August 5, 2010

Thick Black Oil Shale – Big Black Dog #1
We are currently moving the Couch rig #2 54 miles west of Abilene to drill the first of our black oil shale wells, the Big Black Dog #1.  The drilling permit has been approved by the Railroad Commission of Texas and as I have communicated in earlier updates, we plan on partnering with Black Viper Energy of Midland in drilling the horizontal leg of this well.

Among the zones of greatest interest are the Roscoe, South (Strawn) at 6700’ and the Roscoe at 7086’.  I will send a more complete well prognosis of the key sands in a future update.  Production expectations for this well are a minimum 3,000 barrels of oil a month.

Rainman #1
We are continuing completion efforts on this well.  Flow back rates and samples indicate we should initially produce 100 to 120 barrels of oil per day.  We expect the well to consistently produce 2,000 barrels of oil a month.  Below is a sample of the first oil flow back.

Guy Ranch #3
The Guy Ranch #3 will undergo a large slick water frac next week.  So far, it has only had an initial acid stimulation performed on it.  We have already removed the pump and tubing in the well to prepare the well for the frac.

The Guy Ranch #2 and #3, along with the Davis #1B and #2B wells should put production from the Guy Ranch lease over 1,000 barrels of oil a month.

Texakoma-Palo Pinto Reef 2 #1
This well will replace the Spraberry #1.  We have it on our drilling schedule for re-entry in the near future and it will likely produce a minimum of 300 barrels of oil a month.

Hickman Lease
We are continuing our re-work and re-entry efforts on this multi-well lease and anticipate daily production of 10 – 14 barrels of oil a day. For the entire Palo-Bakken package, which also includes the Rainman #2 well yet to be drilled, we are still on course to produce 7,000 – 7,500 barrels of oil a month.