Document:

EXHIBIT 10.31

                                 March 22, 2006

Falcon Natural Gas Corp.
Westchase Center
2500 City West Blvd., Suite 300
Houston TX 77042

Attention: Mr. Fred B. Zaziski, President and CEO

Dear Mr. Zaziski:

      As requested, we have made an estimate of the reserves and future
production and income attributable to certain leasehold interests of Falcon
Natural Gas Corporation (Falcon) as of December 31, 2005. This report is based
on constant prices and costs as set forth in this letter. The subject property
is located in the state of Louisiana. The results of this study are summarized
below:

                         FALCON NATURAL GAS CORPORATION
                     Estimated Net Reserves and Income Data
                   Attributable to Certain Leasehold Interests
                                    SEC Case
                             As of December 31, 2005

                                          Proved
                                       Undeveloped
                                     ---------------
      Remaining Reserves
      ------------------
        Oil/Condensate - MBbls                   364
        Gas - MMCF                            16,226

      Income Data
      -----------
        Future Gross Revenue         $   244,849,296
        Deductions                        24,275,750
                                     ---------------
        Future Net Income            $   220,573,504

      Discounted FNI @ 10%           $   136,224,192

From Landmark Graphics' "Aries" (totals shown above may not add to the summary
cash flow tables due to rounding).

<PAGE>

Falcon Natural Gas Corp.
March 22, 2006
Page 2

      The discounted future net income shown above is based on a discount rate
of 10 percent per annum compounded monthly. Future net income was discounted at
five other discount rates, which are compounded monthly. These data are shown on
each estimated projection of future production and income presented in a later
section of this report and are summarized as follows:

      Discount Rate              Total
         Percent                Proved
      -------------         -------------
            15              $ 112,105,992
            20              $  94,302,695
            25              $  80,720,320
            30              $  70,073,250
            35              $  61,537,906

      These data are presented for your information and should not be construed
as our estimate of fair market value.

      Liquid Hydrocarbon Volumes are expressed in thousands of barrels (MBbls).
A barrel is equivalent to 42 United States gallons. Gas Volumes are expressed in
millions of standard cubic feet (MMCF) at the contract temperature and pressure
base of the state of Texas.

Reserve Definitions

      The proved reserves included herein conform to the definitions as set
forth in the Securities and Exchange Commission's Regulation S-X Part 210.4-10
(a) as clarified by various Commission Staff Accounting Bulletins and to the
definitions endorsed by the Society of Petroleum Engineers (SPE), the Society of
Petroleum Evaluation Engineers (SPEE) and the World Petroleum Congresses (WPC).
Definitions of these reserves are included immediately following this letter.

Estimate of Reserves

      Estimates of reserves were prepared by the use of geological and
engineering methods generally accepted by the petroleum industry. The method or
combination of methods utilized in the analysis of each reservoir was tempered
by experience in the area, stage of development, quality, completeness of basic
data, and production history.

<PAGE>

Falcon Natural Gas Corp.
March 22, 2006
Page 3

      Where applicable, the volumetric method was employed for determining the
original quantities of hydrocarbons in place. Where sufficient geological data
was available, structural maps were prepared to delineate each reservoir and
isopachous maps were constructed to determine reservoir volumes. Electrical
logs, core analysis, and other available data were used to prepare these maps as
well as to determine representative values for porosity and interstitial water
saturation. Reserves based upon volumetric calculations or other methods such as
analogy with offset wells are usually subject to greater revision than those
based upon production and/or pressure performance data. Therefore, it may be
necessary to revise these estimates up or down in the future as more reliable
engineering data becomes available.

      Reserves of depletion-type reservoirs or those whose performance disclosed
reliable decline in production-rate trends or other diagnostic characteristics
were estimated by the application of appropriate decline curves or other
performance relationships. In the analysis of production decline curves,
reserves were established only to a calculated economic limit.

Estimate of Future Producing Rates

      Initial production rates were based on the current rates for those
reservoirs now on production. If no production decline was established, a
decline profile analogous to similar wells was used. If a decline trend was
established, this trend was used as the basis for estimating future rates.

Product Prices

      The product prices used in the current report were provided by Falcon and
are effective December 31, 2005.

      Liquid Prices

      For this report a liquid hydrocarbon price of $57.50 per barrel was used.
This price was held constant over the life of the reserves with no future price
escalation. The resulting overall average price for liquid hydrocarbon reserves
is $57.50. The liquid hydrocarbon reserves account for 8.5 percent of the total
proved reserves.

      Gas Prices

      For this report a gas price of $13.80 per MCF was used. BTUs and shrinkage
charges were applied to each individual property. This price was held constant
over the life of the reserves with no future price escalation. The resulting
overall average price for the gas reserves is $13.80 per MCF and account for
91.5 percent of the total proved reserves.

<PAGE>

Falcon Natural Gas Corp.
March 22, 2006
Page 4

Income Data

      The future gross revenue is determined before deduction of production and
ad valorem taxes. Future net income is determined after deduction of the normal
costs of operating the wells and recompletion and development costs. The
operating, recompletion and development costs were held constant for the life of
the reserves. The future net income is before the deduction for state and
federal income taxes and has not been adjusted for outstanding loans, which may
exist. It does not include any adjustment for cash on hand or undistributed
income.

      Tables 1 and 2 are the Grand Summaries by reserve category. Tables 3
through 5 are the individual lease projections for the Wyandotte Field.
Following the tables, which represents our estimated projections for a
particular property, are the production decline curves which graphically
illustrates past hydrocarbon production history and our estimated projection of
future production.

General

      The reserves included in this report are estimates only and should not be
construed as being exact quantities. They may or may not be actually recovered
and, if recovered, the revenues there from and the actual costs related thereto
could be more or less than the estimated amounts. Because of governmental
policies and uncertainties of supply and demand, the actual sales volumes and
the prices received from the reserves, along with the costs incurred in
recovering such reserves, may vary from those assumptions included in this
report. Also, estimates of reserves may increase or decrease as a result of
future operations.

      We are qualified to perform engineering evaluations and do not claim
expertise in accounting or legal matters. As in all aspects of oil and gas
evaluation, there are uncertainties inherent in the interpretation of
engineering data and therefore, our conclusions necessarily represent only our
best- informed professional judgments.

      The titles to the properties have not been examined by R. A. Lenser and
Associates, Inc. nor has the actual degree or type of interest owned been
independently confirmed. The data used in our estimates were obtained from
Falcon and were accepted as accurate. For the purposes of this report, a field
inspection of the properties was not performed nor was the mechanical operation
or condition of the wells and their related facilities examined. We have not
investigated possible environmental liability related to the properties and;
therefore, our estimates do not include any costs which may be incurred due to
such possible liability.

<PAGE>

Falcon Natural Gas Corp.
March 22, 2006
Page 5

      We are independent petroleum engineers and geologists; we do not own an
interest in these properties and are not employed on a contingent basis. Basic
geologic and field performance data together with our engineering work sheets
are maintained on file in our office and are available for review.

