Universal Oil Gas LLC Bothwell Syncline Federal 1

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Natrona Co. Wyoming API: 49 -025 -239210000 Spud Date: 09/12/14 Drilling Completed: 10/02/14 Location: Sec. 28 T 38 N R 78 W 1457’ FSL & 1964’ FWL Surface Coordinates: Lat. 43. 231544º, Long. -106. 223531º Bottom Hole Location: 85. 44’ N & 2106. 54’ W of surface location or approximately 1542’ FSL & 143’ FEL SE/NE • Ground Elevation: 5541’ • Kelly Bushing Elevation: 5556’ • Logged Interval: ~700’-7457’ TVD (Niobrara “C”) • • • True Drilling Rig #26

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Natrona Co. Wyoming • Highly fractured and faulted syncline to the south west of the Teapot Dome Anticline. Seismic analysis revealed numerous zones of possible hydrocarbon traps targeted in the lateral drilling operations. Surface Location/Lateral Fracture Zones Of Interest Surface Location/Lateral

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Natrona Co. Wyoming Surface Location Start of Tangent/Back Azimuth • Vertical/Pilot & Tangent Operations: The Bothwell 1 -28 H Was planned to have a back azimuth deviated pilot hole (10˚ per 100’ deviated to the East of surface) drilled prior to the lateral operations. • The back azimuth portion was planned to keep the designated lateral at ~1500’ Vertical Section, within Sec. 28. Later in the drilling operation it was brought to the attention of Seidel Geologic TM to hold lease obligations the proposed bottom hole location be located in section 29. End of Tangent/Back Azimuth TD of Vertical/Pilot As Planned

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Pilot & Tangent Operations • The Bothwell 1 -28 H Pilot was planned to TD 100’ into the Niobrara Formation, 7” casing was set to a total depth of 4857. 68’ TVD. Surface Location Start of Tangent/Back Azimuth End of Tangent/Back Azimuth TD of Vertical/Pilot • Due to faulting in the Pilot Hole the depth of Niobrara Formation was adjusted based off samples, as well as real time gamma ray readings. This faulting deepened the prognosis depth of the Niobrara by ~400’ TVD.

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Pilot Operations Cont. • Re-entry of the Pilot hole was conducted on 09/22/14 in order to drill +100’ into the Carlisle formation to obtain electronic logs through the Niobrara. Sample 4875’ MD • Upon re-entry, a mechanical failure (collapse) of the 7” casing was encountered at ~4726’ TVD. The sample cuttings being returned to the surface were of soft, uncured cement, and stainless steel shavings originating from the casing. Sample 4875’ MD Uncured Cement Casing Cuttings • Pressure testing of the casing was conducted and the casing passed the integrity at 1500 psi. • Subsequently the decision was made to attempt to mill through the casing to complete the pilot hole and run electronic logs. This attempt to mill failed on 09/22/14.

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Curve Operations • On 9/23/2014 a whipstock was set at 4241’ TVD, a window was milled in the 7” casing to kick off for the curve portion of the well. Milling/Control Drilling Casing TD of Pilot Hole 4875’ TVD • Milling was completed on 09/25/14 and the window was drilled ~6’ into the formation. Late on 09/25/14 and into 09/26/14 the curve was time and control drilled from 4260’ 4356’ MD with a Hughes Tri-Cone bit in order to gain sufficient distance from the Pilot hole. • After Tripping out of the hole on 09/26/14 to change to the curve BHA the curve was kicked off on 09/27/14 at 4356’ MD/~3320’ TVD. The curve was landed at a total depth of 6028’ MD/5317’ TVD and an inclination of 88. 07º, on 09/30/14.

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Curve Operations Cont. • During drilling of the curve portion of the Bothwell 1 -28 H numerous small TVD changes or possible faulting/fracturing was encountered starting at ~4861’MD/4782’TVD. This faulting deepened the landing depth of the curve to ~5315’ TVD, causing the directional team to “rotate” tangents into the curve in order to bring the well bore to the specified depth. 4985’ MD Survey Wellbore 5206’ MD Survey Wellbore Faulted intervals seen in curve Target Top 5554’ MD Survey 5839’ MD Survey Faulted intervals seen in curve Wellbore Target Top

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Lateral Operations • The lateral was started directly after landing the curve on 09/30/14. • The well was prognosed and planned to have ~89º down dip to the well bore in order to follow the target formation of the Niobrara “C”. Survey Nodes Niobrara “C” Wellbore Target Top

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Lateral Operations Cont. The lateral was started directly after landing the curve on 09/30/14. Lost Circulation Zone Up-dip Feature During the drilling of the lateral numerous structural changes were seen in the targeted formation. The target interval rolled from a ~89˚ down dip to ~92˚ up dip then faulted down as it was determined we had drilled into the foot wall or dropped block of a fault. During the final portion of the lateral the Bothwell 1 -28 H took significant volume of drilling fluid losses (+2000 BBLS) to the formation due to a fractured interval that was encountered. This fracture interval at the end of the lateral also mechanically stuck the pipe most likely due to a collapse that packed of the BHA and made it irretrievable.

