WOODBINE TREND WELLS #13 & #14 - TWO WELL PROJECT - MADISON/BRAZOS COUNTIES, TEXAS - PETROCO ENERGY CORP.
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Woodbine Trend Wells #13 & #14
Two Well Project
S.E. TEXAS WOODBINE TREND RESOURCE PLAY
Two WOODBINE HORIZONTAL Wells
SPECIAL OFFERING IN:
Madison/Brazos Counties, Texas
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
WOODBINE TREND WELLS #13 & #14 TWO WELL PROJECT
PetroCo Energy and PetroMax Operating have completed their first four of five Horizontal oil
wells in Madison County in SE Texas. A plot of the drilling plan/area, and actual Drilling Plat
are enclosed within the following pages. The first four(4) horizontal wells have been completed
successfully: the Wilfred Dainty #1H, the Machac #1H, the Miller #1H, and the Schiflet #1H.
Currently, we have completed drilling the Wilson #1H, which has a 6,200’ horizontal lateral
extension, is OUR 5th well, but is the Woodbine’s first well treated with Halliburton’s newly
developed 15-stage ‘swellable’ packer fracture completion technology. It was completed in late
November. The Wilson #2H reached TD with a 6,029’ lateral horizontal extension and will be
frac treated on February 7, 2010. The Wilson 191 #1H (#7) is currently drilling.
CURRENT WOODBINE WELLS & STATUS
Wilfred Dainty #1H Placed on pump = 446 BOPD IP (averaging 138 BOPD)
Machac #1H Placed on pump = 527 BOPD IP (down for repair - 127 BOPD
historic average; 27,236+ BO Cumulative)
Miller #1H Placed on gas lift; = 547 BOPD IP (averaging 173 BOPD)
Schifllett #1H Placed on gas lift = 603 BOPD IP (averaging 142 BOPD)
Wilson #1H Placed on gas lift = 838 BOPD IP (still averaging over 600+ BOPD)
Wilson #2H Drilled to TD w/a 6,029’ Horizontal extension; w/ historical 20-
stage frac scheduled for 02/07/10
Wells #7 & #8 Drilling Well #7 now, then the #8 following w/2nd rig
Wells #9 & #10 Scheduled to be drilled following Wells #7 & #8 with 2 rigs
Wells #11 & #12 Scheduled to be drilled 2 Rigs following the #9 & #10 Wells
Wells #13 & #14 Scheduled to be drilled 2 Rigs following the #11 & #12 Wells
This material is being forwarded to you so that you might have time to review and contemplate your possible
participation in these proposed Woodbine Horizontal Wells.
PLEASE BE ADVISED: The time frame for you to reserve a position in this OFFERING is fairly
short AND UNITS beyond Reserved Units ARE VERY LIMITED IN NUMBER.
We must have your Participation Agreement and the check for your D&T Funds ASAP!
There is no guarantee, its being offered on a
FIRST COME FIRST SERVE BASIS.
The following is an illustration of the cost breakdown for these TWO WOODBINE WELLS:
COST BREAKDOWN FOR THE WOODBINE WELLS #13 & #14
PER UNIT [ONE UNIT = .25% Working Interest unless otherwise specified]
Drill & Test Turnkey Amount [2 Wells] $ 28,800.00
[PAYABLE WITH PARTICIPATION AGREEMENT]
Completion, Equipping and Treating [2 Wells] 19,470.00
[PAYABLE UPON COMPLETION NOTICE/INVOICE] ___
TOTAL PARTICIPATION AMOUNT PER UNIT: $ 48,270.00
www.petrocoenergy.com 
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Pre-Subscription Summary
Name of the Project WOODBINE WELLS #13 & #14 TWO WELL
PROJECT: Well Locations: (To Be Determined prior to
Drilling) - Madison/Brazos Counties, South East Texas.
petroco energy PetroCo Energy Corp., with offices at: 800 W. State Street,
Garland, TX 75040, (972) 485-1155; (972) 485-1955 FAX,
CORP. is the administrator of this offering. All checks and
correspondence concerning this offering should be sent to
and/or made payable to PETROCO ENERGY CORP.
CONTRACTED PetroMax Operating Co., Inc. (PMO)
603 Main Street, Suite 201
Operator Garland, Texas 75040
(by PetroCo Energy) (972) 271-0999
(877) 971-0999 toll free
OPERATES ALL PETROCO ENERGY WELLS
Fax: (972) 271-2533
www.petromaxoperating.com
Those persons whose subscriptions to purchase the interest(s)
described herein are accepted by PetroCo Energy Corp., for an
amount of $48,270.00 TOTAL Turnkey amount per Unit,
and who are subsequently admitted in the Project.
