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Facts on Mineral Right's Business

Facts on Mineral Right's Business. B-G PARTNERS, LLC. Started in 1983, Has three managing members of the General Partner and over one hundred and fifty Limited Partners,

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Facts on Mineral Right's Business

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  1. Facts on Mineral Right's Business

  2. B-G PARTNERS, LLC Started in 1983, Has three managing members of the General Partner and over one hundred and fifty Limited Partners, For fifteen years, Partners continued to purchase “Class A” locations as delineated by the Majors working in the Michigan Basin. These partnerships were all “rolled up” into two Master Limited Partnerships in 2003 and 2004. Page 2

  3. Energy Business Consists of mineral rights to reduce personal liability for partners. Partners receive their share of revenues as income from producing wells. In partnership with a Michigan LLC, it has 594 sites that represent about 8,000 net acres. Each site may elect to participate (at cost) in the drilling/completion expenses and receive a pro-rata share of net revenue from a successful well rather than a royalty participation. Page 3

  4. Michigan Geology Map of Michigan geological location (Exhibit 1), Formations are U shaped that is similar to the Permian Basin (Exhibit 2), Antrim is 200’ at the edge and 2,000’+ in center of State (Exhibit 3), Dundee is in 3,000’-5,000’ range, Utica-Collingwood shale depth ranges 7,200’ to 9,700’. PDC is at the center and 9,000’-12,000’ deep. Page 4

  5. Exhibit 1 Page 5

  6. Exhibit 2 Page 6

  7. Exhibit3 Page 7

  8. All of BG’s sites have access to pipeline distribution. (Exhibit 4) Page 8

  9. Exhibit 4 Page 9

  10. Bradford Gordon’s Geological Targets Antrim, Dundee, Utica-Collingwood, St. Peter Sandstone/Trenton and Prairie du Chien, Prospects drilled and abandoned by major oil companies, Several up-hole targets identified for redrilling in abandoned PDC wells using new technology. Page 10

  11. Antrim Shale Formation diagram (Exhibit 5A), Comparison with Barnett Shale: i) Antrim Shale covers a larger area than Barnett Shale in Texas. ii) A bullet point list of the Antrim compared to the Barnett Shale that is supported by government documentation (Exhibit 5B+C). iii) It underlies all of the lower peninsula of Michigan and has as much potential as the Barnett, iv) Requires a good fracture system. v) Antrim Shale, as a gas play, at depths of 500’-2,000’, and 2,500’+ for the oils. USGS estimates success rate for finding new Antrim is at 80%… Bradford-Gordon mineral right’s sites (Exhibit 6). Page 11

  12. Exhibit 5A Page 12

  13. Exhibit 5B Page 13

  14. Exhibit 5C Page 14

  15. Antrim Locations Page 15 Exhibit 6

  16. Antrim Shale (continued) Opportunities in Osceola County i) Seventeen identified properties should have an excellent potential for success in the Antrim. ii) Evidence of enhanced fracture content within the Antrim locations because of geological structure associated with currently producing fields. Page 16

  17. Dundee-Fingerprint map of Locations (Exhibit 7) Primarily located in Central Basin where drilling costs are low. Various wells at Fork Field (Mecosta Co.) offer a unique chance to find additional oil at low risk; the location of the oil is known and has a significant percentage of unrecovered hydrocarbons. In the field, a horizontal well can have 4-10 times the productivity of a vertical well. (Exhibit 8). Page 17

  18. Exhibit 7 Page 18

  19. N Exhibit 8 Page 19

  20. Utica-Collingwood Shale • A Michigan geologist indicated huge potential for these shales, which will be proven after additional wells are drilled. • An article from the 1/20/12 issue of the Michigan Oil & Gas News (MOGN) reported some details on the two wells in Kalkaska County. The geologist confirmed the analysis on these two U-C wells could be prolific. Page 20

  21. Utica-Collingwood Shale (con’t) • Through research on the top twenty selected abandoned PDC wells for the U-C Shale potentials, most of the wells ranked higher than St. Pioneer 1-3, which was completed as a first commercial Collingwood Shale well in Michigan in 2010. • The geologist indicated the Bradford Gordon parcels in the counties (Kalkaska, Roscommon, Missaukee and Clare) have a good selection of wells that have been drilled through the U-C shales. Page 21

  22. Upper PDC in Osceola County Drilling mud logs and structure maps are shown for McCasey 1-7, Noreen 1-18, and St. Burdell 1-5 sites. (Exhibits 9-12A+B). The fourth site, Zinger 1-1, has several additional oil/gas reserves in formations located in “deeper productive horizons.” (Exhibits 13A+B) Note: B-G has mineral rights in two other wells near the site. Page 22

  23. Exhibit 9 Page 23

  24. Exhibit 10A Page 24

  25. Exhibit 10B Page 25

  26. Exhibit 11A Page 26

  27. Exhibit 11B Page 27

  28. Exhibit 12A Page 28

  29. Exhibit 12B Page 29

  30. Exhibit 13A Page 30

  31. Exhibit 13B Page 31

  32. Many of Bradford Gordon’s sites are located in Osceola County. As it has a large minority of mineral properties in the county, further evaluation should be on an area wide basis instead of individually (Exhibit 14, on the next page). Most of the top selected abandoned PDC wells for the Utica-Collingwood shale is located in that County. (Exhibit 15, on page 34) Page 32

  33. Exhibit 14 Page 33

  34. Exhibit 15 Exhibit 15 Page 34

  35. Potential Reserves The conversion of “6 to 1” from the gas equivalent to the oil are as follows: Dundee 20 Bcfe 3.3 MMBOE Antrim 695 Bcfe 115.8 MMBOE Upper PDC 816 Bcfe 136.0 MMBOE 255.1 MMBOE Page 35

  36. Potential Reserves (continued) • With oil currently trading at a premium over natural gas, Bradford Gordon, Inc., has balanced potential resources. • With favorable oil outlook in the U.S., for both the long and short term, the energy industry predicts more allocation of its capital expenditure to oil-favored projects. • This would enable several heavily weighted natural gas producing companies to be more balanced with oil and gas equal at a 50-50 ratio. Page 36

  37. Research on Selected Sites: Twenty of the abandoned PDC well sites were identified for re-drilling and offsets in potential reserves, which are located primarily in Osceola and Mecosta Counties. Comments on these sites are available on request; all have top ratings by a noted petroleum geologist. Seismic surveys will be required but, over the ten year period, the total revenues from the Selected Six Sites is projected after drilling cost at $88.5 million, or at present value (PV) valuation of $25.6 million assuming oil at $45 per barrel and gas at $4.25 per Mcf. The PV Valuation, on the next page, should increase in value once research on Utica-Collingwood takes place. Page 37

  38. PV Valuation With PV at $3.034 billion and a 4% participation, the value amounts to $121.3 million - based on $80 per barrel. In another perspective on Bradford Gordon valuation, research on the holdings on the leases was recently valued at $440 billion, with development/ production costs estimated at $12 billion for a $428 billion profit. Page 38

  39. The general partners view $100 million as the fair market price. Page 39

  40. Comprehensive view of locations is on our website at www.bradfordgordon.com Spreadsheet has interesting Purchase Narratives on each site. February 19, 2012 Page 40

  41. End of Show

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