GENERAL GEOLOGY OF MORGAN COUNTY

Monteagle limestone is a Mississippian age formation, consisting of 200-250 feet of massive limestone with shale beds. It contains chert and has fossil-fragmental porous zones. Porosity is vulgar and normally occurs in 5 to 30 feet near the middle of the
formation. It is a consistent oil and gas producing formation. The average barrels of recoverable reserves is in the 20,000 barrels per well range. Most petroleum engineers assign 60 MMCF gas to Monteagle wells. This is based on volumetric calculations.
However, many Monteagle gas wells have produced five times this amount of gas due to natural fracturing. Other Monteagle gas wells in the area are still producing commercial quantities of gas after 30 years.

The Thomas L. Davidson Project

Thomas L. Davidson well #1 is located in the Burrville Oil/Gas Field in Morgan County, Tennessee. A participation agreement with Ky-Tenn Oil Inc., is in place. The well is currently producing, and production is expected to ramp up considerably after the company completes a work-over procedure to increase production. The well is estimated to have 100,000+ barrels of oil in reserve. Magellan recently acidized the well under extreme pressure to flush it out in order to increase production. The well was then capped or closed off and re-opened for production the next day. Magellan expects that this will increase production by 20+ barrels/day before eventually settling back down.