Areas of Operation

Jolly Ranch Project - Denver Basin

Running Foxes Petroleum Inc. (RFPI) is presently producing 40 to 60 BOPD at the John Craig, Jolly Ranch and Bolero fields located in Lincoln County, Colorado. The Company has been waiting to expand development in the project but its partner has had a number of internal issues to resolve over the past year. Production has declined for over a year due to lack of replacing rods, tubing and some pumps in certain wells; expansion of the electrical grid has been put on hold, lack of testing of new zones and general maintenance. The Company is now moving forward to get production back up.

The Jolly Ranch Project began as an unconventional play targeting the Atoka and Cherokee shales located in the southern part of the Denver Basin and include the Manassas, John Craig, Bolero and Jolly Ranch fields. The project is located in Lincoln, Washington and Elbert counties, Colorado. The Company has leased approximately 400,000 gross and 320,000 net acres. Approximately 50,000 acres are HBP while the remaining acres have lease terms of three to ten years. RFPI, with its partner, has drilled fifteen vertical wells to the Mississippian that are or have been completed in the Cherokee “A” and “C” reservoirs. The Company also has two SWD wells at the Jolly and Bolero fields that are completed in the Arbuckle.

The focus in the area has shifted from the Atoka and Cherokee shales to the carbonates that immediately underlie them. Newfield Energy completed their horizontal Mosher well in the Cherokee “B” which mud logs and cores showed to heavily oil saturated. After few months of production and producing essentially 99% water, Newfield set a plug, perforated and acidized the Cherokee “A” which is located in the turn of the horizontal, the well than began producing over 50 to 100 BOPD plus 1,000 BWPD.

The Great Plains Field in northern Lincoln County opened with a high volume well of 640+ BOPD out of the Cherokee “A”. At least 18 producers have been added producing from a variety of Cherokee and Marmaton zones. Some are reservoirs are structural related and others not. Most of the additional wells have IPs of 50 to 200 BOPD.

Auburn Energy has staked two wells for its partner Devon Energy. One will be horizontal in the “Cherokee A” north of the Great Plains Field and four miles northeast of the John Craig Field. The second is a vertical test near RFPI’s Jolly 4-13. The drilling depths are from 6,500 to 8,000 feet.

These same Atoka and Cherokee shale are productive through adjacent carbonates in the Texas Panhandle, the Arkoma and Cherokee basins. The Bakken is produced by drilling horizontally in the carbonate and\or sandstone that lies between the upper and lower Bakken.

The Jolly Project is divided up into the Jolly, Bolero, Aloha More Mula, Mustang Creek, Middle Mist and Manassas fields.

Bourbon Arch Project, Cherokee and Forest City Basins

RFPI is developing several heavy oil and unconventional gas fields at its Bourbon Arch Project in the Cherokee and Forest City basins. Heavy oil production currently represents less than 2% of all daily production worldwide. As conventional oil resources are depleted, the percentage of heavy oil exploration and recovery is expected to increase globally.

The United States Geological Survey has identified several large heavy oil deposits in Linn, Bourbon and Crawford counties, Kansas; and Bates and Vernon counties, Missouri. In addition to the presence of heavy oil deposits, there are also several gas producing coal and carbonaceous shale reservoirs in the project area. RFPI has developed a proprietary fracking method that has substantially increased gas production from these reservoirs. RFPI has also successfully established oil production from the Squirrel, Weir, Bartlesville and McClouth sandstone reservoirs.

RFPI is presently developing the Pleasanton, Fulton Devon, Devon South, Feagins and Thomas oil fields.

The Pleasanton Field is a new Squirrel sandstone discovery in Linn County. The well is presently awaiting completion. The Devon, Devon South and Thomas Fields produce from Bartlesville sands, are being water flooded and the Company is close to fully developing these reservoirs. In all three fields the water flood is expected to reach maximum impact in 2012. The Feagins and Fulton field are presently in the early stages of development for oil from the Squirrel, Weir and Bartlesville sandstones.

RFPI is developing gas production at the Timberhill, Dunlop, Hammond, Xenia and Green Valley fields. The majority of gas production in the Timberhill, Hammond and Xenia fields is from the Riverton coal; and the Excello and Little Osage shales. The Dunlop and Green Valley fields are presently being completed or are producing gas from the Bartlesville sands.

