All Standard Disclaimers & Seller Rights Apply.

December 5, 2012 • Volume 23, No. 16

TransactionsServing the marketplace with news, analysis and business opportunities

SOUTH TEXAS PROJECT 2-Horizontal PDP’s. 14,200-Net Acres.LAVACA COUNTYCONNIFF & GRAHMANN UNITS PPEagleville (Eagle Ford). ~14,000 Ft.Austin Chalk, Edwards & Buda.SIGNIFICANT UPSIDE POTENTIAL100% OPERATED WI; 75% NRI 136Gross Prod: 23 BOPD & 678 MCFD BOEDNet Prod: 17 BOPD & 509 MCFDPLS IS BUILDING DATA ROOMPP 1932DV

PERMIAN SALE PACKAGE 27-PDP Wells. ~1,930 Net Acres.MIDLAND, ECTOR & ANDREWS CO.SPRABERRY (TREND AREA) PPMultipay: Wolfberry; Strawn, Wolfcamp---Dean, Spraberry & Clearfork50-100% OPERATED WI; ~38-75% NRIGross Prod: 573 BOPD & 1,284 MCFD 393Net Prod: 320 BOPD & 741 MCFD BOEDNet Cash Flow: >$1,000,000/MnSubstantial Drilling UpsideOffers Due By December 10, 2012CALL PLS FOR MORE INFOPP 1695DV

FEATURED DEALS

Vanguard picks up Montana production for $131 millionVanguard Natural Resources agreed to acquire mature non-op assets within

Montana's Bakken trend for $131 million from an undisclosed company. Vanguard said current net production of 1,100 boepd will be immediately accretive to cash flow when the deal closes in December. However, the properties are subject to third-party preferential

rights that could reduce the ultimate size of the deal. Those preferential rights expire December 9.

With the Montana purchase, Vanguard has now spent ~$900 million this year acquiring assets—all of which occurred during H2. First it paid Antero Resources $434.4 million in June for Woodford and Fayetteville assets holding proved reserves of ~420 Bcfe (82% gas, 58% developed) and producing ~76 MMcfed (91% gas) on 71,300 net acres.

Then in early November Vanguard announced a $335 million purchase of Piceance Basin assets in Colorado and Wind River Basin assets in Wyoming from Bill Barrett—with production of ~65 MMcfed (86% gas) and proved reserves of ~300 Bcfe (78% gas, 80% developed) on 208,100 net acres.

Atlas buys highly attractive Marble Falls for $255 millionAtlas Resource Partners announced its fifth and largest acquisition since the

shale-focused MLP was spun off from Atlas Energy in March—picking up gas and electric utility DTE Energy’s remaining upstream assets for $255 million.

The assets in the Fort Worth Basin primarily target the shallow, liquids-rich Marble Falls limestone on acreage offsetting Atlas’

existing Barnett shale position. Located in Jack, Erath, Palo Pinto and Clay Cos., Texas, the DTE properties

are estimated by Atlas to hold proved reserves of 35 MMboe (24% oil, 33% NGLs, 43% gas) which will increase the company’s total by 30% to 150 MMboe while also boosting liquids to 26% of total reserves from 17%. DTE placed the assets’ proved reserves at 46.5 MMboe (16% oil, 36% NGLs, 48% gas) at the end of Q2. With 261 wells currently producing 3,800 boepd (and an average 4,000 boepd expected in 2013), the 88,000-net-acre acquisition is 80% undeveloped, 100% operated and held with an average 99% WI.

2H12 acquisitions total ~$900 million, with other buys in Mid-Con & Rockies.

Continues On Pg 17

Pays DTE $500/acre plus $6.30 ppboe/g or $58,000 ppboe/d. QPi

Continues On Pg 16

Continues On Pg 5

Freeport shocks with $20 billion McMoRan & Plains buyGlobal miner Freeport-McMoRan Copper & Gold raised investor eyebrows

by jumping back into the US upstream oil and gas sector, announcing its reunion with 1994 spin-off McMoRan Exploration and also picking up Plains E&P in a pair of acquisitions totaling $19.6 billion in cash, equity and debt. To secure the deals, Freeport

paid shareholders a stock price premium of 74% for McMoRan and 39% for Plains in cash and equity. The deals came as a surprise as

McMoRan has been plagued by operational delays at its landmark Davy Jones discovery and Plains just closed November 30 on a $6.1 billion purchase of deepwater Gulf of Mexico assets from BP and Shell—fundamentally shifting the E&P firm’s portfolio from primarily onshore to about two-thirds offshore.

The two takeovers give Freeport a large oil and gas asset base focused on the deepwater Gulf of Mexico and deep shelf gas prospects. In total, Freeport is getting reserves of 575 MMboe 1P (64% liquids) and 1,581 MMboe 3P (45% liquids) with an additional 6.3 Bboe of near-term resource potential.

The international mining firm takes out 2 respected public E&Ps in one fell swoop.

Continues On Pg 18

Resolute triples Permian production for $120 million

Resolute Energy is adding 1,418 boepd of Permian Basin production in a $120 million deal The producing and undeveloped properties are primarily located in Howard Co., Texas (about six miles away from an existing Resolute property with significant production) and Lea Co., New Mexico and hold proved reserves of 4.1 MMboe (73% oil).

The deal greatly increases both Resolute’s Permian production and reserves from 600 boepd (in Q3) and 3.5 MMboe. The acquired reserves are located 44% in Howard Co. and 36% in Lea Co.’s Denton field with other fields accounting for the remaining 20%.

Assets have 4.1 MMboe 1P (37% PUD) vs. Resolute’s pre-buy 3.5 MMboe (66% PUD).

Transactions 2 December 5, 2012

Find more on the A&D arena at

Abraxas kicks off divestiture program in Texas & MontanaAbraxas Petroleum announced it has entered a preliminary agreement to sell

its 25% WI in the Nordheim project targeting the Eagle Ford for $19.1 million to an unnamed “large institutional buyer.” The assets being divested consist of 544 net acres in DeWitt Co., Texas with net production of ~380 Mcfed (56% gas, 26% NGLs,

26% oil). Abraxas will retain its rights to production, reserves and upside in the overlying Edwards limestone across both its Nordheim

and Wagner lease blocks. Petrie Partners is acting as Abraxas’ advisor in the sale expected to close December 17. The asset was part of Abraxas’ Blue Eagle JV with Rock Oil until the two companies agreed in August to dissolve the partnership.

In another non-core divestiture, Abraxas agreed to sell its ~10,000-net-acre Alberta Basin leasehold in Montana and lease its mineral acreage in the area for combined proceeds of $2.85 million and 1.25-5.00% ORRI. Closing was scheduled for late November on the Alberta Basin properties which do not have any associated production or reserves. Abraxas will use the proceeds to reduce the $134 million in debt owed under its $150 million credit facility.

“The Alberta Basin and potential Nordheim asset sales are the start of what we hope to be an active and profitable campaign of divesting non-core assets,” said Abraxas chief Bob Watson. “We remain committed to enhancing shareholder return by de-levering the balance sheet and refocusing the portfolio on our highest returning and highest growth basins.”

Investor group pushes for further asset sales—Unsatisfied with company efforts, Abraxas investor Clinton Group (which believes

itself to be one of the top 10 stockholders) wrote a letter to the company’s board urging it to rapidly sell non-operated and undeveloped acreage which it believes could bring an additional $160 million. Clinton Group blamed Abraxas’ “unfocused” approach for stock’s 32% slide over the past six months during which peers have seen they’re stock rise ~30%.

“In our view, the Company is too small to effectively support such a highly diversified such a highly diversified

model, and management must take steps to consolidate operations and exploit economies of scale by focusing on development activities in a small number of key basins,” the investment group wrote, specifying Abraxas’ high-working interest, operated holdings in the Bakken, Eagle Ford and Permian.

Clinton Group also complained about Abraxas’ lack of transparency with regard to production guidance and drilling results—a claim the E&P firm apparently took to heart. Four days later Abraxas announced Q4 guidance of 4,300-4,500 boepd and 2013 guidance of 4,900-5,200 boepd (up 21-28% YOY). The Q4 guidance reflects the Nordheim divestment as well as recent and expected Eagle Ford and Bakken well results.

A&D News

Got $20 million in sale of Eagle Ford acreage, $3 million for Montana land.

TPG-Axon ratchets up the heat on SandRidge

Hedge fund TPG-Axon Management sent a second letter on November 30 to SandRidge. “An outright sale of the company is the most realistic path to restoring the shareholder value that has been destroyed,” fund manager Dinakar Singh wrote. A second option includes dramatic simplification and restructuring of the company. TPG-Axon has increased its stake in SandRidge from 6.2% to 6.5%.

The new letter notifies SandRidge of TPG-Axon's intent to take the fight directly to shareholders and conduct a shareholder consent solicitation to amend the bylaws to allow for a de-staggered board and remove directors with or without cause, and to allow for removal and replacement of the entire board of directors. TPG-Axon has retained MacKenzie Partners Inc. to handle the shareholder solicitation.

The November 30 letter follows a November 8 initial letter expressing discontent with SandRidge's performance and management. On November 15, investor Mount Kellett Capital Management (owner of 4.5% of SandRidge) also sent a letter expressing concern over management and value.

Following TPG-Axon’s initial letter, SandRidge adopted a poison pill.

Suggested Further Abraxas Divestitures & Est. Values

Region FormationEst. Net

Acres Est. $/AcreEst. Total

($MM)Powder River Basin Niobrara 17,800 $2,500 $44.50

Western Alberta Pekisko 6,880 $2,500 $17.20

Permian (Reeves) Strawn/Frio/Yates 2,900 $5,500 $15.95

Permian (Other) Strawn/Frio/Yates 32,631 $2,500 $81.58

Total 60,211 $159.23Source: Clinton Group Press Release

The PLS A&D Transactions covers news the active asset marketplace with mergers, divestitures, transaction, analyst comments, deals in play and deal metrics.

To obtain additional PLS product details, drill www.plsx.com/publications.

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Volume 23, No. 16 3 A&D

Post-Merger Sundance Asset Porfolio

Source: Sundance November 13 Presentation via PLS docFinder www.plsx.com/finder

Sundance enters Eagle Ford via $105 million Texon mergerAustralia-listed US unconventional player Sundance Energy agreed to acquire

Eagle Ford producer Texon Petroleum—also based in Australia—in an all-stock deal valued at $104.7 million. The deal adds Eagle Ford exposure to Sundance’s existing

portfolio covering the Williston Basin, DJ Basin, Mississippi Lime and Woodford.

The acquired assets cover ~7,500 net acres (~79% WI) in McMullen Co., Texas with estimated reserves of 1.7 MMboe 1P (NPV10 of ~$25 million), 5.2 MMboe 2P (NPV10 of ~$103 million) and 11.3 MMboe 3P (NPV10 of $280 million) as of August 1. Five wells were producing 511 boepd at the end of Q3 with two more being drilled and potential for more than 100 additional wells. All

leases are covered by 3D seismic.“The combined company will have

production, cash flow and reserve growth potential with highly attractive risk-adjusted return potential,” said Sundance managing director Eric McCrady. “Importantly, the combined company will have the funding capacity to unlock significant value for shareholders.”

Sundance will issue Texon shareholders two common shares per Texon share. Based on the closing prices of both companies the day before the announcement (A$0.82 for Sundance and A$0.36 for Texon), the deal represents a ~14% premium for Texon. Upon closing expected in 1Q13, Texon shareholders will own a ~31% stake in Sundance. They will also retain Texon’s non-Eagle Ford exploration assets in South and East Texas via a new entity called Talon Petroleum to be led by current Texon chief Clifford S. Foss Jr.

A&D News

US shale gas holds appeal for Qatar Petroleum

Qatar Petroleum is seriously considering investing in US unconventional gas, the state-owned firm’s international chief said at an energy

conference in London. Nasser al-Jaidah called the US shale gas boom “an opportunity for us” and

said the company would be interested in partnering with major operators with whom it already has partnerships back home—naming ExxonMobil and Shell specifically.

Al-Jaidah said the US shale gas boom will allow top global LNG exporter Qatar to redirect more supply to lucrative Asian markets. Investing in US gas would also secure control of additional resources at a time when Australia is projected to overtake Qatar as the No. 1 LNG supplier by 2017.

In early October Qatar Petroleum (70% WI) and Exxon (30% WI) won federal approval to export LNG to countries holding free-trade agreements with the US from a $10 billion export plant to be built adjacent to the companies’ Golden Pass LNG import terminal on the Texas Gulf Coast. If constructed, the project could be Qatar’s first venture for selling LNG produced in another country.

Qatar Petroleum & Exxon won DOE approval to ship LNG from Gulf Coast.

Sundance pays $18 ppboe/g or $60,000 ppboe/d plus $9,900/acre.QPi

Texon’s non-Eagle Ford assets will be spun off into new Cliff Foss-led firm Talon.

