Denex Petroleum Corporation

Daily Drilling Report

Well: Hodgkinson No. 1 Permit No.: 47-001-02886
Contractor: SW Jack Rig 14 Spud Date: September 11, 2007
District/County: Glade/Barbour State: West Virginia

Report Date: 10/17/2007 Report Time: 8:30 PM

Projected Operations: Flow back well overnight. Move Denex swab rig to location. Attempt to knock out baffles if well has died down. Prepare to swab as required. Move production unit and tank to location and hook up.

Wednesday, October 17, 2007
From: To: Description of Operations
5:45 AM 9:50 AM Universal arrived at 5:45 AM. Meeks Wireline arrived at 6:30 AM (late). Rigged up frac trucks and perforators. Tried to get down hole to perforate top section of bottom stage (Haverty & Elk). Truck had new wireline and coating would not go through flow tube in lubricator. Washed line with diesel. Finally reached bottom. Perforated Elk section with five shots (4,880-1', 2 shots; 4,771', 2 shots). Shots were 0.375".
9:50AM 10:45 AM Fractured Haverty and Elk with 15,400 lbs of 20/40 sand using 37,000 scf of Nitrogen (assist only). Formation had been previously broken down. Tried to get to 2 lbs./gallon. Formation locked up. Cut sand and flushed with treated water. Pumped 500 gallons of 15% HCl acid. Treated at an average rate of 25.8 bbls/minute and an average pressure of 3,217 (after reducing rate). ISIP was 1,860 psig. Five minute shut-in pressure was 1,800 psig. Total water pumped was 458 bbl (clean volume). Hauled one load of water.
10:45 AM 11:30 AM Perforated Benson and Riley with six shots in each zone. (4,020-4' and 3,868-72')
11:30 AM 12:05 PM Fractured Benson and Riley with 44,100 lbs of 20/40 sand using 81,000 scf of Nitrogen (assist only). Formation broke at 3,510 psig. Tried to get sand concentration to 3lbs/gallon. Formation locked up. Cut sand. Pumped pad of treated water. Started sand, and worked back to 2.5 lbs/gallon. Flushed with treated water. Pumped 500 gallons of 15% HCl acid. Treated at an average rate of 22.5 bbls/minute and an average pressure of 3,243. ISIP was 1,670 psig. Five minute shut-in pressure was 1,600 psig. Total water pumped was 458 bbl (clean volume). Hauled two loads of water.
12:05 PM 12:40 PM Perforated Speechley with fourteen shots in each zone. (2984-92'
12:40 PM 2:20 PM Consolidated water from six tanks to three tanks. Measured water. As sand schedules were reduced, more water was used. Hauled two additional loads of water.
2:20 PM 2:50 PM Fractured Speechley with 40,000 lbs of 20/40 sand (and no Nitrogen). Formation broke at 1,602 psig. Increased sand concentration from 1 lb./gallon to 1.5 lb./gallon to 2.5 lb./gallon. Pressure cllimbed to 3,650 psig. Decided not to increase sand concentration to 3lbs/gallon for fear of excessive pressure. Lower sand concentration consumed excessive water. Formation was treating at 3,000 psi, and would have taken more sand, but water supply was exhausted. Cut sand. Flushed with treated water. Treated at an average rate of 25.8 bbls/minute and an average pressure of 3,206. ISIP was 1,860 psig. Five minute shut-in pressure was 1,830 psig. Total water pumped was 606 bbl (clean volume).
2:50 PM 3:30 PM Shut valve in, rigged down Universal. Installed XH 45 degree flowback equipment and chained to frac valve.
3:30 PM 7:00 PM Opened well through 4 1/2" casing. Recovered both frac balls within five minutes. Well blew hard, cleared pit for over an hour. Added about three feet to pit in three hours. Making a four-inch stream at 7:00, with a lot of foam. Left open overnight.

