What’s Old Is New

Company Mantra:

The Lakeview Gusher, San Joaquin Basin, Kern County, CA

circa 1910 2

Forward Looking Statements

This presentation contains forward-looking statements, including without limitation those statements regarding

Citadel’s ability to exploit mining concessions The statements and discussions contained in this presentation

that are not historical facts constitute forward-looking statements, which can be identified by the use of forward-

looking words such as "believes," "expects," "may," "intends," "anticipates," "plans," "estimates" and analogous

or similar expressions intended to identify forward-looking statements Citadel wishes to caution the reader of

this presentation that these forward-looking statements and estimates as to future performance, estimates as to

future valuations and other statements contained herein regarding matters that are not historical facts, are only

predictions, and that actual events or results may differ materially Citadel cannot assure or guarantee you that

any future results described in this presentation will be achieved, and actual results could vary materially from

those reflected in such forward-looking statements We assume no obligation to update any forward-looking

statements in order to reflect any event or circumstance that may arise after the date of this presentation, other

than as may be required by applicable law or regulation Reserve and Resource Disclosure: Securities and

Exchange Commission (“SEC”) rules prohibit a publicly-reporting oil and gas company from including oil and gas

resource estimates in its filings with the SEC, except proved, probable and possible reserves that meet the

SEC’s definition of such terms Estimates of non-proved and non-probable reserves included herein are not

based on SEC definitions and guidelines and may not meet specific definitions of reserves or resource

categories within the meaning of the SPE/SPEE/WPC Petroleum Resource Management System.

3

Executive Summary: What’s Old Is New

Citadel: A Pure Play California Oil and Gas E&P company

4

§  Founder & CEO: Armen Nahabedian, a fourth generation oil and gas explorer o Family’s discoveries have had significant impact in California o Blended experience with a proven track record – entered business analyzing prospects

while managing drilling operations and strategy §  OTCBB: COIL 23.5MM shares issued (28.5MM including options) §  2 Rig-ready projects in the Salinas and San Joaquin Basins

o Access to unrisked resource potential of over 100 million barrels of oil Partners: Combining Expertise & Opportunity §  Sojitz Energy Ventures (SEV), Joint Venture partner on both rig-ready projects

o $50 billion Japanese trading conglomerate o Vast technical and analytical resources for the projects

§  Nahabedian Exploration Group (NEG) (“the family oil business”) o Previous experience creating substantial shareholder value for publicly traded entities o Highly successful deals with Australian Stock Exchange listed companies o  Interests aligned: All executives of NEG are substantial shareholders in Citadel

§  Citadel and its partners have contributed over $7MM dollars in direct financial costs associated with the prospects currently held for development by Citadel

William Wallace Stabler (CEO’s

Great Grandfather) selling oil

pipe in Los Angeles c1915

The Family Business

Four Generations of California Oil Exploration Success

5

§  Notable family discoveries totaled over 200mmboe o North San Ardo 2005 o South Belridge 2003 o Knights Landing 1993 o Pastoria Creek 1988 o Panama Lane 1986 o Landslide1985

§  Distinct competitive advantages from given local expertise o Preferred access to new leases coming to market o Proven permitting abilities o Constant market surveillance o Good working relationship with Occidental Petroleum (OXY)

§  At NEG, Citadel CEO was personally responsible for drilling and completing multiple prospects over the last 10 years with proven track record of success

§  Citadel retains prospect generation resources of NEG and has right of first refusal on any prospects developed by NEG for two years

Disciplined Geographic Focus

“California’s Oil Renaissance” is in its Nascent Stage

6

§  Driven by technological innovation o Reprocessing of vintage seismic data combined with new, hi-resolution 3-D seismic o Comingling of multiple hydrocarbon bearing zones o Horizontal drilling applied to conventional targets o Advances in thermal recovery for heavy oil

§  Premium Prices: Supply imbalance between California refiners and global markets means local production garners a $10 to $20 per barrel premium to other U.S. markets

§  Limited small-cap opportunities to capitalize on this trend §  Larger independents are aggressively entering region

o  Potential to drive future M&A activity and ultimately exit strategy §  California regulatory environment

o Rapidly improving new leadership at Division of Oil, Gas & GeoResources (DOGGR). o Permitting now taking 30-60 days vs. 180 days

§  Older Fields and Field Extensions represent low hanging fruit as technology and higher commodity prices allow the industry to unlock previously uneconomic zones

The best place to find oil is where it’s already been found!

