Letter From the Desk of Mr. Naeem Tyab, President of Mogul Energy

August 14, 2007

Dear Shareholders,

I would like to share with you some of the exciting recent developments occurring with your Company. As you may be aware, we are currently drilling our first well on our East Wadi Araba (EWA) Concession, located in the Gulf of Suez, Egypt. We will be providing regular drilling updates that will be posted to our website so please visit our website or sign up for automatic email updates.

In addition, Mogul Energy recently announced that it has entered into a letter of intent (“LOI”), dated July 30, 2007, to complete a Business Combination with Sea Dragon Energy, a private Canadian corporation. If the Business Combination is completed as outlined in the LOI, Mogul Energy’s working interest in the EWA Concession would increase from 20% to 60%. To read the complete terms of the LOI, please view the company’s Form 8-K filing with the SEC at http://www.sec.gov.

I believe that the planned combination of Sea Dragon’s 40% interest in the EWA Concession with Mogul Energy’s existing 20% interest is an exciting development for Mogul Energy. In addition to giving Mogul Energy a majority interest in the EWA Concession, the combination would allow the Company to focus the talent and resources of both companies on the development of the EWA Concession. The planned addition to Mogul Energy’s management of the experienced oil and gas team from Sea Dragon should benefit the Company. Upon completion of the Business Combination, it is anticipated that management of Mogul will include the addition of the persons identified below.

David M. Thompson – Chief Executive Officer and Director
David Thompson has over 25 years of financial experience in the oil and gas industry. He joined the Larmag Group of Companies in 1988 and established the oil trading company Larmag Energy Trading Limited based in Bermuda with offices in the US and Europe. Mr. Thompson was appointed senior vice president when he became the finance director for Larmag Energy operating in Turkmenistan in 1992. Mr. Thompson has helped to raise over US$100 million in funds for the Larmag Group of Companies and has negotiated a number of farm-outs to reduce Larmag Group of Companies' interest to Odyssey Petroleum Corporation and later Dragon Oil Plc.
Mr. Thompson became the Chief Financial Officer of Aurado Energy, Inc. (TSX: AEO) in 2002, and became the Chief Financial Officer of Forum Energy Corporation (OTCBB: FRUEF) from 2003 to 2005. In 2005, he helped to take the assets of Forum Energy Corporation into a new UK Company, Forum Energy Plc, and successfully admitted this company to the Alternative Investment Market ("AIM") in London by raising over 15 million Pounds Sterling through an initial public offering.
Mr. Thompson is a Certified Management Accountant (1988) and is on the board of a number of mutual fund companies as well as charities.

Dr. Barry G.M. Wood - Director
Dr. Barry Wood has over thirty-three years experience in the oil and gas industry which includes 16 years with Marathon Oil in various positions such as Exploration Manager, Egypt. Currently, he is the founder and director of PetroQuest International Ltd., a UK based company specializing in identifying and developing exploration fairways, prospect mapping and assisting in development work. Dr. Wood also acts as an international consultant advising on exploration strategies, risks and development plans in North and East Africa, the Middle East and South East Asia. He has also conducted a three-year research project on Basin Evolution of North Africa and the northern Middle East to understand reservoir and trap development in that region. Dr. Wood has a Doctorate of Philosophy from Oxford University (2001), a B.Sc. Honors from Queen's University (1972) and a B.A. from Queen's University (1969).

Ahmed Farid Ahmed Moaaz- Country Manager, Egypt, and Director
Mr. Moaaz has over 30 years experience in the oil and gas industry. Mr. Moaaz was the Chairman and Managing Director of the Egyptian Natural Gas Holding Company (E-Gas), El Wastani Petroleum Company, a joint venture between The Egyptian Natural Gas Holding Company and Centurion International between 2003 and 2005. Mr. Moaaz was also a former Deputy Chairman for Production of Egyptian General Petroleum Corporation where he was responsible for supervising and directing drilling production and petroleum engineering of all joint venture companies operating in Egypt. Mr. Moaaz has also supervised the operations and was a director of Suez Esso Petroleum Company. Mr. Moaaz has a B.Sc. in Petroleum Engineering from Cairo University (1971).

Should you have any questions or wish to further discuss any of the above developments please do not hesitate to contact me at naeem@mogulenergy.com.

Sincerely,

Naeem Tyab
President