INTREPID DIRECTIONAL DRILLING SPECIALISTS

Intrepid is totally committed to providing its clients with the most thorough and accurate planning and support to allow them to aid them in successfully drilling their directional or horizontal well. This includes both providing in-depth pre-well planning information prior to the start of a directional project and comprehensive operational reporting during the course of drilling the well; followed by a detailed Post Well Analysis. Proposal The well planning process begins with a comprehensive proposal (bid) which outlines the technical aspects of the project, as well as a detailed explanation of the anticipated costs of the directional services to be provided. A typical proposal includes: Preliminary Well Survey Plan, Preliminary Well Plot, Commercial Proposal Support information Proposals can be provided on a Day Rate Basis, or if requested, on a Cost per Foot basis. Time Cost Estimate (AFE) At the request of the client, Intrepid will prepare a detailed Time Cost Estimate that the client can use for planning and Authorization for Expenditure (AFE) purposes. Well Planning The actual process of drilling a successful directional well starts with the preparation of an accurate well plan. After developing a thorough understanding the well design goals of the client, Intrepid Well Planners design a well trajectory that takes into consideration; target or multiple target location, geometric trajectory design, maximum dog-leg severity, BHA design and behavior, bit selection, formation tendencies, torque and drag, hole cleaning, rig hydraulics, anti-collision; as well as other operational constraints. Client Pre-Spud Meetings Intrepid requests a Pre-Spud meeting is held with the client prior to the preparation and mobilization of any project. This meeting should include all companies providing products or services that could impact the drilling of the directional portion of the well and clearly define the responsibilities of each. Whenever possible, the Service Quality Team Leader (lead directional driller) should attend the meeting along with the responsible Intrepid operations management. In additional the following topics should be discussed: Establish project objectives and performance expectations of the client. Discuss critical issues and possible contingencies related to the project. Review initial Well Plan, including geologic and geographic restrictions and target accuracy requirements and adjust if required. Discuss Bottom Hole Assembly (BHA) selection, including bit selection. Discuss planned drilling fluid; well bore lubricants and hydraulic requirements. Review planned drilling procedure and anticipated time vs. depth curve. Identify required Intrepid or third party equipment, services and assign supply responsibility. Discuss operating parameters and potential damage to equipment and responsibility of repair. Declare intention to accept / decline Lost in Hole insurance coverage. Coordinate personnel housing and transportation of personnel and equipment. Establish lines of communication, reporting requirements and reporting frequency and both office and field reporting relationships. Discuss project timing and anticipated start date. Staff Pre-Spud Meetings Prior to the mobilization of a directional project, Intrepid requires that a pre-spud meeting be held with the assigned directional drillers and MWD personnel for the project at the local operations office or well site. The purpose of the field staff meeting is to review the information obtained at the Client Pre-Spud Meeting, identify any additional operational issues and resolve any discrepancies. Satellite Communications Intrepid provides real time satellite hookup on all directional jobs. This communications link provides the ability to transmit all types of data and reports; including Daily Reports, e-mail, logs, and pictures, on a real time basis, to the operations office and the client. Further, This method provides dependable data transmission and eliminates problems associated with verbal communications and poor radio and cell phone reception. Reporting A key element of communication is the routine, accurate and timely reporting of the operational status of the well. Intrepid provides this information, via satellite communication system, in a number of ways: Daily Operations Report: This report contains the chronological history of the directional drilling activities on the well for the last 24 hrs; including, drilling parameters, BHA, Slide vs. Rotating and accumulated costs. The report is sent each morning by 6:00 AM, via e-mail, to the Intrepid operations staff for review and then forwarded to the client in the office and simultaneously presented to the Client Representative at the well site. Daily Survey Updates: This report contains the actual recorded MWD surveys; including, direction, azimuth, inclination and dog leg severity (DLS) for the last 24 hrs. The report is sent each morning by 6:00 AM, via e-mail, to the Intrepid operations staff for review and updating of the survey plot with plan vs. actual and then forwarded to the client in the office and simultaneously presented to the Client Representative at the well site. Survey Updates are available more frequently by request of the client. Log Updates: Gamma logs are provided in two formats, LAS (ASKI) and PDF at the client's request. Log strip charts and LAS files are provided at the well site to the Client Representative, Geologist and Mud Logger on a demand basis for correlation purposes; while PDF files are prepared and e-mailed to the client in the office at the frequency specified by the client. Daily Briefing: In an effort to insure that the client is fully aware of the current and pending directional activities at the well site, Intrepid believes that a verbal briefing with the client is also required on a daily basis. This communication is performed at two levels; the Lead Directional Driller will conduct the briefing with the Client Representative at the well site, while the Drilling Manager will conduct the briefing with the client in the office. Critical Period Reports: In addition to routine daily reports and briefings, Intrepid believes that heightened and more frequent communication is required during critical periods; specifically, any event that causes lost time at the well site. Critical Period Reporting requires a verbal briefing at the time the event occurs and follows up briefings until the problem is resolved; This is then followed by a written report, outlining the event, resolution and plan to minimize reoccurrence. Website Posting: As an additional service to clients, Intrepid will post, at the clients request, the various daily reports to a separate and secure folder on the Intrepid Website (www.intrepid-dds.com). Each client is given a secure username and password, which allows them to login to their own personal client area and view or retrieve the current or past reports of wells in progress. This service is particularly helpful while traveling, on weekends and vacation; as clients can view the information from any computer with web access. Post Well Analysis Continual improvement is most effectively accomplished by clearly understanding the performance on past wells and applying the lessons learned to future wells. Intrepid prepares a detailed Post Well Analysis on each well to provide the client with the lessons learned and recommendations for improvement. Each Post Well Analysis contains the following information: Well Summary: Plan vs. Actual Performance Analysis and Recommendations Service Quality Surveys: both Field and Office Copy of Proposal Daily Reports and associated Well Site paperwork Directional Driller Summary and Report BHA Reports Slide vs.