CURRENT OIL DRILLING OPERATIONS

We always spread our investors funds over multiple drilling events. During the fourth quarter of 2011 and first quarter of 2012 we are drilling on fourteen different leases a total of fifteen total wells. We are utilizing both Pioneer Oil and Core Minerals to complete these projects. Typically, we are drilling in areas of past production, however, with this set of wells, we are in many cases drilling to deeper depths than was previously done to find oil that had not been discovered. At this point, we expect that most of these drilling events will become commercial wells, however, we do expect that at least one well will not be successful based on our past/industry experience.

As of December 1st, we have drilled five vertical and one horizontal wells. One well will not be a commercial well, however the remaining four all look to be very good wells and are in various stages of completion. The first vertical well that was completed initially produced 80 BPD from multiple zones and has remained constant at the 40 BPD level for the past three weeks. We would expect that once all of the wells have been completed and operated for 90-120 days that we will then do a second equity raise to finance additional wells on these existing leases as appropriate. This will likely occur in March, 2012.