Pine Ridge Oil and Gas

SOUTHERN DJ BASIN
Florence Field
Fremont County, Colorado

• Canyon City Embayment Florence Field History
  • Second oldest field in the United States (discovered 1876)
  • Field has produced 15.5+ MMBO from over 1,000 wells
  • Shallow production from ~1,800 feet to ~3,500 feet
  • Production from fractured shales of the Cretaceous aged Pierre Formation
• Current Operations
  • Current production of 1,000+ BOPD from 21 producing deviated and horizontal wells drilled over the past 4 years
  • Cumulative production of 520+ MBO
  • Attractive type well economics – simple completions, no fracking
  • High margin production due to low operating costs and no water
  • High quality 31˚ API sweet crude
  • December 2011 production and cash flow
    • 23,699 net BO
    • $1,967,210 net monthly operating income
  • 100% working interest / 80% average net revenue interest
  • ~24,243 gross acres / ~20,526 net acres
    • Majority of leases cover all depths
    • Most of acreage not HBP has 1+ years of primary term
  • Fenced and graveled storage yard available to buyer
  • Operator friendly regulatory environment
• Florence Upside Potential
  • Existing proprietary and licensed 2D and 3D seismic data
  • Pierre Formation - under-pressured, gravity drive fractured shale reservoir
    • 32 Pierre prospects identified on 3D and 2D seismic area
    • 2 locations permitted with State
    • Inexpensive drilling costs and simple low cost completions
    • Pierre is exempt from state spacing regulations
  • Niobrara Horizontal Play
    • Florence area appears geologically similar to the northern DJ but at shallower depths
      • Geochem data and shows demonstrate thermal maturity and relatively high geothermal gradient
    • 400 foot section includes 4 resistive carbonate rich benches
    • Resistivity and calculated SW’s are comparable or superior to those in the productive area of the northern DJ
  • Multiple Stacked Deeper Targets
    • Codell Sandstone, Greenhorn Formation and Dakota Sandstone producing in area
    • Penn/Fountain oil shows reported in the basin
      • Oil seep north of Canon City is from Fountain
        

NOTE: A Confidentiality Agreement (“CA”) must be executed prior
to receiving the data package. Meagher will furnish to you
a CA for execution prior to any data room visit.