PROPERTY PURCHASE CRITERIA

OUR GOAL

Five States has over 35 years of experience acquiring oil and gas properties throughout the continental U.S. Five States is actively purchasing PDP and developmental reserves. We are looking for situations that allow us to acquire a working interest in properties where:

• Operators need a financial partner for acquisitions
• Sellers want to divest non-core assets to re-balance a portfolio.
• Owners want to exit business units or basins.
• Operators want to monetize legacy PDP to fund development or pay down debt.

GEOGRAPHIC LOCATIONS

• We strongly prefer properties in Texas, New Mexico, the Midcontinent, the Rockies, and the Williston Basin. We consider properties in other areas but exclude the deep Gulf Coast unless part of a larger transaction and always exclude offshore properties.
• We exclude California and certain other states for tax reasons or due to regulatory constraints.

RESERVE CATEGORIES

• We primarily purchase Proved Developed Producing (PDP) reserves with stable and predictable production histories.
• Proved Developed Non-Producing (PDNP) or Proved Undeveloped (PUD) reserves will be considered where the value is appropriately discounted and constitutes a moderate percentage of the overall value of the property package.

RESERVOIR TYPES

• We prefer conventional “hard rock” reservoirs.
• We focus on conventional and unconventional solution gas drive reservoirs, along with established waterfloods.
• We generally exclude strong natural water drive reservoirs or “Gulf Coast”-type stacked reservoirs.

PROPERTY ECONOMICS

• Value range $3 million to $30 million, with a fairway of $5-to-$20 million.
• For larger deals we typically bring in one or more industry partners.
• We look for remaining economic half-lives of at least 5 years with current economics.

PROPERTY OPERATORS

• Five States prefers not to operate, but we actively partner with experienced operators in selected geographic regions, with the operator purchasing an equity interest in the properties.
• The character, experience, financial strength, and competency of the partner/operator is paramount.

Contact your Five States Energy representative today.