Elk Antelope Gas Field 2009 GLJ - FINAL

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INTEROIL CORPORATION
RESOURCE ASSESSMENT
ELK/ANTELOPE GAS FIELD

PPL 238, PAPUA NEW GUINEA
Effective December 31, 2009
1100116
GLJ Petroleum Consultants
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ELK/ANTELOPE GAS FIELD
TABLE OF CONTENTS
Page
COVERING LETTER 3
INDEPENDENT PETROLEUM CONSULTANTS' CONSENT 4
INTRODUCTION 5
SUMMARY 6
RESOURCE AND RESERVES DEFINITIONS 8
APPENDIX I
Certificates of Qualification 12
APPENDIX II
Elk/Antelope Gas Field
March 02, 2010 14:52:33

Principal Officers:
GLJ Petroleum
Consultants
Harry Jung, P. Eng.
President, C.E.O.
Dana B. Laustsen, P. Eng.
Executive V.P., C.O.O.
Keith M. Braaten, P. Eng.
Executive V.P.
Officers / Vice Presidents:

February 17, 2010 Terry L. Aarsby, P. Eng.
Jodi L. Anhorn, P. Eng.
Neil I. Dell, P. Eng.
Project 1100116 David G. Harris, P. Geol.
Myron J. Hladyshevsky, P. Eng.
Bryan M. Joa, P. Eng.
John H. Stilling, P. Eng.
Douglas R. Sutton, P. Eng.
James H. Willmon, P. Eng.
Mr. Wayne Hamal
InterOil Corporation
Level 1, 60-92 Cook Street
Cairns, Queensland 4870
Australia
Dear Sir:
Re: Elk/Antelope Gas Field

Independent Resource Assessment
GLJ Petroleum Consultants Ltd. (GLJ) has completed an independent resource assessment of the
Elk/Antelope Gas Field located in Papua New Guinea for InterOil Corporation (the “Company”). The
effective date of this evaluation is December 31, 2009.
This report has been prepared for the Company for the purpose of annual disclosure and other financial
requirements. This evaluation has been prepared in accordance with resources definitions, standards and
procedures contained in the Canadian Oil and Gas Evaluation Handbook.
It is trusted that this assessment meets your current requirements. Should you have any questions regarding
this analysis, please contact the undersigned.
Yours very truly,
GLJ PETROLEUM CONSULTANTS LTD.
“ORIGINALLY SIGNED BY”

Executive Vice-President
KMB/jem
Attachments
4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada T2P 4H2 • (403) 266-9500 • Fax (403) 262-1855 • GLJPC.com
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INDEPENDENT PETROLEUM CONSULTANTS’ CONSENT
The undersigned firm of Independent Petroleum Consultants of Calgary, Alberta, Canada has
prepared an independent resource assessment of the Elk/Antelope Gas Field located in Petroleum
Prospecting License 238 in Papua New Guinea for InterOil Corporation and hereby gives consent
to the use of its name and to the said estimates. The effective date of the assessment is December
31, 2009.
In the course of the analysis, InterOil Corporation provided GLJ Petroleum Consultants Ltd.
personnel with basic information which included land data, well information, geophysical and
geological information, and reservoir studies. Other engineering or geological data required to
conduct the assessment and upon which this report is based, were obtained from public records,
other operators and from GLJ Petroleum Consultants Ltd. nonconfidential files. InterOil
Corporation has provided a representation letter confirming that all information provided to GLJ
Petroleum Consultants Ltd. is correct and complete to the best of its knowledge. Procedures
recommended in the Canadian Oil and Gas Evaluation (COGE) Handbook to verify certain interests
and financial information were applied in this evaluation. In applying these procedures and tests,
nothing came to GLJ Petroleum Consultants Ltd.’s attention that would suggest that information
provided by InterOil Corporation was not complete and accurate. GLJ Petroleum Consultants Ltd.
reserves the right to review all calculations referred to or included in this report and to revise the
estimates in light of erroneous data supplied or information existing but not made available which
becomes known subsequent to the preparation of this report.
The accuracy of any resources estimate is a function of the quality and quantity of available data
and of engineering interpretation and judgment. While resource estimates presented herein are
considered reasonable, the estimates should be accepted with the understanding that reservoir
performance or drilling subsequent to the date of the estimate may justify revision, either upward or
downward.
PERMIT TO PRACTICE
GLJ PETROLEUM CONSULTANTS LTD.
ORIGINALLY SIGNED BY
Signature: JAMES H. WILLMON
Date: February 17, 2010
PERMIT NUMBER: P 2066

The Association of Professional Engineers,
Geologists and Geophysicists of Alberta
HARRY JUNG
GLJ Petroleum Consultants Ltd.

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INTRODUCTION
GLJ Petroleum Consultants Ltd. (GLJ) was commissioned by InterOil Corporation (the
“Company”) to prepare an independent resource assessment of the Elk/Antelope Gas Field
effective December 31, 2009. The Elk/Antelope Gas Field is located in Petroleum Prospecting
License (PPL) 238 in Papua New Guinea. InterOil Corporation (the “Company”) will hold a
57.4751 percent participating interest assuming that all investors and the Papua New Guinea
Government elect to fully participate after a Production Development License has been granted.
The structure was discovered with the drilling of the well Elk-1 which tested gas at 21.7 MMCFD
from DST#2 in 2006. The Elk structure is delineated by the Elk-1 and Elk-2 wells. The Elk-4 well
discovered gas and liquids in the Antelope structure. The reservoir of the Elk/Antelope structure
delineated by the Elk wells is contained within fractured limestones of the Puri and Mendi
Formations. The well Antelope-1 was rig released in 2009 and discovered a dolomitized reef
facies. The dolomitized reef was further delineated by the well Antelope-2 which was drilled with
one DST completed by December 31, 2009. The total gas column defined by the wells drilled to
date is approximately 788 metres in the Elk Block and 688 metres in the Antelope Block.
The resource assessment was initiated in January 2010 and completed by the end of February
2010. Estimates of resources were generally prepared using land, seismic, geological and well
information from the Company to approximately December 31, 2009. The Company has confirmed
that, to the best of its knowledge, all information provided to GLJ is correct and complete as of the
effective date.
This resource assessment has been prepared in accordance with procedures and standards
contained in the Canadian Oil and Gas Evaluation (COGE) Handbook. The resource definitions
used in preparing this report (included herein under “Resource and Reserves Definitions”) are
those contained in the COGE Handbook and the Canadian Securities Administrators National
Instrument 51-101 (NI 51-101).
A table summarizing resource estimates for various resource categories are provided in the Summary
section of this report. The property report, attached hereto in Appendix II, provides additional details.

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SUMMARY
Resource volumes presented in this report have categorized as Contingent Resources – Economic
Status Undetermined. The following contingencies must be met before the resources can be
classified as reserves:
1) Sanctioning of the facilities required to process and transport marketable natural gas to
market.
2) Confirmation of a market for the marketable natural gas and condensate.
3) Determination of economic viability.
GLJ used risk modelling to determine the probability distribution for the recoverable gas
resources of the Elk/Antelope Gas Field. In a probabilistic approach, key parameters that form the
basis of the resource calculation are assigned a range of values and a corresponding probability
distribution. Monte Carlo methods are used to generate a group of realizations from which
resources values at various confidence levels are extracted. The parameters that were assigned a
range of values in this resource assessment consisted of volumetric parameters including
net/gross ratios, porosity, water saturation, gas/fluid contact elevations, reservoir areas and
recovery factor.
The results of the probabilistic analysis are summarized as follows:
Low Best High

Estimate Estimate Estimate
Units P90 P50 P10
Gross Resources
Original Gas-In-Place TCF 9.65 11.03 12.54
Initial Recoverable Raw Gas TCF 6.87 9.08 11.04
Marketable Sales Gas TCF 6.19 8.18 9.94
Marketable Condensate MMBBL 117.1 156.5 194.7
Company Gross Resources

Original Gas-In-Place TCF 5.55 6.35 7.21
Initial Recoverable Raw Gas TCF 3.95 5.22 6.35
Marketable Sales Gas TCF 3.56 4.70 5.71
Marketable Condensate MMBBL 67.3 89.9 111.9

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The original gas-in-place (OGIP) and resource estimates for individual geological entities are neither
completely independent nor dependent. Estimates for petrophysical parameters and net/gross ratios
for each rock type are generally independent given the methodology used in the analysis. The gross
rock volumes used in the probabilistic analysis are completely dependent due to common gas/fluid
elevations and structure top interpretation. Recovery factors are dependent since the entities share a
common reservoir pressure system and underlying aquifer. The strength of the aquifer will have
similar impact on the recovery from each geological entity. The risk simulation has been set up to
account for the dependent variables. Each iteration of the model relies on a single free water level or
abandonment pressure throughout each of the geological entities.
All figures referenced herein are included in the Supplementary Data report.

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RESOURCE AND RESERVES DEFINITIONS
GLJ Petroleum Consultants (GLJ) has prepared estimates of resources and reserves in accordance
with the standards contained in the Canadian Oil and Gas Evaluation (COGE) Handbook. The
following are excerpts from the definitions of resources and reserves, contained in Section 5 of the
COGE Handbook, which is referenced by the Canadian Securities Administrators in “National
Instrument 51-101 Standards of Disclosure for Oil and Gas Activities”.
A. Fundamental Resource Definitions
Total Petroleum Initially-In-Place (PIIP) is that quantity of petroleum that is estimated to exist
originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated,
as of a given date, to be contained in known accumulations, prior to production, plus those estimated
quantities in accumulations yet to be discovered (equivalent to “total resources”).
Discovered Petroleum Initially-In-Place (equivalent to discovered resources) is that quantity of

petroleum that is estimated, as of a given date, to be contained in known accumulations prior to
production. The recoverable portion of discovered petroleum initially in place includes production,
reserves, and contingent resources; the remainder is unrecoverable.
Reserves are estimated remaining quantities of oil and natural gas and related
substances anticipated to be recoverable from known accumulations, as of a given date,
based on the analysis of drilling, geological, geophysical, and engineering data; the use of
established technology; and specified economic conditions, which are generally accepted
as being reasonable. Reserves are further classified according to the level of certainty
associated with the estimates and may be subclassified based on development and
production status. [Reserves are further defined below].
Contingent Resources are those quantities of petroleum estimated, as of a given date,

to be potentially recoverable from known accumulations using established technology or
technology under development, but which are not currently considered to be commercially
recoverable due to one or more contingencies. Contingencies may include factors such as
economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is
also appropriate to classify as contingent resources the estimated discovered recoverable
quantities associated with a project in the early evaluation stage. Contingent Resources
are further classified in accordance with the level of certainty associated with the
estimates and may be subclassified based on project maturity and/or characterized by
their economic status. [Criteria for determining commerciality are further detailed in the
COGE Handbook Section 5.3.4].
Undiscovered Petroleum Initially-In-Place (equivalent to undiscovered resources) is that

quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be
discovered. The recoverable portion of undiscovered petroleum initially in place is referred to as
“prospective resources,” the remainder as “unrecoverable.”
Prospective Resources are those quantities of petroleum estimated, as of a given date,

to be potentially recoverable from undiscovered accumulations by application of future
development projects. Prospective resources have both an associated chance of
discovery and a chance of development. Prospective Resources are further subdivided in
accordance with the level of certainty associated with recoverable estimates assuming
their discovery and development and may be subclassified based on project maturity.

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B. Uncertainty Categories for Resource Estimates

The range of uncertainty of estimated recoverable volumes may be represented by either
deterministic scenarios or by a probability distribution. Resources should be provided as low, best,
and high estimates as follows:
Low Estimate: This is considered to be a conservative estimate of the quantity that will
actually be recovered. It is likely that the actual remaining quantities recovered will exceed
the low estimate. If probabilistic methods are used, there should be at least a 90 percent
probability (P90) that the quantities actually recovered will equal or exceed the low
estimate.
Best Estimate: This is considered to be the best estimate of the quantity that will actually
be recovered. It is equally likely that the actual remaining quantities recovered will be
greater or less than the best estimate. If probabilistic methods are used, there should be
at least a 50 percent probability (P50) that the quantities actually recovered will equal or
exceed the best estimate.
High Estimate: This is considered to be an optimistic estimate of the quantity that will
actually be recovered. It is unlikely that the actual remaining quantities recovered will
exceed the high estimate. If probabilistic methods are used, there should be at least a 10
percent probability (P10) that the quantities actually recovered will equal or exceed the
high estimate.
This approach to describing uncertainty may be applied to reserves, contingent resources, and
prospective resources. There may be significant risk that sub-commercial and undiscovered
accumulations will not achieve commercial production. However, it is useful to consider and
identify the range of potentially recoverable quantities independently of such risk.
C. Reserves Categories
Reserves are estimated remaining quantities of oil and natural gas and related substances
anticipated to be recoverable from known accumulations, as of a given date, based on:
• analysis of drilling, geological, geophysical, and engineering data;

• the use of established technology;
• specified economic conditions1, which are generally accepted as being reasonable, and
shall be disclosed.
Reserves are classified according to the degree of certainty associated with the estimates.
Proved Reserves
Proved reserves are those reserves that can be estimated with a high degree of certainty
to be recoverable. It is likely that the actual remaining quantities recovered will exceed the
estimated proved reserves.
Probable Reserves
Probable reserves are those additional reserves that are less certain to be recovered than
proved reserves. It is equally likely that the actual remaining quantities recovered will be
greater or less than the sum of the estimated proved plus probable reserves.
1
For securities reporting, the key economic assumptions will be the prices and costs used in the
estimate. The required assumptions may vary by jurisdiction, for example:
(a) forecast prices and costs, in Canada under NI 51-101
(b) constant prices and costs, based on the average of the first day posted prices in each of the 12
months of the reporting issuer’s financial year, under US SEC rules (this is optional disclosure under
NI 51-101).

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Possible Reserves
Possible reserves are those additional reserves that are less certain to be recovered than
probable reserves. It is unlikely that the actual remaining quantities recovered will exceed
the sum of the estimated proved plus probable plus possible reserves.
Other criteria that must also be met for the classification of reserves are provided in [Section 5.5 of
the COGE Handbook].
Development and Production Status
Each of the reserves categories (proved, probable, and possible) may be divided into developed
and undeveloped categories.
Developed Reserves
Developed reserves are those reserves that are expected to be recovered from existing
wells and installed facilities or, if facilities have not been installed, that would involve a low
expenditure (e.g., when compared to the cost of drilling a well) to put the reserves on
production. The developed category may be subdivided into producing and non-producing.
Developed Producing Reserves

Developed producing reserves are those reserves that are expected to be recovered from
completion intervals open at the time of the estimate. These reserves may be currently
producing or, if shut in, they must have previously been on production, and the date of
resumption of production must be known with reasonable certainty.
Developed Non-producing Reserves

Developed non-producing reserves are those reserves that either have not been on
production, or have previously been on production, but are shut in, and the date of
resumption of production is unknown.
Undeveloped Reserves
Undeveloped reserves are those reserves expected to be recovered from known
accumulations where a significant expenditure (for example, when compared to the cost of
drilling a well) is required to render them capable of production. They must fully meet the
requirements of the reserves category (proved, probable, possible) to which they are
assigned.
In multi-well pools, it may be appropriate to allocate total pool reserves between the developed and
undeveloped categories or to subdivide the developed reserves for the pool between developed
producing and developed non-producing. This allocation should be based on the estimator’s
assessment as to the reserves that will be recovered from specific wells, facilities, and completion
intervals in the pool and their respective development and production status.
D. Levels of Certainty for Reported Reserves
The qualitative certainty levels referred to in the definitions above are applicable to individual
reserves entities (which refers to the lowest level at which reserves calculations are performed) and
to Reported Reserves (which refers to the highest level sum of individual entity estimates for which
reserves estimates are presented). Reported Reserves should target the following levels of
certainty under a specific set of economic conditions:
• at least a 90 percent probability that the quantities actually recovered will equal or exceed
the estimated proved reserves;
the sum of the estimated proved plus probable reserves;
the sum of the estimated proved plus probable plus possible reserves.