Subscription Amount The offering period for the interest(s) will terminate upon full
subscription, or earlier, at the sole discretion of PetroCo and
PetroMax.
Completion Amount The Turnkey Subscription Amount for Drilling & Testing for
each Unit of interest is $28,800.00, payable upon subscription
in the program, to PETROCO ENERGY CORP.
The Total Turnkey Completion & Equipping Amount for
each Unit of interest is $19,470.00 [$9,735.00 per well],
which includes drilling vertically to the Woodbine section, and
then horizontally for as far as engineering allows, and a Multi-
Stage fracture treatment of the lateral horizontal section in the
Woodbine on each well.
www.petrocoenergy.com 
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Turnkey Drilling “Turnkey” as used herein means that the Operator, or his assigns,
will perform specified tasks and provide specified services for
Contract and a fixed price to Participants, but is not intended and should
Operations not be interpreted to mean that the Operator, or his assigns,
guarantees or undertakes to produce a particular end product
or result. Thus, in drilling operations and testing the wells at
a “turnkey” price, the Operator undertakes to take the wells
to the specified depth and to adequately test the wells without
additional charge to Participants; however if the Operator is
precluded from doing so by subsurface conditions encountered
or any other reason not within its control, the Operator is not
required to do anything further and shall be deemed to have
fully discharged its duties. If the wells for any reason not within
the control of the Operator prove not to be a commercial success,
or it is believed possible that production could be enhanced,
then any further work performed, such as another stimulation
treatment or recompletion in another zone, shall not be included
in the original turnkey contract or undertaking, but shall
constitute subsequent operations, the actual costs of which, like
all other operating costs, shall be borne by the parties prorata in
accordance with the working interest owned by each at the time
operations are undertaken.
PetroMax Operating Co., Inc. (PMO), will operate all wells
on behalf of the Participants, and PMO will attempt to drill
one well bore per well, to a depth sufficient to test the target
zone(s), complete and equip the well in the Woodbine Trend
in South East Texas. The turnkey price for lease purchase to
accomodate each well bore requirements, drilling, completing,
and equipping the Wells as stated herein, will be a firm price
as defined in the drilling and completion cost section of this
memorandum, and in the Drilling Agreement, with additional
assessments to be made to the Participants, only as noted herein.
Upon completion of the project wells, PetroMax Operating will
operate the project well(s) pursuant to the terms of an AAPL
Form 610 Joint Operating Agreement. PetroCo Energy Corp.
reserves the right to substitute any comparable “drill ready”
prospects for the locations described in this program summary
should a change be indicated or required. Any fluctuations or
modifications in the pricing or terms will be adjusted to the
benefit and satisfaction of the Participants at that time.
Note! All of these EXCEPTIONS to the Turnkey cost of drilling,
testing, equipping and completing a well in the Woodbine
Trend are generally NOMINAL considerations when they
occur, in contrast to the potential long-term financial benefits
these additional steps may help develop in the well.
www.petrocoenergy.com 
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Please Note: Operational, engineering drivent exceptions
listed in this document, as well as the Participation Agree-
ment, which could result in additional costs, include, but are
not limited to, (1) drilling, and any associated costs, of addi-
tion wellbore in the horizontal extension of the well, and (2)
additional frac stages, costs and/or materials.
Turnkey Drilling Agreements Limitations:
Per the terms of the TURNKEY provision, the OPERA-
TOR assumes certain risks inherent in drilling, testing, and
completion of the WELL. However, the risks borne by the
OPERATOR do not extend to fluctuations in the cost of raw
materials or services associated with drilling the WELL.
Specifically, the TURNKEY provision does not cover price
increases in areas including, but not limited to, drilling
rates, pipe costs, and completion equipment. The OPERA-
TOR may therefore, at its discretion, assess the PARTICI-
PANTS to offset the increase in market costs over original
AFE estimated costs. In the event the OPERATOR elects
to make such assessments, PARTICIPANTS will be given
the option to pay the additional cost, or to opt for a pro rata
reduction of ownership in the WELL.
Risk Factors Substantial risks are associated with any oil and gas explora-
tion and no guarantee is given that production of any kind
will be found.
Contracted PetroMax Operating Co. Inc., or its assigns or contractors
will drill, test, complete and operate the properties for the
Operator benefit of all the parties.
