Turnkey Agreement Sale Analysis
Information Requested by Staff Location
Funding received Table 1 (Sale Amounts)
Revenues recognized | Table 1 – Predrilling. All pre-drilling revenue is recognized in the year received. For example, 2009 pre-drilling revenue is composed of Project 2008B ($439,579), Project 2009A ($1,639,731), and Project 2009B ($247,999), for a total of $2,327,309 (See Table 2) |
Contract dates | Table 1 (Contract Date Range) |
Drilling dates | Table 1 (Date Drilled) |
Amounts designated as drilling and | Table 1 (Pre-Drilling and Drilling) |
pre-drilling |
Revenue recognized each period | Table 2 (Annual Totals – Income Statement) |
Underlying properties & reserve status | Table 3 |
Royale Energy, Inc.
Turnkey Agreement Sale Analysis
For the three years ended December 31, 2011
Table 1
Sale Amount | Working Interest Recognized | ||||||||||||
Project/Wells | Contracts Date Range | Date Drilled | Prior to 2009 | 2009 | 2010 | 2011 | Total Sales Thru 2011 | Prior to 2009 | 2009 | 2010 | 2011 | Total Interest Recognized | Retained by Royal |
Project - 2008B | Jul '08 - Sept '09 | ||||||||||||
Well #1 | 12/18/2009 | $589,639 | $286,695 | $876,334 | 29.56% | 14.25% | 43.81% | 55.88% | |||||
Well #2 | 10/28/2009 | $539,090 | $262,117 | $801,207 | 29.56% | 14.25% | 43.81% | 53.82% | |||||
Well #3 | 9/1/2010 | $573,880 | $279,032 | $852,912 | 29.56% | 14.25% | 43.81% | 55.88% | |||||
Well #4 | 5/31/2010 | $637,890 | $310,156 | $948,046 | 29.56% | 14.25% | 43.81% | 55.88% | |||||
TOTAL | $2,340,500 | $1,138,000 | $3,478,500 | ||||||||||
Pre-drilling @ 38.63% | $439,579 | ||||||||||||
Deferred Drilling @ 61.37% | $698,421 | ||||||||||||
Project - 2009A | Apr '09 - Dec '09 | ||||||||||||
Well #1 | 4/16/2010 | $1,062,280 | $1,062,280 | 57.14% | 57.14% | 40.21% | |||||||
Well #2 | 7/28/2010 | $1,179,017 | $1,179,017 | 57.14% | 57.14% | 41.19% | |||||||
Well #3 | 9/4/2011 | $467,520 | $467,520 | 17.14% | 17.14% | 81.68% | |||||||
Well #4 | 7/23/2010 | $1,096,182 | $1,096,182 | 57.14% | 57.14% | 12.23% | |||||||
TOTAL | $3,805,000 | $3,805,000 | |||||||||||
Pre-drilling @ 43.094% | $1,639,731 | ||||||||||||
Deferred Drilling @ 56.906% | $2,165,269 | ||||||||||||
Project - 2009B | Dec '09 - Aug '10 | ||||||||||||
Well #1 | 11/11/2010 | $255,595 | $647,285 | $902,880 | 13.67% | 34.61% | 48.28% | 49.09% | |||||
Well #2 | 9/9/2010 | $239,713 | $607,065 | $846,778 | 13.67% | 34.61% | 48.28% | 50.03% | |||||
Well #3 | 3/4/2011 | $236,296 | $598,412 | $834,708 | 13.67% | 34.61% | 48.28% | 50.06% | |||||
Well #4 | 6/19/2011 | $230,896 | $584,738 | $815,634 | 13.67% | 34.61% | 48.28% | 49.65% | |||||
TOTAL | $962,500 | $2,437,500 | $3,400,000 | ||||||||||
Pre-drilling @ 25.766 | $247,999 | $628,050 | |||||||||||
Deferred Drilling @ 74.234% | $714,501 | $1,809,450 | |||||||||||
Project - 2010A | Jul '10 - Feb '11 | ||||||||||||
Well #1 | 11/20/2011 | $986,567 | $6,277 | $992,844 | 54.02% | 0.37% | 54.39% | 43.96% | |||||
Well #2 | To be drilled | $518,368 | $3,298 | $521,666 | 43.40% | 0.30% | 43.70% | 56.00% | |||||
Well #3 | 9/27/2011 | $1,157,071 | $7,362 | $1,164,433 | 54.02% | 0.37% | 54.39% | 44.22% | |||||
Well #4 | 12/2/2012 | $925,656 | $5,890 | $931,546 | 54.02% | 0.37% | 54.39% | 45.24% | |||||
TOTAL | $3,587,662 | $22,827 | $3,610,489 | ||||||||||
Pre-drilling @ 27.874% | $1,000,013 | $6,363 | |||||||||||
Deferred Drilling @ 72.126% | $2,587,649 | $16,464 | |||||||||||
Turnkey Agreement Sale Analysis
Royale Energy, Inc.
