Ann: Quarterly Activities Report & Appendix 5B, page-4

"A strong financial quarter closed with nearly $2 million more cash in hand than had been forecast in the previous quarter. The prime drivers of the better performance were tighter capital control, lower operating costs and higher than expected oil prices and production. We ended the year with $5.94 million (as opposed to the forecasted $4.1 million) and the receipts of the Take-or-Pay payments for the under lift of gas expected to be $4.9 million (as opposed to the forecasted $4.6 million). By January close we expect to be over $3 million above that forecasted in the September quarterly with our cash balance approximately $11.5 million."

CB