The oil field service operations, the oil and gas production activities
and the oil and natural gas drilling of WellTech are subject to various local,
state and federal laws and regulations intended to protect the environment.
Management of WellTech believes that it is in substantial compliance with all
material known existing federal, state and local regulations as they relate to
the environment. Although WellTech has incurred certain costs relating to
compliance with environmental laws and regulations, such amounts were not
material during the past three fiscal years.
Management believes that WellTech is in substantial compliance with all
known material local, state and federal safety guidelines and regulations.