Tomco Energy (NCS)- the next Cadence?

3. The Company's investment strategy following Completion

The Company's strategy relating to the TomCo Leases is set out in paragraph 5.6
below. On completion of the Acquisition the Board intends to apply the net
proceeds of the Placing to acquire and, where appropriate, develop conventional
oil assets in the US, concentrating principally on shallow oil wells, primarily
by leveraging the expertise and extensive industry contacts of Howard Crosby and
John Ryan. The Board intends to focus initially on oil assets, rather than gas,
for cashflow purposes. The criteria that the Board intends to apply to any
potential investment is broadly described as follows:

* The Group will participate principally as a non-operating, minority
investor in prospects operated by industry partners known to the Board;
* The Group will focus initially on shallow oil prospects, being prospects
above 5,000 feet, in the continental USA, with primary focus on established
oil producing provinces in Texas, Oklahoma, Louisiana, New Mexico and
Wyoming;
* Where the Group invests in non-producing wells, the Board intends to
invest in areas with proven wells nearby, adjacent to existing productive
wells, or with other geologic or seismic indications that the risks of the
prospect are relatively low;
* The Group's target investment price for producing oil assets is
approximately US$12 to US$15 per barrel, and funding costs for non-producing
assets are intended to be approximately US$5 to US$7 per barrel;
* The Group will invest primarily where the operator of the well, the
subject of the investment, has invested in the project; and
* Individual investments in proven undeveloped wells are unlikely to
exceed $100,000, thus diluting the Group's risk profile.

By way of this investment strategy the Board intends, over time, to establish a
portfolio of principally producing oil properties. These properties may be
either fully engineered, proven and developed producing wells or proven
undeveloped locations, although initially the Board expect to focus on producing
and fully engineered wells. Accordingly, the Directors and the Proposed Director
are confident that commercial debt facilities will be available to the Group for
the purpose of financing suitable acquisitions.

In addition to this strategy, the Directors may, where appropriate, make
investments in, or acquisitions of, businesses involved in oil production in the
United States.