GLOSSARY OF TERMS
     
The following is a glossary of commonly used terms in
the oil and gas industry which is being provided for ease
of reference and convenience purposes only.

"area of mutual interest" or "AMI" - An agreement by which
parties attempt to describe a geographical area within
which they agree to share certain existing and additional
leases acquired by any of them in the future.

"APO/BPO" - After payout/before payout.

"Btu/MMBtu" - British Thermal Units, a measure of the
heating value of fuel.  MMBtu stands for one million Btu.

"Bbls/MBbls" - A Bbl. or barrel is 42 U.S. gallons of
crude oil or condensate measured at 60 degrees Fahrenheit.
MBbls stands for one thousand Bbls.

"carried interest" - A fractional working interest in an
oil and gas lease, the holder of which is carried and has
no liability for a portion or all of the attirubtable
development and operating costs. The person advancing the
costs is the carrying party; the other is the carried
party.

"casing point" - The time when the operator recommends
that a completion attempt be made, or when the well is
plugged and abandoned without a completion attempt being
made.

"choke/choke size" - A pipe section having an orifice for
restricting and controlling the flow of oil and gas.
Choke size is the orifice diameter and is commonly
expressed in 64ths of an inch.

"continuous drilling" - A lease clause providing that
drilling of another well be commenced within a specified
time after completion of the preceding well.  As a general
rule, if this is not done, all undeveloped acreage must be
released.

"development" - The drilling of a well within the
productive area of an oil or gas reservoir, as indicated
by reasonable interpretation of available data, with the
object of completing the well in that reservoir.

"exploration" - Operations conducted in search of
undiscovered oil, gas and/or condensate.

"farmout/farmin" - An agreement providing for assignment
of a lease.  A typical characteristic of a farmout is the
obligation of the assignee to conduct drilling operations
on the assigned acreage as a pre-requisite to completion
of the assignment.  The assignor will usually reserve some
type of interest in the lease.  The transaction is
characterized as a farmout to the assignor and farmin to
the assignee.

"field" - An area within a lease or leases where
production of oil, gas and/or condensate has been
established and which has been so designated by the
appropriate regulatory authority.

"gathering facilities" - Pipelines and other facilities
used to collect gas from various wells and bring it by
separate and individual lines to a central point where it
is delivered into a single line.

"gathering gas" - The first taking or the first retaining
of possession of gas for transmission through a pipeline,
after the severance of such gas, and after the passage of
such gas through any separator, drip, trap or meter that
may be located at or near the well.  In the case of gas
containing gasoline or liquid hydrocarbons that are
removed or extracted in commercial quantities at a plant
by scrubbing, absorption, compression, or any similar
process, the term means the first taking or the first
retaining of possession of such gas for transmission
through a pipeline after such gas has passed through the
outlet of such plant.  The act of collecting gas after it
has been brought from the earth.

"gathering line" - Pipes used to transport oil or gas from
the lease to the main pipeline in the area.  In the case
of oil, the lines run from the lease tanks to a central
pump station at the beginning of the main pipeline.  In
the case of gas, the flow is continuous from the well head
to the ultimate consumer, since gas cannot be stored.
Gathering lines collect gas under fluctuating pressures
which are then regulated by regulating stations before the
gas is introduced into trunk or transmission lines.

"gathering system" - The gathering lines, pumps, auxiliary
tanks (in the case of oil), and other equipment used to
move oil or gas from the well site to the main pipeline
for eventual delivery to the refinery or consumer, as the
case may be.  In the case of gas, the gathering system
includes the processing plant (if any) in which the gas is
prepared for the market.

"gross/net" - The term "gross" is used when reference is
made, for example, to the total acreage of a lease.  The
term "net" is used when reference is made to the working
interest or net revenue interest in a lease of one
particular leaseholder.  The same term may be applied to a
leaseholder's interest in reserves and/or production from
a lease.

"held by production" or "HBP" - A provision in a lease to
the effect that such lease will be kept in force as long
as there is production from the lease in paying
quantities.

"lease bonus" - A cash payment by the lessee for the
execution of an oil and gas lease by the mineral owner.

