Eberhart Ranch Horizontal Barnett Prospect

Executive Summary

Objective: Lower Barnett Shale Horizontal Completions
PTD: 3400’ TVD, 6500’ MD w/ 3000’ Lateral
Location: Bend Arch, Southwest Fort Worth Basin
TEDC/ 1st Well: $1,500,000
5 Additional Wells: $7,500,000

Reserves

Reserve Potential / well: 100,000 Bblso and 1Bcfg / well
Total Reserves: 600,000 Bblso and 6 Bcfg

Trade: Participant pays 100% of the cost through completion to earn 80% of the working interest in the first well; Wejco, Inc., et.al.; will participate for 20% working interest on all additional wells with Participant at 80% working interest; with an evaluation period between wells. WEJCO, Inc. will operate and receive partial reimbursement for its land and geologic costs of $285,000, proportional to the carried interest purchased. All additional drilling and evaluation costs will be on an actual invoice cost basis plus contingencies. All leases are fully paid, three year term and / or held by production. WEJCO has approximately 2200ac and will deliver a 77% NRI to participants.

Geologic Summary: The Eberhart Ranch Horizontal Barnett Prospect is a development offset to a Mississippian Pinnacle Reef well which has produced over 175,000 Bbls and 2.1 Bcfg from 3400’. The well is still being produced after 22 years and is sourced by the Barnett Shale surrounding this very small reef complex.

The Barnett shale currently is proven productive throughout the Fort Worth Basin as well as the Permian Basin and is the second largest producing reservoir in Texas. The Eberhart Ranch Horizontal Barnett Prospect is in the oil prone, liquids rich portion of the Lower Barnett Shale. The production is relatively stable through time, as it is self-generating and continues to contribute oil and liquids rich gas through desorption, providing for long term cash flow. A low pressure, (35#), gas liquids line on the lease assures non curtailment of this high 1400+ Btu. gas.

The leases are proven productive in the Pennsylvanian Caddo Limestone (2000’), the Mississippian Marble Falls Limestone (2800’), the Duffer Lime (3200’), the Chappel Lime (3300’); and now the Barnett Shale (3400’). Nearby wells document 125’ thickness of productive Barnett proven by Schlumberger F.M.I. Log data and core data. All laterals will be drilled using seismic and well data interpretations provided by WEJCO.

The Pinnacle reef offset well, produced at rates near 200 Bblso/d (192) and averaged over 125 bbls/d and 200 mcfg/d for over 4 months on rework, after producing for 14 years, (40,000 bbls and 1 Bcfg). This well is sourced by the Barnett and is still producing from fractured Chappel. Initial production rates of over 200 bblso/d and 2,000 mcfg/d are anticipated. A very conservative average initial completion of 110 bblso/d and 1,200 mcfg/d at $70/bbl and $4.50/mcfg (with liquids); provides for first well and total initial project payout in five months.

Using a conservative cumulative production of 600,000 Bbls and 6 Bcfg, (100,000 Bblso and 1 Bcfg/well), (Pinnacle reef produced 175,000 bbls/o and 2.1bcfg and is still producing); with the above pricing; the 77% NRI could generate approximately $46,200,000 to the 100% working interest in revenue after project cost recovery for this Prospect, at current pricing. These low risk, Barnett horizontal wells offer a reward to risk ratio of approximately 7:1, in this unconventional, oil and liquids rich play; making this an outstanding opportunity.

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