Planned Acquisitions

Producing Properties

In July, 2011, the Company acquired Tchefuncte Natural Resources, LLC, a Louisiana operator with interests in five producing oil fields in south Louisiana. These properties have substantially increased our reserve base and have added significant monthly net revenue and cash flow. We are currently evaluating other producing oil and gas properties in the area and hope to complete additional acquisitions of this nature in the next twelve months.

Acquisition and Testing of Low-Risk Drilling Prospects with Significant Expansion Potential:

In keeping with our philosophy of balance and diversification, we continue to evaluate oil and gas drilling prospects with existing production as well as significant expansion potential. The types of properties of interest are shallow drilling prospects in shale (both oil and gas), tight gas or coal bed methane reservoirs with significant acreage positions and the potential to drill hundreds of wells and book extensive reserves. These types of reservoirs are relatively low-risk because they have hydrocarbons in place, and the potential for dry holes is very small.

The acquisition of the Java Field was the initial step in the implementation of this strategy. This property, described elsewhere on this website, has existing production with enhancement potential as well as large-scale development potential in the Marcellus Shale.

In keeping with this philosophy, we intend to acquire and develop additional properties of this type, encompassing both oil and natural gas drilling and production. As an early stage public company seeking to rapidly accumulate reserves and build significant shareholder equity, we believe that this kind of large-scale, low-risk, developmental drilling should result in stable, long term growth in revenue, reserve base and shareholder value.