Geological Framework for Active Resource Plays in Oklahoma

Edith Newton Wilson, PhD

Rock Whisperer LLC

March 4, 2014

What Oklahoma looks like from a horizontal perspective Snapshots of active plays, including a closer view of the Woodford and Mississippian Opportunities in a horizontal, heterogeneous, and high fluid volume world

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Oklahoma Oil Production

2000: 200,000 bopd*

2013: 300,000 bopd**

*Dan Boyd, Shale Shaker, 2008

**The Oklahoman, 2013

OK well and production data licensed from IHS

3

Geologic Time Scale millions of years ago

10 0

4 0 0

4500

Cretaceous

Paleogene

Neogene

600

540

250

65

NOW

Devonian

Mississippian

Pennsylvanian

Permian

Triassic

Jurassic

Ce

no

zoic

Ph

an

ero

zoic

Precambrian

Me

sozo

icP

ale

ozo

ic

Cambrian

Ordovician

Silurian

Monterrey Canadian Oil Sands Niobrara Eagle Ford Tuscaloosa Haynesville Bone Spring Permian Basin Barnett & Fayetteville Miss Lime & Bakken Antrim & Woodford Marcellus SCOOP/Golden Trend Utica

Current Horizontal Plays

Antrim .2 bcfpd

Fayetteville 2.8 bcfpd

Barnett 4.6 bcfpd

Woodford 1 bcfpd

Haynesville 6 bcfpd

Bone Spring

Eagle Ford 1,000,,000 bopd

1 bcfpd

Marcellus 8 bcfpd

Tuscaloosa

Utica

Bakken 1,000,000 bopd

Niobrara 250,000 bopd

Miss Lime <100,000 bopd

Monterrey

Canadian Oil Sands 2,500,000 bopd

Permian Basin Spraberry & Wolfcamp

300,000 bopd SCOOP

Data compiled from various trade publications and news articles

Drilling History in Oklahoma

Value Gap

Horizontal Results in Oklahoma

HZ spuds

HZ sales

• 13,126 horizontal wells

• 10,583 with reported tests

• 8,488 with monthly production

Horizontal Drilling 2000-2008

4544 HZ wells

3481 with sales

Peak production (2010)

• 1.5 bcfpd

• 20,000 bopd

Horizontal Drilling 2013

2300 HZ wells

2077 beyond start

800 only partially drilled

546 with sales

SCOOP

STACK

MISS LIME

Horizontal Production

8,488 Producing Wells

Cum to Date

<1 bcf

1-2 bcf

2-5 bcf

> 5 bcf

<50,000 barrels

50-100,000 barrels

100,000-250,000 barrels

>250,000 barrels

Currently making about 100,000 bopd and 2 bcfpd

Oklahoma Geology

Data compiled from USGS digital surface geology and Oklahoma Geological Survey Report of Northcutt and Campbell, 1995

Ozark Uplift

Cretaceous

Wichita Uplift

Arbuckle Uplift Ouachita Uplift

Pre-Penn

Pennsylvanian

Permian

Cover

Virgilian

Missourian

Desmoinesian

Atoka

Morrow

Springer

Chester

Miss Lime

WoodfordHunton

SylvanViola

Simpson

ArbuckleBasement

Stratigraphic Elements

Top of Pressure

Hunton Edge

Chester Sub-crop

Nemaha Ridge

Top of Pressure from USGS OFR 2011-1245, Nelson and Gianoutsos

Chester Sub-crop from SandRidge Investor Presentations

Hunton Edge from Amsden, 1980, OGS Bulletin 121

Horizontal Oil Production

3101 wells HUNTON EDGE

TOP OF PRESSURE

CHESTER SUBCROP

Horizontal Gas Production

5358 wells HUNTON EDGE

TOP OF PRESSURE

CHESTER SUBCROP

Oil Production from Horizontal Gas Wells

Pre-Woodford Plays: Hunton

WOODFORD - 610 Grouped Wells (Daily Rates)

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 0 2 4 6 8 10 12 15OIL=6,961,686.78 (BBL)

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GAS=346,308,786.03 (MCF)

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Wells: 610

Oil: 2,000 bopd

Gas: 0.1 bcfpd

Stage: Plateau

HUNTON EDGE

TOP OF PRESSURE

CHESTER SUBCROP

Woodford Play

Wells: 2479

Oil: 20,000 bopd

Gas: 1.0 bcfpd

Stage: Incline (oil)

Plateau (gas)

WOODFORD - 2479 Grouped Wells (Daily Rates)

91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14OIL=17,192,733 (BBL)

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GAS=2,411,034,220 (MCF)

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Mississippian Lime

Wells: 1620

Oil: 40,000 bopd

Gas: 0.4 bcfpd

Stage: Incline

WOODFORD - 1620 Grouped Wells (Daily Rates)

