Paragon Energy Two, LP, a Texas limited partnership (the "Partnership"), will invest in the oil and gas industry referred to as the upstream end of the oil and gas business.

The main focus of the Partnership's investments will be (1) production acquisitions with additional potential development and (2) high quality drilling projects targeting proven productive reservoirs.

The investors will be limited partners (the "Limited Partners") of the Partnership and will own a total of a 99% interest in the Partnership, with the remaining 1% interest held by Paragon Energy GP, LLC, the General Partner. The General Partner and the Limited Partners are sometimes referred to herein as the "Partners."

All investment prospects will meet a strict risk analysis developed by the General Partner. Risk factors that will be analyzed will include, but not be limited to, the geologic, engineering, and revenue stream.

Other criteria will be applied to all investments, some of which will be the timing of investment capital, overall project cost, standard oil and gas business economic parameters, use of 2-D or 3-D Seismic data when applicable and an attempt to achieve a return on the investment in the shortest period of time possible.