permian verticles

Looking at the victory site as noted they just got another 300 acres in the Permian and that they are avging around 40 barrels per day which they are very please with and shows a payback of 12 months

THE LIGHTNIN' PROSPECT

First of sixteen wells has been completed and is producing
Second well McCauley "6" #1 was spud on May14
Two additional wells are planned for 2013
Formation focus is Wolfberry (with Wolfcamp & Strawn) Fusselman and Cline
640 acre prospect property
Room for 16 vertical wells on 40 acre spacing
Estimated Ultimate Recovery (EUR) range of 115,140 - 228,000 barrels of oil equivalent per well
Expected payback of drilling capital in one year with continued production for nearly 15 years
Located in Glasscock County, Texas

Prospect Background

With the March 2012 acquisition of the first 320-acre Cotter parcel at Lightnin’, the Company, through its partnership with Aurora Energy Partners, began a new focus on the expansion of high-value, low-risk, multi-well properties within the prolific Permian Basin of west Texas and the adjoining area of southeastern New Mexico.

The May 2013 addition of the McCauley parcel brings the total gross acres held at Lightnin’ to 640.

The Lightnin’ property is located in the very active resource play known as the Wolfberry, which is composed of the lower Sprayberry, Dean, Wolfcamp, Cline Shale, into the Pennsylvanian.

The first vertical well (Cotter #1) was spud in January 2013, completed in February and brought into production in late March. The second well (McCauley "6" #1) was spud on May14 and is expected to be completed and placed on production in late June or early July.

With the addition of the McCauley track and utilization of 40 acre spacing, the Lightnin’ property holds at least sixteen total well locations. All of these wells undergo a multi-stage frac procedure as part of the completion. Each well offers an estimated 128,000 gross barrels of oil equivalent (BOE), for an estimated total gross yield of 2,048,000 BOE or 384,000 BOE net to the Company interest.

There were no Proved reserves associated with this property in the Company’s reserve report for the period ended December 31, 2012, however we do anticipate at least one of these wells and the corresponding Proved Undeveloped well locations to be included the reserve report for the period ended June 30, 2013.

Aurora currently holds a 25% WI and an 18.75% net revenue interest (NRI) in the prospect. Average costs to the 25% WI are anticipated to be approximately $600,000 per well.