font></div>
        </div>
      </div>
      <div>&#160;</div>
      <div>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-STYLE: italic; DISPLAY: inline">Revenues</font>.&#160;&#160;As a
result of decreases in reservoir pressure in some of our existing wells, during
the nine months ended December 31, 2009 our oil production decreased 13%
compared to the nine months ended December 31, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">49</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>During the nine months ended December
31, 2009 we realized revenue from oil sales of $41,735,735 compared to
$62,469,174 during the nine months ended December 31, 2008.&#160;&#160;The
significant contributing factors to the 33% decrease in revenue were a 28%
decrease in the price per barrel we received and a 7% decrease in sales volume
as a result of decreased production.&#160;&#160;During the nine months ended
December 31, 2009 and 2008 we exported 94% and 81% of our oil, respectively, to
the world markets and realized the world market price for those
sales.&#160;&#160;Revenue from oil sold to the world markets made up 97% and 95%
of total revenue, respectively, during the nine months ended December 31, 2009
and 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Costs
and Operating Expenses</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The following table presents details of
our costs and expenses for the nine months ended December 31, 2009 and
2008:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="35%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="31%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the nine months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2009</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="29%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the nine months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31, 2008</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Expenses:</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="31%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Export
      duty</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      7,912,459</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Oil
      and gas operating<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">13,685,411</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,065,686</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;General
      and administrative</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10,750,099</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">17,350,218</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Depletion<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7,953,515</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">9,105,564</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Interest
      expense</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,452,646</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Accretion
      expenses</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">332,415</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">325,494</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Amortization
      and depreciation</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">454,756</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">218,610</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="35%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Consulting
      expenses</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">8,662,500</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      36,628,842</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      49,640,531</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Expenses
      ($ per BOE):</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="31%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Oil
      and gas operating<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">17.43</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">7.16</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="35%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;Depletion
      <font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="31%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10.13</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="29%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10.75</font></div>
              </td>
            </tr></table>
      </div>
      <div align="center">
      </div>
      <div align="center">
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(1)
Includes transportation cost, production cost and ad valorem
taxes.</font></div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">
        <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(2)
Represents depletion of oil and gas properties only.</font></div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Export Duty.&#160;&#160;</font>As
noted above, in December 2008 the government repealed the export duty effective
January 26, 2009.&#160;&#160;We are now subject to the new tax code that went
into effect on January 1, 2009.&#160;&#160;As a result of the export duty being
repealed, we paid no export duty during the nine months ended December 31, 2009
compared to $7,912,459 during nine months ended December 31,
2008.&#160;&#160;Export duty was not recorded as part of oil and gas operating
expense and was not included in oil and gas operating expense per BOE
calculation.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Oil and Gas Operating
Expenses</font>.&#160;&#160;During the nine months ended December 31, 2009 we
incurred $13,685,411 in oil and gas operating expenses compared to $6,065,686
during the nine months ended December 31, 2008.&#160;&#160;This increase is
primarily the result of the imposition of new taxes in connection with the new
tax code and increased production expenses, which were partially offset a
decrease in transportation expense.</font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">50</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Oil and
gas operating expenses for the nine months ended December 31, 2009 and 2008
consisted of the following expenses:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="bottom" width="20%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="7" valign="top" width="52%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">For
      the nine months ended December 31,</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="20%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="bottom" width="26%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="top" width="24%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="bottom" width="20%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font></div>
              </td>
              <td valign="middle" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Per
      BOE</font></div>
              </td>
              <td valign="middle" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total</font></div>
              </td>
              <td valign="middle" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="middle" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Per
      BOE</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Oil
      and Gas Operating Expenses:</font></div>
              </td>
