Peak Energy Resources, Inc. (Peak I)
Peak I was formed in November 2002, and subsequently acquired properties in Wyoming, Texas, and New Mexico. Peak I was funded with a total of $55 MM from Yorktown Partners. Over a two year period from acquisition to divestiture, Peak achieved an ROI of 3.2, with an annualized rate of return IRR of 71%.

Texas Panhandle
The Texas Panhandle properties, initially acquired from Merchant Resources in April of 2003, were located primarily in the Buffalo Wallow field in Hemphill and Wheeler Counties, Texas and produced out of the Granite Wash formation. Peak purchased approximately 19,800 gross and 10,700 net acres from Merchant Resources and then proceeded to acquire an additional 13,331 gross and 10,747 net acres in the Granite Wash play. Peak aggressively developed these properties with as many as six rigs drilling at a time. Peak drilled a total of 55 wells in the Granite Wash play prior to divesting of the Texas Panhandle properties to Forest Oil in April of 2005 for $230 million.

San Juan Basin
The San Juan Basin properties consisted of a non-operated position in 495 producing wells. Peak had an average of 9.73% gross working interest and 8.31% net revenue interest in these properties. The San Juan Basin properties, which were primarily operated by Burlington Resources, were acquired from Merchant Resources in April of 2003. Peak sold its San Juan Basin properties to Burlington Resources for $30 million in May of 2005.

Wind River Basin/Ft. Worth Basin
In order to facilitate the sale of the Texas Panhandle properties in a corporate sale, the Wind River Basin and the Ft. Worth Basin assets were sold in August 2004 to Peak Oil & Gas, Inc. (Peak II) based on a fairness opinion prepared by Randall & Dewey.

Peak Oil and Gas, Inc. (Peak II)

Barnett Shale
In April 2003, Peak acquired approximately 10,000 acres held by production from shallow Strawn and Big Saline wells in Hood and Somervell counties from Merchant Resources. This acreage became prospective as the Barnett Shale Newark East Field expanded into these counties. In 2004, Peak II began acquiring additional leasehold acreage in Hood, Somervell, Erath and Parker counties, bringing Peak’s total Barnett Shale acreage to approximately 30,000 net acres. Peak began an active development program by shooting approximately 50 square miles of 3D Seismic. Peak created two affiliates, Pinnacle Drilling and Momentum Energy Group, to help facilitate Peak’s development of the Barnett Shale. Pinnacle Drilling owned and operated three drilling rigs and Momentum Energy Group is a gas gathering and pipeline company that is active in the Barnett Shale and numerous other basins. With the assistance of both Pinnacle and Momentum, Peak drilled a total of 8 Barnett Shale wells and 1 salt water disposal well prior to divesting of the Barnett Shale assets in June 2006. Peak had a total investment of approximately $75 million in both the Barnett Shale assets and Pinnacle Drilling. Peak sold all of the assets for proceeds of approximately $163 million for a rate of return of approximately 80% per year.