Gas Price 2 $/MCF

Drilling Cost 250,000 $

Completion Cost 15,000
Stimulation Cost 50,000 $
Operating Cost 200 $/Day
Interest Rate 4%
Tax and Royalty 30 %

Multi-zone Completion
Drilling Cost 250,000 $
Completion Cost 35,000 $
Escalate 10% per year
Escalate 10% per year
Escalate 10% per year
for S = -3 Escalate 10% per year
Escalates 2% per year

Escalate 10% per year

Escalate 10% per year
Oil price 30 $/STB
Gas price 2 $/MCF
Drilling and Completion Cost 300,000 $/Well
Discount (Interest) Rate 4%
Monthly Operating Cost 500 $/Well
Max. Allowable Oil Rate 400 STB/D
Max. Safe Drawdown 300 psi
Min. flowing pressure 100 psia
Min. Spacing 20 acres
Tax & Royalties 30 %

Multi-zone Completion
Drilling Cost 275,000 $
Completion Cost 40,000 $
Escalate 10% per year
For next 3 years then $4
Escalate 10% per year

Escalate 10% per year

Escalate 10% per year

Escalate 10% per year
Gas Price 2
Drilling Cost 100,000
Completion Cost 10,000
Stimulation Cost 40,000
Operating Cost 100
Water Processing and Disposal Cos 2
Interest Rate 4
Tax and Royalty 30
$/MCF Fixed
$ Escalate 10% per year
Escalate 10% per year
$ for S = -3
$/Day Escalates 2% per year
$/Bbl Fixed
%
%
 P Bo Bg Rs

psia RB/STB RB/SCF SCF/STB

1700 1.265 0.00132 540
1500 1.241 0.0015 490
1300 1.214 0.00175 440
1100 1.191 0.0021 387
900 1.161 0.00262 334
700 1.147 0.00344 278
500 1.117 0.00495 220

P Np Gp kro
psia MSTB BCF
1700 0.0 0.000 0.939
1500 350.4 0.180 0.826
1300 707.1 0.525 0.711
1100 1122.1 1.045 0.593
900 1494.2 1.596 0.476
700 1867.1 2.301 0.386
500 2174.1 3.042 0.288

N 1.0657E+07 G
Swi 0.236
 Viscosity Estimated R Np/N SL kg/ko

o o/g SCF/STB
1.19 59.5 540 0 1 0.00
1.22 61 843 0.03288 0.961 0.0070
1.25 62.5 1002 0.06635 0.921 0.0130
1.3 65 1280 0.10529 0.880 0.0242
1.35 67.5 1682 0.14021 0.839 0.0451
1.5 75 2102 0.17520 0.807 0.0729
1.8 90 2724 0.20400 0.773 0.1233

kro/Boo J Wells qmax q t

STB/D STB/D Days
0.623 0.792 6 238 246
0.546 0.693 6 208 227 251
0.468 0.641 6 192 210 272
0.383 0.567 9 170 190 231
0.304 0.465 14 140 165 150
0.224 0.347 16 104 134 156
0.143 0.221 16 66 100 163

1.02E+10 Oil RF: 20.40%

Gas RF: 22.53%
Calculated R Gp/N Rp Bt

SCF/STB SCF/STB SCF/STB RB/STB

540 0 1.265
843 22.736 691.5 1.316
1002 53.611 808.0 1.389
1280 98.047 931.2 1.5123
1682 149.758 1068.1 1.70072
2102 215.955 1232.6 2.04828
2724 285.468 1399.3 2.701

t t Spacing re Ji
Days Years Acre/ ft STB/D/psi
513.333333 2667.895 0.792
251 0.6888743619 513.333333 2667.895 0.792
524 1.4349792166 166.666667 1520.174 0.853
755 2.0675137955 55.5555556 877.673 0.923
905 2.478249541 35.7142857 703.704 0.954
1060 2.9051268204 31.25 658.255 0.964
1224 3.352930658 31.25 658.255 0.964

