1349 DEP Confidential Inspection Rpts

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Florida Department of Environmental Protection Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office 2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901 Office: (239) 344-5721 & (239) 344-5611 Confidential Page 1 of 4 OIL WELL INSPECTION REPORT County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1 st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S. Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 9.16’ North & 11.43’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 1,980’ DF TVD 1,979.85’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Repairing top drive after drilling 12¼” hole to 1,980’ DF. I certify that the above well and premise was inspected on 12-26-12, 1-2-13, 1-7-13, 1-8-13, 1-9-13, 1-11-13, 1-14-13, 1-16-13, 1-17-13, 1-21-13, 1-24-13, 1-25-13, 1-27-13, 1-28-13, 1-29-13, 1-30-13, 1-31-13, 2-1-13, & 2-2-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________ Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 3 rd day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request. cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/03/13 Permit # 1349 Date 02 03 2013 First Report (#1349-pilot): Drilled 1,861’ of 17½” hole from 47’ DF to 1,908’ DF; Cemented 13.375” O.D. x 54.5#/ft. casing at 1,714’ DF with 863.38 bbls. (composed of 2,138 sacks of cement + 660 sacks of pea gravel); Drilled 201’ of cement from 1,707’ DF to 1,908’ DF; Drilled 72’ of 12¼” hole from 1,908’ DF to 1,980’ DF. Casing Summary: 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) Pre-spud activities: 12-20-12: Contractors started building 300’ x 300’ limerock pad & augmenting 2.7 miles of access road leading to location. (Bruno arrived 12-26-12 at 1 PM, left 12-26-12 at 2 PM.) (Bruno arrived 1-2-13 at 9 AM, left 1-2-13 at 10 AM.) (Attwood arrived 1-2-13 at 3:29 PM, left 1-2-13 at 3:40 PM.) 01-07-13: Six (6) joints of 24” O.D. x 23” I.D. steel conductor on location. Pile driver en route to location to start driving conductor. (Attwood arrived 1-7-13 at 12:55 PM, left 1-7-13 at 1:04 PM.) 01-08-13: 24” O.D. x 23” I.D. steel conductor driven to point of refusal at 196.5’ BGL. Note: Point of refusal reached when 60 blows were required to drive conductor the final one inch (1”) per 1-9-13 communication with Chad Mudge-contractor. 01-08-13: 16” O.D. steel mouse hole driven inside cellar to 90’ BGL. (Bruno arrived 1-8-13 at 11:30 AM, left 1-8-13 at 4:30 PM.) 01-09-13: 10’-diameter x 10’-tall (NOT 8’ tall) x 0.109”-thick corrugated metal cellar installed around #1349 well. (Attwood arrived 1-9-13 at 9:11 AM, left 1-9-13 at 9:25 AM.) 01-10-13: Finished laying down 145’ x 110’ x 40 mil liner on top of compacted limerock pad. 01-11-13: Contractors began installing interlocking, polyethylene drilling mats on top of liner. Note: Drilling mats hauled from #1345-H well site at N. Bear Island Field & re-assembled on top of liner for #1349 (pilot) well. (Bruno arrived 1-11-13 at 9 AM, left 1-11-13 at 9:30 AM.) (Attwood arrived 1-11-13 at 9:15 AM, left 1-11-13 at 9:54 AM.) 01-14-13: Began moving Precision #314 drilling rig components from #1345-H well at N. Bear Island Field to #1349. (Attwood arrived 1-14-13 at 8:04 AM, left 1-14-13 at 8:12 AM.) 01-16-13: LaBelle Well Drilling completed northwest water supply well. 10” PVC casing cemented with 26 sacks of cement from surface to 59’ BGL. Well drilled to a total depth of 80’ BGL (in sand.) (Attwood arrived 1-16-13 at 10:52 AM, left 1-16-13 at 11:08 AM.) 01-17-13: LaBelle Well Drilling completed southeast water supply well. 10” PVC casing cemented from surface to 59’ BGL. Well drilled to a total depth of 90’ BGL. Note: Limerock pad complete. All perimeter dikes finished except for northern dike. (Attwood arrived 1-17-13 at 12:16 PM, left 1-17-13 at 12:25 PM.) Day 1 Summary : 1-21-13 TD = 1,029’ DF. Drilled 1,015’ of 17½” O.D. hole from 47’ DF to 1,029’ DF in 14 hrs. (2 PM 1-20-13 to 6 AM 1-21-13) Spud #1349 well on 1-20-13 at 2 PM. Day 2 Summary : 1-22-13 TD = 1,440’ DF. Drilled 411’ of 17½” O.D. hole from 1,029’ DF to 1,440’ DF in 4.5 hrs. (6 AM 1-21-13 to 6 AM 1-22-13) 189’ of fish left in well from 1,251’ DF to 1,440’ DF. Twisted off 6½” drill collar (pin broken). Left 189’ of fish in well from 1,251’ DF to 1,440’ DF. 189’-long fish composed of 17½” drill bit + bit sub + prodrift tool + three (3) drill collars + two (2) stabilizers + crossover + two (2) 6½” drill collars. (Attwood arrived 1-21-13 at 8:17 AM, left 1-21-13 at 8:49 AM.)

description

DEP Report

Transcript of 1349 DEP Confidential Inspection Rpts

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 9.16’ North & 11.43’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 1,980’ DF TVD 1,979.85’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Repairing top drive after drilling 12¼” hole to 1,980’ DF.

I certify that the above well and premise was inspected on 12-26-12, 1-2-13, 1-7-13, 1-8-13, 1-9-13, 1-11-13, 1-14-13, 1-16-13, 1-17-13, 1-21-13, 1-24-13, 1-25-13, 1-27-13, 1-28-13, 1-29-13, 1-30-13, 1-31-13, 2-1-13, & 2-2-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 3rd day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/03/13

Permit # 1349 Date 02 03 2013

First Report (#1349-pilot): ■Drilled 1,861’ of 17½” hole from 47’ DF to 1,908’ DF;

■Cemented 13.375” O.D. x 54.5#/ft. casing at 1,714’ DF with 863.38 bbls.

(composed of 2,138 sacks of cement + 660 sacks of pea gravel);

■Drilled 201’ of cement from 1,707’ DF to 1,908’ DF;

■Drilled 72’ of 12¼” hole from 1,908’ DF to 1,980’ DF.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) Pre-spud activities: ■12-20-12: Contractors started building 300’ x 300’ limerock pad & augmenting 2.7 miles of access road leading to location. (Bruno arrived 12-26-12 at 1 PM, left 12-26-12 at 2 PM.) (Bruno arrived 1-2-13 at 9 AM, left 1-2-13 at 10 AM.)

(Attwood arrived 1-2-13 at 3:29 PM, left 1-2-13 at 3:40 PM.) ■01-07-13: Six (6) joints of 24” O.D. x 23” I.D. steel conductor on location. Pile driver en route to location to start driving conductor. (Attwood arrived 1-7-13 at 12:55 PM, left 1-7-13 at 1:04 PM.) ■01-08-13: 24” O.D. x 23” I.D. steel conductor driven to point of refusal at 196.5’ BGL. Note: Point of refusal reached when 60 blows were required to drive conductor the final one inch (1”) per 1-9-13 communication with Chad Mudge-contractor. ■01-08-13: 16” O.D. steel mouse hole driven inside cellar to 90’ BGL. (Bruno arrived 1-8-13 at 11:30 AM, left 1-8-13 at 4:30 PM.) ■01-09-13: 10’-diameter x 10’-tall (NOT 8’ tall) x 0.109”-thick corrugated metal cellar installed around #1349 well. (Attwood arrived 1-9-13 at 9:11 AM, left 1-9-13 at 9:25 AM.) ■01-10-13: Finished laying down 145’ x 110’ x 40 mil liner on top of compacted limerock pad. ■01-11-13: Contractors began installing interlocking, polyethylene drilling mats on top of liner. Note: Drilling mats hauled from #1345-H well site at N. Bear Island Field & re-assembled on top of liner for #1349 (pilot) well. (Bruno arrived 1-11-13 at 9 AM, left 1-11-13 at 9:30 AM.) (Attwood arrived 1-11-13 at 9:15 AM, left 1-11-13 at 9:54 AM.) ■01-14-13: Began moving Precision #314 drilling rig components from #1345-H well at N. Bear Island Field to #1349. (Attwood arrived 1-14-13 at 8:04 AM, left 1-14-13 at 8:12 AM.) ■01-16-13: LaBelle Well Drilling completed northwest water supply well.

10” PVC casing cemented with 26 sacks of cement from surface to 59’ BGL. Well drilled to a total depth of 80’ BGL (in sand.) (Attwood arrived 1-16-13 at 10:52 AM, left 1-16-13 at 11:08 AM.) ■01-17-13: LaBelle Well Drilling completed southeast water supply well.

10” PVC casing cemented from surface to 59’ BGL. Well drilled to a total depth of 90’ BGL. Note: Limerock pad complete. All perimeter dikes finished except for northern dike.

(Attwood arrived 1-17-13 at 12:16 PM, left 1-17-13 at 12:25 PM.) Day 1 Summary: 1-21-13 TD = 1,029’ DF. Drilled 1,015’ of 17½” O.D. hole from 47’ DF to 1,029’ DF in 14 hrs. (2 PM 1-20-13 to 6 AM 1-21-13) ■Spud #1349 well on 1-20-13 at 2 PM. Day 2 Summary: 1-22-13 TD = 1,440’ DF. Drilled 411’ of 17½” O.D. hole from 1,029’ DF to 1,440’ DF in 4.5 hrs. (6 AM 1-21-13 to 6 AM 1-22-13) 189’ of fish left in well from 1,251’ DF to 1,440’ DF.

•Twisted off 6½” drill collar (pin broken). Left 189’ of fish in well from 1,251’ DF to 1,440’ DF. •189’-long fish composed of 17½” drill bit + bit sub + prodrift tool + three (3) drill collars + two (2) stabilizers + crossover + two (2) 6½” drill collars.

(Attwood arrived 1-21-13 at 8:17 AM, left 1-21-13 at 8:49 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 9.16’ North & 11.43’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 1,980’ DF TVD 1,979.85’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Repairing top drive after drilling 12¼” hole to 1,980’ DF.

I certify that the above well and premise was inspected on 12-26-12, 1-2-13, 1-7-13, 1-8-13, 1-9-13, 1-11-13, 1-14-13, 1-16-13, 1-17-13, 1-21-13, 1-24-13, 1-25-13, 1-27-13, 1-28-13, 1-29-13, 1-30-13, 1-31-13, 2-1-13, & 2-2-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 3rd day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/03/13

Permit # 1349 Date 02 03 2013

Day 3 Summary: 1-23-13 TD = 1,440’ DF. Unable to latch onto fish with overshot + fishing jars. Ordered overshot with larger skirt. (6 AM 1-22-13 to 6 AM 1-23-13) Day 4 Summary: 1-24-13 TD = 1,638’ DF. Recovered 189’ of fish with bent joint of drill pipe attached to larger cut lip guide on overshot. (6 AM 1-23-13 to 6 AM 1-24-13) Washed 99’ of 17½” O.D. hole from 1,341’ DF to 1,440’ DF.

Drilled 198’ of 17½” O.D. hole from 1,440’ DF to 1,638’ DF in 3 hrs. ■Lost circulation (0% returns) at 1,638’ DF.

Day 5 Summary: 1-25-13 TD = 1,908’ DF. Drilled 270’ of 17½” O.D. hole from 1,638’ DF to 1,908’ DF. (6 AM 1-24-13 to 6 AM 1-25-13) (Bruno arrived 1-24-13 at 4:30 PM, left 1-24-13 at 5:42 PM.) Day 6 Summary: 1-26-13 TD = 1,908’ DF. Back reamed 1,514’ of 17½” O.D. hole from 1,791’ DF to 277’ DF. (6 AM 1-25-13 to 6 AM 1-26-13) B.H.A. stuck in bottom of 24” conductor. (Attwood arrived 1-25-13 at 7:47 AM, left 1-25-13 at 9:14 AM.) Day 7 Summary: 1-27-13 TD = 1,908’ DF. P.O.O.H. 24” conductor shoe damaged. Milled conductor shoe with modified stabilizer assembly. (6 AM 1-26-13 to 6 AM 1-27-13)

•17½” drill bit damaged (see Photo 8) (2”-wide x 3”-long section of metal above three cones worn away.) •17½” stabilizer damaged (see Photo 9) (9¾” of the 24¾”-long x 1.55”-thick stabilizer “fin” worn away.)

Day 8 Summary: 1-28-13 TD = 1,908’ DF. Finished milling 24” conductor shoe. Back reamed out of hole. (6 AM 1-27-13 to 6 AM 1-28-13) Junk in hole. 24” conductor shoe damaged. Ran in hole with 14¾” drill bit. Bit plugged at 526’ DF. P.O.O.H. to clear & inspect drill bit. (Attwood arrived 1-27-13 at 4:49 PM, left 1-27-13 at 5:47 PM; Attwood returned 1-27-13 at 6:55 PM, left 1-27-13 at 8:14 PM.) Day 9 Summary: 1-29-13 TD = 1,908’ DF. Cleared LCM material from 14¾” drill bit & jets. (6 AM 1-28-13 to 6 AM 1-29-13) Tripped in hole to base of 24” conductor. No obstructions encountered at base of conductor. Tagged “junk” in wellbore at 385’ DF. Washed & reamed from 385’ DF to 1,898’ DF. Pushed “junk” to bottom at 1,898’ DF. Circulated well at 1,896’ DF. Attempted to wash metal debris out of bottom of well. Tripped in hole from 1,896’ DF to 1,898’ DF.

Tagged “obstruction” at 1,898’ DF (= 10’ off bottom) with 30,000# of drill string weight. P.O.O.H. slowly. Tripped in hole with 13 3/8” surface casing to 1,644’ DF. (started running casing on 1-28-13 at 11:30 PM.)

Tagged “obstruction” at 1,644’ DF on 1-29-13 at 2:15 AM. Made up circulating swedge. Washed 13 3/8” casing down from 1,644’ DF to 1,664’ DF. (Attwood arrived 1-28-13 at 7:35 AM, left 1-28-13 at 7:57 AM.) (Bruno arrived 1-28-13 at 9 AM, on location 1-29-13 at 6 AM.) Day 10 Summary: 1-30-13 TD = 1,908’ DF. Washed 13 3/8” casing down from 1,664’ DF to 1,714’ DF, then top drive broke down. (6 AM 1-29-13 to 6 AM 1-30-13) Unable to rotate 13 3/8” casing. Pumped through casing with no returns.

(Bruno on location 1-29-13 at 6 AM, left 1-29-13 at 12:50 PM.) (Attwood arrived 1-29-13 at 11:30 AM, left 1-29-13 at 12:55 PM; Attwood returned 1-29-13 at 1:40 PM, left 1-29-13 at 3:55 PM; Attwood returned 1-30-13 at 3:36 AM, left 1-30-13 at 3:43 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 9.16’ North & 11.43’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 1,980’ DF TVD 1,979.85’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Repairing top drive after drilling 12¼” hole to 1,980’ DF.

I certify that the above well and premise was inspected on 12-26-12, 1-2-13, 1-7-13, 1-8-13, 1-9-13, 1-11-13, 1-14-13, 1-16-13, 1-17-13, 1-21-13, 1-24-13, 1-25-13, 1-27-13, 1-28-13, 1-29-13, 1-30-13, 1-31-13, 2-1-13, & 2-2-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 3rd day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/03/13

Permit # 1349 Date 02 03 2013

Day 11 Summary: 1-31-13 TD = 1,908’ DF. Unable to rotate 13 3/8” casing. Pumped through casing at 1,714’ DF with no returns. (6 AM 1-30-13 to 6 AM 1-31-13) •13.375” O.D. x 54.5#/ft. surface casing manufactured in Korea by SeAH Steel Co.

(Bruno arrived 1-30-13 at 8:30 AM, left 1-30-13 at 2:30 PM.) Day 12 Summary: 2-01-13 PBTD = 1,707’ DF. Cemented 13.375” surface casing with 651.79 barrels (1,698 sacks) of cement at 1,714’ DF. (6 AM 1-31-13 to 6 AM 2-1-13) Waiting for cement to settle in annulus before pumping three (3) stages of top off cement. (tagged cement inside 13 3/8” surface casing at 1,707’ DF on 2-2-13.) •Rigged up Youngquist Bros. Logging. Ran Cement Bond Log from 1,711’ DF to 50’ DF on 2-1-13 at 12:30 AM.

(Bruno arrived 1-31-13 at 7:50 AM, left 1-31-13 at 11:24 PM.) (Attwood arrived 2-1-13 at 3:31 AM, left 2-1-13 at 4:25 AM.)

Surface Casing Cement Jobs on 1-31-13 (by Baker Hughes) & 2-1-13 (by Eagle Ready Mix): 13.375" O.D. x 54.5#/ft. J-55 BT&C casing set at 1,714' DF in #1349 (pilot well).

1-31-13 @ 1:55 PM Tested cementing lines to 3,000 PSI. Tested OK.

1-31-13 @ 2:00 PM Spacer Ahead: Pumped 20 bbls. 8.34 ppg fresh water at 5.4 bpm into 5” O.D. x 4.276” I.D. x 19.5#/ft. Grade G-105 drill pipe & tag-in cementing adapter stung into 13.375” casing shoe at 500 PSI. Note: Unplugged line on Baker Hughes’ pumping unit after pumping spacer.

1-31-13 @ 4:30 PM

1st Lead (Scavenger) cement: Pumped 118.33 bbls. (210 sacks/11.0 PPG) of 35:65:6 Poz (fly ash) Class H “scavenger” cement composed of 136.5 sacks (= 12,831#) of Class H cement + 73.5 sacks (= 5,439#) of Poz/fly ash + 6% b.w.o.c. (= 1,096.2#) of gel/bentonite + 3% b.w.o.c. (= 384.93#) of calcium chloride + 3% b.w.o.c. (= 384.93#) of sodium metasilicate + 0.001 gal. per second (= 1.06 gal.) of FP-6L yielding 3.16 cu. ft. of slurry per sack of cement at 6.7 bpm through 5" O.D. drill pipe & stab-in sub into annulus at 633 PSI.

1-31-13 @ 4:55 PM

2nd Lead cement: Pumped 333.06 bbls. (703 sacks/11.5 PPG) of 35:65:6 Poz (fly ash) Class H cement composed of 456.95 sacks (= 42,953.3#) of Class H cement + 246.5 sacks (= 18,241#) of Poz/fly ash + 6% b.w.o.c. (= 3,669.7#) of gel/bentonite + 3% b.w.o.c. (= 1,288.60#) of calcium chloride + 3% b.w.o.c. (= 1,288.60#) of sodium metasilicate + 0.001 gal. per second (= 3.33 gal.) of FP-6L yielding 2.66 cu. ft. of slurry per sack of cement at 6.0 bpm through 5" O.D. drill pipe & stab-in sub into annulus at 525 PSI.

1-31-13 @ 6:05 PM

Tail cement: Pumped 112.40 bbls. (450 sacks/14.5 PPG) of Type I (Class A) cement mixed with + 1% b.w.o.c. (= 423#) of calcium chloride + 0.2% b.w.o.c. (= 84.6#) of ASA-301 + 0.001 gal. per second (= 1.43 gal.) of FP-6L yielding 1.40 cu. ft. of slurry per sack of cement at 4.7 bpm through 5" O.D. drill pipe & stab-in sub into annulus at 338 PSI. •450 sacks of Type 1 (Class A) cement weighed 42,300#. No returns.

1-31-13 @ 6:54 PM Displacement: Pumped 28 bbls. of 9.0 ppg drilling mud at 5 bpm (for 6 minutes) into 5" O.D. drill pipe & stab-in sub into annulus at 641 PSI to push tail cement into annulus.

1-31-13 @ 7:00 PM Shut down.

