API: 49-025-239210000 Spud Date: 09/12/14 Drilling Completed: 10/02/14 Location: Sec. 28 T38N R78W 1457’ FSL & 1964’ FWL Surface Coordinates: Lat. 43.231544º,

• API: 49-025-239210000• Spud Date: 09/12/14• Drilling Completed: 10/02/14• Location: Sec. 28 T38N R78W 1457’ FSL & 1964’ FWL• Surface Coordinates: Lat. 43.231544º, Long. -106.223531º• Bottom Hole Location: 85.44’ N & 2106.54’ W of surface

location or approximately 1542’ FSL & 143’ FEL SE/NE• Ground Elevation: 5541’• Kelly Bushing Elevation: 5556’• Logged Interval: ~700’-7457’ TVD (Niobrara “C”)

Universal Oil & Gas, LLC Bothwell Syncline Federal 1-28H Natrona Co. Wyoming

True Drilling Rig #26

• Highly fractured and faulted syncline to the south west of the Teapot Dome Anticline. Seismic analysis revealed numerous zones of possible hydrocarbon traps targeted in the lateral drilling operations.

Fracture Zones Of Interest

Surface Location/Lateral

Surface Location/Lateral



• Vertical/Pilot & Tangent Operations: The Bothwell 1-28H Was planned to have a back azimuth deviated pilot hole (10˚ per 100’ deviated to the East of surface) drilled prior to the lateral operations.

• The back azimuth portion was planned to keep the designated lateral at ~1500’ Vertical Section, within Sec. 28. Later in the drilling operation it was brought to the attention of Seidel Geologic TM to hold lease obligations the proposed bottom hole location be located in section 29.

Start of Tangent/Back Azimuth

Surface Location

TD of Vertical/Pilot As Planned

End of Tangent/Back Azimuth

Universal Oil & Gas, LLC Bothwell Syncline Federal 1-28H Pilot & Tangent Operations

• The Bothwell 1-28H Pilot was planned to TD 100’ into the Niobrara Formation, 7” casing was set to a total depth of 4857.68’ TVD.

• Due to faulting in the Pilot Hole the depth of Niobrara Formation was adjusted based off samples, as well as real time gamma ray readings. This faulting deepened the prognosis depth of the Niobrara by ~400’ TVD.

Start of Tangent/Back Azimuth

Surface Location

TD of Vertical/Pilot

End of Tangent/Back Azimuth

Universal Oil & Gas, LLC Bothwell Syncline Federal 1-28H

Pilot Operations Cont.• Re-entry of the Pilot hole was conducted on 09/22/14 in

order to drill +100’ into the Carlisle formation to obtain electronic logs through the Niobrara.

• Upon re-entry, a mechanical failure (collapse) of the 7” casing was encountered at ~4726’ TVD. The sample cuttings being returned to the surface were of soft, uncured cement, and stainless steel shavings originating from the casing.

• Pressure testing of the casing was conducted and the casing passed the integrity at 1500 psi.

• Subsequently the decision was made to attempt to mill through the casing to complete the pilot hole and run electronic logs. This attempt to mill failed on 09/22/14.

Sample 4875’ MD

Casing Cuttings

Uncured Cement

Sample 4875’ MD


Curve Operations• On 9/23/2014 a whipstock was set at 4241’ TVD, a window

was milled in the 7” casing to kick off for the curve portion of the well.

• Milling was completed on 09/25/14 and the window was drilled ~6’ into the formation. Late on 09/25/14 and into 09/26/14 the curve was time and control drilled from 4260’-4356’ MD with a Hughes Tri-Cone bit in order to gain sufficient distance from the Pilot hole.

• After Tripping out of the hole on 09/26/14 to change to the curve BHA the curve was kicked off on 09/27/14 at 4356’ MD/~3320’ TVD. The curve was landed at a total depth of 6028’ MD/5317’ TVD and an inclination of 88.07º, on 09/30/14.

