20170401 txso presentation - Texas South Energy, Inc. South Energy 0 John B. Connally III Michael J. Mayell • Bachelor of Science in Mechanical Engineering from Clarkson University

Private and Confidential 1

April 2017

Texas South Energy 0

.

This presentation, including any oral description and/or discussion , contains statements aboutfuture events and expectations that can be characterized as forward-looking statements,including , in particular, statements about plans, prospects, opportunities, strategies, and resultsassociated with the project. The use of the words “anticipate”, “expect”, “based on”, “may”,“project”, “believe” and other similar terms are intended to identify forward-looking statements. Although the author believes that the plans and expectations reflected by the forward-lookingstatements are reasonable at the time that they are made, they do involve significant assumptions, risks and uncertainties and there is no assurance that those expectations will proveto be correct. Actual results can, and probably will, differ materially from the expectations in theforward-looking statements as a result of a number of factors, many of which are unknown at thistime and are beyond our ability to predict or control. We cannot give any assurance that theproject results will meet expectations and investors are advised not to place any reliance on anywritten or oral forward-looking statements made in conjunctions with this presentation and allsuch statements are qualified by the cautionary statements contained in this paragraph. Allinvestors are strongly advised to have their own experts review the data and arrive at their ownconclusions.The author does not have any obligation or undertaking to disseminate any updates or revisionsto any forward-looking statements contained in this presentation to reflect any change in ourexpectations about the statements or any change in events, conditions or circumstances on whichthe statements are based.

Private and Confidential

Texas South Energy

● The complimentary blend of near-term onshore development projects, shallow offshore projects and deep, high potential sub-salt projects offer over 150 MMBOE ofnet reserve potential to Texas South

• A shallow south Louisiana field now installing production facilities and ready for development drilling• A proprietary 3-D seismic-based Louisiana PUD development project with 3.5 MMBO + 6 BCFG• A shallow oil play in south Texas with mostly PUD and probable well locations• An unconventional shallow play in Texas with 7-10 MMBO of reserves across 18,000 acres• A Texas exploitation project based on a proprietary 3-D with 9 MMBO + 50 BCFG potential• A shallow, three prospect , 33 MMBOE project in Vermillion Blocks 375 and 378 offshore, and• A five prospect, 500+ MMBOE, sub-salt project in various offshore blocks

● The onshore projects will add immediate cash flow and proven reserves to Texas

South’s substantial but longer-term offshore reserve potential

● The Texas South management team is led by John B. Connally III and Michael J.Mayell

● The management team has successfully founded and built other private and public oil

and gas companies

Texas South Energy (TXSO) has the Components for Success

0Private and Confidential


John B. ConnallyJohn B. ConnallyIIIIII

Michael J.Michael J.MayellMayell

• Bachelor of Science in Mechanical Engineering from Clarkson University• Shell Oil Company – Drilling & Production Engineering groups in south Louisiana• Kirby Exploration Company - Vice President of Engineering and Operations• Founder and President of Sydson Energy 1982 to present• Co-founded The Meridian Resource Corporation (NYSE) in 1985• Served as President and Chief Operating Officer of Meridian for 20+ years

• Bachelor of Arts and Juris Doctorate degrees from the University of Texas in Austin• Baker Botts – Partner specializing in corporate finance in oil and gas sector• Founding Director of Nuevo Energy, Inc.• Founding Director and Lead Director of Endeavour International Corp.• Founding Director and former CEO of Pure Energy Group and Pure Gas Partners• Founding Shareholder of GulfSlope Energy. Inc.• Founding Shareholder of Texas South Energy, Inc.• Presently Chairman of the Texas Lt. Governor’s Energy Advisory Board


Robert F.Robert F.GoldsteinGoldstein

• Bachelor of Arts – Geology, Rutgers; MS Geology, Florida State University• 40 years experience in Gulf Coast geology interpretation• Geologist with Amerada Hess, Houston Oil and Minerals, Meridian• Early conversion to 2-D and 3-D seismic interpretation

James L.James L.GundersonGunderson

• BBA degree in Petroleum Land Management from University of Oklahoma• Member CPL since 1991, holds annual cont. education seminars for landmen• Land positions in Chevron, Murphy, Cities, Ladd, and Manager at Meridian• Member of AAPL, founding member and VP of ADAM-Houston Network

