H. H. HOWELL, INC. Bevans & Wildcat Field Menard County, Texas API #42-327- 31235 RRC Permit # 803460 GAU letter, RRC Letter #GAU-1436 = 245 Ground Elevation GL: 2186 (Rig KB to GL =8 ) Rig KB =2194 Location: 510 FEL & 1680 FSL of J. D. Sheen Survey #6, A-1021 Long: -99.99042 Lat: 30.81830 State Plane: (Texas Central) X: 2107639.3127 Y: 418996.0993 The drill-site is 6 miles east of Ft. McKavett & 14 miles southwest of Menard (straight line). Legal: 510 FEL & 1345 FSL of Oil and Gas Lease commencing July 3, 2013, from Jerry Wayne Krumrey and Nancy Anne Krumrey, Lessor and H.H. Howell, Inc., Lessee, recorded by Memorandum in Volume 240 at Page 645 of the Official Public Records of Menard County, covering 583.240 acres of land in Menard County, Texas. Permit Depth: 3500. Primary Objectives: Lower Cisco @ 1,760 ; Crosscut @ 2,720 ; Camar @ 3,090 Secondary Objectives: King sand @ 1,390 ; Goen porosity @ 3,150 ; Detrital @ 3,300. Directions: From Menard go west on Eldorado Hwy 190 towards Fort McKavett approx 16 miles to Dunagan Road. Turn left (south) and crossover the San Saba River. Follow Dunagan Road curving right (west) approx 1 mile to McGowan Ranch Road and turn left (south) through rock pillar gate. (If you hit the River again you have gone too far). Thru rock pillar entrance, proceed approx. ¾ mile south/southeast to a Y (with a cowboy cut-out and Baylor painted on it). Continue right (southwest) at the cowboy and then south approx. 2.5 miles (across 2 cattle guards) until you come to a high fence gate. At the high fence gate turn left (east) thru two low fence gates. Combo is 1577 on the lock w/ electrical tape (or 5761 is the other lock). Be sure to relock them back together. Proceed east 2 miles on easement road to Howell Bevans lease entrance Dos Pacanas ranch gate on the left (east). Combo 8758. Follow flagged oilfield road approx 1 mile east to drillsite. Daily Drilling Reports 12-19-14: Meeting with Inland Ocean to finalize operational plans. Confer with landowner. 12-31-14: Transmit drilling prognosis, proposed location plat and commence preliminary operations including contact with 3 drilling companies, mud company. Arrange survey work. Notify landowner of commencement of operations, access and timing. 01-02-15: Continue preliminary operations, review current drilling bids. 01-05-15: Update drilling prognosis. Confirm preliminary survey work. 01-08-15: File RRC Form GW-1. Confer with landowner. 01-09-15: Commence preliminary survey work on the lease. 01-15-15: Receive GAU (Groundwater protection) letter (see above). 01-20-15: Surveyor stakes drillsite and measures distances from lease, Survey lines and the old Quinn Bevans producer, also ground elevation (see above). Report from Survey manager: The site looks good with nothing in the way. Good flat surface and easy to find. 01-21-15: Receive and work with draft of Survey Plat; receive revised Survey Plat and approve same. 01-26-15: Expect to receive Final Survey Plat and file for W-1 (permit). 01-27-15: Received Final Survey Plat. 01-29-15: Filed Form W-1, Application for Drilling Permit. 02-10-15: Receive permit (see above).
