Permian Basin Unconventional Production – Forecasting A Very Bright Future Providing a Play by Play Forecast of Crude Oil Production Volumes and Qualities Across the Permian Basin to Quantify Takeaway Capacity Requirements

Acknowledgments •  1. Arc Light Capital/Element Petroleum, LP •  2. Jerry Berkebile/Eric Hopper/Todd Gibson •  3. Lee Sanders •  4. George Mitchell, Dan Steward, and All Previous Published Authors on Unconventional Resource Plays – Barnett et al.  

Q. Why A Geologist?

Lies, Damn Lies, and “Investor Presentations”

A: Everything in The Oil & Gas Industry Starts with the quality of the “Rock”

What Are the Fundamentals of Unconventional Shale Production? Q.

- i.e. How Does a Shale with No Permeability Produce?

1.  Mature Hydrocarbons – TOC, etc. 2.  Brittle “Homogenous” Rock Mechanics 3.  Commercial OOIP/OGIP Volume – i.e. Gross Thickness of Porous Reservoir

Hydrocarbon Expulsion across the Micro-Fracture Face in Response to ΔP A.

Q. What makes the Permian Basin Unconventional Play so Special?

A. Multiple Unconventional Oil Saturated Targets? 5+ Unconventional Shale Targets 2+ Unconventional Sand Targets

Primary Unconventional Shale Targets •  •  •  •  • 

1. lower Spraberry Shale/Avalon Shale 2. upper Wolfcamp “A” 3. upper Wolfcamp “B” 4. Wolfcamp “C” 5. Cline

Primary Unconventional Sand Targets •  1. lower Spraberry/2nd Bone Spring •  2. Dean/1st Bone Spring

Q. How about a “Real” Economic Projection Model on a Micro Scale?

1  

BOPD   MCFPD   BWPD   GOR   FL  PIP  

Aug-­‐14  

Jul-­‐14  

Jun-­‐14  

May-­‐14  

Apr-­‐14  

Mar-­‐14  

Feb-­‐14  

Jan-­‐14  

Dec-­‐13  

Nov-­‐13  

Oct-­‐13  

Sep-­‐13  

Aug-­‐13  

Jul-­‐13  

Jun-­‐13  

May-­‐13  

BOPD,  MCFPD,  BWPD   10000  

100  

100  

10  

10  

GOR,  FL  -­‐  PIP  psi  

SFH  Unit  23  #  1H  Produc3on  Summary   10,000  

1000   1,000  

1  

BOPD   MCFPD   BWPD   GOR   FL  PIP  

Aug-­‐14  

Jul-­‐14  

Jun-­‐14  

May-­‐14  

Apr-­‐14  

Mar-­‐14  

Feb-­‐14  

Jan-­‐14  

Dec-­‐13  

Nov-­‐13  

Oct-­‐13  

Sep-­‐13  

BOPD,  MCFPD,  BWPD   10000  

100  

100  

10  

10  

GOR,  FL  -­‐  PIP  psi  

Hamlin  1522  #  3H  Produc3on  Summary   10,000  

1000   1,000  

Gardner  Unit  1510  #  2H  Produc3on  Summary   10000  

10,000  

1000  

100  

BOPD  

MCFPD  

BWPD  

GOR  

FL  PIP  

Aug-­‐14  

Jul-­‐14  

Jun-­‐14  

May-­‐14  

Apr-­‐14  

1  

Mar-­‐14  

10  

10  

GOR,  FL  -­‐  PIP  psi  

100  

Feb-­‐14  

BOPD,  MCFPD,  BWPD  

1,000  

Garre