U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 18084 / April 10, 2003

   UNITED STATES OF AMERICA v. BARRY REED and JAMES HAMMONDS (Case No.
   03-CR-65-ALL) (C.D.Cal.)

   RECIDIVIST SECURITIES VIOLATOR AND FORMER COMPANY PRESIDENT INDICTED
   IN OIL AND GAS FRAUD

   On March 19, 2003, a federal grand jury in Orange County, California
   returned an indictment against a recidivist securities violator and
   the former president of a company who were previously charged with
   securities fraud by the Securities and Exchange Commission.

   James E. Hammonds, 62, of Inglewood, California, and Barry V. Reed,
   58, of Las Vegas, Nevada, were charged by the United States Attorney
   for the Central District of California in Santa Ana with using the
   United States mails to perpetrate an oil and gas investment scheme to
   defraud investors.

   In November 2001, Hammonds and Reed, along with two Nevada
   corporations, Texon Energy Corp. and Lonestar Petroleum Corp., were
   charged by the Commission with violating the securities registration
   provisions of the federal securities laws, Sections 5(a) and 5(c) of
   the Securities Act of 1933, and the antifraud provisions, Section
   17(a) of the Securities Act and Section 10(b) of the Securities
   Exchange Act of 1934 and Rule 10b-5 thereunder. Reed was Texon's
   president and Hammonds was Texon's vice-president. The defendants
   raised $1.25 million from the sale of Texon stock to about 65
   investors nationwide. Investors were promised a dividend of 12% per
   year on their investment. The Commission's complaint charged that
   Hammonds and Reed, through Texon and Lonestar, operated a Ponzi-like
   investment scheme in which they paid dividends to existing investors
   with money raised from new investors.

   The Commission's case against Texon and Lonestar was previously
   settled. Through a court-appointed receiver, Texon and Lonestar,
   without admitting or denying the Commission's allegations, consented
   to the entry of a judgment, entered on July 8, 2002, by the U.S.
   District Court in Los Angeles, permanently enjoining them from future
   violations of the antifraud and securities registration provisions of
   the federal securities laws. On August 7, 2002, the Court entered a
   final judgment against Hammonds and Reed that enjoins them from future
   violations of the antifraud and securities registration provisions.
   The judgment orders Hammonds and Reed to pay civil penalties of
   $110,000 each and to disgorge $1,254,100, the amount they fraudulently
   raised from investors, plus prejudgment interest.