OVERPRESSURED FORT UNION PROSPECT IN THE WASHAKIE BASIN, GGRB DESOLATION ROAD UNIT (DRU) Energy, Ethics, Environment. NAPE SUMMIT BOOTH # 1325 PROSPECT PREVIEW -- NAPE 2016 Jacinda N. Brown
INTRODUCTION DRU Leasehold: 24,962 gross ac/ 14,332 net ac WI: 100% / NRI: 80-87.5% Location: 16N/96-97W Overpressured Fort Union Prospect in the Washakie Basin The next Endurance/Barricade Sweetwater Co, WY Washakie Basin, GGRB Upside of Acreage Position: Liquids-rich gas play (~30 bbls/mmcf) Large acreage position with overpressured Fort Union Fm An analog, on structural trend with Samson s Fort Union success in Endurance & Barricade Units Show well, Aminoil well on DRU southern border has > 300 channel sands Stacked pay (3 zones in Fort Union & additional possible targets in deeper Lance) Activity in the area, located downdip to Anadarko s Buffalo Rose prospect (~80,000 ac), 3D seismic is available to purchase over DRU MUSTANG RESOURCES LLC 2
Upper Cretaceous GEOLOGY FORT UNION TYPE LOG ANALOG Anadarko s Buffalo Rose Prospect Updip limit of overpressured Fort Union GEOLOGIC RISK FACTORS Reservoir: Fort Union Formation Source: Interbedded coal & shale, (& underlying Lewis shale) Maturity: Current Fort Union depth that reached peak gas generation is 9100-9600 ft MD Trap/Seal: Overpressure indicates seal. Basin-centered gas play with a capillary water trap at the top. MUD LOG SCALE CHANGE PRIMARY TARGET UPPER LANCE BASE RED = GAS BLUE =WET Samson Endurance 42-10 outside limits of productivity MUSTANG RESOURCES LLC 3 DRU Show well/ Type Log Show well/ Type Log QEP Mulligan Draw 14-2UH Wet well (3 mi updip) Analog: Samson s Endurance & Barricade Units
OVERPRESSURED Mustang believes the key to success in the Washakie Fort Union play is to be in the overpressured zone, which is around ~9300 MD (-2600 SS) 9100-9600 MD present day depth the Fort Union becomes overpressured in the Barricade, Endurance & DRU area Present-day depth of overpressure top ranges from 8000-10000 ft (1997 Surdam) Mudlog will have sustained gas shows when Fort Union becomes overpressured 82% of production in the Washakie basin comes from overpressured zones (1997 Surdam) The top of overpressuring cuts across structural and stratigraphic boundaries. It is not necessary horizontal, but has a wavy form (1997 Surdam) Peak gas generation was reached at 12,370 ft (2015 Lynds), with 3213 ft of missing section today (2005, USGS & 2015 Lynds), means current Fort Union depth that reached peak gas generation is 9247 ft 82% of gas production in the Washakie basin comes from overpressured zones (1997 Surdam) MUSTANG RESOURCES LLC 4
ENDURANCE/BARRICADE EUR MAP First delineate the play with vertical wells Then evaluate economics of horizontal wells after play has been delineated Average EURs for Endurance & Barricade Units MMCF MBO MMCFE (17:1) Bbls/MMCF Average All Well 3,775 88 4,304 28 Average Hz 5,680 136 6,493 30 Average Vert* 2,228 50 2,526 27 Samson Endurance 11-21V At updip limit = less gross pay LOW EUR: 0.2 BCFE QEP Mulligan Draw 2-UH SI due to high water Range of EURs Low High Range Hz (MMCFE) 1,375 15,822 Range Vert (MMCFE)* 957 4,560 Samson Barricade 41S1MH Largest Hz Well EUR: 15.8 BCFE Samson Endurance 41-10 Outside updip limit LOW EUR: 0.3 BCFE Samson Barricade 11-7 Largest Vertical EUR: 4.6 BCFE Legend Almond Structure CI =250 MER Lands (ORRI or WI) MUSTANG RESOURCES LLC EUR (MMCFE) 5
ACTIVITY 2014-2015 Samson drilled DRU 34-21 in 2011, completed 1 stage keeping cost low to get a Yates well determination. More pay behind pipe. Aminoil well drilled in 1982 has >300 of Fort Union channel sands Mustang has two permits waiting approval of EA DRU EA is in process. It will include pipeline & several wells. Adobe Town WSA south of DRU means this is an environmentally sensitive area MUSTANG RESOURCES LLC 6
FORT UNION DISCOVERY & DEVELOPMENT TIMELINE 2007 Samson drilled the discovery well (Barricade 44-11) 2007- Aug 2011 Samson delineated the field with 12 vertical wells Oct 2010 Samson spud the DRU 34-21 & completed one stage Jan 2011 with a 16 day flow test, well was not put on production due to lack of pipeline Aug 2011 Samson drilled & completed their 1 st horizontal well (essentially connecting 2 vertical wells from toe-to-heel) 2012 & 2013 Samson s focus was on delineating commercial extent of field (drilling 4 vertical & 7 horizontal wells with 2 rigs, producing 77 mmcfe/d from 3 different horizontal targets) 2014 Samson continued Ft Union development putting 5 new horizontal wells on production Aug 2014 QEP drilled 1 horizontal Upper Ft Union well ~ 3 mi updip from Samson s nearest producer, it is SI (high water cut), Mustang went non-consent Oct 2014 QEP drilled 1 vertical Fort Union/Lance well also ~ 3 mi updip (a change from original 2 nd horizontal Fort Union) poor producer, Mustang went non-consent 2015 Samson continued Ft Union Development putting 6 new wells on production (2 vertical, 4 horizontal) May/June 2015 Anadarko permits 5 horizontal Fort Union wells in their Buffalo Rose Prospect on the updip border of DRU October 2015 Anadarko permits a vertical Lance well on the updip border of DRU July 2015 Mustang acquired DRU from Samson 2016 Samson indicates they plan to keep one (1) rig drilling in the Ft Union play. Mustang finds a partner and develops DRU 2017 Samson indicates they plan to keep two (2) drilling rigs running in Endurance & Barricade MUSTANG RESOURCES LLC 7
CONCLUSION Mustang is looking for a partner to help develop this exciting play in the Washakie. Mustang would like to keep a 25% WI in the play, but will consider all offers. Mustang has a large acre position in this liquids-rich, stacked-pay, overpressured, Fort Union Formation play Mustang has identified a successful analog with EURS > 15 BCF and a show well confirming presence of reservoir on DRU acreage MUSTANG RESOURCES LLC 8
MUSTANG RESOURCES CONTACT INFORMATION Mustang Resources, LLC NAPE SUMMIT 2016 Booth # 1325 1660 Lincoln St, Ste 1450 Denver, CO 80264 720-550-7507 Mustangresourcesllc.com info@mustangresourcesllc.com Jacinda Nettik Brown Geologist jbrown@mustangresourcesllc.com 720-550-7507x 104 MUSTANG RESOURCES LLC 9