Company Profile

Auterra Energy, LLC is an independent, privately held, oil and natural gas exploration and production company. Auterra was formed in 2013 as a Texas limited liability company, and focuses on creating net asset value primarily through participating as a non-operating working interest partner in developmental drilling opportunities in the conventional oil and gas producing trends located in the onshore areas of Texas and Louisiana. As a secondary focus, Auterra also participates in high quality “exploratory” drilling opportunities and property acquisitions in the same trends.

Auterra is owned by Gerald W. (Jerry) Schlief, who serves as the President and CEO of Auterra. David R. Wood is Auterra’s Vice President of Exploration and is responsible for evaluating high-quality, lower risk, 3D seismic based, conventional, drilling opportunities for Auterra’s participation as a non-operated working interest partner. Mr. Schlief and Mr. Wood both have more than 30 years of experience in the oil and gas industry. Mr. Schlief has an MBA in Finance and a BBA in Accounting, and Mr. Wood has a BS in Geology, is a Certified Professional Geologist in Texas and Louisiana, and a nationally Certified Professional Geophysicist.

Auterra’s high drilling success rate since inception illustrates the company’s competitive strength for finding and developing oil and natural gas reserves in Texas and Louisiana, and the company is continuing to look for high quality drilling opportunities.

Business Strategy

Auterra’s Strategy is to review and analyze a large number of lower risk drilling opportunities, and to take non-operated working interests in projects that meet the company’s stringent prospect risk profile and economic thresholds. Since inception, Auterra has screened more than seven hundred drilling opportunities, and chosen to participate in only a small percentage.

Each prospect is first screened to see if it meets Auterra’s general guidelines and preferences of lower risk, onshore, primarily oil prospects or high condensate yield natural gas prospects. Costs and expected reserve estimates must also meet the rate-of-return and return-on-investment thresholds demanded by Auterra, using Auterra’s proprietary oil and natural gas price forecasts. If a prospect passes the initial screening, a detailed analysis is done to quantify and assign a numerical risk value to each of the following risk parameters, and these risk values are used to calculate a “Risk Adjusted” Rate-of-Return and Return-on-Investment estimates in the pre-drill economics.

Risk Parameters Evaluated

STRUCTURAL RISK
The seismic interpretation and the surrounding well log correlations are audited and verified, and a numerical probability is assigned as to whether the reservoir size and trap are mapped properly.
TRAP AND SEAL RISK
Seismic data and well logs are examined to estimate trap timing and seal integrity, and a numerical probability is assigned as to whether the trap was in place at the time of oil migration and whether the trap is still sealing or has been breached.
RESERVOIR RISK
Regional and nearby well logs are examined to evaluate the variability of the targeted reservoir, and a numerical probability is assigned as to whether the reservoir rocks at the well location will be the quality and thickness of the pre-drill estimates.
DRILLING AND COMPLETION RISK
Drilling reports from nearby wells are reviewed to identify any drilling or completion problems that are likely to be encountered in the prospect area, and the estimated drilling or completion costs are increased in the pre-drill economic analysis to account for the risk.
OPERATOR RISK
The company planning to operate the drilling and production of the well is researched to determine if it and its key staff members have the experience and expertise to drill, complete, and produce the oil and natural gas. Further, Auterra will determine if the operator can properly handle the accounting for tangible and intangible drilling costs and the accounting for the production revenue from the project. When Auterra joins in the drilling of a well, Mr. Wood closely monitors each phase of the project and offers guidance and advice throughout the drilling and completion of the project.
PRICE RISK
Auterra maintains relationships with several leading industry professionals who monitor and predict future oil and gas price movements, and Auterra generally uses the most conservative of these predictions to calculate the expected rate-of-return and return-on-investment in the pre-drill economic analysis.

Business Model

Many domestic exploration and production companies have significantly reduced their emphasis on the proven conventional oil producing trends and have focused on the unconventional resource and shale opportunities. Auterra’s philosophy is to focus on the proven conventional oil and natural gas trends and capture the upside using existing 3D data, advanced geological and geophysical and engineering technologies, and to attempt to utilize the existing pipeline and other infrastructure assets.

Since about 2008, the domestic oil and natural industry has seen a dramatic reduction in drilling budgets for conventional trends and a dramatic increase in drilling budgets for the capital intensive resource and shale operations. This mass movement of capital has left behind many unfinished conventional exploration and development projects with low to moderate risk profiles. This trend is reminiscent of the major oil companies’ exit from onshore and offshore conventional basins in the late 1980s that left tremendous opportunities available for innovative small independent companies. Both Mr. Schlief and Mr. Wood recognized these opportunities during the 1990s, and were able to help build very successful independent exploration and production companies by capitalizing on this trend. Just as in the late 1980s, asset creation belongs to the innovators who capture niche opportunities using technological advances in geophysical, geological, and operational disciplines, and today this focused strategy of targeting conventional basins with pre-existing 3D data coverage and advanced seismic techniques is offering a steady deal flow of high quality prospects with very attractive internal rates of return to Auterra.

