on those locations. We plan to spend approximately $35.0 million on drilling expenditures in 2005, comprised of approximately 34 wells (14.4 net). We also plan to spend $5 million to purchase and reprocess 3-D seismic surveys during 2005.

TEXAS - WILCOX AREAS

We have licenses for approximately 2,066 square miles of 3-D seismic data and 17,966 net acres of leasehold in the Wilcox trend in Texas. From January 1, 2001 through December 31, 2004, we drilled and completed 33 wells (10.9 net) on 39 attempts in this area. We incurred capital expenditures of $9.2 million and drilled 11 wells (4.6 net) in the Texas Wilcox area in 2004 and expect to devote approximately $4.9 million to drill nine wells (3.5 net) in this area in 2005. As of March 1, 2005, we have identified over 25 exploratory drilling locations, with an additional 37 potential extension opportunities, in the Wilcox trend over which we have licenses for 3-D seismic data and leased acreage. Approximately 12 of the 25 exploratory locations we have identified are relatively lower risk and generally shallower with the remainder being relatively higher risk and deeper with greater upside potential.

TEXAS FRIO/VICKSBURG/YEGUA AREAS

This combined trend area sometimes overlaps but is generally closer to the Texas Gulf Coast than the Wilcox areas discussed above. In any particular target or prospect in this area, the Frio is the shallower formation, above the deeper Vicksburg and still deeper Yegua formations. We have licenses for a total of over 2,166 miles of 3-D seismic data and 7,750 net leasehold acres over this trend. Since 1999, we have focused primarily in Matagorda County, the location of the Providence Field, and in Brooks County, the location of the Encinitas Field.

As of March 1, 2005, we have identified over 21 exploratory drilling locations with an additional 19 potential extension opportunities (depending on the success of our initial drilling activities on those locations) in the Frio/ Vicksburg trend area over which we have licenses for 3-D seismic data and leased acreage. Approximately 14 of the 21 exploratory locations we have identified are relatively lower risk and generally shallower with the remaining seven being relatively higher risk and deeper with greater upside potential.

From January 1, 2001 through December 31, 2004, we drilled and completed 41 wells (9.3 net) in 46 attempts in this trend. We incurred capital expenditures of $8.7 million and drilled 16 wells (4.5 net) in the Frio/Vicksburg trend area in 2004 and expect to devote approximately $6.3 million to drill nine wells (2.7 net) in this area in 2005.

Providence Field. We have licenses for over 540 square miles of 3-D data in and surrounding the Providence Field we discovered in 2001. Since the discovery well commenced production in January 2002, six wells have been drilled and successfully completed. Four of the wells had average production rates ranging from 14,339 to 17,669 Mcfe per day per well during the first 90 full days of production. The field has cumulative production as of December 31, 2004 of 18.0 Bcfe. We have working interests ranging from 35% to 45% in the leases in this field and operate four of the six wells.

Encinitas Field. This field, the site of our first 3-D seismic survey in 1995, has 32 wells currently producing. Since 1996, we have participated in the drilling of 29 wells (5.4 net) in this area, 27 (4.9 net) of which were successfully completed. During 2004, we participated in the drilling of five wells, all of which were successfully completed. We expect to drill four wells (1.1 net) in 2005, with an additional eight well locations to be drilled thereafter. We expect to have a 27.5% working interest in those wells.

SOUTHEAST TEXAS AREAS

The Southeast Texas area contains similar objective levels found in the Frio/Vicksburg/Yegua trend area. We separate this as a focus area because of the geographic concentration of our 3-D seismic data and because reservoirs in this area can display seismic amplitude anomalies. Seismic amplitude anomalies can be interpreted as an indicator of hydrocarbons, although these anomalies are not necessarily reliable as to hydrocarbon presence or productivity. We have acquired licenses for approximately 881 square miles of 3-D data over our Southeast Texas project area which is focused primarily on the Frio, Yegua, Cook Mountain and Vicksburg formations.

As of March 1, 2005, we have identified over 22 exploratory drilling locations with an additional 12 potential extension locations in the Southeast Texas area over which we have licenses for 3-D seismic data. Approximately 18 of the 22 exploratory locations we have identified are relatively lower risk and generally shallower with the remaining four being relatively higher risk and deeper with greater upside potential.

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