The Barton Lease
East Feliciana Parish, Louisiana

The Barton Lease, located in East Feliciana Parish, Louisiana, consists of 8543 contiguous acres located about 60 miles southeast of Natchez, Mississippi. With the acquisition, the Company received proprietary 3-D seismic information covering 78 square miles including and surrounding the leased land.

Following closing of the acquisition in August 2000, the Company drilled two wells, one of which is presently producing natural gas at the rate of 50,000 cubic feet per day. The second test well yielded sub-economic levels of gas, and was used for its stratigraphic control data.

Two wells were drilled on the property during 2001 resulting in one gas well producing 100MCF/D and one dry hole. In early February 2002 KFG drilled the #1 Howell in the Barton Area and it was completed as a dry hole.

Company research conducted prior to the acquisitions suggested that many of the abandoned wells were mechanically mismanaged, and that substantial hydrocarbons could still be recovered from the original pay zones by re-entry and/or by twinning the original wells. After drilling five wells which tested our hypothesis, it has been determined that, in fact, there is no more potential on the actual 8500 Barton leasehold. Significant reserve potential remains in the area of the 3D survey but because low gas prices and lack of initial success in East Feliciana Parish, only one additional well (as of now) is planned for Calendar 2002. Other lands have been leased in the area but the Barton Lease has been allowed to lapse.