The Holifield Oil Company (HOC) Oil and Gas Program should generate substantial cash flow and tax credits with low risk and large potential return. Ray Holifield is the President of HOC. Shown below is a summary of the experience of Ray Holifield and some of his affiliated companies and how this experience makes this Program in Giddings Field very attractive at this time.

1. In the early seventies, Ray was associated with the premier and leading edge petroleum-engineering firm (D. R. McCord and Associates) that was the pioneer in using computers for oil field reservoir modeling and simulation of oil and gas fields to predict future performance. Ray developed significant seismic interpretive techniques that were put to use in the Giddings Field based upon techniques and concepts he developed in Algeria and Iran in the Middle East with this firm.

2. Starting in 1976, Ray began using these seismic techniques to locate relatively small faults with great success in the Giddings Field. Many wells commenced initial production at rates exceeding 1,000 barrels of oil per day. Ray was involved in over 1,500 vertical wells in the Austin Chalk that have produced over 200,000,000 barrels oil equivalent (converting natural gas to equivalent oil price) or four and one-half (4.5) billion dollars of oil and gas produced to this date in the Austin Chalk.

3. Ray directed his partners to lease most of the best areas in the Austin Chalk Trend. His initial specialties were selecting the well-site location and proper completion of each well. The best of all areas was a large geographic area in the Giddings Field. For example, the 644 vertical wells Ray drilled with his clients in Lee County averaged 147,936 barrels oil equivalent. Incidentally, his per well average production is 4.77 times that of the average of all competitors (31,001 BOE) for vertical wells.

4. However, since seismic is not an exact science, some of the wells did not encounter the fault and associated fractures. After development of improved fracturing treatments by Ray and partners, fracture treatments could often reach out and connect to nearby fault generated fracturing.

FIRST BOOM

5. During the FIRST BOOM in and about 1981, there were as many as eighty (80) drilling rigs working in the Giddings Field with Ray being involved with up to twenty five (25) of those rigs at any one time. Daily production for clients and partners of Ray during the FIRST BOOM averaged over 20,000 barrels of oil per day and 200 million cubic feet of gas per day.

6. Ray has aggressively continued building a proprietary geological and engineering database since 1975. This includes more than 100 man-years of research valued in excess of $10,000,000.

7. Ray also gained substantial experience managing oil drilling rig operations from 1981 through 1992 when he was Chairman, Co-General Partner and handled all accounting as well as kept the Senior Drilling Rig busy working for the account of his partners.

8. When oil prices declined in 1986, Ray recognized the need and huge potential, even at low oil prices less than $10.00 per barrel, of horizontal drilling and aggressively pursued development of that technology. He was a fifty percent (50%) partner and Chairman of BecField Horizontal Drilling Services Company, the world's first horizontal drilling service company to perform in-expensive but effective re-entry of existing wells that is so cost effective and popular today. His partner was Bechtel Investments, Inc., an affiliate of an international engineering firm. BecField drilled most of the medium radius re-entry horizontal wells drilled in the entire world during the years of 1986-1987-1988-1989.

SECOND BOOM

9. During the SECOND BOOM that occurred when oil exceeded $30.00 per barrel during the Kuwait problem of 1990. BecField was able to run seven horizontal drilling crews for some time. Net profits to BecField exceeded $300,000 per month. Because BecField was producing large profits during this time, Ray allocated much of his time managing BecField instead of drilling wells for his own account. Several companies including Halliburton were attempting to purchase Ray's interest. Ray did sell his half of BecField for $8,500,000 profit.

10. Ray, personally, was involved in re-drills of twenty three (23) wells during a period of time in the late nineties that was researched to determine the actual economic return of wells based upon actual revenue. A study of twenty three (23) horizontal re-entry wells in which Ray participated with other operators reveals twenty two percent (22%) recovered re-drill cost in less than three months, thirty nine percent (39%) in less than six months and sixty five (65%) in less than nine (9) months. Average payback of wells was twelve (12) months. Three will not pay back.

11. HOC believes that use of its database will reduce the number of wells penetrating depleted thief zones. Re-entry horizontal redrills on 171 wells in Lee County are projected to average recovery of 123,560 Barrel Oil Equivalent. This included early experimental wells drilled in 1986 through early 1988, which often had low recoveries because the wells at that time were only drilled short lateral distances. HOC and affiliates have been involved in approximately 250 horizontal wells since 1985.

12. Use of existing wells greatly reduces the capital cost for tangible items. Existing wells usually have casing, pumping equipment and tank batteries on location. Work performed to re-drill a well mostly involves intangible items that have treatment by tax code to allow first year tax deduction. Thus, a large portion of the expenses is deductible for the year expenses occur. In addition, most of the wells will have gas pipeline connections so that oil and gas sales usually start a few days after the rig is released.

13. HOC prepared engineering studies that were provided to Mezzanine Funding Groups for a large drilling program in 1998. A report prepared by Ryder Scott Engineering confirmed that oil and gas reserves are Proved Undeveloped Reserves. Their report based upon twenty-four wells for Lee County indicates that the program would recover all expenses and yield a nice profit. HOC had approval from four different companies for $7,500,000 to $10,000,000 from each company. Unfortunately, the oil prices collapsed to 30-year lows in late 1998 forcing HOC to not accept these funds. The projects were placed on hold. Many of the wells selected for that program will be utilized for this Program.

14. HOC has developed certain new technology (Hybrid Lift System) that will help produce an additional 10,000 to 30,000 barrels of oil from many horizontal wells. Additional development and improvement of this technology must still occur but at this time it is believed that these methods will help produce substantial additional oil and gas.

THIRD BOOM

15. Considering HOC database and the results of considerable horizontal re-drilling in the Giddings Field to this date and armed with the knowledge of how to avoid drainage from prior wells, HOC is convinced that there is at least one billion dollars of oil and gas reserves waiting to be recovered during the expected THIRD BOOM.

16. Which brings us to the present and the opportunity to fund part of the HOC Program. HOC can prudently place up to one hundred million dollars in the acquisition of current production, application of the Holifield Hybrid Lift System, and recovering reserves by short and medium radius horizontal re-drill applications in purchased wells during the next five years. A large oil and gas work over and re-entry horizontal drilling program has been structured by HOC. Major partners with substantial fund commitments have executed agreements with HOC to fund this program. However, interest is still available. Please request additional information if your company would like to receive additional information.

ADDITIONAL INFORMATION

For additional information

REASONS FOR A PROFITABLE PROGRAM

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