LOCATION - The Mississippian Floyd Shale is an exploration shale gas play located in western Alabama.  Hillwood’s acreage position is located primarily in Greene and Sumter Counties.  With many of the characteristics of the Barnett including source, seal and reservoir, it is a technology play that Hillwood is taking the lead in commercializing.

RESERVES - This is a wildcat exploration shale gas play that if successful will generate reserves of several TCF.

With over 60,000 acres in the developing Floyd Shale gas play, Hillwood is uniquely positioned to be a leader in this young exploration play in western Alabama. The Floyd shale is equivalent in age to other late Paleozoic Mississippian shale gas plays such as the Barnett, Woodford and Fayetteville and is located in a similar tectonic setting near the Applachian overthrust belt.  The play covers the better part of eastern Mississippi and western Alabama. The Hillwood acreage is located entirely in western Alabama in a basinward position with excellent geochemical characteristics.  We divide the play into the northern shelf trend and the southern deep basin trend. The Shelf trend has been tested numerous times with mixed to disappointing results.  The shales are thinner and interbedded with gray shales and sands.  They are also lower in thermal maturity and reports of problems with swelling clays exist. The basinward trend, where the Hillwood acreage is located, is more thermally mature and is characterized by thicker organic rich Floyd shale facies. TOC’s range from 2.5 to 3.8 % and Vitrinite reflectance is around 1.8. The basinward trend has been tested only a few times with most of the wells were drilled for deeper objectives and the Floyd never tested. In the Hillwood acreage, we anticipate to encounter the Floyd in optimal position between the depths of 6,500 to 10,500 feet.

Prospect generation is continuing and first drilling is anticipated in 2009.