On March 26, 2007, Bordeaux Energy completed an acquisition from Signature Capital Corporation of all of Signature's right, title and interest in and to a farm-in agreement between Signature and Vermilion REP SAS, a wholly owned subsidiary of Vermilion Energy Trust and Vermilion Exploration SAS, a wholly-owned subsidiary of Verenex Energy Inc., relating to the Aquitaine Maritime Exploration Permit held by Vermilion and Verenex located approximately 30km offshore of Bordeaux, France.

In connection with the Acquisition, the net proceeds of a previously announced private placement of 61,457,000 subscription receipts at a price of $0.65 per Subscription Receipt were released to the Company. The Company paid US$6,000,000 of the net proceeds to Signature in order to complete the Acquisition, and has retained the remaining CDN$31,847,019. The Private Placement was led by Orion Securities Inc. and included Salman Partners Inc., Canaccord Capital Corporation and Haywood Securities Inc.

Effective March 23, 2007, each Subscription Receipt was automatically converted into one unit of the Company, without payment of additional consideration. Each Unit consists of one common share of the Company and one common share purchase warrant, each whole Warrant being exercisable to acquire an additional Common Share of the Company at a price of $0.90 per Common Share until August 6, 2008. The Company issued a total of 1,843,710 compensation options to the Agents, each compensation option entitling the holder to purchase one Common Share of the Company at a price of $0.65 until August 6, 2008. Trading of the warrants on the Exchange began on February 8, 2007 under the symbol "BDO.WT".

Under the Farm-in Agreement, the Company now has earned the right to an undivided 30% beneficial interest in the Permit by paying (a) 50% of the costs and expenses to drill the Orca-1 exploratory well on the Permit area up to a maximum cost of US$17,000,000, and (b) a further US$500,000 to Verenex upon spudding of the Well. For total Well costs exceeding US$34,000,000, all parties shared the excess costs in accordance with their beneficial interests. The Company has earned an undivided 30% beneficial interest in the Permit, and each of the parties must pay its participating interest share of the future costs and expenses relating to the Permit. Pursuant to the terms of the Acquisition, the Company must pay a continuing production royalty of US$0.60 to Signature for each barrel of oil equivalent from the Company's share of production from the Permit area.

Orca, the largest structure on the Aquitaine Maritime Permit, was drilled by the Company and its partners during August and September of 2007. The well encountered a thick sealing element and a thick section of the target Aptian age sandstones, however, no hydrocarbons were discovered and the well was abandoned at a final depth of 2300 metres. Further evaluation of the data gathered from this well, together with integration of the Orca-1 well data with the 3-D seismic, will provide a better understanding of the potential of the remaining five, undrilled structures on the Permit.

The final cost of the Orca-1 exploratory well is estimated to be US$58 million of which approximately US$24 million is net to the Company.

On November 14, 2007, Bordeaux Energy entered into a participation agreement with Savant Alaska LLC under which Bordeaux will earn a 30% undivided interest in seven leases located on and offshore the North Slope of Alaska. The Leases are immediately adjacent to the 100 million barrel Liberty Field which is not yet in production and 20 km from the 13 billion barrel Prudhoe Bay Field.
Drilling of the first exploratory well on the Leases commenced on March 26, 2008 and reached a depth of 10,686 feet on April17, 2008 at which time it was abandoned as a dry hole. The anticipated reservoir sands were encountered but were thinner than expected and were water-wet. The Exploratory Well was drilled to test a prospect identified by Savant on a large 3-D seismic survey that was acquired in 1993 and 1995. The well cost a total of approximately US$14 million to drill and evaluate, of which Bordeaux's share is currently estimated to be US$5.6 million.

Given that the Kemik reservoir was thinner than anticipated and water-wet, the hydrocarbon potential of the Leases has been significantly downgraded. Bordeaux and Savant are currently evaluating the results of the Kupcake #1 well to determine the remaining potential of the Leases.

Under the Participation Agreement, the Company has the right to earn an undivided 30% working interest in the Leases by paying (a) 30% of the land and data costs (approximately US$1,200,000), and (b) 40% of the costs and expenses of the Exploratory Well up to a maximum cost of US$7,000,000, net to Bordeaux after which Bordeaux will pay its proportionate 30% share of any additional costs. Upon full payment of Bordeaux's share of the costs of the Exploratory Well, the Company will have earned an undivided 30% working interest in the Leases and each of the parties must pay its participating interest share of the future costs and expenses relating to the Leases.

The Corporation's general business objective is to acquire interests in high quality oil and gas exploration and development projects. The Corporation seeks to acquire a portfolio of projects in order to reduce risk through diversification, create potential for long-term growth and establish the Corporation as a reputable small cap international oil and gas company. The Corporation's acquisition strategy will be to acquire non-operated, significant but not majority interests in projects located in areas with low political and business risk.