Operator Contact: PetroMax Operating Co., Inc. (PMO)
(to be contracted by 603 Main Street, Suite 201
PetroCo Energy for drilling Garland, Texas 75040
and completion, & operations) (972) 271-0999 • (877) 971-0999 toll free • Fax: (972) 271-2533
www.petromaxoperating.com
The PetroCo Energy Corp.(PEC) website (whose address
PetroCo Website appears at the bottom of each page of this document) offers
(www.petrocoenergy.com)
each Participant a glimpse at the thoughts behind, and the
inside workings of, PEC, and it’s currently comprised of:
• Home Page - with an overview and current news items
• About Us Page - History and principal bios and photos
• Publications Page - Downloadable publications and Special
“Downloads Key” box for downloading offering
documents and other special participants items
• Operations Page - Clicking on this tab takes you directly to
the PetroMax Operating Co. website for secure access
• Contact Us Page - lists PEC address & phone contact data
www.petrocoenergy.com 
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Insurance and Legal Liability Statement
Working Interest participants in all of this Company’s projects are protected from liability
under the Doctrine of Independent Contractor law (an area of both general common law and
tort law) based upon both their initial Participation Agreements signed upon subscription, and
the AAPL Standard Operating Agreements, signed once the well(s) have been drilled, tested,
completed, equipped and are placed into production. The Contracted Operator further insures
itself under a multi-million dollar policy for each well and in the aggregate. The Contracted
Operator also creates additional contractually protective relationships with its various primary
contractors who provide various drilling, testing, equipping, completing and operating ser-
vices.
Contracted Operator Designation and Rights
PetroMax Operating Co., Inc. (PMO), Texas RRC Operator #668494, will be designated the
Operator of the wells and field operations. Currently new completion technologies are being
applied in the field with potential results of larger estimated reserves and lowering finding
costs per barrel of oil. In addition, the Woodbine trend is a highly competitive area for the
acquisition of new leases and farm-out acreage which may contain short term drilling commit-
ments. Therefore, the Operator has the right to place new lease acquisition or farm out leases
in the drilling schedule prior to other wells in the drilling program. Additionally the Operator
shall have the right to substitute other comparable drilling prospects than what may be shown
in this or any other documents or literature, the right to deepen any well as justified by sur-
rounding well geology and area engineering results, and has the right, once a well has been
placed on production to conduct such workover operations or other zone completions as may
be deemed necessary or appropriate for successful or improved well operation and production
In the event additional operations are required after a well is in production, any working inter-
est owner that elects non participation in the operations will be subject to the provisions of the
AAPL 610 Operating Agreement in effect between the parties.
Arbitration
Unless otherwise provided herein, any claim or controversy arising out of or relating to this
Agreement, or a breach hereof, shall, upon the request of any party involved, be submitted to
and settled by arbitration in accordance with the rules of the American Arbitration Association
(or any other form of arbitration mutually acceptable to the parties involved) then obtaining in
the State of Texas. The decision made pursuant to such arbitration, shall be binding and con-
clusive on all parties involved; and judgment upon such decision may be entered in the high-
est court of any forum, Federal or state, having jurisdiction.
www.petrocoenergy.com 
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
WOODBINE WELLS #13 & #14 TWO WELL PROJECT
One Unit investment in TWO wells $ 48,270.00
Estimated 85% Intangible Drilling Cost (IDC expense) $ 41,030.00
1st year write-off (Standard Method w/Tangibles amortized over 7 years)
100% IDC $ 41,030.00
1/7th TDC (Normal AmortizedDepreciation) $ 1.034.00
Estimated first year write-off $ 42,064.00
*42,064.00 Write-Off X 35% Tax Bracket = $14,722.00 in Tax Savings
*This is not to be construed as tax advice. PetroCo recommends the use of a Certified Public Accountant competent in oil and gas matters.
Standard Depreciation Options for Oil & Gas Tangibles:
• Normally the cost of all tangible equipment for O&G is depreciated over 7 years with
original year of the investment in the well being the 1st year of the seven.
• OR - you can elect to take NONE of the tangible depreciation write-offs in the first year,
but then you must do a loss carry-forward with equal (20% each) deductions for the
fixed period of five(5) years immediately following the first year of the investment.
• OR - you may elect to invoke Section 179 and expense 100% of the
tangibles in the first year of investment (Please request the Section
179 Handout).
Leasehold Costs: Costs in each program that relate to the acquisition cost of the lease prop-
erty are written off when the well reaches the end of its commercial viability and is even-
tually plugged and abandoned. Although a very small percentage of the overall costs, it
remains with the property througout its useful life.
