1. FNX RESOURCES LLC OFFER FOR SELLING 9 WELLS AT EAST KENTUCKY, USA
September 2016

2. WHO WE ARE?
FNX Resources is an oil and gas exploration and production company 100% owned by FNX Oil & Gas. Berea Explorations LLC and Weir Explorations LLC are 50% - 50% partnerships between FNX Resources LLC and Hay Exploration Inc. for the development and exploitation of leaseholds at East Kentucky.
FNX Oil & Gas,
LLC
FNX Resources,
Weir Exploration,
Berea
Exploration, LLC
Fort Payne
FNX Resources
II, LLC
FNX Oil & Gas, SLU
USA
50%
100%
FNX Oilfield
Services LLC
Crossrock
Drilling, LLC
45%
Mesa LNG
Partners, LLC
FNX Technologies,
FNX LNG
Solutions, LLC
Basque
American, LLC
BUSINESS DEVELOPMENT
95%
FNX
Midstream, LLC
Spain
Peach
Creek
Buda
USA MANAGING COMPA1Y
COMMERCIAL UNIT

3. LOCATION OF LEASES KENTUCKY STATE
FNX leases are located in the Lawrence County, Kentucky State, in an area of the Appalachian Basin with stacked oil and gas conventional and unconventional reservoirs.
Ohio
Louisa Field
Martha Field
KENTUCKY STATE
Lawrence County
West
Virginia
Hartford
Ohio County
Tennessee

4. OHIO COUNTY, KY
BEREA SANDSTONE

5. BEREA SAND OHIO COUNTY, KY
FNX wells are horizontal and completed in the Berea Sand, a low porosity reservoir with 60 feet thickness and

6. BEREA SAND OHIO COUNTY, KY
According to the porosity from 6 offset well logs, the Berea thickness is 60’ average and the net pay is16’ and porosity of 12.5%

7. TECNOLOGIA RADIAL JET DRILLING
BEREA SAND

8. OHIO COUNTY, KY
BEREA SANDSTONE
Lawrence County

9. MARTHA FIELD
2 Horizontal Wells
R. N. Sparks H #1: Completed in Weir sand, currently producing 4 BOPD 39 °API
R. N. Sparks H #2: Completed in Berea sand, converted in water disposal
Weir and Berea are tight sand oil reservoirs, with an important amount of remaining reserves. From 1960 to 1980 there was a water injection project in the Weir sand
Weir Exploration LLC is a 50% - 50% partnership between FNX Resources LLC and Hay Exploration Inc.
The Weir Exploration, LLC properties consist of one tract of 200 acres. in south Lawrence County, Kentucky. The Company owns 100% working interest in this property and the field operator is hay Exploration Inc.. The oil and gas productions are subject to a 14% royalty rate.
Operating cost has a fixed portion of 800 $/well per month plus a variable portion depending on well services upon request.
Lawrence
County

10. LOUISA FIELD
8 HORIZONTAL WELLS COMPLETED IN BEREA SAND
Walbridge - 37, producing 5 BOPD
Walbridge - 38, producing 5 BOPD
Walbridge - 39, producing 5 BOPD
Walbridge - 40, producing 4 BOPD
Fortner – 41, producing 100% gas (17,000 SCFD to the gas gathering pipeline)
Fortner – 42, producing 3 BOPD
New – 43: producing 5 BOPD
New – 44: producing 3 BOPD
Berea Exploration LLC is a 50% - 50% partnership between FNX Resources LLC and Hay Exploration Inc.
The leaseholds of Berea Exploration, LLC comprise some 5,500 acres in south Lawrence County, Kentucky. The properties consist of one tract totaling 880 acres. The Company owns 100% working interest in this property and the field operator is hay Exploration Inc. The oil and gas productions are subject to a 14% royalty rate.
Operating cost has a fixed portion of 800 $/well per month plus a variable portion depending on well services upon request.
Lawrence
County

11. TECNOLOGIA RADIAL JET DRILLING
HORIZONTAL WELLS

12. OIL PRODUCCION HISTORY
Current production is 34 BOPD in the steady state period, equivalent to 1000 barrels of oil per month.
Transient period
Decline = 80%
Barrels of Oil per day
Semi Steady State period
Decline = 30%
Steady State period
Decline = 0%
WEEKS

13. POZO DE EAGLE INTERCEPTO AL POZO FORTNER 41
OIL PRODUCCION FORECAST
HISTORY
FORECAST
Barrels of Oil per day
Np = 93,580 Bls
EUR- Np = 34,620 Bls
WEEKS

14. IMPORTANT CONTRACT CLAUSE
OHIO COUNTY, KY
IMPORTANT CONTRACT CLAUSE
FNX Oil & Gas financed the total CAPEX for the first nine development wells. According to the contract, FNX Resources LLC will receive 100% of the net income from the leases until recovering 125% of the capital investment, which is estimated will occur in 10 years.
MARTHA FIELD
LOUISA FIELD
FNX Wells

15. TECNOLOGIA RADIAL JET DRILLING
SALES TO REFINERY
Depending on the oil price, these wells produce EBITDA between $30K to $40K monthly

16. TECNOLOGIA RADIAL JET DRILLING
THE OPERATOR AND PARTNER
Hay Exploration Inc. is the FNX’s partner and lease operator in the Martha and Louisa leaseholds. Hay explorations is among the most recognized private operators in the Appalachians.

17. TECNOLOGIA RADIAL JET DRILLING
Upsides
There are options to increase the current production, taking advantage of the high initial production of the horizontal wells. One of these options is developing the leases that even not have been drilled and shown in blue on the chart below.
Total Berea Exploration Inc. lease area is 5,500 acres and the developed area is only 880 acres. There are 4620 acres to be developed.
ESTIMATED DEVELOPMENT CAPITAL COSTS USD
18 Horizontal fractured wells ,500,000
9 Production facilities ,000
Data gathering and transmission system ,000
Future abandonment costs ,000
Total Capital Costs ,800,000
600 MBLS additional proved reserves
1500 BOPD initial production

18. TECNOLOGIA RADIAL JET DRILLING
SALE OFFER
FNX is selling its 50% share on Berea Exploration LLC and Weir Exploration LLC
Sale price is USD 1,500,000 to be transferred to the FNX Oil & Gas bank account in Spain
FNX Oil & Gas financed the total CAPEX for the first nine development wells. According to the contract, FNX Resources LLC will receive 100% of the net income from the leases until recovering 125% of the capital investment, which is estimated will occur in 10 years. Therefore, 100% of net income from these 9 wells will be for the purchaser.