The Projects

What’s Old Is New 7

General Project Locations

Indian

Rancho Grande

8

Project Indian: Overview

688 acres under lease from OXY in San Benito County

9

§  Analogous to North San Ardo oilfield

o Discovered by Chevron in 1950

o Re-discovered by NEG in 2005 with

Salinas Energy

§  Shallow heavy oil – 13 degree API

§  60% working interest – 47.4% NRI

§  50-100 MMBbls of gross oil in place

§  Expected 20% recovery

§  Gross CAPEX $1.5 million

§  5-15 well pilot cyclic steam project

§  Proof of concept expected by mid-2013.

§  Proximity to local utilities improves economics

o Electric power for pumps

o Natural gas for steam

PG&E Gas Transmission Line

PG&E Power

Project Indian

Project Indian: California Heavy Oil Background

The Majority of California Oil Production is Heavy

10

§  Heavy oil characterized as less than 18 degrees API, immobile without stimulation

§  Thermal recovery (steam injection) is the primary stimulation technique o Steam created using natural gas increases recovery by 15-50% of (OOIP)

§  60% of California daily oil production (~300,000 barrels per day) is heavy

Low natural gas prices + high oil prices = attractive thermal economics

~52,000 gross acres leased OXY currently redeveloping adjoining acreage

Rancho Grande & Surrounding Oil Fields

Rancho Grande Area

11

Rancho Grande: Overview

~52,000 gross acres under lease paid for by Sojitz

12

§  Citadel can participate on a 1/3-for-1/4 basis (industry standard), prospect-by-prospect §  15 locations permitted, another 20 permits pending §  2D and 3D seismic coverage of prospects to support extensive well control §  Expect first drilling in 4Q2012 §  Shallow objectives: 20+ Prospects

o 50+ MMBbls o 7,000 feet or less

§  Deeper objectives: 5 Prospects o 100+ MMBbls o 15,000 – 20,000 feet

§  First four wells total CAPEX of $2 million o 2 shallow (up to 2,000 feet) o 2 mid-depth (up to 7,000 feet)

Rancho  Grande  

Rancho Grande: Current Prospect Inventory 1,000 – 7,000 Feet

13

Area Formation Section Unrisked Potential

Description

1 Vedder Oil Pool 19 & 20 15 MM BOE Horizontal Redevelopment of Vedder pool to the south in Sections 28,29,30, 31.

1b Monterey 19 & 20 25 MM BOE Horizontal development of Monterey formation Pulv Chert Zone at 7,500'.

2 Olcese Pool 19 & 20 2 MM BOE Vertical development of Olcese Pool at 7,500 feet.

2b Santa Margarita 19 & 20 5-7 MM BOE Horizontal development of Santa Margarita pool at 3,500 feet - updip from 187-19 w ell.

3 Olcese Channel Sand 21 5-8 MM BOE Seismically definded faulted anticlinal closure in Middle Miocene Olcese channels sand.

4 Valv Channel Sand 10 15 MM BOE Standard 338-9 w ell tested 500 Bopd from upper portion. Seismic show s the channel into Section 10.

5 Vedder & Eocene Sand 5,11,12,14 15 MM BOE Negotiating lease

6 Santa Margarita 4 & 36 8-10 MM BOE Fault-stratigraphic trap updip from Santa Margarita oil show s.

7 Olcese Sands 27 & 34 4-6 MM BOE Stratigraphic trap in thick Middle Miocene Olcese Sands present in 16-26 and 42-26 w ells.

8 Santa Margarita 25 15 MM BOE Anticlinal closure in Santa Margarita and deeper Miocene sandstones.

9 Vedder Sands 4 10 MM BOE 3D Seismic and w ell control defined anticlinal closure at 10,000 feet.

10 Reserve Sands 34 & 35 2 MM BOE 3D Seismic show s fault trap w ith over 100 feet untested closure.

11 Vedder Sands 34 & 35 7-10 MM BOE Untested Veddersand anticlinal closure w ith 3D Seismic and w ell control.

12 Reserve Sands 2 4 MM BOE 3D Seismic and w ell data indicate 2-30 locations updip from 63-2 w ell w ith over 500 feet of pay.

13 Santa Margarita 35 2 MM BOE Updip development at a depth of 1,300 - 2,000 feet.

14 Vedder Sands 1,2,10,11 5-10 MM BOE Fault trap updip from Arco Tejon 1-2 deep test w ell. 3D Seismic show s NE-SW trending reverse fault.