P Np
 psia MSTB
1500 524
1300 928
Rp
SCF/STB
515
743
 P Bo Bg Rs Viscosity Estimated R
psia RB/STB RB/SCF SCF/STB o o/g SCF/STB
1700 1.265 0.00132 540 1.19 59.5 540
1500 1.241 0.0015 490 1.22 61 843
1300 1.214 0.00175 440 1.25 62.5 1002
1100 1.191 0.0021 387 1.3 65 1280
900 1.161 0.00262 334 1.35 67.5 1682
700 1.147 0.00344 278 1.5 75 2102
500 1.117 0.00495 220 1.8 90 2724
300 1.093 0.0086 160 2.28 114 2943

P Np Gp kro kro/Boo J Wells

psia MSTB BCF
1700 0.0 0.000 0.939 0.623 1.283 6
1500 524.0 0.270 0.826 0.546 1.123 6
1300 928.0 0.690 0.711 0.468 1.091 6
1100 1122.1 1.045 0.593 0.383 0.924 8
900 1494.2 1.596 0.476 0.304 0.800 8
700 1867.1 2.301 0.386 0.224 0.617 11
500 2174.1 3.042 0.288 0.143 0.393 11
300 2456.7 3.843 0.204 0.082 0.247 21

N 1.0657E+07 G 1.02E+10
Swi 0.236
 Np/N SL kg/ko Calculated R Gp/N Rp Bt
SCF/STB SCF/STB SCF/STB RB/STB
0 1 0.00 540 0 1.265
0.03288 0.961 0.0070 843 22.736 691.5 1.316
0.06635 0.921 0.0130 1002 53.611 808.0 1.389
0.10529 0.880 0.0242 1280 98.047 931.2 1.5123
0.14021 0.839 0.0451 1682 149.758 1068.1 1.70072
0.17520 0.807 0.0729 2102 215.955 1232.6 2.04828
0.20400 0.773 0.1233 2724 285.468 1399.3 2.701
0.23052 0.744 0.1921 2943 360.609 1564.3 4.361

qmax q t t t Spacing
STB/D STB/D Days Days Years Acre/ ft
385 246 513.33
337 292 258 258 0.7073304691 513.33
327 309 224 482 1.3212876416 166.67
277 293 81 563 1.5418715285 125.00
240 267 166 729 1.9970729601 62.50
185 226 138 867 2.3742250536 45.45
118 172 140 1007 2.7587894486 45.45
74 123 91 1098 3.0088716067 23.81

Oil RF: 23.05%

Gas RF: 22.53%
 re Ji
STB/D/psi
2667.89 1.283
2667.89 1.283
1520.17 1.452
1316.51 1.503
930.91 1.641
793.89 1.713
793.89 1.713
574.57 1.881
 P Np Rp
psia MSTB SCF/STB
1500 524 515
1300 928 743
 P Bo Bg Rs Viscosity
psia RB/STB RB/SCF SCF/STB o
1700 1.265 0.00132 540 1.19
1500 1.241 0.0015 490 1.22
1300 1.214 0.00175 440 1.25
1100 1.191 0.0021 387 1.3
900 1.161 0.00262 334 1.35

700 1.147 0.00344 278 1.5

P Np Gp kro kro/Boo
psia MSTB BCF
1700 0.0 0.000 0.939 0.623
1500 524.0 0.000 0.826 0.546
1300 928.0 0.000 0.670 0.442
1100 1729.7 0.000 0.476 0.307
900 2732.6 -0.481 0.243 0.155
700 2.67906075 0.039 0.022

N 1.0657E+07 G
Swi 0.236
Viscosity Estimated R Np/N SL kg/ko Calculated R
o/g SCF/STB SCF/STB
59.5 540 0 1 0.00 540
61 843 0.03288 0.961 0.0070 843
62.5 1002 0.08568 0.906 0.0161 1137
65 1289 0.16231 0.839 0.0453 2057
67.5 2057 0.25641 0.757 0.1564 5013

75 3307 0.35014 0.686 0.4641 11885

J Wells qmax q t t
STB/D STB/D Days Days
0.792 6 238 246
0.693 6 208 227 376 376
0.561 6 168 198 317 693
0.456 19 137 167 231 924
0.231 10 69 118 702 1627
0.034 15 10 64 -1995 -368

1.02E+10 Oil RF: 25.64%

Gas RF: 26.23%
 Gp/N Rp Bt
SCF/STB SCF/STB RB/STB
0 1.265
0.000 0.0 1.316
0.000 0.0 1.389
-20.362 -125.5 1.5123
-45.135 -176.0 1.70072

