MPG Petroleum, Inc

The Trinity Project

Executive Summary

The Trinity Prospect

Onshore, Texas Gulf Coast

Due to the highly confidential information underpinning the Trinity Prospect, location information is disclosed only to those demonstrating a need to know, imminent to a transaction and subject to a certain Non-compete, Non-disclosure Agreement.

The Trinity Prospect is a 3D Seismic amplitude anomaly supported, conventional, stacked-pay prospect. The potential to recover large reserves of high gravity, sweet crude oil and liquids-rich natural gas appears strong, based on size and thickness of target pays and geochemical analysis of the source rock. Located in close proximity to mature infrastructure and premium markets on the Texas Gulf Coast, the Trinity Prospect presents the opportunity for a high return on investment.

Geological Overview: The largest amplitude anomaly of the Trinity Prospect is the “Upper Target” of the Channelized Package which covers ~212 Acres. The Lower Target covers ~130 Acres. A third potential Pay Target is present but with weaker amplitude. The cut and fill (submarine) Channelized Package is a stratigraphic trap with structural conformance. It is fault bound on the west and east. Its gross thickness is ~ 1160 feet, with net thickness of the Upper and Lower Targets estimated at ~250 feet. The Trinity Prospect is similar to the deep water, submarine Channel deposits found Offshore but is located Onshore and is therefore accessible at a fraction of the cost and turnaround time from discovery to production. The Test Well will be drilled to a vertical depth of 11,135 feet.

Projected Cash Flow: (Initial Flow Rate 2100 BOEPD @ $ 70 Oil, assumes < 50% of Close Proximity Comparable, Oil price significantly below current market in a conservative success case approach)

2100 BOEPD x 30 Days x $ 70 Bbl x 70% NRI x .954 ST = $ 2,944,998 – $ 4000 LOE = $ 2,940,998 Net per Month Projected Payout: $ 6,307,150 / $ 2,940,998 = 2.1 Months to Payout
Projected Recoverable Resources using Mid Case: 6,198,750 BOE
Projected Value of Recoverable Resources in USD: ($ 70 Oil, Mid Case, Net of ST, NRI & BIAPO)

Gross: $ 433,912,500 Net: $ 217,325,076
Estimated ROI: (Mid Case Net, Sunk and D&C Cost of Initial Well, plus assumed D&C of 2 Development Wells @ $ 4 M each)

$ 217,325,076 / $ 14,307,150 = 15:1 ROI

BOEPD = Barrel of Oil Equivalent /Day; Bbl= Barrel); NRI = Net Revenue Interest (net of Royalty and ORRI Interest); ST = State

Tax (Oil 4.6%, Gas 7.5%); LOE = Lease Operating Expense (Mo. Est.); BIAPO = Back In After Payout; ROI = Return on Investment

Terms: Upfront Cost $ 48,823 per 1% Working Interest (Drilling Cost of Test Well); Completion Cost $ 14,248 (payable at Casing Point); 70% NRI; 25% Back In After Payout to MPG; 270 Subject Acres; MPG Operates; Private JV, Subject to Prior Sale, withdrawal or change in terms without notice prior to contract.

Contact: Margaret P. Graham, President MPG Petroleum, Inc.
8700 Crownhill Blvd., Suite 804, San Antonio, Texas, 78209 * 1-210-822-7770 *

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