On September 15, 2010, the Company engaged Ernst & Young (China) Advisory Ltd. to assist the Company to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. More specifically, the Company engaged Ernst &Young to help the Company understand its overall controls environment, as well as key financial accounting procedures, to identify any differences between the Company's internal controls and those required by SEC rules and regulations, and to define areas that needed improvement and the method for implementation of such improvement.
Ernst & Young proceeded in two phases, which took several months. Its work, performed for the Company and its four subsidiaries, included, among other things, the collection and review of data, policies, regulations and procedural documentation, a variety of testing and re-testing, the development of internal control templates for management, the identification of areas of improvement and the issuance of recommendations. Ernst & Young has completed both phases of its work and has concluded its engagement.
Based on the results of the E&Y engagement, the Company has developed an improvement plan for implementation in 2011. The Company believes that the improvement plan substantially improves the quality of its internal controls and is in line with legal and regulatory requirements. The independent auditor for the Company will perform interim internal control tests in the second quarter of 2011.
Drilling services in our Tiancheng production was slower in the first quarter. However, Tiancheng's drilling activity has accelerated since March and is expected to remain strong going forward. As a result of the higher price of oil, PetroChina Jilin has approved the drilling of a large number of new wells in its Jilin oilfield and we are hopeful our drilling services business can benefit from expanded drilling initiatives at PTR as well as among other private oil companies operating in the Jilin oilfield. In fact, earlier this week, our Tiancheng subsidiary signed another contract with PTR to drill another twenty wells. Drilling is scheduled to commence this month and conclude by the end of the year.
We are pleased to have recently closed our Durimu acquisition which has allowed us to secure additional oil reserves, and which will significantly expand our operations and generate better returns on our investment. Our healthy cash flow from operations generated this quarter and expected in future quarters will provide us with adequate resources to further develop oil production activities within the Durimu oilfield. We are excited about the potential of our recent acquisition which further propels NEP into a larger regional oil producing and oilfield services company.