Common use of Note K - Going Concern Clause in Contracts

Note K - Going Concern. As shown in the accompanying financial statements, the Company incurred a net loss of $539,465 during the quarter ended September 30, 2008, and as of that date, the Company’s current liabilities exceeded its current assets by $5,149,331. Those factors, as well as the uncertain conditions that the Company faces regarding its loan agreements (as discussed in Note C), create an uncertainty about the Company’s ability to continue as a going concern. Management of the Company is developing a plan to reduce its liabilities through an increase in drilling revenue. The ability of the Company to continue as a going concern is dependent on acceptance of the plan by the Company’s creditors and the plan’s success. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.