The Company controls approximately 27,000 gross (18,500 net) acres in the Bethany-Longstreet field of DeSoto and Caddo Parishes, Louisiana, and 19,500 gross (6,400 net) acres in an area we call Caddo Parish J.V. The Fields have Hosston and Cotton Valley formations present.

The Cotton Valley formation is predominately natural gas with 8% to 10% porosity. Wells drilled in the Cotton Valley Trend typically exhibit the following characteristics:

• Predominately natural gas
• High probability of success
• Significant development potential and repeatability
• Additional upside in the Pettit and Travis Peak

As of June 30, 2007, we have successfully completed 22 Cotton Valley Trend wells in the Bethany-Longstreet field, and have plans to drill a horizontal test on our Caddo Parish J.V. by the end of the year. Our initiative in this area began in the third quarter of 2003, when we obtained, via farmout, exploration rights to approximately 20,000 gross acres. We have an average 70% working interest in the Bethany-Longstreet field and will have a 67% working interest in the Caddo Parish J.V. upon establishment of production.