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SOF MARIE GOLD COAST J V CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM STRATEGIC 3 D SEISMIC DEFINED WITH AVO SUPPORTED MULTIPLE UPPER WILCOX SANDS

GLOSSARY PAGE 1 2 3 4 5 TITLE Glossary Executive Summary Offering Summary Gold Coast Channel Intro Sof Marie Gold Coast J V Summary DESCRIPTION 6 7 Reason to Participate Drilling Objective 8 9 10 Sof Marie J V Location Pipeline Formation Structure 3D Seismic 11 12 Seismic Data Amplitudes AVO Amplitude Verse Offset Oil Gas Lease Chesterville Unit 5 Overall Upper Wilcox Production E P C FU 1A Unit 1 Square Mile Energy LLC Unit 1 Top Cumulative Active Producers Daily Production Report Mohat Starrlite Fields Ramsey Field Gold Coast Prospect Production Summary 30 31 32 33 34 Partner Economics Potential Estimated Revenue Estimated Revenue Projections Tax Incentives Tax Benefits 35 36 37 38 39 40 41 42 Sof Marie J V Prospect Plat Congress gov Venture Process Certificate of Liability Insurance Industry Partners Industry Terms Notes 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Quick explanation of the Venture Formal introduction to the executive teams involved Companies involved in the venture and primary information of The Sofi Marie J V To introduce the offering and some of its characteristics Great expectations and comparisons to reserves and other wells that are located in the Gold coast channel Main reasons why getting involved makes sense Specific illustration of the intended drilling target as well as the vertical and directional debts Exact location of the lease to drill and all pipeline access to the well To show a map layout of different structural patterns or formations To give a strong reading of the reservoir and targeted pay zones beneath the ground Complete description and location of the company utilized for the seismic 3 D data To be able to detect different anomalies and temperatures for oil and gas patterns Comparisons of amplitudes vs offset locations for more accurate well info Lease documents to show that all leases required have been filed Colorado county TX well info data Shows excellent activity and production within miles of our target Colorado county TX well info data Colorado county TX well info data Overall top active well producers in Colorado county TX Eagle lakes major development discovery Gas well 1 production Filed production history and data Filed production history and data Production overview of the surrounding fields in the area and total production numbers Indication of potential ownership participation levels and total capital raised Potential estimated levels of return for participating Calculated indication of overall potential performance Tax definitions offered by the government on tax benefits After consulting a tax attorney this is an example of how to calculate your tax benefits Exact plat location of acreage participation in Colorado county TX Exportation of oil All the stops of oil and gas participation To insure the operator has full liability insurance on location Partners involved in the venture Oil Gas education for knowledge and wisdom Write down and take notes 1

EXECUTIVE SUMMARY David Mason Founder Wandoo Energy LLC Mr David James Melville Mason also known as Dave B App Sc Founded Wandoo Energy LLC Mr Mason served as the Chief Executive Officer and President at Texon Petroleum Limited from May 17 2006 to November 30 2011 He served for 24 years in the oil and gas industry with three multinational companies namely BHP Petroleum from 1982 to 1986 Petrofina from 1987 to 1996 and Woodside Energy from 1996 to 2005 During this time he gained experience in petroleum ventures in Australia South East Asia North Africa and the USA Mr Mason has held positions in exploration management and as acting General Manager both in Petrofina and Woodside Energy Throughout his career he was directly involved in successful discoveries including Jabiru Skua Legendre Mutineer Bounty in Australia 3 Vietnam fields and the Neptune and Midway fields in the Gulf of Mexico Mr Mason opened Woodside s first international exploration office in the USA As business development team leader he was instrumental in building Woodside s acreage position in the Gulf of Mexico GOM to over 250 leases through lease rounds participation in three joint ventures and acquiring a 20 ownership of the deepwater GOM Neptune field prior to the drilling of the delineation wells that proved commercial volumes He has built and managed exploration teams in 3 countries worked closely with consultants service companies joint ventures as operator and non operator and governments and government petroleum companies under production sharing contracts Mr Mason served as a Non Executive Director of Talon Petroleum Ltd from September 14 2011 to June 27 2014 He served as a Non Executive Director of Texon Petroleum Limited from May 17 2006 to February 2013 He holds a Bachelor of Applied Science Degree in Geophysics from the Western Australian Institute of Technology Richard Monroy Founder and Chief Executive Officer Millennium Exploration Company LLC Over the past 14 years Mr Monroy Founder and CEO of Millennium Exploration Company has amassed valuable knowledge expertise and numerous accolades in the energy industry Mr Monroy has been involved in many facets of the oil and gas industry project management financing acquisitions and prospect selection are among his various executive duties Mr Monroy s strong acuity for oil and gas transactions and his vision for a stable and growing company are the driving force behind Millennium s lasting success Prior to founding Millennium Exploration Co Mr Monroy was a licensed securities broker focusing specifically on oil and natural gas investments Mr Monroy left the brokerage business and assembled a team of experts including geologists geophysicists land negotiators and financial experts to help him produce the highest quality and most probable oil and gas ventures Using his abilities to raise millions of dollars to finance drilling ventures along with his professional associations with industry experts and energy corporations Mr Monroy and Millennium Exploration have become major producers of oil and natural gas reserves in South Texas Mr Monroy aside from Millennium Exploration has various interests in a variety of Texas businesses Mr Monroy believes that his success as an entrepreneur and business owner stems from hard work passion and calculated risk Mr Monroy is a member of Texas Independent Royalty Owners Association Independent Petroleum Association of America San Antonio Chamber of Commerce Texas Alliance of Energy Producers National Association of Royalty Owners Better Business Bureau and Texas Oil and Gas Association Alfredo Manzur Gonzalez President CEO Sof Exploration LLC Mr Alfredo Manzur Gonzalez has been a pivotal leader for over 10 years in the oil and gas exploration field His innovative approach and team leadership mind set has allowed Mr Gonzalez to lay the foundation at Sof Exploration LLC Mr Gonzalez and his industry participation has given him the opportunity to prepare an extensive vetting process in putting quality partnerships together for great potential success His knowledge in the energy sector has diversified him into choosing successful industry partners in many areas of oil and gas 2

