EXECUTIVE SUMMARY

HYDROCARBON EXPLORATION AND DEVELOPMENT - PARAGUAY

Parafin Corporation executed a Farmout Agreement with Guarani Petroleum Exploration, S.A. to acquire the development rights to hydrocarbon Concessions in the Republic of Paraguay consisting of approximately 2,456,453 hectares (approximately 6,069,994 acres) in the Alto Parana Block, Alto Parana Province, Paraguay.

The Alto Parana concession permit was issued by the minister of Public Works and Communications of the Government of Paraguay in the name of Guarani Petroleum Exploration, S.A. granting the exclusive right to study and explore for oil, gas and hydrocarbons in the entire study area known as the the Alto Parana Block. This Block is a contract entered into by the Government of Paraguay and ratified by Decree-Law 31/89. It provides for the prospection, exploration and exploitation of hydrocarbons on the Alto Parana Concession covering approximately 2,456,453 hectares (approximately 6,069,994 acres) in the Alto Parana Block, Alto Parana Province, Paraguay.

Financing for a ten-year exploration and development program for this project is estimated to be approximately $350 million. A further US$2 billion could be required for pipeline construction if reserves justify it. Parafin Corporation has estimated the immediate exploration and development costs to be approximately US$ 7 million and, based on the results obtained from the exploratory drilling, has budgeted an additional US$32 million per year on each concession for a period of ten years. Because of the large size of the hydrocarbon concessions, approximately 6 million acres, the development of the property could justify the long term expenditure of sums in excess of US$1 billion if results of exploration justified it. This amount could also be expended over a much shorter period of time.

The Agreement requires Parafin Corporation to do extensive seismic work including reprocessing current seismic data and, to drill a well to a depth of the shallowest of (1) eleven thousand five hundred (11,500) feet, (2) the bottom of the Devonian formation, or (3) the basement underlying the site of the Farmout Obligation Well on each concession.

Parafin is continuing its efforts to finance the Paraguayan hydrocarbon concessions. Activity in the oil and gas industry is at an historic high as is reflected by the current price of oil.

GEOPHYSICAL AND GEOLOGICAL REPORTS

The Geophysical Report by Byron Ayme, which can be found on the Corporation web site ParafinCorp , indicates the potential of the Concession that is being acquired by the Company. The reports are extremely detailed and conclude that the discovery of hydrocarbons in this area is just a matter of time.

The Parana basin, according to estimates by Petrobras (Brazil), may have generated some 150 billion barrels of hydrocarbons, and a substantial portion of this is thought to have migrated into Eastern Paraguay. The combination of local source beds, hydrocarbon shows in previously drilled wells and several structures which may range from 2,200 acres closure to at least 9,000 acres closure based on current geophysical data and multiple formation objectives, give this block attractive exploration potential and indicate substantial hydrocarbon potential of oil and gas.


FINANCING

Financing required to date by the Company for projects have be undertaken through the facilities of Rukos Security Advice AG, an Investment Banking corporation with Representative offices in Frankfurt, Germany. Other Capital Market financial institutions have expressed an interest in participating in the financing of this project.

FINANCING AND INVESTMENT OPPORTUNITY

To meet the financial requirements of the hydrocarbon exploration, the shareholders have approved the issuance of Common Shares, Preferred shares and Convertible Debentures. Investors will have the option to convert Principal and Interest of any interest bearing financial instrument to common shares.

PLACEMENT FEES

To locate potential investors, the Company plans to negotiate a fiscal agency agreement with several Financial Institutions. There is a commission fee paid to brokers who participate in the placement of the Common Shares, Preferred Shares and Convertible Debenture issues. It is anticipated that independent finders will respond to the Company's advertisements directed at institutions and investors and that other finders may already be known to the Company's officers and/or directors. All such finders will be compensated directly by the Company in the form of shares of the company.