UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

June 10, 2015
Date of Report (Date of earliest event reported)


AMERICA RESOURCES EXPLORATION INC.
(Exact name of registrant as specified in its charter)

Nevada
 
333-196409
 
98-1153516
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
         
2800 Post Oak Boulevard
Suite 4100
Houston, TX
     
77056
(Address of principal executive offices)
     
(Zip Code)
         

(832) 390-2273
Registrant’s telephone number, including area code

1255 W. Rio Salado Parkway, Suite 215, Tempe, AZ  85281
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
 
On June 10, 2015, America Resources Exploration Inc., a Nevada corporation (the “Company”), entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Zheng Xiangwu, a resident of Guang Dong Province, China, whereby the Company issued 4 million shares of its common stock in exchange for rights to certain oil and gas leases located in Frio and Atascosa Counties, Texas, consisting of a total of 714 total acres of land, two (2) working wells and a total of seven (7) wells (the “Leases”).
 
Mr. Zheng is the owner of Rise Fast Limited, a Hong Kong corporation (“Rise Fast”), which is the majority shareholder of the Company. Rise Fast owns 90,000,000 shares of the Company’s common stock. As a result of this transaction, Mr. Zheng controls a total of 94,000,000 shares, which represents 76.64% of the Company’s issued and outstanding shares.
 
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
 
On June 12, 2015, the Company completed the acquisition of the Leases pursuant to the Asset Purchase Agreement. As a result of the completion of this acquisition, 4 million shares of the Company’s common stock were issued to Mr. Zheng Xiangwu, which owns the Company’s largest shareholder, Rise Fast Limited. The number of shares issued to Mr. Zheng was determined by valuing the Leases at $160,000 and valuing the Company’s stock at $0.04 per share.
 
The completion of this acquisition results in the Company cease being a “shell company” as that term is defined in Rule 405 promulgated by the Securities and Exchange Commission under the Securities Act of 1933. Due to the fact that prior to the acquisition the Company was regarded as a shell company, the Company has included below the information that would be required if the Company were filing a general form for registration of securities on From 10 under the Securities Exchange Act of 1934.
 
FORM 10 INFORMATION
 
Item 1. Business.
 
(a)   General Business.
 
America Resources Exploration Inc. (the “Company”) has elected to enter into the oil and gas industry. Our primary objective is to enter the oil and gas industry by acquiring active oil and gas fields. This first step will allow us to enter the market in the U.S. and create immediate cash flow from producing wells. The Company intends to take advantage of currently depressed energy prices by taking over fields from companies that are unable to service their excessive debt due to falling oil prices.

In order to assist the Company’s entry into the oil and gas industry, the Company has added to two (2) members to its Board of Directors that provide, collectively, over sixty (60) years of experience in the exploration, development and production of oil and gas properties.

Mr. Joe M. Seabourn has over 30 years of experience working refinery up-grade design flow process and feasibility studies for Nigeria, Ecuador, Mongolia and Republic of Congo. He is currently using his strategic alliances to establish working joint ventures and partnerships in Congo, Central Africa.
 
 
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Mr. Robert Wiener is our lead geologist and has over 30 years of experience in the industry. He worked on finding some of the most important fields in the world. While working for Conoco Egypt he generated prospects in the Gulf of Suez. Two (2) wells were subsequently drilled successfully. One of his other large finds is also while working for Conoco, Norway. He was deeply involved in interpreting seismic data in the Northern North Sea and Moere Basin. He also developed exploration projects in Russia, West Africa, Vietnam and countless other countries with huge oil potential. We believe that with Mr. Wiener as our lead geologist we will be able to maximize our return on investment and get the most out of our Leases.

Additional information regarding Mr. Seabourn’s and Mr. Wiener’s business experience is provided below under Item 5. Directors and Executive Officers .

CURRENT INVESTMENTS

The Company recently acquired three (3) producing leases covering 714 acres situated in Atascosa and Frio Counties, Texas, located in the Eagle Ford Shale formation - the Jane Burns “C” (“Burns”), the Theo Rogers “C”, and the Theo Rogers “A” & “D” (“Rogers”) Leases. The Company acquired a 99.5% working interest (74.625% net revenue interest) in each lease.  We estimate the Burns and Rogers Leases contain 68,272 net barrels of proved oil reserves having a PV-10 value of approximately $1,007,000 as of April 1, 2015.

The Burns and Rogers Leases provide exploration and production opportunities in the Kyote Field pay zone, very near the Eagle Ford Shale play with access to available rig crews and other vendor-servicers, due to their close proximity to San Antonio, Texas.

The Rogers Lease currently has one (1) operating well, which provides between two to three (2-3) barrels of oil per day (“BOPD”). The Burns Lease also currently has one (1) operating well, which provides one to two (1-2) BOPD. The Company’s management and industry professionals believe that the Company can double or triple existing production on the Burns and Rogers Leases by bringing online 5 available, inactive wells on the Leases and potentially increase total production 2-3 BOPD per well.

The Rogers and Burns Leases hold collectively seven (7) oil wells, which do produce saltwater that must be disposed of. Currently, there are available off-lease options to disposes of the saltwater but the Company will consider enhancing future operations by utilizing an injection well or wells on this property for disposal of saltwater.

The following table shows, as of April 1, 2015, our producing wells, developed acreage, and undeveloped acreage, excluding service (injection and disposal) wells:

   
Productive Wells
   
Developed Acreage
   
Undeveloped Acreage(1)
 
State
 
Gross
   
Net
   
Gross
   
Net
   
Gross
   
Net
 
                                     
Texas
    2       1.9       190       189.0       305       303.5  
 
(1)   Undeveloped acreage includes leasehold interests on which wells have not been drilled or completed to the point that would permit the production of commercial quantities of natural gas and oil regardless of whether the leasehold interest is classified as containing proved undeveloped reserves.
 
 
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The following table shows, as of April 1, 2015, the status of our gross acreage:

State
 
Held by Production
   
Not Held by Production
 
             
Texas
    495       —  

Acres that are Held by Production remain in force so long as oil or gas is produced from one or more wells on the particular lease. Leased acres that are not Held by Production require annual rental payments to maintain the lease until the first to occur of the following: the expiration of the lease or the time oil or gas is produced from one or more wells drilled on the leased acreage. At the time oil or gas is produced from wells drilled on the leased acreage, the lease is considered to be Held by Production.

Proved Reserves

Proved reserves on these leases have been demonstrated consistently for the past several decades as the wells were initially drilled and completed by Texaco, and are still producing commercial quantities of oil.  Below are estimates of our net proved reserves as of April 1, 2015, net to our interest. All of our proved reserves are located in Texas.

Estimates of volumes of proved reserves at April 1, 2015, are presented in barrels (Bbls) for oil and, for natural gas, in millions of cubic feet (Mcf) at the official temperature and pressure bases of the areas in which the gas reserves are located.

   
Oil
(Bbls)
   
Gas
(Mcf)
 
Proved Developed:
 
 
   
 
 
    Producing     4,536       —  
    Non-Producing     8,546       —  
Proved Undeveloped
    55,190       —  
                 
      68,272       —  

"Bbl" refers to one stock tank barrel, or 42 U.S. gallons liquid volume, in reference to crude oil or other liquid hydrocarbons. "Mcf" refers to one thousand cubic feet. A BOE (i.e., barrel of oil equivalent) combines Bbls of oil and Mcf of gas by converting each six Mcf of gas to one Bbl of oil.

Below are estimates of our present value of estimated future net revenues from our proved reserves based upon the standardized measure of discounted future net cash flows relating to proved oil and gas reserves in accordance with the provisions of Accounting Standards Codification Topic 932, Extractive Activities — Oil and Gas. The standardized measure of discounted future net cash flows is determined by using estimated quantities of proved reserves and the periods in which they are expected to be developed and produced based on period-end economic conditions. The estimated future production is based upon benchmark
 
 
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prices that reflect the unweighted arithmetic average of the first-day-of-the-month price for oil and gas during the twelve months period ended April 1, 2015.  The resulting estimated future cash inflows are then reduced by estimated future costs to develop and produce reserves based on period-end cost levels. No deduction has been made for depletion, depreciation or for indirect costs, such as general corporate overhead. Present values were computed by discounting future net revenues by 10% per year.

Future gross revenue
  $ 5,043,929  
Deductions (including estimated taxes)
    (3,580,148 )
         
Future net cash flow
  $ 1,463,781  
         
Discounted future net cash flow
  $ 1,006,861  

Lee Keeling and Associates, Inc. (Lee Keeling) prepared the estimates of our proved reserves, future production and income attributable to our leasehold interests as of April 1, 2015.  Lee Keeling is an independent petroleum engineering firm that provides petroleum consulting services to the oil and gas industry. The estimates of drilled reserves, future production and income attributable to certain leasehold and royalty interests are based on technical analysis conducted by engineers employed at Lee Keeling.

Mr. Phillip W. Grice was the technical person primarily responsible for overseeing the preparation of the reserve report. Mr. Grice earned a Bachelor's Degree in Petroleum Engineering from the University of Tulsa and has more than 33 years of practical experience in the estimation and evaluation of petroleum reserves. Mr. Grice is a licensed Professional Engineer in the State of Texas.  We do not have a reserve committee and we do not have any specific internal controls regarding the estimates of our reserves.

Our proved reserves include only those amounts which we reasonably expect to recover in the future from known oil and gas reservoirs under existing economic and operating conditions, at current prices and costs, under existing regulatory practices and with existing technology. Accordingly, any changes in prices, operating and development costs, regulations, technology or other factors could significantly increase or decrease estimates of proved reserves.
        
Proved reserves were estimated by performance methods, the volumetric method, analogy, or a combination of methods utilizing present economic conditions and limited to those proved reserves economically recoverable. The performance methods include, decline curve analysis that utilize extrapolations of historical production and pressure data available through April 1, 2015, in those cases where such data were considered to be definitive.
        
Forecasts for future production rates are based on historical performance from wells currently on production in the region with an economic cut-off for production based upon the projected net revenue being equal to the projected operating expenses. No further reserves or valuation were given to any wells beyond their economic cut-off. Where no production decline trends have been established due to the limited historical production records from wells on the properties, surrounding wells historical production records were used and extrapolated to wells of the property. Where applicable, the actual calculated present decline rate of any well was used to determine future production volumes to be economically recovered. The calculated present rate of decline was then used to determine the present economic life of the production from the reservoir.
 
 
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For wells currently on production, forecasts of future production rates were based on historical performance data. If no production decline trend has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate, until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to economic depletion of the reserves. If a decline trend has been established, this trend was used as the basis for estimating future production rates.
        
Proved developed non-producing and undeveloped reserves were estimated primarily by the performance and historical extrapolation methods. Test data and other related information were used to estimate the anticipated initial production rates from those wells or locations that are not currently producing. For reserves not yet on production, sales were estimated to commence at a date we determined to be reasonable.
        
In general, the volume of production from our oil and gas properties declines as reserves are depleted. Except to the extent we acquire additional properties containing proved reserves or conduct successful exploration and development activities, or both, our proved reserves will decline as reserves are produced. Accordingly, volumes generated from our future activities are highly dependent upon the level of success in acquiring or finding additional reserves and the costs incurred in doing so.

Future Operations
Management is considering plans to reactive the inactive wells through a rework program on the Leases. Additional rights may be leased out from mineral owner to deeper zones near 5,000 feet and below. However, such plans are subject to raising financing of $500,000 to pay for such rework plans and an analysis of potential income based on projected oil prices in the future.

During the last thirty-six (36) months, the wells located on the Leases have undergone some reworking, which includes the following:

-  
Electrical infrastructure overhaul by installation of 1,200 feet of underground cable to the wells to connect electricity.
-  
Replace belts on pumping unit/motor.
-  
Firewall improvements and earth work cleanup.
-  
Rebuilt down hole pump.
-  
Installed 5 HP motor to bring well online.

Burns 6C:
 
-  
Propane tanks & motor installed.
 
 
 
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Rogers 9D:
 
-  
Hauled off dirt and rebuilt firewalls.
-  
Brought electricity to well site-electrical infrastructure improvements.
-  
Pulled rods, tubing, & installed pump.
-  
Acidization with chemicals down hole to stimulate production.
-  
Tank battery overhauled and cleaned up. Old tanks removed. New tank installed.
-  
Repaired old flow lines.
-  
Pressure tested tubing down hole.
-  
Repaired pumping unit, rebuilt insert pump.
-  
Rebuilt down hole pump, replaced tubing Ts and stuffing box.

Rogers 3A, 7A, & 8A :
 
-  
Performed RRC required H-15s to keep inactive wells in compliance.
 
Lease Data
 
Burns Lease
 
Acreage: 160
 
Working Interest: 99.5%; Net Revenue Interest: 74.625%
 
1 active well with 1-2 BOPD.
 
Depth of wells is from 3,550 to 3,639 ft.
 
Field: Kyote; Zone: Olmos “D” Reservoir.
 
Inventory: 2 pumping units, 2 oil tanks, 1 separator, 2 wells w/tubing & rods downhole, 2 downhole pumps in wells, 3 packers in wells; 2 wells w/electrical connection; 2 propane motors; 1 propane tank; 1 unused well head.
 
Rogers Lease
 
Acreage: 355
 
Working Interest: 99.5%; Net Revenue Interest: 74.625%
 
Has 1 active well doing 2-3 BOPD
 
Depth of wells is from 3,518 to 3,590 ft.
 
Field: Kyote; Zone: Olmos “D” Reservoir.
 
Inventory: 1 pumping unit, 1 oil tank (400 bbls), 1 well w/tubing & rods downhole, 1 downhole pump in well, 1 well w/electrical connection
 
 
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Future Expansion
 
The Company is actively seeking to acquire producing and non-producing leases that will allow us to explore and drill in high-profile pay zones.
 
We intend to raise capital at a low cost from private placements so that we may acquire numerous additional leases, and to commence drilling, and taking advantage of the inevitable uptick in oil prices to come.
 
In the current climate, the Company believes that there are a very large number of oil & gas leases under distress due to the depressed gas prices and that we can strategically position the Company to acquire as many of these leases as possible at a discount to market value, hence creating shareholder value.
 
On the Burns and Rogers Leases, we intend to rework all current wells in order to increase production three to four fold. We are planning an exploration strategy to drill new wells on the current Leases, as well as acquire deeper rights in order to drill some of the wells at great depths. We expect that reservoirs at those depths could yield a very high daily output of oil.
 
Historic Production
 
Taking into consideration the current low prices of oil, we believe that we have a viable strategy as our company is currently debt-free and already owns rights to substantial revenue generating leases and assets. We are confident in our team of geologists and engineers to identify the appropriate distressed leases for further acquisitions and believe, if we can raise sufficient capital from the sale of equity, that we will be able to substantially increase current production from existing wells on all our acquisitions.
 
Item 1A. Risk Factors
 
Risks Related to Our Oil and Gas Operations

If our exploration and development programs prove unsuccessful, we may not be able to continue operations.
 
An investment in our company should be considered highly speculative due to the nature of our involvement in the exploration, development and production of oil and natural gas.  Oil and gas exploration involves a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome.  Exploratory drilling is subject to numerous risks, including the risk that no commercially productive oil and natural gas reservoirs will be encountered.  The cost to drill, complete and operate wells is often uncertain, and drilling operations may be curtailed, delayed or cancelled as a result of a variety of factors including unexpected drilling conditions, abnormal pressures, equipment failures, premature declines of reservoirs, blow-outs, sour gas releases, fires, spills or other accidents, as well as weather conditions, compliance with governmental requirements, delays in receiving governmental approvals or permits, unexpected environmental issues and shortages or delays in the delivery of equipment.  Our inability to drill wells that produce commercial quantities of oil and natural gas would have a material adverse effect on our business, financial condition and results of operations.

 
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Future oil and gas acquisitions or exploration may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after exploration, drilling, operating and other costs.  Completion of wells does not ensure a profit on the investment or recovery of exploration, drilling, completion and operating costs.  Drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may adversely affect production.  Adverse conditions include delays in obtaining governmental approvals or consents, shut-ins of connected wells resulting from extreme weather conditions, insufficient storage or transportation capacity or other geological and mechanical conditions.

Fluctuations in commodity prices could have a material impact on our revenues, which would affect our profitability.

Commodity price risk related to conventional crude oil prices could become our most significant market risk exposure if we achieve oil and natural gas production.  Crude oil prices are influenced by such worldwide factors as the Organization of the Petroleum Exporting Countries actions, political events and supply and demand fundamentals.  At this time, we cannot accurately predict these fluctuations because we do not know when we will commence generating revenues from our oil and gas operations.  Furthermore, we cannot estimate, at this time, the impact of commodity price fluctuations until we can predict the level of revenues.

Application, interpretation and enforcement of government tax and other legislation is inconsistent making it difficult for us to ensure that we are compliant which could lead to penalties.

The tax environment in the United States is subject to change, inconsistent application, interpretation and enforcement.  Non-compliance with US laws and regulations can lead to the imposition of penalties and interest.  We intend to make every effort to conform to these laws and regulations. However, our interpretations and those of our advisors may not be the same as those of government officials, which could lead to penalties and interest.

We face competition which could adversely affect our ability to significantly penetrate the oil and gas market in the U.S., which may make it difficult to attain profitability.

The oil and gas market in the U.S. is highly competitive. Most of the competitors  are major international energy industry operators.  These competitors have various advantages over us, including:
 
 
-
Substantially greater financial resources, which gives them greater access to the types of distressed properties that we are targeting and flexibility when developing their exploration and drilling programs;
 
-
greater recognition in the industry, which influences a potential partners’ decision to participate in programs;
 
-
larger operations, which provides economies of scale and operating efficiencies not available to us;
 
-
longer operating histories; and
 
-
more established relationships with strategic partners.
 
 
 
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We may be unable to successfully compete with these established competitors, which may adversely affect our ability to acquire additional properties and thus impact our ability to generate revenue.

Compliance, interpretation and enforcement with evolving environmental laws and regulations may impact our expenses in a negative manner, which would directly impact our profit margins.

Extensive national, regional and local environmental laws and regulations in the U.S. will affect our operations.  These laws and regulations set various standards regulating certain aspects of health and environmental quality which provide for user fees, penalties and other liabilities for the violation of these standards and establish, in some circumstances, obligations to remediate current and former facilities and off-site locations. We believe we are currently in compliance with all existing environmental laws and regulations.  However, as new environmental laws and legislation are enacted and the old laws are repealed, interpretation, application and enforcement of the laws may become inconsistent.  Compliance in the future could require significant expenditures, which would directly impact our profit margins.

Drilling, exploring for and producing oil is a high risk activity with many uncertainties that could adversely affect our business, financial condition and results of operations.
 
Our future financial condition and results of operations will depend on the success of our drilling, exploration and production activities. These activities are subject to numerous risks beyond our control, including the risk that drilling will not result in economic oil production or increases in reserves. Many factors may curtail, delay or cancel our scheduled development projects, including:
 
·  
decline in oil prices;
·  
compliance with governmental regulations, which may include limitations on hydraulic fracturing, access to water or the discharge of greenhouse gases;
·  
inadequate capital resources;
·  
inability to attract and retain qualified personnel;
·  
unavailability or high cost of drilling and completion equipment, services or materials;
·  
unexpected drilling conditions, pressure or irregularities in formations, equipment failures or accidents;
·  
adverse weather conditions;
·  
surface access restrictions;
·  
mechanical difficulties.
 
Oil prices are volatile, and a decline in oil  prices could significantly affect our business, financial condition and results of operations and our ability to meet our capital expenditure requirements and financial commitments.
 
Our revenues, profitability and cash flow will depend substantially upon the prices and demand for oil. The markets for this commodity are volatile, and even relatively modest drops in prices can affect significantly our financial results and impede our growth. Prices for oil fluctuate widely in response to relatively minor changes in the supply and demand for these commodities, market uncertainty and a variety of additional factors beyond our control, such as:
 
·  
domestic and foreign supply of oil;
·  
domestic and foreign consumer demand for oil;
·  
overall United States and global economic conditions;
·  
price and availability of alternative fuels;
·  
governmental regulations;
·  
technological advances affecting oil consumption.
 
 
 
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Further, oil prices continue to be volatile. Advanced drilling and completion technologies, such as horizontal drilling and hydraulic fracturing, have resulted in increased investment by oil and gas producers in developing U.S. shale gas and, more recently, tight oil projects. The results of higher investment in the exploration for and production of oil and gas and other factors, such as global economic and financial conditions discussed below, may cause the price of oil to fall. Lower oil prices may not only cause our revenues to decrease but also may reduce the amount of oil that we can produce economically. Substantial decreases in oil prices would render uneconomic some or all of our drilling locations. This may result in our having to impair our estimated proved reserves and could have a material adverse effect on our business, financial condition and results of operations. Further, if oil prices significantly decline for an extended period of time, we may, among other things, be unable to have any borrowing capacity, repay future debt or obtain additional capital on attractive terms, all of which can affect the value of our common stock.

Future economic conditions in the U.S. and international markets could materially and adversely affect our business, financial condition and results of operations.
 
The U.S. and other world economies continue to experience the after-effects of a global recession and credit market crisis. More volatility may occur before a sustainable growth rate is achieved either domestically or globally. Even if such growth rate is achieved, such a rate may be lower than the U.S. and international economies have experienced in the past. Global economic growth drives demand for energy from all sources, including fossil fuels. A lower, future economic growth rate will result in decreased demand for our oil production and lower commodity prices, and consequently reduce our revenues, cash flows from operations and our profitability.
 
We are subject to complex governmental laws and regulations that may adversely affect the cost, manner and feasibility of doing business.
 
Our oil drilling, production and gathering operations are subject to complex and stringent laws and regulations. To operate in compliance with these laws and regulations, we must obtain and maintain numerous permits and approvals from various federal, state and local governmental authorities. We may incur substantial costs to comply with these existing laws and regulations. In addition, our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations apply to our operations. Such costs could have a material adverse effect on our business, financial condition and results of operations. Failure to comply with laws and regulations applicable to our operations, including any evolving interpretation and enforcement by government authorities, could have a material adverse effect on our business, financial condition and results of operations.
 
Environmental laws and regulations may expose us to significant costs and liabilities.
 
There is inherent risk of incurring significant environmental costs and liabilities in our oil operations due to the handling of petroleum hydrocarbons and generated wastes, the occurrence of air emissions and water discharges from work-related activities and the legacy of pollution from historical industry operations and waste disposal practices. We may incur joint and several or strict liability under these environmental laws and regulations in connection with spills, leaks or releases of petroleum hydrocarbons and wastes on, under or from our properties and facilities, some of which have been used for exploration, production or
 
 
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development activities for many years and by third parties not under our control. In particular, the number of private, civil lawsuits involving hydraulic fracturing has risen in recent years. Since late 2009, multiple private lawsuits alleging ground water contamination have been filed in the U.S. against oil and gas companies, primarily by landowners who leased oil and gas rights to defendants, or by landowners who live close to areas where hydraulic fracturing has taken place. In addition, changes in environmental laws and regulations occur frequently, and any such changes that result in more stringent and costly waste handling, storage, transport, disposal or remediation requirements could have a material adverse effect on our business, financial condition and results of operations. We may not be able to recover some or any of these costs from insurance.
 
Our business requires significant capital expenditures and we may not be able to obtain needed capital or financing on satisfactory terms or at all.
 
Our exploration, development and acquisition activities require substantial capital expenditures. We intend to fund our capital expenditures through a combination of private or public equity financings. We may not be able to obtain equity financing on favorable terms or at all. The failure to obtain financing could cause us to scale back our exploration and development operations, which in turn could lead to a decline in our oil production and reserves, and in some areas a loss of properties.
 
Currently, all of our properties are located in two (2) counties in the State of Texax, making us vulnerable to risks associated with having our production concentrated in a small area.
 
All of our estimated proved reserves are concentrated in two (2) counties in Texas: Atascosa and Frio Counties. As a result of this concentration, we are disproportionately exposed to the natural decline of production from these fields as well as the impact of delays or interruptions of production from these wells, which could be caused by significant governmental regulation, transportation capacity constraints, curtailments of production, service delays, natural disasters or other events that impact this area.
 
Market conditions or transportation and infrastructure impediments may hinder our access to oil markets or delay our production or sales.
 
Market conditions or the unavailability of satisfactory oil processing and transportation services and infrastructure may hinder our access to oil markets or delay our production or sales. The availability of a ready market for our oil production depends on a number of factors, including market demand and the proximity of our reserves to pipelines or trucking and rail terminal facilities. In addition, the amount of oil that can be produced and sold is subject to curtailment in certain circumstances, such as pipeline interruptions due to maintenance, physical damage to the gathering or transportation system or lack of contracted capacity on such systems. The curtailments arising from these and similar circumstances may last from a few days to several months, and in many cases, we are provided with limited, if any, notice as to when these circumstances will arise and their duration. As a result, we may not be able to sell, or may have to transport by more expensive means, the oil that we produce, or we may be required to shut in oil wells or delay initial production until the necessary gathering and transportation systems are available. Any significant curtailment in gathering system, transportation, pipeline capacity or significant delay in construction of necessary gathering and transportation facilities, could adversely affect our business, financial condition and results of operations.
 
 
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The unavailability or high cost of drilling rigs, equipment, materials, personnel and oilfield services could adversely affect our ability to execute our drilling and development plans on a timely basis and within our budget.
 
Our industry is cyclical and, from time to time, there is a shortage of drilling rigs, equipment, supplies or qualified personnel. During these periods, the costs and delivery times of equipment, oilfield services and supplies are substantially greater. In addition, the demand for, and wage rates of, qualified drilling and completion crews rise as the number of active rigs in service increases. Increasing levels of exploration and production will increase the demand for oilfield services, and the costs of these services may increase, while the quality of these services may suffer. If the availability of equipment, crews, materials and services in Atascosa and/or Frio County is particularly severe, our business, results of operations and financial condition could be materially and adversely affected because our properties are located solely in those counties.
 
Competition in the oil and gas industry is intense, and most of our competitors have resources that are greater than ours.
 
We operate in a highly competitive environment for acquiring prospects and productive properties, marketing oil and securing equipment and skilled personnel. Most of our competitors are major and large independent oil and gas companies that have financial, technical and personnel resources substantially greater than ours. Those companies may be able to develop and acquire more prospects and productive properties than our financial or personnel resources permit. Our ability to develop and operate our current project, acquire additional prospects and discover reserves in the future will depend on our ability to hire and retain qualified personnel, evaluate and select suitable properties and consummate transactions and in a highly competitive environment. Also, there is substantial competition for capital available for investment in the oil and gas industry. Larger competitors may be better able to withstand sustained periods of unsuccessful drilling and absorb the burden of changes in laws and regulations more easily than we can, which would adversely affect our competitive position. We may not be able to compete successfully in the future in attracting and retaining qualified personnel, acquiring prospective reserves, developing reserves, marketing oil and raising additional capital.
 
Unless we replace our oil reserves, our reserves and production will decline.
 
Our future oil production depends on our success in finding or acquiring additional reserves. If we fail to replace reserves through reworking, drilling or acquisitions, our production, revenues and cash flows will be adversely affected. In general, production from oil and gas properties declines as reserves are depleted, with the rate of decline depending on reservoir characteristics. Our total proved reserves will decline as reserves are produced, unless we conduct other successful exploration and development activities or acquire properties containing proved reserves, or both. Our ability to make the necessary capital investment to maintain or expand our asset base of oil and gas reserves would be limited to the extent cash flow from operations is reduced and external sources of capital become limited or unavailable. We may not be successful in exploring for, developing or acquiring additional reserves.
 
Our actual production, revenues and expenditures related to our reserves are likely to differ from our estimates of our proved reserves. We may experience production that is less than estimated and drilling costs that are greater than estimated in our reserve reports. These differences may be material.
 
 
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The proved oil reserves data included in this report and the Lee Keeling and Associates Report are estimates. Petroleum engineering is a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact manner. Estimates of economically recoverable oil reserves and of future net cash flows necessarily depend upon a number of variable factors and assumptions, including:
 
·  
historical production from the area compared with production from other similar producing areas;
·  
the assumed effects of regulations by governmental agencies;
·  
assumptions concerning future oil prices; and
·  
assumptions concerning future operating costs, severance and excise taxes, development costs and workover and remedial costs.
 
Because all reserves estimates are to some degree subjective, each of the following items may differ materially from those assumed in estimating proved reserves:
 
·  
the quantities of oil that is ultimately recovered;
·  
the production and operating costs incurred;
·  
the amount and timing of future development expenditures; and
·  
future oil  prices.

As of April 1, 2015, 82% of our proved reserves were proved undeveloped. Estimates of proved undeveloped reserves are even less reliable than estimates of proved developed reserves. Furthermore, different reserve engineers may make different estimates of reserves and future net revenues based on the same available data. Our actual production, revenues and expenditures with respect to reserves will likely be different from estimates and the differences may be material.
 
The PV-10 included in this report should not be considered as the current market value of the estimated oil and gas reserves attributable to our properties.
 
The non-GAAP financial measure, PV-10, in this report is based on an estimated $73.88/Bbl for oil. This pricing was based upon benchmark prices that reflect the unweighted arithmetic average of the first-day-of-the-month price for oil and gas during the twelve (12) month period ended April 1, 2015, as required under SEC rules and regulations. Actual future net revenues will be affected by factors such as the amount and timing of actual production, prevailing operating and development costs, supply and demand for oil and gas, increases or decreases in consumption and changes in governmental regulations or taxation.
 
Operating hazards or other interruptions of our operations could result in potential liabilities, for which we do not have insurance.

 
14
 
 
The oil and gas business involves certain operating hazards such as well blowouts, cratering, explosions, uncontrollable flows of gas, oil or well fluids, fires, surface and subsurface pollution and contamination, and releases of toxic gas. The occurrence of one of the above may result in injury, loss of life, suspension of operations, environmental damage and remediation and/or governmental investigations and penalties.  We do not currently have insurance and if we do acquire insurance at the commencement of operations, then consistent with insurance coverage generally available to the industry, we expect that our insurance policies will provide limited coverage for losses or liabilities relating to pollution, with broader coverage for sudden and accidental occurrences. Our insurance, when acquired, might be inadequate to cover our liabilities. The insurance market in general and the energy insurance market in particular have been difficult markets over the past several years. Insurance costs are expected to continue to increase over the next few years, and we may decrease coverage and retain more risk to mitigate future cost increases. If we incur substantial liability and the damages are not covered by insurance or are in excess of policy limits, or if we incur liability at a time when we are not able to obtain liability insurance, then our business, results of operations and financial condition could be materially adversely affected.
 
Our results are subject to quarterly and seasonal fluctuations.
 
Our quarterly operating results may fluctuate and could be negatively impacted in the future as a result of a number of factors, including seasonal variations in oil  prices, variations in levels of production, if an when production commences,  and the completion of development projects.
 
Risks Relating to an Investment in our Securities
 
If we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.
 
We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting. The standards that must be met for management to assess the internal control over financial reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.
 
In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting, or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.

 
15
 
 
Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses.
 
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. For example, on January 30, 2009, the SEC adopted rules requiring companies to provide their financial statements in interactive data format using the eXtensible Business Reporting Language, or XBRL. We currently have to comply with these rules. Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities. 
 
Because of the early stage of development and the nature of our business, our securities are considered highly speculative.
 
Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We have not generated any revenues nor have we realized a profit from our -operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term.   Any profitability in the future from our business will be dependent upon our ability to market the products developed under our licensing agreement and to source other acquisitions in the industry we have chosen either additional technologies or exploration projects. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order to continue our business operations.
 
We may, in the future, issue additional common shares that would reduce investors’ percent of ownership and may dilute our share value.
 
The future issuance of common shares may result in substantial dilution in the percentage of our common shares held by our then existing stockholders. We may value any common shares issued in the future on an arbitrary basis. The issuance of common shares for future services or acquisitions or other corporate actions may have the effect of diluting the value of the common shares held by our investors, and might have an adverse effect on any trading market for our common shares.
 
Broker-dealers may be discouraged from effecting transactions in our shares because they are considered penny stocks and are subject to the penny stock rules thereby potentially limiting the liquidity of our shares.
 
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on NASD broker-dealers who make a market in "penny stocks". A penny stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share.  Our shares are quoted on the OTC/BB, however none of our shares have ever traded.  NASD broker-dealers who act as market makers for our shares generally facilitate purchases and sales of our shares.  The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.

 
16
 
 
Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.

In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.
 
Our common stock may experience extreme rises or declines in price, and you may not be able to sell your shares at or above the price paid.
 
Our common stock may be highly volatile and could be subject to extreme fluctuations in response to various factors, many of which are beyond our control, including (but not necessarily limited to): (i) the trading volume of our shares; (ii) the number of securities analysts, market-makers and brokers following our common stock; (iii) changes in, or failure to achieve, financial estimates by securities analysts; (iv) actual or anticipated variations in quarterly operating results; (v) conditions or trends in our business industries; (vi) announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; (vii) additions or departures of key personnel; (viii) sales of our common stock; and (ix) general stock market price and volume fluctuations of publicly-trading and particularly, microcap companies.
 
Investors may have difficulty reselling shares of our common stock, either at or above the price they paid for our stock, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our common stock is thinly traded it is particularly susceptible to such changes. These broad market changes may cause the market price of our common stock to decline regardless of how well we perform as a company. In addition, there is a history of securities class action litigation following periods of volatility in the market price of a company’s securities. Although there is no such shareholder litigation currently pending or threatened against the Company, such a suit against us could result in the incursion of substantial legal fees, potential liabilities and the diversion of management’s attention and resources from our business. Moreover, and as noted below, our shares are currently traded on the OTC-BB and, further, are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to manipulation by market-makers, short-sellers and option traders.
 
A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.
 
A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, or convertible debt instruments, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.
 
 
17
 

Item 2. Financial Information
 
The Company is regarded as a “smaller reporting company”, as such term is defined in Item 10(f) of Regulation S-K promulgated by the Securities and Exchange Commission under the Securities Act of 1933, and as such it is not required to provide the information otherwise required under this item.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
This current report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “management believes” and similar language. Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this current report on Form 8-K are forward-looking statements that involve risks and uncertainties. The factors listed in the section captioned “Risk Factors,” as well as any cautionary language in this current report on Form 8-K, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this current report on Form 8-K. 
 
Overview
 
We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements.
 
Corporate History
 
America Resources Exploration Inc. (the "Company") was incorporated on January 24, 2014, under the laws of the State of Nevada to engage in any lawful corporate undertaking, with the specific intended business activity of operating photo booth rentals. The Company was incorporated under the name “Alazzio Entertainment Corp.” and changed its name to America Resources Exploration Inc. on April 29, 2015.
 

 
18
 

In addition to a change in control of its management and shareholders, the Company's operations to date have been limited to attempting to implement its business plan, issuing shares and filing a registration statement on Form S-1 pursuant to the Securities Act of 1934.
 