For the three years ended December 31, 2011
Sale Amount | Working Interest Recognized | ||||||||||||
Project/Wells | Contracts Date Range | Date Drilled | Prior to 2009 | 2009 | 2010 | 2011 | Total Sales Thru 2011 | Prior to 2009 | 2009 | 2010 | 2011 | Total Interest Recognized | Retained by Royal |
Project - 2010B | Oct '10 - Nov '10 | ||||||||||||
Well #1 | 11/30/2010 | $445,874 | $445,874 | 19.79% | 19.79% | 75.99% | |||||||
Well #2 | 1/29/2011 | $445,874 | $445,874 | 19.79% | 19.79% | 76.71% | |||||||
TOTAL | $891,747 | $891,747 | |||||||||||
Pre-drilling @ 39.138% | $349,015 | ||||||||||||
Deferred Drilling @ 60.862% | $542,732 | ||||||||||||
Project - 2010C | Dec '10 - Jul '11 | ||||||||||||
Well #1 | 10/31/2011 | $87,867 | $985,545 | $1,073,412 | 4.05% | 45.42% | 49.47% | 49.23% | |||||
Well #2 | 12/31/2012 | $89,824 | $1,007,493 | $1,097,316 | 4.05% | 45.42% | 49.47% | 50.22% | |||||
Well #3 | To be drilled | $76,021 | $852,674 | $928,695 | 4.86% | 54.54% | 59.40% | 40.23% | |||||
Well #4 | To be drilled | $71,288 | $799,594 | $870,882 | 4.05% | 45.42% | 49.47% | 50.22% | |||||
TOTAL | $325,000 | $3,645,306 | $3,970,306 | ||||||||||
Pre-drilling @ 27.659% | $89,892 | $1,008,255 | |||||||||||
Deferred Drilling @ 72.341% | $235,108 | $2,637,051 | |||||||||||
Project - 2011A | Jul '11 - Aug '12 | ||||||||||||
Well #1 | To be drilled | $680,585 | $680,585 | 30.25% | 30.25% | 48.90% | |||||||
Well #2 | To be drilled | $680,585 | $680,585 | 30.25% | 30.25% | 48.90% | |||||||
Well #3 | To be drilled | $556,380 | $556,380 | 30.25% | 30.25% | 48.90% | |||||||
Well #4 | To be drilled | $542,144 | $542,144 | 30.25% | 30.25% | 48.90% | |||||||
Well #5 | To be drilled | $564,806 | $564,806 | 30.25% | 30.25% | 48.90% | |||||||
TOTAL | $3,024,500 | $3,024,500 | |||||||||||
Pre drilling @ 26.805 | $810,712 | ||||||||||||
Deferred Drilling @ 73.195 | $2,213,788 |
Turnkey Agreement Sale Analysis
Royale Energy, Inc.
