Assumptions Year 1 2 3 4 5 6 7 8 9 Gas Price (MCF) 8.00 8.00...

Assumptions
Year 1 2 3 4 5 6 7 8 9
Gas Price (MCF) 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00
ATMOS Fixed Fee (MCF) 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20 3.20

New Albany Shale spudded per year 20 20 20 20
Fort Payne well spudded per year 20 20 20 20
Total wells spudded per year 40 40 40 40

Working Interest 75.000%

Royalties
Landowner - Royalties 12.500%

Override
Partner A - Override 5.000%
Partner B - Override 4.375%
Partner C - Override 0.000%
Carried Interest 0.000%
Net Interest 56.250%

Turnkey Drilling Cost per Well 150,000 112,500 112,500 112,500 112,500


Valuation Shares
CashFlows 179,091,117 Ords 56.9
Discount Rate 10% Other 77.9
Present Value of CashFlows 121,055,748 New Shares 50.0
Number of AKK Shares (millions) 184.8 Total 184.8

Present Value per AKK Share 0.66
Equity Raised 20,000,000
AKK Share Price pre-announcement 0.43
New Shares issued at: 0.40
Total AKK Share Price 1.09


CashFlow Analysis (USD$)
Year EUR 1 2 3 4 5 6 7 8 9

ANNUAL RATE
New Albany Shale
Decline Rate 80% 51% 5% 5% 5%
New Albany Shale (mmcf) 313 200.0 40.2 19.6 18.6 17.6 16.7
313 200.0 40.2 19.6 18.6 17.6 16.7
313 200.0 40.2 19.6 18.6 17.6 16.7
313 200.0 40.2 19.6 18.6 17.6 16.7

Production per well staggered (mmcf) 200 240 260 278 96 73 53 34 17
Number of New Albany Share wells p.a. 25
Total Production (mmcf) 25,019 4,000 4,804 5,196 5,568 1,920 1,451 1,059 687 334

Fort Payne
Decline Rate 23% 18% 14% 14% 23%
Fort Payne (mmcf) 886 234.0 180.8 148.9 127.6 109.9 85.1
886 234.0 180.8 148.9 127.6 109.9 85.1
886 234.0 180.8 148.9 127.6 109.9 85.1
886 234.0 180.8 148.9 127.6 109.9 85.1

Production per well staggered (mmcf) 234 415 564 691 567 472 323 195 85
Number of Fort Payne wells p.a. 25
Total Production (mmcf) 70,909 4,680 8,296 11,275 13,827 11,345 9,431 6,453 3,900 1,702
Austin Total Production (mmcf) 95,928 8,680 13,100 16,471 19,395 13,266 10,882 7,511 4,587 2,036


DAILY RATE
New Albany Shale
Total Production (mcfd) 68,545 10,959 13,162 14,236 15,255 5,261 3,975 2,901 1,881 916

Fort Payne
Total Production (mcfd) 194,271 12,822 22,730 30,889 37,883 31,083 25,838 17,679 10,685 4,663
Austin Total Production (mcfd) 262,816 23,781 35,891 45,125 53,138 36,345 29,813 20,579 12,566 5,578


Gross Revenue 767,423,971 69,440,000 104,802,750 131,764,523 155,163,455 106,126,820 87,053,243 60,091,470 36,692,537 16,289,172

ATMOS Fee 306,969,588 27,776,000 41,921,100 52,705,809 62,065,382 42,450,728 34,821,297 24,036,588 14,677,015 6,515,669
Net After ATMOS 460,454,383 41,664,000 62,881,650 79,058,714 93,098,073 63,676,092 52,231,946 36,054,882 22,015,522 9,773,503

Landowner - Royalties 57,556,798 5,208,000 7,860,206 9,882,339 11,637,259 7,959,512 6,528,993 4,506,860 2,751,940 1,221,688
Net After Landowner Royalties 402,897,585 36,456,000 55,021,444 69,176,374 81,460,814 55,716,581 45,702,953 31,548,022 19,263,582 8,551,815

Net to AKK after WI split 302,173,189 27,342,000 41,266,083 51,882,281 61,095,611 41,787,436 34,277,214 23,661,016 14,447,687 6,413,862

Partner A - Override 15,108,659 1,367,100 2,063,304 2,594,114 3,054,781 2,089,372 1,713,861 1,183,051 722,384 320,693
Partner B - Override 13,220,077 1,196,213 1,805,391 2,269,850 2,672,933 1,828,200 1,499,628 1,035,169 632,086 280,606
Partner C - Override - - - - - - - - -
Net After Partner A & B 273,844,452 24,778,688 37,397,388 47,018,317 55,367,897 37,869,863 31,063,726 21,442,796 13,093,216 5,812,562

Carried Interest - - - - - - - - -
Net to AKK After Carried Interest 273,844,452 24,778,688 37,397,388 47,018,317 55,367,897 37,869,863 31,063,726 21,442,796 13,093,216 5,812,562

Drilling Cost 18,000,000 4,500,000 4,500,000 4,500,000 4,500,000 - - - - -
Net to AKK 255,844,452 20,278,688 32,897,388 42,518,317 50,867,897 37,869,863 31,063,726 21,442,796 13,093,216 5,812,562

Taxes 30% 6,083,606 9,869,216 12,755,495 15,260,369 11,360,959 9,319,118 6,432,839 3,927,965 1,743,769
Net Profit 179,091,117 14,195,081 23,028,171 29,762,822 35,607,528 26,508,904 21,744,608 15,009,957 9,165,251 4,068,793

Present Value of CashFlows (pre-tax) 172,936,782 18,435,170 27,187,924 31,944,641 34,743,458 23,514,206 17,534,663 11,003,545 6,108,082 2,465,094
Present Value of CashFlows (post-tax) 121,055,748 12,904,619 19,031,546 22,361,249 24,320,421 16,459,944 12,274,264 7,702,481 4,275,657 1,725,566