Broome County Vestal Leasehold Title Screen

LLAMA HORIZONTAL DRILLING TECHNOLOGIES, INC. 307 West 7 th Street, Suite 1250 Fort Worth, Texas Marcellus Shale Joint Venture Broome County, New York Terms of Proposal Introduction: LLAMAHDT controls Oil and Gas Leases covering approximately 12,000 acres in a concentrated block of leasehold (the “Prospect”) in Broome County, New York, which is highly prospective for the Marcellus Shale Gas play. LLAMAHDT continues to aggressively negotiate with Landowner Groups in the area to acquire more leasehold in the Prospect, and we are seeking a partner to participate with us in the acquisition, drilling and development of natural gas production from the Marcellus Shale as well as other prospective formations in our prospect area. Industry wide results in the area have shown initial production figures of up to 10,000 mmcfpd for horizontal completions with many wells still flowing 91% of IP rates after 60 days. The natural gas in this area has shown to be dry and ready to flow directly into pipelines where it receives a premium price due to it’s location near the major markets. Current estimates reflect the Estimated Ultimately Recoverable Reserves at approximately 5.2 BCF (billion cubic feet) per 80 acre well. This estimate seems to being going up as decline curves are reflecting less of a decline than expected. Within a 30 mile radius of our prospect there are over 100 approved Marcellus locations that have been permitted by the likes of Range Resources, Chief, Cabot, Southwest, Chesapeake, Fortuna, Anadarko and East Resources. Exxon, Marathon and Hess have all recently acquired leasehold in the area and competition for leases is increasing at a rapid pace. Most recently lease bonuses have increased to $5,500 per acre on the low side to areas directly to our south now bringing $6,900 per acre with 21% royalties. On December 31 st of this year, the public review period for New York State’s Supplemental Generic Environmental Impact Statement will terminate and the DEC has indicated that it will be issueing horizontal drilling and fracing permits in the first quarter of Everyone believes the competition in Broome County, New York will increase dramatically at that time. LLAMAHDT has maintained a presence in Broome County for the last 24 months and has gained proprietory geological information reflecting key areas for development and have acquired leasehold in these areas and are in negotiations to increase our lease position in “Core Areas” of the Marcellus Shale in both New York and Pennsylvania. We have focused our leasing efforts to areas where all existing data reflects the highest possibility for long term recoverable reserves thus leading to the highest rates of returns per investment dollar. Marcellus Shale Joint Venture

LLAMAHDT Proprietory Marcellus Data: Net Pay200+ feet Average Depth5,000 feet Vitrinite Reflectance2.0 to 2.5 TOC4.0 – 7.0% Est. UR per 80ac. unit BCF and estimates are now increasing. TERMS: LLAMAHDT is seeking to assign its interest in approximately 12,000 acres that it presently has under lease. LEASEHOLD ACQUISITION: Within a specified Area of Mutual Interest, LLAMAHDT will continue to act as acquisition agent to fill in lease blocks and acquire as much additional acreage as requested by the assignee. POTENTIAL FOR EXPANSION: Although we have constructed this brief business model based on know available acreage at prices know to be current market values, additional investment opportunities do exist in the “Core Areas” of the Marcellus Shale. Years of a poor economy followed by last years severe crash has led to many peoples of the area needing money just to survive in the present economic climate. Many landowners were caught off guard when the Marcellus was first discovered and received nominal lease bonuses for their acreage (much of which was gone rather quickly) and are in desperate need of money. We have been told of several of these landowners seeking to sell out portions of their mineral rights while awaiting development and royalties. Although our focus is targeted at development of reserves in the area, it is important to remember that once purchased, mineral rights are yours forever. It is estimated that each royalty acre (based on a 12.5% royalty) in the “Marcellus Core Area” could eventually pay out $46,875. Many people in the area would welcome offers of $2,000 to $3,000 per acre. We are continuing to build a data base of names of landowners leased to other companies. I hope you find this Executive Summary of our presentation for opportunity in the Marcellus, although brief in nature, to be informative and fairly complete. If however you have any additional questions or concerns, please don’t hesitate to call us. Respectfully, Dean Lowry President LLAMAHDT (817) Marcellus Shale Joint Venture

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Industry Marcellus Shale Activiy

COG’s Marcellus Wells

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC LLAMAHDT Vestal Leasehold LLAMAHDT Phase II Acquisition Fortuna 5MM Atlas 2.2MM RRC IP 6.3MM 2.3MM CNX 4.1MM CHK IP 7 MM Competitor Activity

