The growth this Company has accomplished over the years is the direct result of our ability to find international opportunities in exciting Exploration Regions of the world. Our exploration and development personnel have assembled a number of high potential projects which can be pursued in the future. Looking forward to 2006 and beyond, the Company is positioned to make significant steps in continuing our production and reserve growth through our activity in Guatemala, Belize and the CIS Countries.

The company is presently involved in an aggressive exploration and development program in the Astrakhan Region of Russia in partnership with RAO Gazprom. After having acquired the rights to Verbluzzia Field we were able to put together a financial partnership to continue exploration and develop discovered reserves.  The thrust of our activities this past year has been to drill two new wells and increase the reserves of the field substantially..

We believe the key to success internationally and specifically in the former CIS, is to have strong local partners. In Russia, Uzbekistan, Kazhakstan and Ukraine. Pentagon is aligned with the strongest and most respected partners. The potential is limitless and we are positioned to take advantage of those opportunities.

Pentagon’s goals continue to be growth and profitability. Growth means adding more equity each year, a goal the Company has achieved for ten consecutive years. Profitability depends, in a large part, on discovering additional reserves of gas and oil. With the Russia, Guatemala, Belize and other CIS opportunities, the prospects appear encouraging.

Pentagon will continue to have the following goals:

  • To pursue unique International opportunities such as the CIS Countries.
  • Focus on finding and developing natural gas and oil reserves
  • Drill low-risk development programs
  • Acquire properties that mesh strategically with ongoing operations
  • Develop innovative marketing strategies

The future will present difficult challenges, together with significant opportunities, and will require the continued dedication of our loyal and motivated staff to achieve our objectives of increasing production, reserves, cash flow, net income and, ultimately value.

Sincerely,

Larry Sciacchetano
President and Chief Executive Officer