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BASIS OF PRESENTATION</b> </font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The accompanying unaudited condensed consolidated financial statements of Manas Petroleum Corporation ("Manas" or the &#8220;Company") and its subsidiaries (collectively, together with the Company, the &#8220;Group&#8221;) for the three and nine-month periods ended September 30, 2011 have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Group\'s Annual Report on Form 10-K for the year ended December 31, 2010.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">In terms of the oil and gas industry lifecycle, the Company considers itself to be an exploration stage company. Since it has not realized any revenues from its planned principal operations, the Company presents its financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP) that apply in establishing operating enterprises, i.e. development stage companies. As an exploration stage enterprise, the Company discloses the deficit accumulated during the exploration stage and the cumulative statements of operations and cash flows from inception to the current balance sheet date.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The Company, formerly known as Express Systems Corporation, was incorporated in the State of Nevada on July 9, 1988.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">On April 10, 2007, the Company completed a Exchange Transaction whereby it acquired its then sole subsidiary DWM Petroleum AG (&#8220;DWM&#8221;) pursuant to an exchange agreement signed in November 2006 whereby 100% of the shares of DWM were exchanged for 80,000,000 common shares of the Company. At the closing of the Exchange Transaction, the Company issued 800,000 shares as finders&#8217; fees at a price equal to the closing price of $3.20 per share.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The acquisition of DWM has been accounted for as a merger of a private operating company into a non-operating public shell. Consequently, the Company is the continuing legal registrant for regulatory purposes and DWM is treated as the continuing accounting acquirer for accounting and reporting purposes. The assets and liabilities of DWM remained at historic cost. Under US GAAP in transactions involving the merger of a private operating company into a non-operating public shell, the transaction is equivalent to the issuance of stock by DWM for the net monetary assets of the Company, accompanied by a recapitalization. The accounting is identical to a reverse acquisition, except that no goodwill or other intangibles are recorded.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The Group follows a strategy focused on the exploration and development of oil and gas resources in Central and East Asia (Kyrgyz Republic, Republic of Tajikistan and Republic of Mongolia) and in the Balkan Region (participation in Petromanas Energy Inc. with activities in Albania). Although the Group is currently focused primarily on projects located in certain geographic regions, it remains open to attractive opportunities in other areas. There are no known reserves on any of the Group&#8217;s properties.</font> </font> </p> <p> <b>2. ACCOUNTING POLICIES</b> </p> <p align="justify">&#160;</p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The Group&#8217;s condensed consolidated financial statements are prepared in accordance with US GAAP. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures, if any, of contingent assets and liabilities at the date of the financial statements. Actual results could differ from these estimates.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The accompanying financial data as of September 30, 2011 and December 31, 2010 and for the three and nine-month periods ended September 30, 2011 and 2010 and for the period from inception, May 25, 2004, to September 30, 2011, has been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The complete accounting policies followed by the Group are set forth in Note 3 to the audited consolidated financial statements contained in the Group's Annual Report on Form 10-K for the year ended December 31, 2010.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">In the opinion of management, all adjustments (which include normal recurring adjustments, except as disclosed herein) necessary to present a fair statement of financial position as of September 30, 2011 and December 31, 2010, results of operations for the three and nine-month periods ended September 30, 2011 and 2010 and for the period from inception, May 25, 2004, to September 30, 2011, cash flows for the nine-month periods ended September 30, 2011 and 2010 and for the period from inception, May 25, 2004, to September 30, 2011 and statement of shareholders&#8217; equity (deficit) for the period from inception, May 25, 2004, to September 30, 2011, as applicable, have been made. 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For the three-month periods ended September 30, 2011 and 2010, the Company recorded changes in fair value of warrants of $0 and $0, respectively.</font> </font> </p> <p> <b>10. CONTINGENT CONVERTIBLE LOAN</b> </p> <p align="justify">&#160;</p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">On August 18, 2008, the Company issued contingent convertible loans (the &#8220;Loans&#8221;) with an aggregate principal amount of $2,000,000 and disposed of 8% of its interest in it Mongolian project (Blocks 13 and 14) for aggregate proceeds of $2,000,000. The net proceeds after paying a finder&#8217;s fee were $1,860,000. The Company is responsible for the Loan holder&#8217;s share of the exploration costs attributable to Blocks 13 and 14 through phases 1, 2 and 3 (hereinafter, the &#8220;Participation Liability&#8221;).