OFFERING SUMMARY VENTURE Sof Marie Gold Coast J V in Colorado County Texas INDUSTRY PARTNER OPERATOR AND DRILLER Wandoo Energy Millennium Exploration Company LLC and Coastal Drilling Land Company LLC RRC 567496 CONTRACT PURCHASES To be determined by production of rich natural gas and high grade condensate VENTURE PROSPECTS Upper Wilcox Sands The Sof Marie Gold Coast J V is comprised of an exploration of multiple Upper Wilocx Sands located in 300 acres of the Gold Coast Channel within close proximity to the 2015 major field discovery found in Eagle Lake Texas CATEGORY Our proposed multiple Upper Wilcox Sands directional drilling objective in the prolific Gold Coast Channel will perform the vertical depth of 6 800 ft and a directional depth of 2 200 ft focusing on main targets at 7 000 to 8 900 ft reaching a total directional depth TDD at 9 000 ft and carefully exposing the possibility of high grade commercial production PRODUCTION PROFILE Sof Exploration LLC anticipates the potential of high volumes of rich natural liquid gas combined with high grade condensate production and the possibility of multiple offset locations DIRECTIONAL DRILLING PARAMETERS Sof Exploration LLC and all partners will participate in a 3D HD digital potential field discovery opportunity comprised of a directional drilling operation within a defined 3D seismic anomaly in unproven reserves with tremendous upside potential DRILLING TARGETS Sof Exploration LLC and all partners will participate primarily in an AVO supported strategic fault line traps located in the multiple Upper Wilcox Sands All sands produced in the vicinity of the Gold Coast Channel fault line trap have a strong possibility of shows and being present and productive in Colorado County Texas VENTURE OBJECTIVE Sof Exploration LLC main goal is to diversify it s J V partners into a major production and cash flow opportunity with excellent industry partners in the oil and gas sector BTU GRADE I200 British Thermal Units of premium grade rich natural gas 45 gravity of premium crude oil 3

GOLD COAST CHANNEL INTRO Gold Coast Area Prospect Generation Originally the North Winterman Merge 3D excluded Echo 3D survey After reprocessing merge of the two and other adjacent surveys Coolangatta Prospect was identified Wandoo has AVO products including gathers Since making the Coolangatta gas condensate discovery in early 2015 Wandoo has generated several new prospects in the area referred together as the Gold Coast Prospects The upper most 300 of the Upper Wilcox is sand rich and channelized The Starr lite Channel was identified by geological interpretation It trends approximately N S through Starr lite North Starr lite and Eagle Lake fields in which gas condensate is stratigraphically trapped in combination with the E W trending down to the basin faults The upper pay in the Coolangatta discovery correlates with the Starr lite channel but seismic amplitude patterns indicate that it is part of a separate channel and on trend with up dip Mohat gas condensate field Both Mohat and ELGU 1 are excellent quality reservoirs Three new prospects are located in the Gold Coast channel The three prospects have similar seismic character and positive AVO response to Mohat and Coolangatta gas condensate accumulations Wells that penetrated wet sand within the channel or equivalent section outside the channel had a negative AVO response ProspectSummary Summary Prospect Overview Overview PROSPECT 3 Prospects most likely reserves 17 8 BCF 415 000 bo Upper Wilcox sands SOF MARIE GOLD COAST J V All Non Pipe tests ESTIMATED RESOURCE AREA PTD ac tvd ft GAS bcf OIL bo 550 9000 10 2 239 000 407 9200 6 140 000 147 9000 1 6 36 000 17 8 415 000 EMU TVD depth range 9 000ft to 10 000ft 3D defined PLATYPUS AVO supported similar to adjacent fields highly productive sands TOTALS Gold Coast Prospects Overview Gold Coast Prospects Summary 4

SOF MARIE GOLD COAST J V SUMMARY Sof Marie Gold Coast J V Prospect Summary Sof Marie Gold Coast J V Prospect is a stratigraphic trap defined by anomalous amplitudes that are tied to production in adjacent Mohat Field One of a string of dip oriented anomalous amplitudes is interpreted as part of a late Wilcox delta distributary channel referred to as the Gold Coast channel A similar age channel further east has been referred to as the Starr lite channel Both of the Mohat ELGU 1 discoveries are in the Gold Coast channel The 31058 well is down dip in the same fault block as the Sof Marie Gold Coast J V anomaly It penetrated 48 of wet sand correlating with the channel interval has no anomalous amplitude or AVO In contrast Sof Marie Gold Coast J V has well developed AVO in the prospect area as does the adjacent Mohat field Estimated reserves 10 2 bcfg 239 000 bc for Sof Marie Gold Coast J V prospect area based on contouring net pay thickness from amplitude and time structure A deviated well will be required to reach the proposed location Sof Marie Gold Coast J V Prospect Colorado County Texas Upper Wilcox Sands PTD tvd 9 000 no pipe test ML Area 274 ac Offset analogues Mohat Field Coolangatta discovery Prospect Reserves 5 1 bcfg 119 000 bc Upside Reserves incl Sof Marie Gold Coast J V N 10 2 bcfg 239 000 bo 2200 well deviation required Est DHC 1 75mm Est DHC CC 2 35 mm SOF MARIE GOLD COAST J V COLORADO COUNTY TX 5

