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Understanding While Nile acquisition of oil concession in S. Sudan

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July 4, 2006 (LONDON) — To better understand the details of the While Nile Limited acquisition of oil concession in Southern Sudan, please find hereunder the full text of a letter sent by the Company’s Chairman, Phil Edmonds, and other document related to the purchase to the shareholders.

This letter and the attached documents back to May 2005.

(ST)


19th May 2005

White Nile Limited Acquisition of Oil Concession and Re-Admission to Trading

News item - St Brides Media and Finance Ltd

The Company is pleased to announce that a circular is today, 19 May 2005, being posted to shareholders setting out full details of a proposed acquisition of an interest in an oil concession in Southern Sudan and that trading in the company’s shares on AIM will recommence at 7.00am on Monday 23 May 2005.

Full details of the proposed acquisition are set out in the circular, which includes the following information:

· Part 1; a letter from the Company’s Chairman, Phil Edmonds, which summarises the proposed acquisition and related information;

· Part 2; an accountant’s report from Baker Tilly setting out information on the Company’s financial position at 28 February 2005;

· Part 3; an independent consultants’ report from Exploration Consultants Ltd, a firm of oil consultants / geologists on Block Ba in Southern Sudan;

· Part 4; a legal opinion from Maurice Mendelson QC; and

· Part 5; statutory and general information.

The full text of Part 1 of the circular to shareholders is included within this announcement. The Directors of the Company would recommend that shareholders and other interested parties should refer to the text of the full circular and where appropriate take independent advice.

The Company proposes, subject to shareholder approval, to acquire an oil concession in Block Ba in Southern Sudan in consideration for which it will issue 155,000,000 ordinary shares of 0.1p each. An Extraordinary General Meeting is to be held on 16 June 2005 for the purpose of considering and, if thought fit, passing the following resolution as an ordinary resolution:

“That the acquisition by the Company of an interest in a petroleum concession located in an area known as Block Ba in Southern Sudan from Nile Petroleum Corporation Ltd (as more fully described in the letter from the Chairman set out on pages 8 to 17 of the circular to shareholders dated 19 May 2005) in consideration for which the Company is to allot 155,000,000 ordinary shares of 0.1p to Nile Petroleum Corporation Ltd, be and is hereby approved and the Directors of the Company be authorised to implement the terms thereof.”

As noted in the Chairman’s letter below, irrevocable undertakings to vote in favour of the resolution have been obtained from shareholders who hold over 99% of the issued share capital of the Company.

The UK City Code on Takeovers and Mergers (“the City Code”) applies to public companies which are resident in the United Kingdom, the Channel Islands or the Isle of Man and therefore applies to the Company. Under Rule 9 of the City Code a party acquiring a holding of 30% or more of a company’s voting rights is normally obliged to make a general offer to all other shareholders to acquire the shares not held by them. The Takeover Panel has waived the requirement for a general offer to be made and this is the subject of a further detailed regulatory news announcement that is being issued simultaneously with this announcement.

The London Stock Exchange made the admission of the proposed enlarged share capital of the Company the subject of two special conditions which were imposed under Paragraph 9 of the AIM Rules. The two special conditions were that:

1. The Company obtained Counsel’s opinion on the approval process of the licence for the Block Ba concession including the meaning of consensus; and

2. The Company made available for public inspection all signed documents upon which the Company is placing reliance.

These conditions have been satisfied and reference is made to the Counsel’s opinion within the letter from the Chairman that forms Part 1 of the circular to shareholders. A list of the documents available for public inspection is set out in Paragraph 12 of Part 5 of the circular to shareholders. The documents will be available for inspection by the public during normal business hours on any weekday (excluding public holidays) as follows; from the date of this document until 31 July 2005 at Numerica Capital Markets Limited, 66 Wigmore Street, London, W1U 2HQ and from the date of this document until 27 May 2005 at 4th Floor, Clements House, 14 - 18 Gresham Street, London, EC2V 7NN and from 31 May 2005 until 31 July 2005 at Millennium Bridge House, 2 Lambeth Hill, London, EC4V 4AJ.

LETTER FROM THE CHAIRMAN

White Nile Limited

7 New Street

St Peter Port

Guernsey GY1 4BZ

19 May 2005

Dear Shareholder

White Nile was admitted to trading on AIM on 10 February 2005, having raised over £9 million from investors prior to admission. The AIM admission document dated 4 February 2005 described the Company’s strategy as being to identify and acquire projects in the natural resources sector with particular emphasis on oil projects within Africa. The AIM admission document also stated that the Company was specifically negotiating with the Government of Southern Sudan (“GOSS”) for certain oil concessions and that the Directors were optimistic that these negotiations would come to fruition shortly. I am now writing to you with details of the Company’s proposed acquisition and of the Extraordinary General Meeting called for 16 June 2005 to approve this.

