1 Monoco Petroleum, Inc. La Jolla Prospect McMullen County, Texas May 2008

2 Release and Hold harmless: Any party viewing this Power Point agrees to hold MPI harmless from representations regarding Prospect representations made herein. The viewer agrees to do their own due diligence and warrant that they are knowledgeable in evaluating oil and gas Prospects and that they will not rely on MPI for its evaluation decisions of any kind.

3 MONOCO PETROLEUM, INC. La Jolla Prospect McMullen Co., TX Play Type: An extension of reefal producing field discovered in 1982 by the Clifton Wheeler Kilroy #1. 3-D demonstrates strikingly similar seismic character at the Prospect Location. 16,800’ to penetrate reef, 17,500’ to see entire Sligo Lower Cretaceous Sligo Reef facies Multiple Locations Reserve Potential High Side 400 BCF Risked Reserves 7 BCF 31% POS Terms: 1/3 for 1/4 Carry thru hook-up on the 1 st well Up front costs $950,000 to 89% W.I. 74.5% NRI $6.67 MM DHC $1.7 Completion Costs Total: $8.4MM Pipeline on Lease Short Distance Access to Processing Plant Operations: Available

La Jolla Prospect Comparison of A Proposed Location and Wheeler #1 4 3 Miles La JollaWheeler #1 32 BCF Flat Spots (Sag)at 3-D seismic shows a seismic thickening & “pull down” of a 2 nd peak in the upper Sligo section and in the prospect area possibly indicating Ф development & HCs. This seismic anomaly is not seen in the other wells in the area.

Prospect Attributes Primary objective is the Sligo Fm (L. Cretaceous) The prospect also has a large Edwards Fm anomaly The 3-D shoot: 48 18,000 ft. Prospect enhanced by High Resolution Color Inversion “Flat Spot” seismic anomaly unique to La Jolla & Wheeler #1 Anticipated accumulation size: 30 Bcf/well Upside potential: Multiple Wells BCF Estimated initial production rate: 10 – 15 MMCFD Overpressured, minor amounts of H2S (100ppm) 8% CO2 anticpated 5

MPI’ S H IGH R ESOLUTION SEISMIC D ATA C UBE H AS G ENERATED M ULTIPLE R EEFAL D RILLING T ARGETS.. High Resolution Color Inversion Time Slice (not to scale) SHELF EDGE, ATOLLS, BACK REEF, B IOHERMS & FORE - REEF

7 Similarity of Modern Day Reef System to Carbonate Features of Previous Slide

Isolated Highlight of Cretaceous Rocks 8 La Jolla has SIGNIFICANT Reserve POTENTIAL ! This Feature Produced 32 BCF

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10 TOP SLIGO Perforated Pay Anhydrite Layers Unperforated Pay by Log Analysis Moveable Water By Log Analysis 30+ Ft Bypassed Pay? Across the perforated interval & within the anhydrite layered zone, Sw has a direct relationship to the porosity (Ф), such that in each flow unit, as Ф increases, Sw decreases. This occurs where Sw is a function of pore type, and well above any gas-water interface. Ths is confirmed by a H20 free completion & several months of H20 free production. Below the anhydrite layered zone, the lowest Sw ft in the highest Ф flow unit in the entire well. This is still in the free gas column – a separate accumulation below the anhydrite rich facies. The base of the gas column may 16,730 ft where Ф remains in the 6-8% range but Sw registers 89%. This appears to be the top of the transition zone where both gas & H20 are mobile.

11 5,000 lbs. of pressure when the casing collapsed

Rudist Grainstone Facies in Slab Core From Nearby Well 12

Dip Line Across a La Jolla Prop Loc 13

14 Internal Amplitude Evaluation Amplitude Dim-out of More Porous Rocks vs. Stronger Amplitudes of Denser Rocks Wheeler #1 Wheeler #2 La Jolla Acreage

15 Wheeler #1 536 ac. (Green) 288 Ft. La Jolla 844 ac. (Purple) 462 Ft. Possible Areal Drainage Calculated Reservoir Thickness * (* Isopach T / Sligo to Flat Spot)

16 Pipelines thru and near the Prospect Leaseblock leading to a sour gas processing plant Pipeline Map

17 AFE Drill & Complete 17,000 Ft. Test Well DHC $6.65MM Complete $1.74MM TOTAL $8.4MM

18 Independent Risk Analysis by a Houston O&G Company

Comments Re. H 2 S, CO 2 & H 2 O  Corrosive gas quantities are quite low, ranging from ppm  When combined w/ water, temperature & pressure considerations, this becomes more than a nuisance.  Extreme care should be taken to use optimum quality tubulars.  Had this been the Wheeler #1, the casing likely would not have collapsed. 19

Drilling and Completion Considerations The key to a successful Sligo test is to hit the target within a 150 ft. radius of the defined site coordinates. This will require real time direction information and LWD data. In conjunction with an effective acid frac, this will make all the difference between a good or a marginal well. Casing & Tubing must be high end anti-corrosive Overpressure & H 2 S require key decisions related to drilling safety, casing & intermediate string placement. 20

Thank You ! 21 For Further Information Contact David C. Montoya Monoco Petroleum Inc. (281)