251.392 718.0 2.04828

t Spacing re Ji
Years Acre/ ft STB/D/psi
513.33 2667.89 0.79
1.030 513.33 2667.89 0.79
1.899 513.33 2667.89 0.79
2.533 52.63 854.26 0.93
4.457 50.00 832.63 0.93
-1.009 33.33 679.84 0.96
 P Np Rp
psia MSTB SCF/STB
1500 524 515
1300 928 743
 P Bo Bg Rs Viscosity

psia RB/STB RB/SCF SCF/STB o o/g

1700 1.265 0.00132 540 1.19 59.5
1500 1.241 0.0015 490 1.22 61
1300 1.214 0.00175 440 1.25 62.5
1100 1.191 0.0021 387 1.3 65
900 1.161 0.00262 334 1.35 67.5
700 1.147 0.00344 278 1.5 75

P Np Gp kro kro/Boo J
psia MSTB BCF
1700 0.0 0.000 0.939 0.623 1.283
1500 524.0 0.000 0.826 0.546 1.123
1300 928.0 0.000 0.670 0.441 0.909
1100 1730.3 -0.237 0.475 0.307 0.729
900 2744.1 -0.525 0.241 0.154 0.397
700 2.72155242 0.033 0.019 0.052

N 1.0657E+07 G 1.02E+10
Swi 0.236
Estimated R Np/N SL kg/ko Calculated R Gp/N Rp

SCF/STB SCF/STB SCF/STB SCF/STB

540 0 1 0.00 540 0
840 0.03293 0.961 0.0070 843 0.000 0.0
1002 0.08578 0.906 0.0161 1138 0.000 0.0
1290 0.16237 0.839 0.0453 2058 -22.239 -137.0
2057 0.25750 0.757 0.1583 5068 -49.264 -191.3
3308 0.35270 0.684 0.4768 12202 255.380 724.1

Wells qmax q t t t
STB/D STB/D Days Days Years
6 385 246
6 337 291 258 258 0.71
6 273 282 235 493 1.35
7 219 250 431 924 2.53
7 119 185 666 1589 4.35
9 16 100 -2141 -551 -1.51

Oil RF: 25.75%

Gas RF: 26.65%
 Bt

RB/STB
1.265
1.316
1.389
1.5123
1.70072
2.04828

Spacing re Ji
Acre/ ft STB/D/psi
513.3 2667.9 1.3
513.3 2667.9 1.3
513.3 2667.9 1.3
142.9 1407.4 1.5
71.4 995.2 1.6
55.6 877.7 1.7
P Np Rp
 psia MSTB SCF/STB
1500 524 515
1300 928 743
No Injection S=0

Oil Reservoir
Year Month Np
bbls
1 12 524000
2 24 1122100
3 36 1867000

Multizone
Escalates 10%/year
Year Drilling Cost Completion Cost
$ $
1 275,000 40,000
2 302500 44000
3 332750 48400

Year Oil Revenue Gas Revenue

$ $
1 $ 15,720,000.00 $ 540,000.00
2 $ 19,737,300.00 $ 1,550,000.00
3 $ 27,039,870.00 $ 3,994,000.00

Year Wells

1 6
2 9
3 16
 Gp Gp (Coal)
scf scf
270000000 4481000000
1045000000 1360000000
3042000000 484000000

CBM
Fixed Escalate 10% per year
Gas Price Drilling Cost
$/MCF $/Well
2 100000
2 110000
2 121000

Drilling and Completion Cost Operating Costs

$ $
$ 1,980,000.00 $ 108,000.00
$ - $ 118,800.00
$ - $ 130,680.00
 Wp Wells Mutlizone Wells
STB
154937.3 0 18
202696.2 0 18
223481.2 18

CBM
Escalate 10% per year for S = -3 Escalates 2% per year
Completion Cost Stimulation Cost Operating Cost
$/Well $/Well $/Day
10000 40000 100
11000 40000 102
12100 40000 104.04

Water Handling Costs Gross Revenue Operating Expenses

$ $ $
$ 309,874.51 $ 16,260,000.00 $ 2,397,874.51
$ 95,517.81 $ 21,287,300.00 $ 214,317.81
$ 41,570.00 $ 31,033,870.00 $ 172,250.00
 Escalates 10%/year
CBM Wells Oil Price
$/bbl
0 30
0 33
0 36.3