QRE expects robust MLP deal pace to continue next year QR Energy CFO Cedric Burgher believes the entire upstream MLP industry is

“at capacity” with the strong pace of deal activity likely to continue well into 2013. Burgher told Baird at a non-deal road show in Milwaukee that QRE continues to seek non-auctioned deals with reliance upon its reputation for reliable closing and fair dealing among potential private sellers.

Burgher further stressed QRE’s efforts to bring increased transparency to the firm’s G&A structure which Baird called a recent source of investor unease. Baird said it expects material growth for the company next year.

May seek JV with IOC that participates in projects back home, like Exxon or Shell.

Selling made simple!PLS has marketed over $4.0 billion in assets since 1988.

Hire PLS to execute your next negotiated sale, call 713-650-1212

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Transactions 4 December 5, 2012

Magnum becomes US Bakken operator in $30 million dealSamson Resources agreed to sell interests in Williston Basin wells and lease

acreage—much of which include operatorship—in Divide Co., North Dakota to Magnum Hunter for $30 million cash. Magnum already owned an average 47%

WI in the properties and will now hold varied working interests up to 100%. The deal also bring

Magnum sub Williston Hunter its first Bakken-Three Forks operatorship on the North Dakota side of the border, though the company already operates Tableland field on the Saskatchewan side with stakes ranging 70-100%. The Divide Co. properties produce 192 boepd and hold PDP reserves of 310,000 boe on 20,000 net acres—

which brings Magnum’s total Williston leasehold to ~180,000 net acres.

Williston Hunter president Glenn Dawson called the North Dakota operatorship brought by this deal a “primary goal” of the company and said initial drilling operations in the area will commence in 1Q13 using the same methods as are being applied at Tableland.

For Samson, the deal appears to represent the complete divestiture of a 140,000-net-acre Bakken-Three Forks package the company was marketing earlier this year. Continental Resources on November 7 announced the acquisition of 120,000 net acres in Divide and Williams Cos. from $650 million; the remaining acreage in the package is equivalent to what Magnum is buying. Magnum expects to close the deal around December 20.

A&D News •Alberta Bakken explorer Big Sky

Petroleum entered the Permian with the acquisition of an operated 90% WI (75% NRI) in a ~2,300-acre initial lease block targeting the Wolfberry play in the southern Midland Basin. The seller and purchase price were not disclosed. Big Sky estimates the acreage in Schleicher Co., Texas to hold 57 drilling locations at 40-acre spacing with D&C costs of $2.0-2.2 million and well EURs of 120,000 boe. An initial vertical test well is planned for 1Q13.

•Toronto-based miner Canuc Resources acquired 15% WI (12% NRI) in a 14,574-acre lease in north-central Texas for an undisclosed price. Extensively drilled for shallow oil, the Walker Buckler Ranch lease in Shackleford Co. was recently tested with a 4,552-ft well that intersected the Caddo and Marble Falls formations and came online at 250 Mcfd—half of estimated capacity. A second well was scheduled to spud by November 30 in a more oil-prone area. Based on 40-acre spacing, many additional wells can be drilled on the property.

•Eastern American Natural Gas Trust terminated its agreement to sell royalty net profit interests in 257 West Virginia gas wells to Softvest LP after trust sponsor and well operator Energy Corporation of America exercised its right of first refusal. Based on the November 2 closing price for Nymex crude, ECA will pay ~$5.9 million for the interests, which generate average six-month net cash flow of ~$202,000. Eastern American will retain its royalty net profit interests in ~340 Pennsylvania gas wells. The sale is expected to close in January.

•First Titan Corp. announced it is investigation its first production acquisition wells since the company’s IPO in September 2011. First Titan has thus far concentrated its upstream efforts on exploration prospects with partners including Occidental, Anadarko, Energen and Apache on the Gulf Coast, in Oklahoma and in the Permian. It is now evaluating the purchase of a stake in a well producing 4.2 MMcfed (29% oil) near some of the company’s other projects.

A&D Briefs

Magnum Hunter paying $828/acre plus $70,000 ppboe/d.QPi

Deal brings Magnum’s total Williston leasehold to ~180,000 net acres.

RISK?In a year of potential uncertainty from

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We Can Help. Now is the time to mitigate volatility and protect your company from falling market prices. Give us a call to discuss the best hedging strategy for your business in 2013.

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Sale seems to mark full divestiture of Samson’s North Dakota asset package.

For general inquiries, e-mail info@plsx.com

Volume 23, No. 16 5 A&D•Houston-based Halcón Resources

acquired an undisclosed amount of leased acreage near Lordstown, Ohio

from an unidentified operator that, according to a company statement, “did not have the

desire or ability to develop the deeper formations.” Halcón said it intends to “spend hundreds of millions of dollars” drilling horizontal Utica wells after modifying current leases.

•Maverick Drilling & Exploration acquired 100% WI in leases covering 211 acres in and flanking the Gillock oil field 20 miles south of Houston in Galveston Co., Texas for an undisclosed price. The seller was also undisclosed. Initial

reserve estimates are expected next

year following a pilot drilling program targeting the Frio sands. The Gillock acquisition is Maverick’s fourth project area following the nearby Blue Ridge, Nash and Boling salt domes which it is jointly developing with Gulf South Holdings.

•Globalgroup Investment Holdings sub Sovereign Oil Inc. agreed to acquire a 120-acre lease in southeast Kansas holding nine producing oil wells

and five wells scheduled for secondary recovery work from Ad Astra Oil. Sovereign will

assume ownership in the producing wells in Miami Co. upon closing scheduled for December 15 and then begin rework on the five additional wells at an estimated cost of $10,000/well for an added annual revenue stream of ~$250,000.

•Bakken producer Stratex Oil & Gas Holdings acquired non-op interests in six producing wells (ranging 0.14-5.00% WI), three wells being drilled and several permitted well locations in Stark, Williams and Sheridan Cos., North Dakota. Stratex is paying the undisclosed seller $250,000 cash plus 250,000 common shares for a total value of $600,000 based on the prior-day close of $1.40/share. Operators on the 3,850 acres (on which Stratex acquired 2.3% WI) are Whiting, XTO and Continental.

A&D Briefs

Resolute's PDP-Weighted Permian Oil Acquisition• 3Q12 average production: 1,418 net Boe/d• Estimated proved reserves of 4.1 million Boe

• 73% oil, 63% proved developed & 63% operated

• 9,654 gross (6,532 net) acres across several fields

• 90% HBP

• Conventional & unconventional assets with identified upside development projects

• Howard–Wolfberry play (non-op) – 44% of reserves

• Denton–conventional field in Lea County, NM with secondary recovery upside –36% of reserves

• Other fields –20% of reserves

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Gladiola

Northwest

Shelf

San Simon

Channel

Denton

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W & NW

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Dupree

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Midland

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Central

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War-Wink

Eastern

Shelf

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Acquired properties

(red outline denotes key fields)

Source: Resolute December 3 Presentation via PLS docFinder www.plsx.com/finder

PLS believes the seller to be private Fort Worth-based Celero Energy II LLP which operates the producing wells being bought in Denton field according to maps provided by Resolute.

In Howard Co., Resolute is getting 1,310 non-op net acres (39% WI) producing 377 boepd net in Q3 (~64% oil) from 23 wells. Upside exists from ~64 vertical Wolfberry locations and 66 recompletion opportunities. In New Mexico, the chief

asset Resolute will acquire is the operated 1950s-vintage Denton field, a conventional fractured carbonate reservoir

covering 2,767 net acres (96% WI, 100% HBP). Q3 net production from 39 wells was 833 boepd (~89% oil). The upside here comes mainly from deepening existing wells and infill drilling from 40-acre to 20-acre spacing. Finally, Resolute will acquire a combination of conventional and unconventional producing Permian properties covering 2,455 net acres (73% WI, 100% HBP) with Q3 net production of 208 boepd. Resolute will finance the deal with debt and expects to close by December 21 with an effective date of August 1.

“We plan to realize the growth potential from these new assets, which [are] largely self-funded, with a drilling program over the next four to five years,” said Resolute chief Nicholas J. Sutton. “The Permian Basin is an area we have long targeted as an important growth engine for the company, and this most recent expansion further strengthens our visible growth potential in this multi-pay, multi-play oil-prone region.”

Howard Co., Texas bolt-on offers multi-pay horizontal Wolfcamp & Cline upside.

Resolute triples Permian production Continued From Pg 1

Argent Trust adds oily East Texas assets for $120 millionArgent Energy Trust agreed to buy primarily oil producing fields in East Texas

from Wapiti Energy for $120 million. The assets cover 14,990 net acres (97% operated) at Newton, Livingston and Double AA Wells North fields with estimated gross 2P reserves of 8.7 MMboe (77% oil) as of March 31 and September net production of ~1,705 boepd (69% oil, 9% NGLs) linked to LLS. Argent expects to maintain that production level into 2013 with minimal investment.

The deal adds a significant liquids component to Argent’s overall asset base and increases the company’s total production by more than 40%. The acquired assets are expected to generate long-term sustainable cash flow to supplement Argent’s Austin Chalk and Eagle Ford development program. The buyer estimates the deal to be ~21% accretive to 2013 cash flow and production per unit and ~5% accretive to reserves per unit, with a reserve life of ~13 years.

To learn more about PLS, call 713-650-1212Find more on the A&D arena at

Transactions 6 December 5, 2012

•Australian-listed Incremental Oil & Gas has enlisted Envoi’s assistance in finding a partner to drill its Raven Pass exploration prospect (100% WI) in Kern Co., California. IOG is offering a majority interest—complete with operatorship if desired—in exchange for an equity contribution to past costs and a one-well commitment (~$1.3 million gross) to test the shallow Cretaceous and penetrate the deeper Cretaceous reservoir. Learn more from PLS Listing No. DV 1828 or contact the broker.

•Mantle Resources has engaged EnergyNet to sell a package of 29 operated wells located in three Texas counties and in Allen Parish, Louisiana. Net proved reserves are ~337,000 boe (77% oil) with estimated PV-10 of $9.56 million. Gross oil production from six wells was 101 bopd for the last six months and average 12-month cash flow was $173,882/month. Refugio Co. upside includes 12 proved and 17 probable and possible behind-pipe zones and one PUD location. Request PLS Listing No. PP1801DV or contact the broker for more information.

•Texas Tech Foundation retained EnergyNet to sell its 2.5% ORRI in the SandRidge-operated South Fuhrman Mascho unit located in sections 5, 8, 9 and 15-17 of University School Lands Survey Block 10. Gross production is 758 boepd (85% oil). For more, check out PLS Listing No. RR 1856PP or get in touch with the agent.

•Wildhorse Resources hired EnergyNet to divest some of its interests in operated properties at Lisbon field in Claiborne Parish, Louisiana. Wildhorse is selling stakes of ~32-100% WI in nine wells including five producing with 12-month average net income of $82,028/month. Request PLS Listing No. PP 1859 for details.

A&D News

Shoreline buys Wattenberg royalty stakes for $12.5 millionAlberta-focused Shoreline Energy stepped across the border to acquire non-op

Wattenberg field royalty interests in Colorado’s DJ Basin for $12.5 million from an undisclosed private US-based company. The interests range up to 1.45% and

are located on more than 150 land tracks totaling over 22,000 acres predominantly in Weld County. The primary targets are the Niobrara and Codell formations which

are already penetrated by more than 20 horizontal wells on the royalty acreage with nearly 60 additional locations permitted and scheduled for drilling during 1H13. Shoreline estimates the assets to hold an additional 400-700 drilling locations. Besides the horizontal potential, the deal brings royalty revenue from 300 low-rate producing vertical oil wells.

Shoreline projects average cash flow of $375,000/month from the properties next year with a 2013 exit of $750,000/month—providing what CEO Trevor Folk called “the highest return of any project we have evaluated whether in Canada or the US.” The deal closed November 20.

Kabe Exploration enters Mississippian with 1,500-acre buySan Diego-based Kabe Exploration agreed to buy at least 1,500 acres in Cowley

Co., Kansas from an unnamed seller, marking the new company’s first step in a proposed development of up to 50 horizontal Mississippi Lime wells. The company said it plans to expand its position in the play by as much as 15,000 acres.

“Kabe’s field acquisitions were selected due to the tremendous potential of developing substantial oil and natural gas reserves in a regional area which rivals any of the US oil shale plays,” said Kabe chief Erik Ulsteen. “Results of Mississippian Lime horizontally drilled wells demonstrate the potential for 300,000-400,000 boe per well at relatively shallow drilling depths of ~4,000 ft, with high oil quality of 35-38°API gravity.” Kabe’s acquired acreage is east of the generally accepted “sweet spot” of the play.

Expects assets to deliver $4.6 million cash flow in first year—over 30% IRR.

Newly launched E&P firm plans to expand its position by 15,000 acres.

Lime Rock drops $21 million in Oklahoma reserves to MLPUpstream MLP LRR Energy is acquiring its second drop-down from sponsor

Lime Rock Resources, this time getting mature oil-weighted producing assets in Oklahoma for $21 million. In June the companies closed a $67 million transfer of conventional Permian properties in Texas and New Mexico—also oil-weighted.