                                            Very truly yours,

                                            R. A. LENSER AND ASSOCIATES, INC.

                                            /s/ Ronald A. Lenser

                                            Ronald A. Lenser
                                            Registered Professional Engineer
                                            PE No. 30558

RAL/hmg

<PAGE>

R.A.LENSER & ASSOCIATES                        FALCON NATURAL GAS CORP.
     HOUSTON, TEXAS                       ESTIMATED RESERVES AND ECONOMICS
                                     ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS
                                              AS OF DECEMBER 31, 2005

<TABLE>
<CAPTION>
   WYANDOTTE FLD. ST. MARY CO. LA                                                                     TABLE 4
   FALCON NATURAL  GAS CORP
   RESERVOIR: DB-1                                                                                  RESERVE TYPE
   INGLEWOOD INVESTMENTS #2 LOC BP1                                                                 PROVED UNDEVELOPED

               ----------  REVENUE INTERESTS  ----------          --------PRODUCT PRICES--------          -FUTURE NET INCOME-
               Expense      Oil/       Plant                      Oil/Cond  Plt. Prod.     Gas            Discount     Income
               Interest     Cond.     Products     Gas             $/Bbl      $/Bbl       $/Mcf            Rate          M$
               --------  ----------   --------   -------           ------     ------      ------          --------------------
<S>           <C>        <C>         <C>        <C>                 <C>         <C>        <C>           <C>         <C>
 INITIAL      0.9375001  0.6562500   0.6562500  0.6562500           57.50       0.00       13.80         10.0000     12171.927
 FINAL        0.9374998  0.6562501   0.6562501  0.6562499           57.50       0.00       13.80         15.0000      7145.127
                                                                                                         20.0000      4306.033
 REMARKS                                                                                                 25.0000      2657.813
                                                                                                         30.0000      1676.646
                                                                                                         35.0000      1079.016
</TABLE>

<TABLE>
<CAPTION>
                 -------ESTIMATED 8/8 THS PRODUCTION-------     ---------COMPANY NET PRODUCTION---------    --AVERAGE PRICES--

 -END-
 MO-YR   WELLS     Oil/Cond      Plant Prod.        Gas          Oil/Cond     Plant Prod.      Sales Gas     Oil/Co     Gas
 -----  ------   ----MBbls---   ----MBbls---     ---MMCF---     ---MBbls--     ---MBbls--      ---MMCF--    --$/bbl  --$/MCF--
<S>     <C>      <C>            <C>              <C>            <C>            <C>             <C>          <C>      <C>
 12-06      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-07      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-08      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-09      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-10      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-11      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-12      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-13      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-14      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-15      1.          3.390          0.000           178.          2.225          0.000           115.      57.50      13.80
 12-16      1.         19.137          0.000          1007.         12.559          0.000           648.      57.50      13.80
 12-17      1.         17.223          0.000           906.         11.303          0.000           583.      57.50      13.80
 12-18      1.         15.501          0.000           816.         10.172          0.000           525.      57.50      13.80
 12-19      1.         13.951          0.000           734.          9.155          0.000           472.      57.50      13.80
 12-20      1.         10.340          0.000           544.          6.785          0.000           350.      57.50      13.80

 Sub-T      1.         79.542          0.000          4186.         52.199          0.000          2692.      57.50      13.80
 After      1.          1.531          0.000            81.          1.005          0.000            52.      57.50      13.80
 Total      1.         81.073          0.000          4267.         53.204          0.000          2744.      57.50      13.80

 Cumulative             0.000          0.000             0.     NET GAS VOLUME REFLECTS  2.0 % SHRINKAGE
 Ultimate              81.073          0.000          4267.

         -------------------COMPANY FUTURE GROSS REVENUE-------------------      ---- PROD & ADV TAXES ----     ----REVENUE----

 -END-
 MO-YR    Oil/Cond     Plt. Products        Gas        Other       Total           SEV TAX         ADV TAX      AFTER SEV & ADV
 -----   -----$------   -----$------    -----$-----  ----$-----  ----$-----      -----$-----    ------$----     -------$-------
 12-06             0.             0.             0.          0.          0.               0.             0.                  0.
 12-07             0.             0.             0.          0.          0.               0.             0.                  0.
 12-08             0.             0.             0.          0.          0.               0.             0.                  0.
 12-09             0.             0.             0.          0.          0.               0.             0.                  0.
 12-10             0.             0.             0.          0.          0.               0.             0.                  0.
 12-11             0.             0.             0.          0.          0.               0.             0.                  0.
 12-12             0.             0.             0.          0.          0.               0.             0.                  0.
 12-13             0.             0.             0.          0.          0.               0.             0.                  0.
 12-14             0.             0.             0.          0.          0.               0.             0.                  0.
 12-15        127925.             0.       1583578.          0.    1711503.           44908.             0.            1666595.
 12-16        722122.             0.       8939107.          0.    9661227.          253501.             0.            9407727.
 12-17        649910.             0.       8045196.          0.    8695106.          228151.             0.            8466954.
 12-18        584919.             0.       7240676.          0.    7825594.          205336.             0.            7620260.
 12-19        526427.             0.       6516608.          0.    7043036.          184802.             0.            6858233.
 12-20        390162.             0.       4829800.          0.    5219962.          136967.             0.            5082996.

 Sub-T       3001464.             0.      37154964.          0.   40156428.         1053665.             0.           39102764.
 After         57775.             0.        715192.          0.     772967.           20282.             0.             752685.
 Total       3059239.             0.      37870156.          0.   40929396.         1073947.             0.           39855448.

         ------------------------------ DEDUCTIONS -------------------------------  ---FUTURE NET INCOME BEFORE INCOME TAXES---

 -END-     Operating     Development    Abandonment                                         Undiscounted            Discounted
 MO-YR       Costs          Costs          Costs          Other          Total          Annual      Cumulative        @ 10.0%
 -----   ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------
 12-06              0.             0.             0.             0.             0.             0.             0.             0.
 12-07              0.             0.             0.             0.             0.             0.             0.             0.
 12-08              0.             0.             0.             0.             0.             0.             0.             0.
 12-09              0.             0.             0.             0.             0.             0.             0.             0.
 12-10              0.             0.             0.             0.             0.             0.             0.             0.
 12-11              0.             0.             0.             0.             0.             0.             0.             0.
 12-12              0.             0.             0.             0.             0.             0.             0.             0.
 12-13              0.             0.             0.             0.             0.             0.             0.             0.
 12-14              0.             0.             0.             0.             0.             0.             0.             0.
 12-15           7500.        937500.             0.             0.        945000.        721595.        721595.        274607.
 12-16          45000.             0.             0.             0.         45000.       9362727.      10084322.       3445916.
 12-17          45000.             0.             0.             0.         45000.       8421954.      18506276.       2817882.
 12-18          45000.             0.             0.             0.         45000.       7575260.      26081536.       2304172.
 12-19          45000.             0.             0.             0.         45000.       6813233.      32894768.       1883988.
 12-20          45000.             0.             0.             0.         45000.       5037996.      37932764.       1274233.

 Sub-T         232500.        937500.             0.             0.       1170000.      37932764.      37932764.      12000798.
 After          26250.             0.             0.             0.         26250.        726435.      38659200.        171128.
 Total         258750.        937500.             0.             0.       1196250.      38659200.      38659200.      12171926.