REASONS TO PARTICIPATE 1 World class adjacent field production Sof Marie Gold Coast J V is participating in a directional drilling program within close proximity to Wandoo Energy s ELGU 1 that is currently cash flowing and well on it s way on satisfying it s secondary commercially productive well ELGU 2 on the field This area in Colorado County is well known for rich Liquid Natural Gas and high grade levels of Condensate located in the Upper Wilcox Sands 2 Potential Field Discovery Sof Marie Gold Coast J V is proud to be partnering in an AVO supported strategic trap with indications of highly productive locations showing a huge upside potential by testing and exploring the Upper Wilcox Sands All 3D seismic data shows multiple offset drilling opportunities in the near future following the traditional Gold Coast Channel production line 3 Industry participation Millennium Exploration Company LLC our operator is taking a roll of 80 ownership and holds a highly vested interest by being the main participant and leader in our Partnership This shows a firm deal of commitment in performing great operations with calculated risk and excellent upside income potential 4 Potential Cash Flow Opportunities and Tax Benefits Sof Marie Gold Coast J V will begin by drilling and testing the Upper Wilcox Sands with the possibility of potentially acquiring consistent production levels of Liquid Natural Gas and BBL s of rich Condensate in commercial economical quantities while utilizing excellent tax benefits N Follow up Sof Marie Gold Coast J V 2 Location Sof Marie Gold Coast J V 1 Proposed Location 089 00970 W S E Sof Marie Gold Coast J V Prospect Sof Marie Gold Coast J V Prospect Mohat field Sof Marie Gold Coast J V 2 Interdistributary bay sands delta front bars sands shales Gold Coast distributary Channel IL 530 illustrates cross section of the Gold Coast channel up thrown from Mohat field Mohat gas cond production is primarily from the channel sand The channel appears to cause some compactional structure at the overlying Wilcox marker Sof Marie Gold Coast J V 1 Upside Sof Marie Gold Coast J V location is 65 updip from Sof Marie Gold Coast J V 1 6

DRILLING OBJECTIVE SOF MARIE GOLD Coast J V Prospect Colorado County Texas USA Chesterville Unit 5 API 42 089 00260 33 438 MCF 161 961 BO 140 230 440 RRC 567496 6800 TVD 0 20 2 TD 9 000 7

SOF MARIE J V LOCATION PIPELINE Sof Marie Gold Coast J V GPS Coordinates 29 6265768 96 376563698 Eagle Lake Major Development Discovery Sof Marie Gold Coast J V Colorado County Texas Location Mohat Field Production Line 8

FORMATION STRUCTURE Follow up Sof Marie Gold Coast J V 2 Location N Sof Marie Gold Coast J V 1 Proposed Location 089 00970 S Sof Marie Gold Coast J V 2 Sof Marie Gold Coast J V 1 Upside Sof Marie Gold Coast J V location is 65 updip from Sof Marie Gold Coast J V 1 NW Sof Marie Gold Coast J V Emu Mohat Field Coolangatta discovery SE Top Wilcox Mohat gas cond Sof Marie Gold Coast J V Prospect Mohat field Mohat W oil pays Arbline 1 along the Coolangatta Upper Wx Channel 9

3D SEISMIC W Mohat Field Cum 4 1 bcf 98 000 bc E Top Wilcox Main pay sand 50 Upper Wilcox channel Mohat W oil pays Pre 3D Mohat Analogue Field W E Sof Marie Gold Coast J V Prospect Sof Marie Gold Coast J V Prospect Mohat field Interdistributary bay sands delta front bars sands shales Gold Coast distributary Channel IL 530 illustrates cross section of the Gold Coast channel up thrown from Mohat field Mohat gas cond production is primarily from the channel sand The channel appears to cause some compactional structure at the overlying Wilcox marker 10

SEISMIC DATA 11

SEISMIC DATA Seismic Data Allows oil and gas companies to determine the location of oil and gas reservoirs by using sound waves to visualize the Earth s subsurface and create images of geologic structures Helps companies decide how to optimize the millions of dollars they invest in exploration production and drilling operations Can significantly decrease the risk of drilling a non producing well One of the most essential components of successful oil and gas exploration and production Seismic data is critical for successful oil and gas exploration and production 12

AMPLITUDES BHL perfs Surf loc north 275 ac upside Follow up 274 ac Location 3875 from 1 And 65 updip Primary Mohat Field Location Infill stack Nears stack Surface rights controlled by LCRA plan to build a lake starting in 2017 Reserved drilling locations in NE quarter requires a 2200 deviated well to reach proposed location was identified by anomalous full stack amplitudes and AVO but the near trace stack amplitudes and positive AVO suggest that the Prospect could extend to the north Nears stack indicates that extends to north upside area 275 ac BHL perfs 2200 from surface loc Sof Marie Gold Coast J V 274 ac Approx 65 high to 31058 wet channel 48 Sof Marie Gold Coast J V Prospect Channel amplitudes with top Wilcox time contours 13

