Ky/Tenn Report

Volume 15, Number 7 JUNE 2008

KNOXVILLE CONVENTION BIGGEST YET - More than 150 TOGA members and guests participated in the annual meeting in Knoxville, May 14-16, 2008. The large open lobby of the Knoxville Marriott was an excellent setting for the 30 plus exhibitors. Tentative plans call for a return in 2009.

SCOTT GILBERT ELECTED TOGA PRESIDENT - The board of directors of the Tennessee Oil & Gas Association, elected Scott Gilbert, Vinland Energy. President of the association. Jim Washburn, consulting geologist, was re-elected Vice President and Anne Byrd was re-elected as treasurer. All directors, whose terms were expiring, were re-elected.

YOUNG EARNS OILMAN AWARD FOR THIRD TIME-During the noon banquet at the TOGA convention in Knoxville, President Lynn Wagoner presented Anthony Young, CEO Young Oil Corp. with the OILMAN OF THE YEAR award for an unprecedented third time. Young celebrated by picking up the drink tab for the entire convention on the riverboat dinner cruise that evening.

WAGONER GETS AWARD DESPITE PROTEST - HIS - Despite his protest that "he was only doing his job", outgoing TOGA president Lynn Wagoner was awarded the organization's Distinguished Award from a very grateful organization for all he did during his one term as President Elect and his two terms as President of the association.

88 ATTEND WILD WELL CONTROL TRAINING - As the Tennessee oil patch continues to expand, the need for training to control wells has become a necessity. TOGA responded by sponsoring well control training classes, conducted by Wild Well Control, the internationally known well control company. Some 88 drillers, tool pushers and site coordinators attended classes, held at the offices of Water Pollution Control in Knoxville. State personnel were allowed to monitor the classes to become familiar with well control practices. Oil & Gas Supervisor Mike Burton attended and passed the final exam.

PROPOSED REG CHANGES READY - Since the recent Walden Resources well blow out in Anderson County, state and TOGA officials have been working together to draft new regulations to hopefully prevent future blowouts. President Gilbert has been informed by Don Owens, Water Pollution Control, that the state's proposed regs are now available for comment and are expected to be presented at the September Oil & Gas Board Meeting.

THANKS TO SPONSORS, CONVENTION WAS FINANCIAL SUCCESS -Platinum Sponsors include Appalachian Land & Development, Appalachian Production Services, Inc. Acqua-Clear, Inc., Atlas America, Drillers LLC, Griffith Services LLC, Griffith Services Drilling LLC, Norris Well Service, Parmaco of Parkersburg, Signature Oil Corp., Superior Well Services, Tennessee Rotary Drilling, Universal Well Services, Vinland Energy and Young Oil Corp., Gold sponsors include AC Insurance, Bituminous Insurance, Citizens Gas Utility District, CNX Gas, Global Resources, JD's Bit & Supply Company, Keystone Drill Services, Kinzer Drilling Co.,Ky-Tenn Oil Inc., Miller Petroleum, U.S.A. Compression, Varnel International, Weatherford, and Westerman Companies. Silver Sponsors include Atmos Energy, Bill Ray, Countrymark Cooperative, East Tennessee Consultants, Inc., Kentucky Oil Gathering, McJunkin Appalachian, NGAS Resources, Smith Services and Jim Washburn. Bronze sponsors include BJ Services, John Pertz Graphics & Design, New River Energy, Oak Ridge Country Club and Scientific Drilling International. Please thank all of them and do business with them when you can.

JUDGE RULES SPEARS DEFAULTED ON REFINERY PURCHASE - It's official: U.S. Bankruptcy Judge Joseph M. Scott has ruled that William Spears and his corporation, Sonoma Capital, are in default of their agreement to purchase the Somerset Refinery. He authorized Chapter 11 Trustee William Bishop "to proceed with the sale of (the refinery) to other interested parties." The default ruling means that the balance of $691,400 which was deposited in an escrow account by Sonoma is forfeited.

OIL & GAS BOARD TO MEET AUGUST 26TH - The next meeting of the Oil & Gas Board is scheduled for August 26th, 2008. Two of the three items on the agenda for the June 10, 2008 meeting were settled. In the case of Adelco Oil & Gas vs KTO, Adelco withdrew its forced change of operator application.

TENGASCO BUYS 80 BOD IN KANSAS - TOGA member, Tengasco, Inc. (AMEX: TGC) has signed a letter agreement with Black Diamond Oil, Inc. to purchase approximately 80 barrels per day of oil producing properties and related leases and equipment in Rooks County, Kansas for $5.35 million. Tengasco is currently producing some 600 BOD from its existing Kansas properties.

