Helios Energy Ltd. provided an update on recent well testing activities: The testing of Presidio 52#1 well. The testing of Quinn Creek 141#1 well. The testing of Presidio 141#2 well. Connection of the Quinn Creek 141#1 well to production facilities. Presidio 52#1 Testing; The Presidio 52#1 well has been successfully drilled to a total depth (TD) of 8,806 feet. During drilling, the Presidio 52#1 well encountered the lower bench of the Ojinaga Formation (primary target) and the Eagle Ford Shale Formation (secondary target) as well as two older (deeper) Cretaceous units, being the Buda and Georgetown Formations (both secondary targets). The lower bench of the Ojinaga Formation was encountered at the depth of 6,632 feet and is 793 feet thick. Helios has successfully tested and produced oil from all three wells (namely, Presidio 141#2, Quinn Creek 141#1 and Quinn Mesa 113) it has drilled which have penetrated the Ojinaga Formation. The oil analysis shows that the oil in the Ojinaga Formation is sourced from the Eagle Ford Shale Formation. The Eagle Ford Shale was encountered at a depth of 7,425 feet and is 836 feet thick with the deepest 235 feet also referred to as the Boquillas Formation. A workover rig was recently used by Helios to conventionally test (without fracking) the lower Boquillas Formation in the Presidio 52#1 well (which is equivalent to the lower Eagle Ford Formation in Karnes County, Texas). When originally drilling the well, significant wet shows were recorded in the lower Boquillas section with gas measurements of up to 10,000 units and a gas composition of 25% C2 (ethane) to C4 (butane). Natural fractures, high rock brittleness and a relatively high Total Organic Composition (TOC) were also noted. Using the workover rig, Helios perforated a 20 feet section from 8,190 feet to 8,210 feet in the lower Boquillas Formation, which is located immediately above the Buda Formation. Although the test results indicated low permeability the well naturally flowed gas and oil at modest rates without being fracked. This is important as it establishes another potentially productive interval for lateral drilling in the future. Recent Testing of Quinn Creek 141#1 Well; The discovery well in the Presidio Project, Quinn Creek 141#1, was recently re-entered utilizing a workover rig. During the recent re-entry, the bridge plug at 4,350 feet was unseated and the well flowed oil and gas naturally to the pits. The well initially flowed wet gas at an estimated rate exceeding 1,000 MCF per day. However, there was no oil and gas separator nor meter installed to measure the rate accurately. Quinn Creek 141#1 is now shut in with production tubing run in the well. Various artificial lift applications
are being investigated to optimize sustainable production. The well continues to build up pressure while being shut in. Background to Quinn Creek 141#1 Well; In late June 2018, Helios successfully completed a one stage frack in the vertical Quinn Creek 141#1 well to test oil and gas shows and log indications between 4,744 and 4,880 feet (a 136 foot interval) in the lower bench of the Ojinaga Formation. The frack of the lower bench of the Ojinaga Formation in the Quinn Creek 141#1 well resulted in the successful injection of approximately 212,000 pounds of frack sand (approximately 1,500 pounds of frack sand per foot) and approximately 10,000 barrels of slick water (approximately 75 barrels of slick water per foot). On 19 July 2018, Helios reported that the well flowed 260 barrels of oil and 1,345 barrels of completion fluid in 168 hours (7 days). Gas was also produced at 456 mcf per day on a 34/64ths of one inch choke. The well was shut in October 2018. Presidio 141#2 Testing The Presidio 141#2 well required maintenance after mechanical issues downhole disrupted production efforts. After re-entering the well, the damaged artificial lift pump was removed and upon swabbing out 23 barrels of fluid, the well began unassisted flow at a gas rate of 626 MCF per day and 74 barrels of oil were recovered in the first 24 hours. Presidio 141#2 is currently shut in as various artificial lift applications are being investigated to optimize sustainable production. The well continues to build up pressure while being shut in. Recent production has been intermittent due to the artificial lift pumping issues. Production Facilities Installed; Permanent production facilities have been installed at the well site location of the Presidio 141#2 well consisting of a 3-phase separator, two 500 barrel oil tanks, two 500 barrel water tanks, and a flare stack. The Quinn Creek 141#1 well has also been piped into and connected to flow to the shared field production facilities located at the Presidio 141#2 location.