(An attendee then posed a question): Is this the Proper Power property? It is close to Salt Lake City.
Yes, it's a little south and a little east of Salt Lake. This is a 1 to 4 scale map, it's smaller than that I'm sorry. It's a 1 to 100,000 scale. A square mile is about that size. Here's four square miles here. This is our acreage that's outlined. That's our acreage block. That's almost all of it inside the 1's; our best readings. The seismic line that we're looking to buy runs right through there. It's in a good position. It goes through this acreage for a block and about halfway between these two blocks. The structure is going to be oriented north-south.

(An attendee then posed a question): What's most important to give you an idea of what's going on, it's in the middle of the pink.
(An attendee then posed a question): I want you to explain to them that we control 11,000 acres of this.
(An attendee then posed a question): The whole area is pink or 1's. He just outlined it, he didn't color it in.
(An attendee then posed a question): All that white in the center is 1's.
This is about 8 miles across here.

(An attendee then posed a question): What's the little red boxes?
Those are the wave tech depth tools; the locations that we ran.

(An attendee then posed a question): Explain the story of the Rush Valley and how you've mapped it all, and what we're trying to do right now.
We were asked to run some data on the Fitzgerald acreage. It was open, we had an opportunity to buy it so Don and I went up and evaluated this and that's what we came up with and we noticed at acreage was very favorably located and we recommended that it be picked up in a hurry. And I would also recommend at this point that as soon as we finalize our acreage check that we try to get everything else in this area. Our area of mutual interest is three townships north south, two townships east west. It's a pretty big area.

(An attendee then posed a question): Is that about 11 miles? About eight miles?
Yes, six, that'd be eighteen by about eight.

(An attendee then posed a question): This is a developing area. There's new McDonalds, there's new housing going on.
(An attendee then posed a question): It's about half an hour from Salt Lake City
(An attendee then posed a question): It's one of the best kept secrets in Utah, I believe. He will explain what has been going on. According to the study that we have done, it is the best find in Utah. It is the Holy Grail of pay zones. Can we quote you on that?
Yes, we do think this is going to be thicker pay and more reserves because of the migration. Here's a geologic cross-section across Rush Valley and our prospect sitting in here. If you'll notice there is a thrust fault running right through here and across. There's probably two or three others in there. There's also, and this is very significant, there's a down to the west large, I mean large, fault that would act as a trap for this big horseblock that's sitting up there.

(An attendee then posed a question): So can you explain a little bit more about what you mean by a thrust fault and why it's important that that's there?
The thrusting is something that we recently discovered. When I was in school 100 years ago, we were not taught that. There was no thrust faulting in Nevada or Utah. Now with the wells that's been drilled that one I told you about over in Nevada where they found the three thrust faults they've confirmed that. They're confirming it here on the three fields that they have they have three thrusts. There's a continuous band of thrusting from mid Utah over to Nevada. The thrusting is coming from the west. There's a collision of the Pacific plate with the North American plate and the movement forces from the west. Actually the Pacific plate is under-riding the North American plate and that's what's causing your large faults out west and it's causing the activity in the Yellowstone and so forth. So it'll be various faults that tend to follow along shale beds and then they'll come to the surface and they'll be a whole series of these. And sometimes it'll be back-thrusts and that's a little hard to explain but they found that over at Covenant Field. So the continents are in a constant state of flux and pressures can come from different directions at different times so the thrusting can be reversed.

(the Videographer asks: Can I just stop you right there so I can change the tape?)
(Stopped 2nd transcription session at the end of part one on the DVD)
(video begins with): Discussion of the spot report, the seismic, and the radiometrics..

In addition to the radiometrics, I mentioned other tools we use. We ran a geocam at the same location as we did the depth tool and we also ran geocam on both sides of the anomaly; off the structure. We took an average of those readings off the structure and we found that to be about 75. That is 75 parts per million of gas. We consider that the background. Once we got on this anomaly then it jumped up to about 250 to 300 average, so that's a fairly significant increase. So that says there's gas migrating, there should be something below. The depth tool looked very good from 10,000 to 12,000 in particular and to 14,000 on some.

