Exploration / texas

Index is fully funded to participate in two key projects for FY 2009 (ending March 31, 2009):

• Alligator Bayou - High impact exploration prospect in Matagorda County, TX
• West Wharton - Low risk, multiple prospect play, in Wharton County, TX

Alligator Bayou Prospect - High Impact Exploration Prospect

• Deep Wilcox Trend (>20,000')
• Large 4-way structural closure (~10,000ac) defined by 3D seismic
• Upside reserve potential ~1Tcf (gross)
• Multiple reservoir quality Wilcox sands with logged pay in nearby Carrizo, Arco wells
• Carrizo well currently producing from targeted interval
• Very large leased acreage position

First Exploratory Well - Armour-Runnells #1

• Commenced drilling in April 2008.
• Operated by El Paso
• Proposed Total Depth (TD): 25,000 feet
• Dry hole cost: $1.025 mm (net)
• Expected to take approximately 6 months to reach TD
• Index's working interest (WI): 5%
• Index's Net Revenue Interest - 3.50%
• Currently drilling

West Wharton Prospect - Low Risk, Multiple-Prospect Play

• Potentially 4-5 additional wells, following the success of Outlar #1 in FY 2008
• Highly productive Yegua trend
• Regional 3D seismic coverage
• High quality Cook Mtn. reservoirs
• Strongly AVO-supported prospects
• Direct analogies to Outlar discovery
• Multiple prospect continual drilling program
• Reserves ~5Bcfe/prospect (gross)
• Leased acreage ~1800ac (gross)

Exploratory Well - Stewart #1

• Operated by CICO (operated Outlar)
• Proposed TD: 11,900 feet
• Dry hole cost: $0.330mm (net)
• Index WI: 10.94%
• Drilling