Tuesday, October 16, 2007
From:
To:
Description of Operations
9:00 AM 6:00 PM Moved six 250 bbl tanks to location and filled same (Energy Contractors).

Tuesday, October 9, 2007
From: To: Description of Operations
7:45 AM 9:00 AM Moved Weathorford's cased hole unit and mast truck to location, rigged up, and prepared to run correlation log. Rigged up bi-wire shots. Operator arrived without safety key to run electronics. Had to wait for Weston office to deliver key to location.
9:00 AM 10:40 AM Pulled correlation and cement top log. Found baffles in correct location. Found cement top at 2,350'. Likely too low for uppermost zone.
10:40 AM 11:45 AM Perforated lowest section of Haverty with seven shots (5,256-6', 3 shots; 5,233-4, 2 shots; 5,225-6, 2 shots). Rigged up Universal. Dale Currence delivered brand new Baker 5,000 psi test frac valve from McJunkin.
11:45 AM 12:20 PM Tested lines, broke formation at 2,150 psi. Displaced 22 bbls of water to flush acid back into perfs. Pumped (average) 5 bbls/minute at between 2,000 and 2,100 psi.
12:20 PM 12:45 PM Shut valve in, rigged down Universal.

Monday, September 24, 2007
From: To: Description of Operations
12:00 AM 1:00 AM Tripping out of hole, laying down drill pipe. Check gas at collars, no show.
1:00 AM 2:40 AM Pull and lay down collars, kelley.
2:40 AM 3:15 AM Rig up loggers (Weatherford).
3:15 AM 7:30 AM Logged well. Found fluid at 980'. Logger's TD 5,543' (fill-up?).
7:30 AM 10:40 AM Ran (Bush Power Tongs) 125 joints (5,329.8') of new 10.5# Maverick 4 1/2" M-60 casing (from McJunkin), with latch down in shoe on bottom, 10 centralizers (joints 1, 2, 25, 30, 35, 54, 55, 64, 67 and 69), two cement basket on joints 36 and 70, and 3 baffles (3" baffle on joint 24 at 4,301, 3 5/16" baffle on joint 53 at 3,060', and 3 9/16" baffle on joint 63 at 2,635').
10:40 AM 11:45 AM Wait on Universal to arrive on location.
11:45 AM 2:30 PM Cemented (Universal) casing with 570 sx of 50/50 pozmix with 2% gel, 10% salt and 1/4# flake. Pumped plug down with 500 gallons of 15% HCl acid. Landed plug at 90 bbls at about 980 psig. Bumped pressure to about 1,500 psig and held for five minutes. Shut in surface pipe. Released pressure on casing. Latch down held. Plug down at 1:40 PM. Rigged down cementers.

Sunday, September 23, 2007
From: To: Description of Operations
12:00 AM 5:55 PM Drilling 7 7/8" hole, soaping hole. Rig was 5,140' at 7:30 AM, drilling 35 minutes per kelly. Rig was 5,551' at 5:30 PM. Reached TD of 5,575' at 5:55 PM.
5:55 PM 7:10 PM Cleaned Hole.
7:10 PM 11:59 PM Tripping out of hole, laying down drill pipe.

Saturday, September 22, 2007
From: To: Description of Operations
12:00 AM 11:59 PM Drilling 7 7/8" hole, soaping hole. Rig was 4,419' at 7:30 AM, drilling 34 minutes per kelly. Rig was 4,765' at 6:00 PM. Rig was 4,940' at midnight.

Friday, September 21, 2007
From: To: Description of Operations
12:00 AM 11:59 PM Drilling 7 7/8" hole, soaping hole. Rig was 3,523' at 7:30 AM, drilling 36 minutes per kelly. All formations have been found approximately as predicted. Toolpusher reported Speechley formation had a strong odor of oil. Rig was 3,894' at 5:50 PM. Rig was 4,115' at 11:15 PM.

