Mike Cronin716-479-2722

mbc5043@psu.edu

Zach Fidurko716-378-5970

zmf5005@psu.edu

Pure Energy Consultants, LLC

Matt Minemier814-222-1854

mtm5097@psu.edu

Naser Saleh814-441-1599

nbs5043@psu.edu

Field Development Plan of Texas Creek Oriskany Sandstone

Client: Shell (Fm. East Resources)Date: 7 April 2011

Introduction

• Deliverables:1) Reservoir Characterization2) Reservoir Development Options w/ Economics

• Findings:1) OGIP = 5.8 Bscf2) Economics - Gas Price ($4/Mscf)

• Gas Storage Infeasible• Infill Drilling Sub-Economic

3) Recommend Depleting Field to 500psi with Existing Wells.

Reservoir Characterization

Structure Map with Water Saturation: Looking NW

-OGIP = 5.8 Bscf-Swcon = 25%-Thickness = 30ft-Net Pay = 15ft-Porosity = 5%-GWC at 6200ft

History Match

History Match

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Graham 2

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Graham 2

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Modeled

• Cumulative Gas Produced vs. Time

• Daily Gas Produced vs. Time

Development Options

1) Production to Abandonment-Add Wells

-No Additional Wells

2) Gas Storage

Abandonment Strategy

For P abandonment of 500psi:

1) Addition of One Well (Two Test Locations)

VS

2) Produce Existing Wells Until Depleted

TW-1

Incremental Economics TW-1TW- 1

• Gas produced 4.31 BCF

• Recovery Factor 74 %• At $4 Mscf additional

revenue will equal $1.8 million

• Cost to Drill Well (from East AFE) $ 1.3 million

• NPV @ 10 % give $-325,946

• ROR equals 3.3 %

NPV=Net Present ValueROR=Rate of Return

TW-2

Incremental Economics TW-2TW- 2

• Gas produced 4.28 BCF

• Recovery Factor 73%• At $4 Mscf additional

revenue will equal $1.68 million

• Cost to Drill Well (from East AFE) $ 1.3 million

• NPV @ 10 % give $-355,968

• ROR equals 3.2 %

NPV=Net Present ValueROR=Rate of Return

Economics of Abandonment

• Plan Produce Original Three Wells to Abandonment Pressure (500 psi)

• Abandonment Date

• Total Gas Produced BCF

• At $4 Mscf

- Producing to Abandonment

- Stopping Production @ 1000 psi for injection

Gas Storage Strategy

Np, Pressures at inject

-Burst pressure (FG work)

Working Gas: OGIP-Np = 5.8-3.9 = 1.9 Bscf

No new wells, convert existing wells to injectors

-6month injection/production cycling

Gas Storage Results

• Losing X % per cycle

• -(Storage Cost + Summer Buy Price)*Vinj

• + (Winter Sell Price)*Vprod

• -12.5% *Value of Unproduced Accessible Gas

Economics

-1.00E+09

0.00E+00

1.00E+09

2.00E+09

3.00E+09

4.00E+09

5.00E+09

6.00E+09

12/27/2014 5/10/2016 9/22/2017 2/4/2019 6/18/2020 10/31/2021

Cu

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as S

C (

ft^3

)

Date

at t=0 Gas Produced vs. Injected Produced

Production

Injection

Economics

Summer Price $3.75

Winter Price $4.75

Economics

Cycle Money loss

1 -7.67E+06

2 -8.90E+06

3 -9.20E+06

4 -9.07E+06

Cycle Gas loss (ft3)

1 1.90E+09

2 2.27E+09

3 2.44E+09

4 2.52E+09

Cycle % Gas Loss (ft3)

1 14.98537127

2 28.18611201

3 39.47369726

4 48.29953467

Conclusions

-OGIP:

-Reserves:

-Abandonment Economics

-Gas Storage Economics

Questions

Support Slides

Delciotto 2 History Match

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Delciotto 1 History Match

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Graham 2 History Match

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Graham 2

Graham 2

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Graham 2

Historical

Modeled

Pure Energy Consultants, LLC

• Gas Produced 3.86 BCF

• Recovery Factor67%

• With no additional Wells

Pure Energy Consultants, LLC