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Black Gold

Of the four new payzones identified by the Schlumberger (SLB) Pulsar log, three have shown very good promise and one was a dud. The deepest zone, (also the smallest) the Atoka, was tested in the #3WS well and proved to be too tight and had no oil show whatsoever so we will no be pursuing the Atoka formation in the field. The next zone up the hole is the Strawn. This was tested in the 1003 and appears to be productive. Our initial tests ranged 10-15 BOPD, sufficient to justify putting a pumping unit on the well for long term evaluation. The Strawn is in more than 20 wells in this field so many future recompletion opportunities exist. The next pay zone up is the Canyon. This so far is our most exciting discovery. The zone was tested in the 1002 well. While cementing the bottom portion of the zone it flowed back oil (picture is a sample bottle from wellhead). We have since flow tested the well to more than 60 BOPD, however the well started to flow drilling mud into the wellbore from above the zone so we have to do an upper cement "squeeze job" before this well can be put into production. We plan to do this in the coming weeks. The rig will be moving next week to the 1902 (a different part of the field) to test the Canyon once more. All completions in the Canyon will most likely require "block squeeze" cementing. We believe this payzone will be a homerun for the field and most intend to propose many more wells completed here. The last payzone, the Cisco formation, is the shallowest and also had the biggest oil show on the SLB log, showing more than 80 feet of net oil pay. We completed the Cisco zone in the #1801 well and have a good oil show but dealing with substantial drilling mud inflows, so it has been challenging to get cleaned out. We intend to bring in some specialized equipment in the next 1-2 weeks to washout the interval to allow the well to flow. We believe this zone is capable of 40+ BOPD once we get it cleaned out. The Cisco zone is also in nearly every well in the field so there are significant future development opportunities here. Last but not least, we still intend to put more wells on line in the Caddo formation which is the original payzone for the field. In summary, the SLB technology was money well spent and has proven itself to be a valuable tool to finding new reserves in the field. With this knowledge

we believe this field will far exceed our original expectations. Now we are working with our geologist to complete the mapping on these new pay horizons which will be used to form our field development plan moving forward.



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