1-31-13 @ 7:30 PM P.O.O.H. with 9 joints of 5" O.D. drill pipe. Pumped sponge wiper ball through drill pipe to displace 5 bbls. of cement into 13.375” casing. P.O.O.H. with 45 joints of 5” drill pipe + stab-in sub + centralizer + stinger.

1-31-13 @ 8:45 PM From the drill floor, tripped in annular space between 23” I.D. conductor and 13.375” O.D. surface casing with 1¼” O.D. steel tremmie pipe.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 4 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 9.16’ North & 11.43’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 1,980’ DF TVD 1,979.85’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Repairing top drive after drilling 12¼” hole to 1,980’ DF.

I certify that the above well and premise was inspected on 12-26-12, 1-2-13, 1-7-13, 1-8-13, 1-9-13, 1-11-13, 1-14-13, 1-16-13, 1-17-13, 1-21-13, 1-24-13, 1-25-13, 1-27-13, 1-28-13, 1-29-13, 1-30-13, 1-31-13, 2-1-13, & 2-2-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 3rd day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/03/13

Permit # 1349 Date 02 03 2013

1-31-13 @ 9:06 PM

Top Out #1 cement (portion supplied by Baker Hughes): Pumped 40 bbls. (150 sacks/12.7 PPG) of Type I (Class A) cement mixed with 2% b.w.o.c. (= 282#) of calcium chloride + 0.001 gal. per second (= 2.82 gal.) of FP-6L at 0.85 bpm into the annulus of the 13.375" surface casing at 72 PSI. •150 sacks of Type 1 (Class A) cement weighed 14,100#.

1-31-13 @ 9:53 PM

Top Out #2 cement (portion supplied by Youngquist Bros.): Pumped 48 bbls. (185 sacks/12.7 PPG) of Type I (Class A) cement mixed with 2% b.w.o.c. (= 347.8#) of calcium chloride + 0.001 gal. per second (= 3.36 gal.) of FP-6L at 0.85 bpm into the annulus of the 13.375" surface casing at 72 PSI. •185 sacks of Type 1 (Class A) cement weighed 17,390#.

1-31-13 @ 10:49 PM Shut down. Stopped pumping cement. P.O.O.H. with 1¼” O.D. tremmie pipe & rigged down Baker Hughes cementers.

2-01-13 @ 1:35 PM

Final Top Out #3 cement (supplied by Eagle Ready Mix-Estero, FL): •Began pumping 44 cubic yards (per delivery ticket) which equals 211.59 bbls. (1,100 sacks) of Ready Mix cement. •Concrete aggregate consisted of 60% ¼”-diameter rock/pea gravel + 40% cement. Note: 25 sacks of the 60:40 slurry were mixed with water to yield 1 cubic yard of 60:40 slurry(per 2-19-13 conversation with Craig Davis-Youngquist Brothers.) •Hence, 660 sacks of aggregate + 440 sacks of cement were mixed with water to yield 44 cu. yards of ready mix cement. •Strength of aggregate pumped: 3,000 PSI. •Started pumping final 10 cubic yards of Ready Mix cement mixed with pea gravel on 2-1-13 at 5:10 PM.

2-01-13 @ 6:00 PM Top of cement observed in 23” I.D. x 13.375” O.D. annulus at surface.

Day 13 Summary: 2-02-13 PBTD = 1,707’ DF. Lifted diverter stack & made “rough” cut of 13 3/8” surface casing & 24” conductor. (6 AM 2-1-13 to 6 AM 2-2-13) Pumped 211.59 bbls. (1,100 sacks) of Ready Mix cement for final top off. Total volume of cement/aggregate used for surface casing cement job: 863.38 barrels (which = 2,138 sacks of cement + 660 sacks of pea gravel.) Made final cut of 13 3/8” surface casing, then installed & welded wellhead. (tagged cement inside 13 3/8” surface casing at 1,707’ DF on 2-2-13.) (Bruno arrived 2-1-13 at noon, left 2-1-13 at 1 PM.) (Attwood arrived 2-1-13 at 12:20 PM, left 2-1-13 at 2:23 PM.) Day 14 Summary: 2-03-13 TD = 1,980’ DF Tagged firm cement inside 13 3/8” surface casing at 1,707’ DF (= 7’ above casing shoe) with 20,000#. (6 AM 2-2-13 to 6 AM 2-3-13) Performed “successful” M.I.T. of 13 3/8” surface casing at 1,000 PSI (witnessed by drilling consultant.)

Drilled 7’ of cement inside 13 3/8” surface casing with 12¼” bit from 1,707’ DF to 1,714’ DF. Drilled 194’ of cement with 12¼” bit from 1,714’ DF to 1,908’ DF(interval previously drilled on 1-25-13.) Drilled 72’ of formation with 12¼” bit from 1,908’ DF to 1,980’ DF. Youngquist Bros. ran GR/Caliper log from 1,912’ DF to 1,652’ DF. Youngquist Bros. ran SP/Dual Induction log from 1,912’ DF to 1,728’ DF. •13 3/8” surface casing shoe logged at 1,714’ DF (per X-Y caliper log.) •U.S.D.W. ABOVE 13 3/8” casing shoe (resistivity= 2.5 ohms to 3.5 ohms BELOW 1,728’ DF per induction log.) •U.S.D.W. protected. Observation: Saltwater from the Boulder Zone may have migrated up to the severe lost circulation zone at 1,638’ DF, then contaminated the porous zones below 1,638’ DF. TDS of water below 1,728’ DF greater than 10,000 PPM per induction log. (Attwood arrived 2-2-13 at 10:22 PM, left 2-3-13 at 3:03 AM)

---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 6.96’ North & 16.50’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 4,608’ DF TVD 4,607.55’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole at 4,608’ DF.

I certify that the above well and premise was inspected on 2-4-13, 2-6-13, 2-8-13, 2-9-13, 2-10-13, 2-11-13, & 2-12-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 13th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/13/13

Permit # 1349 Date 02 13 2013

Second Report (#1349-pilot): ■Drilled 1,985’ of 12¼” hole from 1,980’ DF to 3,965’ DF;

■Cemented 9.625” O.D. x 47#/ft. casing at 3,964’ DF

with 212.10 bbls./630 sacks of cement;

■Drilled 162’ of cement inside 9.625” O.D. casing from 3,802’ DF to 3,964’ DF;

■Drilled 1’ of cement in (former) 12¼” bore hole from 3,964’ DF to 3,965’ DF;

■Drilled 643’ of 8½” hole from 3,965’ DF to 4,608’ DF.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF. Day 15 Summary: 2-04-13 TD = 1,980’ DF Repairing top drive. No hole drilled. (6 AM 2-3-13 to 6 AM 2-4-13) Day 16 Summary: 2-05-13 TD = 2,182’ DF Drilled 202’ of 12¼” hole from 1,980’ DF to 2,182’ DF in 6.5 hrs. (6 AM 2-4-13 to 6 AM 2-5-13)

■Lost all returns at 2,031’ DF. (Bruno arrived 2-4-13 at 8:40 AM, left 2-4-13 at 9:30 AM.)

(Attwood arrived 2-4-13 at 1:40 PM, left 2-4-13 at 1:50 PM.) Day 17 Summary: 2-06-13 TD = 2,277’ DF. Drilled 95’ of 12¼” hole from 2,182’ DF to 2,277’ DF in 10 hrs. with no returns. (6 AM 2-5-13 to 6 AM 2-6-13) Day 18 Summary: 2-07-13 TD = 2,849’ DF. Drilled 572’ of 12¼” hole from 2,277’ DF to 2,849’ DF in 23 hrs. with no returns. (6 AM 2-6-13 to 6 AM 2-7-13) (Attwood arrived 2-6-13 at 9:15 AM, left 2-6-13 at 9:50 AM.) Day 19 Summary: 2-08-13 TD = 3,196’ DF. Drilled 347’ of 12¼” hole from 2,849’ DF to 3,196’ DF in 19.5 hrs. with no returns. (6 AM 2-7-13 to 6 AM 2-8-13) Day 20 Summary: 2-09-13 TD = 3,775’ DF. Drilled 579’ of 12¼” hole from 3,196’ DF to 3,775’ DF in hrs. with no returns. (6 AM 2-8-13 to 6 AM 2-9-13) (Bruno arrived 2-8-13 at 3:08 PM, left 2-8-13 at 4:39 PM.)

Day 21 Summary: 2-10-13 TD = 3,965’ DF. Drilled 190’ of hole from 3,775’ DF to 3,965’ DF in 6 hrs. with no returns. (6 AM 2-9-13 to 6 AM 2-10-13) Rigged up Offshore Energy casing crew. Tripped in hole with pump-in sub, then washed & reamed 9 5/8” intermediate casing to 3,618’ DF. •9 5/8” O.D. x 47#/ft. intermediate casing manufactured in the United States.

•While washing and reaming 9 5/8” casing, “obstructions” hit at: 2,026’ DF, 2,075’ DF, 2,085’ DF, 2,200’ DF, & 2,300’ DF (per Precision’s driller.) •Note: 1½ hours was needed to get the 9 5/8” casing by “obstruction” at 2,200’ DF.

(Attwood arrived 2-9-13 at 5:16 PM, left 2-9-13 at 5:47 PM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 6.96’ North & 16.50’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 4,608’ DF TVD 4,607.55’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole at 4,608’ DF.

I certify that the above well and premise was inspected on 2-4-13, 2-6-13, 2-8-13, 2-9-13, 2-10-13, 2-11-13, & 2-12-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 13th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/13/13

Permit # 1349 Date 02 13 2013

Day 22 Summary: 2-11-13 PBTD = 3,802’ DF. Finished washing & reaming 9 5/8” int. casing from 3,618’ DF to 3,964’ DF (= 1’ off bottom.) (6 AM 2-10-13 to 6 AM 2-11-13) Cemented 9 5/8” x 47#/ft. intermediate casing with 212.10 bbls. (630 sacks) of cement. Nippled down diverter system & set 9 5/8” casing slips with 105,000# of tension. Made final cut on 9 5/8” casing.

Installed & tested wellhead to 1,500 PSI. Tested OK. Nippled up BOP stack and choke manifold.

(tagged cement inside 9 5/8” casing at 3,802.4’ DF on 2-12-13.) •Last (final) joint of 9 5/8” casing inserted in well on 2-10-13 at 6:30 AM.

•Tagged fill in 12¼” wellbore with 30,000# of casing string weight. (Attwood arrived 2-10-13 at 6:02 AM, left 2-10-13 at 10:26 AM; Attwood returned 2-10-13 at 11:14 PM, on location 2-11-13 at 6:00 AM.)

Intermediate Casing Cement Job on 2-10-13: 9.625" O.D. x 47#/ft. P-110 GB Buttress casing set at 3,964' DF in #1349 (pilot well).

2-10-13 @ 7:25 AM Tested cementing lines to 3,500 PSI. Tested OK. 2-10-13 @ 7:35 AM Spacer Ahead: Pumped 20 bbls. 8.4 ppg MudClean II at 5 bpm into 9 5/8” casing at 179 PSI.

2-10-13 @ 7:45 AM

Lead cement: Pumped 150 bbls. (310 sacks/11.5 PPG) of 35:65:6 Poz (fly ash) Class H cement composed of 108.7 sacks (= 8,043.8#) of Poz/fly ash + 201.5 sacks (=18,941#) of Class H cement + 6% b.w.o.c. (= 1,618.2#) of gel/bentonite + 3% b.w.o.c. (= 568.2#) of calcium chloride + 3% b.w.o.c. (= 568.2#) of sodium metasilicate + 0.001 gal. per second (= 2.15 gal.) of FP-6L yielding 2.66 cu. ft. of slurry per sack of cement at 4.19 bpm into 9 5/8” intermediate casing at 280 PSI.

2-10-13 @ 8:20 AM

Tail cement: Pumped 62.10 bbls. (320 sacks/16.2 PPG) of Class H cement mixed with 0.001 gal. per second (= 0.91 gal.) of FP-6L yielding 1.09 cu. ft. of slurry per sack of cement at 4.11 bpm into 9 5/8” intermediate casing at 273 PSI. •320 sacks of Class H cement weighed 30,080#.

2-10-13 @ 8:42 AM Displacement: Dropped top plug, then displaced lead cement & tail cement in 9 5/8” casing into annulus with 284 bbls. of 9.0 ppg drilling mud at 7.5 bpm & 328 PSI.

2-10-13 @ 9:15 AM Bumped plug to 1,300 PSI. Plug held.

2-10-13 @ 9:20 AM Bled pressure on cement plug to 0 PSI, then began rigging down Baker Hughes cementers.

Day 23 Summary: 2-12-13 PBTD = 3,871’ DF. F.D.E.P. personnel witnessed tests #1a. thru 9b. of BOP Test #66. (6 AM 2-11-13 to 6 AM 2-12-13) Drilling engr. witnessed rest of BOP test. Tagged hard cement inside 9 5/8” casing with 19,700# of weight at 3,802.4’ DF. Drilled 69’ of hard cement inside 9 5/8” casing from 3,802’ DF to 3,871’ DF. •Driller tagged hard cement inside 9 5/8” casing with 19,700# of drill string weight at 3,802.4’ DF on 2-12-13 at 4:33 AM. (Attwood on location 2-11-13 at 6:00 AM, left 2-11-13 at 9:30 AM.) (Bruno arrived 2-11-13 at 8:30 AM, left 2-11-13 at 12:15 PM.) (Attwood arrived 2-11-13 at 5:09 PM, left 2-11-13 at 5:39 PM.) (Attwood arrived 2-12-13 at 2:19 AM, on location 2-12-13 at 6:00 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 6.96’ North & 16.50’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 4,608’ DF TVD 4,607.55’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole at 4,608’ DF.

I certify that the above well and premise was inspected on 2-4-13, 2-6-13, 2-8-13, 2-9-13, 2-10-13, 2-11-13, & 2-12-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 13th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/13/13

Permit # 1349 Date 02 13 2013

BOP Test #66 on 2-11-13: Test of Blowout Preventers, Kill Valves, Hydril, Chokes & Floor Valves (#1349-pilot well)

2-11-13 @ 7:13 AM 2-11-13 @ 7:18 AM 1a. Tested Lower pipe rams at 270 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 7:19 AM 2-11-13 @ 7:24 AM 1b. Tested Lower pipe rams at 3,510 PSI. Lost 40 PSI (1.1%) in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 7:28 AM 2-11-13 @ 7:28:30 AM 2a(1). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 240 PSI. Lost 240 PSI (100%) in ½ minute. FAILED 1st low pressure test. •Re-pressurized system to 400 PSI & re-started test.

2-11-13 @ 7:29:15 AM 2-11-13 @ 7:33:15 AM 2a(2). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 400 PSI. Lost 40 PSI (10.0%) in 4 minutes. FAILED 2nd low pressure test. •Opened line. Pumped one stroke. Closed line & started 3rd low pressure test.

2-11-13 @ 7:33:45 AM 2-11-13 @ 7:38:45 AM 2a(3). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 365 PSI. No pressure lost in 5 minutes. PASSED on 3rd attempt.

2-11-13 @ 7:40:30 AM 2-11-13 @ 7:45:30 AM 2b(1). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,490 PSI. Lost 140 PSI (4.0%) in 5 minutes. FAILED 1st high pressure test. • Opened line. Pumped one stroke. Closed line & started 2nd high pressure test.

2-11-13 @ 7:46 AM 2-11-13 @ 7:51 AM 2b(2). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,480 PSI. Lost 100 PSI (2.9%) in 5 minutes. PASSED on 2nd attempt.

2-11-13 @ 7:54:45 AM 2-11-13 @ 7:59:45 AM 3a. Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 290 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 8:00:30 AM 2-11-13 @ 8:05:30 AM 3b. Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 3,525 PSI. Lost 95 PSI (2.7%) in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 8:09:30 AM 2-11-13 @ 8:14 AM 4a(1). Tested Hydril at 270 PSI. Lost 40 PSI (14.8%) in 4½ minutes. FAILED on 1st low pressure test. • Opened line. Pumped one stroke. Closed line & started 2nd low pressure test.

2-11-13 @ 8:14:15 AM 2-11-13 @ 8:19:15 AM 4a(2). Tested Hydril at 250 PSI. No pressure lost in 5 minutes. PASSED on 2nd attempt.

2-11-13 @ 8:20 AM 2-11-13 @ 8:25 AM 4b(1). Tested Hydril at 2,005 PSI. Lost 75 PSI (3.7%) in 5 minutes. FAILED 1st high pressure test. •Pressured-up Hydril bladder to 1,550 PSI, then started 2nd high pressure test.

2-11-13 @ 8:31:30 AM 2-11-13 @ 8:36:30 AM 4b(2). Tested Hydril at 2,010 PSI. Lost 40 PSI (2.0%) in 5 minutes. PASSED on 2nd attempt.

2-11-13 @ 10:14 AM 2-11-13 @ 10:19 AM 5a. Tested Manual T.I.W. (Full Open Safety Ball) valve at 400 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 10:20 AM 2-11-13 @ 10:25 AM 5b. Tested Manual T.I.W. (Full Open Safety Ball) valve at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 10:33 AM 2-11-13 @ 10:38 AM 6a. Tested Inside Gray (manual dart) valve at 400 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 10:39 AM 2-11-13 @ 10:44 AM 6b. Tested Inside Gray (manual dart) valve at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 10:58 AM 2-11-13 @ 10:59:30 AM 7a(1). Tested Lower manual I.B.O.P. on top drive at 300 PSI. Lost 180 PSI (40.0%) in 1½ minutes. FAILED on 1st low pressure test.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 4 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 6.96’ North & 16.50’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 4,608’ DF TVD 4,607.55’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole at 4,608’ DF.

I certify that the above well and premise was inspected on 2-4-13, 2-6-13, 2-8-13, 2-9-13, 2-10-13, 2-11-13, & 2-12-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 13th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/13/13

Permit # 1349 Date 02 13 2013

BOP Test #66 on 2-11-13: Test of Blowout Preventers, Kill Valves, Hydril, Chokes & Floor Valves (#1349-pilot well)

2-11-13 @ 11:02 AM 2-11-13 @ 11:08 AM 7a(2). Tested Lower manual I.B.O.P. on top drive at 400 PSI. No pressure lost in 6 minutes. PASSED on 2nd attempt.

2-11-13 @ 11:09 AM 2-11-13 @ 11:14 AM 7b. Tested Lower manual I.B.O.P. on top drive at 3,500 PSI. Lost 100 PSI (2.9%) in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 11:21 AM 2-11-13 @ 11:22 AM 8a(1). Tested Upper hydraulic I.B.O.P. on top drive at 300 PSI. Lost 100 PSI (33.3%) in 1 minute. FAILED 1st low pressure test.

2-11-13 @ 11:26 AM 2-11-13 @ 11:31 AM 8a(2). Tested Upper hydraulic I.B.O.P. on top drive at 390 PSI. No pressure lost in 5 minutes. PASSED on 2nd attempt.

2-11-13 @ 11:32 AM 2-11-13 @ 11:37 AM 8b. Tested Upper hydraulic I.B.O.P. on top drive at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 11:53 AM 2-11-13 @ 11:58 AM 9a. Tested 4” Standpipe valve at 310 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 11:59 AM 2-11-13 @ 12:04 PM 9b. Tested 4” Standpipe valve at 3,600 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

FDEP witness (Mr. Pierre Bruno) had to leave location after Test #9b. Tests #10a .thru #14b. witnessed by Mr. Ricky Baughman (PPI drilling consultant).

2-11-13 @ 2:31 PM 2-11-13 @ 2:36 PM 10a. Tested HCR + Inside manual valve +choke manifold valves to gas buster and shale shaker at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 2:37 PM 2-11-13 @ 2:42 PM 10b. Tested HCR + Inside manual valve + choke manifold valves to gas buster and shale shaker at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt. ■ A 150 PSI (4.3%) pressure decline was recorded on the chart record for Test #10b.

