1. Kansas Next Step 2007 Seminar: New Technology, Seismic and Seismic Interpretation Hays, Kansas August 8-9, 2007 Kent F. Perry Gas Technology Institute

3. Unconventional Gas Growth Non-Arctic U.S. and Canadian Production Outlook 2003 NPC Study 0 5 10 15 20 25 30 2000 2005 2010 2015 2020 2025 Tcf ASSOCIATED CONVENTIONAL NONCONVENTIONAL 4 Tcf

4. Area of Drilling Activity Googleearth.com Niobrara Area of Activities

6. 8 3/4” open hole to 376 ft. 5 1/2” casing @ 376 cemented with 145 sacks neat cement Surface Estimated Cost Savings From Conventional Rig from 25% to 35% per well Conventional Well = $125,000 Microhole = $88,000 4 ¾” Open Hole to 1180 ft. 2 7/8” “ casing @ 1179’ cemented w/45 sacks Cement Niobrara Chalk Formation k = .002 md - .5 md Porosity = 20 -35% IP After Frac = 30 - 50 Mcf/d Microhole Well Completion – Goodland, Kansas Niobrara All Wells Fracture Stimulated

8. 1. Efficient Rig Mobilization 50 Feet

9. 2. Small Environmental Footprint 50ft 70ft

10. 3. Rapid Drilling ROP Range = 200 to 500 ft/hr First Wells May, 2005 Bit Design Change Project Wells October, 2005

11. PDC Bit Size: 4.75 inches 4. Good Hole Quality and Cement

12. 5. Rig Capable of Drilling, Logging, Running Casing, Cementing

14. 7. Low Noise - Low Emissions

15. 8. Mud Recycle, Minimum Cuttings and Zero Discharge if Required

17. 3100 Ft. Well Drilled in 19 Hours Allocation of Time Total = 19 Hrs.

19. Precision Replacing Horsepower 1960’s 1980’s 2000’s Nuclear Stimulation Massive Hydraulic Fractures Horizontal Wellbore Fracturing From Pinnacle Technology

20. $3.4 Billion Savings at 25% market penetration of shallow wells.