Luncheon – April 3, 2009

Title: The Yellow Creek Discovery, Piceance Basin, Colorado

Speakers: Edward B. Coalson, Coyote Oil & Gas Company, LLC, Lakewood, CO, and Richard F. lnden, LSSI, Inc., Denver, CO

Date: April 3, 2009

Publication: The Outcrop, April 2009, p. 18

Bass Enterprises Production Company has drilled what may be a significant discovery well in the northern part of the Piceance Basin, Colorado. The prospect as mapped in 1990 was based on subsurface and aeromagnetic data that indicated a possible east-plunging structural nose coincident with an area of presumably mature source rocks in Cameo-equivalent coal beds. The structural nose was confirmed with two lines of 2-D seismic data, one of which was new data shot to detail out the prospect. The trap was envisioned as a structurally influenced “sweet spot” in an area where the Williams Fork sandstones were regionally gas-charged, analogous to Rulison and Parachute fields in the south-central Piceance Basin. It was later realized that north-south trending marine-related sandstones might offer upside potential from combination stratigraphic-structural traps.

Early drilling results indicate that the Williams Fork wells in the Yellow Creek structure, as compared to the analogy fields: a.) produce more water and condensate, and b.) apparently will have lower rates and reserves. These observations are consistent with other wells drilled in the northern Piceance Basin. Possible reasons for this might be: a.) less expelled gas due to lower thermal maturity and/or less volume of source rocks, leading to the nature of the production, b.) better reservoir quality and relative permeability to fluids leading to greater fluid production, and c.) water influx along fractures.