Fixed
Water Costs Interest Rate
$/Bbl fraction
2 0.04
2 0.04
2 0.04

Operating Income BFIT Tax & Royalty

$ $
$ 13,862,125.49 $ 4,158,637.65
$ 21,072,982.19 $ 6,321,894.66
$ 30,861,620.00 $ 9,258,486.00
 Escalates 10%/year
Gas Price D&C Cost
$/MCF $/Well
2 300,000
2 330000
2 363000

Escalates 10%/year
Monthly Operating Cost Tax and Royalty
$/month/well *12 fraction
500 0.3
550 0.3
605 0.3

NCF (Operating Income AFT) PV NPV

$
$ 9,703,487.85 $ 9,703,487.85 $ 9,703,487.85
$ 14,751,087.53 $ 14,183,738.01 $ 23,887,225.86
$ 21,603,134.00 $ 19,973,311.76 $ 43,860,537.62
 No Injection S=-3

Year Month

1 12
2 24
3 36

Multizone
Escalates 10%/year
Year Drilling Cost
$
1 275,000
2 302500
3 332750

Oil Revenue Gas Revenue

$ $
$ 21,497,520.00 $ 939,804.00
$ 25,661,328.00 $ 2,240,196.00
$ 34,938,750.00 $ 4,506,000.00
 Oil Reservoir
Np Gp Gp (Coal)
bbls scf scf
716584 469902000 4323000000
1494200 1590000000 1338000000
2456700 3843000000 482000000

Multizone
Escalates 10%/year Fixed Escalate 10% per year
Completion Cost Gas Price Drilling Cost
$ $/MCF $/Well
40,000 2 100000
44000 2 110000
48400 2 121000

Drilling and Completion Cost Operating Costs Water Handling Costs

$ $ $
$ 3,465,000.00 $ 66,000.00 $ 391,980.00
$ 72,600.00 $ 116,516.00
$ 3,630,000.00 $ 152,460.00 $ 49,412.00
 Wp Wells Mutlizone Wells
STB
195990.0 6 11
254248.0 8 11
278954.0 10 11

CBM
Escalate 10% per year for S = -3 Escalates 2% per year
Completion Cost Stimulation Cost Operating Cost
$/Well $/Well $/Day
10000 40000 100
11000 40000 102
12100 40000 104.04

Gross Revenue Operating Expenses Operating Income BFIT

$ $ $
$ 22,437,324.00 $ 4,362,980.00 $ 18,074,344.00
$ 27,901,524.00 $ 189,116.00 $ 27,712,408.00
$ 39,444,750.00 $ 3,831,872.00 $ 35,612,878.00
 Escalates 10%/year
CBM Wells Oil Price Gas Price
$/bbl $/MCF
30 2
33 2
36.3 2

Fixed Escalates 10%/year

Water Costs Interest Rate Monthly Operating Cost
$/Bbl fraction $/month/well *12
2 0.04 500
2 0.04 550
2 0.04 605

Tax & Royalty NCF (Operating Income AFT) PV

$ $
$ 5,422,303.20 $ 12,652,040.80 $ 12,165,423.85
$ 8,313,722.40 $ 19,398,685.60 $ 17,935,175.30
$ 10,683,863.40 $ 24,929,014.60 $ 22,161,803.20
Escalates 10%/year
D&C Cost
$/Well
300,000
330000
363000

Tax and Royalty

fraction
0.3
0.3
0.3

NPV

$ 12,165,423.85
$ 30,100,599.14
$ 52,262,402.35
 Injection S=0

Oil Reservoir
Year Month Np
bbls
2.5 30 1729670
4.5 54 2732551
6.5 78

Multizone
Escalates 10%/year
Year Drilling Cost Completion Cost
$ $
2.5 275000 40,000
4.5 422759 44000
6.5 422759 48400
All Wells Drilled Day 1

Oil Revenue Gas Revenue Drilling and Completion Cost

$ $ $
$ 58,895,263.50 $ 17,524,000.00 $ 6,300,000.00
$ 37,738,412.03
$ 10,716,243.00
 Gp Gp (Coal) Wp
scf scf STB
-217000000 8979000000 321048.1
-481000000
2679060750