2-11-13 @ 2:51 PM 2-11-13 @ 2:56 PM 11a. Tested HCR + Inside manual valve + three (3) MIDDLE choke manifold valves at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 2:57 PM 2-11-13 @ 3:02 PM 11b. Tested HCR + Inside manual valve + three (3) MIDDLE choke manifold valves at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt. ■ A 150 PSI (4.3%) pressure decline was recorded on the chart record for Test #11b.

2-11-13 @ 3:08 PM 2-11-13 @ 3:13 PM 12a. Tested HCR + Inside manual valve + three (3) INSIDE choke manifold valves at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 3:14 PM 2-11-13 @ 3:19 PM 12b. Tested HCR + Inside manual valve + three (3) INSIDE choke manifold valves at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt. ■ A 100 PSI (2.9%) pressure decline was recorded on the chart record for Test #12b.

2-11-13 @ 4:27 PM 2-11-13 @ 4:32 PM 13a. Tested 4” mud pump valves at 400 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 4:33 PM 2-11-13 @ 4:38 PM 13b. Tested 4” mud pump valves at 3,600 PSI. Lost 100 PSI (2.8%) in 5 minutes. PASSED on 1st attempt. ■ A 120 PSI (3.3%) pressure decline was recorded on the chart record for Test #13b.

2-11-13 @ 5:02 PM 2-11-13 @ 5:07 PM 14a. Tested Blind rams at 350 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-11-13 @ 5:08 PM 2-11-13 @ 5:13 PM 14b. Tested Blind rams at 3,600 PSI. Lost 60 PSI (1.7%) in 5 minutes. PASSED on 1st attempt. ■ An 80 PSI (2.2%) pressure decline was recorded on the chart record for Test #14b.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 5 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 6.96’ North & 16.50’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 4,608’ DF TVD 4,607.55’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole at 4,608’ DF.

I certify that the above well and premise was inspected on 2-4-13, 2-6-13, 2-8-13, 2-9-13, 2-10-13, 2-11-13, & 2-12-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 13th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/13/13

Permit # 1349 Date 02 13 2013

Day 24 Summary: 2-13-13 TD = 4,608’ DF. F.D.E.P. witnessed successful M.I.T. of 9 5/8” intermediate casing. (6 AM 2-12-13 to 6 AM 2-13-13) Drilled 69’ of hard cement inside 9 5/8” casing from 3,871’ DF to 3,964’ DF.

Drilled 1’ of hard cement in (former) 12¼” hole from 3964’ DF to 3,965’ DF. Drilled 643’ of 8½” hole from 3,965’ DF to 4,608’ DF in 20 hrs.

(Attwood on location 2-12-13 at 6:00 AM, left 2-12-13 at 7:14 AM.)

•Performed MIT of 9 5/8” intermediate casing. MIT witnessed by P. Attwood (FDEP-Oil & Gas Section.)

M.I.T #1 of 9 5/8” intermediate casing on 2-12-13 in #1349 well 8½” drill bit at 3,870.4’ DF during MIT

Duration Time (per Pason) Actual/True Time PSIG (per Pason) Start 6:44:30 AM 6:32:48 AM 1002

5 min. 6:49:30 AM 6:37:48 AM 991 10 min. 6:54:30 AM 6:42:48 AM 990 15 min. 6:59:30 AM 6:47:48 AM 989 20 min. 7:04:30 AM 6:52:48 AM 990

Note: Pressure registered on the digital Pason screen (=990 PSI) was 50 PSI lower than the pressure registered on the mechanical Totco gauge (=1,040 PSI) after 20 minutes of the test had elapsed.

25 min. 7:09:30 AM 6:57:48 AM 991 30 min. 7:14:30 AM 7:02:48 AM 992

Summary of MIT #1: Lost 10 PSI (1.00%) in 30 minutes. Passed MIT. PASSED MIT #1 on 2-12-13 at 7:02:48 AM.

---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 14.64’ South & 134.65’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 11,704’ DF TVD 11,701.74’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status P.O.O.H. to rig up Halliburton & cut conventional core #1.

I certify that the above well and premise was inspected on 2-15-13, 2-18-13, 2-21-13, 2-24-13, & 2-25-13 by Paul Attwood. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 26th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/26/13

Permit # 1349 Date 02 26 2013

Third Report (#1349-pilot): ■Drilled 7,096’ of 8½” hole from 4,608’ DF to 11,704’ DF.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF Day 25 Summary: 2-14-13 TD = 5,695’ DF Drilled 1,087’ of 8½” hole from 4,608’ DF to 5,695’ DF in 22 hrs. (6 AM 2-13-13 to 6 AM 2-14-13) Day 26 Summary: 2-15-13 TD = 6,554’ DF Drilled 859’ of 8½” hole from 5,695’ DF to 6,554’ DF in 22 hrs. (6 AM 2-14-13 to 6 AM 2-15-13) Day 27 Summary: 2-16-13 TD = 6,792’ DF Drilled 238’ of 8½” hole from 6,554’ DF to 6,792’ DF in 7.5 hrs. (6 AM 2-15-13 to 6 AM 2-16-13) (Attwood arrived 2-15-13 at 9:51 AM, left 2-15-13 at 10:04 AM.) Day 28 Summary: 2-17-13 TD = 7,302’ DF Drilled 510’ of 8½” hole from 6,792’ DF to 7,302’ DF in 20.5 hrs. (6 AM 2-16-13 to 6 AM 2-17-13) 276.89’ of “fish” left in hole from 7,025’ DF to 7,301.89’ DF. •Well flowing. Raised mud weight from 8.7 PPG to 8.8 PPG. Day 29 Summary: 2-18-13 TD = 7,302’ DF Attempting to recover 276.89’ of “fish” in well from 7,025’ DF to 7,301.89’ DF. (6 AM 2-17-13 to 6 AM 2-18-13) •Well flowing. •Crossover below jars broke off . •276.89’-long fish in well: 8½” drill bit + mud motor + crossover + prodrift tool + seven 6½” drill collars

+ two stabilizers + 1.19’-long crossover. •Tripped in hole with fishing tools. Made seven unsuccessful attempts to recover “fish.” No success.

Day 30 Summary: 2-19-13 TD = 7,302’ DF Recovered 276.89’ of “fish” in well from 7,025’ DF to 7,301.89’ DF. (6 AM 2-18-13 to 6 AM 2-19-13)

•Tripped in hole with overshot + bent joint of drill pipe. Latched onto & recovered 276.89’ of “fish.” (Attwood arrived 2-18-13 at 7:20 AM, left 2-18-13 at 7:48 AM.) Day 31 Summary: 2-20-13 TD = 7,983’ DF Drilled 681’ of 8½” hole from 7,302’ DF to 7,983’ DF in 18 hrs. (6 AM 2-19-13 to 6 AM 2-20-13) Day 32 Summary: 2-21-13 TD = 8,823’ DF Drilled 840’ of 8½” hole from 7,983’ DF to 8,823’ DF in 21.5 hrs. (6 AM 2-20-13 to 6 AM 2-21-13) Day 33 Summary: 2-22-13 TD = 9,900’ DF Drilled 1,077’ of 8½” hole from 8,823’ DF to 9,900’ DF in 19 hrs. (6 AM 2-21-13 to 6 AM 2-22-13) (Attwood arrived 2-21-13 at 1:18 PM, left 2-21-13 at 2:09 PM.) Day 34 Summary: 2-23-13 TD = 10,835’ DF Drilled 935’ of 8½” hole from 9,900’ DF to 10,835’ DF in 19 hrs. (6 AM 2-22-13 to 6 AM 2-23-13) Day 35 Summary: 2-24-13 TD = 11,535’ DF Drilled 700’ of 8½” hole from 10,835’ DF to 11,535’ DF in 21 hrs. (6 AM 2-23-13 to 6 AM 2-24-13) Day 36 Summary: 2-25-13 TD = 11,600’ DF Drilled 65’ of 8½” hole from 11,535’ DF to 11,600’ DF in 3 hrs. (6 AM 2-24-13 to 6 AM 2-25-13) Performed B.O.P. Test #67. Ran Gamma Ray/Sonic/Dual induction correlation logs from 8,500’ DF to 11,600’ DF.

•Performed B.O.P. Test #67. Entire test witnessed by P. Attwood (FDEP-Oil & Gas Section.) •Rigged up Youngquist Bros. logging truck & ran wireline logs for correlation (to pick core points) on 2-25-13: ■Run #1: Gamma Ray/Sonic from 8,500’ DF to 11,600’ DF. ■Run #2: Dual induction from 8,500’ DF to 11,600’ DF.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 14.64’ South & 134.65’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 11,704’ DF TVD 11,701.74’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status P.O.O.H. to rig up Halliburton & cut conventional core #1.

I certify that the above well and premise was inspected on 2-15-13, 2-18-13, 2-21-13, 2-24-13, & 2-25-13 by Paul Attwood. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 26th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/26/13

Permit # 1349 Date 02 26 2013

BOP Test #67 on 2-24-13 & 2-25-13:

Test of Blowout Preventers, Kill Valves, Hydril, Chokes & Floor Valves (#1349-pilot well)

2-24-13 @ 9:22:15 PM 2-24-13 @ 9:27:15 PM 1a. Tested Lower pipe rams at 300 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-24-13 @ 9:28 PM 2-24-13 @ 9:29:15 PM 1b(1). Tested Lower pipe rams at 3,500 PSI. Lost 800 PSI (22.9%) in 1¼ minutes. FAILED 1st high pressure test. •Repaired loose “O” ring connection where pressurized line connects to pressure gauge.

2-24-13 @ 9:32:15 PM 2-24-13 @ 9:37:15 PM 1b(2). Tested Lower pipe rams at 3,370 PSI. Lost 60 PSI (1.8%) in 5 minutes. PASSED on 2nd attempt.

2-24-13 @ 9:41:30 PM 2-24-13 @ 9:44 PM 2a(1). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 320 PSI. Lost 40 PSI (12.5%) in 2½ minutes. FAILED 1st low pressure test. •Increased pressure in system from 280 PSI to 420 PSI, then started 2nd low pressure test.

2-24-13 @ 9:44:30 PM 2-24-13 @ 9:49:30 PM 2a(2). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 420 PSI. Lost 10 PSI (2.4%) in 5 minutes. PASSED on 2nd attempt.

2-24-13 @ 9:50:15 PM 2-24-13 @ 9:51:45 PM 2b(1). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,390 PSI. Lost 220 PSI (6.5%) in 1½ minutes. FAILED 1st high pressure test. • Opened line. Pumped one stroke. Closed line & started 2nd high pressure test.

2-24-13 @ 9:52:30 PM 2-24-13 @ 9:55:30 PM 2b(2). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,475 PSI. Lost 245 PSI (7.0%) in 3 minutes. FAILED 2nd high pressure test. •Opened & closed INSIDE manual valve + INSIDE kill line valve, then re-pressurized line & started 3rd high PSI test.

2-24-13 @ 9:58:30 PM 2-24-13 @ 10:03:30 PM 2b(3). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,500 PSI. Lost 60 PSI (1.7%) in 5 minutes. PASSED on 3rd attempt.

2-24-13 @ 10:06:45 PM 2-24-13 @ 10:08:45 PM 3a(1). Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 270 PSI. Lost 50 PSI (18.5%) in 2 minutes. FAILED 1st low pressure test. • Opened line. Pumped one stroke. Closed line & started 2nd low pressure test.

2-24-13 @ 10:09:15 PM 2-24-13 @ 10:12:15 PM 3a(2). Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 355 PSI. Lost 25 PSI (7.0%) in 3 minutes. FAILED 2nd low pressure test. •At this point, operator decided to run high pressure test.

2-24-13 @ 10:13:30 PM 2-24-13 @ 10:14:30 PM 3b(1). Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 3,380 PSI. Lost 220 PSI (6.5%) in 1 minute. FAILED 1st high pressure test. •Opened & closed upper pipe rams, then started 3rd low pressure test.

2-24-13 @ 10:30:30 PM 2-24-13 @ 10:32:30 PM 3a(3). Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 300 PSI. Lost 40 PSI (13.3%) in 2 minutes. FAILED 3rd low pressure test. • Opened line. Pumped one stroke. Closed line & started 4th low pressure test.

2-24-13 @ 10:33 PM 2-24-13 @ 10:35:30 PM 3a(4). Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 295 PSI. Lost 30 PSI (10.2%) in 2½ minutes. FAILED 4th low pressure test. •Operator decided to try a 2nd high pressure test.

2-24-13 @ 10:36:15 PM 2-24-13 @ 10:41:15 PM 3b(2). Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 3,430 PSI. Lost 45 PSI (1.3%) in 5 minutes. PASSED on 2nd attempt. • Bled pressure from 3,385 PSI to 320 PSI, then started 5th low pressure test.

2-24-13 @ 10:42:30 PM 2-24-13 @ 10:47:30 PM 3a(5). Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 320 PSI. Lost 5 PSI (1.6%) in 5 minutes. PASSED on 5th attempt.

2-24-13 @ 10:52 PM 2-24-13 @ 10:54:30 PM 4a(1). Tested Hydril at 300 PSI. Lost 50 PSI (16.7%) in 2½ minutes. FAILED 1st low pressure test. • Increased pressure from 250 PSI to 300 PSI & continued testing.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 14.64’ South & 134.65’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 11,704’ DF TVD 11,701.74’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status P.O.O.H. to rig up Halliburton & cut conventional core #1.

I certify that the above well and premise was inspected on 2-15-13, 2-18-13, 2-21-13, 2-24-13, & 2-25-13 by Paul Attwood. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 26th day of February 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 02/26/13

Permit # 1349 Date 02 26 2013

BOP Test #67 on 2-24-13 & 2-25-13: Test of Blowout Preventers, Kill Valves, Hydril, Chokes & Floor Valves (#1349-pilot well)

2-24-13 @ 10:55 PM 2-24-13 @ 11:01 PM 4a(2). Tested Hydril at 300 PSI. Lost 10 PSI (3.3%) in 6 minutes. No drips or leaks observed from & around Hydril. PASSED on 2nd attempt.

2-24-13 @ 11:01:45 PM 2-24-13 @ 11:06 PM 4b(1). Tested Hydril at 1,880 PSI. Lost 60 PSI (3.7%) in 4¼ minutes. FAILED 1st high pressure test. • Increased pressure from 1,820 PSI to 2,000 PSI & continued testing.

2-24-13 @ 11:06:45 PM 2-24-13 @ 11:11:45 PM 4b(2). Tested Hydril at 2,000 PSI. Lost 40 PSI (2.0%) in 5 minutes. PASSED on 2nd attempt.

2-24-13 @ 11:27 PM 2-24-13 @ 11:28 PM 5a(1). Blind rams + three (3) INSIDE choke manifold valves at 290 PSI. Lost 115 PSI (39.7%) in 1 minute. FAILED 1st low pressure test. •Pressured up line to 1,000 PSI, then bled pressure back to 350 PSI & started 2nd low pressure test.

2-24-13 @ 11:31:45 PM 2-24-13 @ 11:36:45 PM 5a(2). Blind rams + three (3) INSIDE choke manifold valves at 350 PSI. No pressure lost in 5 minutes. PASSED on 2nd attempt.

2-24-13 @ 11:37:30 PM 2-24-13 @ 11:40 PM 5b(1). Blind rams + three (3) INSIDE choke manifold valves at 3,490 PSI. Lost 150 PSI (4.3%) in 2½ minutes. FAILED 1st high pressure test. • Increased pressure from 3,340 PSI to 3,520 PSI & continued testing.

2-24-13 @ 11:40:30 PM 2-24-13 @ 11:45:30 PM 5b(2). Blind rams + three (3) INSIDE choke manifold valves at 3,520 PSI. Lost 30 PSI (0.9%) in 5 minutes. PASSED on 2nd attempt.

2-24-13 @ 11:54:30 PM 2-24-13 @ 11:59:30 PM 6a. Blind rams + three (3) MIDDLE choke manifold valves at 310 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

2-25-13 @ 12:00:45 AM 2-25-13 @ 12:04:45 AM 6b(1). Blind rams + three (3) MIDDLE choke manifold valves at 3,490 PSI. Lost 85 PSI (2.4%) in 4 minutes. Technically, would have probably PASSED 1st high pressure test if duration = 5 min. •I wanted a “better” test result based on previous questionable test of these three valves on 2-11-13.

2-25-13 @ 12:05:15 AM 2-25-13 @ 12:10:15 AM 6b(2). Blind rams + three (3) MIDDLE choke manifold valves at 3,600 PSI. Lost 15 PSI (0.4%) in 5 minutes. Definitely PASSED on 2nd attempt.

2-25-13 @ 12:15:45 AM 2-25-13 @ 12:20:45 AM 7a. Blind rams + choke manifold valves to shale shakers, panic line, & gas buster at 300 PSI. Lost 5 PSI (1.7%) in 5 minutes. PASSED on 1st attempt.

2-25-13 @ 12:21:30 AM 2-25-13 @ 12:24:30 AM

7b(1). Blind rams + choke manifold valves to shale shakers, panic line, & gas buster at 3,500 PSI. Lost 50 PSI (1.4%) in 3 minutes. Technically, would have probably PASSED 1st high pressure test if duration = 5 min. • I wanted a “better” test result based on previous questionable test of these three valves on 2-11-13. • Increased pressure from 3,450 PSI to 3,670 PSI & continued testing.

2-25-13 @ 12:25 AM 2-25-13 @ 12:30 AM 7b(2). Blind rams + choke manifold valves to shale shakers, panic line, & gas buster at 3,670 PSI. Lost 40 PSI (1.1%) in 5 minutes. PASSED on 2nd attempt.

(Attwood arrived 2-24-13 at 6:55 PM, left 2-25-13 at 12:46 AM.) Day 37 Summary: 2-26-13 TD = 11,704’ DF Drilled 104’ of 8½” hole from 11,600’ DF to 11,704’ DF in 3.5 hrs. (6 AM 2-25-13 to 6 AM 2-26-13) P.O.O.H. to take conventional core #1. ---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 74.96’ South & 193.18’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,908’ DF TVD 12,904.27’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Ricky Baughman (drilling consultants) (713) 395-7571 Well Status Waiting on fishing tools. 236.20’ of “fish” in hole from 12,672.40’ DF to 12,908.6’ DF.

I certify that the above well and premise was inspected on 2-26-13, 3-4-13, 3-6-13, 3-7-13, & 3-8-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 9th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/09/13

Permit # 1349 Date 03 09 2013

Fourth Report (#1349-pilot): ■Cored 32’ from 11,704’ DF to 11,736’ DF. Recovered 32’ of 32’ cored;

■Drilled 134’ of 8½” hole from 11,736’ DF to 11,870’ DF;

■Cored 83’ from 11,870’ DF to 11,953’ DF. Recovered 50’ of 83’ cored;

■Cored 33’ from 11,953’ DF to 11,986’ DF. Recovered 19’ of 33’ cored;

■Drilled 922’ of 8½” hole from 11,986’ DF to 12,908’ DF.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF. Day 38 Summary: 2-27-13 TD = 11,736’ DF. Conventionally cored 32’ from 11,704’ DF to 11,736’ DF (Halliburton Core #1). (6 AM 2-26-13 to 6 AM 2-27-13)

(10:30 AM 2-26-13 to 5:30 PM 2-26-13) •Tripped in hole with Halliburton Core Barrel #1 to 11,700’ DF. Washed 4’ from 11,700’ DF to 11,704’ DF. (5:30 PM 2-26-13 to 9 PM 2-26-13) •Cored 32’ from 11,704’ DF to 11,736’ DF.

Note A: Top of Sunniland = 11,771’ DF. (9 PM 2-26-13 to 6 AM 2-27-13) •P.O.O.H. very slowly with Halliburton Core Barrel #1 from 11,736’ DF to 1,550’ DF. (Attwood arrived 2-26-13 at 8:36 AM, left 2-26-13 at 9:08 AM.)

