SECURITIES AND EXCHANGE COMMISSION

   Litigation Release No. 16951 / April 4, 2001

   S.E.C. v. Source Energy Corporation and Timothy R. Kraft, CIV 2
   00CV757B (U.S.D.C., D. Utah)

   On March 6, 2001, the Honorable Dee Benson, U.S. District Judge,
   District of Utah, issued a permanent injunction by default against
   Timothy R. Kraft. Kraft was enjoined from violating Section 10(b) of
   the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Kraft
   was also ordered to pay civil money penalties which would be
   determined upon further motion by the Commission.

   The complaint alleges that Kraft, in February of 1998, wrote and
   disseminated a press release stating that his company, Source Energy
   Corporation (Source), had entered into a joint venture agreement with
   a Canadian company to manufacture, operate, and market three portable
   natural gas refineries in the Ukrainian Republic. The press release
   further claims that the contract value of the three natural gas
   processing plants would exceed $26 million in revenue to the joint
   venture and the first plant would be operational by the fall of 1998.
   In fact, no joint venture agreement existed between the two companies
   before or after Kraft issued the February press release. In addition,
   in October 1998, Kraft wrote and distributed another press release
   which claimed that his company had acquired a license to proprietary
   technology that would allow Source to manufacture manned and remote
   operated underwater submersibles that had the ability to travel in
   deep-water at nearly four knots and perform complex work tasks that
   would represent new levels of efficiency in the oil and natural gas
   well servicing industry. The purported suppliers of the underwater
   submersible technology never licensed their manned or remote operated
   deep-water submersible technology to Source or Kraft.
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Modified 04/04/2001