5. 3
J o i n t V e n t u r e O b j e c t i v e
To capitalize on the multitude of favorable market conditions
currently presenting themselves, with the aim of providing what
we believe to be an Outstanding Investment opportunity.
6.
7. 5
K e y T i m i n g H i g h l i g h t s
• Crude Oil at relative price threshold seen only 3 times in last 30 Years. Each previous occasion preceded substantial
price rises.
• Optimum market conditions for lease acquisitions.
• Drilling and completion costs currently deeply discounted relative to the 24 months previous.
• Oil price at a 42% discount to the $81.68 ten year average price, and more than a 71% discount to the $147.50 highs
seen in 2007.
• Reuters reported in its October 1st 2015 article that Global Oil demand growing at fastest pace for 5 years.
The recent decline in commodity prices globally has presented us with an excellent opportunity to buy Crude Oil production
at effectively sale prices. The cyclical nature of commodity, and more specifically Crude Oil prices means that we are at a price
threshold which has only presented itself in relative terms three times in the last 30 years. Each time preceded substantial price
increases.
Our extensive relationship network has afforded us a unique opportunity to be able to capitalize on the opportunity at
hand, whereby we are able to produce lucratively at current prices, whilst simultaneously positioning ourselves favorably in
anticipation of a price reversion back in the direction of the 10 year average price of $81.68 per barrel (taken with data on
10/09/2015)
With proven production, a developed infrastructure and an experienced operational team with a highly successful track record
at maximizing production, the Navarro Phase 1 Joint Venture opportunity offers the chance to participate in oil production, at
levels whereby value is being acquired at the outset.
8.
9. 7
O p e r at i o n a l P l a n
Purpose:
To acquire oil producing leases in Wilson County, TX and rework and stimulate those existing oil wells contained thereon. The
joint venture will acquire a total of four existing wells on the S & G lease with the objective of enhancing current production
utilizing modern re-working and well stimulation methods. Additionally, ENERGON³ Operating will drill and complete four new
wells on this lease. The overall objective is to bring 8 wells into production on this lease.
S & G Lease
This S & G lease holds oil production and mineral rights from the Navarro Formation occurring between 1700' and 2000' and the
shallower Glenn Poth Formation occurring between 700' and 900'. The data shows there is an excess of 1.4 MMBOE in reserves
for these 4 new wells as proven from the production data. Recently, ENERGON³ has developed similar wells and it is our belief
that the production of the four existing wells can be increased by re-working them and using modern stimulation methods. (see
Ward well data on page 19)
10. L o c at o r M a p
Wilson County, Texas
Guadalupe County
Bexar County
Guadalupe County
Wilson County
BexarCounty
W
ilson
County
ZAF OIL
D. & L. OIL
PRODUCING CO.
SMITH,
LUTHER H.
JR.
SMITH,
LUTHER H.
JR.
LAND,
CLEATUS H.
ESTATE
THREE J
ENERGY
GROUP THREE J ENERGY GROUP
THREE J ENERGY GROUP
MCMULLAN
OIL COMPANY
QUEST RESEARCH
& DEV. CORP.
SOURCE
PETROLEUM
INC.
HOWELL CRANE
& RIGGING, INC.
BOUNDS,
ROBERT S.
BOUNDS,
ROBERT S.
BOUNDS,
ROBERT S.
BOUNDS,
ROBERT S.
BOUNDS,
ROBERT S.
BOUNDS,
ROBERT S.
CAL-WACO
OIL CO.
INC.
CAL-WACO OIL
CO.
INC. CAL-WACO
OIL CO.
INC.
CAL-WACO OIL
CO. INC.
FALOR,
ALLEN C.FALOR,
ALLEN C. FALOR,
ALLEN C.
FALOR,
ALLEN C.
FALOR,
ALLEN C.
FALOR,
ALLEN C.
FALOR,
ALLEN C.
FALOR,
ALLEN C.
FALOR,
ALLEN C.
THREE J
ENERGY
GROUP THREE J
ENERGY
GROUPTHREE J
ENERGY
GROUP
THREE J
ENERGY
GROUP
THREE J
ENERGY
GROUPTHREE J
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GROUP
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J&J OIL
J&J OIL
QUEST RESEARCH
& DEV. CORP.
LAKE CHEROKEE
PRODUCTION,
LLC
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PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION, LLC
CALTEX ENERGY CO.
CALTEX
ENERGY CO.
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS
COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
HICKEY, EUGENE
HICKEY,
EUGENE
HICKEY, EUGENE HICKEY,
EUGENE
CANTU
OIL CO.
CANTU
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CANTU
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CANTU
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CANTU
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CANTU
OIL CO.
CANTU
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KOCH, I. ERNEST
KOCH,
I. ERNEST
KOCH, I.
ERNEST
KOCH, I.
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KOCH, I.
ERNEST
METCO OIL
CORPORATIONMETCO OIL
CORPORATION
METCO
OIL
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TEXAS COASTAL
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COASTAL
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LLC
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PRODUCTION, LLC
LAKE
CHEROKEE PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION,
LLC
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LLC
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G & J ENERGY
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SEGUIN
PUMPSEGUIN
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MCLAIN
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MCLAIN
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MCLAIN EXPLORATION, INC.
SMITH/A.P.H.
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SMITH/A.P.H. VENTURE
SMITH/A.P.H.
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SMITH/A.P.H.
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STEBAR
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TERRA
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LOCKER RANCH
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AGAPE
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AGAPE
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SOUTHERN GULF PETROLEUM
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CAL-WACO
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CAL-WACO OIL
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NEW
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CALTEX ENERGY CO.
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MCLAIN EXPLORATION,
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DOEGE,
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TEXAS COASTAL
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KUBENA,
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KUBENA, JOSEPH A.
KUBENA,
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KUBENA,
JOSEPH A.
HOWARD,
CALVIN L.
HOWARD,
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ROSKYDAL,
LAVERNE
ROSKYDAL,
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ROSKYDAL, LAVERNEROSKYDAL, LAVERNE
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MOORE PETROLEUM
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THREE J
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MCLAIN EXPLORATION,
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WARNCKE,
GLENNWOOD
MCLAIN
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MCLAIN EXPLORATION,
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DONOCO OIL
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DONOCO OIL
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DONOCO
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DONOCO
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DONOCO OIL
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DOEGE,
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DOEGE,
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DOEGE, DONALD
CALTEX
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RAM OIL
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RAM
OIL &
GAS COMPANY
J.A.G. OIL & GAS
TRANSUE,
JIM
TRANSUE,
JIM
BEL-POTA
COMPANY
SMALLEY,
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W.W.
ENERGY
W.W.
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DOEGE, DONALD
DOEGE,
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TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
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NEW BEGINNING
NEW BEGINNING
LT OIL
LLC
LT OIL LLC
LT OIL LLC
SEGUIN PUMP
SEGUIN PUMP
MIDSTATES
CORPORATION
NEW
BEGINNING
NEW
BEGINNING
DONOCO
OIL COMPANY
DONOCO
OIL COMPANY
MIDSTATES
CORPORATION
MIDSTATES
CORPORATION
MIDSTATES
CORPORATION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO
PRODUCTION
SEACO PRODUCTION
CALTEX
ENERGY
CO.
CALTEX
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SOURCE
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3-L
DRILLING
3-L DRILLING
3-L DRILLING3-L DRILLING
3-L DRILLING
3-L DRILLING
3-L
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SOURCE
PETROLEUM
INC.
DONOCO
OIL
COMPANY
DOEGE,
DONALD
DOEGE, DONALD
DONOCO OIL COMPANY
DONOCO OIL
COMPANY
DONOCO OIL
COMPANY
J&J OIL
LA VERNIA
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SOURCE
PETROLEUM
INC.
