new western energy exploration & production growth nwtr corporate presentation august 2012 new...

NEW WESTERN ENERGY

EXPLORATION & PRODUCTION GROWTH

N W T R

CORPORATE PRESENTATIONAugust 2012

New Western Energy Corporation | 20 Truman Suite 204 | Irvine, CA 92620T: (949) 435-0977 | F: (949) 861-3123 | [email protected]

New Western Energy Corporation | 20 Truman Suite 204 | Irvine, CA 92620

T: (949) 435-0977 | F: (949) 861-3123 | [email protected] 2 N W T R

DISCLAIMER

This presentation contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this presentation which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs and results of our exploration program at our properties and any anticipated production. Actual results could differ from those projected in any forward-looking statements due to numerous factors including, among others, the inherent uncertainties associated with petroleum exploration and development stage exploration companies. These forward-looking statements are made as of the date of this presentation, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this presentation are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate.



CORPORATE SUMMARY

COMPANY PROFILENew Western Energy Corporation, herein referred to as “NWTR” or “We” or “Our” or the “Company”, is an oil and gas and mineral exploration and production company with current projects located in Oklahoma, Texas, Kansas and Pennsylvania.

Our principal business is in the acquisition, exploration drilling and development of, and production from oil, gas and mineral properties.

RECENT ACCOMPLISHMENTSTotal acres: 4,170Rec. Reserves: 13.49 Million bbls of crude oil

3.72 BCF of natural gas or 641,708 boe*Project Location: Oklahoma, Texas, Kansas, PennsylvaniaPartners: Petroleum Energy Management Co. (PEMCO)

Pioneer Oil Development (POD)Carroll Energy, LLC

Acquisition: Royal Texan Energy

* Including natural gas reserves from Moran, excluding Wellsboro natural gas reserves.

KEY INFORMATIONState of Jurisdiction: NevadaPresident /CEO: Javan KhazaliMarket: OTC Bulletin BoardSymbol: NWTR.OBShares Authorized: 100,000,000 common and 5,000,000 preferredShares Issued & Outstanding: 66,890,866 common and 0 preferred (as of 06/30/2012)Fiscal Year: 12/31Market Cap: $36,789,976 (as of market close 08/24/2012)Subsidiaries: New Western Texas Oil and Gas Corporation (12/10)

Royal Texan Energy (01/2012)

INDUSTRY INSIG

HT ASSET G

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STRATEGY

CORPORATE STRATEGYOur principal business strategy is to build our business through the acquisition of producing oil and natural gas wells interests and leases. We plan to ultimately engage in the acquisition and exploration of oil and gas properties and to exploit oil and gas reserves we discover that demonstrate economic feasibility.

DOMESTIC GROWTHThe Company intends to have an emerging presence in the United States. We plan growth & positive cash flow by: •acquiring wells at a low entry cost•exploring and developing production zones overlooked by previous operators•enhancing production in the wells by using tertiary production strategy such as CO2 – Enhanced Oil Recovery•reducing the risk with joint venture partners

ON TIM

E ON B

UD

GET DEVELO

PMENT

LOW COST EXECUTIONWe shall continue to identify, evaluate, and acquire oil property interests including but not limited to shut-in-wells, plugged and abandoned wells, or wells with marginal production rate.

We will strive to achieve desired production rate by undertaking reentry and work-over procedures including clean-up, repairs, treatments of existing wells, as well as drilling into previously non-producing/abandoned areas.

STRATEGIC PARTNERSHIPSWe utilize the expertise of our senior management, operating team and specialized third-party consultants with local area knowledge to screen and source various oil & gas prospects. We have over 100 years of combined experience in petroleum geology and engineering, well simulation, drilling, and oil recovery.

Our current operating partners are:

•Petroleum Energy Management Company (PEMCO)•Pioneer Oil Development (POD)•Royal Texan Energy (subsidiary of NWTR)•Carroll Energy, LLC



OPERATING PARTNERS

ROYAL TEXAN ENERGY*•Experience operator with over 10 years in oil-field operations

•Owns & operates 15 leases and 42 wells covering over 1,280 acres in Shackelford & Stephens County, TX

•Oversees day-to-day operations on our Swenson, Reves & McLellan, Trice & Moran leases in Texas.

* Subsidiary of NWTR

PIONEER OIL DEVELOPMENT•Led by industry veterans with 65 years of combined experience in petroleum geology, engineering, well stimulation, drilling and oil recovery.

•Oversees day-to-day operations on our B&W Ranch and Smith lease in Kansas.

INDUSTRY EXPERTISE LO

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PETROLEUM ENERGY MANAGEMENT COMPANY•Led by industry veterans with more than 60 years of combined experience in managing drilling programs, acquisition of oil properties and technical know-how in implementing new oil & gas technologies.

•Oversees day-to-day operations on our Phillips and Glass leases in Oklahoma.

