Mathers-Gordon

Location and Access

The Lands are located within the northwest corner of the Anadarko Basin of the Texas Panhandle approximately 20 to 25 miles N.E. of the city of Pampa. Access into the Lands is provided by State Highway 152 on the south and FM 1268 on the northern boundary. Topography is generally low undulating grass lands with moderate to steep slope in and around localized erosional ravines and creek beds.

Geological Introduction

The Lands provide a multi-pay opportunity of the Pennsylvanian age Virgilian limestone, multiple Granite Wash sandstones, with Atoka detritus and Permian age Brown Dolomite. Regional strike is southeast to northwest with dip to the northeast.

The following describes the lithology of the Lands:

Brown Dolomite -- 4500': The generalized lithology is a tan to cream buff, very fine crystalline dolomite with intercrystaline and intracrystaline porosity in the upper section, grading downward to a vuggy porosity with scattered vitreous chert. Published core measurements show median porosities of 8 to 16% grading to as high as 24% in some areas. Permeability from core studies vary from a low .03 md. to a median of 10 -- 20 md.

Virgilian Limestone -- 5600': Regionally oolitic and skeletal grainstones are generally developed in a high energy environment with localized algal mounding. Within the prospect area the limestone is white to light grey, to light brown with pinpoint to secondary vuggy porosity ranging from 10 to 22 % with a median value of 12%.

Granite Wash -- 7800' to 8300': Granite Wash sandstones were sourced from the exposed Amarillo Uplift during Pennsylvanian time and deposited in sequential alluvial-fan, braided-stream, and fan-delta environment systems. Porosity consistently averages 11% between 7000' and 11,00' with variable permeability of 0.1 to 20 md. Specific gravity of produced gas ranges from .66 to .72. Generally the nature of the gas is 85% methane with a BTU of 1100. The trapping mechanism is stratigraphic or combination stratigraphic -- structural with reservoir drive mechanism being pressure depletion or combined pressure depletion water drive. The sands contain granite, quartz, chlorites, and feldspars. Characteristically the reservoirs calculate high water saturation due to chemically bound water in the chlorites, variances in the matrix velocity, and grain size.

Atoka - 11,500': Locally the pay sections of the Atoka are thin, dark colored argillaceous limestones generally interbedded and intermixed with siliclastic detritus. The amount of the siliclastic content causes marked lateral and vertical changes in porosity and permeability. Generally the reservoir drive is predominantly pressure depletion with some reservoirs being water drive. Porosities range from 8 to 12% with generally low permeability. Trapping mechanism is stratigraphic or combination stratigraphic-structural.

Gordon Prospect

There are four objectives within the prospect. The Brown Dolomite, at a depth of 4500', the Virgilian at 5600', the Thorndike Granite Wash at 7800' and the Atoka at 11,500'. Numerous wells with historical production from these zones within the general prospect area provide excellent subsurface control.

The primary control well for the Brown Dolomite, is the Maxwell, Moore #1. The Moore was originally drilled by Ricks Exploration as a Brown Dolomite test and completed as such in May, 2001. In November 2003, Maxwell purchased the Moore. It was produced to it's economic limit, and then converted to a salt water disposal well in February, 2007.

The Moore had successfully proved reservoir, sourcing and trapping of a wildcat prospect. To further aid and define the extent of the reservoir, Maxwell purchased two seismic lines. The integrated interpretation of the data showed critical four-way dip on the top of the Brown Dolomite within the prospect, with the Moore being located on the southeast edge of the closure. The size of the reservoir, as mapped, provides up to a maximum of seven locations with potential recoverable reserves estimated at 9 BCF based upon 120 acre drainage.

The Virgilian was proven productive by the southerly offsetting R.B.Mathers 1-74 in 1969. After a misrun drillstem test which had flowed gas to surface, the pay interval was perforated, acidized, and water fractured resulting in the well flowing 750 mcf/d. Undefinitive production records show 378.8 Mmcf + 19,763 bbls. oil from Virgilian. perforations along with 72,880 bbls. oil + 8.314 Mmcf from the Thorndike perforations with possible commingling. Subsurface mapping has identified 3 potential locations within the designated prospect acreage with potential calculated recoverable reserves estimated at 2.8 BCF based upon 120 acre drainage.

The Thorndike Granite Wash interpretation identifies three locations which underlie the above mentioned Virgilian locations. This conveniently allows the evaluation of both zones within the same well bore. Thorndike production was established by the R.B.Mathers 2 located in section 1 of the J.Stump Survey in 1966. The well had produced 341.243 Mmcf + 83,996 bbls. of oil before being plugged back to the Atoka. Several additional wells were completed in this zone which ultimately led to the designation of the multi-pay "Thorndike" Field which has produced 18.878 BCF and 753,935 bbls. oil as of mid 2007. Maxwell is presently producing the Thorndike in the southerly offsetting Mathers 2A-74R which it drilled in December of 2006.

There are two plugged and abandoned Atoka producers within the prospect. The R.B Mathers in the Stump Survey produced 1.562 Bcf + 40,403 bbls.oil from 2/66 to 3/74, and the F.W.Gordon in section 1 produced 172.980 Mmcf + 7716 bbls.oil from 7/70 to 12/71. Several control wells with Atoka production on the east side of the Maxwell acreage block provide excellent subsurface control. Production is from several separate intervals within the lower 500 feet of the section. A geophysical interpretation (above mentioned data) showed the Atoka wells being distributed over five individual fault blocks within the prospect area. Having the benefit of multiple productive lenses, the Atoka interpretation identified four locations on Maxwell acreage. Three of the four locations will also evaluate the overlying Virgilian and Thorndike.

Mathers Prospect

The Missouri "E" Granite Wash (Mo."E") is the primary objective of the prospect at a depth of 8300'. Maxwell established production from the Mo."E" in December 2005, by the drilling and completion of the Mathers 2-74R. The Mo."E" was a wildcat test of a prospective zone that does not have an established production history in the area. In July of 1997, Samedan Oil Corporation perforated the Mo."E" in it's Reeves #1 which is located 2.5 miles to the southeast in section 71 of Wheeler County. Samedan perforated 8' from 8254 -8262 which resulted in an instant gas blow at the surface. A final flow rate of 1.2 Mmcf/d on a 32/64" ck with a 920 # FTP was recorded. Samedan chose not to complete in the Mo."E" and plugged back to the oil leg of the overlying Thorndike. Subsurface mapping has identified an additional eleven locations within the prospect acreage with potential recoverable reserves estimated at 49.368 BCF based upon 120 acre spacing.

There are potentially 11 Thorndike locations within the Mathers prospect. Potentially the estimated recoverable reserves of 16.265 BCF based upon 120 acre drainage. Two offsetting wells to the Maxwell 2A-74R Thorndike producer have produced from the Thorndike. The Huselby #1 in section 73 produced 779.391 Mmcf + 16,151 bbls. oil from 3/70 to 8/75 and the above mentioned R.B Mathers 1-74.

A total of 5 Virgilian locations are mapped within the prospect. Potential recoverable reserves are estimated at 3.978 based upon 120 acre drainage. Of the eleven Mo. "E" locations, the overlying Thorndike is prospective in all of the 11. Five of the eleven locations are also prospective in the overlying Virgilian, and of these five, three are also prospective in the underlying Atoka.

The geophysical interpretation identified 3 Atoka locations within the Mathers prospect with calculated recoverable reserves 6.9 BCF based upon 120 acre drainage.