Executive Management

Portable Cable Tool Drilling Rig (Circa 1915)

Gerald W. (Jerry) Schlief

President and CEO

Phone: 713-882-5025
gschlief@auterraenergy.com

From 1993 through 2007 Mr. Schlief served as the Senior Vice President of ATP Oil & Gas Corporation, an offshore oil and gas development and production company operating in the Gulf of Mexico and in the North Sea. As Senior Vice President, Mr. Schlief was primarily responsible for sourcing and negotiating almost all of the company’s acquisitions of oil and natural gas offshore properties. Mr. Schlief was also responsible for all of the property divestitures of its oil and natural gas properties. In addition, Mr. Schlief was actively involved in almost all of the financing transactions of the company. From 2008 through the second quarter of 2012, Mr. Schlief was a consultant to several companies within the offshore oil and natural gas industry.

Prior to joining ATP, Mr. Schlief served in a variety of capacities within the oil and natural gas industry. Between 1990 and 1993, Mr. Schlief served as a Consultant for the onshore and offshore independent oil and natural gas industry. From 1984 to 1990, Mr. Schlief served as Vice President, Offshore Land for Plumb Oil Company, and its successor Harbert Energy Corporation where he managed the acquisition of interests in over 35 offshore properties. From 1983 to 1984, Mr. Schlief served as Offshore Land Consultant for Huffco Petroleum Corporation. He served as Treasurer and Landman for Huthnance Energy Corporation from 1981 to 1983. In addition, from 1974 to 1978, Mr. Schlief conducted audits of oil and gas companies for Arthur Andersen & Co., and from 1978 to 1981, he conducted audits of oil and gas companies for Spicer & Oppenheim.

Mr. Schlief was a graduate of Stephen F. Austin State University in 1970 with a BBA in Accounting. Mr. Schlief is a Certified Public Accountant in the state of Texas, and he earned his MBA with a major in Finance from the University of Utah in 1974. Mr. Schlief served in the U.S. Army as a First Lieutenant from 1971 to 1974 and was stationed in Stuttgart, Germany.

From 1993 through 2007 Mr. Schlief served as the Senior Vice President of ATP Oil & Gas Corporation, an offshore oil and gas development and production company operating in the Gulf of Mexico and in the North Sea. As Senior Vice President, Mr. Schlief was primarily responsible for sourcing and negotiating almost all of the company’s acquisitions of oil and natural gas offshore properties. Mr. Schlief was also responsible for all of the property divestitures of its oil and natural gas properties. In addition, Mr. Schlief was actively involved in almost all of the financing transactions of the company. From 2008 through the second quarter of 2012, Mr. Schlief was a consultant to several companies within the offshore oil and natural gas industry.

Prior to joining ATP, Mr. Schlief served in a variety of capacities within the oil and natural gas industry. Between 1990 and 1993, Mr. Schlief served as a Consultant for the onshore and offshore independent oil and natural gas industry. From 1984 to 1990, Mr. Schlief served as Vice President, Offshore Land for Plumb Oil Company, and its successor Harbert Energy Corporation where he managed the acquisition of interests in over 35 offshore properties. From 1983 to 1984, Mr. Schlief served as Offshore Land Consultant for Huffco Petroleum Corporation. He served as Treasurer and Landman for Huthnance Energy Corporation from 1981 to 1983. In addition, from 1974 to 1978, Mr. Schlief conducted audits of oil and gas companies for Arthur Andersen & Co., and from 1978 to 1981, he conducted audits of oil and gas companies for Spicer & Oppenheim.

Mr. Schlief was a graduate of Stephen F. Austin State University in 1970 with a BBA in Accounting. Mr. Schlief is a Certified Public Accountant in the state of Texas, and he earned his MBA with a major in Finance from the University of Utah in 1974. Mr. Schlief served in the U.S. Army as a First Lieutenant from 1971 to 1974 and was stationed in Stuttgart, Germany.

David R. Wood

Vice President, Exploration

Phone: 713-376-3642
dwood@auterraenergy.com

Mr. Wood has over 40 years experience in all aspects of Gulf Coast exploration and production. Prior to joining Auterra, Mr. Wood held numerous management positions in geology, geophysics and project management with both major and independent oil and natural gas companies. He started his career in 1971 as a geophysicist with Western Geophysical, and then as a geophysicist with Gulf Oil and Marathon Oil. Later he was a key member of the management teams of several highly successful independent exploration and production companies including Huffco Petroleum Corporation, Plumb Oil Company and its successor Harbert Energy Corporation. Mr. Wood also worked at Gulfstar Energy Corporation, Barrett Resources and Fidelity Exploration Company. Mr. Wood maintains dozens of key industry contacts for new drilling opportunities, and over the last ten years has evaluated hundreds of prospects and placed the companies he worked for in over seventy prospects, with greater than a 50% overall success rate, and has also personally participated in over forty drilling prospects through his own company, Trinity Exploration and Production Company, LLC. Mr. Wood is a Certified Professional Geologist in Texas and Louisiana, is a nationally Certified Professional Geophysicist, and holds a BS degree in Geology from Lamar University.