AMPLITUDES 0 274 ac 10 199 ac 20 151 ac 30 102 ac 40 63 ac 50 24 ac 089 31058 1979 Target first Wilcox sand 45 thick 0 274 ac 10 199 ac 20 151 ac 30 102 ac 40 63 ac 50 24 ac Proposed location 66 up dip from predicted water contact Sof Marie Gold Coast J V Prospect ac ft from amplitude 45 water 6 706 ac ft Resource 5 1 bcfg 119 000 bc Based on 760 mcfg ac ft 23 3 bc mmcfg Mohat Field Sof Marie Gold Coast J V Prospect Ac Ft calculation using Petra 25 0 269 ac 10 161 ac 20 121 ac 30 94 ac 40 53 ac 5403 ac ft Cum Prod 4 1 bcfg 98 000 bc RF 760 mcf ac ft if fully swept Back calculated RF 760 mcfg per ac ft Mohat Field ac ft calculated from amplitude 14

AVO AMPLITUDE VS OFFSET AVO Calibration Gold Coast Channel TexSeis NW Merge 3D The objective of the study was to compare AVO response within Mohat gas condensate field Coolangatta gas condensate discovery with the three Gold Coast Channel prospects In addition the prospects were compared with AVO response in wells that penetrated a thick wet sand within the channel and also points outside the channel that had no anomalous amplitude The three Gold Coast channel prospects all have well developed AVO similar to analogue producing fields also in the channel Wells that penetrated thick wet sands in the channel and wells outside the channel showed no AVO development Sof Marie Gold Coast J V Outside the channel WET PROSPECT Platypus Emu Mohat Inside the channel THICK WET SAND Top Wilcox PRODUCTION Inside the channel THICK WET SAND PROSPECT Gold Coast Channel Sand Outside the channel WET PROSPECT PRODUCTION Prospects Wells selected for AVO analysis AVO analyses within and outside the Gold Coast Channel 15 Coolangatta

AVO AMPLITUDE VS OFFSET Coolangatta ON Coolangatta Mohat producing analogues AVO calibration Sof Marie Gold Coast J V 1 Coolangatta Discovery Upper sand Prospect ON 2 Prospect ON Mohat field Mohat Field ON Mohat field Sof Marie Gold Coast J V 3 4 Prospect OFF Sof Marie Gold Coast J V Prospect AVO 16

OIL GAS LEASE 17

OIL GAS LEASE 18

CHESTERVILLE UNIT 5 19

CHESTERVILLE UNIT 5 20

OVERALL UPPER WILCOX PRODUCTION EAGLE LAKE PRODUCTION SUMMARY Free flowing 120BC D Barrels of Condensate Per Day and 2 000 MCFD of Natural Gas Per Day Sof Marie Gold Coast J V 21 205 BO 347 212 MCF NATURAL GAS Emu Not Completed Coming Soon Started End of 2014 Current X RRC 567496 OPERATOR Platypus FIELD DISCOVERY POTENTIAL RESERVES Future Prospect 10 2 BCFG Billion Cubic Feet of Gas 239 000 BOC Barrels of Condensate COOLANGATTA DEVELOPMENT DISCOVERY Upper Wilcox Trend TEXANA 3D Eagle Lake Development 21 22

E P C FU 1A UNIT 1 23

SQUARE MILE ENERGY LLC UNIT 1 24

TOP CUMULATIVE ACTIVE PRODUCERS 25

DAILY PRODUCTION REPORT 26

MOHAT STARRLITE FIELDS Sof Marie Gold Coast J V Prospect PTD 9000 tvd No pipe test 48 first Wilcox sand Area 274 ac 089 00970 1969 Perfed 8580 96 IP 2 1 mmcfgd Cum 2 7 bcf 62 864 bc Top Wilcox Wx zone 3 Starr lite channel Starr lite field Upper Wilcox Starrlite channel identified by geological interpretation 27

RAMSEY FIELD GOLD COAST PROSPECT W E Gold Coast Channel Cross section In Ramsey field Northerly extension of the Gold Coast Channel S N Top Wilcox DATUM Coolangatta Gas cond Mohat West Oil Top Middle Wilcox Top Lower Wilcox Massive sands Gas cond Regional Wilcox stratigraphy Gold Coast Prospect Area 28

PRODUCTION SUMMARY Estimated Development Potential Reserves 10 2 BCF Billion Cubic Feet of Gas 239 000 BOC Barrels of Condensate 10 2 BCF X 3 00 239 000 BOC X 45 00 TOTAL 3 060 000 000 10 755 000 3 070 755 000 10 Units Drill Test 68 880 00 Completion 29 520 00 Total Unit Cost 98 400 00 Turn Key to Surface Casing Total Project Capitalization 984 000 00 Sof Marie J V Reserves W Sof Marie J V Has 3 Targets E Sof Marie Gold Coast J V Prospect Traditional Upper Wilcox Reserves Sof Marie Gold Coast J V Prospect Mohat field Interdistributary bay sands delta front bars sands shales Gold Coast distributary Channel IL 530 illustrates cross section of the Gold Coast channel up thrown from Mohat field Mohat gas cond production is primarily from the channel sand The channel appears to cause some compactional structure at the overlying Wilcox marker 29

