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<SEC-DOCUMENT>0001001614-05-000028.txt : 20050616
<SEC-HEADER>0001001614-05-000028.hdr.sgml : 20050615
<ACCEPTANCE-DATETIME>20050616095115
ACCESSION NUMBER:		0001001614-05-000028
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20050616
FILED AS OF DATE:		20050616
DATE AS OF CHANGE:		20050616
EFFECTIVENESS DATE:		20050616

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TENGASCO INC
		CENTRAL INDEX KEY:			0001001614
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				870267438
		STATE OF INCORPORATION:			TN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-15555
		FILM NUMBER:		05899146

	BUSINESS ADDRESS:	
		STREET 1:		603 MAIN AVE
		STREET 2:		SUITE 500
		CITY:			KNOXVILLE
		STATE:			TN
		ZIP:			37902
		BUSINESS PHONE:		4235231124

	MAIL ADDRESS:	
		STREET 1:		630 MAIN AVENUE
		STREET 2:		SUITE 500
		CITY:			KNOXVILLE
		STATE:			TN
		ZIP:			37902
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>proxy_05.htm
<DESCRIPTION>PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
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<A NAME=A001></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TENGASCO, INC. </FONT></H1>

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<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10215 TECHNOLOGY DRIVE
N.W. </FONT></H1>

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<A NAME=A003></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>KNOXVILLE, TENNESSEE
37932 </FONT></H1>

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<A NAME=A004></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF ANNUAL
MEETING OF STOCKHOLDERS </FONT></H1>

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<A NAME=A005></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TO BE HELD ON </FONT></H1>

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<A NAME=A006></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>JULY 19, 2005 </FONT></H1>

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<A NAME=A007></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TO THE STOCKHOLDERS: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notice
is hereby given that the 2005 annual meeting of stockholders (the &#147;Annual
Meeting&#148;) of Tengasco, Inc. (the &#147;Company&#148;) has been called for and will be
held at the Homewood Suites by Hilton, 10935 Turkey Drive, Knoxville, Tennessee 37922
10:00 A.M., local time, on Tuesday, July 19, 2005 for the following purposes: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To elect Clarke H. Bailey, Jeffrey R. Bailey, John A. Clendening, Neal F.
          Harding, Carlos P. Salas and Peter E. Salas to the Board of Directors to hold
          office until their successors shall have been elected and qualify; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To approve an amendment to the Tengasco, Inc. Stock Incentive Plan to increase
          the number of shares of common stock that may be issued under the plan from
          1,000,000 to 3,500,000 shares; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To approve a plan to compensate the Company&#146;s independent directors; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To ratify the appointment by the Audit Committee of the Board of Directors of
          Rodefer Moss &amp; Co, PLLC to serve as the independent certified public
          accountants for the current fiscal year; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          To consider and transact such other business as may properly come before the
          Annual Meeting or any adjournments thereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has fixed the close of business on June 1, 2005 as the record date for
the determination of the stockholders entitled to receive notice and to vote at the Annual
Meeting or any adjournments thereof. The list of stockholders entitled to vote at the
Annual Meeting will be available for examination by any stockholder at the Company&#146;s
offices at 10215 Technology Drive N.W., Suite 301, Knoxville, Tennessee 37932, for ten
(10) days prior to July 19, 2005. </FONT></P>



<TABLE align= center BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD>By Order of the Board of Directors</TD>
     <TD></TD></TR>
<TR  VALIGN="TOP">
     <TD><br><br>Jeffrey R. Bailey, President</TD>
     <TD></TD></TR>
</TABLE>



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<A NAME=A008></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dated: June 16, 2005 </FONT></P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE FILL IN, SIGN, AND DATE THE PROXY
SUBMITTED HEREWITH AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE. THE GRANTING OF SUCH
PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH PROXY IN PERSON SHOULD YOU LATER DECIDE TO
ATTEND THE MEETING. THE ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS.</B> </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2 </FONT></P>



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<A NAME=A010></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TENGASCO, INC. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A011></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY STATEMENT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A012></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GENERAL </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement is furnished by the Board of Directors of Tengasco, Inc., a Tennessee
corporation (sometimes the &#147;Company&#148; or &#147;Tengasco&#148;), with offices now
located at 10215 Technology Drive, N.W., Suite 301, Knoxville, Tennessee 37932, in
connection with the solicitation of proxies to be used at the annual meeting of
stockholders of the Company to be held on July 19, 2005 and at any adjournments thereof
(the &#147;Annual Meeting&#148;). This proxy statement will be mailed to stockholders
beginning approximately June 16, 2005. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
may vote in person at the Annual Meeting or you may vote by proxy. We recommend that you
vote by proxy even if you plan to attend the Annual Meeting. If your share ownership is
recorded directly, you will receive a proxy card. Voting instructions are included on the
proxy card. If your share ownership is beneficial (that is, your shares are held in the
name of a bank, broker or other nominee referred to as in &#147;street name&#148;), your
broker will issue you a voting instruction form that you use to instruct them how to vote
your shares. Your broker must follow your voting instructions. Although most brokers and
nominees offer mail, telephone and internet voting, availability and specific procedures
will depend on their voting arrangements. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a proxy is properly executed and returned, the shares represented thereby will be voted as
instructed on the proxy. Any proxy may be revoked by a stockholder prior to its exercise
upon written notice to the President of the Company, or by a stockholder voting in person
at the Annual Meeting. Unless instructions to the contrary are indicated, proxies will be
voted FOR the election of the directors named therein, FOR the approval of the amendment
to the Tengasco, Inc. Stock Incentive Plan to increase the number of shares that may be
issued under the plan from 1,000,000 to 3,500,000 shares, FOR approval of the plan to
compensate the Company&#146;s independent directors and FOR the ratification of the
selection by the Audit Committee of the Board of Directors of Rodefer Moss &amp; Co, PLLC
, as the independent certified public accountants of the Company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
copy of the Company&#146;s annual report on Form 10-K of the Company for the fiscal year
ended December 31, 2004 (&#147;Fiscal 2004&#148;), which contains financial statements
audited by the Company&#146;s independent certified public accountants, accompanies this
proxy statement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
cost of preparing, assembling and mailing this notice of meeting, proxy statement, the
enclosed annual report on Form 10-K and proxy will be borne by the Company. In addition to
solicitation of the proxies by use of the mails, some of the officers and regular
employees of the Company, without extra remuneration, may solicit proxies personally or by
telephone, fax transmission or e-mail. The Company may also request brokerage houses,
nominees, custodians and fiduciaries to forward soliciting material to the beneficial
owners of the common stock. The Company will reimburse such persons for their expenses in
forwarding soliciting material. </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>3</P>


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<A NAME=A013></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>VOTING SECURITIES AND </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A014></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PRINCIPAL HOLDERS
THEREOF </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has fixed the close of business on June 1, 2005 as the record date (the
&#147;Record Date&#148;) for the determination of stockholders entitled to notice of, and
to vote at the Annual Meeting. Only stockholders on the Record Date will be able to vote
at the Annual Meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of the Record Date, 48,677,828 shares of the Company&#146;s common stock, $.001 par value
per share are outstanding, and each share will be entitled to one (1) vote, with no shares
having cumulative voting rights. Holders of shares of common stock are entitled to vote on
all matters. Unless otherwise indicated herein, a majority of the votes represented by
shares present or represented at the Annual Meeting is required for approval of each
matter which will be submitted to stockholders. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
knows of no business other than that specified in Items 1, 2 , 3 and 4 of the Notice of
Annual Meeting which will be presented for consideration at the Annual Meeting. If any
other matter is properly presented, it is the intention of the persons named in the
enclosed proxy to vote in accordance with their best judgment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the share holdings of those persons who own more than 5% of the
Company&#146;s common stock as of June 1, 2005 with these computations being based upon
48,677,828 shares of common stock being outstanding as of that date and as to each
shareholder, as it may pertain, assumes the exercise of options or warrants or the
conversion of convertible debt or preferred stock granted or held by such shareholder as
of June 1, 2005. </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>4</P>



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<A NAME=A015></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Five Percent
Stockholders<SUP>(1)</SUP> </FONT></H1>

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<A NAME=A016></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           </FONT></H1>

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<A NAME=A017></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
</FONT></H1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH align=left COLSPAN=3>Name and Address<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH align = left COLSPAN=3>Title<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Number of Shares<br>Beneficially Owned <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Percent of<br>Class <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=43% ALIGN=LEFT>Dolphin Offshore</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=17% ALIGN=LEFT>Stockholder</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=14% ALIGN=RIGHT>16,540,140</TD>
        <TD WIDTH=9% ALIGN=LEFT>(2)</TD>
     <TD WIDTH=6% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=1% ALIGN=RIGHT>33</TD>
        <TD WIDTH=1% ALIGN=LEFT>.9%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Partners, L.P.</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>129 East 17th Street</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New York, NY 10003</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>SC Fundamental Value</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Stockholder</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>6,494,100</TD>
        <TD ALIGN=LEFT>(3)</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>13</TD>
        <TD ALIGN=LEFT>.3%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Fund, L.P.</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>747 Third Avenue, 27th Fl</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New York, NY 10017</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>



<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>5</P>


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<A NAME=A018></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL NO. 1: </FONT></H1>

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<A NAME=A019></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ELECTION OF DIRECTORS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<A NAME=A020></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GENERAL </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article
III, paragraph number 2 of the Company&#146;s Bylaws provides that the number of directors
of the Company shall be a minimum of three and a maximum of ten. The members of the Board
of Directors are each elected for a one-year term or until their successors are elected
and qualify with a plurality of votes cast in favor of their election. The Board of
Directors consisted of seven persons during Fiscal 2004 and six nominees for the Board are
put forth before the stockholders for the Annual Meeting. All six of the nominees are
presently directors of the Company and all but one of the nominees, Jeffrey R. Bailey,
were elected at the Company&#146;s last annual meeting of stockholders held on August 12,
2004. Mr. Jeffrey R. Bailey formerly served as a Director and is presently the President
of the Company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
directors will serve until the next annual meeting of stockholders and thereafter until
their successors shall have been elected and qualified. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
authority is withheld, the proxies in the accompanying form will be voted in favor of the
election of the nominees named above as directors. If any nominee should subsequently
become unavailable for election, the persons voting the accompanying proxy may in their
discretion vote for a substitute. </FONT></P>

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<A NAME=A021></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BOARD OF DIRECTORS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has the responsibility for establishing broad corporate policies and
for the overall performance of the Company. Although only one member of the Board is
involved in day-to-day operating details, the other members of the Board are kept informed
of the Company&#146;s business by various reports and documents sent to them as well as by
operating and financial reports made at Board meetings. The Board of Directors held twelve
meetings in Fiscal 2004. All directors except for Bill L. Harbert and Richard T. Williams
who are not up for re-election, attended at least 75% of the aggregate number of meetings
of the Board of Directors and of the committees on which such directors served during
Fiscal 2004. Although it has no formal policy requiring attendance, the Company encourages
all of its directors to attend the annual meeting of stockholders. All of the
Company&#146;s directors attended last year&#146;s annual meeting and it is anticipated
that all of the director-nominees will attend this year&#146;s Annual Meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
believes that a majority of the six director-nominees are independent directors in
accordance with the definition of that term under the Rules of the American Stock
Exchange. </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>6</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
is no understanding or arrangement between any director or any other persons pursuant to
which such individual was or is to be selected as a director or nominee of the Company. </FONT></P>





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<A NAME=A022></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Committees</b></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Board has operating audit, nomination and governance, compensation/stock
option and frontier exploration committees. </FONT></P>