15 Shallow Vedder Sands 7,12,13 5 MM BOE Anticlinal closure beneath Tuis Creek basalts at 5,000 feet.

16 Olcese Sands 10,11 5 MM BOE 3D Seismic show s faulted NW trending anticlinal arch w ith amplitude anomalies.

17 Olcese Sands 11 5 MM BOE 3D Seismic show s faulted NW trending anticlinal arch w ith amplitude anomalies.

18 Santa Margarita 23 & 24 10-50 MM BOE Sub-Thrust anticlinal closure beneath the south dipping Pleito Thrust Fault.

19 Vedder Sands 8,9,16,17 20-50 MM BOE Sub-Thrust anticlinal closure beneath the south dipping Pleito Thrust Fault.

20 Reserve Sands 9 5-10 MM BOE Stratographic pinchout, 3D Seismic show s local domal closure.

21 Santa Margarita 8 10-15 MM BOE East plunging anticline defined by 3D Seismic. Stacked amplitude anomalies.

22 Vedder Sands 19 & 20 25-40 MM BOE Westerly continuation of the sub-thrust anticlinal fold beneath the south dipping Pleito Thrust.

23 Vedder Sands 7 10-20 MM BOE Westerly culmination of the Section 8 anticline, w est of the Grapevine Fault.

Executives & JV Partners

Experienced Management Team

Armen Nahabedian: CEO, President & Director

15

§  Fourth generation California oil and gas explorer §  10-year executive in family business (NEG) §  Served in the United States Marine Corps in Operation Iraqi Freedom §  Managed highly profitable JVs with public companies

Daniel Szymanski: Chairman §  20-year industry veteran, including assignments with Tenneco, Chevron and OXY § Served as Manager of Business Development at OXY headquarters in Los Angeles § Since 2008 has been an industry consultant and partner in seismic data firm § BS in Geology, University of Wisconsin and MS in Geophysics from Purdue

Phil McPherson: CFO & Director §  11-year sell-side Small Cap E&P research analyst, most recently at Global Hunter Securities

§  Zack’s 5-star Analyst 2005, 2006 & 2007, WSJ “Best on the Street” analyst in 2011

§  Widely recognized expert in California oil investments

§  Bachelors in Economics from East Carolina University

Sojitz Joint Venture: Overview

Sojitz Corporation

16

§  Tokyo-based trading company

§  Operates in construction, forestry, chemicals, mining, textiles and petroleum

§  Formed in 2004 by the merger of Nissho Iwai Corp and Nichimen Corporation

§  2011 revenue of $48.3 billion and net income of $192 million

§  Over 16,000 employees and 91 offices world wide.

§  Texas Gulf Coast & Gulf of Mexico oil focus Joint Venture §  Sojitz pays 90% of land acquisition costs

§  Targeting 250,000 acres over next 24 months

§  Citadel has first right of refusal to earn from 25% - 67.5% on a prospect-by-prospect basis

§  Promoted on industry standard third for quarter basis on exploration wells only Heads up on all developmental wells

§  Sojitz Operator – experienced operating team with a successful track record

Past Joint Ventures: Case Study #1

NEG & Orchard Petroleum Joint Venture – January 2003

17

§  NEG contributed interest in projects to Orchard Petroleum in exchange for common stock

§  Successfully drilled 2 exploratory wells at South Belridge as operator for JV

o Those wells discovered 15 million barrels recoverable

o Resulting in Orchard’s stock increasing by 10x

§  Eventually taken private for ~$185MM

Past Joint Ventures: Case Study #2

NEG & Salinas Energy Joint Venture – December 2005

18

§  NEG contributed interests in projects to Salinas in exchange for common stock §  Salinas a shell company trading on Australian Stock Exchange §  Successfully drilled 4 exploratory wells at North San Ardo as operator for JV

o First well had an initial production rate of nearly 1,000 Boepd o Resulted in Salinas’s stock increased by a factor of 5 x

§  Company then merged with Neon Petroleum

Conclusion

19

Citadel: A Pure Play California Oil and Gas E&P company Partners: Combining Expertise & Opportunity “California’s Oil Renaissance” is in its Nascent Stage

The best place to find oil is where it’s already been found!

688 acres under lease from OXY in San Benito County ~52,000 gross acres under lease paid for by Sojitz

Four Generations of California Oil Exploration Success

~200-250 MMBOE unrisked potential oil in place

Questions

What’s Old Is New

20

Armen Nahabedian, CEO avn@citadelexploration.com

805-910-5369

Phil McPherson, CFO pjm@citadelexploration.com

(949) 612-8040