Day 39 Summary: 2-28-13 TD = 11,818’ DF. Recovered 32’ of 32’ cored from 11,704’ DF to 11,736’ DF (Halliburton Core #1). (6 AM 2-27-13 to 6 AM 2-28-13) Lost 0’ of core. Drilled 82’ of 8½” hole from 11,736’ DF to 11,818’ DF in 2.5 hrs.

(6 AM 2-27-13 to 9:30 AM 2-27-13) •P.O.O.H. very slowly with Halliburton Core Barrel #1 from 1,550’ DF to surface. Day 40 Summary: 3-01-13 TD = 11,870’ DF. Drilled 52’ of 8½” hole from 11,818’ DF to 11,870’ DF in 1.5 hrs. (6 AM 2-28-13 to 6 AM 3-1-13) Youngquist Bros. logging ran Sonic/Gamma Ray correlation log from 11,870’ DF to 8,500’ DF. Day 41 Summary: 3-02-13 TD = 11,937’ DF. Conventionally cored 67’ from 11,870’ DF to 11,937’ DF (Halliburton Core #2). (6 AM 3-1-13 to 6 AM 3-2-13)

(1:30 PM 3-1-13 to 7:30 PM 3-1-13) •Tripped in hole with Halliburton Core Barrel #2 to 11,850’ DF. Washed 20’ from 11,850’ DF to 11,870’ DF. (7:30 PM 3-1-13 to 6 AM 3-2-13) •Cored 67’ from 11,870’ DF to 11,937’ DF.

Note B: Bottom of Sunniland “B” = 11,834’ DF. Note C: Top of Sunniland “C” = 11,845’ DF. Note D: Top of Rubble Zone = 11,924’ DF.

Day 42 Summary: 3-03-13 TD = 11,953’ DF. Conventionally cored 16’ from 11,937’ DF to 11,953’ DF (bottom portion of Halliburton Core #2). (6 AM 3-2-13 to 6 AM 3-3-13) Recovered 50’ of 83’ cored from 11,870’ DF to 11,920’ DF (upper part of Halliburton Core #2). Lost 33’ of core from 11,920’ DF to 11,953’ DF down well (bottom portion of Halliburton Core #2).

(6 AM 3-2-13 to 10:30 AM 3-2-13) •Cored 16’ from 11,937’ DF to 11,953’ DF after which core barrel appeared to be jammed. Unable to core entire 90’.

Note D: Top of Rubble Zone = 11,924’ DF. Note E: Top of Punta Gorda Anhydrite = 11,951’ DF.

(11 AM 3-2-13 to 12:30 AM 3-3-13) •P.O.O.H. very slowly with Halliburton Core Barrel #2 from 11,953’ DF to surface. (5 AM 3-3-13 to 6 AM 3-3-13) •Tripped in hole with Halliburton Core Barrel #3 to 471’ DF.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 74.96’ South & 193.18’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,908’ DF TVD 12,904.27’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Ricky Baughman (drilling consultants) (713) 395-7571 Well Status Waiting on fishing tools. 236.20’ of “fish” in hole from 12,672.40’ DF to 12,908.6’ DF.

I certify that the above well and premise was inspected on 2-26-13, 3-4-13, 3-6-13, 3-7-13, & 3-8-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 9th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/09/13

Permit # 1349 Date 03 09 2013

Day 43 Summary: 3-04-13 TD = 11,986’ DF. Tagged top of “lost” core at 11,924’ DF. Washed over & attempted to capture 29’ of “lost” core (6 AM 3-3-13 to 6 AM 3-4-13) from 11,924’ DF to 11,953’ DF (bottom portion of Halliburton Core #2). Conventionally cored 33’ from 11,953’ DF to 11,986’ DF (Halliburton Core #3).

(6 AM 3-3-13 to 11:30 AM 3-3-13) •Continued tripping in hole with Halliburton Core Barrel #3 from 471’ DF to 11,924’ DF. Tagged top of “lost” bottom portion of core from conventional core #2 at 11,924’ DF. (11:30 AM 3-3-13 to 1 PM 3-3-13) •Attempted to wash & capture “lost” core from 11,924’ DF to 11,953’ DF. (1 PM 3-3-13 to 4 PM 3-3-13) •Cored 33’ from 11,953’ DF to 11,986’ DF.

Note E: Top of Punta Gorda Anhydrite = 11,951’ DF. (4 PM 3-3-13 to 6 AM 3-4-13) •P.O.O.H. very slowly with Halliburton Core Barrel #3 from 11,986’ DF to 172’ DF.

Day 44 Summary: 3-05-13 TD = 11,986’ DF. Recovered 0’ of “lost” core from 11,924’ DF to 11,953’ DF (Bottom portion of Halliburton Core #2). (6 AM 3-4-13 to 6 AM 3-5-13) Recovered 19’ of core from 11,953’ DF to 11,972’ DF (Halliburton Core #3).

Lost 14’ of core from 11,973’ DF to 11,986’ down well (Halliburton Core #3). (6 AM 3-4-13 to 7 AM 3-4-13) •P.O.O.H. very slowly with Halliburton Core Barrel #3 from 172’ DF to surface. (1 PM 3-4-13 to 2 PM 3-4-13) •Tripped in hole with Halliburton Core Barrel #4 to 3,360’ DF, then cut & slipped drill line (3 hrs.) (5 PM 3-4-13 to 5:30 PM 3-4-13) •Tripped in hole with Halliburton Core Barrel #4 from 3,360’ DF to 3,748’ DF, then shut down for rig repairs. (Attwood arrived 3-4-13 at 7:05 AM, left 3-4-13 at 7:25 AM.)

Day 45 Summary: 3-06-13 TD = 11,986’ DF. Rig repairs. Began rebuilding drawworks low drum clutch assembly. (6 AM 3-5-13 to 6 AM 3-6-13) Day 46 Summary: 3-07-13 TD = 12,299’ DF. Rig repairs. Finished rebuilding drawworks low drum clutch assembly. (6 AM 3-6-13 to 6 AM 3-7-13) Drilled 313’ of 8½” hole from 11,986’ DF to 12,299’ DF in 7.5 hrs.

(1 PM 3-6-13 to 4 PM 3-6-13) •P.O.O.H. with Halliburton Core Barrel #4 from 3,748’ DF to surface. Operator decided to abandon efforts to recover 14’ of “lost” core from 11,973’ DF to 11,986’ DF.

(Attwood arrived 3-6-13 at 6:16 AM, left 3-6-13 at 6:34 AM.) Day 47 Summary: 3-08-13 TD = 12,908’ DF. Drilled 609’ of 8½” hole from 12,299’ DF to 12,908’ DF in 22 hrs. (6 AM 3-7-13 to 6 AM 3-8-13) (Bruno arrived 3-7-13 at 3:36 PM, left 3-7-13 at 5 PM.) Day 48 Summary: 3-09-13 TD = 12,908’ DF. Jars broke off. 236.20’ of “fish” left in hole from 12,672.40’ DF to 12,908.6’ DF. (6 AM 3-8-13 to 6 AM 3-9-13) Performed B.O.P. Test #68. Waited on fishing tools.

•236.20’-long fish in well: 8½” drill bit + mud motor + float sub + crossover + pro drift tool + six 6½” drill collars + 3.59’ of jars

(Attwood arrived 3-8-13 at 8:45 AM, left 3-8-13 at 9:23 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 74.96’ South & 193.18’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,908’ DF TVD 12,904.27’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Ricky Baughman (drilling consultants) (713) 395-7571 Well Status Waiting on fishing tools. 236.20’ of “fish” in hole from 12,672.40’ DF to 12,908.6’ DF.

I certify that the above well and premise was inspected on 2-26-13, 3-4-13, 3-6-13, 3-7-13, & 3-8-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 9th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/09/13

Permit # 1349 Date 03 09 2013

Day 48: 3-09-13 TD = 12,908’ DF (continued)

BOP Test #68 on 3-8-13 & 3-9-13: Test of Blowout Preventers, Kill Valves, Hydril, Chokes & Floor Valves (#1349-pilot well)

3-8-13 @ 10:07 PM 3-8-13 @ 10:13 PM 1a. Tested Lower pipe rams at 250 PSI. No pressure lost in 6 minutes. PASSED on 1st attempt.

3-8-13 @ 10:14 PM 3-8-13 @ 10:20 PM 1b. Tested Lower pipe rams at 3,500 PSI. Lost 40 PSI (1.1%) in 6 minutes per chart record. PASSED on 1st attempt.

3-8-13 @ 10:25 PM 3-8-13 @ 10:31 PM 2a. Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 250 PSI. No pressure lost in 6 minutes. PASSED on 1st attempt.

3-8-13 @ 10:32 PM 3-8-13 @ 10:33 PM 2b(1). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,500 PSI. Lost 200 PSI (5.7%) in 1 minute. FAILED 1st high pressure test.

3-8-13 @ 10:56 PM 3-8-13 @ 11:02 PM 2b(2). Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,500 PSI. Lost 50 PSI (1.4%) in 6 minutes. PASSED on 2nd attempt.

3-8-13 @ 11:19 PM 3-8-13 @ 11:26 PM 3a. Tested Hydril at 250 PSI. No pressure lost in 7 minutes. PASSED on 1st attempt.

3-8-13 @ 11:28 PM 3-8-13 @ 11:35 PM 3b. Tested Hydril at 2,000 PSI. Lost 50 PSI (2.5%) in 7 minutes per chart record. PASSED on 1st attempt.

3-8-13 @ 11:48 PM 3-8-13 @ 11:55 PM 4a. Tested Blind rams + Inside manual valve + three (3) INSIDE choke manifold valves at 250 PSI. No pressure lost in 7 minutes. PASSED on 1st attempt.

3-8-13 @ 11:56 PM 3-9-13 @ 12:01 AM 4b. Tested Blind rams + Inside manual valve + three (3) INSIDE choke manifold valves at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

3-9-13 @ 12:28 AM 3-9-13 @ 12:34 AM 5a. Tested Blind rams + three (3) MIDDLE choke manifold valves at 250 PSI. Lost 30 PSI (12.0%) in 6 minutes per chart record. No pressure loss detected on test pressure gauge.

3-9-13 @ 12:36 AM 3-9-13 @ 12:37 AM 5b(1). Tested Blind rams + three (3) MIDDLE choke manifold valves at 3,500 PSI. Lost 150 PSI (4.3%) in 1 minute. FAILED 1st high pressure test.

3-9-13 @ 12:52 AM 3-9-13 @ 12:55 AM 5b(2). Tested Blind rams + three (3) MIDDLE choke manifold valves at 3,500 PSI. Lost 100 PSI (2.9%) in only 3 minutes. FAILED 2nd high pressure test.

3-9-13 @ 1:01 AM 3-9-13 @ 1:06 AM 5b(3). Tested Blind rams + three (3) MIDDLE choke manifold valves at 3,500 PSI. Lost 50 PSI (1.4%) in 5 minutes per chart record. PASSED on 3rd attempt.

3-9-13 @ 1:15 AM 3-9-13 @ 1:20 AM 6a. Tested Blind rams + right manual & left manual choke manifold valves at 250 PSI. No pressure lost in 5 minutes per chart record. PASSED on 1st attempt.

3-9-13 @ 1:21 AM 3-9-13 @ 1:26 AM 6b. Tested Blind rams + right manual & left manual choke manifold valves at 3,500 PSI. No pressure lost in 5 minutes per chart record. PASSED on 1st attempt

3-9-13 @ 1:34 AM 3-9-13 @ 1:39 AM 7a. Tested HCR (High Closing Ratio) valve + choke manifold valves to shale shaker, panic line, & gas buster at 250 PSI. No pressure lost in 5 minutes per chart record. PASSED on 1st attempt.

3-9-13 @ 1:40 AM 3-9-13 @ 1:44 AM 7b. Tested HCR (High Closing Ratio) valve + choke manifold valves to shale shaker, panic line, & gas buster at 3,500 PSI. No pressure lost in only 4 minutes per chart record. PASSED on 1st attempt.

---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Cemented 5” O.D. x 19.5#/ft. drill pipe in well at 11,382’ DF. Waiting on freepoint tool to arrive from Louisiana.

I certify that the above well and premise was inspected on 3-11-13, 3-12-13, 3-13-13, 3-14-13, 3-15-13, 3-17-13, 3-18-13, & 3-19-13 by Paul Attwood. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 19th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/19/13

Permit # 1349 Date 03 19 2013

Fifth Report (#1349-pilot): ■Recovered entire 236.20’-long fish in well from 12,672.40’ DF to 12,908.6’ DF;

■Drilled 265’ of 8½” hole from 12,908’ DF to 13,173’ DF;

■Conventionally cored 92’ from 13,173’ DF to 13,265’ DF (recovered 90’);

■Drilled 537’ of 8½” hole from 13,265’ DF to 13,802’ DF;

■Logged well & recovered 30 rotary sidewall cores;

■Pumped “Kickoff” Plug #1 at 11,382’ DF consisting of 164.98 barrels

(= 865 sacks) of Class H cement;

■Stuck open-ended 5” drill pipe cementing string in cement at 11,365’ DF.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF. Day 49 Summary: 3-10-13 TD = 12,908’ DF Began recovering 236.20’ of “fish” left in hole from 12,672.40’ DF to 12,908.6’ DF. (6 AM 3-9-13 to 6 AM 3-10-13)

•Tripped in hole with 6¼” grapple on overshot. Tagged “fish” at 12,665’ DF. Began P.O.O.H. with “fish.” Day 50 Summary: 3-11-13 TD = 13,000’ DF Finished recovering 236.20’ of “fish” left in hole from 12,672.40’ DF to 12,908.6’ DF. (6 AM 3-10-13 to 6 AM 3-11-13) Ran Youngquist Bros. GR/CCL log from 12,146’ DF to 11,554’ DF (Run #5.)

(Could not get down past 12,146’ DF.) P.O.O.H. with log. Added weight bars. Ran Youngquist Bros. GR/CCL log again. (Could not get down past 12,146’ DF.) P.O.O.H.

Drilled 92’ of 8½” hole from 12,908’ DF to 13,000’ DF in 1 hr. Day 51 Summary: 3-12-13 TD = 13,000’ DF Ran Youngquist Bros. GR/CCL log (Run #6.) (Could not get down past 12,146’ DF.) P.O.O.H. (6 AM 3-11-13 to 6 AM 3-12-13) Tripped in hole with 5” O.D. x 19.5#/ft. drill pipe to 12,989’ DF. Ran Youngquist Bros. GR/CCL log thru drill pipe from 12,989’ DF to 10,900’ DF (Run #7.) P.O.O.H. with log.

(Attwood arrived 3-11-13 at 7:46 AM, left 3-11-13 at 8:12 AM.) Day 52 Summary: 3-13-13 TD = 13,170’ DF (corrected) Drilled 118’ of 8½” hole from 13,000’ DF to 13,118’ DF in 7.5 hrs. (6 AM 3-12-13 to 6 AM 3-13-13) Ran Youngquist Bros. GR/CCL log thru drill pipe from 13,115’ DF to 10,900’ DF (Run #8.) Drilled 52’ of 8½” hole from 13,118’ DF to 13,170’ DF in 3.5 hrs.

■NO hydrogen sulfide gas encountered so far during the drilling of this well thru 13,059’ DF. (Attwood arrived 3-12-13 at 8:11 AM, left 3-12-13 at 8:58 AM.)

Day 53 Summary: 3-14-13 TD = 13,223’ DF Drilled 3’ of 8½” hole from 13,170’ DF to 13,173’ DF. (6 AM 3-13-13 to 6 AM 3-14-13) Conventionally cored 50’ of the Pumpkin Bay Formation from 13,173’ DF to 13,223’ DF

(top portion of Halliburton Core #4). ■NO hydrogen sulfide gas encountered so far during the drilling of this well thru 13,173’ DF.

(Attwood arrived 3-13-13 at 7:52 AM, left 3-13-13 at 8:49 AM.) Day 54 Summary: 3-15-13 TD = 13,265’ DF Conventionally cored 42’ of the Pumpkin Bay Formation from 13,223’ DF to 13,265’ DF (6 AM 3-14-13 to 6 AM 3-15-13) (bottom portion of Halliburton Core #4). Recovered 90’ of 92’ cored from 13,173’ DF to 13,265’ DF (Halliburton Core #4).

(Attwood arrived 3-14-13 at 8:44 AM, left 3-14-13 at 9:02 AM; Attwood returned 3-14-13 at 10:24 PM, left 3-15-13 at 12:06 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Cemented 5” O.D. x 19.5#/ft. drill pipe in well at 11,382’ DF. Waiting on freepoint tool to arrive from Louisiana.

I certify that the above well and premise was inspected on 3-11-13, 3-12-13, 3-13-13, 3-14-13, 3-15-13, 3-17-13, 3-18-13, & 3-19-13 by Paul Attwood. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 19th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/19/13

Permit # 1349 Date 03 19 2013

Day 55 Summary: 3-16-13 TD = 13,802’ DF Drilled 537’ of 8½” hole from 13,265’ DF to 13,802’ DF in 14.5 hrs. (6 AM 3-15-13 to 6 AM 3-16-13) Scientific Drilling ran gyroscopic (directional) survey from 13,753’ DF to surface. Day 56 Summary: 3-17-13 TD = 13,802’ DF Ran Halliburton’s Triple Gem HFDT log (Run #1) and Wave XRMI log (Run #2). (6 AM 3-16-13 to 6 AM 3-17-13) •”Triple Gem HFDT” = High Frequency Dielectric Tool. This tool has a fancy Gamma Ray (which measures different radioactive elements) + measures resistivity, formation density, & neutron emissions. •”Full Wave XRMI” = eXtended Range MicroImaging Tool. The “wave” component of this tool measures the sonic velocity, and the “microimaging” component of this tool paints a 3-D picture of the fractures. Day 57 Summary: 3-18-13 TD = 13,802’ DF Tried to run Halliburton’s Electric Magnetic Resonance Imaging Log (tool failed downhole twice.) (6 AM 3-17-13 to 6 AM 3-18-13)

(Attwood arrived 3-17-13 at 12:44 PM, left 3-17-13 at 2:40 PM.)

Formation tops (#1349-pilot well) (per Emily Shane -geologist for Dan A. Hughes)

Top of Sunniland 11,693’ DF Top of Sunniland “A” 11,771’ DF Top of Sunniland “B” 11,816’ DF Top of OIL in Sunniland “B” 11,820’ DF Bottom of Sunniland “B” 11,834’ DF Top of Sunniland “C” 11,845’ DF Top of Rubble Zone 11,924’ DF Top of Punta Gorda Anhydrite 11,951’ DF Top of Lehigh Acres Fm. 12,614’ DF Top of West Felda Shale Member 13,178’ DF Top of Pumpkin Bay Fm. 13,222’ DF

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Cemented 5” O.D. x 19.5#/ft. drill pipe in well at 11,382’ DF. Waiting on freepoint tool to arrive from Louisiana.

I certify that the above well and premise was inspected on 3-11-13, 3-12-13, 3-13-13, 3-14-13, 3-15-13, 3-17-13, 3-18-13, & 3-19-13 by Paul Attwood. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 19th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/19/13

Permit # 1349 Date 03 19 2013

Day 58 Summary: 3-19-13 TD = 13,802’ DF Recovered 30 of 31 rotary sidewall cores from 8,345’ DF to 11,950’ DF using Halliburton’s (6 AM 3-18-13 to 6 AM 3-19-13) Hostile Rotary coring tool (see results below.)

Tripped in hole to 12,100’ DF. Pumped sweep. Circulated hole clean. Spotted high viscosity LCM pill. Pulled up to 10,512’ DF & circulated well while waiting for cementers to arrive.

(Attwood arrived 3-18-13 at 8:07 AM, left 3-18-13 at 8:26 AM.)

