FIELDPOINT PETROLEUM CORP (Form: 8-K/A, Received: 05/26/2004 15:55:39)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A-1

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 11, 2004

FIELDPOINT PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)

Colorado	0-9435	84-0811034
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(IRS Employer Identification No.)

1703 Edelweiss Drive, Cedar Park, Texas 78613
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (512) 250-8692

_____________________________________________________
(Former name or former address, if changed since last report)

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

FieldPoint Petroleum Corporation (the "Company") consummated the purchase of a 87.5% to 100% working interest representing a 73.5% to 87.5% net revenue interest in oil and gas properties located in the Lusk Field in Lea County, New Mexico from PXP Gulf Coast, Inc. The acquisition was accomplished through an assignment of mineral leases covering the interests. The Company paid $850,000.00 cash consideration for the lease rights and related equipment. The funds for the acquisition were derived from the Company's existing revolving credit facility.

Closing of the acquisition took place on March 11, 2004, with the effective date being April 1, 2004. The Company plans to hold the interests for production and further development.

ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial Statements
	Pursuant to Item 7(a)(4), the Registrant files herewith the following financial statements of the acquired business: Independent Auditor's Report Historical Summaries of Revenues and Direct Operating Expenses of Properties Acquired in March 2004 Notes to Historical Summaries of Revenues and Direct Operating Expenses of Properties Acquired in March 2004
(b)	Pro Forma Financial Information
	Pursuant to Item 7(b), the Registrant files herewith the following unaudited pro forma financial information: Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2003 Unaudited Pro Forma Consolidated Statement of Income for the Twelve Months Ended December 31, 2003 Unaudited Pro Forma Consolidated Statement of Income for the Three Months Ended March 31, 2004 Notes to Unaudited Pro Forma Financial Information
(c)	Exhibits
	Item	Title
	10.1	Assignment

INDEPENDENT AUDITOR'S REPORT

Board of Directors
FieldPoint Petroleum Corporation
Cedar Park, Texas

We have audited the accompanying historical summaries of revenue and direct operating expenses of properties acquired in March 2004, for the year ended December 31, 2003. The historical summaries are the responsibility of the Company's management. Our responsibility is to express an opinion on the historical summaries based on our audit.

We conducted our audit in accordance the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the historical summaries are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the historical summaries. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall historical summaries presentation. We believe that our audit provides a reasonable basis for our opinion.

The accompanying historical summaries were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the Form 8-K of FieldPoint Petroleum Corporation) as described in Note 1 and are not intended to be a complete presentation of the properties' revenues and expenses.

In our opinion, the historical summaries referred to above present fairly, in all material respects, the revenue and direct operating expenses of the properties acquired in March 2004, in conformity with accounting standards generally accepted in the United States of America.

HEIN + ASSOCIATES LLP

May 20, 2004
Dallas, Texas

FIELDPOINT PETROLEUM CORPORATION

HISTORICAL SUMMARIES OF REVENUES AND DIRECT OPERATING EXPENSES OF PROPERTIES ACQUIRED IN MARCH 2004

	For the Three Months Ended March 31,	For the Three Months Ended March 31,	For the Twelve Months Ended December 31,
	2004	2003	2003
	(Unaudited)	(Unaudited)
OIL AND GAS SALES	$ 64,625	$ 48,639	$ 186,823
DIRECT OPERATING EXPENSES	14,315	10,485	43,812
NET REVENUE	$ 50,310	$ 38,154	$ 143,011

See Notes to Historical Summaries

FIELDPOINT PETROLEUM CORPORATION

NOTES TO HISTORICAL SUMMARIES OF REVENUES AND DIRECT OPERATING
EXPENSES OF PROPERTIES ACQUIRED IN MARCH 2004

1. Basis of Preparation

The accompanying historical summaries of revenues and direct operating expenses relate to the operations of the oil and gas properties acquired by FieldPoint Petroleum Corporation (the "Company") in March 2004 from PXP Gulf Coast, Inc. The properties were acquired for $850,000, before purchase adjustments.

