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|                                                               |
|---------------------------------------------------------------|
|                                                               |  |
|                                                          | Page |
|                                                          |   |
| Independent Auditors' Report                                  | 3 |
| Statements of Revenues and Direct Operating Expenses          | 4 |
| Notes to Statements of Revenues and Direct Operating Expenses | 5 |

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|                                                                         |
|-------------------------------------------------------------------------|
|                                                                         |  |  |  |  |  |  |  |  |  |  |  |
|                                                                    | Three Months Ended March 31, |   | Year Ended |
|                                                                    | 2012 |   | 2011 |   | 2011 |
|                                                                    | (Unaudited) |   |   |
|                                                                    |   |   |   |   |   |
| Revenues                                                                | $ | 8,553 |  |   | $ | 10,916 |  |   | $ | 43,074 |  |
| Direct Operating Expenses                                               | 2,305 |  |   | 2,234 |  |   | 6,171 |  |
| Excess of Revenues over Direct    Operating Expense | $ | 6,248 |  |   | $ | 8,682 |  |   | $ | 36,903 |  |
|                                                                    |   |   |   |   |   |

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|                                          |
|------------------------------------------|
|                                          |  |  |  |  |
|                                     | Oil(BBLS) | Gas(MCF) |
| Proved Reserves                          |   |   |
|   Balance at December 31, 2010 | 9,678,383 |  | 71,768,609 |  |
|   Production                   | (560,118 | ) | (3,466,551 | ) |
|   Revisions                    | 2,315,875 |  | 1,780,184 |  |
|   Balance at December 31, 2011 | 11,434,140 |  | 70,082,242 |  |
|                                     |   |   |

|                           |
|---------------------------|
|                           |  |  |  |  |
|                      | Oil(BBLS) | Gas(MCF) |
| Proved Developed Reserves |   |   |
| December 31, 2010         | 6,748,388 |  | 53,907,562 |  |
| December 31, 2011         | 8,632,098 |  | 53,426,493 |  |

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|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |
|                                                     |   |
|                                                     | December 31, |
| In Thousands                                             | 2011 |
|                                                     |   |
| Future Cash Inflows                                      | $ | 944,179 |  |
| Future Production Costs                                  | (247,358 | ) |
| Future Development Costs                                 | (102,936 | ) |
| Future Net Cash Flows                                    | 593,885 |  |
| Discount of 10% per annum                                | (370,869 | ) |
| Standardized Measure of Discounted Future Net Cash Flows | $ | 223,016 |  |
|                                                     |   |

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|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |
|                                                                          | (In thousands) |
|                                                                          |   |
| Balance at December 31, 2010                                                  | $ | 169,162 |  |
|      Sales of oil and natural gas produced, net      | (36,903 | ) |
|      Net changes in prices and production costs      | 27,622 |  |
|      Previously estimated development costs incurred | 1,361 |  |
|      Net changes in future development costs         | 100 |  |
|      Revisions of previous quantity estimates        | 29,576 |  |
|      Accretion of discount                           | 16,916 |  |
|      Changes in timing and other                     | 15,182 |  |
| Balance at December 31, 2011                                                  | $ | 223,016 |  |
|                                                                          |   |