              <td valign="bottom" width="13%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Production</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      1,413,511</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      1.80</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      603,713</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      0.71</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Transportation</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,769,088</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3.53</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,717,898</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4.39</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Royalty</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,744,075</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2.06</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Rent
      export tax</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,945,938</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">8.85</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="20%">
                <div style="TEXT-INDENT: 18pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Mineral
      extraction tax</font></div>
              </td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,556,874</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3.25</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="20%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      13,685,411</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      17.43</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      6,065,686</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      7.16</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The 134%
increase in production expense during the nine months ended December 31, 2009
compared to the nine months ended December 31, 2008 is due to purchase of light
crude oil for blending purposes from a third party in the amount of $877,603
during the nine months ended December 31, 2009.&#160;&#160;This increase was
partially offset by $67,804 or 11% decrease in payroll and related payments to
production personnel. The decrease in payroll and related payments to production
personnel was due to decreases in production personnel as we have decreased our
exploration activities.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Transportation
expenses decreased by $948,810 or 26% as a result of the decreased volume of oil
we produced and transported.&#160;&#160;We anticipate transportation expenses
will continue to fluctuate in proportion to production volume.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As noted
above, in January 2009 a mineral extraction tax replaced the royalty we were
paying under the prior version of the tax code.&#160;&#160;During the nine
months ended December 31, 2009 mineral extraction tax paid to the government
amounted to $2,556,874.&#160;&#160;During the nine ended December 31, 2008,
royalty payments were $1,744,075.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the nine months ended December 31, 2009 rent export tax paid to the government
amounted to $6,945,938. We were not subject to the rent export tax during the
nine months ended December 31, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We
calculate oil and gas operating expense per BOE based on the volume of oil
actually sold rather than production volume because not all volume produced
during the period is sold during the period. The related production costs are
expensed only for the units sold, not produced.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Expense
per BOE is a function of total expense divided by the number of barrels of oil
we sell.&#160;&#160;During the nine months ended December 31, 2008 we sold
847,036 barrels of oil, during the nine months ended December 31, 2009 we sold
785,044 barrels of oil. The 7% decrease in sales volume coupled with the 126%
increase in oil and gas operating expenses resulted in a $10.27, or 143%,
increase in oil and gas operating expense per BOE.</font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">51</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">General and Administrative
Expenses</font>.&#160;&#160;General and administrative expenses during the nine
months ended December 31, 2009 were $10,750,099 compared to $17,350,218 during
the nine months ended December 31, 2008.&#160;&#160;This represents a 38%
decrease.&#160;&#160;This decrease in general and administrative expenses was
the result of the following:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="middle" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      76% decrease in environmental payments for flaring of decreased volumes of
      unused natural gas resulting from decreased production.&#160;&#160;The
      amount of environmental payments totaled $190,475 and $792,778 during the
      nine months ended December 31, 2009 and 2008,
  respectively;</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      69% decrease in other taxes; </font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;</font></div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      56% decrease in professional services resulting from decreased legal fees
      incurred in our ongoing litigation;</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      39% decrease in business trips and accommodation
  expenses;</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;</font></div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      37% decrease rent expenses; and</font></div>
              </td>
            </tr><tr>
              <td align="left" valign="middle" width="5%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;</font></div>
              </td>
              <td align="left" valign="top" width="2%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-FAMILY: times new roman">&#9679;</font></font></div>
              </td>
              <td align="left" valign="top" width="93%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">a
      17% decrease in payroll expenses.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the nine months ended December 31, 2009 we recognized non-cash compensation
expense of $2,744,133 resulting from restricted stock grants previously made to
employees. By comparison, during the nine months ended December 31, 2008 we
recognized non-cash compensation expense in the amount of $12,731,285 for
restricted stock grants previously made to employees and outside
consultants.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Depletion</font>.&#160;&#160;Depletion
expense for the nine months ended December 31, 2009 decreased by $1,152,049
compared to the nine months ended December 31, 2008.&#160;&#160;The primary
reason for this decrease in depletion expense was a 13% decrease in sales volume
during the nine months ended December 31, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-STYLE: italic; DISPLAY: inline">Interest
Expense</font>.&#160;&#160;During the nine months ended December 31, 2009 we
incurred interest expense of $3,452,646 compared to interest expense of $0
during the same period 2008. As noted herein, we have not drilled any new wells
since the end of the 2008 calendar year.&#160;All interest expense incurred in
connection with our oil and gas properties since that time has been expensed.
During the nine months ended December 31, 2008, we were actively drilling wells
and the interest expense associated with our convertible notes&#160;was
capitalized to oil and gas properties. </font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Amortization and
Depreciation</font>. Amortization and depreciation expense for the nine months
ended December 31, 2009 increased 108% compared to the nine months ended
December 31, 2008.&#160;&#160;The increase resulted from purchases of fixed