The Oklahoma properties have estimated net proved reserves of 1.99 MMboe (55% oil and NGLs, 53% PDP) as of October 1, with current production of 350 boepd

from 124 wells (32 operated) for an implied reserve life of 15.6 years. Annual maintenance capex of $1.0 million is anticipated to

hold production of 270 boepd flat through 2015. According to LRR Energy co-CEO Eric Mullins, the acquisition in Dewey and Custer Cos. have a large inventory of low-risk development opportunities.

“This transaction fits our operational strategy of acquiring long life properties and is a bolt-on to one of our core areas where we have extensive operating expertise and scale,” said co-chief Charlie Adcock.

The purchase price is subject to adjustment based in part on the value at closing (expected around January 3) of hedge contracts included in the deal, which are currently valued at ~$1.7 million. Tudor, Pickering Holt & Co. and Bracewell & Giuliani LLP advised LRR Energy on the deal, which the MLP plans to finance with borrowings under its existing revolving credit facility.

LRR Energy pays sponsor $11 ppboe/g or $60,000 ppboe/d.QPi

What's On the Market Briefs

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Volume 23, No. 16 7 A&DMagnum Hunter markets Eagle Ford, seeks Utica JV

Topping Magnum Hunter Resources’ list of options to “harvest a lot of the potential” of its asset base is selling the company’s Eagle Ford acreage, company management said in a Q3 conference call. Magnum has hired an undisclosed investment bank to shop its 26,000-acre Eagle Ford position concentrated in Gonzales and Lavaca Cos., Texas. The company has already shown the assets to more than 15

companies including other leaseholders in the counties. However, chairman and CEO Gary Evans told Oil & Gas Financial Journal that Magnum is under no duress to sell its Eagle Ford

acreage. “It’s just that we see our upside [in the Eagle Ford] as being defined,” Evans explained. “We’ve done about as well as we can do in this play … [It] is a well-oiled machine, and it might be better suited for someone with a lower cost of capital.”

When asked during the conference call about value of the Eagle Ford acreage, Evans confirmed “that we’re in that range” of $20,000-$30,000/acre. At the midpoint

this would raise $650 million—allowing Magnum to pare debt, fund capex and possibly redeem some preferred shares.

Although Magnum Hunter allocated 40% of its 2012 drilling budget to the Eagle Ford with solid production and reserves results, the company’s two other core plays have a lower cost of capital and larger reserve bases. At 26,000 acres, the Eagle Ford is Magnum’s smallest holding and accounts for only 15% of reserves. The company’s ~467,000 net acres in the Appalachian Basin account for 45% of reserves while its ~138,000 net Williston acres hold the remaining 40% of reserves.

Meanwhile, Magnum is also discussing a JV to cash in on its Utica potential with several companies including foreign partners. The company said a deal could be announced in January or February. Its Utica holdings are in Washington, Noble, and Monroe Cos., Ohio and in Tyler Co., West Virginia.

Chesapeake markets gas property in North Texas

Chesapeake has hired Meagher Energy Advisors to help divest yet another Texas property, this one in

Grayson Co. on the Oklahoma border. The ~3,235-net-acre property

(100% HBP, 84% NRI) had net production of ~1,070 Mcfed (23% oil) during the 12 months ending July 31 from 14 wells (12 operated, 81% WI, 68% NRI). Net operating cash flow during that period was $165,121/month.

According to the Meagher offering memorandum, producing zones are the Oil Creek, Dornick Hills, Viola and Davis. Upside potential exists through infill drilling

opportunities, recompletions in existing wells, waterflood potential over multiple zones, and exploration into deeper horizons of the Woodford shale and Viola lime.

Offers are due December 14 with an effective date of December 1 and closing by February 15. For more details, ask for PLS Listing No. PP 1864DV or contact the agent.

What's On the Market

Hurricane-impaired GOM royalty interests on the blockAs managing general partner of Tel Offshore Trust, Chevron has retained

EnergyNet to market and auction the partnership’s ORRI in shallow-water Gulf of Mexico properties. The ORRI is equivalent to 80% of a 25% net profit interest in the Ship Shoal 182 and 183, South Timbalier 36 and 37, and Eugene Island 339 and

342 blocks. Although the entire royalty is up for sale, the trust partnership reserves the right to retain a portion of its ORRI.

Damage inflicted by Hurricane Ike in 2008 shut down production at Tel Offshore’s two most significant royalty properties. Ike destroyed Eugene Island 339 platforms and wells—and Chevron is still plugging and abandoning wells and cleaning debris with completion expected by year’s end. Chevron has inked a participation agreement with an unnamed company to fund

redevelopment of the EI-339 platforms and wells for up to 65% of Chevron’s working interest.

Another key Tel Offshore property, Ship Shoal 182 and 183, was also impacted by Ike mainly through the 10-month shutdown of a third-party gas pipeline. Production was also shut in for several weeks in 2010 due to a leak in an oil pipeline and tank replacement.

Tel already sold 20% of its ORRI to RNR Production, Land & Cattle in October 2011 for net proceeds of ~$1.49 million. The trust instructed Chevron to sell more of the ORRI after RNR declined to exercise its option to purchase an additional 5.0% royalty interest. The auction is set for December 12.

Western offers royalty stakes in 100% stock sale

Dallas-based Western Petroleum Resources engaged EnergyNet to sell all of the company’s assets in a 100% stock divestment. Over 30 years the company has built a diversified portfolio of non-op ORRI and royalty interests in 118 wells in Texas, Oklahoma, Louisiana, Kansas and Mississippi with an average ~29 MMcfed gross production (36% oil). That total doesn’t include five new wells producing 288 boepd (75% oil).

Western has three wells in completion stages and funding in place to drill four wells through January. Average net cash flow and net revenue over the first nine months of 2012 were $33,985/month and $52,391/month. For further information request PLS Listing No. RR 1861PP or contact the broker.

At $25,000 per Eagle Ford acre, Magnum’s 26,000 acres would net $650MM.

Magnum excited by drilling results of Utica neighbors Anadarko & Gulfport.

ORRI equals 80% of a 25% net profit interest in six shallow-water blocks.

Ike destroyed Eugene Island 339; Chevron partner will earn up to 65% WI to redevelop.

Produces 1.07 MMcfed with upside from infill drilling, waterflood & recompletions.

To learn more about PLS, call 713-650-1212

Transactions 8 December 5, 2012

EAST TEXASCHEROKEE CO., TX PROPERTY2,700-HBP Acres.COON CREEK FIELDCretaceous, Rodessa Hill, Pettit-- PP-- & Travis Peak SandsTest Depth: 9,000 Ft.Total Production: 8.299 BCFG & 152 MBCTotal Reserves: 13.0 BCFG & 203 MBC CRETACEOUSDry Hole Cost: $500,000CONTACT SELLER FOR MORE INFOPP 1177DV

SAN AUGUSTINE CO., TX PROPERTY1-Active Well. 624-Net Acres. HBPREBECCA JAMES LIME FIELDOIL & LIQUIDS RICH PLAY PPNew James Lime. 13,375 Ft. (TD)Wells Currently Being Drilled on Adjacent-- Lands Targeting James Lime Liquids.~97% OPERATED WI; 74.5% NRI 120Gross Prod: 7.0 BOPD & 120 MCFD MCFDTotal AFE Cost: ~$7,000,000CONTACT GENERATOR FOR DETAILSPP 1927

NORTH LOUISIANACLAIBORNE PH, LA PROPERTY5-Active Wells. 4-NonProducing.LISBON FIELD PP~32%-100% OPERATED WI FOR SALEAvg Production: 44 BOPD & 580 MCFD 580Avg Net Income: $82,028/Month MCFDCONTACT AGENT FOR UPDATEPP 1859

ALABAMATUSCALOOSA CO., AL PROPERTY500-Wells (CBM). ~43,000-Net Acres.BLACK WARRIOR BASINROBINSON’S BEND FIELD PP100% OPERATED WI; 75% NRIDaily Production: 16,000 MCFDAverage Cash Flow: $1,000,000/MonthTotal Proved Reserves: 280.4 BCF 16,000Total Proved Rsrvs (PV8): $85,600,000 MCFDAGENT IS ASSEMBLING PACKAGE DATAPP 8999L

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BHP builds up Permian & Eagle Ford presenceBHP Billiton has been picking up small Permian bolt-on assets and is negotiating

larger packages up to 25,000 acres in the heart of its operations, says the head of the Australian mining giant’s oil and gas division. Since its August 2011 acquisition of US unconventional player Petrohawk the company has increased its Permian position 16%

from 378,000 to 440,000 acres according to a September investor presentation. BHP is

also looking to grow its Eagle Ford position when acreage becomes available—with particular interest in adding leasehold around its Black Hawk and Hawkville fields.

Petroleum chief executive Mike Yeager told Upstream that the company thus far has been mostly adding assets of 1,000-5,000 acres in the Permian. In the Eagle Ford it has been making small deals to consolidate its position and buying out minor stakeholders.

The Upstream article suggested one of the larger Permian deals BHP might be looking at is a 22,000-acre Midland Basin package being marketed by J Cleo Thompson. The property in Wolfcamp-prospective Reeves

Co. produces 5,000 boepd and is valued by PLS at over $500 million. J Cleo is the county’s most active driller at 10 rigs as of November 30 according to Smith Bits with BHP and Petrohawk collectively coming in second at five rigs. Bids were due in mid-October.

BHP not going after Yates, & other bidders rejected—One Permian prize Yeager said BHP is not seeking is privately held Yates Petroleum

which has retained JP Morgan Chase to find a buyer for the company. Yates’ Permian operations are focused in New Mexico where the company is a top-10 producer for both oil and gas. However, Yeager said BHP is ill-equipped to hold Yates’ sizeable acreage position. “If we bought Yates we would have to put 10 rigs on it because it would have rig obligations and we don’t have the people to do it,” Yeager said.

Yates has already rejected offers from Occidental and Concho Resources, the Albuquerque Journal reported. The Yates family’s demand that the buyer maintain a large presence in Artesia, N.M. where it is headquartered and their structure of the deal as a stock sale may have suppressed the offer prices.

Has added small packages since buying Petrohawk, now looking at bigger prizes.

J Cleo’s Reeves Co., Texas package in heart of Wolfcamp is a likely BHP target.

Access PLS’ for featured deals for saleFor listing inquiries, e-mail listingmgr@plsx.com

Volume 23, No. 16 9 A&DSOUTH TEXAS

MCMULLEN CO., TX PROPERTY4-Wells. 7,581-Net Acres. 80-Acre PUD.SOUTH TEXASHORIZONTAL EAGLE FORD WELLS PP~98% OPERATED WI FOR SALENet Sales: 340 BOPD & 800 MCFD(Including 76 Bbbls NGLs)93% Revenue from Oil and NGLNet Prov 25 MMBO 6 MMBO NGL 57 BCFTotal PV12 (Proved): $456,000,000 EAGLENet PDP Reserves: 623 MBO & 1.6 BCF FORD(Including 151 MBO NGLs)Total PV12 (PDP): $28,000,000CONTACT AGENT FOR MORE INFOPP 8784DV

MEDINA CO., TX PROPERTY6-Wells. 265-Net Acres.SOUTH TEXAS GULF COAST. FAIR FIELDOlmos. 1,100 Ft. PPUPDIP PROVEN PRODUCTION80% OPERATED WI; 80% NRIGross Production: 4.5 BOPD 4.5Net Production: 4.1 BOPD BOPDCash Flow: $11,070/MonthNet Reserves PV7: $13,100,000CONTACT SELLER FOR MORE INFOPP 1017

REFUGIO CO., TX PROPERTY3-PUDs. +/-5,899-Gross AcresGULF COAST - LA ROSA FIELDMultiple Behind Pipe Zones PPSIGNIFICANT DRILLING POTENTIALProprietary 3-D Seismic Available.50-100% OPERATED WI, 37.5%-75% NRIGross Production: 279 MCFD & 50 BOPDNet Production: 214 MCFD & 50 BOPD 279Net Cash Flow: $180,000/Month MCFDEstimated (PDP) PV10: $2,577,000Estimated (PDNP) PV10: $2,214,000Estimated (PUD) PV10: $4,769,000Total Proved PV10 Reserves: $9,560,000CONTACT AGENT FOR UPDATEPP 1869DV

SOUTH TEXAS NONOPERATED9-Active. 2,400+/- Acres, HBP.EAGLE FORD SHALEDIMMIT & LA SALLE COUNTIES PP9-Wells Scheduled in 2013.Super Pad Drilling, Zipper Frac’s. EAGLE49% NonOperated WI; ~37% NRI FORDSeller’s Cash Flow: $2,500,000/MnPP 2121DV

