University 31E 4. Ward County, TX. Rig: Union Drlg Rig 229. AFE: $1,393, DHC: $761, WI: Notes: Workover:

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1 Zone: War-Wink Cherry Canyon TD: 7250' Rig: Union Drlg Rig 229 Status: WOC Spud Date: 1/26/2013 RR Date: 2/12/2013 First Sales: AFE: $1,393, DHC: $761, WI: Notes: Date Activity 11/14/ /14/12 Building location and reserve pit Sec 31 Blk 17 University Land Ward County, TX GL: 2730' KB: 2751' District: Ardmore Engineer: Steve Plunkett Workover: TC $37,260 11/15/2012 Building location TC $37,260 11/16/ /16/12 Building location TC $37,260 11/17/ /17/12 Building location, will shut down over weekend TC $37,260 11/18/ /18/12 SDFWE TC $37,260 11/19/ /19/12 SDFWE TC $37,260 11/20/ /20/12 Location and pits complete, will begin transferring water from SWD tank battery once pits are lined today. DC $37,260 11/21/ /21/12 Fas-Line lined reserve pits, laid water transfer lines from University SWD tank battery, begin transferring water. DFR until rig moves in. DC $20,700; TC $57,960 12/19/ /19/12 MIRU Butch's Rat Hole and Anchor Service. Drill and set 60' of 20" conductor w/ 7 yds cmt, drill rat and mouse hole. RDMO. WO drilling rig. DC $16,905; TC $74,865 1/24/2013 1/24/13 Moving in Union Rig 229. Moved in mud pumps, mud pits, accumulator skid, upper dog house, parts house, pony subs, rig substructure, derrick, drill pipe, drill collars and pipe racks. TC $74,865 Monday, February 18, 2013 Page 1 of 13

2 1/25/2013 1/25/13 Rigging up Union Rig 229. Set substructure in place, installed drawworks and drawwork motor. Spot and rigged up mud pits, water tank, generator house and parts house. Built derrick, picked up A frame & raised derrick. Union Rig 229 is 85% rigged up. Contacted 12:15 PM. TRRC representative was Cindy. Notification of spudding well, surface casing size and setting depth & cement volumes. TRRC job #855. Received mud products from Bariod, 12-1/4" bit, 7-7/8" bit, 12-1/4" stabilizers, 7-7/8" stabilizers. Halliburton cementing services on will call, casing crew on will call. Welder on will call for nippling up 20" conductor pipe. DC $99,909; TC $174,774 1/26/2013 1/26/13 Activity at report time: Hooking up flow line Dressed off rig floor, mud pumps and mud pits Cut, welded and installed 20" conductor pipe and flowline Hooking up flowline and turnbuckles Remarks: As per toolpusher: UDI Rig 229 does not go on dayrate until bit is ready to be made up. DC $39,844; TC $214,618 1/27/2013 1/27/13 Day 1 MD 651', made 651' in 11.5 hrs Bit #1 12-1/4" HTC GXC09 SN surface has made 651' in 11.5 hrs, WOB 15, RPM MW 8.6, Vis 41, PV 8.0, YP 27, Gels 12/15, ph 10.0, WL 32.0, Cake 1, Sol 1.9 PP #1 & , SPM 67, GPM 273, Str 10, Lnr Installed turnbuckles on conductor pipe, dressed shale shakers with 84 mesh screens Loaded BHA on pipe racks, strapped and calipered BHA and drillpipe Mixed spud mud Performed pre spud rig inspection Picked up BHA handling tools Held safety meeting. Safety topic: proper PPE, picking up BHA Union Drilling Inc. Rig 229 on dayrate at 1700 hrs 1/26/13, spudded well at 1700 hrs 1/26/13. Drilled from surface to 193' Wireline survey at 151'.53 degrees Drilled ahead. Drilled from 193' to 406' Wireline survey at 364'.51 degrees Drilled ahead. Drilled from 406' to 588' Wireline survey at 546'.32 degrees Drilled ahead. Drilled from 588' to 651'. DC $21,226; TC $235,844 Monday, February 18, 2013 Page 2 of 13