Drilling Report Page 2 of 7 02-11-15: Confer with landowner who approves drillsite as staked and access. Scheduled Byler Dozer to meet on location Friday to begin road, location and pit work. Arranging surface hole and surface casing to be preset by Lange Drilling. Receive drilling contract and primary drilling rig is tentatively scheduled for early March. 02-20-15: Summary since last report: Met Byler Dozer and drove to drillsite (on 2-13-15). Agreed to scope of work for access and site plan. Flagged out new oil field road from entrance gate to location (along south fence line). Confirmed with landowner about necessary fence and gate modifications: at the 2 mile turn and at the Dos Pacanas high fence lease entrance in order to accommodate drilling rig. Coordinated with fencing personnel and Byler. Alert GTE and landowner about site work and potential phone line interruption. 03-04-15: Byler started last week but weather has limited time on location. Been working this week until this afternoon and weather getting bad again. Gate and fence work underway also. 03-11-15: Summary since last report: Byler Dozer continues to build roads and location after 2 weeks of intermittent working weather. Gate and fence work also underway. Anticipate location will be ready for Lange Drilling to spud and pre-set surface casing in +/- 7 days. 03-17-15: Road, location, fencing and entrance work 95% complete. Wet weather today, but expect Lange Drilling to Move-in and spud surface hole on Monday or Tuesday. 03-20-15: Road, location*, fencing and entrance work complete (*Cellar to be finished after Surface casing set). Roads are good and prep to move-in Lange Drilling. 03-21-15: Move-in Lange (Surface-Hole) Drilling Rig. 03-23-15: This AM, Rigging up Lange Drilling and awaiting arrival of drill pipe; expect to spud later today. 03-24-15: This AM, prep to spud. 1:30 Afternoon update: Spud surface hole with Lange Drilling and presently drilling 11 hole @ depth of 40. Expect to TD surface hole this PM, plan to run and cement surface casing tomorrow. 03-25-15: [1-s] This AM, condition surface hole to run casing @ 255. Spud and drilled 255 in last 24 hrs. Mud: air/native. Bit #1: 11 in @ spud. Unload & tally 255 8-5/8 23# new STC surface casing. 03-26-15: [2-s] This AM, Surface casing set @ 255 and Lange released. In last 24 hours, run and cement 255 of Surface casing (described above). Cemented with added pea gravel for lost returns and successfully tested to 1800#. Railroad Commission was on-site to witness. 03-27-15: [3-s] This AM, Byler Dozer installing cellar and prep to receive primary drilling rig, Blueline Drilling Co., expected to move-in the week April 6, weather permitting. 03-31-15: Blueline Drilling will have rathole drilled in next day or two and line pit. Mudlogger and water have been alerted to Drill-out spud date of Mon. or Tues. 04-06-15: This AM, moving in Blueline Drilling. Expect rig-up tomorrow and drillout late PM. 04-07-15: This AM, moving in and rigging up Blueline Drilling. Expect drillout this PM.
Drilling Report Page 3 of 7 04-08-15: [1] This 6:00 AM, drilling @ 526. Rigged up Blueline and drilled 271 in last 24 hrs. Mud: 8.7#, 40 visc, WL na. Bit #1: 7-7/8 Ulterra U516S in @ 255. Summary: move-in rig-up; work on pump & nipple up; service rig and sling shot collars; test BOP; drill cement; drill new formation; displace hole with mud; drill. 04-09-15: [2] This 6:00 AM, drilling @ 1,610. Drilled 1,084 in last 24 hrs. Mud: 8.9#, 40 visc, WL na. Bit #1: 7-7/8 Ulterra U516S in @ 255. Deviation Surveys: 1/2 o @ 639 ; 1/2 o @ 1144 Mud loggers: Current background gas 5 units; no shows. Summary: drill; service rig; drill; Wireline survey; drill; wireline survey; drill; service rig; drill; unload hole; drill. Expect to drill Danny Mae sand in next 24 hours. 04-10-15: [3] This 6:00 AM, drilling @ 2,370. Drilled 760 in last 24 hrs. Mud: 9.2#, 44 visc, WL na. Bit #1: 7-7/8 Ulterra U516S in @ 255. Deviation Surveys: 3/4 o @ 1647 ; 1-1/4 o @ 1982 Mud loggers: Current background gas 6 units; Max gas 31 units @ 1956 ; no shows. Summary: drill; Wireline survey; drill; WL survey; drill; WL survey; drill. Expect to drill Canyon & Palo Pinto limes and Cross Cut sands in next 24 hours. 