16. Commitments

Pursuant to current production sharing contracts, the Company is required to perform minimum exploration activities that include various types of surveys, acquisition and processing of seismic data and drilling of exploration wells. In the event that the Company fails to fulfill minimum exploration activities by the end of the relevant exploration phase or early termination of the contract by the Government of India, the Company is liable to pay to the Government of India the amount which would be required to complete the unfinished portion of the minimum exploration activities. These obligations have not been provided for in the financial statements.

The Company has completed the minimum work programs on the Tarapur, Mehsana, Ankleshwar and Sanand-Miroli blocks for all the phases. Accordingly, all financial commitments have been met under the terms of the PSCs.

The following table sets forth the end dates to perform minimum work programs pursuant to current production sharing contracts:

	End dates of
	Phase I (1) (2)	Phase II	Phase III
KG Onshore (3)	February 15, 2012	February 15, 2015	N/A
DS 03 (4)	September 3, 2010	September 3, 2011	September 3, 2013
DS 04	June 6, 2012	June 6, 2015	N/A
RJ 20 (5)	January 20, 2012	January 20, 2015	N/A
RJ 21 (6)	January 20, 2012	January 20, 2015	N/A

(1)	All exploration properties are currently in Phase I.

(2)	Government of India policies provide an option for a six-month extension without penalty to complete the minimum work program commitments. The Company must file an application for the six-month extension, and if approved by the Government of India, the end date for Phase II remains unchanged.

(3)

The end date of Phase I for this block expired on February 15, 2012. The Company applied for a six month extension, which has been approved and accordingly Phase I now expires on August 15, 2012. The Company also experienced delays in obtaining certain pre-requisite permits from local government authorities. Such delays are considered excusable under the Government of India policy, and the Company has applied for an extension equivalent to the time of the delay. If approved, the expiration date for Phase I would be December 10, 2014. The Company anticipates this application will be approved.

(4)

The Company experienced delays in obtaining clearance from various departments of the Government of India which was required to conduct an aeromagnetic survey over the block. Such delays are considered excusable under the Government of India policy, and as a result the Company has applied for an extension equivalent to the time of the delay. If approved, the end date for Phase I, II and III would be November 30, 2012, 2013 and 2015, respectively. The Company anticipates this application will be approved.

(5)	The end date of Phase I for this block expired on January 20, 2012. The Company applied for a six month extension, which has been approved and accordingly Phase I now expires on July 20, 2012.

(6)

The end date of Phase I for this block expired on January 20, 2012. The Company has not applied for the six month extension. The joint venture partners have advised they do not intend to complete the minimum work program and to relinquish their interests in the block. The Company however intends to complete its share of the minimum work program and is pursuing possible arrangements with the Government of India whereby the Company can continue exploration in the property. Such relinquishments by the joint venture partners, the determination of any ensuing penalties, and any arrangement under which the Company would be permitted to continue exploration in the absence of its joint venture partners is subject to approval by the Government of India.

As described in Note 2, the Company's existing cash balance at December 31, 2011 and the anticipated cash flow from operating activities are not sufficient to satisfy its current obligations and to meet its exploration commitments over the twelve months ending December 31, 2012 and the three years ending December 31, 2014. The Company is considering various alternatives to remedy any future shortfall in capital. The Company deems it necessary to raise capital for continued exploration and development expenditures through equity markets, debt markets or other financing arrangements, which could include the sale of the Company's oil and gas interests or participation arrangements in those interests. There can be no assurance that these capital resources will be available and if they are not, the Company may be forced to substantially curtail or cease exploration and development expenditures.

The anticipated payments due under these agreements in effect are as follows:

	Operating Leases	Production Sharing Contracts relating to India	Licenses relating to Israel
	$	$	$
2012	241,000	13,928,000	2,923,000
2013	16,000	12,739,000	--
2014	--	10,247,000	--
2015 and thereafter	--	--	--
	257,000	36,914,000	2,923,000

In June 2010, the Operator of the KG Onshore Block approved an increase of the Company's participating interest from 10% to 20%, subject to Government of India approval. Upon Government of India approval, the Company's commitments would increase by $4.9 million in 2012, $7.6 million in 2013 and $10.2 million in 2014. To date, the approval has not been granted.

The Company has office lease commitments in Calgary, Alberta, Canada and Herzliya, Israel which expire January 2013 and July 2012, respectively.