Reliance Energy Wolfberry

Development

Reliance EnergyHEADQUARTERS:

Reliance Energy, Inc.500 West Illinois AvenueSuite 1200Midland, Texas 79701Phone: 432 683-4816Fax: 432 682-1250www.reimid.com

CONTACTS:

Gary D. McKinney - Presidentgmckinney@reimid.com

Denzil R. West - Vice-President Asset Developmentdwest@reimid.com

J. Michael Party – Vice President Explorationmparty@reimid.com

B. Jack Reed - Chief Financial Officerjreed@reimid.com

Gerald A. Hancock - Vice-President / Special Projectsghancock@reimid.com

DISCLAIMER - Please Read Carefully

The information contained herein does not represent either investment advice or anoffer to buy or sell securities. Potential investors are strongly advised to consult aqualified professional oil and gas industry advisor before making any decisionregarding participation in any exploration prospect(s) or oil and gas venture(s).

Every effort has been made to present accurate and timely information. However,Reliance Energy, Inc. (“Reliance”) does not warrant the accuracy of such informationwhich may be changed, deleted, or updated without notice.

Investing in oil and gas exploration and production can be very exciting and financiallyrewarding; it can also, in certain regrettable circumstances, lead to the loss of one’s totalinvestment. It is critically important for the potential investor to be fully informed andknowledgeable about not only the oil and gas business in general but also the reputationand track record of the company seeking investment.

Reliance Energy

Privately owned company - founded in 1988

Operations in Permian, Arkoma, S Texas, NM

Operate over 34,000 Acres in Wolfberry Trend

Recently Acquired rights to another 46,000 Acres

Current Production- 5,200+ BOEPD

Reliance Energy

5 Drilling Rigs

4 Vertical, 1 Horizontal Rig

2011 Development Budget - $200 MM

Building Crude Gathering System and Gas Plant in Wolfberry

Wolfberry Trend

Spraberry Trend Extended

-Aerially

-Vertically

1996 proven 2,500 Sq Miles

2011 over 10,000 Sq Miles

Courtesy Blacksands Petroleum

Wolfberry Trend FACTORS to Growth

Technology-Shale Plays help us see new pay

Fracs/wireline technology

Regulatory Friendly-CommingleRobust Oil PricesLow Costs to Develop $9-12/BOEFinancial-Capital AccessHedging

Courtesy Blacksands Petroleum

Wolfberry-Yet to Come!40 Acre Spacing Proven

Less than 20 acres being drained

Over 175,000 Potential locations on 40s

Current Rig count -40 Years of Drilling to “Harvest” half of locations Courtesy Blacksands Petroleum

Wolfberry Vertical Extent Originally Spraberry-500-1000’ w/60 MBOE+/- per Well

Now many Operators including 4000+’ of Interval

Clearfork, Spraberry, Dean, Wolfcamp, Cline, Strawn, Atoka

Many areas have Reserves in excess of 150 MBOE per Well

Some areas vertically up to 250 MBOE per Well

Multiple Horizontal Targets Courtesy Pioneer Natural Resources

Wolfberry Drilling Forecast

Great Economics with More Vertical Zones and Higher Oil Prices:

10 Times more Vertical wells to be drilled than over last 60 years

3 String Wells will become more prevalent

Performance Drilling is key to cost control

Wolfberry Drilling Forecast

To Achieve Performance Drilling

Reliance avg 11,600’ in 10-12 day average-3 Strings

Minimum 1000 HP Pumps for rate and pressure

AC rigs-precise Volume/PSI output for increased P Rate

Mobility: 10-14 day wells require 1 day moves

Team effort to get “buy in” of Rig Hands