04-11-15: [4] This 6:00 AM, drilling @ 2,965. Drilled 595 in last 24 hrs. Mud: 9.3+#, 43 visc, WL na. Bit #1: 7-7/8 Ulterra U516S in @ 255. Deviation Surveys: 1 o @ 2340 ; 3/4 o @ 2592 Mud loggers: Current background gas 6 units; Max gas 9 units @ 2881 ; no shows. Summary: Drill; WL survey; drill; WL survey: drill; service rig; drill. 04-12-15: [5] This 6:00 AM, drill stem testing @ 3,223. Drilled 258 in last 24 hrs. Mud: 9.6#, 55+ visc, WL na. Bit #1: 7-7/8 Ulterra U516S in @ 255. Deviation Surveys: 1-1/2 o @ 3029 Mud loggers: Running DST over Shows #1-3 (See below) Summary: Drill; WL survey; drill; circ samples; drill; circ samples; drill; circ samples; drill; circ for short trip; short trip; circ for DST; POOH; pick up DST tool; trip in hole w/ DST tool; DST. Mud Log Show #1: 3,080-3,095 (Camar sand); fair but thin drill break; 14 max gas units; 4% tan oil stain; 5% bright yellow fluorescence; instant good dry cut; fair oil odor. Mud Log Show #2: 3,150-3,165 (upper Goen lime); fair drill break; 33 max gas units; trace of crystal-lined fractures (FFWXLs) w/ tan oil stain & odor; 3% bright yellow fluorescence; good dry cut; fair oil odor. Mud Log Show #3: 3,180-3,213 (lower Goen lime); good drill break on bottom; 44 max gas units; 2-4% re-crystalized zones w/ tan oil stain & odor; 7-8% bright yellow-white fluorescence; good dry cut; good oil odor. Good drill break @ 3210-3213 had oil in sample wash water. 04-13-15: [6] This 6:00 AM, R/U open-hole loggers @ TD 3,500. Drilled 277 last 24 hrs. Mud: 9.5#, 55+ visc, WL na. Bit #1: 7-7/8 Ulterra U516S in @ 255. Deviation Surveys: 1-1/4 o @ 3335 Mud loggers: Show #4 (See below) Summary: DST; POOH w/ DST tool; breakdown & load out tool; TIH to bottom; P/U kelly & circ break; drill; WL survey; drill; circulate to log; TOOH to log; service rig; continue TOOH to log; rig up loggers. Mud Log Show #4: 3,224-3,232 (possible Gray-Gardner sand); excellent but thin drill break; 179 max gas units; 60% white sand w/ porosity; 10% bright yellow fluorescence; strong oil odor. Oil on the pits.
Drilling Report Page 4 of 7 04-13-15: (cont) DST #1: 3,078-3,223 (Note: drill depth and E-log depths are off 13-feet). Opened tool for first flow with weak blow throughout 30 min. SI 1 hour; Reopened well for second flow w/ weak blow throughout 60 min. 1st 30 min Flow Pressures: 38-46# 1st 1 hour SIP: 128# 2nd 60 min Flow Pressures: 41-46# 2nd 2 hour SIP: 356# Recovered in drill pipe: 50 Gas in collars & 40 gas, and oil cut drlg mud (2% oil). Sample Chamber: 46#, trace gas, 1,100 ccs free oil (gravity 39.1 @ 60 deg) & 900 ccs gas cut drlg mud. Note: Oil recovered on DST is green/brown colored, apparent low viscosity (flows easily), sweet crude. 04-14-15: [7] This 6:00 AM, rigging down rig @ TD 3,500. Logged & ran production casing in last 24 hrs. Mud: na. Bit #1: 7-7/8 Ulterra U516S in @ 255, out @ 3500. Summary: Logging with Baker Hughes- High Definition Induction Gamma Ray Log; Compensated Z-Densilog; Compensated Neutron Log; Digital Spectralog; Minilog; Gamma Ray Log; Digital Acoustilog Gamma Ray Caliper; trip in hole w/ drill collars; evaluate logs and recommend running production casing; TIH; break circulation; circulate in prep to down drill pipe; lay down drill pipe and collars; rig up casing crew; run 83 joints of 4-1/2 10.5# production casing to 3494 ; circulate through casing; rig up cementers & cement w/ 545 sx Class C w/ 2% CaCl cement; plug down @ 11:15 PM; pick up BOPs and set slips; cut off casing & rigging down rig. Rig released @ 3:15 AM. End of Well Report to follow. Daily Initial Completion Reports 05-16-15: Install new locks and chain on lease gate. Inspect location weather situation. 06-01-15: Solicit frac and acid stimulation bids for pending completion. 