</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The Company has allocated part of the gross proceeds to the Participation Liability. The Company has estimated that there is a range of costs that could be incurred through phases 1, 2 and 3 of its Mongolia exploration plan. The total minimum amount estimated for expenditure on phase 1, the only phase that is currently probable, is $4,000,000 and therefore a Participation Liability of $320,000 has been recorded. This liability was reduced as expenses incurred and amounted to $0 as of December 31, 2009.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The Loans carried an interest rate of 8% per annum and all principal and accrued interest was payable in full two years from the date of issuance (August 18, 2010). The Loans were secured by the Group&#8217;s assets in the Kyrgyz Republic.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> The principal and any accrued but unpaid interest on the Loans were convertible, in whole or in part, at the option of the holders if the Group conducted a public offering at the prevailing market price. The loan was accounted for as a liability in accordance with FASB ASC 480-10-25 ( <i>Prior authoritative literature:</i> FAS150 <i>&#8220;Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity&#8221;</i> ). 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For the three-month periods ended September 30, 2011 and 2010 the Company amortized debt issuance costs of $0 and $0, respectively.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">For the nine-month periods ended September 30, 2011 and 2010 the Company had interest expense on the Loan of $0 and $29,893, respectively.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">For the three-month periods ended September 30, 2011 and 2010 the Company had interest expense on the Loan of $0 and $0, respectively.</font> </font> </p> <p>At September 30, 2011 and December 31, 2010, the unamortized debt discount relating to the Loan amounted to $0 and $0 respectively. To account for the unamortized debt discount the Company recorded a loss on extinguishment of the Loan for the nine-month periods ended September 30, 2011 and 2010, of $0 and $83,202, respectively.</p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> <b>11. PROMISSORY NOTE</b> </font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">On December 5, 2008, the Company borrowed $540,646 from four shareholders who are also Directors of the Company at no discount to the principal amount by selling to each a promissory note (collectively, the &#8220;Shareholder Notes&#8221;). The parties agreed that no interest would accrue on the Shareholder Notes unless the Company breached the repayment schedule. 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However, as payment was not made on the due date, interest began to accrue on that date.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">On March 9, 2010, the Company fully repaid the principal of $540,646 and total interest accrued of $54,568.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">For the nine-month periods ended September 30, 2011 and 2010, the Company recorded $0 and $11,198 interest expense, respectively.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">For the three-month periods ended September 30, 2011 and 2010, the Company recorded $0 and $0 interest expense, respectively.</font> </font> </p> <p> <b>12. SALE OF MANAS ADRIATIC</b> </p> <p align="justify">&#160;</p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">On February 12, 2010 the Company signed a formal share purchase agreement with WWI Resources Ltd., a Canadian public company (TSXV: PMI). On February 24, 2010, the Company completed the sale of all of the issued and outstanding shares of Manas Adriatic to WWI Resources Ltd. At closing, WWI Resources changed its name to Petromanas Energy Inc. (&#8220;Petromanas&#8221;).</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">As consideration for the shares of Manas Adriatic, Petromanas advanced to DWM Petroleum AG, the Company&#8217;s wholly-owned subsidiary, the sum of $917,723 in December 2009 in payment of expenses, and it paid to DWM Petroleum CAD $2,000,000 ($1,937,396) in cash on March 3, 2010, $350,000 on May 17, 2010 for compensation of operational expenses in Albania for January and February 2010. In addition, Petromanas issued to DWM Petroleum 100,000,000 Petromanas common shares. At closing, the purchase agreement provided that DWM Petroleum would be entitled to receive an aggregate of up to an additional 150,000,000 Petromanas common shares as follows:</font> </font> </p> <ul style="text-align: justify;"> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">100,000,000 Petromanas common shares upon completion of the first well on the Albanian project by Manas Adriatic, or on the date that is 16 months after the Closing Date, whichever occurs first;</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">25,000,000 Petromanas common shares if, on or before the tenth anniversary of the Closing Date, Manas Adriatic receives a report prepared pursuant to Canada&#8217;s National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities, confirming that the Albanian project has 2P reserves of not less than 50,000,000 barrels of oil (BOE); and</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">if, on or before the tenth anniversary of the Closing Date, Manas Adriatic receives a report prepared pursuant to Canada&#8217;s National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities, confirming that the Albanian project has 2P reserves in excess of 50,000,000 BOEs, then for each 50,000,000 BOEs over and above 50,000,000 BOEs, Petromanas will be required to issue 500,000 Petromanas common shares to DWM Petroleum to a maximum of 25,000,000 Petromanas common shares.