A Positive Year

January 15, 2020

Overall, 2019 was a positive year for The Termo Company, with several exploration and recompletion projects. The Termo Operations Team was busy in California and Louisiana and we also expanded our non-operated interest in Colorado and Oklahoma. Some highlights:

Drilled a commerically successful step-out well in Fresno County, CA
Drilled a dry-hole in Kern County, CA (not going to succeed if you don't try)
Recompleted a highly productive well in the Aliso Canyon Field, Los Angeles County, CA
Aquired a neighboring property in our operating area of the Mountain View Field, Kern County, CA and we are currently looking at possible improvements
Successfully reworked wells in our Section 28 Field in St. Martin Parish, Louisiana, resulting in a gain of ~80 bopd
Gained from a successful non-operated position in a development project in Colorado resulting in the completion of multiple Niobrara and Codell wells
Participated in a highly successful Washita County, OK, horizontal well that will lead to the drilling of several offset wells

As 2019 drew to a close, we finalized our 2020 plans for over $7 million in exploration, development, and recompletion projects in our areas of interest.

Termo continued to maintain (and will continue in 2020) a conservative posture while enjoying a strong balance sheet. We benefited from strategically hedging and increased focus on improving operations of marginal properties.

We closed out the year with no safety or lost-time incidents, and we continued to enjoy the support and hard work of a great and dedicated staff.

Here's to continued success in 2020!

Oil and Gas Sands Test in St. Martin Parish, Louisiana

South Louisiana

Termo is partnered with Penta Resources of Lafayette, Louisiana in the Bull Moose Prospect to test the reserve potential of the Marg Tex 2, Stuart A and Bol Mex 2 sands. The well has a proposed TVD of 11,500’ and is located on the north flank of the Section 28 Field. In adjacent fault blocks are the Amoco St. Martin Land #9 and Stanolind St. Martin Land #5 wells. The Amoco #9 has produced 1.19 BCF and 1,100 MBO and the Stanolind #5 has produced 5.90 BCF and 580 MBO. The fault trap is bounded laterally by faults “R” and “S” and updip by Superior St. Martin Land #B-1 and Cypress Stuart #1 with gas pay in the Bol Mex 2A sand. Control for the faulting and salt placement is from reprocessed 3-D seismic data and subsurface well control.

The wells penetrated the Marg Tex sands up-dip from the apparent pay zone in the Amoco SML #20 well. In the up-thrown fault block, the Amoco SML #21 well is actively producing from the Marg Tex 2A sand. Downthrown on Fault T is the Amoco St. Martin Land #16 which is actively producing the Marg Tex 2A sand. In the fault block to the east and on strike, the Amoco St. Martin Land #7, #14 and #19 wells are productive in the Marg Tex 2 sand with cumulative production of 144 MBO and 208 MMCF.

Reserves Summary:

Two cases were run with three sands productive by virtue of the down-dip or adjacent production, a likely case with the Marg Tex 2 having 48 MBO, and 144 MMCF, the Stuart sand having 100 MBO and 250 MMCF and the Bol Mex 2 having 412 MBO and 889 MMCF for total potential reserves of 312 MBO and 639 MMCF. An upside reserve estimate calculated for all three sands is 544 MBO and 1,582 MMCF. The proposed 11,500’ well is estimated to cost $1.2 million dry hole or $2.4 million dry hole if a liner over the Het sand is required. The completed well would cost an additional $720,000 or $1.92 million for a completed well if the liner is not required.

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