BayHill recently announced the execution of a letter of intent (LOI) to acquire all of the outstanding shares of Proteus Energy Corporation (“Proteus”), a California-based independent oil company focused on California and Western U.S. oil prospects.  Under the LOI, BayHill will issue unregistered shares of its common stock for all of the issued and outstanding shares, options, and warrants of Proteus.  The Parties plan to conduct additional due diligence and will seek $5 million of additional funding through a private placement of BayHill common stock to be completed contemporaneously with the closing of the acquisition and, following the closing, to seek the additional capital necessary to develop presently owned oil prospects and explore additional opportunities.  The present executive team at Proteus will be joined by two senior managers from BayHill, to form the new expanded management team, on closing of the acquisition. It is anticipated that the name of the Company will be changed to Proteus Energy Corporation.

The most current petroleum engineering reserve reports completed for Proteus project a discounted net present value of proven undeveloped reserves of: $32,914,000 for the North West Lost Hills Prospect and $6,267,000 for the Crystal Bay Prospect.  In addition, the engineering reports suggest probable and possible (unproved) reserves of $170,000,000.

The combined company intends to engage in purchasing, drilling, and developing oil and gas properties in addition to developing its present properties. We believe that the investment in oil and gas reserves represents a significant opportunity to create shareholder value and growth over the next decade.  We intend to continue acquiring properties that fit our investment profile.