1.1 ACQUISITION

On 16 February 2005, the Company announced that agreement had been concluded with the GOSS and its national oil company, Nile Petroleum Corporation Limited (“NPC”) whereby the Company would acquire a 60% interest in Block Ba, which contains part of the Muglad basin in Southern Sudan. Under the terms of the agreements described in detail in sections 1.1.2 and 1.1.3 below, the Company is entitled to 60% of the gross revenues generated in return for bearing 100% of the costs of exploration, development and production, subject to being entitled to a minimum annual internal rate of return on capital of 40%.

The Directors recognised that the Acquisition was sufficiently large relative to the size of the Company that it was not appropriate to allow the Company’s shares to continue trading until full information on the Acquisition had been published. Accordingly, on 16 February 2005 the Company requested a suspension of trading pending such publication.

The Acquisition represents a reverse takeover for the purposes of the AIM Rules and therefore requires the prior approval of shareholders of the Company at the EGM. If the resolution proposed at the EGM is duly passed the Company’s existing quotation on AIM will be cancelled and the Company will apply for the Enlarged Share Capital to be admitted to trading on AIM.

Under the terms of the Acquisition, the Company is to issue shares that cause NPC to hold 50% of the Enlarged Share Capital though this holding could rise to 70% if NPC exercise the option, described in more detail below, to transfer the remaining interest in the Concession. Under Rule 9 of the City Code on Takeovers and Mergers (“the City Code”), NPC would normally be required to make a mandatory offer for all of the ordinary shares of the Company. For reasons detailed later in this document, the Panel on Takeovers and Mergers (“the Panel”) has determined that, in this particular case, no mandatory offer is necessary.

1.1.1 Background

The area known generally as Southern Sudan has been the subject of a long and protracted civil war which formally ended on 9 January 2005 with the signing of peace accords between the National Government of Sudan based in Khartoum and the GOSS, in the form of the Sudanese People’s Liberation Movement. Anticipating the possibility of peace, and recognising the significant potential for oil exploration and extraction in the region, Andrew Groves and I initiated contacts with leading figures in the South with a view to proposing a novel means of funding oil exploration and development projects in their part of the country.

Traditionally, the relevant authority in a particular region enters into exploration and development agreements with oil exploration companies with a potentially lengthy delay between the entering into of the agreement and the first receipt of production revenues by the relevant governmental authority. The model developed by Andrew Groves and me was designed to enable the GOSS to benefit from the extensive capital markets in London and elsewhere to raise funds to enable development of Southern Sudanese oilfields whilst retaining long term control and influence over them.

To this end, Andrew Groves and I proposed that we would create a shell company that would seek admission to AIM. GOSS would transfer exploration rights to that company in consideration for a substantial shareholding in that company. The proposed scheme was encapsulated in a draft joint venture agreement and the Company was established with the intention of implementing the proposed concept if GOSS decided that it wished to proceed with our proposal. White Nile Limited was not a party to the draft joint venture agreement and at that point there was no contractual binding commitment upon any party. The area of land that was to be the subject of the arrangements was Block Ba, an area that extends to approximately 67,000 sq km and is situated in Southern Sudan north of the town of Juba with its centre having the approximate co-ordinates 7° north and 32° east. Further information on the area is set out in the text of the independent consultant’s review below in Part 3 of this document.

On 14 February 2005, the GOSS confirmed that it wished to proceed with the Company and to enter into an agreement with the Company on the commercial terms set out in the draft joint venture agreement under which the Company would acquire a 60% interest in Block Ba on the terms detailed in this letter.

1.1.2 The Terms of the Acquisition

The Company has now concluded a number of agreements which together set out the terms of the Acquisition described below. These comprise a lock-in agreement dated 17 February 2005, a letter confirming certain information dated 25 March 2005, an agreement dated 26 March 2005 (transferring interests in Block Ba subject to obtaining shareholders’ approval) and the EPLA dated 25 April 2005.

The GOSS had, on 12 August 2004, granted to NPC certain concessions, including the right to develop and explore Block Ba (the “Concession”). Block Ba extends to approximately 67,000 sq km and is situated in Southern Sudan north of the town of Juba with its centre having the approximate co-ordinates 7° north and 32° east. Further information on the area is set out in the text of the independent consultant’s review in Part 3 of this document.

NPC is to transfer to the Company an interest in the Block Ba Concession. Exploitation of Block Ba is subject to the EPLA, which covers exploration operations, revenue sharing and responsibility for costs in respect of Block Ba.

White Nile has sufficient funds to carry out initial exploration, but it is anticipated that, in order to complete the necessary exploration and then to commence production, further equity fund raisings will be necessary.

