Craton Energy Corporation

COTTON VALLEY PARTICIPATION OPPORTUNITY
UNDER EAST TEXAS FIELD
RUSK & SMITH COUNTIES, TEXAS

• DEVELOPMENT PLAN
• Primary objective: Taylor and Upper & Middle Cotton Valley sands
• Secondary objective: Travis Peak and Pettet
• Expect 233 drill sites on a 40-acre development pattern
• Up to 233 additional drill sites on a 20-acre infill pattern
• Gas lift and water disposal infrastructure to be built field-wide
• Potential for horizontal drilling
• Operated by Craton Energy Corporation
   
• LAND
• Fourteen proposed units in 10,000 contiguous gross acres
• 7,500 net acres; leasing ongoing
• Three-year paid up leases
   
• GEOLOGY
  • On trend between Overton and Oak Hill fields
• On strike with western flank of the Sabine Uplift
• Three existing wells confirm the structural and stratigraphic concepts
• Depths from 9,400' to 11,500'
   
• ENGINEERING
• 448 BCF of 3P Reserves assigned by a third party evaluation
• Extensive reservoir analysis of existing Cotton Valley fields
   
• PROPOSED PARTICIPATION ARRANGEMENT
• 25% of Craton's net acreage participation
• Reimbursement of sunk costs
• Promoted drilling and completion costs for initial 14 wells, heads up on remaining wells
• Promoted costs of initial facilities and gathering lines

NOTE: A Confidentiality Agreement ("CA") must be executed prior to receiving the data package. Please visit our web-site to order this package and download the required CA.

Data Room available in Meagher’s Tulsa office by appointment only.
Please call Jacque Semple (918) 481-5900 x221