Areas of Production Operations

Diversified_Resources_Colorado_Areas_OF_Exploration

Denver-Julesberg Basin, Colorado

The DJ Basin consists of a large asymmetric syncline of Paleozoic, Mesozoic, and sedimentary rock layers, trending northeast to southwest along the east side of the Front Range. The basin began forming as early as 300 million years ago during the Colorado Orogeny that created the Ancestral Rockies. Oil and Gas have been produced from the DJ Basin since the recovery of oil in 1901 in the fractured Pierre Shale at the Boulder oil field in Boulder County. The DJ Basin currently has more than 20,000 producing oil and gas wells. The Niobrara Shale has been the focus of recent industry activities in the DJ Basin. This tight oil-bearing reservoir is being targeted along with other prospect Cretaceous formations (e.g. Codell Sandstone, Greenhorn Limestone) due to the favorable economics of pairing new technologies: horizontal drilling with multi-stage fracture stimulation technology. Diversified Resources' strategy in the DJ Basin is to acquire acreage and production capable of increasing  cash flow and reserves. The Company uses its expertise in geology and geophysical evaluation to determine favorable drill-site lease acquisition area.

San Juan Basin, New Mexico

Diversified purchased of BIYA Operating, Inc.  in October 2014 giving the Company a 100% interest in approximately 10,400 acres in the Horseshoe Gallup Field in the San Juan Basin.  Along with the acreage, the Company acquired interest in 52 producing wells, associated production equipment and 55 potential vertical and horizontal drilling locations.  The main target in this area are the Gallup and Tocito Sands as well as the source formation, the Mancos Shale. In July 2017 Diversified began reworking the wells which increased production from 20 bbls per day to approximately 80 bbls per day from 24 of its 52 wells. The Company estimates upon completion of its rework program, production will increase to approximately 130 bbls per day. Upon completion of the well rework program, Diversified intends to begin a well recompletion program and begin permitting additional wells for a shallow vertical drilling program.