*This is not to be construed as tax advice. PetroCo recommends the use of a Certified Public Accountant competent in oil and gas matters.
www.petrocoenergy.com 
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Drilling And Completion Cost – Two Well Project
Program Name.........................................WOODBINE WELLS #13 & #14 TWO WELL PROJECT
Prospect Wells...........................................................Horizontal: Two (2) Wells: To Be Determined
Location..............................................................................................Woodbine Trend, S.E. East Texas
Anticipated Counties.................................................Madison/Brazos Counties, South East Texas
State.....................................................................................................................................................Texas
Type...........................................................................................................................................OIL WELL
Target: Total Vertical Well Depth & Proposed Measured Well Depth..............8,200’+ & 14,000+’
(unless election is made to change)
Unit Cost
(Unit = 0.25% Working Interest per Well unless otherwise specified)
WOODBINE WELLS #13 & #14 TWO WELL PROJECT
Turnkey wellbore purchase and drilling & testing cost/unit..........................$ 28,800.00
(this includes the drilling of one Horizontal wellbore for each of
TWO wells to a depth sufficient to test the Woodbine)
Completion & equipping Cost/unit ...................................................................$ 19,470.00
Base Price includes a drainhole (Horizontal extension) of
up to 7,000’ and an 11 Stage fracture treatment.
TOTAL BASE COST PER UNIT $ 48,270.00
Add-on costs for additional Horizontal extensiondrilling beyond the turnkey
provision to be added to the Completion Invoice:
•
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Interest Breakdown Example
Working Interest(WI) per Unit...................0.25% WI PER WELL per Unit of TWO Well Program
Net Revenue Interest(NRI) per Unit....0.25% per well X 72% Avg. Net Lease* = .00180% N.R.I.
(Net Revenue Interest) per Well per Unit
*PetroCo will typically convey a 72% NRI on most leases, however in most case well NRI should not be less than 70%.
Location/Wellbore Acreage Amounts
WOODBINE WELLS #13 & #14 PROJECT prospects....Production units per well to support
each wellbore based on TRC guidelines.
www.petrocoenergy.com 
PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
East Texas Drilling & Development
WOODBINE WELLS #13 & #14 - TWO WELL PROJECT
TWO WELLS TO BE DETERMINED, Madison/Brazos Counties, Texas
TWO WELL PROJECT - (ONE UNIT = 0.25% Working Interest in THE Wells)
$28,800.00 Turnkey Drill and Test Cost/Unit +
$19,470.00 Completion & Equipping Cost/Unit = $48,270.00 = Total Cash Investment per Unit
$48,270.00 X 85% Intangible Deduction + $1,034.00 Tangible Deduction = $42,064.00 Write Off
$42,064.00 Write Off X 35% Tax Bracket (Federal) = $14,722.00 Tax Savings
$48,270.00 TOTAL Investment -
$14,722.00 in Tax Savings = $33,548.00 = Net Cash Invested per Unit
ILLUSTRATION OF MONTHLY CASH FLOW PER UNIT
Daily Oil Production Cash Flow per Unit*
@$65/Bbl @$88.05/Bbl
Low Example per month per Unit w/two wells (First Year) $ 973.00 month $ 1,346.41 month
[Based upon 150 BOPD LEVELED OUT per Woodbine Well ]
Medium Example per month per Unit w/two wells (First Year) $ 1,324.00 month $ 1,821.88 month
[Based upon 200 BOPD LEVELED OUT per Woodbine Well ]
High Example per month per Unit w/two wells (First Year) $ 1,675.00 month $ 2,297.35 month
[Based upon 250 BOPD LEVELED OUT per Woodbine Well ]
POTENTIAL ANNUALIZED RETURN TO TOTAL CASH INVESTED LOW EXAMPLE 24.19% / 33.47%
MED EXAMPLE 32.91% / 45.29%
HGH EXAMPLE 41.64% / 57.11%
POTENTIAL ANNUALIZED RETURN TO NET CASH INVESTED LOW EXAMPLE 34.80% / 48.16%
MED EXAMPLE 47.36% / 65.17%
HGH EXAMPLE 59.91% / 82.18%
Note: All cash flow and well production estimates are only hypothetical projections and actual results may vary. Production rates utilized
and shown above are based upon initial rates of between 300 to 500 BOPD or more which has been typical of recent Woodbine Horizontal
wells in the immediate Kurten Field Area, but the actual rates shown here are projected from engineering data on production rates after
approximately 7-9 months of initial flush production, therefore initial, first year production may be significantly higher than these ‘leveled
out’ rates shown, and rates for subsequent years will be subject to normal decline rates in the Kurten Field Area, however Estimated Ultimate
Recovery should be enhanced/increased due to higher initial rates, which we believe will be increased due to longer lateral extensions and
increased numbers of fracs per well.