Revenues are recorded when the Company's share of oil or natural gas and related liquids are sold. Direct operating expenses are recorded when the related liability is incurred. Direct operating expenses include lease operating expenses, ad valorem taxes and production taxes. Depreciation and amortization of oil and gas properties, general and administrative expenses and income taxes have been excluded from operating expenses in the accompanying historical summaries because the amounts would not be comparable to those resulting from proposed future operations.

The historical summaries presented herein were prepared for the purpose of complying with the financial statement requirements of a business acquisition to be filed on Form 8-K as promulgated by Regulation S-B Item 3-10 of the Securities Exchange Act of 1934.

2. Supplemental Information on Oil and Gas Reserves (Unaudited)

Proved oil and gas reserves consist of those estimated quantities of crude oil, natural gas, and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

The following estimates of proved reserves have been made by independent engineers. The estimated net interest in proved reserves are based upon subjective engineering judgments and may be affected by the limitations inherent in such estimation. The process of estimating reserves is subject to continual revision as additional information becomes available as a result of drilling, testing, reservoir studies and production history. There can be no assurance that such estimates will not be materially revised in subsequent periods.

The changes in proved reserves of the properties acquired in March 2004 for the year ended December 31, 2003 are set forth below.

	Oil (Barrels)	Natural Gas (Thousand Cubic Feet)
Reserves at December 31, 2002	122,721	123,372
Production	(5,444)	(6,095)
Reserves at December 31, 2003	117,277	117,277
Proved developed reserves December 31, 2003	117,277	117,277

The standardized measure of discounted estimated future net cash flows related to proved oil and gas reserves at the year ended December 31, 2003 is as follows:

			December 31, 2003
	Future cash inflows		$ 4,339,000
	Future production costs		1,956,000
	Future net cash flows, before income tax		2,383,000
	Future income taxes		(521,000)
	Future net cash flows		1,862,000
	10% annual discount		(1,043,000)
	Standardized measure of discounted future net cash flows		$ 819,000

The primary changes in the standardized measure of discounted estimated future net cash flows for the year ended December 31, 2004 were as follows:

December 31,
2004

Beginning of year

$   544,000

Sales of oil and gas produced, net of
     production costs

(143,000)

Effect of change in prices

488,000

Accretion of discount

54,000

Net change in income taxes

(142,000)

Revision of estimates and other

      18,000

End of year

$  819,000

Estimated future cash inflows are computed by applying year-end prices of oil and gas to year-end quantities of proved reserves. Estimated future development and production costs are determined by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. Estimated future income tax expense is calculated by applying year-end statutory tax rates to estimated future pre-tax net cash flows related to proved oil and gas reserves, less the tax basis of the properties involved.

The assumptions used to compute the standardized measure are those prescribed by the Financial Accounting Standards Board and as such, do not necessarily reflect the Company's expectations of actual revenues to be derived from those reserves nor their present worth. The limitations inherent in the reserve quantity estimation process are equally applicable to the standardized measure computations since these estimates are the basis for the valuation process.

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA FINANCIAL INFORMATION

In March 2004, FieldPoint Petroleum Corporation (the "Company") acquired interests in certain producing properties in New Mexico for consideration of $850,000. The acquisition was financed using the Company's existing available cash. The following unaudited pro forma financial statements have been prepared to demonstrate the effect on the Company's financial position and results of operations as if the properties had been acquired on December 31, 2003 (with respect to the pro forma balance sheet) and at the beginning of the periods (with respect to the pro forma statements of income). The pro forma financial statements should be read in conjunction with the historical summaries of revenues and direct operating expenses of the properties included herein and with the financial statements of the Company as filed in their Form 10-KSB. The pro forma financial statements should not be construed as a reflection of the financial position or results of operations that actually would have occurred if the acquisition would have occurred on the above dates.