For the three years ended December 31, 2011
Table 2
Sale Amount | Working Interest Recognized | |||||||||||||
Project/Wells | Contracts Date Range | Date Drilled | Prior to 2009 | 2009 | 2010 | 2011 | Total Sales Thru 2011 | Prior to 2009 | 2009 | 2010 | 2011 | Total Interest Recognized | Retained by Royal | |
Deferred Drilling Recognition – Completion of Obligations under Turnkey Agreement | ||||||||||||||
2006A – Well #2 | 1/31/2009 | $422,157 | ||||||||||||
2007A – Well #1 | 1/31/2009 | $502,304 | ||||||||||||
2008B – Well #2 | 10/28/2009 | $491,718 | ||||||||||||
2008A – Well #3 | 11/4/2009 | $780,472 | ||||||||||||
2008B – Well #1 | 12/18/2009 | $537,829 | ||||||||||||
2009A – Well #1 | 4/16/2010 | $604,500 | ||||||||||||
2006B – Well #1 | 5/31/2010 | $1,103,980 | ||||||||||||
2008B – Well #4 | 5/31/2010 | $581,828 | ||||||||||||
2009A – Well #4 | 7/23/2010 | $623,792 | ||||||||||||
2009A – Well #2 | 7/28/2010 | $670,930 | ||||||||||||
2008B – Well #3 | 9/1/2010 | $523,440 | ||||||||||||
2009B – Well #2 | 9/9/2010 | $627,039 | ||||||||||||
2004A – Well #5 | 9/30/2010 | $122,569 | ||||||||||||
2009B – Well #1 | 11/11/2010 | $671,833 | ||||||||||||
2010B – Well #1 | 11/30/2010 | $271,366 | ||||||||||||
2010B – Well #2 | 1/29/2011 | $271,366 | ||||||||||||
2009B – Well #3 | 3/4/2011 | $617,350 | ||||||||||||
2009B – Well #4 | 6/19/2011 | $607,729 | ||||||||||||
2009A – Well #3 | 9/4/2011 | $266,047 | ||||||||||||
2010A – Well #3 | 9/27/2011 | $847,972 | ||||||||||||
2010C – Well #1 | 10/31/2011 | $782,410 | ||||||||||||
2010A – Well #1 | 1/31/2009 | $714,947 | ||||||||||||
Deferred Drilling Recognized | $2,734,479 | $5,801,276 | $4,107,822 |
Turnkey Agreement Sale Analysis
Royale Energy, Inc.
For the three years ended December 31, 2011
Annual Totals – Income Statement | 2009 | 2010 | 2011 | 2009-2011 Total | ||
Pre-drilling | $2,327,309 | $2,066,969 | $1,825,329 | $6,219,608 | ||
Deferred Drilling Recognized as Revenue | $2,734,479 | $5,801,276 | $4,107,822 | $12,643,577 | ||
Total Turnkey Drilling Revenue | ||||||
Per Above Schedule | $5,061,789 | $7,868,246 | $5,933,151 | $18,863,185 | ||
Per Financial Stmts | $5,061,804 | $7,868,273 | $5,933,065 | $18,863,142 | ||
Difference | -$15 | -$27 | $86 | $43 | ||
Annual Totals | ||||||
Total Receipts | $5,905,500 | $7,241,909 | $6,692,633 | $19,840,042 | ||
Total Spoilage Costs | $98,042 | $201,883 | $12,959 | $312,884 | ||
Total Marketing Costs | $1,171,511 | $1,175,049 | $1,284,575 | $3,631,185 | ||
Total Lease Costs – Unproved Property Only | $17,327 | $133,534 | $85,444 | $236,305 | ||
Total Other Land Costs – Unproved Property Only | $37,788.40 | $150,067.80 | $78,523.57 | $266,380 | ||
Total Intangible Drilling Costs | $3,685,931 | $4,491,656 | $6,552,776 | $14,730,362 | ||
Total Tangible Drilling Costs | $531,016 | $671,762 | $794,967 | $1,997,746 | ||
Total Costs | $5,541,615 | $6,823,952 | $8,809,245 | $21,174,812 | ||
Total Recipts less Total Costs | $363,885 | $417,957 | -$2,116,612 | -$1,334,771 | ||
Percentage of Lease Costs of Total Costs | 0.31% | 1.96% | 0.97% | 1.12% |
Turnkey Agreement Sale Analysis – Drilled Property Description
Royale Energy, Inc.
