WOOLSEY OPERATING COMPANY, LLC

125 NORTH MARKET, SUITE 1000, WICHITA, KANSAS 67202-1775 (316) 267-4379 FAX (316) 267-4383

Woolsey Companies, headquartered in Wichita, Kansas, believes Illinois, Indiana and Kentucky (Illinois Basin) have a significant economic opportunity facing them We base our belief on similarities of the magnitude of development and of the geologic stratigraphic sections in the Illinois Basin compared to Kansas !here !e have been successful in gro!ing our companies "ur belief is strong enough that !e have already made a si#eable commitment $edimentary rocks are thin in the northern part of the Illinois Basin and thicken to the south to over %&,''' feet thick !here the Wabash (iver intersects the three states "ver four billion barrels of oil and no telling ho! many trillions of cubic feet of natural gas have been produced in the Basin )he production has been attributed by the geological history reports to have come from the *e! +lbany shale as the primary source rock *atural gas has been produced from the *e! +lbany in the shallo! portion of the Basin in !est central Indiana !ith only a fe! reported oil sho!s scattered over the Basin We believe the Illinois Basin has both source rocks and tight unconventional sedimentary rock that contains ma,or untapped reserves We have heard some doubt of *e! +lbany shale being a ma,or source of ne! production -o!ever, every basin !ith a shale source rock that contributed ma,or oil production to other sedimentary reservoirs still has and is producing ma,or reserves Why !ould the *e! +lbany be any different. *either hori#ontal drilling nor hydraulic fracture treatments are ne! )he ability to do multiple stage treatments on a hori#ontal !ell !as developed by the industry in the $hale /$ource (ock0 plays )his multiple stage slick !ater fracture treatment that propagate and open up the natural fractures in a reservoir rock has been e1tremely !elcome and economically beneficial to the 2nited $tates and to those states that contain these $hale /$ource (ocks0 and tight unconventional carbonate reservoirs Instead of being beyond /3eak 3roduction0, !e are no! hearing pro,ections of the 2nited $tates becoming /4nergy Independent0 )here are also pro,ections of the 2nited $tates containing %'' years of natural gas reserves *atural gas is one of the cleanest burning fuels We have large compressor engines that have run on natural gas continuously for over ten years !ith very little !ear )o properly evaluate and develop this Illinois Basin potential !ill be e1pensive and very time consuming Currently, and during 5'%5, Woolsey has over %'' full6time, e1perienced people running title, obtaining leases and handling drilling and completion operations in the Basin We !ill not take an oil and gas lease !ith less than a four6year primary term !ith an option for an additional four6year term We must have si#eable blocks of acreage to ,ustify the e1pense of evaluating "ne year of the primary term on the first lease has already elapsed 7ue to the cut6up o!nership, determining o!nership title is taking one good title person ten days to run title on ,ust 8' acres at a cost of 9%5' per acre )o drill a vertical evaluation !ell, !e estimate a cost of appro1imately 9% & million and a hori#ontal !ell at &''' foot depth and 8''' foot lateral to cost 9: & to 98 million $eismic cost for good quality :67 is estimated to be greater than 9&',''' per square mile We must have sufficient time to evaluate by shooting and interpreting seismic, drilling vertical evaluation !ells !ith qualified !ell site geologists, gas detectors, drill stem tests, coring and full electric log suites to develop our leases properly )he %&,''' plus feet of sedimentary deposits in Illinois Basin contain numerous conventional reservoirs, %;'' to 5''' feet of tight unconventional carbonate reservoirs and at least four source rock #ones, that have potential for commercial production <ost of the counties and communities !ithin Illinois !ill have an economic opportunity due to the capital investment required for development, the ongoing operational activities and the associated revenue from oil and gas production Woolsey Companies