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2003

ASSETS

	Historical Amounts	Pro Forma Adjustments		Pro Forma
CURRENT ASSETS:
Cash	$ 1,395,100	$ (850,000)	⁽¹⁾	$ 545,100
Short-term investments	67,428	-		67,428
Accounts receivable:
Oil and gas sales	260,043	-		260,043
Joint interest billings, less allowance for doubtful accounts of $99,192	72,530	-		72,530
Prepaid expenses and other current assets	22,535	-		22,535
Total current assets	1,817,636	(850,000)		967,636
PROPERTY AND EQUIPMENT:
Oil and gas properties	6,192,999	850,000	⁽¹⁾	7,042,999
Furniture and equipment	51,482	-		51,482
Transportation equipment	158,254	-		158,254
Less accumulated depletion and depreciation	(2,108,914 )	-		(2,108,914)
Net property and equipment	4,293,821	850,000		5,143,821
LONG-TERM JOINT INTEREST BILLING RECEIVABLE , net allowance for doubtful accounts of $44,624	65,184	-		65,184
OTHER ASSETS	4,297	-		4,297
Total assets	$ 6,180,938	$ -		$ 6,180,938

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of long-term debt	$ 266,324	$ -	$ 266,324
Accounts payable and accrued expenses	200,827	-	200,827
Oil and gas revenues payable	60,898	-	60,898
Total current liabilities	528,049	-	528,049
LONG-TERM DEBT , net of current portion	1,491,802	-	1,491,802
ASSET RETIREMENT OBLIGATION	496,685	-	496,685
DEFERRED INCOME TAXES	125,000		125,000
STOCKHOLDERS' EQUITY	3,539,402	-	3,539,402
Total liabilities and stockholders' equity	$ 6,180,938	$ -	$ 6,180,938

See accompanying notes to pro forma financial statements.

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 2003

	FieldPoint Petroleum	(2) Properties Acquired		Pro Forma Adjustments		Pro Forma
REVENUE:
Oil and gas sales	$ 2,309,503	$ 186,823	(2)	$ -		$2,496,326
Well operational and pumping fees	119,872	-		-		119,872
Total revenue	2,429,375	186,823		-		2,616,198
COSTS AND EXPENSES:
Production expense	1,103,496	43,812	(2)	-		1,147,308
Exploration expense	86,948	-		-		86,948
Depletion and depreciation	466,969	-		42,000	(3)	508,969
Accretion expense	24,776	-		-		24,776
General and administrative	451,736	-		-		451,736
Total costs and expenses	2,133,925	43,812		42,000		2,219,737
OTHER INCOME (EXPENSE):
Interest income (expense), net	(52,291)	-		-		(52,291)
Miscellaneous	7,426	-		-		7,426
Realized loss on derivatives	(5,184 )	-		-		(5,184)
Total other income (expense)	(50,049 )	-		-		(50,049)
INCOME BEFORE INCOME TAXES	245,401	143,011		42,000		346,412
INCOME TAX PROVISION:
Current expense	6,000	-		42,239	(4)	48,239
Deferred expense	66,000	-		-		66,000
	72,000	-		42,239		114,239
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE	173,401	-		-		232,173
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE , net of tax	(16,506 )	-		-		(16,506)
NET INCOME	$ 156,895	$ 143,011		$ 84,239		$ 215,667
BASIC EARNINGS PER SHARE	$ .02					$ .03
DILUTED EARNINGS PER SHARE	$ .02					$ .03
WEIGHTED AVERAGE SHARES BASIC	7,530,175					7,530,175
WEIGHTED AVERAGE SHARES DILUTED	7,621,868					7,621,868

