Regional Oil & Gas Intelligence March 23, 2017 ARK-LA-TEX SCOUT Serving the local market with drilling activity, permits & deals for sale Volume 05, No. 04 Exco gets performance uplift in Haynesville Regional Activity (State Data) Enhanced completions and longer with 1,600 lb of proppant per foot. Permits Issued (02/27/17 - 03/20/17) laterals have driven up type curves for Exco COO Harold Jameson said on the Compls Permits Resources, particularly in the southern Q4 call that the larger completion has Arkansas 15 2 Shelby area of East Texas (up 73%) and the “yielded a breakthrough in reservoir North Louisiana 19 36 Holly core of North Louisiana (up 13%). performance” in the East East Texas (RRC 5) 4 14 Proppant load is currently 2,700 lb per Texas Haynesville, which East Texas (RRC 6) 11 24 lateral foot, but Exco plans to move higher is deeper than in North TOTAL 49 76 to 3,500 lb per foot in 2017. Louisiana. “This exceptional performance Most Active Operators by Permits Over time, the wells have shown is direct support for higher crude reserve ➊ Indigo Haynesville LLC 7 sustained improvement. In North increases in this area. At year-end 2015, 18 Louisiana, long-lateral wells deliver the PDP in this area was booked at ➋ EXCO Operating Total 6 ➌ Sheridan Production 5 147% more cumulative volume at 1.5 Bcf per 1,000 lateral feet, and we are 200 days online (2.3 Bcf per 1,000 ft) currently booked at 2.6 Bcf per 1,000, or Permits by Formation (by Last Scout) versus standard-length wells completed 73% increase. Continues On Pg 6 Formation 03/23 03/02 02/09 Haynesville 30 21 38 PetroQuest launches new initiatives in East Texas Barnett 10 – – PetroQuest is implementing a number PetroQuest’s current 601-well inventory is Cotton Valley 10 5 14 of new concepts for the company in its based on 1,500-ft spacing. Travis Peak 7 2 10 2017 Cotton Valley program, including The PQ #22 well (39% NRI) sports Pettit 3 3 1 longer laterals, tighter spacing, pad the company’s longest lateral to date at Wilcox 3 2 2 drilling and gathering microseismic data. 7,100 ft. The previous longest lateral was Goodland 2 1 3 The company will drill eight to 10 5,300 ft. The well is in initial flowback. Gray 2 – – Cotton Valley wells this year as The company is currently drilling its first Holt Bryant 2 2 – part of its $40-48 million program. three-well pad—PQ#23-25 (76% WI). Other Formations 7 37 35 The PQ #21 well (61% NRI) tested 800- PetroQuest will gather microseismic data TOTAL 76 73 103 ft well spacing and reached a maximum 24- on the zipper fracs to provide info on frac Sources: AOGC, SONRIS & TXRRC hour rate of 7.1 MMcfe/d. The company height and propagation through a tight Active Rigs Running (Baker Hughes) 55 believes the well confirms tighter spacing. sand environment to improve completions. Exco gets performance uplift in Haynesville DEALS FOR SALE NLA Cumulave Gas vs. Time ETX Cumulave Gas vs. Time Mcf; Days 1 Mcf; Days 2 ARKANSAS & LOUISIANA NONOP 3, 500,000 4,500,000 16-Active Wells. 4,000,000 3,000,000 VAN BUREN CO., AR 60% 3,500,000 2,500,000 23% CADDO & DE SOTO PH., LA 3,000,000 2,000,000 Recent Fayetteville IPs: >4.0 MMCFD PP 87% 2,500,000 1,500,000 2,000,000 Recent Cotton Valley IPs: >1,700 BOED 1,500,000 1,000,000 Varying NonOperated WI For Sale. 1,000,000 500,000 Net Production: ~370 MCFED (99% Gas) 500,000 - - Fayetteville EUR: 3.0 BCF NONOP 04080120 160200 240 050100 150 200 250 300350 400 Cotton Valley EUR: ~1,310 MBOE NLA Caddo Type Curve Progression PP 5790DV Well Performance 3 2016+; Bcf/1000’ 4 • Wells with ~2,700 lb/ compleons performance exceeding expectaons NPV-10 (8/8ths) of Target is $10.7MM, up from $8.6MM at YE ‘15 RED RIVER PH., LA PROPERTIES • Larger smulaon design having posive impact on exisng wells 0.18 55-Producing Wells. 7,886-Net Acres. • Larger compleons and longer laterals delivering 147% more volume in 0.20 approximately 200 days on line in NLA COTTON VALLEY & HAYNESVILLE PP 1.98 • Three long lateral wells in NLA turned-to-sales in Q3 ‘16 averaged $8.8MM/well 1.60 36-Operated Wells. 