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<A NAME=A023></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation/Stock
Option Committee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
Fiscal 2004, the Company&#146;s Board merged its Compensation and Stock Option Committees
into one Committee. The members of the Compensation/Stock Option Committee in Fiscal 2004
were John A. Clendening, Bill L. Harbert and Carlos P. Salas with Mr. Clendening acting as
Chairman. Pursuant to the Rules of the American Stock Exchange this Committee determines
or recommends to the Board of Directors for determination the compensation of the
Company&#146;s President and all of the Company&#146;s other officers. The President may
not be present during the voting or deliberations with respect to his compensation. The
Compensation/Stock Option Committee&#146;s other functions, in conjunction with the Board
of Directors, are to assist in the implementation of, and provide recommendations with
respect to, general and specific compensation policies and practices of the Company for
directors, officers and other employees of the Company. The Compensation/Stock Option
Committee expects to periodically review the approach to executive compensation and to
make changes as competitive conditions and other circumstances warrant and will seek to
ensure the Company&#146;s compensation philosophy is consistent with the Company&#146;s
best interests and is properly implemented. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation/Stock Option Committee is also charged with administering the Tengasco, Inc.
Stock Incentive Plan (the &#147;Stock Incentive Plan&#148;) which was adopted by the Board
of Directors on October 25, 2000. The Compensation/Stock Option Committee has complete
discretionary authority with respect to the awarding of options and Stock Appreciation
Rights (&#147;SARs&#148;), under the Stock Incentive Plan, including, but not limited to,
determining the individuals who shall receive options and SARs; the times when they shall
receive them; whether an option shall be an incentive or a non-qualified stock option;
whether an SAR shall be granted separately, in tandem with or in addition to an option;
the number of shares to be subject to each option and SAR; the term of each option and
SAR; the date each option and SAR shall become exercisable; whether an option or SAR shall
be exercisable in whole, in part or in installments and the terms relating to such
installments; the exercise price of each option and the base price of each SAR; the form
of payment of the exercise price; the form of payment by the Company upon the exercise of
an SAR; whether to restrict the sale or other disposition of the shares of common stock
acquired upon the exercise of an option or SAR; to subject the exercise of all or any
portion of an option or SAR to the fulfillment of a contingency, and to determine whether
such contingencies have been met; with the consent of the person receiving such option or
SAR, to cancel or modify an option or SAR, provided such option or SAR as modified would
be permitted to be granted on such date under the terms of the Stock Incentive Plan; and
to make all other determinations necessary or advisable for administering the Plan. </FONT></P>



<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>7</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
Fiscal 2004 the Compensation/Stock Option Committee met six (6) times. It did not grant
any stock options in Fiscal 2004. </FONT></P>

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<A NAME=A024></A>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation/Stock
Option Committee InterlockingAnd <BR>Insider Participation </I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
interlocking relationship existed or exists between any member of the Company&#146;s
Compensation/Stock Option Committee and any member of the compensation committee of any
other company, nor has any such interlocking relationship existed in the past. No member
or nominee of the Compensation/Stock Option Committee is an officer or an employee of the
Company. </FONT></P>

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<A NAME=A025></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Audit Committee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clarke
H. Bailey, Neal F. Harding and John A. Clendening are the members of the Audit Committee.
Mr. Bailey is the Chairman of the Committee and the Board of Directors has determined that
Mr. Bailey is an &#147;audit committee financial expert&#148; as defined by applicable
Securities and Exchange Commission (&#147;SEC&#148;) regulations. Each of the members of
the Audit Committee met the independence and experience requirements of the applicable
laws, regulations and stock market rules, including the Sarbanes-Oxley Act, regulations
and rules promulgated by the SEC and the American Stock Exchange. The Audit Committee
adopted an Audit Committee Charter during fiscal 2001. In 2004, the Board adopted an
amended Audit Committee Charter, a copy of which was included last year&#146;s proxy
statement and is available on the Company&#146;s internet website, www.tengasco.com. The
Audit Committee&#146;s functions are to review with management and the Company&#146;s
independent auditors, the scope of the annual audit and quarterly statements, significant
financial reporting issues and judgments made in connection with the preparation of the
Company&#146;s financial statements; to review major changes to the Company&#146;s
auditing and accounting principles and practices suggested by the independent auditors; to
monitor the independent auditor&#146;s relationship with the Company; to advise and assist
the Board of Directors in evaluating the independent auditor&#146;s examination; to
supervise the Company&#146;s financial and accounting organization and financial
reporting, and, to nominate, for approval of the Board of Directors, a firm of certified
public accountants whose duty it is to audit the financial records of the Company for the
fiscal year for which it is appointed. In addition, the Audit Committee has the
responsibility to review and consider fee arrangements with, and fees charged by, the
Company&#146;s independent auditors. The Audit Committee met six times in Fiscal 2004 with
the Company&#146;s auditors, including to discuss the audit of the Company&#146;s year end
financial statements for 2004. It is intended that if elected as directors, Messrs.
Bailey, Harding and Clendening will continue to serve as members of the Audit Committee
and Clarke H. Bailey will continue to be designated as the financial expert of the
committee in 2005. </FONT></P>

<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>8</P>

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<A NAME=A026></A>
<p><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;Audit Committee
Report </I></FONT></P>

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<A NAME=A027></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee has:</FONT></P>




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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Reviewed and discussed the Company&#146;s unaudited financial statements for the
               first three quarters of Fiscal 2004 and the Company&#146;s audited financial
               statements for the year ended December 31, 2004 with the management of the
               Company and the Company&#146;s independent auditors. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Discussed with the Company&#146;s independent auditors the matters required to
               be discussed by Statement of Auditing Standards No. 61, as the same was in
               effect on the date of the Company&#146;s financial statements; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Received the written disclosures and the letter from the Company&#146;s
               independent auditors required by Independence Standards Board Standard No. 1
               (Independence Discussions with Audit Committees), as the same was in effect on
               the date of the Company&#146;s financial statements. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on the foregoing materials and discussions, the Audit Committee recommended to the Board
of Directors that the unaudited financial statements for each of the first three quarters
of Fiscal 2004 be included in the Quarterly Reports on Form 10-Q for those quarters and
that the audited financial statements for the year ended December 31, 2004 be included in
the Company&#146;s Annual Report on Form 10-K for the year ended December 31, 2004. </FONT></P>


<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Members of the Audit Committee</FONT></P>
<TABLE align=center BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD>Clarke H. Bailey<br>Neal F. Harding<br>John A. Clendening</TD>
     <TD></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD></TD></TR>
</TABLE>












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<A NAME=A028></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nomination and
Governance Committee </FONT></H1>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Nomination and Governance Committee was formed in Fiscal 2004. The present members of the
Committee are Neal F. Harding, Clarke H. Bailey and Carlos P. Salas, with Mr. Salas acting
as Chairman. The Company believes that each member of the Committee is independent as that
term is defined under the rules of the American Stock Exchange. As the Committee was
recently formed it met only one time in Fiscal 2004. The Committee, among other duties,
determines the slate of director candidates to be presented for election at the
Company&#146;s annual meeting of shareholders. Although the Company does not presently
have a nominating committee charter, on November 18, 2004, the Company&#146;s Board of
Directors adopted procedures for annual director nominations by the Nomination and
Governance Committee. Those procedures provide that the qualifications that should be met
by any person recommended as a nominee for a position on the Company&#146;s Board of
Directors should include one or more of the following: a background or experience in oil
and gas exploration, production, transportation, geology, construction, finance or in
another business, government service, or profession that would reasonably enable the
nominee to provide seasoned and reputable service to the shareholders of the Company in
the performance of the duties of a member of the Board of Directors. In addition to these
qualifications, a nominee must be willing to serve without a right to receive compensation
for such service. </FONT></P>



<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>9</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has no separate policy with regard to the consideration of any director candidates
recommended by security holders. However, the Nomination Committee will consider director
candidates recommended by security holders. Any person recommended by a security holder to
serve on the Board of Directors is considered upon the same terms as candidates
recommended by any other person. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Among
the nominating procedures adopted were the following: (1) Any shareholder, officer, or
director may recommend for nomination any person for the slate of candidates for
membership on the Company&#146;s Board of Directors to be presented to the shareholders at
the Company&#146;s annual meeting of shareholders. Such recommendations must be furnished
in writing addressed to the Company&#146;s Board of Directors at the Company&#146;s
principal offices. All such nominations will be furnished to the Nomination Committee
which may conduct interviews, investigations or make other determinations as to the
qualifications of such recommended persons. (2) Any then-current members of the Board of
Directors desiring to stand for re-election may be placed on the slate of directors for
re-election without further inquiry as to their qualifications. (3) The Nomination
Committee will meet to determine the slate of candidates for the Board in such a manner
and at such a time so as not to delay either the mailing of the proxy statement to the
Company&#146;s shareholders or the annual meeting of shareholders. At such meeting, each
recommended person including directors standing for re-election shall be subject to
affirmative vote of half or more of the members of the Nomination Committee for inclusion
on the slate of nominees. (4) The adopted procedures apply only to the determination of
the slate of directors to be presented for election at the annual meeting of the
shareholders. Any vacancies on the Board of Directors following the annual meeting of
shareholders may be filled in the manner currently applicable under the Company&#146;s
Charter, Bylaws, and applicable state law. (5) The procedures adopted may be amended from
time to time by the Board of Directors or by the Nomination Committee, in order to comply
with any applicable provision or interpretation of any rule, statute, or stock exchange
rule of the exchange on which the Company&#146;s stock may be listed. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
nomination procedures adopted are posted on the Company&#146;s internet website at
www.tengasco.com. In the event of any such amendment to the procedures, the Company
intends to disclose the amendments on the Company&#146;s internet website within five
business days following such amendment. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
other function of this Committee is to oversee the Company&#146;s compliance with the
corporate governance requirements of the SEC and the American Stock Exchange. The Chairman
of the Committee, Carlos P. Salas, is an attorney with experience in the area of
securities law. </FONT></P>





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<A NAME=A029></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Committees </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Board also has a frontier exploration committee. The members of this
Committee in Fiscal 2004 were Jeffrey R. Bailey, John A. Clendening, Richard T. Williams
and Carlos P. Salas. The Committee met three (3) times in Fiscal 2004 to discuss new areas
of potential development for the Company. </FONT></P>

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<A NAME=A030></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial
Ownership</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth information, as of the Record Date with respect to the
beneficial ownership of the Company&#146;s common stock by the current directors who are
up for re-election and executive officers of the Company both individually and as a
group.<SUP>(4)</SUP> </FONT></P>

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<A NAME=A031></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
        </FONT></H1>

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<A NAME=A032></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
</FONT></H1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH align=left COLSPAN=3>Name and Address<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH align=left COLSPAN=3>Title<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Number of Shares<br>Beneficially Owned <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Percent <br>of Class <HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=41% ALIGN=LEFT><br>Clarke H. Bailey</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=15% ALIGN=LEFT>Director</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=10% ALIGN=RIGHT>None</TD>
        <TD WIDTH=10% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=10% ALIGN=RIGHT>0</TD>
        <TD WIDTH=2% ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>1865 Palmer Avenue</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Larchmont, NY 10538</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>Jeffrey R. Bailey</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director;</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>149,412</TD>
        <TD ALIGN=LEFT>(5)</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>Less th</TD>
        <TD ALIGN=LEFT>an</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>2306 West Gallaher Ferry</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>President</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Knoxville, TN 37932</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>John A. Clendening</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>100,000</TD>
        <TD ALIGN=LEFT>(6)</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>Less th</TD>
        <TD ALIGN=LEFT>an</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>1031 Saint Johns Drive</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Maryville, TN 37801</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>Neal F. Harding</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>635,180</TD>
        <TD ALIGN=LEFT>(7)</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>1.4</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>2509 Plantside Drive</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Louisville, KY 40299</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>Carlos P. Salas</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>None</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>0</TD>
        <TD ALIGN=LEFT>%</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>129 East 17th Street</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New York, NY 10003</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>



<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>11</P>

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<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=38% ALIGN=LEFT>Peter E. Salas</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=22% ALIGN=LEFT>Director</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=10% ALIGN=RIGHT>16,540,140</TD>
        <TD WIDTH=8% ALIGN=LEFT>(8)</TD>
     <TD WIDTH=13% ALIGN=right>33.9</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>129 East 17th Street</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>New York, NY 10003</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>Robert M. Carter</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>President</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>20,821</TD>
        <TD ALIGN=LEFT>(9)</TD>
     <TD ALIGN=right>Less than 1%</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>441 Glen Abbey Blvd</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Tengasco</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Knoxville, TN 37922</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Pipeline Corporation</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>Mark A. Ruth</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Chief</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>69,287</TD>
        <TD ALIGN=LEFT>(10)</TD>
     <TD ALIGN=right>Less than 1%</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>9400 Hickory Knoll Lane</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Financial</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Knoxville, TN 37931</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Officer</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>Cary V. Sorensen</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Vice-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>47,875</TD>
        <TD ALIGN=LEFT>(11)</TD>
     <TD ALIGN=right>Less than 1%</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>5517 Crestwood Drive</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>President; General</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Knoxville, TN 37919</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Counsel; Secretary</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><br>All Officers, Directors</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>17,825,840</TD>
        <TD ALIGN=LEFT>(12)</TD>
     <TD ALIGN=right>35.8</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>and Director-Nominees as a group</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>



