FIELD DEMONSTRATION OF CARBON DIOXIDE MISCIBLE FLOODING IN THE LANSING-KANSAS CITY FORMATION, CENTRAL KANSAS

Progress is reported for the period from July 1, 2002 to September 30, 2002. On September 27, 2002 the US DOE approved the proposed modified plan to flood a 10+-acre pattern. MV Energy has received informal notification that GE Capital will approve sale of the portion of the Colliver lease involved in the pilot. Murfin Drilling Company is seeking local small independent partners for the pilot and has received commitment from White Eagle Energy and John O. Farmer Oil Company to date. A Contract was signed between the Kansas Department of Commerce & Housing and Murfin formalizing the KSDOC&H contribution of $88,000 to the pilot project. This money will be used for well rework and testing. The results of this small flood will be used to evaluate the viability of performing a larger-scale demonstration and will be used by the partners to decide their role in a larger-scale demonstration. The 10+-acre pattern requires the least up-front expense to all parties to obtain the data required to accurately assess the viability and economics of CO2 flooding in the L-KC and of a larger-scale demonstration. Proposed modifications to the project plan were reviewed in the previous quarterly technical progress report.