Termo and our Industry Loses a Longtime Friend, Harry Ptasynski

December 23, 2013

On December 19^thTermo lost a longtime friend and partner, Harry Ptasynski of Casper, Wyoming. Harry was a world class geologist, having entered the business after graduating from Stanford in 1950. Harry loved geology and the oil business, and often remarked that he felt he never worked a day in his life after leaving school - it was that much fun! He was a respected member of many geological and producers’ associations, an active officer of the Independent Petroleum Association of America and a much admired member of the US independent oil and gas industry.

Harry was a partner in most of Termo’s projects of the last 25 years. He would support our project analysis with his own geological work and he was not shy about expressing his interpretations. His desire was to help us better understand the various properties in ways that could lead to developing increased production.

We met Harry about 30 years ago when Termo drilled an exploratory well in North Los Angeles County. This was the North Placerita Prospect as developed by Henry Walrond (another great geologist) from Bakersfield. Henry brought Harry to the project as a partner for us. The noncommercial well encountered a series of problems. A second well was drilled, which was a dry hole. Through all these issues Harry was always supportive and stood with us without complaint. Following this difficult start, Harry was convinced of our integrity and desire to succeed with our projects. He expressed interest in joining in our acquisitions and we started acquiring properties from some of the majors and he willing joined in, typically taking about 5% of each acquisition. While not a huge percentage, his geologic support and reviews made him an invaluable partner.

In a recent letter to Termo, Harry shared some of his thoughts about being involved with us over the years: “…in my 60 years of being in the oil business, I have never enjoyed a relationship with any partner as much as I have the one with you and Termo over the past more than 20 years.” Harry really had a lot of fun working with Termo and we really enjoyed his friendship. He was a true gentleman and we will miss him dearly.

Re-evaluation of Complex Geology in Existing Fields

Louisiana

The axiom “the best place to find oil is where it already exists” continues to be tested in Termo’s position in the Section 28 Field of Louisiana. Building off of the success of the Bull Moose Prospect in 2012 Penta Resources of Lafayette, Louisiana and Termo are once again partnering to test the axiom. This time the Keystone Prospect will drill through the complex faulting that can be found in these sub-surface isolated dome like structures that are characteristic of this part of Louisiana to test multiple oil and gas sands.

The test is a 13,500’ MD well on the north flank of Section 28 Field to recover reserves in the Stuart A-B, Bol mex 2 and Bol mex 4 Sands which produce in adjacent fault blocks. If successful in the development phase, an exploration tail could be drilled after protection pipe is set to test the Nonion struma and Nodosaria B Sands. The trap is a fault wedge between Faults A and B-1. The deeper exploration tail crosses Fault B-1 testing a fault wedge between Faults A and B. The Keystone East Prospect will be tested with a new directional-well (1200 ft. kick) from the Termo SMLC 16 location. Both the Keystone East and Keystone Prospects are undrilled fault blocks on the prolific north flank of Section 28 Field. Fault A, the key trapping fault, is controlled by eight subsurface fault picks. Fault B-1, the complimenting trapping fault, is controlled by four subsurface points. Both faults are seen on the reprocessed 3D data. The updip wells from Faults B and B-1 have under-produced indicating these wells are fault separated from downdip reserves. Amoco permitted but never drilled two wells which would have tested the Keystone East Prospect. The Bol mex 4 Sand has large downdip oil production from a stratigraphic reservoir. A substantial upside lies in the Nodosaria B Sand which is interpreted to be a turtle structure with a thick amplitude anomaly.

The estimated reserves associated with a successful test like this are significant. If the entirety of the project is successful, Penta’s analysis suggests up to 5 MMBO and 29 BCF. The affirmation of a correct interpretation of reprocessed 3D seismic data can boost confidence in further analysis of other overlooked or under-produced hydrocarbon zones. Other benefits of this kind of in-field drilling and re-evaluation are the opportunity to greatly lessen the environmental impact of new drilling by utilizing single existing locations for multiple production targets. This is important when considering the cost of construction and reclamation in the marsh ecology in this part of Louisiana and it provides Termo and Penta a great opportunity to balance the need for domestic hydrocarbon energy production and environmental protection.

More information about this project is available by contacting Termo or Penta Resources.

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