In consideration of the transfer of rights in respect of the Concession, NPC is to receive an interest of 50% in the Enlarged Share Capital, through the issue of 155,000,000 ordinary shares of 0.1p each in the Company (“the NPC Shares”). Additionally, NPC will have the right, following the issue of the NPC shares, to appoint two representatives of NPC to the Board of White Nile.

If the transaction is approved White Nile will become a company controlled, at shareholder level, by the GOSS who will hold 50% of the voting shares. As far as the Board of Directors is concerned, Phil Edmonds, Andrew Groves and Brian Moritz will continue to be directors and in due course NPC may appoint two additional directors. As noted above, at present the names of the directors that the GOSS may choose to appoint to White Nile and the extent to which it will seek to exert executive influence over White Nile is not known.

White Nile has, subject to shareholder approval of the Acquisition and admission of the NPC Shares to AIM, also granted NPC the right (“the Option”) to transfer to White Nile its remaining interests in the gross revenues from Block Ba in consideration for the issue to NPC of a further 206,666,667 ordinary shares of 0.1p each in the Company (“the NPC Option Shares”). The exercise of the Option by NPC would increase its shareholding in the Company to 361,666,667 out of (assuming that no further shares are issued) 516,666,667 ordinary shares, being 70% of the Further Enlarged Share Capital. In the event that the Option is exercised, NPC will be entitled to appoint a further representative to the Board of Directors of the Company.

For the reasons set out in paragraph 1.7 below, the NPC Shares are being issued to a nominee holder (“the Nominee”).

1.1.3 The EPLA

On 25 April 2005, the Company and NPC entered into the EPLA. Under the provisions of the EPLA the Company has been granted exploration rights in respect of Block Ba for a period of ten years, divided into an initial period of five years and a second period of five years (“the second period”) and then by two further periods of three years each, subject to the Company having complied with certain minimum exploration obligations set out in the EPLA and subject, in the case of the two further extensions of three years each, to a commercial discovery having been made prior to the end of the second period.

The EPLA imposes minimum obligations on the Company as to exploration work that the Company must carry out and contains provisions for budgets to be agreed, how discoveries are appraised and how commercial discoveries are developed and exploited. The Company will be entitled to exploit commercial discoveries for 25 years following the approval between the parties of a development and exploitation plan in relation to the relevant discovery. The EPLA also contains provisions whereby such periods can be extended for a further period of up to 10 years, if commercial production is still possible beyond the initial 25 year period.

The rights of exploration and development of crude oil and natural gas resources within Block Ba are exclusive to the Company. All costs of such exploration and development will be met by the Company. The gross revenues net of selling costs from the sale of crude oil and natural gas produced pursuant to the EPLA will be split 60-40 between the Company and NPC. Unless NPC determines otherwise, the Company will sell NPC’s share of such produce on its behalf and account to NPC for the sale proceeds. The EPLA specifies that it is the intention of the parties that the Company will attain an annual internal rate of return of a minimum of 40% and that, if such internal rate of return is not achieved by the Company, the parties will re-negotiate the terms of the EPLA in good faith in order to ensure that the Company does achieve such internal rate of return.

1.1.4 Business Strategy

The Company was established in order to identify and acquire projects in the natural resources sector with particular emphasis on oil projects within Africa. In addition to the Acquisition, the Company is currently considering projects in Ethiopia, Kenya and Somalia. In particular, the Company is currently in discussions with the Government of Ethiopia concerning a joint study agreement.

With respect to the Acquisition the Company’s strategy will be:

(a) to subcontract the pre-production phase of Block Ba to professional project managers who will oversee the exploration surveys and confirmatory drilling.

(b) to use the pre-production period to negotiate contracts for the extraction and distribution of oil from Block Ba, and to put into place funding as required.

(c) to engage experienced professional oil industry management staff to handle full commercial production of Block Ba.

1.1.5 The City Code

The terms of the Acquisition give rise to certain considerations under the City Code. Brief details of the Panel, the City Code and the protections they afford are described below.

The City Code has not, and does not seek to have, the force of law. It has, however, been acknowledged by both government and other regulatory authorities that those who seek to take advantage of the facilities of the securities markets in the United Kingdom should conduct themselves in matters relating to takeovers in accordance with high business standards and so according to the City Code.

The City Code is issued and administered by the Panel. The City Code applies to all takeover and merger transactions, however effected, where the offeree company is, inter alia, a listed or unlisted public company resident in the United Kingdom (and to certain categories of private limited companies). It also applies to Channel Island companies resident in the United Kingdom, the Channel Islands or the Isle of Man. The Panel has determined that the Company is such a company and that its shareholders are entitled to the protection afforded by the City Code.

