Page 6 - Petrospex_Elaine Prospect

SUMMARY OF THE ELAINE LEASE

The Elaine lease has a potential of making up to 500,000 BO if all pay
zones are productive over time. The NRI (Net Revenue Interest) is 75%.
Our intent is to take one older non-producing well and convert it into a

water injection well as the Swastika pay-zone is known to produce water
with oil.
We will drill 5 wells of which 4 will be infield wells and one will be a

“step-out” well to determine the extent of this oil field. Should the step-
out well be either successful or give us enough positive data regarding
the extent of this field, more developmental wells could be drilled at a

later date.
As the Geology report in this summary shows, we have multiple pay
zones of oil on this lease so the project is considered low risk due to this

fact as well as the fact that 80% of the wells being drilled are infield
wells.
These 5 wells will be drilled to a total depth of 3600 feet each. The total
cost to drill these 5 wells and convert one older well to an injection well

(which includes a high pressure pump, high pressure flow lines and
other misc. items) will be $1,780,000.00 on a turnkey basis. Each well
should take approximately 2 weeks to drill and complete weather

permitting. We should also note that some of the older wells were
abandoned around the time oil bottomed out at $8.00 per barrel in the
1980’s.

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