PP

PERMIAN BASIN CHAPTER 11 SALE

Producing Properties

All Standard Disclaimers Apply & Seller Rights Retained


PERMIAN BASIN CHAPTER 11 SALE

NEW MEXICO BANKRUPTCY

7-Asset Groups; 306-Wells. ~25,000-Acres

CHAVES, EDDY & LEA COS., NM

5-NORTHWEST SHELF WATERFLOODS

MULTIPLE EXPLOITATION PROJECTS

SAN ANDRES, SEVEN RIVERS, QUEEN

GRAYBURG, YATES & ABO GAS

Immediate Return To Production Options

Majority 100% OPERATED WI For Sale

Recent Prod: 109 BOPD & 1,020 MCFD

TWO PHASE REMEDIATION PLAN:

PDNP Workovers, RTPs & New Drilling

Some Lses Shut-In Offering Remedial WO

Total Proved Net Rsvs >12 MMBO & 16 BCF

STILL MARKETING THRU MARCH 2020

PP 6494DV

Deal Summary
As ordered by the U.S. Bankruptcy Court of the Western District of Texas, Energy Advisors has been retained to market six (6x) shallow New Mexico waterflood projects and additional assets. By virtue of financial conditions, these assets are currently producing but not to full optimal performance.

The company is also behind on some government filings. The run statements and production (Mar-Dec 2019) were added to the VDR in the Accounting and Well Data Folders respectively on January 31.

Original offers were due February 12, 2020 and the COURT Scheduled A Hearing On April 13, 2020 so EAG is Continuing To Market The Assets. We have had a number of offers and do have some liberty to negotiate w/ qualified offers so potential purchasers are encouraged to submit offers as they see fit for either the whole package or individual property groups described down below.

EAG Has Also Updated Accounting Information To The VDR.

Summary---
CHAVES, EDDY & LEA COS., NM (NORTHWEST SHELF WATERFLOODS PLUS OTHER ASSETS)
1-Package, 7-Asset Groups; 5-Waterflood Projects. 306-Total Wells. ~25,000-Gross Acres For Sale.
IMMEDIATE PDNP & RETURN TO PRODUCTION. ADDITIONAL EXPLOITATION & DEVELOPMENT
SAN ANDRES, SEVEN RIVERS, GRAYBURG, QUEEN, YATES, ABO GAS.
Majority 100% OPERATED WI For Sale
Jan-20 Production: 109 BOPD & 1,020 MCFD (280 BOED)
TWO PHASE REMEDIATION PLAN: PDNP Workovers, RTPs & New Drilling
Total Proved Net Reserves >12.1 MMBO & 16 BCF
SEEKING OFFERS BY MID-MARCH, 2020 BUT EAG and SELLER HAVE SOME LIBERTY TO NEGOTIATE ON AONE OFF BASIS
OBVIOUSLY THE ESTATE SEEKS TO SELL ALL ASSETS BY LATER THIS SPRING SO SUBPACKAGE OFFERS ARE SUBJECT TO A RESOLUTION ON MONETIZING THE WHOLE PKG

Narrative--
As described herein the portfolio consists of ~25,000 gross acres broken into 6-Core areas and 1 Non-Core assortment.

The 306-Wells (281-Producers & 25-Injectors/SWDs) have a gross production of 134 BOPD & 1,462 MCFD (378 BOED) and the package is made of existing waterflood units with significant development upside with a total proved net reserves >12.1 MMBO and 16.4 BCF.

A 2-phase exploitation plan is outlined in the package presentation which entails the enhancing and expanding of current waterflood operations followed by the drilling of new producers and injectors to further increase production.

Majority 100% Operated WI for the Core Areas incorporated in the package with all WIWs and SWDs being owned and operated by Remnant Oil.

Area #1 Turkey Trac Sec. 3 Unit
Eddy Co., NM
100% OPERATED WI & Up to 75% NRI
28 Wells (25 Producers & 3 WIW)
----Average Gross Production (01/18-12/18): 7 BOPD, 14 MCFD, 213 BWPD & 74 BWPD Inj.
Total Proved PV10: $21,002 as of 03/01/19
Leases Included: Aurora, Brainard, Brainard Federal, Fina State, McKee Wilson, Turkey Track Sec 3 Unit, Wilson Federal & Wilson State

Area #2 North Square Lake Unit
Eddy Co., NM
100% OPERATED WI & 63% Avg. NRI
90 Wells (80 Producers & 10 WIW)
---Average Gross Production (01/18-12/18): 54 BOPD, 582 BWPD & 647 BWPD Inj.
---Lease Included: North Square Lake Unit

