West Hazel

Acquisition Summary

Acquisition Summary

1. Purchased in November for $2,676,000 (after adjustments)
2. 3 oil wells 15 °API currently producing
3. Current production of approximately 285 bbl/d.
4. 6 wells, produced gas supply line, surface equipment.
5. 200 Acres of land (0.3 sections).
6. Purchase Metrics:
   • Flowing bbl:  $9,950/flbbl (after adjustments)

Development Plan

1. Install water injection to reduce operating costs & extend reserve life
2. Drill 3 infill well location in 2013
3. Drill, case, complete & tie-in
4. Restart 2 of the existing suspended wells
5. Drill Metrics (GP Target, based on $72/bbl oil):
   • IP= 100 bbl/d
   • Op. Costs = $9.80/bbl
   • FCFNB = $38.77/bbl
   • F&D =  $3.33/bbl          
   • Recoverable Reserves = 150 mbbls per well
   • Reserve Life = 15+ Years per well
   • BTIRR =  530.9 % per well
   • ATIRR =  301.4 % per well
   • BTNPV10 = $3,773,000 per well
   • ATNPV10 = $2,588,900 per well