                          SUBJECT TO CONDITIONS AND QUALIFICATIONS PRESENTED IN THE TEXT OF THIS REPORT
</TABLE>

<PAGE>

R.A.LENSER & ASSOCIATES                       FALCON NATURAL GAS CORP.
     HOUSTON, TEXAS                       ESTIMATED RESERVES AND ECONOMICS
                                     ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS
                                              AS OF DECEMBER 31, 2005

<TABLE>
<CAPTION>
   WYANDOTTE FLD. ST. MARY CO. LA                                                                     TABLE 3
   FALCON NATURAL  GAS CORP
   RESERVOIR: DB-3 UPPER                                                                            RESERVE TYPE
   INGLEWOOD INVESTMENTS #2 LOC.                                                                    PROVED UNDEVELOPED

               ----------  REVENUE INTERESTS  ----------          --------PRODUCT PRICES--------          -FUTURE NET INCOME-
               Expense      Oil/       Plant                      Oil/Cond  Plt. Prod.     Gas            Discount     Income
               Interest     Cond.     Products     Gas             $/Bbl      $/Bbl       $/Mcf            Rate          M$
               --------  ----------   --------   -------           ------     ------      ------          --------------------
<S>           <C>        <C>         <C>        <C>                 <C>         <C>        <C>           <C>         <C>
 INITIAL      0.9375000  0.6562500   0.6562500  0.6562500           57.50       0.00       13.80         10.0000     85788.867
 FINAL        0.9374999  0.6562500   0.6562500  0.6562501           57.50       0.00       13.80         15.0000     72650.648
                                                                                                         20.0000     62467.895
 REMARKS                                                                                                 25.0000     54418.937
                                                                                                         30.0000     47943.473
                                                                                                         35.0000     42650.957
</TABLE>

<TABLE>
<CAPTION>
                 -------ESTIMATED 8/8 THS PRODUCTION-------     ---------COMPANY NET PRODUCTION---------    --AVERAGE PRICES--

 -END-
 MO-YR   WELLS     Oil/Cond      Plant Prod.        Gas          Oil/Cond     Plant Prod.      Sales Gas     Oil/Co     Gas
 -----  ------   ----MBbls---   ----MBbls---     ---MMCF---     ---MBbls--     ---MBbls--      ---MMCF--    --$/bbl  --$/MCF--
<S>     <C>      <C>            <C>              <C>            <C>            <C>             <C>          <C>      <C>
 12-06      1.         31.937          0.000          1426.         20.958          0.000           917.      57.50      13.80
 12-07      1.         50.382          0.000          2249.         33.063          0.000          1447.      57.50      13.80
 12-08      1.         45.344          0.000          2024.         29.757          0.000          1302.      57.50      13.80
 12-09      1.         40.810          0.000          1822.         26.781          0.000          1172.      57.50      13.80
 12-10      1.         36.729          0.000          1640.         24.103          0.000          1055.      57.50      13.80
 12-11      1.         33.056          0.000          1476.         21.693          0.000           949.      57.50      13.80
 12-12      1.         29.750          0.000          1328.         19.524          0.000           854.      57.50      13.80
 12-13      1.         26.775          0.000          1195.         17.571          0.000           769.      57.50      13.80
 12-14      1.         21.330          0.000           952.         13.997          0.000           612.      57.50      13.80
 12-15      1.          3.379          0.000           151.          2.217          0.000            97.      57.50      13.80
 12-16
 12-17
 12-18
 12-19
 12-20

 Sub-T      1.        319.491          0.000         14263.        209.666          0.000          9173.      57.50      13.80
 After      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 Total      1.        319.491          0.000         14263.        209.666          0.000          9173.      57.50      13.80

 Cumulative             0.000          0.000             0.     NET GAS VOLUME REFLECTS  2.0 % SHRINKAGE
 Ultimate             319.491          0.000         14263.

         -------------------COMPANY FUTURE GROSS REVENUE-------------------      ---- PROD & ADV TAXES ----     ----REVENUE----

 -END-
 MO-YR    Oil/Cond     Plt. Products        Gas        Other       Total           SEV TAX         ADV TAX      AFTER SEV & ADV
 -----   -----$------   -----$------    -----$-----  ----$-----  ----$-----      -----$-----    ------$----     -------$-------
 12-06       1205105.             0.      12653604.          0.   13858708.          381704.             0.           13477005.
 12-07       1901148.             0.      19962054.          0.   21863204.          602168.             0.           21261036.
 12-08       1711033.             0.      17965850.          0.   19676882.          541951.             0.           19134932.
 12-09       1539930.             0.      16169265.          0.   17709194.          487756.             0.           17221438.
 12-10       1385937.             0.      14552339.          0.   15938278.          438980.             0.           15499297.
 12-11       1247343.             0.      13097106.          0.   14344450.          395082.             0.           13949367.
 12-12       1122609.             0.      11787396.          0.   12910005.          355574.             0.           12554432.
 12-13       1010348.             0.      10608656.          0.   11619005.          320017.             0.           11298989.
 12-14        804855.             0.       8450980.          0.    9255835.          254929.             0.            9000906.
 12-15        127487.             0.       1338611.          0.    1466098.           40380.             0.            1425718.
 12-16
 12-17
 12-18
 12-19
 12-20

 Sub-T      12055796.             0.     126585856.          0.  138641664.         3818542.             0.          134823120.
 After             0.             0.             0.          0.          0.               0.             0.                  0.
 Total      12055796.             0.     126585856.          0.  138641664.         3818542.             0.          134823120.

         ------------------------------ DEDUCTIONS -------------------------------  ---FUTURE NET INCOME BEFORE INCOME TAXES---

 -END-     Operating     Development    Abandonment                                         Undiscounted            Discounted
 MO-YR       Costs          Costs          Costs          Other          Total          Annual      Cumulative        @ 10.0%
 -----   ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------
 12-06          26250.       7860900.             0.             0.       7887150.       5589855.       5589855.       4840735.
 12-07          45000.             0.             0.             0.         45000.      21216036.      26805892.      18411954.
 12-08          45000.             0.             0.             0.         45000.      19089932.      45895824.      15060778.
 12-09          45000.             0.             0.             0.         45000.      17176438.      63072264.      12319230.
 12-10          45000.             0.             0.             0.         45000.      15454297.      78526560.      10076439.
 12-11          45000.             0.             0.             0.         45000.      13904367.      92430928.       8241694.
 12-12          45000.             0.             0.             0.         45000.      12509432.     104940360.       6740782.
 12-13          45000.             0.             0.             0.         45000.      11253989.     116194352.       5512982.
 12-14          45000.             0.             0.             0.         45000.       8955906.     125150256.       4006072.
 12-15          37500.             0.             0.             0.         37500.       1388218.     126538472.        578204.
 12-16
 12-17
 12-18
 12-19
 12-20

 Sub-T         423750.       7860900.             0.             0.       8284650.     126538472.     126538472.      85788880.
 After              0.             0.             0.             0.             0.             0.     126538472.             0.
 Total         423750.       7860900.             0.             0.       8284650.     126538472.     126538472.      85788880.