Area #3 South Red Lake II Unit
Eddy Co., NM
99% OPERATED WI & 74.5% NRI
18 Wells (10 Producers & 8 WIW)
----Average Gross Production (01/18-12/18): 3 BOPD, 4 MCFD, 24 BWPD & 174 BWPD Inj.
Lease Included: South Red Lake II Unit

Area #4 Lusk Seven Rivers Unit
Lea Co., NM
100% OPERATED WI & 74.6% NRI
6 Producing Wells
----Average Gross Production (01/18-12/18): 14 BOPD, 4 BWPD & 0 BWPD Injector
----Lease Included: Lusk Seven Rivers Unit
UPDATE----
----The Seller notes there are shut-in wells on the unit due to mechanical failure and can be turned on for around $100,000.
----These simple remedial tasks could increase volumes 25-30 BOPD

Area #5 Hackberry Waterflood Pilot Project Area
Eddy & Lea Co., NM
100% OPERATED WI & 74.5% NRI
25 Wells (24 Producers & 1 Active SWD)
----Average Gross Production (01/18-12/18): 15 BOPD, 74 BWPD & 194 BWPD Inj.
Leases Included: Amoco Federal, Barton A Federal, English Federal, Hill Federal, Jones Federal, Lusk 2 Federal, Lusk 22 Federal, Miller Federal, Ohio Jones, Parlsey Federal, Sun Federal, Tenneco Federal, Tennessee Federal & Texas Crude

Area #6 Pecos Slope Area
Chaves Co., NM; Abo Gas Play
50%-100% OPERATED WI & 75% Lease NRI
94 Conventional low-rate dry gas wells
----Average Gross Production (01/18-12/18): 1,273 MCFD (100% Gas)
Leases Included: Beavers Fee, Bo Federal, Chaves A 17 Federal Com, Chaves A Federal, Comanche Hill 18 Fed, Coyote Draw Federal, Coyote Federal, Dana Federal, Finch Fee, Jill Federal, JJ 1 Federal Com, JJ Federal, Leeman Federal, Lisa Federal, Luke Federal Com, McClellan Moc Federal, McCrea Fee Com, MM 25 Federal, MM Federal, MM Federal Com, Pecos River Federal, Pecos State 16, Penjack Federal, PJ Federal Com, PZ Federal, Rick Federal, Rick Federal Com, Santa Fe Fee, Su Federal, Suzanne Federal, Tolmac State, Tyrell 13 Federal Com & Tyrell Federal Com

Area #7 Random NonCore Assets
Leases Included: Barnes Federal, Brenda, Cal-Mon, Chama 3 Federal, Charlie State, Davis Federal, Higgins Trust Inc, J H McClure B, Jackson Federal, Lane B, Langley A Federal, Lusk Seven Rivers Unit, New Mexico State, Newman 32 State, Niagara 3 Fee Com, Pearsall Queen Sand Unit, Penroc State 23, Penroc State DV, Ranger Lake 1 State, Rio Bravo Fee, Shell 26 State, State CF, Sunburst Cox, Triple Tres State, Twitty BHF State & Yates ST

The U.S. Bankruptcy Court of the Western District of Texas is entertaining offers on individual areas highlighted within the package but a preference will be given to an offer for the total portfolio.

Comments on Production & Leases
The Remnant assets have not reported any production since March 2019. We expect the Seller and the Court to provide some updated production numbers by January 30, 2020 as the firm gets caught up on their lease reporting for the time period January 2019-March 2019. EAG will also update the sale pkgs with any new production as soon as both the company and the Court update us.

As for lease and land rights in Southeast New Mexico, the vast majority of our acreage is HBP by either our wells or other wells associated with the base lease. There are other shallow wells or deeper wells that are holding rights.

EAG has already prepared a land schedule as Tab 4 in the Package QuickLook in the VDR. We have also marked some leases w relevant land data such as the North Square Unit is well bore only. Unlike Texas, most New Mexico fee leases or UL leases have lack of production clauses that address lack of production, non-economic production, and or shut-in royalties. State Lands and BLM acreage again it typically held by a base lease and not zone dependent.

For buyers with questions about lease and land rights can submit questions and Remnant and EAG will endeavor to pull the applicable lease along with current production to alleviate concerns.

