Baron Energy, Inc. Company Overview January 1, 2015
Forward-Looking Statements Certain statements contained herein regarding future expectations, access to public capital markets, plans for acquisitions and dispositions, oil and gas reserves, exploration, development, production and pricing may be regarded as "forward-looking statements" within the meaning of the Securities Litigation Reform Act. They are subject to various risks, such as operating hazards, drilling risks, the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas, as well as other risks discussed in detail in the Company's periodic reports and other documents filed with the SEC. Actual results may vary materially. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the volatility of oil and gas prices, the costs and results of drilling and operations, the timing of production, mechanical and other inherent risks associated with oil and gas production, weather, the availability of drilling equipment, changes in interest rates, litigation, uncertainties about reserve estimates, environmental risks and other risks and uncertainties set forth in Company's periodic reports and other documents filed with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
Company Baron Energy, Inc. (TKR: BROE) is an independent petroleum company engaged in the acquisition, development, and production of crude oil and natural gas in North America. We leverage the substantial experience of our management team to acquire and operate a portfolio of low-risk producing oil and gas properties with meaningful near-term upside and long-term production.
Company Highlights Seasoned oil and gas management team Operated only properties; mostly 100% working interest 250 BOEPD (160 net); 90% oil; 16 producers Multi-year well inventory of low-risk, long-term production > 150 possible future wells/laterals/recompletions > 8,600 gross acres Multiple pay zones in most wells Manageable debt with 24-36 month payoffs Use of 36 month Volumetric Production Payment (VPP) Management owns ~40% of the company; provides shareholder alignment Aligned with an energy investment bank Plan to implement an investor outreach program in 1Q 2015
Company Overview HQ in San Marcos, Texas Pink Sheets: BROE Common shares outstanding (est): 122 million/15 million float Current price (1/1/15): $0.057/share 3 month average volume: 17,684 shares/day 52 week range: $0.02 - $0.15/share Current Market Cap: $7.0 million Total Debt (est): $11.2 million (includes VPP) www.baronenergy.com
Management Team Ronnie L. Steinocher Chairman, President and CEO 35 years of oil and gas experience including 18 years with a major oil company and 10 years as owner/operator Extensive experience in drilling, engineering, production operations, business development, and general management Licensed Professional Engineer in Texas since 1985 Lisa P. Hamilton Executive Vice President, CFO and Director 34 years of oil and gas experience including 20 years with a major oil company and 10 years as owner/operator Extensive experience in finance, land, contracts, production operations, business development, and general management BS in Business and Commerce with Highest Honors Management team has worked together for more than 20 years Business development Acquisitions/Divestments; > 100 transactions since 2002 Drilling and production operations Private and public companies
Board of Directors Ronnie L. Steinocher, PE Chairman, President & CEO 35 years of oil and gas experience; 18 years with a major oil company; 10 years as owner/operator Extensive experience in drilling, engineering, production, business development, and general management BS in Architecture, The University of Texas at Arlington; BS in Civil Engineering, The University of Texas at Austin Licensed professional engineer in Texas since 1985; member of Society of Petroleum Engineers since 1983 Lisa P. Hamilton Executive Vice President, CFO and Director 34 years of oil and gas experience; 20 years with a major oil company; 10 years as an owner/operator Extensive experience in finance, land, contracts, operations, business development, and general management BS in Business and Commerce with Highest Honors, University of Houston - Downtown Jay D. Squiers, CFA Independent Director 28 years experience in law, underwriting and portfolio management, securities, energy lending, investment evaluations, and portfolio management Currently Managing Director and member of the fund Investment Committee at Petro Capital Energy Funds, Dallas, Texas AB magna mum laude in Economics, Princeton University; JD with Honors Order of the Coif, The University of Texas at Austin School of Law