*Cash flow is partially Tax Free (15% of Gross) due to Oil Depletion Allowance; this increases the After Tax Rate of Return on a producing
well. **NET CASH = TOTAL CASH INVESTED less PROJECTED TAX SAVINGS
Assumptions (based on per Unit)
Write off 85% of investment (see Tax Article)
Tax Bracket 35% (combined Federal, State and Local)
Average Price of Oil: Current $ & Crude 2007-2008 Average $ $65.00 AND $88.05/Bbl (w/no escalation)
State Production Taxes CV Gas = 2.1% for first 120 months; Woodbine Oil = 4.6%
Lease Operations (LOE) monthly $40 per month per Well/per Unit + liquids extraction/Days in
Production per Month 30 days
Average Net Revenue Lease 72% (which may vary from well to well)
Working Interest 100% (w/72% net lease)
We expect recoverable reserves in the Woodbine Trend to be around 425,000 to 500,000 BO EUR per well. We expect Woodbine
horizontal wells to produce for an approximate 30 year life.
www.petrocoenergy.com 10PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
500
$792,450.00 $1,056,600.00 $1,320,750.00
$88.05
$44,025.00
30
0.1800%
$2,377.35
57.11%
21.01
14.60
82.18%
($80.00)
$973.00 $1,324.00 $1,675.00 $1,346.41 $1,821.88 $2,297.35
HIGH Example
Based on $88.05/barrel Oil [Prior 2 Yr. Avg.]
400
$88.05
$35,220.00
30
0.1800%
$1,901.88
26.49
18.41
45.29%
($80.00)
65.17%
Example
MEDIUM
PEC Projected Cash Flow Potential Per Unit
WOODBINE WELLS #13 & #14 TWO WELL PROJECT
35.85
300
$88.05
$26,415.00
30
0.1800%
$1,426.41
24.92
48.16%
($80.00)
33.47%
LOW Example
500
$32,500.00
$975,000.00
$65.00
30
0.1800%
$1,755.00
28.82
20.03
41.64%
59.91%
($80.00)
HIGH Example
Based on $65/barrel Oil
400
$780,000.00
$65.00
$26,000.00
30
0.1800%
$1,404.00
36.46
32.91%
25.34
47.36%
($80.00)
Example
MEDIUM
49.61
300
$65.00
$19,500.00
30
$585,000.00
0.1800%
$1,053.00
34.48
24.19%
34.80%
($80.00)
LOW Example
NET MONTHLY INCOME (per Unit)
Oil Production per Day - leveled off (2wells)
South East Texas Woodbine
Less: Lease Operating Expense (LOE) for 2
Wells per ONE UNIT [.25 WI X .72 Lease]
Net Revenue Interest (NRI) % in TWO
Months until Payback to NET CASH
NRI Revenue per Month - 2 Well
Months until Payback to CASH
Gross Oil Revenues Per Day
Gross Revenues per Month
Annual ROI to NET CASH
TWO WELL PROJECT
Wells at above NRI%
Annual ROI to CASH
Price per Barrel Oil
Days Per Month
OIL
Footnotes:
(1) No guarantees are made, nor can be made as to the ultimate productivity of any individual oil and/or gas well.
(2) Prices used are derived from the average Bloomberg.com NYMEX future & spot price $/MMBTU & NYMEX Crude future/spot prices.
(3) Lease operating expenses (LOE) have been estimated per Unit.
(4) † These are only hypothetical projections and actual results may vary. Production rates utilized and shown above are based upon initial
rates of between 300 to 500 BOPD or more, which has been typical of recent Woodbine Horizontal wells in the immediate Kurten Field Area,
but the actual rates shown here are projected from engineering data on production rates after approximately 7-9 months of initial flush
production, therefore initial, first year production may be significantly higher than these ‘leveled out’ rates shown, and rates for subsequent
years will be subject to normal decline rates in the Kurten Field Area, however Estimated Ultimate Recovery should be enhanced/increased
due to higher initial rates, which we believe will be increased due to longer lateral extensions and increased numbers of fracs per well.
www.petrocoenergy.com 11PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 12PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 13PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 14PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Kurten Field
Top of Woodbine
www.petrocoenergy.com 15PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
The South East Texas Woodbine Trend
[Kurten Field, Madison County, TX]
Over the last 12 months PetroCo and PetroMax have conducted reservoir analysis and geologic evaluation of the
South East Texas Woodbine trend including the reserve modeling of the results of the early horizontal Woodbine
wells which have been drilled. The results confirm that low permeabilities have historically inhibited daily flow
rates in the vertical wells; and a horizontal lateral greatly increases these rates due to the expansive productive
area exposed to the reservoir versus a vertical well.
In January of 2008, the Stroman#1H horizontal well was drilled in the Woodbine sand in Madison County, just
2 miles north of our prospect area. The well produced excellent results, nearly quadrupling the initial daily
production values of the offsetting vertical wells. Since that first well, eight+ additional horizontal wells have
been drilled and completed in Madison County with similar results. Through the use of the new science of
micro seismic evaluation, it was determined that “the fracs were not always being evenly distributed through
the lateral.”
