This is a progress report on the evaluation of a new unconventional exploration technique for locating the natural fracture reservoirs in the Devonian - Ohio Shale. Five PHASE I tests have been drilled, cored, logged, cased and are currently being tested. Findings to date indicate that the technique has been successful in predicting the presence of natural fractures. In the six well PHASE II program, scheduled for later this year, the technique will be used to define the limits of these fracture systems. If PHASE II is successful, the project will have demonstrated that natural fracture reservoirs can be selectively located with a high degree of certainty.

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