The developments in Quebec over the last quarter have brought us closer to establishing the commercial

parameters of this emerging play. It has also rekindled market interest in the Utica shale and the

St. Lawrence Lowlands. We were pleased to see this growing enthusiasm at the first Quebec Oil & Gas

Association Conference held in Montreal last month where participation by industry, the Quebec

government and the financial sector was stronger than expected.

We are very excited about the beginning of the middle Utica pilot horizontal program. Upon the

completion of the St. Edouard #1A horizontal well, we expect drilling to commence on the second

horizontal location at Gentilly. Based on the results from the two initial wells, we understand the operator

could drill up to four more horizontal wells as part of this pilot program. """