Multi-Phase Development Plan

Some of ESG Energy’s Phase One projects include:

• “Lavaca Canyon” - The initial leasing and drilling of 8 of our 40 initial Wilcox prospects in the Lavaca County area of Central Texas. These prospects are based on our 85 sq. mile proprietary 3-D data with excellent nearby down-dip productive analogs. At an average completed cost per well of $2,000,000 and anticipated combined reserves of 100 BCFG (with associated liquids in the 8 MMBO range) for the first 8 wells, these quasi-development locations should prove advantageous to the reserve and revenue base. Estimated gross reserve value: $400Mil + $640Mil *.

• In addition to the first 8 wells, we have identified another 30 attractive prospects in the area with anticipated combined reserves of 350 BCFG (with associated liquids in the 25 MMBO range)

• “Beauregard” – This field, located in Beauregard Parish, is already partially owned by the partners.  The opportunity exists to acquire the remainder with simple leases at a low price.  Based on calculations from 3rd party reserve reports, logs taken from the wells, and in-house proprietary data, the field has 14 reservoirs with hydrocarbons present and at least three reservoirs that have produced in the area that have not yet been penetrated in the target fault block. The reserves are reported to be 50 BCFG (with 2.7 MMBO). 

• The field is currently under-producing due to mechanical failures.  Additional wells and workovers will be required.

• Estimated gross reserve value: $200Mil + $216Mil * 

• “High Reserve Shallow Gas Prospects” – The initial leasing and drilling of 60 of our 300 plus available high reserve shallow gas prospects in the Southeast Texas Frio, Jackson & Yegua sands north of Houston. These prospects are based on our vast 2D seismic data acquired and reprocessed using modern reprocessing techniques by the partners.

• The type curve for them is consistent at 400-500 MCFD, 1.0-2.0 BCFG, $500K Drill & Complete, and a 93% historical success rate so far.

• Estimated gross reserve value: $240Mil * (at a conservative 1.0 BCF/well)

* - The above snapshot valuations are based on a price deck of $4.00/MCFG and $80/BO.