                          SUBJECT TO CONDITIONS AND QUALIFICATIONS PRESENTED IN THE TEXT OF THIS REPORT
</TABLE>

<PAGE>

R.A.LENSER & ASSOCIATES                        FALCON NATURAL GAS CORP.
     HOUSTON, TEXAS                       ESTIMATED RESERVES AND ECONOMICS
                                     ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS
                                               AS OF DECEMBER 31, 2005

<TABLE>
<CAPTION>
   WYANDOTTE FLD. ST. MARY CO. LA                                                                     TABLE 5
   FALCON NATURAL  GAS CORP
   RESERVOIR: DB-3 LOWER                                                                            RESERVE TYPE
   INGLEWOOD INVESTMENTS #3 LOC.                                                                    PROVED UNDEVELOPED

               ----------  REVENUE INTERESTS  ----------          --------PRODUCT PRICES--------          -FUTURE NET INCOME-
               Expense      Oil/       Plant                      Oil/Cond  Plt. Prod.     Gas            Discount     Income
               Interest     Cond.     Products     Gas             $/Bbl      $/Bbl       $/Mcf            Rate          M$
               --------  ----------   --------   -------           ------     ------      ------          --------------------
<S>           <C>        <C>         <C>        <C>                 <C>         <C>        <C>           <C>         <C>
 INITIAL      0.9375000  0.6562500   0.6562500  0.6562500           57.50       0.00       13.80         10.0000     38263.402
 FINAL        0.9375000  0.6562500   0.6562500  0.6562501           57.50       0.00       13.80         15.0000     32310.209
                                                                                                         20.0000     27528.764
 REMARKS                                                                                                 25.0000     23643.566
                                                                                                         30.0000     20453.135
                                                                                                         35.0000     17807.936
</TABLE>

<TABLE>
<CAPTION>
                 -------ESTIMATED 8/8 THS PRODUCTION-------     ---------COMPANY NET PRODUCTION---------    --AVERAGE PRICES--

 -END-
 MO-YR   WELLS     Oil/Cond      Plant Prod.        Gas          Oil/Cond     Plant Prod.      Sales Gas     Oil/Co     Gas
 -----  ------   ----MBbls---   ----MBbls---     ---MMCF---     ---MBbls--     ---MBbls--      ---MMCF--    --$/bbl  --$/MCF--
<S>     <C>      <C>            <C>              <C>            <C>            <C>             <C>          <C>      <C>
 12-06      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 12-07      1.         23.423          0.000          1018.         15.371          0.000           655.      57.50      13.80
 12-08      1.         36.951          0.000          1607.         24.249          0.000          1033.      57.50      13.80
 12-09      1.         33.256          0.000          1446.         21.824          0.000           930.      57.50      13.80
 12-10      1.         29.931          0.000          1301.         19.642          0.000           837.      57.50      13.80
 12-11      1.         25.624          0.000          1114.         16.816          0.000           717.      57.50      13.80
 12-12      1.          4.915          0.000           214.          3.225          0.000           137.      57.50      13.80
 12-13
 12-14
 12-15
 12-16
 12-17
 12-18
 12-19
 12-20

 Sub-T      1.        154.100          0.000          6700.        101.128          0.000          4309.      57.50      13.80
 After      0.          0.000          0.000             0.          0.000          0.000             0.       0.00       0.00
 Total      1.        154.100          0.000          6700.        101.128          0.000          4309.      57.50      13.80

 Cumulative             0.000          0.000             0.     NET GAS VOLUME REFLECTS  2.0 % SHRINKAGE
 Ultimate             154.100          0.000          6700.

         -------------------COMPANY FUTURE GROSS REVENUE-------------------      ---- PROD & ADV TAXES ----     ----REVENUE----

 -END-
 MO-YR    Oil/Cond     Plt. Products        Gas        Other       Total           SEV TAX         ADV TAX      AFTER SEV & ADV
 -----   -----$------   -----$------    -----$-----  ----$-----  ----$-----      -----$-----    ------$----     -------$-------
 12-06             0.             0.             0.          0.          0.               0.             0.                  0.
 12-07        883846.             0.       9038288.          0.    9922134.          275528.             0.            9646607.
 12-08       1394337.             0.      14258610.          0.   15652945.          434667.             0.           15218278.
 12-09       1254903.             0.      12832746.          0.   14087650.          391200.             0.           13696450.
 12-10       1129413.             0.      11549473.          0.   12678888.          352080.             0.           12326806.
 12-11        966911.             0.       9887717.          0.   10854629.          301422.             0.           10553206.
 12-12        185458.             0.       1896511.          0.    2081969.           57814.             0.            2024155.
 12-13
 12-14
 12-15
 12-16
 12-17
 12-18
 12-19
 12-20

 Sub-T       5814868.             0.      59463344.          0.   65278212.         1812711.             0.           63465508.
 After             0.             0.             0.          0.          0.               0.             0.                  0.
 Total       5814868.             0.      59463344.          0.   65278212.         1812711.             0.           63465508.

         ------------------------------ DEDUCTIONS -------------------------------  ---FUTURE NET INCOME BEFORE INCOME TAXES---

 -END-     Operating     Development    Abandonment                                         Undiscounted            Discounted
 MO-YR       Costs          Costs          Costs          Other          Total          Annual      Cumulative        @ 10.0%
 -----   ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------
 12-06              0.             0.             0.             0.             0.             0.             0.             0.
 12-07          26250.       7860900.             0.             0.       7887150.       1759457.       1759457.       1144496.
 12-08          45000.             0.             0.             0.         45000.      15173278.      16932736.      11970786.
 12-09          45000.             0.             0.             0.         45000.      13651450.      30584186.       9791054.
 12-10          45000.             0.             0.             0.         45000.      12281806.      42865992.       8007932.
 12-11          45000.             0.             0.             0.         45000.      10508206.      53374200.       6241302.
 12-12          22500.             0.             0.             0.         22500.       2001655.      55375856.       1107828.
 12-13
 12-14
 12-15
 12-16
 12-17
 12-18
 12-19
 12-20

 Sub-T         228750.       7860900.             0.             0.       8089650.      55375856.      55375856.      38263396.
 After              0.             0.             0.             0.             0.             0.      55375856.             0.
 Total         228750.       7860900.             0.             0.       8089650.      55375856.      55375856.      38263396.

                          SUBJECT TO CONDITIONS AND QUALIFICATIONS PRESENTED IN THE TEXT OF THIS REPORT
</TABLE>

<PAGE>

R.A.LENSER & ASSOCIATES                        FALCON NATURAL GAS CORP.
     HOUSTON, TEXAS                       ESTIMATED RESERVES AND ECONOMICS
                                     ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS
                                               AS OF DECEMBER 31, 2005
<TABLE>
<CAPTION>
   GRAND SUMMARY                                                                                      TABLE 2
   PROVED UNDEVELOPED RESERVES
                                                                                                    RESERVE TYPE
                                                                                                    PROVED UNDEVELOPED

               ----------  REVENUE INTERESTS  ----------          --------PRODUCT PRICES--------          -FUTURE NET INCOME-
               Expense      Oil/       Plant                      Oil/Cond  Plt. Prod.     Gas            Discount     Income
               Interest     Cond.     Products     Gas             $/Bbl      $/Bbl       $/Mcf            Rate          M$
               --------  ----------   --------   -------           ------     ------      ------          --------------------
<S>            <C>       <C>          <C>        <C>               <C>        <C>         <C>            <C>        <C>
 INITIAL                                                                                                 10.0000    136224.188
 FINAL                                                                                                   15.0000    112105.992
                                                                                                         20.0000     94302.695
                                                                                                         25.0000     80720.320
                                                                                                         30.0000     70073.250
                                                                                                         35.0000     61537.906
</TABLE>

