SITLA OIL & GAS OVERVIEWWESLEY ADAMS – ASSISTANT DIRECTOR

AGENDA:

TEAM GROWTHORGANIZATIONAL STRATEGY (SOFTWARE)BUSINESS DEVELOPMENT10-YEAR PERFORMANCE OF OIL AND GAS2020 OUTLOOK

BUILDING TEAM KNOWLEDGE:

Industry Best PracticesLease Analyst, Landman, E&P side of the business

Federal Exploratory Units – Code of Federal Regulations (CFR)

BLM LR 2000, ONRR AFMSS and DOGM Databases

Deep Dive – Working Groups with BLM (agency cohesion and building rapport with new teams)

Collaboration with industry partners and stakeholders

Conveyance Nuances – Record Title and Operating Rights

ORGANIZATION: USING LOGICAL METRICS IN SOFTWARE TO QUANTIFY WHO WE AREDATA OVERLOAD “TMI”RAW DATA IS STATIC, MISSING OR REQUIRES THE USER TO TAKE FOUR TO FIVE STEPS IN ORDER TO INTERPRET ALEASE STATUS – AUTOMATE PROCESSDATA NEEDS TO BE TIED TOGETHER USING RELATIONSHIPS FOR MEANINGFUL INTERPRETATION – UNIT/ POOLING AGREEMENT/ OBA/ STAND- ALONENEED HIERARCHY TO ESTABLISH PROPER FLOW OF INFORMATION THAT WILL TRACK PERFORMANCE METRICS NOT JUST RAW DATA – ROYALTY PER MONTH/ LEASE YEAR/ MINIMUM ROYALTY MET OR PAYING QUANTITIES,ETC

CURRENT PROCESS: A LOT OF NOISE TO FILTER

DESIRED PROCESS: MAKING SENSE OF BIG DATA

UINTA BASIN RAILWAY PROJECT: CONSTRAINED OIL

UINTA BASIN RAILWAY WOULD ALLOW FOR ADDITIONAL 130,000 BARRELS PER DAY INITIALLY AND REPRESENTS 150% PRODUCTIONGROWTH (CURRENTLY MAXED AT85,000 BPD)SURFACE TRANSPORTATION BOARD ISSUED A FINAL SCOPE OF STUDY ON THE PROPOSED ROUTES (12/13/2019) FOR THEENVIRONMENTAL IMPACT STATEMENT (EIS)WHITMORE PARK AS THE PREFERRED ROUTE – DOWN THROUGH INDIAN CANYON

BUSINESS DEVELOPMENT: EXPLORATION OILOTHER BUSINESS ARRANGEMENTSa) ASPHALT RIDGE 27,000 ACRES – CONVENTIONAL TRAP

VERTICAL TEST WELL 11/2020b) BONANZA BLOCK – $17,000,000 WELL DRILLED IN

2017 AS PRODUCER, TRYING TO GET SECOND WELL DRILLED. UGS AND INDUSTRY CASE STUDY

c) HOLLIDAY AND SEEP RIDGE 40,000 ACRES – MANCOS B VERTICAL TEST WELLS 9/2021

d) PR SPRINGS 25,000 ACRES TRYING TO MARKET WITHPARTNER (NAPE 2020 – FEBRUARY)

PERIPHERALa) UGS 2YR STUDY OF MANCOS B (LIQUIDS POTENTIAL)b) HELIUM STUDY (TYLER) – GAINING MOMENTUM 3

PARTIES LAYING GROUNDWORK FOR EXPLORATION IN EMERY COUNTY

c) UGS AND DOE FUNDING PARADOX BASIN STUDY $10 MILLION – WORKING TO DRILL THE REQUIREMENT STRATIGRAPHIC TEST WELL ON SITLA , MARCH 2020.

d) GUNNISON VALLEY UNIT - SLOTTED FOR JUNE 2020 WITH TEST WELL IN 2022. PROMISING SEISMIC. (OBA

PLANNED)

BUSINESS DEVELOPMENT: GAS

WESTERN STATES AND TRIBAL NATIONS – COALITION WORKING TO GET ROCKIES GAS TRANSPORTED TO WEST COAST LNG EXPORT TERMINALS

INCLUDES WYOMING, UTAH, WESTERN COUNTIES OF COLORADO, NEW MEXICO, TRIBES, NORTH DAKOTA, CALGARY, BAJA CALIFORNIA, PRODUCERS ANDGROWINGSTRONG ASIAN DEMAND COULD SUPPORT ROCKIES DRILLING AGAIN IF SUPPLY CAN SUPPORT BUILDING ADDITIONAL PIPELINE AND LIQUEFACTION TERMINALSCOSTA AZUL TERMINAL IN BAJA CALIFORNIA COULD BE VIABLE: REQUIRE 20-YEAR COMMITMENTS ON PRODUCTION

10 YEAR OIL & GAS PERFORMANCE:

• 2009 STRONG GROWTH BECAUSE OF INTERNATIONAL DEMAND ON OIL AND GAS – FRACKING REVOLUTION

• 2014 BEST YEAR ON RECORD $110 OIL, VERY STRONG NGL MARKET AND WET GAS WAS ONLY 2 YEARS OFF PEAK PRODUCTION

• 2019 OIL PRODUCTION IS HURT BY LOW PRICE NOT VOLUME, WEAK NGL MARKET AND GAS IS 7 YEARS IN STRAIGHT DECLINE (62%)

$90,000,000

$80,000,000

$70,000,000

$60,000,000

$50,000,000

$40,000,000

$30,000,000

$20,000,000

$10,000,000

$0

10 Year Commodity Swing

Oil Condensate Gas NGL Total

2009 20142019

OIL AND GAS DRILLING: 2020 OUTLOOK

OILWTI AVERAGED $59.84 FOR DECEMBER 2019REFINERIES CHARGED 21% DISCOUNT - REALIZEDPRICE OF $47.34RIGS LAYDOWN AT ABOUT $45 REALIZED WTI (BREAKEVEN)OPERATORS ARE TRYING TO MAINTAIN PRODUCTION WITH FREE CASH FLOW, DEBT HAS CURTAILED ACTIVITY NATIONWIDEMAJOR CONSOLIDATIONS AND ACQUISITIONS OCCURRED IN 2019 – LEARNING CURVE AHEAD

GASGAS PRICE NYMEX AVERAGED $2.31 MMBTU FOR DECEMBER 2019GAS HAS AVERAGED ABOUT $3.23/MMBTU OVER THE LAST 10 YEARS (ROCKIES REGION ) HENRY HUB PLUSOPERATORS REQUIRE ABOUT $4/MMBTU TO DRILL IN UTAH, BUT SOME PRIVATE EQUITY DRILLING IS MAKING IT WORK IN A $2 WORLDDECLINES AND DIVESTMENT LIKELY, LONG TERM GAS NEEDS A PUSH NOT PULL MENTALITY

QUESTIONS