3 1/28/2013 1/28/13 Day 2 MD 1295', made 644' in 14 hrs Activity at report time: Running 8-5/8" surface casing Bit #1 surface 1295', made 1295' in 25.5 hrs, WOB 15-30, RPM MW 9.2, Vis 41, PV 5.0, YP 38, Gels 12/15, ph 11.0, WL 76.0, Cake 6, Sol 6.4 PP #1 & , SPM 68, GPM 278, Str 10, Lnr 6.50 Remarks: Notified TRRC of csg run 17:00 hrs Drilled ahead. Drilled from 651' to 778' Deviation 736', 0.55 degrees Drilled ahead. Drilled from 778' to 968' Deviation 926', 0.82 degrees Drilled ahead. Drilled from 968' to 1159' Deviation 1117', 0.60 degrees Drilled ahead. Drilled from 1159' to 1295' Circulated until shakers were clean Deviation 1275', 0.63 degrees. Slugged drillpipe and pooh to 8" drill collars. Strapped pipe, no corrections. TIH to 1278' Washed and reamed from 1278' to 1295', no fill. Circulated and conditioned wellbore for 8-5/8" surface casing Slugged drillpipe and POOH. Laid down single jt. Of drillpipe, 2 stabilizers and shock sub Held pre job safety meeting. Safety topics; rigging casing handling tools, pick up machine, picking up and running casing Rigged up casing handling tools and pick up/lay down machine Picking up and running 8-5/8", 24#, J-55, STC casing. Float shoe and Float collar both circulated. DC $22,732; TC $258,576 1/29/2013 1/29/13 Day 3 MD 1295' Activity at report time: Waiting on cement Finished running 31jts 8-5/8" J-55 24# STC surface casing. Casing landed at 1295'. Total footage ran including float equipment ' Rigged up Halliburton cementing head and circulating lines. Made up circulating line to rig standpipe and circulated and conditioned wellbore for cement. Rigged down casing handling tools and pick up-lay down machine while circulating Held safety meeting with rig crew and Halliburton crew. Safety topic: stay clear of circulating lines and pump truck, proper PPE Cement 8-5/8" surface casing as follows: Broke circulation with 2bbls freshwater and test lines to 1500psi. Test good. Pumped additional 18bbls freshwater at 5bpm w/124psi. Mixed and pumped lead cement 425sx EconoCem-HLTRRC cement (139 bbls) mixed at 12.9ppg. Lead cement pumped at 6bpm w/260psi. Mixed and pumped tail cement 260sx Halcem-C cement (62 bbls) Mixed at 14.8ppg. Tail cement pumped at 6bpm w/280psi. Displaced cement with 80bbls of produced saltwater and bumped plug to 880psi. Note: full returns encountered thru 50bbls of displacement and freshwater spacer seen at surface. After 50bbls were displaced returns started to slow, after 62bbls of displacement partial returns were encountered for 70bbls into displacement, final 10bbls of displacement (80bbl total) no returns encountered. Pump rate and pressures 50bbls 6bpm w/360 psi, 60bbls 5bpm w/350psi, 70 and 80bbls 280psi bumped plug 600psi over final circulating pressure to 880psi. Casing was work in 10' increments during cementing Contacted Mr. Jeff Morgan with TRRC about no cement returns at surface. Waiting on cement and Pioneer Wireline Services for Temperature Survey Log Rigged up Pioneer WirelineServicesm Went in hole with Temperature/CCL logging tools to 1217'. POOH and rigged down Waiting on cement for CBL Log. DC $103,927; TC $362,503 Monday, February 18, 2013 Page 3 of 13

