1. WILLISTON BASIN DEVELOPMENT PROJECT Five Well Package Smith Embayment Area Renville County, North Dakota

2. HISTORY: Williston Basin Discovery Well Drilled in 1952 51 Years After Spindletop Redevelopment Targets for Horizontal Drilling -Red River -Ratcliff -Nesson/Mississippian -Bakken Oil Saturated Fields Bakken Formation Expanding to North Dakota

3. THE SMITH EMBAYMENT Covers 25 Township Area on Eastern Flank of the Williston Basin Carved Out of Normal Shoreline Caused by Salt Collapse in the Prairie Evaporite Field Produces from Mississippian Carbonate from 4500 to 6000 ft. All Wells (except Smith) discovered in 1960’s Smith, Discovered in 1990’s, Produced Over 4 Million Barrels of Oil from 5400 ft. Individual Well Cum’s Over 500,000 Barrels from Grainstone & Dolomite Reservoirs

4. THE PROJECT The Smith Embayment was originally developed in the mid- 1960’s, with the discovery of the oil in the Sherwood carbonate(Mission Canyon) at a depth of 4700’. To date, this area has produced approximately 3.7 million barrels of oil from the Sherwood and Mohall reservoirs. The discoveries were made with the use of 2-D seismic lines that were shot along section boundaries, so structures located within a section were not recognized. A detailed geological and engineering study have been completed using core data from existing wells, decline curves and production data from existing wells, along with some of the existing 2-D data. The results of this study clearly indicate the following:

5. 1.) Un-tapped reserves in the Sherwood can be exploited through the drilling of new wells, both horizontal and vertical, by extending existing fields and drilling into new satellite structures. 2.) Most wells that found production in the Sherwood did not drill deep enough to test the deeper Mohall. We now understand that locating Mohall accumulations under Sherwood field structures is an opportunity that was not earlier recognized. 3.) If the embayment, as well as the resulting structures were caused by salt collapse, deeper beds, such as the Nisku, Duperow and Red River could be productive below the Mission Canyon here, as they are in other parts of the basin.

6. THE PLAN The plan is to drill a 5-wells program on five separate structures with in the study area. The following are an overview of these projects: Dry Creek Prospects 1 & 2 Grassland Prospect Greene Prospect Cola Field Prospect

7. DRY CREEK PROSPECTS 1 & 2 Extensions to the Truro Sherwood Shoreline Fields Oil Accumulations trapped by Formation of Lateral Anhydrite Seal in the Sherwood Prospect #1 Production in Existing Well - 69 MBO Structure Covers Approximately 640 Acres Prospect #2 Drill Stem Test Comparable to Production in Embayment Structure Covers Approximately 750 Acres

8. GRASSLAND PROSPECT Sherwood Island Shoal Prospect One Productive Well - 45 MBO Oil Saturation in the Sherwood Structure Should Support More Than 1 Well Approximately 640 Acres

9. GREENE PROSPECT Greene Field Produced 373 MBO From 2 Wells Approximately 450 Acres With 50’ Oil Column Structure Should Support 2 More Wells Waterflood Candidate Another 373 MBO Left on this Structure

10. CHOLA PROSPECT Produced 1.2 MMBO - 80 Ft. of Oil Column Geometry Suggest 2-Stage Salt Dissolution in the Prairie Salt Implementing A Waterflood Test Mohall, Nisku & Duperow Structures Commercial Reserves Found In Comparable Structures in Multiple Horizons Possible New Play on Existing Structures

11. POTENTIAL RESERVES Sherwood & Mohall Reservoirs- Through the drilling of new structures, extension of known structures and re-development of existing fields, there could double the existing reserves for the study area or another 3.7 million barrels of oil. Deeper Reservoirs- A 3-D survey could aid in the success in defining deeper salt related structures, there could be up to an additional four million barrels of reserves trapped if just one of the deeper Nisku, Duperow or Red River reservoirs are successful. This is an on- going study.