18-NonOperated. • Larger compleons delivering 23% more volume in approximately 350 days online in ETX Operated & NonOperated WI Available • Most recent well TTS in the southern area of ETX in Q1 ‘16 cost $10.3MM. This YE '15 Proved YE '16 Proved 3500 lbs./ . Target Est Mar 2017 Production: 9.4 MMCFED well was drilled in the deepest part of the Haynesville play to a TVD of >14,500’ EUR/1000' (BCF) EUR/1000' (BCF) Proppant Est Mar 2017 Cash Flow: $705,000/Mn ~9.5 NLA and ETX wells connue to exceed expectaons; pressure decline is currently <10 psi/day and volumes Net Proved Rsvs: 412 BCFE MMCFED connue to exceed type curve expectaons AGENT WANTS OFFERS MAR 29, 2017 Source: Exco Resources March 20, 2017 via PLS docFinder (www.plsx.com/finder) PP 2857DV Legend ⊞ Field/Formation ' Oil * Gas Õ CBM 9 Plugged Oil % Plugged Gas ARK-LA-TEX 2 ª Dry Hole 6 Injection ° Water Supply O Observation 8 SWD è Service 55 Rigs Running / 76 Permits Issued Rig Count Provided by Baker Hughes SELLING NONCORE ASSETS IN THIS REGION? Seeco filed a permit for Let PLS divestment arm monetize those B-43 field in Cleburne assets and maximize the sale price! County, Ark. See page 5. ARKANSAS Source: AOGC Pg County BHI State ARKANSAS Rigs Permits Rig 01 Running 5 Cleburne – 1 Permits Chesapeake filed three 02 Issued 5 Columbia – – amended permits 5 Franklin – – for Newark E field in Tarrant County, Texas. 5 Logan – – See page 11. 5 Union – 1 6 Van Buren – – 6 White 1 – TOTALS 1 2 ETX (RRC 6) N. LOUISIANA EAST TEXAS (RRC 5) Source: TXRRC Rigs Rigs ETX (RRC 5) 22 Running 31 Running Rigs Permits Permits Pg County BHI State 01 Running Issued 36 Issued Rigs Permits Permits 24 14 Issued 11 Dallas – 4 11 Falls – 1 11 Henderson 1 2 BHP Billiton filed a 11 Robertson – 1 BP America filed two permit for Caspiana field 11 Tarrant – 6 permits for Carthage in Caddo Parish, La. See page 6. 11 Van Zandt – – field in Angelina County, Texas. See page 11. TOTALS 1 14 NORTH LOUISIANA Source: SONRIS Regional Scouts EAST TEXAS (RRC 6) Source: TXRRC BHI State Pg Parish Rigs Permits Pg County BHI State The Ark-La-Tex Scout, published Rigs Permits 6 Bienville – – every three weeks, includes stories – Anderson 1 – 6 Bossier – 1 and graphics highlighting local drilling 11 Angelina 1 2 6 Caddo 1 7 activity, discoveries, new developments plus stats on drilling permits, completions 11 Cass 2 1 6 Cameron – – and P&A activity for Arkansas, North 11 Cherokee 4 1 6 Claiborne – – Louisiana and East Texas (RRC 5 & 6). 12 Gregg – 1 8 DeSoto 18 18 PLS Inc. 12 Harrison 1 3 8 Grant – 2 One Riverway, Suite 2500 Houston, Texas 77056 12 Houston – 1 – Jackson 1 – Postmaster: Send address changes to PLS Inc. 12 Nacogdoches 2 1 10 LaSalle – 1 713-650-1212 (Main) / 713-658-1922 (Fax) 12 Panola 1 8 10 Lincoln 6 5 © Copyright 2017 by PLS Inc. 14 Rusk 3 3 10 Red River 5 – All rights reserved. No part of this document 14 San Augustine 6 2 10 Richland – 2 may be reproduced or transmitted in any 14 Smith 1 1 10 Winn – – form or by any means without permission. TOTALS 22 24 TOTALS 31 36 March 23, 2017 (Data thru 03/20/17) 3 DRILLING & EXPLORATION Operator Index Operator Index Ark-La-Tex Quick News Permits Pg(s) Permits Pg(s) • The Ark-La-Tex region has 55 Basa Resources 1 12 Jack L Phillips Co 1 12 rigs—53 gas and two oil—running BHP Billiton 1 6 James Drilling – 10 this issue, up from 26 YOY. Bonanza Creek Energy – 5 Jamex Inc 1 11 • DeSoto Parish, La., is the most BP America 3 11, 14 Kirby Oil – 6 active county again with 18 rigs, up Breitburn Operating – 11 KJ Energy 1 14 from six YOY. • Cass County, Texas, has two rigs Buffco Production 2 11, 14 Linn Operating 2 10 running this issue, up from one YOY. CCI East TX Upstream LLC 2 12 Nadel & Gussman Ruston 1 6, 10 • Covey Park completed the best Chesapeake 4 11 PAR Minerals Corp 1 5 well of the issue. Drilled in DeSoto Comstock O&G 2 8 PetroQuest Energy – 12 Parish, the Weyerhaeuser 15-22 Covey Park Gas LLC 1 8 R Lacy Svcs Ltd – 12 HC #1-Alt flowed 15.5 MMcfe/d on a 20/64-in. choke. The well has a Covey Park Op 1 11 Range Louisiana Op 2 10 7,500-ft lateral. Covey Park Resources 1 12 Rapiere Resources 1 10 • GEP Haynesville completed Dallas Production 1 12 Sabine O&G – 14 a trio of strong gas wells in Red Denbury 2 10 Saddle Operating 3 11 River Parish at Bracky Branch field. Energy Reserves Group – 6 SEECO 1 5-6 The wells averaged 14.1 MMcfe/d on a 19/64-in. choke. Their laterals Ensight IV Energy Mgmt 1 8 Sheridan Production 5 12 average 5,200 ft. EXCO Operating 6 6 Sonerra Resources – 12 • Breitburn Operating completed GEP Haynesville LLC – 10 Stephens Production – 5 a top Cotton Valley well this issue in GHA Barnett LLC 4 11 Sunland Production 2 8 Cherokee County, Texas, at Overton Goodrich Petroleum 2 8 Tanos Exploration 2 6, 12, 14 field.