The intention is to acquire a combination of currently producing assets as well as assets which provide exploration upside in the Basin. By acquiring established but under-exploited producing assets, the company can increase the value of the assets by using the latest techniques to increase production from these existing producing and/or shut in wells. This will generate attractive returns on investment. This is achieved by acquiring producing properties that are operating below their potential, either due to outdated technology, failure to keep up with maintenance required for optimal production, or lack of access to growth capital to conduct new drilling.

Our objective is to generate long-term reserve and production growth predominantly through our drilling and acquisition activities. We are focused on low-to-medium risk profiles in the Permian Basin of Texas and New Mexico, which are enormously productive regions for conventional and unconventional oil and gas. Our team selectively targets exploration projects that we believe have significant potential.

New exploration and drilling opportunities that we consider are chosen carefully based on assessing the risk/reward ratio. Among the characteristics Blugrass looks at specifically for identifying attractive risk/reward profiles are:

• Regions with previously unrecoverable reserves that are now accessible due to advances in technology and operational methods
• Properties with large Energy companies that are actively developing adjacent fields
• The ability to minimize cash requirements and leverage assets by partnering with well-capitalized major companies to fund exploration and development of Blugrass's properties