CONFIDENTIAL PROPERTY OF TALUS RESOURCES

CONFIDENTIAL PROPERTY OF TALUS RESOURCES



• The earth’s inner core produces an unlimited amount of

gamma radiation.

• Radioactive decay creates gamma radiation that rises to

the surface and produces the planet’s heat.

• TERA uses the earth’s natural core radiation to decode

patterns to identify commercial hydrocarbon deposits

from non-commercial deposits.

• Gamma radiation emanating from the earth’s core

behaves differently in oil and gas saturated rock than

non-saturated rock.

• The greater the degree of change, the greater the

hydrocarbon charge, and thus higher the rate of flow,

given adequate permeability.


• Radiation levels are not static or

constant, and frequently vary area

by area.

• Before surveying occurs, it is first

necessary to establish the

background radiation level. This is

best obtained by identifying the edges

in an existing field.

• The area immediately outside of

commercial production is

composed of rock with little or

no hydrocarbons, and is used to

determine background

radiation level.

• Once this benchmark is established

new areas of commercial production

can be identified.


Although inferior to TERA - Radiometrics is well documented in

identifying hydrocarbon deposits by detecting changes in the

background radiation levels.

Radiometrics has the following primary drawbacks:

1. Lacks the detector capacity sensitivity necessary to differentiate

commercial from non-commercial deposits.

2. Used in airborne reconnaissance survey services, it flies too high

and fast to obtain a high level of detail. They also tend to fly wide

survey patterns in miles and not feet. Wide surveys that don’t

form a grid produce data inadequate for 3-D visualization

programs.

3. Airborne reconnaissance applications which combine

Radiometrics with Electromagnetics often compromise the quality

of a single survey method.

4. Only the biggest fields within unexplored basins can be detected.

However, most mature basins are dominated by structures that

have already been identified with seismic and drilled.

5. Cannot precisely determine field boundaries, depletion patterns,

and bypassed reserves in existing fields.

6. Lacks TERA’s proprietary software and 40 years experience. OIL FIELDS

RESERVOIR ROCK

SOURCE ROCK


• Seismic imaging can identify structures which could contain commercial quantities of oil and gas, but cannot define

“what” they contain.

• However, TERA can not only tell where oil and gas is, but can determine its size, composition, and frequently the

reservoir’s rate of flow.



9

OIL FIELDS

RESERVOIR ROCK

SOURCE ROCK

• Alterations in the

Gama emissions

patterns created by

the contact with

hydrocarbon deposits

is captured by TERA

• Flying low and slow in

established trends,

airborne TERA can

efficiently survey a

large area with a high

degree of precision.



2000

1900

1800

1700

1600

1500

1400

1300

1200

1100

1000

900

800

700

0.0

0.2 0.4 0.6 0.8 1.0 1.2

DISTANCE MILES

COUNTS

• Precision GPS combined with a reading

every second produces detailed survey

lines.

• Ground TERA travels at approximately 2.2

meters per second therefore, each reading

can be accurate to less than 3 meters.

• The length and width of commercial

production (reserves) can be calculated

with a high degree of precision.


2000

1900

1800

1700

1600

1500

1400

1300

1200

1100

1000

900

800

700

0.0

0.2 0.4 0.6 0.8 1.0 1.2

DISTANCE MILES

COUNTS

COUNTS FALL BY 500 OR

MORE INDICATES

COMMERCIAL PRODUCTION

• Water drives reservoirs behave very

differently than solution gas drive

reservoirs.

• In a water drive counts move opposite

from a solution gas drive reservoir.

• Assuming oil saturations are

comparable, counts would fall by 500

or more in a commercial oil field.

COUNTS

DRAMATICALLY RISE

INDICATES EDGE OF

COMMERCIAL

PRODUCTION


3400

3200

3000

2800

2600

2400

2200

2000

1800

1600

1400

1200

1000

800

0

0.2 0.4 0.6 0.8 1.0 1.2

DISTANCE MILES

COUNTS

• Natural gas reservoirs behave

remarkably differently than either

solution gas drive or water reservoirs.

