News Releases

REPORT TO SHAREHOLDERS

Dear Shareholders,

On March 9, 2004 the National Energy Board reported the Summit Creek B-44 well depth at 2,465 meters versus the previous week's well depth at 2505 meters. In our last up date to shareholders we indicated we encountered drilling problems that resulted in a side track hole being drilled. As bad luck would have it during drilling operations on the first side track hole the bottom hole assembly twisted off and could not be retrieved. Given the tight time frame we are under it was decided to run intermediate casing as far down hole as possible, set a cement plug and commence drilling a second side track hole. Intermediate casing was run last week and a second side track hole is currently drilling. If no future drilling problems are encountered we are optimistic that we can drill, log and run drill stem tests if warranted before the third week of March.

There is no doubt we are pushing the weather envelop. The Government maintained winter road closes March 15 and we will be required to pay the cost to maintain the road from March 15 until the rig has been moved south to Wrigley. If we are able to complete drilling operations and move equipment on the winter road well cost should be in the $18 million range; however if we are required to stage drilling equipment on the banks of the Mackenzie River and barge equipment south in the spring well costs will increase in the $3 to $5 million range.

This has been an extremely difficult and expensive well to drill with any luck it will be worth all the hardship.

Sincerely,
Pat Boswell
President