Starting in late 2006, Packers Plus (among others) fracture systems (used by PMO) were employed, which
enabled multi-stage fractures (see following pages), and such fractures are separately treated and initiated in
approximately each 450-500 feet of the lateral well bore. These horizontal packer systems have had dramatic
results in other horizontal trends in Texas and Louisiana.
As of March, 2009, PetroMax had successfully drilled and completed the longest lateral extension in Kurten
Field history to that date at approximately 4,650 ft., in the Wilfred Dainty #1H well, and the Dainty completion
included an historical 10 frac completion chambers. When initially produced it came in at 446 BOPD and has
leveled off at 112 BOPD and has produced to date 52,841 BO cumulatively.
With the drilling of our second well the Machac #1H, which is on the same lease as the Dainty, the well bore
drilling attempted and successfully eclipsed the Dainty well for an unprecedented 4,937’, almost a one-mile
lateral extension, and it received a newly designed 11 chambered frac and initial production rate was 527
BOPD and has leveled off at 136 BOPD and has produced to date 37,856 BO cumulatively.
Our third well, the Miller #1H again topped our lateral extension record by going 6,123’, it also received an
11 chamber frac, and due to a very large amount of gas driving the oil, w/a high production rate of 578 BOPD.
The well was placed on a gas lift system rather than on pump, and since being placed back on production on
June 20, 2009, has leveled off at 108 BOPD and has made a cumulative production of 56,843 BO.
Our fourth well was the Schiflet #1H, and it was drilled to a 5,544’ lateral extension and was completed with
an 11-chamber frac, similar to the Miller #1H, in July, and then had an IP of 609 BOPD. It has leveled off at
175 BOPD w/ 33,542 BO cumulatively. Our fifth well, the Wilson #1H has a 6,200’ lateral extension, had a
record-breaking 15-chamber fracture treatment Dec. 29-31, had an IP of 838 BOPD, is still making 650-700+
BOPD, and has a cumulative already of 13,116 BO in the first 22 days.
Well Name Lateral Extension Number of Frac Initial Prod Rate Current Rate
Stages
Wilfred Dainty #1H 4,650 feet 10 stages (chambered) 446 BOPD 138.00 BOPD
Machac #1H 4,937 feet 11 stages (chambered) 527 BOPD 127.00 BOPD
Miller #1H 6,123 feet 11 stages (chambered 547 BOPD 173.00 BOPD
Schiflet #1H 5,544 feet 11 stages (chambered 609 BOPD 142.00 BOPD
Wilson #1H 6,200 feet 15 stages (swellable) 838 BOPD 650-700+ BOPD
Wilson “Unit A” #2H 6,029 feet Projected to be 20 TBD TBD
www.petrocoenergy.com 16PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
GEOLOGICAL DISCUSSION (Kurten Field – Madison Co.)
The Kurten field has a producing area of almost 100-square miles with estimates of reserves up to 100 million
barrels of oil. It produces from approximately 7,100 to 8,800’ feet in depth. The field remained undiscovered in
one of the most mature petroleum exploration provinces in the United States until 1976. The trapping mechanism
is the result of a fortunate coincidence of stratigraphic (sediment layering) and diagenetic (changing or maturing
of sediment layers) processes operating in sediments deposited in an offshore, shallow marine environment.
Structure shows only gentle monoclinal dip (sediment decline in one direction) to the southeast. Interpretation
of conventional seismic lines across the field does not indicate a hydrocarbon trap. The type of trap in the Kurten
field truly qualifies as one of a subtle variety which may be fairly common, though still hidden (not detectable by
current seismic) in the rock record, and may contain a significant portion of the undiscovered reserves remaining
in the United States.
The sand consists of fine to medium-grained, laminated sandstone with porosities ranging between 10-17% and
permeabilities from 0.1 to 20 millidarcies (unit of measure in reference to permeabilities). Until recently, all of
the production from the Kurten Woodbine Field has been vertical well completions. The basic field completion
consists of running casing through the sands, perforating the sand interval, and then fracture stimulating that
interval to enhance daily production.This vertical type of completion method was used through the 1970’s-80’s.
Cumulative production in our study area has averaged 36,500 BBLS. Historically the Kurten Woodbine wells
were brought on with rates of 50-75 barrels of oil per day. The lower daily rates were primarily due to low
permeabilities in the sands, one reason most were fracture stimulated to accelerate daily rates. The most recent
‘old style’ horizontal completion, and closest to our prospect area, is the Herbich Unit 2H (2008). This well has
produced over 36,000 BO in only 10 months.