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<A NAME=A033></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes
in Control</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the knowledge of the Company&#146;s management, there are no present arrangements or
pledges of the Company&#146;s securities which may result in a change in control of the
Company. </FONT></P>





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<A NAME=A034></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Background
of Directors</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following is a brief account of the experience, for at least the past five (5) years, of
each nominee for director. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clarke
H. Bailey is 51 years old. He is currently Chairman of the Board and Chief Executive
Officer of Glenayre Technologies, Inc. (NasdaqNM:GEMS), a company engaged in the
development and sale of software and equipment in the wireless communications industry. He
has been a director of Glenayre since December 1990, Chairman since October 1999, and CEO
since October 2003. From January 1999 to March 2002 he was Chairman and CEO of
ShipXact.com, Inc. From February 1995 to January 1998 he was Chairman and CEO of United
Acquisition Company and its parent, United Gas Holding Corporation until their acquisition
by Iron Mountain Incorporated (NYSE:IRM), a records and information management services
company, in 1998. He has served on the Board of Directors of Iron Mountain since January
1998. He also served as Chairman of Arcus, Inc. from July 1995 to January 1998, and
Co-Chairman of Highgate Capital L.L.C. from February 1995 to March 2002. He holds a
Bachelor&#146;s degree in Economics and a Bachelor&#146;s degree in Rhetoric from the
University of California, Davis and a Master of Business Administration degree from The
Wharton School, University of Pennsylvania. Mr. Bailey serves as the Chairman of the
Company&#146;s Audit Committee and as the financial expert of that Committee. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jeffrey
R. Bailey is 47 years old. He graduated in 1980 from New Mexico Institute of Mining and
Technology with a B.S. degree in Geological Engineering. Upon graduation he joined
Gearhart Industries as a field engineer working in Texas, New Mexico, Kansas, Oklahoma and
Arkansas. Gearhart Industries later merged with Halliburton Company. In 1993 after 13
years working in various field operations and management roles primarily focused on
reservoir evaluation, log analysis and log data acquisition he assumed a global role with
Halliburton as a petrophysics instructor in Fort Worth, Texas. His duties were to teach
Halliburton personnel and customers around the world log analysis and competition
technology and to review analytical reservoir problems. In this role Mr. Bailey had the
opportunity to review reservoirs in Europe, Latin America, Asia Pacific and the Middle
East developing a special expertise in carbonate reservoirs. In 1997 he became technical
manager for Halliburton in Mexico focusing on finding engineering solutions to the
production challenges of large carbonate reservoirs in Mexico. He joined the Company as
its Chief Geological Engineer on March 1, 2002. He was elected as President of the Company
on July 17, 2002 and as a Director on February 28, 2003 and served as a Director until
August 11, 2004. He was again elected to the Company&#146;s Board of Directors on October
21, 2004. </FONT></P>


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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Dr.
          John A. Clendening is 73 years old. He received B.S. (1958), M.S. (1960) and Ph.
          D. (1970) degrees in geology from West Virginia University. He was employed as a
          Palynologist-Coal Geologist at the West Virginia Geological Survey from 1960
          until 1968. He joined Amoco in 1968 and remained with Amoco as a senior
          geological associate until 1992. Dr. Clendening has served as President and
          other offices of the American Association of Stratigraphic Palynologists and the
          Society of Organic Petrologists. From 1992-1998 he was engaged in association
          with Laird Exploration Co., Inc. of Houston, Texas, directing exploration and
          production in south central Kentucky. In 1999 he purchased all the assets of
          Laird Exploration in south central Kentucky and operates independently. While
          with Amoco Dr. Clendening was instrumental in Amoco&#146;s acquisition in the
          early 1970&#145;s of large land acreage holdings in Northeast Tennessee, based
          upon his geological studies and recommendations. His work led directly to the
          discovery of what is now the Company&#146;s Paul Reed # 1 well. He further
          recognized the area to have significant oil and gas potential and is credited
          with discovery of the field which is now known as the Company&#146;s Swan Creek
          Field. Dr. Clendening previously served as a Director of the Company from
          September 1998 to August 2000. He was again elected as a Director of the Company
          on February 28, 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neal
F. Harding is 63 years old. He received a Bachelors of Science degree in Social Sciences
from Campbellsville University in 1964. He is the Chairman and Chief Executive Officer of
the Heritage Companies based in Cocoa Beach, Florida which are three management companies
specializing in the development, construction, and management of more than 6,000 single
and multi-family affordable housing units. Mr. Harding through various partnerships,
currently owns in excess of 16,000 affordable housing units throughout the country. He is
the owner of R.M.D. Corp., the largest franchisee of Hooters restaurants. He is also the
majority shareholder of World Wide Wings, a Hooters franchisee which owns and manages six
international units located in Canada and England. Mr. Harding is also the majority
shareholder in F &amp; H Development Company, which owns and operates a semi-public
PGA-designed 18-hole golf course in Sikeston, Missouri. Additionally, Mr. Harding is the
sole shareholder of Harding Construction Services, Inc., a real estate company
specializing in the acquisition and development of commercial and residential properties.
Mr. Harding is the exclusive franchisee of Qdoba Mexican Grill Restaurants in south
Florida. Mr. Harding previously served as a director of the Company from August 31, 1999
to August 7, 2000. He was again elected as a Director of the Company on August 12, 2004. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Carlos
P. Salas is 33 years old. He is a principal of Dolphin Advisors, L.L.C., which manages a
private-equity investment fund focused on middle-market opportunities. Before joining
Dolphin Advisors, Mr. Salas led an investor group in the acquisition of a private
engineering and manufacturing firm in 2001, and joined the company to lead a financial and
operating restructuring as CFO in 2002. Previously, Mr. Salas led corporate finance and
mergers and acquisitions advisory assignments for middle-market clients as an investment
banker with the Los Angeles office of Donaldson, Lufkin &amp; Jenrette (&#147;DLJ&#148;),
and when DLJ was acquired by Credit Suisse First Boston Corporation (&#147;CSFB&#148;),
joined CSFB&#146;s mergers and acquisitions group. Prior to joining DLJ in 1999, Mr. Salas
practiced law with Cleary, Gottlieb, Steen &amp; Hamilton in New York, advising financial
sponsors and corporate clients in connection with financings and cross-border mergers and
acquisitions transactions. Mr. Salas received his J.D. from The University of Chicago in
1996, and his B.A. in Philosophy from New York University in 1992. He was elected to the
Company&#146;s Board of Directors on August 12, 2004. </FONT></P>





<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>14</P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter
E. Salas is 50 years old. He has been President of Dolphin Asset Management Corp. and its
related companies since he founded it in 1988. Prior to establishing Dolphin, he was with
J.P. Morgan Investment Management, Inc. for ten years, becoming Co-manager, Small Company
Fund and Director-Small Cap Research. He received an A.B. degree in Economics from Harvard
in 1976. Mr. Salas was elected to the Board of Directors on October 8, 2002. </FONT></P>

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<A NAME=A035></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
16(a) Beneficial Ownership Reporting Compliance</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
16(a) of the Securities Exchange Act of 1934 requires the Company&#146;s executive
officers, directors and persons who beneficially own more than 10% of the Company&#146;s
Common Stock to file initial reports of ownership and reports of changes in ownership with
the SEC. In fiscal 2004, Robert M. Carter, President of TPC, the Company&#146;s
wholly-owned subsidiary, failed to timely file one Form 4 Report involving one
transaction. </FONT></P>

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<A NAME=A036></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Family
and Other Relationships</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
are no family relationships between any of the present directors or executive officers of
the Company except that Carlos P. Salas, a Director of the Company, is the second cousin
of Peter E. Salas, also a director of the Company. Mr. Carlos P. Salas is also one of
seven members of Dolphin Advisors, LLC which serves as the managing general partner of
Dolphin Direct Equity Partners, L.P., a private company investment fund that is not a
shareholder of the Company. The majority owner of Dolphin Advisors, LLC is Dolphin
Management, Inc, the sole shareholder of which is Peter E. Salas. Dolphin Management, Inc.
is also the managing partner of Dolphin Offshore Partners, L.P. which directly owns
16,244,452 shares of the Company&#146;s common stock. Peter E. Salas is the controlling
person of Dolphin Offshore Partners, L.P. Although Carols P. Salas has no direct or
indirect ownership interest in Dolphin Offshore Partners, L.P., he nonetheless may be
deemed an affiliate of Dolphin Offshore Partners, L.P. and Peter E. Salas. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
is no family or other relationship between Clarke H. Bailey, a Director of the Company and
Jeffrey R. Bailey, the President and a Director of the Company. Mr. Clarke H. Bailey owns
an approximately 1.5% investment interest in Dolphin Offshore Partners, L.P. and in
Dolphin Direct Equity Partners, L.P. Management believes that Mr. Bailey is not an
affiliate of either of these entities as a result of his minor percentage investment in
those companies. There are no family relationships between any of the other Directors or
executive officers of the Company. </FONT></P>

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<A NAME=A037></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Involvement
in Certain Legal Proceedings</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the knowledge of management, during the past five years, no present or former director,
executive officer, affiliate or person nominated to become a director or an executive
officer of the Company: </FONT></P>





<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>15</P>



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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Filed a petition under the federal bankruptcy laws or any state insolvency law,
               nor had a receiver, fiscal agent or similar officer appointed by a court for the
               business or property of such person, or any partnership in which he or she was a
               general partner at or within two years before the time of such filing, or any
               corporation or business association of which he or she was an executive officer
               at or within two years before the time of such filing; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Was convicted in a criminal proceeding or named the subject of a pending
               criminal proceeding (excluding traffic violations and other minor offenses); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Was the subject of any order, judgment or decree, not subsequently reversed,
               suspended or vacated, of any court of competent jurisdiction, permanently or
               temporarily enjoining him or her from or otherwise limiting his or her
               involvement in any type of business, commodities, securities or banking
               activities; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Was found by a court of competent jurisdiction in a civil action or by the SEC
               or the Commodity Futures Trading Commission (&#147;CFTC&#148;) to have violated
               any federal or state securities law or Federal commodities law, and the judgment
               in such civil action or finding by the SEC or CFTC has not been subsequently
               reversed, suspended, or vacated. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A038></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code
of Ethics</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Board of Directors has adopted a Code of Ethics that applies to the
Company&#146;s financial officers and executive officers, including its President and
Chief Financial Officer. A copy of this Code of Ethics can be found at the Company&#146;s
internet website at www.tengasco.com. The Company intends to disclose any amendments to
its Code of Ethics, and any waiver from a provision of the Code of Ethics granted to the
Company&#146;s President, Chief Financial Officer or persons performing similar functions,
on the Company&#146;s internet website within five business days following such amendment
or waiver. </FONT></P>

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<A NAME=A039></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholder
Communications with the Board of Directors</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders
may communicate with the Board of Directors of the Company by writing to: Cary V.
Sorensen, Secretary, Tengasco, Inc., 10215 Technology Drive, N.W., Suite 301, Knoxville,
TN 37932 or by e-mail: to: <U>CSorensen@tengasco.com</U> Subject: Communication to Board
of Directors. All letters and e-mails will be answered, if possible, and will be
distributed to board members as appropriate. Notwithstanding the foregoing, the Company
has the authority to discard or disregard any communication which is unduly hostile,
threatening, illegal or otherwise inappropriate or to take any other appropriate actions
with respect to such communications. </FONT></P>



<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>16</P>

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<A NAME=A040></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXECUTIVE COMPENSATION </FONT></H1>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth a summary of all compensation awarded to, earned or paid to,
the Company&#146;s Chief Executive Officer during fiscal years ended December 31, 2004,
December 31, 2003 and December 31, 2002. None of the Company&#146;s other executive
officers earned compensation in excess of $100,000 per annum for services rendered to the
Company in any capacity during those periods. </FONT></P>

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<A NAME=A041></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Summary Compensation
Table </FONT></H1>



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<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=9>----Long Term Awards---- </TH>


     <TH COLSPAN=3></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=6>Annual Compensation</TH>

