I sent this out a month ago....Management fully un

I sent this out a month ago....Management fully understands...This is a rough draft and some things are omitted....This is just my advice. This is way I see it. It's has nothing to do with what management does....

Building a Winning Strategy

It comes to my attention what we need is a long term strategy here in West Texas. I'm fully aware of past failures and we should build upon that experience and move forward.
I see the divestiture of current leases as a positive step forward, and the sale looks to be the best solution to the current status.

Funding losing  leases/propositions endlessly is an unsustainable business model, which will surly result in losses and a lower PPS. Current leases pose significant risk and capital outlay.  I've spent time wondering around the countryside speaking to the locals. It seems many of the leases played out many years ago. There are some locals that wildcat all over on their own time just using their equipment from yesteryear. All shallow drilling. When I do hear of an oil find, it's usually in the 2 to 5 barrel range. I've heard stories of some decent oil finds (20 to 50 bpd) but find them to be untrustworthy.  Plenty of the locals seem to be indoctrinated to saying  50 to 100 bpd.  They use that number without even thinking. It's nowhere close to the truth/facts.

When we look at deep drilling like the Mitchell, the cost associated with this type of drilling may currently be beyond our means. What I'm saying is the capital outlay is large considering our budget. A failure or poor showing would be a major step backwards. I know the Mitchell deal has already been done, but perhaps we could utilize a shallow well program that would offer continuous drilling. This is where we would move from drill site to drill site looking for shallow hydrocarbon deposits. If you're just drilling holes, looking for a find, 25k seems to be a workable number. We shouldn't be afraid to drill and abandon a hole if  we don't find good shows. Once a well is drilled to depth, a meeting is to be held by all the principles(including the driller) as what to do next. The real monies come in the completion of a well as you know. Being a public company lends itself to the completion of wells. Believe me when I tell you, this is a losing strategy long term. I'll give you a prime example. HUSA Houston American Energy. Your 2 year chart. One dry hole, completed well.  http://finance.yahoo.com/q/bc?s=HUSA&t=2y...q=l&c=
HUSA had a 40 million dollar budget. We're not going to be a HUSA if I can help it.

US Fuel is a major addition to our company moving forward. We need to utilize their compliment of leases as a cost effective method of exploration.  Careful thought and planning needs to be utilized along with a funded budget in place, even before we get the permit. Documented research reports are a must to justify drilling a well or buying a lease. I'm prepared to do such reports anytime requested. I'll do them on everything moving forward from here on out so management can be equipped to make the best decisions.  What I've seen in the past is fly by night, funding and planning, which is not a winning strategy. It's time to get highly professional here in West Texas. and work a Winning Strategy.

David (who is critical to Treaty Energy moving forward) has presented us with possible exploration ventures. Some Deep well and some shallow well. I'll spend time over the next few weeks getting a report together on each proposal.

Anything you would like to add feel free to make those additions and send it back to me...