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A quantitative measure of the certainty levels pertaining to estimates prepared for the various
reserves categories is desirable to provide a clearer understanding of the associated risks and
uncertainties. However, the majority of reserves estimates are prepared using deterministic
methods that do not provide a mathematically derived quantitative measure of probability. In
principle, there should be no difference between estimates prepared using probabilistic or
deterministic methods.
Additional clarification of certainty levels associated with reserves estimates and the effect of
aggregation is provided in Section 5.5.3 [of the COGE Handbook].
E. Commercial Risk Applicable to Resource Estimates

Estimates of recoverable quantities are stated in terms of the sales products derived from a
development program, assuming commercial development. It must be recognized that reserves,
contingent resources, and prospective resources involve different risks associated with achieving
commerciality. The likelihood that a project will achieve commerciality is referred to as the “chance
of commerciality.” The chance of commerciality varies in different categories of recoverable
resources as follows:
Reserves: To be classified as reserves, estimated recoverable quantities must be

associated with a project(s) that has demonstrated commercial viability. Under the fiscal
conditions applied in the estimation of reserves, the chance of commerciality is effectively
100 percent.
Contingent Resources: Not all technically feasible development plans will be commercial.
The commercial viability of a development project is dependent on the forecast of fiscal
conditions over the life of the project. For contingent resources the risk component relating
to the likelihood that an accumulation will be commercially developed is referred to as the
“chance of development.” For contingent resources the chance of commerciality is equal to
the chance of development.
Prospective Resources: Not all exploration projects will result in discoveries. The chance
that an exploration project will result in the discovery of petroleum is referred to as the
“chance of discovery.” Thus, for an undiscovered accumulation the chance of
commerciality is the product of two risk components — the chance of discovery and the
chance of development.
F. Economic Status of Resource Estimates

By definition, reserves are commercially (and hence economically) recoverable. A portion of
contingent resources may also be associated with projects that are economically viable but have
not yet satisfied all requirements of commerciality. Accordingly, it may be a desirable option to sub-
classify contingent resources by economic status:
Economic Contingent Resources are those contingent resources that are currently
economically recoverable.
Sub-Economic Contingent Resources are those contingent resources that are not
currently economically recoverable.
Where evaluations are incomplete such that it is premature to identify the economic viability of a
project, it is acceptable to note that project economic status is “undetermined” (i.e., “contingent
resources – economic status undetermined”).
In examining economic viability, the same fiscal conditions should be applied as in the estimation of
reserves, i.e., specified economic conditions, which are generally accepted as being reasonable
(refer to COGEH Volume 2, Section 5.8).

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APPENDIX I
CERTIFICATES OF QUALIFICATION
Keith M. Braaten
David G. Harris
Roger J. Mahoney

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CERTIFICATION OF QUALIFICATION
I, Keith M. Braaten, Professional Engineer, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada
hereby certify:
1. That I am a principal officer of GLJ Petroleum Consultants Ltd., which company did prepare
a detailed analysis of the Elk/Antelope Gas Field for InterOil Corporation. The effective date
of this evaluation is December 31, 2009.
2. That I do not have, nor do I expect to receive any direct or indirect interest in the securities of
InterOil Corporation or its affiliated companies.
3. That I attended the University of Saskatchewan and that I graduated with a Bachelor of
Science Degree in Mechanical Engineering in 1979; that I am a Registered Professional
Engineer in the Province of Alberta; and, that I have in excess of thirty years of experience in
engineering studies relating to Canadian and International oil and gas fields.
4. That a personal field inspection of the properties was not made; however, such an inspection
was not considered necessary in view of the information available from public information
and records, and the files of InterOil Corporation.

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I, David G. Harris, Professional Geologist, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada
hereby certify:
1. That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a
detailed analysis of the Elk/Antelope Gas Field for InterOil Corporation. The effective date
3. That I attended the University of Calgary and that I graduated in 1981 with a Bachelor of
Science Degree with honours in Geology; that I am a registered Professional Geologist in the
Province of Alberta; and, that I have in excess of twenty-eight years experience in geological
and engineering studies relating to Canadian and International oil and gas fields.
David G. Harris, P. Geol.

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I, Roger J. Mahoney, Professional Geophysicist, 230 - 38th Avenue S.W., Calgary, Alberta, Canada
hereby certify:
1. That I have been retained by GLJ Petroleum Consultants Ltd., which company did prepare a
detailed analysis of the Elk/Antelope Gas Field for InterOil Corporation. The effective date
3. That I attended the University of Manchester and that I graduated with a Bachelor of Science
Degree in Physics with Honours in 1964; that I am a Registered Professional Geophysicist in
the Province of Alberta; and, that I have in excess of forty-four years experience in
geophysical studies relating to Canadian and International oil and gas fields.
Roger J. Mahoney, P. Geoph.

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INTEROIL CORPORATION
RESOURCE ASSESSMENT
ELK/ANTELOPE
Prepared by
David G. Harris, P. Geol.
Roger J. Mahoney, P. Geoph.

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ELK/ANTELOPE
TABLE OF CONTENTS
Page
DISCUSSION
General 3
Regional Geology 4
Geophysics 7
Geology 15
Engineering 28
MAPS
Map 1 Location Map 33
Map 2 Early Miocene Paleogeographic Map 34
Map 3 Seismic Control 35
Map 4 Depth Structure Map - All Blocks - GLJ 36
Map 5 Depth Structure Map - All Blocks - InterOil 37
Map 6 Depth Structure Map - Top Puri Reef - GLJ 38
Map 7 Depth Structure Map - Top Puri Reef - InterOil 39
PLOTS
Plot 1 Regional Pressure versus Depth Plot from InterOil 40
Plot 2 Elk/Antelope Pressure versus Depth Plot 41
Plot 3 Elk/Antelope Pressure versus Depth Plot - Expanded 42
Plot 4 Cumulative Probability Curve - Gas Resources 43
Plot 5 Cumulative Probability Curve - Condensate Resources 44
TABLES
Table 1 Core Analysis - Routine and Stressed 45
Table 2 Petrophysical Summary - Off Reef 46
Table 3 Petrophysical Summary - Reef 47
Table 4 Risk Simulation Input Distributions 48
Table 5 Summary of Drill Stem Tests 49
Table 6 Estimate of Fracture Porosity 51
March 02, 2010 14:52:33

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GENERAL
The Elk/Antelope Gas Field is located in Petroleum Prospecting License (PPL) 238 in Papua New
Guinea as shown on Map 1. The block is approximately 300 kilometres northeast of Port
Moresby. InterOil Corporation (InterOil) will hold a 57.4751 percent participating interest
assuming that all investors and the Papua New Guinea Government elect to fully participate after
a Production Development License has been granted.
The structure was discovered with the drilling of the well Elk-1 which tested gas at 21.7 MMCFD
from DST#2 in 2006. The Elk structure is delineated by the Elk-1 and Elk-2 wells. The Elk-4 well
discovered gas and liquids in the Antelope structure. The reservoir of the Elk/Antelope structure
delineated by the Elk wells is contained within fractured limestones of the Puri and Mendi
Formations. The well Antelope-1 was rig released in 2009 and discovered a dolomitized reef
facies. The dolomitized reef was further delineated by the well Antelope-2 which was drilled with
one DST completed by December 31, 2009. The total gas column defined by the wells drilled to
date is approximately 688 metres in the Antelope Block and 788 metres in the Elk Block.
Currently, there is no infrastructure in place to process and transport the natural gas to markets.
The Elk/Antelope Gas Field is expected to form the resource base for a future liquefied natural
gas project to be constructed near Port Moresby.

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REGIONAL GEOLOGY
Papuan Basin
The Papuan Basin contains sediments that range in age from the Late Triassic (~235 million years
before present) to Pliestocene (recent) in age. The main geological events and the principal
formations are described as follows1:
1. Triassic Rifting – Regional grabens created by the breakup of Gondwanna formed

depositional lows for the accumulation of the Kana Volcanics, of Triassic age, and the
arkosic (or feldspar-rich) clastics of the Lower Jurassic age Bol and Kanau Sandstones.
2. Middle Jurassic to Upper Jurassic extensional phase – The post-rift extensional time
period created a wide, passive margin in the south and west towards the emergent
Australian craton, and deep water, basinal conditions to the north and east. In the deeper
parts of the shelf, and in the basin there was widespread deposition of organic rich muds
throughout the Middle Jurassic (Barekewa Mudstone in the south and west on the shelf,
Maril Shale in the deep basin to the north and east). The Upper Jurassic is marked by
regression, and the associated progradation of a coarse clastic sequence (the Koi lange
sandstones) over the shelf mudstones. A marine transgression returned the shelf area to
relatively deeper water conditions, resulting in renewed mud deposition (the Imburu
Mudstone) to the end of the Jurassic. In the basin regions, mud continued to be deposited
right to the end of the Jurassic (Maril Shale).
3. Lower Cretaceous shelf deposition and basinal uplift and erosion – To the south and
west, shelf conditions were maintained throughout this time period; another regional
sequence of coarse clastics, called the Toro Sandstone, prograded out over the Imburu
mudstone. A transgression then flooded this area, covering the Toro Sandstone with the
mudstones of the Neocomian to late Albian age Ieru Formation.
However, the start of the Cretaceous saw radical changes in the former basinal regions to
the north and east. Regional uplift (thrust faulting, and associated volcanism in the
Aptian/Albian) resulted in extensive exposure and erosion of the Maril Shale. This period
of erosion lasted from the Upper Jurassic until the late Aptian, when the coarse clastics of
1
Largely based on; Pigram et al, 1990, Controls on Tertiary Carbonate Platform Evolution in the Papuan Basin:
New Play Concepts: in Carman, G.J. and Z. (Eds), Petroleum Exploration in Papua New Guinea: Proceedings of the
First PNG Petroleum Convention, Port Moresby, 2-14th February 1990.

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the Kerabi Formation, sourced from the volcanic mountains to the north, were laid down
on this unconformity.
4. Upper Cretaceous uplift, exposure and erosion – The Upper Cretaceous saw the onset of
rifting associated with the opening of the Tasman/Proto-Coral Sea. Significant structural
movement was associated with this event, resulting in regional uplift throughout the west,
and deepening conditions in the east. In the west, the Ieru Formation was exposed,
undergoing erosion from the late Aptian until the Middle Oligocene.
In the east, the Kerabi sandstones were covered by a thick sequence of mudstone and
shale (the Upper Cretaceous aged Chim Formation). This period was also complicated by
continued volcanism, brief times of increased sediment influx, and further periods of
uplift. These events created several transitional (barrier island/strand plain),
progradational sand sequences throughout the Upper Cretaceous (Cenomanian aged Subu
Sandstone and the Campanian aged Pale Sandstone). The Pre-Tertiary unconformity,
which, as mentioned above, extends from the Late Aptian to the Middle Oligocene in the
West, becomes less definitive in the east; Maastrichtian to Mid-Eocene in the western
portion of the eastern basin, to absent in the far east (Kubor Anticline) where the
Paleocene aged Moogil Mudstone is present.
5. Early to Middle Miocene Carbonate Platform Development – The Middle Oligocene saw
two important geological events; firstly, the conversion of the tectonic regime from a
divergent to a convergent system, and secondly, the overall migration of the region from a
temperate latitude to a tropical region.
i. Tectonic Regime – In Eocene times, a passive margin was still established in

the Papuan Basin. The Australian carton was emergent to the south and
southwest, and a temperate carbonate platform formed a rim in the shallow
water around its edges (Mendi Limestone). Deeper water (abyssal plain)
existed further to the north and east (Aure Formation). The Middle Oligocene
saw the Australian Craton and Melanesian Arc start to converge. The slow
collision of these two regions transformed Papuan passive margin into a
foreland basin. By the Early Micoene, this transition had created a narrow
foredeep, and a southward moving transgression that greatly expanded the
width of the carbonate platform. As shown on the Early Miocene
Paleogeographic Map reproduced herein as Map 2, it is interpreted that barrier
reefs (Borabi trend) became established along the margins of the platform near

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the shelf edge. Large reefs were also established on structural highs in front of
the main trend (three of these, the Uramu, Pasca and Pandora reefs, located
offshore in the Gulf of Papua, contain significant gas resources). With
continued loading from the thrust sheet to the north, the basin deepened and
sediment influx increases. This caused backstepping of the reef trends into
shallower, cleaner waters to the south.
ii. Northward Movement – Following separation from Antarctica, the Australian
continent started to move northward from temperate areas towards tropical
climactic zones. By early to Mid-Miocene times, the region was tropical,
which assisted in the development of the reefs.
6. Middle to Late Miocene, carbonate platform demise – A regional fall in sea-level

terminated carbonate deposition. Clastic sediments from the north begin to bury the
northern edge of the platform
7. Late Miocene to Early Pliocene, regional clastic sedimentation – A major rise in sea level
initially greatly expanded the area of the foredeep, resulting in the deposition of shales
over the area (lower part of the Orubadi). However, with the encroachment of the
emerging mountain belt to the north, the foredeep and platform was eventually infilled
with clastic sediment. Compressional deformation associated with the southward
movement of the mountain belt created the faults and anticlines that trapped migrating
gas.
The above events combined to create a complete petroleum system. The source rocks are the
Maril, Barekewa, Imburu, Ieru and Cim mudstones and shales. Multiple source kitchens have
been mapped in the basin. In the nearby Aure Trough source kitchen, located just to the east of
Elk/Antelope, the older source rocks are interpreted to have started to generate hydrocarbons in
the Aptian. However, peak generation of the younger source rocks did not occur until the deeper
burial associated with the Late Miocene/Pliocene compressional events. At this time, the older
source rocks are interpreted to have reached overmaturity and produced gas.
Reservoir rocks occur in both clastic and carbonate sequences. The Toro sandstone is the most
common reservoir in the basin, with other resources discovered in the Digimu, Hedinla and Iagifu
Sandstones of the Imburu Formation (progradational pulses into the basin). Gas has also been
discovered in the fractured carbonates of the Foreland region, and in thick reef sequences in the
Gulf of Papua. The top seal is provided by the marls, siltstones and shales of the Orubadi
Formation.