TO LEARN MORE
Energy Advisors Group
Mr. Blake Dornak
A&D Associate
5120 Woodway Dr Ste 10010
Houston, TX 77056
---Phone: 713-600-0123 Direct: 713-600-0169
---Email: [email protected]

Questions Regarding This Asset? Email Blake Dornak or call EAG at 713-600-0123
Virtual Data Room

NEW MEXICO BANKRUPTCY

7-Asset Groups; 306-Wells. ~25,000-Acres

CHAVES, EDDY & LEA COS., NM

5-NORTHWEST SHELF WATERFLOODS

MULTIPLE EXPLOITATION PROJECTS

SAN ANDRES, SEVEN RIVERS, QUEEN

GRAYBURG, YATES & ABO GAS

Immediate Return To Production Options

Majority 100% OPERATED WI For Sale

Recent Prod: 109 BOPD & 1,020 MCFD

TWO PHASE REMEDIATION PLAN:

PDNP Workovers, RTPs & New Drilling

Some Lses Shut-In Offering Remedial WO

Total Proved Net Rsvs >12 MMBO & 16 BCF

STILL MARKETING THRU MARCH 2020

PP 6494DV

Deal Summary
As ordered by the U.S. Bankruptcy Court of the Western District of Texas, Energy Advisors has been retained to market six (6x) shallow New Mexico waterflood projects and additional assets. By virtue of financial conditions, these assets are currently producing but not to full optimal performance.

The company is also behind on some government filings. The run statements and production (Mar-Dec 2019) were added to the VDR in the Accounting and Well Data Folders respectively on January 31.

Original offers were due February 12, 2020 and the COURT Scheduled A Hearing On April 13, 2020 so EAG is Continuing To Market The Assets. We have had a number of offers and do have some liberty to negotiate w/ qualified offers so potential purchasers are encouraged to submit offers as they see fit for either the whole package or individual property groups described down below.

EAG Has Also Updated Accounting Information To The VDR.

Summary---
CHAVES, EDDY & LEA COS., NM (NORTHWEST SHELF WATERFLOODS PLUS OTHER ASSETS)
1-Package, 7-Asset Groups; 5-Waterflood Projects. 306-Total Wells. ~25,000-Gross Acres For Sale.
IMMEDIATE PDNP & RETURN TO PRODUCTION. ADDITIONAL EXPLOITATION & DEVELOPMENT
SAN ANDRES, SEVEN RIVERS, GRAYBURG, QUEEN, YATES, ABO GAS.
Majority 100% OPERATED WI For Sale
Jan-20 Production: 109 BOPD & 1,020 MCFD (280 BOED)
TWO PHASE REMEDIATION PLAN: PDNP Workovers, RTPs & New Drilling
Total Proved Net Reserves >12.1 MMBO & 16 BCF
SEEKING OFFERS BY MID-MARCH, 2020 BUT EAG and SELLER HAVE SOME LIBERTY TO NEGOTIATE ON AONE OFF BASIS
OBVIOUSLY THE ESTATE SEEKS TO SELL ALL ASSETS BY LATER THIS SPRING SO SUBPACKAGE OFFERS ARE SUBJECT TO A RESOLUTION ON MONETIZING THE WHOLE PKG

Narrative--
As described herein the portfolio consists of ~25,000 gross acres broken into 6-Core areas and 1 Non-Core assortment.

The 306-Wells (281-Producers & 25-Injectors/SWDs) have a gross production of 134 BOPD & 1,462 MCFD (378 BOED) and the package is made of existing waterflood units with significant development upside with a total proved net reserves >12.1 MMBO and 16.4 BCF.

A 2-phase exploitation plan is outlined in the package presentation which entails the enhancing and expanding of current waterflood operations followed by the drilling of new producers and injectors to further increase production.

Majority 100% Operated WI for the Core Areas incorporated in the package with all WIWs and SWDs being owned and operated by Remnant Oil.

Area #1 Turkey Trac Sec. 3 Unit
Eddy Co., NM
100% OPERATED WI & Up to 75% NRI
28 Wells (25 Producers & 3 WIW)
----Average Gross Production (01/18-12/18): 7 BOPD, 14 MCFD, 213 BWPD & 74 BWPD Inj.
Total Proved PV10: $21,002 as of 03/01/19
Leases Included: Aurora, Brainard, Brainard Federal, Fina State, McKee Wilson, Turkey Track Sec 3 Unit, Wilson Federal & Wilson State

Area #2 North Square Lake Unit
Eddy Co., NM
100% OPERATED WI & 63% Avg. NRI
90 Wells (80 Producers & 10 WIW)
---Average Gross Production (01/18-12/18): 54 BOPD, 582 BWPD & 647 BWPD Inj.
---Lease Included: North Square Lake Unit

