On June 9, 2010 the Ministry of Tourism of the Sultanate of Oman ("MOT") approved all the terms and conditions of the draft Development Agreement ("DA") for the Company's proposed real estate development project in Oman (the "Omagine Project"). The DA is the contract between the Government of Oman and the Company's presently wholly owned Omani subsidiary, Omagine LLC. The DA will govern the design, development, construction, management and ownership of the Omagine Project. As previously disclosed, the Company and Omagine LLC had been awaiting the approval by the MOT of the final schedule to the DA ("Schedule 24") and Schedule 24 and the rest of the DA and all schedules thereto have now been approved by the MOT and all negotiations with respect to the DA are now concluded.

Printed and bound copies of the DA were delivered today by Omagine LLC to the MOT. The MOT will now officially transmit the DA to the Ministry of Finance ("MOF") and to the Ministry of Legal Affairs ("MOLA") for their official approval. Since representatives of both MOF and MOLA have been involved in every step of the negotiation process to date, the official approvals from MOF and MOLA are viewed by management as simply procedural in nature and such approvals are expected to be forthcoming.

A copy of the final DA was also delivered June 9, 2010 by Omagine LLC to the lawyers for Omagine LLC's proposed new shareholders (the "New Investors") for their review, which review is anticipated to be completed shortly. Subsequent to this review and to the official approvals of MOF and MOLA, Omagine LLC and the New Investors will execute a shareholders' agreement, the New Investors will be formally registered as shareholders of Omagine LLC with the Ministry of Commerce & Industry pursuant to Omani law, and the DA will be signed by Omagine LLC and the Government of Oman. After the New Investors become shareholders of Omagine LLC, the Company's ownership of Omagine LLC will be 50.5%.

The Omagine Project

The Company has proposed to the Government of Oman (the "Government") the development of a real estate and tourism project (the "Omagine Project") to be developed in Oman by Omagine LLC (the "Project Company"). The Project Company will design, develop, own and operate the entire Omagine Project.

The Government will issue a license to the Project Company designating the Omagine Project as an Integrated Tourism Complex ("ITC") and as such, the Project Company will be allowed to sell the freehold title to residential properties developed on the Omagine Site to any person, including any non-Omani person. Non-Omani persons (such as expatriates living and working in Oman) are forbidden by law to purchase any land outside of an ITC. Significant commercial, retail, entertainment and hospitality elements are also included in the Omagine Project which is expected to take about 5 years to complete. The Company plans, over time, to also be in the property management, hospitality and entertainment businesses.

The Project Company

In accordance with Omani law, Omagine LLC was legally formed in Oman as a limited liability company on November 23, 2009, the date of formal approval by the Ministry of Commerce and Industry ("MOCI"). Omagine LLC is presently 100% owned by the Company. The Company plans to reduce its 100% ownership of Omagine LLC in the near future by causing Omagine LLC to sell newly issued shares of its capital stock to investors. The investors are Consolidated Contractors International Company, S.A.L. ("CCIC") and three Omani investors (the "Omani Shareholders"). All proceeds from such sales of capital stock will belong to Omagine LLC. The three Omani Shareholders are: (i) the Office of Royal Court Affairs, an Omani organization representing the interests of His Majesty, Sultan Qaboos bin Said, the ruler of Oman, ("RCA"), (ii) Al-Mabkharah LLC, an Omani limited liability company ("ALM"), and (iii) the Oman Integrated Tourism Projects Fund (the "OITP Fund"). The agreement which will govern the design, development, construction, management and ownership of the Omagine Project is the Development Agreement. The Development Agreement consists of two (2) parts: (i) the "Main Agreement", and (ii) the "Schedules" to the Main Agreement. Prior to the signing of the Development Agreement, the Omani Shareholders and CCIC (collectively, the "New Shareholders") and the Company will enter into a written "Shareholders' Agreement" with respect to, among other things, their respective investments in Omagine LLC and the corporate governance and management of Omagine LLC. The Shareholders' Agreement is presently being reviewed by attorneys for the New Shareholders in anticipation of its imminent signing. The attorneys for the New Shareholders will also review the final draft Development Agreement as soon as it becomes available, after which the Shareholders' Agreement will be executed, the New Shareholders will be formally registered as such with the Ministry of Commerce and Industry in Oman and the Development Agreement will be signed by Omagine LLC and the Government. As presently contemplated, the Company's 100% ownership of Omagine LLC will be reduced to 50.5%. The New Shareholders (CCIC, RCA, ALM, and the OITP Fund) will subscribe for and purchase an aggregate of 49.5% of the capital stock of Omagine LLC for an aggregate cash investment into Omagine LLC of one hundred nine million three hundred fifteen thousand three hundred seventy five U.S. dollars ($109,315,375).

The $ 1.9 + Billion Omagine Project

The Omagine Project is planned to be developed on one million square meters (equal to approximately 245 acres) of beachfront land facing the Gulf of Oman (the "Omagine Site") just west of the capital city of Muscat and nearby Muscat International Airport. It is presently planned to be an integration of cultural, heritage, educational, entertainment and residential components, including: a "high culture" theme park containing seven pearl shaped buildings, each approximately 60 feet in diameter, associated exhibition buildings, a boardwalk, an open air amphitheater and stage; open space green areas; a canal and an enclosed harbor and marina area; associated retail shops and restaurants, entertainment venues, boat slips, and docking facilities; a five-star resort hotel, a four-star resort hotel and possibly a three or four-star hotel; commercial office buildings; shopping and retail establishments integrated with the hotels, and approximately two thousand residences to be developed for sale.

The Company has again updated its projected financial model for the Omagine Project since doing so in November 2009 and such updated financial model presently forecasts net positive cash flows for Omagine LLC in excess of 900 million dollars over the five year period subsequent to the signing of the Development Agreement with a net present value of the project in excess of 400 million dollars. Although the Oman economy has not been as severely affected by the recent worldwide financial crisis as nearby Dubai or other countries, it did experience some negative effects, slowdowns and volatility. Raw material and labor prices initially dropped dramatically and are now experiencing a recovery. Recent sales prices for housing in other integrated tourism projects are stabilizing and, in Oman, the inventory of unsold housing in the secondary (re-sale) market has dropped dramatically in recent months which some observers see as an important indicator of pent up future demand. Management cautions however that investors should not place undue reliance on this financial model forecast as all such projections are subject to significant uncertainties and contingencies, many of which are beyond the Company's control and no assurance can be given that the projections will be realized. Potential investors are cautioned not to place undue reliance on any such forward- looking statement or forecast, which speaks only as of the date hereof. In order to move into the actual development stage of the Omagine Project, Omagine LLC and the Government must first sign the Development Agreement. The Company and the New Shareholders are closely following this matter, and although this process has often been delayed to date, management and the Founder Shareholders remain confident that attainment of the ultimate objective of signing the Development Agreement with the Government is now imminent - although the precise date for such signing is not possible to predict at this time. Subsequent to the signing of the Development Agreement, the Omagine Site's value will be definitively determined by a qualified independent real-estate appraiser and such appraisal will be utilized by Bank Muscat in its discussions with other financial institutions to optimize Omagine LLC's capital structure and to arrange the Construction Financing. No date has yet been established for the signing of the Development Agreement but the Company presently anticipates that the Development Agreement will be signed by Omagine LLC and the Government in late July 2010 after the summer break or in August 2010. Please be advised that the foregoing assumptions and this discussion are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 which involve uncertainties and other factors which could cause the outcomes described herein to differ from future Company achievements as expressed or implied by such forward-looking statements.

Profile last updated: 17-Jun-2010