Rotary Sidewall cores taken in #1349 (pilot) well Depth Stratigraphic location core recovered 8,345’ DF above Sunniland Marker solid core 8,365’ DF above Sunniland Marker solid core 8,383’ DF above Sunniland Marker solid core 9,838’ DF above Sunniland Marker solid core

11,609’ DF above Sunniland Marker solid core 11,793’ DF between Sun. “A” & Sun. “B” fractured core 11,844’ DF 1’ above top of Sunniland “C” solid core 11,865’ DF 20’ below top of Sunniland “C” no core recovered 11,871’ DF 26’ below top of Sunniland “C” solid core 11,918’ DF 6’ above top of Rubble Zone solid core 11,919’ DF 5’ above top of Rubble Zone solid core

11,920.5’ DF 3.5’ above top of Rubble Zone solid core 11,921’ DF 3’ above top of Rubble Zone solid core 11,923’ DF 1’ above top of Rubble Zone solid core 11,926’ DF 2’ below top of Rubble Zone solid core 11,928’ DF 4’ below top of Rubble Zone solid core 11,929’ DF 5’ below top of Rubble Zone solid core

11,931.5’ DF 7.5’ below top of Rubble Zone solid core 11,932.5’ DF 8.5’ below top of Rubble Zone fractured core 11,934.5’ DF 10.5’ below top of Rubble Zone solid core 11,935.5’ DF 11.5’ below top of Rubble Zone fractured core

11,936’ DF 12’ below top of Rubble Zone solid core 11,938.5’ DF 14.5’ below top of Rubble Zone solid core 11,940.5’ DF 16.5’ below top of Rubble Zone solid core

11,942’ DF 18’ below top of Rubble Zone solid core 11,943’ DF 19’ below top of Rubble Zone solid core 11,944’ DF 20’ below top of Rubble Zone solid core 11,945’ DF 21’ below top of Rubble Zone fractured core

11,946.5’ DF 4.5’ above top of Punta Gorda Anhydrite solid core 11,949’ DF 2’ above top of Punta Gorda Anhydrite solid core 11,950’ DF 1’ above top of Punta Gorda Anhydrite solid core

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 4 of 4

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Cemented 5” O.D. x 19.5#/ft. drill pipe in well at 11,382’ DF. Waiting on freepoint tool to arrive from Louisiana.

I certify that the above well and premise was inspected on 3-11-13, 3-12-13, 3-13-13, 3-14-13, 3-15-13, 3-17-13, 3-18-13, & 3-19-13 by Paul Attwood. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 19th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/19/13

Permit # 1349 Date 03 19 2013

Day 59 Summary: 3-20-13 TD = 13,802’ DF Pumped 164.98 bbl./865 sack cement “Kickoff” Plug #1 at 11,382’ DF. (6 AM 3-19-13 to 6 AM 3-20-13) Moved drill pipe up hole 17’ from 11,382’ DF to 11,365’ DF after pulling up to 400,000#.

Entire 5” O.D. x 19.5#/ft. cementing string (drill pipe) stuck at 11,365’ DF.

“Kickoff” Plug #1 in #1349 (Pilot well) on 3-19-13: Pump Depth through 5” O.D. x 4.276” I.D. drill pipe = 11,382’ DF (= 2,420’ above T.D.)

3-19-13 @ 1:10 PM Tested cementing lines to 3,100 PSI. Tested OK.

3-19-13 @ 1:15 PM Fresh water spacer: Pumped 30 bbls. of 8.34 PPG fresh water at 5.8 bpm into 5” drill pipe at 410 PSI.

3-19-13 @ 1:18 PM S,A.P.P. Spacer: Pumped 20 bbls. of 8.34 PPG Mud Clean II at 6 bpm into 5” drill pipe at 423 PSI. note: Mud Clean II is also known as S.A.P.P. (= Sodium Acid Pyrophosphate.)

3-19-13 @ 1:24 PM

“Kickoff” Plug #1: Pumped 164.98 bbls. (865 sacks/16.2 PPG) of Class H cement mixed with 0.15% b.w.o.c. (=121.96#) of R-3 + 3.0% b.w.o.w. (=843.99#) of potassium chloride + 0.25% b.w.o.c. (=203.27#) of CD-32 + 10# of 100 mesh silica sand (sacked) per sack of cement (=8,650#) + 0.001 gal. per sec. FP-6L (=2.19 gal.) yielding 1.21 cu. ft. of slurry per sack of cement at 4.52 bpm into 5” drill pipe & 8½” open hole at 600 PSI. note: 865 sacks of Class H cement weighed 81,310#.

3-19-13 @ 2:00 PM Fresh water spacer: Pumped 10 bbls. of 8.34 PPG at 5 bpm into 5” drill pipe at 148 PSI.

3-19-13 @ 2:05 PM Displacement: Pumped 172 bbls. of 8.6 PPG drilling mud (per drilling report & not cement job report) drilling mud at 9.5 bpm into 5” drill pipe at 300 PSI to displace cement from inside 5” x 19.5#/ft. drill pipe into 8½” open hole. Note: Water flowed out of 5” drill pipe immediately after cementing lines were disconnected.

3-19-13 @ 2:22 PM Cement in place 3-19-13 at 2:22 PM. Unable to P.O.O.H. with 5” drill pipe. Drill pipe stuck at 11,365’ DF.

(Attwood arrived 3-19-13 at 11:56 AM, left 3-19-13 at 3:27 PM.)

---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ PBTD 9,241’ DF Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole for #1349-H (horizontal well) at 9,241’ DF.

I certify that the above well and premise was inspected on 3-20-13, 3-21-13, 3-22-13, 3-24-13, & 3-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 30th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/30/13

Permit # 1349 Date 03 30 2013

Sixth Report (#1349-pilot): ■2,055’-long “fish” consisting of 65 joints of 5” O.D. x 19.5#/ft. drill pipe

left in 8½”-diameter hole from 9,310’ DF to 11,365’ DF; ■Pumped 64.65 bbl. (300 sack) “Kickoff” Plug #2 at 9,223’ DF; ■Tagged top of cement in 8½”-diameter hole at 9,110’ DF;

■Drilled 131’ of cement from 9,110’ DF to 9,241’ DF (“Kickoff” point for #1349-H.)

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF. Day 60 Summary: 3-21-13 TD = 13,802’ DF Unsuccessfully attempted to back off 5” drill pipe at 10,092’ DF. (6 AM 3-20-13 to 6 AM 3-21-13) •Tripped in hole with Weatherford’s freepoint tool using Youngquist Bros. wireline truck.

Results of freepoint survey: Tagged top of cement inside 5” drill pipe with freepoint tool at 10,375’ DF. 5” drill pipe intermittently stuck between 10,375’ DF & 10,100’ DF. Determined that 5” drill pipe was 100% free at 10,100’ DF. Nearest drill pipe collar up hole at 10,092’ DF.

•First attempt to backoff drill pipe: Tripped in hole with collar locator log + nine (9) 4’-long strands of 80 grain primacord to 10,092’ DF. Primacord string shot misfired. P.O.O.H. with “live” charge. (Attwood arrived 3-20-13 at 7:20 AM, left 3-20-13 at 8:12 AM; Attwood returned 3-20-13 at 2:04 PM, left 3-20-23 at 2:35 PM.) Day 61 Summary: 3-22-13 TD = 13,802’ DF Unsuccessfully attempted to back off 5” drill pipe at 10,092’ DF & 10,060.5’ DF. (6 AM 3-21-13 to 6 AM 3-22-13)

•Second attempt to backoff drill pipe: Tripped in hole with CCL (log) + eleven (11) 4’-long strands of 80 grain primacord to 10,092’ DF. Fired primacord string shot. Unable to back off drill pipe. P.O.O.H. with “detonated” charge.

•Third attempt to backoff drill pipe: Tripped in hole with CCL (log) + twenty five (25) 4’-long strands of 80 grain primacord to 10,092’ DF. Fired primacord string shot. Unable to back off drill pipe. P.O.O.H. with “detonated” charge.

•Fourth attempt to backoff drill pipe: Tripped in hole with CCL (log) + forty (40) 4’-long strands of 80 grain primacord to 10,060.5’ DF. Fired primacord string shot. Unable to back off drill pipe. P.O.O.H. with “detonated” charge. •Tripped inside 5” drill pipe with Youngquist Bros. Temperature logging tool & logged well from 10,378’ DF to 8,496’ DF.

Results of temperature survey: ■Tagged top of cement inside 5” drill pipe with logging tool at 10,378’ DF. Found slight variations in temperature at 10,063’ DF. Unable to detect top of cement between exterior of drill pipe & 8½”-diameter hole possibly due to the fact that 50.3 hours had elapsed since the cement kickoff plug was pumped.

Cement volume calculations for “Kickoff” Plug #1. 5” O.D. x 19.5#/ft. drill pipe stuck in cement at 11,365’ DF: 164.98 barrels of cement pumped. -6.44 barrels of cement occupied by 987’ of 5” O.D. x 4.276” I.D. drill pipe from 10,378’ DF to 11,365’ DF. Therefore, 70.46 barrels of cement in 1,004’ of 8½” open hole from 10,378’ DF (tagged top of cement) to 11,382’ DF (pump depth.) and 88.08 barrels of cement in 1,255’ of 8½” open hole from 11,382’ DF (pump depth) to 12,637’ DF (est. bottom of plug.) ■2,259’ of cement in 8½” hole from 10,378’ DF to 12,637’ DF (assuming 0% of cement lost.)

(Attwood arrived 3-21-13 at 10;19 AM, left 3-21-13 at 12:51 PM; Attwood returned 3-21-13 at 1:55 PM, left 3-21-23 at 2:46 PM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ PBTD 9,241’ DF Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole for #1349-H (horizontal well) at 9,241’ DF.

I certify that the above well and premise was inspected on 3-20-13, 3-21-13, 3-22-13, 3-24-13, & 3-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 30th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/30/13

Permit # 1349 Date 03 30 2013

Day 62 Summary: 3-23-13 TD = 13,802’ DF Unsuccessfully attempted to sever 5” drill pipe at 10,028’ DF. (6 AM 3-22-13 to 6 AM 3-23-13) Perforated 5” drill pipe at 9,800’ DF with 5 shots. Unable to circulate through perforations.

•Fifth attempt to backoff drill pipe: Tripped in hole with collar locator log + 2” O.D. severing tool to 10,028’ DF. Pipe severing charge did not fire. Drill pipe not cut. P.O.O.H. with “live” charge.

•Sixth attempt to backoff drill pipe: Tripped in hole with collar locator log + 2” O.D. severing tool to 10,028’ DF. Well started flowing after pipe severing charge was fired.

Youngquist Bros. was not able to go below 10,028’ DF with CCL logging tool after severing tool was fired. Tried to physically part the drill pipe by reciprocating & rotating it. Drill pipe not fully cut.

P.O.O.H. with “detonated” charge. Screwed into drill pipe fish with top drive. Attempted to free pipe with 2500# of “trapped” drill pipe pressure & 20,000# of torque. No success.

•Tripped inside 5” drill pipe with collar locator log + 5 shot perforating gun to 9,800’ DF. Successfully fired perforating gun. Unable to circulate well through probable holes in drill pipe. Bullets may not have penetrated drill pipe. P.O.O.H. with perforating gun. (Attwood arrived 3-22-13 at 8:48 AM, left 3-22-13 at 9:16 AM; Attwood returned 3-22-13 at 5:14 PM, left 3-22-23 at 5:55 PM.) Day 63 Summary: 3-24-13 TD = 13,802’ DF Rigged up Halliburton truck to run a second freepoint on wireline. (6 AM 3-23-13 to 6 AM 3-24-13) Day 64 Summary: 3-25-13 TD = 13,802’ DF Determined 5” drill pipe “100% free” above 9,983’ DF. (6 AM 3-24-13 to 6 AM 3-25-13) Unsuccessfully attempted to back off 5” drill pipe at 9,966’ DF. Perforated 5” drill pipe at 9,956’ DF with 10 shots. •Tripped in hole with Halliburton’s 1.6875” O.D. freepoint tool using Halliburton’s wireline truck.

Results of second freepoint survey: Determined that cemented 5” drill pipe was 100% free from 9,983’ DF to surface. Nearest drill pipe collar up hole at 9,966’ DF. •Seventh attempt to backoff drill pipe:Tripped in hole with collar locator log + ten (10) 6’-long strands of 100 grain primacord to 9,966’ DF.

Primacord string shot malfunctioned (did not fire). P.O.O.H. with “live” charge. •Eighth attempt to backoff drill pipe: Tripped in hole with CCL (log) + fifteen (15) 6’-long strands of 100 grain primacord to 9,966’ DF.

Primacord string shot fired successfully. Drill pipe did not back off. P.O.O.H. with “detonated” charge. •Tripped inside 5” drill pipe with collar locator log + a ten (10) shot perforating gun to 9,956’ DF. Tried to perforate 5” drill pipe.

Perforating gun did not fire. P.O.O.H. with “live” perforating gun. •Tripped inside 5” drill pipe with collar locator log + a second (new) ten (10) shot perforating gun to 9,956’ DF. Tried to perforate 5” drill pipe.

Perforating gun did not fire. P.O.O.H. with “live” perforating gun. •Tripped inside 5” drill pipe with collar locator log + a third (new) ten (10) shot perforating gun to 9,956’ DF. Successfully fired perforating gun. P.O.O.H. with “detonated” perforating gun. Note: Drill pipe being perforated at 9,956’ DF in order to vent exhaust from possible future wireline radial cut.

(Attwood arrived 3-24-13 at 8:55 AM, left 3-24-13 at 10:14 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ PBTD 9,241’ DF Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole for #1349-H (horizontal well) at 9,241’ DF.

I certify that the above well and premise was inspected on 3-20-13, 3-21-13, 3-22-13, 3-24-13, & 3-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 30th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/30/13

Permit # 1349 Date 03 30 2013

Day 65 Summary: 3-26-13 TD = 13,802’ DF Successfully backed off 5” drill pipe at 9,310’ DF. (6 AM 3-25-13 to 6 AM 3-26-13) 2,055’ of 5” O.D. x 19.5#/ft. drill pipe “fish” cemented in hole from 9,310’ DF to 11,365’ DF. Drilling consultant for Dan A. Hughes witnessed B.O.P. Test #69.

•Results of perforating 5” drill pipe with ten (10) shots at 9,956’ DF: Unable to circulate through perforations in drill pipe after pressuring up stuck pipe to 2,500 PSI. No circulation & no loss of “trapped” pressure after repeating procedure a second time. Bullets may not have penetrated drill pipe. •Tripped inside 5” drill pipe with collar locator log + a fifteen (15) shot perforating gun to 9,956’ DF. Successfully fired perforating gun. P.O.O.H. with “detonated” perforating gun. •Results of perforating 5” drill pipe with fifteen (15) shots at 9,956’ DF: Unable to circulate through perforations after pressuring up drill pipe to 2,400 PSI. No loss of “trapped” pressure. Bullets may not have penetrated drill pipe. •Ninth attempt to backoff drill pipe: Tripped in hole with CCL (log) + fifteen (15) 6’-long strands of 100 grain primacord to 9,310’ DF.

Primacord string shot fired successfully. Drill string not free. Unable to circulate well. P.O.O.H. with “detonated” charge. Screwed into drill pipe fish with top drive. 5” drill pipe came free at 9,310’ DF after pulling 248,000#. Circulated bottoms up.

■A 2,055’-long “fish” consisting of sixty five (65) joints of 5” O.D. x 19.5#/ft. drill pipe will be left in the 8½”-diameter #1349 (pilot) wellbore from 9,310’ DF to 11,365’ DF. ■Top of “fish” = 9,310’ DF. ■Top of cement INSIDE “fish” = 10,375’ DF to 10,378’ DF. ■Bottom of “fish” = 11,365’ DF. (990’ of cement INSIDE “fish.”) (Attwood arrived 3-25-13 at 10:55 AM, left 3-25-13 at 11:46 AM.)

(Bruno inspected well & location on 3-25-13.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 4 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ PBTD 9,241’ DF Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole for #1349-H (horizontal well) at 9,241’ DF.

I certify that the above well and premise was inspected on 3-20-13, 3-21-13, 3-22-13, 3-24-13, & 3-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 30th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/30/13

Permit # 1349 Date 03 30 2013

BOP Test #69 on 3-26-13: Test of Blowout Preventers, Kill Valves, Hydril, Chokes & Floor Valves (#1349-pilot well)

No beginning & starting times or starting & ending test gauge pressures recorded for the various tests. BOP Test #69 witnessed by Mr. Robert Mark Jones (drilling consultant for Dan A. Hughes, L.P.)

1st low pressure test 1a. Tested Lower pipe rams at 250 PSI (per chart record.) No pressure lost.

1st high pressure test 1b(1). Tested Lower pipe rams at 3,475 PSI (per chart record.) Lost 750 PSI (21.6%)

2nd high pressure test 1b(2). Tested Lower pipe rams at 3,460 PSI (per chart record.) Lost 925 PSI (26.7%)

3rd high pressure test 1b(3). Tested Lower pipe rams at 3,450 PSI (per chart record.) Lost 70 PSI (2.0%)

1st low pressure test 2a. Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 360 PSI (per chart record.) No pressure lost

1st high pressure test 2b. Tested Upper pipe rams + INSIDE manual valve + INSIDE kill line valve at 3,450 PSI (per chart record.) Lost 100 PSI (2.9%)

1st low pressure test 3a. Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 400 PSI (per chart record.) Lost 25 PSI (6.2%)

1st high pressure test 3b. Tested Upper pipe rams + HCR (High Closing Ratio) valve + OUTSIDE kill line valve at 3,460 PSI (per chart record.) Lost 120 PSI (3.5%)

1st low pressure test 4a. Tested Blind rams + three (3) INSIDE choke manifold valves at 350 PSI (per chart record.) Lost 10 PSI (2.9%)

1st high pressure test 4b. Tested Blind rams + three (3) INSIDE choke manifold valves at 3,500 PSI (per chart record.) Lost 100 PSI (2.9%)

1st low pressure test 5a. Tested Blind rams + three (3) MIDDLE choke manifold valves at 425 PSI (per chart record.) Lost 25 PSI (5.9%)

1st high pressure test 5b. Tested Blind rams + three (3) MIDDLE choke manifold valves at 3,505 PSI (per chart record.) Lost 90 PSI (2.5%)

1st low pressure test 6a. Tested Blind rams + choke manifold valves to gas buster and shale shaker & panic line at 300 PSI (per chart record.) No pressure lost

1st high pressure test 6b. Tested Blind rams + choke manifold valves to gas buster and shale shaker & panic line at 3,275 PSI (per chart record.) Lost 35 PSI (1.1%)

1st low pressure test 7a. Tested Hydril at 375 PSI (per chart record.) No pressure lost 1st high pressure test 7b. Tested Hydril at 2,000 PSI (per chart record.) No pressure lost

1st low pressure test 8a. Tested Inside Gray (manual dart) valve at 290 PSI (per chart record.) Lost 35 PSI (12.1%)

1st high pressure test 8b. Tested Inside Gray (manual dart) valve at 3,585 PSI (per chart record.) Lost 85 PSI (2.4%)

1st low pressure test 9a. Tested Manual T.I.W. (Full Open Safety Ball) valve at 375 PSI (per chart record.) Lost 15 PSI (4.0%)

1st high pressure test 9b. Tested Manual T.I.W. (Full Open Safety Ball) valve at 3,540 PSI (per chart record.) Lost 40 PSI (1.1%)

1st low pressure test 10a. Tested Upper hydraulic I.B.O.P. on top drive at 350 PSI (per chart record.) No pressure lost

1st high pressure test 10b. Tested Upper hydraulic I.B.O.P. on top drive at 3,550 PSI (per chart record.) Lost 50 PSI (1.4%) (Attwood arrived 3-25-13 at 10:55 AM, left 3-25-13 at 11:46 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 5 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211 Permit # 1349 (pilot) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3 Collier-Hogan (pilot) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 20 T 47S R 28E , 69.96’ South & 194.15’ East of S.H.L. Spud 1-20-13 at 2 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 13,802’ DF TVD 13,798.25’ PBTD 9,241’ DF Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Drilling 8½” hole for #1349-H (horizontal well) at 9,241’ DF.