4 1/30/2013 1/30/13 Day 4 MD 1295' Activity at report time: Testing wellhead Waiting on cement and Capitan Wireline Services Rigged up Capitan Wirelines Services Went in hole with Radial Cement Bond/Gamma Ray/CCL logging tools to 1214' and logged well. Estimated top of cement at 300' Rigged down Capitan Wireline Services and loaded out same Waited on orders from TRRC. Jetted and cleaned out rig mud pits. Laid down 6 jts of 8" drill collars. Received OK from TRRC to cement 12.25" x 8.625" annulus with 1" washpipe Picked up and went in hole with 1" CS Hydril tubing breaking circulation every 2 joints made up. Continued in hole tagging at 282' Held safety meeting with Trican Cementing Services and rig crew. Broke circulation with 5 bbls freshwater and test lines to 1000 psi. Test good. Bled off pressure and retest to 500 psi. Pumped 10 bbls freshwater, mixed and pumped 200sx of Class C neat cement at 14.8 ppg (47 bbls) 1.33 cuft/sx. Pumped cement at 1 bpm with 500 psi. After pumping 44 bbls cement, cement at surface, continued pumping remainder of cement. Cement returns weighing 14.8 ppg. Shut down pumping and waited 15 minutes. Cement in annulus did not fall POOH with 282' of 1" CS Hydril tubing, flushed pipe with freshwater, rigged down and loaded out Trican Cementing Services Pumped out 20" conductor pipe to reserve pit and waited on cement and welder Made rough cuts on 20" conductor pipe and 8-5/8" surface casing, laid down cut pieces. Made final cuts on pipe. Installed and welded 11" x 3M Cactus Wellhead Test void/well to 1100 psi (80% of collapse psi) test good DC $46,032; TC $408,535 Monday, February 18, 2013 Page 4 of 13

5 1/31/2013 1/31/13 Day 5 MD 1295' Activity at report time: Working on kelly swivel packing Bit #2 7-7/8" HTC T606X SN ' MW 9.7, Vis 30, PV 2.0, YP 1, Gels 1/1/1, ph 7.0, Cake 1 BHA: Bit Mud motor Totco flow drift /4 DC /2 Stabilizer /16 DC /2 Stabilizer /8 DC /8 Jars/DC Total Length Nippled up 13-5/8" 5M BOP stack. Nippled up 13-5/8" 5M rotating head and flowline Set 11" C-22 test plug in well head. Test blind rams to 250 psi low/3000 psi high. Test annular preventer to 250 psi low/1500 psi high. Test choke manifold and manual chokes to 250 psi low/3000 psi high. Test TIW valve/isbop valve to 250 psi low/3000 psi high. Test upper and lower kelly valves to 250 psi low/3000 psi high. Attempt to test kelly and standpipe test failed due to kelly swivel packing leaking. Installed new swivel packing and attempt to test. Tested failed. Made 6 more attempts to test, all test failed. Swivel packing was changed before each test. 4-1/2" pipe rams tested to 250 psi low/3000 psi high Union Drilling Rig 229 taken off of dayrate at 2030 hrs 1/30/13 until kelly swivel repaired. Rig mechanic called out to rig. Mechanic arrived on 0400hrs Made repairs to swivel packing. New washpipe for swivel was cut to 11-/1/2" and repacked, inserted bonnet in swivel. Test swivel packing to 2700 psi. Test good. Union Drilling Rig 229 back on dayrate at 0600 hrs 1/31/13 DC $20,735; TC $429,270 Monday, February 18, 2013 Page 5 of 13

6 2/1/2013 2/1/13 Day 6 MD 1991', made 696' in 17.5 hrs Bit #2 has made 696' in 17.5 hrs, WOB 6-8K, RPM 147 MW 9.7, Vis 30, PV 2.0, YP 1, Gels 1/1/1, ph 7.0, Cake 1, Sol 0.7 PP #1 1950, SPM 125, GPM 509, Lnr 6.50, Str Installed wear bushing. Made up bit #2, 7-7/8" HTC 1295'. TIH picking up BHA Test mud motor and Totco flo-drift, test good. Continued in hole tagging up at 1250' Drilled float collar, shoe track and float shoe, continued drilling from 1250' to 1295' Drilled from 1295' to 1326'. Taking surveys every kelly. Kelly swivel started leaking. Pumping 10 bbls of hi vis sweep every 2 connections drilled POOH with 2 jts of drillpipe pulling bit to 1266'. Tightened and greased swivel packing Washed down 2 joints of drillpipe from 1266' to 1326'. Drilled from 1326' to 1991' pumping 10 bbls of hi vis sweeps every 2 connections drilled. At 1634' surveys indicated that wellbore was building angle, controlled drilled from 1634' to 1991' at 40'/hr. Back reaming each kelly down 3 times. Continuing to control drill at report time. Depth Inclination DC $26,158; TC $455,428 2/2/2013 2/2/13 Day 7 MD 2784', made 793' in 23.5 Bit #2 has made 1489' in 41 hrs, WOB 6-15K, RPM 161 MW 10.1, Vis 28, PV 1.0, YP 4, Gels 1/2/2, ph 10.5, WL n/c, Cake 1, Sold 0.9 PP #1 2250, SPM 125, GPM 509, Str 10, Lnr Drilled from 1991' to 2403' Service & lubricated rig Drilled from 2403' to 2784' Depth Inclination DC $25,946; TC $481,374 Monday, February 18, 2013 Page 6 of 13