Milling/Control Drilling Casing

TD of Pilot Hole 4875’ TVD


Curve Operations Cont.• During drilling of the curve portion of the Bothwell 1-28H numerous small TVD changes or possible faulting/fracturing was

encountered starting at ~4861’MD/4782’TVD. This faulting deepened the landing depth of the curve to ~5315’ TVD, causing the directional team to “rotate” tangents into the curve in order to bring the well bore to the specified depth.

5206’ MD Survey

Faulted intervals seen in curve

4985’ MD Survey



5554’ MD Survey 5839’ MD Survey


Target Top

Wellbore

Target Top

Wellbore

Target Top

Wellbore

Target Top

Wellbore


Lateral Operations• The lateral was started directly after landing the curve on

09/30/14.

• The well was prognosed and planned to have ~89º down dip to the well bore in order to follow the target formation of the Niobrara “C”.

Niobrara “C”

Target Top

Wellbore

Survey Nodes

Universal Oil & Gas, LLC Bothwell Syncline Federal 1-28H Lateral Operations Cont.

The lateral was started directly after landing the curve on 09/30/14.

During the drilling of the lateral numerous structural changes were seen in the targeted formation. The target interval rolled from a ~89˚ down dip to ~92˚ up dip then faulted down as it was determined we had drilled into the foot wall or dropped block of a fault. During the final portion of the lateral the Bothwell 1-28H took significant volume of drilling fluid losses (+2000BBLS) to the formation due to a fractured interval that was encountered. This fracture interval at the end of the lateral also mechanically stuck the pipe most likely due to a collapse that packed of the BHA and made it irretrievable.

Lost Circulation ZoneUp-dip Feature


• Tight Sands seen in the center part of the target interval had little to no porosity. These sands were extremely well cemented, often contained higher amounts of Bentonite and were associated with lower gas and slightly slower rates of penetration. Trace amounts of oil staining were visible but bound within the matrix of the rock they would not be able to be produced without fracking.

Slower Drilling

No Porosity/No Gas

Bentonite Zone Bentonite Zone


• Calcareous Shale in the upper part of the target zone were more porous and prone to having better gas shows than the sand directly below. The shale interval drilled faster on average and displayed roughly double the amount of liberated gas while drilling. The end of the lateral however showed the shale to be a more unstable drilling medium and prone to collapse when extreme structural anomalies are encountered. This caused a massive loss of drilling fluids +2000 BBLS and a stuck BHA, which was non-retrievable.

Lost Circulation/Stuck BHAPorosity/More Gas


The lateral was started directly after landing the curve on 09/30/14.

During the drilling of the lateral numerous structural changes were seen in the targeted formation. The target interval rolled from a ~89º down dip to almost a 92º up dip very quickly then faulted down as if we had drilled into the down drop block of a fault. The last portion of the lateral the Bothwell 1-28H took significant amount of losses (+2000BBLS) to the formation due to a fractured interval that was encountered. This fracture interval at the end of the lateral also mechanically stuck the pipe most likely due to a collapse that packed of the BHA and made it unretrievable.

Lost Circulation Zone

Tight Sand/Less Gas

Shale/Gas Increases

Shale/Gas Increases


Kick Off Point

Fractured Zone/TD

• The lateral finished drilling on 10/02/14, with the entry into the fracture zone seen at~1800’ vertical section. The BHA drilled 300’ of vertical section into this fracture zone before sustaining a massive fluid loss and eventually becoming stuck. Once stuck due to insurance purposes on the MWD/Directional tools the decision was made to “Jar”, mechanically free, the lost tools.

• The jarring was done from 10/03-10/06/14 and was unsuccessful. The decision was made at ~0700 MST on 10/06/14 to plug and abandon the Bothwell 1-28H.