I certify that the above well and premise was inspected on 3-20-13, 3-21-13, 3-22-13, 3-24-13, & 3-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 30th day of March 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 03/30/13

Permit # 1349 Date 03 30 2013

Day 66 Summary: 3-27-13 PBTD = 9,110’ DF (top of cement tagged in 8½” open hole on 3-27-13.) (6 AM 3-26-13 to 6 AM 3-27-13) Pumped 64.65 bbl. (300 sack) “Kickoff” Plug #2 at 9,223’ DF.

(6 AM 3-26-13 to 6:30 AM 3-26-13) •Rigged down B.O.P. testing unit. (8 AM 3-26-13 to 12:30 PM 3-26-13) •Tripped in hole open-ended with 295 joints of 5” O.D. x 4.276” I.D. drill pipe to 9,290’ DF. (12:30 PM 3-26-13 to 2 PM 3-26-13) •Mixed & spotted 40 bbl. 8.6 PPG high viscosity pill lost circulation pill at 9,290’ DF. (2 PM 3-26-13 to 2:30 PM 3-26-13) •P.O.O.H. 5 stands (= 15 joints) to 8,832’ DF. (2:30 PM 3-26-13 to 4 PM 3-26-13) •Circulated well at 8,832’ DF at 150 spm & 524 gpm. Had initial partial returns & ended with full returns. (4 PM 3-26-13 to 4:15 PM 3-26-13) •Tripped in hole with 4 stands (= 12 joints) from 8,832’ DF to 9,223’ DF. ■Pump Depth for “Kickoff” Plug #2 at 9,223’ DF (= 87’ above top of 5” drill pipe “fish.”) (4:15 PM 3-26-13 to 4:25 PM 3-26-13) •Tied into Baker Hughes cementing lines. Tested lines to 3,200 PSI. (4:26 PM 3-26-13 to 5:15 PM 3-26-13) •Pumped & displaced “Kickoff” Plug #2. ■”Kickoff” Plug #2 in place on 3-26-13 at 5:15 PM. (5:30 PM 3-26-13 to 7 PM 3-26-13) •P.O.O.H. to 8,471’ DF & circulated well for 1 hr. with full returns. (7 PM 3-26-13 to 9 PM 3-26-13) •P.O.O.H. from 8,471’ DF to 3,707’ DF. (9 PM 3-26-13 to 11:30 PM 3-26-13) •Cut & slipped drill line. (11:30 PM 3-26-13 to 6 AM 3-27-13) •P.O.O.H. from 3,707’ DF to surface & waited on cement.

“Kickoff” Plug #2 in #1349 (Pilot well) on 3-26-13: Pump Depth through 5” O.D. x 4.276” I.D. drill pipe = 9,223’ DF (= 4,579’ above T.D.)

3-26-13 @ 4:25 PM Tested cementing lines to 3,200 PSI. Tested OK. 3-26-13 @ 4:26 PM Fresh water spacer: Pumped 30 bbls. of 8.34 PPG fresh water at 7 bpm into 5” drill pipe at 536 PSI.

3-26-13 @ 4:31 PM S,A.P.P. Spacer: Pumped 20 bbls. of 8.34 PPG Mud Clean II at 7 bpm into 5” drill pipe at 539 PSI. note: Mud Clean II is also known as S.A.P.P. (= Sodium Acid Pyrophosphate.)

3-26-13 @ 4:35 PM

“Kickoff” Plug #2: Pumped 64.65 bbls. (300 sacks/15.8 PPG) of Class H cement mixed with 0.15% b.w.o.c. (=42.3#) of R-3 + 3.0% b.w.o.w. (=291.96#) of potassium chloride + 0.25% b.w.o.c. (=70.5#) of CD-32 + 10# of 100 mesh silica sand (sacked) per sack of cement (=3,000#) + 0.001 gal. per sec. FP-6L (=1.04 gal.) yielding 1.21 cu. ft. of slurry per sack of cement at 4.5 bpm into 5” drill pipe & 8½” open hole at 243 PSI. note: 300 sacks of Class H cement weighed 28,200#.

3-26-13 @ 4:54 PM Fresh water spacer: Pumped 10 bbls. of 8.34 PPG at 4.5 bpm into 5” drill pipe at 191 PSI.

3-26-13 @ 4:56 PM Displacement: Pumped 140 bbls. of 8.4 PPG drilling mud drilling mud at 7.4 bpm into 5” drill pipe at 218 PSI to displace cement from inside 5” x 19.5#/ft. drill pipe into 8½” open hole.

3-26-13 @ 5:15 PM Shut down & began rigging down Baker Hughes. Cement in place 3-26-13 at 5:15 PM. Day 67 Summary: 3-28-13 TD = 9,180’ DF Tagged cement “Kickoff” Plug #2 at 9,110’ DF with 20,000#. (6 AM 3-27-13 to 6 AM 3-28-13) Drilled 70’ of 8½” hole (70% cement & 30% formation) from 9,110’ DF to 9,180’ DF. Day 68 Summary: 3-29-13 TD = 9,194’ DF Drilled 14’ of 8½” hole (60% cement & 40% formation) from 9,180’ DF to 9,194’ DF. (6 AM 3-28-13 to 6 AM 3-29-13) Day 69 Summary: 3-30-13 TD = 9,241’ DF Drilled 47’ of 8½” hole from 9,194’ DF to 9,241’ DF (0% cement & 100% formation at 9,241’ DF.) (6 AM 3-29-13 to 11 PM 3-29-13) ■END report for 20-3 Collier-Hogan (#1349 pilot well) at 9,241’ DF. ■BEGIN report for 20-3-H Collier-Hogan (#1349-H horizontal well) at 9,241’ DF. ■99’-thick remnant “Kickoff” Plug #2 in #1349 (pilot) wellbore from 9,241’ DF to 9,340’ DF (….assuming 0% of the 64.65 bbl./230.3’-thick cement plug was lost into the formation.) ---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 216.58’ South & 900.47’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,445’ DF TVD 11,942.62’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Preparing to run 7” production casing to 12,440’ DF in 8½”-diameter to 9 7/8”-diameter hole.

I certify that the above well and premise was inspected on 4-1-13, 4-2-13, 4-4-13, 4-8-13, 4-9-13, 4-10-13, 4-12-13, & 4-15-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 17th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/17/13

Permit # 1349-H Date 04 17 2013

First Report (#1349-H (horizontal): ■Drilled 3,204’ of 8½” hole from 9,241’ DF (“Kickoff” point for #1349-H)

to production casing point of 12,445’ DF;

■Tripped in hole with 7.625” O.D. production casing; ■Stuck 7.625” O.D. casing at 5,352’ DF, then P.O.O.H. & laid down 130 joints. Casing to large for borehole.

■Reamed selected intervals & enlarged 8½”-dia. hole to 9 7/8”-dia.

with 8” O.D. under reamer from 4,004’ DF to 10,410’ DF;

■Reamed 1,166’-thick interval with 8½” mill tooth bit

from 11,271’ DF to 12,437’ DF. Junk in hole.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF. Day 69 Summary: 3-30-13 TD = 9,316’ DF Drilled 75’ of 8½” hole from 9,241’ DF to 9,316’ DF in 13.5 hrs. (11 PM 3-29-13 to 6 AM 3-30-13) ■BEGIN report for 20-3-H Collier-Hogan (#1349-H horizontal well) on 3-29-13 at 9,241’ DF.

Day 70 Summary: 3-31-13 TD = 9,522’ DF Drilled 206’ of 8½” hole from 9,316’ DF to 9,522’ DF in 13.5 hrs. (6 AM 3-30-13 to 6 AM 3-31-13)

Day 71 Summary: 4-01-13 TD = 10,373’ DF Drilled 851’ of 8½” hole from 9,522’ DF to 10,373’ DF in 17 hrs. (6 AM 3-31-13 to 6 AM 4-1-13)

Day 72 Summary: 4-02-13 TD = 11,153’ DF Drilled 780’ of 8½” hole from 10,373’ DF to 11,153’ DF in 22 hrs. (6 AM 4-1-13 to 6 AM 4-2-13) (Bruno arrived 4-1-13 at 9:45 AM, left 4-1-13 at 11 AM.)

Day 73 Summary: 4-03-13 TD = 11,352’ DF Drilled 199’ of 8½” hole from 11,153’ DF to 11,352’ DF in 10.5 hrs. (6 AM 4-2-13 to 6 AM 4-3-13) •Drilling at 11,289’ DF on 4-2-13 at 11:55 AM. (Attwood arrived 4-2-13 at 11:52 AM, left 4-2-13 at 12:16 PM.)

Day 74 Summary: 4-04-13 TD = 11,919’ DF Drilled 567’ of 8½” hole from 11,352’ DF to 11,919’ DF in 23.5 hrs. (6 AM 4-3-13 to 6 AM 4-4-13)

Day 75 Summary: 4-05-13 TD = 12,009’ DF Drilled 90’ of 8½” hole from 11,919’ DF to 12,009’ DF in 6 hrs. (6 AM 4-4-13 to 6 AM 4-5-13) (Bruno arrived 4-4-13 at 9 AM, left 4-4-13 at 9:20 AM.)

Day 76 Summary: 4-06-13 TD = 12,009’ DF Rig repairs. Changed brake bands. Repaired air leaks. (6 AM 4-5-13 to 6 AM 4-6-13) Began repairing high clutch on draw works.

Day 77 Summary: 4-07-13 TD = 12,009’ DF Finished repairing high clutch on draw works. (6 AM 4-6-13 to 6 AM 4-7-13) Tripped in hole with B.H.A. #13 & 5” O.D. x 19.5#/ft. drill pipe to 10,788’ DF.

Day 78 Summary: 4-08-13 TD = 12,445’ DF Drilled 436’ of 8½” hole from 12,009’ DF to 12,445’ DF in 18 hrs. (6 AM 4-7-13 to 6 AM 4-8-13) ■Reached production casing point for #1349-H (horizontal well) of 12,445’ DF on 4-8-13 at 3:30 AM.

Day 79 Summary: 4-09-13 TD = 12,445’ DF Ran 130 joints of 7.625” O.D. x 33.7#/ft/ L-80 LT&C production casing to 5,352’ DF. (6 AM 4-8-13 to 6 AM 4-9-13) Stuck 7.625” O.D. casing at 5,352’ DF in 8½”-diameter hole. Could not go any deeper.

(Bruno arrived 4-8-13 at 1:30 PM, left 4-8-13 at 2:15 PM.)

Day 80 Summary: 4-10-13 TD = 12,445’ DF Laid down 130 joints of 7.625” O.D. x 33.7#/ft/ L-80 LT&C production casing. (6 AM 4-9-13 to 6 AM 4-10-13) B.O.P. Test #70 performed & witnessed by P. Attwood (FDEP-O&G Section.)

•P. Attwood witnessed BOP Test #70 beginning 10:06 PM 4-30-13 & ending 12:44 AM 4-10-13.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 216.58’ South & 900.47’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,445’ DF TVD 11,942.62’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Preparing to run 7” production casing to 12,440’ DF in 8½”-diameter to 9 7/8”-diameter hole.

I certify that the above well and premise was inspected on 4-1-13, 4-2-13, 4-4-13, 4-8-13, 4-9-13, 4-10-13, 4-12-13, & 4-15-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 17th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/17/13

Permit # 1349-H Date 04 17 2013

BOP Test #70 on 4-9-13 & 4-10-13: Test of Blowout Preventers, Kill Valves, Hydril, & Choke Manifold Valves (#1349-H horizontal well)

4-9-13 @ 10:06:30 PM 4-9-13 @ 10:11:30 PM 1a. Tested Lower pipe rams + INSIDE 4.0625” manual valve + INSIDE 2.0625” kill line valve at 370 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 10:13 PM 4-9-13 @ 10:20 PM 1b. Tested Lower pipe rams + INSIDE 4.0625” manual valve + INSIDE 2.0625” kill line valve at 3,600 PSI. Lost 70 PSI (1.9%) in 7 minutes. PASSED on 1st attempt.

4-9-13 @ 10:30 PM 4-9-13 @ 10:35 PM 2a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + choke manifold valves to panic line gas buster & shale shakers at 295 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 10:36:15 PM 4-9-13 @ 10:41:15 PM 2b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + choke manifold valves to panic line gas buster & shale shakers at 3,450 PSI. Lost 80 PSI (2.3%) in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 10:48:15 PM 4-9-13 @ 10:53:30 PM 3a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) MIDDLE choke manifold valves at 300 PSI. No pressure lost in 5¼ minutes. PASSED on 1st attempt.

4-9-13 @ 10:54:30 PM 4-9-13 @ 10:59:30 PM 3b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) MIDDLE choke manifold valves at 3,500 PSI. Lost 70 PSI (2.0%) in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 11:02:30 PM 4-9-13 @ 11:07:30 PM 4a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + middle MIDDLE choke manifold valve + (2) INSIDE choke manifold valves at 320 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 11:08:30 PM 4-9-13 @ 11:13:30 PM 4b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + middle MIDDLE choke manifold valve + (2) INSIDE choke manifold valves at 3,485 PSI. Lost 65 PSI (1.9%) in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 11:18:30 PM 4-9-13 @ 11:23:30 PM 5a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 370 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 11:24:30 PM 4-9-13 @ 11:29:30 PM 5b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 3,480 PSI. Lost 30 PSI (0.9%) in 5 minutes. PASSED on 1st attempt.

4-9-13 @ 11:33:15 PM 4-9-13 @ 11:36:15 PM 6a(1). Tested Hydril + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 260 PSI. Lost 30 PSI (11.5%) in 3 minutes. FAILED 1st low pressure test. •Hydril bladder was pressured up to 1,150 PSI for 1st low pressure test.

4-9-13 @ 11:36:30 PM 4-9-13 @ 11:39:30 PM 6a(2). Tested Hydril + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 300 PSI. Lost 20 PSI (6.7%) in 3 minutes. FAILED 2nd low pressure test. •Hydril bladder was pressured up to 1,150 PSI for 2nd low pressure test.

4-9-13 @ 11:47:45 PM 4-9-13 @ 11:52:45 PM 6a(3). Tested Hydril + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 260 PSI. No pressure lost in 5 minutes. PASSED on 3rd attempt. •Opened & closed Hydril, then pressured-up bladder to 1,450 PSI for 3rd low pressure test.

4-9-13 @ 11:53:30 PM 4-9-13 @ 11:58:30 PM 6b. Tested Hydril + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 2,000 PSI. Lost 50 PSI (2.5%) in 5 minutes. PASSED on 1st attempt.

4-10-13 @ 12:33 AM 4-10-13 @ 12:38 AM 7a. Tested Blind rams + three (3) INSIDE choke manifold valves + OUTSIDE 2.0625” kill line valve at 355 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-10-13 @ 12:39 AM 4-10-13 @ 12:44 AM 7b. Tested Blind rams + three (3) INSIDE choke manifold valves + OUTSIDE 2.0625” kill line valve at 3,440 PSI. Lost 80 PSI (2.3%) in 5 minutes. PASSED on 1st attempt.

(Attwood arrived 4-9-13 at 7:58 PM, left 4-10-13 at 12:53 AM.) (Bruno arrived 4-9-13 at 8 AM, left 4-9-13 at 10:30 AM; Bruno returned 4-9-13 at 12:05 PM, left 4-9-13 at 1 PM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 216.58’ South & 900.47’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,445’ DF TVD 11,942.62’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Preparing to run 7” production casing to 12,440’ DF in 8½”-diameter to 9 7/8”-diameter hole.

I certify that the above well and premise was inspected on 4-1-13, 4-2-13, 4-4-13, 4-8-13, 4-9-13, 4-10-13, 4-12-13, & 4-15-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 17th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: � FDEP (Oil & Gas Section): Tallahassee, FL � FDEP (Oil & Gas Section): Fort Myers, FL � Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/17/13

Permit # 1349-H Date 04 17 2013

Day 81 Summary: 4-11-13 TD = 12,445’ DF Enlarged 176’ of 8½”-diameter hole to 9 7/8”-diameter with 8” O.D. under reamer (6 AM 4-10-13 to 6 AM 4-11-13) from 4,004’ DF to 4,180’ DF to accommodate future 7” production casing string. Day 82 Summary: 4-12-13 TD = 12,445’ DF Enlarged 1,520’ of 8½”-diameter hole to 9 7/8”-diameter with 8” O.D. under reamer (6 AM 4-11-13 to 6 AM 4-12-13) from 4,180’ DF to 5,700’ DF to accommodate future 7” production casing string. Day 83 Summary: 4-13-13 TD = 12,445’ DF Enlarged 1,607’ of 8½”-diameter hole to 9 7/8”-diameter with 8” O.D. under reamer (6 AM 4-12-13 to 6 AM 4-13-13) from 5,700’ DF to 7,307’ DF to accommodate future 7” production casing string.

•Reaming at 6,078’ DF on 4-12-13 at 10:40 AM. (Attwood arrived 4-12-13 at 10:18 AM, left 4-12-13 at 10:42 AM.)

Day 84 Summary: 4-14-13 TD = 12,445’ DF Enlarged 208’ of 8½”-diameter hole to 9 7/8”-diameter with 8” O.D. under reamer (6 AM 4-13-13 to 6 AM 4-14-13) from 7,307’ DF to 7,515’ DF, then tripped in hole to 8,300’ DF.

Enlarged 163’ of 8½”-diameter hole to 9 7/8”-diameter with 8” O.D. under reamer from 8,300’ DF to 8,463’ DF, then tripped in hole to 9,190’ DF.

Enlarged 50’ of 8½”-diameter hole to 9 7/8”-diameter with 8” O.D. under reamer from 9,190’ DF to 9,240’ DF, then tripped in hole to 9,938’ DF.

Enlarged 472’ of 8½”-diameter hole to 9 7/8”-diameter with 8” O.D. under reamer from 9,938’ DF to 10,410’ DF, after which system started stalling & torquing out.. Day 85 Summary: 4-15-13 TD = 12,445’ DF Tripped in hole from 10,410’ DF to 11,750’ DF’, then attempted to ream at 11,750’ DF (6 AM 4-14-13 to 6 AM 4-15-13) with 8” O.D. under reamer. Unable to rotate. Pipe stuck. Jarred on pipe. Pipe came free.

Pulled up to 11,699’ DF. Unable to ream. System stalled & torque out. Pulled up to 11,668’ DF. Circulated sweep. P.O.O.H. to 9,400’ DF, then tripped in hole to 11,322’ DF. Unable to ream at 11,322’ DF. P.O.O.H. One (1) metal “fin” missing & one “fin” barely attached to 8” O.D. under reamer.

Day 86 Summary: 4-16-13 TD = 12,445’ DF Tripped in hole & reamed 1,046’ of 8½”-diameter hole with 8½” mill tooth bit (6 AM 4-15-13 to 6 AM 4-16-13) from 11,271’ DF to 12,317’ DF to accommodate future 7” production casing string.

(Bruno arrived 4-15-13 at 9 AM, left 4-15-13 at 9:20 AM.) Day 87 Summary: 4-17-13 TD = 12,445’ DF Reamed 1,166’ of 8½”-diameter hole with 8½” mill tooth bit (6 AM 4-16-13 to 6 AM 4-17-13) from 12,317’ DF to 12,437’ DF to accommodate future 7” production casing string, Drilled 1’ to 12,438’ DF, then spotted 70 bbl. graphite pill on bottom. P.O.O.H. and laid down 5” O.D. drill pipe. Preparing to run 7” casing. ---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 274.22’ South & 1,326.18’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,874’ DF TVD 11,951.21’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Tripping out of 6.125”-diameter hole after drilling to 12,874’ DF.