Under Rule 9 of the City Code, any person who acquires shares which, when taken together with shares already held by him or shares held or acquired by persons acting in concert with him, carry 30% or more of the voting rights of a company which is subject to the City Code is normally obliged to make a general offer to all other shareholders to acquire the balance of the shares not held by him and his concert parties.

Rule 9 of the City Code also states that if any person or group of persons acting in concert holds not less than 30%, but not more than 50% of the voting rights of such a company a general offer will normally be required if any further shares are acquired.

An offer under Rule 9 must be in cash and at the highest price paid within the preceding twelve months for any shares in the company by the person required to make the offer or any person acting in concert with him.

Following completion of the Acquisition, NPC, which previously held no Ordinary Shares, will hold 50% of the enlarged issued share capital of the Company. In the event that NPC exercises the Option, it is possible that its holding in the Company will be increased to 70%.

The Panel will normally waive the requirement for a general offer to be made if the independent shareholders of a company pass an ordinary resolution (“a whitewash resolution”) approving such waiver. The Panel also has the power to waive the requirement for a general offer to be made where independent shareholders representing more than 50% of the shares of the company which would be eligible to vote on a whitewash resolution irrevocably undertake to vote in favour of a whitewash resolution, were one to be put to the shareholders. Irrevocable undertakings of this nature have been received from independent shareholders representing more than 50% of the shares of the Company, which would be eligible to vote on a whitewash resolution and the Panel has accordingly waived the requirement under Rule 9 of the City Code for a general offer to be made by NPC to the shareholders of the Company either following the issue by the Company of the NPC Shares or following the issue by the Company of the NPC Option Shares.

Following the appointment of NPC’s two representatives to the Board of Directors, the operations of the Company will be carried on from Southern Sudan, the Company’s principal place of business will be in Southern Sudan and the majority of Directors will be resident outside the United Kingdom, Channel Islands and the Isle of Man. Accordingly, the City Code will not apply to the Company after such appointments on the basis that it will then no longer be managed in the United Kingdom, the Channel Islands or the Isle of Man. In these circumstances, NPC will be able to acquire further shares without triggering an obligation to make a mandatory offer under Rule 9 of the City Code, irrespective of the size of NPC’s holding. Upon the appointment by NPC of its two representatives to the Board of Directors an announcement will be made to this effect.

1.1.6 Extraordinary General Meeting

At the end of this document you will find a notice convening an extraordinary general meeting of the Company which is to be held at 3p.m. on 16 June 2005 at 7 New Street, St Peter Port, Guernsey, GY1 4BZ. The resolution to be proposed is for the approval of the Acquisition.

Each of the Directors has entered into an irrevocable undertaking with the Company to vote in favour of the resolution proposed at the EGM in respect of the shares held by them. Other shareholders who, when taken together with the shareholdings of the Directors, hold over 99% of the issued share capital of the Company have also entered into irrevocable undertakings with the Company to vote in favour of the resolution proposed at the EGM.

1.2 INDEPENDENT CONSULTANT’S REVIEW

Independent oil consultant ECL has worked alongside CAMEC to appraise Block Ba. White Nile engaged ECL on 18 February 2005 to provide management consultancy and operational services covering all aspects of oil & gas exploration and production in relation to Block Ba, including the preparation of the report set out in Part 3 below. Established in 1969, ECL has become one of the world’s leading oil and gas consultancy companies. A widely-experienced staff of geologists, geophysicists and engineers operate from offices in Henley-on-Thames, London and Aberdeen in the UK; Houston, USA; Calgary, Canada and Perth, Australia. ECL’s clients include governments and national oil companies, major and independent oil companies and financial institutions. ECL has particular experience of petroleum exploration and development projects in Africa. Projects are currently being undertaken in Morocco, Algeria, Libya, Sudan, Nigeria, Cameroon, Gabon, Congo, Angola, Tanzania and Mozambique. Since 1995 ECL has acted as technical advisors and consultants to the Government of Equatorial Guinea, which is now an established oil producing country.

The executive summary of the ECL report is as follows:

"Block Ba covers an area of approximately 67,000 sq. km, equivalent to some 328 UK North Sea blocks or 11 UK North Sea quadrants. This represents over 2/3 of the area of the original Block B that was licensed to the French oil company Total up to its abandonment of the area in the mid-1980s. Total acquired aeromagnetic and seismic data in Block B but no drilling has taken place.