FIELDPOINT PETROLEUM CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 2004

	FieldPoint Petroleum	(2) Properties Acquired		Pro Forma Adjustments		Pro Forma
	(Unaudited)	(Unaudited)
REVENUE:
Oil and gas sales	$ 542,162	$ 64,625	(2)	$ -		$ 606,787
Well operational and pumping fees	29,967	-		-		29,967
Total revenue	572,129	64,625		-		636,754
COSTS AND EXPENSES:
Production expense	184,849	14,315	(2)	-		199,164
Depletion and depreciation	124,000	-		10,500	(3)	134,500
General and administrative	91,145	-		-		91,145
Total costs and expenses	399,994	14,315		10,500		424,809
OTHER INCOME (EXPENSE):
Interest income (expense), net	(13,797)	-		-		(13,797)
Miscellaneous	(3,185)	-		-		(3,185)
Total other income (expense)	(16,982)	-		-		(16,982)
INCOME BEFORE INCOME TAXES	155,153	50,310		10,500		194,963
INCOME TAX PROVISION:
Current expense	4,000	-		17,000	(4)	21,000
Deferred expense	42,000	-		-		42,000
	46,000	-				63,000
NET INCOME	$ 109,153	$ 50,310		$ 27,500		$ 131,963
BASIC EARNINGS PER SHARE	$ .01					$ .02
DILUTED EARNINGS PER SHARE	$ .01					$ .02
WEIGHTED AVERAGE SHARES BASIC	7,420,175					7,420,175
WEIGHTED AVERAGE SHARES DILUTED	7,444,665					7,444,665

FIELD POINT PETROLEUM CORPORATION

NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION

(1) Adjustment to reflect the acquisition cost of the oil and gas properties for cash.

(2) Oil and gas sales and direct operating expenses of the acquired properties for the
respective periods.

(3) Adjustment to reflect additional depletion and depreciation expense as if the properties had been
acquired at the beginning of the respective periods

(4) Adjustment to reflect additional income tax expense as if the properties had been acquired at the
beginning of the respective periods.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIELDPOINT PETROLEUM CORPORATION
Date: May 26, 2004	By: /s/ Ray Reaves Ray Reaves, President
	By: /s/ Ray Reaves Ray Reaves, President

Well Name:
Jennings Federal 1
Jennings B Fed 002 SWD
Shearn Federal 3

ASSIGNMENT OF OIL, GAS AND MINERAL LEASES
CONVEYANCE AND BILL OF SALE

STATE OF NEW MEXICO        )
                                                     ) KNOW ALL MEN BY THESE PRESENTS THAT:
COUNTY OF LEA                      )

THIS ASSIGNMENT, CONVEYANCE AND BILL OF SALE is from PXP GULF COAST INC., a Delaware corporation whose address is 700 Milam Street, Suite 3100, Houston, Texas 77002 (hereinafter called "Assignor"), to

	COPY OF ORIGINAL
	CONVEYANCE DOCUMENT
	FOR SALE 191C
(hereinafter called "Assignee").	MARCH 10, 2004

Assignor, for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, subject to all of the conditions and covenants set forth below, does hereby TRANSFER, ASSIGN and CONVEY unto Assignee, effective as of 7:00 o'clock a.m. Central Time, on April 1, 2004 (said hour and day being hereinafter called the "Effective Time"), the following properties:

(a) All of Assignor's right, title and interest in and to the Oil, Gas-and Mineral Leases, properties, interests and rights appertaining thereto, including, without limitation, all leasehold working interests and overriding royalty interests, and which are set forth and described in Exhibit "A," attached hereto and hereby made a part hereof for all purposes, together with any and all amendments thereof or ratifications thereto;

(b) All of Assignor's right, title and interest in, to and under or derived from, all of the presently existing and valid communitization, unitization and pooling agreements and the properties covered and the units created thereby (including all units formed under orders, regulations, rules or other official acts of any federal, state or other governmental agency having jurisdiction) which relate to any of the Oil, Gas and Mineral Leases and wells described in Exhibit "A", attached hereto and made a part hereof, or to the production of oil, gas and other hydrocarbons therefrom or attributable thereto;

(c) All of Assignor's right, title and interest in, to and under, or derived from, all of the presently existing and valid oil, casinghead gas and gas sales, purchase, exchange and processing contracts and agreements, operating agreements and farmouts, farmins, and all other contracts, agreements, and instruments which relate to the Oil, Gas and Mineral Leases described in Exhibit "A", or to the production of oil, gas and other hydrocarbons therefrom or attributable thereto; and

(d) All of Assignor's right, title and interest in and to all personal property, improvements, easements, permits, licenses, servitudes and rights-of-way situated upon or used in connection with the exploration, development or operation of the Oil, Gas and Mineral Leases described in Exhibit "A", the wells located thereon, and the production, treating, storing, transportation of oil, gas and other hydrocarbons therefrom or attributable thereto, including, but not by way of limitation, well equipment, tanks, casing, tubing, subsurface equipment, boilers, fixtures, machinery, salt water disposal wells and other equipment, pipelines, power lines, telephone and telegraph lines, roads and other appurtenances (all such personal property, improvements, easements, permits, licenses, servitude and rights-of-way being herein called the "Assigned Appurtenances").