I certify that the above well and premise was inspected on 4-17-13, 4-18-13, 4-19-13, 4-20-13, 4-22-13, 4-24-13, & 4-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 28th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/28/13

Permit # 1349-H Date 04 28 2013

Second Report (#1349-H (horizontal): ■Cemented 7” O.D. x 26.0#/ft. L-80 & P-110 production casing at 12,440’ DF

with 222.06 bbls./1,010 sacks of cement; ■Drilled 1,552’ of cement inside 7” O.D. casing from 10,888’ DF to 12,440’ DF;

■Drilled 5’ of cement in (former) 8½” hole from 12,440’ DF to 12,445’ DF; ■Drilled 429’ of formation & “tungsten metal JUNK” with 6.125” bit

from 12,445’ DF to 12,874’ DF.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF. • 4-17-13: 7” O.D. x 6.276” I.D. x 26.0#/ft. P-110 LT&C casing (45 joints) ran from surface to 2,043.05’ DF and 7” O.D. x 6.276” I.D. x 26.0#/ft. L-80 LT&C casing (236 joints) ran from 2,043.05’ DF to 12,440’ DF.

Day 88 Summary: 4-18-13 PBTD = 10,888’ DF (tagged top of hard cement inside 7” casing on 4-20-13.) (6 AM 4-17-13 to 6:33 AM 4-18-13) 7” O.D. x 26.0#/ft. P-110 and L-80 LT&C production casing ran to 12,440’ DF(= 5’ off bottom.) Cemented 7” O.D. production casing with 222.06 barrels (1,010 sacks) of cement at 12,440’ DF.

Production Casing Cement Job on 4-18-13 in #1349-H (Horizontal) Wellbore: 7” O.D. x 26.0 pound per foot P-110 & L-80 LT&C casing set at 12,440' DF.

4-18-13 @ 3:50 AM Dropped plug. Pumped 5 bbls. of 8.34 PPG S.A.P.P. (sodium acid pyrophosphate) at 6.4 bpm into 7” casing at 351 PSI. note: S.A.P.P. is also called MudClean II by Baker Hughes.

4-18-13 @ 4:00 AM Tested cementing lines to 5,000 PSI (per pg. 2 of cement job report.) Tested OK. note: Lines actually pressure tested to 4,250 PSI (per Baker Hughes pressure chart on pg. 3 of cement job report.)

4-18-13 @ 4:05 AM Spacer Ahead: Pumped 35 bbls. of 8.34 PPG S.A.P.P. (sodium acid pyrophosphate) at 6.4 bpm into 7” casing at 85 PSI.

4-18-13 @ 4:14 AM

Lead cement: Pumped 53.08 bbls. (150 sacks/12.4 PPG) of 35:65:6 Poz (fly ash) Class H cement mixed as follows: 98 sacks (=9,212#) of Class H cement + 53 sacks (= 3,885#) of Poz (fly ash) + 6% b.w.o.c. (=783#) of bentonite + 0.225% b.w.o.c. (=29.4#) of R-3 + 0.15% b.w.o.c. (=19.57#) of CD-32 + 0.001 gal. per second (=0.78gal.) of FP-6L yielding 1.99 cu. ft. of slurry per sack of cement at 4.7 bpm into 7” casing at 154 PSI.

4-18-13 @ 4:27 AM

Tail cement: Pumped 168.98 bbls. (860 sacks/16.2 PPG) of Class H cement + 0.10% b.w.o.c. (=80.84#) of R-3 + 3% b.w.o.w. (=987.28#) of potassium chloride + 0.15% b.w.o.c. (=121.26#) of FL-25 yielding 1.10 cu. ft. of slurry per sack of cement at 5.2 bpm into 7” casing at 106 PSI. note: 860 sacks of Class H cement weighed 80,840#.

4-18-13 @ 5:09 AM Displacement Spacer: Dropped plug, then pumped 20 bbls. of 8.34 PPG fresh water at 5.2 bpm into 7” production casing at 153 PSI with the Baker Hughes cementer to begin displacing lead cement into annulus.

4-18-13 @ 5:15 AM Shut down.

4-18-13 @ 5:20 AM Displacement: Changed over to drilling rig’s pump system and pumped an additional 453 bbls. of 8.8 PPG drilling mud at 7.56 bpm into 7” production casing to displace lead & tail cements into annulus.

4-18-13 @ 6:25 AM Bumped plug with 1,200 PSI (which = 500 PSI over final circulating pressure of 700 PSI.) Held 1,200 PSI OK for 5 minutes. Cement in place 4-18-13 at 6:33 AM.

(Attwood arrived 4-17-13 at 11:24 AM, left 4-17-13 at 11:58 AM; Attwood returned 4-18-13 at 4:17 AM, left 4-18-13 at 6:21 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 274.22’ South & 1,326.18’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,874’ DF TVD 11,951.21’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Tripping out of 6.125”-diameter hole after drilling to 12,874’ DF.

I certify that the above well and premise was inspected on 4-17-13, 4-18-13, 4-19-13, 4-20-13, 4-22-13, 4-24-13, & 4-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 28th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/28/13

Permit # 1349-H Date 04 28 2013

Day 89 Summary: 4-19-13 PBTD = 10,888’ DF (tagged top of hard cement inside 7” casing on 4-20-13.) (6:33 AM 4-18-13 to 8:15 AM 4-19-13) Set 7” casing slips at 150,000#, then made rough & final cuts of 7” casing. Changed upper & lower pipe rams to accommodate 3½” O.D. drill pipe. B.O.P. Test #71 performed & witnessed by Pierre Bruno (F.D.E.P.) (results presented below:)

BOP Test #71 on 4-19-13: Test of Blowout Preventers, Kill Valves, Hydril, Choke Manifold Valves & Floor Valves (#1349-H horizontal well)

4-19-13 @ 2:50 AM 4-19-13 @ 2:58 AM 1a. Tested Lower pipe rams at 200 PSI. No pressure lost in 8 minutes. PASSED on 1st attempt.

4-19-13 @ 3:00 AM 4-19-13 @ 3:08 AM 1b. Tested Lower pipe rams at 3,500 PSI. Lost 100 PSI (2.9%) in 8 minutes. PASSED on 1st attempt.

4-19-13 @ 3:17 AM 4-19-13 @ 3:22 AM 2a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) OUTSIDE choke manifold valves at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 3:25 AM 4-19-13 @ 3:30 AM

2b(1). Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) OUTSIDE choke manifold valves at 3,500 PSI. Lost 200 PSI (5.7%) in 5 minutes. Failed 1st high pressure test. •Re-pressurized system from 3,300 PSI to 3,500 PSI & started 2nd high pressure test.

4-19-13 @ 3:31 AM 4-19-13 @ 3:37 AM 2b(2). Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) OUTSIDE choke manifold valves at 3,500 PSI. No pressure lost in 6 minutes. PASSED on 2nd attempt.

4-19-13 @ 3:45 AM 4-19-13 @ 3:50 AM 3a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) MIDDLE choke manifold valves at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 3:51 AM 4-19-13 @ 3:56 AM 3b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) MIDDLE choke manifold valves at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 4:04 AM 4-19-13 @ 4:09 AM 4a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) INSIDE choke manifold valves at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 4:10 AM 4-19-13 @ 4:15 AM 4b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + three (3) INSIDE choke manifold valves at 3,500 PSI. Lost 50 PSI (1.4%) in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 4:19 AM 4-19-13 @ 4:24 AM 5a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 4:25 AM 4-19-13 @ 4:31 AM 5b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 3,500 PSI. No pressure lost in 6 minutes. PASSED on 1st attempt.

4-19-13 @ 4:35 AM 4-19-13 @ 4:40 AM 6a. Tested Upper pipe rams + INSIDE 2.0625” kill line valve + INSIDE manual valve at 250 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 4:41 AM 4-19-13 @ 4:46 AM 6b. Tested Upper pipe rams + INSIDE 2.0625” kill line valve + INSIDE manual valve at 3,500 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 274.22’ South & 1,326.18’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,874’ DF TVD 11,951.21’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Tripping out of 6.125”-diameter hole after drilling to 12,874’ DF.

I certify that the above well and premise was inspected on 4-17-13, 4-18-13, 4-19-13, 4-20-13, 4-22-13, 4-24-13, & 4-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 28th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/28/13

Permit # 1349-H Date 04 28 2013

BOP Test #71 on 4-19-13: Test of Blowout Preventers, Kill Valves, Hydril, Choke Manifold Valves & Floor Valves (#1349-H horizontal well)

4-19-13 @ 4:55 AM 4-19-13 @ 5:01 AM 7a. Tested Hydril + INSIDE 2.0625” kill line valve + INSIDE manual valve at 250 PSI. No pressure lost in 6 minutes. PASSED on 1st attempt.

4-19-13 @ 5:02 AM 4-19-13 @ 5:07 AM 7b(1). Tested Hydril + INSIDE 2.0625” kill line valve + INSIDE manual valve at 2,000 PSI. Lost 50 PSI (2.5%) in 5 minutes. Tried to get better test results. •Re-pressurized system from 1,950 PSI to 2,000 PSI, then started 2nd high pressure test.

4-19-13 @ 5:13 AM 4-19-13 @ 5:18 AM 7b(2). Tested Hydril + INSIDE 2.0625” kill line valve + INSIDE manual valve at 2,000 PSI. Lost 50 PSI (2.5%) in 5 minutes. Same result as Test #7b(1). PASSED on 2nd attempt.

4-19-13 @ 5:56 AM 4-19-13 @ 5:59 AM 8a(1). Tested Blind rams at 300 PSI. Lost 100 PSI (33.3%) in 3 minutes. Failed 1st low pressure test

4-19-13 @ 6:03 AM 4-19-13 @ 6:08 AM 8a(2). Tested Blind rams at 300 PSI. No pressure lost in 5 minutes. PASSED on 2nd attempt.

4-19-13 @ 6:22 AM 4-19-13 @ 6:27 AM 8b(1). Tested Blind rams at 3,800 PSI. Lost 250 PSI (6.6%) in 5 minutes. Failed 1st high pressure test

4-19-13 @ 6:29 AM 4-19-13 @ 6:37 AM 8b(2). Tested Blind rams at 3,300 PSI. No pressure lost in 8 minutes. PASSED on 2nd attempt.

4-19-13 @ 6:44 AM 4-19-13 @ 6:49 AM 9a. Tested Inside Gray (manual dart) valve at 300 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 6:54 AM 4-19-13 @ 6:59 AM 9b. Tested Inside Gray (manual dart) valve at 3,450 PSI. Lost 100 PSI (2.90%) in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 7:01 AM 4-19-13 @ 7:07 AM 10a. Tested Manual T.I.W. (Full Open Safety Ball) valve at 400 PSI. No pressure lost in 6 minutes. PASSED on 1st attempt.

4-19-13 @ 7:08 AM 4-19-13 @ 7:15 AM 10b. Tested Manual T.I.W. (Full Open Safety Ball) valve at 3,400 PSI. Lost 100 PSI (2.94%) in 7 minutes. PASSED on 1st attempt.

4-19-13 @ 7:38 AM 4-19-13 @ 7:44 AM 11a. Tested Lower manual I.B.O.P. on top drive at 450 PSI. No pressure lost in 6 minutes. PASSED on 1st attempt.

4-19-13 @ 7:45 AM 4-19-13 @ 7:50 AM 11b. Tested Lower manual I.B.O.P. on top drive at 3,500 PSI. Lost 50 PSI (1.4%) in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 7:52 AM 4-19-13 @ 7:57 AM 12a. Tested 4” Standpipe valve at 400 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 7:58 AM 4-19-13 @ 8:03 AM 12b. Tested 4” Standpipe valve at 3,550 PSI. Lost 50 PSI (1.4%) in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 8:04 AM 4-19-13 @ 8:09 AM 13a. Tested 4” mud pump valves at 400 PSI. No pressure lost in 5 minutes. PASSED on 1st attempt.

4-19-13 @ 8:10 AM 4-19-13 @ 8:15 AM 13b. Tested 4” mud pump valves at 3,400 PSI. Lost 0 PSI (1.5%) in 5 minutes. PASSED on 1st attempt.

(Bruno arrived 4-18-13 at 11 AM, left 4-18-13 at noon.) (Bruno arrived 4-19-13 at 12:01 AM, on location 4-19-13 at 6 AM.) Day 90 Summary: 4-20-13 PBTD = 10,888’ DF (tagged top of hard cement inside 7” casing on 4-20-13.) (8:15 AM 4-19-13 to 6 AM 4-20-13) Tripped in hole with autotrack directional B.H.A. & 3½” drill pipe to 9,737’ DF. (Bruno on location 4-19-13 at 6 AM, left 4-19-13 at 10:30 AM.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 4 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 274.22’ South & 1,326.18’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,874’ DF TVD 11,951.21’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Tripping out of 6.125”-diameter hole after drilling to 12,874’ DF.

I certify that the above well and premise was inspected on 4-17-13, 4-18-13, 4-19-13, 4-20-13, 4-22-13, 4-24-13, & 4-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 28th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/28/13

Permit # 1349-H Date 04 28 2013

Day 91 Summary: 4-21-13 PBTD = 12,337’ DF Tripped in hole with autotrack directional B.H.A. & 3½” drill pipe to 10,888’ DF. (6 AM 4-20-13 to 6 AM 4-21-13) Tagged top of hard cement inside 7” casing on 4-20-13 at 10,888’ DF. Drilled 1,449’ of hard cement inside 7” casing from 10,888’ DF to 12,337’ DF.

Cement volume calculations for 7” casing set at 12,440’ DF: 222.06 barrels of cement pumped. -59.38 barrels of cement inside 7” O.D. x 6.276” I.D. casing from 10,888’ DF to 12,440’ DF. -0.35 barrels of cement in 8½”-diameter open hole from 12,440’ DF to 12,445’ DF (below 7” casing shoe). 45.85 barrels of cement in annular space between 7” O.D. casing & 8½”-diameter hole from 12,440’ DF to 10,410’ DF (assuming 0% of cement lost into formation.) 22.24 barrels of cement in annular space between 7” O.D. casing & 9.875”-diameter hole from 10,410’ DF to 9,938’ DF (assuming 0% of cement lost into formation.) 15.76 barrels of cement in annular space between 7” O.D. casing & 8½”-diameter hole from 9,938’ DF to 9,240’ DF (assuming 0% of cement lost into formation.) 2.36 barrels of cement in annular space between 7” O.D. casing & 9.875”-diameter hole from 9,240’ DF to 9,190’ DF (assuming 0% of cement lost into formation.) 16.42 barrels of cement in annular space between 7” O.D. casing & 8½”-diameter hole from 9,190’ DF to 8,463’ DF (assuming 0% of cement lost into formation.) 7.68 barrels of cement in annular space between 7” O.D. casing & 9.875”-diameter hole from 8,463’ DF to 8,300’ DF (assuming 0% of cement lost into formation.) 17.73 barrels of cement in annular space between 7” O.D. casing & 8½”-diameter hole from 8,300’ DF to 7,515’ DF (assuming 0% of cement lost into formation.) 34.29 barrels of cement in annular space between 7” O.D. casing & 9.875”-diameter hole from 7,515’ DF to 6,788’ DF (assuming 0% of cement lost into formation.) ■Est. top of cement behind 7” casing at 12,440’ DF minus 5,652’ = 6,788’ DF (assuming 0% of cement.) (Attwood arrived 4-20-13 at 11:45 AM, left 4-20-13 at 12:36 PM.) Day 92 Summary: 4-22-13 PBTD = 12,441’ DF Successful, 30 minute-long M.I.T. of 7” casing performed. (6 AM 4-21-13 to 6 AM 4-22-13) Drilled 104’ of cement from 12,337’ DF to 12,441’ DF.

•MIT of 7” production casing performed. MIT witnessed by Mark Robert Jones (P.P.I. drilling consultant)

M.I.T #1 of 7” production casing on 4-21-13 in #1349-H well 6.125” drill bit at 12,337’ DF during MIT

Duration Time (per Pason) PSIG (per Pason) Start 6:32 AM 1015

5 min. 6:37 AM 1022 10 min. 6:42 AM 1026 15 min. 6:47 AM 1028 20 min. 6:52 AM 1029 25 min. 6:57 AM 1030 30 min. 7:02 AM 1031

Summary of MIT #1: Gained 16 PSI (1.58%) in 30 minutes. Passed MIT. PASSED MIT #1 on 4-21-13 at 7:02 AM.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 5 of 5

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Current Bottom Hole Location is in Sec. 20 T 47S R 28E , 274.22’ South & 1,326.18’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 12,874’ DF TVD 11,951.21’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Tripping out of 6.125”-diameter hole after drilling to 12,874’ DF.

I certify that the above well and premise was inspected on 4-17-13, 4-18-13, 4-19-13, 4-20-13, 4-22-13, 4-24-13, & 4-25-13 by Paul Attwood & Pierre Bruno. No violations of rules 62C-25 through 30, FAC were found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 28th day of April 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 04/28/13

Permit # 1349-H Date 04 28 2013

Day 93 Summary: 4-23-13 PBTD = 12,442’ DF Drilled 1’ of cement & metal “JUNK” in hole from 12,441’ DF to 12,442’ DF. P.O.O.H. (6 AM 4-22-13 to 6 AM 4-23-13) Tripped in hole with 6.125” O.D. cutrite concave mill to 11,060’ DF. (Attwood arrived 4-22-13 at 10:16 AM, left 4-22-13 at 10:52 AM.) Day 94 Summary: 4-24-13 TD = 12,455’ DF Milled “JUNK” in hole from 12,442’ DF to 12,455’ DF, then P.O.O.H. with 6.125” O.D. mill. (6 AM 4-23-13 to 6 AM 4-24-13) Day 95 Summary: 4-25-13 TD = 12,455’ DF Tripped in hole with 6.125” O.D. bit + autotrak directional assembly + 3½” drill pipe to 11,585’ DF. (6 AM 4-24-13 to 6 AM 4-25-13) (Bruno arrived 4-24-13 at 3 PM, left 4-24-13 at 5 PM.) Day 96 Summary: 4-26-13 TD = 12,695’ DF Tripped in hole with 6.125” O.D. bit + autotrak directional assembly + 3½” drill pipe to 12,430’ DF. (6 AM 4-25-13 to 6 AM 4-26-13) Washed 25’ of hole from 12,430’ DF to 12,455’ DF. Drilled 240’ of 6.125” hole from 12,455’ DF to 12,695’ DF in 16 hrs. (Attwood arrived 4-25-13 at 8:01 AM, left 4-25-13 at 8:25 AM.) Day 97 Summary: 4-27-13 TD = 12,874’ DF Drilled 179’ of 6.125” hole from 12,695’ DF to 12,874’ DF in 17.5 hrs. (6 AM 4-26-13 to 6 AM 4-27-13) ---No Violations---

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 21 T 47S R 28E , 643.86’ South & 4,642.98’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 16,215’ DF TVD 11,948.34’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Moving drilling equipment to #1352 (pilot) well at BreitBurn’s North Bear Island Field. Waiting on completion rig.

I certify that the above well and premise was inspected on 4-27-13, 4-29-13, 4-30-13, 5-3-13, 5-6-13, 5-8-13, 5-10-13, 5-14-13, & 5-16-13 by Paul Attwood & Pierre Bruno. One (1) minor violation of rules 62C-25 through 30, FAC was found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 17th day of May 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 05/17/13

Permit # 1349-H Date 05 17 2013

Third Report (#1349-H (horizontal): ■Drilled 3,341’ of 6.125”-diameter hole from 12,874’ DF to 16,215’ DF;

■A 4,231’-long horizontal wellbore drilled through Rubble Zone

from 11,984’ DF to 16,215’ DF.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.) • 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.) • 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF. • 4-17-13: 7” O.D. x 6.276” I.D. x 26.0#/ft. P-110 LT&C casing (45 joints) ran from surface to 2,043.05’ DF and 7” O.D. x 6.276” I.D. x 26.0#/ft. L-80 LT&C casing (236 joints) ran from 2,043.05’ DF to 12,440’ DF.