South Sudan is an established world class petroleum producing area. It contains a large part of a continent-wide Cretaceous rift basin system that has proved petroliferous in Chad and Niger as well as Sudan. Current production in Sudan is about 350,000 bopd and this is expected to increase as more oilfield discoveries come on stream in 2005. Current proven reserves are 1.2 billion bbls and original oil-in-place is estimated at over 10 billion bbls in the explored part of the Muglad Basin. The main productive trend is that of the Muglad Basin where the biggest oilfields so far discovered, Unity and Heglig, have proven reserves of 250 and 200 million bbls respectively.

It can be demonstrated that the production fairway of the Muglad Basin extends into central Block Ba. This fairway has been mapped by geophysical methods extending south-eastwards from the Heglig-Unity area through Block 5A, where the Thar Jath discovery was made by Lundin in 1999 and the Mala discovery made by Petronas in 2003, and through the highly prospective Block 5B. The area of the main part of the Muglad Basin i.e. the most prospective part, in Block Ba could be at least 6,000 sq. km (i.e. the area of a UK North Sea quadrant). The eastern part of Block Ba also contains the southerly extension of the Melut Basin which is also productive in Block 3 to the north. In addition aeromagnetics have delineated other prospective basinal areas in Block Ba.

In the professional opinion of Exploration Consultants Ltd (ECL) Block Ba is highly prospective and can be expected to have the same level of reserves as the productive parts of the Muglad Basin to the northwest. Therefore by extrapolation Block Ba can be reasonably estimated to have potential oil-in-place figures of up to five billion barrels. In global terms Block Ba can be geologically categorised as low risk/high reward.

An outline budget of $30,000,000 has been placed on an initial 3-year exploration work programme. This includes aeromagnetic and seismic surveys leading up to the drilling of the first exploration well in the first or second quarter of Year 2. Parts of the exploration areas extend over marshlands associated with the Nile which means that specialised swamp crews are required. It is hoped that at least 2 exploration wells can be drilled in the first 3 years of exploration."

The full text of ECL’s report on Block Ba is included at Part 3 of this document.

1.3 SUDAN PEACE ACCORD

On 9 January 2005, the Government of the Republic of Sudan on the one hand and the Sudan People’s Liberation Movement/Sudan People’s Liberation Army on the other reached a comprehensive Peace Accord. This re-confirmed certain Protocols and Agreements reached earlier including the Machakos Protocol dated 20 July 2002, the Framework Agreement on Wealth Sharing During the Pre-Interim and Interim Period dated 7 January 2004 (the “Agreement on Wealth Sharing”) and the Protocol on Power Sharing dated 26 May 2004.

On 12 August 2004, the GOSS under the title of the Civil Authority of New Sudan entered into a concession agreement over Block Ba in favour of its own newly created national oil company NPC.

The Agreement on Wealth Sharing provides for the establishment of a National Petroleum Commission which shall be constituted as follows:-

(a) The President of the Republic of Sudan and President of the GOSS as Co-chairs and permanent members;

(b) Four permanent members representing the National Government;

(c) Four permanent members representing the GOSS; and

(d) Not more than three Representatives of an oil producing State/Region in which petroleum development is being considered, non-permanent members.

As yet the National Petroleum Commission has not been established.

The Agreement on Wealth Sharing also provides that the National Petroleum Commission shall approve all oil contracts for the exploration and development of oil and that in performing this function the National Petroleum Commission shall include both its permanent members as mentioned above and the non-permanent members who are representatives of the region in respect of which the contract is being considered for approval.

The Agreement on Wealth Sharing states that decisions of the National Petroleum Commission shall be by “consensus”. Consensus is not defined and there is some uncertainty whether decisions on the approval of oil contracts are to be made on a unanimous basis or by majority. If unanimous approval of such contracts is required representatives of the North of Sudan could have the ability to prevent approval by the National Petroleum Commission of oil contracts relating to areas in the South of Sudan, including Block Ba.

The procedure for the National Petroleum Commission to follow in negotiating and approving oil contracts for the exploration and development of oil in Sudan has been considered by Leading Counsel and a copy of Leading Counsel’s opinion is included in Part 4 of this document. On the basis of that advice and confirmations from the GOSS and NPC the Directors are satisfied that in dealing with any oil contracts in Southern Sudan:

(a) the decisions of the National Petroleum Commission are to be taken on a majority voting basis and the concern over decisions having to be made on a unanimous basis outlined above is unjustified ; and

(b) the representatives of the GOSS and Southern Sudan will have a majority on the National Petroleum Commission.

The Directors are therefore satisfied that should the matter be put to the National Petroleum Commission the arrangements made by the Company with the GOSS and NPC regarding Block Ba will be approved by the National Petroleum Commission.

In any event it is not clear that the National Petroleum Commission will, when it is formed, have any standing in relation to Block Ba. The Agreement on Wealth Sharing provides that oil contracts made before 9 January 2005 shall not be subject to renegotiation and therefore the Directors consider that the agreement of 12 August 2004 by which the Concession was granted, and from which the EPLA flows, is not subject to renegotiation. Furthermore, it is not self evident that the National Petroleum Commission would have any authority in respect of events prior to its having been constituted.