Thursday, September 20, 2007
From: To: Description of Operations
12:00 AM 1:00 AM Drilling 7 7/8" hole, soaping hole. Rig was 2,913' at 12:55 AM, drilling 30 minutes per kelly. Hole was making a 2" stream of water. Blew hose on booster. Pulled up hole.
1:00 AM 11:00 AM Worked on booster. Pulled five stands, tried to blow water without success. Tripped all pipe out of hole. Found bit in good shape, but picked up brand new bit. Started back in hole. All collars and two joints of drill pipe were in at 6:35. As of 11:00 AM, rig was 250' off bottom, reaming hole. Rig was 3,114' at 7:00 PM. Rig was 3,293' at at 11:30 PM, drilling 35 minutes per kelly.

Wednesday, September 19, 2007
From: To: Description of Operations
12:00 AM 11:59 PM Drilling 7 7/8" hole, soaping hole. Rig was 2,325' at 6:15 AM, drilling 30 minutes per kelly. Hole was making a 2" stream of water. Built second pit, and fenced it. Rig was 2,465' at 10:00 AM. Rig was 2,845' at 11:10 PM, drilling 40 minutes per kelly, carrying 2" stream of water. Decided not to shut down for gas checks, as hole would fill up and be difficult to clean.

Tuesday, September 18, 2007
From: To: Description of Operations
12:00 AM 1:00 AM Waiting on cement.
1:00 AM 4:30 AM Opened BOP. Tripped drill pipe out of hole. Removed defective BOP and replaced with rebuilt BOP. Picked up bit (7 7/8) and started in hole.
4:30 AM 7:00 AM Tripping in hole, blowing water. Water does not appear to be increasing. Rig was drilling
7:00 AM 11:59 PM Rig was 1,575' at 10:00 AM, drilling cement (somewhat scattered). Rig was 1,625' at 12:15 Noon and 1,689' at 1:45 PM, drilling solid cement at 1' per minute. Picked up 3" stream of water at 1,725'. Ran out of cement at 1,735'. Worked down hole to 1,783', and blew hole. Water seemed very fresh. Hole was making about a 1 1/2" stream of water. Rig was 1,910' at 6:30 PM, drilling 25 minutes per kelly. Rig was 2,080' at 10:45, drilling 35 minutes per kelly. Water may have increased. Will check next kelly down. Air pressure about 225 psig.

Monday, September 17, 2007
From: To: Description of Operations
12:00 AM 12:45 AM Worked on BOP, which would not entirely shut off annulus. Managed to get stream to pencil lead size. Pumped 20 bbl gelled water. Pumped 100 sx Class A cement with 3" calcium and 1/4 lb. flake (21.6 bbls) at about 2.75 bbl/minute. Pressure averaged about 1,450 psig. Bladder in BOP failed at about 16 bbl. Pumped 19.4 bbls of water to clear drill pipe. Shut in at 500 psig. Released BOP.
12:45 AM 1:05 AM Pulled 600' (10 stands of doubles) of drill pipe.
1:05 AM 1:15 AM Pumped 15 bbl at 2.5 bbl/minute to make sure drill pipe was clear. Shut in BOP (manually) and bumped pressure on drill pipe to 500 psig. Annular pressure was 600 psig, leaking.
1:15 AM 2:15 AM Kept pressure up on annular, watched drill pipe pressure. Rigged Universal down.
2:15 AM 11:59 PM Waiting (24 hours) on cement.

Sunday, September 16, 2007
From: To: Description of Operations
12:00 AM 7:00 AM Prepare to drill on fluid.
7:00 AM 7:25 PM Dnll 7 7/8" hole on fluid, to attempt to get below water zone to bullhead squeeze. Rig was 1,801' at 4:00 PM, drilling 5 minutes per foot. Reached 1,850' at 7:25 PM.
7:25 PM 8:30 PM Cleaned hole.
8:30 PM 9:00 PM Tripping out of hole to lay down bit and collars.
9:00 PM 11:30 PM Trip in hole to 1,850' with drill pipe (no collars, no bit). Prepare to squeeze cement. Rig up Universal to squeeze.
11:30 PM 11:59 PM Mixed gel with 25 lbs of flake. Pumped 5 bbls of water to establish circulation. Pumped 25 bbls of gel with flake. Pumped 10 bbl spacer. Shut down, closed BOP.

