• pursuing value-accretive acquisition and corporate merger opportunities, which could increase the scale of our operations; • maximizing operating margins and corporate level cash flows by minimizing operating and overhead costs; • expanding our acreage positions and drilling inventory in our primary areas of interest through acquisitions and farm-in opportunities, with an emphasis on operated positions; • blocking up acreage to allow for longer horizontal lateral drilling locations which provide higher economic returns; and • maintaining a strong balance sheet and financial flexibility. • extensive horizontal development potential in one of the most oil rich basins of the United States; • experienced management team with substantial technical and operational expertise; • ability to attract technical personnel with experience in our core area of operations; • history of successful acquisition and merger transactions; • operating control over the majority of our production and development activities; • conservative balance sheet; and • commitment to cost efficient operations. • Full year 2019 average daily sales volumes of 13,429 Boepd exceeded our production goals and increased 35% • Increased drilling efficiencies by drilling multi-well pads and longer lateral length wells averaging 10,700 feet in the Midland Basin • Improved frac efficiency from 8 to 12 stages per day • Reduced total drilling and completion costs by approximately 16% • Increased Proved Developed reserves by 33% • Increased Adjusted EBITDAX by 51% (reconciled in “Non-GAAP Measures” below) • Improved our operating margins by 10% • Realized $15.9 million from our hedge positions thereby mitigating commodity price volatility • Strong balance sheet and liquidity position with $155 million of undrawn capacity on a $325 million senior secured revolving credit facility and a cash balance of $13.8 million as of December 31, 2019 Subsequent to December 31, 2019, oil prices have declined sharply in response to drastic price cutting and increased production by Saudi Arabia coupled with reduced demand caused by the global coronavirus outbreak. Prior to the recent decline in oil prices, we announced our 2020 capital budget of $160-170 million which assumed a one-rig operated program in the Midland Basin as well as non-operated activity currently in progress, which was expected to result in bringing 19 gross / 16.2 net operated wells and 3.1 net non-operated wells online in 2020. Due to the recent oil price volatility, we are currently evaluating our 2020 capital program. On November 21, 2019, we entered into a new credit agreement with respect to our senior secured revolving credit facility (the “Credit Agreement”). The Credit Agreement has a maturity date of November 21, 2024 with a maximum credit amount of $1.5 In addition to our drilling program described above, the following are additional highlights of our 2019 activities compared to activity in 2018: We believe that the following strengths are beneficial in achieving our business goals: Our Strengths 2019 Highlights Recent Developments Sharp Decline in Oil Prices New Credit Agreement 9