*Prepared in accordance with the definitions, standards, and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 "Standars of Disclore for Oil and Gas Activities" of the Canadian Securities Administrators ("NI 51-101").Subsequent Mancos development by Black Hill Energy (BKH NYSE) within 5 miles radius.
The high pressure Mancos/Niobrara is a viable resource with the Williams Fork being a secondary target. Plans being proposed for 8 Mancos/Niobrara Hz wells on current lands from a single pad maintaining the Williams Fort behind pipe for subsequent drainage.
The main producing formations at Roan Creek is the Mancos/Niobrara from 4000' to 8500'. The Cretacious Williams Fort and Illes Members of the Mesa Verde Formation are a secondary target at depths between 2900' and 5600' in this area.
Black Hills, Encana, and Laramie have developed significant Mancos/Niobrara production relative to DXI Energy's Roan Creek lands. The Mancos/Niobrara Formation, below the Williams Fork, has over 4000' of production potential as seen in Black Hills "Homer Deep" development where with EUR's approximately 10 BCFe and daily production of 6-8 MMcf/d per well, with further drilling continuing to justify this production. Encana's "Gasaway" project 8 miles to the west confirms this production potential.
DXI Energy’s acreage has 200-250 feet of gas sand in the Williams Fork Formation which translates into approximately 0.25 BCF per well if completed using past practices and may be considerably more using today’s state of the art. OXY (USA) has drilled Williams Fork wells to the east of the acreage and they estimate reserves of approximately 1mm cubic feet per net foot of gas sand. This cumulative is based on production from over 250 wells completed by OXY (USA) and Chevron with the benefit of new completion practices.