CBM
Fixed Escalate 10% per year Escalate 10% per year
Gas Price Drilling Cost Completion Cost
$/MCF $/Well $/Well
2 100000 10000
2 110000 11000
2 121000 12100
X X

Operating Costs Water Handling Costs Gross Revenue

$ $ $
$ 340,575.00 $ 642,096.17 $ 76,419,263.50
$ 134,774.40 $ 37,738,412.03
$ 244,615.68 $ 10,716,243.00
Wells
Oil
19
8
12
 Wells Mutlizone Wells CBM Wells

20
8
12
X X

CBM
for S = -3 Escalates 2% per year Fixed
Stimulation Cost Operating Cost Water Costs
$/Well $/Day $/Bbl
40000 100 2
40000 102 2
40000 104.04 2
X X

Operating Expenses Operating Income BFIT Tax & Royalty

$ $ $
$ 7,282,671.17 $ 69,136,592.33 $ 20,740,977.70
$ 134,774.40 $ 37,603,637.63 $ 11,281,091.29
$ 244,615.68 $ 10,471,627.32 $ 3,141,488.20
 Escalates 10%/year Escalates 10%/year
Oil Price Gas Price D&C Cost
$/bbl $/MCF $/Well
34.05 2 300,000
37.63 4 330000
41.58 4 363000
Average X

Escalates 10%/year
Interest Rate Monthly Operating Cost Tax and Royalty
fraction $/month/well *12 fraction
0.04 567.625 0.3
0.04 701.95 0.3
0.04 849.36 0.3
Average

NCF (Operating Income AFT) PV NPV

$
$ 48,395,614.63 $ 43,875,558.89 $ 43,875,558.89
$ 26,322,546.34 $ 22,063,676.04 $ 65,939,234.93
$ 7,330,139.12 $ 5,680,617.04 $ 71,619,851.97
 Injection S=-3

Oil Reservoir
Year Month Np
bbls
2.5 30 1730331
4.5 54 2744108
6.5 78

Multizone
Escalates 10%/year
Year Drilling Cost Completion Cost
$ $
2.5 275000 40,000
4.5 422759 44000
6.5 422759 48400
All Wells Drilled Day 1

Oil Revenue Gas Revenue D&C Cost

$ $ $
$ 58,917,770.55 $ 17,828,000.00 $ 4,095,000.00
$ 38,148,428.51
$ 10,886,209.68
 Gp Gp (Coal) Wp
scf scf STB
-237000000 9151000000 412829.2
-525000000
2721552420

CBM
Fixed Escalate 10% per year Escalate 10% per year
Gas Price Drilling Cost Completion Cost
$/MCF $/Well $/Well
2 100000 10000
2 110000 11000
2 121000 12100
X X

Operating Costs Water Handling Costs Gross Revenue

$ $ $
$ 221,373.75 $ 825,658.36 $ 76,745,770.55
$ 117,927.60 $ 38,148,428.51
$ 183,461.76 $ 10,886,209.68
 Wells Mutlizone Wells CBM Wells

13
7
9
X X

CBM
for S = -3 Escalates 2% per year Fixed
Stimulation Cost Operating Cost Water Costs
$/Well $/Day $/Bbl
40000 100 2
40000 102 2
40000 104.04 2
X

Operating Expenses Operating Income BFIT Tax & Royalty

$ $ $
$ 5,662,032.11 $ 71,083,738.44 $ 21,325,121.53
$ 117,927.60 $ 38,030,500.91 $ 11,409,150.27
$ 183,461.76 $ 10,702,747.92 $ 3,210,824.38
 Escalates 10%/year
Oil Price Gas Price
$/bbl $/MCF
34.05 2
37.63 4
41.58 4
Average

Escalates 10%/year
Interest Rate Monthly Operating Cost
fraction $/month/well *12
0.04 567.625
0.04 701.95
0.04 849.36
Average

NCF (Operating Income AFT) PV

$
$ 49,758,616.91 $ 45,111,259.42
$ 26,621,350.64 $ 22,314,135.13
$ 7,491,923.54 $ 5,805,994.65
Escalates 10%/year
D&C Cost
$/Well
300,000
330000
363000
X

Tax and Royalty

fraction
0.3
0.3
0.3

NPV

$ 45,111,259.42
$ 67,425,394.56
$ 73,231,389.21
Wells

6
6
6
7
7
9