Cessford Property - Oil, Cessford area, Alberta

• Altai acquired 50% gross working interest in the Cessford property of 240 acres of Alberta Crown leases and light oil production from four long-life wells by paying $800,000 cash consideration to the previous owner in late December 2012. On closing of the acquisition Altai paid in kind two Calgary parties which provided technical assistance to the Company during the acquisition process, i.e. each of the two parties was paid a 2.5% working interest in the property. After closing, Altai owns 45% working interest in the property. ConocoPhillips Canada Energy Partnership of ConocoPhillips Canada Resources Corp., a fully owned subsidiary of ConocoPhillips, US was the 50% working interest partner and the property operator. In November 2015, Conoco assigned its interest in the property to Canadian Natural Resources Limited which becomes the partner and operator of the property.

    

• The Cessford property is in the Cessford area of Alberta, approximately 200 km east of Calgary.

   

• There are four long-life (estimated reserve life of 13-15 years) wells producing approximately 12.5 barrels of light oil per day (11 bopd net to Altai). Altai paid approximately $64,000 per flowing barrel of oil per day and $22.80 per barrel of proven reserves in the ground. These are lower than the average price paid per flowing bopd (based on transactions done in the first four months of 2012) of $85,891 and $29.17 per barrel. The four wells are producing from the Glauconitic "C" Pool. Typically vertical wells in the Glauconitic "C" Pool come on at 30 bopd (13 bopd net to Altai) and short horizontal wells perform better. The four wells are subject to certain royalty payments.

   

• There are future infill locations for two additional wells and undrilled lands for future exploration and drilling opportunities.

   

• Cessford property is Altai's first venture into conventional oil exploration and production in Alberta.