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Reported Flow Rates

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC COG’s Marcellus Wells

Date AnnouncedDeveloperPartner TV ($MM) Net AcresLocation Amount PurchasedDescription 8/19/2009ChiefEnerplus$406116,000Marcellus30%-$1,400/acre cash -$2,100/acre carry 6/30/2009EXCOBG$798*42,000*Haynesville50%-$11,780/acre cash -$7,220/acre carry 6/22/2009Rex EnergyWilliams$3322,000Marcellus50%-$1,500/acre carry 6/9/2009East ResourcesKKR$350NAMarcellusNASubstantial minority; est. at $2,000-$2,500/acre 6/2/2009TrianaMorgan Stanley NA MarcellusNA-$1,000-$1,500/acre 5/18/2009QuicksilverEni$2803,575Barnett27.50%-$2.13/Mcfe; $16,500/Mcfe/Day 5/14/2009DenburyTalon$27011,640Barnett60%-$1.00/Mcfe; $5,900/Mcfe/Day 11/11/2008ChesapeakeStatoil$3,375585,000Marcellus32.50%-$2,136/acre cash -$3,632/acre carry 11/4/2008CarrizoAvista$150775,000Marcellus50%-$1,000-$1,500/acre 9/2/2008ChesapeakeBP$1,900135,000Fayetteville25%-$8,150/acre cash -$5,925/acre carry 7/1/2008ChesapeakePlains E&P$2,500110,000Haynesville20%-$15,000/acre cash -$15,000/acre carry 6/16/2008GoodrichChesapeake$17310,250Haynesville50%-16,878/acre cash Recent Upstream Joint Ventures

Gas Shale Comparison LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC GAS SHALE BASINBARNETT (CORE)FAYETTEVILLEHAYNESVILLEMARCELLUSWOODFORD EST. BASIN AREA SQ/ MILES5,0009,000 95,00011,000 DEPTH, FEET6,500-8,5001,500-7,00010, ,0003, ,5006, ,000 NET THICKNESS, FEET GIP, BCF/SQ MILE AVERAGE TOTAL ORGANIC CONTENT (wt%)45364 POROSITY45986 RECOVERY FACTOR (%/SPACING)20/6030/8025/8030/8020/160 RESERVES/ HORIZONTAL WELL2.75 BCF2.0 BCF6.5 BCF4.2 BCF4.0 BCF INITIAL PROD. RATES (MMCFD) WELL COSTS, $MILLION AVERAGE ROYALTY BASIS DIFFERENTIAL TO NYMEX, $ FINDING COST, $/MCF AVAILABLE ACREAGE IN COREVERY LITTLE SOMEYESVERY LITTLE LEASING PRICES/ ACRE, $3,0001,5005,0005,500+1,000 Source: Chesapeake, Deutsche Bank, DOE, Fairway Internal Estimates Gas Shale Comparison

Top Fayetteville Shale Base Fayetteville Shale SEECO, Thomas #1-9 Top of Effective Pay Base Marcellus Shale Top Marcellus Shale Quaker State, Kark # Marcellus in northern Broome County is as thick and slightly deeper than the Fayetteville Shale in the core. Cross-Section and Comparison

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Cross-Section and Comparison

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC LLAMAHDT LEASEHOLD Isopach

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC LLAMAHDT LEASEHOLD Vitrinite Reflectance

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC LLAMAHDT LEASEHOLD Depth to Drill

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC LLAMA HDT Leasehold

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC LLAMAHDT Lease-in-Hand Phase I LLAMAHDT Letters of Intent Phase II LLAMAHDT Letters of Intent Phase II LLAMAHDT In Negotiations Phase III LLAMA HDT Leasehold Schedule

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Aqua Terre 14 Laterals Possible 14 Lateral Unit

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC LLAMAHDT LEASEHOLD LLAMAHDT South Maine LLAMAHDT Kirkwood LLAMAHDT Windsor-Colesville Broome & Susquehanna Pipelines

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC XTO – Contango 2/06 20,000 $11,800/acre Fayetteville BP – CHK 9/08 135, $14,074/acre Fayetteville CHK – Residents 3/08 2,000 $22,000/acre Barnett XTO – undisco 7/08 12,900 62, 015/acre Barnett XTO - Multiple 2/08 76,000 $6,184/acre Woodford, Fayetteville, Bakken XTO – SWN 4/ $9,340/acre Fayetteville BP – CHK 8/08 90,000 $19,444/acre Woodford Williams – Aspeot 7/08 10,000 $16,600/acre Barnett CHK – STATOIL 11/08 $5,768/acre Marcellus Value Firm Concept PDP Established Development Model Verified Asset Risk Decreases Unconventional Resource Value Progression

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Transactions AcquirerSellerDateTransaction Type TierEffective Cost per Acre ($) Net Acres Current Net Prod (mmcfd) Estimated Reserves (bcf) Other Terms XTOLinn6/1/08Sale2,3,4,5 152, proved $600 million purchase of producing properties, acreage and infrastructure (infrastructure valued at $50 million). Approx 132,000 acres are HBP. AnteroDominion9/24/08 Sale of Marcellus Rights 3,4,5$3,037114,259 $347 million purchase of mostly HBP Marcellus rights, Dominion to retainan 87.5% ORRI. StatoilHydroChesapeake11/25/08 Joint Venture all$5,625600,000 15, ,000 $3.38 billion total deal value - $1.25 billion up front, rest paid through drill to earn structure (Statoil to pay % of D&C during carry period to earn 32.5% interest). Statoil must fund the deal by the end of Burnett6/1/09 Partial Sale of Marcellus Rights mostly 4,5 $2,7596,760 Sale of 20% interest non-op interest in acreage Market Indicators

