Marketed: KONA Oil & Gas Nonoperated Multibasin Opportunity

The following information is provided by Detring Energy Advisors LLC. All inquiries on the following listings should be directed to Detring. Hart Energy is not a brokerage firm and does not endorse or facilitate any transactions.

KONA Oil & Gas Properties retained Detring Energy Advisors to market for sale its nonoperated oil and gas interests concentrated in top resource plays throughout the Lower 48.

The assets generate $71 million in operating cash flow from about 800 producing wells plus 120 DUCs and permits. Additionally, the assets include ongoing development in key regions, including the Delaware Basin, SCOOP/STACK and Williston Basin, driving continued near-term production and cash flow growth with substantial remaining undeveloped inventory offering highly economic development under top operators, according to Detring.

Asset Highlights:

• 2,100 boe/d of net production and $43 million in next 12-month operating cash flow (PDP-only)
  • Substantial PDP assets with exposure to all major Lower-48 basins and plays
    • PDP Net Reserves: 5.2 MMboe (45% oil)
    • PDP PV-10: $123 million
  • 820 PDP wells (368 horizontal)
    • Average 2.8% working interest and 2.2% net revenue interest (horizontal only)
  • Existing production and cash flow provides ample funding for ongoing development of near-term wells
• Rapidly Developing Asset Offers Imminent Cash Flow Uplift
  • The assets have experienced tremendous growth over the past 18 months, which is forecast to continue as 120 near-term wells are TIL over the next 6-12 months
    • Net production set to increase by ~75% from ~2,100 boe/d to ~3,700 boe/d
    • Delaware Basin alone has averaged eight spuds/month on-lease since January 2021
  • 80 DUCs and 40 permits contribute $29 million in next 12-month operating cash flow
    • DUC/Permit PV-10: $60 million
  • Top Delaware operators, including Devon Energy Corp., Coterra Energy Inc., Tap Rock Resources and more, are engaged in robust drilling programs driving near-term value
• Significant Remaining Potential Identified In Over 40 Units
  • Interest in 43 units across the Permian, Williston, and Midcon regions with >250 identified locations
  • Highly-economic remaining potential through key regions and targets provides surety of development
    • 100%+ average IRR
    • ~$120million in additional undeveloped NPV-10

Process Summary:

• Evaluation materials are available via the Virtual Data Room on July 27
• Bids are due on Aug. 31

For information visit detring.com or contact Melinda Faust at mel@detring.com or 512-296-4653.