Page 13 - Petrospex_Elaine Prospect

Elaine Prospect
Jones County, Texas
Geology Summary

The Elaine Lease Acreage is located on approximately 163.15 acres in Section 174 of the BBBC RR CO
Survey, north of the City of Hamlin, in Jones County, Texas.

The lease currently contains one well known as the Elaine #1. It is located west of the Robinson Gardner
#1 and 1646’ from the west line of Section 174. This well was completed in 2009 in the Swastika
Sandstone with an open hole completion at a depth of 3513’. The Elaine #1 produced 12,632 BO from
2009-13 and was plugged in April of 2013. Initial production tests show 60 BOPD in the Swastika with
no treatments or artificial stimulation. Most likely because there was not an injection well to go with the
water if treated. When the production slowed, Cholla Petroleum made the decision to plug the well. In
2016 Royal Texan Resources re-entered this well. They found through swabbing that the well would
make approximately 3 BOPD and water. Without an injection well this well would not be economical.
They are in the process of converting this well into an injection well. This will do a number of positive
things. It will take off a large amount of expense when producing the wells to be drilled and add
significant value to the lease. It will also allow Royal Texan Resources to treat the drilled wells more
aggressively to get the most production out of each well. Something the previous companies that drilled
wells in this field were not allowed to do.

The RH Gardner #2 is located west of the Elaine #1 and was completed in the Swastika Sandstone in
1959 and Plugged in 1975. It had an initial production test of 110 BOPD in the Swastika, however
cumulative production records are not available. The sample log of this well illustrates hydrocarbon
shows in both the Flippen and Gunsight Limestones.

The Gardner ML #1 is also located west of the Elaine #1 and was completed in the Swastika Sandstone. It
had an initial production test of 137 BOPD in the Swastika. The sample log of this well illustrates
hydrocarbon shows in both the Flippen and Gunsight Limestones as well.

The RH Gardner #1 was drilled in 1960 and was evaluated as a dry hole. This well is located East of the
Elaine #1. There was a drill stem test performed on the Gunsight Limestone (3391’-3402’) during the
drilling operations. They recovered 90’ of free oil and 30’ of oil and gas cut mud with a flowing pressure
of 120# and a final shut in pressure of 1360#.

In order to evaluate the potential for oil production, it is my recommendation that the Elaine #2 be drilled
to a depth of 3,600’ and production tests to be performed on the Swastika Limestone with possible pay
behind the pipe in the Flippen Limestone and Gunsight Limestone. There is a possibility of up to 5 wells
to be drilled infield. Reservoirs tend to move in a Northeastern trend. When looking at the contour map
provided you can see that the field could possibly be moving in that direction. No wells have been drilled
to confirm this. It is recommended to continue drilling north east until the Swastika Sandstone shows to
start falling off.

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