EAST OMG

Overview

Yuma’s East OMG 3D prospect is located in Cameron Parish, Louisiana. This prospect is adjacent to but separated by one large fault from the 500+BCFE Chalkley Miogyp field, which produces from the same Upper Miogyp sandstones that are the main objective of the East OMG Prospect. Yuma’s proposed, slightly deviated, 16,500’ (TVD) well will not only test the Upper Miogyp, but also an AVO supported Camerina structure 400’ high to logged pay on water in a flank well, and a shallower Marg Howei structure that appears to have been proven productive by a well that logged and tested pay, but had completion problems. These shallower Camerina and Marg Howei objectives represent viable, arguably PUD drilling objectives that greatly reduce the risk associated with the prospect. The combined reserve potential of the four principal objective sandstones that comprise the East OMG prospect is estimated to be greater than 59 BCFE.

In generating the East OMG prospect, Yuma utilized approximately 200 square miles of 2003 vintage reprocessed 3D Pre-Stack Time Migrated seismic data, that was then reprocessed in 2006 by Yuma (using Tricon) to create a proprietary PSTM volume. This reprocessed data has greatly improved the structural resolution of the prospect and also allowed for AVO evaluation of the Camerina objective. Yuma has secured all of the acreage necessary to control this prospect. Participants will have access to 12 square miles of this data to evaluate this relatively low risk, yet large up side, opportunity of Yuma’s offices.

Yuma has a history of exploration in this area and in September 2005 made a discovery on its “OMG” prospect, approximately 1.5 miles northwest of the proposed East OMG drill site; this well is currently producing out of the Lower Miogyp.

Conclusion
 
Participants in the East OMG prospect will have the opportunity to gain exposure to the large reserve potential of Upper Miogyp, and at the same time reduce the economic risk of targeting this one objective given the high probability of success in the shallower Camerina and Marg Howei objectives. These shallower objectives greatly increase the likelihood that commercial volumes of hydrocarbons will be found in the proposed well. At the Upper Miogyp level, significant reserves may await the drill bit high to the petrophysical pay in the Hunt well. Finally, drilling a structure that is eastern limb of an anticline, that has already produced 500 BCFE in the adjacent fault block, has its own, perhaps unquantifiable attraction.

The economic evaluation, based on the NYMEX strip of $8.64 per MMBTU gas, $73.73 for oil and the most likely reserve case of 59 BCFE, shows an undiscounted ROI of 19.46 to 1, a ROR of 100 percent, and a finding and development cost of $0.40 per MCFeq. Payout is in 8 months.