Day 98 Summary: 4-28-13 TD = 12,995’ DF Precision’s driller witnessed B.O.P. Test #72 (see results below:) (6 AM 4-27-13 to 6 AM 4-28-13) Drilled 121’ of 6.125”-diameter hole from 12,874’ DF to 12,995’ DF in 5.5 hrs. (Attwood arrived 4-27-13 at 8:44 AM, left 4-27-13 at 9:14 AM.) •Operator was P.O.O.H. on 4-27-13 at 8:50 AM to test BOPs after drilling to 12,874’ DF.

BOP Test #72 on 4-27-13 (witnessed by Precision’s driller): Test of Blowout Preventers, Kill Valves, Hydril, & Choke Manifold Valves (#1349-H horizontal well)

4-27-13 @ 11:21 AM 4-27-13 @ 11:26 AM 1a. Tested Upper pipe rams + INSIDE 2.0625” kill line valve + INSIDE manual valve at 300 PSI. No pressure lost in 5 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure loss recorded on chart.

4-27-13 @ 11:27 AM 4-27-13 @ 11:32 AM 1b. Tested Upper pipe rams + INSIDE 2.0625” kill line valve + INSIDE manual valve at 3,500 PSI. Pressure increase of 100 PSI (2.9%) recorded in 5 minutes (per driller.) PASSED on 1st attempt. Note: pressure increase recorded on chart was 50 PSI (1.4 %.)

4-27-13 @ 11:35 AM 4-27-13 @ 11:40 AM 2a. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 300 PSI. Pressure increase of 25 PSI (8.3%) recorded in 5 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure increase recorded on chart.

4-27-13 @ 11:41 AM 4-27-13 @ 11:46 AM 2b. Tested Upper pipe rams + OUTSIDE 2.0625” kill line valve + HCR (High Closing Ratio) valve at 3,500 PSI. Pressure increase of 100 PSI (2.9%) recorded in 5 minutes (per driller.) PASSED on 1st attempt. Note: pressure increase recorded on chart was 100 PSI (2.9 %.)

4-27-13 @ 11:49 AM 4-27-13 @ 11:55 AM 3a. Tested Lower pipe rams at 300 PSI. Lost 5 PSI (1.7%) in 6 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure increase recorded on chart.

4-27-13 @ 11:56 AM 4-27-13 @ noon 3b. Tested Lower pipe rams at 3,550 PSI. Pressure increase of 40 PSI (1.1%) recorded in 4 minutes (per driller.) PASSED on 1st attempt. Note: pressure increase recorded on chart was 20 PSI (0.6 %.)

4-27-13 @ 12:05 PM 4-27-13 @ 12:10 PM 4a. Tested Upper pipe rams + three (3) INSIDE choke manifold valves at 250 PSI. Lost 5 PSI (2.0%) in 5 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure increase recorded on chart.

4-27-13 @ 12:11 PM 4-27-13 @ 12:17 PM 4b. Tested Upper pipe rams + three (3) INSIDE choke manifold valves at 3,600 PSI. No pressure lost in 6 minutes (per driller.) PASSED on 1st attempt. Note: pressure increase recorded on chart was 70 PSI (2.0 %.)

4-27-13 @ 12:21 PM 4-27-13 @ 12:27 PM 5a. Tested Upper pipe rams + three (3) MIDDLE choke manifold valves at 495 PSI. No pressure lost in 6 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure loss recorded on chart.

4-27-13 @ 12:28 PM 4-27-13 @ 12:35 PM 5b. Tested Upper pipe rams + three (3) MIDDLE choke manifold valves at 3,500 PSI. Lost 10 PSI (0.3%) in 7 minutes (per driller.) PASSED on 1st attempt. Note: pressure loss recorded on chart was 100 PSI (2.9 %.)

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 2 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 21 T 47S R 28E , 643.86’ South & 4,642.98’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 16,215’ DF TVD 11,948.34’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Moving drilling equipment to #1352 (pilot) well at BreitBurn’s North Bear Island Field. Waiting on completion rig.

I certify that the above well and premise was inspected on 4-27-13, 4-29-13, 4-30-13, 5-3-13, 5-6-13, 5-8-13, 5-10-13, 5-14-13, & 5-16-13 by Paul Attwood & Pierre Bruno. One (1) minor violation of rules 62C-25 through 30, FAC was found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 17th day of May 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 05/17/13

Permit # 1349-H Date 05 17 2013

BOP Test #72 on 4-27-13 (witnessed by Precision’s driller): Test of Blowout Preventers, Kill Valves, Hydril, & Choke Manifold Valves (#1349-H horizontal well)

4-27-13 @ 12:37 PM 4-27-13 @ 12:43 PM 6a. Tested Upper pipe rams + choke manifold valves to panic line, gas buster & shale shakers at 400 PSI. No pressure lost in 6 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure loss recorded on chart.

4-27-13 @ 12:44 PM 4-27-13 @ 12:49 PM 6b. Tested Upper pipe rams + choke manifold valves to panic line, gas buster & shale shakers at 3,600 PSI. Lost 100 PSI (2.8%) in 5 minutes. PASSED on 1st attempt. Note: pressure loss recorded on chart was 100 PSI (2.8 %.)

4-27-13 @ 12:53 PM 4-27-13 @ 12:58 PM 7a. Tested Hydril at 400 PSI. No pressure lost in 5 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure loss recorded on chart.

4-27-13 @ 1:00 PM 4-27-13 @ 1:06 PM 7b. Tested Hydril at 2,500 PSI. Pressure increase of 100 PSI (4.0%) recorded in 6 minutes (per driller.) PASSED on 1st attempt. Note: pressure increase recorded on chart was 100 PSI (4.0 %.)

4-27-13 @ 1:18 PM 4-27-13 @ 1:24 PM 8a. Tested Blind rams at 400 PSI. No pressure lost in 6 minutes (per driller.) PASSED on 1st attempt. Note: No (0%) pressure loss recorded on chart.

4-27-13 @ 1:25 PM 4-27-13 @ 1:30 PM 8b. Tested Blind rams at 3,500 PSI. No pressure lost in 5 minutes (per driller.) PASSED on 1st attempt. Note: pressure loss recorded on chart was 10 PSI (0.3 %.)

Higher ending than starting pressures may be attributed to natural gas (from Rubble Zone) trying to expand in fluid (per Robert Mark Jones-drilling consultant.) Bottoms up trip gas was 2,500 units prior to pulling out of the hole earlier in the day to test BOPs (per Robert Mark Jones-drilling consultant.)

Day 99 Summary: 4-29-13 TD = 13,363’ DF Drilled 368’ of 6.125”-diameter hole from 12,995’ DF to 13,363’ DF in 16.5 hrs. (6 AM 4-28-13 to 6 AM 4-29-13) Day 100 Summary: 4-30-13 TD = 13,985’ DF Drilled 622’ of 6.125”-diameter hole from 13,363’ DF to 13,985’ DF in 20.5 hrs. (6 AM 4-29-13 to 6 AM 4-30-13) (Attwood arrived 4-29-13 at 6:54 AM, left 4-29-13 at 7:47 AM.) •Operator was drilling at 13,397’ DF on 4-29-13 at 6:58 AM. Day 101 Summary: 5-01-13 TD = 14,483’ DF Drilled 498’ of 6.125”-diameter hole from 13,985’ DF to 14,483’ DF in 17.5 hrs. (6 AM 4-30-13 to 6 AM 5-1-13) (Attwood arrived 4-30-13 at 9:35 AM, left 4-30-13 at 10:04 AM.) •Operator was drilling at 14,060’ DF on 4-30-13 at 9:37 AM. Day 102 Summary: 5-02-13 TD = 14,772’ DF Drilled 289’ of 6.125”-diameter hole from 14,483’ DF to 14,772’ DF in 16.5 hrs. (6 AM 5-1-13 to 6 AM 5-2-13) Day 103 Summary: 5-03-13 TD = 15,255’ DF Drilled 483’ of 6.125”-diameter hole from 14,772’ DF to 15,255’ DF in 21 hrs. (6 AM 5-2-13 to 6 AM 5-3-13) Day104 Summary: 5-04-13 TD = 15,800’ DF Drilled 545’ of 6.125”-diameter hole from 15,255’ DF to 15,800’ DF in 20.5 hrs. (6 AM 5-3-13 to 6 AM 5-4-13) (Attwood arrived 5-3-13 at 9:55 AM, left 5-3-13 at 10:45 AM.) •Operator was drilling at 15,347’ DF on 5-3-13 at 10:24 AM.

Florida Department of Environmental Protection

Bureau of Mining & Minerals Regulation Ft. Myers Oil & Gas Field Office

2295 Victoria Avenue, Suite 179 Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 3 of 3

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal) Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal) Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E Final Bottom Hole Location is in Sec. 21 T 47S R 28E , 643.86’ South & 4,642.98’ East of S.H.L. Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 16,215’ DF TVD 11,948.34’ Rig Name & # Precision Drilling #314 Contact Person & # Dana Martin & Mark Jones (drilling consultants) (713) 395-7571 Well Status Moving drilling equipment to #1352 (pilot) well at BreitBurn’s North Bear Island Field. Waiting on completion rig.

I certify that the above well and premise was inspected on 4-27-13, 4-29-13, 4-30-13, 5-3-13, 5-6-13, 5-8-13, 5-10-13, 5-14-13, & 5-16-13 by Paul Attwood & Pierre Bruno. One (1) minor violation of rules 62C-25 through 30, FAC was found. Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator This Oil Well Inspection Report was mailed to recipients marked below on the 17th day of May 20 13. Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame. A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL x FDEP (Oil & Gas Section): Fort Myers, FL x Dan A. Hughes Company: Dana Martin (drilling consultant) IH-1 Rev. 05/17/13

Permit # 1349-H Date 05 17 2013

Day 105 Summary: 5-05-13 TD = 16,215’ DF Drilled 415’ of 6.125”-diameter hole from 15,800’ DF to 16,215’ DF in 21 hrs. (6 AM 5-4-13 to 6 AM 5-5-13) ■Reached FINAL total depth of 16,215’ DF on 5-5-13 at 5:30 AM. ■4,231’-long lateral wellbore drilled through Rubble Zone from 11,984’ DF to 16,215’ DF. Day 106 Summary: 5-06-13 TD = 16,215’ DF Reamed tight spot from 14,580’ DF to 16,215’ DF, then P.O.O.H. (6 AM 5-5-13 to 6 AM 5-6-13) Began tripping in hole with Baker’s Star Trak high-definition resistivity imaging tool. •This Star Trak imaging tool identifies resistivity, fractures, and sedimentary bedding in conductive drill fluid. Day 107 Summary: 5-07-13 TD = 16,215’ DF Logged well with Baker’s Star Trak high-definition resistivity imaging tool (6 AM 5-6-13 to 6 AM 5-7-13) from 12,452’ DF to 13,819’ DF. (Attwood arrived 5-6-13 at 7:28 AM, left 5-6-13 at 7:43 AM.) •Operator was going in hole with Baker Star Trak logging tool at 5,799’ DF on 5-6-13 at 7:32 AM. Day 108 Summary: 5-08-13 TD = 16,215’ DF Logged well with Baker’s Star Trak high-definition resistivity imaging tool (6 AM 5-7-13 to 6 AM 5-8-13) from 13,819’ DF to 15,896’ DF. Day 109 Summary: 5-09-13 TD = 16,215’ DF Logged well with Baker’s Star Trak high-definition resistivity imaging tool (6 AM 5-8-13 to 6 AM 5-9-13) from 15,896’ DF to 16,215’ DF, then P.O.O.H. Pumped eight (8) 55 gal. drums of bleach in Rubble Zone, then displaced fluid in hole with potassium chloride. Began laying down 3½” O.D. drill pipe. (Attwood arrived 5-8-13 at 10:57 AM, left 5-8-13 at 11:15 AM.) •Operator was pumping eight (8) 55 gal. drums of bleach into Rubble Zone on 5-8-13 at 11:10 AM. Day 110 Summary: 5-10-13 TD = 16,215’ DF Finished laying down 3½” O.D. drill pipe & directional tools. (6 AM 5-9-13 to 6 AM 5-10-13) Changed out pipe rams. Removed blind rams. Nippled down BOPs.

Installed dry hole cap on well. Day 111 Summary: 5-11-13 TD = 16,215’ DF Finished cleaning mud tanks. (6 AM 5-10-13 to 6 AM 5-11-13) ■Released Precision #314 drilling rig on 5-10-13 at 6 PM. (Bruno arrived 5-10-13 at 12:40 PM, left 5-10-13 at 4:30 PM.) 5-12-13 TD = 16,215’ DF Continued rigging down drilling rig. Rigged down mud pumps, SCR house & cables. 30% rigged down at day’s end. (6 AM 5-11-13 to 6 AM 5-12-13) 5-13-13 TD = 16,215’ DF 65% rigged down. 5% rigged up. 30% rigged down and moved to BreitBurn’s #1352 (pilot) location at N. Bear Island. (6 AM 5-12-13 to 6 AM 5-13-13) •Began moving drilling rig equipment to BreitBurn Florida’s #1352 (pilot) well at North Bear Island Field (Pad 1) on 5-12-13. 5-15-13 TD = 16,215’ DF (6 AM 5-14-13 to 6 AM 5-15-13) (Attwood arrived 5-14-13 at 9:02 AM, left 5-14-13 at 9:20 AM.) •Contractors for BreitBurn Florida were hauling drilling mats to #1352 (pilot) well at North Bear Island Field on 5-14-13 at 9:15 AM. •Torn & stained liner formerly underlying rig has not yet been removed. Location has not been cleaned up. 5-17-13 TD = 16,215’ DF 100% rigged down. 5% (6 loads) left to be moved to BreitBurn’s #1352 (pilot) location at N. Bear Island. (6 AM 5-16-13 to 6 AM 5-17-13) (Attwood arrived 5-16-13 at 10 AM, left 5-16-13 at 10:42 AM.)

•Torn & stained liner formerly underlying rig has not yet been removed. Location has not been cleaned up. •40’-long x 4’-12’-wide area on limerock pad (centered 89’ E & 38’ N of SW corner of perimeter dike) with oil on standing water. •28’-long x 5’-wide area on limerock pad (centered 139’ E & 30’ N of SW corner of perimeter dike) stained with oil.

---one (1) minor violation: Two (2) areas near southern perimeter dike are stained with hydrocarbons & need to be excavated & removed. (see 5-17-13 entry on this report.)

Florida Department of

Environmental Protection Bureau of Mining & Minerals Regulation

Ft. Myers Oil & Gas Field Office 2295 Victoria Avenue, Suite 179

Fort Myers, FL 33901

Office: (239) 344-5721 & (239) 344-5611

Confidential Page 1 of 1

OIL WELL INSPECTION REPORT

County Collier API # 09-021-20211-01 Permit # 1349-H (horizontal)

Operator Dan A. Hughes Company, L.P. Well # & Name 20-3-H Collier-Hogan (horizontal)

Field/Pad Wildcat (1st pad) Well Type Wildcat-Oil BCS/BCNP B.C.S.

Surface Location (SHL) 2,116’ FSL & 3,315’ FEL Sec. 20 T 47S R 28E

Final Bottom Hole Location is in Sec. 21 T 47S R 28E , 643.86’ South & 4,642.98’ East of S.H.L.

Spud 3-29-13 at 11 PM GL 20.6’ (in 11-12 before pad built) DF 25.5’ above G.L. TD 16,215’ DF TVD 11,948.34’

Rig Name & # C.S. Forbes #71 Contact Person & # Dana Martin (drilling consultant) (361) 701-8069

Well Status C.S. Forbes completion rig on well on 7-12-13.

Well making 16 bbls. to 27 bbls. of 23° to 24° oil + trace of 1,500 PPM chloride water per day.

I certify that the above well and premise was inspected on 5-14-13, 5-16-13, 5-19-13, 5-24-13, & 7-12-13 by Paul Attwood.

No violations of rules 62C-25 through 30, FAC were found on 7-12-13.

Signed________________________________________________

Paul J. Attwood, Oil and Gas Coordinator

This Oil Well Inspection Report was mailed to recipients marked below on the 15th day of July 20 13.

Note: If a violation exists, designate the rule violated and describe the infraction. Specify to the operator what must be done and time frame.

A copy of rule 62C-25.0075 as well as a copy of the rule violated will be mailed upon request.

cc: x FDEP (Oil & Gas Section): Tallahassee, FL

x FDEP (Oil & Gas Section): Fort Myers, FL

x Dan A. Hughes Company: Dana Martin (drilling consultant)

IH-1 Rev. 07/15/13 Permit # 1349-H

Date 07 15 2013

Fourth Report (#1349-H (horizontal): ■Eight (8) cu. yds. contaminated limerock excavated & placed

on an impermeable, 40 mil liner;

■Completion rig on well. Evaluation still in progress as of 7-12-13.

Casing Summary: • 1-08-13: 24” O.D. x 23” I.D. x 125#/ft. conductor driven to 196.5’ B.G.L. (= 222’ DF using Precision #314 DF elevation.)

• 1-30-13: 13.375” O.D. x 12.615” I.D. x 54.5#/ft. J-55 BT&C surface casing set at 1,714’ DF (per Caliper log ran 2-3-13.)

• 2-10-13: 9 5/8” O.D. 8.681” I.D. x 47#/ft. P-110 GB buttress intermediate casing set at 3,964’ DF.

• 4-17-13: 7” O.D. x 6.276” I.D. x 26.0#/ft. P-110 LT&C casing (45 joints) ran from surface to 2,043.05’ DF and

7” O.D. x 6.276” I.D. x 26.0#/ft. L-80 LT&C casing (236 joints) ran from 2,043.05’ DF to 12,440’ DF.

A minor violation was noted on the inspection report for #1349-H dated 5-17-13. That minor violation is summarized below:

■Two (2) areas on the limerock pad were stained with petroleum products released from equipment associated with the

Precision #314 drilling rig:

•40’-long x 4’ to 12’-wide area on limerock pad (centered 89’ E & 38’ N of SW corner of the perimeter dike) stained

with oil from the drilling rigs’ mud pumps. See Photos 52 & 53.

•28’-long x 5’-wide area on limerock pad (centered 139’ E & 30’ N of SW corner of the perimeter dike) stained

with oil &/or diesel in the vicinity of the aboveground diesel tank formerly on the location

& used to fuel the drilling rigs’ generators. See Photos 54 & 55.

■Also, one (1) area on the 40 mil liner underlying the drilling rig’s equipment was capped with stained limerock:

•24’-long x 16’-wide area containing limerock on the liner (centered 30’ WNW of #1349-H wellhead) stained

with crude oil that dripped off drill pipe and associated downhole drilling equipment. See Photo 51.

On 5-20-13, contractors:

1. scraped off crude oil-stained limerock centered 30’ WNW of #1349-H wellhead that was ON the liner and placed it

on a 21’-long x 18’-wide piece of 40 mil liner.

2. removed the remainder of the 40 mil liner underlying the drilling rig’s equipment and disposed of it in dumpsters.

3. excavated the 40’-long x 4’ to 12’-wide area on the limerock pad stained with mud pump oil and placed it on the

21’-long x 18’-wide piece of 40 mil liner.

4. excavated the 28’-long x 5’-wide area on the limerock pad stained with oil &/or diesel and placed it on the

21’-long x 18’-wide piece of 40 mil liner.

Summary: No violations.

■8 cu. yds. of contaminated limerock present & contained on an impermeable, 40 mil piece of liner.

Center of pile situated on high ground on the limerock pad 88’ N & 14’ E of the SW corner of the perimeter dike.

■This material, along with any additional limerock that might be stained with crude oil during the current workover operations,

will be transported to the Cemex incinerator in Miami for disposal after the completion rig has moved back to Texas.

■As of 7-12-13, a completion rig was rigged up on the well, & the operator was still trying to turn this well into a commercial producer.