In August of 2018, Veracity Energy completed the #1 Ferguson Ranch well in the Lewis Sand. The well IP was 250-350 BOPD. Production was flat until the first week of October when the well went from no water to 100% water in 3-5 days. The well tested the sand 114’ high to downdip water-drive production that had 567 MBO cumulative production. What went wrong? The well had a bad cement job and the deeper, higher pressured and wet Frio 3 Sand broke through and stopped the Lewis Sand oil production. The well was plugged. Seven D O&G proposes to re-enter the #1 Ferguson well, do the repair work needed to the well bore and place the well back on production. Based on reservoir analysis and mapping there should be 570 MBO recoverable in the Lewis Sand and another 100 MBO recoverable in the overlaying Savage Sand.

Estimated Re-Entry Cost and Remediation                      $1,000,000
Land and G&G Cost                                                              $230,000
5% Carry & 17.5% BIAPO                                                 NRI 73%