Texas South Energy

The Texas South projects are all in the Gulf Coast area


SWEET HOMEPROJECT

Texas South Energy

The Offshore projects are in 300’ to 450’ of water depth


Texas South Energy

The Offshore projects are in 300’ to 450’ of water depth


Texas South Energy

Bayou Bouillon Salt Dome (37.5% - 45% TXSO WI)• Shallow production tested at 400 BOPD; three PDNP zones, designing facilities• Deeper PUD targets (11,000’ +/-) updip to 28 MMBO and 63 BCF historical production

Tuleta-Ray (50% TXSO WI)• Multiple mostly PUD target sands in Vicksburg and Hockley above 3,700’• Substantial acreage -1,900 gross, 900 net acres with reserves of 750 MBO; 2+ BCFG

Wilinda (75% TXSO WI)• Shallow 5,000’ TVD Buda Lime horizontal project…no fracture stimulation needed• 18,000 acres prospective with potential reserves of 7-10 MMBO

Sweet Home (50% TXSO WI)• Defined by a recent proprietary 85 Sq. mile 3-D seismic survey with 10+ prospects• Potential reserves of 9 MMBO and 50 BCF

Offshore GoM Slope Projects• 71% WI in three shallow prospects; D&M Report shows 23 net MMBOE recoverable• 20% WI in five sub-salt prospects; D&M Report shows 100 net MMBOE recoverable

Texas South Total Net Reserve Potential: 150 Texas South Total Net Reserve Potential: 150+ MMBOE+ MMBOE

Near-term Development Projects Support Offshore Opportunities


Private and Confidential 0

RisRiskk

ReturnReturnPotentiPotenti

alal

Low

High

TuletaTuletaRayRay

Sweet HomeSweet Home

WilindaWilinda

BayouBayouBouillonBouillon

Low

Texas South Energy

High

The program is heavily weighted toward development risk

OffshoreOffshoreGoMGoM

Texas South Energy

($000s)


• PV(10) $5,000• IRR 79%

Tuleta-Ray Development Project

Bayou Bouillon PDNP & PUD Program*

• PV(10) $12,756 $15,912 $9,417 $38,085$38,085• IRR >100% 57% 59% 57% - >100%

Sugarberry SouthProject

SE Flank Project

NE FlankProject

Sweet Home 3-D Exploratory Project

• PV(10) $107,300 139%• IRR

• PV(10) $47,100• IRR 147%

Wilinda Horizontal Development Project

*Does not include exploratory reserves associated with PUD locations

Offshore GoM Project• PV(10) $711,500• IRR 59%

Texas SouthTexas SouthTotalsTotals• PV(10PV(10)) $$909,000909,000

BB Total

A PUD Development Project

0

• Proprietary 3-D: 55 square miles in 2013• Project Areas: Multiple updip flank areas• Downdip Production: 30 MMBO and 63 BCFG• Primary Objectives: Multiple PDNP & PUD sands• Additional Targets: Lower Miocene and Bol. Mex.• PUD Reserves: Up to 500 MBO/well• Production Rates: Tested >300 BOPD at 1,700’• Status: Preparing to Install Facilities



Planned wells are all PUD reserves


LOI/FarmoutAreas

A Development Project

0

• Primary Objectives: Vicksburg and Hockley sands• Structural Setting: Updip to production at all levels• Well Depths: 2,800’ to 3,500’• Acreage: 1,900 gross and 900 net acres• Well Spacing: 10 – 40 acres/well• Reserves per well: 35 – 75 MBO plus .25 – 1 BCF• Well Costs: $210,000 DHC; $350,000 CWC



Adjacent Vicksburg production is 700,000 BO Downdip production is over 500,000 BO

Acreage is surrounded by production PUD locations updip to prior production

Tuleta-Vicksburg

Hockley3100’

Hockley3500’

Ray-Vicksburg

The Tuleta Ray area has been producing for 80+ years


0

An Unconventional Development Project

• Substantial size: 18,000 prospective acres• Shallow depth: 4,500’ to 5,000’ TVD• Primary Objective: Horizontal Buda Lime• Reserves: 150 MBO per well• Average Well Cost: $1.6 MM completed (Open Hole)• The overlying Austin Chalk produced over 6,400,000 BO• Buda oil production in vertical wells on the project• Enhanced natural fractures in Buda from adjacent A/C fault


Texas South Energy

Austin Chalk and Buda produce in downthrown fault blocks

Buda and A/C need natural

fractures to produce.

