These properties consist of non-operated working interests in approximately 1,100 identified producing wells, with 32.7 MMBOE of proved reserves as of December 31, 2007. Pioneer is the operator of all of the Company’s wells.

The Company’s producing assets consist of mineral interests and leasehold interests in approximately 1,100 producing wells located in the Spraberry field in the Permian Basin of West Texas.

The Spraberry field was discovered in 1949 and encompasses eight counties in West Texas. The field is approximately 150 miles long and 75 miles wide at its widest point. The oil produced is West Texas Intermediate Sweet, and the gas produced is casinghead gas with an average energy content of 1,400 Btu.

The oil and gas are produced by the Company primarily from three formations, the upper and lower Spraberry and the Dean, at depths ranging from 6,700 feet to 9,200 feet.

In addition, Pioneer has started completing the majority of its wells in the Wolfcamp formation at depths ranging from 9,300 feet to 10,300 feet with successful results. Pioneer intends to retain the interest in the Wolfcamp formation.

Production costs increased by $3.8 million and $3.0 million during the years ended December 31, 2006 and 2007, respectively, as compared to the years ended December 31, 2005 and 2006, respectively.

Depreciation, depletion and amortization expense increased by $642 thousand and $336 thousand during the years ended December 31, 2006 and 2007, respectively, as compared to the years ended December 31, 2005 and 2006, respectively.