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The directional drilling contractor was Scientific Drilling, Inc. (SDI), operating out of <br />Grand Junction, Colorado. SDI used two crews per day each crew consisting of a <br />directional driller and a monitor - while - drilling (MWD) person, working a twelve -hour shift <br />from 06:00 hours to 18:00 hours, and 18:00 hours to 06:00 hours, respectively. <br />Two geologists from Daub and Associates, Inc. (Daub) based in Grand Junction, Colorado <br />were on -site to monitor the well drilling operations. The Daub geologists described rotary <br />drill cuttings samples (RDCS), picked field stratigraphic tops and reported daily operations. <br />In addition, the Daub geologists ensured that the intermediate casing was set in the upper <br />section of the UBB prior to drilling the horizontal recovery section of the well. The primary <br />drilling consultants were Scott Claussen and Kelly Claussen of Claussen Consulting, Inc. <br />The mud engineer was Hamm R. Collins of Marquis Alliance Energy Group USA from <br />Denver, Colorado. <br />Conductor Hole <br />The conductor hole was drilled by AAA Drilling Inc. on August 4, 2013 and the casing was <br />set the same day. The conductor hole was drilled with a 26 -inch bit to a depth of 92 feet <br />MD KB and the 13.375 -inch conductor casing was set to the same depth. The casing was <br />cemented to surface with 12 cubic yards of Portland type II cement on August 5, 2013. <br />Intermediate Hole Operations <br />Capstar picked up BHA No. 1 and spudded the hole at 23:55 hours on August 26, 2013. <br />The vertical hole section was drilled from 91 feet to 1,444 feet MD KB. BHA No. 1 was a <br />steerable directional assembly consisting of, in part, a 9.875 -inch Reed type LHA517G tri- <br />cone rock bit (Serial No. 21894) and a 6.75 -inch mud motor with a 2 degree bend. Losses <br />were encountered three times while drilling this section; at 585 feet, 700 feet and 1,444 <br />feet MD KB. Circulation was not lost completely in any of these zones and losses were <br />stopped with the addition of LCM in the form of sawdust and fiberseal (with viscosity of 36 <br />centipoise (0) and mud weight of 8.5 to 8.9 ppg). <br />Daub & Associates, Inc. Page 2 of 7 13H -R Well Summary Report <br />