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GEOPHYSICS
This interpretation of the seismic data includes information from the Elk-4 well, together with
data from the Antelope-1 and Antelope-2 wells. The work has been concentrated on obtaining a
depth structure map to the top of the Puri Limestone, top of potential reservoir, and also the
mapping of the extent of the porous facies involved in the reef development in the area.
Basic Data
The seismic grid consists of 2D data that has been acquired in 2005 and 2007 (Map 3). The
majority of the lies trend east-northeast to west-southwest, which is the direction that is
approximately normal to the dominant strike of the thrust sheets. Three more lines trend northeast
-southwest, and these combined set of lines are best positioned to map the thrusting in the area.
There is a redundancy of seismic control in the vicinity of the Elk-1 well and some of these lines,
if they had been moved to areas with no current control, would have helped improve the
interpretation. All the data has been acquired with large split spreads, a minimum of 10 kilometre
offset, which is an important consideration in the migration of the data in a structured area. The
group interval used in the 2005 survey was 30 metres, and this was reduced to 15 metres during
the 2007 acquisition. Presumably there may have been a concern with aliasing in the processing
of the 2005 data and subsequently the decision was made to half the group interval in the 2007
data set. Steep dips are apparent in the shallow part of the data, but at the Puri Limestone level the
most pronounced dips appear to be on the splay thrust, the Bevan Elk North, near the Elk-1 well.
When measured on the line E2IOL05, the dip on the Puri Limestone was measured to have a
tangent of 0.29; a 16 degree dip. Without the benefit of modeling it is difficult to be definitive
about the group interval needed to image dips in the 16 to 20 degree range, however, a 30 metre
group interval probably would have been adequate to accomplish the task.
At the main zone of interest, i.e., Top Puri Limestone and deeper, the signal/noise ratio on the
data can be described as fair-good. The Top Puri event is relatively strong and coherent, enabling
it to be correlated away from the well control with some confidence. The overlying Orbulina Marl
event is weak at the jump tie to Elk-2 and it is not considered that this event would be confused
with the stronger Top Puri Limestone event. The top of the interpreted main reef build up,
referred to as the Top Main Reef, is also well imaged (Line e17iol07, Figure 1), and one of the
strongest events on the data is a planar event that has been identified as the base of the carbonate
section; equivalent to the base of the Mendi Limestone as identified in the Elk-2 well. The base of
the porous Limestone section, as identified in well Antelope-2, has been picked on seismic and
correlated away from the well. This event is not strong and the picking of this event can be

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considered interpretive. The same applies to the event from the top of Dolomite, it is also not
considered a reliable event. Seismo-stratigraphic work and analysis will be important in
attempting to map the distribution of the best quality reservoir facies within the reef section.
Using the information from the seis-strat work development wells could be positioned to target
preferred reservoir facies. Acquisition of a 3D survey that was positioned over the area of the
currently mapped area of gas accumulation would be advantageous in the facies analysis of the
reef (however, this seismic acquisition may prove cost prohibitive owing to surface
considerations). The interpreted main reef is thick, (on Line e17iol07 the thickness is ~0.350
seconds; using an estimated intra reef velocity of 5000 metres/second (m/s), this computes to a
reef isopach of ~ 875 metres) and it would be possible to undertake some seismo-stratigraphic
analysis in this interval, especially when a future well has been drilled into this section and would
provide the data to hopefully calibrate the seismic.
Velocity information in the form of Vertical Seismic Profiles (VSP) and/or checkshots is
available at the wells. GLJ tied the seismic data to the wells, with only Elk-2 not providing a
direct tie to the seismic. The independent identifications of the seismic events made by GLJ agree
with the identifications made by InterOil. Consequently the interpretation that was supplied to
GLJ by InterOil was used as the framework for the GLJ interpretation.
Tectonics
The main thrusts in the area of interest are reasonably well defined at the zone of interest, but less
well defined in the shallow section. They are oriented in an approximate north-northwest to
south-southeast. direction, implying that the main compressional forces were in a east-southeast
to west-southwest direction. The thrusting is relatively high angled, especially in the shallower,
post Puri part of the section. There is limited evidence for thin skinned tectonics in the mapped
area. The Bevan North Elk splay thrust does not appear to be deep rooted and has a shallow fault
plane beneath the carried carbonate section. There is no good evidence for a sub reef, or sub
carbonate decollement zone , except where the Bevan North Elk Fault flattens out, possibly in the
upper Mendi, immediately before it merges with the Bevan South Fault to the east.
The names used by GLJ to identify the faults are consistent with the InterOil naming convention.
Based on the interpretation of the data some changes in fault identification have been made in
order to fit the GLJ interpretation.
The southwest end of line E1IOL05 displays the eastern side of the Mule Deer structure.
Originally the Puri Antelope Cross Fault was interpreted to be present at the eastern side of the

Page: 9 of 51
structure. However, the Puri Limestone event is continuous on the eastern side of the structure,
there does not appear to be a fault present. On line e09IOL07, to the south, both the Mena Fault
and the Puri Antelope Cross Fault are clearly present and separate; on line E1IOL05 and lines to
the north, these two faults have been merged. Additional seismic control in this area would help
resolve the relationship between the two faults in the area of the Mule Deer Structure.
On the interpreted set of data that GLJ received from InterOil a transfer fault, named the Bevan
Elk Transfer Fault, had been interpreted, southeast of ELK-1, and trending northeast to southwest.
It was difficult to confirm the presence of this transfer fault on the GLJ work so that it has been
omitted from the interpretation. GLJ has used another fault, the Bevan North Elk Thrust, in order
to explain the structuring in the vicinity of the Elk-1 well. The Elk-1 well has penetrated a
thrusted sheet that appears to carry a partial carbonate section at the well location. This fault has
been interpreted by GLJ as a splay thrust off the Antelope Front Fault, merging with the Antelope
Front Fault north of the Elk-1 well. The throw on this fault, the Bevan Elk North dissipates to the
southeast with the fault merging with the northwest to southeast trending Bevan South Fault. On
the InterOil interpretation, the Bevan Elk Transfer Fault ties the Bevan South Fault, (the
northeasternmost fault), and as a result separates the northeast designated interpreted carbonate
block from the southeast block. It is possible that the section penetrated by the Elk-1 well has
become detached as a result of compression. This would be similar to the detached Laramide
blocks, like the Heart River block, found in Wyoming.
The InterOil structure map shows a high on Line-e12iol07, abutting the Antelope Front Fault, and
a profile for a portion of this line has been included in order to demonstrate the differences in the
interpretation (Figure 2). In the vicinity of the line two faults, the Antelope Front and the Puri
Antelope Cross respectively, merge, and are in close proximity on the profile (e12ioL07,
Figure 2). GLJ has placed the Antelope Front Fault based on the termination of the good coherent
events in the zone of interest; specifically, 1) an intra Mendi event, 2) the Top Mendi/ Base Reef
event, 3) a strong intra reef event, and 4) the Top Reef/ Top Puri event. The Antelope Front Fault
has not been placed within that portion of the line where the data quality has deteriorated and
become noisier. This has resulted in an increased area for the structure on the InterOil
interpretation and the structural elevation against the Antelope Front Fault is higher on the
InterOil mapping, providing for enhanced volumetrics.
There are two additional pieces of information that may be able to help constrain the position of
the Antelope Front Fault; 1) Surface geological information can often locate a fault trace at the
surface, and this data point can then be used to extrapolate into the sub-surface to tie the
shallowest good fault contact. However, the vegetation and/or terrain may prevent possible

Page: 10 of 51
identification of any surface information. 2) It is sometimes possible to identify discontinuities/

faults by examining the refraction data that was used in the first break analysis as part of the
statics computations. It might be worthwhile inspecting the refraction profiles that have been
generated in order to determine if there is any evidence for the presence of faulting in the shallow
part of the section.
GLJ has placed the Antelope Front Fault to coincide with the termination of the coherent events.
Faulting is not the only mechanism that can affect the loss of continuity and/or signal/noise ratio
on the data. In order to attempt to eliminate the possibility of other causes it is suggested that the
critical part of Line e12ioL07 be reprocessed to find out if changes in, e.g. 1) the mute, 2) the
offset range of traces in the stack , 3) the applied NMO, or 4) changes in the bandpass, have the
effect of improving the data quality. It is not advocated that any velocity filtering, or similar
technique, that will create lateral continuity on the data be carried out. By undertaking this
reprocessing it may be possible to better resolve the placement of the Antelope Front Fault. This
is not only important from a gas-in-place perspective, but also because an additional well may be
placed in this area.
It should be emphasized that interpreting fault patterns using a sparse 2D grid of data will
probably not result in the optimum fault configuration. This was demonstrated by Shell Canada
Limited in a paper that was published a number of years ago which reported on the changing
interpreted fault pattern, onshore The Netherlands, when sparse 2D, then detailed 2D, and finally
3D seismic was available. Additional 2D control, or better still, some 3D data over the Elk area
will modify the existing InterOil and GLJ fault patterns. The interpreted fault configurations that
exist can be considered the best efforts using the current data set.
Interpretation
InterOil supplied a complete seismic data set comprised of a set of picked events, a set of picked
faults, together with a set of fault polygons. These were all copied so that GLJ could make
changes that were deemed necessary on a separate data set.
The seismic data when loaded on the GLJ workstation had the processing static shift applied,
which had been used in order to preserve live shallow data on all the seismic lines. These static
shifts were removed so that the InterOil event interpretation would fit the seismic lines.
The Top Puri Limestone event has been interpreted by InterOil as a zero crossing pick between a
trough and a strong trailing peak; this convention has been followed by GLJ. The Top Main Reef

Page: 11 of 51
event has been identified as a strong trough that lies immediately below the Top Puri Limestone
event. The Base Main Reef/Mendi Limestone top event has been picked as a strong peak; the
original Mendi identification having been made with a tie to the Elk-2 well. These two events
have been identified on the assumption that the data set has been recorded and processed adhering
to the SEG polarity convention, i.e. a compressional wave is displayed as a trough. The top reef
has therefore been identified as a strong trough; a compressional wave, and the base reef has been
identified as a strong peak, a rarefaction, a high to low velocity interface. Note that the original
Top Puri event is three quarters of a cycle above the top reef pick, but the two picks track each
other in the area of the reef. No stratigraphic relevance or significance should be placed on the
separation of the top Puri and top reef picks.
The Top Puri Limestone was identified and correlated on both the upthrown and downthrown
sides of each thrust fault. This was the reason for compartmentalizing the Puri picks into areas
assigned to each fault block. In this manner the structure on the Top Puri was mapped in the areas
of overlapping picks beneath the fault planes.
The top of the reef penetrated in the Antelope-1 well ties to a weaker event on the seismic. When
the interpreted version of Line-E4Iol05 (Figure 3) is examined the reef slope of the main reef,
between CDPs 490-550, is clearly visible. The reef that has been penetrated in Antetlope-1
appears to be a younger reef that has been formed to the northwest of the main reef, probably
after a brief hiatus in carbonate deposition. The location of the younger reef has been controlled
by the differential structuring that was ongoing during the reef building time, with there being a
structural tilting, approximately northwest to southeast. There is a possibility that a third phase of
reef building has occurred, as demonstrated on Line-e09ioL07 (Figure 4), where the possible reef
slope for the reef penetrated in the Antelope-1 well occurs at ~ CDPs, 1250-1310. The data west
of this slope could be a younger phase of reefing, extending to the northwest. Similar multistage
reef building occurs in Alberta, within the Rainbow, Devonian, Keg River Basins. This reef
development has resulted from movement on the Hay River wrench fault which was active during
the time of deposition. On Line-e09ioL07 the base of limestone event can be seen to be weak and
does not conform to the interpretation that can be made for reef fronts.
The top reef event has been correlated and the isochron to the base of reef event calculated. This
was converted to isopach using a velocity of 5000 m/s for the section within the interpreted reef.
This velocity has been estimated based on knowledge of Paleocene and Eocene reefs in other
basins, and also based on the interval velocity within the Puri Limestone. The velocity could vary
from this value especially if the reef were to be highly porous. However, highly porous reefs, with
lower velocities, tend to be free of reflections, e.g. the Paleocene Intisar reefs of the Sirte Basin

Page: 12 of 51
that have porosities in the 28 percent range. The conclusion to be drawn from inspecting the
seismic lines across the mapped reef is the deposition has been cyclical, and that the porous units
present are discrete and separated by non-reservoir units, or reservoir units of lower porosity.
The GLJ fault pattern together with the reef distribution is shown on Map 3. The positions shown
for the faults are at the terminations of the Top Puri event on the upthrown side of a fault. The
light blue outline shown is an attempt to map the areal extent of the development of the porous
Limestone unit that was penetrated in Antelope-2. The darker blue line is the interpreted limit of
reef build up, where the top and base reef events merge. It is difficult to map the limit of the reef
to the east, with the data quality deteriorating near the Bevan Fault. To the west the reef abuts the
Antelope Front Fault, which if active could have limited reef growth in this direction. Note that
thin reef is interpreted to be present at the location of Elk-4, but the well did not drill deep enough
to encounter the interpreted reef. The mauve line on the map indicates the interpreted extent of
the upper dolomite section, as penetrated in Antelope-1 and Antelope-2.
Depth Conversion
The Top Puri Limestone two-way time (TWT) structure map was converted to depth using a
velocity map that was constructed by employing a number of ghost wells positioned to provide
additional velocity control. The positions of the ghost wells that were used are shown by crosses
on Map 3. All the ghost wells are directly tied to the seismic data in order that a Top Puri
Limestone time could be measured. In Tertiary basins, the velocity in the clastic section is
directly related to the depth of burial, with the value measured usually being in the range of 0.5-
0.7 m./sec/m. The mathematical relationship used is as follows:
Vz = Vo + K Z
Where,
Vz is the velocity at depth Z,
Vo is the velocity at depth 0, and has a value of 2250 m/s,
K is the acceleration factor, in this case in m/s/m.
Z is the depth in m.
The value chosen for Vo is the replacement velocity, equivalent to the velocity within the first
consolidated layer, the velocity that has been used in the static corrections. The Elk-4 VSP data
has a value of 2427 m/s for the shallowest recorded value, and the VSP in Elk-2 has a shallowest
value of 2252 m/s. A value of 2250 m/s. was used for Vo in the depth conversion.

Page: 13 of 51
In undertaking this depth conversion it would be preferable to map a value of K derived from the
wells, and obtain the average velocity map to the Puri Limestone in this manner by employing a
variable K. However, the four wells are clustered in a north-south line with, with no spatial
distribution, preventing employing a variable K. For the first set of depth maps that GLJ
produced, a constant K was been used , which was derived from the data in Antelope-1, and this
value of K was used in all the ghost wells. In the three remaining drilled wells the average
velocity to the Puri Limestone/top carbonate is obtained using the depth and time value at the
particular well. The first step in the calculation is to obtain a depth to the Puri Limestone at a
particular ghost well. This is done using the following relationship.
Z = 2VoT/ (4-KT)
In order to obtain a velocity value at a ghost well this depth was used together with the TWT to
the Puri at the well tie. Once the velocities at all the wells were obtained, a map of the average
velocity to the Top Puri Limestone was gridded and contoured. This velocity map was then
integrated with the Top Puri TWT map in order to produce a structure map to the top of the
carbonate (Map 4).
The ghost wells were placed so as to provide spatial velocity control, but should also honour
critical TWT highs and lows.
A potential problem in employing this technique in areas that have been structured is that portions
of the section could have been deeply buried prior to the tectonic phase. Being deeply buried and
subsequently being uplifted, would result in a higher velocity section being positioned at a
shallow depth. This would not be taken care of in the method used and would result in an
erroneous depth estimate. In the studied area the uplift has been slightly later than deposition of
the Miocene section, all relatively high areas have moved together except for the splay thrust at
Elk-1. Therefore it appears that using the accelerating velocity method is not invalidated by the
presence of structuring.
When the Antelope-2 well was drilled the top of Puri was much shallower than predicted by the
depth mapping; the velocity used, which had largely been based on the velocity in Antelope-1,
had been too high. In constructing the current depth map a variable K has been used for depth
conversion, in spite of the poor distribution of the wells. A K map was derived using the
information from the drilled wells. After some experimenting with different mapping options it
was decided that krigging be used with a dominant trend being east to west, honouring the high K
value in Antelope-1. The contours on this map were extrapolated to the nearest dummy wells in

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order to expand the mapping. A new K map was then produced and extrapolations carried out to
the next closest dummy wells until K values were obtained over the entire map. The formula for
converting to depth Z is shown above. GLJ obtained an average velocity to the Puri Limestone by
using the Puri depth and time maps.

