Sabalo Energy

On November 23, 2020 I received a packet of information from Sabalo Energy reguarding:

Priscilla/Flaming Star and Fire Eyes/Flaming Star Units. They sent me a Production Sharing Agreement which allocates production on a horizontal lateral length basis as to that portion of the Flaming Star Unit to be included in horizontal allocation wells. The existing wells on these pooled units, the Flaming Star Nos.02-11 #4AH (42-227-39847) and #4SH (API No. 42-227-39848). Units are currently producing and the proposed2y way. The proposed Agreement only applies to horizontal wells drilled across the Priscilla/Flaming Star and Fire Eyes/Flaming Star Units. Such Wells are described as "Sharing Wells in the attached Agreement.

The planned horizontal wells will traverse essentially the entirety of Priscilla and south one-half (S2) Flaming Star Unit and entirety of Fire Eyes and north one-half of Flaming Star Unit. Drilling is planned for latter part 2021 or first half 2022 with plans to drill a Wolfcamp A and a Lower Spraberry test well. This plan is always subject to change due to variances (product prices, securing equipment, ect) but as of today our efforts are focused on these four wells.

In addition to the foregoing, each of the undersigned Interest Owners do hereby ratify, adopt and confirm the Units and Leases under which such Interest Owners’s interest is derived and do hereby grant, lease and let unto Operator, all of Interest Owner’s interest in the acreage covered by the ratified Lease, subject to the same terms and conditions provided for in such Lease, as same may have been heretofore amended, or as amended herein

Has anyone received this packet and what are the pro’s and con’s of signing it? Thank you for your help.

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