Grand Energy focuses on opportunities for additional development in existing fields where drilling success ratios are high. There are two types of developmental opportunities in these areas: In-field wells - drilled to the same productive reservoir as other wells within the established boundaries of the field. Offsetting wells - usually not more than one drill site away from existing production, drilled into reservoirs believed to be contiguous to other productive reservoirs. Especially when compared with oil and gas exploration, developmental drilling greatly increases the opportunity for attractive returns and continuing income. Grand Operating's experience creates a significant advantage for investors. Its understanding of the situations and conditions that will be encountered during operations allows it to drill, complete and equip wells on a turnkey, fixed-cost basis. That eliminates the potential for cost overruns to investors. In fact, Grand Energy's participation agreements limit the investor's financial commitment to the amount of the fixed, turnkey cost during the drilling and completion phases. To assure that the focus is always on enhancing investor return, Grand Energy participates as an investor in every program it offers. To assure that costs are tightly controlled, the Company - through its Grand Operating subsidiary - is the named operator for every program. In addition, Grand Operating limits its operating fee to the median overhead costs for the area, as determined by the Annual Fixed Rate Survey of Oil and Gas Operators conducted by the accounting firm of Ernst & Young, LLP. Grand Energy maintains excellent working relationships with major oil field service and supply companies such as Schlumberger Oil Field Services, Halliburton Energy Services and Baker Hughes. As a result, the Company incorporates the most recent technological advances in its completion designs. Due to the fact that surrounding oil and gas properties are already in production, the Company can take advantage of existing facilities to control production costs and expedite marketing. Existing pipelines can be used to transport oil and gas production to buyers - often simultaneously reducing costs, maximizing the value of the production and hastening cash flow. To further enhance returns, the Company maintains favorable relationships with aggressive gas marketing organizations. The marketing organizations are in daily contact with natural gas purchasers in a constant effort to obtain the best possible price.