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GEOLOGY
Elk/Antelope
The Elk/Antelope gas field is located in the Puri fold and thrust belt of the Foreland portion of the
Papuan Basin, Papua New Guinea. Gas in this field is structurally trapped within a complex pore
system that is developed within carbonates of the Early Miocene age Puri Formation (also known
as the Darai Carbonate). As shown on the depth structure map presented herein as Map 4, drilling
to date has proved gas in two fault blocks (Elk and Antelope), with a third fault block to the west
that is structurally high enough to contain gas (Mule Deer). Based on new pressure-depth data
and a re-interpretation of older data points, GLJ now interprets that the drilled blocks may not be
in direct hydraulic communication. The free water level in the Elk Block appears to be lower than
in the Antelope Block, and additional data regarding condensate yields suggest that the fluids are
also of different compositions (see the engineering sections of this report). This would require the
Bevan Fault to be sealing; possible reasons for a fault sealing in this situation could be fault
gouge, fault cementation and/or bitumen (which has been noted in some tests), and will have a
tendency to seal regions against fluid flow.
The top seal is provided by the marls, siltstones and shales of the overlying Orubadi Formation.
The reservoir is not sealed at the base. The down dip limit of the gas reservoir is controlled by the
intersection of declining structure on the flanks, and a gas/water contact that will vary according
to the quality of the reservoir in the region of the free water level (FWL)2. Based on the most
likely FWL at an elevation of -2228 metres in the Antelope Block, and on a transition zone of 0.0
metres in the fracture system, the gas column was estimated at 688 metres using the GLJ depth
structure maps, and 898 metres using the InterOil depth structure maps. Using a FWL at an
elevation of -2248 metres in the Elk Block, these values were estimated at 788 metres and 928
metres, respectively for this Block.
The reservoir is currently delineated by five wells, excluding one unsuccessful sidetrack. The
three wells drilled to date (Elk-1, 2 and 4) have encountered reservoir rock that is composed
mainly of low porosity, micritic limestone (mudstone to wackestone) interpreted to have been
deposited in the offshore basin. The pore geometry encountered by these wells is very complex,
consisting of a mixture of very low permeability intercrystalline pores associated with the
2
Free water level – The elevation at which the capillary pressure is equal to zero (it is not the point at which the
water saturation is equal to 100 percent).

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cryptocrystalline and microcrystalline limestone, low permeability intercrystalline pores in more

microsucrosic limestones, and very high permeability created by the fracture system.
The Antelope-1 well penetrated a thick, Early Micoene Reef development. A study of the samples
by Dr. Moyra Wilson3 has confirmed that pervasive dolomitisation of an original reef facies has
occurred. The uppermost carbonate section (1754 – 1779 metres) is described as mudstone,
wackestone and coral floatstone, containing “Common coral fragments together with rare
imperforate foraminifera (Borelis) and micritised coralline algae…”. The dominant depositional
environment is interpreted to be a shallow photic zone in close proximity to coral growth.
InterOil obtained a Formation MicroScanner Image (FMI) of the Antelope-1 borehole. This
proved invaluable in logging the entire well for a depositional profile. InterOil provided GLJ with
a copy of the interpretation of this log suite conducted by Schlumberger, Data & Consulting
Services Division, Perth, dated February 6, 2009. Schlumberger divided the Puri carbonate into
five facies based on FMI image texture, dolomite content and BorTex outputs:
1. Back Reef – Reef Fringe (2454.0 – 2246.6 metres)

2. Reef Flat – Reef Crest, rough water (2246.6 – 2060.3 metres)
3. Reef Flat, calm water (2060.3 – 1976.2 metres)
4. Reef Flat, rough water (1976.2 – 1935.0 metres)
5. Dolomitized Reef (1935.0 – 1732.0 metres).
Special Core Studies and the Assessment of the Porosity Cutoff
InterOil had conducted extensive tests on the core obtained from Elk-2. As such, these samples
represent the micritic, basinal limestone. Although sidewall cores were obtained from the reef
facies in the Antelope-1 well, special core analysis (SCAL) has not yet been conducted.
Routine and Overburden Pressure Work
InterOil cut both sidewall and whole cores from the basinal, micritic limestones in Elk-2 well, and
conducted a full suite of special core studies on these samples. The routine and stressed data is
presented as Table 1, and the porosity versus permeability cross plot derived from the overburden
data is included as Figure 6. This plot indicates the very low in-situ matrix permeability of the
basinal micritic limestones, with values ranging between 0.0005 and 0.13 millidarcies (md). The
selection of an appropriate porosity cutoff from this data is difficult due to the influence of
3
Department of Applied Geology, Curtain University, Perth, Australia.

Page: 17 of 51
fracturing; some would argue that a porosity cutoff should not be used at all in a fractured system
because the pores tend to be such a short distance away from a channel of communication. GLJ is
not in agreement with this interpretation, and submits that a porosity cutoff is still necessary since
the gas still must flow in the matrix in order to get to a fracture. However, the porosity cutoff that
is applied should be lower than for typical reservoir with more conventional matrix permeability.
At a permeability cutoff of 0.005 to 0.01 md., a porosity cutoff ranging between 2.0 and 6.0
percent is suggested. GLJ reviewed additional special core data in order to narrow this range.
Capillary Pressure Data
The core samples from Elk-2 were subjected to both mercury and air-brine capillary pressure
tests. The mercury injection data has been converted to an equivalent height above the free water
level using typical lab to reservoir, and mercury to gas contact angles and interfacial tension
constants. These results are presented as Figure 7.
Of six samples tested, it is noted that three samples (#2, 30 and 45) had entry pressures that are so
high that gas is not likely to be present in rock of this quality, even at 2000 feet above the FWL.
The highest porosity and permeability observed in these three samples is 2.1 percent, and 0.002
millidarcies, respectively. This lower limit is consistent with what was suggested by the
overburden corrected core data above. The remaining three samples (#82, 83 and 88) all show
that reasonable gas saturations (>35 percent) can be expected at distances greater than about 163
feet above the FWL (i.e. the thickness of the lower transition zone, where gas saturations are too
low to allow gas movement, is expected to exceed 163 feet). The lowest porosity and
permeability observed in these samples is 5.1 percent and 0.041 millidarcies, respectively,
slightly lowering the upper limit for a reasonable porosity cutoff.
Six core samples were also tested using the Air-Brine system (Figure 8). Unfortunately, all of the
samples that were analyzed were of superior quality, ranging in porosity from 6.8 to 9.4 percent,
and in permeability from 0.016 to 0.13 millidarcies. As expected for this rock, the entry pressures
were lower, and the minimum thickness of the lower transition zone is less (97 feet).
The above data suggests that an appropriate porosity cutoff for the basinal micritic limestones is
between 2.1 and 5.1 percent. If one considers that the mercury injection capillary pressure curve
for Sample 82, which has the porosity value of 5.1 percent, shows an excellent gas saturation
profile, then it is reasonable to assume that the porosity cutoff should be significantly less than
this. Along a similar line of reasoning, Sample 30, which has a porosity of 2.1 percent, has
virtually no gas saturation at any distance above the FWL, suggesting that the porosity cutoff

Page: 18 of 51
should be well above this value. The midpoint of these end points would seem to be a reasonable
value for a most likely case, which can be rounded down to 3.5 percent. GLJ has utilized a
porosity cutoff of 3.5 percent in the low and most likely cases, and has dropped it to 3.0 percent
in the high case.
J Function
A method of normalizing capillary pressure functions has been established; it is referred to as the
Leverett “J Function”. This is a useful way of estimating the water saturation that is independent
from log analysis. The equation is as follows:
J = [0.2166 x Pc x √(k/ Φ)]/(T cos θ)
Where:
Pc = Capillary Pressure (psi)

K = permeability (md)
Φ = Porosity (v/v)
T = Interfacial Tension (dynes/cm)
θ = Contact angle, degrees.
Capillary pressure data from the laboratory is used to establish a correlation of J against Sw. The
J is then calculated in the reservoir, and the correlation is used to estimate the Sw. However, the
main drawback of this method is that it is based on the ratio of permeability to porosity, and as
such can have misleading results in low permeability rocks. As an extreme example, this method
would end up assigning the same Sw to a rock with a permeability of 20 md at a porosity of 0.20
as it would to a rock with a permeability of 0.02 md at a porosity of 0.0002, assuming that the two
rocks are at the same height above the FWL (i.e. Pc). This would clearly not be the case.
Therefore, in low permeability rocks, the J Function tends to be optimistic and must be used with
care.
The J Functions calculated using the mercury injection capillary data is included herein as
Figure 9. The mercury injection data was used to establish the correlation in the higher J Function
range, above about 4.0. The Air-Brine data, shown on Figure 10, was used to establish the
correlation in the lower range. The most likely correlation, as shown on Figures 9 and 10, was
used to estimate a water saturation curve, which is identified as Sw_J.

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Archie Parameters
Twelve samples were analyzed to determine the cementation factor (“m”) and the saturation
exponent (“n”). This analysis showed that “m” varies between a low of 1.79 and a high of 2.23,
with an average value of 2.00. The saturation exponent varies between a low of 1.68 and a high of
2.23, with an average of 1.89. The average factors were used in the petrophysical study conducted
herein.
Petrophysical Analysis
GLJ has conducted a detailed petrophysical analysis of all of the wells that delineate the
Elk/Antelope reservoir as of December 31, 2009. All digital files, including the open-hole logs
and the directional surveys were obtained directly from InterOil. Horizon picks supplied by
InterOil were verified by GLJ. This data was loaded into the GEOLOG software used by GLJ,
and was analyzed using deterministic methods.
Given the complexity of the reservoir, the varied pore types, and the need to define ranges for
later use in the risk analysis, GLJ directed the petrophysical study towards defining a low case,
most likely case, and a high case set of well bore parameters, using the following procedure:
• Based on sample and log descriptions, it is interpreted that there is very little clay in the
Puri carbonate. The Volume of shale (Vsh) was determined using both the Gamma Ray
and the Sigma logs. For the Gamma Ray, the Clavier transform was used. The exact
method of combining the Vsh determined from each of these logs was largely dependent
on hole conditions and relative responses (either minimum, average or a single log was
accepted).
• In the Elk Block, the lithology is essentially pure limestone, as suggested by core data and
identified using the Photoelectric effect (PEF) log. The matrix density of limestone was
permitted to vary between a minimum of 2710 and a maximum of 2730 kg/m3, with an
expected value of 2715 kg/m3 (some minor dolomite is present on the core). These figures
form limits on the effective porosity (PHIE) that can be calculated.
• In the Antelope Block, both limestone and dolomite was encountered. For the dolomite
lithofacies, the matrix limits were set at 2810 and 2870 kg/m3, with an expected value of
2850 kg/m3. Dolomite was identified using the photoelectric log.

Page: 20 of 51
• The PHIE was determined using a neutron-density cross plot. A comparison of the various
raw neutron log suites to the overburden corrected core porosity suggested that the APLC
log was the appropriate curve to utilize. It was later discovered that this was the preferred
tool used by Schlumberger in the analysis they presented. For the basinal limestones, the
PHIE was limited by a maximum value of (1-Vsh) x 0.11. Due to the amount of bad hole
present, a detailed review of this value was conducted to ensure that the bad hole
processing, and this upper limit were appropriate. In the reef, this value was increased to
0.40, however, the density log was altered where necessary based on the sonic and the
neutron porosity log, so the bad hole was processed somewhat differently.
• The PHIE determined by GLJ was compared to that determined by Schlumberger, and it
was noted that the Schlumberger analysis was slightly more pessimistic. It is difficult to
determine the accuracy of either porosity curve using the overburden corrected core data
due to great uncertainty in the depth adjustment that should be made. However, on at least
a qualitative basis, the overburden corrected core porosity suggests that both may be a
slightly low. However, substantial additional core analysis must be obtained before any
concrete conclusions can be made.
• With the petrophysical analysis geared towards determining appropriate inputs for the
Risk Analysis, GLJ determined three porosity curves; a low case PHIE curve which was
based on the minimum value of the GLJ and the Schlumberger curves, a most likely value
which was the average of the two, and a high case which took the maximum of the two
curves.
• Log based water saturation was determined using the PHIE from the most likely case, the
Archie parameters from the special core study, and the deep resistivity log. This Sw curve
was then averaged with the Schlumeberger Sw curve in order to derive a most likely Sw
profile. The high Sw curve used the maximum of the Sw curve determined by GLJ, by
Schlumberger and using the J Function, whereas the low Sw curve used the minimum of
the three. In all cases, the Sw was set at 1.0 where the PHIE was less than 0.021 (see the
discussion on the capillary pressure). The gas-in-place in the fracture porosity was
assessed within the Risk Analysis.
• Well bore parameters were determined using different cutoffs and log suites for the low,
most likely and high cases, as shown in the summary table presented as Table 2 for the
wells in the Elk Block. The results of the petrophysical analysis of the wells in the
Antelope Block well are provided in Table 3.

Page: 21 of 51
Reef Model
Depth Structure
The depth structure map on the top of the reef was determined using the following procedure:
1. An isochron map of the interval between the top of the Puri Formation and the top of the
reef was created.
2. This map was converted to an isochore map using the pseudo-seismic interval velocity
determined at the Antelope-2 well.
3. This Isochore map was then subtracted from the depth structure map created on the top of
the Puri.
Reef Isochore and Layer Depth Structure Maps
The gross thickness isochore map for the total reef was generated by stacking three layers (in
stratigraphically descending order): the high porosity limestone that caps the reef in the Antelope-
2 well, the dolomitic portion of the reef penetrated by both the Antelope-1 and Antelope-2 wells,
and the reef limestone below the dolomite that is continuous to below the gas-water contact
(GWC).
The upper porous limestone isochore was generated using the same procedure described above
for the limestone above the reef. The isochron map was converted using the pseudo-seismic
velocity extracted from the Antelope-2 well. Similarly, the isochore map for the high porosity
dolomite was generated by converting the isochron map using a pseudo-velocity grid based on the
values determined at the Antelope-1 and Antelope-2 wells.
The isochron map for the remaining medium porosity limestone was derived by subtracting the
sum of the above two isochron maps from the total reef. This was then converted to an isochore
map using an appropriate velocity constant.
The above three isochore maps were then summed to arrive at the gross thickness isochore grid
for the total reef.
The depth structure map on the top of each of these layers was then generated by subtracting each
layer from the overlying layer.