• When encountered, natural gas is

revealed when counts dramatically rise

above the background radiation level,

frequently 2200 counts higher. COUNTS

DRAMATICALLY RISE

INDICATES EDGE OF

COMMERCIAL

PRODUCTION


The survey grid below shows a series

of color coded survey lines over the

Calvert Oil Field. The areas of high

oil saturations are yellow to red, and

low saturations blue to green. The

real time mapping provides key

information how to prioritize addition

surveys.

Once a sufficient number of surveys

are obtained the data can be

imported into a 3-D mapping

program. Visualization in 3-D shows

the orientation of faults and the oil

that banks up against the faults

(traps). In existing fields, oil drainage

patterns and depletion can also be

determined.

Fault Blocks which contain free gas

can be distinguished from those that

contain solution gas drive oil.


• All published reports support the use of Radiometrics to identify hydrocarbon deposits.

• Despite its poor performance Radiometrics is still used as a commercial service.

• Radiometrics is inferior compared to TERA.

TERA Pros:

In Existing Fields

• Is highly accurate in finding: field

boundaries, oil/water contact, areas

of bypassed reserves, and depletion

patterns from reservoir drainage.

• Can locate low displacement faults

that trap oil.

• Frequently finds more than twice a

field’s estimated remaining

reserves, and provides operators

with invaluable details from which

intelligent financial decisions can be

made.

In New Fields

• Can determine commercial from

non-commercial production.

• Can accurately determine: field

size, reservoir drive mechanism,

and estimate oil and/or gas flow.

• Can make seismic imaging far more

valuable and less expensive by

limiting seismic surveys to targeted

smaller structures and only areas of

commercial production.

Radiometrics Pros:

• Can sometimes detect the

presence of oil and gas.

• Larger detector capacity currently

employed with some systems has

helped improve capability.

• Can sometimes determine low

displacement faults that trap oil.

Radiometrics Cons:

Lacks ability to:

• Accurately determine field

boundaries.

• Accurately differentiate oil from

gas.

• Accurately distinguish commercial

from non-commercial deposits.

• Accurately determine reservoir

drive mechanism.

• Determine bypassed reserves

• Produce accurate consistent

readings resulting in frequent false

positives.

False readings result in dry holes.

TERA Cons:

• Cannot be used: on cloudy days,

in high ground moisture, limited

to specific times of the day, and

areas where radioactive

potassium fertilizer is spread.

• Used alone, cannot determine

formation depth, unless

supported by geology and other

methods, combined with digitally

correlated TERA on nearby

fields.


• The present system is limited to

ground reconnaissance using a

single NaI (sodium iodide)

detector mounted on the back of

an SUV or pickup truck.

• With funding obtained, TERA is

designed to be used with multiple

(4) detectors from a helicopter, or

ROV.

• Both the current ground and near

term airborne systems can

determine field boundaries, size,

reservoir drive, and approximate

rate of flow (assuming good

permeability), but TERA

reconnaissance alone cannot

precisely determine depth.

• This limitation can be largely

overcome by working in

established trends where nearby

reservoirs can be compared with

TERA both digitally and

geologically.

• Other methods including stationery

TERA and Electromagnetics can

be employed to determine depth.

• After 40 years of service and

development Talus has learned

through extensive field

observations the best way to use

TERA in order to ensure data

accuracy.

• For example, it cannot be used

during certain times of the day.

• Also, ground moisture and

barometric pressure must be

within an acceptable range.

Knowledge essential to the use of

TERA can be obtained only from

years of working experience.


In West Texas near Lubbock TERA surveys were later performed on an prospect developed

with Radiometrics that resulted in the drilling of three dry holes.

TERA showed that the dry holes were drilled in areas with very low oil saturations and that

Radiometrics had produced false and misleading information.

In this case, misleading Radiometrics survey data caused the loss of more than $9 million

invested over 10 year period.


• GERT conducted

a blind test on 12

oil and gas survey

technologies

covering 18

actual drilling

prospects from

Permian Basin

Companies.

• 1st generation

stationery analog

ERA technology

was the clear

winner.

ERA PREDICTED 15/18 (83%) OVERALL ACCURACY (CORRECT) AND 2/3 (67%) FOR OIL DISCOVERY AND 13/15 (87%) SUCCESS PREDICTING MARGINAL OR DRY WELLS.