PARTNER ECONOMICS Working Interest 1 Unit 2 Net Revenue Interest 1 Unit 1 5 PARTICIPATION Unit W I N R I D T COMPLETION TOTAL 1 2 1 5 68 880 00 29 520 00 98 400 00 1 0 75 34 440 00 14 760 00 49 200 00 0 50 0 375 17 220 00 7 380 00 24 600 00 Drill Test 68 800 00 Completion 29 520 00 1 Unit Turn key to Surface Casing Labor and Materials 98 400 00 TOTAL CAPITALIZATION 984 000 00 30

POTENTIAL ESTIMATED REVENUE OIL 200 BOPD X 45 00 9 000 IPD 9 000 IPD X 30 4 Days 273 600 IPM 273 600 IPM X 12 Months 3 283 200 IPY 3 283 200 IPY X 1 5 Per Unit 49 248 00 IPU 49 248 00 IPU 12 Months 4 104 00 4 104 00 Oil Proceeds Per Month estimate NATURAL GAS 2 000 MCF X 3 00 6 000 IPD 6 000 IPD X 30 4 Days 182 400 IPM 182 400 IPM X 12 Months 2 188 800 IPY 2 188 800 IPY X 1 5 Per Unit 32 823 00 IPU 32 823 00 IPU 12 Months 2 736 00 2 736 00 Gas Proceeds Per Month estimate PROCEEDS 4 104 00 Oil estimate 2 736 00 Gas estimate 6 840 00 Total estimate Oil Return 30 60 Annual return 50 80 Liquid Natural Gas Rich Condensate Oil Annual Rate Return 24 month payout These are estimated figures only upon production BPD BARRELS PER DAY MCF MILLION METRIC CUBIC FEET IPD INCOME PER DAY IPM INCOME PER MONTH IPY INCOME PER YEAR IPU INCOME PER UNIT These numbers were calculated on first annual rate of return without any depletion rates 31

ESTIMATED REVENUE PROJECTIONS OIL Average BO p d 100 150 200 Price of BOC 45 00 50 00 55 00 Monthly Income 1 847 00 2 052 00 2 508 00 Estimated Operating Expenses 205 00 228 00 250 00 Annual Rate of Return 20 22 23 24 25 30 Monthly Income 2 770 20 3 078 00 3 385 80 Estimated Operating Expenses 307 80 342 00 376 20 Annual Rate of Return 30 32 33 36 37 40 Monthly Income 3 693 60 4 104 00 4 514 40 Estimated Operating Expenses 410 40 456 00 501 60 Annual Rate of Return 40 43 44 48 49 53 Price of MCF 3 00 4 00 5 00 Monthly Income 1 223 20 1 641 60 2 052 00 Estimated Operating Expenses 136 80 182 40 228 00 Annual Rate of Return 10 14 15 19 20 24 Monthly Income 2 462 40 3 283 20 4 104 00 Estimated Operating Expenses 273 60 364 80 456 00 Annual Rate of Return 24 29 30 38 39 48 Monthly Income 3 693 60 4 924 80 6 156 00 Estimated Operating Expenses 410 40 547 20 684 00 Annual Rate of Return 40 43 44 58 59 72 GAS Average MCF Gas p d 1 000 2 000 3 000 Spreadsheet has been rounded off to the nearest decimal These numbers were calculated on first annual rate of return without any depletion rates 32

TAX INCENTIVES Congressional Incentives Encourage Domestic Petroleum Development Oil and Natural Gas from domestic reserves helps to make our country more energy self sufficient by reducing our dependence on foreign imports In light of this Congress has provided tax incentives to simulate domestic natural gas and oil production financed by private sources Drilling projects offer many tax advantages and these benefits greatly enhance the economics The incentives are not Loop Holes they were placed in the Tax Code by Congress to make participation in oil and gas ventures one of the best tax advantaged investments Intangible Drilling Cost Tax Deduction The intangible expenditures of drilling labor chemicals mud grease etc are usually about 65 to 80 of the cost of a well These expenditures are considered Intangible Drilling Costs IDC which are 100 deductible during the first year For example a 100 000 investment could yield up to 80 000 in tax deductions during the first year of the venture These deductions are available in the year the money was invested even if the well does not start drilling until March 31 of he year following the contribution of capital Sec Section 263 of the Tax Code Tangible Drilling Cost Tax Deduction The total amount of the investment allocated to the equipment Tangible Drilling Costs TDC is 100 tax deductible In the example above the remaining tangible cost 25 000 may be deducted as depreciation over a seven year period See Section 263 of the Tax Code Active vs Passive Income The Tax Reform Act of 1986 introduced into the Tax Code the concepts of Passive income and Active income The Act prohibits the offsetting of losses from Passive activities against income from Active businesses The Tax Code specifically states that a Working Interest in an oil and gas well is NOT a Passive Activity therefore deductions can be offset against income from active stock trades business income salaries etc See Section 469 c 3 of the Tax Code Small Producers Tax Exemption The 1990 Tax Act provided some special tax advantages for small companies and individuals This tax incentive known as the Percentage Depletion Allowance is specifically intended to encourage participation in oil and gas drilling This tax benefit is not available to large oil companies retail petroleum marketers or refiners that process more than 50 000 barrels per day The Small Producers Exemption allows 15 of the Gross Income not Net Income from an oil and gas producing property to be tax free Lease Costs Lease costs purchase of leases minerals etc sales expenses legal expenses administrative accounting and Lease Operating Costs LOC are also 100 tax deductible through cost depletion Alternative Minimum Tax Prior to the 1992 Tax Act working interest participants in oil and gas ventures were subject to the normal Alternative MinimalTax to he extent that this tax exceeded their regular tax This Tax Act specifically exempted Intangible Drilling Cost as a Tax Preference item Alternative Minimum Taxable Income generally consists of adjusted gross income minus allowable Alternative Minimum Tax itemized deduction plus the sum of tax preference items and adjustments Tax preference items are preferences existing in the Code to greatly reduce or eliminate regular income taxation Included within this group are deductions for excess Intangible Drilling and Development Costs and the deduction for depletion allowable for a taxable year over the adjusted basis in the Drilling Acreage and the wells thereon 33