SOURCE PETROLEUM INC.
SOURCE PETROLEUM INC.
ENERGON3
ENERGON3
ENERGON3
ENERGON3
J.A.G. OIL & GAS
J.A.G. OIL & GAS
SWOBODA,
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SWOBODA, G. M.
SWOBODA,
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SWOBODA,
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SWOBODA,
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THREE J ENERGY,
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THREE J ENERGY,
INC.
SEACO PRODUCTION
SEACO
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SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO
PRODUCTION
SEACO PRODUCTION
SEACO
PRODUCTION
SEACO
PRODUCTION
LAMBECK
PETROLEUM,
LLC
LAMBECK PETROLEUM, LLC
J&J OIL
J&J OIL
J&J OIL
DOEGE,
DONALD
DOEGE, DONALD
DOEGE,
DONALD
J.A.G.
OIL & GAS
SEGUIN PUMP
SEGUIN PUMP
SEGUIN
PUMP
SEGUIN PUMP
SEGUIN
PUMP
SEGUIN
PUMP
SEGUIN PUMP
SEGUIN PUMP
SEGUIN PUMP
RANKIN
DRILLING
COMPANY, INC.
SOURCE
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INC.
DONOCO OIL
COMPANY
DONOCO OIL COMPANY
DONOCO OIL COMPANY
TEXAS COASTAL
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XSTOR
ENERGY, LLC
SMALLEY,
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SEACO
PRODUCTION
THREE J
ENERGY,
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THREE J
ENERGY,
INC.
THREE J
ENERGY,
INC.
TEXAS
COASTAL
RESOURCES LLC
J.A.G.
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J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL &
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DOEGE,
DONALD
FUEGO
ENERGY,
LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES
LLC
J-ENERGY
J-ENERGY
J-ENERGY J-ENERGY
J-ENERGY
THOMPSON,
TOMMY
DONOCO
OIL
COMPANY
DONOCO OIL
COMPANY
DONOCO OIL
COMPANY
DONOCO
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COMPANY
DONOCO
OIL COMPANY
NOVA ENERGY
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GREAT
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DONOCO OIL
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TEXAS
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TEXAS COASTAL
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TEXAS COASTAL
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LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION, LLCLAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION, LLC
CALTEX
ENERGY
CO.
CALTEX
ENERGY CO.
CALTEX
ENERGY
CO.
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION, LLC
BLOUNT, T.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
TEXAS BISON
PETROLEUM
DOYLE &
DOUGLAS
GLENCO
OIL & GAS
COMPANY
GLENCO
OIL & GAS
COMPANY
GLENCO
OIL & GAS
COMPANY
MATTKE, PAUL
& WITTE,
MELVIN
SOUTHERN GULF
PETROLEUM
CO.
SOUTHERN
GULF PETROLEUM CO.
LIBERTY HEAD
PETROLEUM, INC.
LIBERTY HEAD
PETROLEUM, INC.
CALTEX
ENERGY
CO.
CALTEX
ENERGY
CO.
CALTEX
ENERGY
CO.
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
HENDERSON
EXPLORATION
HENDERSON
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J.A.G. OIL & GAS
J.A.G.
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& GAS
MCGAUGHY
OIL COMPANY
MCGAUGHY
OIL COMPANY
DEAGEN,
BILL &
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KAYE POTH OIL
CORP.
KAYE POTH
OIL CORP.
3-L
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3-L
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RODRIGUEZ,
FRANK
METCO OIL
CORPORATION
METCO OIL
CORPORATION
CUNNINGHAM,
H. T.,
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CUNNINGHAM,
H. T.,
TRUSTEE
CUNNINGHAM,
H. T.,
TRUSTEE
CUNNINGHAM,
H. T.,
TRUSTEE
GAT-MAN
PETRO INC.
P.S.N.
PETROLEUM,
INC.
LIBERTY HEAD
PETROLEUM,
INC.
3-L
DRILLING
3-L
DRILLING
EMBREY OIL
PRODUCTION CO.
EMBREY OIL
PRODUCTION
CO.
TANGLEWOOD
OIL &
GAS CO.
TRANSIERRA
EXPLORATION
CORP.
TRANSIERRA
EXPLORATION
CORP.
TRANSIERRA
EXPLORATION CORP.
CROSSROADS
MINERAL
PROD., L.L.C.
BRANNAN,
JOHN T. III BRANNAN,
JOHN T. III
BRANNAN,
JOHN T. III
BRANNAN,
JOHN T. III
BRANNAN,
JOHN T. III
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JOHN T. III
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III
BRANNAN,
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JOHN
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J.A.G. OIL & GAS
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J.A.G. OIL
& GAS
J.A.G.
OIL & GAS
J.A.G. OIL & GAS
J.A.G. OIL & GAS
H. & J.
DRILLING
COMPANY
AUTRY,ALLEN
MATTKE,
PAUL
MATTKE,
PAUL
LYNCH,
W. W.
SEGURO WELL
SERVICE,
INC.
KOCH,
SEBASTIAN H.
KOCH,
SEBASTIAN H.
METCO OIL
CORPORATION
METCO OIL CORPORATION
LIBERTY
HEAD PETROLEUM, INC.
LIBERTY HEAD
PETROLEUM, INC.
CALTEX
ENERGY
CO.
CALTEX
ENERGY
CO.
PIERDOLLA,
JEFFERY
H. & J.
DRILLING
COMPANY
SAN MIGUEL
EXPLORATION
COMPANY
BRITANCO,
L.L.C.
SAN MIGUEL
EXPLORATION
COMPANY
SAN MIGUEL
EXPLORATION
COMPANYSAN MIGUEL
EXPLORATION
COMPANY
SAN MIGUEL
EXPLORATION
COMPANY
JOHANSON OIL
W.W.
ENERGY
W.W.
ENERGY
W.W.
ENERGY
SYJ OIL &
GAS,
INC.
SYJ OIL &
GAS, INC.
SYJ OIL &
GAS, INC.
SYJ OIL &
GAS,
INC.
CUNNINGHAM,
H. T.,
TRUSTEE
LA VERNIA
OIL CO.
LA VERNIA
OIL CO.LA VERNIA
OIL CO.
LA VERNIA OIL
CO.LA VERNIA
OIL
CO. LA VERNIA OIL CO.
LA VERNIA
OIL
CO.
BLACK JACK WELL
SERVICE,
INC.
BLACK JACK WELL
SERVICE, INC.
BLACK JACK
WELL SERVICE,
INC.
BLACK JACK WELL
SERVICE, INC.
SOURCE
PETROLEUM
INC.
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WELL
SERVICE
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ROYALTY
COMPANY
LA VERNIA
OIL
CO.
LA VERNIA
OIL CO.
LA VERNIA
OIL
CO.
LUNDELLS,
INC. LUNDELLS,
INC.
LUNDELLS,
INC.
DARICO OIL
& GAS CO.
EMBREY OIL
PRODUCTION CO.
DEAGEN,
BILL &
SONS, LTD.
AUTRY,
ALLEN
JARUTOWICZ, HAROLD
JARUTOWICZ,
HAROLD
METCO OIL
CORPORATION
METCO OIL CORPORATION
RIGHTMER,
JOHN W.
TEXAS COASTAL RESOURCES
LLC
TEXAS COASTAL
RESOURCES LLC
METCO OIL
CORPORATION
METCO OIL CORPORATION
METCO OIL
CORPORATION
METCO OIL
CORPORATION
METCO OIL
CORPORATION
METCO
OIL CORPORATION
METCO
OIL
CORPORATION
SEACO PRODUCTION
SEACO
PRODUCTION
SEACO
PRODUCTION
GEOMEG ENERGY
OPERATING
CO., LLC
AUTRY,
ALLEN
TEXAS
COASTAL RESOURCES LLC
H. & J.
DRILLING
COMPANY
SEACO
PRODUCTION
SEACO
PRODUCTION
SEACO PRODUCTION
METCO
OIL CORPORATION
T & T OIL CO.