NEW Open Hole Completion Technology
The first four (4) horizontal wells drilled by PetroCo were completed with a completion method known as multi-
stage fracing. Isolated frac stages are created with the use of swellable external casing packers and ball-actuated
stimulation sleeves. PetroMax is now moving to a more fail safe completion strategy of using pump down plugs
in place of the ball actuated sleeves. The drilled horizontal wells allow maximum exposure to a reservoir, and
the new pump down plug completion technique allows fracturing of the Woodbine formation along the full
extent of the wellbore to maximize production. We have now successfully drilled our fifth horizontal Woodbine
well, the Wilson #1H. Because technology has advanced very rapidly this year, our engineers will be using this
very latest technology.
Here is How It Works..... First a combination bridge and perforating gun attached to a wire line are pumped
into the horizontal well bore to an exact location. The plug is set and the perforating gun is freed to be pulled
back to the desired locations. The gun is fired, pulled from the well and the frac is initiated from the surface.
Upon frac completion, another combination bridge and perforating gun is pumped into the well bore and set up
hole from the previously treated zone to isolate it while the next zone is perforated and treated.
The procedure is repeated until all stages have been treated. The composite bridge plugs are drilled up and the
well is cleaned and made ready for final production. Some of the benefits of this new completion technique are:
(1) unlimited potential frac stages, (2) reduced statistical/mechanical failures associated with the ball activated
sleeves, and (3) continued mechanical engineering of the wells that will lead to increased production at a lower
cost per barrel. Our Operator will utilize the new pump down ‘swellable’ plug completion technique on the
Wilson #1H which which had a fifteen stage frac procedure utilized for completion.
www.petrocoenergy.com 17PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Woodbine Trend Stratigraphic Column
Upper Navarro
Kemp Clay
Corsicana Marl
Navarro Nacatoch Sand
Lower
Navarro
Neylandville
Marl
Upper Taylor
Pecan Gap
Taylor
Mesozoic Era Lower Taylor
Cretaceous System Wolf City Sand
Gulf Series
Gober Chalk
Tokio FM.
Austin
Austin Chalk
Ector Chalk
Eagle Ford Formation
Eagel Ford (SubClarksville Sand - Coker Sand - Harris Sand)
Lewisville
Woodbine
Dexter
Maness Shale
Washita Buda Limestone
www.petrocoenergy.com 18PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 19PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 20PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Projected Economics for Horizontal Woodbine With Packer Plus Completion
100% WI / 75% NRI
Net Operating
Gas Gas & Capitol Cash Flow Cash Flow
Year Total Months Oil (BO) (mmcf) Oil ($BBL) ($/MMBTU) Gross Revenue Net Revenue Expenses (undiscounted) (PV10%)
2008 12 41,032 0 $90.00 $6.50 $3,692,866 $2,769,649 $30,000 $2,543,004 $2,429,058
2009 24 25,841 0 $92.70 $6.70 $2,395,488 $1,796,616 $30,900 $1,638,156 $1,408,232
2010 36 21,733 0 $95.48 $6.90 $2,075,063 $1,556,297 $31,827 $1,413,973 $1,099,463
2011 48 19,419 0 $98.35 $7.10 $1,909,804 $1,432,353 $32,782 $1,297,874 $913,238
2012 60 17,859 0 $101.30 $7.32 $1,809,011 $1,356,758 $33,765 $1,226,663 $781,179
2013 72 16,704 0 $104.33 $7.54 $1,742,850 $1,307,137 $34,778 $1,179,552 $679,898
2014 84 15,801 0 $107.46 $7.76 $1,698,051 $1,273,538 $35,822 $1,147,296 $598,575
2015 96 15,066 0 $110.69 $7.99 $1,667,659 $1,250,744 $36,896 $1,125,045 $531,299
2016 108 14,452 0 $114.01 $8.23 $1,647,618 $1,235,714 $38,003 $1,109,975 $474,475
2017 120 13,927 0 $117.43 $8.48 $1,635,385 $1,226,538 $39,143 $1,100,311 $425,747
2018 132 13,470 0 $120.95 $8.74 $1,629,269 $1,221,951 $40,317 $1,094,875 $383,476
2019 144 13,069 0 $124.58 $9.00 $1,628,102 $1,221,076 $41,527 $1,092,853 $346,478
2020 156 12,711 0 $128.32 $9.27 $1,631,048 $1,223,286 $42,773 $1,093,660 $313,862
2021 168 12,389 0 $132.17 $9.55 $1,637,492 $1,228,119 $44,056 $1,096,866 $284,940
2022 180 12,098 0 $136.13 $9.83 $1,646,972 $1,235,229 $45,378 $1,102,150 $259,170
2023 192 11,833 0 $140.22 $10.13 $1,659,136 $1,244,352 $46,739 $1,109,264 $236,115
2024 204 11,589 0 $144.42 $10.43 $1,673,710 $1,255,283 $48,141 $1,118,016 $215,419