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Lateral Operations Cont. • Tight Sands seen in the center part of the target interval had little to no porosity. These sands were extremely well cemented, often contained higher amounts of Bentonite and were associated with lower gas and slightly slower rates of penetration. Trace amounts of oil staining were visible but bound within the matrix of the rock they would not be able to be produced without fracking. Slower Drilling Bentonite Zone No Porosity/No Gas

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Lateral Operations Cont. • Calcareous Shale in the upper part of the target zone were more porous and prone to having better gas shows than the sand directly below. The shale interval drilled faster on average and displayed roughly double the amount of liberated gas while drilling. The end of the lateral however showed the shale to be a more unstable drilling medium and prone to collapse when extreme structural anomalies are encountered. This caused a massive loss of drilling fluids +2000 BBLS and a stuck BHA, which was non-retrievable. Porosity/More Gas Lost Circulation/Stuck BHA

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Lateral Operations Cont. Shale/Gas Increases Tight Sand/Less Gas Shale/Gas Increases Lost Circulation Zone

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Lateral Operations Cont. • The lateral finished drilling on 10/02/14, with the entry into the fracture zone seen at~1800’ vertical section. The BHA drilled 300’ of vertical section into this fracture zone before sustaining a massive fluid loss and eventually becoming stuck. Once stuck due to insurance purposes on the MWD/Directional tools the decision was made to “Jar”, mechanically free, the lost tools. • The jarring was done from 10/03 -10/06/14 and was unsuccessful. The decision was made at ~0700 MST on 10/06/14 to plug and abandon the Bothwell 1 -28 H. Projection to bit: 7457’MD, 86. 66º INC, 271. 03º AZI, 5335. 35’TVD, 2106. 54’VS Bottom hole location: 85. 44’ N & 2106. 54’ W of Surface / 1542’ FSL & 143’ FEL SE/NE Sec. 29 T 38 N R 78 W Kick Off Point Total Depth 7457’ MD Fractured Zone/TD Kick Off Point Total Depth 7457’ MD

Hydrocarbon Shows Niobrara A 4853’-5056’ TVD Summary • None to good fluorescence • Instant-slow blooming, diffusing to streaming cuts beginning at 5080’ MD 92’ into the Niobrara A • Trace light brown oil staining observed beginning at 5080’ MD • Fluorescence varied from bright whiteblue-dull yellow gold • Gas shows muted due to drilling on air to prevent lost circulation ~peak connection gas 73 total gas units • Mud weight consistent at 9. 0 lbs/gal • No visible free oil observed in reserve pit, shakers or in samples • Trace intergranular porosity observed

Hydrocarbon Shows Niobrara B 5056’-5195’ TVD Summary • Fair to good fluorescence • Instant-slow blooming, diffusing to streaming cuts • Trace to common light brown spotty oil staining observed throughout Niobrara B member • Fluorescence varied from common bright white-blue to trace dull yellow gold • Gas shows associated with connection gases. Peak connection gas 69 total gas units • Mud weight ranged from 9. 0 to 9. 1 lbs/gal • No visible free oil observed in reserve pit, shakers or in samples • Trace intergranular porosity observed

Hydrocarbon Shows Niobrara C 5195 -5355’ TVD Summary • Shows increased in Niobrara C member • Poor to good fluorescence • Instant-slow blooming, diffusing to streaming cuts • Trace to common light brown spotty oil staining observed through Niobrara C above middle of lateral target zone • Fluorescence varied from common bright white-blue to trace dull yellow gold • Gas shows associated with connection gas and possible fracture porosity. Peak gas 91 total gas units at 5483’ MD • Mud weight ranged from 9. 0 to 9. 6 lbs/gal • Trace visible free oil observed in reserve pit and shakers • Trace intergranular porosity observed w/trace fracture porosity

Hydrocarbon Shows Niobrara C Lateral 5933 -7457’ MD Summary • Shows dependent on lithology • Poor to good fluorescence • Instant-slow blooming, diffusing to streaming cuts • Trace to common light brown spotty oil staining observed through Niobrara C above middle of lateral target zone • No shows in siltstone facies of target zone • Fluorescence varied from common bright white -blue to trace dull yellow gold • Gas shows associated with connection gas and possible fracture porosity. Peak trip gas 194 total gas units at 7370’ MD • Mud weight ranged from 9. 0 to 9. 6 lbs/gal • Trace visible free oil observed in reserve pit and shakers • Trace intergranular porosity observed w/trace fracture porosity • 357 total gas units observed upon circulating 27 hrs post TD

Hydrocarbon Potential Summary • Most productive zones are Niobrara B & C members • Further data gathering and evaluation required to determine hydrocarbon potential • Fracture zones severely under-pressured. • Fracture zones highly unstable when drilling laterally. • No observable fluid recovered from fracture intervals due to lost circulation • Gas shows muted due to higher mud weights and drilling on air • Oil shows indicated moderate volumes of matrix bound fluid • Overall Niobrara B & C displayed consistent fair to good cut fluorescence

Universal Oil & Gas, LLC Bothwell Syncline Federal 1 -28 H Recommendations Vertical Drilling • Drill vertically into one of the fractured intervals seen on seismic. Then continue on to the Dakota or Morrison Formations below to asses their potential. • Electronically log the intervals of interest and make adjustments accordingly to target the most viable interest. • Drill on air to minimize the amount of hydrocarbon migration due to drilling fluid over pressure. • Core the intervals of interest for potential total organic carbon readings. • Complete the well with perforated casing and determine recoverable hydrocarbons. Lateral Drilling • Target the best zone observed while evaluating the vertical well drilled into zones of interest. • Switch to a unconventional approach and target tight oil shale that will need to be hydraulically fracked to complete. • Drill parallel within the frack radius to fractured zones due to hole instability and fluid losses. • Using knowledge gained from electric logs and or coring to target the most organically rich zones and maintain wellbore placement within this interval.