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8/8/2019 002.Bill Daugherty
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DUG EastTempting Targets in the Southern Appalachian Basin
PittsburghNovember 3, 2010
www.ngas.com
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Disciplined growth through the drillbit
Exploit horizontal drilling potential of prospects
Add acreage opportunistically
Recent success into Weir Sand oil and gas formation increases oil exposure
400 potential drilling locations on 70,000 acres
Drilling program results in predictable production growth
Drilling funded from cash flow
Limited financial risk
Drilling with partnerships and JV partners to prove up additional reserves
Strategy
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Southern Appalachian Basin98% successful completion
rateMultiple, low-risk payzonesDevonian Shale consists ofCleveland; upper, middle andlower Huron sections
Long-lived asset base withrepeatable drilling1,200 Btu dry gasPipeline infrastructure enablesus to move gas to the market
Core Area
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Appalachian Lease Position315,000 acres
220,000 acresundeveloped
Large undevelopedareas due to coalmining activities
Well developedgathering infrastructure
New horizontal drillingtechnology increasingoil and gas recoveries
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Drilled first verticalwell in 1989
Drilled first horizontalwell in February 2008
56 on line
Operating 1,000vertical DevonianShale wells
NGAS History in Devonian Shale
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Structurally
uncomplicatedUniform structurethroughout area ofinterestGood control with over1,000 verticalwellboresPredictable declineratesNo water challenges
Devonian Shale - Huron/Cleveland Sections
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315,000 acres
Drilled 56 Huron/ClevelandShale wells
2,000 potential horizontaldrilling locations
$1.0 MM average costsUp to 1.1 Bcfe EUR/well
Extending lateral legs out4,700 feet
Horizontal Devonian Shale Play
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Increased oil and gas production accelerates value creationNew technology drives cost of oil and gas finding costsdownUses existing pipeline infrastructure to move gasAdds to operational flexibility
Reduces total wellsite footprint One horizontal location replaces three four vertical locations Pad drilling - multiple horizontal wells on single location
Allows access to development of areas otherwiseinaccessible due to coal mining activities or difficult terrain
Horizontal Drilling Upside
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315,000 acres
2,000 potential locations
Improved economics withextended laterals
Environmentally sounddrilling and fracingoperations Drilling with air Nitrogen fracing no fluids
are used on shale zones
Horizontal Devonian Shale Play Summary
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Increases oil exposure
70,000 acres78 producing vertical wells2 horizontal test wells
Weir Well #1- 2,040 horizontal leg- 10-stage water frac
Weir Well #2 2,500 horizontal leg 12-stage foam frac
Significant growth potential 400 horizontal drilling
locations, risked at 40%
Weir Sand Oil & Gas Prospect
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NGAS is the operator30,000 Mcf/d firm capacityLarge area of controlStreamlines gastransportation
90% of NGAS productiongoes direct from wellheadto interstate pipeline
Pipeline willaccommodate 60,000Mcf/d
Gathering System Infrastructure
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Processes up to 25,000Mcf/d
Expandable design;second 25,000 Mcf/dcapacity equipment instorage
Selling 43,500 gallons/day
Straddles East TennesseeInterstate Pipeline
50/50 JV with SeminoleEnergy
Rogersville Liquids Processing Plant
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TVA Building 880MW Gas-Fired Plant5.5 miles fromRogersville gasprocessing plant(John Sevier plantsite)160,000 Mcf/dmaximum naturalgas fuel burnFall 2011completion date
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TVA John Sevier
880 MW gasplantTVA plans to idlenine coal-firedunits
Progress Energyto close 11 coal-fired plantsDuke Power toclose 18 coal-fired plants
Southeast Utilities Ups Plans to Replace Coal-Fired Plants
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Illinois Basin / New AlbanyShale
45,000 acres 40 wells (3 horizontals) New gathering system
Arkoma Basin CBM (25%working interest)
51 horizontal wells 15 vertical wells
West Virginia Devonian ShaleinterestsWilliston Basin Bakken Play
Dunn County, ND overrideson 18,000 acres
Exposure to Other Basins
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Large land position (315,000 gross acres)
220,000 undeveloped acresPredictable reservoir characteristics
1,000 vertical control wells
Generous takeaway to markets with premium pricing NGL processing facility on line
No water challenges Drilling with air Fracing with nitrogen
Ample equipment and services available
NGAS Devonian Shale Advantages
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Large unconventional resource base 360,000 acres (gross)
Ample gathering/processing facilitiesProven horizontal drilling/completiontechnologyInterests in over 1,400 producingwellsDrilling partnerships prove up acreageposition
Shares development costs Substantial back-in interest after
payout
Increased oil exposure in Weir Sand 70,000 acres to develop 400 potential horizontal locations
NGAS Summ ary
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Forward-Looking StatementCorporate OfficeNGAS Resources, Inc.120 Prosperous PlaceSuite 201Lexington, KY 40509859.263.3948859.263.4228 (Fax)Website: www.ngas.com
ContactsWilliam S. DaughertyPresiden t & CEO
D. Michael WallenExecutive Vice President
A number of statements made during the company'spresentation, other than statements of historical fact,may be forward-looking within the meaning of Section21E of the Securities Exchange Act of 1934. Thesestatements involve risks and uncertainties that couldcause actual results to differ materially from thoseexpressed or implied in those statements due toeconomic conditions and other risks, uncertainties
and circumstances partly or totally outside the controlof the company, including risks of productionvariances from expectations, volatility of productprices, the availability of capital to fund drilling and theability of the company to implement its businessstrategy. These and other risk factors are describedin the company's annual report on Form 10-K for 2009which is available on the companys website. Thecompany will not necessarily update any of theforward-looking statements except as required by law.
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