"Key Points        Increasing development activity has RFE’s...

"Key Points        

Increasing development activity has RFE’s Mississippi Lime operated inventory at 16 wells.

RFE has begun to participate in several non-op wells.  RFE’s participation in non-op horizontal wells is expected to increase in the new year with the increasing operating activity being witnessed east of the Nemaha Ridge.

We believe that some of the non-op activity will also include Woodford oil shale tests; this will be significant in terms of alluding to the potential for additional layers of development within RFE’s acreage.

State 1-16H (130bopd with negligible gas after 12 days) and State 1-13H (50%) are on test, with Warburton 1-23H (61.5%) undergoing stimulation and Mawson 1-3H (100%)  to follow.

3 new completions planned for January.

RFE has a growing oil dominated production base; currently we est. 1300boepd (@66% oil) from all assets.

A midstream agreement with DCP Midstream Partners, has secured term off-take for gas and assoc. liquids production from RFE’s Pawnee and Payne development areas.

Investment Thesis

RFE is showing steady inc. to development pace and efficiency at its  Big River Mississippi Lime asset.  RFE is in a strong financial and functional position to ramp-up development and leverage their acreage position. The maiden reserves validate our view that there remains significant upside to valuation once factoring-in full field development. We retain our Buy with a valuation and price target of $1.50/sh that reflects development drilling purely to hold acres by production."