There is an ongoing process of negotiating and drafting constitutional and legislative arrangements. It is the case, however, that there is a significant degree of uncertainty in regard to the arrangements that are the subject of the Agreement on Wealth Sharing and related agreements. Nevertheless, the Directors take the view that the oil in Block Ba and the contracts over that oil are in the domain of the GOSS and they have effective authority there.

The Agreement on Wealth Sharing covers the Pre-Interim and Interim Periods, which are defined in the Machakos Protocol of 20 July 2002. The Pre-Interim Period is a six month period for the implementation of the, then anticipated, Peace Agreement. The Interim Period is a six year period following the Pre-Interim Period. The Agreement on Wealth Sharing provides that net oil revenue derived from oil producing wells in Southern Sudan shall be allocated 50% to the “National Government and States in Northern Sudan” and 50% to the GOSS. The definition of net oil revenue has to be agreed between the Government of the Republic of Sudan and the Sudan People’s Liberation Movement. The Directors are of the opinion that these wealth sharing arrangements will not have any impact upon the Company on the footing that the sharing arrangements concern receipts by the GOSS rather than the Company.

Total SA, a French company, has issued a press release and Total E&P Sudan and its lawyers have written to the Company and its Nominated Adviser stating that on 21 December 2004 Total had reached agreement with the Government of Sudan (i.e. the Government of the North of Sudan) to revise the contract entered into in 1980 under which Total was awarded the right to operate Block B (which includes Block Ba). The GOSS has informed the Directors that any contract allegedly entered into by Total with the Government in the North of Sudan on 21 December 2004 is ineffective because of the earlier grant on 12 August 2004 by the GOSS to NPC as mentioned above. Further, the GOSS has advised the Directors that the concession agreement of 12 August 2004 between the GOSS and NPC remains valid and the GOSS has authorised NPC to enter into the EPLA and has confirmed that the EPLA is the licensing agreement referred to in the concession agreement.

1.4 DIRECTORS

Philippe Henri Edmonds, aged 54, Chairman and Chief Executive, (MA Cantab)

Philippe Edmonds holds an honours degree in land economy from Cambridge University. He played cricket for England and for Middlesex from 1974 to 1987 and has been involved in a number of public and private companies, including Southern African Resources Plc, Middlesex Holdings Plc and Grosvenor Land Holdings Plc. He is chairman of AIM-listed Central African Mining & Exploration Company Plc, Central African Gold Plc and Capricorn Resources Plc and is chairman of Middlesex County Cricket Club.

Andrew Stuart Groves, aged 37, Development Director

Andrew Groves was born in Harare, Zimbabwe and educated in Zimbabwe and South Africa. He has been involved in a number of private companies in Zambia and Zimbabwe and has significant experience in operations management in Southern and Central Africa, particularly in Zambia and Zimbabwe. He also has a good knowledge of Namibia and Mozambique. He is a director of AIM-listed Southern African Resources Plc, Central African Mining & Exploration Company Plc, Central African Gold Plc and Capricorn Resources Plc.

Brian Michael Moritz, aged 68, Non-executive Director

Brian Moritz is a chartered accountant and former chairman of the Capital Markets Group of Grant Thornton UK LLP, one of the world’s top ten accounting firms. He specialises in advising public companies, mainly in the area of flotation. He is a director of Metal Bulletin Plc, a listed company, and a number of companies, mainly in the natural resources sector, which are traded on AIM.

The Directors are also directors of other companies engaged in the natural resource sector in Africa. It is the Directors’ intention, however, that whenever they identify an oil project in Africa, they will offer that project to the Company before they do so to any other company.

Future Directors

NPC was incorporated in Yei, Southern Sudan, on 22 July 2004 with company number 196. It is wholly owned by the GOSS. The directors of NPC are Bullen Bol, Kuol Manyang Juuk and Simon Kun Puoch. Sudan is essentially governed by two governments: Northern Sudan is governed by the National Islamic Front and Southern Sudan, where the Concession is located, is governed by the Sudan People’s Liberation Movement who formed the GOSS. Doctor Riek Machar is the Prime Minister of the GOSS and he chairs the leadership council comprising of around 7 members who represent different tribal groups. NPC director Kuol Manyang Juuk is a member of the leadership council. The managing director of NPC, Bullen Bol, reports to the Minister of Energy, who in turn reports to the leadership council. It is not yet known which representatives of NPC or the GOSS will be appointed to the board of White Nile, though such appointments are subject to their meeting the requirements of the London Stock Exchange. The appointments will be determined by the directors of NPC at the direction of the leadership council. Once the Directors of the Company have that information, the Company will announce such information as is required by Schedule 2 paragraph (f) of the AIM Rules.

