1) What is Baron Energy? What is its purpose?

Baron Energy Inc. (“Baron” or the “Company”) (OTCPK: BROE) is a publically-traded, independent energy company based in San Marcos, Texas. Baron operates and manages a consortium of oil and gas non-operated working interest partners and is building a portfolio of producing properties in South Texas with the goal of monetizing the portfolio in 2019. Additional information on Baron’s South Texas Project can be found at BaronEnergy.com..

2) Who is Baron’s management team and what is their experience level?

Our management team includes two seasoned executives with more than 37 years of industry experience each. Team members have both major oil company and private oil company owner/operator experience across multiple disciplines. The team covers most of the upstream disciplines and also has extensive experience in business development, new ventures, and public company management. Team members have worked together for more than 23 years.

3) What is the timing for the South Texas Project exit strategy?

Baron plans to implement an exit strategy in 2019 for its South Texas Project. Numerous exit options are under consideration. We are currently targeting the 3Q 2019 for our exit.

4) What is Baron’s current focus area? Why was this area chosen?

Baron chose South Texas as a focus area because it is a major oil and gas producing area in which we have worked since 2013. Our general focus is on 17 counties with more than 122,000 well bores, stacked pay scenarios in many areas, and more than one million barrels of oil equivalent production per day. Our specific operational focus is on a two-county area in which we have worked since 2013.

5) What type of properties does Baron target for acquisition?

We seek to acquire small, operated producing properties with upside potential. This upside can be well workovers, recompletions, and/or future drilling locations. Our primary focus is on oil production and future drilling locations. We do not participate in exploration activities.

6) What is the valuation range for the targeted portfolio?

We believe that we have a sufficient number of properties such that the portfolio will have substantial value versus the amount of investment. Our valuation target is 3-10 times investment. Our experience leads us to believe this is a reasonable exit target. The higher range of our valuation target should be realized if we can execute a successful drilling/production program in 2018-2019.

7) Does Baron’s management team have experience with this type of business model?

Our management team has been active with this type business model for the past 17 years. We have completed more than 130 buy/sell transactions and have owned/operated oil and gas properties in 24 Texas counties. We are comfortable with the business model. We only operate in Texas and over the years have developed an excellent data base for production operations including the Permian Basin of West Texas, Eastern Shelf of Central Texas, Panhandle of North Texas and the Plains of South Texas. Our business development activities have provided the opportunity to evaluate oil and gas properties in an additional 38 Texas counties.

8) What are Baron’s major challenges going forward?

We have reached a point in the project to begin drilling operations. We believe we currently have enough potential growth in our portfolio to get us to our exit in 2019. Our goal is to deliver at least 300 BOPD in 2019. We also continue to seek growth capital for acquisitions and to accelerate our drilling programs.

9) How does Baron’s general and administrative costs compare to the industry?

Our general and administrative expenses are low compared the industry. We have two full-time employees and one part-time assistant. Our management team has extensive, multi-discipline experience thus reducing the need for a larger staff. We do not anticipate adding more staff to achieve our growth targets. We are able to easily travel to our field operations in South Texas, which reduces the time and cost required for providing production operations management, land-related activities, field inspections, acquisition due diligence, etc.

10) What projected oil prices are being used by Baron for its business plan?

We are currently using $55/Bbl oil for 2018 for our base case cash flow projections and $35/Bbl as a low case. We are aligned with general industry thinking which says that oil markets will balance in 2018 and that oil prices could stabilize around $60 per barrel by year-end 2018.

11) What are Baron’s plans for the remainder of 2017 and 2018?

We want to begin drilling operations in 2018 and continue to look for small bolt-on acquisitions in our focus area that meet our criteria. Our goal is to drill 1-2 new development wells in 2018 and, if on prognosis, to drill 3-4 new wells in 2019. A successful program will provide a significant ramp up in production and revenue as we move toward our 2019 exit. Additional information on Baron and its South Texas Project can be found on our website.

12) Does Baron have a contingency plan should industry conditions change?

We designed our business model to be flexible under a number of different scenarios including our ability to identify and fund acquisitions, low oil prices, slowdown in industry conditions, etc. Our contingency plan is similar to our base case plan; under certain conditions, the pace of acquisitions and production ramp-up is slowed but the general acquire, exploit, and exit plan remains the same. We call this our low case and it requires less investment than our base case over the next few years and could extend our exit by a year.