RockfordOilCorp.
ReserveReport
As of November1, 2012
PropertiesinBartonandButlerCounty,Kansas
By:
James E Melland,PE,PG Melland Engineering,Inc.
P.O.Box841
McPherson,Kansas 67460
November30, 2012
ExecutiveSummary
Thisreport statesthereservesforRockfordOilCorp.'s oilandgas propertiesinBartonandButlerCounty,Kansas(Table1). The AndersonLeaseisinBartonCountyandconsists of160acres,two(2) producingwellsand one(1)saltwaterdisposalwell(SWD). The AsmussenleaseisinButlerCountyandconsists of80acresandtwo(2)producingwells.
The reserveswereestimated usingdecline curveanalysis.Foreachlease,aninitial productionrate(IP)andannual decline ratewere establishedto generatetheproductionforecastcurve,whichwasthenenteredintoaneconomicspreadsheetto determineeconomic reserves.Foreachlease,monthly production data forthe first halfof2012was usedto determinethetotal 2012 production volume,whichwasthen usedastheIPfor eachdeclinecurve.Aportion ofthe2012 productionisincludedinthereservevolume report, butisconsidered negligibleduetothelow productionrates.Usinghistorical production data,the annual declinerate forthe Andersonwasestimatedto be2.5% and 5.0%fortheAsmussen.
Theproductionforecast data wasenteredinto a25year10%discountedcashflow(10% DCF)to determinetheeconomicreserves. Themain purposeofthe10% DCFisto determineeconomic reserves,itis notintendedto bea financialforecast,therefore,the10% DCFvaluereported is onlyanindicatorinthisreport. Thecashflowis based on anetrevenueinterest(NRI)of0.875.An oil priceof$76.00/BOwas used based ontheNCRAaverageKansasCommon priceposting. The expenses usedare estimatedindustrystandardexpenses,whichrepresentthe costto operateaproperlydesignedandfunctioning oil
wellinKansas. Theproductionwith positive cashflowequalsthereserves. Theleaseswith positive cashflow beyond 25yearsare indicatedwith a"+"afterthe reservenumber.
The reservesfor eachlease aresummarizedintheTable1 below.
| ReserveSummaryTable | ||||
| County | Lease | OilReserves,BO | GasReserves,MCF | 10%DCFValue, $ |
| Barton | Anderson | 18,300+ | 0 | 295,000 |
| Butler | Asmussen | 11,000 | 161,000 | |
| Totals | 29,300 | 0 | 456,000 | |
Abbreviations andDefinitions
BOBarrelsOil
BOPYBarrelsOil perYear
D&ADrilledandAbandoned(dryhole) DCFDiscountedCashFlow
IPInitialProductionRate
J&AJunkedandAbandoned(plugged dueto holeproblemswhiledrilling) KGSKansasGeologicalSurvey
LKCLansing-KansasCityformations
MCF Thousandcubicfeet
P&AProducedandAbandoned orPluggedandAbandoned
PDPProvenDevelopedProducingreservesPDNPProvenDevelopedNon-ProducingreservesPUDProvenUnDevelopedreserves
Field:Chase-Silica,BartonCounty,Kansas
Lease:Anderson160AcresNW/4 28-20S-12WProducingZone:Arbuckle
Well #4 | Spot NW SWNW | API# 15-009-07395-0001 | Type-Status OIL | PrimeMover Electric | |
| #7 | NESENW | l | 15-009-12231 | OIL | Electric |
| #8 | SW SENW | 15-009-05244-0001 | SWD | ||
| #9 | E2SENW | 15-009-25773 | Spudded | Electric | |
#1 |
SWNWNW |
Oil |
15-009-00299 |
OIL-P&A | |
| #2 | SENWNW | Oil | 15-009-07394 | OIL-P&A | |
| #3 | NENWNW | 15-009-05638 | D&A | ||
| #5 | NESWNW | 15-009-05795 | D&A | ||
| #6 | SESENW | 15-009-75883 | OIL-P&A |
ReserveDeterminationMethod
The reservesweredeterminedbydecline curveanalysis usinga25year10%discountedcashflow. Theforecasted productionwith positive cashflowequaledthe reserve amount.
The Andersonleasehasbeen producingfromtheArbuckle formation since1956.As ofthemidyear
2012,it has produced 356,354BOfromfive (5)wells. Therearetwo(2)activeproducers,the#4and #7,and asaltwaterdisposalwell,the#8. The#9welliscurrentlybeingdrilled.Wells #1, #2,and #6 have been pluggedandabandoned.
Historic annual production data was usedtoestablishanannual decline rateof2.5%. Monthlyproduction data was usedtoestimatethe annual productionfor2012 of974BO,whichwas usedastheIPforthe productioncurve.
Oil
PDP: 18,300+BOPDNP: 0BO
PUD:Unknown
10% DCF=$295,000
Field:Asmussen,ButlerCounty,Kansas
Lease:Asmussen 80AcresW/2SE/4 16-29S-4EProducingZone:Arbuckle
Well #16-1 | Spot E2NWNW SE | API# 15-015-23749-0001 | Type-Status SWD | PrimeMover |
| #16-1 | E2NWNW SE | 15-015-23749 | OILRecompleted | Electric |
| #16-2 | S2NWNWSE | 15-015-23777 | OIL | Electric |
| #5 | NWSWSE | 15-015-21205 | SWD | |
#1 |
NWNW SE |
15-015-70292 |
OIL-P&A | |
| #1 | NWNW SE | 15-015-00285 | OIL?(Now 16-1?) | |
| #2 | SWNWSE | 15-015-78230 | Oil-P&A | |
| #3 | NENW SE | 15-015-78231 | OIL-P&A | |
| #4 | SW SE | 15-015-78232 | SWD-P&A | |
| #6 | NWNW SE | 15-015-23136 | OTHER |
Therewas a conflictinthedatasourcesastowhichwellwasthe#4SWDandthe#5SWD.
ReserveDeterminationMethod
The reservesweredeterminedbydecline curveanalysis usinga25year10%discountedcashflow. Theforecasted productionwith positive cashflowequaledthe reserve amount.
The Asmussenleasehasbeen producingsince fromthe Arbuckle formation since1965. Theproduction data reported onthe KGSwebsite waslisted undertwoleases,the Amussen(1956 -1989) andtheAsmussen 16-1(2008 -2012). Thetotal productionas ofmid 2012is 242,402BO. Therearetwoactive producers, #16-1and #16-2. Theproducedwateris disposed ofinthe#5SWD,whichis ownedand operatedbyAbercromieEnergyLLC.
The Asmussenlease wasreactivatedin 2008andshowedflush productionthrough 2009.Production
ratesfrom 2010to 2012wereusedtoestablish adecline rateof5%. Monthlyproduction data wasusedtoestimatethe annual productionfor2012 of950BO,whichwas usedastheIPfortheproductioncurve.
Oil
PDP: 11,000BOPDNP: 0BO
PUD:Unknown
10% DCF=$161,000
Qualification Statement
The author of this report, JamesE. Melland, is a licensed Professional Petroleum Engineer in California (#P1806) and Kansas(#17848), a licensed ProfessionalGeologist in California (#7166), has a Bachelors of Sciencedegree in Geological Engineering from the University of Missouri-Rolla, and has over twenty-five (25) years of geological and engineering experience in the oil and gas industry.
| /s/ James E. Melland, PE, PG | 1/11/2013 |
| James E. Melland, PE, PG | Date |
| President |
