West Pruitt

Atascosa County

The West Pruitt prospect is located in the heart of the Cretaceous sandstone/limestone production trend that runs through Atascosa and Frio counties. Some of the more notable fields in the area include the Charlotte, Pruitt, Southeast Pruitt, Stacy, West Charlotte, East Crown and Pearsall Austin Chalk. Production from the Olmos sand, Austin Chalk Limestone and Buda formations totaled over 70.4 million barrels of oil (MM BO) and 25.4 billion cubic feet (Bcf) of natural gas.

The prospect is set up by four wells drilled along a down-to-the-coast fault called the Goldfinch field, discovered in 1951. Four Olmos sand completions yielded wells that produced between 20 to120 B.O. per day. All wells cut the critical down-to-the-coast fault that seems to cause the production, similar to the way that a down-to-the-coast fault causes the production in the Pruitt field east of the Goldfinch field. We plan to continue drilling along the fault, starting from the south and working our way northeast, thus lowering the risk.

In addition to the Olmos sand target the Austin Chalk formation is targeted along with the Buda and Edwards limestone. Numerous good completions yielded approximately 1.78 MM BO from the Pearsall field locally around the prospect. Austin Chalk production is generally associated with secondary porosity created by small fractures. Two wells on the northeast and southwest side of the Pipeline lease yielded oil production from the Austin Chalk. Close proximity to the faulting seen should aid in creating good secondary porosity around this prospect.

The West Pruitt Williams #1 commenced drilling 4 October 2008 and reached a total depth of 6212’ on 15 October. The Olmos target zones were faulted out and too tight to produce; however, a 118’ section of the Austin Chalk formation tested productive. Production casing was run in November, followed by a frac clean-up and tank battery and pipeline construction in December. The well came on at 200-250 BO per day and was subsequently cut back to 100-125 BO per day during initial production to determine optimum flow.

The West Pruitt’s potential reserves are calculated at 1.42 MM BO. In May of 2009 Pipeline acquired an additional 550.9 acres adjoining the present lease to protect the property and explore additional drilling options. The second well in the project, the Tshirhart #1, was drilled in September '09. Completions in two potential pay zones were unsuccessful. Completion in the final zone is currently taking place.

The Williams #1 is continuing to produce over 2100 BO/month. Plans for additional vertical wells and/or a horizontal test are ongoing.