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March 2004, FIRST QUARTER 2004 – EXPLORATION AND PRODUCTION NEWS

GALION EXTENSION PROSPECT, CAMPBELL COUNTY, WYOMING

Four wells were drilled since the end of 2001: the Trend Fee #28-2, the Trend Federal #7-6, the Trend Federal #17-1 and the Trend Tyree #21-1.
The Trend Fee #28-2 is an offset well to the Trend Fee #28-1. This directional well reached a total depth of 8,620 feet (2627m). The current production is approximately ten barrels of oil per day.
The directional Trend Federal #7-6 was drilled in the Jazbo field and reached a total depth of 8,800 feet (2682m).This well is structurally higher to the producing Trend Federal #7-4 well. The Minnelusa ”C” Sand showed a low permeability and no oil show was found. Therefore the well was plugged and abandoned.
The Trend Federal #17-1 well reached a total depth of 8,550 feet (2697m). A drillstem test recovered water in the reservoir. Therefore the well was plugged and abandoned.
The Trend Tyree #21-1 reached a total depth of 8,800 feet (2682m). A drillstem test recovered 95% water. The oil column was only two feet high. Consequently the well was plugged and abandoned.

In 2004, Trend plan to drill three new wells.

During June 2003, Trend as well as Texican Oil decided to participate in a farm-out agreement in order to drill and test the Muddy/Minnelusa Sands on a 218-acres block (88 ha) in the southern part of Jazbo field.
Texican Oil participation interest is 3,5625% and Trend remain the operator of this prospect.

The first well of this new association, the Trend Prima Federal #19-1 was a dry hole without any oil shows and plugged and abandoned.


CALVERT PROSPECT, ROBERTSON COUNTY, TEXAS

Two new Buda wells were drilled in June-July 2002 in the Calvert prospect. A buildup test was conducted on each single well in order to better know the characteristics of the reservoir.
The Wiese-Gibson Unit #1 well reached a total depth of 4,600 feet (1402m). As the Buda formation has a poor permeability the well required acidification stimulation. The current production is approximately 30,000 cubic feet of gas per day.
The Pauline D. Burnitt #3 well reached a total depth of 4,550 feet (1387m). The low permeability of the Buda reservoir leads Texican Oil to make two acidification stimulations, one before the buildup test and another after. This well is currently flowing approximately 160,000 cubic feet of gas per day.

During 2003, three new Briggs Sands shallow wells were drilled.
The C.P. Briggs Gas Unit #2 well and the C.P. Briggs Gas Unit #3 well were drilled in July 2003 whereas the Sallie Jane Anderson Unit #1 well was drilled in August.
The C.P. Briggs Gas Unit #2 well reached a total depth of 1,915 feet (583,7m). The Briggs sands which having a low permeability and in order to improve the production were fractured. The current production is approximately 100,000 cubic feet of gas per day.
A second development well being the C.P. Briggs Gas Unit #3 was drilled on the same structure and reached a total depth of 2,003 feet (610,5m). After fracturing the Briggs Sands the well is currently flowing approximately 80,000 cubic feet of gas per day.
The Sallie Jane Anderson Unit #1 reached a total depth of 2,802 feet (854m). This well is being completed and will also require fracturing for same reasons referenced above.

The Lutz #1 well being none commercial was plugged and abandoned.

The Wiese-Gibson Unit #1 and Pauline D. Burnitt #3 wells were connected to the CALGAS LLC pipeline (Phase IV, 0.62 mile).
The Phase V consisted in connecting the C.P. Briggs Gas Unit #2 and C.P. Briggs Gas Unit #3 wells (0.57 mile).

As of the first of October 2003, CALGAS LLC is contract operator of the Twin Oaks Power Plant 16” pipeline system (5.5 miles; northern part of Calvert) which was formerly operated by El Paso Field Services.
Presently CALGAS LLC is selling gas southward to the North Calvert metering gas station.
CALGAS LLC envisions a future tie-in into the existing Twin Oaks Power Plant 16” pipeline in order to sell limited gas to Twin Oaks Power Plant and sell/transport additional gas volumes in the future (if required). This future tie-in to Twin Oaks Power Plant will be significantly cheaper as compared to a new pipeline tie-in to Tufco pipeline (24” Old Ocean).

Texican Oil plan to drill two new development wells on the two Buda structures during 2004.

The possibility of drilling a deep Cotton Valley sand well (11,000 ft total depth) with partners is being studied.


BALL RANCH PROSPECT, KENEDY COUNTY, TEXAS

Western Part

Presently the Clark & Sain #2 well which had an initial production of 9,000,000 cubic feet of gas per day is flowing approximately 1,100,000 cubic feet of gas per day.

After the drilling of this initial well Texican Oil decided to drill additional explorations wells on the Vicksburg sands AVO seismic anomalies.