assets.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Income from Operations</font>.<font style="FONT-STYLE: italic; DISPLAY: inline">&#160;</font> During the nine months
ended December 31, 2009 we realized income from operations of $5,106,893
compared to income from operations of $12,828,643 during the nine months ended
December 31, 2008. This decrease in income from operations during the nine
months ended December 31, 2009 is the result of the 33% decrease in revenue,
which decrease was partially offset by a 26% decrease in total costs and
operating expenses.</font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">52</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Total Other
(Expense)/Income</font>.<font style="FONT-STYLE: italic; DISPLAY: inline">&#160;</font>During the nine months
ended December 31, 2009 we realized total other expense of $429,021 compared to
total other income of $2,029,724 during the nine months ended December 31,
2008.&#160;&#160;The change from other income to other expense between the
respective periods is largely attributable to $1,650,293 we received from a
Company shareholder during the nine ended December 31, 2008, as disgorgement of
profits earned in violation of the short-swing profit rules of Section 16b of
the Securities Exchange Act of 1934, coupled with decreases in foreign exchange
gain of $464,012 and interest income of $214,279.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Net Income</font>.<font style="FONT-STYLE: italic; DISPLAY: inline">&#160;</font>For the foregoing
reasons, during the nine months ended December 31, 2009 we realized net income
of $4,677,872 or $0.09 per share compared to a net income of $14,858,367 or
$0.32 per share for the nine months ended December 31, 2008.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Liquidity
and Capital Resources</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">For the
period from inception on May 6, 2003 through December 31, 2009, we have incurred
capital expenditures of $280,660,000 for exploration, development and
acquisition activities.&#160;&#160;Funding for our activities has historically
been provided by funds raised through the sale of our common stock and debt
securities and revenue from oil sales.&#160;&#160;From inception to December 31,
2009 we raised approximately $94.6 million through the sale of our common
stock.&#160;&#160;Additionally, during the quarter ended December 31, 2007 we
completed the placement of $60 million in principal amount of 5.0% Convertible
Senior Notes due in 2012.&#160;&#160;The net proceeds from the Note issuance of
approximately $56.2 million were used to pursue our drilling
program.&#160;&#160;For additional detail regarding the Notes, including
adjustments to the initial conversion price and the registration right of the
Noteholders, see <font style="FONT-STYLE: italic; DISPLAY: inline">Note 9
</font>to the <font style="FONT-STYLE: italic; DISPLAY: inline">Notes to the
Consolidated Financial Statements, December 31, 2009.</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Problems in the credit markets, the
significant declines in worldwide oil prices and volatility and downward trends
in the stock markets have caused many junior exploration and production
companies, including us, to seek additional capital in order to stay in
business.&#160;&#160;Some companies have been acquired by larger companies and
others have failed.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">At
December 31, 2009, our current assets exceeded current liabilities by
$3,884,117. </font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
Convertible Senior Notes mature in July 2012. However, the indenture agreement
governing the Convertible Senior Notes provides that the noteholders may require
us to repurchase the Notes on July 13, 2010.&#160;&#160;We do not currently have
funds to do so, nor do we expect to generate sufficient funds from operations by
July 2010 to pay the repurchase price if the Senior Convertible Notes are
tendered.&#160;&#160;We are currently&#160;investigating solutions to address
this issue including working with the noteholders to
forego&#160;exercising&#160;their put option&#160;in July 2010.</font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">53</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Cash
Flows</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the nine months ended December 31, 2009 cash was primarily used to fund
exploration expenditures.&#160;&#160;See below for additional discussion and
analysis of cash flow.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="bottom" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="21%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Nine
      months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">December
      31, 2009</font></div>
              </td>
              <td valign="bottom" width="17%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Nine
      months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">December
      31, 2008</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="17%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      cash provided by operating activities</font></div>
              </td>
              <td align="right" valign="bottom" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      9,929,483&#160;</font></div>
              </td>
              <td align="right" valign="bottom" width="17%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      52,260,731&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      cash used in investing activities</font></div>
              </td>
              <td align="right" valign="bottom" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (7,941,040)</font></div>
              </td>
              <td align="right" valign="bottom" width="17%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (62,075,909)</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Net
      cash (used in)/provided by financing activities</font></div>
              </td>
              <td align="right" valign="bottom" width="21%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(1,500,000)</font></div>
              </td>
              <td align="right" valign="bottom" width="17%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      50,001&#160;</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="bottom" width="33%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="21%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="17%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="33%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">NET
      CHANGE IN CASH AND CASH EQUIVALENTS</font></div>
              </td>
              <td align="right" valign="bottom" width="21%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      488,443&#160;</font></font></div>
              </td>
              <td align="right" valign="bottom" width="17%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$
      (9,765,177)</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Our
principal source of liquidity during the nine months ended December 31, 2009 was
cash and cash equivalents.&#160;&#160;At March 31, 2009 cash and cash
equivalents totaled approximately $6.8 million.&#160;&#160;At December 31, 2009
cash and cash equivalents had increased to approximately $7.2
million.&#160;&#160;During the nine months ended December 31, 2009 we spent
approximately $7.9 million to fund our drilling and development
activities.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Certain
operating cash flows are denominated in local currency and are translated into
U.S. dollars at the exchange rate in effect at the time of the transaction.