1.5 CORPORATE GOVERNANCE

The Directors support the highest standards of corporate governance and intend to observe the requirements of the Combined Code on Corporate Governance to the extent they consider appropriate in light of the Company’s size, stage of development and resources.

The Company intends to set up Remuneration and Audit committees with formally delegated duties and responsibilities.

The Company will abide by Rule 21 of the AIM Rules, including the provisions regarding Directors’ dealings, and will take all reasonable steps to ensure compliance by Directors and applicable employees.

1.6 DIVIDEND POLICY

It is the intention of the Directors to achieve capital growth. As outlined in the strategy section (1.1.4 above) the Directors intend to carry out exploration and development of oil concessions in Southern Sudan. This is unlikely to generate revenues and profits in the next two to three years and therefore the Company is unlikely to declare dividends in the foreseeable future.

1.7 LOCK-IN ARRANGEMENTS

Each of the Directors has agreed with Hichens, Harrison & Co plc, Numerica and the Company that they will not (except in the limited circumstances permitted by the AIM Rules including in the event of an intervening court order, the death of a Director, or in respect of the acceptance of a take-over offer of the Company which is open to all shareholders) dispose of any Ordinary Shares in which they or any connected person are interested until the date which falls 12 months after the date of Admission.

NPC has agreed with the Company that it will not dispose of any Ordinary Shares for a period of 12 months starting from the date of Admission. In order to secure this obligation, the NPC Shares have been issued to the Nominee where they will be held until the expiry of the lock-in period.

1.8 WORKING CAPITAL

Having regard to the proposed exploration programme and the cash resources available to the Company, which presently stand at approximately £9 million, in the opinion of the Directors, having made due and careful enquiry, the working capital available to the Company is sufficient for its present requirements, that is for at least 12 months from the date of Admission.

It is anticipated that a fundraising exercise will need to be undertaken by the Company to raise money to finance the development and production of the Concession.

1.9 CREST

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by a written instrument. The Ordinary Shares have been admitted to CREST. Accordingly, settlement of transactions in the Ordinary Shares may take place within the CREST system if the relevant shareholders so wish.

CREST is a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so.

1.10 DIRECTORS, EMPLOYEES AND CONSULTANTS SHARE OPTION SCHEME

On the Commencement Date the Company adopted the Share Option Scheme, for which no application for approval was made to the Inland Revenue. The principal features of the Share Option Scheme, which is administered by the Board, are set out in section 5 of Part 5. The scheme is open to Directors of, employees of and consultants to the Company or any of its subsidiaries from time to time who are not bound to retire within the period of two years after the date on which the Board invites such persons to apply for the grant of options.

1.11 REASONS FOR THE ADMISSION

The Company will make an application for the Enlarged Share Capital to be admitted to trading on AIM. It is a requirement of NPC that receive consideration for the Acquisition in the form of securities which are tradeable on an open market. NPC wish to have access through its shareholding in the Company to the capital markets of the developed economies to enable development of Southern Sudanese oilfields for the benefit of the people of Southern Sudan. Admission is also expected to raise the public profile of the Company.

1.12 RISK FACTORS

The risk factors which should be taken into account in assessing the Company’s activities and investment in the Company include, but are not necessarily limited to, those set out below. Shareholders should carefully consider the following factors, among others, affecting the proposed activities of the Company following the conclusion of the Acquisition. The exploration and development of natural resources is a speculative activity that involves a high degree of financial risk.

Government and legal risk

Changes in government, monetary policies, taxation and other laws can have a significant impact on the Company’s assets, operations and ultimately the financial performance of the Company and its securities. Sudan is emerging from a long period of civil war, and economic sanctions imposed by the United States currently remain in place. There can be no guarantee that the process of law, including the enforceability of contracts with the GOSS and NPC, and the granting of legal title in Southern Sudan will operate as it does in the United States or the European Union.

The GOSS is a fledgling government that has been formed by people who have been fighting a long civil war, and they do not have the degree of legal or commercial infrastructure or sophistication of governments that have been established for longer periods. It was therefore not possible to negotiate the degree of detail and precision in the arrangements that would have been normal in a transaction of this nature, had it been concluded with a more established government.

The Peace Accord signed on 9 January 2005 refers to the creation of a National Petroleum Commission on which there will be representatives of the Government of the Republic of Sudan in Khartoum and the newly autonomous GOSS. As yet the commission has not been established and therefore it is not possible to predict how the commission will operate and the effects of this on concessions and licensing agreements. It is possible that the ability of the GOSS to validly agree concessions or licences may be subject to challenge. It is also possible that conflicting claims may arise from parties purporting to have been granted concessions to Block Ba by the Government of the Republic of Sudan in Khartoum.

