Texas Oil & Gas

Northside High Prospect:

Drilling of the Northside High Prospect in the Beauregard Parish of Louisiana, which is a 7,300 foot test into the Cockfield (Yegua) Sand is scheduled to begin during the summer of 2019. Notable wells in the area have produced in excess of 200,000 barrels from this formation. NMEX is participating in this well by acquiring up to 8% of the working interest. Site preparation and road construction is being conducted for drilling to commence during the summer of 2019.

J. E. Richey Lease:

The re-completion of the Concho Richey well conducted almost four years ago is still producing commercial quantities of oil and gas from the Gray formation at approximately 3,900 feet. Plans are to rework J.E. Richey #3 on the same lease to further enhance the oil and gas revenue stream from this lease. NMEX owns 24% of the working interest in the Richey Lease. Plans are being put into motion to drill a new 4,500 foot well on the Richey Lease which will encounter five known productive formations in the area with the primary targets being the Gray and Morris. The Gray is known to produce for more than 30 years of commercial quantities of oil and gas with cumulative production numbers of more than 100,000 barrels of oil and 200 million cubic feet of natural gas.

J. E. Richey 2A - Drilling Targets – Both Primary & Secondary:

Our drilling location for the J. E. Richey 2A has multiple potential payable productive formations which will each be carefully evaluated during the drilling and logging process. Plans are to retain up to 20% of the interest in this drilling prospect. The following are the formations of interest in our J. E. Richey 2A well, with the most notable targets being the Ellenberger, Gary and Morris:

Primary Target - Ellenberger– The Ellenberger Dolomite was formed during the Ordovician age, which was later eroded resulting in several highly structured trapping mechanisms, which were highly fractured resulting in very good secondary porosity. These wells are known for their high rate of production and quick payout. The best known Ellenberger Field in this area, is the Hrubetz, which has produced over 1.4 million barrels of oil and 1.5 billion cubic feet of gas.

Primary Target - Gray (Sand) – The Gray Sand is trending Northwest to Southeast across the north half of the acreage. The Gray Sand is a significant oil and gas producer in this area. Gray production was established in both the Richey wells #1 & 2 and Concho Richey #1.and the Olympia Hale #1 well. Another notable Gray field is the Templeton Field located about 3 miles east of the acreage that has produced in excess of 1.5 million barrels and 4.1 BCF of gas.

Primary Target - Morris Sand – Morris production has been established on the lease in the J. E. Richey Well # 3, which has made approximately 215 million cubic feet of gas and approximately 3600 barrels of oil. The Morris Sand is of a Channel nature running east-west in a meander trend through the lease area.

McClure 2B Gas Well – Producing:

The McClure lease covers 40 acres and has one producing gas well (McClure 2B) and is located in Palo Pinto County near the Community of Graford, Texas. The McClure 2B well is completed in the Strawn in the interval 2,882’ to 2,940’ and has produced in excess of 70 million cubic feet of natural gas. The McClure 2B well is a flowing well and is currently producing approximately 8 MCF per day with little to no saltwater. The Strawn formation is more than 400 foot thick in the McClure 2B well and has 7 other intervals that can be perforated and stimulated to produce additional natural gas. The Net Revenue Interest in this well is 75%. The lease is held by production.

Carter & Foster Wells – Producing:

The Carter and Foster wells are located west of the Community of Atwell, Texas in Callahan County. The Carter lease consists of 40 acres and has one well. The Foster lease has 10 acres around each well of the three wells, all of which are fully equipped with surface and subsurface equipment. All four wells are completed in the Palo Pinto Limestone formation at approximately 1,900 feet. The Carter lease has a down-hole pump problem and is awaiting to be pulled and replace the down-hole pump. The wells on the Foster lease are pumping. These wells are producing approximately 20 barrels per month with little to no formation water. The plan is to conduct a multiple stage acid job on three of the four wells to increase production. Net Revenue Interest in the Carter Lease is 75%. Lease is held by production. Net Revenue Interest in the Foster Lease is 60%. Leases are held by production.

Tax Advantages of Oil and Gas Investing

When it comes to tax-advantaged investments for wealthy or sophisticated investors, one commodity continues to stand alone above all others: oil. With the government’s backing, domestic energy production has created a litany of tax incentives for both investors and small producers. Several major tax benefits are available for oil and gas investors that are found nowhere else in the tax code.

An investment in oil and gas drilling/exploration is now tax deductible up to 100% (95 % in the 1st year & 5% over a 5 year period) because of a combination of Section 179 and bonus depreciation*.

The intangible drilling costs (IDC) deduction has been allowed in the US since 1913 in order to attract investment capital to oil and gas exploration. However, President Reagan’s tax reform along with President Trump’s January 2018 changes have made oil and gas one of the most unique and attractive investments for high income, high net-worth individuals looking for tax write offs and current income. For small independent drillers, the IRS allows 15% of that income to be received by investors income-tax free at the federal level.Quotes by TradingView

Disclaimer:

*All information provided herein is not to be used as tax advice.  Investors should and are encouraged to consult a tax attorney and/or an accountant to determine their own tax benefits and tax advantages through investing in oil and gas drilling programs.

REGULATION D 506(C) MANDATED LEGEND

Any historical performance data represents past performance. Past performance does not guarantee future results; Current performance may be different than the performance data presented; The Company is not required by law to follow any standard methodology when calculating and representing performance data; The performance of the Company may not be directly comparable to the performance of other private or registered funds or companies; The securities are being offered in reliance on an exemption from the registration requirements, and therefore are not required to comply with certain specific disclosure requirements; The Securities and Exchange Commission has not passed upon the merits of or approved the securities, the terms of the offering, or the accuracy of the materials.

Forward Looking Statements:Statements which are not historical facts contained in this release are forward looking statements that involve risks and uncertainties, including but not limited to, the effect of economic conditions, the impact of competition, the results of financing efforts, changes in consumers’ preferences and trends.  The words “estimate,” “possible,” “seeking,” and similar expressions identify forward-looking statements, which speak only to the date the statement was made.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, because of new information, future events, or otherwise.  Future events and actual results may differ materially from those set forth herein, contemplated by, or underlying the forward-looking statements. The information herein is subject to change without notice.  Northern Minerals & Exploration Ltd. shall not be liable for technical or editorial errors or omissions contained.