The Horizontal Mississippi Lime
It’s Real and It’s Spectacular
The Mighty Mississippi
1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 1061131201271341411481551621691761831901972042111
10
100
1000
10000
Oil
Gas Flowing up Tubing
Venting Gas
Ran Tubing, Flowing up Annulus
Longhurst 3H-34
Merits of the Horizontal Mississippian
Observations Momentum increased dramatically in last 18 months SandRidge continues to lead the way (47% of 2012 Capex of $1.8 billion)Liquid-weighted (~63%) with NGL componentConventional carbonate reservoir: 3,000 – 6,000 ft vertical depths
Low well costs (~$3.5 million per location)Low and improving drill times (currently ~24 days)Low pressure rigs, fracs and completions (equipment availability)
Infrastructure already in placeRepeatabilityIRRs ~100%
Mississippian vs. Bakken and Bone Spring Shale
“Tudor, Pickering, Holt & Co. Securities Inc. analysts observed: ‘Horizontal moves to conventional activity: If it’s good for the goose, it’s good for the gander. Horizontal drilling, combined with fracing – makes shales productive. So, why shouldn’t that make conventional reservoirs productive? Answer: It should’ “Nissa Darbonne - Oil & Gas Investor
Missis
sipp
ian
Bakke
n
Bone
Sprin
g
513
677570
EUR (MBOe/Well)
Missis
sipp
ian
Bakke
n
Bone
Sprin
g
735791
900
IP Rate (BOe/d)
Missis
sipp
ian
Bakke
n
Bone
Sprin
g
$6.82
$12.93 $13.21
F&D ($/BOe)
Mississippian vs. Shales
Obtained original property set 4Q 2009 Increased through additional leasing Spud first Mississippian well in June 2010 Began 2 rig program in July 2010 Current 3 rig line, moving to 4 Drilling our ~50th Mississippian horizontal
Eagle Energy Overview
~85,000 net acres in Mississippian Protected through term and drilling schedule Short spud to production time frame Flat topography in pro-oilfield area ~600 potential locations PV10 of P3 reserves in excess of $1.75 billion
Eagle Energy Position Highlights
The Horizontal Mississippi Trend
Source: 2012 SD Investor Presentation
Low cost of ~$3.5 million/well
Mostly oil and liquids production
High permeability, carbonate reservoir
- No seismic needed; ~17,000 vertical Mississippian data points
- working off mud logs
- Industry average peak 30-day production ~300 boepd
Rigs are abundant and only require ~1,000 HP
~ 500 horizontal well data points currently, rig count increasing dramatically
Average lateral length of 3,000-4,000 feet
Fracturing with fresh water and acid
~One fracture stage per 400-500 feet of lateral
- 10,000-12,000 Hydraulic HP pressure pumping for completions, in contrast to 40,000 needed in deeper, tighter unconventional plays
- Ottawa sand proppant is plentiful
IRRs ~ 100%Sources: SandRidge Energy April 2011 Investor Presentation and Oil and Gas Investor, April 2011.
Horizontal Mississippian Overview
Vertical Mississippian wells provide control Limestone, Dolomite & Chert
10-15% porosity 35-65% water saturation
Stacked progradational porosity wedges Better porosity areas show vugs and dolomite rhomb
development Monoclinal dip
Geology
Breakeven play comparison to achieve 10% IRR
Liquids content
Note: Liquids includes oil and NGLs. Excludes primarily gas plays (i.e. Haynesville and Marcellus).
Source:Wall street research, SandRidge investor presentation and EOG resources investor presentation. And Eagle internal data.
Oil Weighting
Marce
llus -
Liq
uids
Cana
Woo
dfor
d Sh
ale
Eagl
e Fo
rd
Grani
te W
ash
Missis
sippi
an
Bakke
n
32.0% 37.0%
55.0% 56.0%
63.0%
85.0%
Bakke
n (S
anish
)
Utica
- 910
mbo
e
Niobr
ara
Missis
sippi
an
Eagl
e Fo
rd (O
il)
Utica
- 455
mbo
e
$40.00
$46.00 $51.00
$55.00
$67.00
$84.00
The area’s legacy production has significant existing available infrastructure
Extensive infrastructure
Extensive Existing Infrastructure
Takeaways
Horizontal drilling effectively connects existing porosity wedges
Exceptional horizontal well performance across the play by a variety of operators
Single well economic summary
Eagle SD CHK RRC
Lateral (Ft) 3,500' 4,000' 4,000' 2,200'
EUR (MBOe) 300-650 300-500 290-435 300-500
D&C Cost ($ mm) $3.5 $3.2 $3.7 $3.1
Repeatable Play
0 24 48 72 96 120 144 168 192 216 240 264 288 312 336 360 384 408 432 456 480 504 528 552100
1,000
10,000
100,000
Months On
Ave
rag
e M
on
thly
Pro
du
cti
on
(B
Oe
)
30 Day IP: 738 BOe/d
513 MBOE (12/31)
Eagle Energy Type Well
Average peak 30 day production across all 32 wells is 658 BOE/day.
