EnDevCo holds a farm-in agreement to “drill to earn” a 33% working interest in East Cameron Block 71 (EC Block 71) located in federal waters 54 feet deep offshore Louisiana. Open Choke Energy, LLC (“OCE”) has been named the Operator of the project and plans to commence drilling of the EC 71-9 well this year. The well will target the prolific “OC” pay sand in the area and is projected to develop proved reserves of approximately 8.1 million BOE and achieve an estimated daily production of 3,000 BOE per day. This production will be produced through the existing EC 71/72 Field production platform and facilities already installed on EC Block 71. Concurrent with drilling and completion of the EC 71-9 well, 3D seismic previously acquired over EC Block 71 will be utilized to identify additional drilling locations to fully develop probable and possible reserves of approximately 44.6 million BOE.

The farm-in agreement was originally secured from Noble Energy, Inc. (“Noble”), Mariner Energy, Inc. (“Mariner”) and EnTech Enterprises, Inc. (“EnTech”) in 2005 and grants EnDevCo an assignment of their operating rights down to a depth of 12,800 feet upon the initial commercial completion of the OC sand. Noble, Mariner and EnTech before payout were to retain a total 8.33% overriding royalty interest which could be converted at their option to a 25% working interest after payout. Mariner acquired the rights of Noble and EnTech in EC Block 71 in 2006.

Pursuant to a joint participation agreement between EnDevCo and OCE, EnDevCo will earn 1/3 and OCE will earn 2/3 of the rights in this farm-in. The joint participation agreement also secures EnDevCo's access to the production platforms on the EC 71/72 Field that are currently producing approximately 20 million cubic feet of gas per day and which are equipped with all necessary production facilities and pipelines to support increased oil and gas production resulting from drilling and completing new wells.

The EC 71/72 Field was discovered by Conoco in 1954. The Field pays consist of lower Pliocene, upper Miocene and middle Miocene sands which are trapped on a classic four-way closure downthrown to the main expansion fault. The discovery well found gas in multiple sands on this downthrown closure at depths between 6,500 feet and 9,000 feet in quantities sufficient to justify development of the field. Hydrocarbons have also been discovered and produced in closures up-thrown to the primary trapping fault.

EC 71/72 Field has produced a total of 277 BCFE since 1958. It is positioned in the offshore shelf area that has been characterized by deposition of abundant terrigenous clastics since the end of the Cretaceous period 65 million years ago. The sediments have been distributed by multiple active deltaic sequences dumping into a slowly subsiding basin. Multiple pay sands are common in this type of field environment and over 41 reservoirs are believed to exist in the EC 71/72 Field area. Both normal and geo-pressured reservoirs have been encountered and produce in the Field.

Geologically the Field produces primarily from a low relief anticline found downthrown to a major east-west trending growth fault. The Field is segregated into two primary structural components separated by three growth faulted compartments which comprise the closures containing hydrocarbons. Several peripheral fault blocks and secondary fault traps have also been identified and offer additional upside for future drilling projects beyond the main field structures. Recent 3-D seismic, of excellent quality, has been utilized to better identify potential pay zones. Amplitude anomalies exist in several interpreted sand reservoirs. Over 130 maps have been generated from well and seismic data to delineate the field structure, likely gas and condensate traps, and associated drillable targets.

The Field produces primarily gas and associated condensate from lower Pliocene, upper Miocene and middle Miocene sands. High quality 3D seismic data has been acquired over EC Block 71 and interpreted. The seismic data clearly maps the high amplitude ("bright spots") indicative of gas filled reservoir sands. In addition to mapping the existing proved production, the 3D seismic mapping highlights significant upside potential for future development.

The productive lower Pliocene, upper Miocene, and middle Miocene sands contain both normally pressured and geo-pressured sands. Production depths within the Field range between 4,000 feet (EK sand) to 12,600 feet (OC sands). Primary reservoir drive mechanisms include water and pressure depletion.