Following sections are devoted to a discussion of Goldking’s Operating History, Current Activities and Strategy for Growth.

Operating History

The original Goldking was founded 1968 as an independent onshore exploration and production company. Over the next few decades, Goldking’s various operating units included not only oil and gas exploration and production, but refining, equipment rental, contract drilling and contract well operations. With respect to oil and gas operations, during the 1970s and 1980s, Goldking participated in the drilling of more than 1,000 wells and operated more than 420 wells, principally on the Texas and Louisiana Gulf Coast.

In late 1991, Mr. Tallerine acquired Goldking, and immediately undertook an evaluation of its oil and gas assets. During 1994 and 1995, Goldking sold a portion of its assets to Lomack Petroleum (now Range Resources; NYSE: RRC) in two separate transactions which initiated a high-grading of assets and a redirectioning of the company. During 1995, after another period of making acquisitions and conducting drilling and workover activities, Goldking acquired a majority interest in the Umbrella Point Field located in Trinity Bay, Texas. Goldking took over operation of the Trinity Bay Field in August 1995, and embarked on a program of workovers, production optimization, cost saving measures and 3-D analysis aimed at maximizing the value of the field. Goldking developed several deeper gas prospects which targeted undrilled Umbrella Point Field fault block.

Goldking was sold to Panaco (formerly NASDAQ: PANA) for $43.8 million in a tax-free merger, and the new Goldking Energy Corporation was formed in early 1998. During 1998 and 1999, Goldking actively acquired oil and natural gas working interests. In August 1999, Goldking closed the following four acquisitions totaling $10.3 million: (1) a majority working interest in the Grand Lake Field, Cameron Parish, Louisiana; (2) a majority working interest in the Lacassine Refuge Field, Cameron Parish; (3) a majority working interest in the Alwan Field, El Campo County, Texas; and (4) a minority working interest in the North Bammell Field, Harris County, Texas operated by Enron. In August 2001, after a series of workovers, and production optimizations, Goldking sold its interests in Grand Lake, Lacassine Refuge, Alwan, East Milton and the North Francitas Field to GulfWest Energy (now Crimson Exploration; OTC: CXPO) for cash consideration of $15.0 million in cash and $4.0 million in preferred stock, with Goldking retaining certain overriding royalty interests, a 50% participation right in the drilling of a prospect at Lacassine Refuge Field (which Goldking, as operator, drilled in the fall of 2001), and a 50% interest in a lease at the Grand Lake Field below 11,000 feet.

From 2002 to July 2004, Goldking participated in drilling activities on new prospects and made a series of acquisitions that resulted in working interests in the 23 properties. In late 2002, the Goldking purchased the East Drake’s Bay Field from Calpine for $3.0 million, and simultaneously with closing sold a promoted interest in the property to an industry partner. Then in July 2003, Goldking sold an approximate 85% interest of the retained interest in the same field to the same industry partner for $2.2 million.

On December 15, 2004, Goldking acquired oil and natural gas working interests in certain oil and gas properties constituting the Live Oak Field in Vermillion Parish, Louisiana from Dunhill Exploration & Production for a net purchase price of approximately $6.0 million. The acquisition consisted of approximately 11,200 net leasehold acres and included working interests in seven operated producing wells, with total net proved reserves estimated as of the acquisition date to be 273,000 barrels of oil and 1,985 Mmcf of natural gas, or 3.6 Bcf of natural gas equivalent after converting oil to natural gas using a ratio of 6 to 1.

On October 31, 2005, Goldking acquired oil and natural gas working interests in certain South Louisiana and Texas Gulf Coast oil and natural gas properties from EnerVest Energy for a net purchase price of approximately $89.0 million. These properties, known as the Bayou Properties, consisted of working interests in the Bateman Lake, Broussard North, Leeville and Garden Island Bay Fields which are located in various parishes in South Louisiana, and the Chocolate Bayou Field in Brazoria County, Texas. The Bayou Properties were operated by Goldking since the acquisition. Total net proved reserves were estimated at the time of purchase to be 5.2 million barrels of oil and 30,240 Mmcf of natural gas, or 61.2 Bcf of natural gas equivalent after converting oil to natural gas using a ratio of 6 to 1.

On September 29, 2006, Goldking acquired oil and natural gas working interests in certain oil and natural gas properties located in Louisiana and Texas from three partnerships managed by Hilcorp Energy Company for approximately $126.0 million. The Louisiana properties consisted of ten fields located in eight South Louisiana parishes. The Texas properties include four fields in the central Gulf Coast area that are all operated with working interests. Total net proved reserves for the Hilcorp properties were estimated as of September 1, 2006 to be 3.4 million barrels of oil and 34,474 Mmcf of natural gas, or 54.8 Bcf of natural gas equivalent after converting oil to natural gas using a ratio of 6 to 1.

Current Activities

On May 15, 2007, shareholders sold their shares of Goldking to Dune Energy for $328.5 million, consisting of $310.5 million in cash and $18.0 million in Dune common stock. The Goldking properties were located onshore the Louisiana and Texas Gulf Coast, and consisted of interests in 23 fields and 136 producing wells. Goldking operated more than 90% of its production, and maintained a 100% working interest in many of the more significant properties. Based upon the total purchase price of $328.5 million, the implied price Dune paid to Goldking shareholders was $2.92 per Mcfe of proved reserves.

After the sale to Dune, Goldking was reestablished to continue pursuing opportunities in the oil and gas industry. Currently, Goldking’s development focus is twofold. First, through Goldking Minerals, it is acquiring oil and gas royalty interests from individuals, companies and estates. Second, Goldking intends to carry out a balanced program of acquisition, development, production enhancement and exploration, aided by the application of the latest industry technology, to assemble, operate and exploit a substantial portfolio of oil and gas properties.

Strategy for Growth: Goldking’s Business Development Plan

At the core of Goldking’s business development plan is to build a portfolio of energy assets that is geographically and geologically focused and operationally balanced. Goldking intends to once again establish a strategic set of assets in onshore and state water locations along the South Louisiana and Gulf Coast. This focused asset base will allow Goldking to leverage its regional technical knowledge and operating dynamics within the region, as well as to position it to establish economies of scale in both drilling and production operations. In addition, a portfolio balanced of proved developed and proved undeveloped reserves and exploratory drilling opportunities will provide an attractive combination of current cash flow and opportunities for grow through drilling.

To execute on this aspect of its business development plan, Goldking intends to position itself to be able to lead or participate in exploration projects that will be both internally and externally generated. Goldking also will establish alliances with select industry partners. However, in all cases, Goldking’s will employ disciplined prospect evaluation methodology based on technical merit, financial terms, expected timing and risk-adjusted returns on a project-by-project basis.

The other key elements of our business development plan include: (1) actively manage the drilling risk by operating wells that fit our risk profile and seek partners for those wells that have higher potential, but carry higher associated risks and costs; (2) utilizing technical advancements, including 3-D seismic data and directional drilling to identify new opportunities; and (3) pursuing opportunistic acquisitions of underdeveloped properties.

In the past, Goldking has been successful in acquiring complementary assets that have expanded it reserve base and provided immediate increased production levels and greater cash flow. Since July 2004, Goldking has acquired 106 Bcfe of reserves at an average cost of $2.09 per Mcfe. Now, as then, Goldking intends to continue to evaluate acquisition opportunities and make acquisitions that it believes will enhance its operations and reserves in a cost-effective manner.