06-10-15: Move-in Frac tanks for completion operations. Rig scheduled for Wed 17th. 06-15-15: Inspect location for weather situation. Location received +2 inches of rain in a few hours; too wet for Wednesday. Rig rescheduled for next week. 06-23-15: Yesterday, again inspected for access; low spot still wet. Have scheduled Anchor truck to set anchors for workover rig today; will get another update this PM. Have rescheduled Forbes completion rig for July 2nd. (Soonest they could get back to us). Current plan is to perforate on Friday, 3rd, test over the weekend and then the Mac Oilfield Services frac on Monday 6th. 06-24-15: This AM, anchors are drilled and set; roads looking good. 07-02-15: This AM, move in completion rig. Expect to run cased hole logs and perforate Friday (tomorrow). 07-03-15: TIH with bit & scraper. Circulated. Drum chain on WO rig broke. Repaired in 1 hr. TIH with PSI Wireline and run Cased Hole GR, CBL log. TOH with log tools. Bond good across interval to perforate. TIH w/ 3 1/8 (7 ) perforating gun. Perforated 3210 16 (6 spf) in Gray-Gardner sand. TIH w/ packer, model AD-1, 4 ½. GIH w/ 10 jts. in hole and rig broke down at 4:30pm. WO mechanic. SDFN
Drilling Report Page 5 of 7 07-04-15: Mechanic repaired rig by 10:00am. Finished GIH with packer. Set at 3,050. N/U tree. TIH with swab. Hit fluid at 60 ; pulled from 1500, 2500 and 3030. Recovered 9 bbls load water, no oil. SDFN 07-05-15: Shut down for Sunday. 07-06-15: This AM, SITP 0#. TIH with swab. Hit fluid at 2900 (150-feet feed-in). Swabbed ½ bbl. water. At 9:00 am TIH with swab. No fluid level. Pulled no water, no oil. At 10 am repeated with same results. TIH to deepen packer to 3150. Lowered packer deeper and reset @ 3150 ; Swabbed 40 water and 8-10 oil (5 gal.). Made additional swabs every hour with no entry. Last swab had no entry. Loading hole with water and prep to add Goen lime perforations in the AM. 07-07-15: This AM, SITP 0#. Go in hole with PSI Wireline perforating gun and perforated 3,184-3,206 (Goen A ) and 3,220-3,226 (Goen B /Caddo). Rigging-up to perform acid job. 07-08-15: This AM, SITP 1200#. Opened well for flow back @ 8:00 AM. At 9:00 AM, flowing solid stream 1-1/4 of spent acid water. Will continue flow back as long as well free flows, then swab. In last 24 hours, Went in hole and perforated Goen zones as reported above. Rigged up Mac Oilfield for Acid job (details to follow) Summary: Broke down perfs with 3400#; average treating pressure 2000#; pumped 3000 gal acid, completed with ISIP @ 1500#. Kept rig on standby to swab until swabbing unit is located. PM Update: Opened well @ 8:00 AM (as reported above) and it flowed at 175psi FTP. Recovered spent acid water with some oil, measuring 3 water in frac tank with 3 oil (160 bbls water and 13.5 bbls oil). Oil is greenish black, w/ good light color. Shut-in and lowered packer to 3,181. Swabbed water with last swab with 10-15% oil. Shut well in due to rain and bad weather conditions. Will check in AM and resume flowing well to tanks. Rig is still there and will swab as needed tomorrow. (Cannot get rig out or swabbing unit in; location is a mess according to Jerry). 07-09-15: This AM, after 2 hours swabbed 2 bbls w/ 30% oil, pulling from 2900. Packer is leaking. Ordered new packer rubbers and resume swabbing. At 1:30, pulled from 2900 recovering 2 bbls w 10% oil. Backside had 60#. Pulled packer out and observed 13 stands (780 ) soaking in oil, confirming oil is moving up the backside via packer leak. Remove packer & GIH with tubing only. Tubing in hole swab 2 bbls w/ 50% oil. 07-10-15: This AM, go in hole and swab open ended: Swab # Tagged @ Recovered Notes 1 2900 1-1/2 bbl 75% oil; 30 min 2 2850 1 bbl acid water. 3 2800 1 bbl acid water w trace oil 4 2800 1 bbl acid water w trace oil 5 2900 ½ bbl acid water w trace oil gas on casing side POOH w tubing; GIH w/ tubing and redressed packer. Set packer and resume swabbing: Swab # Tagged @ Recovered Notes 6 3000 1/2 bbl 100% oil; 0# on casing, 15# on tubing 7 SN no fluid-gassy 30 min 8 SN 2-gals 25% oil good gas 9 SN 1-1/2 gal 100% oil very gassy 07-11-15: Release and move out completion rig. Shut-in for weekend.