Because of the potential for civil unrest, war and asset expropriation, some or
all of these matters, which impact operating cash flow, may affect our ability
to meet our short-term cash needs.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Contractual
Obligations and Contingencies</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
following table lists our significant commitments at December 31, 2009,
excluding current liabilities as listed on our consolidated balance
sheet:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="21%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="5" valign="top" width="59%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Payments
      Due By Period</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="bottom" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Contractual
      obligations</font></div>
              </td>
              <td valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: -9pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total</font></div>
              </td>
              <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Less
      than 1 year</font></div>
              </td>
              <td valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2-3
      years</font></div>
              </td>
              <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">4-5
      years</font></div>
              </td>
              <td valign="bottom" width="8%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">After
      5 years</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Capital
      Expenditure</font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;Commitment<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(1)</font></font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$63,700,000</font></div>
              </td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$21,520,000</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;42,180,000</font></div>
              </td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;&#160;-</font></div>
              </td>
              <td align="right" valign="bottom" width="8%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="middle" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Due
      to the Government of&#160;</font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;the
      Republic of Kazakhstan<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(2)</font></font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,844,880</font></div>
              </td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">300,000</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,544,880</font></div>
              </td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;-</font></div>
              </td>
              <td align="right" valign="bottom" width="8%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Liquidation
      Fund</font></div>
              </td>
              <td align="right" valign="bottom" width="15%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,596,409</font></div>
              </td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
              <td align="right" valign="bottom" width="13%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,596,409</font></div>
              </td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
              <td align="right" valign="bottom" width="8%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Convertible
      Notes with Interest<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">(3)</font></font></div>
              </td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">73,323,785</font></div>
              </td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,000,000</font></div>
              </td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">70,323,785</font></div>
              </td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="21%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Total</font></font></div>
              </td>
              <td align="right" valign="bottom" width="15%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$153,465,074</font></div>
              </td>
              <td align="right" valign="bottom" width="11%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$24,820,000</font></div>
              </td>
              <td align="right" valign="bottom" width="13%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$128,645,074</font></div>
              </td>
              <td align="right" valign="bottom" width="12%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;&#160;-</font></div>
              </td>
              <td align="right" valign="bottom" width="8%" style="BORDER-BOTTOM: black 4px double">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;&#160;-</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block">54<br></div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 27pt">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(1)</font></div>
              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Under
      the terms of our subsurface exploration contract we are required to spend
      a total of $63.7 million in exploration activities on our properties,
      including a minimum of $21.5 million by January 2011, $27.3 million by
      January 2012 and $14.9 million by January 2013.&#160;&#160;The rules of
      the MEMR provide a process whereby capital expenditures in excess of the
      minimum required expenditure in any period may be carried forward to meet
      the minimum obligations of future periods.&#160;&#160;Our capital
      expenditures in prior periods have exceeded our minimum required
      expenditures by more than $200
million.</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 27pt">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(2)</font></div>
              </td>
              <td>
                <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
      connection with our acquisition of the oil and gas contract covering the
      ADE Block, the Southeast Block and the Northwest Block, we are required to
      repay the ROK for historical costs incurred by it in undertaking
      geological and geophysical studies and infrastructure
      improvements.&#160;&#160;Our repayment obligation for the ADE Block is
      $5,994,200 and our repayment obligation for the Southeast Block is
      $5,350,680.&#160;&#160;We anticipate we will also be obligated to assume a
      repayment obligation in connection with the Northwest Block, although we
      do not yet know the amount of such obligation.&#160;&#160;The terms of
      repayment of these obligations, however, will not be determined until such
      time as we apply for and are granted commercial production rights by the
      ROK.&#160;&#160;Should we decide not to pursue commercial production
      rights, we can relinquish the ADE Block, the Southeast Block and/or the
      Northwest Block to the ROK in satisfaction of their associated
      obligations. The recent addenda to our exploration contract which granted
      us with the extension of exploration period and the rights to the
      Northwest Block also require us to:</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 63pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif">&#183;&#160;&#160;</font></div>
              </td>
              <td>
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">make
      additional payments to the liquidation fund, stipulated by the
      Contract;</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 63pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif">&#183;&#160;&#160;</font></div>
              </td>
              <td>
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">make
      a one-time payment in the amount of $200,000 to the Astana Fund by the end
      of 2010; and</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 63pt">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif">&#183;&#160;&#160;</font></div>
              </td>
              <td>
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">make
      annual payments to social projects of the Mangistau Oblast in the amount
      of $100,000 from 2010 to 2012.</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td style="WIDTH: 36px">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(3)</font></div>
              </td>
              <td width="945">
                <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
      July 16, 2007 the Company completed the private placement of $60 million
      in principal amount of 5.0% convertible senior notes due 2012 (&#8220;Notes&#8221;).