<TABLE>
<CAPTION>
                 -------ESTIMATED 8/8 THS PRODUCTION-------     ---------COMPANY NET PRODUCTION---------    --AVERAGE PRICES--

 -END-
 MO-YR   WELLS     Oil/Cond      Plant Prod.        Gas          Oil/Cond     Plant Prod.      Sales Gas     Oil/Co     Gas
 -----  ------   ----MBbls---   ----MBbls---     ---MMCF---     ---MBbls--     ---MBbls--      ---MMCF--    --$/bbl  --$/MCF--
<S>     <C>      <C>            <C>              <C>            <C>            <C>             <C>          <C>      <C>
 12-06      1.         31.937          0.000          1426.         20.958          0.000           917.      57.50      13.80
 12-07      2.         73.805          0.000          3268.         48.435          0.000          2101.      57.50      13.80
 12-08      2.         82.296          0.000          3631.         54.006          0.000          2335.      57.50      13.80
 12-09      2.         74.066          0.000          3268.         48.606          0.000          2102.      57.50      13.80
 12-10      2.         66.659          0.000          2941.         43.745          0.000          1891.      57.50      13.80
 12-11      2.         58.680          0.000          2590.         38.509          0.000          1666.      57.50      13.80
 12-12      2.         34.665          0.000          1542.         22.749          0.000           992.      57.50      13.80
 12-13      1.         26.775          0.000          1195.         17.571          0.000           769.      57.50      13.80
 12-14      1.         21.330          0.000           952.         13.997          0.000           612.      57.50      13.80
 12-15      1.          6.769          0.000           329.          4.442          0.000           212.      57.50      13.80
 12-16      1.         19.137          0.000          1007.         12.559          0.000           648.      57.50      13.80
 12-17      1.         17.223          0.000           906.         11.303          0.000           583.      57.50      13.80
 12-18      1.         15.501          0.000           816.         10.172          0.000           525.      57.50      13.80
 12-19      1.         13.951          0.000           734.          9.155          0.000           472.      57.50      13.80
 12-20      1.         10.340          0.000           544.          6.785          0.000           350.      57.50      13.80

 Sub-T      1.        553.133          0.000         25149.        362.994          0.000         16174.      57.50      13.80
 After      1.          1.531          0.000            81.          1.005          0.000            52.      57.50      13.80
 Total      1.        554.664          0.000         25230.        363.998          0.000         16226.      57.50      13.80

 Cumulative             0.000          0.000             0.     NET GAS VOLUME REFLECTS  0.0 % SHRINKAGE
 Ultimate             554.664          0.000         25230.

         -------------------COMPANY FUTURE GROSS REVENUE-------------------      ---- PROD & ADV TAXES ----     ----REVENUE----

 -END-
 MO-YR    Oil/Cond     Plt. Products        Gas        Other       Total           SEV TAX         ADV TAX      AFTER SEV & ADV
 -----   -----$------   -----$------    -----$-----  ----$-----  ----$-----      -----$-----    ------$----     -------$-------
 12-06       1205105.             0.      12653604.          0.   13858708.          381704.             0.           13477005.
 12-07       2784994.             0.      29000342.          0.   31785338.          877696.             0.           30907644.
 12-08       3105370.             0.      32224460.          0.   35329828.          976618.             0.           34353208.
 12-09       2794833.             0.      29002012.          0.   31796844.          878956.             0.           30917888.
 12-10       2515350.             0.      26101812.          0.   28617166.          791061.             0.           27826104.
 12-11       2214254.             0.      22984824.          0.   25199080.          696505.             0.           24502572.
 12-12       1308067.             0.      13683907.          0.   14991974.          413388.             0.           14578587.
 12-13       1010348.             0.      10608656.          0.   11619005.          320017.             0.           11298989.
 12-14        804855.             0.       8450980.          0.    9255835.          254929.             0.            9000906.
 12-15        255412.             0.       2922189.          0.    3177601.           85288.             0.            3092312.
 12-16        722122.             0.       8939107.          0.    9661227.          253501.             0.            9407727.
 12-17        649910.             0.       8045196.          0.    8695106.          228151.             0.            8466954.
 12-18        584919.             0.       7240676.          0.    7825594.          205336.             0.            7620260.
 12-19        526427.             0.       6516608.          0.    7043036.          184802.             0.            6858233.
 12-20        390162.             0.       4829800.          0.    5219962.          136967.             0.            5082996.

 Sub-T      20872128.             0.     223204144.          0.  244076336.         6684918.             0.          237391424.
 After         57775.             0.        715192.          0.     772967.           20282.             0.             752685.
 Total      20929902.             0.     223919344.          0.  244849296.         6705200.             0.          238144112.

         ------------------------------ DEDUCTIONS -------------------------------  ---FUTURE NET INCOME BEFORE INCOME TAXES---

 -END-     Operating     Development    Abandonment                                         Undiscounted            Discounted
 MO-YR       Costs          Costs          Costs          Other          Total          Annual      Cumulative        @ 10.0%
 -----   ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------
 12-06          26250.       7860900.             0.             0.       7887150.       5589855.       5589855.       4840735.
 12-07          71250.       7860900.             0.             0.       7932150.      22975492.      28565348.      19556450.
 12-08          90000.             0.             0.             0.         90000.      34263208.      62828556.      27031564.
 12-09          90000.             0.             0.             0.         90000.      30827888.      93656448.      22110284.
 12-10          90000.             0.             0.             0.         90000.      27736104.     121392552.      18084370.
 12-11          90000.             0.             0.             0.         90000.      24412572.     145805120.      14482996.
 12-12          67500.             0.             0.             0.         67500.      14511087.     160316208.       7848610.
 12-13          45000.             0.             0.             0.         45000.      11253989.     171570192.       5512982.
 12-14          45000.             0.             0.             0.         45000.       8955906.     180526096.       4006072.
 12-15          45000.        937500.             0.             0.        982500.       2109812.     182635904.        852812.
 12-16          45000.             0.             0.             0.         45000.       9362727.     191998624.       3445916.
 12-17          45000.             0.             0.             0.         45000.       8421954.     200420576.       2817882.
 12-18          45000.             0.             0.             0.         45000.       7575260.     207995840.       2304172.
 12-19          45000.             0.             0.             0.         45000.       6813233.     214809072.       1883988.
 12-20          45000.             0.             0.             0.         45000.       5037996.     219847072.       1274233.

 Sub-T         885000.      16659300.             0.             0.      17544300.     219847072.     219847072.     136053072.
 After          26250.             0.             0.             0.         26250.        726435.     220573504.        171128.
 Total         911250.      16659300.             0.             0.      17570550.     220573504.     220573504.     136224192.

