Charter Oak Production Co., LLC Quail Pointe Drive Oklahoma City, Oklahoma 73134

Transcription

1 Northeast Blanchard Prospect McClain County, Oklahoma Charter Oak Production Co., LLC Quail Pointe Drive Oklahoma City, Oklahoma 731 Joseph C. Brevetti, P.E. Mark Svoboda, Geologist Telephone Facsimile

2 Executive Summary NE Blanchard Prospect The NE Blanchard Prospect is located 2 miles northeast of Blanchard, Oklahoma, on the northeast flank of the Anadarko Basin. Major objectives of the 12,000 Arbuckle test are the Viola Lime and Bromide Sands with secondary objectives in the Hart and Osborne Sands, Woodford Shale, Hunton Lime, Lower Bromide Sands and Arbuckle Dolomite. The NE Blanchard Prospect is defined by subsurface geology and seismic. It offsets an 85 MBO+ Viola/Osborne well and a recent Second Bromide well drilled by Kirkpatrick Oil that had an after frac IP of 150 BOPD and 1.5 MMCFGPD. Since there is Tulip Creek, McLish and Oil Creek Sand production nearby, this well is proposed to the Arbuckle to test those formations. Geologically the NE Blanchard Prospect is on a large nosing structure as shown on the included Top of Viola Structure Contour Map. Structural lows flank this nose to the north and to the south which create one positive ingredient for the Viola through Arbuckle to trap. This structural nose overprints a thin Viola to Second Bromide interval (as shown on the Isopach Map) which is a stratigraphic, paleo-trapping mechanism. The combination of the two makes the Viola and Bromide sands very prospective in the prospect. One east-west single fold seismic line is also included with the prospect information. This line, which runs across the center of the N/2 of Section 17-8N-4W, shows an up-to-the-west fault with about of throw and may cover acres. A number of fields in the immediate area, mainly to the east, have produced over.5 MMBO and 4 BCFG from features like this. In the Freeny Field in Section 14-8N-4W to the east, individual wells have produced to date over 150 MBO plus gas as shown on the prospect cross section. The CHK (Oxley) #1 Wilson in Section 8-8N-4W, the section to the immediate north of the NE Blanchard Prospect, has a fractured appearing Viola lime which had an IP of 185 BOPD and 250 MCFGPD with no stimulation being reported. This well has produced a majority of the 85 MBO from the Viola and likely a lesser amount from an Osborne sand. Porosity is developed in the top 200 of Viola (see cross section) and we expect a similar Viola section at the proposed location based upon the seismic and regional structure of the area. Recently Kirkpatrick Oil has completed the Maynard #1 in the W/2 W/2 of Section 9-8N-4W for 150 BOPD and 1.5 MMCFGPD. The fracture stimulated perforations are currently producing, after 90 days of production, over 100 BOPD and 1 MMCFG. EUR on the well should be over 100,000 BO and 1 BCFG.