     <TH COLSPAN=3></TH>
     <TH COLSPAN=6>--Awards--</TH>

     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH></TR>
<TR VALIGN=Bottom>
     <TH align=left COLSPAN=3>Name and<BR>
Principal Position<BR>
<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Year<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Salary ($)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Bonus ($)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Other Annual<BR>
Compensation($<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Restricted<BR>
Stock<BR>
Awards($)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Securities<BR>
Underlying<BR>
Options/<BR>
SARs(#)(13)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Payouts<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE> </TH>
     <TH COLSPAN=3> All Other<br>Compensation<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=37% ALIGN=LEFT>Richard T. Williams,</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=LEFT>2004</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>$</TD><TD WIDTH=6% ALIGN=RIGHT> 80,000</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=4% ALIGN=LEFT>$-0-</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=6% ALIGN=LEFT>$-0-</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=LEFT>-0-</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=6% ALIGN=RIGHT>13,125</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=LEFT>-0-</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=3% ALIGN=LEFT>-0-</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Chief Executive Officer</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>2003</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT> 80,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>$-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>$-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>73,125</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>

     <TD COLSPAN=26 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR>

     <TD COLSPAN=26 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Malcolm E. Ratliff,</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>2002</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT> 80,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>$-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>$1,000</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>52,500</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>-0-</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Chief Executive Officer(14)</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
</TABLE>







<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>17</P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Aggregate Option Exercises For Fiscal 2004
and Year End Option Values</FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3>Number of Securities   <BR>
Underlying Unexercised <BR>
Options/SARs at<BR>
December 31, 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Value(15) of Unexercised<BR>
In-the-Money<BR>
Options/SARs at<BR>
December 31, 2003<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH       align= left COLSPAN=3>Name<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Shares Acquired<BR>
on Exercise<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Value ($)<BR>
Realized(16)<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Exercisable/<BR>
Unexercisable<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Exercisable/<BR>
Unexercisable<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=24% ALIGN=LEFT>Richard T. Williams</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=5% ALIGN=RIGHT>50,000</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>$</TD><TD WIDTH=5% ALIGN=RIGHT> 8,500</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=25% ALIGN=LEFT>-0-/-0-</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=25% ALIGN=LEFT>-0-</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD></TR>

</TABLE>


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<A NAME=A044></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Option Grants For Fiscal
2004 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
stock options or stock appreciation rights were granted during fiscal year ended December
31, 2004 to the Chief Executive Officer. None of the Company&#146;s other executive
officers earned compensation in excess of $100,000 per annum for services rendered to the
Company in any capacity during the fiscal year ended December 31, 2004. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None
of the Company&#146;s other executive officers earned compensation in excess of $100,000
per annum for services rendered to the Company in any capacity. </FONT></P>

<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>18</P>

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<A NAME=A045></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compensation of Directors </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has resolved to compensate members of the Board of Directors for
attendance at meetings at the rate of $250 per day, together with direct out-of-pocket
expenses incurred in attendance at the meetings, including travel. The Directors, however,
have waived such fees due to them as of this date for prior meetings. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Members
of the Board of Directors may also be requested to perform consulting or other
professional services for the Company from time to time. The Board of Directors has
reserved to itself the right to review all directors&#146; claims for compensation on an
ad hoc basis. </FONT></P>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors
who are on the Company&#146;s Audit, Compensation/Stock Option and Nomination and
Governance Committees are independent and therefore, do not receive any consulting,
advisory or compensatory fees from the Company. However, such Board members may receive
fees from the Company for their services on those committees. A new plan to issue cash
and/or shares of stock to independent directors for service on the various committees of
the Board of Directors was authorized by the Company&#146;s Board on May 19, 2005 and is
proposed to be approved by shareholders at the Annual Meeting. See, Proposal No. 3 in this
proxy statement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company adopted an employee health insurance plan in August 2001. The Company does not
presently have a pension or similar plan for its directors, executive officers or
employees. Management has considered adopting a 401(k) plan and full liability insurance
for directors and executive officers. However, there are no immediate plans to do so at
this time. </FONT></P>

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<A NAME=A046></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment Contracts </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company had entered into an employment contract with its former Chief Executive Officer,
Richard T. Williams for a period of two years through December 31, 2004 at an annual
salary of $80,000. Dr. Williams resigned as Chief Executive Officer of the Company at the
expiration of his employment contract. There are presently no other employment contracts
relating to any member of management. However, depending upon the Company&#146;s
operations and requirements, the Company may offer long term contracts to directors,
executive officers or key employees in the future. </FONT></P>

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<A NAME=A047></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTAIN TRANSACTIONS </FONT></H1>

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<A NAME=A048></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transactions
with Management and Others</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as set forth hereafter, there have been no material transactions, series of similar
transactions or currently proposed transactions during 2004, to which the Company or any
of its subsidiaries was or is to be a party, in which the amount involved exceeds $60,000
and in which any director or executive officer or any security holder who is known to the
Company to own of record or beneficially more than 5% of the Company&#146;s common stock,
or any member of the immediate family of any of the foregoing persons, had a material
interest. </FONT></P>





<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>19</P>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Board of Directors has not adopted any general policy with respect to these
transactions, many of which were effected on behalf of the Company by senior management
prior to consideration of the transaction by the Board of Directors in light of senior
management&#146;s perceived urgency of the funding requirements, the limited availability
of alternative sources, and the belief that the terms of such transactions were at least
as favorable to the Company as could have been obtained through arms-length negotiations
with unaffiliated third parties. In each of the loans to the Company by Dolphin Offshore
Partners, L.P. (&#147;Dolphin), which owns more than ten percent of the Company&#146;s
outstanding Common Stock and whose general partner, Peter E. Salas, is a Director of the
Company, Mr. Salas negotiated on behalf of Dolphin with senior management of the Company
as to the terms thereof and did not participate in any Board action with respect thereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February 2, 2004, Dolphin loaned the Company the sum of $225,000 which was used for making
payment of principal and interest to Bank One for February, 2004. This loan was evidenced
by a promissory note bearing interest at the rate of 12% per annum, with payments of
interest only payable quarterly and the principal balance payable on April&nbsp;4, 2004.
The obligations under the loan were secured by an undivided interest in the Company&#146;s
Tennessee and Kansas pipelines. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
March, 2004, net proceeds from the Company&#146;s Rights Offering in the amount of
$3,850,000 were used to pay the principal amount plus accrued indebtedness owed by the
Company to Dolphin for all loans previously made by Dolphin to the Company, including the
loan made on February 2, 2004 described above. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the number of shares of Common Stock purchased in connection
with the Rights Offering by persons who at the time were either Directors and Officers of
the Company or owners of more than ten percent of the Company&#146;s outstanding Common
Stock. </FONT></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH align=left COLSPAN=3>Name<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH align= left COLSPAN=3>Position<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Shares Purchased<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=44% ALIGN=LEFT>Stephen W. Akos</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=40% ALIGN=LEFT>Director</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>&nbsp;</TD><TD WIDTH=8% ALIGN=RIGHT>48,868</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=6 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Jeffrey R. Bailey</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director; President</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>66,287</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=6 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>John A. Clendening</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>75,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=6 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Robert L. Devereux</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>412,457</TD>
        <TD ALIGN=LEFT><sup>(17)</sup></TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=6 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Richard T. Williams</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Director; Chief Executive Officer</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>190,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=6 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Dolphin Offshore Partners, L.P.<sup>(18)</sup></TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>Shareholder</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>14,248,732</TD>
        <TD ALIGN=LEFT><sup>(19)</sup></TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=6 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
</TABLE>

<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>20</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May 18, 2004, Dolphin loaned the Company $2,500,000 bearing interest at 12% per annum with
interest payable monthly beginning June 18, 2004 and principal payable on May 18, 2005.
This loan is secured by a first lien on the Company&#146;s Tennessee and Kansas producing
properties and the Tennessee pipeline. The proceeds of this loan were used to fund in part
the Company&#146;s settlement of its litigation with Bank One. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 30, 2004, Neal F. Harding, a Director of the Company, pursuant to the offering
made to all holders of the Company&#146;s Series A 8% Cumulative Convertible Preferred
Stock (&#147;Series A Shares&#148;) exchanged all of his 1,985 Series A Shares for 4.48
units in the Company&#146;s Kansas drilling program. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December 30, 2004 Dolphin loaned the Company $550,000 bearing interest at 12% per annum
with interest payable quarterly and principal payable on May 20, 2005. This loan is
secured by a first lien on the Company&#146;s Tennessee and Kansas producing properties
and the Tennessee pipeline. The proceeds of this loan were used to fund in part the
Company&#146;s exchange of cash for a portion of the Company&#146;s outstanding Series A
Shares. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
March 4, 2005, the Company sold its gas wells, associated gathering system, underlying
leases and rights of way located on its Kansas Properties for $2.4 million. The net
proceeds from the sale were used to pay down the Company&#146;s note to Dolphin dated May
18, 2004 from its original amount of $2,500,000 to $150,000. </FONT></P>

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<A NAME=A049></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indebtedness of
Management </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
officer, director or security holder known to the Company to own of record or beneficially
more than 5% of the Company&#146;s common stock or any member of the immediate family of
any of the foregoing persons is indebted to the Company. </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>21</P>

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<A NAME=A050></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Parent of the Issuer </FONT></H1>

 <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company has no parent.</FONT></P>


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<A NAME=A051></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PERFORMANCE GRAPH </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
graph below compares the cumulative total stockholder return on the Company&#146;s common
stock with the cumulative total stockholder return of (1) the American Stock Exchange
Index and (2) the Standard Industrial Code Index for the Crude Petroleum and Natural Gas
Industry based on 202 different companies, assuming an investment in each of $100 on
December 21, 1999, the date on which the Company&#146;s Common Stock began trading on the
American Stock Exchange. </FONT></P>

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<A NAME=A052></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMPARISON OF
CUMULATIVE TOTAL RETURN OF ONE OR MORE </FONT></H1>

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<A NAME=A053></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMPANIES, PEER
GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS </FONT></H1>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=70%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>
     <TH COLSPAN=3></TH>

     <TH COLSPAN=9>---- FISCAL YEAR ENDING----<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     </TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3>COMPANY/INDEX/MARKET<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>12/31/1999<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>12/29/2000<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>12/31/2001<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>12/31/2002<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>12/31/2003<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>12/31/2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Tengasco Incorporated</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>.00</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>117</TD>
        <TD ALIGN=LEFT>.65</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>81</TD>
        <TD ALIGN=LEFT>.86</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>10</TD>
        <TD ALIGN=LEFT>.87</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>7</TD>
        <TD ALIGN=LEFT>.41</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>2</TD>
        <TD ALIGN=LEFT>.57</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Crude Petroleum&nbsp;&amp; Natural Gas</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>.00</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>127</TD>
        <TD ALIGN=LEFT>.04</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>116</TD>
        <TD ALIGN=LEFT>.56</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>124</TD>
        <TD ALIGN=LEFT>.27</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>199</TD>
        <TD ALIGN=LEFT>.58</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>253</TD>
        <TD ALIGN=LEFT>.54</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>AMEX Market Index</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>100</TD>
        <TD ALIGN=LEFT>.00</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>98</TD>
        <TD ALIGN=LEFT>.77</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>94</TD>
        <TD ALIGN=LEFT>.22</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>90</TD>
        <TD ALIGN=LEFT>.46</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>123</TD>
        <TD ALIGN=LEFT>.12</TD>
     <TD ALIGN=RIGHT>&nbsp;</TD><TD ALIGN=RIGHT>140</TD>
        <TD ALIGN=LEFT>.99</TD></TR>
</TABLE>










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<A NAME=A055></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BOARD RECOMMENDATION AND
VOTE REQUIRED </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
Proposal No. 1 regarding the election of directors, votes may be cast in favor of all
nominees, may be withheld with regard to all nominees or may be withheld only with regard
to nominees specified by the stockholder. Directors will be elected by a plurality of the
votes of the shares of the Company&#146;s common stock present in person or represented by
proxy, and entitled to vote on the election of directors at a meeting at which a quorum is
present. Abstentions are tabulated in determining the votes present at a meeting.
Consequently, an abstention has the same effect as a vote against a director-nominee, as
each abstention would be one less vote in favor of a director nominee. If a broker
indicates on the proxy that it does not have discretionary authority as to certain shares
to vote on a particular matter (i.e., a &#147;broker non-vote&#148;), those shares will
not be considered as present and entitled to vote with respect to that matter. The Board
of Directors recommends that stockholders vote &#147;FOR&#148; the nominees set forth
above. Unless marked to the contrary, proxies received will be voted FOR the nominees set
forth above. </FONT></P>





