B-G PARTNERS, LLCB-G PARTNERS, LLC
• Started in 1983,Started in 1983,• Has three managing members of the General Partner Has three managing members of the General Partner
and over one hundred and fifty Limited Partners,and over one hundred and fifty Limited Partners,• For fifteen years, Partners continued to purchase For fifteen years, Partners continued to purchase ““Class Class
AA”” locations as delineated by the Majors working in the locations as delineated by the Majors working in the Michigan Basin.Michigan Basin.
• These partnerships were all These partnerships were all ““rolled uprolled up”” into two Master into two Master Limited Partnerships in 2003 and 2004.Limited Partnerships in 2003 and 2004.
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Energy BusinessEnergy Business• Consists of mineral rights to reduce personal liability Consists of mineral rights to reduce personal liability
for partners.for partners.• Partners receive their share of revenues as income from Partners receive their share of revenues as income from
producing wells.producing wells.• In partnership with a Michigan LLC, it has 594 sites In partnership with a Michigan LLC, it has 594 sites
that represent about 8,000 net acres.that represent about 8,000 net acres.• Each site may elect to participate (at cost) in the Each site may elect to participate (at cost) in the
drilling/completion expenses and receive a pro-rata drilling/completion expenses and receive a pro-rata share of net revenue from a successful well rather than a share of net revenue from a successful well rather than a royalty participation.royalty participation.
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Michigan GeologyMichigan Geology
• Map of Michigan geological location (Exhibit 1),Map of Michigan geological location (Exhibit 1),• Formations are U shaped that is similar to the Permian Formations are U shaped that is similar to the Permian
Basin (Exhibit 2),Basin (Exhibit 2),• Antrim is 200Antrim is 200’’ at the edge and 2,000 at the edge and 2,000’’+ in center of State + in center of State
(Exhibit 3),(Exhibit 3),• Dundee is in 3,000Dundee is in 3,000’’-5,000-5,000’’ range, range,• Utica-Collingwood shale depth ranges 7,200’ to 9,700’.Utica-Collingwood shale depth ranges 7,200’ to 9,700’.• PDC is at the center and 9,000PDC is at the center and 9,000’’-12,000-12,000’’ deep. deep.
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Exhibit 1 Page 5
Exhibit 2 Page 6
Exhibit 3 Page 7
All of BG’s sites have access All of BG’s sites have access to pipeline distribution. to pipeline distribution. (Exhibit 4)(Exhibit 4)
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Exhibit 4 Page 9
Bradford Gordon’s Bradford Gordon’s Geological TargetsGeological Targets
• Antrim, Dundee, Utica-Collingwood, St. Peter Antrim, Dundee, Utica-Collingwood, St. Peter Sandstone/Trenton and Prairie du Chien,Sandstone/Trenton and Prairie du Chien,
• Prospects drilled and abandoned by major oil Prospects drilled and abandoned by major oil companies,companies,
• Several up-hole targets identified for redrilling Several up-hole targets identified for redrilling in abandoned PDC wells using new technology.in abandoned PDC wells using new technology.
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Antrim ShaleAntrim Shale• Formation diagram (Exhibit 5A),Formation diagram (Exhibit 5A),• Comparison with Barnett Shale:Comparison with Barnett Shale:
i)i) Antrim Shale covers a larger area than Barnett Shale in Antrim Shale covers a larger area than Barnett Shale in Texas.Texas.
ii)ii) A bullet point list of the Antrim compared to the Barnett A bullet point list of the Antrim compared to the Barnett Shale that is supported by government documentation (Exhibit 5B+C).Shale that is supported by government documentation (Exhibit 5B+C).
iii) iii) It underlies all of the lower peninsula of Michigan and has as much It underlies all of the lower peninsula of Michigan and has as much potential as the Barnett,potential as the Barnett,
iv) iv) Requires a good fracture system.Requires a good fracture system. v) v) Antrim Shale, as a gas play, at depths of 500Antrim Shale, as a gas play, at depths of 500’’-2,000-2,000’’, and 2,500, and 2,500’’+ for + for
the oils.the oils.
• USGS estimates success rate for finding new Antrim is at USGS estimates success rate for finding new Antrim is at 80%80%…… Bradford-Gordon mineral right Bradford-Gordon mineral right’’s sites s sites
(Exhibit 6).(Exhibit 6). Page 11
Exhibit 5A Page 12
Exhibit 5B Page 13
Exhibit 5C Page 14
Antrim LocationsAntrim Locations
Exhibit 6 Page 15
Antrim Shale (continued)Antrim Shale (continued)
• Opportunities in Osceola CountyOpportunities in Osceola County i)i) Seventeen identified properties should have an Seventeen identified properties should have an
excellent excellent
potential for success in the Antrim.potential for success in the Antrim. ii) Evidence of enhanced fracture content within the Antrim ii) Evidence of enhanced fracture content within the Antrim
locations because of geological structure associated with locations because of geological structure associated with
currently producing fields.currently producing fields.
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Dundee-Fingerprint map of Dundee-Fingerprint map of Locations (Exhibit 7)Locations (Exhibit 7)
• Primarily located in Central Basin where drilling Primarily located in Central Basin where drilling costs are low.costs are low.
• Various wells at Fork Field (Mecosta Co.) offer a Various wells at Fork Field (Mecosta Co.) offer a unique chance to find additional oil at low risk; unique chance to find additional oil at low risk; the location of the oil is known and has a the location of the oil is known and has a significant percentage of unrecovered significant percentage of unrecovered hydrocarbons.hydrocarbons.
• In the field, a horizontal well can have 4-10 times In the field, a horizontal well can have 4-10 times the productivity of a vertical well. (Exhibit 8).the productivity of a vertical well. (Exhibit 8).
