Program Update: May 19, 2008

KUSHEQUA PROSPECT (EXHIBIT C-III):

Five of the final nine wells are scheduled to be completed beginning May 20. One of the remaining four wells is scheduled to be completed horizontally in the next 30-35 days. Based on the results of the horizontal experiment, a decision will be made to complete the other three wells either vertically or horizontally.

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PARTNERSHIP INCOME ANALYSIS:
ASSUMPTIONS: (1) the remaining nine wells are completed vertically and will produce the same volumes of gas and oil as the first nine wells — assumes the horizontal experiment will not be effective; (2) collectively, all 18 wells will produce 30 barrels of oil and 100,000 cubic of gas per day; (3) oil will sell for $100 per barrel and gas will sell for $10.00 per thousand cubic feet; and (4) the Partnership’s share of operating expenses is $6,000.00 per month.
NOTATIONS: (1) analysis does not include prior distributions of income; (2) the Partnership’s Working Interest is 45% and its Net Revenue Interest is 36.75%; (3) the first nine wells’ production has been restricted and their pressures have not changed; (4) the remaining nine wells’ production will not be restricted to the extent as that of the first nine wells; (5) the Operator states the electric logs of the remaining nine wells reflect zones with better characteristics than those of the first nine wells; and (6) there are no severance taxes.

ESTIMATED MONTHLY NET INCOME TO THE PARTNERSHIP: $38,000.00

LA REFORMA PROSPECT (EXHIBIT C-IV):

The bridge plug set above the lower fracture stage of the O Sand of the Perez #1 Well (Well) did not eliminate the flow of saltwater. Obviously, the water from the lower O Sand fracture communicated with the upper O Sand fracture. Although the O Sand will not be commercially productive in the Perez #1, it did prove to be gas productive, and a great deal of knowledge was gained from its completion. The Sand was never an objective in the Well because it was presumed to be non-productive. However, since the Perez #1 proved it to be gas productive and it is present on all of our La Reforma Prospect acreage, a more knowledgeable completion in future wells drilled is eminent. Operations to complete in the Well’s L Sand will begin May 19. The Sand has 13 feet of pay and, by electric log and core analysis, is expected to be very productive.

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PARTNERSHIP INCOME ANALYSIS:
ASSUMPTIONS: (1) the L Sand will produce at least 2,000,000 cubic feet of gas and 20 barrels of condensate per day; (2) oil will sell for $100.00 per barrel and gas will sell for $10.00 per thousand cubic feet of gas; and (3) the Partnership’s share of operating expenses will be $10,000.00 per month.
NOTATIONS: (1) the Partnership’s Working Interest is 100% and its Net Revenue Interest is 65%;
(2) severance tax on gas of 7.5% has been deducted; (3) severance tax on oil of 4.6% has been deducted; and (4) four additional productive zones remain up-hole of the L Sand, one of them being an oil sand.

ESTIMATED MONTHLY NET INCOME TO THE PARTNERSHIP: $388,000.00

NORTH HOUMA PROSPECT (EXHIBIT C-V):

The Well has been completed in the Krumbhaar C Sand which has 20 feet of net pay. Superior Energy Services, Inc., Broussard, Louisiana, tested the Christopher Dill, et al #1 Well on a 22/64ths choke to produce 1,200,000 cubic feet of gas, 25 barrels of oil and 4.8 barrels of water per day. The Well’s originating geologist and two reservoir engineers estimate the Krumbhaar C and A Sands, overall, should produce in excess of 4 billion cubic feet of gas and 80,000 barrels of oil. The Operator states the well should be selling oil and gas within the next 60 days. The delay is due to the need for a gas contract with a bureaucratic interstate gas transmission company.

PARTNERSHIP INCOME ANALYSIS:
ASSUMPTIONS: (1) the Krumbhaar C Sand will produce at least 1,200,000 cubic feet of gas and 25 barrels of oil per day; (2) oil will sell for $100.00 per barrel and gas will sell for $10.00 per thousand cubic feet of gas; and (3) the Partnership’s share of operating expenses will be $2,400.00 per month.
NOTATIONS: (1) the Partnership’s Working Interest is 20% and its Net Revenue Interest is 14.2%; (2) severance tax on gas of $.373 per thousand cubic feet of gas has been deducted; (3) severance tax on oil of 12.5% has been deducted; and (4) the Krumbhaar A Sand is electric log productive up-hole of the Krumbhaar C Sand.

ESTIMATED MONTHLY NET INCOME TO THE PARTNERSHIP: $56,800.00

RACELAND FIELD PROSPECT (EXHIBIT C-I):

Electric logs run by Schlumberger and sidewall cores analyzed by OMNI Laboratories, Inc. show evidence of four productive formations. The Well was completed in the 6,420’ gas sand and, on a 9/64ths choke, tested at 877,000 cubic feet of gas per day. It should be selling gas by June 1.

PARTNERSHIP INCOME ANALYSIS:
ASSUMPTIONS: (1) the Well will produce 850,000 cubic feet of gas per day – no oil projected- from its lower gas formation; (2) gas will sell for $10.00 per thousand cubic feet; and (3) the Partnership’s share of operating expenses will be $10,000.00 per month.
NOTATIONS: (1) the Partnership’s Working Interest is 94% and its Net Revenue Interest is 65.8%; (2) severance tax on gas of $.373 per thousand cubic feet of gas has been deducted; and (3) by electric logs and core analysis, three additional productive zones remain up-hole of the completed 6,420’ sand, the 4,365 gas sand, the 4,460’ oil sand and the 4,540’ gas sand.

ESTIMATED MONTHLY NET INCOME TO THE PARTNERSHIP: $155,000.00


A ONE-UNIT PARTNER’S SHARE OF THE ABOVE ESTIMATES, PRIOR TO THE RETURN OF THEIR INVESTMENT (BEFORE PAYOUT), DEPENDS UPON THEIR DATE OF ENTRY INTO THE PROGRAM. IN ORDER TO CALCULATE YOUR ESTIMATED SHARE, MULTIPLY THE ABOVE PARTNERSHIP INCOME ESTIMATES BY YOUR APPLICABLE PERCENTAGE. SELECT YOURS FROM THE FOLLOWING:

Entry between 10-16-06 and 12-31-06 = 1.369863% Before Payout; 1.027397% After Payout

Entry between 01-01-07 and 02-28-07 = 1.232877% Before Payout; 1.027397% After Payout

Entry between 03-01-07 and 04-30-07 = 1.164384% Before Payout; 1.027397% After Payout

Entry between 05-01-07 and 06-30-07 = 1.095890% Before Payout; 1.027397% After Payout

Entry between 07-01-07 and 10-15-07 = 1.027397% Before Payout; 1.027397% After Payout

EAST GUEYDAN PROSPECT (EXHIBIT C-II):

Operations on this Prospect well, the James A. Whitson, Jr. — No. 1 Adams Heirs, began on October 18, 2007, and the well was plugged and abandoned on December 4, 2007. A final accounting of well expenses will be furnished to Program Partners in the near future.