NGAS PROVIDES HORIZONTAL DRILLING UPDATE - TOGA member NGAS (NASDAQ: GAS) reports success with the five horizontal wells drilled to date and says it plans a total of 20 in 2008. The first horizontal well averaged 367 mcfpd for the first 30 days. The second and third well have now been on line for more than 30 days and are averaging 405 mcfpd and 421 mcfpd respectively. The fourth and fifth well are expected to be on line in June. The wells, located in the Leatherwood field, are producing through the lower Huron section of the Devonian shale.

TENNESSEE JUNE PERMITS: Cumberland County - Duncan Drilling Co., JM Smith Heirs, #2, 2000', Campbell Junction / Fentress County - Outdoor Resources, Inc., Danny Smith & Cheryl Threet, 1-Azim / 2500', 2-Azim, 2500', Wilder, Young Oil Corp., Ronald Manis, #1, 2000', Robert Cole Etal #9, 2000', William Penny Cuff, #1, 2000', Riverton / Morgan County - Eastern Energy Resources Inc., Troy McCord #2A, 4000', John E Goodson Heirs #1-A, Pilot Mountain, HP Kemper 2-A, 4200', Robbins / Overton County - McDonald Oil Company, Roger McDonald #5-A, 2000', Alpine / Pickett County - Tennessee Petroleum, Inc., Danny Crouch Eta; #1, 2000', Rome Oil & Gas Company, Herbert T. Grace, 1A, 2000', Moodyville, American Oil & Gas Company, Inc., Roquell Chambers A2, 2000', Byrdstown

KENTUCKY JUNE PERMITS: Barren County - Arcadia Energy LLC, Steve L. Capps, #2, Knox Gp, Onyx Int'l Exploration LLC, Stanley Wilson, #10C, Wendell Froggett, #12, Fort Payne Fm / Clinton County - Crudewell Drilling, Inc., Roger Beard, #1A, #2A, #3, Explo Oil, Inc., Explo Oil Inc, #7, Lucky Production Oil Expl, LLC, Greg Beard ER AL, Sean Parrish, Brad & Angie Bell, #1, Lucky Production Oil Expl, LLC, Greg Beard ET AL, #GK-1, Consolidated Oil & Gas Corp., Tony Beaty, #1, E B Conner Jr., Danny Thomas, #1, Seven Wonders Energies, Inc., Ralph Neal, #20, Knox Gp, Allen Page, Deloy Brown, #3, Stones River / Cumberland County - Hart Oil, LLC, Chat Chowning, #8, #6, #7, #9, Marty York, Leo, Linda & Rus Anderson, STL Energy, Kent Sawyers, #5, #6, #2, Harvey Dale Scott, #15, Mark Thomas ET AL, #12, #13, #J Garmon 10, Knox Gp, S W O Drilling, Larry & Deloris Wisdom, #3, Stone River, #1RE, Granville / Harlan County - Daugherty Pet, Inc., Marion Turner Heirs ET AL, #DPI=345, Clinton Sh, Daugherty Pet, Inc., Jack, Nina & Shell Martin, #DPI-1234, Devonian, LP, Lewis-Warfield Heirs, #DPI-1236, Huron MBR, Ohio Sh / Knox County - Vinland Energy Operations, LLC, Larry D Taylor, #1, Martin Hampton, #5, Burchell Blevins, ET AL, Swan Pond Inc., #3, Clinton Sh / Leslie County - Vinland Energy Operations, LLC, Medina Royalties, LLC, Corniferous, Equitable Production Company, Equitable Production Company #5679_, CNX Gas Company, LLC, Begley Properties, LLC, #HK-001, Huron Mbr, Ohio Sh, Letcher County - Chesapeake Appalachia, LLC, Penn Virginia Operating Company, LLC, #825699, Devonian, LP, Equitable Production Company, Equitable Production Company, #567967, Huron Mbr, Ohio Sh, #567968, Elkhorn Collieries, Inc., #566573, Cleveland Mbr, Ohio Sh / Whitley County - Vinland Energy Operations, LLC, Roger Wells, #2, James Croley, #2, Tommy Gambrel, #7, #8, Clinton Sh, Jackson Enterprises, Howard Jackson DBA, Arlean Hamblin, #66, Devonian, LP

KY/TENN REPORT
750 OLD HICKORY BLVD, #150-2
BRENTWOOD, TN 37027