Page: 22 of 51
Volumetric Risk Analysis
The volumetric analysis of the Elk/Antelope field involved splitting the structure into three fault
blocks (Elk, Antelope and Mule Deer, as shown on Maps 4-7). The Antelope Fault Block was
further subdivided into a Reef and a Non-Reef facies, and the reef itself was split into a high
porosity limestone cap, and high porosity dolomite and a medium porosity lower reef limestone
volume. Within each of these fault blocks, the pore system was further subdivided into a matrix
and a fracture component. Each of these pore systems was analyzed individually, as follows:
Free Water Level/Gas-Water Contact
As noted previously, the FWL in the Elk Block has been placed at an elevation of -2248
metres, whereas the FWL in the Antelope Block is placed at an elevation of -2228 metres
based on the pressure-depth work. The highest known water occurs at the top of the Puri
Limestone in the Elk-2 well, at an elevation of -2261.0 metres, whereas the lowest known gas
(somewhat reliably picked based on all three Sw curves) occurs at an elevation of -2199.7 in
the Elk-4 well. These elevations are consistent with the FWL identified in the pressure-depth
work.
In this reservoir, the exact elevation of the GWC will depend on the quality of the rock in the
transition zone. In the fracture system, the GWC is equal to the FWL. In a highly porous and
permeable rock, such as in the reef in the Antelope Block, the GWC could be a few metres
above the FWL. However, throughout the non-reef portions of this reservoir, the matrix is of
poor quality, such that the GWC will be well above the FWL (as discussed in the earlier
section on capillary pressure). Using an Sw of 65 percent to define the GWC, it is noted that
the basal portion of the transition zone (65 to 100 percent Sw, containing immobile gas)
varies between a low of 29.7 metres in higher quality matrix (Air-Brine Sample #20, phi=8.2
percent, k=0.13 md) to a high of 102.1 metres in the poorer quality samples (Air-Brine
Sample #55, phi=6.8%, k=0.016 md). Excluding the non-reservoir quality Sample #55 from
consideration, the Air-Brine samples suggest an average basal transition zone of 46.6 metres,
whereas the Hg injection samples average 52.3 metres. Therefore, the lower part of the
transition zone in the micritic limestone is anticipated to be about 50 metres thick.

Page: 23 of 51
Residual Oil
An examination of the tests that were run in the sidetrack wells at Antelope-1 show the rare
recovery of both black oil and some bitumen. However, as discussed in the test review, the
existence of pure gas tests in equivalent structural intervals suggests that this oil saturation is
not a continuous phase across the field. GLJ has modeled this as a sporadically distributed oil
saturation that comes into play at an elevation of between -2195 metres and -2210 metres.
Although this has been handled as a reduction in the average gas saturation below these
elevations (of between 5 and 20 saturation units), it should be noted that it is likely that the oil
saturation reaches values both above the high end of this distribution (probably where oil was
recovered) and below the low end (where it is immobile and only gas is recovered). The
values used in this analysis are considered a reasonable average for the structural interval
when taken as a whole unit. To date, there has been no data supplied that would assist in
defining both the distribution of the oil and the actual oil saturations.
Oil saturations have not been applied outside the Antelope Block.
Fracture System
GLJ has conducted a detailed study of the fracture system as discussed in the Engineering
section. This review has indicated that the fracture net/gross ratio varies between about 0.5
and 0.7, and the fracture porosity varies between 0.07 and 0.15 percent. The water saturation
in the fracture system is estimated to be between 1.0 and 5.0 percent.
The above volumetric parameters were applied to the gross rock volume above the FWL,
minus the net rock volume that has pay in the matrix (the porosity in this rock was determined
using porosity logs that react to all porosity, including fracture porosity).
This was applied to both the reef and the non-reef facies, and to both the limestone and the
dolomite portions of the reef. As one can guess from the reservoir properties, the fracture
system is volumetrically insignificant; however, it is extremely important from deliverability
and recovery perspective.
Matrix System Non-Reef
The petrophysical analysis provided estimates of the net/gross ratio, porosity and the water
saturation in the micritic limestone matrix system. This was applied to the gross rock volume
in the basinal limestones above the matrix GWC.

Page: 24 of 51
Matrix System Reef
GLJ conducted a petrophysical study on the reef penetrated by the Antelope-1 and Antelope-2
wells, as noted on Table 3. These properties were used in the volumetric assessment of the
OGIP in the reef.
A full summary of the input parameters is presented on Table 4.
Volumetric Model
The model is set up to first calculate the OGIP in each pore system assuming that no reef is
present, then it calculates the OGIP in the reef. The final process is to add these two together and
subtract the duplicated volume. The following example, using the “mean values” from Table 4
and the InterOil Depth Structure Maps, illustrates how the Risk Model works (more significant
digits in the model result in some slight differences in the products noted below):
Gas-Water Contacts
• FWL = -2228 = GWC in fracture system in the Antelope Block (-2248.0 in the other
Blocks).
• Non Reef GWC - Basal transition zone thickness in micritic limestone matrix = 46.3
metres, giving a matrix GWC at -2181.7 metres in the Antelope Block and -2201.7 metres
in the other Blocks.
• Reef GWC –
o Basal transition zone thickness in Upper Reef Limestone = 8.0 metres, giving a
GWC at -2220.0 metres.
o Basal transition zone thickness in reef dolomite = 4.0 metres, giving reef GWC at -
2224.0 metres.
o Basal transition zone thickness in lower reef limestone = 31.3 metres, giving reef
GWC in the limestone at -2196.7 metres.
Pore Systems
1. Non Reef Micritric Limestone:
Matrix System, Gross Rock Volume (GVr) of Puri only:

Page: 25 of 51
• Micritic limestone Matrix: Antelope GVr above Sor zone = Antelope GVr above
GWC = 13.13 MM ac-ft, Elk = 3.99 MM ac-ft, Mule Deer = 11.01 MM ac-ft.
• Matrix N/G = 0.111, PHIE = 0.061, Sg = 0.61, Bgi = 204.1; OGIP in matrix in
Antelope if there was no reef = 479.5 BCF, in Elk = 144.6 BCF and in Mule Deer =
399.1 BCF, for a total of 1023.2 BCF in the micritic limestone matrix if no reef was
present.
Fracture System in the micritic Puri Limestone:
• Antelope GVr in Puri above Sor zone = 12.37 MM ac-ft, Elk = 3.89 MM ac-ft, Mule
Deer = 10.59 MM ac-ft. Please note that even though the GWC is lower in the fracture
system, in some cases the fracture system GVr is lower than the matrix GVr because
the net rock volume included in the matrix system must be excluded (the PHIE of the
matrix was calculated using neutron-density tools, therefore the fracture porosity is
included here).
• Fracture net/gross = 0.6, PHIE = 0.0011, Sg = 0.972; the OGIP in the fracture system
below the matrix porosity cutoff in Antelope = 68.4 BCF, Elk = 21.3 BCF and in Mule
Deer = 58.1 BCF for a total of 147.8 BCF. The OGIP in the fracture system below the
top Sor zone in the Antelope Block is calculated at 4.6 BCF, for a total of 152.4 BCF
in the fracture system.
Mendi Limestone:
• OGIP in the matrix = 48.7+55.2+175.1 = 279 BCF

• OGIP in the fracture system = 10.5 (+2.0 in Sor Zone)+11.5+35.4 = 59.4 BCF
In the non-reef pore systems the mean estimated OGIP = 1023.2 + 152.4 + 279.0 + 59.4 =
1514.0 BCF.
2. In the Reef:
• Upper reef limestone: Static model GVr of porous limestone cap above Sor zone =
2.85 MM ac-ft. When multiplied by the continuity uncertainty factor of 0.8 a value of
2.28 MM ac-ft is calculated. Using the petrophysical parameters presented in Table 4,
the OGIP is estimated at 2253.8 BCF.

Page: 26 of 51
Static model GVr rock of porous limestone cap between Sor top and GWC =
0.2 MM ac-ft., when multiplied by 0.8 gives a value of 0.16 MM ac-ft. Using
the parameters in Table 4, the OGIP is estimated at 134.4 BCF.
• Dolomite: Static model GVr of dolomite above Sor zone = 6.91 MM ac-ft. When
multiplied by the continuity uncertainty factor of 0.8 a value of 5.53 MM ac-ft is
calculated. Using the petrophysical parameters presented in Table 4, the OGIP is
estimated at 6055 BCF.
Static model GVr rock of the dolomite between the Sor top and GWC = 0.5
MM ac-ft., when multiplied by 0.8 gives a value of 0.4 MM ac-ft. Using the
parameters in Table 4, the OGIP is estimated at 370.3 BCF.
• Lower Reef Limestone: The static model GVr of Lower Reef limestone above top of
the Sor zone = 2.27 MM ac-ft. However, the gross rock excluded in the above facies
by the application of the lateral uncertainty factor of 0.8 must be included with this
volume. Therefore, the final GVr of this facies is estimated at 4.23 MM ac-ft. Using
the petrophysical parameters presented in Table 4, the OGIP is estimated at 1613 BCF.
The mean estimated OGIP in the reef = 2253.8 + 134.4 + 6055.0 + 370.3 + 1613.0 =
10426.5 BCF.
3. Must subtract OGIP in the duplicated rock volume:
• OGIP in micritic limestone volume replaced by reef = 516.8 BCF.
Therefore, the final OGIP = 1514 + 10426.5 – 516.8 = 11423.7 BCF in the mean case using the
InterOil maps. The equivalent value using the GLJ maps is 10533.1 BCF. These two models were
combined into a single distribution by using a discrete distribution. This function combined five
thousand iterations of each model together to generate a single data set of ten thousand iterations.
Anticipated Aquifer Strength
A geological map of the Papuan fold belt included as Figure 2 in a paper by Hill4 shows the Darai
limestone (Puri equivalent) outcropping over a large area to the west of the Elk/Antelope
structure (The Darai Plateau). This is the recharge area for a large artesian aquifer in this region.
A pressure-depth plot supplied by InterOil and included herein as Plot 1 shows the continuity in
this hydraulic system, and extrapolating to a recharge elevation just above sea level. If the
4
Hill, Kevin C., 1991, Structure of the Papuan Fold Belt: AAPG Bulletin, v. 75, no. 5, p. 857 – 872.

Page: 27 of 51
Elk/Antelope structure was connected to this system, then an infinite-acting aquifer would be
expected. However, as shown on Plot 1, the Elk/Antelope aquifer is approximately 460 psi higher
in pressure, proving a disconnection. The over pressuring of this aquifer could be related to a
sealed fault block or series of fault blocks being elevated during tectonic movement, which would
result in a limited water drive, or a higher recharge area (approximately 500+ metres above sea
level, which would be in the mountains to the north). This second option would require a
regional, north-south oriented permeability barrier to the west of the structure. If this was the
case, then a strong aquifer would exist.
Given that there are no production analogues for this field, GLJ has considered the above
information in assessing the recovery factor. At this point in time, GLJ interprets that the first
possibility discussed above is the more likely scenario, and that reasonably good recovery is
likely. A detailed discussion on the derivation of the recovery factor within the probabilistic
model is presented in the Engineering section.

Page: 28 of 51
ENGINEERING
Well Test Results
Drill stem tests (DST’s) have been analyzed by Focal Petroleum Engineering Pty Ltd. or
Knowledge Reservoir, LLC. The results of the individual DST’s are presented in Table 5.
There exists some uncertainty in the extrapolated reservoir pressures due to the limited shut-in
times and the mechanical problems experienced during the pressure buildup periods. This
uncertainty is partially reflected in the range of pressures interpreted by the two referenced firms.
The uncertainty gives rise to a range in the interpreted free water levels in the Antelope Block as
will be discussed further on in this report. GLJ did not conduct an independent pressure test
analysis for these DST’s.
It is noted that DST’s that straddled the FWL did not conclusively recover significant volumes of
formation water. The data reviewed to date suggest that most of the water recovered was
completion fluid. This could mean that water influx may not be a significant factor in the
reservoir depletion mechanism, at least at the points penetrated by wells thus far.
Initial Reservoir Conditions and Fluid Properties
The initial reservoir conditions and fluid properties used in the best estimate case in this study are
summarized as follows:
Reservoir Reservoir Gas Condensate

Pressure1 Temperature Deviation Yield3
Block psia ºR Factor2 BBL/MMCFraw
Elk 3693 680 0.948 6.7
Antelope 3663 680 0.933 18.0
Notes:
1) At estimated datum elevation of -2000 metres.
2) From PVT analyses.
3) Calculated from recombined well stream composition.
The only gas sample on which a PVT analysis was conducted for the Elk Block was obtained
from well Elk-1 on October 10, 2006 during DST #2 which was conducted over the open hole
interval from an elevation of -1564.7 metres to -1764.8 metres. A total of four PVT analyses were
available from wells Elk-4 and Antelope-1 on the Antelope Block.

Page: 29 of 51
The calculated condensate yields on the four PVT analyses are summarized in the following
table:
Interval Interval Condensate

Top Elevation Base Elevation Yield1
Well DST m m BBL/MMCFraw
Elk-4 DST 4 -2063.9 -2189.1 19.8
Antelope-1 DST 6 -1537.3 -2129.1 17.0
Antelope-1 DST 12 -2125.2 -2203.1 18.5
Antelope-1 DST 14 -2220.3 -2252.7 17.0
Notes:
1) Calculated from recombined well stream composition.
The difference in pressure and gas composition between the Elk and Antelope Blocks suggests
that these are two separate gas accumulations. The condensate yields observed to date suggest
that there is not a significant compositional gradient within the Antelope Block.
The volumetric risk analysis uses the following triangular distributions for the reservoir pressure,
condensate yields and shrinkage for removal of CO2, condensate and fuel gas requirements:
Low Best High

Parameter Estimate Estimate Estimate
Elk Block
Reservoir Pressure (PSIA) 3680 3693 3706
Condensate Yield (BBLS/MMCF) 5.0 6.0 7.0
Shrinkage 8% 8% 8%
Antelope Block
Reservoir Pressure (PSIA) 3650 3662.5 3675
Condensate Yield (BBLS/MMCF) 16.5 18.0 19.5
Shrinkage 10% 10% 10%
Free Water Level
The FWL interpretation is based on the pressure versus depth plots included as Plots 2 and 3. The
water gradient of 0.434 psi/foot is defined by pressure data from the DST’s taken on the Elk-2
well. The calculated gas gradients using the recombined fluid analysis from the Elk and Antelope
Blocks are 0.071 and 0.079 psi/foot, respectively. The pressure data from the Elk-1 well has been
used to define a FWL at an elevation of -2248 metres in the Elk Block. The pressure data from

Page: 30 of 51
the Elk-4 and Antelope wells and a gas gradient of 0.071 psi/foot was used to define the
minimum and maximum FWL of -2219 and -2237 metres for the Antelope Block.
The risk simulation uses a fixed FWL for the Elk Block and a triangular distribution for the
Antelope Block with a most likely FWL at -2228 metres and the minimum and maximum case
FWL’s at -2219 and -2237 metres, respectively.
Fracture Porosity
Fracture porosity has been estimated using the flow capacity calculated from the DST’s for wells
Elk-1 and Elk-2 and the fracture frequency determined from the Formation Micro Imager (FMI)
log. The flow capacity has been related to the fracture permeability using the following equation:
Φf = [kf/(1.04 × a2)]1/3
Where;
Φf = fracture porosity
kf = fracture permeability (Darcies)
a = distance between fractures (cm)
For all of the intervals tested in wells Elk-1 and Elk-2, it is assumed that the entire flow capacity
is related to the fracture porosity. The fracture porosity for the Elk-1 and Elk-2 wells are
calculated to be 0.070 and 0.078 percent with net fractured to gross interval ratios of 59 and 63
percent, respectively. The estimate of fracture porosity is detailed in Table 6.
It is noted that natural fractures are an important characteristic in the Elk Block in that they
improve the flow capacity and drainage of the low permeability limestone. Fractures may also be
present in the reef facies, however, they become less significant due to the higher porosity and
permeability.
Recovery Factors
The gas recovery factor for the Elk/Antelope Field will be dependent on the aquifer strength, the
trapped gas saturation and the withdrawal rates.