</font> </font> </p> </li> </ul> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">At closing, Petromanas also funded Manas Adriatic with $8,500,000 to be used by Manas Adriatic to repay advances previously made by DWM Petroleum and its predecessors in respect of the Albanian project and Petromanas appointed to its six member board of directors three directors who were nominated by our company (Michael Velletta, Heinz Scholz and Peter-Mark Vogel). Also at closing, the board of directors of Petromanas appointed Erik Herlyn (our former Chief Executive Officer) and Ari Muljana (our Chief Financial Officer) as the Chief Executive Officer and Chief Financial Officer, respectively, of Petromanas. Erik Herlyn ceased to act as Chief Executive Officer of Petromanas on July 15, 2010; Ari Muljana ceased to act as Chief Financial Officer of Petromanas on August 31, 2010, respectively.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Contemporaneously with the completion of its purchase of Manas Adriatic, Petromanas completed a private placement offering in which it sold to third parties an aggregate of 100,000,000 of its common shares for gross proceeds of CAD $25,000,000 (approximately $24,518,000). After adjustment for the 100,000,000 common shares issued to DWM Petroleum at the completion of the sale of Manas Adriatic and the 100,000,000 common shares issued in this private placement, Petromanas had 328,231,466 common shares issued and outstanding, of which DWM Petroleum owned 100,000,000, or approximately 30.47% .</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Immediately following the closing, the Company analyzed whether it had obtained control of Petromanas at closing. In conducting this analysis, the Company&#8217;s management considered beneficial ownership of voting power (both diluted and undiluted), composition of the Petromanas board of directors and management, the terms of the purchase agreement and the relative size of Petromanas and Manas Adriatic. Based on this analysis, the Company concluded that:</font> </font> </p> <ul style="text-align: justify;"> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">the Company did not have majority voting interest in Petromanas. DWM Petroleum, the Company&#8217;s wholly-owned subsidiary, held 100,000,000 outstanding shares of Petromanas, which represented 30.47% of the issued and outstanding shares of Petromanas;</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">the Company&#8217;s nominees did not constitute a majority of the board of directors of Petromanas, nor did the Company have the ability to appoint, elect or remove a director of Petromanas;</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">although two of the three executive officers of Petromanas were also officers of the Company, this was a temporary solution and, due to the inherent conflicts of interest, was subject to change in near future;</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">no assessment could be made concerning whether or not a significant premium was paid by either party in respect of the exchange of equity interests; and</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">both Petromanas and Manas Adriatic were small companies, neither had yet generated any revenue and neither was significantly larger than the other.</font> </font> </p> </li> </ul> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Based on the above, the Company&#8217;s management concluded that it did not obtain control over Petromanas upon closing of the transaction. The transaction therefore was accounted for in accordance with ASC 810-10-40, which resulted in a de-recognition of the subsidiary, Manas Adriatic GmbH, in exchange for cash received, liabilities assumed and Petromanas common shares issued.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The shares of Petromanas are traded on the TSX-V, which is an active market and the Company believes that the quoted market price for Petromanas common shares (TSXV:PMI) is readily determinable and can reasonable be taken as a basis for the calculation of the fair value.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The Company&#8217;s management reached this conclusion based on an assessment on the following criteria:</font> </font> </p> <ul style="text-align: justify;"> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The shares are traded in a foreign market of breadth and scope comparable to the OTCBB, which according to ASC 820 provides readily determinable fair value for equity securities;</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Bid/ask-spreads are narrow; and</font> </font> </p> </li> <li> <p> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Trading activity is regular and frequent.