ann. oil producer

Ann. late yesterday

As part of the ongoing exploration program in Kentucky the Company spudded and
drilled the Riddle #14 well over the past weekend. This well was designed to test the
Sunnybrook and Stones River formations, which have been proven to be good oil
produces both on our lease and the nearby leases.

The well intersected the Sunnybrook oil zone at 575 feet (175m) and produced live oil
into the well bore. As there is little gas in this zone and also no water to drive the oil, the
well did not flow to surface.

Drilling continued to the Stones River Formation where it intersected significant oil
shows from 668 feet to 725 feet (205 m – 223 m) and a gas show at 730 feet (224m).
Riddle #14 will now be acidised to clean up both oil horizons and fitted with a pump to
establish the amount of oil production. The oil will be pumped down hill to the tank at
# 11, which is just over 400 feet (123m) away.

The rig has been release from the site and has now been moved to the Riddle #13
location. This location is near the old Riddle #3 well, which produced 50 barrels of oil per
day from the Stones River when drilled in 1983.

A work over continues on the Carter lease, we have now arranged for a field services
company to undertake a full acidisation program of six of the oil producing wells on the
lease. This program will stimulate all of the wells with the aim of producing two to three
times more oil than previously produced.