OUR OIL AND GAS PRODUCTION PARTNERS

Midwest Energy Partners, LLC utilizes two oil and gas production companies when developing new drilling/production packages in the Illinois Basin. They are Pioneer Oil Company, located in Lawrenceville, Illinois, and Core Minerals located in Evansville, Indiana (a brief narrative on each company is below). Both companies operate with a high level of integrity, are well managed, and utilize advanced drilling and production techniques to maximize the investor’s returns.

Midwest will not involve itself in any prospect areas that may be in competition between Core and Pioneer because we get involved only after operating leases have been executed between the operator (Core/Pioneer) and the mineral owner. But due to the long term nature of sourcing and finalizing prospect areas for development as explained below, working with both companies gives Midwest the best opportunities for continuous transaction flow for our investors.

The two companies operate quite differently as it relates to their overall operations. While both firms are always looking for sources of existing production and matching this with potential new locations, Core utilizes outside drilling services to drill and complete their wells. Pioneer owns their own drilling rigs with their employees doing the bulk of their drilling and completion. While Midwest never shares cost data between the two firms, each company utilizes a different strategic approach that can be beneficial to the investor.  Pioneer is a truly vertically integrated family of companies, while Core operates as an outsourcer of drilling services.

PROSPECT DEVELOPMENT

The process of locating, researching, and developing potential areas for new well-sites is a time consuming process compounded by competitive pressures, legal documentation and landowner concerns. The time required to bring a project to development can often take a year or longer once the property is identified. The steps needed to take before it becomes a viable prospect include the following:

• Are the mineral interests available? The existing owner, not always the surface owner, needs to be a willing seller/partner to the new transaction.

• Geology/History of the property? What Zones are expected to produce commercial levels of oil and gas so that a drilling program/plan can be established? A geologist needs to be able to review all information in order to recommend the project to Core/Pioneer.

• Legal documentation needs to be completed transferring all mineral leases over to Core/Pioneer.

• Drilling permits need to be filed and approved with each respective state’s Department of Natural Resources.