¹ The estimated 25-year royalties production and 300m barrel projection are based on the independent, third-party study report of (and assumptions outlined in) William Cobb & Assoc. (the “ORE Consultant”), described as the Official Royalty Evaluation (“ORE”), which was last updated on January 16, 2019.  The ORE was commissioned by an affiliate of both Klondike Royalties, LP (“Partnership”) and Klondike Royalties II, LP (“Partnership II”).  The ORE is attached as an exhibit to each private placement memorandum.  Partnership and Partnership II had no input in generating the ORE, nor did Partnership or Partnership II make any amendments or adjustments to the ORE.  Neither of Partnership, Partnership II nor any of their affiliates have undertaken to, or engaged third parties to, conduct additional ORE studies or evaluations.  Summaries of certain details of the ORE are contained below:

Geo Data

The structural configuration of the North Cook Inlet Structure has been defined using a combination of 2-D seismic data and sub-surface well control.  Formation tops for the key prospective horizons were identified from well logs in 17 deep wells drilled on the North Cook Inlet Structure and synthetic seismograms were generated in eight wells to assist in identification of the reflectors on the seismic data.

Methodology

The Royalty Evaluation is based on the probabilistic evaluation of the reserves and resource volumes attributable to the net overriding royalty interest in the Kitchen Lights Area.  The resource volumes were estimated using a Monte Carlo-based probabilistic model.  Gross reservoir volume, net pay thickness, porosity, oil saturation, recovery factor and oil formation volume factor were input values used to generate distributions of both original oil or gas in place – “OOIP” – and recoverable oil.  The governing equation used to calculate the recoverable oil volumes is as follows:

Recoverable Oil Volume    =    (Area * Net Pay * [Porosity * Oil Saturation] * Recovery Factor) / (Oil Formation Volume Factor)

The above information, as a high-level summary of the ORE, is based on existing data available on the Cook Inlet Basin region and the methodologies used by the ORE Consultant to generate the estimates contained in the ORE. Any statements contained in the ORE that are not statements of historical fact may be deemed to be forward-looking statements.  Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “targets,” and similar expressions identify as forward-looking statements.  There are several important factors that could cause the results of outstanding and future investments, within and outside of either Partnership or Partnership II, to differ materially from those indicated by these forward-looking statements.  The ORE is not determinative with regards to any potential investment return to the partners of Partnership or Partnership II.  Neither Partnership nor Partnership II have any control over economic, political, or other market-influencing events that may materially change the statements and estimates set forth in the ORE.  Any person considering an investment in Partnership or Partnership II should conduct its own thorough evaluation of all materials and offering documents provide by Partnership or Partnership II and determine, in its own estimation based on its own judgment or the advice of its professionals, whether or not an investment is the best decision for such person.