The frac the well has produced in excess of 1,900 Mcf/d and 6 Bo/d but the production has not been sustained due to frac sand blockages in the well bore and loading problems associated with water production and/or clogged perforations. The well bore will be cleaned out with coiled tubing and will be re-tested in early May 2009.

If the 10,100 ft zone is deemed to be incapable of sustained flow the well will be plugged back to a Wilcox zone at 9,500 ft that produced 0.75 BCF and 35,000 BO in the offset well.

Up-Mack Prospect-Goliad county, Texas

The D.M. Rush #1 operator, Tempest Energy, tested a 10,900 ft Wilcox zone in February that produced at a sustained rate of 200 Mcf/d. A retrievable plug was set over this zone (the 200 Mcf/d will be added to the flow stream at a later date) and the operator then tested the 10,250 ft Wilcox. This zone is currently making 250 Mcf/d but is making in excess of 300 Bwpd. This zone will be monitored over the next few weeks then will be temporarily abandoned in order to test the uppermost productive horizon in this well, the 10,100 ft Wilcox. The well will be put to sales from the co-mingled Wilcox zones in the June fiscal 2008/2009.

There are at least a further three wells that are likely to be drilled on this prospect over the coming 12-24 months. Snipe, Egret and sandpiper prospects-Galveston block 307-Offshore-Texas State Waters Three directional wells were successfully drilled and cased on this prospect in the quarter. The Snipe prospect, an untested fault block within the Brazos 386 S field, was directionally drilled to a depth of 9,850 ft (7,126 ft, TVD) encountering three pay zones. The well has been completed in the “7,000 ft” sand, a common productive zone in nearby fields, the Rob L, the primary producer at Brazos 386 S field, and the Rob C, also a primary field pay.

Following the Snipe well, the Egret prospect, an exploration project, was drilled from the same surface location. The original Egret well found productive Rob C pay on water in the target sand. The well was sidetracked successfully to a higher location on the structure and encountered the Rob C sand full to base. Production casing was run and the well will be completed and tested in early May 2009.

Following the Egret well, the sandpiper prospect, an attic test of the main pay zones within the Brazos 386 S field, was drilled from the same surface location. The Sandpiper well encountered two productive reservoirs, the 7,000 ft sand and Rob L. The well has been cased and at the time of this report was being completed and tested.

A production caisson has been installed and final completion work is currently underway on all three wells. Subsequent to the completion and flow test of each well, production facilities will be set and the production stream will be tied into a nearby sales line. Initial production from all three wells is anticipated late in the June fiscal 2008/09 quarter or early in the September fiscal 2008/09 quarter.

Alford Prospect-Victoria County, Texas

The Alford #1 well (operated by the company’s US Operations Manager, Hibernia Resources, LLC) was put on production in December 2008 at 125 MCFPD (net 70 MCFPD to Kilgore Oil & Gas). The well began to load with formation water in January 2009 and stopped flowing in February 2009. In late March 2009 the well was put on gas assist in order to keep the well unloaded. At the time of this report the well was making 90 Mcf/d.

Other Quarterly Activity Drilling

Boettcher Prospect-Wharton County, Texas

The Boettcher prospect was tested during the quarter with the drilling of the Vacek #1. The well was drilled to the planned total depth of 16,000 ft (4,900 meters) and after numerous logs, surveys and tests the well was permanently plugged and abandoned.

The primary target, the Wilcox Meek sand, was encountered structurally low to prognosis but with significant gas shows. The 3D seismic and other geological data was further evaluated in order to determine if an economically viable sidetrack option existed. Upon completion of the review it was deemed by the operator, Common Resources, and Kilgore Oil & Gas that the prospect had been sufficiently tested and a sidetrack of the existing well bore was not viable.

Skimmer Prospect-Brazos Block 446-Offshore-Texas State Waters

The Skimmer Prospect, operated by Black Pool Energy LLC of Houston, Texas, was drilled and abandoned as a dry hole in the quarter. The well was drilled to the planned total depth of 8,200 ft (2,505 meters) and encountered all of the targeted Miocene sands well developed but with non-commercial shows of gas. The well has been plugged and abandoned with no further drilling anticipated in the immediate area.