GERT PROJECT RESULTS COUNTING MARGINAL WELLS AS DRY HOLES

WELL RESULT SOIL GAS

GAS

SENSING

RADAR

MICRO-

MAGNETICS

RESIDULA

MICRO-

MAGNETICS

SPECIAL

MAGNETIC

SUSEPTION

RADIUM

SULPHATEERA

GAMMA

RAY

AUIDIO

MAGNETO

-TELLUR.

LANDSET

IMAGERY

MN/K

RATIO

FLOURES

ENCE

ENSERCH DRY I I C C C C C C C C C C

GUNN DRY C C C C N I C C C I C C

HUNT 1 OIL I I C C N I C I N C C C

HUNT 2 OIL I I I I N N C I N C N N

IP-GCO 1 DRY I I C C C C C C C C C I

IP-GCO 2 DRY I I C C N C C C C C N N

IP-GCO 3 DRY I C C C N C C C C C N N

IP-GCO 4 DRY N C C I N C C C C C N N

LANDRETH 1 MARGINAL I C C I I C C C N C I I

LANDRETH 2 DRY I C C C N C C C C C I C

MAXUS DRY C I I C I I C C N C I C

MERIDIAN MARGINAL I I I I C C C C C I I C

MOBIL DRY I I I I I N C C C C N N

PRIMARY

FUELSMARGINAL C C C C N C C C C C C C

SANDIA DRY I C C C N C I I I C C I

UNION

TEXASDRY C C I I C C C I I I C C

HILLIN MARGINAL I I C C N C I C N I I C

YOUNG OIL I I I N I I I I N I C C

CORRECT/T

OTAL3/18 4/17 8/18 12/18 11/17 4/8 12/16 15/18 13/18 10/12 13/18 8/13 10/13

ACCURACY 16.7% 23.5% 44.4% 66.7% 64.7% 50.0% 75.0% 83.3% 72.2% 83.3% 72.2% 61.5% 76.9%

DRILL

SUCCESS3/18 0/10 0/7 1/5 1/6 0/3 0/2 2/4 0/2 0/2 2/6 2/6 2/5

ACCURACY 16.7% 0.0% 0.0% 20.0% 16.7% 0.0% 0.0% 50.0% 0.0% 0.0% 33.3% 33.3% 40.0%


• TERA, Talus Resources proprietary survey technology, can provide detailed information in existing

fields and new undiscovered fields.

• Other survey systems including Radiometrics that use passive gamma radiation are inferior in

many ways and often cause the drilling of dry holes.

• TERA is the result of more than 40 years of investment proven through more than

35 years of service.

• The older analog ERA system proved 83% accurate in predicting commercial production in wildcat

drilling.

• TERA works best in existing fields to find bypassed reserves, low displacement faults that can trap

oil, and areas of high saturation (sweet spots). This information cannot be obtained with any other

known system.

• A detailed 3-D TERA survey combined with existing wells and structure will reveal extremely

valuable information enabling operating companies and lenders to fully understand the value of

their holdings.


• Identification of Earth Material by Induced Gamma-Ray Spectral Analysis (SPE 1957).

• Radiometrics for the Petroleum Explorationist (AAPG Bulletin 1985).

• “How 12 geochemical methods fared in GERT project the Permian Basin”

(Gary G. Calhoun, Independent Geologist, Midland, Texas, Oil and Gas Journal, May 13, 1991)

Geochemical Evaluation Research Team, Dept. of Energy sponsored analysis.

• “Statistical, economic analysis given for surface exploration projects”

(Brian F. Towler, University of Wyoming, Laramie, Wyoming, Oil and Gas Journal, May 13, 1993) Critical and positive

review of the GERT project.

Numerous letters of endorsement to Energy Exploration, Inc. concerning success with the ERA tools, several of examples

of these follow:

• “I have come to one definite conclusion I would never drill a well that did not have a positive ERA indication”

Jack J. Reynolds, Petroleum Consultant

• “Since you were contracted full time with Amerada Hess, I could not avail Myself of your technology, but became very

impressed with the accuracy of your exploratory analysis of the areas you surveyed for them”.

Don H. Ford, Don H. Ford & Associates.

CONFIDENTIAL PROPERTY OF TALUS RESOURCES

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