3 Numerous Pennsylvanian sands exist including the Gibson, Hart and Osborne. The Gulf Central Lemon #1 in the NW SE of Section 17, to the south of the proposed location, has possibly 20 of Gibson sand that may be productive plus some edge development of the Hart and Osborne sands so they are considered prospective. The Gulf Central well also attempted a DST in the Upper Hunton, likely Bois d Arc member. Only water cushion was recovered however there is 30 of Microlog and the electric log indicates intervals with 40 to 50% water saturation. We should be structurally high to this Lemon #1 test in the Hunton. A thin Chimney Hill Keel Zone is developing in the Kirkpatrick Maynard #1 well in Section 9 and is also present to the south in the Fink Hester#1 in Section 21-8N-4W. The 25- thick Tulip Creek sand is a notable producer to the east in the Freeny Field where individual wells can produce up to 200,000 BO. The Oil Creek sand is present and develops up to 50 in thickness in the area. With the fault described above present, this could juxtapose Oil Creek shale against Arbuckle dolomite and Oil Creek sand. The Woodford shale has been drilled by Newfield Exploration to the west in Section 14-8N-5W with no results reported as of this time. Newfield has staked and built pads for three 2-section horizontals that will total of 6 miles in length. See attached maps. The Woodford activity in this area has recently heated up driving up the lease costs and pooling values. To date Charter Oak has assembled a position of approximately 597 acres (640 acre spacing for all formations) in Section 17. The proposed location of the initial test, the Floyd #1-17, is in the N/2 SW NE of Section 17-8N-4W. It is scheduled to spud in early first quarter of Major objectives of the Floyd #1 are the Viola and Second Bromide with secondary objectives in the Gibson, Hart, Osborne, Woodford, Hunton, Tulip Creek and Oil Creek. Total depth should be 12,000 or sufficient to test the Arbuckle. The Area of Mutual Interest (AMI) for the NE Blanchard Prospect includes Sections 7 10 and of Township 8 North, Range 4 West. While at present there is only acreage committed in Section 17, Charter Oak is continuing to work on acquisition of additional acreage within the AMI as needed for potential future development.

4 R 5 W R 4 W 15,200 BO 1.8 BCFG 20 YEARS TD 8375 TD 10,970,600 BO 19 YEARS TD 8474 TD BO 175 MMCFG 12 YEARS 6400 BO 3 YEARS TD 10, ,200 BO 31 YEARS NEWFIELD WELL 6600 BO 23 MMCFG 8 YEARS TD 9410 TD 10, PROPOSED NEWFIELD HORIZONTAL WOODFORD 1 12 GRADY COUNTY McCLAIN COUNTY TD BLANCHARD TD 10,280 PROPOSED LOCATION TD 11,637 TD 10,379 TD 11,007 TD 10, TD 2945 TD 10, BO 6 YEARS CHK WILSON 84,600 BO YEARS A KIRKPATRICK NEW WELL IP: 1.5 MMCFPD 150 BOPD TD 10,895 16,800 BO 9 YEARS TD 10,469 TD 9550 TD 3005 TD 10, TD BO 30 MMCFG PENN, VIOLA & BROMIDE 440 MBO 4 BCFG TD 10,216 TD 9649 TD 9706 TD 9707 TD 11,030 TD 95 PENN, HUNTON, VIOLA & BROMIDE 2.0 MMBO 15 BCFG 26 TD 10,297 TD 8956 A' TD 9964 T 8 N PENN WOODFORD HUNTON VIOLA BROMIDE NE BLANCHARD PROSPECT GRADY AND McCLAIN COUNTIES, OKLAHOMA PRODUCTION MAP

5 R 5 W R 4 W TD , TD 12,200 TD 9550 TD TD TD 11,548 TD 7000? TD TD 11,190 TD TD 9831 TD 10,715 TD 10, T 9 N TD 12,050 TD 11,9 TD 10,572 TD 10,603 TD 10, TD 10, TD 11,909 TD ,453-10, TD 10, TD 11,628 TD 10,940-10, TD 10,5 TD 11,975 TD 11, ,474-10,500 TD 8375 TD 10,970 TD TD 12,253 TD 9659 TD 10,787-10,236-10,753 TD 12, ,000 TD 9410 TD 10, PROPOSED NEWFIELD HORIZONTAL WOODFORD TD 11,000 GRADY COUNTY McCLAIN COUNTY NDE TD 9865 TD 10, BLANCHARD 31 TD 10, TD 11,637 TD 10,379 TD 11,007 TD 10,895 TD 10, TD 9821 TD PROPOSED LOCATION SEISMIC FAULT TD 10,650 84,600 BO VIOLA -9454E U A D TD IP: 1.5 MMCFGPD 150 BOPD 2ND BROMIDE TD 10,469 TD 9550 TD 10, TD 9450 TD TD 9400 NDE TD 9400 TD 10, TD 10, TD 9649 TD 9706 TD TD 11, TD TD 10,638 TD 10,237 TD 10, TD TD 10,740 A' TD T 8 N NE BLANCHARD PROSPECT GRADY AND McCLAIN COUNTIES, OKLAHOMA STRUCTURE MAP: TOP OF VIOLA LIME C.I. = 500' GEOLOGY: M.S.S. SCALE: 2" = 1 MILE