Average peak 30 day production across wells included in the type curve is 705 BOE/day.
Average peak 30 day production for wells with less than 12 months production is 803 BOE/day.
Eagle Energy Mississippian Production
Eagle Energy Mississippian Production
Ames
3H-2
7
Avard
1H-3
0
Avard
1H-3
1
Baker
1H-3
3
Brock
man
1-H
Buckl
es 1
H-3
Buckl
es 1
H-9
Edwar
ds 1
H-36
Glass
1H-1
8
Glass
1H-7
John
son
1H-1
3
Joy
1H-3
6
Keltn
er 1
H-17
Leep
er 1
H-26
Leslie
1H-2
Leslie
1H-2
8
Leslie
1H-3
3
Lohm
ann
1H-2
0
Lohm
ann
1H-2
9
Lohm
ann
1H-8
Lone
Eag
le 1
-8
Long
hurs
t 3H-3
4
Mary
Beth
1-H
Page
2H-2
6
Perc
ival
1H-6
Reed
1H-1
0
Shar
p 1H
-12
Stel
ling
1H-2
3
Thor
p 1H
-6
Wen
nige
r #1
Wes
sels 1
H-26
Zahor
sky
1H-8
0.0
500.0
1000.0
1500.0
2000.0
2500.0
3000.0
492 272 572 313 102 175 200 431 394 320 265 303 149 195 47 158 406 153 180 206 2751,874423 4 190 360 269 413 104 75 52 310
353
275
342
382
103239 341
144 225359
59 236
77529
159
107
271
388 329 233172
499
94
115
129
187133
650
219 57 58
165
173
134
168
187
51
117
167 70110
176
29
115
38
259
7852
133
190 161114 84
244
46
56
63
91
65
318
107
28 28
81
NGL Dry Gas (BOe) Oil
Avg
. 3
0 D
ay IP (
BO
e/D
ay)
Eagle Energy Mississippian Production DRY GAS
Dry Gas (BOe) Oil NGL BOE TYPE WELL
MOST RECENT
< 12 Months Production
Ames 3H-27 2115.0 352.5 492.0 172.5 1017.0 1017.0 1017.0Avard 1H-30 1649.0 274.8 271.8 134.5 681.1 681.1 681.1Avard 1H-31 2054.4 342.4 571.9 167.6 1081.9 1081.9 Baker 1H-33 2289.8 381.6 313.0 186.8 881.4 881.4 881.4Brockman 1-H 620.4 103.4 101.6 50.6 255.6 Buckles 1H-3 1434.7 239.1 175.0 117.0 531.1 531.1 531.1Buckles 1H-9 2044.5 340.8 200.0 166.8 707.5 707.5 707.5Edwards 1H-36 864.3 144.1 431.0 70.5 645.6 645.6 Glass 1H-18 1352.2 225.4 394.3 110.3 730.0 730.0 730.0Glass 1H-7 2153.8 359.0 319.9 175.7 854.5 854.5 854.5Johnson 1H-13 353.9 59.0 264.8 28.9 352.7 352.7 352.7Joy 1H-36 1415.6 235.9 302.7 115.5 654.1 654.1 654.1Keltner 1H-17 463.9 77.3 148.8 37.8 264.0 264.0 264.0Leeper 1H-26 3172.5 528.8 195.0 258.8 982.5 982.5 982.5Leslie 1H-2 956.0 159.3 46.5 78.0 283.8 283.8 Leslie 1H-28 639.4 106.6 157.6 52.2 316.3 316.3 Leslie 1H-33 1626.4 271.1 405.7 132.7 809.4 809.4 809.4Lohmann 1H-20 2327.2 387.9 152.8 189.8 730.4 730.4 Lohmann 1H-29 1974.0 329.0 180.0 161.0 670.0 670.0 670.0Lohmann 1H-8 1395.9 232.7 206.0 113.9 552.5 552.5 552.5Lone Eagle 1-8 1033.5 172.3 275.4 84.3 531.9 531.9 Longhurst 3H-34 2997.0 499.5 1874.0 244.4 2617.9 2617.9 2617.9Mary Beth 1-H 564.7 94.1 423.1 46.1 563.3 563.3 Page 2H-26 690.9 115.2 4.0 56.4 175.5 Percival 1H-6 775.5 129.3 190.0 63.3 382.5 382.5 382.5Reed 1H-10 1121.0 186.8 360.4 91.4 638.6 638.6 638.6Sharp 1H-12 795.2 132.5 269.3 64.9 466.7 466.7 Stelling 1H-23 3898.7 649.8 412.8 318.0 1380.6 1380.6 1380.6Thorp 1H-6 1316.9 219.5 104.0 107.4 430.9 430.9 Wenniger #1 341.2 56.9 75.2 27.8 159.9 Wessels 1H-26 348.3 58.0 52.2 28.4 138.6 138.6 Zahorsky 1H-8 987.0 164.5 310.0 80.5 555.0 555.0 555.0
Average: 1430.4 238.4 302.5 116.7 657.6 705.2 803.3Wells: 32 32 32 32 32 29 19
The Mighty Mississippi
1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 1061131201271341411481551621691761831901972042111
10
100
1000
