An investment in an Oil & Gas Direct Participation Fund such as the Fund, allows investors to participate directly in the Fund’s cash flow, which is generated by the oil and gas assets owned by the Fund. In addition, some investors may enjoy the tax benefits generated by the Fund’s activities, which could potentially be used to help reduce the individual investor’s tax burden.

Accredited investors seeking (1) to generate income along with opportunities for upside growth, (2) direct exposure to profit potential generated by oil and gas operations, and (3) tax advantages, may find that an investment in the Fund is an attractive diversification option to an existing investment strategy. Investors should note that oil and gas direct investing carries significant risk and there are no guarantees that any cash flow will be achieved. Please review the offering documents relating to any investment opportunity being evaluated in full prior to making an investment including specifically any Risk Factors identified therein. ACCREDITED INVESTORS ONLY

Eagle’s acquisition model focuses on proven-producing fields with existing infrastructure and wells expected to generate immediate cash flow and potential upside through additional drilling operations. We plan to primarily target the acquisition of financially distressed energy assets that may immediately benefit from operational improvements paid for with an infusion of capital. This sets the stage for an attractive arbitrage opportunity on the buy-side, which could maximize our Funds’ overall return potential. In addition, through our wholly-owned subsidiary ENR Operating we are able to better control costs by directly negotiating and managing required oilfield services.

Yes. Non-U.S. residents may invest in Eagle’s Fund, subject to local securities laws.

If the Fund’s revenues exceed its expenses, investors are expected to receive periodic distributions of the Fund’s cash profits. Eagle expects that cash distributions to the partners will begin approximately three months after the Fund acquires or drills, completes and hooks up its first producing well, and may be made as frequently as monthly thereafter, but in any event, no less than quarterly. The distribution amount will depend primarily on the Fund ‘s net cash receipts from oil and natural gas operations and will be affected, among other things, by the price of oil and natural gas and the level of production of the Fund’s properties.

There are restrictions in transferring ownership of units in the Fund; Ownership in the Fund is not a liquid investment. No public market for the units exists or is likely to develop. You should be fully aware of the long-term nature of an investment in the Fund. Investors will be required to represent that they are purchasing units in the Fund for their own account for investment purposes and not with a view toward resale or redistribution. The sale of the Fund units will not be registered under the Securities Act, and the units must be held indefinitely unless they are subsequently registered under the Securities Act (which is not expected) or unless an exemption from registration is available. Resale of the units under Rule 144 of the Securities Act within one year from the date they are fully paid will not be possible because of the absence of sufficient public information about the Partnership. Furthermore, you may not transfer your units except as expressly permitted in the Fund’s partnership agreement

Oil and gas direct investing offers many tax advantages that can help greatly enhance the economics of an investment. The following information and Internet URL are provided for your convenience and should not be construed as tax advice from Eagle. It is the responsibility of each PARTNER to investigate the tax consequences, under the laws of pertinent jurisdictions, of his or her investment in the FUND. THE ANALYSIS HEREIN IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX PLANNING. ACCORDINGLY, EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT WITH HIS OWN PERSONAL TAX ADVISOR CONCERNING (i) THE APPLICABILITY TO AND EFFECT ON HIM OF THE UNITED STATES INCOME TAX LAWS AND THEIR ADMINISTRATION, AND (ii) THE APPLICABILITY TO AND EFFECT ON HIM OF STATE, LOCAL AND FOREIGN TAX LAWS AND THEIR ADMINISTRATION. NO LAW FIRM OR ACCOUNTING FIRM HAS PROVIDED OR OTHERWISE Rendered an opinion on the FEDERAL, state, local or foreign tax consequences of an investment in THE FUND. The Online U.S. Tax Code may be accessed at http://www.fourmilab.ch/ustax/ustax.html

Intangible Drilling Cost Tax Deduction

The intangible expenditures of drilling (labor, chemicals, mud, grease, etc.) are usually about (65 to 80%) of the cost of drilling an oil and/or gas well. These expenditures are considered “Intangible Drilling Cost (IDC)”, which may be 100% deductible during the first year for certain qualifying investors. For example, a $100,000 investment could yield up to $80,000 in IDC tax deductions during the first year of the venture. These deductions are generally available in the year the money was invested, even if the well does not start drilling until March 31 of the year following the contribution of capital. (See Section 263 of the Tax Code.)

Tangible Drilling Cost Tax Deduction

The total amount of the investment allocated to the equipment “Tangible Drilling Costs (TDC)” is 100% tax deductible. In the example above, the remaining tangible costs ($20,000) may be deducted as depreciation over a seven-year period. (See Section 263 of the Tax Code.)

Active vs. Passive Income

The Tax Reform Act of 1986 introduced into the Tax Code the concepts of “Passive” income and “Active” income. The Act prohibits the offsetting of losses from Passive activities against income from Active businesses. The Tax Code specifically states that a Working Interest in an oil and gas well is not a “Passive” Activity. (See Section 469(c)(3) of the Tax Code). As such, if the Fund owns one or more working interests in one or more oil or gas leases at any time during a tax year, individual investors that own general partnership interests directly or through entities that do not limit their liabilities with respect to their units should not be subject to the passive activity loss rules with respect to such working interests for the tax year. As a result, such investors should be able to utilize losses from the Fund from such working interests to offset future income from the Fund and their other so-called “active income” (e.g., salary) and “portfolio income” (e.g., dividends, interest and royalties not derived in the active conduct of a trade or business).

Small Producers Tax Exemption

The 1990 Tax Act provided some special tax advantages for small companies and individuals. This tax incentive, known as the “Percentage Depletion Allowance”, is specifically intended to encourage participation in oil and gas drilling. This tax benefit is not available to large oil companies, retail petroleum marketers, or refiners that process more than 50,000 barrels per day. It is also not available for entities owning more than 1,000 barrels of oil (or 6,000,000 cubic feet of gas) average daily production. The “Small Producers Exemption” allows 15% of the Gross Income (not Net Income) from an oil and gas producing property to be tax-free.

Lease Costs

Lease costs (purchase of leases, minerals, etc.), sales expenses, legal expenses, administrative accounting, and Lease Operating Costs (LOC) are also 100% tax deductible through cost depletion.

At the expense of the Fund, Eagle will engage a certified public accountant to prepare the Fund’s annual income tax return and the return required by Internal Revenue Code section 6050K relating to sales and exchanges of interests in the Fund. Within a reasonable time after the close of each accounting year, Eagle will transmit to each person who was a partner during such accounting year a report (which may be in the form of Schedule K-1 to IRS Form 1065) indicating such person’s respective share of profits, losses and other federal income tax items, tax preference items and investment credits, if any, for such year. Eagle will also furnish to the Fund’s investor partners a report containing an overview of operations on at least an annual basis.