TAX BENEFITS EXAMPLE THE BASIC TAX CONSIDERATIONS INVOLVED IN AN OIL GAS INVESTMENT 1 INTANGIBLE DRILLING COSTS Up to 80 of the investment amount constitutes what are known as intangible Drilling Costs IDC and are deductible against active passive or portfolio income in the first year incurred This includes all labor related costs for the prospect well Including but not limited to drilling contractors professional services and others The total amount of IDC is reported to each participant at the end of the year Please consult with your tax advisor for further details 2 TANGIBLE DRILLING COSTS Approximately 20 of the amount of costs to drill the well constitutes Tangible Drilling Costs TDC This includes but is not limited to all well equipment piping storage tanks wellhead equipment lease expenses and others The exact amount will be determined after the well is drilled This portion of an investment is depreciated over a seven year period Please consult with your tax advisor for further details ESTIMATED TAX INVESTMENT EXAMPLE A 37 000 x 80 29 600 1 049 30 649 B 30 649 x 35 10 727 Total Deduction estimate Maximum Income Tax Bracket TOTAL FIRST YEAR CASH VALUE OF DEDUCTIONS estimate C 37 000 10 727 26 273 Investment Amount Actual Cash Savings from Tax Deductions estimate AFTER TAX CASH INVESTMENT estimate Investment Amount Intangible Drilling Costs estimate 1st year deductions of intangible drilling costs estimate 1st year depreciation deduction estimate 37 000 x 20 divided by 7 years TOTAL FIRST YEAR TAX DEDUCTIONS estimate 3 DEPLETION ALLOWANCE Currently the depletion allowance is 15 This means that fifteen cents of every dollar is tax free Please consult with your tax advisor for further details 4 STATE INCOME TAXES State income taxes could add substantial additional savings however they may vary from state to state Please consult with your tax advisor for further details 34

SOF MARIE J V PROSPECT PLAT Wandoo Energy LLC Sof Marie Gold Coast J V Prospect 300 Acres in Colorado County Texas 35

CONGRESS GOV H R 702 114TH Congress 2015 2016 Passed House amended 10 09 2015 Sec 3 Amends the Energy Policy and Conservation Act to repeal authority to restrict the export of 1 coal petroleum products natural gas or petrochemical feedstocks and 2 supplies of materials or equipment necessary to maintain or further exploration production refining or transportation of energy supplies or for the construction or maintenance of energy facilities within the United States Prohibits any federal official from imposing or enforcing any restriction on the export of crude oil Sec 4 Directs the Department of Energy DOE to study 1 the appropriate size composition and purpose of the Strategic Petroleum Reserve and 2 the net greenhouse gas emissions that will result from the repeal of the crude oil export ban Directs the Department of Commerce to study the state and national implications of lifting the crude oil export ban with respect to consumers and the economy including energy prices and employment Sec 5 Declares that this Act does not limit the authority of the President to prohibit exports under either the Constitution the International Emergency Economic Powers Act the National Emergencies Act the Energy Policy and Conservation Act Trading with the Enemy Act or any other law that imposes sanctions on a foreign person or foreign government or prohibits or restricts U S persons from engaging in a transaction with sanctioned person or government including a foreign government designed as a state sponsor of terrorism Sec 6 Increases for FY2017 FY2021 both the authorization of appropriations and payments to contractors for each vessel in the Maritime Security Fleet covered by an operating agreement Sec 7 Directs DOE to 1 continue to develop and broaden partnerships with minority serving institutions including Hispanic Serving Institutions and Historically Black Colleges and Universities in the areas of oil and gas exploration production midstream and refining and 2 encourage publicprivate partnerships between the energy sector and those institutions Sec 8 Requires both DOE and the Commerce to report jointly to Congress regarding The impact of lifting the oil export ban under this Act as it relates to promoting U S energy and national security and How lifting the ban will help create opportunities for veterans and women in the Unites States while promoting energy and national security Sec 10 Declares that nothing in this Act shall be construed as authorizing the export of crude oil refined petroleum products and petrochemical products by any entity or person subject to U S jurisdiction to any entity or person located in subject to the jurisdiction of or sponsored by the Islamic Republic of Iran 36

