'A slickwater hydraulic fracture treatment of the Barker Creek...

'A slickwater hydraulic fracture treatment of the Barker Creek interval (12,561’ - 12,599’) was
completed successfully. Following a shut in period the well uploaded gas and process water, and
remnant drilling fluids. Pressure recorders left in place while the well was shut in indicated a
formation pressure of 8,700 psi.'

Definition as follows:

Hydraulic Fracturing
Hydraulic fracturing, or fracing, is used to initiate production in low-permeability reservoirs and re-stimulate production in older producing wells. In hydraulic fracing, a fluid is injected into a well at pressures so intense that the structure 'cracks,' or fractures. Fracing is used both to open up fractures already present in the formation and create new fractures. Fracture fluid can be oil-based, water-based, acid-based or gel. However, water fracs are the most common and least expensive. Slick water frac jobs are the primary technique used for developing tight-gas reservoirs, such as the Barnett Shale in Texas. In order to retrieve gas at a commercially profitable rate, most tight-gas reservoirs need to be fractured. As part of the frac procedure, propping agents are injected along with the fluid to prop open the new fractures. The U.S. Department of Labor defines a propping agent, or proppant, as: "a granular substance (sand grains, aluminum pellets, or other material) that is carried in suspension by the fracturing fluid and that serves to keep the cracks open when fracturing fluid is withdrawn after a fracture treatment."

In order to effectively select the right combination and concentrations of frac fluid and propping agents, geologists must know a lot about a reservoir. To create the right approach to a frac job, geologists gather information from well logs about a variety of factors such as porosity, permeability, saturation levels, pressure and temperature gradients. Using this information, geologists run scenarios through 2D or 3D reservoir models to predict the outcomes of various approaches.

Types of Frac Jobs
Gel-based fracing is one of the oldest approaches. It is most effective in moderately permeable formations. Gel fracs combine water with a polymer to thicken the fluid so that it can carry a significant amount of proppants into the formation. Because gel fracs require a large amount of expensive proppants, they were not economically viable for smaller reservoirs. Eventually, a new approach was developed that achieved better results while reducing costs - slick-water fracing. Slick-water fracs combine water with a friction-reducing chemical additive which allows the water to be pumped faster into the formation. Water fracs don't use any polymers to thicken and the amount of proppant used is significantly less than that of gels. Slick water fracs work very well in low-permeability reservoirs, and they have been the primary instrument that has opened up unconventional plays like the Texas Barnett Shale. In addition to the cost advantage, water fracs require less cleanup and provide longer fractures. In shale formations, brine water is used because the salt content inhibits the formation from swelling. Freshwater is used in other formations where swelling of the clays is not a problem.

Bottom Line: 'SUCCESSFUL'

Flow Test Results will follow within 48 hours.

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