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Transactions AcquirerSellerDateTransaction Type TierEffective Cost per Acre ($) Net Acres Current Net Prod (mmcfd) Estimated Reserves (bcf) Other Terms WilliamsRex6/22/09Joint Venture4,5$1,66422,000 $36.6 million deal value - $3.6MM up front, rest paid through drill to earn structure (Williams to pay 90% of D&C costs during carry period to earn 50% interest). Williams must fund the deal by the end of 2011 with carry or cash. Williams to operate. Newfield Exploration Hess Oil 8/14/09Joint Venture3,4140,000 Newfield to operate the 50/50 joint venture in Susquehanna and Wayne Counties PA. E nerplusChief9/1/09Joint Ventureall$3,540116,000 1,400 $411 million deal value - $164.4MM up front, rest paid through drill to earn structure (Enerplus to pay 60.75% of D&C costs during carry period to earn 21.5% interest). Enerplus to fund deal over four year period. Market Indicator

LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC

Field: Appalachia Reservoir: Marcellus Lease: Broome County County,St: Broome, NY Working Interest: GAS Eur: 4, mmcf GAS Init Decl: 98% IROR: 95.26% GAS Init Qi: 180,000 mmcf/mon Disc Value: 5, m $

Present Worth VS Gas Price

Rate of Return VS Gas Price

ECONOMIC BEFORE TAX PROJECTION Date :11/6/2009 Project Name : LLAMAHDT As Of Date 3/1/2011Case : Broome County Partner : Discount Rate (%) : Case Type : LEASE CASE Working Interest 100% Field :Appalachia GAS price$6 Flat Revenue Interst 75%Operator :UNKOWN Payout (yrs) 0.94 Marcellus EUR Cum Gas (mmcf):5 BCFCo., State :Broome, NY D&C cost $4.2 million including $600k in lease cost PW (10%)$4,065,241 Gross Net OilGasOilGasMisc.Total YearOilGasOilGasPrice Revenue (MBBL)(MMCF)(MBBL)(MMCF)($/BBL)($/MCF)(M$) , , , , , , , , , , , , Rem0.001, , , , Total0.005, , , , Ult0.005, Economic Before Tax Projection

Net AnnualCum Disc. SeveranceAdValoremExpensesInvestmentDepreciationDepletionFed. Inc. Tax Cash Flow YEAR (M$) , , , , , , , , , , , , , , , , Rem , , Total1, , , , , Present Worth Profile (M$) Major Phase :GASWorking Int : Perfs :0 -0Revenue Int : PW 5.00% :7, Initial Rate :180,000.00mcf/monthDisc. Initial Invest. (m$) :2, PW 8.00% :5, Abandonment :2,301.71mcf/monthInternal ROR (%) : 69.86PW 10.00% :4, Initial Decline :97.30% yearb =1.550 ROInvestment (disc/undisc) : 2.68 / 4.49PW 12.00% :3, Beg Ratio :0.00bbl/mcfYears to Payout :1.41PW 15.00% :2, End Ratio :0.00bbl/mcfAbandonment Date :10/25/2041PW 20.00% :1, ECONOMIC BEFORE TAX PROJECTION Economic Before Tax Projection

Advantages of the Marcellus Shale play – World class basin size Spans 15 million acres; 5x the Haynesville and 10x the Barnett – Close to U.S. population centers and best natural gas markets – Over-pressured reservoir – Significant portions of play are geologically stable – structurally uncomplicated – Largely located in rural areas LLAMAHDT advantages – Substantial leasehold position in-hand, gaining new acreage daily – Our company has formed partnerships with existing coalitions and established contact points with both county and municipality governments – Experience gained from other shale plays allows us to quickly identify the best areas – Geological and Engineering expertise – LLAMAHDT has several years of experience in the northeastern portion of the Marcellus Shale and has earned a reputation of fair and honest dealings with landowners and coalitions who often seek our advice prior to negotiating with any other companies. LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Marcellus Shale Advantages

Major surface water resources in the Marcellus area – Susquehanna River – Delaware River – Chenango River – Chemung River – Ohio River Groundwater resources – 95% of all groundwater comes from shallow aquifers – Average depth less than 200 feet – Easy to isolate and protect Wastewater treatment facilities – Large volumes available LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Water Sources- Marcellus Shale

Marcellus Shale is likely to become the largest natural gas field in the U.S. LLAMAHDT has acquired approximately 15,000 acres to date and is currently in negotiations for an additional 110,000 acres in Broome County alone. Our targeted 125,000 acre total lease block represents over 7 TCF net reserve potential for our prospective partners. The Marcellus Shale has the highest rate of return of any shale play in the U.S. LLAMA HORIZONTAL DRILLING TECHNOLOGIES INC Conclusion