VENTURE PROCESS 37

CERTIFICATE OF LIABILITY INSURANCE 38

INDUSTRY PARTNERS PROJECT GENERATOR DAVID MASON CHIEF EXECUTIVE OFFICER PHONE AVAILABLE UPON REQUEST RICHARD MONROY FOUNDER AND CHIEF EXECUTIVE OFFICER 210 579 0734 EARTHVIEW ASSOCIATES INC SAMUEL D LEROY PHD IN GEOLOGY 218 556 9765 SEITEL TEXANA 3D REPORT 713 881 8900 ALFREDO MANZUR GONZALEZ PRESIDENT CEO DIRECT 469 802 0332 Sof Exploration LLC memorandum does not constitute any accuracy or any guarantees of present or future success of this venture Sof Exploration LLC is not responsible for the outcome or the performance of the venture This memorandum is for illustration purposes only 39

INDUSTRY TERMS Acreage Anticline Barrel of Oil Equivalent Basin Borehole British Thermal Unit BTU Casing Coal Bed Methane CBM Completion Condensate Conventional Resources Developed Acreage Developed Reserves Development Well Directional Drilling Drilling Rig Dry Gas Dry Hole E P Economically Producible Enhanced Oil Recovery Environmental Assessment Estimated Ultimate Recovery Exploratory Well Farm In Farm Out Field Flaring Formation Fossil Fuel Heavy Oil Horizontal Drilling Hydraulic Fracturing Hydraulic Fracturing Fluids Hydrocarbons Improved Oil Recovery Infill Wells Jack up Rig Joint Operating Agreement Lease Liquefied Natural Gas Land leased for oil and gas exploration and or land for which Millennium Exploration owns the mineral rights A convex upward formation of rock layers which may form a trap for hydrocarbons A measure used to aggregate oil and gas resources for production with one BOE being approximately equal to 6 000 cubic feet of natural gas A large natural depression on the Earth s surface in which specimins brought by water accumulate A hole in the earth made by a drilling rig The heat required to raise the temperature of a one pound mass of water by one degree Fahrenheit Thick walled steel pipe placed in wells to isolate formation fluids such as fresh water and to prevent borehole collapse Natural gas extracted from coal beds The process of making a well ready to produce natural gas or oil Completion involves installing permanent equipment such as a wellhead and often includes hydraulic fracturing Mixture of hydrocarbons which as in a gaseous state under reservoir conditions and when produced become liquids at the temperature and pressure is reduced Discrete accumulations of hydrocarbons contained in rocks with relatively high matrix permeability which normally have relatively high recovery factors The number of acres that are allocated to assignable to productive wells or wells capable of production Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well and if extraction is by means other than a well through installed equipment and infrastructure operational at the time of the reserves estimate A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive The application of special tools and techniques to drill a wellbore at a predetermined angle Horizontal drilling is a form of directional drilling where the wellbore is ultimately drilled at 90 degrees to the vertical direction The machine used to drill a wellbore Dry gas is almost pure methane and occurs in the absence of liquid hydrocarbons or by processing natural gas to remove liquid hydrocarbons and impurities A well incapable of economically producing saleable hydrocarbons in suffucuent quantities to justify commercial exploitation Exploration and Production A resource that generates revenue that exceeds or is reasonably expected to exceed the costs of the operation One or more of a variety of processes that seek to improve recovery of hydrocarbon from a reservoir after the primary production phase A study that can be required to assess the potential direct indirect and cumulative environmental impacts of a project The sum of reserves remaining as of a given date and cumulative production as of that date A well drilled to find a new field or a new reservoir in a field previously found the be productive of oil or gas in another reservoir The acquisition of part or all of an oil natural gas or mineral interest from a third party The assignment of part or all of an oil natural gas or mineral interest to a third party An area consisting of a single hydrocarbon reservoir or multiple geologically related reservoirs all grouped or related to the same individual geological structure or stratigraphic condition The burning of natural gas for safety reasons or when there is no way to transport the gas to the market to use the gas for other beneficial purposes such as EOR or reservoir pressure maintenance The practice of flaring is being steadily reduced as pipelines are completed and in response to environmental concerns A rock layer which has distinct characteristics e g rock type geologic age A fuel source such as oil condensate natural gas liquids or coal formed in the earth from plant or animal remains Crude oil with an API gravity less than 20 degrees Heavy oil generally does not flow easily due to its elevated viscosity A drilling technique whereby a well is progressively turned from vertical to horizontal so as to allow for greater exposure to an oil or natural gas reservoir Horizontal laterals can be more than a mile long In general longer exposure lengths allow for more oil and natural gas to be recovered from a well and often can reduce the number of wells required to develop a field thereby minimizing surface disturbance Horizontal drilling technology as been extensively used since the 1980s and is appropriate for many but not all developments Hydraulic fracturing also referred to as frac ing or fracking is an essential completion technique in use since the 1940s that facilitates production of oil and natural gas trapped in low permeability reservoir rocks The process involves pumping fluid at high pressure into the target formation thereby creating small fractures in the rock that enable hydrocarbons to flow into the wellbore Mixture of water and proppant along with minor amounts of chemical additives used to hydraulically fracture low permeability formations Water and sand typically compromise 99 5 of the mixture An organic compound containing only carbon and hydrogen and often occurring in nature as petroleum natural gas coal and bitumens or in refined products such as gasoline and jet fuel Term used to describe methods employed to improve the flow of hydrocarbons from the reservoir to the wellbore or to recover more oil or natural gas Enhanced oil recovery would be one form of IOR Wells drilled into the same reservoir as know producing wells so that oil or natural gas does not have to travel as far through the formation thereby helping to improve or accelerate recovery An offshore rig with retractable steel legs that are placed on the ocean floor to raise the rig above the water line An agreement governing the rights and obligations of co owners in a field or undeveloped acreage which defines amongst other things how costs and revenues are to be shared among the parties and who is the operator A legal document executed between a mineral owner and a company or individual that conveys the right to explore for and develop hydrocarbons and or other products for a specific period of time over a given area Natural gas that has been converted to a liquid by refrigerating it to 260 degrees Fahrenheit Liquefying natural gas reduces the fuel volume by 600 times enabling it to be shipped economically from distant producing areas to markets 40

