Market Overview

The Oil Supply Crunch to hit in Five Years With Prices Skyrocketing: A shortage of oil to bring higher oil prices. "The Next Crisis: Prepare for Peak Oil", WSJ, 11 Feb 2010.

167 Wells for the Price of One Rough costs to drill one new well are $5 million. With a 60% success rate that brings the cost of one new "exploratory" well to $8.3 million. Investing the same capital in the redrilling of existing Appalachian wells that are known to produce oil and natural gas yields 167 wells. This means much lower startup costs, much less risk and a quicker route to profitability. Technology, developed since these wells were abandoned, now indicates significantly more reserves exist and enables their extraction.

The Company expects to successfully out maneuver others to secure the most desirable available leases. It is a niche market that through their industry contacts, business relationships, extensive research, study and planning they are uniquely positioned for success. The two senior-most executives of the Company have both cut their industry teeth in the heart of the Marcellus Basin. They have extensive regional industry contacts and intimate knowledge of the unique local business culture. This is a decided advantage in identifying and securing leases of existing wells with high yield oil and gas prospects.

Instead of Competing with the Big Boys, Become an Attractive Acquisition Target! While the Company's focus is to "roll-up" the low hanging lease fruits below and beyond the radar of the majors, they equally have concluded that, once they meet critical mass, their most likely exit strategy will be a major. That's where the Company sees an opportunity to profit.

Instead of trying to compete with the major oil companies head on they plan to position the Company as an acquisition candidate when the timing is right for both parties. Simultaneously, the major oil companies offer a profitable exit strategy for investors.

A number of companies have successfully followed this strategy of buying up leases too small for the majors. These are then aggregated into a larger "rolled up" pool, with the resulting pool sold to the majors at a significantly higher multiple and at a significantly higher profit.

Early on in Phase Three (first 24 months), the Company expects to produce approximately six barrels of oil and 75 MCF of natural gas each day from each of its 92 Wells. The result is 550 bls of oil and 300 bls of oil equivalent in natural gas for a per day total of 850 bls. Using the common industry valuation of $50,000 per running barrel, the total of 850 running bls yields a valuation of $42.5 million in the first two years.