Mongolia

The company signed a contract with the government of Mongolia for a six month option on two shut-in oil fields. A thorough evaluation was completed on Dzunbain and Tsagan-Els oil fields in November, 1990. It was concluded that the cost of developing infrastructure in Mongolia made the fields economically unfeasible. The lack of infrastructure made the development costs prohibative. In May 1991, an evaluation report was submitted to the Ministry of Energy and Mines. Pentagon continues to monitor the economics with the eye toward returning to Mongolia.