LA VERNIA
OIL
CO.
LA VERNIA OIL
CO.
LA VERNIA OIL CO.
LA VERNIA
OIL CO.
H. & J.
DRILLING
COMPANY
EMBREY OIL
PRODUCTION
CO.
EMBREY OIL
PRODUCTION CO.
BJT OIL
COMPANY,
INC
BJT OIL
COMPANY,
INC
LT OIL
LLC
LT OIL
LLC LT OIL
LLCLT OIL
LLC
LT OIL
LLC
EMBREY OIL
PRODUCTION
CO.EMBREY OIL
PRODUCTION
CO.
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
GAUNTT,
INC.
GLENCO
OIL & GAS
COMPANY
COPPERHEAD
OIL & GAS,
LTD.
COPPERHEAD
OIL &
GAS, LTD.
COPPERHEAD
OIL &
GAS, LTD.
COPPERHEAD
OIL &
GAS, LTD.
COPPERHEAD
OIL & GAS, LTD.
SEACO
PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
LT OIL
LLC
LT OIL
LLC
LT OIL
LLC
H &
P PARTNERSHIP
LT OIL LLC
LT OIL
LLCLT OIL
LLC
LT OIL
LLC
H. & J.
DRILLING
COMPANY
EMBREY OIL
PRODUCTION
CO.
EMBREY OIL
PRODUCTION
CO.
CASTILLO
OIL
COMPANY LLC
CASTILLO
OIL COMPANY LLC
T & T
OIL CO.
JARUTOWICZ
OIL
COMPANY
SEGURO WELL
SERVICE,
INC.
TRIPLE 3H
ENERGY, LLC
TRIPLE 3H ENERGY,
LLC
TRIPLE 3H
ENERGY, LLC
TRIPLE 3H
ENERGY, LLC
STELLER ENERGY
& INVESTMENT CORP
STELLER ENERGY &
INVESTMENT CORP
STELLER ENERGY &
INVESTMENT CORP
STELLER
ENERGY &
INVESTMENT CORP
STELLER ENERGY &
INVESTMENT CORP
GLENCO
OIL & GAS
COMPANY
G & K
OPERATING,
LLC
G & K
OPERATING,
LLC
METCO OIL
CORPORATION
ABRAXAS PETROLEUM
CORPORATION
CALTEX
ENERGY
CO.
EMBREY OIL
PRODUCTION
CO.
EMBREY OIL
PRODUCTION CO.
WOLFE OIL
COMPANY
WOLFE OIL
COMPANY
WOLFE OIL
COMPANY WOLFE OIL
COMPANY
WOLFE
OIL
COMPANY
WOLFE OIL COMPANY
WOLFE OIL
COMPANY
WOLFE OIL COMPANY
WOLFE OIL
COMPANY
CASTILLO
OIL COMPANY
LLC
H & P PARTNERSHIP
TRIPLE
3H ENERGY,
LLC
JOHANSON OIL
GEOMEG ENERGY
OPERATING CO., LLC
ROLLERT
CO.,
INC., THE
ROLLERT
CO.,
INC., THE
JOHANSON
OIL
JOHANSON OIL
JOHANSON
OIL
JOHANSON
OIL
GEOMEG ENERGY
OPERATING
CO., LLC
OFFSPRING
WELL
SALVAGE
PULLIN LEASE
SERVICE, INC.
COPPERHEAD
OIL & GAS, LTD.
COPPERHEAD
OIL &
GAS, LTD.
COPPERHEAD OIL
& GAS, LTD.
COPPERHEAD
OIL &
GAS, LTD.
COPPERHEAD
OIL &
GAS, LTD.
PETROSE,
INC.
METCO OIL
CORPORATION
METCO
OIL
CORPORATION
LYNCH, WILBUR
WALDO,
ESTATE OF
LYNCH, WILBUR
WALDO,
ESTATE OF
LYNCH,
WILBUR WALDO,
ESTATE OF
LYNCH, WILBUR
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WILBUR WALDO,
ESTATE OF
LYNCH, WILBUR
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ESTATE OF
LYNCH,
WILBUR WALDO,
ESTATE OF
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.
GRAMMER, JOHN,
OIL ACCOUNT
GRAMMER,
JOHN, OIL
ACCOUNT
GRAMMER,
JOHN, OIL
ACCOUNT
GRAMMER,
JOHN, OIL
ACCOUNT
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.GAUNTT, INC.
GAUNTT, INC.
GAUNTT,
INC.
GAUNTT,
INC.GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT, INC.
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT, INC.
GAUNTT,
INC.
GAUNTT,
INC.
MATTKE, PAUL
MATTKE,
PAUL
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH NATURAL
GAS,
INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH NATURAL
GAS,
INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT
WORTH NATURAL
GAS, INC.
FORT WORTH
NATURAL
GAS, INC. FORT WORTH
NATURAL
GAS, INC.FORT WORTH
NATURAL
GAS, INC.
FORT WORTH NATURAL
GAS,
INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS,
INC.
FORT WORTH
NATURAL GAS, INC.
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MCMULLAN
OIL COMPANY
SOURCE
PETROLEUM
INC.
HOWELL CRANE
& RIGGING, INC.
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS
COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
CANTU
OIL CO.
CANTU
OIL CO.
CANTU
OIL CO.
CANTU
OIL CO.
CANTU
OIL CO.
CANTU
OIL CO.
CANTU
OIL CO.
KOCH, I.
ERNEST
KOCH, I.
ERNEST
KOCH, I.
ERNEST
TEXAS COASTAL
RESOURCES LLC
TEXAS
COASTAL
RESOURCES LLC
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION, LLC
LAKE
CHEROKEE PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION, LLC
NEW BEGINNING
ENERGY
INC. J ENERGY
THOMPSON, TOMMY
THOMPSON, TOMMY
THOMPSON,
TOMMY
THOMPSON,
TOMMY
SEGUIN
PUMPSEGUIN
PUMP
SMITH/A.P.H.
VENTURE
SOURCE
PETROLEUM
INC.
TERRA
LOCUS
SERVICES
T. W.
OIL CO.
T. W.
OIL CO.
EAGLE
FORD OIL
CO., INC.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
SOUTHERN GULF PETROLEUM
CO.
LT OIL LLC
CAL-WACO
OIL CO. INC.
CAL-WACO OIL CO. INC.
CAL-WACO OIL
CO.
INC.
CAL-WACO
OIL CO.
INC.
CAL-WACO
OIL CO.
INC.
J.A.G.
OIL & GAS
CALTEX ENERGY CO.
CALTEX ENERGY
CO.
CALTEX
ENERGY CO.
CALTEX
ENERGY CO.
MCLAIN EXPLORATION,
INC.
MCLAIN
EXPLORATION,
INC.
MCLAIN
EXPLORATION, INC.
DOEGE,
DONALD
DOEGE, DONALD
DOEGE,
DONALD
DONOCO OIL
COMPANY
DONOCO
OIL COMPANY
NEW BEGINNING
NEW
BEGINNING
NEW BEGINNING
NEW BEGINNING
NEW BEGINNING
NEW BEGINNING
SOURCE
PETROLEUM
INC.
SOURCE PETROLEUM
INC.
SOUTHERN GULF
PETROLEUM CO.
LT OIL
LLC
LT OIL
LLCGREAT
PLAINS RESOURCES,
INC.
PERKINS,
EUGENE O.
