Hi all,

Sorry it has taken me this long to get my thaughts and facts on paper. There is still alot more coming and things I am working to find out, but I will give you a brief update now.

Clearly we are in a downtrend and have been for quite sometime. Who knows why or where it will stop, but when it turns around hopefully we all have our fill of cheap shares and are ready for the upside.

As I mentioned the Arnold Rust 2-3 is producing and I am very suprised we didn't hear about it today in that news release. I am expecting 800-1500MCF/Day. The rig should be on its way to Arnold Rust 1-3 (will let you know) and it should be only about 30 days from Spud date to completion. So results mid december and another 800-1500MCF/day well. Comstock hasn't missed yet, so i don't expect them to now.

As for the Jackson Williams #3, not much to say here we got very little % and I am hearing some things about this well i need to confirm. In the grand scheme of things its not a company maker and I am not overly concerned if it works out or not. The only reason I can see why SXN is involved with it at such low % is because it is an exploration well and perhaps opportunities on development wells in the future. Its being completed so it should be producing shortly, but like I say South Texas is not the companies focus and we should not be distracted by that.

The New Mexico Eumont well we are waiting on a permit and should start drilling in November. The 3D seismic is encouraging and the company seems excited about this one. Workovers continue to go well in NM and we are increasing our production and reserves without spending a lot of cash.

Kansas: Something big has to be in the works around here IMO and I think Kansas is going to be a big cash cow for SXN moving forward. So far we have acquired 92 miles of pipeline (bonanza owns 20%) and we are looking to pick up more. When I heard this I started to speculate on a big deal to pick up producing assets in the area to fill the pipelines. I can't say forsure, but it appears there is nothing of that nature in the works yet, but hope I am right in the end. So for now in Kansas we still have exploration opportunities and development opportunties, as well as workovers. Remember this is Mr. Greens neck of the woods and he knows it really well. Look for big things in Kansas and hopefully my thinking is correct on a deal in the near future.

Italy: Environmental issues still being worked out, working on getting some bids on doing some 3D seismic shoots and then we drill drill drill. Company maker is Italy and it has huge potential with some big Natural Gas targets we will be going after.

So as you can see lots is coming and still more to find out. The only thing missing is promotion and that should change as we get closer to our plans in Italy and I think Kansas is important to as the bloodlines of SXN and will fund operations until we hit some big targets over in Italy. IMO there is a great story to tell, but we need someone to tell it, other than the company. Having said that, IMO we need to accomplish a few things first so we are taken more serious in the market.

Rich is working on it and is doing a great job, but he is at the mercy of the markets and the manipulation with SXN going on. I haven't checked this week, but he has been accumulating down here. I might do the same, but lots to think about and the end seems so far away right now. The downtrend in a stock is something you never want to fight, and the best decision is to either cut your losses early before they get out of hand and wait for the trend to turn. Or believe in the story and wait it out and accumulate if you can.

As always do your own DD. I do mine

Cheers,

cva01