7 2/3/2013 2/3/13 Day 8 MD 3702', made 918' in 23.5 hrs Bit #2 has made 2407' in 64.5 hrs, WOB 10-23K, RPM 169 MW 10.1, Vis 28, PV 1.0, YP 4, Gels 1/2/3, ph 10.0, WL n/c, Cake 1, Sol.09 PP #1 2600, SPM 122, GPM 497, Str 10, Lnr Drilled from 2784' to 3005' Service rig Drilled from 3005' to 3702' Depth Inclination DC $34,386; TC $515,760 2/4/2013 2/4/13 Day 9 MD 3711', made 9' in.50 hrs Activity at report time: Working on kelly swivel Bit #2 1295' 3711' made 2416' in 65.0 hrs, WOB 10-23K, RPM 169 Bit #3 7-7/8" HTC T606X SN ' MW 10.0, Vis 28, PV 1.0, YP 4, Gels 1/2/3, ph 10.0, WL n/c, Cake 1, Sol 0.5 BHA: Bit 7-7/8" Mud motor 6-1/8" Totco flow dift 6-3/8" DC 6-1/4" Stabilizer 6-1/2" DC 6-1/16" Stabilizer 6-1/2" /8" DC's Jars 5 6-1/8" DC Total Length Drilled from 3702' to 3711' Pumped hi vis sweep surface to surface POOH, laid down Totco Flo-Drift, mud motor and bit Changed out kelly swivel. Test kelly swivel, swivel leaking Rigged down Totco Flo-Drift equipment. Waited on directional tools and gryo Strapped and calipered directional tools. Hooked up surface equipment for MWD Picked up bit, directional tools, program MWD surface equipment. Installed MWD and test same. Test good Trip in hole with directional tools to 800' Repacking swivel packing and test. Swivel packing leaking Laid down kelly swivel. Inspected swivel packing, tightened bonnet and greased, pick up previous kelly swivel. Test to 2500 psi test good Trip in hole to 3711' Circulated bottoms up. Swivel packing started leaking with 1900 psi pump pressure Rigged gryo survey tool. Went in hole taking gryo surveys every 100'. Tagged baffle plate at 3596'. POOH & RD POOH with 26 stands into 8-5/8" surface casing Working on swivel packing DC $52,466; TC $568,226 Monday, February 18, 2013 Page 7 of 13

8 2/5/2013 2/5/13 Day 10 MD 4315' TVD 4308', made 604' in 15 hrs Bit #3 made 604' in 15 hrs, WOB 6-15K, RPM 180 MW 10.0, Vis 28, PV 1.0, YP 4, Gels 1/2/3, ph 9.0, WL n/c, Cake 1, Sol.5 PP #1 2300, SPM 105, GPM 427, Str 10, Lnr 6.50 BHA: Bit 7-7/8" Mud motor 6-1/8" Mule shoe sub 6-1/2" monel DC's 6-1/2" DC's 6-1/2" Jars 6-1/4" DC's 6-1/4" Total Length Swapped out kelly swivel, repacked swivel packing, made swivel to kelly Test swivel packing to 2200 psi, test good Tripped in hole to 3681' Service rig and clibrated MWD Washed and reamed from 3681' to 3711' Rotary drilled and sliding from 3711' to 3720' Rotary chain parted, replaced rotary chain Rotary drilling, sliding and taking MWD surveys from 3720 to 4315'. Depth Inclination Azimuth DC $97,408*; TC $665,634 *Updated the costs with damages from UL for road/dirt and water for building location, topographic survey/trrc permits, caught up on supervision. Monday, February 18, 2013 Page 8 of 13

