Spotlight: May 22, 2007

Corsicana Operations Update

The Company's Corsicana operations have achieved two key milestones toward achieving production status. First, ReoStar received an exemption to the statewide rule prohibiting production casing swabbing on several of its leasehold properties. As a result of the hearing, its affiliate operator, Texas MOR, Inc. was granted the right to swab wells on certain leases that do not have access to the current power grid. Swabbing production can produce 300 to 500 barrels of incremental oil per month with two units operating full time. ReoStar began casing swabbing operations in May and has been able to swab 30 to 40 barrels per day during dry weather days. Swabbing will commence continuously when the hot dry weather comes.

The Company has received an approval permit for the Polymer flood in its King Pilot Flood. The permit, issued by the Texas Railroad Commission, marks a significant milestone in ReoStar's efforts to test its redevelopment strategies on a potentially significant amount of in-place, shallow reserves. Thirteen old wells were plugged and thirteen new wells were drilled and completed to ensure that the system was working with good quality wellbores. Six of the new wells were completed as injectors. The polymer blending and injection plant is 90 percent complete and preparing for start up at this time. The polymer flood should commence on the Company's King pilot location in June of 2007.