Assignor's right, title and interest in the Oil, Gas and Mineral Leases, properties, rights, interests, contracts, agreements and Assigned Appurtenances specified in the foregoing clauses (a) through (d) are collectively referred to herein as the "Assigned Properties".

Assignee, in consideration of the mutual benefits to be derived hereunder, and by its acceptance hereof, understands and agrees it shall be subject to the following:

(1) The terms, provisions, covenants and royalties set forth in the Oil, Gas and Mineral Leases, pooling, communitization and unitization agreements or orders including and affecting the Oil, Gas and Mineral Leases;

(2) The terms and conditions of all existing valid orders, rules and regulations and ordinances of federal, state and other governmental agencies;

(3) The terms and conditions of all valid, subsisting and outstanding overriding royalty interests, restrictions, exceptions, reservations, burdens, encumbrances, conditions, limitations, interests, instruments, agreements and other matters, if any, which are of record in the state and county or parish identified in Exhibit "A" and which burden or affect the Assigned Properties as of the Effective Time hereof;

(4) The terms and conditions contained in the joint operating agreements and unit operating agreements, if any, which cover and affect any of the Assigned Properties;

(5) All taxes affecting or relating to the Assigned Properties, including but not limited to, excise taxes, ad valorem taxes, production taxes and severance taxes (exclusive of federal and state income taxes imposed upon Assignor) accruing to the Assigned Properties after the Effective Time. As between Assignor and Assignee, Assignor shall be and remain liable for all taxes affecting or relating to the Assigned Properties prior to the Effective Time;

(6) Oil remaining in the tanks above the pipeline connection on the Effective Date hereof shall be the property of Assignor. All gas produced and saved up to such Effective Date shall belong to Assignor. All gas produced and saved after such Effective Date shall belong to Assignee.

(7) After the Effective Time of this Assignment, Assignee shall be responsible to plug and abandon the wells conveyed hereby and any future wells it may hereafter drill on the Assigned Properties in accordance with the rules and regulations of the state of New Mexico, and, to the extent required under the Oil, Gas and Mineral Leases, shall restore said premises within a reasonable length of time after the date production, if any, permanently ceases from said wells. Assignee agrees to indemnify and hold Assignor harmless from any and all surface or subsurface restoration, well abandonment or other similar obligations pertinent to the well(s) assigned herein which may arise out of any oil and gas lease, contract, permit or other agreement or laws or regulation affecting the lands upon which said wells are located and shall be responsible for any clean-up, restoration or other. action with respect to any governmental request or landowner obligations as to all surface usage associated with the operations of the Assigned Properties; and

(8) All recording, transfer or filing fees, or any other fee imposed by any local county, parish, state or federal governmental agency due to the recording or transfer of the Assigned Properties pursuant to this instrument.

Assignee agrees to indemnify, defend and to hold Assignor and its agents and representatives harmless for any claims, losses, demands or expenses arising out of Assignee's failure to comply with items 1 through 7 above.

The terms, covenants and conditions hereof shall be binding upon and shall inure to the benefit of Assignor and Assignee, their successors and assigns, and shall be covenants running with the lands and lease acreage herein assigned and with each transfer or assignment of said lease acreage.

This instrument shall be binding upon all parties who execute same, their successors and assigns, whether or not it is executed by all parties named herein. This instrument maybe executed in identical counterparts, and each counterpart shall be deemed an original. Each counterpart shall be binding upon the executory party thereto, effective as to its interest in the properties described herein as fully as if all parties had executed one instrument.

Assignor shall promptly deliver to Assignee such of the lease files pertaining to the Assigned Properties in its possession or under its control as Assignee may designate.