Faulting creates natural

fractures in an elongate

“shatter zone” and has

resulted in many linear A/C

fields orientated along the

faults (NE/SW).

The shatter zone on down-

thrown side of fault is usually

greater than up-thrown side.


0

• 3-D Seismic Survey: Proprietary 85 Sq. Mi. Survey in 2011• Primary Objective: Lower Wilcox sands• Avg. Prospect Size: 200 – 500 acres; 10+ Prospects• Reserves/Well: 125 – 750 MBO + 1-4 BCFG• Reserves/Field: 1 million BO + 5-10 BCFG • Well Depths: 9,500’ to 11,000’• Average Well Costs: $800,000 DHC; $1,200,000 CWC



Sea level rises during early Wilcox timesands and shales as deltaic layers

Climate conditions change and sea level dropssharply, exposing the newly deposited sediments

Multiple Changes in Sea Level Deposit and Erode Sands

As sea level continues to rise, sands andshales are deposited as deltaic layers

As the land is exposed. rivers unevenly erodethe sediments into wide channels and tributaries



Another climate change and sea level rises,filling the new channels with mud and clay

Fast forward ±50 million years to today.Under 9000’ of sediment, hydrocarbons are

trapped in sands against shale filled channelsthat have now formed seals.

The same type of erosional events areoccurring today as seas and channels

erode shorelines

Sea Level Changes Fill Channels With Mud To Form Traps



3-D Seismic Shows Multiple Erosional Remnants


ANALOG FIELD1.3 MMBO + 5.4 BCF

LEVERAPROSPECT

HENRYPROSPECT

STOCKINGPROSPECT

CORNPROSPECT

0

• 3-D Seismic Survey: 2.2 MM Acres (covering 440 Blocks)

• Primary Objective: Subsalt Miocene

• Water Depths: 300’ – 450’

• Reserves/Field: 30 - 300+ MMBOE

• Well Depths: 5,000’ to 25,000’

• Average Well Costs: $9 - $35 MM



GrossGross PoSPoS Net Risked*Net Risked* F&DF&DPV(10)PV(10)MM$MM$2017 Drilling Program 2017 Drilling Program – GulfSlope– GulfSlope

operatedoperated

Canoe** 71% WI 20 MMBOE 85% 10 MMBO $1.62 $143

Selectron** 71% WI 13 MMBOE 70% 5 MMBO $2.84 $74

Photon 20% WI 140 MMBOE 81% 18 MMBOE $1.22 $297

2018 - 2020 Drilling Program 2018 - 2020 Drilling Program - GulfSlope operated- GulfSlope operated

Pomeron 20% WI 40 MMBOE 62% 4 MMBOE $2.32 $13.5

Graviton 20% WI 189 MMBOE 39% 12 MBOE $1.58 $53

Tachyon 20% WI 70 MMBOE 34% 4 MMBOE $2.39 $25.5

Tanker 20% WI 93 MMBOE 52% 8 MMBOE $2.07 $105

TotalsTotals 565 MMBOE565 MMBOE 61 MMBOE61 MMBOE $711$711

DeGolyer & MacNaughton Resource Report results


*Net of WI, Royalty and Rose & Assoc. Risk**Resource Report and Risking by GulfSlope internal calculation

Texas South Energy

• Texas South has a range of development projects with timing and scale of initial production ranging from months to years

• The Bayou Bouillon project adds immediate cash flow, proved reserves and immediate activity to the Company

• Bayou Bouillon production and revenues enable further development ofproject acreage and reserves showing steady growth

• With clear sustainability from revenues, increased share price will enable funding of other onshore development projects and shallow offshore projects

• The current corporate structure and existing project portfolio are the line of sight path to rapid and accelerating growth over the next five years

• Successful start-up of production will enable funding of shallow offshore projects

NNew projects add Cash Flow and Sustainability


Documents

20170401 txso presentation - Texas South Energy, Inc. South Energy 0 John B. Connally III Michael J. Mayell • Bachelor of Science in Mechanical Engineering from Clarkson University