The Company has oil and gas properties in Wyoming and California.

Wyoming.

The 100% working interest in the four separate oil and gas leases no longer exists; company only have a 100% working interest in two located near the Jonah Field region, which encompasses an area of premium natural gas reserves within the Greater Green River Basin in the Rocky Mountains area of Wyoming. The Green River Basin area contains approximately 26 TCF (Trillion Cubic Feet) of natural gas, with the Jonah Field estimated to contain 7 to 10 TCF according to the Wyoming State Geological Survey. The Jonah Field currently produces from in excess of 500 wells. This well-defined region has a high success rate for drilling and completion.

Referred to the four leases in this region as the SE Jonah Prospect. These four leases were issued by the United States Department of the Interior Bureau of Land Management: #WYW158664 and #WYW158665 dated August 1, 2004, #WYW159734; and #159737 dated February 1, 2004 and we no longer have #WYW159734 and #159737. The leases covered 3,744.57 acres in the Jonah Prospect, South of the Jonah Field in the Greater Green River Basin, Wyoming. The two leases are subject to a 12.5% royalty retained by the lessor and a 5% overriding royalty retained by the seller. Company acquired the leases on March 17, 2010 for $300,000 cash from a related party and have conducted no exploration work on the properties.

The SE Jonah Prospect is located six miles southeast of the Jonah Field. The breakdown of the acreage and royalties that are owed to various parties is set forth in the table below. In June of 2012 we learned that SunCal Energy Inc. did not reinstate two leases and additionally SunCal Energy Inc. had not properly completed and submitted the assignment documentation nor paid the lease payments to the Bureau of Land Management so leases #WYW158664 and 158665 have officially been terminated and we are in the process of submitting the documentation and lease payments for #WYW158664 and 158665 so we can contain these leases.

California.

On January 20, 2011 the Company purchased, through its subsidiary Joaquin Basin Resources Inc., a 50% working interest (37% net revenue interest) in a mineral lease on 4,000 acres in Kings and Fresno counties in California. The lease was initially recorded at the cost of issuing 62,000,000 common shares. The agreement also required an issue of 2,076,334 preferred shares.

On November 21, 2011 a portion of the interest in the lease was swapped for a future “carry’ of exploration costs and administration of the lease. Grid’s 50% working interest (37.5% net revenue interest) was reduced to 30% and 14% respectively. The co-lessee, Xploration Inc., is the obligor under the agreement. Future exploration costs include the operating “carry” costs of the lease and drilling costs of the first well, named “First Farmin Well”. The exploration costs were valued and recorded based on the percentage reduction in net revenue interest: $4,825,334. This was a reduction in the value of the Joaquin Basin property.

On January 20, 2011, 2,076,000 shares of convertible preferred stock were issued in concluding the Joaquin Basin purchase agreement. The cost of the issue, $4,152,000, was based on the value of preferred stock as if converted to common stock. $4,152,000 was added to the cost of the Joaquin property, including liabilities assumed in the November 21, 2011 agreement with Xploration Inc. The total value, $7,026,666, was reflected in a volumetric analysis.

Volumetric calculations of the 30% lease (14% net revenue) were conducted by a geologist and valuation determined using a “P10” factor, i.e. a 10% recovery rate, at a value for oil of $100 per barrel, which equated to net revenue of approximately $20,000,000, ($15,800,000 after landowner’s share). The P factor was further reduced by management by approximately 50%, based on company estimates of recoverability, resulting in an approximate value of $7,700,000.

Impairment of the properties from their recorded acquisition values was considered at June 30, 2012. Management considered that there were no changes in circumstances that would warrant impairment from the estimated values indicated by geological reports.