</font> </font> </p> </li> </ul> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">In addition, the shares of Petromanas owned by DWM Petroleum are held in escrow imposed pursuant to the Policies of the TSX Venture Exchange. Since these shares are held in escrow and are subject to an escrow release schedule, the Company&#8217;s management consider the shares as a Level 2 input for the calculation of the fair value in accordance with ASC 820 (fair value measurements and disclosures). The Company applies an annual discount rate of 12% on the quoted market price based on the time before the shares become freely tradable. The discount rate is an estimate of the cost of capital, based on previous long-term debt the Company has issued. The following table outlines the escrow release schedule:</font> </font> </p> <br/> <div> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="40%"> <tr valign="top"> <td align="center" nowrap="nowrap" style="border-top: 1px solid rgb(0, 0, 0); border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> <b>Release Dates</b> </font> </font> </td> <td align="center" nowrap="nowrap" style="border-right: 1px solid rgb(0, 0, 0); border-top: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> <b>Number of Shares</b> </font> </font> </td> </tr> <tr valign="top"> <td align="center" nowrap="nowrap" style="border-left: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);">&#160;</td> <td align="center" nowrap="nowrap" style="border-right: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> <b>Released from Escrow</b> </font> </font> </td> </tr> <tr> <td align="center" style="border-left: 1px solid rgb(0, 0, 0);">&#160;</td> <td align="center" style="border-right: 1px solid rgb(0, 0, 0);" width="50%">&#160;</td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">24.06.2010</font> </font> </td> <td align="center" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">10'000'000</font> </font> </td> </tr> <tr valign="top"> <td align="center" style="border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">24.08.2010</font> </font> </td> <td align="center" style="border-right: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">15'000'000</font> </font> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">24.02.2011</font> </font> </td> <td align="center" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">15'000'000</font> </font> </td> </tr> <tr valign="top"> <td align="center" style="border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">24.06.2011</font> </font> </td> <td align="center" style="border-right: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">40'000'000</font> </font> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">24.08.2011</font> </font> </td> <td align="center" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">30'000'000</font> </font> </td> </tr> <tr valign="top"> <td align="center" style="border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">24.02.2012</font> </font> </td> <td align="center" style="border-right: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">30'000'000</font> </font> </td> </tr> <tr valign="top"> <td align="center" bgcolor="#e6efff" style="border-left: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">24.08.2012</font> </font> </td> <td align="center" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0);" width="50%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">30'000'000</font> </font> </td> </tr> <tr valign="top"> <td align="center" style="border-left: 1px solid rgb(0, 0, 0); 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As the likelihood of the contingent events is not reasonably determinable, these shares will only be recognized when realized.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">A gain on sale of asset is recognized on the statement of operations under non-operating income and is calculated according to ASC 810-10-40 as the difference between the fair value of the consideration received and the carrying amount of Manas Adriatic GmbH&#8217;s assets and liabilities resulting in a gain on sale of subsidiary:</font> </font> </p> <table border="0" cellpadding="2" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse;" width="100%"> <tr valign="top"> <td align="left" style="border: 1px solid rgb(0, 0, 0);">&#160;</td> <td align="left" style="border: 1px solid rgb(0, 0, 0);" width="25%">&#160;</td> <td align="left" style="border-top: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="25%">&#160;</td> <td align="right" style="border-right: 1px solid rgb(0, 0, 0); border-top: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">USD</font> </font> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0); border-left: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Cash</font> </font> </td> <td align="left" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0); border-left: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">CAD$ 2,000,000</font> </font> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="25%">&#160;</td> <td align="right" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">$1'937'396</font> </font> </td> </tr> <tr valign="top"> <td align="left" style="border-right: 1px solid rgb(0, 0, 0); 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border-left: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">compensation for operational expenses for January and February in Albania to be borne by Petromanas</font> </font> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="25%">&#160;</td> <td