Investment Strategy:

S.K. Oil and Gas is in the business of capitalizing on the current
global energy situation while also avoiding many of the sort of risks
that were once universal within the energy financing industry, and
which still plague many other firms even in the midst of unprecedented
oil prices. By structuring developmental drilling programs which are
themselves based around high-risk exploratory efforts that have
already been undertaken by third parties, we are thus capable of
operating with little or no real risk to our own investors, who are
not asked to invest in anything unproven but are rather called upon to
finance the drilling of wells in areas that have already been shown to
be profitable. Coupled with recent advances in drilling technology,
our particularly deliberate approach to energy financial services
tends to result in absolute success with few surprises.

We structure Developmental Drilling Programs that take advantage of
the high-risk exploratory efforts of others.  Once oil and gas have
been found the development of a field becomes a routine exercise with
few, if any surprises.  Technology has greatly reduced the risks of
exploration and has had an even greater impact for those of us who
follow up with developmental drilling.  Many sites have 100% success
after the initial discovery well proves up reserves.

Source of Prospects:

Deal Flow within the industry generally starts with relationships
among geologists, engineers and operators.  Our primary source of
prospects come from operators who have already proven the viability of
a site and wish to have us complete the find with our funds and
management team.  Most often, they stay in the projects and continue
to co-ordinate operations.

An additional source of prospects may come from banks that are willing
to loan on a project but require additional equity.  We are able to
bridge the equity gap with investor funds.  This is a form of
Mezzanine Financing that places us in a position to secure equity
positions with the added benefit of lender recourse.