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Drilling Venture

Lower. Wilcox. 6-25 MBOE. Drilling Venture. Donald P. Muth. Petroleum Consultant. AAPG Certified Geologist. Oakmont Minerals. Costs vs. Rewards. Costs Lease acquisition and G&A @ $0.5 M Dry Hole Cost @ $1.4 M Completion Cost @ $0.8 M 100% WI Completion @ $2.7 M (First Well)

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Drilling Venture

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  1. Lower Wilcox 6-25 MBOE Drilling Venture Donald P. Muth Petroleum Consultant AAPG Certified Geologist

  2. Oakmont Minerals

  3. Costs vs. Rewards Costs • Lease acquisition and G&A @ $0.5 M • Dry Hole Cost @ $1.4 M • Completion Cost @ $0.8 M • 100% WI Completion @ $2.7 M (First Well) • 1% WI Participation & Completion @ $27,000 Revenue • Deliver .73 NRI to WI • Gross Potential per Well @ 525,000 BOE • Net Potential per Well @ 383,250 BOE to WI • EURev @ $75 per BBLS = $28.74 M per well • ROI = 8.58 to 1 on First Well (Promoted) = 13.0 to 1 on Development Wells • Payout @ less than six months

  4. Objectives • Lower Wilcox Sands (Paleocene), 7-oil & 3-gas sands • Depth 12,500’ PTD • First location, 6 MBOE Potential • Potential 6-25 MBOE across 3 FAULT BLOCKS

  5. Type Log Magnolia Petroleum Co. No. 1 J.D. Frazar Section 25-3S-11W Beauregard Parish, Louisiana (NEALE FIELD)

  6. Drilling Engineering • Location- Dry Land, Surface Elev. @ 138’ • Depth- 12,500’ • MW- 10.5 Oil Base • 9 ⅝” Surface Casing to 3,700’ • Time to Drill- Approx. 22 Days • MUD SYSTEM: CLOSED LOOP- oil • Completion- Multi Stage Frac

  7. Reservoir Engineering • Area- 485 acres (1st location) Fault Block No. 1 • Net Pay- 75’ across 4 or more SANDS • Permeability- 50-100 mD (FRAC stimulation) • Porosity- 15% average • BBLS / Acre Foot = 175 • Decline Curve- see MIDSTATES No. 1 Musser-Davis Well (33-6S-11W, South Bear Head Creek Field)

  8. EUR @ 525,000 BOE per Well

  9. Lease Block • One Lessor 25% Royalty • Lessor has 20,000 Acres • Current Lease Position- 700 Acres

  10. The Gulf Coast Lower Wilcox “More to Find from the Micro to Macro” Donald P. Muth Petroleum Consultant AAPG Certified Geologist

  11. Down-Dip Lower Wilcox Characteristics • Low Porosity-Low Permeability • Secondary Porosity Development • Dissolution of feldspars and carbonate cements • Geopressure reservoirs are hyposaline - acetate waters • Geopressure reservoirs have higher soluble silica, low calcium • Oil Source- Mesozoic, Tertiary or Both • Mesozoic brine waters are more Ca rich • Tertiary brine waters are more Na rich

  12. Down-Dip Lower Wilcox Conclusions Multiple faults & periods of faulting- BEST TARGETS • Vertical Fluid Flow of oil to Wilcox Reservoir • Halite dissolution along salt welds & diapirs, localized • Wrench fault movement- seismic pumping, regional • Regional “down to basin (south) faulting” from subsidence • Counter regional “north dipping faulting” from Sabine Uplift

  13. Petroleum Consultant AAPG Certified Petroleum Geologist Donald P. Muth www.OakmontMinerals.com

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