Magnum Producing LP

The Taffy Prospect targets multiple shallow Miocene sands, with great nearby production, in an un-produced, 700 plus acre, 3 way up-thrown closure. The 3D delineated 75 foot trapping fault is found in 2 wells. One of those wells, about 1200 feet from the proposed well, has about 7 feet of gas log show in the lower most targeted sands. Just up-thrown on the same fault, 2 more anomalous amplitudes can be tested. The PSTM, AVO, and Energy Absorption anomalies can be correlated to the productive sands in a 2.6+ BCF – 1217 BO well less than 1 mile away.

The prospect is located approximately 3 miles west of Sargent, in Abstract 71 of Matagorda County, Texas. The Magnum acreage position is in an area with prolific production from the entire Miocene and Frio sections. Magnum is proposing a 6500 foot test well with estimated total potential reserves of around 2 BCFE.

In many of the areas wells, the bulk of the production comes from sands of less than 10 feet thick and does not display anomalous 3D attributes. The analogy well with 2.6+ BCF and 1217 BO total production comes from sands less than 10 feet thick. This would be under seismic tuning for the target depths and frequency of the 3D data. This leads me to believe that the estimated potential of this 700 plus acre, 3 way up-thrown closure could be much more. Reserve estimates are based on 24 feet of gas sands, 100 acre anomalies and ~850 Mcfg per acre foot.

Acreage: 150 acres leased – 72% NRI delivered.

Leasehold - G&G Cost:

$100,000 to 8/8ths prospect fee

Well Cost: estimated, 6500 foot TD, dry hole cost with location: $275,000.

Estimated Completion costs: $150,000

Terms of Sale: 25% carry on all costs prior to casing point including prospect fee

Contact Robert Kust, 713-462-2388, ext. 115, rkust@logixonline.com.