1. Improved Recovery Demonstration for Williston Basin Carbonates DE-FC22-93BC14984 Luff Exploration Company Mark Sippel, Consulting Engineer

2. Location of Project Demonstration Sites in the Williston Basin

3. Project Objectives Better Reservoir Characterization –Regional Studies –3D Seismic Better Completion Efficiency –Jetting Lance Perforating –Amoco Sidewinder Short Radius Drilling –Horizontal Mudmotor Drilling

4. Statement of Problems Reservoir Characterization High Drilling Cost 2D Seismic Used for Structure Delineation Small Structures, Less Than 1 sq. mile Optimal Reservoir Quality Frequently not Found at Crestal Position Reservoir Characterization from Seismic Attributes in Infancy 3D Seismic Had not Been Used Locally

5. Statement of Problems Completion Efficiency Perforation and Acid - Standard Completion Hydraulic Fracturing Communicates with Water Zones Low Primary Recovery Low Water Injectivity for Waterflooding

6. Type Log for Red River Formation The Upper Red River Consists of Four Episodes in Shallow Shelf Carbonate Setting Main Reservoirs are: Red River B Zone Red River D Zone

7. Original Drilling Strategy (1970’s) One Well for Each Small-Structure Feature Seismic Time Seconds 0.5 mile 0.8 km

8. Forward Seismic Modeling 0.7 0.8 0.9 1.0 1.1 NormalReversePolarity Time Seconds P1 P2 T1 T2 Duperow Interlake Red River Base D zone Winnipeg Mission Canyon Upper Red River Reservoirs Are “Seismic Thin Beds” Reservoir Information Contained in Two Peak-Trough Pairs Each Event Consistently Labeled in Every Seismic Survey

9. Synthetic Seismogram 0.0 1.0 Time - Seconds Interlake Red River Winnipeg P1 T1 P2 Low PorosityHigh Porosity T2 Weak Amplitude Response Strong Amplitude Reponse

10. Reservoir Variation in Red River D Zone Weak Amplitude Response Low Porosity Strong Amplitude Reponse High Porosity Red River D Zone C Anhydrite

11. Example of Red River Small-Structure Feature Amplitude Response High Porosity Low Porosity Red River Time Structure 1 msec = 5 ft

12. Demonstration Site 1 Small-Structure Red River Feature Amplitude Response Original Well High Porosity Low Porosity Red River Time Structure 1 msec = 5 ft

13. Production Rate - Time Graph Demonstration Site 1 Depletion of Crestal Well New Drilling

14. Cumulative Production - Time Graph Demonstration Site 1

15. Demonstration Site 2 Small-Structure Red River Feature Amplitude Response Original Well High Porosity Low Porosity

16. Production Rate - Time Graph Demonstration Site 2 Depletion of Crestal Well New Drilling

17. Cumulative Production - Time Graph Demonstration Site 2

18. Completion Efficiency Horizontal Wells for Waterflooding Low Water Injectivity in Vertical Completions at 100 - 150 bwpdLow Water Injectivity in Vertical Completions at 100 - 150 bwpd Local Industry Prejudice of Early Water BreakthroughLocal Industry Prejudice of Early Water Breakthrough Successful Waterflooding Would Require Downspacing to 80 acre/wellSuccessful Waterflooding Would Require Downspacing to 80 acre/well Vertical Well Project - Not EconomicalVertical Well Project - Not Economical

19. Red River B Zone Type Log Top Red River B Zone Gamma RayNeutron-Density Porosity 010030%0%

20. Jetting Lance Completion Technology Unsuccessful

21. Amoco Sidewinder Completion Technology Unsuccessful

22. North Buffalo Red River Unit Demonstration Site 3 Depth Feet Pilot Horizontal Water Injection Well Pilot Horizontal Water Injection Well

23. Production Rate - Time Graph Demonstration Site 3

24. Cumulative Production - Time Graph Demonstration Site 3

25. Horizontal Wells for Waterflooding High Water Injectivity at 500 - 1000 bwpdHigh Water Injectivity at 500 - 1000 bwpd Early Water Breakthrough Has Not OccurredEarly Water Breakthrough Has Not Occurred Re-entry Laterals Were Drilled from Vertical WellsRe-entry Laterals Were Drilled from Vertical Wells Waterflood Reserves Will Equal or Exceed Primary RecoveryWaterflood Reserves Will Equal or Exceed Primary Recovery

26. Production from Three Demonstration Sites Project Start Project Conclusion Current Trend Prior Trend

27. Conclusions - Reservoir Characterization Reservoir Characterization from 3D Seismic is Very Rewarding Forward Seismic Modeling is a Must Amplitude Attributes Were Identified for Prediction of Porosity Development in Red River D Zone Development of Depositional Models Understanding Importance of Depositional Setting and Relation to Reservoir Quality (porosity and permeability)

28. Conclusions - Horizontal Completions Horizontal Completions Yield High Water Injection Rate and Efficient Waterflood Sweep Horizontal Injection Rate Five Times that of Vertical Completion (750 vs 150 bwpd at maximum pressure)

29. Post-Project Contuation Reservoir Characterization Additional Forward Seismic Modeling and Seismic Attribute Study Better Prediction of Depositional Setting for Each of Upper Red River Zones Further Integration of Geologic and Production Attributes with Seismic Attributes

30. Post-Project Continuation Waterflooding the Red River Fm. Project Demonstration Waterflood Site was Unitized Re-entry Laterals Drilled from Four Wells Peak Waterflood Rate and Reserves Equal to Primary Two Additional Red River Waterflood Units Formed Since Project Conclusion Plan Five Additional Units in 2003 and 2004

31. Post-Project Continuation Completion Efficiency Typical Horizontal Re-entry Completion Yields Three-Fold Increase in Productivity Horizontal Drilling from Plugged and Uneconomic Vertical Wells Yielded Rates Over 150 bopd Operator is Agressively Re-Developing Fields That Were Initially Developed in the 1970’s