The Clark & Sain #3 well was drilled in April 2002 in order to test the Vicksburg sands on a new northern seismic anomaly. The well reached a total depth of 12,700 feet (3871m). It is now flowing 1,300,000 cubic feet of gas per day.
The Clark & Sain #4 well was drilled on another seismic AVO anomaly and reached a total depth of 12,750 feet (3886m). A new second sand level was encountered. After an initial fracturing the well has cumulative production of 591,600,000 cubic feet of gas. It is today flowing 630,000 cubic feet of gas per day.
The field development continued with the drilling of the Clark & Sain #6 well in December 2002. This well reached a total depth of 16,176 feet (4930m). Only a few gas shows were encountered and Texican Oil decided to go non consent in any completion attempt. Despite two consecutive fracturings conducted in the Vicksburg sands this well is non productive.
In May 2003 the Clark & Sain #7 was drilled southward of the Clark & Sain #2 well on an AVO anomaly. It reached a total depth of 12,950 feet (3947m). A fracturing in the Vicksburg sands was necessary to increase the production. Now the well is flowing approximately 500,000 cubic feet of gas per day.
The Clark & Sain #8 well drilled in July 2003, 2762 feet westward of the Ball Ranch #1 well (842m),
reached a total depth of 16,330 feet (4977m). New sand levels were discovered. The initial production was 11,850,000 cubic feet of gas per day after fracturing. Presently it produces 3,770,000 cubic feet of gas per day and has cumulative production over a billion cubic feet of gas.
Texican Oil drilled a eastern development well of the Clark & Sain #2 well being the Clark & Sain #5 well on the same AVO anomaly. This well reached a total depth of 14,200 feet (4328m) and a new productive sand level was found. A fracturing was conducted and the well is currently flowing approximately 330,000 cubic feet of gas per day.
The development well Clark & Sain #9 was drilled southward of the Clark & Sain #8 in November-December 2003. It reached a total depth of 14,200 feet (4328m). Numerous new shows were observed and new sands levels encountered. After a fracturing which is now routine (due to a lack of permeability in the Vicksburg sands), the well flowed 15,000,000 cubic feet of gas per day. Now the well is flowing approximately 11,000,000 cubic feet of gas per day after producing almost half of a billion cubic feet of gas within a month.

During 2004, Texican Oil has decided to drill two development wells on the same AVO anomaly where the Clark & Sain #8 and the Clark & Sain #9 wells have been drilled and also an exploration well.

Eastern Part

Based on the AVO anomaly Texican Oil decided to drill two wells on the east part of the prospect.
Texican Oil drilled the Ball Ranch #1 well in the third quarter of year 2002. The well reached a total depth of 12,845 feet (3915m). Two production zones were discovered in the Vicksburg sands. The lower zone was fractured and put on sale. It delivered a total of 307,676,000 of gas before being commingled with the upper zone which was previously fractured. The well is currently producing approximately 700,000 cubic feet of gas per day.
The Ball Ranch #2 well drilled in March-April 2003 1,200 feet north-westward of the Ball Ranch #1 well (366m) reached a total depth of 16,383 feet (4993,5m). The Vicksburg sands encountered were fractured and a build up test conducted. The well has a cumulative production of half of a billion cubic feet of gas and is presently flowing approximately one million cubic feet of gas per day.
In August-September 2003 Texican Oil drilled the Ball Ranch #3 well which reached a total depth of 11,006 feet (3354,6m). This specific well was drilled in order to test the lower Frio sands. These sands were fractured and produce approximately one million cubic feet of gas per day after six months production.

The development of the field will continue with the drilling of one exploration well and one development well during 2004.


CHOKE CANYON PROSPECT, LIVE OAK COUNTY, TEXAS

Texican Oil sold half of it’s interest retaining a 12.5 % earned Working Interest in the prospect in 2002.

The USA #1 horizontal well was drilled into the Edwards reef limestones during the last quarter of 2002.
It reached a total true vertical depth of 12,679 feet (3864,5m) and a total measured depth of 15,730 feet (4794,5m). An acidification stimulation was conducted in order to improve the permeability and therefore the production.
Cumulative production is approximately 162,000,000 cubic feet of gas since September 2004. The current daily production is 800,000 cubic feet of gas per day.

Texican Oil have not planned a particular development program for this prospect during 2004 except the installation of a compressor.


K-RAY, COLORADO COUNTY, TEXAS

Texican Oil drilled the Campbell #2 on the 160-acre block which is north/northwest of the Campbell #1 well. The well reached a total vertical depth of 6,460 feet (1969m). The formation tester in the Yegua sands detected formation water. Therefore the well was plugged and abandoned.

The Campbell #1 well became uneconomical and Texican Oil sold it’s interest (WI) during March 2004.


MARACAS FIELD, CESAR BASIN, COLOMBIA

In order to satisfy all the Maracas Association Contract exploration obligations Texican Oil drilled the fourth vertical well of the field being the Compae #4 well which is located at 2,297 feet (700m) north-eastward of the Compae #2 well and between this last one and the Compae #1 well.
The well reached a total depth of 2,335 feet (712m).
On the contrary we observed on the 2D seismic results of this well show a subsided structure.
The field’s reserves were revised downwards from a minimum proved reserves of 12.7 billion cubic feet to approximately 10 billion cubic feet of gas.
A new commerciality request was submitted to Ecopetrol in December 2003.