Nemaha Ridge, Logan County

Osage Exploration's primary targets in Oklahoma are the Mississippian and Woodford formations.

Mississippi Lime:

Across northern Logan County, Oklahoma, the Company is targeting the Osagean section of the Mississippian aged carbonate formation that lies between the Pennsylvanian and Devonian aged rocks. The Mississippian is a fractured carbonate that historically has been drilled vertically in many areas of Oklahoma, most notably in the Sooner Trend. Osage is focused on an area on the east side of the Nemaha Ridge where there is a significant amount of natural regional fracturing that we believe will enhance recoveries of oil. We have targeted the eastern side of the Nemaha Ridge for two main reasons: the rock quality is excellent, and due to the relatively low number of vertical wells drilled historically, the Mississippian has not been pressure depleted.

Woodford Shale:

The Woodford is and has been a horizontal target in Oklahoma for over a decade. The primary area for horizontal Woodford development has been in the Arkoma Basin in Southeast Oklahoma. However, the main product in the Arkoma Basin is natural gas due to the degree of thermal maturation in the area. Over the last three years the Woodford has been tested in other areas of the state that fall into the oil window. Major independent operators have targeted the oily Woodford in Oklahoma in recent years, and a general consensus is forming that the minimum formation thickness for optimal rate of starts at 50 gross feet. In comparison, the Woodford Shale is present across Osage's entire acreage block, with thickness averaging approximately 90 feet. Osage is very excited about the potential of the Woodford play which could significantly increase the recoverable reserves under Osage's acreage block.
Osage's multi-year drilling program which commenced in the first quarter of 2012 is funded out of cash flows from the initial wells drilled in the project, and by draw-downs on the Company's $20 million credit facility with Apollo Investment Corporation