Grand Gulf advised that the Reservoir Saturation Tool (RST) has confirmed the presence of untapped oil in the 9850 Hosston Sand in the 31-11 well. The logs indicate oil bearing reservoir sands between 9,849-9,863ft. This interval has the potential to recover up to 100,000 barrels of net oil at flow rates of up to 100 bbls oil per day. The RST log also confirmed multiple, thinner, potential zones of interest above the 9850 Hosston Sand. These will be evaluated in due course. The well is presently undergoing cement squeeze operations to isolate the Hosston pay zone prior to perforating and testing of the interval next week. There have been a number of issues, including with cementation and weather, which have delayed the progress of operations. However, these issues have been overcome and the well is in good standing. Following successful re-completion and production from the Smak Dixon 31-11 the Company will undertake a re-completion program in the Smak Dixon 31-6. The Smak Dixon 31-6 is also anticipated to have up to 100,000 barrels of recoverable oil remaining. The Pleasant Home Field has produced in excess of 934,000 bbls of oil since 1999 from the 4 wells. The wells produce from multiple zones and presently have a number of zones that, based on show and log data, are interpreted to be bypassed oil pay and are yet to be completed for production. Following an evaluation of the recompletion results the Company will be better placed to determine whether the field can support additional development drilling. If so, up to 650,000 bbls of additional oil (gross) may be proven. With multiple reservoirs, the potential reserves for remaining recoverable oil on the field is estimated at between 200,000 to 850,000 bbls.