As indicated in paragraph 1.3 above within Sudan there is an ongoing process of negotiating and drafting constitutional and legislative arrangements. There is a significant degree of uncertainty in regard to the arrangements that are the subject of the Agreement on Wealth Sharing and related agreements and there is therefore a risk that this process could adversely affect the Company. Also as indicated in paragraph 1.3 above, Total SA has indicated that it believes that it has claims over Block Ba. There may be other parties who will also seek to make claims over Block Ba. There is a risk that Total SA or other parties may take legal proceedings against the GOSS, NPC or the Company to enforce such claims.

Exploration risks

Oil and gas exploration by its nature contains elements of significant risk. Commercial and successful operations are therefore dependent upon the acquisition of and the discovery of economically recoverable hydrocarbons, access to competent operational management and title risk. Adverse weather conditions over a prolonged period can also adversely affect exploration activities.

Commodity price risk

The price for oil and gas will depend on available markets at acceptable prices and transmission and distribution costs. Any substantial decline in the price of oil or an increase in transmission or distribution costs could have a material adverse effect on the Company.

Environmental risks

The Company’s projects are subject to laws and regulations regarding environmental matters and the discharge of hazardous waste and materials. The potential for liability is a risk. Costs may be incurred in environmental rehabilitation, damage control and losses.

Operational and technical risks

A range of factors may affect the current and future operations of the Company, including exploration, appraisal and possible production activities, including start-up risks, geological conditions, limitations on activities due to seasonal and exceptional weather patterns, alterations to joint venture programmes and budgets, unanticipated operational and technical difficulties encountered in seismic survey, drilling and production activities, mechanical failure of operating plant and equipment, adverse weather conditions, industrial and environmental accidents, industrial disputes, unavailability of drilling equipment, unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment, prevention of access by reason of political unrest, outbreak of hostilities, inability to obtain consents or approvals, contracting risk from third parties providing essential services, potential problems in locating and securing the services in a timely and cost effective fashion of appropriately skilled employees, consultants or contractors.

Insurance

Insurance of all risks associated with oil and gas exploration and production is not always available and, where available, the cost can be high. The Company will endeavour to put in place insurance considered appropriate for the Company’s needs. The Company will not be insured against all possible losses, either because of the unavailability of cover or because the Directors believe the premiums are excessive relative to the benefits that would accrue. The Directors will continue to review the insurance cover in place to ensure that it is appropriate.

Funding

The Company is dependent on obtaining future equity capital or debt funding sufficient to continue its exploration and contemplated development, production and sales and to provide sufficient future working capital. The Company’s ability to raise such funding will vary according to a number of factors including: the success or otherwise of exploration and the future development of any hydrocarbons discovered; stock market conditions; oil and gas prices; and access to pipeline or other facilities required to transport any produced hydrocarbons to point of sale.

Access to Infrastructure

The Company will require access to processing and transmission facilities including pipelines in order to commercially exploit any hydrocarbons discovered. Third party access to such infrastructure may depend on the level of uncontracted capacity available from time to time. Access to processing plant is likely to depend on the successful negotiation of commercial arrangements with the owner of such plant.

1.13 RECOMMENDATION

The Directors consider the Acquisition to be fair and reasonable and in the best interests of the Company’s shareholders and recommend the Company’s shareholders to vote in favour of the resolution to be considered at the EGM, as they have irrevocably undertaken to do in respect of their holdings of Ordinary Shares.

Yours truly,

PHIL EDMONDS

Chairman

Copies of the circular will be available to the public during normal business hours on any weekday (excluding public holidays) as follows; from the date of this document until 27 May 2005 at 4th Floor, Clements House, 14 - 18 Gresham Street, London, EC2V 7NN and from 31 May 2005 until 31 July 2005 at Millennium Bridge House, 2 Lambeth Hill, London, EC4V 4AJ.

Enquiries concerning this announcement should be directed to:

Phil Edmonds White Nile Limited, 18 Upper Brook Street , London, W1K 7PU Tel: 0845 108 6060

Hugo de Salis St Brides Media & Finance Ltd, 46 Bedford Row, London, WC1R 4LR Tel: 020 7242 4477

Paul Gray or Jeff Ward Numerica Capital Markets Limited, 66 Wigmore Street, London, W1U 2HQ Tel: 020 7467 4000

St Brides Media & Finance Ltd 46 Bedford Row London WC1R 4LR Tel: 020 7242 4477 Fax: 020 7242 4488 Email: info@sbmf.co.uk

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The Sudan Tribune editorial team.

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