On June 10, 2015, America Resources Exploration Inc., a Nevada corporation, entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Zheng Xiangwu, a resident of Guang Dong Province, China, whereby the Company issued 4 million shares of its common stock in exchange for rights to certain oil and gas leases located in Frio and Atascosa Counties, Texas, consisting of a total of 714 total acres of land, two (2) working wells and a total of seven (7) wells (the “Leases”).
 
Mr. Zheng is the owner of Rise Fast Limited, a Hong Kong corporation (“Rise Fast”), which is the majority shareholder of the Company. Rise Fast owns 90,000,000 shares of the Company’s common stock. As a result of this transaction, Mr. Zheng controls a total of 94,000,000 shares, which represents 76.64% of the Company’s issued and outstanding shares.
 
The transaction has been now been completed and accounted for a business combination as the Company is under control of Mr. Zheng.
 
The three (3) producing leases acquired by the Company are situated in Atascosa and Frio Counties, Texas, located in the Eagle Ford Shale formation - the Jane Burns “C” (“Burns”), the Theo Rogers “C”, and the Theo Rogers “A” & “D” (“Rogers”) Leases. The Company acquired a 99.5% working interest (74.625% net revenue interest) in each lease.  We estimate the Burns and Rogers Leases contain 68,272 net barrels of proved oil reserves having a PV-10 value of approximately $1,007,000 as of April 1, 2015.
 
Business Overview
 
The Burns and Rogers Leases provide exploration and production opportunities in the Kyote Field pay zone, very near the Eagle Ford Shale play with access to available rig crews and other vendor-servicers, due to their close proximity to San Antonio, Texas.
 
The Rogers Lease currently has one (1) operating well, which provides between two to three (2-3) barrels of oil per day (“BOPD”). The Burns Lease also currently has one (1) operating well, which provides one to two (1-2) BOPD. The Company’s management and industry professionals believe that the Company can double or triple existing production on the Burns and Rogers Leases by bringing online 5 available, inactive wells on the Leases and potentially increase total production 2-3 BOPD per well.
 
The Rogers and Burns Leases hold collectively seven (7) oil wells which have a long history of producing a favorable oil to water ratio, such that an injection well is not needed for disposal of saltwater.
 
Periods Ended March 31, 2015 and 2014
 
The following discussion and analysis should be read in conjunction with the audited Statements of Revenues and Direct Operating Expenses of the Leases, for the periods from April 1, 2013 to March 31, 2014 and from April 1, 2014 to March 31, 2015 and accompanying notes that appear in Exhibit 99.1 in this current report.
 
 
19
 

Results of Operations for the Periods Ended March 31, 2015 and 2014
 
The Leases generated revenue from oil and gas sales in the amount of $31,878 for the twelve (12) month period ended March 31, 2015, compared to $64,074 for the same period from the previous year. The direct operating expenses decreased to $19,448 during the period ended March 31, 2015, from $33,548 for the same period from the previous year.  The decrease in operating expenses was due to a decrease in lease operating expenses to $18,019 for the twelve (12) month period ended March 31, 2015, from $31,033 for the same period from the previous year and a decrease in production taxes to $1,429 for the period ended March 31, 2015, from $2,515 for the same period from the previous year. Net revenue for the periods ended March 31, 2015 and 2014 was $12,430 and $30,526, respectively.
 
Plan of Operation
 
Management is considering plans to reactive the inactive wells through a rework program on the Leases. Additional rights may be leased out from mineral owner to deeper zones near 5,000 feet and below. However, such plans are subject to raising financing of $500,000 to pay for such rework plans and an analysis of potential income based on projected oil prices in the future.
 
The Company is actively seeking to acquire producing and non-producing leases that will allow us to explore and drill in high-profile pay zones.
 
We intend to raise capital at a low cost from private placements so that we may acquire numerous additional leases, and to commence drilling, and taking advantage of the inevitable uptick in oil prices to come.
 
In the current climate, the Company believes that there are a very large number of oil & gas leases under distress due to the depressed gas prices and that we can strategically position the Company to acquire as many of these leases as possible at a discount to market value, hence creating shareholder value.
 
On the Burns and Rogers Leases, we intend to rework all current wells in order to increase production three to four fold. We are planning an exploration strategy to drill new wells on the current Leases, as well as acquire deeper rights in order to drill some of the wells at great depths. We expect that reservoirs at those depths could yield a very high daily output of oil.
 
Off-Balance Sheet Arrangements
 
As of March 31, 2015, the Company had no off-balance sheet arrangements.
 
Critical Accounting Policies
 
We believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this “Management’s Discussion and Analysis of Financial Condition and Results of Operation.”
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
 
 
20
 
 
The Company’s significant accounting estimates and assumptions affecting the financial statements were the inventory costs and the assumptions used to determine the discounted cash flows used to determine if an impairment of its property, plant and equipment were necessary. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.
 
Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
 
Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.
 
Recent Accounting Pronouncements
 
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
 
Item 3. Properties
 
TRACT 1: Roger f Theo "A" and "D" Lease 355 acres of land, more or less, being all of the Leopold Menetrier Survey No 1347, A-510 and A-583, Frio and Atascosa Counties, Texas, more commonly referred to as the Rogers "A" Lease, Wells #3, #7, and #8, and the Rogers "D" Lease, Well #9, as to and only as to those rights from the surface down to 100 feet below the base of the Olmos-D-Reservoir as encountered at the subsurface depth of 3,566 feet in The Texaco Jane Burns "B" Well No. 28; Subject to Oil, Gas and Mineral Lease, dated November 2, 1946, from K. T. Tidwell and wife Olga Tidwell, and Theo Rogers and wife Veta Rogers to Shell Oil Co„ recorded in Volume 184, Page 358, Deed Records of Atascosa County, Texas, as amended by instrument dated July 27, 1951, recorded in Volume 208, Page 511 of the Deed Records of Atascosa County, Texas.
 
Rogers, Theo “C”: 219 acres of land, more or less, being all of the Irene L. Menetrier Survey No. 1346, A-584, Cert 48 , Pat 330 Vol. 29, Atascosa County, Texas, more commonly referred to as the Rogers “C” Lease, Well #5, as to and only as to those rights from the surface down to 100 feet below the base of the Olmos-D-Reservoir as encountered at the subsurface depth of 3,566 feet in The Texaco Jane Burns “B” Well No. 28, save and except the northeast 102.4 acres thereof, the southwest line of which is parallel with the northeast line of said survey; Subject to Oil, Gas and Mineral Lease, dated July 27, 1951, from Theo Rogers and wife Veta Rogers, and K.T. Tidwell and wife Olga Tidwell and to Miller Royalty Company and C.C. Dauchy, recorded in Volume 209, page 581, Deed Records of Atascosa County, Texas.
 
TRACT 2: Jane Burns "C" Lease Tract 2: 160 acres of land, more or less. being the north 160 acres. in the form of a square, of the Francis Oerelling Survey No. 1336, A-532 and A-654, Frio and Atascosa Counties, Texas, and the northeast and northwest lines of this 160-acre tract lying upon the northeast and northwest lines respectively of said survey, and the southeast and southwest lines of the 160-acre tract being parallel with the northwest and northeast lines respectively, of said survey, as to and only as to those rights from the surface down to 100 feet below the base of the Olmos -D- Reservoir as encountered at the subsurface depth of 3,566 feet in the Texaco Jane Burns "B" Well No. 28.
 
 
21
 
 
Item 4. Item Security Ownership of Certain Beneficial Owners and Management.
 
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of June 12, 2015 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) members of our Board of Directors, and or (iii) our executive officers. Unless otherwise indicated, the stockholder listed possesses sole voting and investment power with respect to the shares shown.

Title of Class
 
Name and Address
of beneficial owner
 
Amount and nature of
beneficial ownership (1)
 
Percent
of class
             
Common Stock
 
Zheng Xiang Wu (2)
Central office at 9th Floor
Amtel Building
148 Des Voeux Road
Central, Hong Kong China
 
94,000,000
 
76.64%
             
Common Stock
 
Huang Yu
Gao Xin Kai Fa Qu Gao Xin Si Lu Zhong
Jian San Ju Rong He Tian Yu Xiang Mu Bu,
Liu Zhou
Guang Xi, China
 
-0-
 
-
             
Common Stock
 
Joe M. Seabourn
2925 Robertson Dr.
Abilene, Texas 79606
 
-0-
 
-
             
Common Stock
 
Robert A. Wiener
2537 s. Gessner, #201
Houston, Texas 77063
 
-0-
 
-

(1)
A beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding on June 12, 2015. As of June 12, 2015, there were 129,400,000 shares of our common stock issued and outstanding.
 
(2)
Zheng Xiangwu is the sole owner of Rise Fast Limited, a Hong Kong corporation, which owns 90 million shares of the Company’s common stock. Mr. Zheng owns 4,000,000 shares in his own name.
 

 
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Item 5. Directors and Executive Officers
 
(a) – (b) Identification of Directors and Executive Officers.
 
The Company:   The following individuals are members of the Company’s Board of Directors and executive officers; all of the members of the Board are appointed until their respective successor is elected or until their resignation.
 
Name
 
Age
 
Positions Held
 
Date of
Appointment
             
Huang Yu
 
32
 
Member of the Board of Directors; President,  Secretary and Treasurer
 
April 3, 2015
             
Joe M. Seabourn
 
64
 
Member of the Board of Directors
 
June 12, 2015
             
Robert A. Wiener
 
65
 
Member of the Board of Directors
 
June 12, 2015
 
(c) Identification of certain significant employees.
 
The Company currently does not have any significant employees. However, the Company will hire Mr. Seabourn as the Company’s Head Geologist and be paid a salary of $3,000 per month.
 
(d) Family relationships. None.
 
(e)   Business experience.
 
Mr. Huang Yu

From July 2010 through January 2015, Mr. Huang was employed, in different capacities, by the Chinese Construction Third Construction Company Limited, a construction company based in Guang Xi, China. From July 2010 through September 2012, he was an Assistant Engineer for the company; from October 2012 through October 2013, he worked as an Engineer; and from November 2013 through January 2015, Mr. Huang was the Chief Engineer and Operating Officer. Mr. Huang graduated from the Inner Mongolia University of Science and Technology with a Bachelor's Degree in 2009. Mr. Huang has not served as an officer or director of any other SEC registered company.

Mr. Yu has not held a directorship in any company with a class of securities registered pursuant to section 12 of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of section 15(d) of the Exchange Act.

Mr. Joe M. Seabourn – Member of the Board of Directors

Mr. Seabourn, age 64, has been an officer of U.S. Energy – Resources LLC, based in Abilene, Texas, since 2000, which presently is acquiring land holds and leases to drill near Sylvester, Texas. Mr. Seabourn has over 30 years of experience working refinery up-grade design flow process and feasibility studies for Nigeria, Ecuador, Mongolia and Republic of Congo. He is currently using his strategic alliances to establish working joint ventures and partnerships in Libya, North Africa. Mr. Seabourn also served in the US Army 101 st Airbornne from 1968 to 1972 and was awarded four Bronze Stars. Mr. Seabourn also received a patent for Diverter Valve for Offshore Drilling Applications.

Mr. Seabourn has not held a directorship in any company with a class of securities registered pursuant to section 12 of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of section 15(d) of the Exchange Act. Mr. Seabourn will be employed by the Company as Head Geologist and will receive a salary of $3,000 per month.
 
 
23
 
 
Mr. Robert A. Wiener – Member of the Board of Directors

Mr. Wiener, age 65, received his Bachelors in Science, Geology, in 1973, University of Rhode Island. He spent his senior year at the Middle East Technical University, Ankara, Turkey in a cooperative program with the University of Rhode Island.

From October 2012, Mr. Wiener has been President of Goh Exploration, Inc., which is in the business of interpreting new 3D data set on-shore Southern Basin for Petrotrin (a petroleum company of Trinidad and Tobago) with Getz Exploration Consultants that generates significant overthrust and subthrust prospects. The focus of his work through Goh Exploration is the development of techniques to interpret poor data and develop new models of tectonic framework. Mr. Wiener has worked with a wide range of international companies, from some that are in the start-up phase and up to meeting the President of Republic of Congo to propose industrial and exploration projects. He has worked with private businessman to review Niger’s Agadem Area as well as other international projects. From October 2009 to October 2012, Mr. Wiener worked to generate Hackberry and Miocene prospects in southwest Louisiana and helped sell leases.
 
Mr. Wiener has not held a directorship in any company with a class of securities registered pursuant to section 12 of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of section 15(d) of the Exchange Act. The Company has agreed to engage Mr. Wiener as a consultant on a continuing basis, reviewing all rework projects on the wells and new lease purchases, at his ongoing rate of $200 per hour.

(f) Involvement in certain legal proceedings.
 
None of the Company’s executive officers or directors have been involved in any legal proceedings during the past five (5) years.
 
(g) Promoters and control persons.
 
Mr. Zheng Xiangwu is the Company’s controlling shareholder. Mr. Zheng has not been a party to any legal proceedings at any time during the past five (5) years.
 
Item 6. Executive Compensation
 
The Company has not paid any compensation to any of its officers or directors and does not have any agreements in place or understandings to pay any compensation to its officers and directors.
 
Item 7. Certain Relationships and Related Transactions and Director Independence
 
Other than as described below, neither the Company has not engaged in any transactions with any of its related persons.
 
On June 10, 2015, the Company entered into a Asset Purchase Agreement (the “Share Exchange Agreement”) with Mr. Zheng Xiangwu, a resident of Guang Dong Province, China, whereby the Company issued 4 million shares of its common stock in exchange for one hundred percent interest in certain oil and gas leases giving the holder the right to produce oil and gas from an aggregate of 515 acres located in Frio and Atascosa Counties, Texas.
 
Mr. Zheng is the sole owner of Rise Fast Limited, a Hong Kong corporation, which is the majority shareholder of the Company and, prior to this transaction, owns a total of 90 million shares of the Company’s common stock. As a result of this transaction, Mr. Zheng will control 72.64% of the Company’s issued and outstanding shares.
 
 
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Item 8. Legal Proceedings
 
None.
 
Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
 
Not applicable.
 
Item 10. Recent Sales of Unregistered Securities
 
As discussed above under Item 7. Certain Relationships and Related Transactions and Director Independence ,   on June 12, 2015, the Company issued 4 million shares of its common stock to Mr. Zheng in exchange for assignment of certain oil and gas leases.
 
The foregoing issuance of securities was exempt from registration pursuant to Rule 506 of Regulation D. Neither we nor any person acting on our behalf offered or sold these securities by any form of general solicitation or general advertising. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption therefrom. Mr. Zheng represented to the Company that he was purchasing the securities for his own account and not for the account of any other persons. Mr. Zheng was provided with written disclosure that the securities have not been registered under the Securities Act of 1933 and therefore cannot be sold without registration under the Securities Act of 1933 or an exemption therefrom.
 
Item 11. Description of Registrant’s Securities to be Registered
 
General
 
Our authorized share capital consists of 300,000,000 shares of common stock, par value $0.001 per share.  As of the date hereof, 129,400,000 shares of our common stock were outstanding. We do not have any authorized class of preferred stock.  
 
Common Stock
 
Each share of our common stock entitles its holder to one vote in the election of each director and on all other matters voted on generally by our stockholders. No share of our common stock affords any cumulative voting rights. This means that the holders of a majority of the voting power of the shares voting for the election of directors can elect all directors to be elected if they choose to do so. 
 
Holders of our common stock will be entitled to dividends in such amounts and at such times as our Board of Directors in its discretion may declare out of funds legally available for the payment of dividends. We currently intend to retain our entire available discretionary cash flow to finance the growth, development and expansion of our business and do not anticipate paying any cash dividends on the common stock in the foreseeable future. Any future dividends will be paid at the discretion of our Board of Directors.
 
 
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If we liquidate or dissolve our business, the holders of our common stock will share ratably in all our assets that are available for distribution to our stockholders after our creditors are paid in full and the holders of all series of our outstanding preferred stock, if any, receive their liquidation preferences in full. 
 
Our common stock has no preemptive rights and is not convertible or redeemable or entitled to the benefits of any sinking or repurchase fund. 
 
Dividends
 
We have not paid any cash dividends to our shareholders.  The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions.  It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations. 
 
Transfer Agent and Registrar
 
Our transfer agent is Globex Transfer, LLC, 780 Deltona Boulevard, Suite 202, Deltona, Florida 32725.
 
Item 12. Indemnification of Directors and Officers
 
Section 78.7502 of the Nevada Corporate Law provides, in part, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.  

Similar indemnity is authorized for such persons against expenses (including attorneys' fees) actually and reasonably incurred in defense or settlement of any threatened, pending or completed action or suit by or in the right of the corporation, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and provided further that (unless a court of competent jurisdiction otherwise provides) such person shall not have been adjudged liable to the corporation. Any such indemnification may be made only as authorized in each specific case upon a determination by the stockholders or disinterested directors that indemnification is proper because the indemnity has met the applicable standard of conduct. Where an officer or a director is successful on the merits or otherwise in the defense of any action referred to above, we must indemnify him against the expenses which such offer or director actually or reasonably incurred. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
 
 
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Item 13. Financial Statements and Supplementary Data
 
Reference is made to the statements revenues and unaudited pro forma financial information relating to the Leases contained in Item 9.01 of this Current Report on Form 8-K, which is incorporated by reference.
 
Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
Item 15. Financial Statements and Exhibits
 
(a)   Financial statements:
 
Audited Statements of Revenues and Direct Operating Expenses of the Theo Rogers “A”, “C”, and “D” Lease and the Jane “C” Burns Lease for the period from April 1, 2013 to March 31, 2014 and the period from April 1, 2014 to March 31, 2015 are filed as Exhibit 99.1.
 
Unaudited Pro Forma Condensed Balance Sheet as of December 31, 2014, unaudited Pro Forma Condensed Statement of Operations for the twelve months ended March 31, 2014 and unaudited Pro Forma Condensed Statement of Operations for the Period April 1, 2014 to December 31, 2014 are filed as Exhibit 99.2.
 
(b)   Exhibits.
 
3.1 Articles of Incorporation of the Registrant incorporated by reference to Exhibit 3.1 to the Registrant’s registration statement on Form S-1 filed with the SEC on May 20, 2014, file number 333-196109.
 
3.2 Bylaws of Registrant incorporated by reference to Exhibit 3.2 to the Registrant’s registration statement on Form S-1 filed with the SEC on May 20, 2014, file number 333-196109.
 
10.1 Asset Purchase Agreement, among the Registrant, Zheng Qiangwu and Nelaco Operating Inc., dated June 10, 2015.
 
99.3 Estimated Reserves and Future Net Revenue Report.
 
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS

Effective June 11, 2015, the Company’s Board of Directors expanded the number of members of the Board of Directors to two (2) and elected Joe M. Seabourn and Robert A. Wiener as a members of the Board of Directors to fill the vacancies caused by the expansion of the Board.

 
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Biographies

Mr. Joe M. Seabourn – Member of the Board of Directors

Mr. Seabourn, age 64, has been an officer of U.S. Energy – Resources LLC, based in Abilene, Texas, since 2000, which presently is acquiring land holds and leases to drill near Sylvester, Texas. Mr. Seabourn has over 30 years of experience working refinery up-grade design flow process and feasibility studies for Nigeria, Ecuador, Mongolia and Republic of Congo. He is currently using his strategic alliances to establish working joint ventures and partnerships in Congo, Central Africa. Mr. Seabourn also served in the US Army 101 st Airbornne from 1968 to 1972 and was awarded four Bronze Stars. Mr. Seabourn also received a patent for Diverter Valve for Offshore Drilling Applications.

Mr. Seabourn has not held a directorship in any company with a class of securities registered pursuant to section 12 of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of section 15(d) of the Exchange Act.

Mr. Robert A. Wiener – – Member of the Board of Directors

Mr. Wiener, age 65, received his Bachelors in Science, Geology, in 1973, University of Rhode Island. He spent his senior year at the Middle East Technical University, Ankara, Turkey in a cooperative program with the University of Rhode Island.

From October 2012, Mr. Wiener has been President of Goh Exploration, Inc., which is in the business of interpreting new 3D data set on-shore Southern Basin for Petrotrin (a petroleum company of Trinidad and Tobago) with Getz Exploration Consultants that generates significant overthrust and subthrust prospects. The focus of his work through Goh Exploration is the development of techniques to interpret poor data and develop new models of tectonic framework. Mr. Wiener has worked with a wide range of international companies, from some that are in the start-up phase and up to meeting the President of Republic of Congo to propose industrial and exploration projects. He has worked with private businessman to review Niger’s Agadem Area as well as other international projects. From October 2009 to October 2012, Mr. Wiener worked to generate Hackberry and Miocene prospects in southwest Louisiana and helped sell leases.

Mr. Wiener has not held a directorship in any company with a class of securities registered pursuant to section 12 of the U.S. Securities Exchange Act of 1934 (the “Exchange Act”) or subject to the requirements of section 15(d) of the Exchange Act.

ITEM 5.06 CHANGE IN SHELL COMPANY STATUS

On June 12, 2015, the Company completed the acquisition of certain oil and gas leases pursuant to an Asset Purchase Agreement. As a result of the completion of this acquisition, 4 million shares of the Company’s common stock were issued to Mr. Zheng Xiangwu, which is the owner of the Company’s largest shareholder, Rise Fast Limited, a Hong Kong corporation. The number of shares issued to Mr. Zheng was determined valuing the oil and gas assets at their historical cost of $160,000 and the shares issued to Mr. Zheng at $0.04 per share.

The completion of the Company’s acquisition of the oil and gas leases has resulted in the Company cease being a “shell company” as that term is defined in Rule 405 promulgated by the Securities and Exchange Commission under the Securities Act of 1933. Due to the fact that prior to the acquisition the Company was regarded as a shell company, the Company has included below the information that would be required if the Company were filing a general form for registration of securities on From 10 under the Securities Exchange Act of 1934.
 
 
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
 
(a) Financial statements:
 
Audited Statements of Revenues and Direct Operating Expenses of the Theo Rogers “A”, “C”, and “D” Lease and the Jane “C” Burns Lease for the period from April 1, 2013 to March 31, 2014 and the period from April 1, 2014 to March 31, 2015 are filed as Exhibit 99.1.
 
Unaudited Pro Forma Condensed Balance Sheet as of December 31, 2014, unaudited Pro Forma Condensed Statement of Operations for the twelve months ended March 31, 2014 and unaudited Pro Forma Condensed Statement of Operations for the Period April 1, 2014 to December 31, 2014 are filed as Exhibit 99.2.
 
(b) Exhibits.
 
3.1 Articles of Incorporation of the Registrant incorporated by reference to Exhibit 3.1 to the Registrant’s registration statement on Form S-1 filed with the SEC on May 20, 2014, file number 333-196109.
 
3.2 Bylaws of Registrant incorporated by reference to Exhibit 3.2 to the Registrant’s registration statement on Form S-1 filed with the SEC on May 20, 2014, file number 333-196109.
 
10.1 Asset Purchase Agreement, among the Registrant, Zheng Qiangwu and Nelaco Operating Inc., dated June 10, 2015.
 
99.3 Estimated Reserves and Future Net Revenue Report.
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AMERICA RESOURCES EXPLORATION INC. 

DATE: June 15, 2015


By: /s/ Huang Yu                    
Name: Huang Yu
Title: President                                  

 
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Exhibit 10.1
 
ASSET PURCHASE AGREEMENT
 

 
BY AND BETWEEN:
 

 
AMERCIA RESOURCES EXPLORATION INC. , a Nevada corporation having an office in the Tempe, Arizona (hereinafter referred to as the “ Corporation ”);
 

ZHENG XIANGWU , an individual residing in China (hereinafter referred to as the “ Owner ”);

- And -
 
NELACO OPERATING INC. , a Texas corporation having offices in Abilene, Texas (hereinafter referred to as “Nelaco”)
 

 

                                      
 
ASSET PURCHASE AGREEMENT
                                      
 


 

 

Dated as of June 10, 2015
 

 
 
 

ASSET PURCHASE AGREEMENT
 
THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of the 10 th day of June 2015, by and between AMERICA RESOURCES EXPLORATION INC. , a Nevada corporation (the “Corporation”), ZHENG XIANGWU , an individual residing in the Province of Guang Dong, China (“Owner”) and NELACO OPERATING, INC. , a Texas corporation having offices in Abilene, Texas (“Nelaco”).

WHEREAS , Nelaco has acquired, on behalf of and in trust for, the Owner one hundred percent interest in certain leases located in Atascosa and Frio Counties, Texas (referred to herein as the “Burns and Rogers Leases”);

WHEREAS , the Corporation is a publicly reporting company whose stock trades on OTC Markets:Pink Sheets under the trading symbol “AREN” and is interested in entering into the oil and gas business by purchasing interests in properties located Texas as well as other jurisdictions in the United States, and is also interested in acquiring companies that owns such properties, specifically the Rogers and Burns Leases;

WHEREAS , the Corporation has agreed with the Owner to issue Four Million (4,000,000) shares of the Corporation’s common stock (the “AREN Shares”) to the Owner in exchange for assignment of the Burns and Rogers Leases to the Corporation, on the terms and conditions set forth herein;

NOW THEREFORE in consideration of the mutual covenants, representations and warranties, which are to be made and performed by the respective Parties, it is hereby agreed as follows:

ARTICLE I
INTERPRETATION

Section 1.01. Definitions . The following terms when used in this Agreement shall have the meanings hereby assigned to them:

“Business Day” shall mean any day other than a day which is a Saturday, a Sunday or a statutory holiday in Tempe, Arizona;

“Effective Date” shall mean June 10, 2015;

“Effective Time” shall mean 12:01 a.m. MST on the Effective Date;

“Encumbrance” shall mean any mortgage, charge, pledge, lien, (otherwise than arising by statute or operation of law), equities, hypothecation or other encumbrance, priority or security interest, pre-emptive right deferred purchase, title retention, leasing, sale-and-repurchase or sale-and-leaseback arrangement whatsoever over or in any property, assets or rights of whatsoever nature and includes any agreement for any of the same and reference to “Encumbrances” shall be construed accordingly;

 
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“Escrow” shall mean the holding of the AREN Shares pending completion of the transactions set forth herein.

“Escrow Holder” shall mean Booth Udall Fuller PLC, a professional law corporation with offices located in Tempe, Arizona.

“Exchange Act” shall mean the US Securities Exchange Act of 1934;

“Governmental Entity” shall mean any court or tribunal in any jurisdiction or any federal, state, municipal or other governmental body, agency, authority, department, commission, board or instrumentality;

“Party” shall mean a Person, which is bound by this Agreement;

“Person” shall mean any individual, firm, company, government, state or agency of a state or any joint venture, association or partnership (whether or not having separate legal personality);

“Regulations” shall mean all statutes, laws, codes, treaties, ordinances, decrees, rules, orders and regulations in effect from time to time and made by governments or Governmental Entities having jurisdiction over the Corporation, the Owner, or the Partnership.

“Securities Act” shall mean the US Securities Act of 1933;

“SEC” shall mean the US Securities and Exchange Commission; and

“US” shall mean United States of America.

ARTICLE II
ASSET PURCHASE

Section 2.01. Agreement of Asset Purchase . By execution of this Agreement, and pursuant to the terms hereof, the Corporation agrees to issue the AREN Shares to the Owner and the Owner agree to cause the Burns and Rogers Leases to be assigned to the Corporation (the “Asset Purchase”) as follows:

(a) Upon execution of this Agreement, (1) the Corporation shall cause the AREN Shares, to be placed into Escrow with the Escrow Holder pending full and complete performance of all of Owner’s obligations under this Agreement and (2) the Owner shall cause the Burns and Rogers Leases to be assigned into the name of the Corporation (the “Assignment”)..

(b) Upon completion of the Assignment, the Escrow Holder shall release the AREN Shares to the Owner.

 
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(c)  In the event that either party does not fulfill its obligations set forth herein, then the AREN Shares shall be released from Escrow and returned to the Corporation for cancellation and return to treasury.

Section 2.02. Corporate Governance .  The Corporation and the Owner agree that on the Effective Date, or as soon as practical thereafter, there shall be three (3) members of the board of directors of the Corporation with two (2) directors designated by the Owner, and one (1) director designated by the Corporation.

ARTICLE III
REPRESENTATIONS AND WARRANTIES

Section 3.01. Each Party represents and warrants to the other Party that each of the warranties it makes is accurate in all respects and not misleading as at the date of this Agreement.

Section 3.02. Each Party undertakes to disclose in writing to the other Party anything which is or may constitute a breach of or be inconsistent with any of the warranties immediately upon the same coming to its notice at the time of and after Completion.

Section 3.03. Each Party agrees that each of the warranties it makes shall be construed as a separate and independent warranty and (except where expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other warranty or any other term of this Agreement.

Section 3.04. Each Party acknowledges that the restrictions contained in Section 6.07 (Public Notices) shall continue to apply after the Completion under this Agreement without limit in time.

Section 3.05. All representations, warranties, covenants and agreements contained in this Agreement on the part of each of the Parties shall survive the Effective Date, the issuance and delivery of the AREN Shares and the Assignment. If no claim shall have been made under this Agreement against a Party with respect to any incorrectness in or breach of any representation or warranty made by that Party in this Agreement within six months following the Effective Date, that Party shall have no further liability with respect to the representation or warranty.

Section 3.06.  The representations and warranties contained in clauses 3.1 and 3.2 herein of this Agreement shall be deemed to apply to all and shall not merge or diminish as a result of the Asset Purchase as contemplated hereunder.
 
Section 3.07. The Owner specifically acknowledges, agrees and accepts the inherent risk associated with investing and operating in public companies (including, without limitation, companies whose stock trades on the OTC:Pinks).
 

 
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

Section 4.01. Organization, Standing and Authority; Foreign Qualification. The Corporation is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to own, lease and operate its properties and to conduct its business as presently conducted and as proposed to be conducted and is duly qualified or licensed as a foreign corporation in good standing in each jurisdiction in which the character of its properties or the nature of its business activities require such qualification.

Section 4.02. Corporate Authorization. The execution, delivery and performance by the Corporation of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action of the Corporation, and this Agreement constitutes a valid and binding agreement of the Corporation. The AREN Shares to be issued in accordance with this Agreement shall be duly authorized and, upon such issuance, will be validly issued, fully paid and non-assessable.

Section 4.03. Capitalization.   The Corporation’s authorized capital stock consists solely of 300,000,000 shares of common stock, of which 125,400,000 shares of common stock are issued and outstanding as of the date hereof; all of such issued and outstanding shares of the Corporation’s common stock are duly authorized, validly issued, fully paid and non-assessable. There are no outstanding options, warrants, agreements or rights to subscribe for or to purchase, or commitments to issue, shares of the Corporation’s common stock or any other security of the Corporation or any plan for any of the foregoing.

Section 4.04 Subsidiaries. The Corporation does not have any subsidiaries.

Section 4.05. SEC Filings. (a) The Corporation has delivered to the Owner (i) the Corporation’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014, containing the Corporation’s consolidated balance sheet at March 31, 2014 and March 31, 2014 and statements of income, changes in shareholders' equity and cash flows of the Corporation for the period from January 24, 2014 (date of inception) to March 31, 2014, along with a copy of the audit report of Harris & Gillespie CPA’s, PLLC, independent auditors; (ii) quarterly reports on Form 10-Q for the three (3) quarters ended June 30, September 30, and December 31, 2014, respectively; and (iii) all current reports on Form 8-K filed by the Corporation since August 28, 2014 (collectively, “the Corporation’s Reports”). To the best of the Corporation’s knowledge and belief, all of the Corporation’s Reports as of their respective dates (i) comply in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC thereunder, (ii) do not contain any untrue statement of a material fact, and (iii) do not omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b) All documents which the Corporation is responsible for filing with the SEC or any regulatory agency in connection with this Agreement will comply as to form in all material respects with the requirements of applicable law, and all of the information relating to the Corporation in any document filed with the SEC or any other regulatory agency in connection with this Agreement or the transactions otherwise contemplated hereby shall be true and correct in all material respects.
 
 
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Section 4.06. Certificate of Incorporation and By-Laws. The Corporation has heretofore delivered to the Owner true, correct and complete copies of its Certificate or Articles of Incorporation (certified by the Secretary of State of the State of Nevada and By-laws, certified by the Corporation’s corporate secretary thereof).

Section 4.07. No Conflict.   The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein will not:

(a)  
Violate any provision of the Articles or Certificate of Incorporation, By-laws or other charter or organizational document of the Corporation;
(b)  
Violate, conflict with or result in the breach of any of the terms of, result in any modification of the effect of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both) a default under any contract to which the Corporation is a party or by or to which its assets or properties may be bound or subject;
(c)  
Violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, or any agreement with, or condition imposed by, any governmental or regulatory body, foreign or domestic, binding upon the Corporation or upon the securities, assets or business of the Corporation;
(d)  
Violate any statute, law or regulation of any jurisdiction as such statute, law or regulation relates to the Corporation or to the securities, properties or business of the Corporation; or
(e)  
Result in the breach of any of the terms or conditions of, constitute a default under, or otherwise cause an impairment of, any permit or license held by the Corporation.

Section 4.08. Litigation. There is no litigation, suit, proceeding, action or claim at law or in equity, pending or to the Corporation 's best knowledge threatened against or affecting the Corporation or involving any of the Corporation’s property or assets, before any court, agency, authority or arbitration tribunal, including, without limitation, any product liability, workers' compensation or wrongful dismissal claims, or claims, actions, suits or proceedings relating to toxic materials, hazardous substances, pollution or the environment. Except as set forth in such Schedule 4.10 hereto, the Corporation is not subject to or in default with respect to any notice, order, writ, injunction or decree of any court, agency, authority or arbitration tribunal.

Section 4.09. Compliance with Laws. To the best knowledge of the Corporation, it has complied with all laws, municipal bylaws, regulations, rules, orders, judgments, decrees and other requirements and policies imposed by any governmental authority applicable to it, its properties or the operation of its business, except where the failure to comply will not have a material adverse effect on the business, properties, financial condition or earnings of the Corporation.
 
 
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Section 4.10. True and Correct Copies. All documents furnished or caused to be furnished to the Owner by the Corporation are true and correct copies, and there are no amendments or modifications thereto except as set forth in such documents.

Section 4.11. Compliance with Securities Act. (a) To the best of the Corporation’s knowledge, no one authorized to act on its behalf has taken, or will take, any action that would subject the issuance or sale of the AREN Shares hereunder to the registration requirements of Section 5 of the Securities Act; provided however, the availability of an exemption from the registration requirements of Section 5 is based upon the accuracy and completeness of the representations and warranties of the Owner, on which the Corporation will rely. In connection with the offer and sale of the AREN Shares, the Corporation has not conducted any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media, or broadcast over radio, the Internet or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

(b) The Corporation, in connection with the transaction contemplated by this Agreement, has complied with the provisions of, and restrictions contained in Regulation D, promulgated by the SEC under the Securities Act.

