Vermilion Block 141 Prospect

Vermillion Block 141 is in the federal portion of the Gulf of Mexico and is in 75 feet of water, 84 miles south of Lake Charles, Louisiana. The prospect is a combination fault closure and stratigraphic trap of two shallow Pliocene age sandstones with distinct 3D seismic amplitude anomalies. The targets are at approximately 1,800 feet and 3,000 feet. The seismic amplitude response at both targets is a classic Gulf of Mexico "bright spot" which are often direct hydrocarbon indicators.

If successful, the 3,000 foot and 1,800 foot objectives will be dually completed, with production taken to an existing facility at East Cameron Block 129. Apache Corporation will operate and own 85% working interest before prospect payout. The combined potential reserves of the two targets are 1.96 to 3.73 BCF net to KEI. KEI will have 15% working interest before project payout and 11.3% after payout. KEI's proportionate estimated costs are US$91,892 for land, US$435,000 drilling and, if successful, US$1,125,000 for completion.