Financial

Revenue for the three months ended June 30, 2009, totaled $285,000 compared with $1.4 million for the prior year period. Cash flow from operations for the quarter was $165,000 compared with $971,000 for the prior year period. Sharon had a loss of $475,000 versus earnings of $180,000 in the prior year period.

Capital expenditures for the three months ended June 30, 2009, totaled $309,000 compared with $1.2 million for the prior year period. Capital expenditures were financed from working capital, cash flow and property dispositions.

Sharon exited the first quarter with working capital of $222,000 versus working capital of $310,000 at the beginning of the year.

All dollar figures are United States dollars.

New Land Acquisitions

In the U.S., Sharon has acquired approximately 8,500 gross acres (3,621 net acres) in the Eagleford fractured shale play. Sharon's acreage is on trend with a large development program operated by Apache Corporation. However, the Company is actively looking to sell or farmout this project as individual well costs may be significant.

In Canada, Sharon has acquired 9,611 acres (2,816 net acres) in Alberta and Saskatchewan. The Alberta lands were acquired to expand existing holdings at Big Bend. Sharon's primary Canadian exploration focus is in Saskatchewan where the Company now has acreage on prospective Viking, Shaunavon and Bird Bear oil plays.

Production

For the three months ended June 30, 2009, production decreased 62% to 112 BOEd compared with 292 BOEd for the prior year quarter. The primary cause of the drop resulted in Canada from the shut-in of production at the Big Bend field which will be put back on production in late fall, and in the U.S. resulting from the shut-in of production at the Black Owl field combined with declining production rates at the Hound Dog, N.W. Speaks and Allen Ranch fields.

Business Outlook

The continued weak natural gas pricing environment has led to a sharp reduction in the number of rigs drilling for natural gas over the last eight months. The drop of rig activity in Canada and the U.S. should decrease domestic supply as production rates from existing wells decline without offsetting new production. However, there is still considerable uncertainty as to when prices will again rise to above $7.00 Mcf.