Section 4.12 Contracts.   (a) The Corporation is not a party to any:

(i)  
Contracts with any current or former officer, director, employee, consultant, agent or other representative having more than three (3) months to run from the date hereof or providing for an obligation to pay and/or accrue compensation of $200,000 or more per annum, or providing for the payment of fees or other consideration in excess of $200,000 in the aggregate to any officer or director of the Corporation, or to any other entity in which the Corporation has an interest;
(ii)  
Contracts for the purchase or sale of equipment or services that contain an escalation, renegotiation or re-determination clause or that can be cancelled without liability, premium or penalty only on ninety (90) days’ or more notice;
(iii)  
Contracts for the sale of any of its assets or properties or for the grant to any person of any preferential rights to purchase any of its or their assets or properties;
(iv)  
Contracts (including, with limitation, leases of real property) calling for an aggregate purchase price or payments in any one (1) year of more than $200,000 in any one case (or in the aggregate, in the case of any related series of contracts);
(v)  
Contracts relating to the acquisition by the Corporation of any operating business of, or the disposition of any operating business by, any other person;

 
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(vi)  
Executory contracts relating to the disposition or acquisition of any investment or of any interest in any person;
(vii)  
Joint venture contracts or agreements;
(viii)  
Contracts under which the Corporation agrees to indemnify any party, other than in the ordinary course of business or in amounts not in excess of $200,000, or to share tax liability of any party;
(ix)  
Contracts containing covenants of the Corporation not to compete in any line of business or with any person in any geographical area or covenants of any other person not to compete with the Corporation in any line of business or in any geographical area;
(x)  
Contracts for or relating to computers, computer equipment, computer software or computer services; or
(xi)  
Contracts relating to the borrowing of money by the Corporation or the direct or indirect guarantee by the Corporation of any obligation for, or an agreement by the Corporation to service, the repayment of borrowed money, or any other contingent obligations in respect of indebtedness of any other Person, including, without limitation:

(1)      
any contract with respect to lines of credit;
(2)      
any contract to advance or supply funds to any other person other than in the ordinary course of business;
(3)      
any contract to pay for property, products or services of any other person even if such property, products or services are not conveyed, delivered or rendered;
(4)      
any keep-well, make-whole or maintenance of working capital or earnings or similar contracts; or
(5)      
any guarantee with respect to any lease or other similar periodic payments to be made by any other person; and

(xii)  
Any other material contract whether or not made in the ordinary course of business.

Section 4.13. Operations of the Corporation.   Except as contemplated by this Agreement, since the latest filing date of the Corporation’s Reports, the Corporation has not:

(a)  
Amended its Certificate or Articles of Incorporation or By-laws or merged with or into or consolidated with any other person or entity, subdivided or in any way reclassified any shares of its capital stock or changed or agreed to change in any manner the rights of its outstanding capital stock or the character of its business;
(b)  
Issued, reserved for issuance, sold or redeemed, repurchased or otherwise acquired, or issued options or rights to subscribe to, or entered into any contract or commitment to issue, sell or redeem, repurchase or otherwise acquire, any shares of its capital stock or any bonds, notes, debentures or other evidence or indebtedness;

 
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(c)  
Incurred any indebtedness for borrowed money or incurred or assumed any other liability in excess of $500,000 in any one case (or, in the aggregate, in the case of any related series of occurrences) or $1 million in the aggregate;
(d)  
Declared or paid any dividends or declared or made any other distributions of any kind to its shareholders;
(e)  
Made any change in its accounting methods or practices or made any change in depreciation or amortization policies, except as required by law or GAAP;
(f)  
Made any loan or advance to any of its shareholders or to any of its directors, officers or employees, consultants, agents or other representatives, or made any other loan or advance, otherwise than in the ordinary course of business;
(g)  
Entered into any lease (as lessor or lessee) under which it is obligated to make or would receive payments in any one (1) year of $200,000 or more;
(h)  
Sold, abandoned or made any other disposition of any of its assets or properties;
(i)  
Granted or suffered any lien on any of its assets or properties;
(j)  
Entered into or amended any contracts to which it is a party, or by or to which it or its assets or properties are bound or subject which, if existing on the date hereof, would be required to be disclosed in Schedule 4.12;
(k)  
Made any acquisition of all or a substantial part of the assets, properties, securities or business of any other person or entity;
(l)  
Paid, directly or indirectly, any of its material liabilities before the same became due in accordance with its terms or otherwise than in the ordinary course of business;
(m)  
Terminated or failed to renew, or received any written threat (that was not subsequently withdrawn) to terminate or fail to renew, any contract that is or was material to the assets, liabilities, business, property, operations, prospects, results of operations or condition (financial or otherwise) of the Corporation; or
(n)  
Entered into any other contract or other transaction that materially increases the liabilities of the Corporation.

Section 4.14.   Absence of Certain Changes.   Since the date of the Corporation’s Financial Statements, there has been no event, change or development, which could have a material adverse effect on the Corporation.

Section 4.15.   Material Information.   This Agreement, the Schedules attached hereto and all other information provided, in writing, by the Corporation or representatives thereof to the Owner, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make any statement contained herein or therein not misleading.  There are no facts or conditions which have not been disclosed to the Owner in writing which, individually or in the aggregate, could have a material adverse effect on the Corporation or a material adverse effect on the ability of the Corporation to perform any of its obligations pursuant to this Agreement.

 
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Section 4.16.   Brokerage.   No broker or finder has acted, directly or indirectly, for the Corporation nor did the Corporation incur any finder’s fee or other commission, in connection with the transactions contemplated by this Agreement.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE OWNER AND NELACO

The Owner and Nelaco represent and warrant to the Corporation as follows:

Section 5.01. Organization, Standing and Authority; Foreign Qualification. Nelaco is a corporation duly organized, validly existing and in good standing under the laws of the State of Texas and has all requisite corporate power and authority to own, transfer and assign the Burns and Rogers Leases and to conduct its business as presently conducted and as proposed to be conducted and is duly qualified or licensed as a foreign corporation in good standing in each jurisdiction in which the character of its properties or the nature of its business activities require such qualification.

Section 5.02. Authorization. The execution, delivery and performance the Owner of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Owner and all necessary action on the part of each of the Owner. The Owner has duly executed and delivered this Agreement and this Agreement constitutes a valid and binding agreement of the Owner. Ownership of the Burns and Rogers Leases to be transferred to the Corporation in accordance with this Agreement has been duly authorized and validly issued, fully paid and non-assessable and no Encumbrance whatsoever exists thereon.

Section 5.03. Title to Burns and Rogers Leases. Upon completion of the Assignment, the Corporation shall be the beneficial and record holder of the Burns and Rogers Leases, without any Encumbrances.

Section 5.04. Restriction on AREN Shares. Owner consents to the Corporation making a notation on its records or giving instructions to any transfer agent of the AREN Shares in order to implement the restriction on transfer set forth and described herein. Nelaco has been independently advised as to, and are aware of, the restrictions with respect to trading in the AREN Shares pursuant to the applicable securities laws and further agrees that it is solely responsible for compliance with all such restrictions as set forth in Schedule B.

Section 5.05. Investment Risk.   Owner understands that an investment in the Corporation includes a high degree of risk, have such knowledge and experience in financial and business matters, investments, securities and private placements as to be capable of evaluating the merits and risks of their investment in the AREN Shares, are in a financial position to hold the AREN Shares for an indefinite period of time, and are able to bear the economic risk of, and withstand a complete loss of such investment in the AREN Shares.

 
9
 

Section 5.06. Cooperation. If required by applicable securities laws or order of a securities regulatory authority, stock exchange or other regulatory authority, Owner will execute, deliver, file and otherwise assist the Corporation in filing such reports, undertakings and other documents as may be required with respect to the issuance of the AREN Shares.

Section 5.07. Tax Advice. Owner is responsible for obtaining such legal, including tax, advice as it considers necessary or appropriate in connection with the execution, delivery and performance by it of this Agreement and the transactions contemplated herein.

Section 5.08. Investment Representations. All of the acknowledgements, representations, warranties and covenants set out in Schedule B hereto are true and correct as of the date hereof and as of the Closing Date.

Section 5.09. Investment Purpose . Owner, or its assigns, is acquiring the AREN Shares as principal for its own account to be held for investment purposes only, not for the benefit of any other person and not with a view to the resale, distribution or other disposition of all or any of the AREN Shares and are delivering concurrently with this Agreement, a Certificate in the form attached to this Agreement as Schedule B.

Section 5.10 No Conflict.   The execution, delivery and performance of this Agreement and the completion of the transactions contemplated herein will not:

(a) Violate any provision of the Articles or Certificate of Incorporation, By-laws or other charter or organizational document of Nelaco or the terms and conditions of the Burns and Rogers Leases;

(b) Violate, conflict with or result in the breach of any of the terms of, result in any modification of the effect of, otherwise give any other contracting party the right to terminate, or constitute (or with notice or lapse of time or both constitute) a default under, any contract to which Owner or Nelaco is a party or by or to which either of its assets or properties, including the Burns and Rogers Leases, may be bound or subject;

(c) Violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, or any agreement with, or condition imposed by, any governmental or regulatory body, foreign or domestic, binding upon Owner, Nelaco or upon the Burns and Rogers Leases;

(d) Violate any statute, law or regulation of any jurisdiction as such statute, law or regulation relates to Owner, Nelaco or to the Burns and Rogers Leases; or

(e) Result in the breach of any of the terms or conditions of, constitute a default under, or otherwise cause an impairment of, any permit or license held by Nelaco or the Burns and Rogers Leases.

 
10
 

Section 5.11. Compliance with Laws.   To the best of Nelaco’s knowledge, Nelaco is not in violation of any applicable order, judgment, injunction, award or decree nor is it in violation of any federal, state, local or foreign law, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator, other than those violations which, in the aggregate, would not have a material adverse effect on Nelaco or the Burns and Rogers Leases and Nelaco has not received written notice that any violation is being alleged.

Section 5.12. Material Information.   This Agreement, the Schedules attached hereto and all other information provided, in writing, by Owner or Nelaco or representatives thereof, to the Corporation, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make any statement contained herein or therein not misleading.  There are no facts or conditions which have not been disclosed to the Corporation in writing which, individually or in the aggregate, could have a material adverse effect on Owner or Nelaco or a material adverse effect on the ability of Owner to perform any of its obligations pursuant to this Agreement or on the ability of Nelaco to operate the Burns and Rogers Leases.

Section 5.13. Actions and Proceedings. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against or involving Nelaco.  There are no actions, suits or claims or legal, regulatory, administrative or arbitration proceedings pending or, to the knowledge of Nelaco, threatened against or involving Nelaco, its assets or the Burns and Rogers Leases.

Section 5.14. Operating Statements.   (a) Owner has, or will have prior to the Closing Date, provided to the Corporation financial or operating statements pertaining to the Burns and Rogers Leases for the last three (3) fiscal years ended immediately prior to the date of this Agreement that are an accurate portrayal of the operations of the Burns and Rogers Leases (the “Operating Statements”).

(b) The Operating Statements shall be true, correct and complete in all material respects and fairly present the financial condition of Burns and Rogers Leases.

Section 5.15. Status of Burns and Rogers Leases . The Burns and Rogers Leases are, and at the time of the Asset Purchase shall be, in good standing and free from any Encumbrances whatsoever..

Section 5.16. Brokerage.   No broker or finder has acted, directly or indirectly, for Owner nor has Owner incurred any obligation to pay any brokerage, finder’s fee or other commission in connection with the transactions contemplated by this Agreement.

 
11
 

ARTICLE VI
 
NOTICE
 
Section 6.01. Service of Notice
 
All notices, requests, consents and other communications required or permitted hereunder shall be deemed to be served properly if served (i) when delivered if delivered personally (including by courier); (ii) on the third day after mailing, if mailed postage prepaid, by registered or certified mail (return receipt requested); (iii) on the day after mailing if sent by a nationally recognized overnight delivery service which maintains records of the time, place and recipient of delivery; or (iv) upon receipt of a confirmed transmission, if sent by telecopy or facsimile transmission, in each case to the parties at the following addresses.
 
Section 6.02. Addresses for Notices
 
The address for service of notices hereunder of each of the Parties shall be as follows:
 
Corporation:      America Resources Exploration Inc.
1255 W. Rio Salado Parkway, Suite 215
Telephone: 480-830-2700

Owner:             Zheng Qiangwu
Hao Kai Sha Jing Road 1, Door 51
Long Tian Town, Chao Nan District
Shan Tou City, Guang Dong Province
China
 
        Nelaco:            Nelaco Operating, Inc.
2925 Robertson Dr.
Abilene, Texas 79606

Section 6.03. Right to Change Address
 
A Party may change its address for service by notice to the other Parties, and such changed address for service thereafter shall be effective for all purposes of this Agreement.
 
ARTICLE VII
 
MISCELLANEOUS PROVISIONS
 
Section 7.01. Assignment
 
The rights of the Parties shall not be assignable without the prior written consent of the other Party, which assignment shall not be unreasonably withheld.
 

 
12
 

Section 7.02. Expenses . Each Party to this Agreement will pay its own expenses in connection with the negotiation of this Agreement, the performance of its obligations hereunder, and the consummation of the transactions contemplated herein.
 
Section 7.03.   Governing Law .  This Agreement shall be subject to and be interpreted, construed and enforced in accordance with the laws in effect in the State of Arizona applicable therein to the exclusion of any conflicts of laws rules, which would refer the matter to the laws of another jurisdiction.  Each Party accepts the exclusive jurisdiction of the courts of the State of Arizona and all courts of appeal there from.
 
Section 7.04.   Time .  Time shall be of the essence in this Agreement.
 
Section 7.05.   No Amendment Except in Writing .  This Agreement may be amended only by written instrument executed by all of the Parties hereto.
 
Section 7.06.   Further Assurances .  The Parties shall with reasonable diligence do all things and provide all reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each Party shall provide such further documents or instruments required by any other Party as may be reasonably necessary or desirable to effect the purpose of this Agreement and to carry out its provisions, whether before or after the Effective Date.
 
Section 7.07.   Notices . The Parties agree that all notices to third parties and all other publicity concerning the transactions contemplated by this Agreement shall be jointly planned and coordinated and no Party shall act unilaterally in this regard without the prior approval of the others, such approval not to be unreasonably withheld.

IN WITNESS WHEREOF the Parties have executed this Asset Purchase Agreement on the date first above written.

AMERICA RESOURCES EXPLORATION
OWNER
INC. , a Nevada corporation
 
   
   
By: /s/ HUANG YU                    
/s/ ZHENG XIANGWU                    
Name: Huang Yu
Zheng Xiangwu
Title:  CEO
 
   
NELACO OPERATING INC. ,
 
a Texas corporation
 
   
   
By: /s/ JOE M. SEABOURN                
 
Name: Joe M. Seabourn
 
Title:  President
 
 
 
13
 
 
Schedule “A”
Identification Burns and Rogers Leases

1.   Roger f Theo “A” and “D” Lease: 335 acres of land, more or less, being all of the Leopold Menetrier Survey No. 1347, A-510 and A-583, Frio and Atascosa Counties, Texas, more commonly referred to as the Rogers “A” Lease, Wells #3, #7 and #8 and the Rogers “D” Lease, Well #9, as to and only as to those rights from the surface down to 100 feet below the base of the Olmos-D-Reservoir as encountered at the subsurface depth of 3,566 feet in The Texaco Jane Burns “B” Well No. 28; Subject to Oil, Gas and Mineral Lease, dated November 2, 1946, from K.T. Tidwell and wife Olga Tidwell and Theo Rogers and wife Veta Rogers to Shell Oil Co., recorded in Volume 184, page 358, Deed Records of Atascosa County, Texas, as amended by instrument dated July 27, 1951, recorded in Volume 208, page 511 of the Deed Records of Atascosa County, Texas.

2.   Rogers, Theo “C”: 219 acres of land, more or less, being all of the Irene L. Menetrier Survey No. 1346, A-584, Cert 48 , Pat 330 Vol. 29, Atascosa County, Texas, more commonly referred to as the Rogers “C” Lease, Well #5, as to and only as to those rights from the surface down to 100 feet below the base of the Olmos-D-Reservoir as encountered at the subsurface depth of 3,566 feet in The Texaco Jane Burns “B” Well No. 28, save and except the northeast 102.4 acres thereof, the southwest line of which is parallel with the northeast line of said survey; Subject to Oil, Gas and Mineral Lease, dated July 27, 1951, from Theo Rogers and wife Veta Rogers, and K.T. Tidwell and wife Olga Tidwell and to Miller Royalty Company and C.C. Dauchy, recorded in Volume 209, page 581, Deed Records of Atascosa County, Texas.

3.   Jane Burns “C” Lease: 160 acres of land, more or less, being the north 160 acres, in the form of a square, of the Francis Oerelling Survey No. 1336, A-532 and A-654, Frio and Atascosa Counties, Texas, and the northeast and northwest lines of this 160-acre tract lying upon the northeast and northwest lines respectively of said survey, and the southeast and southwest lines of the 160-acre tract being parallel with the northwest and northeast lines respectively of said survey, as to and only as those rights from the surface down to 100 feet below the base of the Olmos-D-Reservoir as encountered at the subsurface depth of 3,566 feet in The Texaco Jane Burns “B” Well No. 28, recorded January 29, 1947 at Volume 184, pages 427-434 of the Official Records of Atascosa County, Texas.


 
14
 

SCHEDULE "B"
 
CERTIFICATE OF ACCREDITED INVESTOR
 
The Owner, by initially one of the categories below, represents and warrants to the Issuer that it is an “accredited investor” as defined in Regulation D (please place your initials on the appropriate line(s); if no categories are applicable, please do not place your initials beside any category):
 
   
Category 1.
A bank, as defined in Section 3(a)(2) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or
       
   
Category 2.
A savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act, whether acting in its individual or fiduciary capacity; or
       
   
Category 3.
A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934 ; or
       
   
Category 4.
An insurance company as defined in Section 2(13) of the U.S. Securities Act; or
       
   
Category 5.
An investment company registered under the Investment Issuer Act of 1940 ; or
       
   
Category 6.
A business development company as defined in Section 2(a)(48) of the Investment Issuer Act of 1940 ; or
       
   
Category 7.
A small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958 ; or
       
   
Category 8.
A plan established and maintained by a state, its political subdivision or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, with assets in excess of US$5,000,000; or
       
        
Category 9.
An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 in which the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company or registered investment advisor, or an employee benefit plan with total assets in excess of US$5,000,000 or, if a self-directed plan, the investment decisions are made solely by persons who are accredited investors; or
       
 
 
 
15
 
 
 
   
Category 10.
A private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940 ; or
       
   
Category 11.
An organization described in Section 501(c)(3) of the Internal Revenue Code , a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of US$5,000,000; or
       
   
Category 12.
A director, executive officer or general partner of the Issuer; or
       
   
Category 13.
A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of this purchase exceeds US$1,000,000; or
       
   
Category 14.
A natural person who had an individual income in excess of US$200,000 in each year of the two most recent years or joint income with that person’s spouse in excess of US$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or
       
   
Category 15.
A trust, with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the Securities offered, whose purchase is directed by a sophisticated person as described in SEC Rule 506(b)(2)(ii); or
       
   
Category 16.
An entity in which each of the equity owners meets the requirements of one of the above categories.

June 10, 2015                                 
Date



ZHENG XIANGWU

 
16
 

Exhibit 99.1

Report of Independent Registered Public Accounting Firm
 
To the Board of Directors and Stockholders of
America Resources Exploration, Inc.
 
We have audited the accompanying statements of revenues and direct operating expenses of the Theo Rogers “A”, “C”, and “D” Lease and the Jane “C” Burns Lease (the “Rogers and Burns Leases”) which were acquired by American Resources Exploration, Inc. for the period from April 1, 2013 to March 31, 2014 and the period from April 1, 2014 to March 31, 2015.  These statements are the responsibility of management. Our responsibility is to express an opinion on these statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.
 
The accompanying statements referred to above were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. The statements are not intended to be a complete presentation of the revenues and expenses for the Properties.
 
In our opinion, the statements referred to above present fairly, in all material respects, the revenues and direct operating expenses of the Rogers and Burns Leases, which were acquired by American Resources Exploration, Inc., for the period from April 1, 2013 to March 31, 2014 and the period from April 1, 2014 to March 31, 2015, in conformity with U.S. generally accepted accounting principles.

 
/s/ Briggs & Veselka Co.                

Briggs & Veselka Co.
A Professional Corporation
Certified Public Accountants
Houston, Texas

June 12, 2015

 
F-1
 

Rogers and Burns Leases

Statements of Revenues and Direct Operating Expenses
Period from April 1, 2013 to March 31, 2014
and Period from April 1, 2014 to March 31, 2015


   
Period from
   
Period from
 
   
April 1, 2014 to
   
April 1, 2013 to
 
   
March 31, 2015
   
March 31, 2014
 
             
Revenues
           
Oil and gas sales
  $ 31,878     $ 64,074  
                 
Direct operating expenses:
               
Lease operating expenses
    18,019       31,033  
Production taxes
 
1,429
   
2,515
 
Total direct operating expenses
 
19,448
   
33,548
 
                 
Excess of revenues over direct operating expenses
  $ 12,430     $ 30,526  




See accompanying notes to statements of revenues and direct operating expenses.

 
F-2
 

Rogers and Burns Leases

Notes to Statements of Revenues and Direct Operating Expenses
Period from April 1, 2013 to March 31, 2014
and Period from April 1, 2014 to March 31, 2015


Note 1.  Basis of Presentation
 
On June 10, 2015, American Resources Exploration Inc. (the “Company”) acquired a 99.5% working interest and a 74.625% net revenue interest in 714 acres in the Rogers and Burns Leases, including two producing oil wells and five non-producing oil wells.

The accompanying statements present the revenues and direct operating expenses related to 99.5% of the working interests for these properties (the “Properties”).  The Rogers and Burns Leases are located in Atascosa County and Frio County, Texas approximately 70 miles south of San Antonio.
 
Historical financial statements prepared in accordance with accounting principles generally accepted in the United States of America have never been prepared for the Properties. The accompanying statements of revenues and direct operating expenses related to the Properties were prepared from the historical accounting records of Inceptus Resources, LLC, the seller.

Certain indirect expenses, as further described in Note 3, were not allocated to the Properties and have been excluded from the accompanying statements.  Any attempt to allocate these expenses would require significant and judgmental allocations, which would be arbitrary and may not be indicative of the performance of the Properties on a stand-alone basis.
 
These statements of revenues and direct operating expenses do not represent a complete set of financial statements reflecting financial position, results of operations, stakeholders’ equity, and cash flows of the Properties and are not necessarily indicative of the results of operations for the Properties going forward.

Note 2.  Significant Accounting Policies
 
Use of Estimates.   Accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the amounts reported in the statements of revenues and direct operating expenses. Actual results could be different from those estimates.
 
Revenue Recognition.   Revenue from oil and gas sales is recognized when sold.  There were no significant imbalances with other revenue interest owners during any of the periods presented in these statements.
 
Direct Operating Expenses.   Direct operating expenses, which are recognized on an accrual basis, relate to the direct expenses of operating the Properties. The direct operating expenses include lease operating, ad valorem tax and production tax expense. Lease operating expenses include lifting costs, well repair expenses, surface repair expenses, well workover costs and other field expenses. Lease operating expenses also include expenses directly associated with support personnel, support services, equipment, and facilities directly related to oil and gas production activities.

 
F-3
 

Note 3.  Excluded Expenses
 
The Properties were part of a larger enterprise prior to the date of the sale.  Indirect general and administrative expenses, interest, income taxes, and other indirect expenses were not allocated to the Properties and have been excluded from the accompanying statements. In addition, any allocation of such indirect expenses may not be indicative of costs which would have been incurred by the Properties on a stand-alone basis.

Also, depreciation, depletion, and amortization have been excluded from the accompanying statements of revenues and direct operating expenses as such amounts would not be indicative of the depletion calculated on the Properties on a stand-alone basis.

Note 4.  Supplemental Information relating to oil and gas producing activities (unaudited)
 
Estimated Quantities of Proved Reserves .  Lee Keeling and Associates, Inc., an independent petroleum engineering consultant firm, prepared the estimates of the proved reserves, future production, and income attributable to the leasehold interests as of April 1, 2015.  Estimates of Proved Reserves as of March 31, 2014 were prepared by management using the report of Lee Keeling and Associates, Inc.  The estimated proved net recoverable reserves presented below include only those quantities that were expected to be commercially recoverable at prices and costs in effect at the balance sheet dates under the then existing regulatory practices and with conventional equipment and operating methods.  Proved Developed Reserves represent only those reserves estimated to be recovered through existing wells.  Proved Undeveloped Reserves include those reserves that may be recovered from new wells on undrilled acreage or from existing wells on which a relatively major expenditure for recompletion or secondary recovery operations is required.  All of the Properties’ Proved Reserves are located onshore in the continental United States of America.
 
Discounted future cash flow estimates like those shown below are not intended to represent estimates of the fair value of oil and gas properties. Estimates of fair value should also consider unproved reserves, anticipated future oil and gas prices, interest rates, changes in development and production costs and risks associated with future production.  Because of these and other considerations, any estimate of fair value is subjective and imprecise.
 
The following table sets forth estimates of the proved oil and gas reserves (net of royalty interests) for the Properties and changes therein, for the periods indicated.
 
Estimated Quantities of Proved Reserves

   
Oil
 
   
(US Barrels)
 
       
April 1, 2013
     
Purchases of reserves in place
    69,250  
Production
    (583 )
         
March 31, 2014
    68,667  
         
Production
    (395 )
         
March 31, 2015
    68,272  

 
 
F-4
 

Standardized Measure of Discounted Future Net Cash Flows .  The Standardized Measure related to proved oil and gas reserves is summarized below.  Future cash inflows were computed by applying a twelve month average of the first day of the month prices to estimated future production, less estimated future expenditures (based on year end costs) to be incurred in developing and producing the proved reserves, less estimated future income tax expense.  Future income tax expenses are calculated by applying appropriate year-end tax rates to future pretax net cash flows, less the tax basis of properties involved. Future net cash flows are discounted at a rate of 10% annually to derive the standardized measure of discounted future net cash flows.  This calculation procedure does not necessarily result in an estimate of the fair market value or the present value of the Properties.
 
Estimated Quantities of Proved Developed Reserves

March 31, 2015
  13,082
March 31, 2014
  12,687
 
Standardized Measure of Oil and Gas

March 31, 2015
     
Future cash inflows
  $ 5,043,929  
Future production costs
    (1,452,774 )
Future development costs
    (1,592,000 )
Future income taxes
    (535,374 )
         
Future net cash flows
    1,463,781  
Discount of future net cash flows at 10% per annum
    (456,921 )
         
Standardized measure of discounted future net cash flows
  $ 1,006,861  
         
March 31, 2014
       
Future cash inflows
  $ 5,059,916  
Future production costs
    (1,468,443 )
Future development costs
    (1,592,000 )
Future income taxes
    (525,180 )
         
Future net cash flows
    1,474,293  
Discount of future net cash flows at 10% per annum
    (370,883 )
         
Standardized measure of discounted future net cash flows
  $ 1,103,410  


 
F-5
 

The following table sets forth the changes in standardized measure of discounted future net cash flows relating to proved oil and gas reserves for the periods indicated.

Changes in Standardized Measure
 
Period ended March 31, 2015
     
Sales of oil and gas produced, net of production costs
  $ (12,430 )
Purchases of minerals in place
    160,000  
Net changes in prices and production costs
    (74,296 )
Accretion of discount before income taxes
    110,341  
Changes in timing and other
    (280,164 )
         
Net change
  $ (96,549 )
         
Period ended March 31, 2014
       
Sales of oil and gas produced, net of production costs
  $ (30,526 )
Net changes in prices and production costs
    (531,298 )
Changes in timing and other
    1,665,234  
         
Net change
  $ 1,103,410  


 
F-6
 

Exhibit 99.2

AMERICA RESOURCES EXPLORATION INC.

UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
 
Introduction

The following pro forma condensed financial statements of America Resources Exploration, Inc. (the “Company”) reflects preliminary estimates and assumptions based on the information available at the time of preparation, including, but not limited to, the following events that occurred subsequent to December 31, 2014, which had a material effect on the capitalization and liquidity of the Company: the acquisition by America Resources Exploration Inc. of three (3) producing leases covering 714 acres situated in Atascosa and Frio Counties, Texas, located in the Eagle Ford Shale formation - the Jane Burns “C” Lease and the Theo Rogers “A”, “C”, and “D” Lease (“Rogers and Burns Leases”).

The pro forma condensed financial statements are not necessarily indicative of what the Company’s financial position and results of operations would have been had the aforementioned transaction been completed at the date indicated. The pro forma condensed financial statements should be read in conjunction with the audited financial statements of the Company for the year ended March 31, 2014 filed with the Securities and Exchange Commission in the Company’s registration statement on Form S-1 on August 13, 2014 and the audited Statements of Revenues and Direct Operating Expenses of the Rogers and Burns Leases for the period from April 1, 2013 to March 31, 2014 and the period from April 1, 2014 to March 31, 2015.

On June 12, 2015, the Company completed the acquisition of the Rogers and Burns Leases pursuant to the Asset Purchase Agreement. As a result of the completion of this acquisition, 4 million shares of the Company’s common stock were issued to Mr. Zheng Xiangwu, which owns the Company’s largest shareholder, Rise Fast Limited. The number of shares issued to Mr. Zheng was determined by valuing the Leases at $160,000 and valuing the Company’s stock at $0.04 per share.
 
The pro forma adjustments to the unaudited and audited historical statements of operations are based upon currently available information and certain estimates and assumptions. The actual effect of the transactions discussed in the accompanying notes ultimately may differ from the unaudited pro forma adjustments included herein. However, management believes that the assumptions utilized to prepare the pro forma adjustments provide a reasonable basis for presenting the significant effects of the transactions as currently contemplated and that the unaudited pro forma adjustments are factually supportable, give appropriate effect to the expected impact of events that are directly attributable to the transactions, and reflect those items expected to have a continuing impact on the Company.
 
 
F-1
 

AMERICA RESOURCES EXPLORATION INC.
 
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AS OF DECEMBER 31, 2014
 
 
   
America Resources
   
 
       
    Exploration Inc.    
Pro forma
       
   
Historical
   
Adjustments
   
Pro forma
 
ASSETS
                 
                   
CURRENT ASSETS
                 
Cash and cash equivalents
  $ 7,221     $ -     $ 7,221  
     TOTAL CURRENT ASSETS
    7,221       -       7,221  
                         
PROPERTY AND EQUIPMENT
                       
Oil and gas properties
    -       170,000       170,000  
Equipment
    8,565               8,565  
     TOTAL PROPERTY AND EQUIPMENT
    8,565       170,000       178,565  
                         
TOTAL ASSETS
  $ 15,786     $ 170,000     $ 185,786  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY
                       
                         
CURRENT LIABILITIES
                       
Accounts payable
  $ 100     $ -     $ 100  
Loan from director
    9,050       -       9,050  
     TOTAL CURRENT LIABILITIES
    9,150       -       9,150  
                         
LONG TERM LIABILITIES
                       
Asset Retirement Obligations
            10,000       10,000  
                         
TOTAL LIABILITIES
    9,150       10,000       19,150  
                         
STOCKHOLDERS’ EQUITY
                       
Common stock
    8,360       4,000       12,360  
Additional paid-in capital
    21,159       156,000       177,159  
Accumulated deficit
    (22,883 )     -       (22,883 )
                         
     TOTAL STOCKHOLDERS’ EQUITY
    6,636       160,000       166,636  
                         
TOTAL LIABILITIES AND  STOCKHOLDERS’ EQUITY
  $ 15,786     $ 170,000     $ 185,786  
 
 
 
 
See accompanying notes to the unaudited pro forma condensed statements of operations
 
 
F-2
 

AMERICA RESOURCES EXPLORATION INC.
 
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED MARCH 31, 2014

 
   
America Resources
   
Roger's and
   
 
       
    Exploration Inc.     Theo Leases    
Pro forma
       
   
Historical
   
Acquisition
    Adjustments    
Pro forma
 
Revenues
                       
Oil and gas sales
  $ -     $ 64,074           $ 64,074  
                               
Costs and expenses
                             
Lease operating expense
    -       31,033             31,033  
Production taxes
    -       2,515             2,515  
Depreciation, depletion and amortization
    -       -       1,431  
{a}
  1,431  
Asset retirement obligation accretion
    -       -       1,500  
{b}
  1,500  
General and administrative
    57       -       36,000  
{c}
  36,057  
Other
    -       -               -  
                                 
Total costs and expenses
    57       33,548               72,536  
                                 
Income (loss) before taxes
    (57 )     30,526               (8,462 )
                                 
Provision for income taxes
    -       -               -  
                                 
Net income (loss)
  $ (57 )   $ 30,526             $ (8,462 )
                                 
Loss per share - Basic and diluted
  $ (0.00 )                   $ (0.00 )
                                 
Weighted Average Number of Common Shares Outstanding: Basic and Diluted
    6,000,000                       10,000,000  
 
 
   
 
See accompanying notes to the unaudited pro forma condensed statements of operations
 
 
F-3
 

AMERICA RESOURCES EXPLORATION INC.
 
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 2014 TO DECEMBER 31, 2014
 
 
   
America Resources
   
Roger's and
             
    Exploration Inc.     Theo Leases    
Pro forma
       
   
Historical
   
Acquisition
   
Adjustments
    Pro forma  
Revenues
                       
Oil and gas sales
  $ -     $ 29,786           $ 29,786  
                               
Costs and expenses
                             
Lease operating expense
    -       14,962             14,962  
Production taxes
    -       1,429             1,429  
Depreciation, depletion and amortization
    -       -       733  
{a}
  733  
Asset retirement obligation accretion
    -       -       1,125  
{b}
  1,125  
General and administrative
    22,826       145       27,000  
{c}
  49,971  
Other
    -       1,000               1,000  
                                 
Total costs and expenses
    22,826       17,536               69,220  
                                 
Income (loss) before taxes
    (22,826 )     12,250               (39,434 )
                                 
Provision for income taxes
    -       -               -  
                                 
Net income (loss)
  $ (22,826 )   $ 12,250             $ (39,434 )
                                 
Loss per share - Basic and diluted
  $ (0.00 )                   $ (0.00 )
                                 
Weighted Average Number of Common Shares Outstanding: Basic and Diluted
    6,908,945                       10,908,945  
 
 
 
 
 
See accompanying notes to the unaudited pro forma condensed statements of operations
 
 
F-4
 

AMERICA RESOURCES EXPLORATION INC.
 
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS


Note 1.  Pro Forma Adjustments and Assumptions

Pro Forma Condensed Balance Sheet

The pro forma adjustments in the pro forma condensed balance sheet reflect the acquisition of the Rogers and Theo Leases for an acquisition value of $160,000 completed with the issuance of 4 million shares of the Company’s stock.  Management has preliminarily estimated the asset retirement obligation associated with the acquired oil & gas properties to be $10,000.