TEXAS SECONDARY
OIL CORPORATION
TEXAS SECONDARY
OIL CORPORATION
CAL-WACO OIL
CO.
INC.
CAL-WACO
OIL CO.
INC.
CAL-WACO
OIL CO. INC.
HOWARD,
CALVIN L.
HOWARD,
CALVIN L.
MOORE PETROLEUM
CO., INC.
MOORE PETROLEUM CO.,
INC.
NEW
BEGINNING
NEW BEGINNING
INC.
WARNCKE,
GLENNWOOD
MCLAIN
EXPLORATION,
INC.
MCLAIN EXPLORATION,
INC.
DONOCO OIL
COMPANY
DONOCO OIL
COMPANY
DONOCO
OIL
COMPANY
DONOCO
OIL COMPANY
DONOCO OIL
COMPANY
ENERGY
CO.
J.A.G. OIL & GAS
TRANSUE,
JIM
TRANSUE,
JIM
SMALLEY,
RICHARD
LOUIS
W.W.
ENERGY
W.W.
ENERGY
DOEGE,
DONALD
DOEGE, DONALD
DOEGE,
DONALD
DOEGE,
DONALD
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
LT OIL
LLC
LT OIL LLC
NEW
BEGINNING
NEW
BEGINNING
CALTEX
ENERGY
CO.
CALTEX
ENERGY
CO.
DONOCO OIL COMPANY
DONOCO OIL
COMPANY
DONOCO OIL
COMPANY
J&J OIL
J.A.G. OIL & GAS
J.A.G. OIL & GAS
SWOBODA,
G. M.
SWOBODA, G. M.
SWOBODA,
G. M.
SWOBODA,
G. M.
SWOBODA,
G. M.
J&J OIL
J&J OIL
J&J OIL
J.A.G.
OIL & GAS
SEGUIN PUMP
DONOCO OIL
COMPANY
DONOCO OIL COMPANY
DONOCO OIL COMPANY
TEXAS COASTAL
RESOURCES LLC
SMALLEY,
RICHARD LOUIS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
J.A.G.
OIL &
GAS
DOEGE,
DONALD
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES
LLC
THOMPSON,
TOMMY
DONOCO
OIL
COMPANY
DONOCO OIL
COMPANY
DONOCO OIL
COMPANY
DONOCO
OIL
COMPANY
DONOCO
OIL COMPANY
NOVA ENERGY
GROUP, INC.
NOVA ENERGY
GROUP, INC.
GREAT
PLAINS
RESOURCES, INC.
GREAT PLAINS
RESOURCES, INC.
GREAT PLAINS
RESOURCES,
INC.
GREAT PLAINS
RESOURCES, INC.
GREAT PLAINS
RESOURCES,
INC.
LLC
J-ENERGY
THREE J
ENERGY, INC.
THREE
J ENERGY, INC.
THREE J
ENERGY,
INC.
THREE J
ENERGY,
INC.
CO.
HOWELL
CRANE &
RIGGING, INC.
HOWELL CRANE &
RIGGING,
INC.
HOWELL CRANE
& RIGGING,
INC.
HOWELL CRANE &
RIGGING,
INC.
J-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY J-ENERGY
J-ENERGYJ-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY
J-ENERGY
UNION PACIFIC
RESOURCES
COMPANY
DONOCO OIL
COMPANY
DONOCO OIL
COMPANY
TEXAS COASTAL
RESOURCES LLC
HOWELL CRANE
& RIGGING, INC.
HOWELL CRANE &
RIGGING, INC.
HOWELL CRANE &
RIGGING, INC.
HOWELL CRANE &
RIGGING, INC.
HOWELL CRANE &
RIGGING,
INC.
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO
PRODUCTION
SEACO
PRODUCTION
SCHIEVELBEIN,
BRYAN O.
BRAC OIL
RUBIN,
GUNNAR ASKO
TEXAS
COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
LT OIL LLC
LT OIL
LLC
LT OIL LLC
LT OIL
LLC
LT OIL
LLC
DONELCO
INDUSTRY
DONELCO INDUSTRY
TEXAS COASTAL
RESOURCES LLC
TEXAS
COASTAL RESOURCES LLC
TEXAS COASTAL
RESOURCES
LLC
V & B
OIL
V & B
OIL V & B
OILEOG
RESOURCES,
INC.
JWC
OIL
OPERATOR, LLC
JWC
OIL
OPERATOR, LLC
JWC
OIL
OPERATOR, LLC
JWC
OIL OPERATOR,
LLC
JWC
OIL
OPERATOR, LLC
OPERATOR, LLC
JWC
OIL OPERATOR,
LLC
JWC OIL OPERATOR,
LLC
JWC OIL
OPERATOR,
LLC
JWC OIL
OPERATOR, LLC
EMERALD BAY
ENERGY, INC.
LA VERNIA
OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA
OIL
LA VERNIA
OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA OIL
LA VERNIA
OIL
LA VERNIA
OIL
DONOCO OIL
COMPANY
CADDELL WELL
SERVICE, INC.
CADDELL
WELL SERVICE, INC.
JGC OIL
CO.
EMBREY OIL
PRODUCTION
CO.
J-ENERGY
WALKER,
HARREL L.
WALKER,
HARREL L.
WALKER,
HARREL L.
GLENCO OIL
& GAS COMPANY
GLENCO OIL &
GAS
COMPANY
GLENCO OIL &
GAS COMPANY
J&J OIL
LEASE & WELL
SERVICE, INC.
G & K
OPERATING,
LLC
EMBREY OIL
PRODUCTION
CO.
GLOVER &
COMPANY
KOCH, I.
ERNEST
KOCH, I.
ERNEST
KOCH, I.
ERNEST
KOCH,
S. H.
KOCH,
SEBASTIAN H.
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
P.S.N.
PETROLEUM,
INC.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
GLENCO
OIL & GAS
COMPANY
GLEN DOEGE
OIL & GAS
GLEN DOEGE
OIL & GAS
GLENCO
OIL & GAS
COMPANY
GLENCO
OIL & GAS
COMPANY
NEW
BEGINNING
GLENCO
OIL & GAS
COMPANY
J&J OIL
J&J OIL
SMITH/A.P.H.
VENTURE
SOURCE
PETROLEUM
INC.
TERRA LOCUS
SERVICES
TERRA
LOCUS
SERVICES
E-P OIL CO.
INC.
H. & J.
DRILLING
COMPANY
JOHANSON
OIL
JOHANSON OIL
OFFSPRING
WELL
SALVAGE
OFFSPRING
WELL
SALVAGE
TANGLEWOOD
OIL &
GAS CO.
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION, LLCLAKE CHEROKEE
PRODUCTION,
LLC
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION, LLC
LAKE CHEROKEE
PRODUCTION, LLC
BLOUNT, T.
L & L PIPE &
SUPPLY INC.
L & L PIPE &
SUPPLY INC.
TEXAS BISON
PETROLEUM
DOYLE &
DOUGLAS
GLENCO
OIL & GAS
COMPANY
GLENCO
OIL & GAS
COMPANY
GLENCO
OIL & GAS
COMPANY
MATTKE, PAUL
& WITTE,
MELVIN
SOUTHERN GULF
PETROLEUM
CO.
SOUTHERN
GULF PETROLEUM CO.
LIBERTY HEAD
PETROLEUM, INC.
LIBERTY HEAD
PETROLEUM, INC.
CALTEX
ENERGY
CO.
CALTEX
ENERGY
CO.
CALTEX
ENERGY
CO.
J.A.G.
OIL & GAS
J.A.G.
OIL & GAS
HENDERSON
EXPLORATION
HENDERSON
EXPLORATION
J.A.G. OIL & GAS
J.A.G.
