Prospect Selection Philosophy:
Underground Energy is constantly searching for new producing opportunities and unconventional resource plays with exceptional recovery potential. Among these opportunities, various prospects have been chosen for further examination because of their attractiveness and
suitability to our recovery methodology. These prospects can be either new resource discoveries in undeveloped areas (ie wildcat), or previously discovered rescources without successful production which require unconventional methodology to successfully recover. Each potential project is taken through
multiple levels of feasibility testing, geologic and petrophysic study to determine the reasonable
recovery factor and overall profitability that can be expected. In this early developmental stage, prospects are
designed in a conceptual manner to aid in the selection process.
Prospective Assets/Reserves (not yet under lease):The following table shows additional assets and corresponding reserves that have been identified in the prospects we are actively pursuing, but have not yet been acquired under lease. The risk factor for these prospective projects is significantly higher than those already under lease, and the acquisition of these resources increases the value of Underground Energy in potential and worth.
Prospect
| Status
| OOIP (MMBBLS)
| NPV10 (MM$)
| Recoverable Oil (MMBLS)
| Risk Adjustment Discount
| NPV (MM$)
| $/BBL
| $/share
| Prospect A
| Prospective Probable Resource
| 273
| $98.2
| 27.3
| 95%
| $4.9
| $0.18
| $0.27
| Prospect B
| Prospective Possible Resource | 672
| $220.7
| 134.5
| 95%
| $11.0
| $0.08
| $0.60
| Prospect C
| Undiscovered Prospect
| 1,509
| $1,052.0
| 181.1
| 95%
| $52.6
| $0.29
| $2.86
| Prospect D
| Proved Undeveloped Prospect
| 209
| $67.0
| 3.8
| 80%
| $13.4
| $3.53
| $0.73
| Total
| 2,663
| $1,437.9
| 347
|
| $81.9
|
|
|
|