Pro Forma Condensed Statements of Operations

The pro forma condensed statements of operations are prepared assuming the acquisition of the Rogers and Theo Leases had occurred on April 1, 2013.  The Acquisition column represents the Revenues and Direct Operating Expenses for 99.5% of the working interest in the properties acquired in the Rogers and Theo Leases Acquisition, as described below:

{a}
Pro forma adjustment to reflect the depreciation, depletion and amortization for the assets acquired by America Resources Exploration, Inc. as part of the Roger’s and Theo Leases Acquisition, using the unit of production method of accounting.
 
{b}
Pro forma adjustment to reflect the accretion of asset retirement obligations for the assets acquired by America Resources Exploration, Inc. as part of the Roger’s and Theo Leases Acquisition, assuming a 15% annual accretion rate.
 
{c}
Pro forma adjustment to reflect the yearly salary of Mr. Seabourn, head geologist for the Company.
 

 
F-5
 

Exhibit 99.3
 
AMERICAN RESOURCES EXPLORATION
 
ESTIMATE RESERVES AND
 
FUTURE NET REVENUE
 
PROBABLE AND POSSIBLE RESERVES
 
ATACOSA AND FRIO COUNTIES, TEXAS
 
CONSTANT PRICING
 
Effective Date: April 1, 2015
 
 

 
 
 
 

L EE   K EELING AND   A SSOCIATES ,   I NC .
P ETROLEUM   C ONSULTANTS
First Place Tower
15 East Fifth Street • Suite 3500
Tulsa, Oklahoma 74103-4350
(918) 587-5521 • Fax: (918) 587-2881


June 8, 2015


America Resources Exploration, Inc.
2800 Post Oak Boulevard
Suite 4100
Houston, TX  77056

Attn: Mr. Andy Wong

RE:      Reserve Estimate and Future Net Revenue
Proved, Probable and Possible Reserves
Jane Burns -C- and Theo Roger “A”&“D” Leases
Atascosa and Frio Counties, Texas
Constant Prices and Expenses

Gentlemen:

In accordance with your request, we have prepared an estimate of reserves and future net revenue from the interests owned by Inceptus Resources, LLC. and in various producing properties located in the Atascosa and Frio Counties, Texas.  The effective date of the report is April 1, 2015, and the results are summarized as follows:
 
   
ESTIMATED REMAINING
         
   
NET RESERVES
FUTURE NET REVENUE
               
Present Worth
RESERVE
 
OIL
GAS
   
TOTAL
Disc.@ 10%
CLASSIFICATION
 
(MBBL)
(MMCF)
   
(M$)
 
(M$)
                   
Proved Reserves
                 
    Producing
 
4.536
           -
   
158.418
 
91.811
 
 Non-Producing
 
8.546
           -
   
142.544
 
53.988
 
    Sub-Total
 
13.082
           -
   
300.962
 
145.799
 
                   
    Undeveloped
 
55.190
           -
   
1,698.193
 
588.621
 
                   
Total Proved Reserves
 
68.272
           -
   
1,999.155
 
734.420
 
                   
Non-Proved Reserves
                 
    Probable
 
31.913
           -
   
868.167
 
282.784
 
    Possible
 
65.297
           -
   
1,976.974
 
496.463
 
Total Non-Proved Reserves
97.210
           -
   
2,845.141
 
779.247
 
                   
 Total All Reserves
 
165.482
           -
   
4,844.296
 
1,513.667
 
                   
Note:  Totals may not agree with schedules due to roundoff.
     
 
 
 
 
 
 
Future net revenue is the amount, exclusive of state and federal income taxes, which will accrue to the subject interests from continued operation of the properties to depletion.  It should not be construed as a fair market or trading value.

This report consists of various summaries.  Schedule No. 1 presents summary forecasts of annual gross and net production, severance and ad valorem taxes, operating income, and net revenue by reserve type.  Schedule No. 2 is a sequential listing of the individual properties based on discounted future net revenue by reserve category.  An alphabetical one-line summary by property is presented on Schedule No. 3.  Individual forecasts, ordered by reserve category and lease, are presented on Schedule No. 4.

CLASSIFICATION OF RESERVES

Reserves assigned to the various leases and/or wells have been classified as either “proved” or “non-proved” in accordance with the definitions of reserves as promulgated by the Security and Exchange Commission (SEC).

Proved Developed Oil and Gas Reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.  Additional oil and gas expected to be obtained through the application of fluid injection or other improved recovery techniques for supplementing the natural forces and mechanisms of primary recovery should be included as “proved developed reserves” only after testing by a pilot project or after the operation of an installed program has confirmed through production response that increased recovery will be achieved.

Proved Developed Oil and Gas Reserves attributed to the subject leases have been further classified as follows:

Proved Developed Producing Reserves are those reserves expected to be recovered from currently producing zones under continuation of present operating methods.

Proved Developed Non-Producing Reserves are those reserves expected to be recovered from zones that have been completed and tested but are not yet producing due to situations including, but not limited to, awaiting connection to a market, minor completion problems that are expected to be corrected, or reserves to be recovered from future stimulation treatments based on analogy to nearby wells.

Proved Undeveloped Reserves are quantities expected to be recovered through future investments:  (1) from new wells on undrilled acreage in known accumulations, (2) from deepening existing wells to a different (but known) reservoir, (3) from infill wells that will increase recovery, or (4) where a relatively large expenditure (e.g. when compared to the cost of drilling a new well) is required to (a) recomplete an existing well or (b) install production or transportation facilities for primary or improved recovery projects.

Non-Proved Reserves are reserves that the SEC allows companies to report as follows:

Probable Reserves are those additional reserves which analysis of geoscience and engineering data indicate are less certain to be recovered than Proved Reserves but which, together with proved reserves, are as likely as not to be recovered.
 
 
 
 
 

 
Possible Reserves are those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recoverable than Probable Reserves.

ESTIMATION OF RESERVES

Proved Reserves

The subject wells have been producing for a considerable length of time and all have well-defined production declining trends.  Reserves attributable to these wells were based upon extrapolation of these trends to an economic limit.

Our estimate of reserves used all methods and procedures considered necessary, under the circumstances, to prepare this report.

The proved developed non-producing reserve estimate was made based on a timetable for work to be performed on wells which are shut-in and are not currently producing.  Only wells requiring a minimal capital expenditure to return the wells to production were considered.

The timetable only considers wells to be returned to production within the next two years.  Due to this limited scope, only wells currently non-producing were included in the proved developed non-producing portion of this report.

Non-Proved Reserves

The non-proved reserves are based on offsetting wells with a considerable production history.  Comparison of well logs, used to identify similarities to the offsetting production, and mapping of the formation over the undeveloped acreage, resulted in estimates of reserves for each location.

Eagle Ford

The Eagle Ford formation is not currently developed in this area.  Regional mapping of the Eagle Ford indicates the expected formation thickness and thermal maturity of the reservoir fail to reach the minimal requirements to be considered as a reserve.  For that reason, the Eagle Ford can only be considered as a “Contingent Resource” at this location.

FUTURE NET REVENUE

Oil Income and Prices

The pricing used for this evaluation was based on the unweighted average of the posted oil price on the first day of the month, for the 12-month period prior to the end of the reporting period (Exhibit I). A differential was applied to this oil price based on the difference from the posted oil price and the actual oil price received.  The average price for oil sold from these leases was determined to be $73.88 per barrel of oil.  This price was held constant for the length of the evaluation.

Operating Expenses

Operating expenses were based upon our experience of operating costs reported by operators in the area.  Operating expenses were held constant for the life of the property.

 
 
 

GENERAL

The assumptions, data, methods and procedures used are appropriate for the purpose served by the report.

Information upon which the report has been based was retrieved from public sources. This information is assumed to be correct.  No attempt has been made to verify title or ownership of the subject interest.  Leases were not inspected by a representative of this firm, nor were the wells tested under our supervision.

This report has been prepared utilizing methods and procedures regularly used by petroleum engineers to estimate oil and gas reserves for properties of this type and character.  The recovery of reserves and projection of producing rates are dependent upon many variable factors including prudent operation, installation of lifting equipment and remedial work when required.  The reserves included in this report have been based upon the assumption that the wells will be operated in a prudent manner under the same conditions existing at the present time.  Actual production results and future well data may yield additional facts, not presently available to us, which will require an adjustment to our estimates.

The reserves included in this report are estimates only and should not be construed as being exact quantities.  They may or may not be actually recovered and, if recovered, the revenues therefrom and the actual costs related thereto could be more or less than the estimated amounts.  As in all aspects of oil and gas estimation, there are uncertainties inherent in the interpretation of engineering data and, therefore, our conclusions necessarily represent only informed professional judgments.

The prices used in this estimation are based on the NYMEX futures pricing published following the close of trading on April 15, 2015.  There are no assurances that the prices received will actually match or that a maximum price may not be imposed.  The future net cash from the sale of production from the subject properties may vary from the estimates contained in this report because of facts and situations not determinable as of the data of this report.

No attempt has been made to quantify or otherwise account for any accumulative gas production imbalances that may exist.  Neither has an attempt been made to determine whether the wells and facilities are in compliance with various governmental regulations, nor have costs been included in the event they are not.Information developed during the course of this investigation, basic data, maps and worksheets showing recovery determinations are available for inspection in our office.
 
Yours very truly,
 
 
LEE KEELING AND ASSOCIATES, INC.
 


 
 
 

EXHIBIT 1
 
AMERICA RESOURCES EXPLORATION, INC.
POSTED OIL PRICES
 
FOR THE TWELVE MONTHS PRIOR TO APRIL, 2015
 
4/1/2014 $ 99.79
 
5/1/2014 99.47
 
6/2/2014 102.50
 
7/1/2014 105.40
 
8/1/2014 97.61
 
9/1/2014 95.82
 
10/1/2014 90.85
 
11/3/2014 78.31
 
12/1/2014 68.49
 
1/1/2015 53.84
 
2/2/2015 49.91
 
3/2/2015 49.97
 
AVERAGE $ 82.66
 
 
 
 
THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 

 
 
 


 
 
 
 
 
 
 
 
 
 
 AMERICA RESOURCES EXPLORATION, INC.                                                                  DATE     : 06/08/2015
 ESTIMATED RESERVES AND FUTURE NET REVENUE                                                            TIME     : 11:25:42
 CONSTANT PRICING                                                                                     DBS      : LKA0415
 TOTAL ALL RESERVES                                                                                   SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.545        0.000        0.407        0.000       73.880        0.000       30.054        0.000       30.054
 
 
 12-2016        3.265        0.000        2.436        0.000       73.880        0.000      180.004        0.000      180.004
 12-2017       10.258        0.000        7.655        0.000       73.880        0.000      565.534        0.000      565.534
 12-2018       12.668        0.000        9.453        0.000       73.880        0.000      698.402        0.000      698.402
 12-2019       15.038        0.000       11.222        0.000       73.880        0.000      829.084        0.000      829.084
 12-2020       21.525        0.000       16.063        0.000       73.880        0.000     1186.737        0.000     1186.737
 
 
 12-2021       22.732        0.000       16.964        0.000       73.880        0.000     1253.295        0.000     1253.295
 12-2022       21.895        0.000       16.339        0.000       73.880        0.000     1207.114        0.000     1207.114
 12-2023       17.427        0.000       13.005        0.000       73.880        0.000      960.810        0.000      960.810
 12-2024       14.223        0.000       10.614        0.000       73.880        0.000      784.167        0.000      784.167
 12-2025       12.275        0.000        9.161        0.000       73.880        0.000      676.783        0.000      676.783
 
 
 12-2026       10.848        0.000        8.095        0.000       73.880        0.000      598.095        0.000      598.095
 12-2027        9.653        0.000        7.204        0.000       73.880        0.000      532.200        0.000      532.200
 12-2028        8.636        0.000        6.445        0.000       73.880        0.000      476.151        0.000      476.151
 12-2029        7.599        0.000        5.671        0.000       73.880        0.000      418.970        0.000      418.970
 12-2030        6.579        0.000        4.910        0.000       73.880        0.000      362.725        0.000      362.725
 
 
 12-2031        5.627        0.000        4.199        0.000       73.880        0.000      310.226        0.000      310.226
 12-2032        4.798        0.000        3.580        0.000       73.880        0.000      264.520        0.000      264.520
 12-2033        3.833        0.000        2.860        0.000       73.880        0.000      211.328        0.000      211.328
 12-2034        3.143        0.000        2.346        0.000       73.880        0.000      173.309        0.000      173.309
 
 
   S TOT      212.568        0.000      158.629        0.000       73.880        0.000    11719.506        0.000    11719.506
 
 
   AFTER        9.182        0.000        6.852        0.000       73.880        0.000      506.250        0.000      506.250
 
 
   TOTAL      221.750        0.000      165.481        0.000       73.880        0.000    12225.756        0.000    12225.756
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.545        1.383        9.958        0.000        0.000       59.700      -41.531      -41.531      -39.485
 
 
 12-2016        3.263        8.280       39.131        0.000        0.000      412.925     -283.594     -325.125     -291.523
 12-2017       10.251       26.015       85.273        0.000        0.000      646.750     -202.755     -527.880     -465.957
 12-2018       12.659       32.126      100.830        0.000        0.000      298.500      254.286     -273.593     -287.779
 12-2019       15.028       38.138      115.054        0.000        0.000      895.500     -234.636     -508.229     -451.268
 12-2020       21.511       54.590      150.183        0.000        0.000      895.500       64.953     -443.276     -425.599
 
 
 12-2021       22.717       57.652      162.148        0.000        0.000      597.000      413.778      -29.498     -203.067
 12-2022       21.880       55.527      165.201        0.000        0.000      298.500      666.006      636.508      125.496
 12-2023       17.416       44.197      150.240        0.000        0.000        0.000      748.957     1385.465      467.428
 12-2024       14.214       36.072      139.082        0.000        0.000        0.000      594.799     1980.264      714.223
 12-2025       12.267       31.132      132.299        0.000        0.000        0.000      501.084     2481.348      903.158
 
 
 12-2026       10.841       27.512      125.538        0.000        0.000        0.000      434.204     2915.552     1051.979
 12-2027        9.647       24.481      119.585        0.000        0.000        0.000      378.488     3294.040     1169.906
 12-2028        8.631       21.903      116.044        0.000        0.000        0.000      329.573     3623.613     1263.267
 12-2029        7.594       19.273      112.432        0.000        0.000        0.000      279.670     3903.283     1335.308
 12-2030        6.575       16.685      108.880        0.000        0.000        0.000      230.585     4133.869     1389.317
 
 
 12-2031        5.623       14.270      105.564        0.000        0.000        0.000      184.769     4318.638     1428.668
 12-2032        4.795       12.168      102.079        0.000        0.000        0.000      145.478     4464.116     1456.837
 12-2033        3.831        9.721       84.989        0.000        0.000        0.000      112.788     4576.903     1476.694
 12-2034        3.141        7.972       76.319        0.000        0.000        0.000       85.877     4662.780     1490.441
 
 
   S TOT      212.428      539.097     2200.827        0.000        0.000     4104.375     4662.780     4662.780     1490.441
 
 
   AFTER        9.176       23.287      292.269        0.000        0.000        0.000      181.517     4844.297     1513.668
 
 
   TOTAL      221.604      562.385     2493.096        0.000        0.000     4104.375     4844.297     4844.297     1513.668
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                 25.0         0.0         LIFE, YRS.                 29.25            5.00     2683.693
 GROSS ULT., MB & MMF     228.315       0.000         DISCOUNT %                 10.00            9.00     1697.033
 GROSS CUM., MB & MMF       6.565       0.000         UNDISCOUNTED PAYOUT, YRS.   6.79           15.00      844.613
 GROSS RES., MB & MMF     221.750       0.000         DISCOUNTED PAYOUT, YRS.     7.37           20.00      445.503
 NET RES.,   MB & MMF     165.481       0.000         UNDISCOUNTED NET/INVEST.    2.18           25.00      199.622
 NET REVENUE, M$        12225.757       0.000         DISCOUNTED NET/INVEST.      1.54           30.00       44.509
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       32.24           40.00     -119.156
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00     -213.189
                                                                                                 80.00     -217.487
                                                                                                100.00     -202.347

 
THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 1


 
 AMERICA RESOURCES EXPLORATION, INC.                                                                  DATE     : 06/08/2015
 ESTIMATED RESERVES AND FUTURE NET REVENUE                                                            TIME     : 11:25:41
 CONSTANT PRICING                                                                                     DBS      : LKA0415
 TOTAL PROVED DEVELOPED PRODUCING RESERVES                                                            SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.385        0.000        0.287        0.000       73.880        0.000       21.212        0.000       21.212
 
 
 12-2016        0.486        0.000        0.363        0.000       73.880        0.000       26.794        0.000       26.794
 12-2017        0.457        0.000        0.341        0.000       73.880        0.000       25.186        0.000       25.186
 12-2018        0.429        0.000        0.320        0.000       73.880        0.000       23.675        0.000       23.675
 12-2019        0.404        0.000        0.301        0.000       73.880        0.000       22.254        0.000       22.254
 12-2020        0.379        0.000        0.283        0.000       73.880        0.000       20.919        0.000       20.919
 
 
 12-2021        0.357        0.000        0.266        0.000       73.880        0.000       19.664        0.000       19.664
 12-2022        0.335        0.000        0.250        0.000       73.880        0.000       18.484        0.000       18.484
 12-2023        0.315        0.000        0.235        0.000       73.880        0.000       17.375        0.000       17.375
 12-2024        0.296        0.000        0.221        0.000       73.880        0.000       16.333        0.000       16.333
 12-2025        0.278        0.000        0.208        0.000       73.880        0.000       15.353        0.000       15.353
 
 
 12-2026        0.225        0.000        0.168        0.000       73.880        0.000       12.409        0.000       12.409
 12-2027        0.176        0.000        0.131        0.000       73.880        0.000        9.703        0.000        9.703
 12-2028        0.165        0.000        0.123        0.000       73.880        0.000        9.121        0.000        9.121
 12-2029        0.156        0.000        0.116        0.000       73.880        0.000        8.574        0.000        8.574
 12-2030        0.146        0.000        0.109        0.000       73.880        0.000        8.059        0.000        8.059
 
 
 12-2031        0.137        0.000        0.103        0.000       73.880        0.000        7.576        0.000        7.576
 12-2032        0.129        0.000        0.096        0.000       73.880        0.000        7.121        0.000        7.121
 12-2033        0.121        0.000        0.091        0.000       73.880        0.000        6.694        0.000        6.694
 12-2034        0.114        0.000        0.085        0.000       73.880        0.000        6.292        0.000        6.292
 
 
   S TOT        5.492        0.000        4.098        0.000       73.880        0.000      302.797        0.000      302.797
 
 
   AFTER        0.586        0.000        0.437        0.000       73.880        0.000       32.303        0.000       32.303
 
 
   TOTAL        6.078        0.000        4.536        0.000       73.880        0.000      335.100        0.000      335.100
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.384        0.976        6.713        0.000        0.000        0.000       13.139       13.139       12.685
 
 
 12-2016        0.486        1.233        8.856        0.000        0.000        0.000       16.219       29.358       27.098
 12-2017        0.457        1.159        8.755        0.000        0.000        0.000       14.816       44.174       39.067
 12-2018        0.429        1.089        8.659        0.000        0.000        0.000       13.497       57.671       48.980
 12-2019        0.403        1.024        8.570        0.000        0.000        0.000       12.258       69.928       57.165
 12-2020        0.379        0.962        8.485        0.000        0.000        0.000       11.092       81.021       63.898
 
 
 12-2021        0.356        0.905        8.406        0.000        0.000        0.000        9.997       91.018       69.415
 12-2022        0.335        0.850        8.332        0.000        0.000        0.000        8.967       99.985       73.913
 12-2023        0.315        0.799        8.262        0.000        0.000        0.000        7.999      107.984       77.562
 12-2024        0.296        0.751        8.196        0.000        0.000        0.000        7.090      115.074       80.502
 12-2025        0.278        0.706        8.134        0.000        0.000        0.000        6.234      121.308       82.852
 
 
 12-2026        0.225        0.571        6.157        0.000        0.000        0.000        5.456      126.764       84.722
 12-2027        0.176        0.446        4.195        0.000        0.000        0.000        4.886      131.650       86.244
 12-2028        0.165        0.420        4.158        0.000        0.000        0.000        4.378      136.028       87.484
 12-2029        0.155        0.394        4.124        0.000        0.000        0.000        3.900      139.929       88.488
 12-2030        0.146        0.371        4.091        0.000        0.000        0.000        3.451      143.380       89.296
 
 
 12-2031        0.137        0.348        4.061        0.000        0.000        0.000        3.029      146.410       89.941
 12-2032        0.129        0.328        4.032        0.000        0.000        0.000        2.633      149.042       90.450
 12-2033        0.121        0.308        4.005        0.000        0.000        0.000        2.260      151.302       90.848
 12-2034        0.114        0.289        3.979        0.000        0.000        0.000        1.909      153.212       91.153
 
 
   S TOT        5.488       13.929      130.168        0.000        0.000        0.000      153.212      153.212       91.153
 
 
   AFTER        0.586        1.486       25.025        0.000        0.000        0.000        5.207      158.418       91.811
 
 
   TOTAL        6.074       15.415      155.193        0.000        0.000        0.000      158.418      158.418       91.811
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  2.0         0.0         LIFE, YRS.                 26.17            5.00      116.567
 GROSS ULT., MB & MMF      12.643       0.000         DISCOUNT %                 10.00            9.00       95.882
 GROSS CUM., MB & MMF       6.565       0.000         UNDISCOUNTED PAYOUT, YRS.   0.00           15.00       75.844
 GROSS RES., MB & MMF       6.078       0.000         DISCOUNTED PAYOUT, YRS.     0.00           20.00       64.824
 NET RES.,   MB & MMF       4.536       0.000         UNDISCOUNTED NET/INVEST.    0.00           25.00       56.809
 NET REVENUE, M$          335.100       0.000         DISCOUNTED NET/INVEST.      0.00           30.00       50.734
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.      100.00           40.00       42.154
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       32.250
                                                                                                 80.00       26.690
                                                                                                100.00       23.116

 
THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 1


 AMERICA RESOURCES EXPLORATION, INC.                                                                  DATE     : 06/08/2015
 ESTIMATED RESERVES AND FUTURE NET REVENUE                                                            TIME     : 11:25:41
 CONSTANT PRICING                                                                                     DBS      : LKA0415
 TOTAL PROVED DEVELOPED NON-PRODUCING RESERVES                                                        SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.160        0.000        0.120        0.000       73.880        0.000        8.843        0.000        8.843
 
 
 12-2016        0.970        0.000        0.724        0.000       73.880        0.000       53.453        0.000       53.453
 12-2017        0.979        0.000        0.731        0.000       73.880        0.000       54.001        0.000       54.001
 12-2018        0.921        0.000        0.687        0.000       73.880        0.000       50.761        0.000       50.761
 12-2019        0.865        0.000        0.646        0.000       73.880        0.000       47.716        0.000       47.716
 12-2020        0.814        0.000        0.607        0.000       73.880        0.000       44.853        0.000       44.853
 
 
 12-2021        0.765        0.000        0.571        0.000       73.880        0.000       42.161        0.000       42.161
 12-2022        0.719        0.000        0.536        0.000       73.880        0.000       39.632        0.000       39.632
 12-2023        0.676        0.000        0.504        0.000       73.880        0.000       37.254        0.000       37.254
 12-2024        0.635        0.000        0.474        0.000       73.880        0.000       35.019        0.000       35.019
 12-2025        0.597        0.000        0.446        0.000       73.880        0.000       32.918        0.000       32.918
 
 
 12-2026        0.561        0.000        0.419        0.000       73.880        0.000       30.942        0.000       30.942
 12-2027        0.528        0.000        0.394        0.000       73.880        0.000       29.086        0.000       29.086
 12-2028        0.496        0.000        0.370        0.000       73.880        0.000       27.341        0.000       27.341
 12-2029        0.466        0.000        0.348        0.000       73.880        0.000       25.700        0.000       25.700
 12-2030        0.438        0.000        0.327        0.000       73.880        0.000       24.158        0.000       24.158
 
 
 12-2031        0.412        0.000        0.307        0.000       73.880        0.000       22.709        0.000       22.709
 12-2032        0.375        0.000        0.280        0.000       73.880        0.000       20.667        0.000       20.667
 12-2033        0.075        0.000        0.056        0.000       73.880        0.000        4.145        0.000        4.145
 12-2034
 
 
   S TOT       11.452        0.000        8.546        0.000       73.880        0.000      631.358        0.000      631.358
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL       11.452        0.000        8.546        0.000       73.880        0.000      631.358        0.000      631.358
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.160        0.407        3.245        0.000        0.000       59.700      -54.669      -54.669      -52.170
 
 
 12-2016        0.969        2.459       20.092        0.000        0.000       39.800       -9.867      -64.537      -62.116
 12-2017        0.979        2.484       21.321        0.000        0.000        0.000       29.217      -35.319      -38.511
 12-2018        0.920        2.335       21.116        0.000        0.000        0.000       26.390       -8.930      -19.127
 12-2019        0.865        2.195       20.924        0.000        0.000        0.000       23.732       14.802       -3.280
 12-2020        0.813        2.063       20.743        0.000        0.000        0.000       21.233       36.035        9.610
 
 
 12-2021        0.764        1.939       20.573        0.000        0.000        0.000       18.885       54.920       20.033
 12-2022        0.718        1.823       20.413        0.000        0.000        0.000       16.677       71.597       28.401
 12-2023        0.675        1.714       20.263        0.000        0.000        0.000       14.602       86.199       35.062
 12-2024        0.635        1.611       20.122        0.000        0.000        0.000       12.651       98.850       40.309
 12-2025        0.597        1.514       19.989        0.000        0.000        0.000       10.817      109.667       44.388
 
 
 12-2026        0.561        1.423       19.864        0.000        0.000        0.000        9.094      118.761       47.506
 12-2027        0.527        1.338       19.747        0.000        0.000        0.000        7.474      126.235       49.836
 12-2028        0.496        1.258       19.637        0.000        0.000        0.000        5.951      132.185       51.523
 12-2029        0.466        1.182       19.533        0.000        0.000        0.000        4.519      136.704       52.688
 12-2030        0.438        1.111       19.436        0.000        0.000        0.000        3.173      139.877       53.433
 
 
 12-2031        0.412        1.045       19.344        0.000        0.000        0.000        1.908      141.785       53.840
 12-2032        0.375        0.951       18.618        0.000        0.000        0.000        0.723      142.509       53.982
 12-2033        0.075        0.191        3.844        0.000        0.000        0.000        0.036      142.544       53.988
 12-2034
 
 
   S TOT       11.444       29.042      348.828        0.000        0.000       99.500      142.544      142.544       53.988
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000      142.544       53.988
 
 
   TOTAL       11.444       29.042      348.828        0.000        0.000       99.500      142.544      142.544       53.988
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  5.0         0.0         LIFE, YRS.                 18.25            5.00       88.665
 GROSS ULT., MB & MMF      11.452       0.000         DISCOUNT %                 10.00            9.00       59.833
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   4.13           15.00       30.636
 GROSS RES., MB & MMF      11.452       0.000         DISCOUNTED PAYOUT, YRS.     5.00           20.00       14.306
 NET RES.,   MB & MMF       8.546       0.000         UNDISCOUNTED NET/INVEST.    2.43           25.00        2.526
 NET REVENUE, M$          631.358       0.000         DISCOUNTED NET/INVEST.      1.58           30.00       -6.191
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       26.45           40.00      -17.841
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -29.354
                                                                                                 80.00      -34.108
                                                                                                100.00      -36.083

 
THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 1


 AMERICA RESOURCES EXPLORATION, INC.                                                                  DATE     : 06/08/2015
 ESTIMATED RESERVES AND FUTURE NET REVENUE                                                            TIME     : 11:25:41
 CONSTANT PRICING                                                                                     DBS      : LKA0415
 TOTAL PROVED UNDEVELOPED RESERVES                                                                    SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        1.407        0.000        1.050        0.000       73.880        0.000       77.563        0.000       77.563
 12-2017        6.828        0.000        5.095        0.000       73.880        0.000      376.426        0.000      376.426
 12-2018        9.782        0.000        7.300        0.000       73.880        0.000      539.297        0.000      539.297
 12-2019        9.939        0.000        7.417        0.000       73.880        0.000      547.945        0.000      547.945
 12-2020        7.464        0.000        5.570        0.000       73.880        0.000      411.534        0.000      411.534
 
 
 12-2021        5.750        0.000        4.291        0.000       73.880        0.000      317.026        0.000      317.026
 12-2022        4.750        0.000        3.545        0.000       73.880        0.000      261.895        0.000      261.895
 12-2023        4.138        0.000        3.088        0.000       73.880        0.000      228.141        0.000      228.141
 12-2024        3.709        0.000        2.768        0.000       73.880        0.000      204.484        0.000      204.484
 12-2025        3.373        0.000        2.517        0.000       73.880        0.000      185.987        0.000      185.987
 
 
 12-2026        3.012        0.000        2.248        0.000       73.880        0.000      166.047        0.000      166.047
 12-2027        2.596        0.000        1.937        0.000       73.880        0.000      143.143        0.000      143.143
 12-2028        2.185        0.000        1.630        0.000       73.880        0.000      120.447        0.000      120.447
 12-2029        1.822        0.000        1.359        0.000       73.880        0.000      100.426        0.000      100.426
 12-2030        1.519        0.000        1.134        0.000       73.880        0.000       83.764        0.000       83.764
 
 
 12-2031        1.268        0.000        0.946        0.000       73.880        0.000       69.893        0.000       69.893
 12-2032        1.058        0.000        0.790        0.000       73.880        0.000       58.342        0.000       58.342
 12-2033        0.884        0.000        0.659        0.000       73.880        0.000       48.719        0.000       48.719
 12-2034        0.738        0.000        0.551        0.000       73.880        0.000       40.700        0.000       40.700
 
 
   S TOT       72.221        0.000       53.895        0.000       73.880        0.000     3981.778        0.000     3981.778
 
 
   AFTER        1.736        0.000        1.295        0.000       73.880        0.000       95.694        0.000       95.694
 
 
   TOTAL       73.957        0.000       55.190        0.000       73.880        0.000     4077.471        0.000     4077.471
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        1.406        3.568        6.093        0.000        0.000      298.500     -232.004     -232.004     -205.646
 12-2017        6.823       17.316       31.538        0.000        0.000      597.000     -276.251     -508.255     -437.876
 12-2018        9.775       24.808       47.796        0.000        0.000      298.500      158.418     -349.837     -330.192
 12-2019        9.932       25.205       51.924        0.000        0.000      298.500      162.383     -187.454     -229.656
 12-2020        7.459       18.931       43.905        0.000        0.000        0.000      341.239      153.785      -22.233
 
 
 12-2021        5.746       14.583       37.935        0.000        0.000        0.000      258.762      412.547      120.726
 12-2022        4.747       12.047       34.453        0.000        0.000        0.000      210.648      623.195      226.458
 12-2023        4.135       10.494       32.321        0.000        0.000        0.000      181.191      804.386      309.112
 12-2024        3.706        9.406       30.826        0.000        0.000        0.000      160.545      964.931      375.678
 12-2025        3.371        8.555       29.658        0.000        0.000        0.000      144.402     1109.333      430.108
 
 
 12-2026        3.010        7.638       28.398        0.000        0.000        0.000      127.001     1236.334      473.641
 12-2027        2.595        6.585       26.952        0.000        0.000        0.000      107.012     1343.346      506.996
 12-2028        2.183        5.541       25.518        0.000        0.000        0.000       87.205     1430.551      531.713
 12-2029        1.820        4.620       24.253        0.000        0.000        0.000       69.732     1500.283      549.683
 12-2030        1.518        3.853       23.201        0.000        0.000        0.000       55.191     1555.475      562.613
 
 
 12-2031        1.267        3.215       22.325        0.000        0.000        0.000       43.086     1598.561      571.791
 12-2032        1.058        2.684       21.595        0.000        0.000        0.000       33.005     1631.566      578.184
 12-2033        0.883        2.241       20.987        0.000        0.000        0.000       24.607     1656.174      582.518
 12-2034        0.738        1.872       20.481        0.000        0.000        0.000       17.609     1673.783      585.338
 
 
   S TOT       72.174      183.162      560.159        0.000        0.000     1492.500     1673.783     1673.783      585.338
 
 
   AFTER        1.735        4.402       65.148        0.000        0.000        0.000       24.410     1698.193      588.621
 
 
   TOTAL       73.908      187.564      625.307        0.000        0.000     1492.500     1698.193     1698.193      588.621
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  5.0         0.0         LIFE, YRS.                 25.67            5.00      999.558
 GROSS ULT., MB & MMF      73.957       0.000         DISCOUNT %                 10.00            9.00      655.328
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   5.30           15.00      334.559
 GROSS RES., MB & MMF      73.957       0.000         DISCOUNTED PAYOUT, YRS.     5.91           20.00      171.379
 NET RES.,   MB & MMF      55.190       0.000         UNDISCOUNTED NET/INVEST.    2.14           25.00       63.544
 NET REVENUE, M$         4077.472       0.000         DISCOUNTED NET/INVEST.      1.50           30.00       -9.183
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       29.37           40.00      -93.061
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00     -149.911
                                                                                                 80.00     -155.594
                                                                                                100.00     -146.875

 
THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 1


 AMERICA RESOURCES EXPLORATION, INC.                                                                  DATE     : 06/08/2015
 ESTIMATED RESERVES AND FUTURE NET REVENUE                                                            TIME     : 11:25:41
 CONSTANT PRICING                                                                                     DBS      : LKA0415
 TOTAL PROBABLE RESERVES                                                                              SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.403        0.000        0.300        0.000       73.880        0.000       22.194        0.000       22.194
 12-2017        1.994        0.000        1.488        0.000       73.880        0.000      109.920        0.000      109.920
 12-2018        1.536        0.000        1.146        0.000       73.880        0.000       84.669        0.000       84.669
 12-2019        2.490        0.000        1.858        0.000       73.880        0.000      137.300        0.000      137.300
 12-2020        6.172        0.000        4.606        0.000       73.880        0.000      340.291        0.000      340.291
 
 
 12-2021        4.946        0.000        3.691        0.000       73.880        0.000      272.690        0.000      272.690
 12-2022        3.706        0.000        2.765        0.000       73.880        0.000      204.313        0.000      204.313
 12-2023        2.960        0.000        2.209        0.000       73.880        0.000      163.204        0.000      163.204
 12-2024        2.543        0.000        1.898        0.000       73.880        0.000      140.227        0.000      140.227
 12-2025        2.264        0.000        1.690        0.000       73.880        0.000      124.843        0.000      124.843
 