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<A NAME=A056></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL NO. 2 </FONT></H1>

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<A NAME=A057></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>APPROVAL OF AMENDMENTTO THE TENGASCO, INC.<br>STOCK INCENTIVE PLAN
TO INCREASE THE <br>NUMBER OF SHARES THAT
MAY BE<br>ISSUED UNDER THE PLAN</FONT></H1>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors of the Company (the &#147;Board&#148;) on October 25, 2000 adopted the
Tengasco, Inc. Stock Incentive Plan (the &#147;Plan&#148;) to provide an incentive to key
employees, officers, directors and consultants of the Company and its present and future
subsidiary corporations, and to offer an additional inducement in obtaining the services
of such individuals. The plan was approved by the Company&#146;s shareholders on June 26,
2001. Under the Plan a maximum of 1,000,000 shares of the Company&#146;s $.001 par value
per share (&#147;Common Stock&#148;) are issuable. The Plan provides for the grant to
employees of the Company of &#147;Incentive Stock Options,&#148; within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;),
Nonqualified Stock Options to outside Directors and consultants to the Company and stock
appreciation rights (&#147;SARs&#148;). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
May 19, 2005, the Board of Directors, upon recommendation of the Compensation/Stock Option
Committee approved, subject to shareholder approval an amendment to the Plan, attached
hereto as Appendix A, which provides for the an increase of the aggregate number of shares
that may be issued under the Plan from 1,000,000 shares to 3,500,000 shares. All other
terms of the Plan remain unchanged. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of June 1, 2005, there were outstanding options to purchase 282,028 shares granted under
the Plan. In addition, the Stock Option/Compensation Committee recently recommended
subject to shareholder approval to amend the Plan, options to purchase 1,250,000 shares to
Jeffrey R. Bailry, President; 400,000 shares to Mark A. Ruth, Chief Financial Officer;
400,000 shares to Cary V. Sorensen, Vice-President, General Counsel and Corporate
Secretary; and, 200,000 shares to be issued to employees of the Company whose performance
in the President&#146;s discretion warrant the award of such options. All options granted
under the Plan were granted at an exercise price at least equal to the market price of the
Common Stock on the date of the grant of such options. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
the number of shares under the existing Plan are not sufficient to cover the options
awarded, at the Annual Meeting, the shareholders will be asked to approve the amendment to
the Plan. Shareholder approval of the proposed amendment is required pursuant to the terms
of the Plan and the rules and policies of the American Stock Exchange. The purpose of this
amendment to the Plan is to provide the Company with a greater ability to attract and
retain qualified individuals as employees consultants, officers and directors by the
granting of options and stock appreciations rights. In order to attract and retain such
individuals the Company needs to be in a position to offer options to acquire shares of
the Company&#146;s common stock in excess of the 1,000,000 share maximum under the current
Plan. </FONT></P>

<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>24</P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following summary description of the principal terms of the Plan, does not purport to be
complete and is qualified in its entirety by the full text of the Plan, as amended, a copy
of which may be obtained without cost upon written request to the Secretary of the
Company. </FONT></P>

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<A NAME=A061></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TERMS OF THE PLAN </FONT></H1>

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<A NAME=A062></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administration</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan is administered by the Compensation/Stock Option Committee (the
&#147;Committee&#148;) which is appointed by the Company&#146;s Board of Directors. </FONT></P>

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<A NAME=A063></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eligibility</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan provides for the grant to employees of the Company of &#147;Incentive Stock
Options,&#148; within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;), Nonqualified Stock Options to outside Directors and
consultants to the Company and stock appreciation rights (&#147;SARs&#148;). The Plan is
open to participation by any person or entity that renders bona fide services to the
Company, including, without limitation, (i) a person employed by the Company in a key
capacity; (ii) an officer or director (including advisory or other directors) of the
Company; and (iii) a person or company engaged by the Company as a consultant or advisor. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining the persons to whom Options or SARs shall be granted (hereinafter an
individual who receives a grant of an Option or SAR is referred to as the
&#147;Recipient&#148;) and the number of shares to be covered by each Option or SAR, the
Committee takes into account the duties of the respective persons, their past, present and
potential contributions to the success of the Company, and such other factors as the
Committee shall deem relevant to accomplish the purposes of the Plan. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
Recipient shall be eligible to receive more than one grant of an Option or SAR during the
term of the Plan. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without
amending the Plan, the Board of Directors may grant Options and SARs under the Plan to
employees of the Company who are foreign nationals or employed outside the United States,
or both, on such terms and conditions different from those specified in the Plan but
consistent with the purpose of the Plan, as it deems necessary and desirable to create
equitable opportunities given differences in tax laws of other countries. </FONT></P>




<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>25</P>

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<A NAME=A064></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination
of the Plan and Amendment</b></FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
options may be granted under the Plan after October 24, 2010. The Plan may be amended
consistent with applicable laws and regulations, suspended or terminated at any time by
the Committee. The Committee may decrease the number of shares subject to the Plan and may
increase such number but only as a consequence of a stock split, reorganization, merger,
recapitalization or other change in the corporate structure of the Company affecting all
shares of Common Stock, as more specifically explained in the Plan. No termination or
amendment of the Plan shall, without the consent of the Recipient of an existing Option or
SAR, adversely affect his rights under such Option or SAR. </FONT></P>

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<A NAME=A065></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Grant
of Options and SARs</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
option or SAR granted under the Plan shall be evidenced by a written agreement (the
&#147;Agreement&#148;) between the Company and the Recipient which shall state the number
of shares covered by the option or SAR; the exercise price for the option or the base
price for the SAR; and, the period during and times at which the option or SAR shall be
exercisable. The Fair Market Value of the Company&#146;s Common Stock on the date such
Option and SAR is granted shall be the closing price per share of Common Stock on the
American Stock Exchange on that day or if the Common Stock is not listed on a national
securities exchange it shall be determined by the Committee. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purchase price of a Nonqualified Stock Option may not be less than 85% of the Fair Market
Value of shares of Common Stock underlying such option and the Committee and the Recipient
shall also pay the full amount of any required Federal, state or local withholding tax.
The Committee may permit the Recipient to pay the withholding tax by having the Company
withhold Shares having a Fair Market Value at the time of exercise equal to the amount
required to be withheld. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purchase price of an Incentive Stock Option may not be less than 100% of the Fair Market
Value of shares of Common Stock underlying such option and must be exercisable within ten
years from the date it was granted. The aggregate Fair Market Value of the shares of
Common Stock underlying an Incentive Stock Option which are exercisable during any
calendar year during the term of such Option shall not exceed $100,000. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
purchase price of any Incentive Stock Option granted to any Employee of the Company who
owns more than 10% of the total combined voting power of all classes of stock of the
Company shall be 110% of the Fair Market Value of the shares of Common Stock underlying
such option on the date it is granted and such option must be exercisable within 5 years
from the date it was granted. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event any Option granted as an Incentive Stock Option fails to conform to the
applicable requirements, it shall be treated and honored by the Company as a Nonqualified
Stock Option. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
SAR may be granted separately, in tandem with or in addition to any option, and may be
granted before, simultaneously with or after the grant of an option hereunder. </FONT></P>

<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>26</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company may, in its sole discretion and without the consent of the Recipient, elect at any
time to convert any Option granted under the Plan to a SAR. In the event of such an
election, any converted SAR shall remain in effect until the Option involved would have
expired under the terms of the Agreement with the Recipient. The value of such a SAR shall
be determined using the Fair Market Value of the Shares subject to the Option on the date
the Option was first granted. Notice of such an election shall be provided to the
Recipient as soon as feasible after the date of the election. </FONT></P>

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<A NAME=A066></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise
of Option or SAR</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the exercise of an Option<B>, </B>payment of the option purchase price shall be paid in
full unless the Agreement permits installment payments. The purchase price for the option
shall be paid in cash, or in shares of Common Stock having a Fair Market Value equal to
such option price, or in property or in a combination of cash shares and property and,
subject to approval of the Committee, may be effected in whole or in part with funds
received from the Company at the time of exercise as a compensatory cash payment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
the exercise of an SAR, the Committee shall issue to the Recipient either (1) Shares of
Common Stock based on the Fair Market Value on the date of payment (with any fractional
Shares to be paid in cash), (2) cash or (3) a combination of Shares and cash, equal in
value to the amount payable under the SAR. Any cash payment to be made by the Company may,
as determined by the Committee in its sole discretion, be payable in installments over a
period of no more than 6 months. </FONT></P>

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<A NAME=A067></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination
of Association with the Company</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event a Recipient ceases to be an employee or Director of, or consultant to, the
Company (other than for reasons of disability retirement or death) all Options and SARs
granted to the Recipient prior to the date of termination may be exercised at any time
within three months after the date of termination, but in no event after the the term of
the Option or SAR if it expires prior to the end of that three month period. In the event
a Recipient&#146;s employment, consulting or other relationship is terminated for cause,
all Options and SARs previously granted to such Recipient to the extent not previously
exercised will terminate immediately. </FONT></P>

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<A NAME=A068></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Death,
Disability or Retirement</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
a Recipient retires or dies while he is associated with the Company or whose association
with the Company is terminated by reason of a permanent and total disability (as defined
in Section 22(e) (3) of the Code), any option or SAR granted to the Recipient may be
exercised by the Recipient or by the Recipient&#146;s estate or by a person who acquired
the right to exercise such options or SARs by reason of the death or Disability of the
Recipient, at any time within one year after the date of death, disability or retirement
of the Recipient unless the term of the Option or SAR expires prior to that time;
provided, however, that in the case of an Incentive Stock Option such one-year period
shall be limited to three months in the case of retirement. </FONT></P>




<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>27</P>

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<A NAME=A069></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Laws
and Regulations</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
obligation of the Company to issue and deliver shares following the exercise of an Option
or payment upon the exercise of an SAR under the Plan shall be subject to the condition
that the Company be satisfied that the sale and delivery thereof will not violate any
Federal or state securities laws or any other applicable laws, rules or regulations. </FONT></P>

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<A NAME=A070></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discretion
as to Awards</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee shall have absolute discretion to determine when and to whom grants of Options
or SARs under the Plan are to be made, and the number of shares and exercise prices to be
awarded. No person shall have any tacit or other right to an award of an Option or SAR
unless and until an explicit award under the Plan has been made. </FONT></P>

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<A NAME=A071></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nature
of the Plan</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan is strictly compensatory in nature and is not in the nature of savings, dividend
reinvestment, profit-sharing or pension plan. Accordingly, the Plan has no assets or funds
to be administrated or invested by its administrators. Please note that participants do
not and will not own any interest of any kind in the Plan itself. </FONT></P>

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<A NAME=A072></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tax Matters </FONT></H1>

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<A NAME=A073></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ERISA
Applicability</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan, the award shares and option shares issuable thereunder, are not subject to the
Employee Retirement Income Security Act of 1974, as amended. </FONT></P>

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<A NAME=A074></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal
Income Tax Consequences</b></FONT></P>

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<A NAME=A075></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recipients</b></FONT></P>

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<A NAME=A076></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options
granted under the Plan may be either Nonqualified Stock Options or Incentive Stock Options
qualifying under Section 422A of the Code. </FONT></P>

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<A NAME=A077></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Non Qualified Stock
Options </I></FONT></P>

<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>28</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
Recipient is not subject to Federal income tax upon the grant of a Nonqualified Stock
Option. At the time of exercise, the Recipient will realize compensation income (subject
to withholding) to the extent that the then Fair Market Value of the Option Shares exceeds
the purchase price of the Option. The amount of such income will constitute an addition to
the Recipient&#146;s tax basis in the Option Shares. Sale of the Shares will result in
capital gain or loss (long-term or short-term) depending on the Recipient&#146;s holding
period. The Company is entitled to a Federal tax deduction at the same time and to the
same extent that the Recipient realizes compensation income. </FONT></P>