(An attendee then posed a question): Are we talking about the spot report?
Yes, those red spots there. That line. Also ran one here. What we're looking for on that, well before I get into that, the theory behind this wave tech depth tool is that they're utilizing the bleed off of electrical energy from the USA power grid. It's in 60 cycle, or harmonics of 60, and vibration is set up from the surface down to I don't know where but deep, and you get vibrations back from each surface change. It acts just like seismic, in fact it's called passive seismic. We're not introducing anything into the ground other than we're utilizing this electrical power grid. The data is recorded on tape and then we send it off to Houston to be processed, it comes back to us on a disc, and then we can work on it on our computer at home. What we're looking for on these two sets of curves is on this upper red and blue curve for those to be in sync; to practically overlay one another. Then we go down to the other two sets and we want those to be offset. We want the lower curve to be leading the upper of these two, correction, we want the lower to be lagging behind and the upper curve to be leading so that we're looking at this like this. See those orange lines I put in there? They're correlating from peak that's pointing down to the peak that's pointing up. Does that make sense at all?

OK let me go through some of these for you. OK here's the depth scale. And this depth analysis, (there is some shuffling of maps), OK this particular depth point is 10 which is located right there. That's within the 1's, now I have tried to interpret this, and wherever I have the red dashed line I'm interpreting that as a positive anomaly and it should be a possibility of production there at that depth. Now notice starting at 11,000 feet notice the positive possibilities. So we go on deeper to 11,200 and now look what's happening. It's almost continuous positive response. Again we're drawing a line from that trough and it hits that peak up here and that peak is offset from that peak in this direction. First thing we look at is to see if we have an overlay up here and then we look down here to see if there's an offset. That's how you read the depth tool.

(An attendee then posed a question): Now all these spots are measured to 20,000 feet down? This study has already been done.
Now here's a different station, that's station one right there. And again from 11,200 to 12,000 notice how hot that is with positive response. It's not just profile it's every one of these that's saying the same thing.

(An attendee then posed a question): So are they all in the center of the pink as its colored on the site? It's all 1's by his method of 1 to 30; they're all 1's.
So in summary here the Radiometric Plus is showing a very positive anomaly, the gas geocam anomaly is very good, the depth readings are showing very positive and now once we get the seismic that will help us locate where to drill this well within the anomaly. We'll want to try to pick the high point if we can on our acreage and the only way we can do it is with seismic unless I can make some kind of correlation from profile to profile on the wave tech, but we still need the seismic.

(An attendee then posed a question): The seismic will help you?
Hopefully it'll determine the highest point to drill.

(An attendee then posed a question): From looking at this here can you see it clearer than the other line that goes across?
It was a lot more clear than the first line that I looked at. I saw fragments of deep data in addition to the shallow data where I could see this fault. There was no doubt about that fault being on the seismic. This is a high block over here at the near surface and then it dipped back down so this is a high block.

(An attendee then posed a question): So you think you can offer some improvement?
We hope, you can't say for sure, but I've seen examples of data that was about this quality and we were able to improve it a lot and bring in the deeper data. There is no doubt about the fact that this line is better than the first line. A lot of difference.

(An attendee then posed a question): Mr Dunbar, I'd like to have you reiterate that again. That particular graph there on your scale of 1 to 30, I want to make sure I heard that right. That's in your 1 category as far as volume?
Yes, we consider that those will make the best wells.

(An attendee then posed a question): Mr Dunbar, based on your experience, the radiometric, the gas movement, the wave tech depth, and then assuming the seismic is brought in there, you've had all four of that information in your past experience, how often have you been accurate with regard to it being a 1 in those areas with all four of those measurements?
Accurate enough that anyone can make a lot of money behind it. As evidenced by the clients in west Texas and Oklahoma and so forth. Anyway yeah I think we definitely need the seismic. For one reason you need that to sell your clients. Everybody wants to see seismic, everyone wants to see 3D, but 3D is not the answer; that'll break you.