align="right" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">$350'000</font> </font> </td> </tr> <tr valign="top"> <td align="left" style="border-right: 1px solid rgb(0, 0, 0); border-left: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">100,000,000 WWI Resources common shares received on March 3, 2010</font> </font> </td> <td align="left" style="border-right: 1px solid rgb(0, 0, 0); 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border-left: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">100,000,000 WWI Resources common shares for issuance on the later of 16 months after the Closing date and the drilling of a well</font> </font> </td> <td align="left" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0); border-left: 1px solid rgb(0, 0, 0); border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">100,000,000 times quoted market price at February 25, 2010 of CAD$0.30 (dilution of issuable 100,000,000 shares included) discounted by an effective discount of 20.53%*</font> </font> </td> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">CAD$0.30 x 100,000,000 (USD / CAD : 0.94763 on Feb 25, 2010) 2010) discounted by 20.53%</font> </font> </td> <td align="right" bgcolor="#e6efff" style="border-right: 1px solid rgb(0, 0, 0); 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The annual interest rate applied to discount the diluted quoted market price was 12% and represents cost of opportunity at which the Company may raise debt.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Net cash proceeds from the sale of Manas Adriatic GmbH amounted to a total of CAD $2,000,000 ($1,937,396), $8,500,000 to be used by Manas Adriatic to repay advances made by DWM Petroleum and $350,000 for compensation of operational expenses in Albania for January and February 2010 reduced by $21,586, the cash owned by Manas Adriatic consolidated as of February 24, 2010.</font> </font> </p> <p> <b>13. 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In addition, all of these shares were deposited into an escrow pursuant to the requirements of the TSX Venture Exchange, which provides for the release of the shares from escrow in installments over a two year period (see Note 12, above).</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">DWM currently owns and controls 200,000,000 common shares of Petromanas and it has the right to acquire a further 50,000,000 common shares upon the occurrence of certain conditions. The 200,000,000 common shares represent approximately 31.7% of the issued and outstanding common shares of Petromanas.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">Since the shares were subject to a hold period of thirteen months, and because the shares were also deposited into escrow and subject to a fixed escrow release schedule, the Company has deemed them to have a Level 2 input for the calculation of the fair value in accordance with ASC 820 (Fair value measurements and disclosures). The Company applies an annual discount rate of 12% on the quoted market price based on the time before the shares become freely tradable. The discount rate is an estimate of the cost of capital, based on previous long-term debt the Company has issued.</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">The quoted market price for one common share of Petromanas on September 30, 2011 was CAD $0.1250 (approximately $0.1210) .</font> </font> </p> <p align="justify"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">In order to calculate the fair value of the Company&#8217;s investment in Petromanas the Company has discounted the market price of the shares based on the escrow release schedule. 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In addition, technological dependencies do not exist. The majority ownership of the investee is concentrated among a small group of shareholders who operate the investee without regard to the views of the Company. The Company made an effort to obtain from Petromanas financial information that would be needed in order for the for the Company to include that information in its own financial disclosure, but Petromanas, which is a reporting company in Canada and subject to the Canadian regulatory requirements in respect of selective disclosure, has refused to provide this information in advance of it being made available to the general public in its own periodic disclosure filings. 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<font style="font-family: times new roman,times,serif;"> <b>Company</b> </font> </font> </td> <td align="left" style="border-bottom: 2px solid rgb(0, 0, 0);" width="25%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> <b>Country</b> </font> </font> </td> <td align="center" style="border-bottom: 2px solid rgb(0, 0, 0);" width="11%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> <b>Sep 30, 2011</b> </font> </font> </td> <td align="center" style="border-bottom: 2px solid rgb(0, 0, 0);" width="11%"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;"> <b>Dec 31, 2010</b> </font> </font> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" style="border-bottom: 1px solid rgb(0, 0, 0);"> <font style="font-size: 10pt;"> <font style="font-family: times new roman,times,serif;">DWM Petroleum AG, Baar (1)</font> </font> </td> <td align="left" bgcolor="#e6efff" 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SUBSEQUENT EVENT(S)</strong> </p> 七次郎在线观看,久青草国产在线视频,,一夜七次郎免费线路