Environment

The operations of the Company are subject to a variety of laws and regulations governing the discharge of materials into the environment or otherwise relating to environment protection. Failure to comply with these laws and regulations can result in the imposition of substantial fines and penalties as well as potential orders suspending or terminating rights to operate. Some environmental laws to which the Company is subject provide for strict liability for pollution damage, rendering a person liable for environmental damage without regard to negligence or fault on the part of such person.

In addition, the Company’s operations are subject to particular hazards incidental to exploration, development and production of oil and gas, such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires and pollution and other risks. These hazards can cause personal injury or death, damage or destruction of property and equipment, pollution or environmental damage and suspension of operation. The Company will put in place and maintain insurance against the risks associated with its activities, in line with legislation and standard industry practice.

Offshore Pollution Liability

i3 intends to be a member of the Offshore Pollution Liability Association Ltd., the voluntary oil pollution compensation scheme which all offshore operators currently active in exploration and production on the UKCS are party to. The Company intends to put in place an Environmental Management Systems in line with the requirements of OSPAR recommendation 2003/5 to Promote the Use and Implementation of Environmental Management Systems by the Offshore Industry, as implemented in the UK by OGA.

The Company is committed to following good practice in respect of environmental matters and its environmental policy includes, amongst other things, compliance with applicable laws and regulations, implementation of systems to identify and manage risks associated with its activities and ensuring that its employees and contractors are adequately trained in the environmental aspects of their jobs.

The Board intends to establish an Environmental Management Committee which will be responsible for formulating and recommending policies on environmental issues relating to the Company’s operations.