Diaz Resources

Capex

Future Plans

Diaz has an improved market outlook for the natural gas industry in 2008. The first quarter of 2008 looks to be exciting for the Company as the drilling of the N.W. Speaks Robertson #1 well, Lava County, Texas should be completed. In Canada two new gas wells, one new oil well and the rework of an existing oil well will add to Canadian production. For 2008 the Company plans to carefully manage its cash and to develop existing reserves while maintaining a reduced exploration program. The Company's number one priority for 2008 is to optimize existing oil and gas properties.

Production

Natural gas production for the year decreased to average 4.6 MMcfd from 6.0 MMcfd for 2006 and oil production decreased to average 97 Bopd for 2007 compared with 130 Bopd for the prior year.

In Canada, 2007 average natural gas production was down 11% to 2.7 MMcfd from 3.0 MMcfd in 2006. Gas production in the United States was down 36% to average 1.9 MMcfd for 2007 compared with 3.0 MMcfd in 2006.

Reserves

The independent engineering evaluation of Diaz's properties assigned proved reserves before royalties of 2.4 million BOE and total reserves before royalties totaled 4.8 million BOE at December 31, 2007. These reserve estimates result in a before tax present value of estimated future net revenues, discounted at 10%, of $83.2 million.

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