(An attendee then posed a question): Didn't you tell me that that particular property it will be hard to go 3D?
There's none available and you sure don't want to shoot it because you're looking at $200,000 per square mile. And you don't have square miles here, you have liner of 20.

(An attendee then posed a question): So this seismic that we are acquiring, it's 20 across?
Yes, 20. And we're reprocessing it up in Denver at a good company that I have experience with; good experience with processing in Arizona; a thrust fault seismic line and he really did a good job for us and we're hoping he can do the magic again.

(An attendee then posed a question): So with these 11 spots that you studied, do you still feel confident that it'll be producing sites?
I feel extremely confident based on our record. If you drill deep enough. I'd recommend engineering it to 17,000 feet, definitely want it to go at least to 14,000.

(An attendee then posed a question): You originally said 12,000 to 15,000.
Yeah, we're seeing the possibility of stuff all the way to 17,000 feet.

(An attendee then posed a question): So you're adding 2,000 miles extra, do you understand?
That's my recommendation to not take a chance of overlooking anything.

(An attendee then posed a question): What is the chance that we'll find something from 7,000 to 10,000 feet?
Well looking at the depth log from 10,000 to 12,000 is your best chance, and 11,000 to 12,000 is your best chance.

(An attendee then posed a question): Alright what about 7,000 to 10,000?
No chance, I don't think so. It's deep drilling and you'll have to face that. You need to be prepared for a deep well because you don't want to overlook anything. And you may not have to drill that deep, you may stop at 10,000 or 11,000. You may drill the second well deeper like Wolverine did. They drilled their 8th well deeper.

(An attendee then posed a question): You told me one of them was almost 14,000 feet deep.
Yes.

OK what have I not covered? Anything?

(An attendee then posed a question): The issue is here, after you spent 4 years in Utah doing most of your, you ran into that what did you run into, what did he call it? What did he call it? A pearl necklace of finds?
OK he knows about the trends and the Wolverine production in here at Ridgefield and now two more fields in here. They'll be more fields discovered in here and that's what he's calling a string of pearls. And that will actually tie into this string of pearls up here in Utah and Wyoming and eventually on into Idaho and Montana into Canada. OK that's one string. Now what I'm saying in there's more than one string that's going to be found out here and it's probably going to be like in Canada where it's four strings wide east to west.

(An attendee then posed a question): And you see the trend going west to Salt Lake City all the way to Nevada?
Yes, they're not continuous but we have seen other anomalies to the west of Rush Valley which is sitting right here; Wolverine right here. And we've also seen long linear north south anomalies. Utah is where it's at and Nevada.

(An attendee then posed a question): Do you believe that the Proper Power prospect, after the time you've studied it, what do you believe that the pay zone is?
I think the overall prospect outlook is better than Wolverine, and the pay zone is going to be the same, the nugget, the Jurassic nugget. The yellow. And this is a simplified map, there's the thrust fault, now there's going to be more than one thrust so you're going to have more than one nugget pay. That's another reason for being prepared to drill. A 17,000 foot test would cost you about $12 million a few months back and probably $8 million to $10 million. 14,000 feet would be $5-$6 million, so now's the time to do it. Don't wait until things recover and your costs go way back up.

(An attendee then posed a question): So let me ask you, Mr Dunbar, if you had four to five bullet points that the Proper Power property has, based on your study, some of the positive things, compared to Wolverine, that Proper Power has. Can you summarize some bullet points? In maybe four or five quick bullet points?
For one thing our prospect is bigger. We could fit Wolverine in one tiny little area down here. So this is larger, the surface expression of a high is very good here as Wolverine is pretty good. The deeper possibilities, well the potential for finding more pay is better here because of the thicker Mississippian shale section as we go west from Wolverine, so any way you look at it this has advantages over Wolverine.