Eagleford Energy to Boost Productivity at San Miguel Formation

Eagleford Energy has performed a nitrified acid injection treatment in the San Miguel formation on its Matthews/Dyami #3 well. A nitrified acid treatment was injected into the wellbore using a coil tubing unit to improve conductivity around the wellbore, increase productivity and satisfy a condition of the lease purchase agreement. These objectives have been accomplished. The injection operation was successful and fluid level measurements within the wellbore are considerably higher which is indicative of materially improved inflow of oil from the reservoir. The well is currently undergoing production testing and has been recovering minimal amounts of treatment water and is primarily producing oil. The oil gravity is approximately 10 degree API and production rates are varying due to ambient surface conditions.

Under the terms of a Farmout Agreement announced by the Company on April 8, 2011, the farmee may spend up to $1,050,000 on exploration and development to earn a maximum of 50% of the Company's working interest or a 42.50% working interest (31.875% net revenue interest) from surface to the base of the San Miguel formation on the Company's Matthews Lease. The farmee earns an initial 21.25% working interest by paying 100% of the costs to drill, complete, equip and perform an injection operation on the Matthews/Dyami #3. The farmee may increase its working interest to 42.5% by spending the entire $1,050,000 on additional operations on the San Miguel in a good faith effort to produce hydrocarbons.

Albert Dawsey of Dawsey Operating LLC stated, "We are pleased with the initial production results from completing this first San Miguel oil well. The data gathered from drilling this well and the completion results indicate enhanced recovery processes for this heavy oil can sustain production of the field. This new data also supports prior information about the oil in place and the ability to produce significant amounts of oil from the reservoir."

The Company's Matthews Lease comprises 2,629 acres of land in Zavala County, Texas. Zavala County, Texas is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies north boundary of the Smackover-Austin-Eagle Ford total petroleum system. This area is often referred to as the oil window of the present Eagle Ford shale play.