6 R 5 W R 4 W TD 9425 TD 7000? T TD ' TD 12,200 TD ' TD ' TD 11,548 TD ' 499' 467' 451' 431' TD 11,190 TD ' TD 9831 TD 10,715 T H I N TD 10, ' 455' 450' 9 N 630' 604' TD 12,050 TD 11,9 TD 10,572 TD 10,603 TD 10,800 TD 10, ' TD 11,909 TD ' TD 10,550 5' TD 10,5 478' TD 11, ' 536' TD 11,628 TD 10,940 TD 11, '? 487' TD 8375 TD 10,970 TD 8474 TD 12,253 TD 9659 TD 10, ' TD 12, TD 9410 TD 10, PROPOSED NEWFIELD HORIZONTAL WOODFORD ' T H I N ' TD 11, ' GRADY COUNTY McCLAIN COUNTY TD 9865 TD 10, BLANCHARD ' TD 10,280 T H I C K 500' 450' 450' TD 11,637 TD 10,379 TD 11,007 TD 10,895 TD 10, ' TD ' T H I C K 552' PROPOSED LOCATION TD ' TD 10,650 84,600 BO VIOLA 469' A IP: 1.5 MMCFGPD 150 BOPD 2ND BROMIDE TD ' 442' 436' T H I N 484' 468' 506' TD 10,469 TD 9550 TD 10, ' TD 9450 TD 3005 TD ' TD 9400 TD 10, ' 438' 450' 509' 470' TD 10, ' 517' 465' 497' 480' 459' TD 9649 TD 9706 TD ' TD 11, ' 448' 421' 400' 486' 418' TD ' 422' 420' 26 TD 10,638 TD 10, ' TD 10, ' 400' TD ' 450' 446' 458' 457' 455' 473' TD 10, ' TD '? 457' 449' 499' 441' A' 448' T 8 N NE BLANCHARD PROSPECT GRADY AND McCLAIN COUNTIES, OKLAHOMA ISOPACH: T/VIOLA TO T/SECOND BROMIDE C.I. = 50' GEOLOGY: M.S.S. SCALE: 2" = 1 MILE

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9 CHARTER OAK PRODUCTION CO., LLC QUAIL POINTE DRIVE OKLAHOMA CITY, OK 731 (405) Fax: (405) A F E CHARTER OAK PRODUCTION CO QUAIL POINTE DRIVE OKLAHOMA CITY, OK 731 Account: Date: 10/15/2012 Authority For Expenditure AFE# FLOY01 Property# FLOYD17 Description FLOYD #1-17 Property Desc FLOYD 1-17 NEW DRILL Section 17-8N-4W McClain County, OK 12,000' Arbuckle County/State MC CLAIN, OK Description DRILLING Intangible Drilling Costs DRILLING OVERHEAD 5, BITS & REAMERS 60, CASING CREW 5, CEMENTING & SERVICES 14, CONTRACT SUPERVISION 38, DRILLING FLUIDS 58, DRILLING-MOBILIZATION 85, DRILLING-DAYWORK 5, FLOAT EQUIPMENT 1, FUEL, OIL & CHEMICALS 114, INSURANCE 6, LAND / LEGAL 8, MISCELLANEOUS & SUPPLIES 5, MUD LOGGER 9, OPEN HOLE LOGGING 24, P & A CLEANUP 15, PERMITS PITS & DISPOSAL 15, RAT HOLE SERVICE 7, RENTAL EQUIPMENT 9, ROADS LOCATION & PADS 57, ROUSTABOUT CREW 6, SURFACE CASING 39, SURFACE WELLHEAD 2, SURFACE DAMAGES 27, SURVEYING TRUCKING & HAULING 5, WATER & LINES 8, WELDING Total - Intangible Drilling Costs 1,162, TOTAL DRILLING 1,162,840.00

