This "costless collar" agreement was effective August 1, 2009 through July 31, 2011 and had a $60.00 per barrel floor and $81.50 per barrel cap on a volume of 9,500 barrels per month during the period from August 1, 2009 through December 31, 2010, and 7,375 barrels per month from January 1, 2011 through July 31, 2011. The prices referenced in this agreement were WTI NYMEX. While the agreement was based on WTI NYMEX prices, the Company receives a price based on Kansas Common plus bonus, which results in a price approximately $7 per barrel less than current WTI NYMEX prices.

Under the "costless collar" agreement, no payment was made or received by the Company, as long as the settlement price was between the floor price and cap price ("within the collar"). However, if the settlement price was above the cap, the Company was required to pay the counterparty an amount equal to the excess of the settlement price over the cap times the monthly volumes hedged. If the settlement price was below the floor, the counterparty was required to pay the Company the deficit of the settlement price below the floor times the monthly volumes hedged. As of August 1 2011, the "costless collar" agreement had expired.

On June 27, 2011 the Company entered into an agreement with Cargill, Incorporated for the period from August 1, 2011 through December 31, 2012 ("Cargill Agreement"). The agreement provides to the Company a $65 per barrel floor on a stated quantity of 10,000 barrels per month, which is approximately half of the Company's current production of oil. If the average price falls below $65 per barrel, then Cargill will pay to the Company the difference between $65 and the lower average price for 10,000 barrels per month in each month during when such lower average prices occur. However, unlike the "costless collar" arrangement, the Company will not have a price cap on any portion of its production volumes. The cost to the Company was $2.20 per barrel per month or a total of $374,000 for the entire period of the agreement. This cost was paid by the Company on June 27, 2011.

These agreements were primarily intended to help maintain and stabilize cash flow from operations if lower oil prices return. If lower oil prices return, the Cargill Agreement may allow the Company to maintain production levels of crude oil by enabling the Company to perform some ongoing polymer or other workover treatments on then existing producing wells in Kansas.

As of September 30, 2011, the Company's open forward positions on our outstanding "put" agreements with Cargill, were as follows (fair value is based on methodology described in footnote 12 Fair Value Measurement):

Period	Monthly Volume	Total Volume	Floor/Cap NYMEX	Fair Value at September 30, 2011
	Oil (Bbls)	Oil (Bbls)	$ per Bbl	(in thousands)

4^th Qtr 2011	10,000	30,000	$65.00-N/A	$ 38
1^st Qtr 2012	10,000	30,000	$65.00-N/A	$ 109
2^nd Qtr 2012	10,000	30,000	$65.00-N/A	$ 151

3^rd Qtr 2012	10,000	30,000	$65.00-N/A	$ 179
4^th Qtr 2012	10,000	30,000	$65.00-N/A	$ 186
				$ 663

			Current Asset	$ 477
			Non Current Asset	$ 186

Management has engaged Risked Revenue Energy Associates to perform an independent valuation of the Fair Value of the Company's open forward positions. The Company records changes in the unrealized derivative asset or liability as a "Gain (loss) on derivatives" in the Consolidated Statements of Operations. The Company recorded a $0.54 million unrealized gain for the quarter ended September 30, 2011 and a $(0.09) million unrealized loss for the quarter ended September 30, 2010. During the first nine months of 2011 the Company recorded a $0.98 million unrealized gain and a $0.37 million purchase of a $65 floor, compared to recording a $0.82 million unrealized gain during the first nine months of 2010.

The following settlement payments related to the "costless collar" were made by the Company in 2011 (in thousands):

These realized losses were recorded as a "Gain (loss) on derivatives" in the Consolidated Statements of Operation. During the first nine months of 2010, the Company made settlement payments of $0.03 million.