The 160 acre Hite prospect is located one mile east of the town site of Glen Flora in north-central Wharton County, Texas. The well was drilled on the flanks of the prolific Spanish Camp Field. Substantial oil and gas reserves have been produced in this field from the lower Wilcox (17,000’) through the shallow Miocene formations.

The 5000’ Hite well was designed to test the lower Frio sands identified as prospective utilizing a newly reprocessed three-dimensional seismic survey. An anomalous seismic “bright spot” indicated a gas pay interval in the Frio formation at approximately 4900’. This interval ties into two pay sands discovered previously by the operator nearby that have produced collectively over 1.2 billion cubic feet (Bcf) of gas. The identified anomaly covers a similar productive area and should be of a thickness to produce similar reserves. Two other bright spots should be encountered in shallower sands that could add additional reserves. The exploration risks are mitigated by the previous drilling and therefore make for a very low risk project. The previous wells in this pay interval have produced at rates between 400 and 650 thousand cubic feet (Mcf) of gas per day.

The Hite #1 was successfully drilled in February ’08 and went into production in March. Since then, the Hite has produced over 310 MMcf. The well is curently shut in, awaiting recompletion.