      The Notes carry a 5% coupon and have a yield to maturity of
      6.25%.&#160;&#160;Interest will be paid at a rate of 5.0% per annum on the
      principal amount, payable semiannually.&#160;&#160;The Notes are callable
      and subject to early redemption in July 2010.&#160;&#160;Unless previously
      redeemed, converted or purchased and cancelled, the Notes will be redeemed
      by the Company at a price equal to 107.2% of the principal amount thereof
      on July 13, 2012. The Notes constitute direct, unsubordinated and
      unsecured, interest bearing obligations of the Company.&#160;&#160;For
      additional details regarding the terms of the Notes, see Note 9 &#8211;
      Convertible Notes Payable to the notes to our Unaudited Consolidated
      Financial Statements.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">Off-Balance Sheet Financing
Arrangements</font></font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>As of December 31, 2009, we had no
off-balance sheet financing arrangements.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
3. Qualitative and Quantitative Disclosures About Market Risk</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Our primary market risks are
fluctuations in commodity prices and foreign currency exchange rates. We do not
currently use derivative commodity instruments or similar financial instruments
to attempt to hedge commodity price risks associated with future crude oil
production.</font><br>&#160;</div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Commodity
Price Risk</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Our revenues, profitability and future
growth depend substantially on prevailing prices for crude
oil.&#160;&#160;Prices also affect the amount of cash flow available for capital
expenditures and our ability to either borrow or raise additional capital. Price
affects our ability to produce crude oil economically and to transport and
market our production either through export to international markets or within
Kazakhstan.&#160;&#160;Our third fiscal quarter 2009 crude oil sales in the
international export market were based on prevailing market prices at the time
of sale less applicable discounts due to transportation.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">55</div>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
          </div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Historically, crude oil prices have
been subject to significant volatility in response to changes in supply, market
uncertainty and a variety of other factors beyond our control.&#160;&#160;Crude
oil prices are likely to continue to be volatile and this volatility makes it
difficult to predict future oil price movements with any
certainty.&#160;&#160;Any declines in oil prices would reduce our revenues, and
could also reduce the amount of oil that we can produce
economically.&#160;&#160;As a result, this could have a material adverse effect
on our business, financial condition and results of operations.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">During
the fiscal quarter ended December 31, 2009, we sold 279,605 barrels of
oil.&#160;&#160;We realized an average sales price per barrel of $49.69. For
purposes of illustration, assuming the same sales volume but decreasing the
average sales price we receive from oil sales by $5.00 and $10.00 respectively
would change total revenue from oil sales as follows:</font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="26%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Average
      Price</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Per
      Barrel</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="8%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block">&#160;</div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Barrels
      of Oil Sold</font></div>
              </td>
              <td valign="bottom" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="12%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Approximate
      Revenue from Oil Sold</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(in
      thousands)</font></div>
              </td>
              <td valign="bottom" width="2%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="bottom" width="11%" style="BORDER-BOTTOM: black 2px solid; TEXT-ALIGN: center">
                <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Reduction</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">in
      Revenue</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(in
      thousands)</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="26%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Actual
      sales for the three months ended December 31, 2009</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$49.694</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="8%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">279,605</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$13,895</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="26%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Assuming
      a $5.00 per barrel reduction in average price per barrel</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$44.694</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="8%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">279,605</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$12,497</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$1,398</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="26%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Assuming
      a $10.00 per barrel reduction in average price per barrel</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$39.694</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="8%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">279,605</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="12%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$11,099</font></div>
              </td>
              <td valign="bottom" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="11%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$2,796</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Foreign
Currency Risk</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Our
functional currency is the U.S. dollar.&#160;&#160;Emir Oil, LLP, our
Kazakhstani subsidiary, also uses the U.S. dollar as its functional
currency.&#160;&#160;To the extent that business transactions in Kazakhstan are
denominated in the Kazakh Tenge we are exposed to transaction gains and losses
that could result from fluctuations in the U.S. Dollar&#8212;Kazakh Tenge exchange
rate.&#160;&#160;We do not engage in hedging transactions to protect us from
such risk.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Our
foreign-denominated monetary assets and liabilities are revalued on a monthly
basis with gains and losses on revaluation reflected in net income.&#160;&#160;A
hypothetical 10% favorable or unfavorable change in foreign currency exchange
rate at December 31, 2009 would have affected our net income by less than $1
million.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
4. Controls and Procedures</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Evaluation
of Disclosure Controls and Procedures</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">We
maintain disclosure controls and procedures, as such term is defined in Rules
13a-15(e) and 15d-15(e)&#160;under the Securities Exchange Act of 1934, as
amended (the &#8220;Exchange Act&#8221;), that are designed to provide reasonable assurance
that information <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">required
to be disclosed by us in the reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the SEC rules&#160;and forms, and that such information is
accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required financial disclosures. Because of inherent
limitations, our disclosure controls and procedures, no matter how well designed
and operated, can provide only reasonable, and not absolute, assurance that the
objectives of such disclosure controls and procedures are
met.</font></font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">56</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">As of the
end of the period covered by this report we conducted an evaluation, under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rules&#160;13a-15(b)&#160;and
15d-15(b).&#160;&#160;Based on this evaluation, our principal executive officer
and principal financial officer concluded that our disclosure controls and
procedures were effective as of December 31, 2009.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Changes
in Internal Control over Financial Reporting</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">There
were no changes in our internal control over financial reporting during the
quarter ended December 31, 2009 that materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.</font><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PART
II - OTHER INFORMATION</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
1. Legal Proceedings</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>See Note 18<font style="FONT-STYLE: italic; DISPLAY: inline"> &#8220;Commitments and
Contingencies&#8221;</font> to the <font style="FONT-STYLE: italic; DISPLAY: inline">Notes to the Consolidated Financial
Statements</font> under Part I &#8211; Item 1of this Form 10-Q.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
1A. Risk Factors</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In
addition to the other information set forth in this Quarterly Report, you should
carefully consider the risks discussed in our 2009 Annual Report on Form 10-K,
including under the heading &#8220;Item 1A. Risk Factors&#8221; of Part I, which risks could