"lease" or "leasehold" - An interest for a specified term
in property allowing for the exploration for and
production of oil, gas and/or condensate.

"log" - A record of the formations penetrated by a well,
from which their depth, thickness, rock properties and (if
possible) contents may be obtained.

"Mcf/MMcf/Bcf" - Mcf stands for one thousand cubic feet of
gas, measured at 60 degrees Fahrenheit and at atmospheric
pressure of 14.7 pounds per square inch. MMcf stands for
one million cubic feet of gas.  Bcf stands for one million
Mcf.

"net revenue interest" or "NRI" - The share of revenues to
which the holder of a working interest is entitled upon
fulfilling the obligations, after deduction of all
royalties, overriding royalties or similar burdens,
attributable to his working interest.

"operator" - The person or company having the operational
management responsibility for the drilling of or
production from any oil, gas and/or condensate well.

"overriding royalty" - A form of royalty, entitling the
holder to receive a percentage of oil, gas and/or
condensate produced from the wells on a specified lease,
or the revenues arising from the sale thereof, free of all
expenses arising therefrom, save for production taxes.
Generally, the rights accruing to working interest holders
are subject to the rights of overriding royalty holders
and any rights of overriding royalty holders terminate
upon cancellation or reversion of the underlying lease.

"pay" - The geological deposit in which oil, gas and/or
condensate is found in commercial quantities.

"payout" - Generally, that point in time, determined by
agreement, when a person has recouped his investment in
the drilling, development, equipping and operating of a
well or wells.

"permeability" - A measure of the resistance offered by
rock to the movement of fluids through it.

"porosity" - The volume of the pore spaces between mineral
grains as compared to the total rock volume.  Porosity is
a measure of the capacity of rock to hold oil, gas and
water.

"probable reserves" - The estimated quantities of
commercially recoverable hydrocarbons associated with
known accumulations, which are based on engineering and
geological data similar to those used in the estimates of
proved reserves but, for various reasons, these data lack
the certainty required to classify the reserves as proved.
In some cases, economic or regulatory uncertainties may
dictate the probable classification.  Probable reserves
are less certain to be recovered than proved reserves.

"prospect" - One lease comprising, or several leases which
together comprise, a geographical area believed to contain
commercial quantities of oil, gas and/or condensate.

"prospective" - A geographical area or structure believed
to contain commercial quantities of oil, gas and/or
condensate.

"proved reserves" - Estimated quantities of crude oil,
condensate, natural gas, and natural gas liquids that
geological and engineering data demonstrate with
reasonable certainty to be commercially recoverable in the
future from known reservoirs under existing conditions
using established operating procedures and under current
governmental regulations.

"psig" - Pounds per square inch, gauge.

"rental payment" - A sum of money payable to the lessor by
the lessee for the privilege of deferring the commencement
of drilling operations or the commencement of production
during the primary term of the lease.

"reserves" - The estimated value of oil, gas and/or
condensate which is economically recoverable.  Reserves
may be categorized as proved or probable.

"reservoir" - A porous, permeable, sedimentary rock
containing commercial quantities of oil, gas and/or
condensate.

"salt dome" - A mass or plug of salt which has pushed or
domed up sedimentary beds around it; this type structure
is favorable to oil and gas accumulation.

"sand" - A sedimentary rock consisting mostly of sand
grains.

"shut-in royalty" - A payment made when a gas well,
capable of producing in paying quantities, is shut-in for
lack of a market for the gas.

"structure" - A configuration of subsurface rock
formations considered, on the basis of geological or
geographical interpretation, to be capable of containing a
reservoir.

"target depth" - The primary geological formation or depth
identified in an agreement applicable to the relevant well
or wells.

"test well" - An exploratory well.

"tight formation" - A zone of relatively low permeability
and thus low well productivity.  Wells in such zones
usually require fracturing or other stimulation.
Typically, the productive capacity of a new well completed
in a tight zone declines rapidly for several months or
longer after completion.

"working interest" or "WI" - An interest in a lease
carrying the obligation to bear a proportion of drilling
and operating costs and the right to receive a proportion
of the production or gross revenues attributable thereto.

"workover" - Remedial operations on a well with the
intention of restoring or increasing production.