OIL
& GAS
MCGAUGHY
OIL COMPANY
MCGAUGHY
OIL COMPANY
DEAGEN,
BILL &
SONS, LTD.
3-L
DRILLING
3-L
DRILLING
RODRIGUEZ,
FRANK
METCO OIL
CORPORATION
METCO OIL
CORPORATION
GAT-MAN
PETRO INC.
P.S.N.
PETROLEUM,
INC.
LIBERTY HEAD
PETROLEUM,
INC.
3-L
DRILLING
3-L
DRILLING
TANGLEWOOD
OIL &
GAS CO.
TRANSIERRA
EXPLORATION
CORP.
TRANSIERRA
EXPLORATION
CORP.
TRANSIERRA
EXPLORATION CORP.
CROSSROADS
MINERAL
PROD., L.L.C.
J.A.G. OIL & GAS
J.A.G. OIL & GAS
J.A.G. OIL
& GAS
J.A.G.
OIL & GAS
J.A.G. OIL & GAS
J.A.G. OIL & GAS
AUTRY,ALLEN
MATTKE,
PAUL
MATTKE,
PAUL
LYNCH,
W. W.
SEGURO WELL
SERVICE,
INC.
KOCH,
SEBASTIAN H.
KOCH,
SEBASTIAN H.
METCO OIL
CORPORATION
METCO OIL CORPORATION
LIBERTY
HEAD PETROLEUM, INC.
LIBERTY HEAD
PETROLEUM, INC.
CALTEX
ENERGY
CO.
CALTEX
ENERGY
CO.
PIERDOLLA,
JEFFERY
SAN MIGUEL
EXPLORATION
COMPANY
BRITANCO,
L.L.C.
SAN MIGUEL
EXPLORATION
COMPANY
SAN MIGUEL
EXPLORATION
COMPANYSAN MIGUEL
EXPLORATION
COMPANY
SAN MIGUEL
EXPLORATION
COMPANY
JOHANSON OIL
W.W.
ENERGY
W.W.
ENERGY
W.W.
ENERGY
SYJ OIL &
GAS,
INC.
SYJ OIL &
GAS, INC.
SYJ OIL &
GAS, INC.
SYJ OIL &
GAS,
INC.
CUNNINGHAM,
H. T.,
TRUSTEE
LA VERNIA
OIL CO.
LA VERNIA
OIL CO.LA VERNIA
OIL CO.
LA VERNIA OIL
CO.LA VERNIA
OIL
CO. LA VERNIA OIL CO.
LA VERNIA
OIL
CO.
BLACK JACK WELL
SERVICE,
INC.
BLACK JACK WELL
SERVICE, INC.
BLACK JACK
WELL SERVICE,
INC.
BLACK JACK WELL
SERVICE, INC.
W D
WELL
SERVICE
W D WELL SERVICE
LA VERNIA
OIL
CO.
LA VERNIA
OIL CO.
LA VERNIA
OIL
CO.
LUNDELLS,
INC. LUNDELLS,
INC.
LUNDELLS,
INC.
DARICO OIL
& GAS CO.
EMBREY OIL
PRODUCTION CO.
DEAGEN,
BILL &
SONS, LTD.
AUTRY,
ALLEN
JARUTOWICZ, HAROLD
JARUTOWICZ,
HAROLD
METCO OIL
CORPORATION
METCO OIL CORPORATION
TEXAS COASTAL RESOURCES
LLC
TEXAS COASTAL
RESOURCES LLC
METCO OIL
CORPORATION
METCO OIL CORPORATION
METCO OIL
CORPORATION
METCO OIL
CORPORATION
METCO OIL
CORPORATION
METCO
OIL CORPORATION
METCO
OIL
CORPORATION
SEACO PRODUCTION
SEACO
PRODUCTION
SEACO
PRODUCTION
GEOMEG ENERGY
OPERATING
CO., LLC
AUTRY,
ALLEN
TEXAS
COASTAL RESOURCES LLC
SEACO
PRODUCTION
SEACO
PRODUCTION
SEACO PRODUCTION
METCO
OIL CORPORATION
T & T OIL CO.
LA VERNIA
OIL
CO.
LA VERNIA OIL
CO.
LA VERNIA OIL CO.
LA VERNIA
OIL CO.
EMBREY OIL
PRODUCTION
CO.
EMBREY OIL
PRODUCTION CO.
BJT OIL
COMPANY,
INC
BJT OIL
COMPANY,
INC
LT OIL
LLC
LT OIL
LLC LT OIL
LLCLT OIL
LLC
LT OIL
LLC
EMBREY
PRODUCT
CO.EMBREY OIL
PRODUCTION
CO.
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
TEXAS COASTAL
RESOURCES LLC
GLENCO
OIL & GAS
COMPANY
SEACO
PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
SEACO PRODUCTION
LT OIL
LLC
LT OIL
LLC
LT OIL
LLC
LT OIL LLC
LT OIL
LLCLT OIL
LLC
LT OIL
LLC
H. & J.
DRILLING
COMPANY
EMBR
PRODU
CO
CASTILLO
OIL
COMPANY LLC
CASTILLO
OIL COMPANY LLC
T & T
OIL CO.
JARUTOWICZ
OIL
COMPANY
SEGURO WELL
SERVICE,
INC.
TRIPLE 3H
ENERGY, LLC
TRIPLE 3H ENERGY,
LLC
TRIPLE 3H
ENERGY, LLC
TRIPLE 3H
ENERGY, LLC
STELLER ENERGY
& INVESTMENT CORP
STELLER ENERGY &
INVESTMENT CORP
STELLER ENERGY &
INVESTMENT CORP
STELLER
ENERGY &
INVESTMENT CORP
STELLER ENERGY &
INVESTMENT CORP
GLENCO
OIL & GAS
COMPANY
G & K
OPERATING,
LLC
G & K
OPERATING,
LLC
METCO OIL
CORPORATION
CALTEX
ENERGY
CO.
EMBREY OIL
PRODUCTION
CO.
EMBREY OIL
PRODUCTION CO.
WOLFE OIL
COMPANY
WOLFE OIL
COMPANY
WOLFE OIL
COMPANY WOLFE OIL
COMPANY
WOLFE
OIL
COMPANY
WOLFE OIL COMPANY
WOLFE OIL
COMPANY
WOLFE OIL COMPANY
WOLFE OIL
COMPANY
CASTILLO
OIL COMPANY
LLC
TRIPLE
3H ENERGY,
LLC
JOHANSON OIL
GEOMEG ENERGY
OPERATING CO., LLC
ROLLERT
CO.,
INC., THE
ROLLERT
CO.,
INC., THE
JOHANSON
OIL
JOHANSON OIL
JOHANSON
OIL
JOHANSON
OIL
GEOMEG ENERGY
OPERATING
CO., LLC
OFFSPRING
WELL
SALVAGE
PULLIN LEASE
SERVICE, INC.
PETROSE,
INC.
METCO OIL
CORPORATION
METCO
OIL
CORPORATION
LYNCH, WILBUR
WALDO,
ESTATE OF
LYNCH, WILBUR
WALDO,
ESTATE OF
LYNCH,
WILBUR WALDO,
ESTATE OF
LYNCH, WILBUR
WALDO,
ESTATE OF
LYNCH,
WILBUR WALDO,
ESTATE OF
LYNCH, WILBUR
WALDO,
ESTATE OF
LYNCH,
WILBUR WALDO,
ESTATE OF
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.
GRAMMER, JOHN,
OIL ACCOUNT
GRAMMER,
JOHN, OIL
ACCOUNT
GRAMMER,
JOHN, OIL
ACCOUNT
GRAMMER,
JOHN, OIL
ACCOUNT
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.GAUNTT, INC.