materially affect our business, financial condition or future results. These
risks are not the only risks facing our Company. Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial also may materially adversely affect our business, financial
condition or future results.</font></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">57</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
2. Unregistered Sales of Equity Securities and Use of Proceeds</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>As previously reported by the Company
in a Current Report on Form 8-K filed with the U.S. Securities and Exchange
Commission (the &#8220;SEC&#8221;) on January 6, 2010 (the &#8220;January 6, 2010 Current
Report&#8221;), on January 1, 2010 we entered into Restricted Stock Grant Agreements
with certain executive officers, directors, employees and outside consultants of
the Company.&#160;&#160;The total number of shares granted was
1,500,000.&#160;&#160;For additional information regarding the restricted stock
grants see Note 20<font style="FONT-STYLE: italic; DISPLAY: inline"> &#8220;Subsequent
Events&#8221;</font> to the <font style="FONT-STYLE: italic; DISPLAY: inline">Notes to
the Consolidated Financial Statements</font> under Part I &#8211; Item 1of this Form
10-Q and the January 6, 2010 Current Report filed with the SEC.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
4. Submission of Matters to a Vote of Security Holders</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
January 12, 2010, we held our annual meeting of stockholders to vote on the
following matters:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 61px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;</font>&#160;&#160;</font></div>
              </td>
              <td width="920">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">to
      elect two Class II directors to our&#160;&#160;Board of Directors;
      and</font></div>
              </td>
            </tr></table>
      </div>
      <div>
        <table cellpadding="0" cellspacing="0" id="list" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
              <td align="right" style="WIDTH: 61px">
                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt" face="Symbol, serif"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#9679;&#160;</font></font></div>
              </td>
              <td width="920">
                <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">to
      ratify the selection of Hansen, Barnett &amp; Maxwell, P.C. as the
      independent registered public accounting firm of the Company for the 2010
      fiscal year.</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>The number of shares outstanding and
entitled to vote upon these matters was 50,365,015.&#160;&#160;The number of
shares represented at the annual meeting of stockholders was 32,076,410.
</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>At the meeting two individuals, Leonard
M. Stillman, Jr. and Daymon M. Smith were nominated and elected to fill
directorships for until the 2012 annual meeting of stockholders and until their
successors are elected and qualified.&#160;&#160;Following are the results of
voting in the election of directors:</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr bgcolor="#cceeff">
              <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="20%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Votes
      For</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="22%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Votes
      Withheld</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="20%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="22%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="30%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Leonard
      M. Stillman Jr.</font></div>
              </td>
              <td valign="top" width="20%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">17,885,722</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">6,467,314</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="30%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Daymon
      M. Smith</font></div>
              </td>
              <td valign="top" width="20%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">19,598,528</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4,754,508</font></div>
              </td>
            </tr></table>
      </div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>31,755,236 shares voted to ratify the
selection of Hansen, Barnett &amp; Maxwell, P.C. as our independent registered
public accounting firm for the 2010 fiscal year, 306,965 shares voted against
and 14,209 shares abstained from voting on the matter.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>No other items were submitted to a vote
of our stockholders at the annual meeting of stockholders.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">58</div><br>
      <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always; WIDTH: 100%">
          <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
          <div style="TEXT-ALIGN: center; WIDTH: 100%">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
        </div>
      </div><br>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item
6. Exhibits</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Exhibit
      No.</font></div>
              </td>
              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="top" width="49%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Description
      of Exhibit</font></div>
              </td>
            </tr><tr>
              <td valign="top" width="7%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
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              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="15%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="2%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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on its behalf, thereunto duly authorized.</font></div>
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<tr>
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              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="2" valign="top" width="35%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="2" valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="2" valign="top" width="35%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="2" valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="2" valign="top" width="35%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="2" valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td colspan="2" valign="top" width="49%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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      <div style="TEXT-INDENT: 0pt; DISPLAY: block">59</div><br>
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<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>2
<FILENAME>bmbex121q123109.htm
<DESCRIPTION>EXHIBIT 12.1
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12.1</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">BMB
MUNAI, INC.</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">COMPUTATION
OF RATIO OF EARNINGS/(LOSS) TO FIXED CHARGES</font></div>
      <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
              <td valign="top" width="32%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="top" width="23%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="top" width="22%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="32%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="top" width="23%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 12.7pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Three
      months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 12.7pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31,</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td colspan="3" valign="top" width="22%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 12.7pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Nine
      months ended</font></div>
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 12.7pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December
      31,</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="32%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2009</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2009</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2008</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="32%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Earnings:</font></div>
              </td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="32%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Income/(loss)
      before income taxes</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;&#160;&#160;
      607,081</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      (8,292,982)</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$
      4,677,872</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">$&#160;14,858,367</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Add:
      Fixed charges</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,159,268</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,146,399&#160;&#160;</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,452,646</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,415,040</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Add:
      Amortisation of capitalized interest</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">12,514</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">11,927&#160;&#160;</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">104,346</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">120,425</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="32%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Less:
      Interest capitalized</font></div>
              </td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,146,399&#160;&#160;</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">-</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,415,040</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="32%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      earnings/(loss)</font></div>
              </td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,778,863</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">(8,281,055)</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">8,234,864</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">14,978,792</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td valign="top" width="32%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Fixed
      charges:</font></div>
              </td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="32%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="#cceeff">
              <td align="left" valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Interest
      expensed and capitalized</font></div>
              </td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">750,000</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">750,000&#160;&#160;</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="9%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,250,000</font></div>
              </td>
              <td valign="bottom" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2,250,000</font></div>
              </td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="32%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 18pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amortized
      premiums, discounts, &amp; </font><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">bond
      costs</font></div>
              </td>
              <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;&#160;409,268</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">396,399&#160;&#160;</font></div>
              </td>
              <td valign="bottom" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,202,646</font></div>
              </td>
              <td valign="bottom" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="bottom" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,165,040</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="32%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td align="left" valign="top" width="32%" style="PADDING-BOTTOM: 2px">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Total
      fixed charges</font></div>
              </td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,159,268</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">1,146,399&#160;&#160;</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,452,646</font></div>
              </td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">3,415,040</font></div>
              </td>
            </tr><tr bgcolor="#cceeff">
              <td valign="top" width="32%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="9%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="3%" style="PADDING-BOTTOM: 2px"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td valign="top" width="10%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr bgcolor="white">
              <td valign="top" width="32%">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Ration
      of earnings/(loss) to fixed charges</font></div>
              </td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">1.53</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(7.22)</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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              <td align="right" valign="top" width="9%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2.39</font></div>
              </td>
              <td valign="top" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="right" valign="top" width="10%" style="BORDER-BOTTOM: black 2px solid">
                <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 2.85pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">4.39</font></div>
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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>bmbex311q123109.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">EXHIBIT
31.1</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>I, Gamal Kulumbetov, certify
that:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;I
have reviewed this Quarterly Report on Form 10-Q of BMB Munai,
Inc.;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
registrant&#8217;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">a)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">designed
      such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">b)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">designed
      such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting
      principles;</font></div>
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          </tr></table>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">c)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">evaluated
      the effectiveness of the registrant&#8217;s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures as of the end of the period covered
      by this report based on such evaluation;
and</font></div>
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          </tr></table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 72pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td>&#160;</td>
          </tr></table>
    </div>
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              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">d)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">disclosed
      in this report any change in the registrant&#8217;s internal control over
      financial reporting that occurred during the registrant&#8217;s most recent
      fiscal quarter (the registrant&#8217;s fourth fiscal quarter in the case of an
      annual report) that has materially affected, or is reasonably likely to
      materially affect, the registrant&#8217;s internal control over financial
      reporting; and</font></div>
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registrant&#8217;s other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant&#8217;s auditors and the audit committee of the registrant&#8217;s board of
directors (or persons performing the equivalent functions):</font></div>
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              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">all
      significant deficiencies and material weaknesses in the design or
      operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant&#8217;s ability to record,
      process, summarize and report financial information;
  and</font></div>
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              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant&#8217;s internal control
      over financial reporting.</font></div>
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      </font></td>
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      </font></td>
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            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
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            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Date:</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">February
      9, 2010</font></div>
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              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">/s/
      Gamal Kulumbetov</font></div>
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      </font></td>
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      </font></td>
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      Kulumbetov</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Chief
      Executive Officer</font></div>
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<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>bmbex312q123109.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
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    <title>bmbex312q123109.htm</title>
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31.2</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CERTIFICATION
OF PRINCIPAL FINANCIAL OFFICER</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>I, Evgeniy Ler, certify
that:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;I
have reviewed this Quarterly Report on Form 10-Q of BMB Munai,
Inc.;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
registrant&#8217;s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:</font></div>
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    <div>
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<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">a)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">designed
      such disclosure controls and procedures, or caused such disclosure
      controls and procedures to be designed under our supervision, to ensure
      that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
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              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
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            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">b)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">designed
      such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external
      purposes in accordance with generally accepted accounting
      principles;</font></div>