10000
Oil
Gas Flowing up Tubing
Venting Gas
Ran Tubing, Flowing up Annulus
Longhurst 3H-34
Eagle Energy Mississippian Production
IP’s of Wells in Last 100 Days Gas Volumes are Wet Gas
Berry 1H-32 290 BO, 2.2 MMCF (10 Day) Baker 1H-33 313 BO, 3.2 MMCF (30 Day) Zahorsky 1H-8 310 BO, 1.4 MMCF (30 Day) Percival 1H-6 190 BO, 1.1 MMCF (30 Day) Ames 3H-27 443 BO, 2.9 MMCF (45 Day)
492 BO, 3.0 MMCF (30 Day)
Leeper 1H-26 190 BO, 4.1 MMCF (45 Day) 195 BO, 4.5 MMCF (30 Day)
Lohmann 1H-29 115 BO, 1.8 MMCF (80 Day) 180 BO, 2.8 MMCF (30 Day)
Buckles 1H-9 165 BO, 2.8MMCF (100 Day) 200 BO, 2.9 MMCF (30 Day)
Evolution of current wellbore design. Wenniger #1 – Re-Entry of Hunton wellbore Brockman 1-H – 5 ½” long string Leslie 1H-2 – 7” production – 4.5” liner
Evolution of targeting Originally targeted the top 100’ of the Mississippian
Resulted in high water production, lower IP’s than expected Currently targeting the top 60’
Better IP’s Lower water production
Eagle Energy Wellbore Evolution
–
5
10
15
20
25
30
35
40
45
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
Day
s to
dri
ll
Wells chronological by spud date
Horizontal locations on top of thousands of historical vertical wells
Drilling days improve with experience
Mississippian – Drilling times trend lower
Source:SandRidge and Continental Resources investor presentation.
30
Days 22
Days
Technology Improvements
500’ Stages (~425’ GPI) Original design was too large
3,500 bbls Water 85,000# Sand 200 bbls 15% HCl
Larger design combined with lower targeting resulted in higher water production and lower reserves.
Current design 1,600 bbls Water 20,000# 30/50 Sand 575 bbls 15% HCl 100bpm Average treating pressure 3500psi
Better cleanup near wellbore Natural permeability Can re-stimulate to restore production.
1 re-complete to date: ~300 MBOe added reserves at a cost of ~$1.40/BOe
Drill out with Coiled Tubing
Eagle Completion Summary
Wellbore Design
Infrastructure Designed for Hunton dewatering
Artificial Lift Initially running ESPs
High volume pumps Quick recovery of frac load Lowers fluid levels quickly
VSDs allow flexibility Adaptable to individual wells
Eagle Energy Production Summary
Highest average IP’s in the Mississippian trend Longhurst 3H-34: ~3,000 BOe/d (24hr)
30 Day: 1874 BO, 4.251 MMCF 60 Day: 1833 BO, 4.453 MMCF 210 Day: 1129 BO, 2.875 MMCF
To Date: 240+ MBO, 0.610+ BCF IP’s based on Wet Gas
Sharp 1H-12: ~2,600 BOe/d (24hr) Avard 1H-31: ~1,900 BOe/d (24hr) Stelling 1H-23 ~1,700 BOe/d (24hr) Avard 1H-30 ~1,900 BOe/d (24hr)
~735 BOe/d Avg 30 day IP, leveling off at ~250BOe/d Type Well = 513,300 BOe EUR Liquid Content = 63% (45% Crude) LOE = $2.06/BOe F & D = $6.81/BOe
Eagle Energy Well Performance
Conclusions IRRs exceeding other liquids-rich plays IRRs driven by low drilling and service costs coupled with attractive oil mix and EURsAmple available infrastructure and equipment Improving results and costs will drive economics higher; EURs have improved with recent results
Rate of return
Source:SandRidge investor presentation and Eagle internal data.
Attractive Economics, Returns & Growth
E a g l e E n e r g y C o m p a n y o f O k l a h o m a, LLC