 
 12-2026        2.058        0.000        1.536        0.000       73.880        0.000      113.481        0.000      113.481
 12-2027        1.895        0.000        1.414        0.000       73.880        0.000      104.486        0.000      104.486
 12-2028        1.746        0.000        1.303        0.000       73.880        0.000       96.268        0.000       96.268
 12-2029        1.540        0.000        1.149        0.000       73.880        0.000       84.897        0.000       84.897
 12-2030        1.342        0.000        1.001        0.000       73.880        0.000       73.967        0.000       73.967
 
 
 12-2031        1.173        0.000        0.875        0.000       73.880        0.000       64.650        0.000       64.650
 12-2032        1.028        0.000        0.767        0.000       73.880        0.000       56.692        0.000       56.692
 12-2033        0.905        0.000        0.675        0.000       73.880        0.000       49.879        0.000       49.879
 12-2034        0.743        0.000        0.555        0.000       73.880        0.000       40.984        0.000       40.984
 
 
   S TOT       41.444        0.000       30.928        0.000       73.880        0.000     2284.958        0.000     2284.958
 
 
   AFTER        1.320        0.000        0.985        0.000       73.880        0.000       72.749        0.000       72.749
 
 
   TOTAL       42.764        0.000       31.913        0.000       73.880        0.000     2357.706        0.000     2357.706
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.402        1.021        4.088        0.000        0.000       74.625      -57.942      -57.942      -50.859
 12-2017        1.992        5.056       23.659        0.000        0.000       49.750       29.463      -28.480      -28.638
 12-2018        1.535        3.895       23.258        0.000        0.000        0.000       55.982       27.502       12.560
 12-2019        2.489        6.316       27.777        0.000        0.000      298.500     -197.781     -170.279     -118.907
 12-2020        6.168       15.653       45.972        0.000        0.000      298.500      -26.002     -196.281     -141.936
 
 
 12-2021        4.943       12.544       42.299        0.000        0.000        0.000      212.905       16.624      -24.331
 12-2022        3.703        9.398       37.979        0.000        0.000        0.000      153.232      169.856       52.679
 12-2023        2.958        7.507       35.383        0.000        0.000        0.000      117.355      287.211      106.247
 12-2024        2.542        6.450       33.931        0.000        0.000        0.000       97.303      384.515      146.609
 12-2025        2.263        5.743       32.960        0.000        0.000        0.000       83.878      468.392      178.232
 
 
 12-2026        2.057        5.220       32.242        0.000        0.000        0.000       73.962      542.354      203.577
 12-2027        1.894        4.806       31.674        0.000        0.000        0.000       66.112      608.466      224.172
 12-2028        1.745        4.428       31.155        0.000        0.000        0.000       58.940      667.406      240.867
 12-2029        1.539        3.905       30.437        0.000        0.000        0.000       49.016      716.422      253.497
 12-2030        1.341        3.403       29.746        0.000        0.000        0.000       39.478      755.900      262.745
 
 
 12-2031        1.172        2.974       29.158        0.000        0.000        0.000       31.347      787.247      269.421
 12-2032        1.028        2.608       28.655        0.000        0.000        0.000       24.401      811.649      274.147
 12-2033        0.904        2.294       28.225        0.000        0.000        0.000       18.456      830.105      277.397
 12-2034        0.743        1.885       24.976        0.000        0.000        0.000       13.379      843.484      279.540
 
 
   S TOT       41.417      105.108      573.573        0.000        0.000      721.375      843.484      843.484      279.540
 
 
   AFTER        1.319        3.346       43.400        0.000        0.000        0.000       24.683      868.167      282.784
 
 
   TOTAL       42.736      108.454      616.973        0.000        0.000      721.375      868.167      868.167      282.784
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  7.0         0.0         LIFE, YRS.                 25.25            5.00      489.702
 GROSS ULT., MB & MMF      42.764       0.000         DISCOUNT %                 10.00            9.00      315.306
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.26           15.00      163.869
 GROSS RES., MB & MMF      42.764       0.000         DISCOUNTED PAYOUT, YRS.     3.45           20.00       92.844
 NET RES.,   MB & MMF      31.913       0.000         UNDISCOUNTED NET/INVEST.    2.20           25.00       49.169
 NET REVENUE, M$         2357.706       0.000         DISCOUNTED NET/INVEST.      1.57           30.00       21.737
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       36.90           40.00       -6.935
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -23.081
                                                                                                 80.00      -23.986
                                                                                                100.00      -21.917

 
THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 1


 AMERICA RESOURCES EXPLORATION, INC.                                                                  DATE     : 06/08/2015
 ESTIMATED RESERVES AND FUTURE NET REVENUE                                                            TIME     : 11:25:42
 CONSTANT PRICING                                                                                     DBS      : LKA0415
 TOTAL POSSIBLE RESERVES                                                                              SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        1.340        0.000        1.000        0.000       73.880        0.000       73.870        0.000       73.870
 12-2020        6.695        0.000        4.996        0.000       73.880        0.000      369.140        0.000      369.140
 
 
 12-2021       10.915        0.000        8.145        0.000       73.880        0.000      601.753        0.000      601.753
 12-2022       12.384        0.000        9.242        0.000       73.880        0.000      682.790        0.000      682.790
 12-2023        9.338        0.000        6.969        0.000       73.880        0.000      514.836        0.000      514.836
 12-2024        7.039        0.000        5.253        0.000       73.880        0.000      388.104        0.000      388.104
 12-2025        5.762        0.000        4.300        0.000       73.880        0.000      317.682        0.000      317.682
 
 
 12-2026        4.992        0.000        3.725        0.000       73.880        0.000      275.216        0.000      275.216
 12-2027        4.458        0.000        3.327        0.000       73.880        0.000      245.782        0.000      245.782
 12-2028        4.044        0.000        3.018        0.000       73.880        0.000      222.975        0.000      222.975
 12-2029        3.616        0.000        2.699        0.000       73.880        0.000      199.373        0.000      199.373
 12-2030        3.134        0.000        2.339        0.000       73.880        0.000      172.776        0.000      172.776
 
 
 12-2031        2.637        0.000        1.968        0.000       73.880        0.000      145.399        0.000      145.399
 12-2032        2.207        0.000        1.647        0.000       73.880        0.000      121.698        0.000      121.698
 12-2033        1.848        0.000        1.379        0.000       73.880        0.000      101.890        0.000      101.890
 12-2034        1.548        0.000        1.155        0.000       73.880        0.000       85.333        0.000       85.333
 
 
   S TOT       81.958        0.000       61.161        0.000       73.880        0.000     4518.617        0.000     4518.617
 
 
   AFTER        5.541        0.000        4.135        0.000       73.880        0.000      305.504        0.000      305.504
 
 
   TOTAL       87.500        0.000       65.297        0.000       73.880        0.000     4824.121        0.000     4824.121
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        1.339        3.398        5.860        0.000        0.000      298.500     -235.227     -235.227     -156.589
 12-2020        6.691       16.980       31.078        0.000        0.000      597.000     -282.609     -517.836     -334.938
 
 
 12-2021       10.907       27.681       52.935        0.000        0.000      597.000      -86.770     -604.606     -388.908
 12-2022       12.376       31.408       64.024        0.000        0.000      298.500      276.482     -328.124     -255.955
 12-2023        9.332       23.682       54.012        0.000        0.000        0.000      427.810       99.686      -60.555
 12-2024        7.035       17.853       46.007        0.000        0.000        0.000      317.210      416.895       71.125
 12-2025        5.758       14.613       41.559        0.000        0.000        0.000      255.752      672.647      167.578
 
 
 12-2026        4.989       12.660       38.876        0.000        0.000        0.000      218.691      891.339      242.533
 12-2027        4.455       11.306       37.017        0.000        0.000        0.000      193.004     1084.343      302.658
 12-2028        4.042       10.257       35.576        0.000        0.000        0.000      173.100     1257.443      351.680
 12-2029        3.614        9.171       34.085        0.000        0.000        0.000      152.502     1409.945      390.952
 12-2030        3.132        7.948       32.405        0.000        0.000        0.000      129.291     1539.236      421.230
 
 
 12-2031        2.635        6.688       30.676        0.000        0.000        0.000      105.399     1644.635      443.674
 12-2032        2.206        5.598       29.179        0.000        0.000        0.000       84.715     1729.349      460.075
 12-2033        1.847        4.687       27.928        0.000        0.000        0.000       67.429     1796.778      471.943
 12-2034        1.547        3.925       26.882        0.000        0.000        0.000       52.979     1849.757      480.422
 
 
   S TOT       81.904      207.856      588.099        0.000        0.000     1791.000     1849.757     1849.757      480.422
 
 
   AFTER        5.538       14.053      158.697        0.000        0.000        0.000      127.217     1976.974      496.463
 
 
   TOTAL       87.442      221.910      746.796        0.000        0.000     1791.000     1976.974     1976.974      496.463
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  6.0         0.0         LIFE, YRS.                 29.25            5.00      989.202
 GROSS ULT., MB & MMF      87.500       0.000         DISCOUNT %                 10.00            9.00      570.684
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   8.52           15.00      239.705
 GROSS RES., MB & MMF      87.500       0.000         DISCOUNTED PAYOUT, YRS.     9.21           20.00      102.149
 NET RES.,   MB & MMF      65.297       0.000         UNDISCOUNTED NET/INVEST.    2.10           25.00       27.573
 NET REVENUE, M$         4824.121       0.000         DISCOUNTED NET/INVEST.      1.47           30.00      -12.589
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.43           40.00      -43.472
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -43.092
                                                                                                 80.00      -30.489
                                                                                                100.00      -20.587


 
THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
 
 
AMERICA RESOURCES EXPLORATION, INC.  SCHEDULE 2
ESTIMATED RESERVES AND FUTURE NET REVENUE
MAXIMUM TO MINIMUM DISCOUNTED FUTURE NET REVENUE
AS OF APRIL 1, 2015
 
(DESCENDING BY DISCOUNTED FUTURE NET REVENUE)
SEQ. NO.
LEASE
STATE
RSV.
CAT.
COUNTY
GROSS OIL
MBO
GROSS GAS MMCF
NET OIL MBO
NET GAS MMCF
WORKING INTEREST
REVENUE INTEREST
CASHFLOW (M$)
DFNR
DISC. 10%
(M$)
4
BURNS, JANE -C- PUD 1
TX
4PUD
FRIO
17.497
0.000
13.057
0.000
0.995000
0.746250
456.487
182.504
6
ROGERS, THEO 'D' PUD 1
TX
4PUD
ATASCOSA
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
120.656
5
BURNS, JANE -C- PUD 2
TX
4PUD
FRIO
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
115.041
7
ROGERS, THEO 'D' PUD 2
TX
4PUD
ATASCOSA
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
109.687
13
BURNS, JANE -C- POSS 1
TX
9POS
ATASCOSA
15.567
0.000
11.617
0.000
0.995000
0.746250
373.804
109.142
14
BURNS, JANE -C- POSS 2
TX
9POS
ATASCOSA
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
90.651
17
ROGERS, THEO 'D' POSS 1
TX
9POS
ATASCOSA
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
86.432
18
ROGERS, THEO 'D' POSS 2
TX
9POS
ATASCOSA
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
82.410
15
ROGERS, THEO 'D' PROB 1
TX
6PRB
ATASCOSA
14.092
0.000
10.516
0.000
0.995000
0.746250
306.721
82.166
1
ROGERS, THEO 'D'
TX
1PDP
ATASCOSA
4.867
0.000
3.632
0.000
0.995000
0.746250
140.430
78.584
19
ROGERS, THEO 'D' POSS 3
TX
9POS
ATASCOSA
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
78.575
16
ROGERS, THEO 'D' PROB 2
TX
6PRB
ATASCOSA
14.092
0.000
10.516
0.000
0.995000
0.746250
306.721
78.342
8
ROGERS, THEO 'D' PUD 3
TX
4PUD
ATASCOSA
12.632
0.000
9.427
0.000
0.995000
0.746250
242.437
60.733
21
ROGERS, THEO 'D' POSS 4
TX
9POS
ATASCOSA
13.495
0.000
10.071
0.000
0.995000
0.746250
270.811
49.255
24
ROGERS, THEO 'A' RE-FRAC
TX
6PRB
ATASCOSA
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
25.238
23
BURNS, JANE -C- RE-FRAC
TX
6PRB
ATASCOSA
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
24.841
20
BURNS, JANE -C- RE-FRAC
TX
6PRB
ATASCOSA
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
24.449
25
ROGERS, THEO 'A' RE-FRAC
TX
6PRB
ATASCOSA
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
24.064
22
BURNS, JANE -C- RE-FRAC
TX
6PRB
ATASCOSA
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
23.685
3
BURNS, JANE -C-
TX
1PDP
FRIO
1.211
0.000
0.904
0.000
0.995000
0.746250
17.989
13.227
2
ROGERS, THEO 'A'
TX
2PNP
ATASCOSA
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
11.143
11
BURNS, JANE -C-
TX
2PNP
ATASCOSA
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.968
10
BURNS, JANE -C-
TX
2PNP
FRIO
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.795
9
ROGERS, THEO 'A'
TX
2PNP
ATASCOSA
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.625
12
BURNS, JANE -C-
TX
2PNP
ATASCOSA
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.457
         
221.750
0.000
165.481
0.000
   
4,844.296
1,513.668
                           T
 

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.

 
 
 

AMERICA RESOURCES EXPLORATION, INC.  SCHEDULE 3
ESTIMATED RESERVES AND FUTURE NET REVENUE
ONELINE SUMMARY OF DISCOUNTED FUTURE NET REVENUE
 
AS OF APRIL 1, 2015
 
(SORTED BY LEASE, WELL ID, RESERVE CATEGORY)
SEQ NO.                         LEASE
RSV
CAT.
STATE
COUNTY
 
GROSS OIL
MBO
GROSS GAS MMCF
NET OIL MBO
NET GAS MMCF
WORKING INTEREST
REVENUE INTEREST
CASHFLOW (M$)
DFNR
DISC 10%
(M$)
10
BURNS, JANE -C-
2PNP
TX
FRIO
 
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.795
12
BURNS, JANE -C-
2PNP
TX
ATASCOSA
 
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.457
11
BURNS, JANE -C-
2PNP
TX
ATASCOSA
 
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.968
3
BURNS, JANE -C-
1PDP
TX
FRIO
 
1.211
0.000
0.904
0.000
0.995000
0.746250
17.989
13.227
13
BURNS, JANE -C- POSS 1
9POS
TX
ATASCOSA
 
15.567
0.000
11.617
0.000
0.995000
0.746250
373.804
109.142
14
BURNS, JANE -C- POSS 2
9POS
TX
ATASCOSA
 
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
90.651
4
BURNS, JANE -C- PUD 1
4PUD
TX
FRIO
 
17.497
0.000
13.057
0.000
0.995000
0.746250
456.487
182.504
5
BURNS, JANE -C- PUD 2
4PUD
TX
FRIO
 
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
115.041
20
BURNS, JANE -C- RE-FRAC
6PRB
TX
ATASCOSA
 
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
24.449
22
BURNS, JANE -C- RE-FRAC
6PRB
TX
ATASCOSA
 
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
23.685
23
BURNS, JANE -C- RE-FRAC
6PRB
TX
ATASCOSA
 
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
24.841
9
ROGERS, THEO 'A'
2PNP
TX
ATASCOSA
 
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
10.625
2
ROGERS, THEO 'A'
2PNP
TX
ATASCOSA
 
2.290
0.000
1.709
0.000
0.995000
0.746250
28.509
11.143
25
ROGERS, THEO 'A' RE-FRAC
6PRB
TX
ATASCOSA
 
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
24.064
24
ROGERS, THEO 'A' RE-FRAC
6PRB
TX
ATASCOSA
 
2.916
0.000
2.176
0.000
0.995000
0.746250
50.945
25.238
1
ROGERS, THEO 'D'
1PDP
TX
ATASCOSA
 
4.867
0.000
3.632
0.000
0.995000
0.746250
140.430
78.584
17
ROGERS, THEO 'D' POSS 1
9POS
TX
ATASCOSA
 
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
86.432
18
ROGERS, THEO 'D' POSS 2
9POS
TX
ATASCOSA
 
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
82.410
19
ROGERS, THEO 'D' POSS 3
9POS
TX
ATASCOSA
 
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
78.575
21
ROGERS, THEO 'D' POSS 4
9POS
TX
ATASCOSA
 
13.495
0.000
10.071
0.000
0.995000
0.746250
270.811
49.255
15
ROGERS, THEO 'D' PROB 1
6PRB
TX
ATASCOSA
 
14.092
0.000
10.516
0.000
0.995000
0.746250
306.721
82.166
16
ROGERS, THEO 'D' PROB 2
6PRB
TX
ATASCOSA
 
14.092
0.000
10.516
0.000
0.995000
0.746250
306.721
78.342
6
ROGERS, THEO 'D' PUD 1
4PUD
TX
ATASCOSA
 
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
120.656
7
ROGERS, THEO 'D' PUD 2
4PUD
TX
ATASCOSA
 
14.609
0.000
10.902
0.000
0.995000
0.746250
333.090
109.687
8
ROGERS, THEO 'D' PUD 3
4PUD
TX
ATASCOSA
 
12.632
0.000
9.427
0.000
0.995000
0.746250
242.437
60.733
         
TOTAL
221.750
0.000
165.481
0.000
   
4,844.296
1,513.668

 

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.


 
 
 

 3   BURNS, JANE -C-                                                                                  DATE     : 06/08/2015
 FRIO  TX                                                                                             TIME     : 12:01:07
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 1PDP                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.110        0.000        0.082        0.000       73.880        0.000        6.039        0.000        6.039
 
 
 12-2016        0.138        0.000        0.103        0.000       73.880        0.000        7.629        0.000        7.629
 12-2017        0.130        0.000        0.097        0.000       73.880        0.000        7.171        0.000        7.171
 12-2018        0.122        0.000        0.091        0.000       73.880        0.000        6.741        0.000        6.741
 12-2019        0.115        0.000        0.086        0.000       73.880        0.000        6.336        0.000        6.336
 12-2020        0.108        0.000        0.081        0.000       73.880        0.000        5.956        0.000        5.956
 
 
 12-2021        0.102        0.000        0.076        0.000       73.880        0.000        5.599        0.000        5.599
 12-2022        0.095        0.000        0.071        0.000       73.880        0.000        5.263        0.000        5.263
 12-2023        0.090        0.000        0.067        0.000       73.880        0.000        4.947        0.000        4.947
 12-2024        0.084        0.000        0.063        0.000       73.880        0.000        4.650        0.000        4.650
 12-2025        0.079        0.000        0.059        0.000       73.880        0.000        4.371        0.000        4.371
 
 
 12-2026        0.038        0.000        0.028        0.000       73.880        0.000        2.086        0.000        2.086
 12-2027
 12-2028
 12-2029
 12-2030
 
 
 12-2031
 12-2032
 12-2033
 12-2034
 
 
   S TOT        1.211        0.000        0.904        0.000       73.880        0.000       66.788        0.000       66.788
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        1.211        0.000        0.904        0.000       73.880        0.000       66.788        0.000       66.788
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.109        0.278        3.068        0.000        0.000        0.000        2.584        2.584        2.495
 
 
 12-2016        0.138        0.351        4.064        0.000        0.000        0.000        3.076        5.660        5.229
 12-2017        0.130        0.330        4.035        0.000        0.000        0.000        2.676        8.336        7.392
 12-2018        0.122        0.310        4.008        0.000        0.000        0.000        2.301       10.636        9.083
 12-2019        0.115        0.291        3.982        0.000        0.000        0.000        1.948       12.584       10.384
 12-2020        0.108        0.274        3.958        0.000        0.000        0.000        1.616       14.200       11.366
 
 
 12-2021        0.101        0.258        3.936        0.000        0.000        0.000        1.304       15.504       12.086
 12-2022        0.095        0.242        3.914        0.000        0.000        0.000        1.011       16.515       12.594
 12-2023        0.090        0.228        3.894        0.000        0.000        0.000        0.735       17.250       12.930
 12-2024        0.084        0.214        3.876        0.000        0.000        0.000        0.476       17.726       13.128
 12-2025        0.079        0.201        3.858        0.000        0.000        0.000        0.233       17.959       13.216
 
 
 12-2026        0.038        0.096        1.923        0.000        0.000        0.000        0.030       17.989       13.227
 12-2027
 12-2028
 12-2029
 12-2030
 
 
 12-2031
 12-2032
 12-2033
 12-2034
 
 
   S TOT        1.211        3.072       44.516        0.000        0.000        0.000       17.989       17.989       13.227
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       17.989       13.227
 
 
   TOTAL        1.211        3.072       44.516        0.000        0.000        0.000       17.989       17.989       13.227
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 11.25            5.00       15.262
 GROSS ULT., MB & MMF       2.565       0.000         DISCOUNT %                 10.00            9.00       13.590
 GROSS CUM., MB & MMF       1.354       0.000         UNDISCOUNTED PAYOUT, YRS.   0.00           15.00       11.666
 GROSS RES., MB & MMF       1.211       0.000         DISCOUNTED PAYOUT, YRS.     0.00           20.00       10.442
 NET RES.,   MB & MMF       0.904       0.000         UNDISCOUNTED NET/INVEST.    0.00           25.00        9.462
 NET REVENUE, M$           66.788       0.000         DISCOUNTED NET/INVEST.      0.00           30.00        8.663
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.      100.00           40.00        7.445
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00        5.904
                                                                                                 80.00        4.976
                                                                                                100.00        4.357

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 1   ROGERS, THEO 'D'                                                                                 DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:07
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 1PDP                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.275        0.000        0.205        0.000       73.880        0.000       15.172        0.000       15.172
 
 
 12-2016        0.348        0.000        0.259        0.000       73.880        0.000       19.165        0.000       19.165
 12-2017        0.327        0.000        0.244        0.000       73.880        0.000       18.015        0.000       18.015
 12-2018        0.307        0.000        0.229        0.000       73.880        0.000       16.934        0.000       16.934
 12-2019        0.289        0.000        0.215        0.000       73.880        0.000       15.918        0.000       15.918
 12-2020        0.271        0.000        0.203        0.000       73.880        0.000       14.963        0.000       14.963
 
 
 12-2021        0.255        0.000        0.190        0.000       73.880        0.000       14.065        0.000       14.065
 12-2022        0.240        0.000        0.179        0.000       73.880        0.000       13.221        0.000       13.221
 12-2023        0.225        0.000        0.168        0.000       73.880        0.000       12.428        0.000       12.428
 12-2024        0.212        0.000        0.158        0.000       73.880        0.000       11.682        0.000       11.682
 12-2025        0.199        0.000        0.149        0.000       73.880        0.000       10.981        0.000       10.981
 
 
 12-2026        0.187        0.000        0.140        0.000       73.880        0.000       10.323        0.000       10.323
 12-2027        0.176        0.000        0.131        0.000       73.880        0.000        9.703        0.000        9.703
 12-2028        0.165        0.000        0.123        0.000       73.880        0.000        9.121        0.000        9.121
 12-2029        0.156        0.000        0.116        0.000       73.880        0.000        8.574        0.000        8.574
 12-2030        0.146        0.000        0.109        0.000       73.880        0.000        8.059        0.000        8.059
 
 
 12-2031        0.137        0.000        0.103        0.000       73.880        0.000        7.576        0.000        7.576
 12-2032        0.129        0.000        0.096        0.000       73.880        0.000        7.121        0.000        7.121
 12-2033        0.121        0.000        0.091        0.000       73.880        0.000        6.694        0.000        6.694
 12-2034        0.114        0.000        0.085        0.000       73.880        0.000        6.292        0.000        6.292
 
 
   S TOT        4.281        0.000        3.194        0.000       73.880        0.000      236.009        0.000      236.009
 
 
   AFTER        0.586        0.000        0.437        0.000       73.880        0.000       32.303        0.000       32.303
 
 
   TOTAL        4.867        0.000        3.632        0.000       73.880        0.000      268.313        0.000      268.313
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.275        0.698        3.645        0.000        0.000        0.000       10.555       10.555       10.190
 
 
 12-2016        0.347        0.882        4.793        0.000        0.000        0.000       13.143       23.698       21.868
 12-2017        0.327        0.829        4.720        0.000        0.000        0.000       12.140       35.838       31.675
 12-2018        0.307        0.779        4.652        0.000        0.000        0.000       11.197       47.035       39.898
 12-2019        0.289        0.732        4.587        0.000        0.000        0.000       10.310       57.344       46.781
 12-2020        0.271        0.688        4.527        0.000        0.000        0.000        9.476       66.821       52.532
 
 
 12-2021        0.255        0.647        4.470        0.000        0.000        0.000        8.693       75.514       57.329
 12-2022        0.240        0.608        4.417        0.000        0.000        0.000        7.956       83.470       61.320
 12-2023        0.225        0.572        4.367        0.000        0.000        0.000        7.264       90.734       64.632
 12-2024        0.212        0.537        4.320        0.000        0.000        0.000        6.613       97.347       67.374
 12-2025        0.199        0.505        4.276        0.000        0.000        0.000        6.002      103.349       69.636
 
 
 12-2026        0.187        0.475        4.234        0.000        0.000        0.000        5.427      108.776       71.496
 12-2027        0.176        0.446        4.195        0.000        0.000        0.000        4.886      113.662       73.018
 12-2028        0.165        0.420        4.158        0.000        0.000        0.000        4.378      118.040       74.257
 12-2029        0.155        0.394        4.124        0.000        0.000        0.000        3.900      121.940       75.262
 12-2030        0.146        0.371        4.091        0.000        0.000        0.000        3.451      125.391       76.070
 
 
 12-2031        0.137        0.348        4.061        0.000        0.000        0.000        3.029      128.421       76.714
 12-2032        0.129        0.328        4.032        0.000        0.000        0.000        2.633      131.054       77.224
 12-2033        0.121        0.308        4.005        0.000        0.000        0.000        2.260      133.314       77.621
 12-2034        0.114        0.289        3.979        0.000        0.000        0.000        1.909      135.223       77.927
 
 
   S TOT        4.278       10.856       85.652        0.000        0.000        0.000      135.223      135.223       77.927
 
 
   AFTER        0.586        1.486       25.025        0.000        0.000        0.000        5.207      140.430       78.584
 
 
   TOTAL        4.863       12.342      110.677        0.000        0.000        0.000      140.430      140.430       78.584
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 26.17            5.00      101.305
 GROSS ULT., MB & MMF      10.078       0.000         DISCOUNT %                 10.00            9.00       82.292
 GROSS CUM., MB & MMF       5.211       0.000         UNDISCOUNTED PAYOUT, YRS.   0.00           15.00       64.177
 GROSS RES., MB & MMF       4.867       0.000         DISCOUNTED PAYOUT, YRS.     0.00           20.00       54.382
 NET RES.,   MB & MMF       3.632       0.000         UNDISCOUNTED NET/INVEST.    0.00           25.00       47.347
 NET REVENUE, M$          268.313       0.000         DISCOUNTED NET/INVEST.      0.00           30.00       42.071
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.      100.00           40.00       34.709
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       26.346
                                                                                                 80.00       21.714
                                                                                                100.00       18.759

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 10   BURNS, JANE -C-                                                                                 DATE     : 06/08/2015
 FRIO  TX                                                                                             TIME     : 12:01:07
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 2PNP                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.018        0.000        0.013        0.000       73.880        0.000        0.990        0.000        0.990
 
 
 12-2016        0.208        0.000        0.156        0.000       73.880        0.000       11.488        0.000       11.488
 12-2017        0.196        0.000        0.146        0.000       73.880        0.000       10.799        0.000       10.799
 12-2018        0.184        0.000        0.137        0.000       73.880        0.000       10.151        0.000       10.151
 12-2019        0.173        0.000        0.129        0.000       73.880        0.000        9.542        0.000        9.542
 12-2020        0.163        0.000        0.121        0.000       73.880        0.000        8.970        0.000        8.970
 
 
 12-2021        0.153        0.000        0.114        0.000       73.880        0.000        8.431        0.000        8.431
 12-2022        0.144        0.000        0.107        0.000       73.880        0.000        7.926        0.000        7.926
 12-2023        0.135        0.000        0.101        0.000       73.880        0.000        7.450        0.000        7.450
 12-2024        0.127        0.000        0.095        0.000       73.880        0.000        7.003        0.000        7.003
 12-2025        0.119        0.000        0.089        0.000       73.880        0.000        6.583        0.000        6.583
 
 
 12-2026        0.112        0.000        0.084        0.000       73.880        0.000        6.188        0.000        6.188
 12-2027        0.106        0.000        0.079        0.000       73.880        0.000        5.817        0.000        5.817
 12-2028        0.099        0.000        0.074        0.000       73.880        0.000        5.468        0.000        5.468
 12-2029        0.093        0.000        0.070        0.000       73.880        0.000        5.140        0.000        5.140
 12-2030        0.088        0.000        0.065        0.000       73.880        0.000        4.831        0.000        4.831
 
 
 12-2031        0.082        0.000        0.061        0.000       73.880        0.000        4.541        0.000        4.541
 12-2032        0.077        0.000        0.058        0.000       73.880        0.000        4.269        0.000        4.269
 12-2033        0.012        0.000        0.009        0.000       73.880        0.000        0.686        0.000        0.686
 12-2034
 
 
   S TOT        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.018        0.046        0.361        0.000        0.000       19.900      -19.335      -19.335      -18.146
 
 
 12-2016        0.208        0.528        4.308        0.000        0.000        0.000        6.444      -12.891      -12.420
 12-2017        0.196        0.497        4.264        0.000        0.000        0.000        5.842       -7.048       -7.699
 12-2018        0.184        0.467        4.223        0.000        0.000        0.000        5.277       -1.771       -3.823
 12-2019        0.173        0.439        4.185        0.000        0.000        0.000        4.745        2.974       -0.655
 12-2020        0.163        0.413        4.149        0.000        0.000        0.000        4.246        7.220        1.923
 
 
 12-2021        0.153        0.388        4.115        0.000        0.000        0.000        3.776       10.996        4.007
 12-2022        0.144        0.365        4.083        0.000        0.000        0.000        3.335       14.331        5.680
 12-2023        0.135        0.343        4.053        0.000        0.000        0.000        2.920       17.251        7.012
 12-2024        0.127        0.322        4.024        0.000        0.000        0.000        2.530       19.780        8.061
 12-2025        0.119        0.303        3.998        0.000        0.000        0.000        2.163       21.943        8.877
 
 
 12-2026        0.112        0.285        3.973        0.000        0.000        0.000        1.818       23.761        9.500
 12-2027        0.105        0.268        3.949        0.000        0.000        0.000        1.494       25.255        9.966
 12-2028        0.099        0.252        3.927        0.000        0.000        0.000        1.190       26.445       10.303
 12-2029        0.093        0.236        3.907        0.000        0.000        0.000        0.903       27.348       10.536
 12-2030        0.088        0.222        3.887        0.000        0.000        0.000        0.634       27.982       10.685
 
 
 12-2031        0.082        0.209        3.869        0.000        0.000        0.000        0.381       28.364       10.767
 12-2032        0.077        0.196        3.852        0.000        0.000        0.000        0.143       28.507       10.795
 12-2033        0.012        0.032        0.640        0.000        0.000        0.000        0.002       28.509       10.795
 12-2034
 
 
   S TOT        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       10.795
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       28.509       10.795
 
 
   TOTAL        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       10.795
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 17.92            5.00       17.732
 GROSS ULT., MB & MMF       2.290       0.000         DISCOUNT %                 10.00            9.00       11.964
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   4.12           15.00        6.124
 GROSS RES., MB & MMF       2.290       0.000         DISCOUNTED PAYOUT, YRS.     5.00           20.00        2.859
 NET RES.,   MB & MMF       1.709       0.000         UNDISCOUNTED NET/INVEST.    2.43           25.00        0.505
 NET REVENUE, M$          126.272       0.000         DISCOUNTED NET/INVEST.      1.58           30.00       -1.236
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       26.45           40.00       -3.557
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -5.835
                                                                                                 80.00       -6.757
                                                                                                100.00       -7.121

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 11   BURNS, JANE -C-                                                                                 DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:07
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 2PNP                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.054        0.000        0.040        0.000       73.880        0.000        2.954        0.000        2.954
 
 
 12-2016        0.206        0.000        0.154        0.000       73.880        0.000       11.371        0.000       11.371
 12-2017        0.194        0.000        0.145        0.000       73.880        0.000       10.688        0.000       10.688
 12-2018        0.182        0.000        0.136        0.000       73.880        0.000       10.047        0.000       10.047
 12-2019        0.171        0.000        0.128        0.000       73.880        0.000        9.444        0.000        9.444
 12-2020        0.161        0.000        0.120        0.000       73.880        0.000        8.878        0.000        8.878
 
 
 12-2021        0.151        0.000        0.113        0.000       73.880        0.000        8.345        0.000        8.345
 12-2022        0.142        0.000        0.106        0.000       73.880        0.000        7.844        0.000        7.844
 12-2023        0.134        0.000        0.100        0.000       73.880        0.000        7.374        0.000        7.374
 12-2024        0.126        0.000        0.094        0.000       73.880        0.000        6.931        0.000        6.931
 12-2025        0.118        0.000        0.088        0.000       73.880        0.000        6.515        0.000        6.515
 
 
 12-2026        0.111        0.000        0.083        0.000       73.880        0.000        6.124        0.000        6.124
 12-2027        0.104        0.000        0.078        0.000       73.880        0.000        5.757        0.000        5.757
 12-2028        0.098        0.000        0.073        0.000       73.880        0.000        5.411        0.000        5.411
 12-2029        0.092        0.000        0.069        0.000       73.880        0.000        5.087        0.000        5.087
 12-2030        0.087        0.000        0.065        0.000       73.880        0.000        4.782        0.000        4.782
 
 
 12-2031        0.082        0.000        0.061        0.000       73.880        0.000        4.495        0.000        4.495
 12-2032        0.077        0.000        0.057        0.000       73.880        0.000        4.225        0.000        4.225
 12-2033
 12-2034
 
 
   S TOT        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.054        0.136        1.082        0.000        0.000       19.900      -18.217      -18.217      -17.388
 
 
 12-2016        0.206        0.523        4.300        0.000        0.000        0.000        6.341      -11.876      -11.753
 12-2017        0.194        0.492        4.257        0.000        0.000        0.000        5.746       -6.130       -7.111
 12-2018        0.182        0.462        4.217        0.000        0.000        0.000        5.186       -0.944       -3.302
 12-2019        0.171        0.434        4.179        0.000        0.000        0.000        4.660        3.716       -0.190
 12-2020        0.161        0.408        4.143        0.000        0.000        0.000        4.166        7.881        2.339
 