ASSIGNOR HEREBY TRANSFERS AND ASSIGNEE HEREBY ACCEPTS THE ASSETS AND OTHER PERSONAL PROPERTY CONSTITUTING A PART OF THE ASSETS "AS IS, WHERE IS" AND SUBJECT TO ALL FAULTS, AND WITHOUT ANY WARRANTY OF ANY KIND, EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, ANYIMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, ANY IMPLIED OR EXPRESS WARRANTY AS TO QUALITY, DESCRIPTION, VALUE, PHYSICAL OR ENVIRONMENTAL CONDITION (BOTH SURFACE AND SUBSURFACE, IF APPLICABLE), AND ANY IMPLIED OR EXPRESSED WARRANTY OF CONFORMITY TO MODELS OR SAMPLES OF MATERIALS. ASSIGNEE HAS INSPECTED, OR BEEN GIVEN THE OPPORTUNITY TO INSPECT, THE ASSIGNED PROPERTY AND IS SATISFIED AS TO THE PHYSICAL AND ENVIRONMENTAL CONDITION AND ACCEPTS ALL OF THE SAME IN THEIR "AS IS, WHERE IS" CONDITION AND STATE OF REPAIR AND WITH ALL FAULTS AND DEFECTS. IN ADDITION, ASSIGNOR MAKES NO REPRESENTATION, COVENANT OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA DELIVERED TO THE ASSIGNEE WITH RESPECT TOTHE INTERESTS, OR CONCERNING THE QUALITY OR QUANTITY OF HYDROCARBON RESERVES, IF ANY, ATTRIBUTABLE TO THE INTERESTS, OR THE ABILITY OF THE INTERESTS TO PRODUCE HYDROCARBONS, OR THE PRICES WHICH ASSIGNEE IS OR WILL BE ENTITLED TO RECEIVE FOR ANY SUCH HYDROCARBONS.

IN WITNESS WHEREOF, Assignor and Assignee have caused this instrument to be executed on the date of the acknowledgment annexed hereto, but effective for all purposes herein as of the Effective Time.

	ASSIGNOR:
	PXP GULF COAST INC.
	By: /s/ R. W. Pendleton
	Name: R. W. Pendleton
	Title: Vice President, Central Business Unit

STATE OF TEXAS

COUNTY OF HARRIS

Before me, the undersigned, a Notary Public, on this day personally appeared R. W. PENDLETON, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said PXP GULF COAST INC., a Delaware corporation, and that he has executed the same as the act of such corporation for the purposes and consideration therein expressed, and in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of _______________, 2004.

(seal)

_______________________________________
Notary Public, State of Texas

	ASSIGNEE:
	By:______________________________
	Name:
	Title:

STATE OF TEXAS

COUNTY OF HARRIS

Before me, the undersigned, a Notary Public, on this day personally appeared ___________________, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed, and in the capacity therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this ____ day of _______________, 2004.

(seal)

_______________________________________
Notary Public, State of _________

EXHIBIT "A"
LEA COUNTY, NEW MEXICO

LESSOR	LESSEE	LEASE DATE	TWP	RANGE	SEC	LEGAL DESCRIPTION
Jennings Federal 1 Jennings B Fed 002 SWD Shearn Federal 3
USA NM-063530	Michael C. Shearn	2/1/60	19S	32E	11 14 15	E/2E/2 E/2 NW/4 NE/4 SW/4 W/2 W/2
USA NM-025497	Howard R. Jennings	9/1/56	19S	32E	14 15	W/2 W/2, W/2 SE/4 NE/4 E/2 W/2, E/2
NM-55749 (ROW)	Sun Exploration & Production Company	3/5/84	19S	32E	15	NW/4 NW/4, S/2 NW/4 E/2, SW/4

END OF EXHIBIT "A"

			December 31, 2004
	Beginning of year		$ 544,000
	Sales of oil and gas produced, net of production costs		(143,000)
	Effect of change in prices		488,000
	Accretion of discount		54,000
	Net change in income taxes		(142,000)
	Revision of estimates and other		18,000
	End of year		$ 819,000