Page: 31 of 51
A discussion regarding aquifer strength was included in the geological section of the report. In the
most likely case, the aquifer strength is expected to be moderate to weak resulting in limited
water influx and a relatively low reservoir abandonment pressure.
The Arun Gas Field located in Indonesia is considered to be a potential analog for the
Elk/Antelope Gas Field. Gas recovery from the Arun Gas Field is expected to reach
approximately 94 percent of the OGIP. This has been used to define the upper limit for the
recovery factor distributions.
The following parameters have been used as inputs for calculating the recovery factors:
Low Best High

Parameter Estimate Estimate Estimate
Abandonment Pressure (psia) 2750 800 250
Residual Gas Saturation
Non-Reef Matrix 50% 35% 20%
Non-Reef Fractures 15% 10% 5%
Reef Limestone 30% 20% 10%
Reef Dolomite 30% 20% 10%
Water Swept Volume 80% 50% 20%
Recovery Factors
Non-Reef Matrix 24% 83% 94%
Non-Reef Fractures 75% 88% 95%
Reef Limestone 60% 87% 95%
Reef Dolomite 61% 87% 95%
Risk Analysis Results
Risk simulation results include an array of possible outcomes of OGIP and recoverable resources.
Results for individual geological entities must be compiled to obtain field totals. A fundamental
principle of probability and statistical analysis is that the probabilistic sum of a number of
independent events is not equal to the arithmetic sum (except for the sum of the mean values
which is equal). If events were completely dependent on the outcome of each other, then the
arithmetic sum would equal the probabilistic sum.
In the Elk/Antelope structure, the OGIP and resource estimates for individual geological entities are
neither completely independent nor dependent. Estimates for petrophysical parameters and net/gross

Page: 32 of 51
ratios for each rock type are generally independent given the methodology used in the analysis. The
gross rock volumes used in the probabilistic analysis are completely dependent due to common
gas/fluid elevations and structure top interpretation. Recovery factors are dependent since the entities
share a common reservoir pressure system and underlying aquifer. The strength of the aquifer will
have similar impact on the recovery from each geological entity. The risk simulation has been set up
to account for the dependent variables. Each iteration of the risk simulation relies on a single free
water level or abandonment pressure throughout each of the geological entities.
The results of the probabilistic analysis are summarized on the cumulative probability curves for
the OGIP and the initial recoverable raw gas resources presented on Plot 4 and the initial
recoverable condensate resources presented on Plot 5.

Page: 33 of 51

Page: 34 of 51

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E1
iol07 m ig_
21 00
e08 _fpre
2 51
iol07
1 699
250
60 0
e13
2 00
5
0
00
0
19
24 00
20
19 00
0
1 5 99
30
1
2410
230
)
1 80
2225
0
( ID
1 4 99
0
oc t4
220
00
mig_
17 00
20
_fpre
25 15
iol07
2500
210
1 3 99
e14
1600
24 00
25 10
200
1500
1 2 99
0
00
2300
14 00
21
1900
10 70 0
1 1 99
1 3 00
22 00
180
20
0
11 200
25 97
68
21 00
31
17 00
e1 6iol
1 0 99
00
22
ID
1 1 00
20 00
8)
g(
160
232
07_f pr
3)
0
em
( ID 206
1900
t23 2 (ID
15 00
pr
_oc ig_m
ay2
5f
m ig 65
emig_
00
rem
18 00
re L0
23 20
1 40
_fp fp
l07 l07_
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(ID
E3
1700
nov14
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13 00
79 9 j un
ig_
1600
1 20
10
E 4IO
1
00
em
(ID 24
24
0
pr
62 )
15 00
_f
POROUS LIMESTONE OUTLINE
1100
l07
31
L0 5 fp
1i o
96 )
1400
2064
(ID
69 0
9 (ID 24
bh
20
july 1
ig
r em ig
51
ig_
13 00
r em
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_fp rem
7io
20
iol07
fp
00
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1200
l 07
(ID 317
05
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pr
11 00
IO
em
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19
2225
i g_
00
t4 ( ID
se
c
ig_o
pt2
rem
7_fp POROUS DOLOMITE OUTLINE
0
4iol0
(ID
e1
18
21
00
15
17
00
LIMIT REEF BUILD UP
16
00
15
00
GHOST WELL
14
00
13
00
12
00
11
00
65
20
(ID
e6
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Page: 36 of 51
282000 284000 286000 288000 290000 292000 294000 296000 298000 300000 302000 304000 306000 308000 310000 Map 4
Line of schematic Papuan Basin
Cross Section
Elk/Antelope Structure
9224000 Free Water Level A 9224000
Depth Structure Map (metres)
Top Puri Limestone
-2900
@ -2248 metres
GLJ Interpretation
-3100
9222000 Mule Deer 9222000 Company: InterOil Corporation
Property: Elk / Antelope
Effective Date: December 31, 2009
Scale: 1:130,000
Block -2700 s1100116/drafting/Map4 DStr GLJ dftg.pdf
-25
00 Elk Block
9220000 00 9220000
Elk-2 -33
-3100
-3100
-2900 -2262.8
0
-290
9218000 -2700 9218000
-250
0
-17
-21-30800090000
-230 -3 -3 -3-4800000 -4200-440
20 40 -36
00
0
-2 6-01 -24
-2
- 23
0
000
-21 0 0 00
00
00
-46
9216000 9216000
-4800
-5000
-19
-520
00
- 540
Elk-1
0
-1700
0
0
-1500
-2
30
20
-1576.4
-2
9214000 -5 9214000
0
Elk-4 6 00 -5
80
-250 Elk-4a 0
0
-27
0
-2038.9
0 -20
00
9212000 9212000
-2 9
0
00
0
-3 Antelope
00
20
Antelope-1
-3
Block
-1800
9210000 -1550.3 -3 -4 9210000
-3 -36 800 000 -420 -4400 -4600
-310
-32 400 00
0
-3400 0
80
-1600 -3 00
0 00
0
-3
-360
-2 0
-33
-2
0
80
-4000
60 0
-2
0
0
0
40
9208000 -4 0 9208000
2 Antelope-2 60
00 -4
-4800
-1685.1
-5
9206000 0 00 -4400 9206000
-4800
-52 -200
0
Mena Block 00
-4 6
0
-560 00
9204000 -220 9204000
0
-5400
9202000
A' 9202000
0
00 0
40
-4
80 -28 -500
-4
0 400 00
-40 00
00
-4200 00
-2600 0
-30 -320 -3 -36
8
-3
-5200
9200000 9200000
Free Water Level 00
-54
-5
@ -2228 metres
00
0
-54
0
60
00
-5
9198000 -4 9198000
20
0
9196000 9196000
282000 284000 286000 288000 290000 292000 294000 296000 298000 300000 302000 304000 306000 308000 310000

Page: 37 of 51
282000 284000 286000 288000 290000 292000 294000 296000 298000 300000 302000 304000 306000 308000 310000 Map 5
Line of schematic Papuan Basin
Cross Section
Free Water Level Elk/Antelope Structure
9224000 @ -2248 metres A 9224000
-3200 Top Puri Limestone
InterOil Interpretation
0
Mule Deer
00
-2600
-28
9222000 9222000 Company: InterOil Corporation Effective Date: December 31, 2009
-3 0
Block Property: Elk / Antelope Scale: 1:130,000
s1100116/drafting/Map5 DStr Intoil dftg.pdf
-260
-3 -3
40 60 Elk Block
-3
-3 00
0 0
20
0
0
0
40
0
9220000 -28 -2 9220000
00
Elk-2 00
-26 -3 2
00
-24 -2262.8
00
00
9218000 -2 2 9218000
00
-18
-20 -3200
-2
600
00 -
600
-2 300
20
-1
-360
-40
-200
0
80 -2 800 0
-2-1
-34
-1 0
00
-2 600
0
9216000 9216000
0
60 4
-3
00
-14 0 -2 00
-3800
20
20
Elk-1
0
-1200 -3 0
-3200000
00 40 0
-280
-26
-32 00 -46
-2800
00 0 -2 0
-1576.4 0
-3
0
00
00
60
0
9214000 9214000
-2400
Elk-4
-2200
2
-3
-3 -4
-1000
0 00 Elk-4a
-800
/A
-2038.9 -44 Antelope
-2 00 -2000 00
40 -18 60
0
Block
-3400
9212000 0 -2 -2000 9212000
Antelope-1
-380
-4000
0
60
-4000
0
-1550.3
-3
-1800-4400
9210000 0
0 9210000
-16
-4200
-3400
-300 -36
-2
-2800 0 -34 00
-3
-46
60
80
00
-3200 0
00
0
-32
9208000 9208000
-240
Antelope-2
-48
00
00
0
-2200
0 -1685.1
-160
-380
9206000 00 9206000
-20
0
-4000
- 240
-3800
9204000 -4000 9204000

0
Mena Block
-4200
9202000 9202000
A'
00
00
-44
-26 00
-28 0
Free Water Level -300
9200000 9200000
@ -2228 metres 00 0
-32 -340
-3600
00
-38
9198000 9198000
9196000 9196000
282000 284000 286000 288000 290000 292000 294000 296000 298000 300000 302000 304000 306000 308000 310000

Page: 38 of 51
292000 294000 296000 298000 300000 302000 304000 306000 308000 310000
Map 6
Papuan Basin
9218000 9218000
Antelope Block
-3 -3 -40 -420-4400 -4600
6 80 0 0 0 Top Puri Reef
00
-3
-3 00 0
-48
40
-28
20 GLJ Interpretation
00
-3 0
-2400
00
0
-50
-52 0
-54 0
9216000 9216000 Company: InterOil Corporation Effective Date: December 31, 2009
-56 0
-2
-58 0
0
60
0
Property: Elk / Antelope
0
0 Scale: 1:100,000
0
00
s1100116/drafting/Map6 DStr GLJ reef.pdf
Elk-1
Off Reef
9214000 9214000
Elk-4 -22
Elk-4a 00
DE
-200
0
-2
80
9212000 - 3 -3 - 3 9212000
0
4060 8 -40 -4 -4
0 0 00 00 200 400 -
46
-3
Antelope-1 -24 00 -5800
20
00 -5600
0
-4 -5400
80
0 -500-5200
-1550.3 0
-30
-2600
9210000 9210000
00
-1800
-1600
9208000 9208000
Antelope-2
-22
00
-1685.1
-2800
-380 -3600
-4000
9206000 -1800 9206000
-4200
-4400
-20
00
-3400
-4600
-2200
-3200
-4800
00
9204000 0 9204000
40
-50
-2
-3000
-5200
00
-26
9202000 9202000
00
-28
0
9200000 40 9200000
-5
-5600
Free Water Level
0
00 -5800
60
-32 00
-3
@ -2228 metres -34

0
80
9198000 -3 00
0 9198000
0
40
-4
-4
9196000 9196000
292000 294000 296000 298000 300000 302000 304000 306000 308000 310000

Page: 39 of 51
292000 294000 296000 298000 300000 302000 304000 306000 308000 310000
Map 7
Papuan Basin
9218000 9218000
Antelope Block
Top Puri Reef
0
-280
20
00 InterOil Interpretation
-3
-34
00
0
-30
0
9216000 -360 9216000 Company: InterOil Corporation Effective Date: December 31, 2009
-2600
Property: Elk / Antelope Scale: 1:100,000
s1100116/drafting/Map7 DStr Intoil reef.pdf
Elk-1
-3800
Off Reef -4000
9214000 -2400 9214000
Elk-4
Elk-4a
-2000
DE
-2200
9212000 9212000
-4000
-36
-3 0
-3 00
0
-380
-2 -260
-3 00
20
Antelope-1
00
8
0
40
0
0
-1550.3
9210000 9210000
-2000
0
-160
-18
00
-24
-2200
0
9208000 9208000
0
Antelope-2
-1685.1
0
-3400
80
9206000 -1 9206000
-3200
0
00
-2
-3000
00
-34
-2800
-240
0
9204000 9204000
-260
0
-360
0
00
-22
-38
00
00
-24
9202000 9202000
-4
0 00
9200000 0 9200000
00 00
-3
-32
0
-340
-3600
9198000 9198000
Free Water Level -3800
@ -2228 metres
9196000 9196000
292000 294000 296000 298000 300000 302000 304000 306000 308000 310000

Elk/Antelope Data and Offset Well DST data
0
Kuru Gas Field
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000
Puri 1_1A
Bwata 1
-500 Triceratops 1
Elk-2
Antelope-1 DST#1
Antelope-1 DST#3 (2626mbkb)
-1000
Antelope-1 DST#6
Elk-1 DST#2
Elk-4 DST#1
Pressure PSI
-1500 Elk-4 DST#2

Elk-4 DST#4
Antelope-1 SGS Gradient Plot
-2000
Load Water
-2500
-3000
-3500
Depth (m)ASL
Page: 40 of 51
Plot 1

ELK/ANTELOPE STRUCTURE
Pressure versus Depth
-1500
-1600 Elk-1 appears to be completed in a

separate reservoir based on both
-1700 pressure and gas composition
-1800
-1900
-2000
-2100
Elevation metres
-2200
-2300
-2400
-2500
-2600
-2700
-2800
-2900
-3000
3300 3500 3700 3900 4100 4300 4500 4700
Reservoir Pressure psia
Elk 1 Gas (Elk-1, 0.071 psi/ft) FWL (Elk-1 -2248 m) Elk 2
Elk 4 Elk 4A Antelope 1 Antelope 1ST1
Antelope 1ST2 Antelope 2 Gas (Min, 0.079 psi/ft) Gas (Max, 0.079 psi/ft)
Water Min FWL -2219 m Max FWL -2237
Page: 41 of 51
Plot 2