Saturday, September 15, 2007
From: To: Description of Operations
12:00 AM 10:05 AM Drillng 7 7/8" hole. Rig was 1,545' (in the bottom of the Big Injun?) at 6:15 AM, dusting, drilling 1.5 minutes per foot. Found top of Big Lime at at 1,323'. Drilled to 1,720'. Made connection. Air pressure jumped.
10:05 AM 12:45 PM Suspected plugged bit. Tripped out of hole. Checked bit. Found bit okay.
12:45 PM 2:00 PM Tripped back in hole. Found fluid at 600'. Could not clean hole. Estimated 4-5" stream of water. Not too salty. Ordered mud pump..
2:00 PM 11:59 PM Wait on mud pump. Prepare to drill on fluid.

Friday, September 14, 2007
From: To: Description of Operations
12:00 AM 12:30 AM Finished running 26 jts of new 20# 8 5/8" surface casing (McJunkin) with guide shoe on bottom, three centralizers and one basket.
12:30 AM 2:30 AM Cemented (Universal) casing with 320 sx (about 10% excess) of Class A cement with 3% calcium and 1/4 lb. flake. Cement circulated to surface. Plug was down at 2:30 AM.
2:30 AM 10:30 AM Waiting on cement. Cement holding at surface at 3:30 AM.
10:30 AM 4:00 PM Nipple up on 8 5/8" casing. Trip in hole, blow water. Drill cement and plug.
4:00 PM 11:59 PM Drillng 7 7/8" hole. Rig was 1,316' at 11:30 PM, dusting, drilling 1 minute per foot.

Thursday, September 13, 2007
From: To: Description of Operations
12:00 AM 9:45 PM Drilling 11" hole. Rig was 560' at 6:00 AM, drilling 3 minutes per foot, soaping. Ordered 8 5/8" cement shoe, three centralizers and basket for surface cement job. Reached TD of 1,055' at 9:45 PM.
9:45 PM 11:59 PM  Clean hole. Trip out of hole. Run 8 5/8" casing.

Wednesday, September 12, 2007
From: To: Description of Operations
12:00 AM 11:59 PM Drilling 12 3/8" hole. Hit 1/2" stream of water at 28', just below conductor. Rig was 68' at 6:30 AM, drilling 1.5' per minute. Built fence around pit to keep cows out. Rig was 232' at 10:00 AM. Drilled to 300', tripped out, switched to 11" bit. Rig was 415' at 9:45 PM, drilling 3-4 minutes per foot, soaping.

Tuesday, September 11, 2007
From: To: Description of Operations
8:00 AM 6:00 PM Moving rig, rigging up. Rain making a mess. Sent plow truck (A Plus Rentals) out to clean County Road. Sent tri-axle load of stone (JF Allen) to rock approach to County Road near cattle crossing. Hauled 8 5/8" casing, wellhead and 60' X 120' pit liner to location. Talked with Jerry Willett about drilling 12" top hole with hammer. More cement expense, but better cement for surface pipe. Cement only additional expense. Expect to spud about 6:00 PM.
6:00 PM 10:15 PM  Spudded hole. Drilled 15" hole. Set 25' (1 joint) 13 3/8" (used) conductor. Nippled up on conductor, prepared to drill top hole with hammer.
10:15 PM 11:59 PM Drilled 12 3/8" hole with air hammer.

Monday, September 10, 2007
From: To: Description of Operations
8:00 AM 7:00 PM Moving rig, rigging up.