CORPORATE PROFILE

 

            Trek Resources, Inc. is an independent energy company that is engaged in the exploration, development, exploitation and acquisition of on-shore oil and natural gas properties in conventional producing areas of the United States.  We originally incorporated our company in the State of Utah in 1983 under the name of Quasar-Tech, Inc.  From 1983 until 1992, we engaged in various types of business activities, including the manufacture of oil and natural gas recovery equipment.  In 1992, we concentrated our efforts in the production of oil and natural gas when McGowen Oil & Gas Company, Inc., a Texas Corporation, merged with Quasar-Tech, at which point we changed our name to McGowen Resources Company, Inc.  We continued operations under this name until June 2000, when we changed our name to Trek Resources, Inc.  Recently, we merged with and into a wholly owned subsidiary in order to change our state of incorporation from Utah to Delaware.  We conduct our primary operations in Oklahoma and Texas and also own non-operated interests in New Mexico.  To date, we have grown almost exclusively through the acquisition of producing properties and prospects.  Our Corporate offices are located in Dallas, Texas.

 

            We strive to enhance stockholder value by expanding our oil and natural gas reserves, raising production levels and increasing cash flow.  We intend to foster our growth as an independent oil and natural gas company by implementing the following business strategies:

 

·        Financial Growth.  We plan to achieve asset, revenue and cash flow growth, and increase the value of our stock, as a result of the acquisition and further development of producing oil and natural gas properties.   We plan to maintain financial strength and flexibility through effective management of debt and equity.

 

·        Acquire and Enhance Producing Oil and Natural Gas Properties.  We plan to take advantage of opportunities that exist in the United States to acquire producing oil and natural gas properties.  We continue to focus our acquisition activities onshore in Texas, New Mexico, and Oklahoma in order to complement our existing properties and operations; however, we plan to review potential acquisitions in other regions of the United States if they represent a significant concentration of energy-related assets.  We prefer to acquire properties with production from shallow to medium depths, which offer lower geologic and mechanical risk of operations.  We believe that numerous opportunities exist to acquire additional energy assets and to enhance the value of those assets through improved operating practices and by aggressively developing reserve potential.

 

·        Emphasize Exploitation and Development Activities.  We plan to exploit existing oil and natural gas properties and to conduct development evaluation and drilling on our existing and future oil and natural gas properties.  We intend to concentrate on enhancement opportunities such as infill drilling, recompletions, secondary recovery projects, repairs and equipment changes.  We may participate, from time to time, in a limited number of exploratory wells.

 

·        Corporate Efficiencies.  At a minimum, we plan to increase our number of producing properties to the point where our existing level of overhead is fully utilized.  This will enable us to manage our properties at the most efficient rate for a given level of resources.  We will seek to optimize the use of internal resources and outsourcing for all supporting functions.

 

·        Technology.  We plan to increase exploitation efforts, focusing on established geological trends where we can employ geological, geophysical and engineering expertise.  We are considering the application of 3-D seismic and advanced drilling technologies.

   

            We have financed our recent acquisitions and development of properties through cash flow from operations.  We participate in exploration on a limited basis as a partner with other oil and natural gas companies in order to reduce the risk inherent in these activities.

 

            We prefer to act as operator of the oil and natural gas properties and prospects in which we own an interest.  The operator of oil and natural gas properties:

 

·        Supervises production;

·        Maintains production records;

·        Contracts with field personnel to oversee the general operations of the properties;

·        Performs other functions required for the production of oil and natural gas; and

·        Monitors performance, both operating and financial, necessary to optimize cash flows derived from the properties.