Area #3 South Red Lake II Unit
Eddy Co., NM
99% OPERATED WI & 74.5% NRI
18 Wells (10 Producers & 8 WIW)
----Average Gross Production (01/18-12/18): 3 BOPD, 4 MCFD, 24 BWPD & 174 BWPD Inj.
Lease Included: South Red Lake II Unit

Area #4 Lusk Seven Rivers Unit
Lea Co., NM
100% OPERATED WI & 74.6% NRI
6 Producing Wells
----Average Gross Production (01/18-12/18): 14 BOPD, 4 BWPD & 0 BWPD Injector
----Lease Included: Lusk Seven Rivers Unit
UPDATE----
----The Seller notes there are shut-in wells on the unit due to mechanical failure and can be turned on for around $100,000.
----These simple remedial tasks could increase volumes 25-30 BOPD

Area #5 Hackberry Waterflood Pilot Project Area
Eddy & Lea Co., NM
100% OPERATED WI & 74.5% NRI
25 Wells (24 Producers & 1 Active SWD)
----Average Gross Production (01/18-12/18): 15 BOPD, 74 BWPD & 194 BWPD Inj.
Leases Included: Amoco Federal, Barton A Federal, English Federal, Hill Federal, Jones Federal, Lusk 2 Federal, Lusk 22 Federal, Miller Federal, Ohio Jones, Parlsey Federal, Sun Federal, Tenneco Federal, Tennessee Federal & Texas Crude

Area #6 Pecos Slope Area
Chaves Co., NM; Abo Gas Play
50%-100% OPERATED WI & 75% Lease NRI
94 Conventional low-rate dry gas wells
----Average Gross Production (01/18-12/18): 1,273 MCFD (100% Gas)
Leases Included: Beavers Fee, Bo Federal, Chaves A 17 Federal Com, Chaves A Federal, Comanche Hill 18 Fed, Coyote Draw Federal, Coyote Federal, Dana Federal, Finch Fee, Jill Federal, JJ 1 Federal Com, JJ Federal, Leeman Federal, Lisa Federal, Luke Federal Com, McClellan Moc Federal, McCrea Fee Com, MM 25 Federal, MM Federal, MM Federal Com, Pecos River Federal, Pecos State 16, Penjack Federal, PJ Federal Com, PZ Federal, Rick Federal, Rick Federal Com, Santa Fe Fee, Su Federal, Suzanne Federal, Tolmac State, Tyrell 13 Federal Com & Tyrell Federal Com

Area #7 Random NonCore Assets
Leases Included: Barnes Federal, Brenda, Cal-Mon, Chama 3 Federal, Charlie State, Davis Federal, Higgins Trust Inc, J H McClure B, Jackson Federal, Lane B, Langley A Federal, Lusk Seven Rivers Unit, New Mexico State, Newman 32 State, Niagara 3 Fee Com, Pearsall Queen Sand Unit, Penroc State 23, Penroc State DV, Ranger Lake 1 State, Rio Bravo Fee, Shell 26 State, State CF, Sunburst Cox, Triple Tres State, Twitty BHF State & Yates ST

The U.S. Bankruptcy Court of the Western District of Texas is entertaining offers on individual areas highlighted within the package but a preference will be given to an offer for the total portfolio.

Comments on Production & Leases
The Remnant assets have not reported any production since March 2019. We expect the Seller and the Court to provide some updated production numbers by January 30, 2020 as the firm gets caught up on their lease reporting for the time period January 2019-March 2019. EAG will also update the sale pkgs with any new production as soon as both the company and the Court update us.

As for lease and land rights in Southeast New Mexico, the vast majority of our acreage is HBP by either our wells or other wells associated with the base lease. There are other shallow wells or deeper wells that are holding rights.

EAG has already prepared a land schedule as Tab 4 in the Package QuickLook in the VDR. We have also marked some leases w relevant land data such as the North Square Unit is well bore only. Unlike Texas, most New Mexico fee leases or UL leases have lack of production clauses that address lack of production, non-economic production, and or shut-in royalties. State Lands and BLM acreage again it typically held by a base lease and not zone dependent.

For buyers with questions about lease and land rights can submit questions and Remnant and EAG will endeavor to pull the applicable lease along with current production to alleviate concerns.

TO LEARN MORE
Energy Advisors Group
Mr. Blake Dornak
A&D Associate
5120 Woodway Dr Ste 10010
Houston, TX 77056
---Phone: 713-600-0123 Direct: 713-600-0169
---Email: [email protected]

Questions Regarding This Asset? Email Blake Dornak or call EAG at 713-600-0123