Joint Interest Agreement

3 Months Ended

Sep. 30, 2012

Joint Interest Agreement

Joint Interest Agreement

Note 3 — Joint Interest Agreement

Effective April 17, 2012, a wholly owned subsidiary of the Company entered into definitive agreements with Orion Exploration Partners, LLC (“Orion”) to acquire and develop interests in oil and gas leases, associated surface rights and related assets located in the Mississippian Lime formation in Kay County in North Central Oklahoma.  The Company agreed to contribute cash and a drilling carry to maintain its  non-operated working interest in the joint venture.  Orion contributed the leases, its portion of the drilling capital, its operating expertise in the area and the Mississippian Lime play.  The agreement commits the parties to drill between six and fourteen gross wells by April 17, 2013.  To date one salt water disposal well and one producer well have been completed..

Our participation in this joint venture is reflected on our September 30, 2012 and June 30, 2012 balance sheets by the items below.  Included in the $1.4 million June 30, 2012 advance to our joint interest operating partner is an accrued $1,142,716 drilling cash call, which is also reflected in the due to joint interest partner balance.

	September 30, 2012		June 30,2012
Advances to joint interest operating partner	$	325,995	$	1,366,921
Due to joint interest partner	1,313,222		3,217,975