speeding ticket, page-3

Bugger they do read HC :-)

fracture stimulation. Total oil and gas production is up to 102 barrels of oil equivalent (BOE) per day.
The SRH #1 and SRH #2 wells are currently awaiting fracture stimulation across the Spraberry and
Dean Intervals. Once the stimulation treatments on the #1, #2 and #6 wells are completed we expect
to see initial daily production to double from the project.
A new vertical well is being planned for October and will be our sixth vertical well on the 771 lease.
We are also preparing for a new horizontal well on the 772 lease once the current issue with the
Texas Railroad Commission (RRC) concerning depth severance in the Lind Wolfcamp Field is resolved.
This dispute has an impact on all nearby areas where leases have been granted on a depth severance
basis, and could apply to companies other than GGP. Drilling on our 772 lease cannot reasonably
proceed until a RRC ruling has been made or we would risk access or rights to production from the
well. A ruling is expected in the next few months.
Funding for these projects will continue to come from existing financial programs in place. In addition,
we are working on several new funding programs including financing with debt which is designed to
accelerate the current drilling program. We are also looking at optioning out an equity piece in the
project in order to fund further activities.
In order to accelerate the development of the Permian project, we have decided to seek a ruling from
the Texas Court over the current dispute with Petro-Raider. This dispute has been outstanding since
April 20, 2011 and has precluded us from arranging more traditional funding methods at cost effective
pricing levels. Our actions involve first asking the Texas Court to rule on our motion to dismiss some of
the ancillary claims from the original filings by Petro-Raider. We believe depositions taken so far
clearly show that there was no collusion between parties to the original lease purchase. In addition,
we may pursue other strategies to simplify and accelerate the case. A decision by the Court either in
our favour or against us will quantify the leasehold exposure and remove a primary impediment to a
full development of the project. We hope to be before the Court and have a decision by the end of
this year.
During the legal process, GGP remains open to reaching a settlement with Petro-Raider that will be in
both parties’ best interests. We do not expect the full potential of our current leasehold position or
the leases returned to the lessor earlier this year will be possible until this dispute is resolved.
The Permian Project is considered a very valuable asset. Over 5 million barrels of P1 and P2 reserves
have been independently confirmed in the Spraberry Dean intervals on the 771 lease. In addition,
there are significant contingent resources identified in the Wolfcamp. GGP’s current market
capitalization is considered only a small fraction of the present value of the Permian Project. Every
effort and avenue is being explored to achieve greater recognition of the true value of this resource
as GGP’s primary asset.