INDUSTRY TERMS Natural Gas Natural Gas Liquids Net Acres Oil Sands Operator Permeability Play Porosity Possible Reserves Probably Reserves Produced Water Productive Well Proppant Proved Developed Reserves Proven Reserves Recompletion Reserves Reservoir Resources Shale Sour Gas Spacing Steam Assisted Gravity Drainage Sweet Gas Tight Gas Unconventional Reservoirs Undeveloped Acreage Unit Waterflood Wellbore Wet gas Working Interest Naturally occurring hydrocarbon gases found in porous rock formations Its principal component is usually methane Non hydrocarbon gases such as carbon dioxide and hydrogen sulfide can sometimes be present in natural gas A general term for highly volatile liquid products separated from natural gas in a gas processing plant NGLs include ethane propane butane and condensate The percentage that a company owns in an acreage position with multiple owners For example a company that has a 50 interest in a lease covering 10 000 acres owns 5 000 net acres Geologic formation comprised predominately of sand grains and bitumen a highly viscous form of crude oil The entity responsible for managing operations in a field or undeveloped acreage position The permeability of a rock is the measure of the resistance to the flow of liquid through the rock High permeability means fluid passes through the rock easily An areas in which hydrocarbon accumulations or prospects with similar characteristics occur such as the Lower Tertiary plan in the deepwater Gulf of Mexico or the Marcellus play in the eastern United States The measure of a rock s ability to slow a fluid Porosity is normally expressed as a percentage of the total rock which is taken up by pore space Additional reserves that are less certain to be recovered than probable reserves Additional reserves that are less certain the be recovered than proven reserves but which together with proved reserves are as likely as not to be recovered Water produced in connection with oil and natural gas exploration and development activities A well that is capable of producing hydrocarbons in sufficient quantities to justify commercial exploitation Sand or man made sand sized particles pumped into a formation during a hydraulic fracturing treatment to keep fractures open so that oil and natural gas can flow through the fractures to the wellbore Proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well Proved oil and gas reserves are those quantities of oil and gas which by analysis of geosciences and engineering date can be estimated with reasonable certainty to be economically producible as defined by the US Securities and Exchange Commission regulations and the Millennium Exploration Policy for Reserves Estimation Accounting and Reporting The process of entering an existing wellbore and performing work designed to establish production from a new zone Estimated remaining quantities of oil and gas related substances anticipated to be economically producible as of a given date by application of development projects to know accumulations In addition there must exist or there must be a reasonable expectation that there will exist the legal right to produce or a revenue interest in production installed means of delivering oil and gas related substances to market and all permits and financing required to implement the project A porous and permeable underground formation containing a natural accumulation of producible il and or gas that is confined by impermeable rock or water barriers and is individual and separate to other reservoirs Quantities of oil and gas estimated to exist in naturally occurring accumulations A portion of the resources may be estimated to be recoverable and another portion may be considered to be unrecoverable Resources include both discovered and undiscovered accumulations A very fine grained sedimentary rock that is formed by the consolidation of clay mud or silt and that usually has a finely stratified or laminated structure Certain shale formations such as the Eagle Ford and the Barnett contain large amounts of oil and natural gas Sour gas is a natural gas or other gas containing significant amounts of hydrogen sulfide The distance between wells producing from the same reservoir Spacing is often expressed in terms of acres and is often established by regulatory agencies A process used to recover butimen that is too deep to mine A pair of horizontal wells is drilled from a central well pad In a plant nearby steam generators heat water and transform it into steam The steam then travels through above ground pipelines to the wells It enters the ground via the steam injection well and heats the bitumen to a temperature at which it can flow by gravity into the producing well The resulting bitumen and condensed steam emulsion is then piped from the producing well to the plant where it is separated and treated The water is recycled for generating new steam Natural gas that contains little or no hydrogen sulfide Natural gas produced from relatively impermeable rock Getting tight gas out usually required enhances technology applications like hydraulic fracturing The term is generally used for reservoirs other than shale Reservoirs with permeability so low generals less than 0 1 millidarcy that horizontal hydraulically fractured stimulated wells or other advanced completion techniques must be utilized to extract hydrocarbons at commercial rates Shale reservoirs such as the Eagle Ford and Barnett as well as tight reservoirs like the Bakken and Three Fork both are examples of unconventional reservoirs Acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and gas regardless of whether or not the acreage contains proved reserves The joining interests in a reservoir or field to provide for development and operations without regard to separate properly interests Also the area covered by a unitization agreement An improved oil recovery technique that involves injecting water into a producing reservoir to enhance movement of oil to producing wells The hole drilled by a drilling rig to explore for or developed oil and or natural gas Also referred to as a well or borehole Produced gas that contains natural gas liquids The right granted to the lessee of a property to explore for produce and own oil gas or other minerals The working interest owners bear the exploration development and operating costs 41

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