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SOUTHPEN

05/19/11 2:09 PM

#884 RE: oil export #883

Stock based compensation 300,000 shares at .14 cents to the 3 Directors was paid in full in the first quarter(that's it for the year) .Also one quarter of their wages has been paid. The Lonestar Gas Well is not running near capacity because of the owner of the pipeline not wanting that much gas at this time. Higher gas demand could change that. Two wells for LIGHT OIL will be drilled this summer,1 in Texas and 1 at King City,California. In Texas, (donner 1) and Oklahoma properties are presently producing oil. Lonestar in California is presently producing Natural Gas. The King City ,California oil prospect has been extensively surveyed and tested for success in the first of what could be many wells.