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Exhibit 7 Page 18
Exhibit 8N
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Utica-Collingwood Shale
• A Michigan geologist indicated huge potential for these shales, which will be proven after additional wells are drilled.
• An article from the 1/20/12 issue of the Michigan Oil & Gas News (MOGN) reported some details on the two wells in Kalkaska County. The geologist confirmed the analysis on these two U-C wells could be prolific.
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Utica-Collingwood Shale (con’t)
• Through research on the top twenty selected abandoned PDC wells for the U-C Shale potentials, most of the wells ranked higher than St. Pioneer 1-3, which was completed as a first commercial Collingwood Shale well in Michigan in 2010.
• The geologist indicated the Bradford Gordon parcels in the counties (Kalkaska, Roscommon, Missaukee and Clare) have a good selection of wells that have been drilled through the U-C shales.
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Upper PDC in Osceola CountyUpper PDC in Osceola County
• Drilling mud logs and structure maps are shown Drilling mud logs and structure maps are shown for McCasey 1-7, Noreen 1-18, and St. Burdell for McCasey 1-7, Noreen 1-18, and St. Burdell 1-5 sites. (Exhibits 9-12A+B).1-5 sites. (Exhibits 9-12A+B).
• The fourth site, Zinger 1-1, has several The fourth site, Zinger 1-1, has several additional oil/gas reserves in formations located additional oil/gas reserves in formations located in in ““deeper productive horizons.deeper productive horizons.”” (Exhibits (Exhibits 13A+B)13A+B) Note: B-G has mineral rights in two other wells near Note: B-G has mineral rights in two other wells near
the site.the site.
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Exhibit 9 Page 23
Exhibit 10A Page 24
Exhibit 10B Page 25
Exhibit 11A Page 26
Exhibit 11B Page 27
Exhibit 12A Page 28
Exhibit 12B Page 29
Exhibit 13A Page 30
Exhibit 13B Page 31
Many of Bradford GordonMany of Bradford Gordon’’s sites are s sites are located in Osceola County.located in Osceola County.
• As it has a large minority of mineral properties As it has a large minority of mineral properties in the county, further evaluation should be on an in the county, further evaluation should be on an area wide basis instead of individually (Exhibit area wide basis instead of individually (Exhibit 14, on the next page).14, on the next page).
• Most of the top selected abandoned PDC wells Most of the top selected abandoned PDC wells for the Utica-Collingwood shale is located in for the Utica-Collingwood shale is located in that County. (Exhibit 15, on page 34)that County. (Exhibit 15, on page 34)
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Exhibit 14 Page 33
Exhibit 15Exhibit 15
Exhibit 15 Page 34
Potential ReservesPotential Reserves
• The conversion of The conversion of ““6 to 16 to 1”” from the gas from the gas equivalent to the oil are as follows:equivalent to the oil are as follows: DundeeDundee 20 Bcfe 20 Bcfe 3.3 MMBOE 3.3 MMBOE AntrimAntrim 695 Bcfe695 Bcfe 115.8 115.8
MMBOE MMBOE Upper PDCUpper PDC 816 Bcfe816 Bcfe 136.0136.0 MMBOE MMBOE
255.1255.1 MMBOE MMBOE
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Potential Reserves (continued)Potential Reserves (continued)
• With oil currently trading at a premium over natural gas, Bradford Gordon, Inc., has balanced potential resources. With favorable oil outlook in the U.S., for both
the long and short term, the energy industry predicts more allocation of its capital expenditure to oil-favored projects.
This would enable several heavily weighted natural gas producing companies to be more balanced with oil and gas equal at a 50-50 ratio.
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Research on Selected Sites:Research on Selected Sites:• Twenty of the abandoned PDC well sites were identified Twenty of the abandoned PDC well sites were identified
for re-drilling and offsets in potential reserves, which for re-drilling and offsets in potential reserves, which are located primarily in Osceola and Mecosta Counties. are located primarily in Osceola and Mecosta Counties. Comments on these sites are available on request; all have top Comments on these sites are available on request; all have top
ratings by a noted petroleum geologist.ratings by a noted petroleum geologist. Seismic surveys will be required but, over the ten year period, Seismic surveys will be required but, over the ten year period,
the total revenues from the Selected Six Sites is projected after the total revenues from the Selected Six Sites is projected after drilling cost at $88.5 million, or at present value (PV) drilling cost at $88.5 million, or at present value (PV) valuation of $25.6 million assuming oil at $45 per barrel and valuation of $25.6 million assuming oil at $45 per barrel and gas at $4.25 per Mcf.gas at $4.25 per Mcf.
The PV Valuation, on the next page, should increase in value The PV Valuation, on the next page, should increase in value once research on Utica-Collingwood takes place.once research on Utica-Collingwood takes place.
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PV ValuationPV Valuation
• With PV at $3.034 billion and a 4% With PV at $3.034 billion and a 4% participation, the value amounts to $121.3 participation, the value amounts to $121.3 million - based on $80 per barrel.million - based on $80 per barrel.
• In another perspective on Bradford Gordon In another perspective on Bradford Gordon valuation, research on the holdings on the leases valuation, research on the holdings on the leases was recently valued at $440 billion, with was recently valued at $440 billion, with development/ production costs estimated at $12 development/ production costs estimated at $12 billion for a $428 billion profit. billion for a $428 billion profit.
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The general partners view The general partners view $100 million as the fair $100 million as the fair market price.market price.
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• Comprehensive view of locations is on our Comprehensive view of locations is on our website at website at www.bradfordgordon.com
• Spreadsheet has interesting Purchase Narratives Spreadsheet has interesting Purchase Narratives on each site.on each site.
February 19, 2012February 19, 2012
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