SOUTH LOUISIANASOUTH LOUISIANA PRODUCTION30-Active Wells. ~10,532-Gross Acres.ACADIA, ALLEN, BEAUREGARD,CALCASIEU, CAMERON, EVANGELINE, PPST LANDRY & JEFFERSON DAVIS PH.Wilcox, Frio, Cockfield, Miocene, Sparta.Significant Upside in Unidentified Prospects3D Seismic Data Covering 1,251 Sq. Miles100% OPERATED WI; 75% NRIProd:1,630 BOED (Gross); 235 BOED (Net)Net Operating Cash Flow: $311,722/Month 1,630Net Proved Rsrvs: 372 MBO & 1,067 MMCF BOEDTotal Net Proved Rsrvs PV10: $23,900,000Probable Reserves: 354 MBOEPossible Reserves: 128 MBOECA Required to View Data RoomCONTACT AGENT FOR UPDATEPP 1952DV

TUSCALOOSA SHALE ROYALTY100-Gross Acres. 50-Net Acres.MISSISSIPPI & LOUISIANAAmite & Wilkinson Co., MS RRSt. Helena, East & West Feliciana Ph., LALow-Cost Entry Into Emerging Shale PlayOperators: Encana, Devon & Goodrich ROYALTYCONTACT GENERATOR FOR DETAILSRR 9539

SOUTH TEXASBROOKS CO., TX PROPERTY46-Active. 34-PUD. 7,481-Gross Acres.DIABLO FIELDMATURE CONVENTIONAL ASSETS PPUpper & Lower Vicksburg Play3D Seismic Covers Entire Area.OPERATED WI AVAILABLEGross Prod: 167 BOPD & 3.8 MMCFD DIABLO/Cumm’d Production:2.6 MMBO & 64 BCF 3DTotal Gross EUR/CG&A: 330 BCFE10-Probable & 8-Possible.3rd Party Reserve Report.AGENT PREPARING DETAILED PKGPP 2219DV

LIVE OAK CO., TX PROJECT299-Net / 1,793-Gross Mineral Acres.EAGLE FORD - GAS CONDENSATESUGAR KANE FIELD PPAustin Chalk, Edwards, Buda Potential.Sweet Spot Of Eagle Ford Trend.Initial Well Being Completed.Surrounded By Eagle Ford Production.MINERALS INTEREST FOR SALE EAGLEORRI, OR Convertible To WIAPO FORD---Well By Well1st Well IP: 1,600 BOPDRsrvs: 27BCF+12MMBO(3.3MMB NGL)Operator: PetrohawkCONTACT SELLER FOR DETAILSPP 5012L

MISSISSIPPIGULF COAST PRODUCTION SALE4-Wells. 4-PUD’s. 1-SWD. 160-Acres.WILKINSON COUNTY, MISSISSIPPIBELMONT LAKE OIL FIELD PPFrio Sand. 2,800 Ft.CONVENTIONAL SHALLOW OIL3-D Seismic Data & Well Logs Available58-66% OPERATED WI; 44-50% NRIOpportunity to Purchase 100% WI 133Avg Net Prod: 133 BOPD; 265 BOPD Gross BOPDNet Operating Cash Flow: $325,000/MthNet Proved Reserves: 238 MBONet Proved Reserves PV10: $14,500,0003rd Party Reserve Report AvailableAFE Drill & Completion Cost: $568,000CONTACT AGENTPP 1973DV

SOUTH LOUISIANAEAST FELICIANA PH., LA ROYALTY1,100-Gross Acres. 550-Net Acres. RRTUSCALOOSA MARINE SHALELouisiana Light-Sweet Premium Oil ROYALTYCONTACT SELLER FOR MORE INFORR 1014

LAFAYETTE PH., LA NONOPERATED3-Active & 1-SWD. 800-Gross Acres.BROUSSARD FIELDNEAR LAFAYETTE PP Leases Cover +/-150-Acres (Unitized).Bol Perca Sand: Clean, Normal Pressure-- w/Excellent Porosity & Permeability.Well & Facilities Accessible By Road.~10.5% NonOperated WI; 7.9% NRIGross Prod: 295 BOPD & 324 MCFD 349Net Production: ~23 BOPD & 26 MCFD BOEDNet Cash Flow: $61,000/MnNet Prov Rsrvs: 33 MBO & 34 MMCFCALL SELLER FOR ADDITIONAL INFOPP 2897DV

LOUISIANA PROPERTIES61-Active Wells. 110,000-Net Acres.AUSTIN CHALKFIELDS INCL: MASTERS CREEK PP-- MONCRIEF & N BAYOU JACK FIELD~30,000-Net Acres HBP. 4-Active Rigs.~80,000-Net Undeveloped Acres.> 500-Drilling Locations Identified. ~335OPERATED & NonOperated WI BOEDNet Production: ~335 BOEDIPs As High As 4,000 BOEDEURs Range: 320-600 MBOE/WellConfidentiality Agreement Required.CONTACT AGENT FOR UPDATEPP 1483DV

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Transactions 10 December 5, 2012

PERMIAN / NEW MEXICOSE NEW MEXICO PROPERTIES106-PDP Wells. 66-PDNP. 87-PUD’s.LEA CO., NM WATERFLOOD UNITS6,300-Gross Acres. 4,600-Net Acres. PPYates, Seven Rivers & Queen.Depth Range: 2,900-3,800 Ft.LONG-LIFE PREDICTABLE RESERVES~74% OPERATED WI; ~57% NRINet Sales: 380 BOPD, 160 MCFD 380--& 35 Bbls NGL Per Day BOPDProjected PDP Cash Flow: $741,666/MnNet Prov Reserves: 8.0 MMBO & 3.2 BCFTotal Proved Net Reserves: 9.0 MMBOETotal Net Proved (PV10): $162,429,000CONTACT AGENT FOR UPDATEPP 1901WF

PERMIAN / WEST TEXASPERMIAN BASIN PROPERTIES65-Active. 4,564-Net Acres.100% HBPNORTHERN CROCKETT COUNTYPROLIFIC WORLD FIELD PPGrayburg Formation. 2,700 to 4,500 Ft.SIGNIFICANT UPSIDE POTENTIALLOW RISK DRILL OPPORTUNITIES~100% OPERATED WI; 80% NRI 302Net Operating Cash Flow: $480,000/Month BOPDTotal Net Proved Reserves: 2.7 MMBOAdditional Probable Reserves: 748 MBOTotal Net Reserves PV10: $48,300,000Additional Net PV10: $8,300,000CONTACT DALLAS AGENTPP 1987DV

PERMIAN BASIN PROPERTIES14-Active. 19,172-Gross Acres.UPTON COUNTY, TX. WOLFBERRY TRENDATTRACTIVE HORIZONTAL WOLFCAMP PPHigh-BTU Devonian DevelopmentUpside Potential Clearfork/Spraberry3-D Seismic Available Over Entire Acreage100% OPERATED WI; 75-79% NRINet Production: 500 BOED 500Forecast Net Peak Prod: >13.4 MBOED BOEDNet Operating Income: $600,000/MonthTotal Net Rsrvs: 67 MMBOE (84% Liquids)Net PDP Reserves: 2.1 MMBOETotal Reserves PV10: $593,000,000CONTACT AGENT FOR UPDATEPP 1975DV

SOUTHEAST TEXASJEFFERSON CO., TX PROPERTY16-Active Wells. 618-Acres.SPINDLETOP FIELDDeeper Nodasaria Gas Play. PP30-Additional Drilling Locations.Numerous Behind Pipe Zones.100% OPERATED WI; 73% NRIGross Production: ~155 BOPDNet Cash Flow: ~$300,000/Mn ~110Est Net Proved Reserves: 4.1 MMBO BOPDP+P+P Reserves: 4.77 MMBO & 6.5 BCFNet Proved Rsrvs (PV10): $156,000,000CALL SELLER FOR ADDITIONAL INFOPP 1527DV

SOUTHEAST TEXAS NONOP SALE111-Active. 53-PUD. >200,000-Acres.JASPER, TYLER & POLK COUNTIESBROOKELAND SW FIELD PPUPSIDE DRILLING FOR AUSTIN CHALKWoodbine Rights Under Acreage.18-37% NonOperated WI; 14-28% NRIAvg Cash Flow: $3,238,000/Mn AUSTINEst Total Reserves: 13,396 MBOE CHALKReserves PDP (PV10): $104,678,000(Brookeland) EUR/Well: 6.0 to 11.7 BCFECONTACT AGENT FOR MORE INFOPP 9548DV

SOUTHEAST TEXAS PROPERTY12-Active. 20-PUD&Prosp. 8,000-Acres.RACCOON BEND FIELDAUSTIN & WALLER COUNTIES PPUpper Wilcox Formation.Rights 5,000 Ft & Below.3D Seismic Covers All FarmOut Area.OPERATIONAL CONTROL 750Gross Production: 750 BOPD BOPDAvg (RB Wilcox) Prod: 400 BOPD IPCash Flow: $2,000,000/MnAvg (RB Wilcox) Rsrvs: 300 MBO/WellAGENT PREPARING PACKAGEPP 1642DV

MULTISTATE GULF COASTGULF COAST PRODUCTION PACKAGE52-Wells. 5,634-Net Acrs. >12,000-Gross.ONSHORE TEXAS & LOUSIANA6 OPERATED & 10 NONOP FIELDS PPFrio, Yegua, Wilcox, Vicksburg & Hackberry>1,200 Sq. Mi of Proprietary & ---- 3,200 Sq. Mi. of Licensed 3-D Seismic18-28% NonOperated WI; 14-21% NRI25-100% OPERATED WI; 18-80% NRINet Production:83 BOPD & ~2.46 MMCFD 2,459Avg Total Cash Flow: $332,660/Mn MCFDEstimated Proved Reserves: 126.4 BCFEEst Total Rsrvs: 6.6 MMBO & 190.1 BCFTotal Proved (PV10): $201,600,000CONTACT AGENT FOR UPDATEPP 9551DV

SOUTH TEXASSOUTH TEXAS PROPERTIES7-Active Wells. 6-Shut In. 1-SWD.ATASCOSA & FRIO CO.EAST CROWN FIELD (3,522-Acres) PPOlmos Formation Production. 4,200 Ft.40% NonOperated WI; 30% NRIGross Production: 50-60 BOPD 45Net Production: 15-18 BOPD BOPDNet Cash Flow: $15,000-30,000 /MonthCONTACT SELLER FOR MORE INFOPP 1872DV

SOUTH TEXAS PROPERTY17-Active Wells.HELEN GOHIKE FIELDDE WITT & VICTORIA COUNTIES PP~85-100% OPERATED WI FOR SALEAvg Gross Prod: 198 BOPD & 182 MCFD 228Avg Cash Flow: $407,939/Mn BOEDCONTACT AGENT FOR UPDATEPP 1739DV

WEBB CO., TX PROPERTY25-Active. 13-PUD. 6,058-Net Acres.VAQUILLAS RANCH FIELDLobo Stacked Sands. ~9,100 Ft. PPLONG WELL LIFEGathering System Included.59-Sq Mi Proprietary 3D Seismic Data.Low-risk Upside. Liquids-Rich.100% OPERATED WI; 75% NRINet (July) Prod: 32 BOPD & 7.0 MMCFDPlus 485 NGL BPD. 31% Liquids. 10Projected Cash Flow: $1,400,000/Mn MMCFEDNet Proved Reserves: 39 BCFENet Proved Rsrvs (PV10): $69,000,000CONTACT AGENT FOR UPDATEPP 9118DV

WILLACY CO., TX OVERRIDE5 Active Wells; 1 SI Well; 4 PUDs~1,000 Acres HBPRecompletion & Workover Potential. RRRoughly 1% ORRIsGross Production: ~1.7 MMCFEDNet Production: ~16 MCFED RECOMPLETION6 Month Avg. Cashflow: ~$3,000CONTACT SELLER FOR DETAILSRR 4711

SOUTHEAST TEXASGULF COAST NONOP704-Gross Acres (HBP).WHARTON CO., TEXASWILCOX PRODUCTION PP85-100% OPERATED WI; 75% NRIGross Prod: 87 BOPD & 3.9 MMCFD 3.7Net Cash Flow: $453,000/Month MMCFDCONTACT AGENT FOR UPDATEPP 1903

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Volume 23, No. 16 11 A&DPERMIAN / WEST TEXAS

WEST TEXAS PROPERTIES17-Wells. 12-RRC Leases. 1,240-Acres.ECTOR & WINKLER CO.YATES, GRAYBURG, SAN ANDRES, PP-- CLEARFORK & WICHITA-ALBANYPotential Upside Drilling & Recompletion60-100% OPERATED WI; 48-80% NRIGross Production: 65 BOPD & 600 MCFD 600Avg Net Cash Flow: $123,288/Month MCFDCONTACT AGENT FOR UPDATEPP 1958DV

WEST TEXAS PROPERTIES18-Wells. 7-PUDs. 2-SWD. 4,480-Acres.LYNN, DAWSON & BORDEN CO.PERMIAN BASIN PRODUCTION PPFusselman & Spraberry Producers.960-Acres for Waterflood Development~100% OPERATED WI; 75-81.25% NRI 1,492Gross Production: 1,492 BOPD BOPDNet Income: $2,350,000/MonthCONTACT AGENT FOR UPDATEPP 1938DV

