(GIP) 42,500,000 Mcfg and Drilling 14 Wells

Estimated Capital to Lease, D&C CAPEX, LOE, and Manage 30 wells: +/- $50MM

The Yegua Formation is a geological mappable unit of Eocene age that is highly productive of oil and natural gas throughout South Texas. This prominent reservoir is regionally extensive. Furthermore, the formation extends into East Texas, Louisiana, and Mississippi, and to the southwest into Mexico and remains hydrocarbon productive throughout. It continues to be a major exploration objective throughout these hydrocarbon producing states and regions. Four wells have been drilled, completed, and classified by the Railroad Commission of Texas as Yegua gas producers.

All four wells produced gas and condensate. There is very little to no chance of drilling a Yegua dry well on this prospect. All 4 wells ceased producing in commercial quantities not due to depletion but due to poor completion techniques and casing design. The fact that the dry hole risk has been virtually eliminated, it behooves the owner/operator to solve the casing issue in the lowest part of the well. This will extend the life of the well thereby maximizing the ultimate recovery