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              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
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              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">c)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">evaluated
      the effectiveness of the registrant&#8217;s disclosure controls and procedures
      and presented in this report our conclusions about the effectiveness of
      the disclosure controls and procedures as of the end of the period covered
      by this report based on such evaluation;
and</font></div>
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<tr valign="top">
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              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
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            <td>&#160;</td>
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<tr valign="top">
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              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
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              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">d)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">disclosed
      in this report any change in the registrant&#8217;s internal control over
      financial reporting that occurred during the registrant&#8217;s most recent
      fiscal quarter (the registrant&#8217;s fourth fiscal quarter in the case of an
      annual report) that has materially affected, or is reasonably likely to
      materially affect, the registrant&#8217;s internal control over financial
      reporting; and</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: -36pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
registrant&#8217;s other certifying officers and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant&#8217;s auditors and the audit committee of the registrant&#8217;s board of
directors (or persons performing the equivalent functions):</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
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<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
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            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">a)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">all
      significant deficiencies and material weaknesses in the design or
      operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant&#8217;s ability to record,
      process, summarize and report financial information;
  and</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
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<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
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              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">b)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">any
      fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant&#8217;s internal control
      over financial reporting.</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
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            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td align="left" valign="top" width="8%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Date:</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="40%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">February
      9,&#160;&#160;2010</font></div>
            </td>
            <td align="left" valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">/s/
      Evgeniy Ler</font></div>
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            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td align="left" colspan="3" valign="top" width="38%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Evgeniy
      Ler</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Chief
      Financial Officer</font></div>
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          </tr></table>
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</font></div>
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</html>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>bmbex321q123109.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
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32.1</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CERTIFICATION
PURSUANT TO</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">18
U.S.C. SECTION 1350,</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">AS
ADOPTED PURSUANT BY</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>In connection with this Quarterly
Report of BMB Munai, Inc. (the &#8220;Company&#8221;) on Form 10-Q for the period ended
December 31, 2009, as filed with the Securities and Exchange Commission on the
date hereof (the <font style="FONT-STYLE: italic; DISPLAY: inline">"Report"</font>), I, Gamal
Kulumbetov, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(1)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
      Report fully complies with the requirements of section 13 (a) or 15 (d) of
      the Securities Exchange Act of 1934;
and</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(2)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
      information contained in the Report fairly presents, in all material
      respects, the financial condition and result of operations of the
      Company.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td align="left" valign="top" width="8%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Date:</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="40%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">February
      9,&#160;&#160;2010</font></div>
            </td>
            <td align="left" valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">/s/
      Gamal Kulumbetov</font></div>
            </td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td align="left" colspan="3" valign="top" width="38%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Gamal
      Kulumbetov</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Chief
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            </td>
          </tr></table>
    </div><br>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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</font></div>
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        <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
</font></div>
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</font></div>
      </div>
    </div><br></body>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>bmbex322q123109.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
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    <title>bmbex322q123109.htm</title>
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</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">EXHIBIT
32.2</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CERTIFICATION
PURSUANT TO</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">18
U.S.C. SECTION 1350,</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">AS
ADOPTED PURSUANT BY</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>In connection with this Quarterly
Report of BMB Munai, Inc. (the &#8220;Company&#8221;) on Form 10-Q for the period ended
December 31, 2009, as filed with the Securities and Exchange Commission on the
date hereof (the <font style="FONT-STYLE: italic; DISPLAY: inline">"Report"</font>), I, Evgeniy Ler,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(1)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
      Report fully complies with the requirements of section 13 (a) or 15 (d) of
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and</font></div>
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          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
<tr valign="top">
            <td style="WIDTH: 36pt">
              <div><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;
      </font></div>
            </td>
            <td style="WIDTH: 36pt">
              <div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(2)</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The
      information contained in the Report fairly presents, in all material
      respects, the financial condition and result of operations of the
      Company.</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div>
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<tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td colspan="2" valign="top" width="29%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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          </tr><tr>
            <td align="left" valign="top" width="8%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Date:</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="40%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">February
      9,&#160;&#160;2010</font></div>
            </td>
            <td align="left" valign="top" width="40%" style="BORDER-BOTTOM: black 2px solid">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">/s/
      Evgeniy Ler</font></div>
            </td>
            <td valign="top" width="12%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
          </tr><tr>
            <td valign="top" width="8%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td align="left" colspan="3" valign="top" width="38%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Evgeniy
      Ler</font></div>
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Chief
      Financial Officer</font></div>
            </td>
          </tr></table>
    </div><br>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 8pt">&#160;
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