                          SUBJECT TO CONDITIONS AND QUALIFICATIONS PRESENTED IN THE TEXT OF THIS REPORT
</TABLE>

<PAGE>

R.A.LENSER & ASSOCIATES                       FALCON NATURAL GAS CORP.
     HOUSTON, TEXAS                       ESTIMATED RESERVES AND ECONOMICS
                                     ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS
                                             AS OF DECEMBER 31, 2005
<TABLE>
<CAPTION>
   GRAND TOTAL                                                                                        TABLE 1
   TOTAL PROVED RESERVES
                                                                                                    RESERVE TYPE
                                                                                                    TOTAL PROVED

               ----------  REVENUE INTERESTS  ----------          --------PRODUCT PRICES--------          -FUTURE NET INCOME-
               Expense      Oil/       Plant                      Oil/Cond  Plt. Prod.     Gas            Discount     Income
               Interest     Cond.     Products     Gas             $/Bbl      $/Bbl       $/Mcf            Rate          M$
               --------  ----------   --------   -------           ------     ------      ------          --------------------
<S>            <C>       <C>          <C>        <C>               <C>        <C>         <C>            <C>        <C>
 INITIAL                                                                                                 10.0000    136224.188
 FINAL                                                                                                   15.0000    112105.992
                                                                                                         20.0000     94302.695
                                                                                                         25.0000     80720.320
                                                                                                         30.0000     70073.250
                                                                                                         35.0000     61537.906
</TABLE>

<TABLE>
<CAPTION>
                 -------ESTIMATED 8/8 THS PRODUCTION-------     ---------COMPANY NET PRODUCTION---------    --AVERAGE PRICES--

 -END-
 MO-YR   WELLS     Oil/Cond      Plant Prod.        Gas          Oil/Cond     Plant Prod.      Sales Gas     Oil/Co     Gas
 -----  ------   ----MBbls---   ----MBbls---     ---MMCF---     ---MBbls--     ---MBbls--      ---MMCF--    --$/bbl  --$/MCF--
<S>     <C>      <C>            <C>              <C>            <C>            <C>             <C>          <C>      <C>
 12-06      1.         31.937          0.000          1426.         20.958          0.000           917.      57.50      13.80
 12-07      2.         73.805          0.000          3268.         48.435          0.000          2101.      57.50      13.80
 12-08      2.         82.296          0.000          3631.         54.006          0.000          2335.      57.50      13.80
 12-09      2.         74.066          0.000          3268.         48.606          0.000          2102.      57.50      13.80
 12-10      2.         66.659          0.000          2941.         43.745          0.000          1891.      57.50      13.80
 12-11      2.         58.680          0.000          2590.         38.509          0.000          1666.      57.50      13.80
 12-12      2.         34.665          0.000          1542.         22.749          0.000           992.      57.50      13.80
 12-13      1.         26.775          0.000          1195.         17.571          0.000           769.      57.50      13.80
 12-14      1.         21.330          0.000           952.         13.997          0.000           612.      57.50      13.80
 12-15      1.          6.769          0.000           329.          4.442          0.000           212.      57.50      13.80
 12-16      1.         19.137          0.000          1007.         12.559          0.000           648.      57.50      13.80
 12-17      1.         17.223          0.000           906.         11.303          0.000           583.      57.50      13.80
 12-18      1.         15.501          0.000           816.         10.172          0.000           525.      57.50      13.80
 12-19      1.         13.951          0.000           734.          9.155          0.000           472.      57.50      13.80
 12-20      1.         10.340          0.000           544.          6.785          0.000           350.      57.50      13.80

 Sub-T      1.        553.133          0.000         25149.        362.994          0.000         16174.      57.50      13.80
 After      1.          1.531          0.000            81.          1.005          0.000            52.      57.50      13.80
 Total      1.        554.664          0.000         25230.        363.998          0.000         16226.      57.50      13.80

 Cumulative             0.000          0.000             0.     NET GAS VOLUME REFLECTS  0.0 % SHRINKAGE
 Ultimate             554.664          0.000         25230.

         -------------------COMPANY FUTURE GROSS REVENUE-------------------      ---- PROD & ADV TAXES ----     ----REVENUE----

 -END-
 MO-YR    Oil/Cond     Plt. Products        Gas        Other       Total           SEV TAX         ADV TAX      AFTER SEV & ADV
 -----   -----$------   -----$------    -----$-----  ----$-----  ----$-----      -----$-----    ------$----     -------$-------
 12-06       1205105.             0.      12653604.          0.   13858708.          381704.             0.           13477005.
 12-07       2784994.             0.      29000342.          0.   31785338.          877696.             0.           30907644.
 12-08       3105370.             0.      32224460.          0.   35329828.          976618.             0.           34353208.
 12-09       2794833.             0.      29002012.          0.   31796844.          878956.             0.           30917888.
 12-10       2515350.             0.      26101812.          0.   28617166.          791061.             0.           27826104.
 12-11       2214254.             0.      22984824.          0.   25199080.          696505.             0.           24502572.
 12-12       1308067.             0.      13683907.          0.   14991974.          413388.             0.           14578587.
 12-13       1010348.             0.      10608656.          0.   11619005.          320017.             0.           11298989.
 12-14        804855.             0.       8450980.          0.    9255835.          254929.             0.            9000906.
 12-15        255412.             0.       2922189.          0.    3177601.           85288.             0.            3092312.
 12-16        722122.             0.       8939107.          0.    9661227.          253501.             0.            9407727.
 12-17        649910.             0.       8045196.          0.    8695106.          228151.             0.            8466954.
 12-18        584919.             0.       7240676.          0.    7825594.          205336.             0.            7620260.
 12-19        526427.             0.       6516608.          0.    7043036.          184802.             0.            6858233.
 12-20        390162.             0.       4829800.          0.    5219962.          136967.             0.            5082996.

 Sub-T      20872128.             0.     223204144.          0.  244076336.         6684918.             0.          237391424.
 After         57775.             0.        715192.          0.     772967.           20282.             0.             752685.
 Total      20929902.             0.     223919344.          0.  244849296.         6705200.             0.          238144112.

         ------------------------------ DEDUCTIONS -------------------------------  ---FUTURE NET INCOME BEFORE INCOME TAXES---

 -END-     Operating     Development    Abandonment                                         Undiscounted            Discounted
 MO-YR       Costs          Costs          Costs          Other          Total          Annual      Cumulative        @ 10.0%
 -----   ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------  ------$------
 12-06          26250.       7860900.             0.             0.       7887150.       5589855.       5589855.       4840735.
 12-07          71250.       7860900.             0.             0.       7932150.      22975492.      28565348.      19556450.
 12-08          90000.             0.             0.             0.         90000.      34263208.      62828556.      27031564.
 12-09          90000.             0.             0.             0.         90000.      30827888.      93656448.      22110284.
 12-10          90000.             0.             0.             0.         90000.      27736104.     121392552.      18084370.
 12-11          90000.             0.             0.             0.         90000.      24412572.     145805120.      14482996.
 12-12          67500.             0.             0.             0.         67500.      14511087.     160316208.       7848610.
 12-13          45000.             0.             0.             0.         45000.      11253989.     171570192.       5512982.
 12-14          45000.             0.             0.             0.         45000.       8955906.     180526096.       4006072.
 12-15          45000.        937500.             0.             0.        982500.       2109812.     182635904.        852812.
 12-16          45000.             0.             0.             0.         45000.       9362727.     191998624.       3445916.
 12-17          45000.             0.             0.             0.         45000.       8421954.     200420576.       2817882.
 12-18          45000.             0.             0.             0.         45000.       7575260.     207995840.       2304172.
 12-19          45000.             0.             0.             0.         45000.       6813233.     214809072.       1883988.
 12-20          45000.             0.             0.             0.         45000.       5037996.     219847072.       1274233.