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<A NAME=A078></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><i>Incentive Stock
Options </i></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options
granted under the Plan denominated as Incentive Stock Options are intended to constitute
incentive stock options under Section 422A of the Code. A Recipient is not subject to
Federal income tax upon either the grant or exercise of an Incentive Stock Option. If the
Recipient holds the shares acquired upon exercise for at least one year after issuance of
the Option Shares and until at least two years after grant of the Option (the
&#147;Requisite Holding Period&#148;), then the difference between the amount realized on
a subsequent sale or other taxable disposition of the shares and the option price will
constitute long-term capital gain or loss. To obtain favorable tax treatment, an Incentive
Stock Option must be exercised within three months after termination of employment (other
than by retirement, disability, or death) with the Company or a 50% subsidiary. To obtain
favorable tax treatment, an Incentive Stock Option must be exercised within three months
of retirement or within one year of cessation of employment for disability (with no
limitation in the case of death), notwithstanding any longer exercise period permitted
under the terms of the Plan. The Company will not be entitled to a Federal tax deduction
with respect to the grant or exercise of the Incentive Stock Option. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Recipient sells the Option Shares acquired under an Incentive Stock Option before the
Requisite Holding Period, he or she will be deemed to have made a &#147;disqualifying
disposition&#148; of the shares and will realize compensation income in the year of
disposition equal to the lesser of the fair market value of the shares at exercise or the
amount realized on their disposition over the option price of the shares. (However, if the
disposition is by gift or by sale to a related party, the compensation income must be
measured by the value of the shares at exercise over the option price.) Any gain
recognized upon a disqualifying disposition in excess of the ordinary income portion will
constitute either short-term or long-term capital gain. In the event of a disqualifying
disposition, the Company will be entitled to a Federal tax deduction in the amount of the
compensation income realized by the Recipient. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the federal income tax consequences described above, a Recipient may be
subject to the alternative minimum tax, which is payable to the extent it exceeds the
Recipient&#146;s regular tax. For this purpose, upon the exercise of an Incentive Stock
Option, the excess of the Fair Market Value of the Option Shares over the exercise price
for such shares is a tax preference item. In addition, the Recipient&#146;s basis in the
Option Shares is increased by such amount for purposes of computing the gain or loss on
the disposition of the shares for alternative minimum tax purposes. If a Recipient is
required to pay an alternative minimum tax, the amount of such tax which is attributable
to deferral preferences (including the incentive stock option preference) is allowed as a
credit against the Recipient&#146;s regular tax liability in subsequent years. To the
extent the credit is not used, it is carried forward. </FONT></P>

<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>29</P>
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<A NAME=A079></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SARs </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SARs
may be awarded with respect to both Incentive Stock Options and Nonqualified Stock Options
under the Plan. A Recipient is not taxed upon the grant of an SAR. A Recipient exercising
an SAR for cash will realize compensation income (subject to withholding) in the amount of
the cash received. The Company is entitled to a tax deduction at the same time and to the
same extent that the Recipient realizes compensation income. </FONT></P>

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<A NAME=A080></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company</b></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
grant and exercise of Incentive Stock Options and Nonqualified Stock Options under the
Plan generally have no direct tax consequences to the Company. The Company generally will
be entitled to a compensation deduction with respect to any ordinary income recognized by
a Recipient including income that results from the exercise of a Nonqualified Stock
Option, SAR or a disqualifying disposition of an Incentive Stock Option. Any such
deduction will be subject to the limitations of Section 162(m) of the Code which generally
disallows a public company&#146;s tax deduction for compensation to covered employees in
excess of $ 1 million in any tax year beginning on or after January 1, 2004. Compensation
that qualifies as &#147;performance-based compensation&#148; is excluded from the $1
million deductibility cap, and therefore remains fully deductible by the company that pays
it. The Company believes that the options and SAR&#146;s it grants under the Plan will be
considered &#147;performance-based&#148; and not subject to the deduction limitations of
Section 162(m). Future changes in Section 162(m) or the regulations thereunder may
adversely affect the Company&#146;s ability to ensure that grants under the Plan will
qualify as &#147;performance-based compensation&#148; that is fully deductible by the
Company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
foregoing is only a summary of the effect of federal income taxation upon the Recipient
and the Company with respect to grants under the Plan. It does not purport to be complete
and does not discuss, among other things, the tax consequences arising in the event of a
Recipient&#146;s death or the income tax laws of the municipality or state under which the
Recipient&#146;s income may be taxable. </FONT></P>

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<A NAME=A081></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NEW PLAN BENEFITS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
than the options previously granted under the Plan as set forth above, any future grants
under the Plan are subject to the discretion of the Committee and therefore, are not
determinable at this time. Each grant of an Incentive Stock Option will be made at fair
market value on the date of the grant; the Company expects that each award other than an
Incentive Stock Option will be made with an exercise price at or near the market value of
the Company&#146;s Common Stock on the day of grant. The value of each such grant depends
on the fair market value of the Company&#146;s Common Stock on the day of exercise and
therefore, can not be determined or estimated at this time. Since neither future grants or
the value of such grants under the Plan can be determined at this time a new benefits
table, as described in the federal proxy rules, is not provided. </FONT></P>



<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>30</P>

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<A NAME=A082></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EQUITY COMPENSATION PLAN
INFORMATION </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides information regarding the number of shares of Common Stock that
were subject to outstanding stock options or other compensation plan grants and awards at
the end of Fiscal 2004. As of the end of Fiscal 2004, the only equity compensation awards
granted by the Company have been pursuant to the Plan. </FONT></P>

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     <HR NOSHADE COLOR=#000000 SIZE=1>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=760>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=26% ALIGN=LEFT>Plan Category</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=22% ALIGN=LEFT>Number of securities</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=22% ALIGN=LEFT>Weighted-average</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=22% ALIGN=LEFT>Number of securities</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>to be issued upon</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>exercise price of</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>remaining available</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>exercise of</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>outstanding, options,</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>for future issuance</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>outstanding options,</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>warrants and rights</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>under equity</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>warrants and rights</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>compensation plans</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>(excluding securities</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>reflected in column</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>(a))</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>(a)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>(b)</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>(c)</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Equity compensation</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>plans approved by</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>security holders</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>295,153</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>$1.26</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>704,847</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Equity compensation</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>plans not approved</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>by security holders</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>0</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>N/A</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>0</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>Total</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>295,153</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>$1.26</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT>704,847</TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
</TABLE>



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<A NAME=A083></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BOARD RECOMMENDATION AND
VOTE REQUIRED </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board deems approval of the amendment to the Plan to be in the best interests of the
Company and therefore, recommends a vote FOR the amendment to the Plan. If a quorum is
present at the annual meeting, the amendment to the Plan will be approved upon the
affirmative vote by a majority of votes cast on the proposal, provided that the total
votes cast on the proposals represents a majority of the shares entitled to vote on the
proposal. Unless otherwise directed by the stockholder giving the proxy, the proxy will be
voted for the approval of the amendment to the Plan. If a broker indicates on the proxy
that it does not have discretionary authority as to certain shares to vote on a particular
matter (i.e., a &#147;broker non-vote&#148;), those shares will not be considered as
present and entitled to vote with respect to that matter. An abstention from voting by a
stockholder present in person or by proxy at the meeting has the same legal effect as a
vote &#147;against&#148; Proposal No. 2 because it represents a share present or
represented at the meeting and entitled to vote, thereby increasing the number of
affirmative votes required to approve this proposal. </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>31</P>

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<A NAME=A084></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL NO. 3 </FONT></H1>

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<A NAME=A085></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>APPROVAL OF A PLAN FOR </FONT></H1>

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<A NAME=A086></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMPENSATION OF
INDEPENDENT DIRECTORS </FONT></H1>

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<A NAME=A087></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GENERAL </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Companycs Board of Directors has adopted a resolution approving, declaring advisable and
recommending to the stockholders for their approval, a proposal to approve and adopt a
plan or arrangement (the &#147;Plan&#148;) providing that the Board of Directors may in
its discretion from time to time to compensate independent outside directors either in
cash or in stock, provided that such compensation does not exceed the limits of
compensation for determination of the independence of directors under rules and
regulations of the Securities and Exchange Commission or the American Stock Exchange
(&#147;AMEX&#148;). The approval of such a plan or arrangement by the shareholders is
necessary to comply with the AMEX rule that any plan or arrangement whereby any director
may be compensated in stock or other equity-based compensation requires prior shareholder
approval, and to specifically allow grants to independent directors in the future under
the Plan without additional shareholder action or approval. </FONT></P>

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<A NAME=A088></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REASONS FOR THE PLAN </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors has approved the Plan and recommends its approval by the stockholders
because such a plan is viewed as a minimum level of potential compensation that is
necessary in order for the Company to attract or cause qualified individuals to serve on
the Company&#146;s Board of Directors in the capacity of independent directors, with the
attendant duties and obligations of service on the Company&#146;s Audit,
Compensation/Stock Option, and Nominating and Corporate Governance committees. The
corporate governance requirements of the Sarbanes-Oxley Act, the SEC and the American
Stock Exchange emphasize the need and importance of the Company to be able to attract and
retain qualified independent directors. Without such independent directors the
Company&#146;s ability to comply with the foregoing rules and regulations would be
severely and negatively impacted. The Company does not presently compensate any director,
whether or not such director is considered independent, for service on the Board or on any
committee of the Board. </FONT></P>






<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>32</P>

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<A NAME=A089></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPERATION OF THE PLAN </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan will operate as follows: </FONT></P>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
any time, and from time to time, the Board of Directors may grant compensation to any or
all independent directors serving on the Company&#146;s Board of Directors as the Board
may deem appropriate in the form of cash or Company stock, provided that the value of such
compensation does not exceed the limits of compensation for determination of the
independence of directors under rules and regulations of the Securities and Exchange
Commission or the American Stock Exchange (&#147;AMEX&#148;) or such other exchange upon
which shares of the Company may be listed. The Board may, but is not required, to consider
the recommendations of the Compensation/Stock Option Committee with regard to any such
cash or equity compensation to be awarded. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
determination to grant compensation in cash or in stock or combination thereof shall be
made by a majority vote of the directors present at any regular or special meeting of the
Board of Directors or in an action taken without meeting as provided by state law. Any
independent director may, but shall not be required to, abstain from the vote upon any
such determination of grant that may be a grant to that director; provided however that
all directors shall vote on such determination if one or more abstention(s) by independent
director(s) for this reason would reduce the number of directors present and voting to
less than a majority of the directors present at the meeting. No vote by any independent
director on any such proposal whether voluntary or required by the previous sentence shall
be considered to be a conflict of interest under state law sufficient to invalidate the
determination by the Board to make the grant. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors may award such cash or stock to any number of independent directors as
it deems appropriate, and may but is not required to award cash or stock to all
independent directors at such time any award to one or more independent directors is made.
Such awards may be for past, present, or future service as the Board in its discretion may
determine to be appropriate. Such awards may be made at any time, and from time to time in
the future without need for any additional shareholder approval as to any future award
under this Plan, as the Board in its discretion shall deem appropriate and necessary to
adequately compensate one or more independent directors for service on the Board or its
committees. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors is specifically authorized to issue upon shareholder approval of this
Plan, 100,000 shares to Clarke H. Bailey; 100,000 shares to John Clendening; and 50,000
shares to Neal Harding in replacement of those shares previously authorized by the Board
for service as independent directors, issued by the Company in December 2004, and returned
to the Company as requested and thereafter cancelled by the Company. This authorization
shall not prevent or affect the issuance of any additional cash or shares to these named
persons as the Board may from time to time in the future deem to be appropriate. </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>33</P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
award of cash or stock pursuant to the Plan shall not affect any determination by the
Compensation/Stock Option Committee to grant options to any independent director under the
Tengasco, Inc. Stock Incentive Plan administered by that committee. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
shares issued pursuant to an award under the Plan shall be unregistered shares and bear
appropriate restrictions upon transfer, unless by further specific determination of the
Board any stock to be awarded is to be an award of stock that is registered under federal
securities laws or has become free of restrictions upon transfer by operation of
securities laws (e.g. stock purchased by the Company on the open market). </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan shall terminate on the later of July 19, 2015 or ten years following the additional
approval of the Plan by the shareholders of the Company at any annual or special meeting
of the shareholders held after July 19, 2005. </FONT></P>

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<A NAME=A090></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BOARD RECOMMENDATION AND
VOTE REQUIRED </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board believes that approval of the proposed plan is in the best interests of the Company
and recommends that you vote FOR the proposal. The affirmative vote of the holders of a
majority of the shares present and voting at the meeting in person or by proxy will be
required to approve the Plan. Unless otherwise directed by the stockholder giving the
proxy, the proxy will be voted for the approval of the Plan. Shares voted as abstaining
will count as votes cast. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter (i.e., a
&#147;broker non-vote&#148;), those shares will not be considered as present and entitled
to vote with respect to that matter. An abstention from voting by a stockholder present in
person or by proxy at the meeting has the same legal effect as a vote &#147;against&#148;
the Plan, because it represents a share present or represented at the meeting and entitled
to vote, thereby increasing the number of affirmative votes required to approve this
proposal. </FONT></P>





