The initial exploration on this lease began in August 2004 with the drilling of the Angell Ranch #1 well. This initial test well indicated excellent shows from the Delaware, Upper Bone Spring and Morrow Sands. The well was successfully completed in the Morrow Sand and came on at 1.2 million cubic feet (MMCF) of gas per day. It is estimated the Morrow Sands alone have reserve potential of 1-3 billion cubic feet (Bcf). Total production to date is over 1Bcf.

A second shallow well was drilled after the Angell Ranch #1 to test an oil sand. This well was unsuccessful. We will continue to produce the Morrow sand in the #1 well until it becomes unprofitable; then we will move up-hole, recomplete in either the Delaware or Upper Bone Spring, and produce from that sand.