Upshur Oil And Gas Report - Dec. 2008

Valence, XTO and Apache receive permits to drill new wells in Upshur.

The Texas Railroad Commission approved permits in December granting the three operators permission to drill wells in excess of 12,000 feet deep in the hunt for more natural gas.

Two of the new wells will be in the Cherokee Trace field, and one in Cedar Springs.

On 12-29-08, Maximus Operating, LTD submitted a permit request to the Railroad Commission to drill a new oil/gas well, the Tarter Coleman #2. It will be drilled to a depth of 12,500 feet in the Cedar Springs field, 8.21 miles NE of Gilmer.

Permits Approved To Drill New Wells In Upshur County:

On 12-02-08, the RRC approved a permit to Valence Operating to drill a new gas well, the JB Orr #3. It will be drilled to a depth of 12,200 feet in the Cedar Springs field, 1.1 miles NW of New Mountain.

On 12-04-08, the RRC approved a permit to XTO Energy to drill a new gas well, the Linda O. Spruiell Gas Unit #2. It will be drilled to a depth of 13,500 feet in the Cherokee Trace field, 8.0 miles NE of Gilmer.

On 12-29-08, the RRC approved a permit to the Apache Corporation to drill a new gas well, the Wright Gas Unit #1. It will be drilled to a depth of 15,000 feet in the Cherokee Trace field, 7.0 miles NE of Gilmer.

Upshur County Well Completions and Potential Testing:

Maximus Operating completed drilling the Phillips-Wright #1 well on 09-04-2008. It was drilled to a total depth of 4100 feet in the Glenwood field, 4.7 miles NE of Gladewater. Maximus has declared this a dry hole.

New Lease Construction Completed In Upshur County:

Apache reported to the RRC on 12-30-08 that surface construction was complete at the WF Smith Gas Unit #4 well. The company also reported on 12-22-08 that surface construction was complete at the James Jackson Gas Unit #4 well.

Forest Oil Corporation reported to the RRC on 12-09-08 that surface construction was complete at the DJ White Gas Unit #2H well.

Maximus Operating reported to the Railroad Commission on 12-10-08 that surface construction was complete at the Malone Heirs #1 well.

Maximus also reported to the Railroad Commission on 12-05-08 that surface construction was complete at the Tanner #1 well.

Pipeline Permitting and Construction In Upshur County:

On 11-17-08, Maximus received permission from the RRC to operate an additional .67 miles of 6" Cedar Springs Gathering System. The new line is from the Malone Heirs #1 well, to tie into the existing line from McCaslin Hall #3, and ties into an Enbridge line.

Monthly Production Totals For Upshur County:

For the month of October, 2008, the RRC reports that combined production of Upshur oil and gas leases were 9,583 barrels of oil, 7,895 MCF of natural gas, and 42,935 barrels of condensate.