 
 12-2021        0.151        0.384        4.109        0.000        0.000        0.000        3.701       11.582        4.381
 12-2022        0.142        0.361        4.077        0.000        0.000        0.000        3.264       14.846        6.019
 12-2023        0.134        0.339        4.048        0.000        0.000        0.000        2.853       17.699        7.321
 12-2024        0.126        0.319        4.020        0.000        0.000        0.000        2.467       20.166        8.344
 12-2025        0.118        0.300        3.994        0.000        0.000        0.000        2.104       22.269        9.137
 
 
 12-2026        0.111        0.282        3.969        0.000        0.000        0.000        1.763       24.032        9.742
 12-2027        0.104        0.265        3.946        0.000        0.000        0.000        1.442       25.474       10.191
 12-2028        0.098        0.249        3.924        0.000        0.000        0.000        1.141       26.615       10.515
 12-2029        0.092        0.234        3.903        0.000        0.000        0.000        0.857       27.472       10.736
 12-2030        0.087        0.220        3.884        0.000        0.000        0.000        0.591       28.063       10.874
 
 
 12-2031        0.081        0.207        3.866        0.000        0.000        0.000        0.341       28.404       10.947
 12-2032        0.077        0.194        3.849        0.000        0.000        0.000        0.105       28.509       10.968
 12-2033
 12-2034
 
 
   S TOT        2.289        5.808       69.766        0.000        0.000       19.900       28.509       28.509       10.968
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       28.509       10.968
 
 
   TOTAL        2.289        5.808       69.766        0.000        0.000       19.900       28.509       28.509       10.968
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 17.75            5.00       17.877
 GROSS ULT., MB & MMF       2.290       0.000         DISCOUNT %                 10.00            9.00       12.137
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.95           15.00        6.268
 GROSS RES., MB & MMF       2.290       0.000         DISCOUNTED PAYOUT, YRS.     4.83           20.00        2.947
 NET RES.,   MB & MMF       1.709       0.000         UNDISCOUNTED NET/INVEST.    2.43           25.00        0.524
 NET REVENUE, M$          126.272       0.000         DISCOUNTED NET/INVEST.      1.58           30.00       -1.291
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       26.44           40.00       -3.762
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -6.310
                                                                                                 80.00       -7.452
                                                                                                100.00       -7.993

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 12   BURNS, JANE -C-                                                                                 DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:07
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 2PNP                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.158        0.000        0.118        0.000       73.880        0.000        8.727        0.000        8.727
 12-2017        0.200        0.000        0.149        0.000       73.880        0.000       11.024        0.000       11.024
 12-2018        0.188        0.000        0.140        0.000       73.880        0.000       10.363        0.000       10.363
 12-2019        0.177        0.000        0.132        0.000       73.880        0.000        9.741        0.000        9.741
 12-2020        0.166        0.000        0.124        0.000       73.880        0.000        9.156        0.000        9.156
 
 
 12-2021        0.156        0.000        0.117        0.000       73.880        0.000        8.607        0.000        8.607
 12-2022        0.147        0.000        0.110        0.000       73.880        0.000        8.091        0.000        8.091
 12-2023        0.138        0.000        0.103        0.000       73.880        0.000        7.605        0.000        7.605
 12-2024        0.130        0.000        0.097        0.000       73.880        0.000        7.149        0.000        7.149
 12-2025        0.122        0.000        0.091        0.000       73.880        0.000        6.720        0.000        6.720
 
 
 12-2026        0.115        0.000        0.086        0.000       73.880        0.000        6.317        0.000        6.317
 12-2027        0.108        0.000        0.080        0.000       73.880        0.000        5.938        0.000        5.938
 12-2028        0.101        0.000        0.076        0.000       73.880        0.000        5.582        0.000        5.582
 12-2029        0.095        0.000        0.071        0.000       73.880        0.000        5.247        0.000        5.247
 12-2030        0.089        0.000        0.067        0.000       73.880        0.000        4.932        0.000        4.932
 
 
 12-2031        0.084        0.000        0.063        0.000       73.880        0.000        4.636        0.000        4.636
 12-2032        0.079        0.000        0.059        0.000       73.880        0.000        4.358        0.000        4.358
 12-2033        0.038        0.000        0.028        0.000       73.880        0.000        2.080        0.000        2.080
 12-2034
 
 
   S TOT        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.158        0.401        3.238        0.000        0.000       19.900      -14.970      -14.970      -13.764
 12-2017        0.200        0.507        4.278        0.000        0.000        0.000        6.039       -8.931       -8.885
 12-2018        0.188        0.477        4.237        0.000        0.000        0.000        5.462       -3.469       -4.873
 12-2019        0.177        0.448        4.197        0.000        0.000        0.000        4.919        1.450       -1.589
 12-2020        0.166        0.421        4.160        0.000        0.000        0.000        4.409        5.858        1.088
 
 
 12-2021        0.156        0.396        4.126        0.000        0.000        0.000        3.929        9.788        3.257
 12-2022        0.147        0.372        4.093        0.000        0.000        0.000        3.479       13.267        5.002
 12-2023        0.138        0.350        4.062        0.000        0.000        0.000        3.055       16.322        6.396
 12-2024        0.130        0.329        4.034        0.000        0.000        0.000        2.657       18.979        7.498
 12-2025        0.122        0.309        4.006        0.000        0.000        0.000        2.283       21.261        8.358
 
 
 12-2026        0.114        0.291        3.981        0.000        0.000        0.000        1.931       23.192        9.020
 12-2027        0.108        0.273        3.957        0.000        0.000        0.000        1.600       24.792        9.519
 12-2028        0.101        0.257        3.935        0.000        0.000        0.000        1.289       26.081        9.885
 12-2029        0.095        0.241        3.913        0.000        0.000        0.000        0.997       27.078       10.142
 12-2030        0.089        0.227        3.894        0.000        0.000        0.000        0.722       27.800       10.311
 
 
 12-2031        0.084        0.213        3.875        0.000        0.000        0.000        0.464       28.264       10.410
 12-2032        0.079        0.200        3.857        0.000        0.000        0.000        0.221       28.485       10.453
 12-2033        0.038        0.096        1.922        0.000        0.000        0.000        0.024       28.509       10.457
 12-2034
 
 
   S TOT        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       10.457
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       28.509       10.457
 
 
   TOTAL        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       10.457
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 18.25            5.00       17.446
 GROSS ULT., MB & MMF       2.290       0.000         DISCOUNT %                 10.00            9.00       11.625
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   4.46           15.00        5.845
 GROSS RES., MB & MMF       2.290       0.000         DISCOUNTED PAYOUT, YRS.     5.34           20.00        2.690
 NET RES.,   MB & MMF       1.709       0.000         UNDISCOUNTED NET/INVEST.    2.43           25.00        0.468
 NET REVENUE, M$          126.272       0.000         DISCOUNTED NET/INVEST.      1.58           30.00       -1.132
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       26.46           40.00       -3.180
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -4.989
                                                                                                 80.00       -5.554
                                                                                                100.00       -5.652

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 2   ROGERS, THEO 'A'                                                                                 DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:07
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 2PNP                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.089        0.000        0.066        0.000       73.880        0.000        4.899        0.000        4.899
 
 
 12-2016        0.204        0.000        0.152        0.000       73.880        0.000       11.254        0.000       11.254
 12-2017        0.192        0.000        0.143        0.000       73.880        0.000       10.579        0.000       10.579
 12-2018        0.180        0.000        0.135        0.000       73.880        0.000        9.944        0.000        9.944
 12-2019        0.170        0.000        0.127        0.000       73.880        0.000        9.347        0.000        9.347
 12-2020        0.159        0.000        0.119        0.000       73.880        0.000        8.786        0.000        8.786
 
 
 12-2021        0.150        0.000        0.112        0.000       73.880        0.000        8.259        0.000        8.259
 12-2022        0.141        0.000        0.105        0.000       73.880        0.000        7.764        0.000        7.764
 12-2023        0.132        0.000        0.099        0.000       73.880        0.000        7.298        0.000        7.298
 12-2024        0.124        0.000        0.093        0.000       73.880        0.000        6.860        0.000        6.860
 12-2025        0.117        0.000        0.087        0.000       73.880        0.000        6.448        0.000        6.448
 
 
 12-2026        0.110        0.000        0.082        0.000       73.880        0.000        6.062        0.000        6.062
 12-2027        0.103        0.000        0.077        0.000       73.880        0.000        5.698        0.000        5.698
 12-2028        0.097        0.000        0.072        0.000       73.880        0.000        5.356        0.000        5.356
 12-2029        0.091        0.000        0.068        0.000       73.880        0.000        5.035        0.000        5.035
 12-2030        0.086        0.000        0.064        0.000       73.880        0.000        4.733        0.000        4.733
 
 
 12-2031        0.081        0.000        0.060        0.000       73.880        0.000        4.449        0.000        4.449
 12-2032        0.064        0.000        0.047        0.000       73.880        0.000        3.503        0.000        3.503
 12-2033
 12-2034
 
 
   S TOT        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.089        0.225        1.802        0.000        0.000       19.900      -17.117      -17.117      -16.635
 
 
 12-2016        0.204        0.518        4.293        0.000        0.000        0.000        6.239      -10.878      -11.090
 12-2017        0.192        0.487        4.250        0.000        0.000        0.000        5.650       -5.228       -6.525
 12-2018        0.180        0.457        4.210        0.000        0.000        0.000        5.096       -0.132       -2.782
 12-2019        0.169        0.430        4.172        0.000        0.000        0.000        4.575        4.444        0.274
 12-2020        0.159        0.404        4.137        0.000        0.000        0.000        4.086        8.530        2.754
 
 
 12-2021        0.150        0.380        4.104        0.000        0.000        0.000        3.626       12.156        4.755
 12-2022        0.141        0.357        4.072        0.000        0.000        0.000        3.193       15.349        6.358
 12-2023        0.132        0.336        4.043        0.000        0.000        0.000        2.787       18.136        7.629
 12-2024        0.124        0.316        4.015        0.000        0.000        0.000        2.405       20.541        8.627
 12-2025        0.117        0.297        3.989        0.000        0.000        0.000        2.046       22.586        9.398
 
 
 12-2026        0.110        0.279        3.965        0.000        0.000        0.000        1.708       24.294        9.984
 12-2027        0.103        0.262        3.942        0.000        0.000        0.000        1.391       25.685       10.417
 12-2028        0.097        0.246        3.920        0.000        0.000        0.000        1.092       26.777       10.727
 12-2029        0.091        0.232        3.900        0.000        0.000        0.000        0.812       27.589       10.936
 12-2030        0.086        0.218        3.881        0.000        0.000        0.000        0.548       28.137       11.065
 
 
 12-2031        0.081        0.205        3.863        0.000        0.000        0.000        0.300       28.437       11.129
 12-2032        0.063        0.161        3.206        0.000        0.000        0.000        0.072       28.509       11.143
 12-2033
 12-2034
 
 
   S TOT        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       11.143
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       28.509       11.143
 
 
   TOTAL        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       11.143
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 17.58            5.00       18.023
 GROSS ULT., MB & MMF       2.290       0.000         DISCOUNT %                 10.00            9.00       12.313
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.78           15.00        6.416
 GROSS RES., MB & MMF       2.290       0.000         DISCOUNTED PAYOUT, YRS.     4.66           20.00        3.038
 NET RES.,   MB & MMF       1.709       0.000         UNDISCOUNTED NET/INVEST.    2.43           25.00        0.544
 NET REVENUE, M$          126.272       0.000         DISCOUNTED NET/INVEST.      1.58           30.00       -1.349
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       26.44           40.00       -3.979
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -6.825
                                                                                                 80.00       -8.219
                                                                                                100.00       -8.972

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 9   ROGERS, THEO 'A'                                                                                 DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:07
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 2PNP                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.192        0.000        0.144        0.000       73.880        0.000       10.613        0.000       10.613
 12-2017        0.198        0.000        0.148        0.000       73.880        0.000       10.911        0.000       10.911
 12-2018        0.186        0.000        0.139        0.000       73.880        0.000       10.256        0.000       10.256
 12-2019        0.175        0.000        0.130        0.000       73.880        0.000        9.641        0.000        9.641
 12-2020        0.164        0.000        0.123        0.000       73.880        0.000        9.063        0.000        9.063
 
 
 12-2021        0.155        0.000        0.115        0.000       73.880        0.000        8.519        0.000        8.519
 12-2022        0.145        0.000        0.108        0.000       73.880        0.000        8.008        0.000        8.008
 12-2023        0.137        0.000        0.102        0.000       73.880        0.000        7.527        0.000        7.527
 12-2024        0.128        0.000        0.096        0.000       73.880        0.000        7.076        0.000        7.076
 12-2025        0.121        0.000        0.090        0.000       73.880        0.000        6.651        0.000        6.651
 
 
 12-2026        0.113        0.000        0.085        0.000       73.880        0.000        6.252        0.000        6.252
 12-2027        0.107        0.000        0.080        0.000       73.880        0.000        5.877        0.000        5.877
 12-2028        0.100        0.000        0.075        0.000       73.880        0.000        5.524        0.000        5.524
 12-2029        0.094        0.000        0.070        0.000       73.880        0.000        5.193        0.000        5.193
 12-2030        0.089        0.000        0.066        0.000       73.880        0.000        4.881        0.000        4.881
 
 
 12-2031        0.083        0.000        0.062        0.000       73.880        0.000        4.588        0.000        4.588
 12-2032        0.078        0.000        0.058        0.000       73.880        0.000        4.313        0.000        4.313
 12-2033        0.025        0.000        0.019        0.000       73.880        0.000        1.379        0.000        1.379
 12-2034
 
 
   S TOT        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.290        0.000        1.709        0.000       73.880        0.000      126.272        0.000      126.272
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.192        0.488        3.954        0.000        0.000       19.900      -13.922      -13.922      -13.090
 12-2017        0.198        0.502        4.271        0.000        0.000        0.000        5.940       -7.982       -8.291
 12-2018        0.186        0.472        4.230        0.000        0.000        0.000        5.369       -2.613       -4.347
 12-2019        0.175        0.443        4.191        0.000        0.000        0.000        4.832        2.219       -1.121
 12-2020        0.164        0.417        4.154        0.000        0.000        0.000        4.327        6.546        1.506
 
 
 12-2021        0.154        0.392        4.120        0.000        0.000        0.000        3.852       10.398        3.632
 12-2022        0.145        0.368        4.088        0.000        0.000        0.000        3.406       13.805        5.341
 12-2023        0.136        0.346        4.057        0.000        0.000        0.000        2.987       16.792        6.704
 12-2024        0.128        0.325        4.029        0.000        0.000        0.000        2.593       19.385        7.779
 12-2025        0.121        0.306        4.002        0.000        0.000        0.000        2.222       21.607        8.617
 
 
 12-2026        0.113        0.288        3.977        0.000        0.000        0.000        1.874       23.481        9.260
 12-2027        0.107        0.270        3.953        0.000        0.000        0.000        1.547       25.028        9.742
 12-2028        0.100        0.254        3.931        0.000        0.000        0.000        1.239       26.267       10.093
 12-2029        0.094        0.239        3.910        0.000        0.000        0.000        0.950       27.217       10.338
 12-2030        0.088        0.225        3.890        0.000        0.000        0.000        0.678       27.895       10.497
 
 
 12-2031        0.083        0.211        3.872        0.000        0.000        0.000        0.422       28.317       10.587
 12-2032        0.078        0.198        3.854        0.000        0.000        0.000        0.182       28.499       10.623
 12-2033        0.025        0.063        1.281        0.000        0.000        0.000        0.010       28.509       10.625
 12-2034
 
 
   S TOT        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       10.625
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       28.509       10.625
 
 
   TOTAL        2.289        5.808       69.765        0.000        0.000       19.900       28.509       28.509       10.625
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 18.08            5.00       17.588
 GROSS ULT., MB & MMF       2.290       0.000         DISCOUNT %                 10.00            9.00       11.793
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   4.29           15.00        5.983
 GROSS RES., MB & MMF       2.290       0.000         DISCOUNTED PAYOUT, YRS.     5.18           20.00        2.773
 NET RES.,   MB & MMF       1.709       0.000         UNDISCOUNTED NET/INVEST.    2.43           25.00        0.486
 NET REVENUE, M$          126.272       0.000         DISCOUNTED NET/INVEST.      1.58           30.00       -1.183
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       26.46           40.00       -3.363
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -5.395
                                                                                                 80.00       -6.126
                                                                                                100.00       -6.344

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 4   BURNS, JANE -C- PUD 1                                                                            DATE     : 06/08/2015
 FRIO  TX                                                                                             TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 4PUD                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        1.407        0.000        1.050        0.000       73.880        0.000       77.563        0.000       77.563
 12-2017        2.775        0.000        2.071        0.000       73.880        0.000      153.006        0.000      153.006
 12-2018        2.238        0.000        1.670        0.000       73.880        0.000      123.372        0.000      123.372
 12-2019        1.574        0.000        1.175        0.000       73.880        0.000       86.774        0.000       86.774
 12-2020        1.245        0.000        0.929        0.000       73.880        0.000       68.635        0.000       68.635
 
 
 12-2021        1.056        0.000        0.788        0.000       73.880        0.000       58.196        0.000       58.196
 12-2022        0.929        0.000        0.693        0.000       73.880        0.000       51.223        0.000       51.223
 12-2023        0.837        0.000        0.625        0.000       73.880        0.000       46.156        0.000       46.156
 12-2024        0.767        0.000        0.572        0.000       73.880        0.000       42.268        0.000       42.268
 12-2025        0.699        0.000        0.522        0.000       73.880        0.000       38.538        0.000       38.538
 
 
 12-2026        0.607        0.000        0.453        0.000       73.880        0.000       33.460        0.000       33.460
 12-2027        0.525        0.000        0.392        0.000       73.880        0.000       28.930        0.000       28.930
 12-2028        0.454        0.000        0.339        0.000       73.880        0.000       25.012        0.000       25.012
 12-2029        0.392        0.000        0.293        0.000       73.880        0.000       21.626        0.000       21.626
 12-2030        0.339        0.000        0.253        0.000       73.880        0.000       18.698        0.000       18.698
 
 
 12-2031        0.293        0.000        0.219        0.000       73.880        0.000       16.166        0.000       16.166
 12-2032        0.254        0.000        0.189        0.000       73.880        0.000       13.977        0.000       13.977
 12-2033        0.219        0.000        0.164        0.000       73.880        0.000       12.085        0.000       12.085
 12-2034        0.190        0.000        0.141        0.000       73.880        0.000       10.448        0.000       10.448
 
 
   S TOT       16.798        0.000       12.536        0.000       73.880        0.000      926.133        0.000      926.133
 
 
   AFTER        0.698        0.000        0.521        0.000       73.880        0.000       38.508        0.000       38.508
 
 
   TOTAL       17.497        0.000       13.057        0.000       73.880        0.000      964.641        0.000      964.641
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        1.406        3.568        6.093        0.000        0.000      298.500     -232.004     -232.004     -205.646
 12-2017        2.773        7.038       13.247        0.000        0.000        0.000      129.947     -102.056     -100.337
 12-2018        2.236        5.675       11.375        0.000        0.000        0.000      104.086        2.029      -23.772
 12-2019        1.573        3.992        9.063        0.000        0.000        0.000       72.147       74.176       24.477
 12-2020        1.244        3.157        7.917        0.000        0.000        0.000       56.317      130.493       58.689
 
 
 12-2021        1.055        2.677        7.258        0.000        0.000        0.000       47.206      177.699       84.749
 12-2022        0.928        2.356        6.818        0.000        0.000        0.000       41.121      218.819      105.382
 12-2023        0.837        2.123        6.497        0.000        0.000        0.000       36.699      255.519      122.119
 12-2024        0.766        1.944        6.252        0.000        0.000        0.000       33.305      288.824      135.926
 12-2025        0.699        1.773        6.016        0.000        0.000        0.000       30.051      318.875      147.256
 
 
 12-2026        0.606        1.539        5.696        0.000        0.000        0.000       25.619      344.494      156.039
 12-2027        0.524        1.331        5.409        0.000        0.000        0.000       21.665      366.159      162.791
 12-2028        0.453        1.151        5.162        0.000        0.000        0.000       18.247      384.405      167.961
 12-2029        0.392        0.995        4.948        0.000        0.000        0.000       15.291      399.696      171.900
 12-2030        0.339        0.860        4.763        0.000        0.000        0.000       12.736      412.432      174.882
 
 
 12-2031        0.293        0.744        4.603        0.000        0.000        0.000       10.526      422.958      177.124
 12-2032        0.253        0.643        4.465        0.000        0.000        0.000        8.616      431.574      178.791
 12-2033        0.219        0.556        4.345        0.000        0.000        0.000        6.964      438.538      180.017
 12-2034        0.189        0.481        4.242        0.000        0.000        0.000        5.536      444.074      180.903
 
 
   S TOT       16.787       42.602      124.170        0.000        0.000      298.500      444.074      444.074      180.903
 
 
   AFTER        0.698        1.771       23.626        0.000        0.000        0.000       12.413      456.487      182.504
 
 
   TOTAL       17.485       44.373      147.795        0.000        0.000      298.500      456.487      456.487      182.504
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 25.67            5.00      285.405
 GROSS ULT., MB & MMF      17.497       0.000         DISCOUNT %                 10.00            9.00      199.450
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.73           15.00      116.424
 GROSS RES., MB & MMF      17.497       0.000         DISCOUNTED PAYOUT, YRS.     4.24           20.00       71.817
 NET RES.,   MB & MMF      13.057       0.000         UNDISCOUNTED NET/INVEST.    2.53           25.00       40.541
 NET REVENUE, M$          964.641       0.000         DISCOUNTED NET/INVEST.      1.69           30.00       17.969
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       35.53           40.00      -11.169
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -37.785
                                                                                                 80.00      -46.991
                                                                                                100.00      -49.504

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 5   BURNS, JANE -C- PUD 2                                                                            DATE     : 06/08/2015
 FRIO  TX                                                                                             TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 4PUD                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        1.306        0.000        0.975        0.000       73.880        0.000       72.023        0.000       72.023
 12-2018        2.577        0.000        1.923        0.000       73.880        0.000      142.077        0.000      142.077
 12-2019        1.977        0.000        1.476        0.000       73.880        0.000      109.022        0.000      109.022
 12-2020        1.377        0.000        1.028        0.000       73.880        0.000       75.927        0.000       75.927
 
 
 12-2021        1.089        0.000        0.813        0.000       73.880        0.000       60.056        0.000       60.056
 12-2022        0.924        0.000        0.689        0.000       73.880        0.000       50.921        0.000       50.921
 12-2023        0.813        0.000        0.607        0.000       73.880        0.000       44.820        0.000       44.820
 12-2024        0.733        0.000        0.547        0.000       73.880        0.000       40.387        0.000       40.387
 12-2025        0.671        0.000        0.501        0.000       73.880        0.000       36.984        0.000       36.984
 
 
 12-2026        0.606        0.000        0.452        0.000       73.880        0.000       33.410        0.000       33.410
 12-2027        0.505        0.000        0.377        0.000       73.880        0.000       27.846        0.000       27.846
 12-2028        0.418        0.000        0.312        0.000       73.880        0.000       23.051        0.000       23.051
 12-2029        0.346        0.000        0.258        0.000       73.880        0.000       19.082        0.000       19.082
 12-2030        0.287        0.000        0.214        0.000       73.880        0.000       15.796        0.000       15.796
 
 
 12-2031        0.237        0.000        0.177        0.000       73.880        0.000       13.076        0.000       13.076
 12-2032        0.196        0.000        0.147        0.000       73.880        0.000       10.825        0.000       10.825
 12-2033        0.163        0.000        0.121        0.000       73.880        0.000        8.961        0.000        8.961
 12-2034        0.135        0.000        0.100        0.000       73.880        0.000        7.418        0.000        7.418
 
 
   S TOT       14.360        0.000       10.716        0.000       73.880        0.000      791.684        0.000      791.684
 
 
   AFTER        0.250        0.000        0.186        0.000       73.880        0.000       13.775        0.000       13.775
 
 
   TOTAL       14.609        0.000       10.902        0.000       73.880        0.000      805.459        0.000      805.459
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        1.305        3.313        5.743        0.000        0.000      298.500     -236.839     -236.839     -190.734
 12-2018        2.575        6.536       12.556        0.000        0.000        0.000      120.410     -116.429     -102.024
 12-2019        1.976        5.015       10.468        0.000        0.000        0.000       91.562      -24.867      -40.771
 12-2020        1.376        3.493        8.378        0.000        0.000        0.000       62.680       37.814       -2.662
 
 
 12-2021        1.089        2.763        7.375        0.000        0.000        0.000       48.829       86.643       24.305
 12-2022        0.923        2.342        6.798        0.000        0.000        0.000       40.857      127.500       44.811
 12-2023        0.812        2.062        6.413        0.000        0.000        0.000       35.533      163.033       61.019
 12-2024        0.732        1.858        6.133        0.000        0.000        0.000       31.664      194.697       74.147
 12-2025        0.670        1.701        5.918        0.000        0.000        0.000       28.694      223.392       84.961
 
 
 12-2026        0.606        1.537        5.692        0.000        0.000        0.000       25.575      248.967       93.730
 12-2027        0.505        1.281        5.341        0.000        0.000        0.000       20.720      269.687      100.190
 12-2028        0.418        1.060        5.038        0.000        0.000        0.000       16.535      286.222      104.877
 12-2029        0.346        0.878        4.787        0.000        0.000        0.000       13.071      299.293      108.246
 12-2030        0.286        0.727        4.580        0.000        0.000        0.000       10.204      309.497      110.637
 
 
 12-2031        0.237        0.602        4.408        0.000        0.000        0.000        7.830      317.327      112.305
 12-2032        0.196        0.498        4.266        0.000        0.000        0.000        5.865      323.192      113.441
 12-2033        0.162        0.412        4.148        0.000        0.000        0.000        4.238      327.430      114.188
 12-2034        0.134        0.341        4.051        0.000        0.000        0.000        2.892      330.322      114.651
 
 
   S TOT       14.350       36.417      112.095        0.000        0.000      298.500      330.322      330.322      114.651
 
 
   AFTER        0.250        0.634       10.124        0.000        0.000        0.000        2.768      333.090      115.041
 
 
   TOTAL       14.600       37.051      122.219        0.000        0.000      298.500      333.090      333.090      115.041
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 22.33            5.00      196.382
 GROSS ULT., MB & MMF      14.609       0.000         DISCOUNT %                 10.00            9.00      128.294
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   5.15           15.00       64.408
 GROSS RES., MB & MMF      14.609       0.000         DISCOUNTED PAYOUT, YRS.     5.85           20.00       31.802
 NET RES.,   MB & MMF      10.902       0.000         UNDISCOUNTED NET/INVEST.    2.12           25.00       10.286
 NET REVENUE, M$          805.459       0.000         DISCOUNTED NET/INVEST.      1.48           30.00       -4.141
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.56           40.00      -20.488
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -30.616
                                                                                                 80.00      -30.501
                                                                                                100.00      -27.720

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 6   ROGERS, THEO 'D' PUD 1                                                                           DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 4PUD                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        2.746        0.000        2.049        0.000       73.880        0.000      151.397        0.000      151.397
 12-2018        2.221        0.000        1.657        0.000       73.880        0.000      122.450        0.000      122.450
 12-2019        1.631        0.000        1.217        0.000       73.880        0.000       89.947        0.000       89.947
 12-2020        1.210        0.000        0.903        0.000       73.880        0.000       66.708        0.000       66.708
 
 
 12-2021        0.997        0.000        0.744        0.000       73.880        0.000       54.970        0.000       54.970
 12-2022        0.863        0.000        0.644        0.000       73.880        0.000       47.603        0.000       47.603
 12-2023        0.770        0.000        0.575        0.000       73.880        0.000       42.445        0.000       42.445
 12-2024        0.700        0.000        0.522        0.000       73.880        0.000       38.583        0.000       38.583
 12-2025        0.644        0.000        0.481        0.000       73.880        0.000       35.501        0.000       35.501
 
 
 12-2026        0.555        0.000        0.414        0.000       73.880        0.000       30.606        0.000       30.606
 12-2027        0.460        0.000        0.343        0.000       73.880        0.000       25.336        0.000       25.336
 12-2028        0.380        0.000        0.284        0.000       73.880        0.000       20.973        0.000       20.973
 12-2029        0.315        0.000        0.235        0.000       73.880        0.000       17.362        0.000       17.362
 12-2030        0.261        0.000        0.195        0.000       73.880        0.000       14.372        0.000       14.372
 
 
 12-2031        0.216        0.000        0.161        0.000       73.880        0.000       11.898        0.000       11.898
 12-2032        0.179        0.000        0.133        0.000       73.880        0.000        9.849        0.000        9.849
 12-2033        0.148        0.000        0.110        0.000       73.880        0.000        8.153        0.000        8.153
 12-2034        0.122        0.000        0.091        0.000       73.880        0.000        6.749        0.000        6.749
 
 
   S TOT       14.418        0.000       10.759        0.000       73.880        0.000      794.900        0.000      794.900
 
 
   AFTER        0.192        0.000        0.143        0.000       73.880        0.000       10.559        0.000       10.559
 
 
   TOTAL       14.609        0.000       10.902        0.000       73.880        0.000      805.459        0.000      805.459
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        2.744        6.964       12.548        0.000        0.000      298.500     -169.359     -169.359     -146.805
 12-2018        2.220        5.633       11.317        0.000        0.000        0.000      103.282      -66.078      -70.936
 12-2019        1.630        4.138        9.264        0.000        0.000        0.000       74.915        8.838      -20.795
 12-2020        1.209        3.069        7.796        0.000        0.000        0.000       54.634       63.472       12.406
 
 
 12-2021        0.996        2.529        7.054        0.000        0.000        0.000       44.390      107.863       36.917
 12-2022        0.863        2.190        6.589        0.000        0.000        0.000       37.961      145.824       55.966
 12-2023        0.769        1.952        6.263        0.000        0.000        0.000       33.460      179.284       71.227
 12-2024        0.699        1.775        6.019        0.000        0.000        0.000       30.089      209.373       83.702
 12-2025        0.643        1.633        5.824        0.000        0.000        0.000       27.400      236.773       94.029
 
 
 12-2026        0.555        1.408        5.515        0.000        0.000        0.000       23.128      259.901      101.961
 12-2027        0.459        1.165        5.182        0.000        0.000        0.000       18.529      278.429      107.738
 12-2028        0.380        0.965        4.907        0.000        0.000        0.000       14.721      293.151      111.911
 12-2029        0.315        0.799        4.679        0.000        0.000        0.000       11.570      304.721      114.893
 12-2030        0.261        0.661        4.490        0.000        0.000        0.000        8.961      313.681      116.993
 
 
 12-2031        0.216        0.547        4.334        0.000        0.000        0.000        6.801      320.482      118.442
 12-2032        0.179        0.453        4.204        0.000        0.000        0.000        5.013      325.496      119.413
 12-2033        0.148        0.375        4.097        0.000        0.000        0.000        3.533      329.029      120.036
 12-2034        0.122        0.310        4.008        0.000        0.000        0.000        2.308      331.337      120.406
 
 
   S TOT       14.408       36.565      114.089        0.000        0.000      298.500      331.337      331.337      120.406
 
 
   AFTER        0.191        0.486        8.129        0.000        0.000        0.000        1.753      333.090      120.656
 
 
   TOTAL       14.600       37.051      122.219        0.000        0.000      298.500      333.090      333.090      120.656
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 21.83            5.00      201.232
 GROSS ULT., MB & MMF      14.609       0.000         DISCOUNT %                 10.00            9.00      133.943
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   4.63           15.00       69.070
 GROSS RES., MB & MMF      14.609       0.000         DISCOUNTED PAYOUT, YRS.     5.38           20.00       34.838
 NET RES.,   MB & MMF      10.902       0.000         UNDISCOUNTED NET/INVEST.    2.12           25.00       11.501
 NET REVENUE, M$          805.459       0.000         DISCOUNTED NET/INVEST.      1.48           30.00       -4.721
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.54           40.00      -24.242
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -38.727
                                                                                                 80.00      -40.921
                                                                                                100.00      -39.202

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 7   ROGERS, THEO 'D' PUD 2                                                                           DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 4PUD                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        2.746        0.000        2.049        0.000       73.880        0.000      151.397        0.000      151.397
 12-2019        2.221        0.000        1.657        0.000       73.880        0.000      122.450        0.000      122.450
 12-2020        1.631        0.000        1.217        0.000       73.880        0.000       89.947        0.000       89.947
 
 
 12-2021        1.210        0.000        0.903        0.000       73.880        0.000       66.708        0.000       66.708
 12-2022        0.997        0.000        0.744        0.000       73.880        0.000       54.970        0.000       54.970
 12-2023        0.863        0.000        0.644        0.000       73.880        0.000       47.603        0.000       47.603
 12-2024        0.770        0.000        0.575        0.000       73.880        0.000       42.445        0.000       42.445
 12-2025        0.700        0.000        0.522        0.000       73.880        0.000       38.583        0.000       38.583
 
 
 12-2026        0.644        0.000        0.481        0.000       73.880        0.000       35.501        0.000       35.501
 12-2027        0.555        0.000        0.414        0.000       73.880        0.000       30.606        0.000       30.606
 12-2028        0.460        0.000        0.343        0.000       73.880        0.000       25.336        0.000       25.336
 12-2029        0.380        0.000        0.284        0.000       73.880        0.000       20.973        0.000       20.973
 12-2030        0.315        0.000        0.235        0.000       73.880        0.000       17.362        0.000       17.362
 
 
 12-2031        0.261        0.000        0.195        0.000       73.880        0.000       14.372        0.000       14.372
 12-2032        0.216        0.000        0.161        0.000       73.880        0.000       11.898        0.000       11.898
 12-2033        0.179        0.000        0.133        0.000       73.880        0.000        9.849        0.000        9.849
 12-2034        0.148        0.000        0.110        0.000       73.880        0.000        8.153        0.000        8.153
 
 
   S TOT       14.295        0.000       10.668        0.000       73.880        0.000      788.151        0.000      788.151
 
 
   AFTER        0.314        0.000        0.234        0.000       73.880        0.000       17.309        0.000       17.309
 
 
   TOTAL       14.609        0.000       10.902        0.000       73.880        0.000      805.459        0.000      805.459
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        2.744        6.964       12.548        0.000        0.000      298.500     -169.359     -169.359     -133.459
 12-2019        2.220        5.633       11.317        0.000        0.000        0.000      103.282      -66.078      -64.488
 12-2020        1.630        4.138        9.264        0.000        0.000        0.000       74.915        8.838      -18.904
 
 
 12-2021        1.209        3.069        7.796        0.000        0.000        0.000       54.634       63.472       11.278
 12-2022        0.996        2.529        7.054        0.000        0.000        0.000       44.390      107.863       33.561
 12-2023        0.863        2.190        6.589        0.000        0.000        0.000       37.961      145.824       50.878
 12-2024        0.769        1.952        6.263        0.000        0.000        0.000       33.460      179.284       64.752
 12-2025        0.699        1.775        6.019        0.000        0.000        0.000       30.089      209.373       76.093
 
