EXECUTIVE SUMMARY                SOUTH KELSEY 755 PROSPECT                        SOUTH KELSEY FIELD                                            STARR COUNTY, TEXAS PROSPECT HIGHLIGHTS: The 755 SHALLOW OIL PROSPECT is a multi-well shallow oil drilling program consisting of three (3) proposed well locations, the first being an oil test well identified by close order well control and two development oil well locations immediately offsetting wells which faulted-out on known oil sands. The Miocene-Frio Oil Sand Trend characterized by strong shallow (less than 5500 feet) oil and gas production and wells which initially flow at 100 to 150 barrels of oil per day.  The program seeks to capitalize on higher oil prices and lower drilling and lease costs while utilizing close-in well control in a highly oil-productive area to identify overlooked commercial oil reservoirs. PROSPECT LOCATION: The identified prospects are located northeast of Santa Elena in Northeast Starr County, Texas and are south and west of and on strike with the hugely productive Kelsey Oil Field which produced over 5 million barrels of oil from these shallow horizons. STRUCTURE OF THE PROSPECT AREA: The known oil producing fields (fault blocks) trap on high-side closure against 45 to 150 foot down-to-the-coast faults which are several well locations long and two well locations wide. TRADE TERMS: 3 Well Prospect:                  Proposed Location 1 –  Miocene & Frio step-out test well (5500 ft) with 4 known oil pays and one development well                                            identified by fault-cuts in wells Proposed Location 2 –  Miocene & Frio off-set test well (4900 ft) with 1 known oil pay faulted-out in adjacent well Proposed Location 3 –  Frio off-set test well (5500 ft) gaining 20 ft of structure on known oil pay in down-dip well Potential Reserves (est.):         300,000 bbls oil (3-test wells), 150,000 to 200,000 bbls oil from development wells Number of Wells:                        3 structural test wells with 2 potential development wells Working Interest Available:      100% (15% APO) Operator:                                     Open at time of posting (To be determined by largest WI Buyer) Total Seismic Purchase:            None required (two locations are offsets to wells which faulted-out oil pays) Total Leasehold:                         169 acres Net Revenue Interest:              75%NRI on 100% Working Interest with SELLER back-in for 15% WI after payout of the initial                                                    test well. On subsequent wells for the prospect, SELLER will pay 15% of all drilling and                                                    completion costs. Costs:                          Land, Geology & Geophysics:         $85,000 for all 3 proposed wells (to be paid upon execution of Participation Agreement) Drilling and Completion (est.):                                                          8/8ths*              25%                1%       G & G & Land                          $  85,000        $  21,250         $   850       Drilling (5400 Sd)                    $200,000        $  43,750         $2,000       Completion (5400 Sd)            $150,000        $  37,500         $1,500       TOTAL (est.):                           $435,000        $108,750         $4,350 *SELLER may consider alternative offers on 100% WI. Subject to prior sale.