Lake Hermitage Field

Plaquemines Parish, Louisiana

The Company owns 100% working interest in nineteen wells in the Lake Hermitage Field. Current net production is approximately 172 barrels of oil and 242 mcf of gas per day from seven producing wells and a total of 3,578 mineral acres is held by production in the field. Twelve wells are currently shut-in pending evaluation for workover and/or future recompletion in uphole zones and one well is in the process of being converted to a salt water disposal well. There are three processing facilities and tank batteries in the field. The high gravity crude produced in the field is transported out of the field by barge on a two week rotating basis.

A third party engineering report prepared by Collarini Associates as of April 1, 2011 places the value of total Proved reserves using a discount rate of 10% (PV-10) at approximately $15.25 million with a PDP component of $5.24 million. Probable reserves are estimated at $10.65 million.

We believe that a significant increase in production can be achieved in the Lake Hermitage Field by improving operational efficiencies, recompleting or otherwise returning several shut-in wells to production and by optimization of the gas lift system. A plan is in place and those efforts are underway. In addition, there are a number of proved undeveloped (PUD) drilling locations in the field and our technical team is currently evaluating the data and formulating a drilling plan for those locations.