<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>34</P>

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<A NAME=A091></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL NO. 4 </FONT></H1>

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<A NAME=A092></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RATIFICATION OF
SELECTION OF </FONT></H1>

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<A NAME=A093></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RODEFER MOSS &amp; CO,
PLLC AS INDEPENDENT AUDITORS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to its review of outside audit requirements, the Audit Committee of the Board of Directors
of the Company requested proposals for its independent auditor services for the year
ending December 31, 2005 (&#147;Fiscal 2005&#148;). After reviewing these proposals the
Audit Committee on May 31, 2005 determined to engage Rodefer Moss &amp; Co, PLLC, which
has one of its offices in Knoxville, Tennessee, as independent certified public
accountants, to audit the accounts for the Company for Fiscal 2005. The Company&#146;s
prior accountants, BDO Seidman, LLP had audited the Company&#146;s financial statements
for the fiscal years ended December 31, 2003 and 2004. The Company is advised that neither
Rodefer Moss &amp; Co, PLLC nor any of its partners has any material direct or indirect
relationship with the Company. The Audit Committee considers Rodefer Moss &amp; Co, PLLC
to be well qualified for the function of serving as the Company&#146;s auditors. Tennessee
law does not require the approval of the selection of auditors by the Company&#146;s
stockholders, but in view of the importance of the financial statements to stockholders,
the Board of Directors deems it desirable that they pass upon its selection of auditors.
In the event the stockholders disapprove of the selection, the Board of Directors will
consider the selection of other auditors. </FONT></P>

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<A NAME=A094></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Previous Independent
Auditors </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          BDO Seidman LLP&#146;s audit reports on the financial statements for the years
          ended December 31, 2003 and 2004 were qualified for an uncertainty as to the
          Company&#146;s ability to continue as a going concern. BDO Seidman LLP&#146;s
          audit reports for those periods contained no adverse opinion or disclaimer of
          opinion and were not qualified or modified as to audit scope or accounting
          principles. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          During the two most recent fiscal years ended December 31, 2003 and 2004 and the
          subsequent interim period through May 31, 2005, there were no disagreements with
          BDO Seidman LLP on any matter of accounting principle or practice, financial
          statement disclosure, or auditing scope or procedure which, if not resolved to
          BDO Seidman LLP&#146;s satisfaction, would have caused them to make reference to
          the subject matter of the disagreement in connection with their reports. </FONT></P>




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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          None of the reportable events set forth in Item 304(a)(1)(v) of Regulation S-K
          occurred within the years ended December 31, 2003 and 2004 or within the period
          from January 1, 2005 through May 31, 2005 except, as previously reported in the
          Company&#146;s Quarterly Report on Form 10-Q for the quarter ending September
          30, 2004 and in its Annual Report on Form 10-K for the year ended December 31,
          2004 for one matter in 2004 that the Company&#146;s disclosure controls and
          procedures were not effective with respect to that matter to ensure that
          material information was recorded, processed, summarized and reported by
          management of the</FONT></P>





<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>35</P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Company on a timely basis in order to comply with the
          Company&#146;s disclosure obligations under the Securities Exchange Act of 1934,
          and the rules and regulations thereunder. The matter involved an error in the
          calculation of the estimated fair value of the Company&#146;s mandatory
          preferred stock for presentation in accordance with Statement of Financial
          Accounting Standard No. 150 &#147;Accounting for Certain Financial Instruments
          with Characteristics of both Liabilities and Equity.&#148; Management noted that
          the matter (i) related principally to the implementation of complex and new
          calculations under a newly implemented accounting standard, and (ii) that the
          error described did not result from the failure of the Company&#146;s disclosure
          controls and procedures to make known to the appropriate officials and auditors
          the facts concerning the Company&#146;s convertible preferred stock. Management
          after consulting with BDO determined that this could be remedied by continuing
          education and professional development of accounting staff on&nbsp;new
          accounting pronouncements and their application would be sufficient to prevent
          any similar reoccurrence. The Company is continuing to provide necessary and
          appropriate educational and professional development and such efforts have
          remediated the material weakness described herein. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Audit Committee of the Board of Directors participated in and approved the
          decision to change accountants. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          The Company has provided BDO Seidman LLP with a copy of the foregoing statements
          and requested that BDO furnish it with a letter addressed to the Securities and
          Exchange Commission stating whether or not it agrees with such statements. A
          copy of such letter dated June 3, 2005 is attached hereto as Appendix B. </FONT></P>

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<A NAME=A095></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>New Independent
Accountants </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to its engagement of Rodefer Moss &amp; Co, PLLC as its new independent auditors, the
Company did not consult with Rodefer Moss &amp; Co, PLLC regarding (i) the application of
accounting principles to a specified transaction, either completed or proposed; (ii) the
type of audit opinion that might be rendered by Roderfer Moss &amp; Co, PLLC on the
Company&#146;s financial statements; or (iii) any other matter that was the subject of a
disagreement between the Company and its former auditors as described in Item
304(a)(1)(iv) of Regulation S-K or a reportable event as that term is defined in Item
304(a)(1)(v). </FONT></P>

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<A NAME=A096></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AUDIT AND NON-AUDIT FEES </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents the fees for professional audit services rendered by the
Company&#146;s prior independent accountants, BDO Seidman, LLP, for the audit of the
Company&#146;s annual consolidated financial statements for the fiscal years ended
December 31, 2004 and December 31, 2003, and fees for other services rendered by BDO
Seidman, LLP during those periods: </FONT></P>


<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>36</P>


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<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH align= left COLSPAN=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fee Category<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Fiscal 2004<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3>Fiscal 2003<HR WIDTH=95% SIZE=1 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=74% ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Fees</TD>
     <TD WIDTH=1% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>$</TD><TD WIDTH=8% ALIGN=RIGHT> 155,000</TD>
        <TD WIDTH=3% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=1% ALIGN=RIGHT>$</TD><TD WIDTH=8% ALIGN=RIGHT> 209,310</TD>
        <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=5 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-Related Fees</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT>       0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT>       0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=5 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Fees</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT>       0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT>       0</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=5 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Other Fees</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT>  12,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT>   7,250</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=5 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Fees</TD><TD ALIGN=LEFT>&nbsp;</TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT> 167,000</TD>
        <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=RIGHT>$</TD><TD ALIGN=RIGHT> 216,560</TD>
        <TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=2 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD>
     <TD COLSPAN=5 ALIGN=RIGHT><HR NOSHADE COLOR=#000000 SIZE=1></TD><TD></TD></TR>
</TABLE>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit
fees include fees related to the services rendered in connection with the annual audit of
the Company&#146;s consolidated financial statements, the quarterly reviews of the
Company&#146;s quarterly reports on Form 10-Q and the reviews of and other services
related to registration statements and other offering memoranda. The audit fees in 2004
were substantially less than in 2003 due to the settlement of the Company&#146;s
litigation with Bank One in May 2004. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-related
fees are for assurance and related services by the principal accountants that are
reasonably related to the performance of the audit or review of the Company&#146;s
financial statements. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax
Fees include (i) tax compliance, (ii) tax advice, (iii) tax planning and (iv) tax
reporting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
Other Fees includes fees for all other services provided by the principal accountants not
covered in the other categories such as litigation support, etc. In 2004, the amount of
fees in this category were higher than in 2003 due to fees for services performed by BDO
Seidman, LLP in connection with the Company&#146;s filling of a registration statement on
Form S-1 with the SEC for the Rights Offering which offering was completed in March 2004. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of the services for 2003 and 2004 were performed by the full-time, permanent employees of
BDO Seidman, LLP. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of the 2004 services described above were approved by the Audit Committee pursuant to the
SEC rule that requires audit committee pre-approval of audit and non-audit services
provided by the Company&#146;s independent auditors to the extent that rule was applicable
during fiscal year 2004. The Audit Committee considered whether the provisions of such
services, including non-audit services, by BDO Seidman, LLP was compatible with
maintaining BDO Seidman, LLP&#146;s independence and concluded that it was. </FONT></P>





<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>37</P>

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<A NAME=A097></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BOARD RECOMMENDATION AND
VOTE REQUIRED </FONT></H1>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors recommends that you vote in favor of the above proposal to ratify the
appointment of Rodefer Moss &amp; Co, PLLC as independent auditors of the Company for
Fiscal 2005. </FONT></P>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A representative of Rodefer Moss
&amp; Co, PLLC is expected to be present at the Annual Meeting with the opportunity to
make a statement if he desires to do so, and is expected to be available to respond to
appropriate questions. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratification
will require the affirmative vote of a majority of the shares present and voting at the
meeting in person or by proxy. In the event ratification is not provided, the Audit
Committee and the Board of Directors will review the future selection of the
Company&#146;s independent auditors. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise directed by the stockholder giving the proxy, the proxy will be voted for the
ratification of the selection by the Board of Directors of Rodefer Moss &amp; Co, PLLC as
the Company&#146;s independent certified public accountants for Fiscal 2005. Shares voted
as abstaining will count as votes cast. If a broker indicates on the proxy that it does
not have discretionary authority as to certain shares to vote on a particular matter
(i.e., a &#147;broker non-vote&#148;), those shares will not be considered as present and
entitled to vote with respect to that matter. An abstention from voting by a stockholder
present in person or by proxy at the meeting has the same legal effect as a vote
&#147;against&#148; Proposal No. 3 because it represents a share present or represented at
the meeting and entitled to vote, thereby increasing the number of affirmative votes
required to approve this proposal. </FONT></P>

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<A NAME=A098></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>STOCKHOLDERS&#146;
PROPOSALS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proposals
of stockholders intended to be presented at the 2006 annual meeting must be received in
writing, by the President of the Company at its offices by March 11, 2006 in order to be
considered for inclusion in the Company&#146;s proxy statement relating to that meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEC
rules and regulations provide that if the date of the Company&#146;s 2006 Annual Meeting
is advanced or delayed more than 30 days from the date of the 2005 Annual Meeting,
stockholder proposals intended to be included in the proxy materials for the 2006 Annual
Meeting must be received by the Company within a reasonable time before the Company begins
to print and mail the proxy materials for the 2006 Annual Meeting. Upon determination by
the Company that the date of the 2006 Annual Meeting will be advanced or delayed by more
than 30 days from the date of the 2005 Annual Meeting, the Company will disclose such
change in the earliest possible Quarterly Report on Form 10-Q. </FONT></P>






<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By Order of the Board of Directors<br><br>Cary V. Sorensen, Secretary</FONT></P>



  <DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>37</P>

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<A NAME=A099></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TENGASCO, INC. </FONT></H1>

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<A NAME=A100></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS PROXY IS
SOLICITED ON BEHALF </FONT></H1>

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<A NAME=A101></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OF THE BOARD OF
DIRECTORS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned hereby appoints Jeffrey R. Bailey and Cary V. Sorensen as proxies (the
&#147;Proxies&#148;), each with power of substitution and resubstitution, to vote all
shares of Common Stock, $.001 par value per share, of Tengasco, Inc. (the
&#147;Company&#148;) held of record by the undersigned on June 1, 2005 at the Annual
Meeting of stockholders to be held at the Homewood Suites by Hilton, 10935 Turkey Drive,
Knoxville, Tennessee, on Tuesday, July 19, 2005, at 10:00 A.M. local time, or at any
adjournments thereof, as directed below, and in their discretion on all other matters
coming before the meeting or any adjournments thereof. </FONT></P>

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<A NAME=A102></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please mark boxes / / in
blue or black ink. </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.&nbsp;&nbsp;&nbsp;&nbsp;
          Election of Directors: Clarke H. Bailey, Jeffrey R. Bailey, John A. Clendening,
          Neal F. Harding, Carlos P. Salas and Peter E. Salas. </FONT></P>

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<A NAME=A103></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Mark
only one of the two boxes for this item)</I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>/
/</B> VOTE FOR all nominees named above except those who may be named on these two lines: </FONT></P>

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     <HR ALIGN=CENTER WIDTH=100% SIZE=1 NOSHADE><br>