9 2/6/2013 2/6/13 Day 11 MD 5348' TVD 5341', made 1053' in 16 hrs Bit #3 made 1657' in 31 hrs, WOB 6-15K, 136 RPM MW 10.0, Vis 30, PV 2.0, YP 1, Gels 1/1/1, ph 9.5, WL n/c, Cake 1, Sol 0.3 PP #1 2050, SPM 80, GPM 330, Str 10, Lnr Drilling/ sliding/taking MWD surveys from 4315' to 4791' Service and lubricated rig Drilling/ sliding/taking MWD surveys from 4791' to 5166'. At 5166' lost complete returns Slowed mud pump down to 40 spm (162 gpm), pulled kelly out of hole and continued to pump brine water down drillpipe and rotating kelly, bit depth at 5136'. Mixed and pumped 1st 60 LCM pill with 5 ppb "PLUG-GIT", after pumping 30 bbls out of drillpipe partial returns was encountered. Mixed and pumped LCM pill #2, started washing kelly after pill was coming out of bit kelly was washed down 10', bit depth 5146', pulled kelly back up placing bit at 5136' while continuing to pump pill #2. Circulation was regained. Mixed and pumped LCM pill #3 with full returns. Washed kelly down while pumping LCM pill #3 at 40 spm to td at 5166'. Staged pump rate up to 80 spm with 1460 psi. Full returns Drilling/sliding/taking MWD surveys from 5166' to 5348'. Pump rate at 82 spm, 334 gpm with 1460 psi. Motor rpm at 97 rpm's, rotary at 40 rpm's total bit rpm 137. Rop at 30-45'/hr. Pumping 20 bbls LCM pill every connection. Full returns Depth Inclination Azimuth DC $43,456; TC $709,090 Monday, February 18, 2013 Page 9 of 13

10 2/7/2013 2/7/13 Day 12 MD 5846' TVD 5838', made 503' in 18 hrs Bit #3 made 2160' in 49 hrs, WOB 6-15K, RPM 136 MW 10.0, Vis 30, PV 2.0, YP 1, Gels 1/1/1, ph 10.0, Cake 1, Sol 0.3, Chl PP #1 1610, SPM 85, GPM 350, Str 10, Lnr Drilling/ taking MWD surveys from 5345' to 5410'. At 5410' loss circulation Pulled bit off bottom, slowed pump rate to 40 spm. Pumped 2 LCM pills and regained circulation Drilling/taking MWD surveys from 5410' to 5519'. At 5519' loss circulation Pulled bit off bottom, slowed pump rate to 40 spm pumped 60 bbls LCM pill and regained circulation Drilling/taking MWD surveys from 5519' to 5584'. At 5584' loss circulation Pulled bit off bottom, slowed pumps, pumped 4 LCM pills, regained partial circulation. Continued pumping on well at 40 spm while treating active system with 7 ppb LCM products. Circulation was regained Drilling/taking MWD surveys from 5584' to 5846'. Drilling at 25' to 30'/hr while continuing to add LCM products to circulating system. Maintaining 12 ppb LCM products in mud system Depth Inclination Azimuth DC $39,842; TC $748,932 2/8/2013 2/8/13 Day 13 MD 6900' TVD 6893', made 1054' in 23.5 hrs Bit #3 made 3189' in 72.5 hrs, WOB 6-12K, RPM 173 MW 10.3, Vis 36, pv 5.0, Yp 18, Gels 4/7, ph 10.0, Cake 2, Sol 3.6, Chl PP #1 2300, SPM 100, GPM 407, Str 10, Lnr Drilling and taking MWD surveys from 5846' to 6215' Service and lubricated rig Drilling and taking MWD surveys from 6215' to 6900' Depth Inclination Azimuth DC $37,974; TC $786,906 Monday, February 18, 2013 Page 10 of 13