Drilling Report Page 6 of 7 07-13-15: 48 hours Shut-in pressure = uncertain; gauge was not working. Opened well and blew down in 5-10 minutes with possible fluid downhole. Shutin and went to town for new gauge. Returned and installed new gauge showing no pressure after about a two hour shut in. Reopened well and recovered no gas, just a whiff this time of air. Shut in. 07-15-15 48-hour Shut-in pressure = 0#. Opened well and observed good 30 second blow of air indicating possible fluid is moving uphole. Tie-in well to frac tanks; have 380 bbls capacity in tank #1, with 500 bbls in standby tank. Leave well open to tanks. 07-17-15: 48-hour tubing open to tanks w 0#. SICP 0#. No fluid recovered in tanks. Opened the 1 valve and again observed puff of air, suggesting fluid moving uphole. Will leave open over the weekend to tanks and move-in swab rig Tuesday or as available. 07-17-15: 48-hour tubing open to tanks w 0#. SICP 0#. No fluid recovered in tanks. Opened the 1 valve and again observed puff of air, suggesting fluid moving uphole. Will leave open over the weekend to tanks and move-in swab rig Tuesday or as available. 07-21-15: Tubing open to tanks w 0#. SICP 0#. No fluid recovered in tanks. Opened the 1 valve and again observed puff of air, suggesting fluid moving uphole. Will leave open to tanks and move-in swab rig Thursday. 07-23-15: Tubing open to tanks w 0#. SICP 0#. No fluid recovered in tanks. Opened the 1 valve and again observed puff of air. Move-in swab rig this AM and go in hole with swab as follows: 1 1400 2700 30% oil 70% water immediate 2 2300 3181 (SN) 30% oil 70% water immediate 3 2800 3181 (SN) 30% oil 70% water immediate 4 Dry wait 1 hr 5 3040 3181 (SN) 80% oil 20% water wait 1 hr 6 3030 3181 (SN) 30% oil 70% water wait 1-1/2 hr 7 3050 3181 (SN) 40% oil 60% water wait 1-1/2 hr 8 3100 3181 (SN) 35% oil 65% water wait 1 hr Estimate 3 bbls oil and 4 bbls water for the day. Oil has good odor, breaks out easy from the water. Shut well in and will resume in the morning. 07-24-15: SITP = 10# (12 hours). Opened well & GIH w/ swab as follows: 1 2700 3181 (SN) 50% oil * immediate 2 3030 3181 (SN) 10% oil (*bottoms) wait 1 hour 3 3060 3181 (SN) 60% oil * wait 1 hour 4 3100 SN 40% oil * wait 1 hour 5 3100 SN 50% oil * wait 1 hour 6 3120 SN 50% oil * wait 1 hour 7 3140 SN 40% oil * wait 1 hour 8 3170 SN 50% oil * wait 1 hour 9 Dry SN trace gas *water is oil streaked, grey filmy appears to be spent acid, KCl or drill fluids. Left well open to tanks. Total fluid recovered today 6 bbls: approx. 3 bbls oil, 3 bbls water. Reports continued on next page
Drilling Report Page 7 of 7 07-25-15: Open tubing pressure = 0#, no fluid recovered overnight in tanks, but observing slight gas vapors. GIH w/ swab as follows: 1 2700 3181 (SN) 90% oil * immediate 2 dry 3181 (SN) 100% spray oil wait 1 hour 3 3030 3181 (SN) 80% oil * wait 1 hour, Had good tail gas blow for 6 minutes 4 3140 SN 60% oil * wait 1 hour 5 3140 SN 50% oil * wait 1 hour 6 3160 SN 60% oil * wait 1 hour 7 3160 SN 50% bubbly oil * wait 1 hour 8 Dry SN gas dropping off *water is oil-streaked, grey filmy appears to be spent acid, KCl or drill fluids. Shut down for the day (Saturday). Left open to tanks; plan to resume Monday. Total fluid recovered today 4 bbls: approx. 3 bbls oil, 1 bbl water. 07-26-15: Open to tanks; no activity (Sunday). 07-27-15: Open tubing pressure = 0#, (41 hours) no fluid recovered. GIH w/ swab as follows: 1 2600 3181 (SN) 60% oil ** immediate 2 dry 3181 (SN) a little tail gas wait 1 hour 3 3080 3181 (SN) 40% oil ** wait 1 hour, 4 3130 SN 30% oil ** wait 1 hour 5 3175 SN 20% oil ** wait 1 hour 6 3175 SN 20% oil ** wait 2 hours 7 3160 SN 30% oil ** **water is clearing up. Shut down for day and release swab rig. Sending water and oil samples for analysis and evaluating for stimulation. 08-06-15: Awaiting samples to be analyzed; evaluating for stimulation. Surface operations suspended.