the Company's focus has progressed into Four definitive projects of:

1.    Cougar Trout Properties, Alberta (Core Area) -- farm-in and acquired lands in the Trout,           Kidney and Equisetum fields;

2.    CREEnergy Project, Alberta -- exploration and development opportunities within the
        CREEnergy Agreement;

3.    Lucy, British Columbia -- Horn River Basin Muskwa shale gas project;

4.    Other Alberta properties.

During the third quarter of 2009, Cougar Energy, Inc., the Company's majority-controlled Canadian subsidiary, completed the following transactions:

Farm-in (completed June 9, 2009) Completed a farm-in agreement with an unrelated private oil and gas company and acquisitions of producing and non-producing properties from two unrelated private oil and gas companies.

Acquisitions On September 30, 2009 and October 1, 2009, acquired from an unrelated private company certain wells, facilities and producing operations in and adjacent to the CREEnergy project in Alberta, Canada. The acquisition included 11 producing wells, 21 suspended wells and associated production, water disposal, production facilities and pipelines in the Trout field

Acquired Production and Properties Additional Discussion

The existing infrastructure and initial production on the acquired properties enables the Company to realize higher netbacks and focus on deploying capital to the drill bit and development work. Additional details include:

• The existing area field personnel agreed to transfer to Cougar with their many years of hands-on field expertise thereby greatly reducing the risk of downtime due to lack of qualified field personnel.

• The existing pipeline systems provides direct access to sales of oil products, which results in the access to sales being in the Company's control and not third party pipeline operator dependent.

• There are 2 batteries for the handling and treating of oil and the disposal of the produced water. The batteries are capable of handling an estimated 2,500 bbl/d with nominal refit costs.

• Many of the wells are piped into the batteries to reduce the need for trucking, which is important for the higher water cut wells. These pipelines can be expanded to further lower operating costs.

• There are 37 wells, which 13 were producing as of December 31, 2009. The 20 suspended wells are workover or recompletion candidates.

• The produced water can be used for future water floods, which regularly have been shown to add substantial incremental production in the area.

• As of December 31, 2009, the average production is 125 bbl/d net of light sweet crude oil at an average operating cost of CAD$20.00 to CAD$25.00/bbl.

Resources                        Oil, gas, heavy oil
Gross Acreage                  ~46,000 (Phase 1 - earned interest with an overall total of ~345,000 exclusive                                                opportunity to earn)
Working Interest              100%
Status                                 Signed joint venture agreement in Q4 2008 to develop identified oil
                                            and gas projects

• CREEnergy recognizes that the value of the relationship comes from success and has not restricted the land selections, other than traditional significance and community commercial and residential lands

• Geological prospects include a range of conventional oil and natural gas reservoirs from approximately 400 meters to 1,800 meters (1,300 feet to 5,900 feet) in depth and shallower heavy oil reservoirs

Resources                        Shale Gas
Gross Acreage                  ~1,920
Working Interest              80%
Status                                  2 wells drilled and cased; proposed work program of Phase I -- perform a
                                            vertical frac on one well, tie-in and production test; upon successful
                                            of Phase 1, implement Phase II -- drill a horizontal leg from the second well
                                            and perform a staged horizontal frac

• Substantial long term upside through developing a high impact Muskwa/Evie shale gas play

• Close to existing infrastructure -- pipeline, roads

• Estimated 123 Bcf of gas in place and 60m pay zone, according to engineering report

Private Company Production and Property Acquisition (completed October 1, 2009)

1.    2 producing oil properties in the Crossfield and Alexander fields in Central Alberta.

2.    100% working interest in the Crossfield property -- 1 producing well with single well
        battery with approximately 5 barrels per day (bbl/d) net production -- production
        continues to be stable with no capital commitment required.

3.    55% working interest in the Alexander property -- 1 shut in oil well with a single well
        battery, 1 suspended well. Expected production of approximately 10 bbl/d net production         upon restarting shut in oil well after spring break up.

In August, 2009, it was determined that Cougar's working interest partner in the Lucy, B.C. project was unable to complete the financing as required in the farm-out agreement and as a result, in October after due diligence and environmental reviews, Cougar has accepted the transfer of the partner's Alexander and Crossfield, Alberta properties as a penalty payment. The properties received are valued at approximately $500,000 CAD (NPV 10% escalated pricing). Cougar has assumed asset retirement obligations in connection with the properties estimated at $50,000 CAD. The properties have an estimated potential average production of 15 boe/d.

Production from the Company's new proved reserves commenced on October 1, 2009 and recognition of the associated revenue and cash flow began on that date.