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1830 Snake River, Unit A
Katy, TX 77449
Tel: 281-646-9878
www.mireandassociates.com
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April 30, 2015
Rockdale Resources Corporation
710 N Post Oak #400
Houston, TX 77024
ATTN: Mr. Leo Womack
SUBJECT: 2014 YE SEC RESERVES EVALUATION
Mr. Womack,
Mire and Associates, Inc. (MAI) has evaluated the proved and probable reserves as of December 31, 2014 for the Rockdale Resources Corporation (Rockdale) interest in selected oil properties. Reserves and cash flows were generated for the Rockdale interests using SEC pricing ($94.99 per barrel). These estimates were done as per the Securities and Exchange Commission’s standards as described in the December 2008 amendment of Section 210.4-10 of Regulation S - X. This report is provided to Rockdale Resources Corporation to satisfy the requirements contained in Item 1202(a)(8) of U.S. Securities and Exchange Commission Regulation S-K.
As of December 31, 2014 we estimate Rockdale’s net proved and probable (2P) reserves to be about 545,010 barrels of oil (545.0 MBO). Projected future cash flows show a discounted net present value (NPV10%) of $11,390,460. Rockdale’s net proved reserves are estimated to be 301,920 barrels of oil (301.9 MBO) and projected future cash flows indicate a discounted net present value of (NPV10%) of $6,303,880.
Discussion
The Rockdale properties consist of producing and undeveloped reserves in the Minerva-Rockdale Field located in Milam County, Texas. The purpose of this report is to estimate oil and gas reserves for Rockdale Resources Corporation using industry standard assumptions and methods. We evaluated the properties and a summary of the reserves and value by reserves class and category is shown in the following table.
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Rockdale Resources Corporation
Reserves & Value Summary - December 31, 2014
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| Reserves Type |
Gross Oil
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Net Oil
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Net Revenue
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Expenses
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Investments
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Disc. Cashflow
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Life
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MBO
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MBO
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M$ |
& Taxes M$
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M$ |
NPV10 (M$)
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Years
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| Proved | ||||||||||||||||||||||||||||
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Producing
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99.2 | 69.4 | 6,303.5 | 4,557.1 | 0.0 | 1,141.1 | 18.7 | |||||||||||||||||||||
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Non-Producing
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11.6 | 9.7 | 878.2 | 412.0 | 109.0 | 219.9 | 20.0 | |||||||||||||||||||||
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Undeveloped
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267.4 | 222.8 | 20,235.8 | 9,412.4 | 2,398.0 | 4,942.9 | 21.4 | |||||||||||||||||||||
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Total Proved
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378.2 | 301.9 | 27,417.6 | 14,381.5 | 2,507.0 | 6,303.9 | 21.4 | |||||||||||||||||||||
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Probable
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Undeveloped
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291.7 | 243.1 | 22,075.4 | 10,267.5 | 2,616.0 | 5,086.6 | 22.2 | |||||||||||||||||||||
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Total (2P)
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669.9 | 545.01 | 49,493.0 | 24,649.0 | 5,123.0 | 11,390.5 | 22.2 | |||||||||||||||||||||
Method of appraisal
Significant data was collected and examined using offset analogy, volumetric calculations and decline curve analysis. Offset production, logs, maps, analog information and accounting statements were all studied. The properties have been evaluated on the basis of future net cash flow or income. This income will accrue to the appraised interest as the wells are produced to their economic limits. The future net income has also been shown discounted at ten percent (10%) to determine its present worth as required by Regulation S - X.
Economic assumptions
For the cash flow analysis an oil price of $94.99 per barrel was used as per SEC pricing guidelines for 2014. There were no gas reserves. Local field price differentials were applied. These prices were held constant (no escalations).
Operating expense data were supplied by Rockdale for the properties. MAI analyzed these expenses and average values were included in our cash flows. These expenses were held constant through the life of the properties (no escalations). Lease restoration and well abandonment costs are not included in our analysis as the equipment salvage value should cover these costs.
Reserves determination
Reserves were estimated for the wells by using engineering and geologic methods widely accepted in the industry. For the producing reservoirs, performance methods were used to estimate reserves. Extrapolations were made of various historical data including oil, gas and water production and pressure data. For undrilled reservoirs we used volumetric calculations or offset analogy analysis.
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Mire & Associates, Inc. have made use of all data, appropriate methods, and procedures that are needed to prepare this report according to SEC regulation S-X Section 210.4-10 as amended on December 2008. All estimates are a function of the quality of the available data and are subject to the existing economic conditions, operating methods, and government regulations in effect at the time of the report. The reserves presented in this report are estimates only and should not be interpreted as being exact amounts. Actual volumes recovered could be higher or lower than estimated.
Not only are such reserves and revenue estimates based on that information which is currently available, but such estimates are also subject to the uncertainties inherent in the application of judgmental factors in interpreting such information. New regulations could have an adverse effect on the reserves calculated in this report. Importantly changes to regulations on water disposal or well reinjection could significantly decrease or eliminate this report’s proved reserves.
Titles to the evaluated property have not been examined or independently confirmed. The data used in this evaluation was supplied by Rockdale or was obtained from public sources.
Summary
Mire & Associates, Inc. has evaluated the 2014 YE reserves for Rockdale Resources’ properties in Milam County Texas. Net proved and probable (2P) reserves are 545,010 barrels of oil with a net present value of $11,390,460.
Kurt Mire supervised or performed all of the relevant technical work during the creation of this report. He is a licensed petroleum engineer with a B.S. degree in Petroleum Engineering from the University of Louisiana at Lafayette and 30 years of experience. In our opinion the reserve estimates presented in this report are reasonable and were made with generally accepted engineering and evaluation principles. The Economic Summary Projection tables for each reserves category are attached.
Sincerely,
Kurt Mire, P.E.
Petroleum Engineering Consultant
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