11 2/9/2013 2/9/13 Day 14 MD 7236' TVD 7229', made 336' in 9.5 hrs Bit #3 has made 3525' in 82.0 hrs, WOB 12-22K, RPM MW 10.2, Vis 38, PV 7.0, YP 7, Gels 3/4/6, ph 10.0, WL 32.0, Cake 2, Chl PP #1 1300, SPM 80, GPM 326, Str 10, Lnr 6.50 BHA: Bit 7-7/8" Bit sub 6-1/4" DC's 6-1/2" Jars 6-1/2" DC's 6-1/4" Total Length Drilling/taking MWD surveys from 6900' to 7071'. At 7071' loss circulation was encountered Pulled kelly out of hole and slowed pump rate to 42 spm. Mixed and pumped 4 LCM pills with 35 ppb lcm products. On 4th pill pumped circulation was regained. Staged pump up to drill rate Drilled from 7071' to 7076' and loss circulation Racked back kelly and POOH strapping drillpipe. Laid down directional tools. No correction required on pipe strap Made up bit #3 and drill collars, went in hole with same Changed out rotating head drillpipe rubber Slip and cut 84' of drill line Service rig Trip in hole filling drillpipe every 30 stands. Trip hole to 6909' Wash and ream from 6909' to 7076' for safety and due to backside wanting to pack-off Drilled ahead. Drilled from 7076' to 7236' with no problems Depth Inclination Azimuth DC $40,607; TC $827,513 2/10/2013 2/10/13 Day 15 MD 7250', made 14' in 1 hr Activity at report time: LD DP Bit #3 rerun 3711' 7250' made 3539' in 83.0 hrs, WOB 12-22K, RPM MW 10.3, Vis 33, PV 7.0, YP 8, Gels 3/4/6, ph 9.0, WL 28.0, Cake 2, Sol 2.7, Chl Drill from 7236' to 7250' Circ & cond hole for logs TOH to log RU loggers & log TIH at slow rate because of loss circulation Break circulation & circulation for 5 mins, lost circulation, pump LCM slugs to regain circulation Safety meeting LD DP DC $69,003; TC $896,516 Monday, February 18, 2013 Page 11 of 13

12 2/11/2013 2/11/13 Day 16 MD 7250' Activity at report time: Circ between cement stages LD DP PU & break kelly LD DP Pull & remove rotating head LD DP Pull wear bushing & clear rig floor to rig up csg crew Hold pre-job safety meeting with rig crew & csg crew, RU csg crew Run csg at slow rate because power tongs wouldn't spin pipe fast enough Fill csg & break circ Run csg - csg 7,250' as follows: float shoe, jt 5-1/2" 20# N-80, float collar, 10 jts 5-1/2" 20# N-80, DV 6,838', 21 jts 5-1/2" 20# N-80, top of 6,025', 26 jts 5-1/2" 17# N-80, DV 4,942' 113 jts 5-1/2" 17# N-80'. 2 spiragliders per joint btm 14 jts, 2 below and 1 above top DV tool Fill csg & safety wash to btm, circ while RD casing crew Have safety meeting with rig crews & Halliburton Cmt first stage Pump bomb & circ DC $195,581; TC $1,095,097 2/12/2013 2/12/13 Day 17 MD 7250' Activity at report time: Rigging down Circ after first stage of cmt job. First Stage: pumped 10 bbls fresh water, 50 sks lead Versacem-H, lb/gal 1.25 cuft/sk, 62 sks tail Versacem-H lb/gal 1.25 cuft/sk pumped 167 bbls displacement. Bumped plug with 1100 PSI (700 PSI over) dropped bomb & open DV tool, circ 4 hrs. Second Stage: pumped 10 bbls H2O spacer, 20 bbls Super Flush spacer, 10 bbls H2O spacer 177 sks lead Versacem-H lb/gal 2.27 cuft/sk, 310 sks tail Versacem-H lb/gal 1.24 cuft/sk, pumped 158 bbls displacement, bumped plug with 2600 PSI (1600 PSI over). Dropped bomb & opend DV tool, circ 4 hrs. Third Stage: pumped 10 bbls H2O spacer, 171 sks Halcem-C lb/gal 1.33 cuft/sk cmt, displace with 115 bbls fresh water bumped plug with 2600 PSI (2100 PSI over) plug 17:28 2/11/ RD cementers ND BOP, left stack, set slips with 105,000#, make rough cut on casing, LD BOP Install tbg head & test to 3000 PSI Jet & clean pits, rig 2:00 AM 2/12/ RD DC $122,472; TC $1,217,569 Monday, February 18, 2013 Page 12 of 13

13 Monday, February 18, 2013 Page 13 of 13

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