[Jack_Aster]

Sorry everyone, an error was pointed out to me and I confirmed it. KFG shows a 74.9% working interest in Fayette, but only 59.4% of it is NET to them. So below are the re-calucations which are still good regardless.

Using the current numbers that were updated today on the website, here is what KFG's wells are producing as a whole and the net back to KFG. Fayette does not state a number, but if you look back at other financial statements, it shows production at a constant 110-120bopd from the 9 wells. For this chart I'm only using the lower amount.

Wells(name) Total Production KFG's WI(net) KFG's Cut(bopd)

9 Fayette 110bopd 59.4% 65.5bopd

2 Macneil 50bopd 20.5% 10bopd

3 Parker 90bopd 10% 9bopd

3 Craig 165bopd 21.5% & 10% 30bopd

1 Barnum 140bopd 9% 13bopd

1 Dale 25bopd 17% 4bopd

1 Miller 12bopd 4% 0.5bopd

20 Producing 592bopd - 132bopd

Average WI in all wells: 132bopd(KFG) / 592bopd(Total) = 22.3% or 22% average

Now lets see what KFG can cash flow at $80 per barrel with LLS prices right now:

132(bopd) X $80(per barrel) X 90 days(quarter) = $950,400 not including management fees.

Below is a list of wells that either have to A) Be put back online B) Need to be drilled, or C) Have to still pay out.

- Craig 3 well still needs to pay out, increasing from 10% to 21.5%
- Barnum 2 wells still needs to pay out, increasing from 9% to 20.5%
- Roundtree well shut for now, needs to be put back online
- Miller well still needs to pay out, increasing from 4$ to 18%
- 1 Fayette well to be drilled soon, as per the September 11th 2014 news release
- Craig 4 well to be drilled in December 2014
- Barnum offset in first quarter of 2015, could be 2 other potential offsets
- Several Franklin areas to drill in Q1 2015 with 3 targets ready

All information was updated November 1st 2014 as per the main page of the KFG website.