(4) Equity Investment in Savoy

6 Months Ended

Jun. 30, 2011

Equity Investment InSavoy

(4)           Equity Investment in Savoy

We own a 45% interest in Savoy Energy L.P., a private company engaged in the oil and gas business primarily in the State of Michigan. Savoy uses the successful efforts method of accounting.  We account for our interest using the equity method of accounting.

Below (in thousands) are a condensed balance sheet at June 30, 2011 and a condensed statement of operations for the six months ended June 30, 2011 and 2010.

Condensed Balance Sheet

	2011
Current assets	$	16,324
Oil and gas properties, net		19,192
	$	35,516
Total liabilities	$	11,560
Partners' capital		23,956
	$	35,516

Condensed Statement of Operations

	2011			2010
Revenue	$	15,325		$	5,385
Expenses		(8,426	)		(4,715	)
Net  income	$	6,899		$	670

7

	2011		2010
Revenue:
Oil	$	12,277	$	3,590
Gas		291		414
NGLs (natural gas liquids)		254		66
Contract drilling		2,277		798
Other		226		517
Total revenue		15,325		5,385
Costs and expenses:
LOE (lease operating expenses)		1,799		881
Contract drilling costs		1,468		706
DD&A (depreciation, depletion & amortization)		1,679		1,185
G&G (geological and geophysical) costs		490		642
Dry hole costs		906		497
Impairment of unproved properties		1,410		207
Other exploration costs		188		74
G&A (general & administrative)		486		523
Total expenses		8,426		4,715
Net income	$	6,899	$	670
The information below is not in thousands:
Oil production in barrels		131,500		50,000
Average oil prices/barrel for the period	$	93.36	$	72.00