COCHRAN CO., TX PROPERTY22-Active. 14-SI/TA. 3-Inj. 1,990-Acres.LEVELLAND (SAN ANDRES) FIELDInfill Drilling & Waterflood Potential. PP100% OPERATED WI; 75% NRIGross Production: 75 BOPD 75Net Income: $124,533/Mn BOPDCONTACT MIDLAND AGENT FOR INFOPP 1743DV

KENT CO., TX NONOPERATED21-Active. 1,416+/- Gross Acres.DOUBLE MOUNTAIN FIELDCanyon Sand Formation. PP1-WIW & 1-SWD Well.Significant Canyon Sand UpSide.~15% NonOperated WI; ~11,625 NRIGross Production: ~546 BOPDNet Production: ~63 BOPD NONOPAvg Net Income: $121,788/MnCALL MIDLAND AGENT FOR UPDATEPP 2139DV

LYNN CO., TX PROPERTY2-Active. 2-PUD. 1-SWD. ~169-Acres.PERMIAN BASINSpraberry Formation. PPAcreages Held By Production.Opportunity To Reduce Opex.100% OPERATED WI; ~76% NRIGross Production: 35 BOPD 35Net Cash Flow: $48,000/Mn+/- BOPDNet Proved Rsrvs (PV10): $9,600,000--Convert Jet Pump To Rod PumpCONTACT AGENT FOR MORE INFOPP 4681DV

PERMIAN / WEST TEXASHOWARD CO., TX NONOP3-Active Wells. 160-Gross Acres HBP.SPRING FIELD75% NonOperated WI; 56-61% NRI PPAvg 6-Mn Prod: 22 BOPD & 107 MCFDAvg 6-Mn Net Income: $29,677/Month 107Operator: Legacy Reserves Operating MCFDCONTACT AGENT FOR UPDATEPP 1910

MARTIN CO., TX SALE PACKAGE14-Active. 56-PUD. ~3,076-Gross Acres.WOLFBERRYSpraberry, Wolfcamp & Strawn. PPDeep Rights: Surface to Base of Deepest-- Formation or 100 Ft Below TD.13-PUD Held By Production-All Acreage.1-Well Recently Frac Stimulated. 360100% OPERATED WI; 75% NRI (Lease) BOEDGross Prod: ~347 BOPD & 559 MCFDAvg Net Income: $424,000/MnCONTACT MIDLAND AGENTPP 8129DV

PERMIAN PROPERTIES51-PUDs. ~608-Gross Acres HBP.ANDREWS & ECTOR CO.SAN ANDRES & CLEARFORK PPInfill and Horizontal Drilling OpportunitesPotential Waterflood Development100% OPERATED WI; 75-80% NRICurrent Prod: 238 BOPD & 537 MCFD 238Avg Net Cash Flow: $563,000/Month BOPDPDP Reserves: $21,917,000PDNP Reserves: $2,271,000PUD Reserves: $80,083,000Total Proved PV10: $104,271,000CONTACT AGENT FOR UPDATEPP 1934DV

WEST TEXAS PRODUCTION5-Active Wells. 860-Acres Leasehold.MIDLAND & HOWARD CO.‘’WOLFBERRY’’ PLUS STRAWN, PP-- ATOKA & MISSISSIPPIANPotential Upside in 7 Additional Wells.100% OPERATED WI; 75% NRI 140Gross Prod: 140 BOPD & 869 MCFD BOPDAvg Net Cash Flow: $101,840/MonthCONTACT AGENT FOR UPDATEPP 1956DV

WEST TEXAS OVERRIDEMultiple Active Wells.PERMIAN BASIN - ANDREWS CO.SOUTH FUHRMAN MASCHO UNIT RR2.5% ORRI FOR SALEGross Prod: 646 BOPD & 672 MCFD 758Avg Net Cash Flow: $49,881/Month BOEDAGENT WANTS OFFERS DEC 13, 2012RR 1856PP

PERMIAN / WEST TEXASSUTTON CO., TX DEVELOPMENT5,500-Acres. 32-Existing Wells.MULTIPAY OPPORTUNITYWolfcamp, U. Canyon Sand, PPM. Canyon Shale/Sand, L. Canyon Sand,Strawn Lime, Strawn Detritals, Ellenberger.Significant Behind Pipe Potential.100-Drilling Locations, 40-Acre Spacing.100% OPERATED WI; 75% NRIFOR SALE OR FARMOUT MULTIPAYNet Production: ~400 MCFDEst Reserves: 1.0-5.0+ BCF/WellField Has Cumm’d ~40 BCF To Date.CALL SELLER FOR MORE INFOPP 8363DV

ANDREWS CO., TX PROPERTY5-Active Wells. 80-Acres.PERMIAN BASINDrill 3-InFill Wells (10-Acre Spacing). PPSeveral Recompletions of Existing Wells --- From San Andres Thru Wichita-Albany.100% OPERATED WI; 75% NRIGross Prod: ~95 BOPD & 482 MCFD 131Net Production: ~71 BOPD & 362 MCFD BOEDNet Income: $188,014/MnCALL MIDLAND AGENT FOR UPDATEPP 9295DV

ANDREWS CO., TX PROPERTY26-Active. 26-WIW. 2,243-Acres.PERMIAN BASINMCFARLAND FIELD PPQueen Sand FormationRemedial Stimulation OpportunitiesDrill On 10-Ac Spa. Flood On 20-Ac Spa.Well Logs & Seismic Data Available 25100% OPERATED WI; 75% NRI (Lease) BOPDGross Production: ~33 BOPDAvg Production: 450 BWPDNet Income: $31,167/MnCONTACT AGENT FOR UPDATEPP 9665DV

GLASSCOCK CO., TX PROPERTY5-Active (Wolfberry). 4,662-Net Acres.PERMIAN BASINHorizontal Cline & Wolfcamp Acreage. PPCline, Lower Wolfcamp, Strawn, Atoka.Secondary Obj Penn Sands, Miss Shales-- Carbonates & Silurian Fusselman.Offset Vertical Wolfcamp Development.~82% OPERATED WI; 75% NRINet (Wolfberry) Production: 158 BOEDEstablished Production Base. 158Net (Wolfberry) Cash Flow: $179,110/Mn BOEDNet Reserve Potential: 9.8 MMBOEEst Reserves Net PV10: $82,200,00035-Horizontal Cline Locations.Favorable Marketing Agreements In Place.CONTACT AGENT FOR UPDATEPP 9790DV

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Transactions 12 December 5, 2012

OKLAHOMAOKLAHOMA SALE PACKAGE150-Wells. 62-Operated. 15,667-Net Acres.CUSTER, DEWEY & ROGER MILLSPUTNAM FIELD - WESTERN ANADARKO PPTonkawa/Douglas Interval. 7,800 Ft.Cleveland Formation. 9,000 Ft.28% NonOperated WI; 22% NRI (PDP Avg)Net Production: 1,200 BOED (57% Liquid)Average Net Cash Flow: $1,933,333/Month ~1,200Total Proved Net Reserves: 7.3 MMBOE BOEDProv+Prob Net Reserves: 10.2 MMBOETotal Proved Rsrvs (PV10): $108,000,000CA Required for Data Room PresentationCONTACT AGENTPP 1019L

OKLAHOMA WATERFLOOD PROJECT8-Active Wells. 10-ShutIn. 5-Injection.OKMULGEE CO.BALD HILL PPObj 1: Booch. 1,300 Ft.Obj 2: Redfork. 860 Ft. (50-Ft Thick)100% OPERATED WI; 80% NRIGross Production: 10 BOPDNet Cash Flow: $20,000/Mn 10Horizontal Well Potential: 500 BOPD BOPDEst Booch Rsrvs: 200 MBO RecoverableEst Red Ford Rsrvs: 1.0 MMBO (In Place)CALL SELLER FOR MORE INFOPP 3048WF

PAYNE CO., OK PROPERTY1-Active Well. 320-Net Acres.ANADARKO BASINFOR IMMEDIATE SALE PPRelinquishing Operations.OPERATED WI AVAILABLENet Production: 16 BOPD 16Avg Net Revenue: $21,705/Mn BOPDExec Summary, Vouchers, OnLine Data.CONTACT AGENT FOR UPDATESPP 1544DV

SOUTH OKLAHOMA PROPERTY289-Active. 80,000-Gross Acres.GRADY, GARVIN & STEPHENSCHITWOOD - KNOX AREA PPCANA WOODFORD SHALE TRENDSycamore, Woodford, Hunton, Viola, HoxbarSimpson, Deese, Morrow & SpringerOPERATED & NonOperated Wells~14%-75% WI Available; ~11%-60% NRINet Prod: ~10.7 MMCFD & 342 BOPD 10,747POSSIBLE HORIZONTAL DEVELOPMENT MCFDNet Operating Cash Flow: $1,658,000/MonthExpected EURs: 1,447 MBOE/WellEURs After Processing: 2,102 MBOE/WellNet Reserves (PV10): $10,900,000Completed Well Cost: $9,000,000CA Required for Data PackageCALL OKLAHOMA AGENT FOR UPDATEPP 1992L

NORTH TEXASTEXAS PANHANDLE PROPERTIES3-Packages. Open Acreage & Production.HUTCHINSON, GRAY & ROBERTS& HOCKLEY COUNTIES PPFormations Incl: Cleveland, Morrow, HutonDeep Rights Open Acreage.3D Seismic Data Covering 163 Sq Mi.OPERATED WI AVAILABLE 192(Area1) Gross Production: 192 BOED BOED(Area1) Net Cash Flow: $133,000/MnCONTACT AGENT FOR DETAILSPP 8700PKG

OKLAHOMAKAY CO., OK PROPERTY3-Active Wells. 3-SWD. ~13,000-Net Acres.HORIZONTAL MISSISSIPPIANDepth Ranges: 3,560-4,055 Ft. PPPrime Lease Position In County.Varying OPERATED WI; 78-81% NRIGross Production: 100 BOPD & 334 MCFD >100Gross Cash Flow: ~$300,000/Mn BOEDAdditional Infrastructure In Place----For Property Development.CALL SELLER FOR MORE INFOPP 1149DV

LEFLORE CO., OK PROPERTY 6-Operated Wells. ~3,500-Gross Acres.OFFSET TO - POTATO HILLSPROLIFIC ARKOMA BASIN PP19-Offset Drilling Opportunities Identified.All Rights - Including Deep Arbuckle.Gathering System/Compression/Pipeline.Operated Gas Wells, Leases, Prospects.100% OPERATED WI; 75% NRICurrent Production Minimal. 293Estimated Gas In Place: 293 BCF BCFNet Proved Rsrvs (PV10): $43,500,000$1,500,000 Quickly Establishes More Vols.CALL SELLER FOR ADDITIONAL INFOPP 3825DV

NORTH OKLAHOMA PACKAGE85-Wells. ~14,346-Net Acres.BEAVER, ELLIS & HARPER CO.MOCANE-LAVERNE AREA PPChester, Morrow, Tonkawa, Chase-- & Council Grove Production.Various Depth Limitations & RestrictionsAvg 59% OPERATED WI; 48.3% NRIGross Prod: 2,800 MCFD & 11 BOPD 2,800Net Sales: 1,200 MCFD & 3.0 BOPD MCFDNet Operating Cash Flow: $68,900/MonthCONTACT AGENT FOR UPDATEPP 5999DV

KANSASALLEN CO., KS PROPERTY34-Producers. 2-Leases. 800-Acres HBP.SOUTHEAST KANSAS>10-Identified InFill Locations. PP>6-Behind Pipe Zones Possible.100% OPERATED WI; 80% NRISeller Will Consider Retaining Operations.Current Net Production: 33 BOPD 30Net Cash Flow: ~$66,000/Mn BOPDCONTACT BROKER FOR MORE INFOPP 1542DV

PHILLIPS CO., KS PROPERTY8-Oil Wells. 1-SWD. 1-ShutIn.RAY FIELDReagan Sand Production. 3,600 Ft. PP24-Old Well Re-Entries.100% OPERATED WI; 75%-84.5% NRIGross Production: 38-43 BOPD---PLUS 8,500 BWPD PACKAGENet Cash Flow: $40,000-$50,000/MnSWD Well Is 20,000 BPD.Property Includes 10-Inch Pipeline.CONTACT SELLER FOR DETAILSPP 8013SWD

NORTH TEXASGRAYSON CO., TX PROJECT14-Total Wells. 3,235-Net Acres (HBP).MULTIPLE UPSIDE OPPORTUNITIESSurrounds Big Mineral Creek Field PPOil Creek, Dornick Hills, Viola & Davis.Depths Range: 3,500 Ft. to 12,500 Ft.Exploration Opportunities into Deeper ---- Horizons of the Woodford Shale & ViolaAvg ~81% OPERATED WI; ~68% NRIGross Prod: 1,064 MCFD & 52 BOPD 821Avg Net Sales: 821 MCFD & 41 BOPD MCFDOperating Net Cash Flow: $165,121/MnAdditional Upside:- Recompletions in Existing Wells- Waterflood Potential Over Multiple ZonesCA Required to View Data RoomAGENT WANTS OFFERS DEC 14, 2012PP 1864DV