 
 12-2026        0.643        1.633        5.824        0.000        0.000        0.000       27.400      236.773       85.481
 12-2027        0.555        1.408        5.515        0.000        0.000        0.000       23.128      259.901       92.691
 12-2028        0.459        1.165        5.182        0.000        0.000        0.000       18.529      278.429       97.944
 12-2029        0.380        0.965        4.907        0.000        0.000        0.000       14.721      293.151      101.737
 12-2030        0.315        0.799        4.679        0.000        0.000        0.000       11.570      304.721      104.448
 
 
 12-2031        0.261        0.661        4.490        0.000        0.000        0.000        8.961      313.681      106.357
 12-2032        0.216        0.547        4.334        0.000        0.000        0.000        6.801      320.482      107.674
 12-2033        0.179        0.453        4.204        0.000        0.000        0.000        5.013      325.496      108.557
 12-2034        0.148        0.375        4.097        0.000        0.000        0.000        3.533      329.029      109.123
 
 
   S TOT       14.286       36.255      110.081        0.000        0.000      298.500      329.029      329.029      109.123
 
 
   AFTER        0.314        0.796       12.138        0.000        0.000        0.000        4.061      333.090      109.687
 
 
   TOTAL       14.600       37.051      122.219        0.000        0.000      298.500      333.090      333.090      109.687
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 22.83            5.00      191.649
 GROSS ULT., MB & MMF      14.609       0.000         DISCOUNT %                 10.00            9.00      122.883
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   5.63           15.00       60.061
 GROSS RES., MB & MMF      14.609       0.000         DISCOUNTED PAYOUT, YRS.     6.38           20.00       29.031
 NET RES.,   MB & MMF      10.902       0.000         UNDISCOUNTED NET/INVEST.    2.12           25.00        9.201
 NET REVENUE, M$          805.459       0.000         DISCOUNTED NET/INVEST.      1.48           30.00       -3.632
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.58           40.00      -17.316
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -24.204
                                                                                                 80.00      -22.734
                                                                                                100.00      -19.601

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 8   ROGERS, THEO 'D' PUD 3                                                                           DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 4PUD                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        2.535        0.000        1.892        0.000       73.880        0.000      139.751        0.000      139.751
 12-2020        2.001        0.000        1.493        0.000       73.880        0.000      110.316        0.000      110.316
 
 
 12-2021        1.398        0.000        1.044        0.000       73.880        0.000       77.097        0.000       77.097
 12-2022        1.037        0.000        0.774        0.000       73.880        0.000       57.178        0.000       57.178
 12-2023        0.855        0.000        0.638        0.000       73.880        0.000       47.117        0.000       47.117
 12-2024        0.740        0.000        0.552        0.000       73.880        0.000       40.802        0.000       40.802
 12-2025        0.660        0.000        0.492        0.000       73.880        0.000       36.381        0.000       36.381
 
 
 12-2026        0.600        0.000        0.448        0.000       73.880        0.000       33.071        0.000       33.071
 12-2027        0.552        0.000        0.412        0.000       73.880        0.000       30.425        0.000       30.425
 12-2028        0.473        0.000        0.353        0.000       73.880        0.000       26.074        0.000       26.074
 12-2029        0.388        0.000        0.289        0.000       73.880        0.000       21.383        0.000       21.383
 12-2030        0.318        0.000        0.237        0.000       73.880        0.000       17.536        0.000       17.536
 
 
 12-2031        0.261        0.000        0.195        0.000       73.880        0.000       14.381        0.000       14.381
 12-2032        0.214        0.000        0.160        0.000       73.880        0.000       11.794        0.000       11.794
 12-2033        0.175        0.000        0.131        0.000       73.880        0.000        9.672        0.000        9.672
 12-2034        0.144        0.000        0.107        0.000       73.880        0.000        7.932        0.000        7.932
 
 
   S TOT       12.350        0.000        9.216        0.000       73.880        0.000      680.910        0.000      680.910
 
 
   AFTER        0.282        0.000        0.210        0.000       73.880        0.000       15.543        0.000       15.543
 
 
   TOTAL       12.632        0.000        9.427        0.000       73.880        0.000      696.453        0.000      696.453
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        2.533        6.429       11.812        0.000        0.000      298.500     -179.523     -179.523     -128.080
 12-2020        2.000        5.075       10.550        0.000        0.000        0.000       92.692      -86.831      -71.761
 
 
 12-2021        1.397        3.546        8.452        0.000        0.000        0.000       63.701      -23.129      -36.524
 12-2022        1.036        2.630        7.194        0.000        0.000        0.000       46.318       23.189      -13.261
 12-2023        0.854        2.167        6.558        0.000        0.000        0.000       37.537       60.726        3.868
 12-2024        0.740        1.877        6.159        0.000        0.000        0.000       32.027       92.752       17.151
 12-2025        0.659        1.674        5.880        0.000        0.000        0.000       28.168      120.921       27.769
 
 
 12-2026        0.599        1.521        5.671        0.000        0.000        0.000       25.279      146.200       36.430
 12-2027        0.551        1.400        5.504        0.000        0.000        0.000       22.970      169.170       43.585
 12-2028        0.473        1.199        5.229        0.000        0.000        0.000       19.173      188.343       49.020
 12-2029        0.388        0.984        4.933        0.000        0.000        0.000       15.079      203.422       52.907
 12-2030        0.318        0.807        4.690        0.000        0.000        0.000       11.722      215.144       55.653
 
 
 12-2031        0.261        0.662        4.490        0.000        0.000        0.000        8.968      224.112       57.564
 12-2032        0.214        0.543        4.327        0.000        0.000        0.000        6.710      230.822       58.864
 12-2033        0.175        0.445        4.193        0.000        0.000        0.000        4.859      235.681       59.720
 12-2034        0.144        0.365        4.083        0.000        0.000        0.000        3.340      239.021       60.255
 
 
   S TOT       12.342       31.322       99.725        0.000        0.000      298.500      239.021      239.021       60.255
 
 
   AFTER        0.282        0.715       11.131        0.000        0.000        0.000        3.416      242.437       60.733
 
 
   TOTAL       12.624       32.037      110.856        0.000        0.000      298.500      242.437      242.437       60.733
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 22.58            5.00      124.888
 GROSS ULT., MB & MMF      12.632       0.000         DISCOUNT %                 10.00            9.00       70.759
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   7.25           15.00       24.596
 GROSS RES., MB & MMF      12.632       0.000         DISCOUNTED PAYOUT, YRS.     8.52           20.00        3.891
 NET RES.,   MB & MMF       9.427       0.000         UNDISCOUNTED NET/INVEST.    1.81           25.00       -7.984
 NET REVENUE, M$          696.453       0.000         DISCOUNTED NET/INVEST.      1.29           30.00      -14.658
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       21.64           40.00      -19.847
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -18.578
                                                                                                 80.00      -14.448
                                                                                                100.00      -10.849

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 20   BURNS, JANE -C- RE-FRAC                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 6PRB                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.048        0.000        0.036        0.000       73.880        0.000        2.669        0.000        2.669
 12-2017        0.434        0.000        0.324        0.000       73.880        0.000       23.931        0.000       23.931
 12-2018        0.306        0.000        0.228        0.000       73.880        0.000       16.845        0.000       16.845
 12-2019        0.246        0.000        0.184        0.000       73.880        0.000       13.576        0.000       13.576
 12-2020        0.210        0.000        0.157        0.000       73.880        0.000       11.604        0.000       11.604
 
 
 12-2021        0.186        0.000        0.139        0.000       73.880        0.000       10.256        0.000       10.256
 12-2022        0.168        0.000        0.125        0.000       73.880        0.000        9.261        0.000        9.261
 12-2023        0.154        0.000        0.115        0.000       73.880        0.000        8.491        0.000        8.491
 12-2024        0.143        0.000        0.107        0.000       73.880        0.000        7.873        0.000        7.873
 12-2025        0.134        0.000        0.100        0.000       73.880        0.000        7.362        0.000        7.362
 
 
 12-2026        0.125        0.000        0.094        0.000       73.880        0.000        6.918        0.000        6.918
 12-2027        0.118        0.000        0.088        0.000       73.880        0.000        6.503        0.000        6.503
 12-2028        0.111        0.000        0.083        0.000       73.880        0.000        6.113        0.000        6.113
 12-2029        0.104        0.000        0.078        0.000       73.880        0.000        5.746        0.000        5.746
 12-2030        0.098        0.000        0.073        0.000       73.880        0.000        5.401        0.000        5.401
 
 
 12-2031        0.092        0.000        0.069        0.000       73.880        0.000        5.077        0.000        5.077
 12-2032        0.087        0.000        0.065        0.000       73.880        0.000        4.773        0.000        4.773
 12-2033        0.081        0.000        0.061        0.000       73.880        0.000        4.486        0.000        4.486
 12-2034        0.070        0.000        0.052        0.000       73.880        0.000        3.875        0.000        3.875
 
 
   S TOT        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.048        0.123        0.467        0.000        0.000       24.875      -22.845      -22.845      -19.665
 12-2017        0.434        1.101        5.094        0.000        0.000        0.000       17.303       -5.542       -5.635
 12-2018        0.305        0.775        4.646        0.000        0.000        0.000       11.118        5.576        2.547
 12-2019        0.246        0.624        4.440        0.000        0.000        0.000        8.266       13.842        8.073
 12-2020        0.210        0.534        4.315        0.000        0.000        0.000        6.545       20.387       12.049
 
 
 12-2021        0.186        0.472        4.230        0.000        0.000        0.000        5.368       25.756       15.014
 12-2022        0.168        0.426        4.167        0.000        0.000        0.000        4.501       30.256       17.273
 12-2023        0.154        0.391        4.118        0.000        0.000        0.000        3.828       34.084       19.019
 12-2024        0.143        0.362        4.079        0.000        0.000        0.000        3.289       37.373       20.383
 12-2025        0.133        0.339        4.047        0.000        0.000        0.000        2.843       40.216       21.455
 
 
 12-2026        0.125        0.318        4.019        0.000        0.000        0.000        2.455       42.672       22.297
 12-2027        0.118        0.299        3.993        0.000        0.000        0.000        2.093       44.765       22.949
 12-2028        0.111        0.281        3.968        0.000        0.000        0.000        1.753       46.517       23.446
 12-2029        0.104        0.264        3.945        0.000        0.000        0.000        1.433       47.950       23.815
 12-2030        0.098        0.248        3.923        0.000        0.000        0.000        1.132       49.082       24.080
 
 
 12-2031        0.092        0.234        3.903        0.000        0.000        0.000        0.849       49.930       24.261
 12-2032        0.087        0.220        3.883        0.000        0.000        0.000        0.583       50.513       24.374
 12-2033        0.081        0.206        3.865        0.000        0.000        0.000        0.333       50.846       24.433
 12-2034        0.070        0.178        3.528        0.000        0.000        0.000        0.099       50.945       24.449
 
 
   S TOT        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       24.449
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       50.945       24.449
 
 
   TOTAL        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       24.449
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 19.67            5.00       34.744
 GROSS ULT., MB & MMF       2.916       0.000         DISCOUNT %                 10.00            9.00       26.177
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.25           15.00       17.569
 GROSS RES., MB & MMF       2.916       0.000         DISCOUNTED PAYOUT, YRS.     3.44           20.00       12.781
 NET RES.,   MB & MMF       2.176       0.000         UNDISCOUNTED NET/INVEST.    3.05           25.00        9.338
 NET REVENUE, M$          160.759       0.000         DISCOUNTED NET/INVEST.      2.14           30.00        6.796
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       60.95           40.00        3.408
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00        0.079
                                                                                                 80.00       -1.293
                                                                                                100.00       -1.880

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 23   BURNS, JANE -C- RE-FRAC                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 6PRB                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.137        0.000        0.102        0.000       73.880        0.000        7.555        0.000        7.555
 12-2017        0.402        0.000        0.300        0.000       73.880        0.000       22.178        0.000       22.178
 12-2018        0.293        0.000        0.219        0.000       73.880        0.000       16.151        0.000       16.151
 12-2019        0.239        0.000        0.178        0.000       73.880        0.000       13.184        0.000       13.184
 12-2020        0.206        0.000        0.154        0.000       73.880        0.000       11.346        0.000       11.346
 
 
 12-2021        0.183        0.000        0.136        0.000       73.880        0.000       10.070        0.000       10.070
 12-2022        0.165        0.000        0.123        0.000       73.880        0.000        9.120        0.000        9.120
 12-2023        0.152        0.000        0.113        0.000       73.880        0.000        8.379        0.000        8.379
 12-2024        0.141        0.000        0.105        0.000       73.880        0.000        7.781        0.000        7.781
 12-2025        0.132        0.000        0.099        0.000       73.880        0.000        7.285        0.000        7.285
 
 
 12-2026        0.124        0.000        0.093        0.000       73.880        0.000        6.847        0.000        6.847
 12-2027        0.117        0.000        0.087        0.000       73.880        0.000        6.436        0.000        6.436
 12-2028        0.110        0.000        0.082        0.000       73.880        0.000        6.050        0.000        6.050
 12-2029        0.103        0.000        0.077        0.000       73.880        0.000        5.687        0.000        5.687
 12-2030        0.097        0.000        0.072        0.000       73.880        0.000        5.346        0.000        5.346
 
 
 12-2031        0.091        0.000        0.068        0.000       73.880        0.000        5.025        0.000        5.025
 12-2032        0.086        0.000        0.064        0.000       73.880        0.000        4.724        0.000        4.724
 12-2033        0.081        0.000        0.060        0.000       73.880        0.000        4.440        0.000        4.440
 12-2034        0.057        0.000        0.043        0.000       73.880        0.000        3.154        0.000        3.154
 
 
   S TOT        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.137        0.348        1.373        0.000        0.000       24.875      -19.177      -19.177      -16.851
 12-2017        0.402        1.020        4.983        0.000        0.000        0.000       15.773       -3.404       -4.067
 12-2018        0.293        0.743        4.602        0.000        0.000        0.000       10.513        7.109        3.669
 12-2019        0.239        0.606        4.415        0.000        0.000        0.000        7.924       15.034        8.966
 12-2020        0.206        0.522        4.299        0.000        0.000        0.000        6.320       21.354       12.805
 
 
 12-2021        0.183        0.463        4.218        0.000        0.000        0.000        5.206       26.560       15.680
 12-2022        0.165        0.420        4.158        0.000        0.000        0.000        4.377       30.937       17.877
 12-2023        0.152        0.385        4.111        0.000        0.000        0.000        3.730       34.667       19.579
 12-2024        0.141        0.358        4.073        0.000        0.000        0.000        3.209       37.876       20.910
 12-2025        0.132        0.335        4.042        0.000        0.000        0.000        2.776       40.652       21.956
 
 
 12-2026        0.124        0.315        4.014        0.000        0.000        0.000        2.393       43.045       22.777
 12-2027        0.117        0.296        3.989        0.000        0.000        0.000        2.035       45.080       23.411
 12-2028        0.110        0.278        3.964        0.000        0.000        0.000        1.698       46.778       23.892
 12-2029        0.103        0.262        3.941        0.000        0.000        0.000        1.381       48.159       24.248
 12-2030        0.097        0.246        3.920        0.000        0.000        0.000        1.083       49.242       24.502
 
 
 12-2031        0.091        0.231        3.899        0.000        0.000        0.000        0.803       50.046       24.673
 12-2032        0.086        0.217        3.880        0.000        0.000        0.000        0.540       50.586       24.778
 12-2033        0.080        0.204        3.862        0.000        0.000        0.000        0.293       50.879       24.830
 12-2034        0.057        0.145        2.886        0.000        0.000        0.000        0.066       50.945       24.841
 
 
   S TOT        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       24.841
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       50.945       24.841
 
 
   TOTAL        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       24.841
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 19.50            5.00       35.027
 GROSS ULT., MB & MMF       2.916       0.000         DISCOUNT %                 10.00            9.00       26.556
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.07           15.00       17.984
 GROSS RES., MB & MMF       2.916       0.000         DISCOUNTED PAYOUT, YRS.     3.28           20.00       13.176
 NET RES.,   MB & MMF       2.176       0.000         UNDISCOUNTED NET/INVEST.    3.05           25.00        9.692
 NET REVENUE, M$          160.759       0.000         DISCOUNTED NET/INVEST.      2.14           30.00        7.099
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       60.95           40.00        3.605
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00        0.086
                                                                                                 80.00       -1.426
                                                                                                100.00       -2.110

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 22   BURNS, JANE -C- RE-FRAC                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 6PRB                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.359        0.000        0.268        0.000       73.880        0.000       19.777        0.000       19.777
 12-2018        0.336        0.000        0.251        0.000       73.880        0.000       18.516        0.000       18.516
 12-2019        0.262        0.000        0.196        0.000       73.880        0.000       14.464        0.000       14.464
 12-2020        0.221        0.000        0.165        0.000       73.880        0.000       12.172        0.000       12.172
 
 
 12-2021        0.193        0.000        0.144        0.000       73.880        0.000       10.657        0.000       10.657
 12-2022        0.173        0.000        0.129        0.000       73.880        0.000        9.563        0.000        9.563
 12-2023        0.158        0.000        0.118        0.000       73.880        0.000        8.728        0.000        8.728
 12-2024        0.146        0.000        0.109        0.000       73.880        0.000        8.065        0.000        8.065
 12-2025        0.136        0.000        0.102        0.000       73.880        0.000        7.523        0.000        7.523
 
 
 12-2026        0.128        0.000        0.096        0.000       73.880        0.000        7.062        0.000        7.062
 12-2027        0.120        0.000        0.090        0.000       73.880        0.000        6.638        0.000        6.638
 12-2028        0.113        0.000        0.084        0.000       73.880        0.000        6.240        0.000        6.240
 12-2029        0.106        0.000        0.079        0.000       73.880        0.000        5.866        0.000        5.866
 12-2030        0.100        0.000        0.075        0.000       73.880        0.000        5.514        0.000        5.514
 
 
 12-2031        0.094        0.000        0.070        0.000       73.880        0.000        5.183        0.000        5.183
 12-2032        0.088        0.000        0.066        0.000       73.880        0.000        4.872        0.000        4.872
 12-2033        0.083        0.000        0.062        0.000       73.880        0.000        4.580        0.000        4.580
 12-2034        0.078        0.000        0.058        0.000       73.880        0.000        4.305        0.000        4.305
 
 
   S TOT        2.897        0.000        2.162        0.000       73.880        0.000      159.724        0.000      159.724
 
 
   AFTER        0.019        0.000        0.014        0.000       73.880        0.000        1.035        0.000        1.035
 
 
   TOTAL        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.358        0.910        3.936        0.000        0.000       24.875      -10.302      -10.302       -9.065
 12-2018        0.336        0.852        4.752        0.000        0.000        0.000       12.577        2.275        0.194
 12-2019        0.262        0.665        4.496        0.000        0.000        0.000        9.041       11.316        6.239
 12-2020        0.221        0.560        4.351        0.000        0.000        0.000        7.041       18.357       10.517
 
 
 12-2021        0.193        0.490        4.255        0.000        0.000        0.000        5.718       24.075       13.675
 12-2022        0.173        0.440        4.186        0.000        0.000        0.000        4.764       28.839       16.066
 12-2023        0.158        0.401        4.133        0.000        0.000        0.000        4.035       32.874       17.907
 12-2024        0.146        0.371        4.091        0.000        0.000        0.000        3.456       36.330       19.341
 12-2025        0.136        0.346        4.057        0.000        0.000        0.000        2.983       39.313       20.465
 
 
 12-2026        0.128        0.325        4.028        0.000        0.000        0.000        2.581       41.894       21.350
 12-2027        0.120        0.305        4.001        0.000        0.000        0.000        2.211       44.106       22.039
 12-2028        0.113        0.287        3.976        0.000        0.000        0.000        1.864       45.970       22.567
 12-2029        0.106        0.270        3.953        0.000        0.000        0.000        1.537       47.507       22.963
 12-2030        0.100        0.254        3.930        0.000        0.000        0.000        1.230       48.737       23.252
 
 
 12-2031        0.094        0.238        3.909        0.000        0.000        0.000        0.941       49.678       23.452
 12-2032        0.088        0.224        3.890        0.000        0.000        0.000        0.670       50.348       23.582
 12-2033        0.083        0.211        3.871        0.000        0.000        0.000        0.415       50.762       23.655
 12-2034        0.078        0.198        3.854        0.000        0.000        0.000        0.175       50.937       23.683
 
 
   S TOT        2.895        7.347       73.670        0.000        0.000       24.875       50.937       50.937       23.683
 
 
   AFTER        0.019        0.048        0.961        0.000        0.000        0.000        0.008       50.945       23.685
 
 
   TOTAL        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       23.685
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 20.00            5.00       34.183
 GROSS ULT., MB & MMF       2.916       0.000         DISCOUNT %                 10.00            9.00       25.436
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.57           15.00       16.770
 GROSS RES., MB & MMF       2.916       0.000         DISCOUNTED PAYOUT, YRS.     3.73           20.00       12.028
 NET RES.,   MB & MMF       2.176       0.000         UNDISCOUNTED NET/INVEST.    3.05           25.00        8.668
 NET REVENUE, M$          160.759       0.000         DISCOUNTED NET/INVEST.      2.14           30.00        6.227
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       60.97           40.00        3.046
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00        0.068
                                                                                                 80.00       -1.063
                                                                                                100.00       -1.492

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 24   ROGERS, THEO 'A' RE-FRAC                                                                        DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 6PRB                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.217        0.000        0.162        0.000       73.880        0.000       11.971        0.000       11.971
 12-2017        0.376        0.000        0.281        0.000       73.880        0.000       20.745        0.000       20.745
 12-2018        0.282        0.000        0.210        0.000       73.880        0.000       15.531        0.000       15.531
 12-2019        0.233        0.000        0.174        0.000       73.880        0.000       12.822        0.000       12.822
 12-2020        0.201        0.000        0.150        0.000       73.880        0.000       11.103        0.000       11.103
 
 
 12-2021        0.179        0.000        0.134        0.000       73.880        0.000        9.893        0.000        9.893
 12-2022        0.163        0.000        0.122        0.000       73.880        0.000        8.984        0.000        8.984
 12-2023        0.150        0.000        0.112        0.000       73.880        0.000        8.271        0.000        8.271
 12-2024        0.140        0.000        0.104        0.000       73.880        0.000        7.692        0.000        7.692
 12-2025        0.131        0.000        0.098        0.000       73.880        0.000        7.210        0.000        7.210
 
 
 12-2026        0.123        0.000        0.092        0.000       73.880        0.000        6.777        0.000        6.777
 12-2027        0.116        0.000        0.086        0.000       73.880        0.000        6.370        0.000        6.370
 12-2028        0.109        0.000        0.081        0.000       73.880        0.000        5.988        0.000        5.988
 12-2029        0.102        0.000        0.076        0.000       73.880        0.000        5.629        0.000        5.629
 12-2030        0.096        0.000        0.072        0.000       73.880        0.000        5.291        0.000        5.291
 
 
 12-2031        0.090        0.000        0.067        0.000       73.880        0.000        4.973        0.000        4.973
 12-2032        0.085        0.000        0.063        0.000       73.880        0.000        4.675        0.000        4.675
 12-2033        0.080        0.000        0.059        0.000       73.880        0.000        4.395        0.000        4.395
 12-2034        0.044        0.000        0.033        0.000       73.880        0.000        2.441        0.000        2.441
 
 
   S TOT        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
   TOTAL        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.217        0.551        2.249        0.000        0.000       24.875      -15.921      -15.921      -14.342
 12-2017        0.376        0.954        4.892        0.000        0.000        0.000       14.522       -1.399       -2.576
 12-2018        0.282        0.714        4.563        0.000        0.000        0.000        9.972        8.573        4.760
 12-2019        0.232        0.590        4.392        0.000        0.000        0.000        7.608       16.181        9.845
 12-2020        0.201        0.511        4.283        0.000        0.000        0.000        6.108       22.289       13.556
 
 
 12-2021        0.179        0.455        4.207        0.000        0.000        0.000        5.052       27.341       16.345
 12-2022        0.163        0.413        4.149        0.000        0.000        0.000        4.259       31.599       18.482
 12-2023        0.150        0.380        4.104        0.000        0.000        0.000        3.636       35.235       20.141
 12-2024        0.139        0.354        4.068        0.000        0.000        0.000        3.131       38.366       21.440
 12-2025        0.131        0.332        4.037        0.000        0.000        0.000        2.710       41.076       22.462
 
 
 12-2026        0.123        0.312        4.010        0.000        0.000        0.000        2.332       43.408       23.261
 12-2027        0.115        0.293        3.984        0.000        0.000        0.000        1.977       45.386       23.877
 12-2028        0.109        0.275        3.960        0.000        0.000        0.000        1.644       47.029       24.343
 12-2029        0.102        0.259        3.938        0.000        0.000        0.000        1.330       48.360       24.686
 12-2030        0.096        0.243        3.916        0.000        0.000        0.000        1.035       49.395       24.929
 
 
 12-2031        0.090        0.229        3.896        0.000        0.000        0.000        0.758       50.153       25.090
 12-2032        0.085        0.215        3.877        0.000        0.000        0.000        0.498       50.651       25.187
 12-2033        0.080        0.202        3.860        0.000        0.000        0.000        0.253       50.905       25.232
 12-2034        0.044        0.112        2.244        0.000        0.000        0.000        0.041       50.945       25.238
 
 
   S TOT        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       25.238
 
 
   AFTER        0.000        0.000        0.000        0.000        0.000        0.000        0.000       50.945       25.238
 
 
   TOTAL        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       25.238
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 19.33            5.00       35.313
 GROSS ULT., MB & MMF       2.916       0.000         DISCOUNT %                 10.00            9.00       26.940
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   2.89           15.00       18.407
 GROSS RES., MB & MMF       2.916       0.000         DISCOUNTED PAYOUT, YRS.     3.10           20.00       13.582
 NET RES.,   MB & MMF       2.176       0.000         UNDISCOUNTED NET/INVEST.    3.05           25.00       10.059
 NET REVENUE, M$          160.759       0.000         DISCOUNTED NET/INVEST.      2.14           30.00        7.417
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       60.94           40.00        3.812
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00        0.093
                                                                                                 80.00       -1.573
                                                                                                100.00       -2.369

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 25   ROGERS, THEO 'A' RE-FRAC                                                                        DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
 INCEPTUS OPERATIONS, LLC                                                                             DBS      : LKA0415
 6PRB                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.422        0.000        0.315        0.000       73.880        0.000       23.290        0.000       23.290
 12-2018        0.320        0.000        0.239        0.000       73.880        0.000       17.626        0.000       17.626
 12-2019        0.254        0.000        0.190        0.000       73.880        0.000       14.001        0.000       14.001
 12-2020        0.215        0.000        0.161        0.000       73.880        0.000       11.879        0.000       11.879
 
 
 12-2021        0.190        0.000        0.141        0.000       73.880        0.000       10.451        0.000       10.451
 12-2022        0.171        0.000        0.127        0.000       73.880        0.000        9.409        0.000        9.409
 12-2023        0.156        0.000        0.117        0.000       73.880        0.000        8.607        0.000        8.607
 12-2024        0.145        0.000        0.108        0.000       73.880        0.000        7.967        0.000        7.967
 12-2025        0.135        0.000        0.101        0.000       73.880        0.000        7.441        0.000        7.441
 
 
 12-2026        0.127        0.000        0.095        0.000       73.880        0.000        6.990        0.000        6.990
 12-2027        0.119        0.000        0.089        0.000       73.880        0.000        6.570        0.000        6.570
 12-2028        0.112        0.000        0.084        0.000       73.880        0.000        6.176        0.000        6.176
 12-2029        0.105        0.000        0.079        0.000       73.880        0.000        5.806        0.000        5.806
 12-2030        0.099        0.000        0.074        0.000       73.880        0.000        5.457        0.000        5.457
 
 
 12-2031        0.093        0.000        0.069        0.000       73.880        0.000        5.130        0.000        5.130
 12-2032        0.087        0.000        0.065        0.000       73.880        0.000        4.822        0.000        4.822
 12-2033        0.082        0.000        0.061        0.000       73.880        0.000        4.533        0.000        4.533
 12-2034        0.077        0.000        0.058        0.000       73.880        0.000        4.261        0.000        4.261
 
 
   S TOT        2.910        0.000        2.171        0.000       73.880        0.000      160.416        0.000      160.416
 
 
   AFTER        0.006        0.000        0.005        0.000       73.880        0.000        0.343        0.000        0.343
 
 
   TOTAL        2.916        0.000        2.176        0.000       73.880        0.000      160.759        0.000      160.759
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.422        1.071        4.755        0.000        0.000       24.875       -7.833       -7.833       -7.295
 12-2018        0.319        0.811        4.695        0.000        0.000        0.000       11.801        3.968        1.390
 12-2019        0.254        0.644        4.466        0.000        0.000        0.000        8.637       12.604        7.165
 12-2020        0.215        0.546        4.332        0.000        0.000        0.000        6.785       19.389       11.287
 
 
 12-2021        0.189        0.481        4.242        0.000        0.000        0.000        5.539       24.928       14.345
 12-2022        0.171        0.433        4.176        0.000        0.000        0.000        4.629       29.557       16.669
 12-2023        0.156        0.396        4.126        0.000        0.000        0.000        3.930       33.487       18.462
 12-2024        0.144        0.366        4.085        0.000        0.000        0.000        3.371       36.858       19.860
 12-2025        0.135        0.342        4.052        0.000        0.000        0.000        2.912       39.770       20.958
 
 
 12-2026        0.127        0.322        4.024        0.000        0.000        0.000        2.518       42.288       21.821
 12-2027        0.119        0.302        3.997        0.000        0.000        0.000        2.152       44.440       22.492
 12-2028        0.112        0.284        3.972        0.000        0.000        0.000        1.808       46.248       23.004
 12-2029        0.105        0.267        3.949        0.000        0.000        0.000        1.485       47.732       23.387
 12-2030        0.099        0.251        3.927        0.000        0.000        0.000        1.181       48.913       23.663
 
 
 12-2031        0.093        0.236        3.906        0.000        0.000        0.000        0.895       49.808       23.854
 12-2032        0.087        0.222        3.887        0.000        0.000        0.000        0.626       50.434       23.976
 12-2033        0.082        0.209        3.868        0.000        0.000        0.000        0.374       50.808       24.042
 12-2034        0.077        0.196        3.851        0.000        0.000        0.000        0.136       50.944       24.064
 
 
   S TOT        2.908        7.379       74.310        0.000        0.000       24.875       50.944       50.944       24.064
 
 
   AFTER        0.006        0.016        0.320        0.000        0.000        0.000        0.001       50.945       24.064
 
 
   TOTAL        2.914        7.395       74.630        0.000        0.000       24.875       50.945       50.945       24.064
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 19.83            5.00       34.462
 GROSS ULT., MB & MMF       2.916       0.000         DISCOUNT %                 10.00            9.00       25.804
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   3.41           15.00       17.165
 GROSS RES., MB & MMF       2.916       0.000         DISCOUNTED PAYOUT, YRS.     3.59           20.00       12.399
 NET RES.,   MB & MMF       2.176       0.000         UNDISCOUNTED NET/INVEST.    3.05           25.00        8.997
 NET REVENUE, M$          160.759       0.000         DISCOUNTED NET/INVEST.      2.14           30.00        6.505
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       60.96           40.00        3.222
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00        0.073
                                                                                                 80.00       -1.173
                                                                                                100.00       -1.675

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 15   ROGERS, THEO 'D' PROB 1                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 6PRB                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        1.256        0.000        0.937        0.000       73.880        0.000       69.253        0.000       69.253
 12-2020        2.478        0.000        1.849        0.000       73.880        0.000      136.612        0.000      136.612
 
 
 12-2021        1.886        0.000        1.408        0.000       73.880        0.000      104.001        0.000      104.001
 12-2022        1.312        0.000        0.979        0.000       73.880        0.000       72.312        0.000       72.312
 12-2023        1.037        0.000        0.774        0.000       73.880        0.000       57.196        0.000       57.196
 12-2024        0.880        0.000        0.656        0.000       73.880        0.000       48.497        0.000       48.497
 12-2025        0.774        0.000        0.578        0.000       73.880        0.000       42.686        0.000       42.686
 
 
 12-2026        0.698        0.000        0.521        0.000       73.880        0.000       38.464        0.000       38.464
 12-2027        0.639        0.000        0.477        0.000       73.880        0.000       35.223        0.000       35.223
 12-2028        0.578        0.000        0.432        0.000       73.880        0.000       31.886        0.000       31.886
 12-2029        0.487        0.000        0.363        0.000       73.880        0.000       26.826        0.000       26.826
 12-2030        0.407        0.000        0.304        0.000       73.880        0.000       22.429        0.000       22.429
 
 
 12-2031        0.340        0.000        0.254        0.000       73.880        0.000       18.753        0.000       18.753
 12-2032        0.284        0.000        0.212        0.000       73.880        0.000       15.679        0.000       15.679
 12-2033        0.238        0.000        0.177        0.000       73.880        0.000       13.109        0.000       13.109
 12-2034        0.199        0.000        0.148        0.000       73.880        0.000       10.961        0.000       10.961
 
 
   S TOT       13.493        0.000       10.069        0.000       73.880        0.000      743.887        0.000      743.887
 
 
   AFTER        0.600        0.000        0.448        0.000       73.880        0.000       33.067        0.000       33.067
 
 
   TOTAL       14.092        0.000       10.516        0.000       73.880        0.000      776.955        0.000      776.955
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        1.255        3.186        5.568        0.000        0.000      298.500     -239.256     -239.256     -159.195
 12-2020        2.476        6.284       12.211        0.000        0.000        0.000      115.641     -123.616      -88.784
 
 
 12-2021        1.885        4.784       10.151        0.000        0.000        0.000       87.180      -36.435      -40.581
 12-2022        1.311        3.326        8.150        0.000        0.000        0.000       59.525       23.090      -10.671
 12-2023        1.037        2.631        7.195        0.000        0.000        0.000       46.333       69.423       10.477
 12-2024        0.879        2.231        6.645        0.000        0.000        0.000       38.741      108.165       26.546
 12-2025        0.774        1.964        6.278        0.000        0.000        0.000       33.670      141.835       39.239
 
 
 12-2026        0.697        1.769        6.012        0.000        0.000        0.000       29.986      171.821       49.513
 12-2027        0.638        1.620        5.807        0.000        0.000        0.000       27.157      198.978       57.972
 12-2028        0.578        1.467        5.596        0.000        0.000        0.000       24.246      223.224       64.842
 12-2029        0.486        1.234        5.276        0.000        0.000        0.000       19.829      243.053       69.951
 12-2030        0.407        1.032        4.999        0.000        0.000        0.000       15.992      259.045       73.697
 