The Company has opened up a new field in southern Linn County called Mantey just north of the Timberhill Project. The initial discovery well is the Linn-Lea 12-34 producing from the Bartlesville naturally through perforations. The well had an IP of 250+ MCFGPD and has settled at 45 to 60 MCFGPD. RFPI has drilled two offsets to the Linn-Lea; one is being completed as an oil well and one as a gas producer.

Present production from the project is approximately 750 to 850 MCFGPD and 200 to 245 BOPD. The majority of wells are depths from 150 to 850 feet. The Company plans to drill over 100 wells in 2012.

Big Sky Project - Big Horn Basin

The Big Sky project is located in Carbon County, Montana at the northern end of the Big Horn Basin. The project targets the Greybull sandstone which is part of a Cretaceous Age channel system that crosses through the project area. RFPI has flown and interpreted a detailed aeromagnetic survey of the region which was designed to identify features such as faulting and fracturing, horsts and grabens. This has been followed up by a surface geochemical survey. The Company purchased a 2D seismic line through the surface geochemical anomaly that was found and identified changes in amplitude (potential channel) in the Greybull and Lakota strata, a structural roll, and a geochemical anomaly in the area of thick Greybull. Based on existing wells and available seismic data it has been determined that there is a Greybull sand channel that covers approximately 5,000 acres, it is estimated that the project has the potential of being a 10M+ BOE field. Several miles up-dip to the prospect is the Mosser Field which has 1 BBO in place in the Greybull sandstone. There are several fields in the area at depths shallower than 4,000 feet that have been prolific producers from the Greybull and Lakota sandstones. Unconventional targets are the coals in the Eagle and carbonaceous shales such as the Cody and Niobrara.

The Niobrara equivalent and the Cody Shale have also been identified in the area. This shale is undergoing exploitation to the south in the heart of the Big Horn Basin.

The Company is planning a 3D seismic survey over the prospective acreage followed by at least two test wells in 2012 to analyze the Greybull and the carbonaceous shales and coals.

Centurion Project - Sedgwick Basin

The Centurion Project is located in Sumner County, Kansas. The project is targeting the Mississippian “Line”, Simpson sandstone and the shallow Pennsylvanian age sandstones.

The North Sazuek Field is part of the Centurion Project located in the Sedgwick Basin in Sumner County, Kansas. The Company has sold 80% of its working interest to a third party and turned over operatorship. RFPI’s former partner, Bluebird Energy, has sold their entire 50% working interest to the same third party.

The Rusk Field was reopened by RFPI with the completion of the Schlichting 7-8-4. The well is producing 10 to 20 BOPD plus 250 BWPD through perforations from the Simpson sandstone. A disposal well has been drilled and is awaiting approval. Once that well approved water costs will drop significantly and allow increase movement of fluid and hopefully increase amount of oil.

The Tate Field was opened with the completion of the Ruyle 11-31-1. The well was completed open hole in the Simpson Sand and is producing consistently 15 to 20 BOPD almost water free.

The Sazuek Field was expanded with the addition of the Andra 8-12-3; White 9-12-2 wells; two wash downs and two new wells on the Atoka-Nighthawk lease. Limited production has been made from the Simpson in the Andra 8-12-3 well and the White 9-12-2 well is producing from the Mississippian Limestone through perforations without stimulation. Both wells are in the process of being fracked in the Mississippian “Lime”. The North Sazuek Field had one additional well added and production for the field is presently at 13 BOPD.

The Ryan 13-9-4 well in the Portland East Field reached total depth and is awaiting completion in the Mississippian and “Noxie” zones.

Work at the project was limited during the sale process but production is expected it increase. One or more horizontal wells are planned for next year.

The present play targets three zones in the Mississippian “Lime”, one at the top which usually the “Chat”, one in the middle of the carbonate section and one at its base. These zones are generally marginal or not economic in vertical wells. The horizontal wells are typically being drilled on 160 acres. Present initial rates vary from 25 to 1,000 BOPD with an average around 250 BOPD and with average water production of 1,000 BPD. The wells, based on decline curve analysis, are projected to recover from 150,000 to 250,000 each.

The company has a ten percent working interest is under 15,000 acres. The Mississippian varies from 3,300 to 4,200 feet in vertical depth.