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 200 BOE from seven producing wells and a total of 3,578 mineral acres is held by production in the field. Eleven wells are currently shut-in pending evaluation for workover and/or future recompletion in uphole zones. The remaining well is being evaluated for conversion to a salt water disposal well which would reduce expenses and allow us to handle more fluid on a daily basis. There are three processing facilities and tank batteries in the field. The high gravity crude produced at Lake Hermitage is transported out of the field by barge.

A significant increase in production has been achieved in the Lake Hermitage Field by improving operational efficiencies and by optimization of the gas lift system. Two wells were successfully recompleted to uphole zones in the 4^th quarter of 2011 with excellent results.  The recompletion of two additional wells is planned for the 2^nd quarter of 2012 with more recompletions to follow in the 3^rd and 4^th quarters of 2012.

An extensive geological and engineering evaluation of the field has identified fifty-eight potential drilling locations, nine of which are proved undeveloped (“PUD”) locations with multiple stacked pay zones. We expect to drill the first of several developmental wells in this field later this year.