Total Depth 7457’ MD

Projection to bit: 7457’MD, 86.66º INC, 271.03º AZI, 5335.35’TVD, 2106.54’VSBottom hole location: 85.44’ N & 2106.54’ W of Surface / 1542’ FSL & 143’ FEL SE/NE Sec. 29 T38N R78W

Kick Off PointTotal Depth 7457’ MD

Hydrocarbon ShowsNiobrara A 4853’-5056’ TVD

Summary

• None to good fluorescence

• Instant-slow blooming, diffusing to streaming cuts beginning at 5080’ MD 92’ into the Niobrara A

• Trace light brown oil staining observed beginning at 5080’ MD

• Fluorescence varied from bright white-blue-dull yellow gold

• Gas shows muted due to drilling on air to prevent lost circulation ~peak connection gas 73 total gas units

• Mud weight consistent at 9.0 lbs/gal

• No visible free oil observed in reserve pit, shakers or in samples

• Trace intergranular porosity observed

Hydrocarbon ShowsNiobrara B 5056’-5195’ TVD

Summary

• Fair to good fluorescence

• Instant-slow blooming, diffusing to streaming cuts

• Trace to common light brown spotty oil staining observed throughout Niobrara B member

• Fluorescence varied from common bright white-blue to trace dull yellow gold

• Gas shows associated with connection gases. Peak connection gas 69 total gas units

• Mud weight ranged from 9.0 to 9.1 lbs/gal

• No visible free oil observed in reserve pit, shakers or in samples

• Trace intergranular porosity observed

Hydrocarbon Shows Niobrara C 5195-5355’ TVD

Summary

• Shows increased in Niobrara C member

• Poor to good fluorescence


• Trace to common light brown spotty oil staining observed through Niobrara C above middle of lateral target zone


• Gas shows associated with connection gas and possible fracture porosity. Peak gas 91 total gas units at 5483’ MD


• Trace visible free oil observed in reserve pit and shakers

• Trace intergranular porosity observed w/trace fracture porosity

Hydrocarbon Shows Niobrara C Lateral5933-7457’ MD

Summary

• Shows dependent on lithology

• Poor to good fluorescence


• Trace to common light brown spotty oil staining observed through Niobrara C above middle of lateral target zone

• No shows in siltstone facies of target zone


• Gas shows associated with connection gas and possible fracture porosity. Peak trip gas 194 total gas units at 7370’ MD


• Trace visible free oil observed in reserve pit and shakers

• Trace intergranular porosity observed w/trace fracture porosity

• 357 total gas units observed upon circulating 27 hrs post TD

Hydrocarbon Potential Summary

• Most productive zones are Niobrara B & C members• Further data gathering and evaluation required to determine hydrocarbon

potential• Fracture zones severely under-pressured.• Fracture zones highly unstable when drilling laterally.• No observable fluid recovered from fracture intervals due to lost circulation• Gas shows muted due to higher mud weights and drilling on air• Oil shows indicated moderate volumes of matrix bound fluid• Overall Niobrara B & C displayed consistent fair to good cut fluorescence


Recommendations

• Drill vertically into one of the fractured intervals seen on seismic. Then continue on to the Dakota or Morrison Formations below to asses their potential.

• Electronically log the intervals of interest and make adjustments accordingly to target the most viable interest.

• Drill on air to minimize the amount of hydrocarbon migration due to drilling fluid over pressure.

• Core the intervals of interest for potential total organic carbon readings.

• Complete the well with perforated casing and determine recoverable hydrocarbons.

Vertical Drilling

• Target the best zone observed while evaluating the vertical well drilled into zones of interest.

• Switch to a unconventional approach and target tight oil shale that will need to be hydraulically fracked to complete.

• Drill parallel within the frack radius to fractured zones due to hole instability and fluid losses.

• Using knowledge gained from electric logs and or coring to target the most organically rich zones and maintain wellbore placement within this interval.

Lateral Drilling

Documents

API: 49-025-239210000 Spud Date: 09/12/14 Drilling Completed: 10/02/14 Location: Sec. 28 T38N R78W 1457’ FSL & 1964’ FWL Surface Coordinates: Lat. 43.231544º,