SOFI FOX CREEK COUNTY OKLAHOMA CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM EXHIBIT F Two Well Fracking Program With Proven Undeveloped Oil Reserves and New Production Facilities
1 EXECUTIVE SUMMARY ALFREDO MANZUR GONZALEZ President CEO Sof Exploration Alfredo M Gonzalez is the President and CEO of Sofi Exploration Mr Gonzalez is a sought after influential leader For the last 10 years his forte is offering proficient Good Practice Guidance aligning high production Asset Development opportunities in the Oil and Gas sectors with sophisticated investors who are in the market to expand their Cash Flow and Tax Advantage positions His corporate Vision for Sofi Exploration is to be the energy company most admired for its people partners and performance His corporate mission is to build successful partnerships based on 7 established pillars High Performance Integrity Transparency Trust Verification and Protecting Partners and the Environment His immense knowledge and innovative counsel regarding asset development programs in the industry confirms the confidence of vigorous partnerships and superior offerings from the industry s leading and selective Operators Drilling Corporations and Completion Companies Mr Gonzalez continues to develop an extensive vetting process compelling industry leaders to perform at the highest levels for investor participation and production achievement The corporate goals are capital development drilling completion production success and continuous liquidity development for his associates and partners Alfredo M Gonzalez President C E O Alan Giradot President CEO Rush Creek Resources Alan Girardot 36 president and CEO of Rush Creek Resources is an independent Texas and Oklahoma energy entrepreneur who established Rush Creek Resources in 2014 during the initial shockwave of the most recent oil crash Prior to establishing Rush Creek Mr Girardot served as a senior executive in both private equity venture management and operations management within the upstream oil and gas sector He founded Rush Creek to capitalize on the bear energy market that he believed would facilitate the largest transfer of mineral wealth Americans have seen in a generation Since 2014 Rush Creek has expanded from an idea to 4 000 mineral acres 125 wellbores and a vertically integrated low cost operating company during an elongated period of basement oil prices Additionally Mr Girardot graduated from Texas Tech University with a B A in political science while simultaneously serving as a United States Marine during Operation Iraqi Freedom Kim Drew Geologist Kim Drew has worked mainly in vertical drilling and improving secondary recovery projects but have also developed several horizontal ideas in new target formations Additional responsibilities include managing regulatory filings such as permitting operations spacing and pooling expert testimony hearings and disposal well applications Tristan W McKinney Chief Operating Officer Olivia M Gonzalez Executive Director
2 OPERATION SUMMARY Operator Write Up The objective of this recompletion is to unlock additional oil reserves in the Skinner sandstone which Rush Creek has recently successfully completed in the Lost Creek 32 1 Lost Creek 32 2 Lost Creek 33 1 and Gunslinger 32 1 wells located within the same geological formation as the Fox 1 and Fox 2 Rush Creek acquired the Fox 1 and Fox 2 wells as part of a larger 960 acre acquisition of the comingled Tibbens Skinner Sand Unit during the elongated period of the low oil prices that followed the 2014 oil crash This oil bearing sand when stimulated correctly through modern day completion procedures provides low cost long term cash flows which Rush Creek has proven through drilling activities in the area since 2018 Rush Creek under my leadership began quietly testing the lateral extent of the Skinner sand body outside of the Tibbens Unit during the recent period of low oil prices and successfully grew our contiguous acreage position of proven reserves and producing wellbores The Fox 1 and Fox 2 wells will be our third step back into the unit for additional development now that oil prices have climbed Fox 1 and 2 are wells which were originally open hole completed and then stimulated with nitroglycerin When these wells were originally drilled much of the original sand body which consists of a sand and laminated shale sequence was thought to not be permeable enough to produce The stimulation techniques utilized by Rush however have shown to be effective in creating the secondary porosity networks needed to make these tight zones produce I have provided run statements for your review of close proximity production to serve as an example of what is possible when a modern day completion procedure is executed successfully in the Skinner Sandstone Thank you again for your consideration in this low cost high impact workover This document was issued by Rush Creek Resources