 Sub-T         885000.      16659300.             0.             0.      17544300.     219847072.     219847072.     136053072.
 After          26250.             0.             0.             0.         26250.        726435.     220573504.        171128.
 Total         911250.      16659300.             0.             0.      17570550.     220573504.     220573504.     136224192.

                          SUBJECT TO CONDITIONS AND QUALIFICATIONS PRESENTED IN THE TEXT OF THIS REPORT
</TABLE>EMPLOYMENT AGREEMENT

      This Employment Agreement is made and entered into this 1st day of
December, 2004, by and between Mercer Capital, Inc., a Delaware corporation (the
"Company"), and Robert L Flickinger, an individual ("President, Director &
Manager").

                                    RECITALS

      A. The Company desires to be assured of the association and services of
Manager for the Company's Boca Raton, Florida office. The Company hereby
appoints the Manager to "President" of Mercer Capital Management and to the
Board of Directors with full voting rights of Mercer Capital Inc.

      B. Manager is willing and desires to be employed by the Company, and the
Company is willing to employ Manager, upon the terms, covenants and conditions
hereinafter set forth.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:

      1. Employment. The Company hereby employs Manager subject to the
supervision and direction of the Company's Board of Directors.

      2. Term. The term of this Agreement shall be for a period of three (3)
years commencing on the date hereof and shall be automatically renewed for a
period of one (1) year, unless terminated earlier pursuant to Section 8 below;
provided, however, that Manager's obligations in Section 7 below shall continue
in effect after such termination. This Employment Agreement shall have a
possible maximum term of three years.

      3. Compensation; Reimbursement.

<PAGE>

      3.1 Base Salary. For all services rendered by Manager under this
Agreement, the Company shall pay Manager a salary of Six Thousand Six Hundred
Dollars($6,600) per month (the "Base Salary"). The Board of Directors of the
Company may increase at any time and the amount of the Base Salary from time to
time. No such change shall in any way abrogate, alter, terminate or otherwise
affect the other terms of this Agreement.

      3.2 Reimbursement. Manager shall be reimbursed for all reasonable
"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement
(1) so long as such expenses constitute business deductions from taxable income
for the Company and are excludable from taxable income to the Manager under the
governing laws and regulations of the Internal Revenue Code (provided, however,
that Manager shall be entitled to full reimbursement in any case where the
Internal Revenue Service may, under Section 274(n) of the Internal Revenue Code,
disallow to the Company 20% of meals and entertainment expenses); and (2) to the
extent such expenses do not exceed the amounts allocable for such expenses in
budgets that are approved from time to time by the Company. The reimbursement of
Manager's business expenses shall be upon monthly presentation to and approval
by the Company of valid receipts and other appropriate documentation for such
expenses.

      4. Scope of Duties.

      4.1 Assignment of Duties. Manager shall have such duties as may be
assigned to him from time to time by the Company's Board of Directors
commensurate with his experience and responsibilities in the position for which
he is employed pursuant to Section 1 above. Such duties shall be exercised
subject to the control and supervision of the Chief Officer and the Board of
Directors of the Company.

      4.2 General Specification of Duties. Manager's duties shall include, but
not be limited to, the duties and performance goals as follows:

<PAGE>

      (1) act as the Manager of the Company's Boca Raton, Florida office and
perform all duties, functions and responsibilities generally associated with the
head of an operating division or subsidiary;

      (2) execute on behalf of the Company, in his capacity as Manager, all
documents as requested by the Company;

      (3) employ, pay, supervise and discharge all employees of the Boca raton
Office and determine all matters with regard to such personnel, including,
without limitation, compensation, bonuses and fringe benefits, all in accordance
with the Annual Plan (as defined in Section 4.3);

      (4) establish procedures for implementing the policies established by the
Company;

      (5) insure cooperation by the Boca Raton office with other divisions or
subsidiaries of the Company;

      (6) cause the Boca Raton office to be operated in compliance with all
legal requirements;

      (7) operate the Boca Raton office in conformance with the Annual Plan
approved by the Company, as such may be amended from time to time with the
concurrence of the Company; and

      The foregoing specifications are not intended as a complete itemization of
the duties that Manager shall perform and undertake on behalf of the Company in
satisfaction of his employment obligations under this Agreement.

      4.3 Manager's Devotion of Time. Manager hereby agrees to devote his full
time, abilities and energy to the faithful performance of the duties assigned to
him and to the promotion and forwarding of the business affairs of the Company,
and not to divert any business opportunities from the Company to himself or to
any other person or business entity.

<PAGE>

      4.4 Conflicting Activities.

      (1) Manager shall not, during the term of this Agreement, be engaged in
any other business activity without the prior consent of the Board of Directors
of the Company; provided, however, that this restriction shall not be construed
as preventing Manager from investing his personal assets in passive investments
in business entities which are not in competition with the Company or its
affiliates, or from pursuing business opportunities as permitted by paragraph
4.5(b).

      (2) Manager hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated
future business of the Company, in a manner consistent with the best interests
of the Company and with his duties under this Agreement. Should Manager discover
a business opportunity that does not relate to the current or anticipated future
business of the Company, he shall first offer such opportunity to the Company.
Should the Board of Directors of the Company not exercise its right to pursue
this business opportunity within a reasonable period of time, not to exceed
sixty (60) days, then Manager may develop the business opportunity for himself;
provided, however, that such development may in no way conflict or interfere
with the duties owed by Manager to the Company under this Agreement. Further,
Manager may develop such business opportunities only on his own time, and may
not use any service, personnel, equipment, supplies, facility, or trade secrets
of the Company in their development. As used herein, the term "business
opportunity" shall not include business opportunities involving investment in
publicly traded stocks, bonds or other securities, or other investments of a
personal nature.

      5. Stock of Company. So long as this Agreement is in effect, Manager shall
be entitled to purchase stock of the Company in the same amounts and for the
same consideration, terms and conditions as provided to other officers of the
Company's operating divisions or subsidiaries. The manner of acquisition of
stock shall be structured so as to minimize adverse tax consequences to Manager.

<PAGE>

      6. Severance. So long as this Agreement is in effect, Manager shall at all
times be entitled to severance benefits equal to those provided to other chief
operating officers of the Company's operating divisions or subsidiaries. These
benefits shall include, without limitation, the Company's maintenance at its
cost of a life insurance policy and disability policy on Manager payable to
Manager and/or his legal representative or heirs as applicable, in amounts
reasonably agreed to by Manager and the Company.

      7. Confidentiality of Trade Secrets and Other Materials.

      7.1 Trade Secrets. Other than in the performance of his duties hereunder,
Manager agrees not to disclose, either during the term of his employment by the
Company or at any time thereafter, to any person, firm or corporation any
information concerning the business affairs, the trade secrets or the customer
lists or similar information of the Company. Any technique, method, process or
technology used by the Company shall be considered a "trade secret" for the
purposes of this Agreement.

      7.2 Ownership of Trade Secrets; Assignment of Rights. Manager hereby
agrees that all know-how, documents, reports, plans, proposals, marketing and
sales plans, client lists, client files and materials made by him or by the
Company are the property of the Company and shall not be used by him in any way
adverse to the Company's interests. Manager shall not deliver, reproduce or in
any way allow such documents or things to be delivered or used by any third
party without specific direction or consent of the Board of Directors of the
Company. Manager hereby assigns to the Company any rights that he or she may
have in any such trade secret or proprietary information.

