KMG EP has preferential access to exploration acreage due to its relationship with the Kazakh Government and the parent company. Together with the pre-emption rights to acquire existing oil and gas assets offered for sale, the Company has access to new areas obtained by NC KMG via direct negotiations with the government. Such advantage allows the Company to replenish its exploration portfolio and to compete effectively with the largest transnational oil corporations.

The Company maintains that the potential for exploration in Kazakhstan is considerable, both offshore and onshore. KMG EP is currently carrying out offshore exploration in the areas of Liman, Taisogan, R-9 and also in the areas neighbouring the Uzen and Karamandybas fields. Onshore the country has been well explored down to a depth of 3 – 3.5 kilometres. KMG EP believes, however, that there are large potential resources lying beneath that depth, particularly in the subsalt horizons.

The Company is planning to continue seismic studies at existing exploration blocks andplanning to drill exploration wells targeting subsalt structures as well as looking for additions to the Company's exploration portfolio using NC KMG's right for direct negotiations with the Government for new exploration licenses.

Acquisition of exploration assets reflects updated strategy of KMG EP to shift its efforts towards exploration: the Company acquired 100% in LLP “SapaBarlauService” (currently JSC “KMG EP Exploration assets”, KMG EP EA) and 100% in LLP NBK in September 2010, 50% in “Urals Group Limited” which owns the license for the Fedorovskiy block in March 2011, four exploration blocks Temir, Teresken, Uzen-Karamandybas and Karaton-Sarkamys in April 2011 and 100% in JSC Karpovskiy Severniy.