Luncheon – October 5, 2011

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Talk: The Discovery of a Significant Gas/Condensate Field from the Paleocene Fort Union Formation at Barricade and Endurance Units, Washakie Basin, Sweetwater County Wyoming

Speaker: Greg P. Anderson, Samson Resources

Location: Denver Marriott City Center

Date: October 5, 2011

Description: Published in the October 2011 Outcrop

The Paleocene Fort Union Formation is a significant producer of gas and oil along the shallow flanks of the Washakie Basin. The Barricade 44-1 discovery, completed by Samson Resources in September of 2007 extends Fort Union production deeper into the basin. This new field discovery has been confirmed by eleven additional commercial wells, proving up approximately 10,000 acres. The expectation is that the fully delineated field will cover a significantly larger area. The productive and potentially productive area is within by the Barricade and Endurance federal units, these two units comprise approximately 40,000 contiguous acres. Prior to the completion of the Barricade 44-1 discovery well, drilling in this area had focused on deeper Cretaceous objectives. This drilling proved to be marginally economic due to unpredictable drilling costs (severe lost circulation problems) and highly variable reserves. Numerous pipe-run dry holes located directly offsetting highly prolific Cretaceous completions.

The Fort Union Formation in the Washakie Basin is over 3,000 feet thick. The objective interval has a gross thickness of approximately 900 feet with up to 250 feet of net pay. Due to the absence of core data and production data from wells located in the deeper portions of the basin, the evaluation of the Fort Union prospect idea moved to the outcrops flanking the basin and to the fields that produce from the Fort Union Formation on the margins of the basin. In outcrop, the Fort Union contains numerous multi-story braided stream deposits that have highly prospective reservoir characteristics. Analysis of conventional core from Powder Wash Field located on the southern margin of the basin, showed the Fort Union sandstones to have 15% porosity and over 10 millidarcies permeability at a depth of 4,400 feet. Petrographic thin-section examination indicated this sublitharenite reservoir sandstone has significant secondary porosity development that would likely be preserved to form a commercial reservoir at drilling depths of 10,000 feet.

The Barricade 44-1 was drilled as the obligation well for the Barricade Unit to a total depth of 13,794 feet. The primary objective was the Cretaceous Lewis formation. The Lewis was determined to be uneconomic and the well was plugged back to test numerous gas shows in the secondary objective Fort Union Formation. Three sands with a total of 56 feet of net pay were completed with a single stage, nitrogen foam fracture stimulation. The discovery well had an initial production rate of 3,185 MCF, 80 BO, and 61 BWPD.

Additional leasehold was acquired, and the 24,957 acre Endurance Unit was formed to hold expiring leases, and to control operatorship of the prospective area. Subsequent completions in both Barricade and Endurance Units have been continually modified resulting in increasingly higher production rates. The 2010 drilling program resulted in consistently lower drilling costs and high initial production rates averaging the equivalent of over 400 BOPD. Natural gas liquids and condensate contribute significantly to the value of these wells.

Due to wildlife stipulations on federal lands, drilling is restricted to 6 months per year; drilling in 2011 is scheduled to help determine the appropriate well spacing across the field area. Based on the current drilling schedule, it is expected to take two more years before Samson Resources will have delineated the commercial extent of the field.