LEGAL

> JV DRILLING OPPORTUNITY - FAYETTE COUNTY

SUMMARY
INTRODUCTION
GEOLOGY
LEASE
CROSS SECTION
STAGES
CONCLUSION

 

Moya Little, President
Western Divestments
Suite 105, 214 - 11 Avenue SE,
Calgary, Alberta, Canada
T2G 0X8

Phone: (403) 543-4080

> Lease

The SBJ Energy Partners LLC Fayette leases are located within the Austin Pearsall-Giddings Area Oil and Gas Assessment Unit (A.U.) as defined by the Texas Railroad Commission andthe USGS. Within the A.U. the Austin Chalk the produces oil and gas in a continuous reservoir and traditional trap styles such as anticlines and faults are not essential for the accumulation and production of oil and gas. A number of local structures associated with Giddings field are likely to enhance production primarily due to the enhancement of fracture systems.

The SBJ Energy Partners LLC Fayette project initially involves the abandonment of the Lower Austin Chalk legs in three suspended Lower Chalk producers. The well bores will then be whipstocked/sidetracked into the Upper Chalk which has not been tested in the Mecon area. Map 3 shows the location of the three proposed re-entry well paths in the Hawk, Polk and Mecon leases. Pending the results of the first stage an addition 10 to 20 Upper Austin Chalk horizontal development wells will be proposed.

Table 2 summarizes the operations proposed for each of the initial three whipstock/sidetracks.

TABLE 2 - SBJ FAYETTE PROJECT

WELL LEGS TARGET
MECOM 1 SIDETRACK UPPER AUSTIN CHALK
POLK 3 SIDETRACKS UPPER AUSTIN CHALK
HAWK 2 SIDETRACKS UPPER AUSTIN CHALK

The initial sidetrack operation will be conducted on the Mecon lease. Figure 2 shows a vertical log offsetting the Mecon lease that illustrates the target horizon for the sidetrack leg. Map 4 shows a detail view of the Mecon Lease and the proposed well path of the sidetrack. The cross section highlighted on Map 4 is shown in Figure 3. This section illustrates the Upper Chalk target horizon approximately 150 feet below the top of the Upper Austin Chalk. Similar operations are proposed for the Polk and Hawk leases. Pending the Stage One sidetrack results additional Upper Austin Chalk horizontal development will be proposed for the Fayette leases. Current setbacks and mapping suggests the potential for an additional ten to twenty Upper Chalk development wells

TSBJ ENERGY PARTNERS LLC FAYETTE PROJECT GIDDINGS FIELD OFFSET LOG NEAR MECOM UNIT