GAUNTT, INC.
GAUNTT,
INC.
GAUNTT,
INC.GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT, INC.
GAUNTT,
INC.
GAUNTT,
INC.
GAUNTT, INC.
GAUNTT,
INC.
GAUNTT,
INC.
MATTKE, PAUL
MATTKE,
PAUL
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH NATURAL
GAS,
INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH NATURAL
GAS,
INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT
WORTH NATURAL
GAS, INC.
FORT WORTH
NATURAL
GAS, INC. FORT WORTH
NATURAL
GAS, INC.FORT WORTH
NATURAL
GAS, INC.
FORT WORTH NATURAL
GAS,
INC.
FORT WORTH
NATURAL
GAS, INC.
FORT WORTH
NATURAL GAS, INC
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS, INC.
FORT WORTH
NATURAL GAS,
INC.
FORT WO
NATURAL
11. 9
L e a s e L o c at i o n s
Existing Wells
Project Wells
LEGEND
12. S t r u c t u r e M a p
Bexar County
Atascosa County
DeWitt County
Gonzales County
Frio County
Goliad County
Medina County
Wilson County
Karnes County
Victoria County
Guadalupe County
Lavaca County
Comal County
Bee County
Caldwell County
Fayette County
McMullen County
Live Oak County
La Salle County
Bandera County
Kendall County
Refugio County
Kerr County Hays County
Bastrop County
Jackson County
Calhoun County
Webb
Frio
Kerr
Duval
Uvalde
Bee
Bexar
Zavala
Dimmit
Kimble
La Salle
Medina
Travis
Lee
Real
DeWitt
Lavaca
Hays
Goliad
Atascosa
Wharton
Fayette
Edwards
Gillespie
Llano
Live Oak
Wilson
McMullen
Victoria
Bastrop
Gonzales
Nueces
Colorado
Austin
Karnes
Blanco
Refugio
Jackson
Grimes
Matagorda
Bandera
Mason Williamson
Kendall
Comal
Milam
Waller
Maverick
Burleson
Burnet
Jim Wells
Kinney
Brazos
Guadalupe
Caldwell
San Patricio
Sutton
Washington
Fort Bend
Calhoun
Aransas
Harris
Menard
Kleberg
Brazoria
Montgomery
Walker
Calhoun
Calhoun
Schleicher
Aransas
Robertson
Nueces
Bell
Kleberg
Calhoun
Calhoun
.
0 38,000 76,000 114,000 152,00019,000
Feet
Scull & Grun Leasehold
Eagle Ford Shale
DRY GAS
OIL
WET GAS/ CONDENSATE
13. 11
3 - D S c h e m at i c
Navarro Production
Joint Venture Multiple
Horizons Future
Redrill Potential
Montgomery
Willingham
Carrizo
Poth
Navarro
Anacocho
Austin Chalk
Buda
Eagle Ford
14.
15. 13
h i s t o r y o f t h e P r o j e c t
Wilson County:
Wilson County (N-16) is on the upper coastal plain of South Texas. The county seat and largest city is Floresville, which is thirty
miles southeast of San Antonio. Four major highways serve the county, U.S. highways 87 and 181 and State highways 97 and
123. Transportation needs are also served by the Southern Pacific Railroad. Wilson County covers 809 square miles with an
elevation of 300 to 600 feet above sea level. The terrain is nearly flat to gently undulating, surfaced by deep loamy soils with
clayey subsoils that support grasses, mesquiteqv, blackjack, post oak, live oak, thorny shrubs, and cacti. Between 31 and 40
percent of the land in the county is considered prime farmland.
Oil was discovered in the Navarro Formation in 1941, but only one well was in production in 1946. Since that time, however, the
oil business has expanded gradually. Between 1941 and January 1, 1991, the county produced 37,111,560 barrels of crude oil.
In 1990 production of crude was 1,973,734 barrels, and in the early 1990s oil, gas, and oilfield services still formed an important
segment of the county’s economy. Between 1890 and 1930 the population of Wilson County grew steadily.
Leading industries included agribusiness, oil and gas field services, and the manufacture of structural clay products and
fabricated metal plate work.
Wilson County (809 sq miles) is in the liquids-rich Eagle Ford Shale Play of South Texas. Generally, drilling activity targets the oil
window of the Eagle Ford in the southeastern half of the county where well economics are enhanced by the production of oil.
The formation is found at depths between 4,000 ft and 8,000 ft as you move southeast through the county. The deeper portions
of the county are considered more prospective as the formation is also thicker in this area of the play.
The county’s oil and gas production previously exploited the Austin Chalk and conventional formations, but recent activity has
shifted to the Eagle Ford Shale Oil Play.
16.
17. 15
h i s t o r y o f t h e P r o j e c t ( c o n t i n u e d )
Major Operators in Wilson County
EOG Resources and Marathon Oil are the largest producers with operations targeting the Eagle Ford Shale Oil Play.
EOG Resources’ well results are very positive as the company has reported IPs at its Borgfeld #3H and Casares #1H leases
averaged initial production rates (IP rates) in excess of 800 bbls/d and almost 400 mcfd.
Marathon Oil also has a considerable operated acreage position in the county.
Oil and gas have been produced in every township in Wilson County. Oil was first discovered in the county near Neodesha in
1890 (Haworth, 1908, p. 24). Neodesha was supplied with gas on Ju1y 4, 1894. More than 40 wells were producing gas in this
area by the close of 1894. Oil and gas were produced near the towns of Fredonia, Benedict, and Buffalo in 1900. Neodesha,
Altoona, Fredonia, Buffalo, and Vilas are nearly surrounded by producing areas. The oil and gas resources of Wilson County
were described by Moore and Boughton (1921); and the subsurface geology of the county was described by Stryker (1925).
These reports are useful both in reference to early developments and in possibilities of new discoveries or in reference to water
flooding in present fields.
In 1952, 67,271 barrels of oil were produced in Wilson County. Gas production recorded for 1952 was 185,316 thousand cubic
feet.
18.
19. 17
T h e P r o j e c t
Navarro Phase 1 Joint Venture – Wilson County, Texas:
Introduction: Poplar Royalty LLC has recently acquired an oil and gas lease covering a 1,073-acre tract, which is out of a larger
oil and gas lease that was taken in 1925 and covered 1,920 acres of land.
Lease Production History: The previous lease owner returned from WW2 to the Seguin, Texas area and began working for
Union, exploring for Austin Chalk oil. In 1948, he helped discover the La Vernia field, and went on to own 75% of the
30,000 acre Navarro field. Over the years, his projects grew bigger and bigger, from the Woodbine of East Texas to the
West Texas Permian Basin to the Eagle Ford Shale and finally the Bakken Shale. At 90 year old, he decided he was ready
to retire, and in his own words, “I just ran out of time.” He had already sold all his oil rights, except for the Navarro, which
was the last of his personal oil projects. Even though he kept this lease as a personal development project, he had been
working with a local operator over the last 4 years, ENERGON³, to produce and rework several of his other properties. Due
to the like minded approach to developing oil wells on both a personal and professional level, he felt that it was time to
turn over the reigns of one of the most sought after leases in the South Texas Navarro field to someone he trusted and
knows will develop it to its highest potential, and he therefore afforded ENERGON³ ( Russ Montgomery) the opportunity
to purchase the lease.
Productive Zones: Based on electric log and core analysis we believe there are 8 productive zones in these wells. The first zone
is a shallow Montgomery/Willingham occurring at just a few hundred feet. The core analysis indicates the zone to be oil
productive. Following are the Carrizo, Poth, Navarro, Anacocho, Austin Chalk, Buda, and Eagle Ford zones. All of which
have a long track record of being commercially producible.
20.
