great result

Finally the long wait will pay off....for those who have shown patience.

August 22, 2005
SUCCESSFUL RECOMPLETION PHASE TWO OF CHILDERS #1 WELL IN EAST TEXAS
The company is pleased to announce the successful execution of the second phase of the recompletion of the Childers #1 well in the 30% owned Jefferson-McLeod Project in East Texas.
In the second phase of the recompletion of the Childers #1 well, a third, new zone was perforated and fracture stimulated. The well is currently producing from this zone at 1.4 million cubic feet (“mmcf”) and 10 barrels (“bbls”) of oil per day, flowing at 1200 lbs of flowing tubing pressure through a 22/64 inch choke.
This reservoir is also present behind pipe, but not yet perforated in the Harris #1, the Huntington-1L and the Walker #3 wells.
The Childers well was originally producing approximately 300 thousand cubic feet (“mcf”) of natural gas and 10 bbls of oil per day from a Travis Peak reservoir. This production was temporarily shut in, in order to test a second Travis Peak zone. The second zone was perforated and fracture stimulated and was producing 450 mcf of natural gas and 10 bbls of oil per day. The production from this reservoir had almost stabilized and continued to increase slowly, when the company shut in this reservoir in order to start phase two of the recompletion, as described above. The company plans to commingle all three reservoirs and produce them together. Total stabilized production from this well is expected to be greater than 2.0 mmcf and 30 bbls of oil per day.
As the company’s Chief Executive Officer, Jeffrey Clarke stated in last week’s press release: “the company’s multi-well development drilling and recompletion program is beginning to show positive and repeatable results, with potential for a solid build-up in operating cash flow. As a result of commodity prices (currently approximately US$ 9.00/mcf), operating cash flow margins should be at enviable levels.”