3 PRODUCTION MAP Creek County Oklahoma Operations Decades of County Specific Expertise Proven Track Record Conventional Vertical Oil Proven Geological Areas Favorable Regulatory Environment Low Mechanical and Engineering Risks Renewed Interest and Activity in the Area Excellent Potential Reserves to Depth Ratios This document was issued by Rush Creek Resources
4 GOOGLE EARTH VIEW GOOGLE EARTH LOCATION Sofi Fox 1 GPS 35 44 4 89 N 96 22 53 76 W Sofi Fox 2 GPS 35 44 4 26 N 96 22 45 78 W This document was issued by Rush Creek Resources
5 LOCATION PHOTO Fox 1 Current well head
6 LOCATION PHOTO Indication of future well pump
7 LOCATION PHOTO Fox 2 Current well pump
8 LOCATION PHOTO Indication of future well pump
9 LOCATION PHOTO Fox 1 2 Current Production Facilities
10 LOCATION PHOTO Indication of future production facilities Cow is not included
11 ASSIGNMENT This document was issued by Rush Creek Resources
12 LEASE ASSIGNMENT This document was issued by Rush Creek Resources
13 LEASE ASSIGNMENT This document was issued by Rush Creek Resources
14 WELL TRANSFER This document was issued by Rush Creek Resources
15 WELL TRANSFER This document was issued by Rush Creek Resources
16 JOB DATA This document was issued by Rush Creek Resources
17 FLUID SPECIFICATIONS This document was issued by Rush Creek Resources
18 PUMP SCHEDULE This document was issued by Rush Creek Resources
19 A F E This document was issued by Rush Creek Resources AFE is subject to change depending upon market conditions
20 ESTIMATED PARTNERSHIP ECONOMICS WORKING INTEREST PARTICIPATION Working Interest W I 1 Unit 3 75 Net Revenue Interest N R I 1 Unit 2 925 Ownership Per Well Unit W I N R I 1 3 75 2 925 1 2 1 875 1 4625 1 4 0 9375 0 73125 10 Units Total Participation Price 1 Unit 45 000 1 2 Unit 22 500 1 4 Unit 11 250 TOTAL CAPITALIZATION 450 000 00
21 POTENTIAL REVENUE PROJECTIONS Oil Production Estimates Per Well 6 68 BPD X 90 601 2IPD 601 2 IPD X 30 4 Days 18 276 48 IPM 18 276 48IPM X 534 58 2 925 N R I 534 58 Oil Proceeds Per Month estimated Oil 10 15 30 Income Monthly Income Does Not Include L O E Monthly Income Does Not Include L O E Monthly Income Does Not Include L O E 85 755 82 90 95 800 28 844 74 1 133 73 1 200 42 1 267 11 2 267 46 2 400 84 2 534 22 Annual return 10 50 Potential Oil Reserves Payout 24 month payment These are estimated figures only upon production BPD BARRELS PER DAY MCF MILLION METRIC CUBIC FEET IPD INCOME PER DAY IPM INCOME PER MONTH IPU INCOME PER UNIT L O E LEASE OPERATING EXPENSES these numbers were formulated based on first annual rate of return without expenses and depletion rates These calculations are estimates only and do not reflect any guarantees
22 MONTHLY RUN STATEMENTS Run Statements are from surrounding active production This document was issued by Rush Creek Resources
23 MONTHLY RUN STATEMENTS Run Statements are from surrounding active production This document was issued by Rush Creek Resources
24 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 is known as intangible Drilling Costs IDC and is 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 45 000 x 80 36 000 1 028 57 37 028 57 B C Investment Amount Intangible Drilling Costs estimate 1st year deductions of intangible drilling costs estimate 1st year depreciation deduction estimate 91 000 x 20 divided by 7 years TOTAL FIRST YEAR TAX DEDUCTIONS estimate 37 028 57 x 35 12 960 Total Deduction estimate Maximum Income Tax Bracket TOTAL FIRST YEAR CASH VALUE OF DEDUCTIONS estimate 45 000 12 960 32 040 Investment Amount Actual Cash Savings from Tax Deductions estimate AFTER TAX CASH INVESTMENT 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
25 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 stimulate 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 taxadvantaged 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 the year following the contribution of capital See 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 the 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
26 CERTIFICATE OF INSURANCE This document was issued by Rush Creek Resources
27 INDUSTRY TERMS
28 INDUSTRY TERMS
29 INDUSTRY PARTNERS REFERENCES ALAN GIRADOT PRESIDENT CEO AGIRADOT RUSHCREEKRESOURCES COM D 214 329 5979 ALFREDO MANZUR GONZALEZ PRESIDENT CEO ALFREDO SOFIEXPLORATION COM O 469 802 0332 D 214 514 9022 REFERENCES KITTELSON LAW OFFICE DOUG KITTELSON DOUG KITTELSONLAW COM WWW KITTELSONLAW COM O 214 734 2700 C 214 704 5721 CATHY GRUEN CATHY HENSLEYCPAS US WWW HENSLEYCPAS US O 214 390 9071 C 972 977 5678 MINDY GAYER BUSINESS DEVELOPMENT MANAGER MGAYER THEENTRUSTGROUP COM O 615 569 9122
FOX 1880 West Prosper Trail Prosper Texas 75078 469 802 0332 Alfredo sofiexploration com