21. 19
P r o v e n S u c c e s s
ENERGON³ has extensive experience in both drilling new wells and reworking existing wells in South Texas, with special focus in
Wilson and surrounding counties. Their new-drill wells have an average IP of 50 BOPD. (barrel of oil per day) Currently, they hold
the field record for well production rates. (IP) Additionally, the ENERGON³ team has decades of experience in secondary well
production with both water and gas injection techniques. Both have proven to be very effective ways of producing significantly
more oil from older wells.
ENERGON³ has worked closely with industry insiders to
develop some of the best rework programs designed to
stimulate existing wells. They are able to achieve such
high success rates and significant production increases
with their proprietary chemical treatment process. As
shown in the graph, the Ward well, which is only 4 miles
from the joint venture wells, presents a good example of
that success by taking a non-commercially productive
well and turning it into a 50 BOPD producer (IP) in the
Navarro formation.
Ward Well
60
50
40
30
20
10
0
BarrelsofOilperDay
Production before rework Production after rework
22.
23. 21
P r o j e c t S u m m a r y
Key Project Highlights
• Existing storage and pipeline infrastructure already in place, requiring relatively minimal overhaul and additions.
• Developmental project of Offset drilling to proven reserves.
• 4 Wells to be drilled to the productive Navarro Formation.
• Proof of Concept to Navarro formation achieved in multiple ENERGON³ operated Leases
• Estimated Pulling Cost at 200 bopd of $2.75 per barrel
• ENERGON³ has proven Well optimization expertise
• Lease currently producing 11 bopd. As part of the project, in addition to the new drills these will be optimized to an
anticipated increase to between 16-24 bopd.
• The lease has its own water disposal well, thus substantially reducing production expenses.
• Prolific production - Lease has been commercially productive since being developed in the 1950’s
NOTE: Even when factoring in the lowest oil price from the last 11 years, $35.12 per barrel, the return of principle is still less than 36
months.
24. I n c o m e C o n v e r s i o n
Figures are calculated at
a cost of $120,000 per
unit, earning a 2.33% Net
Revenue Interest in the
eight (8) wells. Figures are
rounded to the nearest
dollar amount.
This economic analysis
is a theoretical model
based on historical data
and current market
conditions; it in no
way guarantees or
suggests guarantees
concerning the outcome
of program participation.
Actual profits resulting
from participation
in the program will
vary over time due to
changing economic and
unforeseen geologic and
or engineering events
outside of the company’s
control.
Note: The original
investment is still in the
wells and the reserve
value of the NRI will most
likely retain its present
value or increase in the
future. These wells can
produce for many years
and some are still in
production after 50 years.
25. 23
I n c o m e C o n v e r s i o n
Income projection
showing the 10 year
average Crude Price of
$81.68 per barrel (Data
taken on 10/09/2015)
NOTE: None of the
Income Conversion
tables take into account
the tax savings of both
the 100% tax write off of
the initial investment or
that 20% of the profits
are income tax free every
year. (It is recommended
that you verify these tax
savings with your personal
CPA or tax advisor)
26. I n c o m e C o n v e r s i o n
NOTE: This income
projection at the low
price of the last
11 years shows the
economic viability of the
project with a re-turn of
principle at mid-point
expected production in
less than 36 months.
27. 25
Ta x A d v a n ta g e s
Oil & Gas Investments
Congressional Incentives Encourage Domestic Petroleum Development: Oil and Natural gas from domestic reserves
helps to make our country more energy self-sufficient by reducing our dependence on foreign imports. In light of this,
Congress has provided tax incentives to stimulate domestic natural gas and oil production financed by private sources.
Drilling projects offer many tax advantages and these benefits greatly enhance the economics. These incentives are not
“Loop Holes” — they were placed in the Tax Code by Congress to make participation in oil and gas ventures one of the
best tax advantaged investments.
Intangible Drilling Cost Tax Deduction: The intangible expenditures of drilling (labor, chemicals, mud, grease, etc.) are usually
about (65 to 80%) of the cost of a well. These expenditures are considered “Intangible Drilling Cost (IDC)”, which is 100%
deductible during the first year. For example, a $100,000 investment would yield up to $80,000 in tax deductions during
the first year of the venture. These deductions are available in the year the money was invested, even if the well does not
start drilling until March 31 of the year following the contribution of capital. (See Section 263 of the Tax Code.)
Tangible Drilling Cost Tax Deduction: The total amount of the investment allocated to the equipment “Tangible Drilling
Costs (TDC)” is 100% tax deductible. In the example above, the remaining tangible costs ($25,000) may be deducted as
depreciation over a seven-year period. (See Section 263 of the Tax Code.)
28.
29. 27
Ta x A d v a n ta g e s ( c o n t i n u e d )
Active vs. Passive Income: The Tax Reform Act of 1986 introduced into the Tax Code the concepts of “Passive” income and
“Active” income. The Act prohibits the offsetting of losses from Passive activities against income from Active businesses.
The Tax Code specifically states that a Working Interest in an oil and gas well is not a “Passive” Activity, therefore,
deductions can be offset against income from active stock trades, business income, salaries, etc. (See Section 469(c)(3) of
the Tax Code.)
Small Producers Tax Exemption: The 1990 Tax Act provided some special tax advantages for small companies and individuals.
This tax incentive, known as the “Percentage Depletion Allowance”, is specifically intended to encourage participation
in oil and gas drilling. This tax benefit is not available to large oil companies, retail petroleum marketers, or refiners that
process more than 50,000 barrels per day. It is also not available for entities owning more than 1,000 barrels of oil (or
6,000,000 cubic feet of gas) average daily production. The “Small Producers Exemption” allows 15% of the Gross Income
(not Net Income) from an oil and gas producing property to be tax-free.
Lease Costs: Lease costs (purchase of leases, minerals, etc.), sales expenses, legal expenses, administrative accounting, and
Lease Operating Costs (LOC) are also 100% tax deductible through cost depletion.
Consult Your Tax Advisor: The above examples are for general information only and are not intended as individual tax advice.
Consult your personal tax advisor concerning the applicability and effect of oil and gas investments on your personal
tax situation. This information was current as of the date this document was first printed. However, tax laws change from
time to time and there can be no guarantee of the interpretation of the tax laws.
30.
31. 29
K e y P e r s o n n e l
As the operator, ENERGON³ has a direct presence in the target area. Their intimate knowledge of this region can create
significant advantages for our program. Their staff and consultants, with years of field experience, provide a direct benefit for
investors. Their participating agreements limit the investor financial commitment to the amount of the fixed, turnkey cost.
ENERGON³, LLC is a Texas Limited Liability Company.
Russell Montgomery, Jr., Program Manager: Mr. Montgomery serves as Manager and Lead Engineer for ENERGON³. He has
served as the Chief Operating Officer for multiple companies with oil and gas leases in East Texas, South Texas, and the Texas
Gulf Coast. He has supervised all aspects of drilling and field operations; hired and trained field personnel and supervisors; and
directly participated in the analysis and acquisition of new oil and gas development projects in those areas. He has managed
20 mobile field locations as Director of Operations of the Deep East Texas Region of Geosearch Logging, Inc. and became
proficient in log evaluation and production analysis. Mr. Montgomery has a BA in Business Administration from the University of
Texas and a BS in Geology at Texas A&M University. Mr. Montgomery brings with him the knowledge and ability to increase the
productivity and profitability of oil drilling and recompletion projects while reducing costs by utilizing efficient and proprietary
field processes and operations.