OCHILTREE CO., TX PROPERTYMultiple Active Wells. 1,328-Net Acres.CLEVELAND OIL PLAY4-Remaining Locations To Be Drilled -- PP-- In Cleveland Horizon.Active Horizontal Development7-Rigs & >100 Permits: Pan Petro Field100% OPERATED WI; ~74% NRI(Lease)Est Net Production: ~670 BOED ~67030-Day IP Rates: 230-490 BOED -- BOED--From Initial 4 Horizontal Cleveland Wells.Aries & PHDWin Reserve Report.CONTACT AGENT FOR UPDATEPP 1259HZ To get started, please call 713-600-0154

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Volume 23, No. 16 13 A&DMONTANA

SHERIDAN CO., MT STRIPPER WELL1-Active Well. 320-Acres(HBP).WILLISTON BASINClose To North Dakota Border. PPProducing Commingled Red River/Nisku.Bakken/Three Forks Upside.Also Potential Mission Canyon Re-Drill.DRILL STEM TEST BAKKEN/>35% OPERATED WI; ~74% NRI THREEAvg Net Production: ~20 BOPD FORKSNet Taxable Cash Flow: ~$7,500-$8,000/MnCALL SELLER FOR MORE INFOPP 6009DV

NORTH DAKOTAMCKENZIE CO., ND PROPERTY12-Active.10-PUD.12,800-Gross Acres.BAKKEN SHALEBirdbear, Duperow, Red River Formation. PPSignificant UpSide Potential.100% OPERATED WI AVAILABLENet Production: 170 BOED 170Avg Net Cash Flow: $223,896/Mn BOEDCONTACT AGENT FOR ADD’L INFOPP 9497DV

NORTH DAKOTA NONOPERATED58-Active Wells. 13,900-Net Acres.HORIZ BAKKEN & THREE FORKSDUNN, MCKENZIE, MOUNTRAIL -- PP-- & WILLIAMS CO., ND346 Proved Undeveloped LocationsVARIOUS NONOPERATED WI FOR SALENet Volumes:1,000 BOPD & 60 MCFD 1,010Net Proved Reserves: 25 MMBO & 10 BCF BOEDTotal Proved Rsrvs (PV12): $335,000,000NEGOTIATED SALE. SEE VDR.CONTACT AGENT FOR MORE INFOPP 1222DV

NORTH DAKOTA ROYALTY SALE367-Horizontal Wells. >240-Sections.MOUNTRAIL & BURKE COBAKKEN / THREE FORKS RR34-Active Horizontal Rigs (Mountrail Co.)CONSIDERABLE UPSIDEOVERRIDING ROYALTY FOR SALETop Operators: Whiting O&G, Fidelity E&P,-- Oasis, Hess, Murex & EOG Resources. BAKKENAvg 6-Month Net Cash Flow: $127,589/MnTotal EUR’s: 628 MBOE (Bakken)Total EUR’s: 490 MBOE (Three Forks)CALL DALLAS AGENT FOR DETAILSRR 3998PP

OHIOOHIO NON-PRODUCING ROYALTIES~12,000-Acres.STARK, MAHONING, JEFFERSON,--HARRISON, COLUMBIANA, CARROLL, RR-- & BELMONT COUNTIESUTICA SHALE PLAY5.0% ORRI FOR SALE ROYALTYException of 1.5% in 820 Acres.CALL LESSOR FOR MORE INFORR 1867

PENNSYLVANIAPENNSYLVANIA PACKAGE700-Active Wells. 51,000-Acres.MARCELLUS & UTICA SHALES PP400 Miles Pipeline, Potential Storage,Drilling Operation & Company For Sale. MARCELLUSCONTACT BROKER FOR DETAILSPP 9639CO

PENNSYLVANIA PRODUCTION SALE690-Total Acres. 2-Properties.FAYETTE & WESTMORELAND CO.APPALACHIAN BASIN PPAll Mines and MineralsUp to 50% Interest in Marcellus; 83% NRIAvg. Wells Producing 15 MMCFD MINERALSMajor Gas Pipelines Run thru PropertiesCONTACT SELLER FOR DETAILSPP 7585M

WEST VIRGINIAWEST VIRGINIA ROYALTY257-Active.COUNTIES INCL: BARBOUR, GILMER-- BOONE, HARRISON, RANDOLPH RRBirdbear, Duperow, Red River Formations.Significant UpSide Potential.ROYALITIES FOR SALENet Profits Interest Under Royalty NPI ROYALTYAvg Net Cash Flow: $201,916/MnSealed Bid Offering.CONTACT AGENT FOR UPDATERR 1569PP

COLORADOSAN MIGUEL CO., CO PROPERTY3-Wells. 8-PUDs. 610-Net Acres.COCKLEBUR DRAWObj 1: Cutler Honaker. 7,000 Ft. PPObj 2: Hermosa. 9,500 Ft.Uphole Potential.50% OPERATED WI; 40% NRIGross Production: 800 MCFD 400Net Production: 400 MCFD MCFD8 PUD’s w/ Possible 3.0 BCF Per Well.CONTACT SELLER FOR MORE INFOPP 2668DV

OKLAHOMASOUTHERN OKLAHOMA PROJECT42-Wells. ~37,200-Net Acres.CARTER, LOVE, MARSHALL & BRYANARDMORE BASIN - LAKE MURRAY PPArbuckle, Bromide, Caney, DeeseDornick Hills, Goddard, Hunton, Sycamore,Springer, Viola, Simpson & Woodford.Upside: Woodford, Goddard & SimpsonAverage 27% NonOperated WI; 21% NRI 1,443Net Sales: 1,443 MCFD & 6.0 BOPD MCFDProprietary 3-D Seismic Shoots Available.Operating Net Cash Flow: $109,023/MonthEstablished Revenue Stream ---- With Ongoing Development.CONTACT AGENT FOR UPDATEPP 1917DV

STEPHENS CO., OK PACKAGEMultiple Active. 227-PUD. 845-Acres.ANADARKO BASINLOCO FIELD PPS Location Undergoing Waterflood.Significant UpSide Drilling Potential.100% OPERATED WI; 81% NRIGross Production: 316 BOPDNet Production: 258 BOPDNet Proved Reserves: 2,675 MBOENet Proved Rsrvs (PV10): $69,000,0003rd Party Reserves Report.CONTACT AGENT FOR MORE INFOPP 2872DV

WEST OKLAHOMA PROPERTY117-Wells. 28,360-Acres. 51-HBP SectionsBECKHAM, CUSTER & WASHITA CO.WEST TURKEY CREEK AREA PPDes Moines Granite Wash, Hogshooter,Cottage Grove, Red Fork, Atoka & Morrow13%-63% NonOperated & OPERATED WIAverage Leasehold Delivered 80% NRI 9,935Avg Net Sales: 765 BOPD, 9,935 MCFD MCFDOperating Net Cash Flow: $3,234,018/MnCA Required to View Data RoomCONTACT AGENT FOR UPDATEPP 1963DV

OHIOEASTERN OHIO NONOP87,400 Gross Acres. 21,800-Net Acres.HORIZONTAL UTICA SHALEWET GAS WINDOW & OIL WINDOW PP10 Wells Drilled to Date536 Locations on 160-Acre Spacing-- Additional 250 Potential Locations25% NonOperated WI For Sale 4,340Well Tested Up to 4,340 BOED BOED1,560 BOPD, 7.1 MMCFD & 1,030 BNGLOperated by Gulfport Energy Corp.CA Required to View Data RoomCONTACT AGENT FOR MORE INFOPP 1891DV www.plsx.com/ma

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Transactions 14 December 5, 2012

MULTISTATE CROSS REGIONMULTISTATE ROYALTY PACKAGE118-Wells. 5-States.TEXAS, OKLAHOMA, KANSAS ---- LOUISIANA & MISSISSIPPI RRProduction from 5 New Wells.3 Wells in Completion Stages100% COMPANY STOCK SALE 8,959Gross Prod: 1,145 BOPD & 8,959 MCFD MCFD5-New Wells: 216 BOPD & 429 MCFDAvg 9-Month Net Cash Flow: $33,985/MnCONTACT AGENT FOR UPDATERR 1861PP

WANTEDSEEKING OIL PROPERTIESPrefers Operated.TEXAS & WEST COASTPrefers Older Field w/ Production-- W--& Development Upside.Waterflood & Horizontal Drilling.Also Consider Significant NonOp Position. WANTEDSeeking Values $25MM - $75MM.CONTACT PLS AGENT WITH DEALSW 8076PP/DV

WANTED: OIL & GAS PRODUCTIONU.S.ONSHORE OR OFFSHOREWants Proved Production w/ Upside.Wants. NonOperated Working Interest WPrefers 30%-40% PDP.Prefers 50%-60% PDP+PUD.Price Range: $100 MM - $300 MM WANTEDCan Typically Close In 90-120 Days.CALL PLS TO LEARN MOREW 2420PP

SEEKING ROCKIES PROPERTIESBoth Oil & Gas.DAKOTAS, MONTANA, WYOMINGUnconventional & Conventional. WRelatively Shallow Depths (<5,000 Ft).Also Interested In Leases.OPERATED OR NON-OPERATED WIPrice Range: Under $500,000 WANTEDCONTACT PLS FOR BUYER INTROW 7135PP/L

WANTED: TEXAS GAS PRODUCTION200-700 MCFD. Long Lived Production.TEXAS & GULF COASTTarget Formations: Miocene & Frio WTarget Depths: ~5,000 Ft.Single Well or Small Field (Gas). WANTEDSEEKING 100% OPERATED WIQuick Close After Due Diligence.W 9224PP

CALIFORNIAKERN CO., CA PROPERTY42-Active. 5-SWD.NORTH BELRIDGE FIELDDIATOMITE & TULARE PPSignificant Low-Risk Undeveloped OilEXCELLENT OPPORTUNITY100% OPERATED WI AVAILABLECurrent Production: 150 BOED (95% Oil)Since Mid 2010: 140 BOPD & 100 MCFD 150Net(Proved)Rsrvs: 2,663 MBO & 683 MCF BOEDNet (Proved) PV10: $92,500,000Est Net (3P) Reserves: 4,302 MBOEEst (3P) Reserves PV10: $92,000,000CONTACT AGENT FOR UPDATEPP 9365WF

KERN CO., CA PROPERY2-Active Wells. 1-Water Disposal Well.BEAR VALLEY. ASPHALTO FIELD.Depth Limit - Bottom Of Monterey. PPAntelope Shale (Monterey)~5,800-6,500Ft.Drill 5-Vertical Wells On 10-Acre Spacing--- OR Significant Horizontal Well Potential100% OPERATED WI; 80% NRIGross Prod: ~5.0 BOPD & 550 MCFD MONTEREYNet Cash Flow: ~$25,000/MnNet Proved Rsrvs: ~163 MBO & 12 BCFNet Proved Rsrvs (PV10): $19,000,000CONTACT AGENT FOR CA & REPORTPP 7689DV

MULTISTATE GULF COASTTEXAS & LOUISIANA PROPERTIES3-Fields. 46-Active. 19,380-Net Acres.EAGLE FORD & E TX CRETACEOUSCLAY & HARDIN (TEXAS) PPGRAND LAKE (LOUISIANA)Significant UpSide: Y-4 Horizontal DrillingIncluding CO2 Flood Potential.~100-Development Locations.OPERATED WI FOR SALENet Production: 180 BOED 180Net Cash Flow: $140,000/Mn BOEDNet Proved Reserves: 10.7 MMBOENet Prov Rsrvs (PV10): $157,000,000(LA)Net PDNP Rsrvs (PV10): $4,100,000CONTACT AGENT FOR UPDATEPP 2309DV

GULF OF MEXICOGULF OF MEXICO OVERRIDE6-Blocks.OFFSHORE LOUISIANAShip Shoal 182/183 RRSouth Timbalier 36/37Eugene Island 339 & 34280% ORRI SALE OF A 25% NPI OFFSHOREOFFERS DUE BY DECEMBER 12, 2012RR 1863

WYOMINGNIOBRARA CO., WY PROPERTY8-Active Wells. 2-Potential Locations.NORTH ANT HILLS FIELDMultiple Wells w/ Reserves Behind Pipe PPLakota Marine Bar & Lakota Channel Sand.5.5% ORRI in 2 Leo Formation Oil Wells--Option to Convert ORRI to 30% WI APO 128100% OPERATED WI; Avg 82% NRI BOPDGross Production: 128 BOPD11-Mn Net Cash Flow: $230,077/MonthEst Recoverable Reserves: 250-400 MBOCONTACT AGENT FOR UPDATEPP 1880RR

