Operations

Proven Reserves, Historic Production and Favorable Geology.

Hunter Oil owns and operates two large, proven oil fields in the State of New Mexico - The Chaveroo and Milnesand Fields

By exploiting the pre-existing infrastructure at proven, legacy assets, Hunter Oil are able to capitalizes on a significantly reduced exploration and finding cost threshold that enables profitability.

Milnesand and Chaveroo were first developed in the 1950’s and 1960’s, with vertical well production technology, leaving significant recoverable reserves behind. The geology of the San Andres formation produced only a fraction of the OOIP, yielding some 40 million barrels of oil. The ongoing opportunity is a result of the low level of permeability in the lenticular dolomite formation of the San Andres. Hunter Oil’s operations involve re-accessing these existing reservoirs, and developing the resource utilizing contemporary completion techniques and proven, unconventional recovery technologies.

Estimating recovery of only 6% of the remaining OIP, independent reservoir engineers have certified Hunter's fields as capable of producing 11.3 million barrels of oil, with the development of 71 horizontal wells. Our plan is to commence drilling Chaveroo and Milnesand sites in Q3 of 2017. Development and exploitation will entail a combination of horizontal wells extending between 4,000’ and 7,000’ laterally.

General Location Map

An infill horizonal development is planned for Chaveroo and Milnesand using the latest drilling and completion techniques. The 6-year program is planned to commence mid-2017.

The Company holds a 100% Working Interest (WI) and an average 80% Net Revenue Interest (NRI) in approximately 23,000 acres in the two fields. Both fields produce from the resource rich San Andres formation.

Acreage Map

The Company’s current operations are summarized below:

Description Milnesand Chaveroo Total
Working Interest 100% 100% 100%
Net Revenue Interest 80% 80% 80%
Gross Acerage 7,435 15,698 23,133
Held By Production (acres) 6,795 13,108 19,903
Net Production (BOPD) 63 44 108

Our independent reserve evaluators, Cawley, Gillespie and Associates, Inc. prepared the following reserve valuations based on this development plan.

CG&A Reserve Report per NI 51-101 Guidelines with effective date of January 1, 2017 - Summary of Oil and Gas Reserves:

Description Milnesand Chaveroo Total
PDP Reserves (MMBOE) 0.03 0.02 0.05
PUD Reserves (MMBOE) 4.13 8.06 12.19
Probable Reserves (MMBOE) 1.78 3.12 4.90
Possible Reserves (MMBOE) 4.33 9.72 14.05
Total Reserves (MMBOE) 10.27 20.92 31.19

Net Present Value at 10% Discount- U.S. Dollars:

Description Milnesand Chaveroo Total
PDP Value (MM$) 0.19 -0.08 0.11
PUD Value (MM$) 93.26 164.70 257.96
Probabale Value (MM$) 66.50 99.94 166.44
Possible Value (MM$) 166.15 327.68 493.83
Total Value (MM$) 326.10 592.24 918.34

CG&A August 26, 2016 SPE-PRMS Reserve Report at a NYMEX strip with effective date of January 1, 2017 - Summary of Oil and Gas Reserves:

Description Milnesand Chaveroo Total
PDP Reserves (MMBOE) 0.02 0.01 0.03
PUD Reserves (MMBOE) 4.10 8.00 12.10
Probable Reserves (MMBOE) 1.78 3.12 4.90
Possible Reserves (MMBOE) 4.33 9.69 14.02
Total Reserves (MMBOE) 10.23 20.82 31.05

Net Present Value at 10% Discount- U.S. Dollars:

Description Milnesand Chaveroo Total
PDP Value (MM$) 0.01 -0.19 0.18
PUD Value (MM$) 54.34 90.24 144.58
Probabale Value (MM$) 49.03 69.74 118.77
Possible Value (MM$) 123.34 233.11 356.45
Total Value (MM$) 226.72 392.90 619.62