Pressure versus Depth (Expanded)
-1500
-1600 Elk-1 appears to be completed in a

separate reservoir based on both
-1700 pressure and gas composition
-1800
-1900
Elevation metres
-2000
-2100
-2200
-2300
-2400
-2500
3500 3600 3700 3800 3900 4000 4100 4200
Reservoir Pressure psia
Elk 1 Gas (Elk-1, 0.071 psi/ft) FWL (Elk-1 -2248 m) Elk 2
Elk 4 Elk 4A Antelope 1 Antelope 1ST1
Antelope 1ST2 Antelope 2 Gas (Min, 0.079 psi/ft) Gas (Max, 0.079 psi/ft)
Water Min FWL -2219 m Max FWL -2237
Page: 42 of 51
Plot 3

Antelope / Elk / Mule Deer
100%
Low Estimate Resources
OGIP = 9.65 TCF
90%
Recoverable Raw Gas = 6.87 TCF
Recoverable Sales Gas = 6.19 TCF
80%
70%
Probability >= X Axis
Best Estimate Resources

OGIP = 11.03 TCF
60%
Recoverable Raw Gas = 9.08 TCF
50%
40%
30%
20%
High Estimate Resources
OGIP = 12.54 TCF
10% Recoverable Raw Gas = 11.04 TCF
0%
2000 4000 6000 8000 10000 12000 14000 16000
Gas (BCF)
OGIP Sales Gas
Page: 43 of 51
Plot 4

Antelope / Elk / Mule Deer
100%
Low Estimate Resources
90% Recoverable Condensate
= 117.1 MMBBLS
80%
70%
Probability >= X Axis
60%
Best Estimate Resources
= 156.5 MMBBLS
40%
30%
20%
High Estimate Resources
= 194.7 MMBBLS
0%
0 50 100 150 200 250 300 350
Condensate (MMBBLS)
Page: 44 of 51
Plot 5

Page: 45 of 51
TABLE 1
Elk-2
Table 1
SUMMARY OF ROUTINE AND STRESSED DATA
Porosity (v/v) Permeability (md)

Depth (m) TVD (m) Routine OB Est In-situ K air K air Est In-Situ K air G Dens
calc from BFL OB calc from BFL (kg/m3)
2321.40 2316.69 0.042 0.034 0.036 0.004 < 0.001 0.002 2720
2355.80 2350.77 0.021 0.016 0.002 0.001 2700
2416.00 2410.14 0.013 0.009 2690
2416.60 2410.72 0.085 0.076 2730
2557.60 2549.32 0.003 0.002 0.002 0.001 < 0.001 0.001 2680
2584.00 2575.30 0.014 0.010 2680
2607.40 2598.15 0.012 0.008 0.008 0.010 < 0.001 0.005 2650
2620.40 2610.80 0.023 0.018 0.002 0.001 2690
2622.80 2613.13 0.056 0.049 0.014 0.007 2670
2625.40 2615.66 0.005 0.003 0.003 0.001 < 0.001 0.001 2700
2635.50 2625.49 0.008 0.005 2690
2657.48 2646.96 0.003 0.002 0.161 0.089 2700
2659.13 2648.58 0.002 0.001 0.001 0.001 2700
2659.93 2649.37 0.003 0.002 5.500 3.232 2700
2660.05 2649.48 0.007 0.005 2700
2679.00 2668.11 0.062 0.055 2720
2685.00 2674.03 0.010 0.007 2710
2687.20 2676.20 0.062 0.055 2710
2691.40 2680.35 0.065 0.058 2710
2698.80 2687.67 0.080 0.072 2590
2708.90 2697.66 0.043 0.036 0.037 0.001 0.001 0.001 2700
2709.09 2697.85 0.030 0.024 0.025 0.002 0.001 0.001 2720
2709.48 2698.24 0.004 0.003 0.003 0.002 2700
2709.89 2698.64 0.017 0.012 0.013 0.001 < 0.001 0.001 2690
2710.09 2698.84 0.048 0.042 0.042 0.005 0.002 0.003 2710
2710.42 2699.17 0.048 0.040 0.042 0.001 < 0.001 0.001 2710
2711.60 2700.34 0.089 0.079 0.080 0.016 0.007 0.009 2710
2714.40 2703.11 0.121 0.110 2710
2731.00 2719.56 0.103 0.094 0.093 0.048 0.029 0.026 2710
2731.20 2719.76 0.096 0.085 0.087 0.040 0.032 0.022 2710
2731.60 2720.16 0.103 0.094 0.093 0.041 0.025 0.022 2710
2732.30 2720.85 0.114 0.103 2700
2749.00 2737.38 0.015 0.011 0.011 0.002 < 0.001 0.001 2700
2753.50 2741.83 0.066 0.058 2710
2756.40 2744.70 0.068 0.060 2710
2757.20 2745.49 0.065 0.058 0.049 0.027 2720
2760.60 2748.85 0.064 0.057 0.034 0.018 2730
2779.00 2767.00 0.095 0.083 0.086 0.130 0.057 0.072 2710
2779.30 2767.30 0.013 0.009 2600
2812.60 2800.02 0.073 0.068 0.065 0.026 0.016 0.014 2710
2813.00 2800.41 0.075 0.067 2700
2813.40 2800.80 0.076 0.068 2700
2815.00 2802.37 0.014 0.010 2700
2819.00 2806.29 0.004 0.003 2670
2823.50 2810.69 0.016 0.012 2730
2858.60 2844.78 0.016 0.012 0.001 0.001 2720
2858.70 2844.88 0.064 0.055 0.057 0.090 0.041 0.049 2720
2878.40 2863.74 0.057 0.050 0.026 0.014 2710
2878.60 2863.93 0.016 0.012 2710
2881.00 2866.21 0.086 0.077 2710
2881.20 2866.40 0.021 0.016 0.001 0.001 2700
2894.90 2879.34 0.053 0.046 2760
2925.00 2907.38 0.043 0.034 0.037 0.035 0.018 0.019 2740
2925.50 2907.84 0.066 0.058 0.064 0.035 2770
2926.00 2908.30 0.073 0.064 0.065 0.069 0.051 0.038 2760
2926.70 2908.94 0.073 0.070 0.065 0.110 0.067 0.061 2780
2928.00 2910.14 0.080 0.072 0.075 0.041 2720
2928.80 2910.88 0.079 0.072 0.071 0.095 0.066 0.052 2740
2930.00 2911.98 0.090 0.082 0.081 0.340 0.130 0.191 2770
2931.50 2913.36 0.068 0.060 2720
2935.00 2916.57 0.034 0.029 2650
2936.50 2917.94 0.081 0.072 0.130 0.072 2740
2938.00 2919.32 0.008 0.005 2710
2939.00 2920.23 0.072 0.064 2700
2941.40 2922.43 0.083 0.074 2710
2958.00 2937.49 0.103 0.093 2760
2963.00 2941.99 0.044 0.038 2770
2965.80 2944.51 0.058 0.051 16.700 9.997 2740
2966.50 2945.14 0.052 0.046 0.045 0.033 0.020 0.018 2730
2968.80 2947.21 0.051 0.044 0.044 0.041 0.019 0.022 2770
2970.60 2948.82 0.056 0.049 0.045 0.024 2720
2972.40 2950.44 0.051 0.044 0.034 0.018 2720
3063.00 3032.27 0.045 0.039 0.010 0.005 2710
3072.20 3040.80 0.066 0.058 0.043 0.023 2720
3085.60 3053.30 0.059 0.052 2730
3099.00 3065.86 0.056 0.049 0.230 0.128 2710
3193.40 3156.22 0.084 0.075 2720
3247.40 3209.17 0.061 0.054 0.021 0.011 2730

TABLE 2
ANTELOPE / ELK STRUCTURE
PETROPHYSICAL SUMMARY
BASINAL MICRITIC LIMESTONE
Well Datum Top Puri Base logs Top Trans Base Trans Base Puri G Gas Low Case
MD TVD Elev MD TVD Elev MD TVD Elev MD TVD Elev MD TVD Elev TVD H, M Dpth N/G Phie Sw
Elk-1ST 76.20 1688.13 1652.34 -1576.14 1826.05 1789.31 -1713.11 NDE NDE NDE NDE NDE NDE NDE NDE NDE 136.97 11.89 0.086 6.3% 36%
Elk-2 71.20 2337.04 2332.18 -2260.98 3311.00 3272.32 -3201.12 Wet Wet 2925.11 2907.48 -2836.28 Wet Wet 0.060 5.3%
Elk-4 117.28 2171.00 2156.18 -2038.90 2385.00 2365.57 -2248.29 2267.10 2249.36 -2132.08 2340.56 2321.69 -2204.41 NDE NDE NDE 165.52 9.91 0.046 6.3% 56%
Elk-4a 117.28
0.072 0.063 0.451
Well Datum Top Puri Base logs Top Trans Base Trans Base Puri G Gas Most Likely Case
Elk-4 117.28 2171.00 2156.18 -2038.90 2385.00 2365.57 -2248.29 2267.10 2249.36 -2132.08 2340.56 2321.69 -2204.41 NDE NDE NDE 165.52 18.59 0.087 6.7% 42%
Elk-4a 117.28
0.111 0.064 0.393
Well Datum Top Puri Base logs Top Trans Base Trans Base Puri G Gas High Case
Elk-4 117.28 2171.00 2156.18 -2038.90 2385.00 2365.57 -2248.29 2267.10 2249.36 -2132.08 2340.56 2321.69 -2204.41 NDE NDE NDE 165.52 37.19 0.174 6.2% 43%
Elk-4a 117.28
0.242 0.055 0.392
Low: 0.072 0.063 0.451

Average: 0.111 0.064 0.393
High*: 0.242 0.055 0.392
Notes:
Most Likely: Used phie_avg & Swe_ml, with cutoffs of phie>=0.035 & Swe<=0.60
Low Case: Used phie_lc & Swe_high, with cutoffs of phie>=0.035 & Swe<=0.60
High Case: Used phie_hc & Swe_low, with cutoffs of phie>=0.03 & Swe<=0.65
*Phie is low in high case due to inclusion of poorer quality rock. This is linked in the Risk Analysis.
Page: 46 of 51
TABLE 3
ANTELOPE / ELK STRUCTURE
PETROPHYSICAL SUMMARY
REEF
LIMESTONE
Well Datum Top Puri Base logs Top Trans Base Trans Base Puri Gas col G Gas Case Wellbore Parameters
MD TVD Elev MD TVD Elev MD TVD Elev MD TVD Elev MD TVD Elev above FWL in lst ,TVD H, M Dpth N/G Phie Sw
BACK REEF BELOW DOLOMITE
Antelope-1 194.45 1746.00 1744.75 -1550.30 2701.00 2698.21 -2503.76 2389.30 2387.86 -2193.41 2426.50 2425.04 -2230.59 NDE NDE NDE 683.70 476.75 Low 292.15 0.613 7.3% 29%
Antelope-1 AS ABOVE 476.75 Most Likely 342.14 0.717 7.3% 18%
Antelope-1 AS ABOVE 476.75 High 392.89 0.824 7.2% 15%
REEF FLAT / MARGIN ABOVE DOLOMITE
Antelope-2 142.25 1828.00 1827.38 -1685.13 2213.30 2212.38 -2070.13 NDE NDE NDE NDE NDE NDE NDE NDE NDE 385.0* 162.03 Low 152.40 0.940 13.0% 22%
*Logged to date, actual gas col = 548.9 m. Majority of this lst section is above the dolomite
DOLOMITE (REEF FLAT / MARGIN)
Well Datum Top Puri Base logs Top Trans Base Trans Base Puri Gas col G Gas Case Wellbore Parameters
MD TVD Elev MD TVD Elev MD TVD Elev MD TVD Elev MD TVD Elev above FWL in dol, TVD H, M Dpth N/G Phie Sw
Antelope-1 194.45 1746.00 1744.75 -1550.30 2701.00 2698.21 -2503.76 2389.30 2387.86 -2193.41 2426.50 2425.04 -2230.59 NDE NDE NDE 683.70 206.93 Low 200.71 0.970 13.5% 17%
Antelope-2 142.25 1828.00 1827.38 -1685.13 2213.30 2212.38 -2070.13 NDE NDE NDE NDE NDE NDE NDE NDE NDE 385.0* 222.94 Low 222.66 0.998 13.7% 19%
N/G Phie Sg
Low Case 0.970 0.135 83%
Most Likely 0.986 0.147 85%
High Case 1.000 0.162 93%
Notes:
Most Likely: Used phie_avg & Swe_ml, with cutoffs of phie>=0.035 & Swe<=0.60
Low Case: Used phie_lc & Swe_high, with cutoffs of phie>=0.035 & Swe<=0.60
High Case: Used phie_hc & Swe_low, with cutoffs of phie>=0.03 & Swe<=0.65
*Phie is low in high case due to inclusion of poorer quality rock. This is linked in the Risk Analysis.
Page: 47 of 51
TABLE 4
VOLUMETRIC RISK ANALYSIS
SUMMARY OF INPUT DISTRIBUTIONS
Input Parameter Units Type of Most Mean Minimum Maximum St. Deviation Comments
Distribution Likely
Free Water Level (Antelope) m Triang -2228.0 -2228.0 -2237.0 -2219.0
Free Water Level (Other Blocks) m Triang -2248.0 -2248.0 -2257.0 -2239.0
Elevation of top Sor zone m Triang -2200.0 -2201.7 -2210.0 -2195.0 based on test recoveries
Antelope Block Depth Structure Map (Gross Rock Volume)

Area of -1800 metre contour fixed
Area factor of -2000 metre contour* dec equation tied to -2350 variation approximates +- 50 metre variation
Area factor of -2350 metre contour* dec Triang 1.00 1.00 0.83 1.17 approximates +- 100 metre variation
Fracture System
Lwr Transition Zone m Constant 0.0
Net/Gross v/v Triang 0.60 0.60 0.50 0.70
Phie v/v Triang 0.0010 0.0011 0.0007 0.0015
Sg v/v Triang 0.975 0.972 0.950 0.990
Basinal Micritic Limestone

Lower Trans Zone thickness m Triang 54.0 46.3 25.0 60.0 Micritic lst matrix
Net/Gross, lst matrix v/v Trunc Lognorm 0.110 0.111 0.05 0.25 0.05 negative dependence on phie
Phie, lst matrix v/v Triang 0.0639 0.0610 0.0550 0.0640
Sg , lst matrix v/v Triang 0.61 0.61 0.52 0.70 positive dependence on phie
decrease in Sg , Sor Zone (Antelope) v/v Trunc Normal 0.10 0.107 0.05 0.20
Antelope Upper Reef (High Porosity Limestone)

Lower Trans Zone thickness m Triang 4.0 4.0 1.0 7.0 Above dol GWC
Gross Rock Vol ac*ft determined from depth structure maps variation permited by using a % of the equivalent total reef area
continuity factor Gross Rock Vol v/v Triang 0.800 0.800 0.600 1.000 max value reduced to account for uncertainty in lateral continuity
Net/Gross v/v Trunc Normal 0.968 0.967 0.900 1.000 0.015
Phie v/v Trunc Normal 0.140 0.140 0.120 0.160 0.010
Sg v/v Trunc Normal 0.82 0.820 0.77 0.87 0.025 positive dependence on phie
decrease in Sg , Sor Zone (Antelope) As Above
Antelope Reef (Dolomite)

