LOCATION - Eastern shelf of the Permian Basin in Shackelford County, Texas

RESERVES - Six exploration prospects covering an area of 320 acres each have been identified with the potenial for finding 500,000 barrels of oil per prospect at depths of only 1,700-1,800 feet.

Hillwood leased the 16,000 acre-Chimney Creek Ranch in Shackelford County in December 2006. The Chimney Creek Ranch has produced in excess of 1,500,000 barrels since it was drilled in the early 1900s; however the last wells on the ranch were drilled in the 1940s due to the owners desire to maintain the beauty of his ranch. After extensive geological study of the existing wells on the ranch, Hillwood identified six shallow sandstone prospects that are analogous to discovered fields on the east and west sides of the ranch.