SUPPLEMENTAL OIL AND GAS INFORMATION (UNAUDITED)

Results of Operations

Oil and natural gas sales reflect the market prices of net production sold or transferred with appropriate adjustments for royalties, net profits interest, and other contractual provisions. Production expenses include lifting costs incurred to operate and maintain productive wells and related equipment including such costs as operating labor, repairs and maintenance, materials, supplies, and fuel consumed. Production taxes include production and severance taxes. Depletion of crude oil and natural gas properties relates to capitalized costs incurred in acquisition, exploration, and development activities. Results of operations do not include interest expense and general corporate amounts. The results of operations for the Company’s oil and natural gas production activities are provided in the Company’s related statements of operations and comprehensive income (loss).

Costs Incurred and Capitalized Costs

The costs incurred in oil, natural gas, and NGL acquisition, exploration and development activities are as follows:

For the year ended December 31,		2022		2021
Unevaluated property acquisition	$	2,244,517	$	6,200,745
Development		248,185,340		68,323,942
Exploration costs		5,179,046		1,406,101
Total	$	255,608,903	$	75,930,788

Capitalized costs for unproved and unevaluated properties that are excluded from depletion is disclosed in Financial Statement Note 4 Oil and Natural Gas Properties, Net.

Oil and Natural Gas Reserves Data

Information with respect to the Company's oil and natural gas producing activities is presented in the following tables. Reserve quantities, as well as certain information regarding future production and discounted cash flows, were determined by W.D. Von Gonten Engineering LLC as of January 1, 2023, the Company's third-party independent reserve engineers, based on information provided by the Company.

The following tables present the Company's estimates of its proved oil and natural gas reserves, net of royalties. The Company emphasizes that reserves are approximations and are expected to change as additional information becomes available. Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment.

	Oils		Natural Gas		NGLs		Total
	(Mbbl)		(MMcf)		(Mbbl)		MBOE
Total proved reserves at December 31, 2020	5,209		23,505		5,156		14,283

Revisions of previous estimates, and other	(2,445	)	5,415		(3,550	)	(5,093	)
Improved recovery	1,715		6,201		1,220		3,969
Production	(743	)	(2,398	)	(358	)	(1,501	)
Total proved reserves at December 31, 2021	3,735		32,724		2,469		11,658

Revisions of previous estimates, and other	(1,850	)	(27,505	)	(1,271	)	(7,705	)
Extensions, discoveries and other additions	2,281		93,381		1,930		19,775
Improved recovery	1,111		14,069		671		4,127
Production	(1,030	)	(13,317	)	(588	)	(3,838	)
Total proved reserves at December 31, 2022	4,247		99,352		3,211		24,017
Proved Developed Reserves:
December 31, 2020	2,275		6,672		1,692		5,079
December 31, 2021	2,137		7,468		1,041		4,423
December 31, 2022	3,973		70,480		2,962		18,682

Proved Undeveloped Reserves:
December 31, 2020	2,934		16,833		3,464		9,204
December 31, 2021	1,598		25,256		1,428		7,235
December 31, 2022	274		28,872		249		5,335

Proved reserves are estimated quantities of crude oil and natural gas, which geological and engineering data indicate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are included for reserves for which there is a high degree of confidence in their recoverability and they are scheduled to be drilled within the next five years.

Notable changes in proved reserves for the year ended December 31, 2022 included the following:

Extensions and Discoveries: In 2022, total extensions and discoveries of 19.78 million BOE were primarily attributable to successful drilling in the Giddings Field, Austin Chalk and Hawkville Field, Austin Chalk, as well as the addition of proved locations. Included in these discoveries were 5.60 million BOE as a result of successful drilling in the Giddings Austin Chalk, the addition of 1.16 million BOE of additional proved locations and 7.25 million BOE attributable to the successful drilling in the Hawkville Austin Chalk and Eagle Ford and the addition of 5.70 million BOE as a result of additional proved locations.
Improved Recoveries: In 2022, additions of proved reserves of 3.97 million BOE were primarily due to the managing of existing proved developed locations and an increase of projected recoverable volumes.

Notable changes in proved reserves for the year ended December 31, 2021 included the following:

Revisions to Previous Estimates - In 2021, revisions to previous estimates decreased proved reserves. These revisions were adjusted downward caused by the removal of undeveloped locations from the previous year's development schedule in the Giddings Austin Chalk area.
Improved Recovery - In 2021, additions to proved reserves of 4.13 million BOE were primarily due to the optimization of existing proved developed locations, via additional improvement projects, and an increase of projected recoverable volumes.

Standardized Measure of Discounted Future Cash Flows

The following table presents a standardized measure of discounted future net cash flows relating to proved crude oil and natural gas reserves. The changes in the standardized measure of discounted future net cash flows relating to proved crude oil and natural gas were prepared in accordance with the provisions of ASC 932 Extractive Activities - Oil and Gas.

The standardized measure of discounted future net cash flows is computed by applying average prices for the last 12 months to estimated future production, year-end costs and legislated tax rates and a discount factor of 10 percent to net proved reserves. The Company believes the standardized measure does not provide a reliable estimate of the Company's expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its proved oil and gas reserves. Actual future cash inflows may vary considerably.

For the year ended December 31,		2022			2021
Future cash inflows	$	1,092,307,120		$	247,313,824
Future production costs		(136,423,094	)		(53,266,494	)
Future development and abandonment costs		(75,501,920	)		(3,124,700	)
Future income tax expense		(98,092,314	)		(24,496,630	)
Future net cash inflows	$	782,289,792		$	166,426,000
10% annual discount for estimated timing of cash flows		(303,833,120	)		(55,888,400	)
Standardized measure of discounted future net cash flows	$	478,456,672		$	110,537,600

The twelve-month average prices were adjusted to reflect applicable transportation and quality differentials on a well-by-well basis to arrive at realized sales prices used to estimate the Company's reserves. The price of other liquids is included in natural gas. The prices for the Company's reserve estimates were as follows:

		Oil		Natural Gas		NGLs
		(Mbbl)		(MMcf)		(Mbbl)
December 31, 2022	$	94.49	$	6.25	$	32.62
December 31, 2021	$	66.55	$	3.64	$	27.29

Changes in the standardized measure of discounted future net cash flows at 10% per annum are estimated as follows:

For the year ended December 31,		2022			2021
Beginning of period	$	110,537,600		$	82,028,564
Sales of oil and natural gas produced, net of production costs		(81,065,058	)		(26,623,743	)
Extensions, discoveries and other additions		200,494,177			(12,803,556	)
Previously estimated development cost incurred during the period		(3,124,700	)		14,038,000
Net change of prices and production costs		139,967,308			114,050,543
Change in future development and abandonment costs		(57,466,319	)		48,932,984
Revisions of quantity and timing estimates		225,544,516			(120,961,889	)
Accretion of discount		(760,264	)		18,575,522
Change in income taxes		(55,419,410	)		8,768,285
Other		(251,178	)		(15,467,110	)
End of period	$	478,456,672		$	110,537,600