10 From: CHARTER OAK PRODUCTION CO., LLC AFE: FLOY01 Page 2 To: CHARTER OAK PRODUCTION CO Property: FLOYD17 Summary by Owner DRILLING Running Total Owner# Owner Name Percent Amount Amount CHARTER OAK PRODUCTION CO ,162, ,162, Description COMPLETION Intangible Completion Costs ACIDIZING & FRACTURING 270, CASING CREW / TONGS 14, CEMENTING & SERVICES 22, COMPLETION OVERHEAD 5, COMPLETION UNIT 30, ELECTRIC SERVICES 3, ENGINEERING/SUPERVISION 12, EQUIPMENT RENTAL 10, FLOAT EQUIPMENT 2, FUEL/OIL/PROPANE 6, INSPECTION / TESTING 4, INSURANCE 4, LOGGING & PERFORATING 13, P&A CLEANUP 15, ROADS & LOCATION 5, ROUSTABOUT SERVICES 4, TRUCKING & HAULING 7, VALVES & FITTINGS 5, WATER DISPOSAL 20, WELDING 1, WATER & LINES 36, Total - Intangible Completion Costs 463, Equipment Costs PRODUCTION CASING 125, PUMPING UNIT 72, PUMPS-DOWNHOLE 4, RODS 57, SEPARATORS 1, TANK BATTERY, TUBING 69, TUBING HEAD 4, WELLHEAD 5, Total - Equipment Costs 371, TOTAL COMPLETION 8, Summary by Owner COMPLETION AFE Total Owner# Owner Name Percent Amount Amount CHARTER OAK PRODUCTION CO , ,997,980.00

11 NE BLANCHARD PROSPECT SUMMARY AND TERMS Sections 7-9 and 15-18, T8N, R4W McClain County, Oklahoma NEW DRILL: Floyd #1-17 LOCATION: 2130 FNL & 2490 FEL of NE/4 17-T8N-R4W Depth: 12,000 Arbuckle Anticipated Spud Date: February, 2013 Reserve Potential: Approx 80, ,000 BOE/WELL Unit Spacing: 640 acre Acreage: NMA in Section 17-8N-4W (93.% of unit) Cost: $750/acre (Acreage is provided at approximate cost) Note that a 25% marketing fee will apply if any acreage rights are sold within first 5 years. 20% Carry To Casing Point First Well Only NRI: 78% on all leasehold delivered and/or acquired with a minimum 3.25% ORRI on leasehold in AMI, with 75% NRI unit minimum AMI: Sections 7-10 and 15-18, T8N, R4W, McClain County, Oklahoma Dry Hole Cost: $1,162,840 AFE Completion Cost: $8,140 (including 2-stage frac job and pumping unit) Total Completed Well Cost: $1,997,980 10% Prospect WI Risk Cost = $180,465 (Acreage & DHC including carry) 10% Prospect WI Well Completion Cost = $77,946 Subject to Prior Sale Charter Oak Production Co., LLC Quail Pointe Drive Oklahoma City, OK 731 Contact: Joseph C. Brevetti, P.E (405) Neither this memorandum, nor the prospect it represents, is an offer for sale, nor has it been submitted or reviewed by the Securities and Exchange Commission, any other agency or authority of the U. S. Federal Government, the State of Oklahoma, or agencies of any other State. The information contained herein is provided by Charter Oak Production Co., LLC exclusively for the individuals receiving it, and for said individuals' private use only. The information provided is intended as a guide for evaluating this prospect. The reserves are provided as a courtesy and are not a prediction of the outcome of this venture. The AFE provided is an estimate of costs only. You may lose part or all of your investment if this venture results in non-commercial production or is a dry hole.