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LOUISIANA ENERGY CONFERENCE Tuscaloosa Marine Shale – An Emerging Oil

PlayJune 27, 2012

LOUISIANA ENERGY CONFERENCE Tuscaloosa Marine Shale – An Emerging Oil

PlayJune 27, 2012

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TUSCALOOSA MARINE SHALETUSCALOOSA MARINE SHALEEmerging Shale Oil Play

■ Emerging shale oil play

■ 132,000 net acres leased

■ Net cost ≈ $30 million or ~ $225 / acre

■ Average depth 11,000’ – 13,000’ TVD

■ Thickness 100’ – 200’

■ High quality crude (38 – 44 degrees API)

■ LLS pricing and lower royalty burdens provide 15-25% uplift in economics

■ Emerging shale oil play

■ 132,000 net acres leased

■ Net cost ≈ $30 million or ~ $225 / acre

■ Average depth 11,000’ – 13,000’ TVD

■ Thickness 100’ – 200’

■ High quality crude (38 – 44 degrees API)

■ LLS pricing and lower royalty burdens provide 15-25% uplift in economics

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��E��IE� � ��CA��A �A�I�E �HA�E

An unconventional oil resource play over approximately 2.5 million acres covering portions of four counties in MS and seven parishes in LA

Silica rich shale with 90% oil and 10% high BTU gas (NGLs)

A mature source rock of oil and gas for the lower Tuscaloosa sandstone (3.5 Tcfe produced to date), and the Austin Chalk formations in Mississippi and Louisiana

Proven ability of matrix flow over long period of time from old, under-stimulated completions. In addition to matrix flow, significant vertical and horizontal fracture system will improve permeability and meaningfully contribute to production and EUR

Resistivity profile of the TMS is the most diagnostic, log-based feature that can be mapped (4-9 ohms). Elevated resistivity in the TMS increases more as a function of burial depth than formation gross thickness, which is consistent with an interpretation of increased thermal maturity and hydrocarbons with depth

Over-pressured formation will allow for high oil saturations and assist in liquids lifting

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HIGH �E�I��I�I�� G CHA�AC�E�I��IC

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CORE ANALYSIS

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1962: Humble - Spears 1 (Amite County, MS). Dry hole but cored 3’ of oil saturated TMS

1975: Callon-Cutrer #2 (Tangipahoa PH, LA). Vertical well produced 2,500 BO over 15 years. Core showed 5-7% porosity, vertical and horizontal fractures with live oil saturations

1977: Texas Pacific Oil Company – Blades No. 1 (Tangipahoa PH, LA) produced 24,000 barrels of oil over 30 years from an unstimulated vertical well

1980s: Exxon – Jackson #4 and Amerada Hess – Montrose Plantation #1 (Wilkinson County, MS) blow out while drilling the TMS

1998: UPRC – Richland Plantation #5 (East Feliciana, Parish, LA). Short lateral (1,100’) well with IP of 117 BOPD that produced 4,000 barrels of oil. Killed with salt water for workover and never produced after treatment

1999: Worldwide #1 Braswell 24-12 in Pike County. Short horizontal well but not fracked. Has produced 12.7 MBO and still producing 2 BOPD 13 years later

2000: Petroquest – Lambert 1H (Amite County, MS). Not fracked, but had peak rates of 400-600 BOPD and has produced 11,600 barrels of oil in 11 years and still producing

2004: Worldwide #1A Spears (Amite County, MS). Not fracked but has produced 11.8 MBO in eight years and still producing

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2005: Encore – Joe Jackson #4. (1,650’) 3 frac stages. Well has produced 28,800 barrels

2007: Encore – Richland Plantation #1. (3,100’) 3 frac stages and IP of 200 BOPD. Cumulative production of 10,700 barrels

2008: Encore – Weyerhaeuser No. 1 (Sec 60, T1S, R4E, St Helena Parish, LA) – (4,100’) 323 BOPD, 3 fracstages, cumulative production of 27,000 barrels

2011: ECA – Board of Education #1, Amite County, MS. Re-entry (3,100’) with 5 successful frac stages IP: 373 BOPD on 12/64 choke with 1770 psi.

2011: DVN – Beech Grove 68H-1, East Feliciana Parish, LA. Mechanical issues – 101 BOEPD 30 day average

2011: ECA – Weyerhaeuser 73H-1, St. Helena, LA. (5,137’) 30-Day Rate: 700 BOPD

2012: DVN – Soterra 6H-1. 30-Day Rate: 176 BOEPD

2012: ECA – Horseshoe Hill 10H-1, Wilkinson County, MS. IP: 761 BOEPD

2012: ECA – Anderson 17H-1, Amite County, MS. (7,365’) 72-HR IP: 1,081 BOEPD on 15/64 choke

2012: ECA – Anderson 18H-1, Amite County, MS. (8,755’) 30-Day Rate: 1,072 BOEPD

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1,650’ Lateral3 Frac Stages85 MBO EUR

28 MBO/Stage


15 MBO/Stage


21 MBO/Stage

DECLINE CURVE ANALYSISInitial Encore Wells (Source: Indigo Minerals)

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TUSCALOOSA MARINE SHALETUSCALOOSA MARINE SHALE

ECAJoe Jackson 4H #2

(Drilling)(GDP WI: 25%)

~ 7,200’ Lateral (Prop.)

DVNSoterra 6H #1

IP: 176 Bopd 30-day Avg~ 4,300’ Lateral(13 Frac stages)

ECA Horseshoe Hill 10H #1

IP: 656 BOE/Day(30 day Avg.)

~ 5,300’ Lateral (anno.)(18 Frac stages)

DVNRichland Farms 74H #1

IP: 284 BOE/Day9/64 choke 2,700# FCP

~ 5,000’ Lateral(20 Frac stages)

DVNBeech Grove Land Co 68H #1

IP: 101 Bopd 30-day Avg~ 3,400’ Lateral(12 Frac stages)

ECA Anderson 18H #1IP: 1,072 BOE/Day

(30 Day Avg)8,800’ Lateral

(29 Frac Stages)

ECA Anderson 17H #1IP: 1,083 BOE/Day

15/64 Choke 2044# FCP(72 Hour Avg)

~ 7,300’ Lateral(30 Frac Stages)

GDPDenkmann 33H #1

(Drilling)~ 7,300 Lateral (Prop.)

(GDP WI: 75%)

GDPCrosby 12H #1

~ 7,300’ Lateral (Prop.)(GDP WI: 75%)

ECA Weyerhaeuser 73H #1

IP: 740 BOE/Day(30-day avg.)

~ 5,000’ Lateral(15 Frac stages)

DVNMurphy 63H #1

(Drilling)~ 5,300’ Lateral (Prop.) DVN

Weyerhaeuser 14H #1(Completing)

~ 6,500’ Lateral (Prop.)

EOG Proposed Unit

DVNThomas 38H #1

(Drilling)

ECAWeyerhaeuser 60H #1

(Drilling)~ 7,000’ Lateral (Prop.)

TxPacBlades #1

(Vert. Comp. 1977)

EOG Dupuy Land Co #1

(Permit)

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