Geology and Exploration Dynamics

The West Texas (Ouachita) Overthrust (WTO) Resource Play is characterized by production from wells with shallow repeating multiple pay zones many of which produce from highly fractured reservoir rock. These hydrocarbon reservoirs are sourced by the organically rich and thick Barnett and Woodford age Shale formations beneath. Reservoir rock is fractured by a system of major thrust faults including the Warwick, Dugout Creek, Frog Creek, Haymond Thrusts as well as others. The shallow Caballos horizons at Pinon have been Longfellow's most prolific producers to date some 7-8,000' wells' reserve estimates exceeding 20 BCF/well of sweet gas on 40 acre spacing with Pinon Warwick Caballos wells yielding an average 7.3 BCF EUR of wet gas per well according to the Operator. These wells can have producing pressures of 2000 psi and flow rates exceeding 10 MMCF/Day. (There are a number of deeper Paleozoic and Permian Wolfcamp targets with some area wells that are capable of yielding 50 BCF per well). To date the Longfellow area of the WTO play has demonstrated a high propensity to contain high methane low CO2 Gas production. Numerous producing area wells demonstrate the WTO play's repeatability and over 1,400 potential drilling locations have been identified at Longfellow to date

Current Ouachita Overthrust oil and gas development activity in the WTO is often compared to the early stage (and hugely successful) Rocky Mountain Overthrust play which began in the 1970’s and has grown to become one of our nation’s largest sources of natural gas production. Similarly this remote area of West Texas is where the continental plates of North and South America collided to form the ancient supercontinent of Pangea. The point of collision along the front of the Ouachita-Marathon Thrust Belt fractured and pushed up rock to form the ancient Ouachita Mountain Range some 300 Million years ago. Much of these ancestral mountains have since been eroded and covered with thousands of feet of thick hydrocarbon-rich basin sediments in the Longfellow area. By way of comparison a similar plate collision formed the much younger Rockies “only 100 Million years ago”.