Prospect Outline

SYNERGY OPERATING, LLC
PO BOX 5513, FARMINGTON, NM 87499
(505) 325-5449

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  • Prospect:
    • San Juan Basin – Chaco Slope, Shallow Fruitland Coal Play (< 900’)
    • Low Risk, Premier CBM Development Opportunity
  • Acreage:
    • 10,000 +/- Acres (100% WI / 75% NRI)
    • Area of Mutual Interest (AMI), T21N7W, T22N7W, T21N8W, T22N8W
    • Farmout Obligations (120 day continuous development)
    • Confidentiality & AMI Agreement REQUIRED
  • Wells:
    • Twelve (12) existing wells with gas & water gathering system
    • SWD – permit is approved
    • Five (5) APDs in hand ready to drill
    • Forty (40) Additional locations
  • Seeking:
    • Joint Venture Partner - Capital Needed - $ 1,715,000 – to achieve PDP status Synergy will be operator, ready to implement
  • Terms:
    • Partner to spend $ 1,715,000 to complete remaining wells ($105K), drill the SWD well ($700K), purchase generators/skids ($110K), complete pipeline work ($150K), and PNM connection ($650K). Flexible deal terms.
  • Geology/Reserves:
    • 160 Acre spacing, per well EUR of 345 MMCF
    • Coal Footage 20 to 30 feet (Horizontal Development ?)
    • Earn both Fruitland Coal and Pictured Cliffs
    • Gas Content Data, Mud & Well Logs, Adsorption Data, Gas Samples AVAILABLE
  • Analogous Production:
    • Coleman Oil & Gas, Rosetta, SG Interests, Dugan Production, XTO
  • Economic Model:
    • 15 MCFD per well initial rate. 1000% incline 1st yr. Peak @ 165 MCFD+
    • 185 BWPD per well decline @ 15% per year
    • Overhead $ 300 per well per month
    • Direct Op Cost $ 900 per well per month
    • $ 0.25 / bbl Water Disposal, $ 0.25 / MCF gas transportation
    • $ 5.00 / MMBTU flat over project life – 970 BTU/scf
  • Impact:
    • Initial Project (Pod-10 wells)
    • Gross Reserves: 3.448 BCF
  • Main Contact: Glen Papp gpapp@synergyoperating.com
  • Engineering: Tom Mullins tom.mullins@synergyoperating.com
  • Land: Patrick Hegarty patrick.hegarty@synergyoperating.com
  • Geology: Lisa Gusek lgusek@synergyoperating.com