|
|
 |
|
|
|
|
Photos of Lease - October 2005 PHOTOS OF INTEGRITY TESTING AND GENERAL SITE OVERVIEW
____________________________ Well Testing Requirements FLUID TESTING OR INTEGRITY TESTING SUMMARY Wells that are 25 years and older that have been inactive for greater than
3 years or have had change of ownership (and were inactive for 1 year) must be
tested to assure they are not going to cause an environmental hazard or they
must be plugged. If we don't want to plug the well, then one needs to provide
assurance that the well is environmentally safe and we must seek a plugging
extension (see Texas Administrative Code, Title 16, Part 1, Chapter 3, Rule 3.14).
This requirement is regulated by Rule 14(b)(2) extension permits.
The wells must pass a test to assure they are acceptable and are not causing
damage to the environment. There are two ways to determine whether the well is
acceptable and both are documented on an H-15 form that is titled, "Test
on an Inactive Well More Thank 25 Years Old":
Option 1 - Fluid Level Check: To check the wells one can measure the fluid
level of the liquid in the well and that of the deepest subsurface water level
to determine if it is even possible the two could have come into contact with
each other. In our lease, the water's deepest useable quality water level is
1150-feet. Therefore, the level of the liquid in the well must be at least further underground
than the water level or greater than 1150-feet. If the distance is greater than
250-ft below the water level, then the well passes the H-15 test. This test
needs to be performed once a year thereafter. Option 2 - Mechanical Integrity Check: This test is more involved and takes much more equipment and time to perform. This test is usually performed on wells which failed the Fluid Level Check or which have been inactive for 10 years or more. The well is filled with salt water, sealed and pressurized to a minimum of 250 psi and held for 30 minutes. The pressure level cannot change by even 1 pound during this test. If the pressure holds, the test is satisfied. This test is much more thorough than the fluid level test and only needs to be performed once every 5 years. If the well fails its fluid level test, then one can perform a mechanical
integrity check. If it fails the mechanical integrity check and the well does
not show visible signs of damage to the environment, it can be reworked to resolve problem and then it can
be retested at a later date. In the meantime, one is severed from being able
to sell or pump oil for selling.
____________________________ Energy Development OIL LEASE SUMMARY All oil reports are compiled by Registered Professional Engineers in
the petroleum field. The reports are considered by the company as valid and true reports on the values of the properties prior to Eagle
obtaining them. The accompanying reports generally contain the estimate
of the proved producing reserves and future net revenue projections and
values of the properties. Each report is prepared using current economic
considerations and non-escalated oil prices and associated costs and described
herein. For example, the Siler Field shows an amount of 24,000,000 barrels
in reserves. Currently oil is at $60 or more per barrel and gas is at
$12 or more per MCF which puts us with extensive reserves for many years
of operations. Silar Wells:
MANUFACTURING and OIL FIELD OPERATIONS All manufacturing will be done by contract to others with supervision by the Chief Engineer to insure the proper assembly. Eagle will not directly construct the units. Eagle has contracted with other operators. to continue operating the existing fields and the new fields as they come into ownership of Eagle. Eagle will not be operating the fields directly. |