Raymond Ward, Chief Drilling Engineer—Torchwood, Inc.: Mr. Ward has
27 years of experience in drilling, work over, and completion in the Navarro
Formation and the Poth Formation in Guadalupe, Wilson, and Caldwell Counties
with 3J Energy and La Vernia Oil. Mr. Ward currently serves as President of
Torchwood, Inc., a drilling and work over group. Mr. Ward brings with him intimate
knowledge of the area and of the oil-bearing formations located within. He is a
welcome addition to the team and his involvement bodes well for the success of
this project.
Torchwood 1 Drilling Rig – Our main drilling rig features
a 71 foot derrick and twin 1000 horsepower engines
from Caterpillar.
32.
33. 31
O f f e r i n g S u m m a r y
Joint Venture Name: Navarro Phase 1 Joint Venture
Manager of Joint Venture: Navarro Phase 1 LLC will serve as the “Joint Venture Manager”. Joint Venture Manager’s address is
6500 River Place Blvd., Bldg. 7, Suite 250, Austin, TX 78730.
Joint Venturers: Those persons whose Subscriptions to purchase Units of Joint Venture Interest (“Units”) offered hereby are
accepted by the Joint Venture Manager in an amount aggregating $2,520,000 (21 Units) who are subsequently admitted
to the Joint Venture.
Joint Venture Objective: The primary investment objective of the Joint Venture is the acquisition of 100% of the Working
Interest, which is a 49% Net Revenue Interest in 4 existing oil wells and 4 new oil wells to be drilled on oil producing
leases in Wilson County, TX. The Joint Venturers will be entitled to those tax advantages, if any, which may accrue them
as a result of such activites by the Joint Venture.
Subscription for Interests: The subscription price for each Unit is $120,000 payable upon subscription.
Offer and Sale of Interests: The offering period for the Units will terminate on July 20, 2016, or earlier if all interests are sold. At the
sole discretion of the Joint Venture Manager, the offering period may be extended for up to an additional 60 days.
Term of the Joint Venture: The Joint Venture was organized under the laws of the State of Texas as of May 4, 2016, and shall
continue for the duration of the project, unless sooner terminated or upon the occurrence of any events of dissolution
as described in the Joint Venture Agreement.
Subscription Documents: Each subscriber shall return an executed set of Subscription Documents along.
Capitalization: The Joint Venture will have $2,545,454 in available funds if the full subscription amount is raised. Of the full
amount, $2,520,000 will be contributed by the Joint Venturers and $25,454 by the Joint Venture Manager.
Joint Venture Manager’s Compensation: The Joint Venture Manager and its affiliates will receive compensation of costs and
expenses that may be significant in the aggregate.
34.
35. 33
O f f e r i n g S u m m a r y ( c o n t i n u e d )
Proceeds: All funds representing Subscriptions from the Joint Venturers will be placed in a segregated account in the name of
Navarro Phase 1 LLC, Segregated Account at American Bank of Commerce, Austin, TX. There is no minimum subscription
amount. If all units are not fully subscribed by end of offer period, the company has the option to extend for a further
60 days. In the event of all units not being fully subscribed after said extension, the Joint Venture Manager will either
purchase the outstanding unsold units itself, or return investor funds.
Operator of Record: The operator of record shall be ENERGON³, its successors or assigns, pursuant to a Standard Form of
Operating Agreement.
Turnkey Drilling Agreement: The Joint Venture will enter into a Turnkey Drilling and Completion Agreement with ENERGON³
to purchase and re-work 4 existing wells, and to drill, equip, and complete 4 new wells in Wilson County, TX. ENERGON³
or its assignee, will act as operator of record of the Joint Venture wells pursuant to the terms of a Standard Operating
Agreement.
Assessments: The Joint Venture may be assessed by the
Joint Venture Manager for costs associated with
drilling and completion attempts on additional wells,
including operational costs of the Joint Venture
wells. Failure to pay will result in a 200% penalty. Said
penalty to be paid from production revenues.
Risk Factors: There are substantial risks associated with the
purchase of an interest in the Navarro Phase 1 Joint
Venture.
Additional Documents: A copy of Form AAPL610 Sample
Standard Operating Agreement will be provided to
prospective investors upon request.
Project Name: Navarro Phase 1 Joint Venture
Project Location: Wilson County, Texas
Number of Wells: 4 new drills and 4 rework wells
Objective Leases: S & G Lease
Turnkey Cost: $2,520,000
Number of Units: 21
Unit Cost: $120,000
Working Interest: 4.71% - Per Unit
Net Revenue Interest: 2.33% - Per Unit
36. F i n a n c i a l s
USE OF PROCEEDS
Subscription proceeds shall be used as follows:
SOURCE OF FUNDS AMOUNT PERCENTAGE
Joint Venture Manager’s Capital Contribution $25,454 1%
Joint Venturers’Capital Contributions $2,520,000 99%
TOTALS: $2,545,454 100%
USE OF PROCEEDS - ESTIMATED AMOUNT PER UNIT TOTAL AMOUNT PERCENTAGE
Purchase of Leases & Existing Wells $7,200 $151,200 6%
Geology, Surveying, & Engineering $12,000 $252,000 10%
Drilling & Completion Costs $73,200 $1,537,200 61%
Site Preparation $9,600 $201,600 8%
Management & Administrative Fee $12,000 $252,000 10%
Legal, Accounting, Printing, & Organization Costs $6,000 $126,000 5%
TOTALS: $120,000 $2,520,000 100%
Use of Proceeds does not include the Joint Venture Manager’s Capital Contribution.
All figures used represent our best estimate and are subject to adjustment.
COMPENSATION
The intent of this table is to inform the prospective investor of the types and amounts of compensation in which the Joint Venture
Manager will receive from the Joint Venture.
ESTIMATED COMPENSATION JOINT VENTURE MANAGER’S COMPENSATION
Management & Admin. Fee equal to 10% of Capital Contributions. $252,000
Legal, Accounting, Printing and Organization Costs associated with the Joint Venture
equal to 5% of the Capital Contributions.
$126,000
A 26% Net Revenue Interest in each of the Joint Venture Wells. Indeterminate
37. 35
PROGRAM DISTRIBUTION
This table describes the percentage allocation of the Working Interest and the Net Revenue Interest in the ENERGON³ JV Wells.
OWNERSHIP WORKING INTEREST NET-REVENUE
Joint Venturers 100% 49%
Poplar Royalty LLC 0% 13%
ENERGON³ LLC 0% 13%
Landowner & Overriding Royalty Interest 0% 25%
TOTALS: 100% 100%
Each of the Joint Venturers’Units represents approximately a 4.71% Working Interest and a 2.33% Net Revenue Interest in each of
the oil producing wells. Navarro Phase 1 LLC, the Joint Venture Manager, purchases a 1% interest in the Joint Venture.
PARTICIPATION IN COSTS AND REVENUES
This table describes the percentage allocation of Joint Venture costs and revenues between the Joint Venturers and the Joint
Venture Manager.
CAPITAL EXPENDITURES JOINT VENTURERS
JOINT VENTURE
MANAGER
Purchase of Leases 99% 1%
Engineering, Equipment, and Completion Costs 99% 1%
Legal, Accounting, Printing and Organization Costs 99% 1%
Management Fee 99% 1%
All Other Costs 99% 1%
REVENUES
Revenues from Oil Wells 99% 1%
38.
39. DISCLAIMER
This Executive Summary should not be construed as an offer to sell a Security. Such an offer
can only be made by furnishing an offeree with a complete Private Placement Memorandum
obtained from the issuer of such securities.
An offering of any joint venture interests can be made only through the Company’s Private
Placement Offering Memorandum. Each prospected purchaser must execute a Purchaser
Suitability Questionnaire before becoming an Investor.
This Executive Summary is simply a brief recitation of the information necessary to reach an
informed understanding of the nature of the investment opportunity and does not contain all
of the facts or the cautionary information contained in the Private Placement Memorandum.