MULTISTATE ROCKIESMULTISTATE ROCKIES NONOP238-Active Wells. ~12,220-Net Acres.NORTH DAKOTA & MONTANABAKKEN / THREE FORKS PLAY PP>170-Active Rigs in the AreaOperators Rapidly Developing AcreageAvg 4.3% NonOperated WI; 3.5% NRIEst October 2012 Net Prod: ~885 BOEDOperators Include: Continental, EOG, ~885Hess, Marathon, Statoil, Slawson & Oasis. BOEDNet PDP Reserves: 1,701 MBOETotal Proved Reserves: 4,027 MBOENet Proved PV10 Rsrvs: $87,500,000CA Required to View Data RoomCONTACT AGENT FOR UPDATEPP 1974

ROCKIES SALE PACKAGE34-Active Wells. 2-SWD.NORTH DAKOTA & MONTANAWILLISTON BASIN PPProducing from Madison Formation.4 NonOperated Behind Pipe Opportunities.LOW RISK, LONG LIFE PRODUCTIONNonOperated & Operated WI Available ~26013-81% WORKING INTEREST FOR SALE BOEDNet Production: ~260 BOED (86% Liquids)Sale Does Not Include Bakken/TF InterestCGA Reserve Report Available.CA Required to View Data RoomOFFERS DUE BY DECEMBER 2012PP 1896DV

WILLISTON BASIN NONOP145-Wells. ~2,706-Net Acres.NORTH DAKOTA & MONTANABAKKEN / THREE FORKS PP>300 Identified Drilling Locations.Averaging 8 New Wells Per MonthAvg 1.79% NonOperated WI; 1.43% NRI ~300Net Production: ~300 BOED BOEDOperators:EOG, Hess, Marathon,Whiting & WPXCONTACT AGENT FOR UPDATEPP 1955DV To get started, please call 713-600-0154

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Volume 23, No. 16 15 A&DLinn Co. LLC (LNCO; $38.60–Nov. 29; Outperform; PT: $48)

LNCO Firepower Cued for E&P C-Corp Buyouts: While still un-utilized as an M&A vehicle since its 10/12/12 IPO, we think it is only a matter of time before LinnCo (LNCO) is put to work as an M&A vehicle to grow distributions at Linn Energy (LINE). ... We estimate the most accretive takeout would be Whiting Petroleum Corp. (WLL, 47% accretive) followed by SM Energy Co. (SM, 26%) and Oasis Petroleum Inc. (OAS, 25%). We estimate that LNCO could pay a 20% premium for SandRidge Energy Inc. (SD) and generate accretion of 12%. Our list is in no way an exhaustive representation of potential takeout candidates, but is instead illustrative of the very broad opportunity set available to Linn for friendly merger deals. ... The simple mechanics of a transaction for LNCO would be to issue LNCO units to the target, with LNCO effecting an immediate swap of the assets for more LINE units. LINE would then raise its distribution based on the accretion from the transaction, in turn raising the dividend at LNCO. LNCO’s steadily decreasing discount to LINE, now measuring less than 3%, underscores increasing investor understanding/attraction to the unique LNCO vehicle. —Ethan H. Bellamy, Baird

SandRidge (SD; $5.62–Nov. 23; Hold)SD adopts poison pill: Company trying to fend off recent activist campaigns

calling for strategic and management changes. Purpose of new shareholder rights plan and change to bylaws include: 1) deters hostile takeovers as significant costs/dilution comes with acquiring 10+% stake (15% for passive institutions); 2) forces direct negotiations with management/board vs. acquiring shares in open market; and 3) adds additional layer of complexity to making board/management changes.

—Jeff Tillery, Tudor, Pickering, Holt & Co.

QEP Resources (QEP; $26.67–Nov. 16; Outperform; Range: $40-$44)Management has laid out and reviewed four potential pathways to raising a target

of $1 billion by mid-2013. In no particular order the options are as follows: Sale of non-core upstream assets (which assets not specified); Royalty Trust/VPP; Partial midstream sale to financial partner; MLP of midstream assets. After thoroughly reviewing all, the board and management eliminated the trust/VPP option ... Obviously there were a lot of

questions about what is considered “non-core” but management is reluctant to telegraph divestiture plans at this point. One thing was clear though: in spite of a recent upswing in natural gas transactions, management still

believes this is a bad time to sell gas assets as valuations are still too low. For this reason, it is unlikely that QEP would sell the Haynesville or other dry gas assets at this point. So what does this leave for “non-core” assets that could potentially be sold? We think given inventory and midstream investment in the Uinta and Pinedale, that these are likely viewed as long-term strategic assets and are unlikely to be sold. The mid-continent liquids plays (Granite Wash, Tonkawa, Marmaton, Cana) seem like the most likely candidates given lack of investment, but valuations are likely hurt by mid-continent gas and NGL markets. QEP could also find some interest for the Powder River Basin, which is currently facing difficulty in getting off the ground due to the pace of federal permitting. There are some other smaller assets, such as the Vermillion that could be sold off, but likely not large needle movers. —David Tameron, Wells Fargo

Vanguard Natural Resources (VNR; $26.00–Nov. 16; Outperform; PT: $34)Acquisitions to drive DPU growth: With over $900MM in acquisitions year-

to-date, we anticipate VNR to grow distributions by 5.7% in 2013 to $2.54/unit. We model a compound annual growth rate of 6.0% from 2012-2015 predicated on continued growth through acquisitions. We model $250MM in acquisitions per year, which may prove to be conservative given management’s strong acquisition appetite and related track record in 2012. —Ethan H. Bellamy, Baird

What the Analysts Are Saying About A&D •Denver-based Anschutz

Exploration appointed Chris Hunt as chairman and CEO. Hunt worked for

affiliated company Anschutz Corp. as

VP before leaving to form private investment firm Knightsbridge Capital. He also co-founded Caerus Oil & Gas.

•Southwest oil and gas acquirer Core Resource Management appointed financial advisor Dennis Orsi to its board as an independent director.

•Gulfport Energy hired Jordan Brandenburg as landman for the Utica. Brandenburg previously served as senior landman at Chesapeake.

•Jones Energy appointed Steve Bryson as land manager at its Austin

headquarters. Bryson joins Jones from

Reeder Energy Partners where he was VP of land.

•Petroshale Inc. announced the departure of Worldwide Geochemistry president Daniel M. Jarvie from its board. Jarvie will continue to work with Petroshale as a technical consultant.

•Eagle Ford producer Sanchez Energy hired Joseph R. DeDominic as SVP and COO. DeDominic joins the company from Occidental Petroleum

where he served for 12 years, most recently as president and GM of the Willistion

business unit. Also, Sanchez Oil & Gas co-founder, CEO and chairman A. R. Sanchez Jr. was appointed executive chairman of the Sanchez Energy board. IBC Insurance senior commercial producer Alan G. Jackson was also appointed to the board as an independent member.

•Oil and gas non-op Victory Energy’s CFO Mark Biggers resigned citing family and personal reasons. Biggers will serve as interim CFO during the transition period.

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Transactions 16 December 5, 2012

Millbrae adds senior execs to expand acquisitions

Mid-Continent and Permian producer Millbrae Energy hired two senior executives from Chaparral Energy as part of its effort to accelerate and diversify its acquisition activity. Larry E. Gateley—a 39-year industry veteran who served at Chaparral as long-time SVP of A&D and corporate reserves and recently added the role of Southern region manager—is now EVP and COO at Milbrae. Former Chaparral SVP and general counsel Robert W. Kelly II has been named to the same roles at Millbrae.

Like Gateley, Kelly has spent much of his 32-year career engaged in A&D activity, as well as in oil and gas law and land work.

Millbrae’s new management team will help deploy a 2013 target budget of more than $500 million for acquisitions and development drilling “to help the company grow rapidly in size and scope,” said founder, chairman and president Stewart Mills Reid. The new team is also moving Millbrae’s regional office from Tulsa to Oklahoma City.

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The Marble Falls is present on 75,000 net acres of the acquisition with 700 identified vertical locations plus opportunities for vertical downspacing and horizontal drilling.

“We are looking forward to adding the valuable oil, liquids and natural gas production from these assets, and are optimistic about the potential for continued development of the highly attractive Marble Falls play,” said Atlas president and COO Matthew A. Jones. “We believe that this acquisition will further diversify our cash flow by increasing our contribution

from oil and NGL production to approximately 20% based on third-quarter 2012 production. In addition, we expect to gain significant efficiencies in this region as our established Fort Worth

team will operate and develop these assets.”In addition to the Barnett assets it

picked up from Titan Operating and Carrizo earlier this year, Atlas picked up mostly undeveloped Mississippian acreage from Equal Energy in two transactions (see table). Properties from the company’s initial spinoff are located in the Marcellus (accounting for 90% of initial production), Niobrara, New Albany, Antrim and Chattanooga shales.

For DTE, the deal represents the completion of a multi-year exit from the upstream sector that began in 2007 with a $1.2 billion divestment of Michigan gas properties to (poetically enough) Atlas Energy. Toward the end of that year DTE sold the majority of its Barnett assets to Range Resources for $260 million.

Atlas plans to hedge ~80-100% of its available acquired production for the next three years, then 40-60% of available production for the subsequent two years. The company secured financing for the deal from Wells Fargo and Citigroup in connection with its revolving credit facility. Citigroup also acted as Atlas’ financial advisor with Houston-based Jones Day and Philidelphia-based Ledgewood as legal advisors. The deal is expected to close by December 31.

Fort Worth Basin sale completes utility DTE Energy’s multi-year upstream exit.

Atlas plans to commence Marble Falls drilling next year.

Next ProspectCentre

Atlas buys highly attractive Marble Falls Continued From Pg 1

Atlas Resource Partners Acquisitions To Date Source: PLS M&A Database

Date SellersValue

($MM) LocationProd.

(boepd)1P

(MMboe)1P %

gasNet

Acres11/19/12 DTE $255 Barnett 3,800 35 43% 88,000

9/24/12 Equal $40 Mississippian 1,400 — — 8,500

5/17/12 Titan Operating $184 Barnett 4,000 42 84% 16,000

4/4/12 Equal $18 Mississippian — — — 7,250

3/15/12 Carrizo $190 Barnett 6,000 46 79% 12,000

10/17/11 Atlas Energy — Marcellus 800 30 87% —

Total $687 — 16,000 153 74% 131,750

Founded in 2001, the Permian & Mid-Con producer is now looking to new plays.

Nytex sells to JV partner Newark E&P to fund Marble FallsFort Worth-based Newark E&P bought JV partner Nytex Energy Holdings’ 15%

WI in ~17,000 North Texas leasehold acres including two producing wells and carried interest in seven drilling prospects for $3.2 million cash.

“The sale of our 15% interest in the 17,000 leasehold acres provides us additional capital to exploit the burgeoning opportunities created by our early success in our target multi-pay oil resource plays,” said Nytex chief Michael Galvis. Nytex owns an average 5% WI in ~5,600 acres and 1% ORRI in more than 88,000 acres in Jack, Throckmorton and Young Cos., Texas targeting the Marble Falls, Mississippi and Caddo limestones. The company maintains an ongoing acquisition program in the Marble Falls play.

FOR SALE

Call 713-650-1212

PERMIAN SALE PACKAGE27-PDP Wells. ~1,930 Net Acres.MIDLAND, ECTOR & ANDREWS CO.SPRABERRY (TREND AREA) PPMultipay: Wolfberry; Strawn, Wolfcamp---Dean, Spraberry & Clearfork50-100% OPERATED WI; ~38-75% NRIGross Prod: 573 BOPD & 1,284 MCFDNet Prod: 320 BOPD & 741 MCFDNet Cash Flow: >$1,000,000/MnSubstantial Drilling UpsideCALL PLS FOR MORE INFOPP 1695DV

For more details on this package, please e-mail Brian Green at

bgreen@plsx.com

This package’s virtual data room can be access for additional info at www.plsx.com

Access PLS’ archive for previous A&D newsFor general inquiries, e-mail info@plsx.com

Volume 23, No. 16 17 A&DClosings

East West & Lani complete San Joaquin farm-in dealEast West Petroleum completed its farm-in and AMI agreements announced

September 4 to carry out joint exploration with Lani LLC in California’s San Joaquin Basin. East West now holds interests in ~4,500 gross acres (3,200 net) at the Tejon Extension and Tejon Main areas (25% and 21.25%, respectively) primarily targeting shallow oil prospects and will contribute $2.5 million over the next four to six months to drill two exploratory wells and acquire additional joint leases.

Lani will initially operator and East West will have an option to become operator at a later date. By the November 19 closing Lani had acquired ~1,000 gross acres in the AMI, and the two companies hope to add at least 7,000 more on a 50:50 basis.

Offshore A&D

•Leni Oil & Gas closed the sale of its seven Gulf of Mexico leases for $1.714 million after closing adjustments, a 5% increase over the $1.625 million

consideration originally announced. It also identified the previously unnamed US

buyer as Natural Gas Partners portfolio company Northstar Offshore Group. Leni will now focus investment on its operations onshore Trinidad.

