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May 2005, SECOND QUARTER 2005 – EXPLORATION AND PRODUCTION NEWS

GALION EXTENSION PROSPECT, CAMPBELL COUNTY, WYOMING

Four wells have been drilled since March 2004: the Trend State #16-4 in April 2004, the Trend Fee #28-3A in July/ August 2004, the Trend Federal #28-4 in November 2004 and the Trend State #16-5 in February 2005.
The Trend State #16-4 was offsetting prior wells drilled in the #16 section. This well reached a total depth of 8,722 feet (2658m). A drillstem test was conducted in the Minnelusa C Sand recovering 85% formation water and 15% oil. Therefore the well was plugged and abandoned.
The directional Trend Fee #28-3A reached a total depth of 8,753 feet (2668m). This well is 8 feet structurally higher to the Trend Fee #28-1 and 20 feet higher to the Trend Fee #28-2 which was converted to a disposal water well during 2004. From August 2004 through January 2005 the well has had cumulative production of 17,521 barrels oil.
Review of the Jazbo 3D seismic survey, incorporating revised velocity gradients and data from nearby Minnelusa wells, suggested an extensive structure on which the Trend Fee #28-4 was drilled. This well reached a total depth of 8,678 feet (2645m). An 18 feet oil column defined by electric logs was completed in the Minnelusa C Sands. From December 2004 through January 2005 the well has had cumulative production of 1,882 barrels oil. Present daily production is approximately 130 barrels of oil per day.
The Trend State #16-5, chosen with the assistance of the seismic review, reached a total depth of 8,770 feet (2673m). No oil show was encountered and the electric log did not confirm commercial production. Therefore the well was plugged and abandoned.
Plans are to install progressive cavity pumps in May/June 2005 in the #28-3A and #28-4 in order to obtain higher volume rates thus leading to higher oil rates.

CALVERT PROSPECT, ROBERTSON COUNTY, TEXAS

The Sallie Jane Anderson Unit #1 (2,802 feet), drilled in August 2003, was completed in December 2003, fractured in July 2004, and connected to CALGAS LLC’s pipeline system in August 2004. Initially the well flowed 15,000 to 20,000 cubic feet of gas per day. The current production is now less than 10,000 cubic feet of gas per day.
The Seth Burnitt #1 well was drilled in April 2005 to a total depth of 4,962 feet. Unfortunately, the well was evaluated by electric log, formation tester, and sidewall cores and determined to be non-commercial. Therefore the well was plugged and abandoned.
The CALGAS LLC tie-in into the existing Twin Oaks Power Plant 16” pipeline is being studied.

BALL RANCH PROSPECT, KENEDY COUNTY, TEXAS

Western Part

Texican Oil drilled two development wells on the same AVO anomaly than the one on which wells Clark & Sain #8 and Clark & Sain #9 are located.
The Clark & Sain #10 was drilled in February/ March 2004. The well reached a total depth of 14,510 feet (4,422.60m). Three productive Vicksburg sand levels were encountered and fractured. The initial production was approximately 14,000,000 cubic feet of gas per day in April 2004. Presently this well has had cumulative production of 1.5 billion cubic feet of gas and is currently flowing 2,300,000 cubic feet of gas per day.
The directional Clark & Sain #11 was drilled on the same AVO anomaly in April/May 2004 and reached a total depth of 14,450 feet (3,886m). A new sand level was encountered. Weak gas shows were observed while drilling. Texican Oil decided not to participate in this completion.
After a sands’ fracturation the well flowed for less than eight months a cumulative production of 264,000,000 cubic feet of gas. Presently the well is flowing at a rate of 200,000 cubic feet of gas per day.

Eastern Part

Since the first quarter of 2004, Texican Oil drilled three wells in order to properly explore/evaluate this part of the prospect area.
In April/May 2004 Texican Oil drilled the Ball Ranch #4 which reached a total depth of 15,590 feet (4,752m). A sand level in the Frio formation provided some gas shows while drilling although no gas shows were noticed in the Vicksburg sands. Consequently the well was temporarily abandoned in anticipation of future testing of the Frio formation.
The Ball Ranch #5 was drilled in August/September 2004 on the identical AVO anomaly as the Clark & Sain #8 and Clark & Sain #9 are located. The well reached a total depth of 15,428 feet (4,702.5m). Rotary cores were taken in order to best define the productive zones. Three Vicksburg sands levels were fractured and put into production in November 2004. The well has produced approximately one billion cubic feet of gas in five months and is presently flowing 3,200,000 cubic feet of gas per day.
In October/November 2004 Texican Oil drilled the Ball Ranch #6 which is located 1,200 feet to the north of the Ball Ranch #5. As was done in the Ball Ranch #5 three Vicksburg sands levels were fractured and presently produce approximately 1.25 million cubic feet of gas per day. To date the cumulative production is approximately a quarter billion cubic feet of gas. Texican Oil has a slightly increased interest in this well until the payout of the completion costs by the net production revenues.

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Texican Oil did participate in some workovers in a few wells within the prospect area.
Production strings were installed in the Clark & Sain #7, Clark & Sain #8, Clark & Sain #9, and Clark & Sain #10 wells in May through December 2004.
The Ball Ranch #2 was re-fractured in October through December 2004.
In 2005 Texican Oil will preferably drill development wells in order to reduce exploration risk and increase the reserves.

EXXONMOBIL JOINT VENTURE (NORTH JULIAN PROSPECT/BALL RANCH AREA)

The oil/gas lease located south of the Ball Ranch area belongs to ExxonMobil. An association was created between all Ball Ranch working interest participants and this well-known company. The operator remains unchanged (Abaco Operating LLC) and Texican Oil participates with 7.4664% WI.
The first new well of this association, the Clark & Sain #12, is currently being completed. This well appears to be productive in the identical Vicksburg sands producing in the Clark & Sain #8, #9, and #10 wells.
The second well of this association, the King Ranch State 136-1 is currently drilling.

CHOKE CANYON PROSPECT, LIVE OAK COUNTY, TEXAS

In 2004, a leased compressor was installed by the operator in order to enhance the production. A coiled tubing acid job was also performed and the results were dismal.

MARACAS FIELD, CESAR BASIN, COLOMBIA

Following the new commerciality request submitted in December 2003, Ecopetrol provided its position in late July 2004. Texican Oil is able to commercialize its gas reserves in sole risk status.