11th April 2024, Update

Dear Valued Investor Partners,

We trust this message finds you well.

In this update, we aim to provide clarity regarding the extended pause in production and outline the ongoing work in progress to recommence oil production.

Initially, we planned to transition the Phase 1 tank battery to our larger facility, engage Indian Electric for a three-phase power connection, and swiftly resume oil production within 3-4 weeks. However, based on solid data and valuable insights from our experienced geologists and operators, we changed our strategy to activate the Cherokee 2–9 well once the Cherokee 3–9 (Injection well) is operational and we have initiated injecting water into the Red Fork Formation.

There have been a few delays due to repositioning some of the Phase 2 wells because of the discovery of the Skinner and Prue formation (3 pay zones in total including the Red Fork).  All of the following scope of works are essential steps in the development process to not only recommence the Cherokee Phase 1 hydrocarbon production but to maximize the effectiveness of our pressure maintenance program, which is designed to positively impact the 2-9 well.  In fact, based on where the Cherokee 2-9 is positioned there is strong evidence to support that this well and the 5-9 (Phase 2) could benefit the most from the pressure maintenance program.

Here is the current sequence of events:

• Trenching for the Cherokee 2-9 flow lines and connecting lines to the injection well is underway and scheduled for completion this Friday. This facilitates the pressure maintenance program for Phase 1.
• The Phase 1 tank battery, including the shared water treatment facility, is estimated for full construction within the next 2 weeks, vital for processing fluids for reinjection into the 3-9 well.
• Perforation of the Cherokee 3-9 well in the Red Fork formation is expected within 7-10 days, with readiness for water intake within 2-2.5 weeks.
• Setting up the water pump is slated for completion by mid-next week.

We have ordered a new Six-cylinder Arrow engine for the Cherokee 2–9 well, costing approximately US$15,000. To demonstrate our commitment to our investor's best interest and to make up for the delays, this expense will not burden the Phase 1 Limited Partnership or investors. The new engine will not only enhance well efficiency but also reduce monthly expenses by eliminating electricity costs for the pumping unit. Expected arrival in approximately three weeks aligns with the completion of ongoing works, marking the final step before production is due to restart.

Furthermore, the bullish oil market forecasts, predicting $80-$100 per barrel for the remainder of the year, bode well for Cherokee 2–9's return online and the full impact of pressure maintenance. Despite setbacks, we firmly believe these delays will ultimately convert to a benefit, capitalizing on higher oil prices and anticipating increased hydrocarbon recovery over the medium to long term due to our pressure maintenance program.

We sincerely appreciate your continued patience and understanding.

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Warm regards,

The ASE Team