•QR Energy LP closed its acquisition of mature, predominantly oil properties in East Texas field for $214.3 million cash after customary adjustments.

QRE’s 8-K filing identifies the seller as Danmark Energy. The properties in Gregg and

Rusk Cos. contain 397 wells producing 1,400 boepd (90% oil) with proved reserves of 10.7 MMboe. The acquired assets overlap QR Energy’s existing properties in the field.

•Sefton Resources closed on part of its Leavenworth Co., Kansas lease acquisition announced September 24 and named the previously

unidentified seller as Dark Horse Operations. Sefton picked up 42% WI in the

lease on November 15 via its sub TEG MidContinent for an initial $75,000 and will pay another $125,000 upon transfer of the remaining working interest. The lease holds 14 wellbores which are not currently in production plus surface equipment and water disposal facilities.

•Houston-based Texas Petroleum Investment Co. closed its acquisition of south Louisiana properties from Forest Oil on November 16 for $208 million—down from the $220 million initial announced October 11 because of customary adjustments. Forest expects to get another ~$2.0 million for assets on which third parties possess preferential purchase rights. As a result of the ~22 MMcfed of Q3 production included in the sale, Forest lowered its H2 guidance range by 10 MMcfed to 320-330 MMcfed (still 66% gas).

Closing Briefs

Denbury closes first phase of Bakken deal with ExxonEOR operator Denbury Resources closed on the first phase of its Bakken sale

and asset exchange with ExxonMobil and sub XTO Energy. Exxon paid ~$1.3 billion cash (including preliminary closing adjustments) for 82.5% of Denbury’s North Dakota and Montana producing properties (161,700 net acres) and transferred to Denbury its operating interests in Texas’ Webster field and Wyoming’s Hartzog Draw field. Denbury plans to invest a substantial portion of proceeds to acquire

interests in oil fields that are suitable for CO2-enhanced oil recovery. The companies are working to complete the final phase of the deal

which involves Exxon transferring an interest in its CO2 reserves in LaBarge field in Wyoming to Denbury for the remaining 17.5% of the Bakken assets (34,300 net acres). If that transfer does not go through as planned, Denbury will sell an additional 17.5% Bakken-area interest to Exxon for a further $350 million.

Although the oil-gas production breakout for the Montana deal was not disclosed, Vanguard said properties are “characterized by mature oil production with some associated natural gas production” so they are certain to represent Vanguard’s oiliest acquisition YTD.

The deal will more than double Vanguard’s Williston Basin production to 2,000 boepd. The company’s existing Williston assets produce 900 boepd (90% liquids) and proved reserves of 5.3 MMboe

(93% oil, 95% developed) for a reserve life of 16 years. Vanguard operates 70% of existing properties including 75 producing wells. The 45,022 net acres (70% WI) in its pre-deal Williston portfolio are located across multiple counties in North Dakota and Montana.

In March Vanguard farmed out interests in order to develop two of its North Dakota Bakken properties—to Oasis Petroleum for $1.0 million and Triangle Petroleum for $4.4 million. According to an October 10 presentation the company was negotiating a JV for additional development in 2012-2013.

Paid $119,091 ppboe/d—34% above YTD Bakken avg. of $88,771.QPi

Exxon confirms farm-in to Anadarko’s Phobos prospectDuring its Q3 conference call, ExxonMobil confirmed itself as the company to

which Anadarko in July had farmed out a 20% stake in Sigsbee Escarpment Block 39 containing part of the deepwater Phobos prospect. Between Exxon and an earlier

farmout to Plains E&P, operator Anadarko will be carried for 100% of the initial exploration well scheduled to spud by

year’s end. Anadarko now holds a 30% stake in the Gulf of Mexico block with Plains holding 50%. Phobos is estimated to hold resource potential of 306 MMboe.

Exxon also said it had acquired 35% WI in the Thom prospect 30 miles northeast of the major’s Julia discovery in the GOM. A Thom exploration well is scheduled for next year.

Vanguard picks up Montana production Continued From Pg 1

QR Energy

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Transactions 18 December 5, 2012

CNOOC reboots Nexen buy, filing with US regulator

As Canada nears a decision on whether to approve Chinese NOC CNOOC’s $15.1 billion takeover bid for Nexen, the two companies withdrew and resubmitted their application for US approval of the deal by the Committee on Foreign Investment in the US. The companies did not give a reason for the move, leading to speculation that the review process may have hit a snag.

Although most of Nexen’s properties are in Canada, the deal also requires US approval because Nexen has assets in the US Gulf of Mexico including interests in 205 blocks holding more than 100

prospects and the Appomattox and Knotty Head developments. The deal would be China’s biggest overseas buy, exposing CNOOC to the US GOM as well as Nexen’s large positions in the UK North Sea, West Africa and Alberta’s oil sands and other unconventional plays.

Heritage Foundation research fellow Derek Scissors told Reuters the resubmission is not likely to represent a major hurdle for the deal: “It typically occurs when there’s a declaration by the applicant that runs afoul of a CFIUS regulation but can be reformulated. The reformulations usually are procedural, not material.”

Nexen has 203 MMboe of 1P, 310 MMboe of 2P & 13,000 boepd output in GOM.

Offshore A&D

CNOOC GOPLS provides clients with research, insight and transaction opportunities...

24 | 7 | 365Source information at www.plsx.com

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Freeport's New Oil & Gas Portfolio From Plains & McMoRan

575 MMBOE

California

38%

California

38%

4%4%

Eagle Ford

6%6%

Haynesville

22%

Haynesville

22%

Other

DeepwaterGOM

25%

DeepwaterGOM

25%

5%

GOMShelf

Proved Reserves (1)

California23%

California23%

EagleFord21%

EagleFord21%

Haynesville

9%9%

Other3%

175 MBOE/d

DeepwaterGOM33%

DeepwaterGOM33%

2013e Production by Region

GOMShelf11%

GOMShelf11%

Natural Gas Oil

Oil

66%

Oil

66%

Gas

28%

Gas

28%

2013e Production Mix

NGLs6%6%

1. PXP Reserves as of 12/31/11 except for reserves purchased in deepwater acquisitions which are as of 9/30/12; MMR reserves are mid-year 2012 pro forma for 2H12 divestitures. e = estimateSource: Freeport December 5 Presentation via PLS docFinder www.plsx.com/finder

On the production side, the acquisitions bring 182,000 boepd of Q3 volumes (66% liquids) which includes 60,000 boepd from Plains’ recent GOM buys. Onshore assets include Plains’ established California oil production, growing Eagle Ford profile and large Haynesville gas resource base as well as McMoRan’s leadership position in the

onshore Louisiana portion of the ultra-deep shelf play. On a pro forma basis, ~74% of Freeport’s 2013 EBITDA is expected to

be generated from mining and 26% from oil and gas, with 48% of combined EBITDA sourced to US operations. In its investor presentation, Freeport suggested that its new oil exposure is in line with favorable commodity supply-demand fundamentals that are supportive of future prices for both oil and its core copper business. Reasons for the favorable outlook include emerging market growth and global urbanization which are expected to grow energy consumption by more than 30% by 2035 and refined copper consumption by 60% by 2025.

Other benefits of the acquisitions identified by Freeport are a large oil-focused revenue base coupled with a favorable entry point into low-cost, long-term gas resources—plus significant exploration upside and the strong margins and cash flows to fund its development.

“The transaction will add a high-quality portfolio of assets with strong current cash flows, significant growth options and complementary exposure to markets positioned for global growth in the developed and developing world, and reflects our positive view of the factors that will drive demand for copper and other commodities,” said Freeport president and CEO Richard C. Adkerson. “The oil and gas assets being acquired possess the asset quality characteristics that we seek in our mining business—large-scale assets with long lives, low cost and geologic potential to support growth through exploration and development.”

Financial terms, plus James Flores to run E&P—The majority of the deal value consists of ~$10.3 billion in assumed Plains debt

(largely related to the recent deepwater buys) with another $300 million of McMoRan debt included. Freeport will also pay McMoRan shareholders per-share consideration of $14.75 cash plus 1.15 units of a royalty trust which will hold a 5% ORRI in future production from the GOM explorer’s ultra-deep prospects.

Freeport shocks with McMoRan & Plains buy Continued From Pg 1

Total deal value yields $34 ppboe/g or $108,000 ppboe/d.QPi

Continues On Pg 19

Access PLS’ archive for previous A&D newsFor general inquiries, e-mail info@plsx.com

Volume 23, No. 16 19 A&DOffshore A&D Memorial leaps offshore California with $268 million buy

Upstream MLP Memorial Production Partners made the largest acquisition in its 12 months of operation and its first offshore buy, agreeing to acquire Rise Energy Partners’ stake in the producing Beta oil field off southern California. For a purchase price of $268 million (excluding $3.0 million of working capital and other customary adjustments) Memorial will get an operated 51.75% WI in three

Pacific OCS blocks in federal waters ~11 miles off Long Beach along with three conventional wellhead and processing platforms, a 17.5-mile pipeline and an onshore tankage and metering facility. Two of the

platforms are bridge connected and stand in ~260 ft of water while the third stands in ~700 ft of water.

In production since January 1981, the properties have estimated proved oil reserves of 14.3 MMbbl (100% oil, 70% developed) as of September 30 with a PV-10 of $392.8 million. The field’s 51 wells produced 1,574 bopd during the first nine months of 2012 implying a reserve life of ~25 years.

According to Memorial the field exhibits a stable production profile with an annual PDP decline rate of 5% and is expected to be accretive to distributable cash flow.

Memorial said the field has high operating margins and modest capex requirements, with multiple low-cost development opportunities including drilling, recompletions and injection enhancement. Highlighting the potential of these opportunities, the recovery factor to date is only 9% based on estimated OOIP of ~940 MMbbl and

cumulative production of ~86 MMbbl.“We believe these properties are

ideal for an MLP because they are located in a mature, legacy basin characterized by long-life oil reserves, stable production with a low decline rate and low-risk development drilling opportunities,” said John A. Weinzierl, chairman, president and CEO of Memorial’s GP. “This acquisition also diversifies our commodity mix by adding a significant amount of oil production and reserves.”

The Beta field buy is 50% larger by value than Memorial’s previous four acquisitions combined, two of which were from the MLP’s sponsor Memorial Resource Development LLC (for $11.3 million) and all of which were onshore Texas and Louisiana. The latest deal represents 14% of Memorial’s total pro forma reserves and increases the oil content from 21% of reserves to 32%.

As part of the deal, Memorial will acquire crude oil hedges from closing (expected before year’s end) through 2015 which will cover a significant portion of 2013 volumes and some 2014 and 2015 production.

Memorial’s first offshore buy greatly increases oil reserves & production.

Shell buys out Callon stake at Habanero in deepwater GOM

Callon Petroleum agreed to sell its 11.25% WI in the deepwater Habanero field offshore Louisiana to operator Shell for $42 million. Located on Garden Banks Block 341 in 2,015 ft of water, the

Gulf of Mexico field produced ~420 boepd (80% oil) net to Callon during October

representing 8.7% of the company’s total output. Net proved reserves are 8.2 Bcfe (56% gas, 16% developed) with a PV-10 of ~$46.6 million.

Chairman and CEO Fred Callon called the sale “another significant step in the transformation of our asset base” to onshore, with more than half of company-wide production for October being

onshore pro forma to the transaction. Callon plans to use the proceeds to pay down debt, giving the company flexibility to continue its Permian growth efforts. Callon still holds 15% WI in the deepwater Medusa field and several shallow-water Gulf of Mexico properties in addition to its Permian and Haynesville assets.

The deal increases Shell’s stake at Habanero to 66.25% with Murphy Oil holding the remainder. A sidetrack at the field is expected to add over 900 boepd in late 1Q13 with maintenance scheduled for 3Q13. Closing is expected by December 28 subject to the exercise of preferential rights and customary closing conditions.

$42 million deal helps Callon shift to onshore, especially in Permian Basin.

MLP pays Rise Energy Partners $19 ppboe/g or $174,000 ppboe/d.QPi

Find it now!PLS docFinder saves valulable time in sourcing critical data.

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The cash portion represents a 74% premium to McMoRan’s prior-day closing price and totals $2.1 billion (net of MMR interests currently held by Freeport and Plains). Plains shareholders will get 0.6531 Freeport common shares and $25.00 cash per share (totaling $50.00/share based on Plains’ prior-day close—a 39% premium)

with aggregate value of ~$6.9 billion.

Both deals are expected to close in 2Q13 at which time Plains chief James C. Flores will become vice chairman of Freeport and CEO of its oil and gas operations and two additional Plains board members will be added to Freeport’s board. Credit Suisse Securities and Wachtell, Lipton, Rosen & Katz advised Freeport in the transaction. Evercore Partners and Weil, Gotshal & Manges LLP advised McMoRan while Barclays and Latham & Watkins LLP advised Plains.

Cash & stock portions represent 74% premium to McMoRan & 39% to Plains.

Freeport shocks with McMoRan & Plains buy Continued From Pg 18

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