2025 216 11,364 0 $148.76 $10.74 $1,690,480 $1,267,860 $49,585 $1,128,257 $196,784
2026 228 11,156 0 $153.22 $11.07 $1,709,277 $1,281,958 $51,073 $1,139,866 $179,962
2027 240 10,962 0 $157.82 $11.40 $1,729,966 $1,297,474 $52,605 $1,152,748 $164,744
2028 252 10,781 0 $162.55 $11.74 $1,752,439 $1,314,330 $54,183 $1,166,829 $150,949
2029 264 10,611 0 $167.43 $12.09 $1,776,613 $1,332,459 $55,809 $1,182,046 $138,422
2030 276 10,452 0 $172.45 $12.45 $1,802,418 $1,351,813 $57,483 $1,198,351 $127,029
2031 288 10,302 0 $177.62 $12.83 $1,829,801 $1,372,351 $59,208 $1,215,706 $116,653
2032 300 10,160 0 $182.95 $13.21 $1,858,720 $1,394,040 $60,984 $1,234,080 $107,191
2033 312 10,025 0 $188.44 $13.61 $1,889,145 $1,416,859 $62,813 $1,253,449 $98,553
2034 324 9,898 0 $194.09 $14.02 $1,921,052 $1,440,789 $64,698 $1,273,795 $90,659
2035 336 9,776 0 $199.92 $14.44 $1,954,424 $1,465,818 $66,639 $1,295,106 $83,438
2036 348 9,661 0 $205.91 $14.87 $1,989,251 $1,491,938 $68,638 $1,317,373 $76,828
2037 360 9,550 0 $212.09 $15.32 $2,025,529 $1,519,147 $70,697 $1,340,591 $70,771
Total at 30 Yrs 423,690 0 $55,708,637 $41,781,478 $1,427,262 $37,387,731 $12,982,606
*These are only hypothetical mathematical projections based on current well data in the subject area, and actual result may vary significantly over time.
Woodbine Horizontal Oil Production Decline Curve
45,000
40,000
35,000
30,000
Oil (BBLS)
25,000 Oil Production
(BBL) 1-30Yrs
20,000
15,000
10,000
5,000
0
1 6 11 16 21 26
Years Of Production
www.petrocoenergy.com 21PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 22PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
S.E. Texas Woodbine
Resource Play
www.petrocoenergy.com 23Project Highlights
Horizontal Drilling within established field
PETROCO ENERGY CORP.
IP’s 300 – 500 bbls oil per day
EUR’s 350,000 – 450,000 bbls oil
Proven Results
www.petrocoenergy.com
Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
24PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Vertical Vs. Horizontal Woodbine Production
www.petrocoenergy.com 25PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
SPECIAL NOTE OF EXPLANATION
ON THE NEXT THREE SLIDES
The pages immediately following this Special Note, are illustrative of the
true significance of the currently THIRTEEN (13) HORIZONTAL WELLS
DRILLED PRIOR TO 2009 IN THE KURTEN FIELD. They began with the
Shepherd Creek #1H, found on the far left of the graph, which is among
some of the six(6) early horizontals drilled, and these six wells received
only a single-stage frac completion, and you can see clearly the resulting
production from those early wells.
The next group of seven (7) horizontal wells, beginning with the Herbich
Unit #2H thru the Tauber Ranch #2H, all received multi-stage frac
completions, with the last well, the Tauber Ranch #2H receiving a total of
six fracs. In our Wilfred Dainty #1H, we were able to drill significantly
further on our horizontal lateral extension than any previous well in the
field to 4,650’, but this additional length allowed us to design a 10-stage frac
completion, and we utilized the most recent developments in Baker’s Packer
Plus System. Our engineers indicate that we should be able to expect a
much greater intial flow rate and a much higher EUR (Estimated Ultimate
Recovery) with this expanded treatment area. Plus: Our second well, the
Machac #1 has a lateral extension of 4,937’; the Miller #1H went to 6,123’; the
Schiflet #1H went 5,544’; and the Wilson #1H went 6,200’., THE WELLS IN
THIS PROGRAM will undergo a minimum of a 15-Stage frac treatment, if not 20
stages: ANOTHER RECORD of some kind every time we drill!
The graph on the following pages clearly illustrates the significant oil
recovery achieved in just the first nine months from the Tauber Ranch #2H
as a result of only a 6-stage frac treatment, and the Prospect Area map
shows the proximity of all our wells, as well as the other horizontal wells,
and older vertical wells, to each other in the field.
www.petrocoenergy.com 26PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 27PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
www.petrocoenergy.com 28PETROCO ENERGY CORP. Woodbine Trend - Kurten Field - Madison/Brazos Counties, Texas
Wilfred Dainty #1H As Drilled Plat
www.petrocoenergy.com 29You can also read
