As of April 30, 2019, Texas South Energy, Inc. has received a Default Notice and Demand for Payment under the terms of its joint operating agreement with GulfSlope Energy, Inc. ("GulfSlope") and Delek GOM Investments, LLC as a result of its payment failure of $2,870,183.11 due as of April 18, 2019 with respect to drilling the Tau Prospect in the Gulf of Mexico Outer Continental Shelf. GulfSlope, the operator of the Tau Prospect, previously informed the Company on February 12, 2019 of an event of default with respect to the payment failure of $1,299,229, which amount is included in the $2,870,183.11 amount due as of April 18, 2019. The operating agreement grants a lien and security interest on the Company's interest in the leases comprising the Tau Prospect, and grants to the operator the right to pursue foreclosure of the lien and security interest. The Company is using its best efforts to raise capital to fund its obligations under the operating agreement with GulfSlope regarding the drilling of the Tau Prospect. If the Company fails to raise needed capital and foreclosure is pursued and is successful, this could result in a loss of all of the Company's rights in the Tau Prospect.