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     <HR ALIGN=CENTER WIDTH=100% SIZE=1 NOSHADE>

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<A NAME=A104></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(OR) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>/
/</B> VOTE WITHHELD as to all nominees named above. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.&nbsp;&nbsp;&nbsp;&nbsp;
          Proposal to approve an amendment to the Tengasco, Inc. Stock Incentive Plan
          which will increase the number of authorized shares of common stock that can be
          issued under the Plan from 1,000,000 to 3,500,000:<br><br> FOR      /   /    AGAINST  /   /   ABSTAIN  /   / </FONT></P>




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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.&nbsp;&nbsp;&nbsp;&nbsp;
          Proposal to approve a plan to compensate the Company&#146;s independent
          directors:<br> <br>FOR      /   /    AGAINST  /   /   ABSTAIN  /   /</FONT></P>



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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.&nbsp;&nbsp;&nbsp;&nbsp;
          Proposal to ratify appointment of Rodefer Moss &amp; Co, PLLC as the
          Company&#146;s independent certified public accountants for Fiscal 2005:<br><br> FOR      /   /    AGAINST  /   /   ABSTAIN  /   / </FONT></P>









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              <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.&nbsp;&nbsp;&nbsp;&nbsp;
                    In their discretion, the Proxies are authorized to vote upon such other business
                    as may properly come before the meeting. </FONT></P>
                    <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When
properly executed, this Proxy will be voted as directed. If no direction is made, this
Proxy will be voted &#147;FOR&#148; Proposals 1, 2 , 3 and 4. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Please
mark, date, sign and return this Proxy promptly in the enclosed envelope.</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Please
sign exactly as name appears hereon. When shares are held by joint tenants, both should
sign. When signing as attorney or executor, administrator, trustee or guardian, please
give your full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in partnership name
by authorized person.</B> </FONT></P>









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     <TD></TD>
     <TD></TD>
     <TD></TD></TR>
<TR VALIGN="TOP">
     <TD></TD>
     <TD></TD>
     <TD></TD></TR>
<TR VALIGN="TOP">
     <TD>Dated:<HR ALIGN=left WIDTH=30% SIZE=1 NOSHADE>&nbsp;,2005<br><br>X<HR ALIGN=left WIDTH=30% SIZE=1 NOSHADE><br>Signature<br>X
<HR ALIGN=left WIDTH=30% SIZE=1 NOSHADE><br>Print Name(s)<br>X<HR ALIGN=left WIDTH=30% SIZE=1 NOSHADE><br> Signature, if held jointly
</TD>
     <TD></TD>
     <TD></TD></TR>
</TABLE>



<DIV STYLE="page-break-after:always"></DIV><P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT>38</P>

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               <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(1)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Unless otherwise stated, all shares of Common Stock are directly held with sole
                    voting and dispositive power. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(2)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Consists of 16,244,452 shares held directly by Dolphin Offshore Partners, L.P.
                    (&#147;Dolphin&#148;) of which Peter E. Salas, a Director of the Company, is the
                    controlling person; a warrant held by Dolphin to purchase 10,500 shares at $7.98
                    per share; 117,188 shares underlying 9,000 shares of the Company&#146;s Series B
                    8% Cumulative Convertible Preferred Stock held directly by Dolphin; and, 168,000
                    shares held directly by Peter E. Salas. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(3)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Ownership of shares reported on Schedule 13F filed with the SEC by member of a
                    group consisting of SC Fundamental Value Fund, L.P., SC Fundamental LLC, SC-BVI
                    Partners, PMC-BVI, Inc., SC Fundamental Value BVI, Inc., Peter M. Collery and
                    Neil H. Koffler. This group initially reported its ownership on a Schedule 13G
                    filed with the SEC. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(4)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     These computations are based upon 48,677,828 shares of common stock being
                    outstanding as of June 1, 2005, the Record Date, and as to each shareholder, as
                    it may pertain, assumes the exercise of options or warrants or the conversion of
                    convertible debt or preferred stock granted or held by such shareholder as of
                    June 1, 2005. Unless otherwise stated, all shares of common stock are directly
                    held with sole voting and dispositive power. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(5)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Consists of 76,287 shares held directly and an option to purchase 73,125
                    shares. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>




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                    <TR VALIGN=TOP>
                    <TD ALIGN=left WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <SUP>(6)</SUP>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Consists of shares held directly.</FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>




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               <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
                    <TR VALIGN=TOP>
                    <TD ALIGN=left WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <SUP>(7)</SUP>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Consists of shares held directly. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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               <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(8)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Consists of 168,000 shares held directly, 16,244,452 shares held directly by
                    Dolphin Offshore Partners, L.P. (&#147;Dolphin&#148;) of which Peter E. Salas is
                    the controlling person; a warrant held by Dolphin to purchase 10,500 shares at
                    $7.98 per share; and, 117,188 shares underlying 9,000 shares of the
                    Company&#146;s Series B 8% Cumulative Convertible Preferred Stock held by
                    Dolphin which is convertible into the Company&#146;s Common Stock. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(9)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Consists of 7,696 shares held directly and options to purchase 13,125 shares.
                    </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>






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               <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
                    <TR VALIGN=TOP>
                    <TD ALIGN=left WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)</SUP>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Consists of 100 shares held directly and options to purchase
                    69,187shares. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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               <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(11)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Consists of shares underlying options. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(12)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Consists of shares held directly and indirectly by management, shares held by
                    Dolphin, 203,312 shares underlying options, 10,500 shares underlying warrants
                    and 117,188 shares underlying convertible preferred stock. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(13)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Number of shares underlying options has been retroactively adjusted for a 5%
                    stock dividend declared by the Company as of September 4, 2001. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(14)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Malcolm E. Ratliff served as the Company&#146;s Chief Executive Officer
                    throughout 2002. Richard T. Williams replaced Mr. Ratliff as Chief Executive
                    Officer on February 3, 2003 and continued in that position until he resigned as
                    of December 31, 2004. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(15)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                     Unexercised options are in-the-money if the fair market value of the underlying
                    securities exceeds the exercise price of the option. The fair market value of
                    the Common Stock was $0.26 per share on December 31, 2004, as reported by the
                    American Stock Exchange. Prior to his becoming Chief Executive Officer of the
                    Company, Dr. Williams on August 5, 2002 was granted an option to purchase 13,125
                    shares of the Company&#146;s common stock at a price of $2.69 per shares. That
                    option expires on August 4, 2005. Since the exercise price of shares underlying that option had a negative value as of December 31, 2004 they are not included
in this chart.  </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(16)</SUP> </FONT></TD>
                    <TD ALIGN=LEFT WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Value realized in dollars is based upon the difference
between the fair market value of the underlying securities on the date of
exercise, and the exercise price of the option. On February 25, 2004, Dr. Williams
exercised his option to the extent of purchasing 50,000 shares of the Company&#146;s
common stock at $0.50 per share. The closing price of the Company&#146;s common stock on
February 25, 2004 as reported on by the American Stock Exchange was $0.67 per share.</FONT></TD>
</TR>
</TABLE>
<BR>


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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
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               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(17)</SUP>
               Consists of 352,012 shares purchased directly with his spouse and 60,445 shares
               purchased by a limited liability company. The shares purchased by the limited
               liability company have been adjusted to reflect Mr. Devereux&#146;s beneficial
               ownership interest in the shares purchased by the limited liability company. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
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               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(18)</SUP>
               Peter E. Salas, a Director of the Company, is the general partner and
               controlling person of Dolphin Offshore Partners, L.P. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD ALIGN=RIGHT WIDTH=5%></TD>
               <TD WIDTH=95%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>(19)</SUP>
               Consists of 14,104,732 shares purchased directly by Dolphin Offshore Partners,
               L.P. and 144,000 shares purchased by Peter E. Salas. </FONT></P></TD>
               </TR>
               </TABLE>
               <BR>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>bdo_letter.htm
<DESCRIPTION>APPENDIX B BDO CONSENT LETTER
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>
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<A NAME=A001></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Appendix B </FONT></P>

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<A NAME=A002></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(BDO SEIDMAN, LLP
LETTERHEAD) </FONT></P>

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<A NAME=A003></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>June 3, 2005 </FONT></P>

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<A NAME=A004></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Securities and Exchange
Commission100 <BR>F Street, N.E.Washington, <BR>D.C. 20549-7561 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have been furnished with a copy of
the response to Item 4.01 of Form 8-K for the event that occurred on May 31, 2005, to be
filed by our former client, Tengasco, Inc. We agree with the statements made in response
to that Item insofar as they relate to our Firm. </FONT></P>

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<A NAME=A005></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Very truly yours, </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<A NAME=A006></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>s/BDO Seidman, LLP </FONT></P>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>stock_amend.htm
<DESCRIPTION>APPENDIX A STOCK PLAN AMENDMENT
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
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<A NAME=A001></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Appendix A </FONT></H1>

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<A NAME=A002></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2005 AMENDMENT TO THE </FONT></P>

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<A NAME=A003></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TENGASCO, INC. STOCK
INCENTIVE PLAN </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Tengasco, Inc. Stock Incentive Plan (the &#147;Plan&#148;) is hereby amended as follows: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Paragraph
5.1(a) is hereby amended to provide that the aggregate number of shares of common stock,
$.001 par value of Tengasco, Inc. (the &#147;Company&#148;) as to which options and stock
appreciation rights may be granted from time to time under the Plan shall be increased
from 1,000,000 to 3,500,000. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
amendment to the Plan was approved by the Board of Directors of the Company on May 19,
2005. If this Amendment is not approved by the shareholders of the Company within 12
months of the date the Amendment was approved by the Board of Directors of the Company as
required by Section 411(b)(1) of the Internal Revenue Code, this Amendment and any options
granted thereunder shall be and remain effective, but the reference to Incentive Stock
Options in the Plan shall be deleted and all options granted pursuant to this Amendment
shall be Non-Qualified Stock Options pursuant to Article 6 of the Plan. </FONT></P>
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<TYPE>EX-99
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<FILENAME>coverpage.htm
<DESCRIPTION>COVER PAGE TO PROXY STATEMENT
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>SCHEDULE 14A
INFORMATION </FONT></H1>

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<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>PROXY STATEMENT
PURSUANT TO SECTION 14(a)OF <BR>THE SECURITIES EXCHANGE ACT OF 1934 </FONT></H1>

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<A NAME=A003></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Filed by the Registrant
/X/ </FONT></H1>

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<A NAME=A004></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Filed by a Party other
than the Registrant / / </FONT></H1>

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<A NAME=A005></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Check the Appropriate
Box:/ <BR>/Preliminary Proxy Statement </FONT></H1>

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<A NAME=A006></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>/ /Confidential for Use
of Commission Only <BR>/x/Definitive Proxy Statement/ <BR>/Definitive Additional Materials </FONT></H1>

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<A NAME=A007></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>/ /Soliciting Materials Pursuant
to &sect;240.14a-11(c) or &sect;240.14a-12 </FONT></H1>

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<A NAME=A008></A>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TENGASCO,
INC. </b> </FONT></P>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Name of Registrant as
Specified in its Charter) </FONT></H1>

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<P align =center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(Name
of person(s) Filing Proxy Statement if other than Registrant)</B> </FONT></P>

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<A NAME=A010></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Payment of Filing Fee
(Check the appropriate box) <BR>/x/ No Fee Required </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>/ / $125 per Exchange Act
Rules-O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. / / Fee
computed on table below per Exchange Act Rules14A-6(i)(4) and O-11.</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<B>1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Title of each class of securities to which each transaction applies:</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<B>2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Aggregate number of securities to which transaction applies:</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<B>3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Per unit price or other underlying value of transaction computed pursuant to
          Exchange Act Rule O-11 (Set forth the amount on which the filing fee is
          calculated and state how it was determined)</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<B>4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          Proposed maximum aggregate value of transaction.</B> </FONT></P>

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<A NAME=A011></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Total fee paid.</b> </FONT></P>

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<A NAME=A012></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>/ / Fee paid previously
by written preliminary materials. </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>/ / check box if any part of the
fee is offset as provided by Exhange Act Rule O-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1)&nbsp;&nbsp;&nbsp;&nbsp;
          Amount Previously Paid <U> </U>2) Form Schedule or Registration Statement
          No.:<U> </U>3) Filing Party: <U> </U>4) Date Filed: <U></U></B> </FONT></P>
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