“WAG” Enhanced Oil Recovery

After opening the formation, the next step is to balance the formation pressure to optimize
recovery. The Chappell Maddux is a water-driven formation. The lease was previously set up to waterflood by injecting water through injection wells to push oil toward producing wells. We
intend to reestablish the water flood and enhance it with nitrogen. This method of enhanced recovery is called Water Alternating Gas or WAG.

Studies have shown that nitrogen injection can increase the recovery of oil in place reserves by 45%-90% and increase production by 5%-20% over waterflood alone.

It takes approximately 45 days to reach optimum production using this method. We will treat the wells in groups of five.