For the three years ended December 31, 2011
Table 3
Original Property Description | Drilled Property Description | ||||||||||||
Project/Wells | Contracts Date Range | Date Drilled | Location | Reserve Status | Substitution of Original Location | Location | Reserve Status | Successful Well | |||||
Project - 2008B | Jul '08 - Sept '09 | ||||||||||||
Well #1 | 12/18/2009 | Colusa County, CA | Unproved | YES | Colusa County, CA | Unproved | Dry Hole | ||||||
Well #2 | 10/28/2009 | Colusa County, CA | Unproved | NO | Proved | ||||||||
Well #3 | 9/1/2010 | Kern County, CA | Unproved | NO | Dry Hole | ||||||||
Well #4 | 5/31/2010 | To be determined | Unknown | N/A | Sacramento County, CA | Unproved | Dry Hole | ||||||
Project - 2009A | Apr '09 - Dec '09 | ||||||||||||
Well #1 | 4/16/2010 | Colusa County, CA | Unproved | NO | Proved | ||||||||
Well #2 | 7/28/2010 | Colusa County, CA | Unproved | NO | Proved | ||||||||
Well #3 | 9/4/2011 | San Joaquin County, CA | Unproved | NO | Proved | ||||||||
Well #4 | 7/23/2010 | To be determined | Unknown | N/A | Tehema County, CA | Proved | |||||||
Project - 2009B | Dec '09 - Aug '10 | ||||||||||||
Well #1 | 11/11/2010 | Colusa County, CA | Unproved | NO | Proved | ||||||||
Well #2 | 9/9/2010 | Tehama County, CA | Unproved | NO | Dry Hole | ||||||||
Well #3 | 3/4/2011 | Colusa County, CA | Unproved | YES | Colusa, County, CA | Unproved | Dry Hole | ||||||
Well #4 | 6/19/2011 | To be determined | Unknown | N/A | Colusa, County, CA | Unproved | Dry Hole | ||||||
Project - 2010A | Jul '10 - Feb '11 | ||||||||||||
Well #1 | 11/20/2011 | Colusa County, CA | Unproved | YES | Colusa, County, CA | Unproved | Dry Hole | ||||||
Well #2 | To be drilled | Tehama County, CA | Unproved | N/A | |||||||||
Well #3 | 9/27/2011 | Colusa County, CA | Unproved | NO | Proved | ||||||||
Well #4 | 12/2/2012 | To be determined | Unknown | N/A | Colusa, County, CA | Unproved | Dry Hole | ||||||
Project - 2010B | Oct '10 - Nov '10 | ||||||||||||
Well #1 | 11/30/2010 | Colusa County, CA | Proved | NO | Proved | ||||||||
Well #2 | 1/29/2011 | Colusa County, CA | Proved | NO | Proved | ||||||||
Project - 2010C | Dec '10 - Jul '11 | ||||||||||||
Well #1 | 10/31/2011 | Colusa County, CA | Unproved | No | |||||||||
Well #2 | 12/31/2012 | Colusa County, CA | Unproved | YES | Colusa, County, CA | Unproved | Proved | ||||||
Well #3 | To be drilled | Solana County, CA | Unproved | N/A | |||||||||
Well #4 | To be drilled | To be determined | Unknown | N/A | |||||||||
Project - 2011A | Jul '11 - Aug '12 | ||||||||||||
Well #1 | To be drilled | Colusa County, CA | Unproved | N/A | |||||||||
Well #2 | To be drilled | Colusa County, CA | Unproved | N/A | |||||||||
Well #3 | To be drilled | Colusa County, CA | Unproved | N/A | |||||||||
Well #4 | To be drilled | Colusa County, CA | Unproved | N/A | |||||||||
Well #5 | To be drilled | Solana County, CA | Unproved | N/A |