Current Status Company Wide Baron operates 100% of all properties ~$260,000/month revenue ~$180,000/month net cash flow 75-100% WI (working interest) ownership; 56.25-75% NRI (net royalty interest) 160 BOEPD net; 90% oil 16 producers; 2 SWD wells 8,691 acres gross Up to 150 future new wells/recompletions/laterals; multi-year drilling inventory Reserve life > 40 Years Successful drilling programs in 1-2Q will significantly increase production, revenue, and reserves
Production Focus Areas N TEXAS HQ San Marcos County of Operations
GROSS BO/MTH Production and Projected Monthly Oil Production and Projected 9000 8000 7000 6000 Frio County Acquisition Effective July 1, 2014 Begin in-field drilling programs 5000 S1H RC 4000 Frio 3000 Taylor 2000 1000 0 J F M A M J J A S O N D J F M 2014-2015
2014 Goals (Year-end Status) Acquire an anchor project Complete divestment of non-core properties Become fully SEC compliant; trade on the OTC exchange Align with an energy investment bank Restructure private debt Maintain current low-cost G&A structure Focus on meaningful producing property acquisitions
2015 Goals Continue development of Frio County properties Drill 3-4 new Austin Chalk horizontal wells; target one well per quarter Drill 1-2 shallow oil wells or lateral recompletions Complete geological/engineering evaluation of all properties by end of 2Q ID potential recompletions and future drilling locations Become fully SEC compliant; trade on the OTC exchange Complete audited financials; targeted completion end of Feb 2015 Complete divestment of non-core properties Sell by mid-year (pending market conditions) Focus on meaningful producing property acquisitions Operated only; prefer 100%WI; must be scalable Maintain current low-cost G&A structure Use outsourcing where possible/practical Implement a continuous investor outreach program in 1Q
Frio County, South Texas 100% operated properties 89.1-100% WI/64.15%-75% NRI Gross 200 BOPD/138 MCFPD/225 BOEPD (150 BOEPD net) 14 producers; 90% Oil; 320 acre well spacing 8,082 gross acres; 8 producing leases Multi-year drilling inventory Multiple production targets (Olmos Sand, San Miguel, Austin Chalk, Eagle Ford Shale, Buda Lime, Pearsall Shale) Up to 80 possible future laterals (new wells/recompletions) in the Austin Chalk 100-500 BOPD/well IP s; 50M-300MBO/well EUR More than 80 possible shallow oil well locations in the Olmos and San Miguel Formations 30-100 BOPD/well IP s; 30M-150MBO/well EUR; 40 acre well spacing Reserve life > 40 years
Austin Chalk Section Austin Chalk has three productive zones: B-1, B-2, and Lower Chalk Upper Chalk B-1 5,150 Top of Chalk Upper Chalk B-2 Lower Chalk Eagle Ford Shale 5,500 Base of Chalk
GROSS BOPD Austin Chalk Single Well Example 250 Example Initial Production plus Two Recompletions (RC) Austin Chalk Formation 200 150 100 RC2 RC1 Primary 50 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 YEAR
Gross BOPD Frio County, Texas Example Projected Production 1200 Example Production and Projected at Year-end Austin Chalk Formation Production will vary depending on number of wells and recompletions per year 1000 800 600 400 200 PUD5 PUD4 PUD3 PUD2 PUD CURRENT 0 2014 2015 2016 2017 2018 2019 YEAR
Taylor County, Central Texas 100% operated properties 75% WI/54.75% NRI Gross 22-25 BOPD gross 2 producers; 1 SWD; 100% Oil 609 contiguous acres; 2 producing leases Possible future well locations Flippen Sand Formation at 2,900 10-acre spacing Open hole completions 30-60 BOPD/well IP s; 20-40MBbl/well EUR 3 PUD locations permitted to drill Reserve life > 30 years
GROSS BOPD Taylor County, Central Texas 140 120 Current Production and Projected Flippen Sand Formation 100 80 60 40 20 PUD3 PUD2 PUD C1 Well B4 Well 0 O N D J F M A M 2014-2015
Acquisition Focus Area Baron Energy, Inc. HQ in San Marcos, Texas
Acquisition Criteria for Producing Properties Operated properties only; prefer 100% WI Current production > 200 BOEPD per project Focus on oil production Less than 10,000 feet well depth Multiple pay zones Upside via drilling, recompletions, and horizontal wells Long-term production life > 20 years
Acquisition Cycle ID & Evaluate Project Repeat Process Successful Offer Acquire Fund
Company Contact Baron Energy, Inc. 300 S. CM Allen Parkway, Suite 400 San Marcos, Texas 78666-2278 Phone: 512-392-5775 Fax: 512-392-7238 info@baronenergy.com www.baronenergy.com