 
 12-2031        0.340        0.863        4.767        0.000        0.000        0.000       12.784      271.829       76.420
 12-2032        0.284        0.721        4.572        0.000        0.000        0.000       10.101      281.931       78.376
 12-2033        0.238        0.603        4.410        0.000        0.000        0.000        7.859      289.789       79.759
 12-2034        0.199        0.504        4.274        0.000        0.000        0.000        5.984      295.773       80.717
 
 
   S TOT       13.484       34.219      101.912        0.000        0.000      298.500      295.773      295.773       80.717
 
 
   AFTER        0.599        1.521       19.999        0.000        0.000        0.000       10.948      306.721       82.166
 
 
   TOTAL       14.083       35.740      121.911        0.000        0.000      298.500      306.721      306.721       82.166
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 24.75            5.00      159.913
 GROSS ULT., MB & MMF      14.092       0.000         DISCOUNT %                 10.00            9.00       94.182
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   7.36           15.00       39.314
 GROSS RES., MB & MMF      14.092       0.000         DISCOUNTED PAYOUT, YRS.     8.25           20.00       15.097
 NET RES.,   MB & MMF      10.516       0.000         UNDISCOUNTED NET/INVEST.    2.03           25.00        1.275
 NET REVENUE, M$          776.955       0.000         DISCOUNTED NET/INVEST.      1.42           30.00       -6.556
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       25.81           40.00      -13.023
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -13.113
                                                                                                 80.00      -10.002
                                                                                                100.00       -7.258

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 16   ROGERS, THEO 'D' PROB 2                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 6PRB                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        2.640        0.000        1.970        0.000       73.880        0.000      145.574        0.000      145.574
 
 
 12-2021        2.129        0.000        1.589        0.000       73.880        0.000      117.364        0.000      117.364
 12-2022        1.554        0.000        1.159        0.000       73.880        0.000       85.664        0.000       85.664
 12-2023        1.152        0.000        0.860        0.000       73.880        0.000       63.531        0.000       63.531
 12-2024        0.950        0.000        0.709        0.000       73.880        0.000       52.352        0.000       52.352
 12-2025        0.822        0.000        0.614        0.000       73.880        0.000       45.336        0.000       45.336
 
 
 12-2026        0.733        0.000        0.547        0.000       73.880        0.000       40.424        0.000       40.424
 12-2027        0.666        0.000        0.497        0.000       73.880        0.000       36.745        0.000       36.745
 12-2028        0.613        0.000        0.458        0.000       73.880        0.000       33.815        0.000       33.815
 12-2029        0.532        0.000        0.397        0.000       73.880        0.000       29.338        0.000       29.338
 12-2030        0.445        0.000        0.332        0.000       73.880        0.000       24.529        0.000       24.529
 
 
 12-2031        0.372        0.000        0.278        0.000       73.880        0.000       20.509        0.000       20.509
 12-2032        0.311        0.000        0.232        0.000       73.880        0.000       17.147        0.000       17.147
 12-2033        0.260        0.000        0.194        0.000       73.880        0.000       14.337        0.000       14.337
 12-2034        0.217        0.000        0.162        0.000       73.880        0.000       11.987        0.000       11.987
 
 
   S TOT       13.398        0.000        9.998        0.000       73.880        0.000      738.652        0.000      738.652
 
 
   AFTER        0.695        0.000        0.518        0.000       73.880        0.000       38.303        0.000       38.303
 
 
   TOTAL       14.092        0.000       10.516        0.000       73.880        0.000      776.955        0.000      776.955
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        2.639        6.696       12.180        0.000        0.000      298.500     -174.441     -174.441     -113.366
 
 
 12-2021        2.127        5.399       10.995        0.000        0.000        0.000       98.842      -75.599      -58.809
 12-2022        1.553        3.941        8.993        0.000        0.000        0.000       71.177       -4.421      -23.017
 12-2023        1.152        2.922        7.595        0.000        0.000        0.000       51.862       47.441        0.662
 12-2024        0.949        2.408        6.889        0.000        0.000        0.000       42.106       89.547       18.130
 12-2025        0.822        2.085        6.446        0.000        0.000        0.000       35.983      125.530       31.696
 
 
 12-2026        0.733        1.859        6.135        0.000        0.000        0.000       31.696      157.226       42.558
 12-2027        0.666        1.690        5.903        0.000        0.000        0.000       28.486      185.712       51.431
 12-2028        0.613        1.555        5.718        0.000        0.000        0.000       25.928      211.640       58.773
 12-2029        0.532        1.350        5.435        0.000        0.000        0.000       22.022      233.662       64.446
 12-2030        0.445        1.128        5.131        0.000        0.000        0.000       17.825      251.487       68.622
 
 
 12-2031        0.372        0.943        4.877        0.000        0.000        0.000       14.316      265.803       71.671
 12-2032        0.311        0.789        4.665        0.000        0.000        0.000       11.383      277.186       73.874
 12-2033        0.260        0.659        4.488        0.000        0.000        0.000        8.930      286.116       75.446
 12-2034        0.217        0.551        4.339        0.000        0.000        0.000        6.879      292.995       76.548
 
 
   S TOT       13.389       33.978       99.790        0.000        0.000      298.500      292.995      292.995       76.548
 
 
   AFTER        0.694        1.762       22.120        0.000        0.000        0.000       13.726      306.721       78.342
 
 
   TOTAL       14.083       35.740      121.911        0.000        0.000      298.500      306.721      306.721       78.342
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 25.25            5.00      156.059
 GROSS ULT., MB & MMF      14.092       0.000         DISCOUNT %                 10.00            9.00       90.210
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   7.84           15.00       36.660
 GROSS RES., MB & MMF      14.092       0.000         DISCOUNTED PAYOUT, YRS.     8.72           20.00       13.782
 NET RES.,   MB & MMF      10.516       0.000         UNDISCOUNTED NET/INVEST.    2.03           25.00        1.140
 NET REVENUE, M$          776.955       0.000         DISCOUNTED NET/INVEST.      1.42           30.00       -5.750
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       25.83           40.00      -11.006
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -10.367
                                                                                                 80.00       -7.455
                                                                                                100.00       -5.133

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 13   BURNS, JANE -C- POSS 1                                                                          DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 9POS                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        1.340        0.000        1.000        0.000       73.880        0.000       73.870        0.000       73.870
 12-2020        2.643        0.000        1.972        0.000       73.880        0.000      145.720        0.000      145.720
 
 
 12-2021        2.064        0.000        1.540        0.000       73.880        0.000      113.805        0.000      113.805
 12-2022        1.443        0.000        1.077        0.000       73.880        0.000       79.543        0.000       79.543
 12-2023        1.141        0.000        0.852        0.000       73.880        0.000       62.916        0.000       62.916
 12-2024        0.968        0.000        0.722        0.000       73.880        0.000       53.346        0.000       53.346
 12-2025        0.852        0.000        0.636        0.000       73.880        0.000       46.955        0.000       46.955
 
 
 12-2026        0.767        0.000        0.573        0.000       73.880        0.000       42.310        0.000       42.310
 12-2027        0.703        0.000        0.524        0.000       73.880        0.000       38.745        0.000       38.745
 12-2028        0.637        0.000        0.476        0.000       73.880        0.000       35.139        0.000       35.139
 12-2029        0.541        0.000        0.403        0.000       73.880        0.000       29.801        0.000       29.801
 12-2030        0.456        0.000        0.340        0.000       73.880        0.000       25.131        0.000       25.131
 
 
 12-2031        0.384        0.000        0.287        0.000       73.880        0.000       21.193        0.000       21.193
 12-2032        0.324        0.000        0.242        0.000       73.880        0.000       17.872        0.000       17.872
 12-2033        0.273        0.000        0.204        0.000       73.880        0.000       15.071        0.000       15.071
 12-2034        0.231        0.000        0.172        0.000       73.880        0.000       12.709        0.000       12.709
 
 
   S TOT       14.767        0.000       11.020        0.000       73.880        0.000      814.127        0.000      814.127
 
 
   AFTER        0.801        0.000        0.597        0.000       73.880        0.000       44.142        0.000       44.142
 
 
   TOTAL       15.567        0.000       11.617        0.000       73.880        0.000      858.269        0.000      858.269
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        1.339        3.398        5.860        0.000        0.000      298.500     -235.227     -235.227     -156.589
 12-2020        2.641        6.703       12.786        0.000        0.000        0.000      123.589     -111.638      -81.340
 
 
 12-2021        2.063        5.235       10.771        0.000        0.000        0.000       95.737      -15.901      -28.417
 12-2022        1.442        3.659        8.606        0.000        0.000        0.000       65.836       49.934        4.663
 12-2023        1.140        2.894        7.556        0.000        0.000        0.000       51.325      101.260       28.089
 12-2024        0.967        2.454        6.952        0.000        0.000        0.000       42.974      144.233       45.914
 12-2025        0.851        2.160        6.548        0.000        0.000        0.000       37.396      181.629       60.011
 
 
 12-2026        0.767        1.946        6.255        0.000        0.000        0.000       33.342      214.971       71.436
 12-2027        0.702        1.782        6.029        0.000        0.000        0.000       30.231      245.203       80.852
 12-2028        0.637        1.616        5.802        0.000        0.000        0.000       27.084      272.287       88.525
 12-2029        0.540        1.371        5.464        0.000        0.000        0.000       22.426      294.713       94.303
 12-2030        0.456        1.156        5.169        0.000        0.000        0.000       18.350      313.063       98.601
 
 
 12-2031        0.384        0.975        4.921        0.000        0.000        0.000       14.913      327.976      101.776
 12-2032        0.324        0.822        4.711        0.000        0.000        0.000       12.015      339.991      104.102
 12-2033        0.273        0.693        4.534        0.000        0.000        0.000        9.571      349.562      105.787
 12-2034        0.230        0.585        4.385        0.000        0.000        0.000        7.509      357.071      106.989
 
 
   S TOT       14.757       37.450      106.349        0.000        0.000      298.500      357.071      357.071      106.989
 
 
   AFTER        0.800        2.031       24.579        0.000        0.000        0.000       16.733      373.804      109.142
 
 
   TOTAL       15.557       39.480      130.927        0.000        0.000      298.500      373.804      373.804      109.142
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 25.83            5.00      200.933
 GROSS ULT., MB & MMF      15.567       0.000         DISCOUNT %                 10.00            9.00      123.377
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   6.99           15.00       58.025
 GROSS RES., MB & MMF      15.567       0.000         DISCOUNTED PAYOUT, YRS.     7.61           20.00       28.601
 NET RES.,   MB & MMF      11.617       0.000         UNDISCOUNTED NET/INVEST.    2.25           25.00       11.322
 NET REVENUE, M$          858.269       0.000         DISCOUNTED NET/INVEST.      1.55           30.00        1.101
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       30.92           40.00       -8.323
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00      -11.048
                                                                                                 80.00       -8.962
                                                                                                100.00       -6.683

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 14   BURNS, JANE -C- POSS 2                                                                          DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 9POS                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        2.746        0.000        2.049        0.000       73.880        0.000      151.397        0.000      151.397
 
 
 12-2021        2.221        0.000        1.657        0.000       73.880        0.000      122.450        0.000      122.450
 12-2022        1.631        0.000        1.217        0.000       73.880        0.000       89.947        0.000       89.947
 12-2023        1.210        0.000        0.903        0.000       73.880        0.000       66.708        0.000       66.708
 12-2024        0.997        0.000        0.744        0.000       73.880        0.000       54.970        0.000       54.970
 12-2025        0.863        0.000        0.644        0.000       73.880        0.000       47.603        0.000       47.603
 
 
 12-2026        0.770        0.000        0.575        0.000       73.880        0.000       42.445        0.000       42.445
 12-2027        0.700        0.000        0.522        0.000       73.880        0.000       38.583        0.000       38.583
 12-2028        0.644        0.000        0.481        0.000       73.880        0.000       35.501        0.000       35.501
 12-2029        0.555        0.000        0.414        0.000       73.880        0.000       30.606        0.000       30.606
 12-2030        0.460        0.000        0.343        0.000       73.880        0.000       25.336        0.000       25.336
 
 
 12-2031        0.380        0.000        0.284        0.000       73.880        0.000       20.973        0.000       20.973
 12-2032        0.315        0.000        0.235        0.000       73.880        0.000       17.362        0.000       17.362
 12-2033        0.261        0.000        0.195        0.000       73.880        0.000       14.372        0.000       14.372
 12-2034        0.216        0.000        0.161        0.000       73.880        0.000       11.898        0.000       11.898
 
 
   S TOT       13.969        0.000       10.424        0.000       73.880        0.000      770.149        0.000      770.149
 
 
   AFTER        0.640        0.000        0.478        0.000       73.880        0.000       35.310        0.000       35.310
 
 
   TOTAL       14.609        0.000       10.902        0.000       73.880        0.000      805.459        0.000      805.459
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        2.744        6.964       12.548        0.000        0.000      298.500     -169.359     -169.359     -110.297
 
 
 12-2021        2.220        5.633       11.317        0.000        0.000        0.000      103.282      -66.078      -53.296
 12-2022        1.630        4.138        9.264        0.000        0.000        0.000       74.915        8.838      -15.624
 12-2023        1.209        3.069        7.796        0.000        0.000        0.000       54.634       63.472        9.321
 12-2024        0.996        2.529        7.054        0.000        0.000        0.000       44.390      107.863       27.736
 12-2025        0.863        2.190        6.589        0.000        0.000        0.000       37.961      145.824       42.048
 
 
 12-2026        0.769        1.952        6.263        0.000        0.000        0.000       33.460      179.284       53.514
 12-2027        0.699        1.775        6.019        0.000        0.000        0.000       30.089      209.373       62.887
 12-2028        0.643        1.633        5.824        0.000        0.000        0.000       27.400      236.773       70.645
 12-2029        0.555        1.408        5.515        0.000        0.000        0.000       23.128      259.901       76.605
 12-2030        0.459        1.165        5.182        0.000        0.000        0.000       18.529      278.429       80.945
 
 
 12-2031        0.380        0.965        4.907        0.000        0.000        0.000       14.721      293.151       84.080
 12-2032        0.315        0.799        4.679        0.000        0.000        0.000       11.570      304.721       86.321
 12-2033        0.261        0.661        4.490        0.000        0.000        0.000        8.961      313.681       87.898
 12-2034        0.216        0.547        4.334        0.000        0.000        0.000        6.801      320.482       88.987
 
 
   S TOT       13.960       35.427      101.780        0.000        0.000      298.500      320.482      320.482       88.987
 
 
   AFTER        0.640        1.624       20.439        0.000        0.000        0.000       12.607      333.090       90.651
 
 
   TOTAL       14.600       37.051      122.219        0.000        0.000      298.500      333.090      333.090       90.651
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 24.83            5.00      173.832
 GROSS ULT., MB & MMF      14.609       0.000         DISCOUNT %                 10.00            9.00      103.428
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   7.63           15.00       45.415
 GROSS RES., MB & MMF      14.609       0.000         DISCOUNTED PAYOUT, YRS.     8.38           20.00       20.161
 NET RES.,   MB & MMF      10.902       0.000         UNDISCOUNTED NET/INVEST.    2.12           25.00        5.888
 NET REVENUE, M$          805.459       0.000         DISCOUNTED NET/INVEST.      1.48           30.00       -2.149
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.66           40.00       -8.834
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -9.455
                                                                                                 80.00       -7.017
                                                                                                100.00       -4.900

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 17   ROGERS, THEO 'D' POSS 1                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 9POS                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        1.306        0.000        0.975        0.000       73.880        0.000       72.023        0.000       72.023
 
 
 12-2021        2.577        0.000        1.923        0.000       73.880        0.000      142.077        0.000      142.077
 12-2022        1.977        0.000        1.476        0.000       73.880        0.000      109.022        0.000      109.022
 12-2023        1.377        0.000        1.028        0.000       73.880        0.000       75.927        0.000       75.927
 12-2024        1.089        0.000        0.813        0.000       73.880        0.000       60.056        0.000       60.056
 12-2025        0.924        0.000        0.689        0.000       73.880        0.000       50.921        0.000       50.921
 
 
 12-2026        0.813        0.000        0.607        0.000       73.880        0.000       44.820        0.000       44.820
 12-2027        0.733        0.000        0.547        0.000       73.880        0.000       40.387        0.000       40.387
 12-2028        0.671        0.000        0.501        0.000       73.880        0.000       36.984        0.000       36.984
 12-2029        0.606        0.000        0.452        0.000       73.880        0.000       33.410        0.000       33.410
 12-2030        0.505        0.000        0.377        0.000       73.880        0.000       27.846        0.000       27.846
 
 
 12-2031        0.418        0.000        0.312        0.000       73.880        0.000       23.051        0.000       23.051
 12-2032        0.346        0.000        0.258        0.000       73.880        0.000       19.082        0.000       19.082
 12-2033        0.287        0.000        0.214        0.000       73.880        0.000       15.796        0.000       15.796
 12-2034        0.237        0.000        0.177        0.000       73.880        0.000       13.076        0.000       13.076
 
 
   S TOT       13.866        0.000       10.348        0.000       73.880        0.000      764.481        0.000      764.481
 
 
   AFTER        0.743        0.000        0.555        0.000       73.880        0.000       40.978        0.000       40.978
 
 
   TOTAL       14.609        0.000       10.902        0.000       73.880        0.000      805.459        0.000      805.459
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        1.305        3.313        5.743        0.000        0.000      298.500     -236.839     -236.839     -143.301
 
 
 12-2021        2.575        6.536       12.556        0.000        0.000        0.000      120.410     -116.429      -76.652
 12-2022        1.976        5.015       10.468        0.000        0.000        0.000       91.562      -24.867      -30.632
 12-2023        1.376        3.493        8.378        0.000        0.000        0.000       62.680       37.814       -2.000
 12-2024        1.089        2.763        7.375        0.000        0.000        0.000       48.829       86.643       18.261
 12-2025        0.923        2.342        6.798        0.000        0.000        0.000       40.857      127.500       33.667
 
 
 12-2026        0.812        2.062        6.413        0.000        0.000        0.000       35.533      163.033       45.844
 12-2027        0.732        1.858        6.133        0.000        0.000        0.000       31.664      194.697       55.708
 12-2028        0.670        1.701        5.918        0.000        0.000        0.000       28.694      223.392       63.833
 12-2029        0.606        1.537        5.692        0.000        0.000        0.000       25.575      248.967       70.421
 12-2030        0.505        1.281        5.341        0.000        0.000        0.000       20.720      269.687       75.274
 
 
 12-2031        0.418        1.060        5.038        0.000        0.000        0.000       16.535      286.222       78.796
 12-2032        0.346        0.878        4.787        0.000        0.000        0.000       13.071      299.293       81.327
 12-2033        0.286        0.727        4.580        0.000        0.000        0.000       10.204      309.497       83.123
 12-2034        0.237        0.602        4.408        0.000        0.000        0.000        7.830      317.327       84.376
 
 
   S TOT       13.857       35.166       99.631        0.000        0.000      298.500      317.327      317.327       84.376
 
 
   AFTER        0.743        1.885       22.588        0.000        0.000        0.000       15.763      333.090       86.432
 
 
   TOTAL       14.600       37.051      122.219        0.000        0.000      298.500      333.090      333.090       86.432
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 25.33            5.00      169.642
 GROSS ULT., MB & MMF      14.609       0.000         DISCOUNT %                 10.00            9.00       99.066
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   8.15           15.00       42.349
 GROSS RES., MB & MMF      14.609       0.000         DISCOUNTED PAYOUT, YRS.     8.85           20.00       18.404
 NET RES.,   MB & MMF      10.902       0.000         UNDISCOUNTED NET/INVEST.    2.12           25.00        5.267
 NET REVENUE, M$          805.459       0.000         DISCOUNTED NET/INVEST.      1.48           30.00       -1.885
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.68           40.00       -7.466
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -7.475
                                                                                                 80.00       -5.230
                                                                                                100.00       -3.465

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 18   ROGERS, THEO 'D' POSS 2                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 9POS                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2021        2.746        0.000        2.049        0.000       73.880        0.000      151.397        0.000      151.397
 12-2022        2.221        0.000        1.657        0.000       73.880        0.000      122.450        0.000      122.450
 12-2023        1.631        0.000        1.217        0.000       73.880        0.000       89.947        0.000       89.947
 12-2024        1.210        0.000        0.903        0.000       73.880        0.000       66.708        0.000       66.708
 12-2025        0.997        0.000        0.744        0.000       73.880        0.000       54.970        0.000       54.970
 
 
 12-2026        0.863        0.000        0.644        0.000       73.880        0.000       47.603        0.000       47.603
 12-2027        0.770        0.000        0.575        0.000       73.880        0.000       42.445        0.000       42.445
 12-2028        0.700        0.000        0.522        0.000       73.880        0.000       38.583        0.000       38.583
 12-2029        0.644        0.000        0.481        0.000       73.880        0.000       35.501        0.000       35.501
 12-2030        0.555        0.000        0.414        0.000       73.880        0.000       30.606        0.000       30.606
 
 
 12-2031        0.460        0.000        0.343        0.000       73.880        0.000       25.336        0.000       25.336
 12-2032        0.380        0.000        0.284        0.000       73.880        0.000       20.973        0.000       20.973
 12-2033        0.315        0.000        0.235        0.000       73.880        0.000       17.362        0.000       17.362
 12-2034        0.261        0.000        0.195        0.000       73.880        0.000       14.372        0.000       14.372
 
 
   S TOT       13.753        0.000       10.263        0.000       73.880        0.000      758.251        0.000      758.251
 
 
   AFTER        0.856        0.000        0.639        0.000       73.880        0.000       47.208        0.000       47.208
 
 
   TOTAL       14.609        0.000       10.902        0.000       73.880        0.000      805.459        0.000      805.459
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2021        2.744        6.964       12.548        0.000        0.000      298.500     -169.359     -169.359     -100.270
 12-2022        2.220        5.633       11.317        0.000        0.000        0.000      103.282      -66.078      -48.451
 12-2023        1.630        4.138        9.264        0.000        0.000        0.000       74.915        8.838      -14.203
 12-2024        1.209        3.069        7.796        0.000        0.000        0.000       54.634       63.472        8.474
 12-2025        0.996        2.529        7.054        0.000        0.000        0.000       44.390      107.863       25.215
 
 
 12-2026        0.863        2.190        6.589        0.000        0.000        0.000       37.961      145.824       38.226
 12-2027        0.769        1.952        6.263        0.000        0.000        0.000       33.460      179.284       48.649
 12-2028        0.699        1.775        6.019        0.000        0.000        0.000       30.089      209.373       57.170
 12-2029        0.643        1.633        5.824        0.000        0.000        0.000       27.400      236.773       64.223
 12-2030        0.555        1.408        5.515        0.000        0.000        0.000       23.128      259.901       69.640
 
 
 12-2031        0.459        1.165        5.182        0.000        0.000        0.000       18.529      278.429       73.586
 12-2032        0.380        0.965        4.907        0.000        0.000        0.000       14.721      293.151       76.437
 12-2033        0.315        0.799        4.679        0.000        0.000        0.000       11.570      304.721       78.473
 12-2034        0.261        0.661        4.490        0.000        0.000        0.000        8.961      313.681       79.908
 
 
   S TOT       13.744       34.880       97.446        0.000        0.000      298.500      313.681      313.681       79.908
 
 
   AFTER        0.856        2.172       24.772        0.000        0.000        0.000       19.408      333.090       82.410
 
 
   TOTAL       14.600       37.051      122.219        0.000        0.000      298.500      333.090      333.090       82.410
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 25.83            5.00      165.554
 GROSS ULT., MB & MMF      14.609       0.000         DISCOUNT %                 10.00            9.00       94.888
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   8.63           15.00       39.491
 GROSS RES., MB & MMF      14.609       0.000         DISCOUNTED PAYOUT, YRS.     9.38           20.00       16.800
 NET RES.,   MB & MMF      10.902       0.000         UNDISCOUNTED NET/INVEST.    2.12           25.00        4.711
 NET REVENUE, M$          805.459       0.000         DISCOUNTED NET/INVEST.      1.48           30.00       -1.653
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.70           40.00       -6.310
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -5.909
                                                                                                 80.00       -3.898
                                                                                                100.00       -2.450

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 19   ROGERS, THEO 'D' POSS 3                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 9POS                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2021        1.306        0.000        0.975        0.000       73.880        0.000       72.023        0.000       72.023
 12-2022        2.577        0.000        1.923        0.000       73.880        0.000      142.077        0.000      142.077
 12-2023        1.977        0.000        1.476        0.000       73.880        0.000      109.022        0.000      109.022
 12-2024        1.377        0.000        1.028        0.000       73.880        0.000       75.927        0.000       75.927
 12-2025        1.089        0.000        0.813        0.000       73.880        0.000       60.056        0.000       60.056
 
 
 12-2026        0.924        0.000        0.689        0.000       73.880        0.000       50.921        0.000       50.921
 12-2027        0.813        0.000        0.607        0.000       73.880        0.000       44.820        0.000       44.820
 12-2028        0.733        0.000        0.547        0.000       73.880        0.000       40.387        0.000       40.387
 12-2029        0.671        0.000        0.501        0.000       73.880        0.000       36.984        0.000       36.984
 12-2030        0.606        0.000        0.452        0.000       73.880        0.000       33.410        0.000       33.410
 
 
 12-2031        0.505        0.000        0.377        0.000       73.880        0.000       27.846        0.000       27.846
 12-2032        0.418        0.000        0.312        0.000       73.880        0.000       23.051        0.000       23.051
 12-2033        0.346        0.000        0.258        0.000       73.880        0.000       19.082        0.000       19.082
 12-2034        0.287        0.000        0.214        0.000       73.880        0.000       15.796        0.000       15.796
 
 
   S TOT       13.629        0.000       10.171        0.000       73.880        0.000      751.404        0.000      751.404
 
 
   AFTER        0.980        0.000        0.732        0.000       73.880        0.000       54.055        0.000       54.055
 
 
   TOTAL       14.609        0.000       10.902        0.000       73.880        0.000      805.459        0.000      805.459
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2021        1.305        3.313        5.743        0.000        0.000      298.500     -236.839     -236.839     -130.274
 12-2022        2.575        6.536       12.556        0.000        0.000        0.000      120.410     -116.429      -69.684
 12-2023        1.976        5.015       10.468        0.000        0.000        0.000       91.562      -24.867      -27.847
 12-2024        1.376        3.493        8.378        0.000        0.000        0.000       62.680       37.814       -1.818
 12-2025        1.089        2.763        7.375        0.000        0.000        0.000       48.829       86.643       16.601
 
 
 12-2026        0.923        2.342        6.798        0.000        0.000        0.000       40.857      127.500       30.606
 12-2027        0.812        2.062        6.413        0.000        0.000        0.000       35.533      163.033       41.677
 12-2028        0.732        1.858        6.133        0.000        0.000        0.000       31.664      194.697       50.643
 12-2029        0.670        1.701        5.918        0.000        0.000        0.000       28.694      223.392       58.030
 12-2030        0.606        1.537        5.692        0.000        0.000        0.000       25.575      248.967       64.019
 
 
 12-2031        0.505        1.281        5.341        0.000        0.000        0.000       20.720      269.687       68.431
 12-2032        0.418        1.060        5.038        0.000        0.000        0.000       16.535      286.222       71.633
 12-2033        0.346        0.878        4.787        0.000        0.000        0.000       13.071      299.293       73.934
 12-2034        0.286        0.727        4.580        0.000        0.000        0.000       10.204      309.497       75.566
 
 
   S TOT       13.620       34.565       95.223        0.000        0.000      298.500      309.497      309.497       75.566
 
 
   AFTER        0.980        2.487       26.996        0.000        0.000        0.000       23.593      333.090       78.575
 
 
   TOTAL       14.600       37.051      122.219        0.000        0.000      298.500      333.090      333.090       78.575
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 26.33            5.00      161.564
 GROSS ULT., MB & MMF      14.609       0.000         DISCOUNT %                 10.00            9.00       90.887
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.   9.15           15.00       36.825
 GROSS RES., MB & MMF      14.609       0.000         DISCOUNTED PAYOUT, YRS.     9.85           20.00       15.337
 NET RES.,   MB & MMF      10.902       0.000         UNDISCOUNTED NET/INVEST.    2.12           25.00        4.213
 NET REVENUE, M$          805.459       0.000         DISCOUNTED NET/INVEST.      1.48           30.00       -1.450
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       28.72           40.00       -5.333
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -4.672
                                                                                                 80.00       -2.905
                                                                                                100.00       -1.732

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.
 
 
 
SCHEDULE 4


 21   ROGERS, THEO 'D' POSS 4                                                                         DATE     : 06/08/2015
 ATASCOSA  TX                                                                                         TIME     : 12:01:08
                                                                                                      DBS      : LKA0415
 9POS                                                                                                 SETTINGS : LKA0415
                                                                                                      SCENARIO : SEC0415
 
 
                                           R E S E R V E S   A N D   E C O N O M I C S
 
 
                                                    AS OF APRIL 1, 2015
 
 
 --END--   GROSS  OIL   GROSS  GAS    NET  OIL     NET  GAS     NET OIL      NET GAS        NET          NET         TOTAL
 MO-YEAR   PRODUCTION   PRODUCTION   PRODUCTION   PRODUCTION     PRICE        PRICE      OIL SALES    GAS SALES    NET SALES
 -------  ---MBBLS---  ----MMCF---  ---MBBLS---  ----MMCF---  ---$/BBL---  ---$/MCF---  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2021        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2022        2.535        0.000        1.892        0.000       73.880        0.000      139.751        0.000      139.751
 12-2023        2.001        0.000        1.493        0.000       73.880        0.000      110.316        0.000      110.316
 12-2024        1.398        0.000        1.044        0.000       73.880        0.000       77.097        0.000       77.097
 12-2025        1.037        0.000        0.774        0.000       73.880        0.000       57.178        0.000       57.178
 
 
 12-2026        0.855        0.000        0.638        0.000       73.880        0.000       47.117        0.000       47.117
 12-2027        0.740        0.000        0.552        0.000       73.880        0.000       40.802        0.000       40.802
 12-2028        0.660        0.000        0.492        0.000       73.880        0.000       36.381        0.000       36.381
 12-2029        0.600        0.000        0.448        0.000       73.880        0.000       33.071        0.000       33.071
 12-2030        0.552        0.000        0.412        0.000       73.880        0.000       30.447        0.000       30.447
 
 
 12-2031        0.490        0.000        0.365        0.000       73.880        0.000       26.999        0.000       26.999
 12-2032        0.424        0.000        0.316        0.000       73.880        0.000       23.357        0.000       23.357
 12-2033        0.367        0.000        0.274        0.000       73.880        0.000       20.207        0.000       20.207
 12-2034        0.317        0.000        0.237        0.000       73.880        0.000       17.481        0.000       17.481
 
 
   S TOT       11.975        0.000        8.936        0.000       73.880        0.000      660.205        0.000      660.205
 
 
   AFTER        1.520        0.000        1.134        0.000       73.880        0.000       83.811        0.000       83.811
 
 
   TOTAL       13.495        0.000       10.071        0.000       73.880        0.000      744.016        0.000      744.016
 
 
 --END--  AD VALOREM   PRODUCTION   DIRECT OPER    INTEREST     CAPITAL       EQUITY     FUTURE NET   CUMULATIVE   CUM. DISC.
 MO-YEAR      TAX         TAX         EXPENSE        PAID      REPAYMENT    INVESTMENT    CASHFLOW     CASHFLOW     CASHFLOW
 -------  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----  -----M$----
 
 
 12-2015        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2016        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2017        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2018        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2019        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2020        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 
 
 12-2021        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000        0.000
 12-2022        2.533        6.429       11.812        0.000        0.000      298.500     -179.523     -179.523      -96.228
 12-2023        2.000        5.075       10.550        0.000        0.000        0.000       92.692      -86.831      -53.915
 12-2024        1.397        3.546        8.452        0.000        0.000        0.000       63.701      -23.129      -27.441
 12-2025        1.036        2.630        7.194        0.000        0.000        0.000       46.318       23.189       -9.963
 
 
 12-2026        0.854        2.167        6.558        0.000        0.000        0.000       37.537       60.726        2.906
 12-2027        0.740        1.877        6.159        0.000        0.000        0.000       32.027       92.752       12.885
 12-2028        0.659        1.674        5.880        0.000        0.000        0.000       28.168      120.921       20.863
 12-2029        0.599        1.521        5.671        0.000        0.000        0.000       25.279      146.200       27.371
 12-2030        0.552        1.401        5.505        0.000        0.000        0.000       22.989      169.189       32.751
 
 
 12-2031        0.489        1.242        5.287        0.000        0.000        0.000       19.980      189.169       37.004
 12-2032        0.423        1.074        5.057        0.000        0.000        0.000       16.802      205.971       40.255
 12-2033        0.366        0.930        4.858        0.000        0.000        0.000       14.053      220.024       42.728
 12-2034        0.317        0.804        4.686        0.000        0.000        0.000       11.674      231.698       44.595
 
 
   S TOT       11.967       30.369       87.671        0.000        0.000      298.500      231.698      231.698       44.595
 
 
   AFTER        1.519        3.855       39.323        0.000        0.000        0.000       39.113      270.811       49.255
 
 
   TOTAL       13.486       34.225      126.994        0.000        0.000      298.500      270.811      270.811       49.255
 
 
                        OIL         GAS                                                         P.W. %     P.W., M$
                        ---------   ---------                                                   ------     --------
 GROSS WELLS                  1.0         0.0         LIFE, YRS.                 29.25            5.00      117.676
 GROSS ULT., MB & MMF      13.495       0.000         DISCOUNT %                 10.00            9.00       59.038
 GROSS CUM., MB & MMF       0.000       0.000         UNDISCOUNTED PAYOUT, YRS.  10.25           15.00       17.600
 GROSS RES., MB & MMF      13.495       0.000         DISCOUNTED PAYOUT, YRS.    11.52           20.00        2.846
 NET RES.,   MB & MMF      10.071       0.000         UNDISCOUNTED NET/INVEST.    1.91           25.00       -3.828
 NET REVENUE, M$          744.016       0.000         DISCOUNTED NET/INVEST.      1.32           30.00       -6.553
 INITIAL PRICE, $          73.880       0.000         RATE-OF-RETURN, PCT.       22.13           40.00       -7.205
 INITIAL N.I., PCT.        74.625       0.000         INITIAL W.I., PCT.        99.500           60.00       -4.533
                                                                                                 80.00       -2.477
                                                                                                100.00       -1.356

THIS SCHEDULE IS PART OF A REPORT AND SUBJECT TO QUALIFICATIONS OF THE REPORT.
LEE KEELING AND ASSOCIATES, INC.