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 0 2 4 6 8 10 12 15OIL=24,212,985.67 (BBL)

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GAS=222,404,377.5 (MCF)

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Hartshorne Coal

Wells: 1608

Gas: 0.1 bcfpd

Stage: Decline

WOODFORD - 1608 Grouped Wells (Daily Rates)

98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14OIL=2,720 (BBL)

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1

10-1

GAS=454,352,674 (MCF)

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Pennsylvanian Sands

Desmoinesian Wash

• Wells: 308

• Oil: 10,000 bopd

• Gas: 0.2 bcfpd

• Stage: Plateau

WOODFORD - 308 Grouped Wells (Daily Rates)

6 7 8 9 10 11 12 13 14OIL=15,142,068 (BBL)

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GAS=305,120,203 (MCF)

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Marmaton

• Wells: 249

• Oil: 9,000 bopd

• Gas: 0.05 bcfpd

• Stage: Plateau

Tonkawa

• Wells: 320

• Oil: 8,000 bopd

• Gas: 0.01 bcfpd

• Stage: Plateau

Cleveland

• Wells: 249

• Oil: 9,000 bopd

• Gas: 0.1 bcfpd

• Stage: Plateau

WOODFORD - 249 Grouped Wells (Daily Rates)

8 9 10 11 12 13 14OIL=5,951,666 (BBL)

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GAS=40,306,711 (MCF)

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WOODFORD - 530 Grouped Wells (Daily Rates)

78 80 82 84 86 88 90 92 94 96 98 0 2 4 6 8 10 12 15OIL=15,432,400.67 (BBL)

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GAS=169,212,749.47 (MCF)

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WOODFORD - 320 Grouped Wells (Daily Rates)

94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14OIL=7,876,883 (BBL)

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GAS=26,644,617 (MCF)

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Play by Play

Number of producing horizontal wells

Daily

Oil

Pro

duction (

barr

els

)

Daily

Gas P

roduction (

mcf)

Wo

od

ford

Mis

s Li

me

Hartshorne CBM Hunton

Cleveland

Penn Sands

Wells bopd mcfpd

Sycamore 42 200 2,000

Ordovician 43 200 1,000

Council Grove 63 1,000

Marmaton 249 9,000 50,000

Desmoinian Wash 308 10,000 200,000

Tonkawa 320 8,000 10,000

Cleveland 530 9,000 100,000

Hunton 610 2,000 100,000

Hartshorne 1608 100,000

Miss Lime 1620 40,000 400,000

Woodford 2479 20,000 1,000,000

7872 98,400 1,964,000

A Closer Look at the Woodford

Arkoma Basin

150-200’ thick

Fairly uniform porosity

Hot gamma throughout

Variable but predictable and high resistivity

Underlain by Hunton and Sylvan

Dominated by dry gas production

WOODFORD

HUNTON

SYLVAN

Logs leased from TGS

Anadarko Basin

200-250’ thick

Hot gamma throughout

Higher and more variable porosity

Lower and more uniform resistivity

Underlain by Hunton and Sylvan

Bounded by pressure

Significant liquids-rich zone

WO

OD

FO

RD

HU

NT

ON

Logs leased from TGS

Cherokee Platform Woodford Oil Play

Variable thickness (35-120’)

Variable lithology

Variable thickness of Miss above

Unconformable base

Structural complexity

WOODFORD

HUNTON

SYLVAN

VIOLA

MISS LIME

Logs leased from TGS

A Closer Look at the Mississippian

From Sandridge Investor Presentations

WATER FREE OIL

2014: Heterogeneous Reservoirs

1% OIL

10 % OIL

WATER FREE OIL SMALL TRANSITION ZONE GOOD RESERVOIR

POOREST

RESERVOIR

POOR RESERVOIR

10 % OIL

80 % OIL

90 % OIL

1 % OIL

5% OIL

WASTE ZONE

HEALTHY OIL COLUMN

fractures and micro-pores

FREE WATER

OIL WATER CONTACT

ULTIMATE TRAP

LARGE TRANSITION ZONE

2014: High Fluid Volume

Double Plays: Filling the Value Gap

• Piggyback conventional drilling on horizontal development in lease fairways

• HBP with profitable foundation production from vertical development

• Long term reserve growth from horizontal development

Oklahoma’s Oil and Gas Landscape

Horizontal drilling moves the needle and creates an opportunity in the vertical value gap

High fluid volume plays elevate the importance of artificial lifting and surface operations

Heterogeneous reservoirs require a renewed focus on trap configuration and geologic insight

Thank you Shane Matson Mike Mackey Heath Wallis Tara Righetti Investor clients

Oklahoma Earthquakes 1980-2014