      8. Termination.

      8.1 Bases for Termination.

      (1) Manager's employment hereunder may be terminated at any time by mutual
agreement of the parties.

<PAGE>

      (2) This Agreement shall automatically terminate on the last day of the
month in which Manager dies or becomes permanently incapacitated. "Permanent
incapacity" as used herein shall mean mental or physical incapacity, or both,
reasonably determined by the Company's Board of Directors based upon a
certification of such incapacity by, in the discretion of the Company's Board of
Directors, either Manager's regularly attending physician or a duly licensed
physician selected by the Company's Board of Directors, rendering Manager unable
to perform substantially all of his duties hereunder and which appears
reasonably certain to continue for at least six consecutive months without
substantial improvement. Manager shall be deemed to have "become permanently
incapacitated" on the date the Company's Board of Directors has determined that
Manager is permanently incapacitated and so notifies Manager.

      (3) Manager's employment may be terminated by the Company "with cause,"
effective upon delivery of written notice to Manager given at any time (without
any necessity for prior notice) if any of the following shall occur:

      (a) any willful breach of duty, habitual neglect of duty, and continued
incapacity);

      (b) any material breach of Manager's obligations in Section 8 above; or

      (c) any material acts or events which inhibit Manager from fully
performing his responsibilities to the Company in good faith, such as (i) a
felony criminal conviction; (ii) any other criminal conviction involving
Manager's lack of honesty or moral turpitude; (iii) drug or alcohol abuse; or
(iv) acts of dishonesty, gross carelessness or gross misconduct.

      (4) Manager's employment may be terminated by the Company "with out cause"
(for any reason or no reason at all) at any time by giving Manager 60 days prior
written notice of termination, which termination shall be effective on the 60th
day following such notice. If Manager's employment under this Agreement is so
terminated, the Company shall (a) make a lump sum cash payment to Manager within
10 days after termination of an amount equal to (i) Manager's Base Salary for
the balance of the year in which termination occurs, (ii) a prorata portion of
any Incentive Bonus earned for the year in which termination occurs prorated to
the date of termination, plus (iii) any unreimbursed expenses accruing to the
date of termination; and (b) make a lump sum cash payment equal to Manager's
annual Base Salary, as increased pursuant to Section 3.1, on each anniversary
date of this Agreement for the balance of the term specified in Section 2. For
purposes of this provision, Manager's annual Base Salary and the remaining
portion of the term of the Agreement shall be calculated as of the termination
date. After the Company's termination of Manager under this provision, the
Company shall not be obligated to provide the benefits to Manager described in
Section 3.4 (except as may be required by law).

<PAGE>

      (5) Manager may terminate his employment hereunder by giving the Company
60 days prior written notice, which termination shall be effective on the 60th
day following such notice.

      8.2 Payment Upon Termination. Upon termination under paragraphs 8.1(1),
(2), (3), or (5), the Company shall pay to Manager within 10 days after
termination without cause an amount equal to the sum of (1) Manager's Base
Salary for three months equal to the date of termination; and (2) unreimbursed
expenses accrued to the date of termination. After any such termination, the
Company shall not be obligated to compensate Manager, his estate or
representatives except for the foregoing compensation then due and owing, nor
provide the benefits to Manager described in Section 3.4 (except as provided by
law).

      8.3 Severance Provisions. The provisions of Sections 8.1 and 8.2 shall be
subject to and deemed modified by the terms of any severance benefits granted to
Manager as provided under Section 6.

      8.4 Dismissal from Premises. At the Company's option, Manager shall
immediately leave the Company's premises on the date notice of termination is
given by either Manager or the Company.

<PAGE>

      9. Injunctive Relief. The Company and Manager hereby acknowledge and agree
that any default under Section 7 above will cause damage to the Company in an
amount difficult to ascertain. Accordingly, in addition to any other relief to
which the Company may be entitled, the Company shall be entitled to such
injunctive relief as may be ordered by any court of competent jurisdiction
including, but not limited to, an injunction restraining any violation of
Section 7 above and without the proof of actual damages.

      10. Miscellaneous.

      10.1 Transfer and Assignment. This Agreement is personal as to Manager and
shall not be assigned or transferred by Manager without the prior written
consent of the Company. This Agreement shall be binding upon and inure to the
benefit of all of the parties hereto and their respective permitted heirs,
personal representatives, successors and assigns.

      10.2 Severability. Nothing contained herein shall be construed to require
the commission of any act contrary to law. Should there be any conflict between
any provisions hereof and any present or future statute, law, ordinance,
regulation, or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.

      10.3 Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of the State of Delaware.

      10.4 Counterparts. This Agreement may be executed in several counter parts
and all documents so executed shall constitute one agreement, binding on all of
the parties hereto, notwithstanding that all of the parties did not sign the
original or the same counterparts.

<PAGE>

      10.5 Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements, arrangements, and
understandings with respect thereto. No representation, promise, inducement,
statement or intention has been made by any party hereto that is not embodied
herein, and no party shall be bound by or liable for any alleged representation,
promise, inducement, or statement not so set forth herein.

      10.6 Modification. This Agreement may be modified, amended, superseded, or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
party or parties to be bound by any such modification, amendment, supersession,
cancellation, or waiver.

      10.7 Attorneys' Fees and Costs. In the event of any dispute arising out of
the subject matter of this Agreement, the prevailing party shall recover, in
addition to any other damages assessed, its attorneys' fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether
or not an action is brought or prosecuted to judgment. In construing this
Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.

      10.8 Waiver. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform under this Agreement by
the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.

      10.9 Cumulative Remedies. Each and all of the several rights and remedies
provided in this Agreement, or by law or in equity, shall be cumulative, and no
one of them shall be exclusive of any other right or remedy, and the exercise of
any one of such rights or remedies shall not be deemed a waiver of, or an
election to exercise, any other such right or remedy.

      10.10 Headings. The section and other headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.

<PAGE>

      10.11 Notices. Any notice under this Agreement must be in writing, may be
telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage-prepaid and registered or certified with a return
receipt requested. The addresses of the parties for the receipt of notice shall
be as follows:

      If to the Company:        Mercer Capital, Inc.
                                ------------------------------------
                                1200 N federal Hwy #315
                                Boca Raton Fl 33432

      If to Manager:            Robert Flickinger
                                ------------------------------------
                                501 N Riverside Dr # 302
                                Pompano Beach, Florida 33062

      Each notice given by registered or certified mail shall be deemed
delivered and effective on the date of delivery as shown on the return receipt,
and each notice delivered in any other manner shall be deemed to be effective as
of the time of actual delivery thereof. Each party may change its address for
notice by giving notice thereof in the manner provided above.

              (Balance of this page was intentionally left blank.)

<PAGE>

      10.12 Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Manager and the
Company.

      10.13 Right of Set-Off. Upon termination or expiration of this Agreement,
the Company shall have the right to set-off against the amounts due Manager
hereunder the amount of any outstanding loan or advance from the Company to
Manager.

      10.14 Effective Date. This Agreement shall become effective as of the date
set forth on page 1 when signed by Manager and the Company.

      IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.

"Manager"

----------------------------------         ----------------------------------
 Robert Flickinger                         Mercer Capital, Inc.

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