Lower Trans Zone thickness m Triang 4.0 4.0 1.0 7.0 Above FWL
continuity factor Gross Rock Vol v/v Triang 0.800 0.800 0.600 1.000 max value reduced to account for uncertainty in lateral continuity
Net/Gross v/v Trunc Normal 0.986 0.986 0.970 1.000 0.007
Phie v/v Trunc Normal 0.147 0.147 0.127 0.167 0.008
Sg v/v Trunc Normal 0.85 0.022 0.80 0.90 0.85 positive dependence on phie
Antelope Lower Reef (Medium Porosity Limestone)

Lower Trans Zone thickness m Triang 34.0 31.3 4.0 56.0 Dol + (2,30,50)
Net/Gross v/v Triang 0.650 0.643 0.300 0.980
Phie v/v Triang 0.095 0.095 0.050 0.140
Sg v/v Triang 0.60 0.60 0.50 0.70 positive dependence on phie
IOL/GLJ model weighting Discrete 0.00 1.00 GLJ and IOL models equally weighted
Page: 48 of 51
Italicized values are outputs
* Intervening contours are interpolated

Page: 49 of 51
TABLE 5 Page 1 of 2
SUMMARY OF DRILL STEM TEST DATA
Test Interval Elev. Recorder Depth Fluid Rates3

1
KB Elev Test Interval mKB mTVD Measured TVD Elevation Pressure Pressure2 kh Gas Cond CGR Water
Well Source m Top Base Top Base mKB mKB m psia psia md-ft Skin MMCFD BPD B/MMCF BPD
_____________ _____________ _________ _________ _________ _________ _________ ___________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ Comment
________________________________________
Elk 1 DST 2 75.80 1640.9 1841.0 -1529.5 -1720.3 1621.0 1585.4 -1509.6 3580.0 3580.0 69131 -7.6 17.5 89.3 5.1 18.0 Water of condensation
Elk 2 DST 1 69.38 2259.0 2657.0 -2185.3 -2577.1 2369.0 2363.8 -2294.5 Not Not Tr Reservoir pressure interpretation is unreliable. Gas
Reliable Reliable rate was too low to measure.
DST 1A 69.38 3004.0 3327.5 -2909.4 -3216.9 3009.8 2983.9 -2914.6 4673.0 4673.0 11339 3.4 Tr 1931.0 Water salinity 13,000 ppm, outer radius kh =
197,000 md-ft
DST 2 69.38 2919.4 2959.0 -2832.8 -2869.0 2920.6 2903.3 -2833.9 4589.3 4589.3 2756 0.1 Tr 2088.0 Outer radius kh = 472,000 md-ft
DST 2A 69.38 2898.4 2938.0 -2813.2 -2849.9 2899.6 2883.7 -2814.4 4564.7 4564.7 524 -0.6 Tr 1200.0
DST 3 69.38 2785.4 2825.0 -2703.9 -2742.8 2786.6 2774.5 -2705.1 4393.6 4393.6 69 1.3 0.0 168.0 Outer radius kh = 10,827 md-ft
DST 4 69.38 2744.4 2785.4 -2663.4 -2703.9 2745.6 2734.0 -2664.6 4340.9 4340.9 224 6.2 0.0 480.0 Outer radius kh = 337 md-ft
DST 5 69.38 2240.0 2773.0 -2166.5 -2691.7 2751.5 2739.9 -2670.5 4359.3 4359.3 1969 28 0.0 1087.0 Outer radius kh = 42,917 md-ft
DST 6 69.38 2216.0 2640.0 -2142.6 -2560.5 2485.0 2478.0 -2408.6 4053.8 4053.8 4.7 -4.4 0.0 39.0
DST 7 69.38 2347.0 2386.5 -2272.7 -2311.7 2350.0 2345.0 -2275.6 3360.0 3360.0 0.8 -5.3 0.0 2.5
DST 8 69.38 2230.0 2425.0 -2156.5 -2349.6 2347.6 2342.6 -2273.3 4043.2 4043.2 2.8 -3.6 0.0 56.0
Elk 4 DST 1 117.28 1868.0 2250.0 -1743.8 -2115.3 1874.0 1866.9 -1749.6 3587.0 3587.0 11270 596 7.0 80.7 11.5 241.7
DST 2 117.28 1868.0 2312.0 -1743.8 -2176.2 2288.2 2270.1 -2152.8 3691.7 3691.7 48375 143 14.1 203.0 14.4 0.0 Cannot confirm condensate and water rates from
flow test data.
Elk 4A DST 3 117.28 2325.0 2382.0 -2189.1 -2245.3 2.2 621.4 Uncertain if water is load or formation fluid
DST 4A 117.28 2197.0 2325.0 -2063.9 -2189.1 2287.5 2269.4 -2152.1 3696.6 3696.6 37402 60 7.9 53.6 6.8 8.0 Produced water is load fluid. Condensate rate is
not valid due to problems in production data sheet.
Antelope 1 DST 1 194.45 2395.6 2460.0 -2199.7 -2264.1 2398.9 2397.5 -2203.0 N/A N/A N/A N/A 8.1 80.8 10.0 1222.0 Pressure data is not valid due to leaking around the
packer. Water was pumped down the annulus
during the test. Drilling fluid chloride content 100
ppm. Produced water chloride content 60 ppm and
is likely not formation water.
DST 2 194.45 2531.0 2549.2 -2335.0 -2353.2 Test failed
DST 2A 194.45 2618.0 2636.3 -2421.9 -2440.2 Test failed
DST 3 194.45 2623.2 2709.1 -2427.1 -2503.8 2626.6 2624.9 -2430.5 4016.0 N/A 3770 1.6 295.0 Produced water chloride content 6000 to 8700
ppm. Water is formation water. Pressure is FSI
from guage 16026.
DST 4 194.45 2426.0 2458.0 -2230.1 -2262.1 Test failed
DST 5 194.45 2408.0 2424.0 -2212.1 -2228.1 Test failed
DST 6 194.45 1747.0 2355.0 -1537.3 -2129.1 1746.5 1745.3 -1550.8 3540.0 3540.0 6130 857 12.7 156.8 12.3 62.7 Produced water chloride content 200 to 600 ppm.
Water is water of condensation.
DST 7 194.45 Test failed
Antelope 1ST1 DST 8 194.45 2388.6 2416.5 -2192.6 -2220.4 2391.9 2390.4 -2196.0 3721.0 3719.0 43 1.6 0.0 0.0 0.0 110.2 Recovered 0.25 BBLS 43.9 deg API Oil, Gas at
150 scf/day. Water salinity was not recorded but is
likely water cushion, completion fluid and drilling
fluids. Interval has low permeability.
DST 9 194.45 Test failed
DST 10 194.45 2299.1 2414.5 -2103.3 -2218.4 2283.0 2281.6 -2087.1 3685.0 Not N/A N/A 12.2 152.0 12.5 480.0 Water production is completion water. Salinity 100
Reliable to 400 ppm. Well produced water free near end of
the test except when water pumped down the
annulus started to return. Reservoir pressure
interpretation may unreliable due to possible
leaking packer and short build-up (~20 min).

Page: 50 of 51
Test Interval Elev. Recorder Depth Fluid Rates3 Page 2 of 2

1 2
KB Elev Test Interval mKB mTVD Measured TVD Elevation Pressure Pressure kh Gas Cond CGR Water
Well Source m Top Base Top Base mKB mKB m psia psia md-ft Skin MMCFD BPD B/MMCF BPD
_____________ _____________ _________ _________ _________ _________ _________ ___________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ Comment
________________________________________
Antelope 1ST2 DST 11 194.45 2297.8 2347.0 -2100.0 -2148.6 2302.7 2299.3 -2104.9 3695.0 Not N/A N/A 9.9 149.0 15.1 80.0 Rates taken after flow stabilized at 11:00 on May
Reliable 7th until annulus pumping started at 09:30 on May
8th. Water production is completion water. Salinity
100 ppm.
DST 12 194.45 2323.4 2402.0 -2125.2 -2203.1 2342.8 2338.9 -2144.4 3710.0 3694.0 93 13 2.6 40.6 15.6 40.7 Quoted rates are for the period with 48/64" choke
setting. Water salinity started at 160,000 ppm and
declined to fluctuating between 2500 and 38,000
ppm. Steady at 10,000 ppm during quoted period.
Likely coning some formation water due to high
drawdown. Water may be mix of completion fluid
and formation water. Some light oil recovered.
DST 13 194.45 2374.8 2402.0 -2176.2 -2203.1 2375.4 2371.2 -2176.8 3718.0 3698.0 147 150 0.0 0.0 0.0 Rec 11.2 Recovered water is load fluid. Some 35 deg API
BBLS oil was recovered.
DST 14 194.45 2419.4 2452.0 -2220.3 -2252.7 2420.0 2415.4 -2220.9 3732.0 3731.0 N/A N/A 1.4 23.8 17.0 158.0 Recovered water salinity was 1200 ppm with PH
6.5 towards end of flow period and is likely load
fluid.
DST 15 194.45 2462.0 2490.0 -2262.5 -2290.3 Test failed
Antelope 2 DST 1 142.25 1832.0 1882.0 -1689.1 -1739.1 1831.3 1830.7 -1688.4 3581.0 N/A 152000 84 11.8 175.1 14.8 95.2 Water is load fluid and stopped flowing after 12
hours.
Notes:
1) Pressures are from Focal for the Elk wells and from Knowledge Reservoir for the Antelope wells.
2) Pressures are from Focal for all wells. The difference in interpretation on the Antelope wells illustrated the uncertainty in the reservoir pressures.
3) Quoted fluid rates are generally the average rate over the flow period.
4) Water rates shown in the cells highlighted in blue are most likely formation water.

TABLE 6
ELK STRUCTURE
ESTIMATE OF FRACTURE POROSITY
Well Elk-1 Elk-2 Elk-2 Elk-2 Elk-2 Elk-2 Elk-2 Elk-2 Elk-2 Elk-2
DST 1 1A 2 3C 4 5 5 less 6 6 7 8
Interval Top mKB 1640.9 3004.0 2919.4 2785.4 2744.4 2240.0 2640.0 2216.0 2347.0 2230.0
Interval Base mKB 1841.0 3327.5 2959.0 2825.0 2785.4 2773.0 2773.0 2640.0 2386.5 2425.0
FMI Interval m 178.0 316.0 39.6 39.6 41.0 515.0 133.0 350.0 39.5 167.0
Fracture Net/Gross Ratio 58.9% 56.0% 80.8% 67.4% 73.2% 100.0% 56.9% 65.8% 100.0% 100.0%
Net Fractured Interval m 104.9 177.1 32 26.7 30 515 75.7 230.4 39.5 167.0
Net Fractured Interval feet 344.2 581.0 105.0 87.6 98.4 1689.6 248.4 755.9 129.6 547.9
Total Flow Capacity mD-ft 69131.0 197000.0 472000.0 714.0 337.0 42917.0 42912.3 4.7 0.8 2.8
Fracture Permeability D 0.201 0.339 4.496 0.008 0.003 0.025 0.173 0.000 0.000 0.000
Conductive Fractures
Net Fractured Interval m 123.1 25.6 11.9 13.6 13.4 28.3
Number 219 371 96.3 44.1 53.7 81 49.3 80 4 7
Frequency per metre 2.09 3.01 3.76 3.71 3.95 0.16 3.68 2.83 0.10 0.04
Distance Between Fractures (a) cm 47.9 33.2 26.6 27.0 25.3 635.8 27.2 35.4 987.5 2385.7
Fracture Porosity 0.044% 0.067% 0.183% 0.022% 0.017% 0.004% 0.061% 0.002% 0.000% 0.000%
Fracture Width (b) microns 105.0 110.6 243.1 29.8 21.8 124.7 82.6 3.0 9.0 11.4
Partially Conductive Fractures
Net Fractured Interval m 87.3 27.6 19.5 33.5 68.1 203.9
Number 222 412 182.1 130.6 216.9 1383 574.5 1281.9 77 230
Combined Fractures
Net Fractured Interval m 177.1 32.0 26.7 30 75.7 230.4
Number 441 783 278.4 174.7 270.6 1464 623.8 1361.9 81 237
Distance Between Fractures (a) cm 23.8 22.6 11.5 15.3 11.1 35.2 12.1 16.9 48.8 70.5
Fracture Porosity 0.070% 0.086% 0.320% 0.032% 0.030% 0.027% 0.104% 0.003% 0.001% 0.001%
Fracture Width (b) microns 83.1 97.3 183.8 24.6 16.6 47.5 63.2 2.3 3.3 3.5
Interval Representative of
Interval Top mKB 1643 2975 2885 2785.4 2773 2640 2290
Interval Base mKB 1821 3320 2975 2885 2785.4 2773 2640
Thickness m 178.0 345.0 90.0 99.6 12.4 133.0 350.0
Net Fractured Interval m 104.9 193.4 72.7 67.2 9.1 75.7 230.4
Net/Gross Ratio 58.9% 56.0% 80.8% 67.4% 73.2% 56.9% 65.8%
Elk-1 Elk-2
Thickness Weighted Average Porosity 0.070% 0.078%
Net Fractured Thickness m 104.9 648.4
Page: 51 of 51
Net/Gross Ratio 58.9% 63.0%

Elk Antelope Gas Field 2009 GLJ - FINAL

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ELK/ANTELOPE GAS FIELD

Effective December 31, 2009

ELK/ANTELOPE GAS FIELD

INDEPENDENT PETROLEUM CONSULTANTS' CONSENT 4

RESOURCE AND RESERVES DEFINITIONS 8

March 02, 2010 14:52:33

GLJ Petroleum Consultants

Officers / Vice Presidents:

Re: Elk/Antelope Gas Field

Yours very truly,

GLJ PETROLEUM CONSULTANTS LTD.

“ORIGINALLY SIGNED BY”

Keith M. Braaten, P. Eng.

INDEPENDENT PETROLEUM CONSULTANTS’ CONSENT

Date: February 17, 2010

PERMIT NUMBER: P 2066

GLJ Petroleum Consultants

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The results of the probabilistic analysis are summarized as follows:

Low Best High

Company Gross Resources

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RESOURCE AND RESERVES DEFINITIONS

A. Fundamental Resource Definitions

Discovered Petroleum Initially-In-Place (equivalent to discovered resources) is that quantity of

Contingent Resources are those quantities of petroleum estimated, as of a given date,

Undiscovered Petroleum Initially-In-Place (equivalent to undiscovered resources) is that

Prospective Resources are those quantities of petroleum estimated, as of a given date,

GLJ Petroleum Consultants

B. Uncertainty Categories for Resource Estimates

• analysis of drilling, geological, geophysical, and engineering data;

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Development and Production Status

Developed Producing Reserves

Developed Non-producing Reserves

D. Levels of Certainty for Reported Reserves

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E. Commercial Risk Applicable to Resource Estimates

Reserves: To be classified as reserves, estimated recoverable quantities must be

F. Economic Status of Resource Estimates

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Effective December 31, 2009

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March 02, 2010 14:52:33

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1. Triassic Rifting – Regional grabens created by the breakup of Gondwanna formed

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i. Tectonic Regime – In Eocene times, a passive margin was still established in

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6. Middle to Late Miocene, carbonate platform demise – A regional fall in sea-level

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identification of any surface information. 2) It is sometimes possible to identify discontinuities/

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