CARROLL ENERGY•Led by industry veteran who has supervised and provided daily management and operations for numerous oil and gas companies , cumulatively producing more than 15 BCF of gas and 750,000 BBLs of oil.

•Kansas based company with over 30 years of experience in the Oil & Gas sector.

•To conduct geological and feasibility report on our B&W Ranch and Smith lease in Kansas.



OIL LEASES BY STATE

PRO

VEN RESERVES HISTO

RIC VALU

E

OKLAHOMATwo oil leases:•Phillips•Glass

TEXASFive oil leases:•Swenson•Reves •McLellan•Moran*•Trice* Oil & Gas reserve

KANSASTwo oil leases:•B&W Ranch•Smith

PENNSYLVANIAOne natural gas lease: •Wellsboro



RESERVES & RECOVERY

PROVEN PAYZONESKANSAS leases are located in the Chautauqua Arch. To the south, the Central Oklahoma platform merges with the Cherokee basin of southeastern Kansas, in which some of the first commercial discoveries for the mid-continent region were made. The depth of the reservoir is approximately 1,000 – 1,800 ft.

TEXAS (Swenson, Reves, and McLellan) leases are located in Jones County that is surrounded by wells with a history of oil production of approx. 19.60 million barrels of oil with formation depths of between 1,000 and 3,000 ft. Moran lease is located in Shackelford County with several proven pay zones including Mississippi, Bend Conglomerate, Caddo, Lower Gardener, Jennings, and Moran Sand which have been highly productive throughout Texas Railroad Commission District. Trice lease is located in Shackelford County where most wells are in the King Sand formation, which is a series of sandstone channels producing from depths of 500 – 700 ft.

OKLAHOMA leases are located in Rogers County where the Bartlesville sand formation is one of the most reliable pay zones in our area of operation and has produced more than 1.6 billion barrels of oil from the Bartlesville sandstone in northeastern Oklahoma.

* Includes Moran gas reserves



E&P ASSET PORTFOLIO

EXISTING LEASES

(1) See attached Geologist Report for each lease(2) Existing wells on site ready for reentry and work-over(3) Water injection wells(4) Moran also has additional 3.72 BCF of natural gas

Lease Name County, State AcresOil Reserves

(bbls) (1)

# of Wellson site (2)

DisposableWells (3)

Phillips Rogers County, OK 150 647,008 7 1Glass Rogers County, OK 80 297,907 12 1

Swenson Jones County, TX 161 88,677 1 -Reves Jones County, TX 84 46,487 - -McLellan Jones County, TX 160 88,126 - -Trice Shackelford County, TX 580 39,570 24 6

Moran (4) Shackelford County, TX 680 183,837 12 -

B&W Ranch Chautauqua County, KS 1,700 9,141,823 - -Smith Chautauqua County, KS 550 2,957,649 - -

Wellsboro Tioga, PA 25 - - -

Total 4,170 13,491,084 56 8



E&P ASSET PORTFOLIO

TARGET LEASES (next 90 to 120 days)

(1) Company’s estimate based on average recovery rate of 3,500 bbl per acre(2) Existing wells on site ready for reentry and work-over(3) Water injection wells

Lease Name County, State AcresOil Reserves

(bbls) (1)

# of Wellson site (2)

DisposableWells (3)

Jackson Rogers County, OK 50 175,000 4 1Acro/Selby Rogers County, OK 40 140,000 5 -Anna Rogers County, OK 80 280,000 9 1Payne Rogers County, OK 80 280,000 6 1Kerrigan Rogers County, OK 40 140,000 3 1Calvin Rogers County, OK 320 1,120,000 61 2Jameson Rogers County, OK 40 140,000 4 1Larison Rogers County, OK 20 70,000 3 -Turner Rogers County, OK 80 280,000 5 -Reed Rogers County, OK 70 245,000 6 -Brady Rogers County, OK 60 210,000 4 -

Total 880 3,080,000 110 7



USE OF PROCEEDS

Use of proceeds for drilling and completion of wells, working capital and corporate development:

Description Value

Drilling & Completion Cost $3,000,000

Commission/Fees/Costs $700,000

Strategic Acquisitions (including Target Companies, Land) $550,000

General & Administration $300,000

Equipment & Machinery $200,000

Investor Relations $100,000

Audit + Bookkeeping $70,000

Legal $50,000

Travel/Meals/Entertainment $30,000

Total $5,000,000



PLANNED CAPEX

Avg. Start-up Cost per Well*:Shallow Well $37,433 (Drilling Cost)

$50,421 (Completion Cost)Total $87,855 per well

Deep Well $98,232 (Drilling Cost)$80,980 (Completion Cost)

Total $179,212 per well

2012 Capex to be funded from equity financing:Shallow Wells: 14Deep Wells: 6Total New Wells: 20 or $2.31 million

2013 Capex to be funded from partially from equity financing & balance from free cash flow from operations:Shallow Wells: 26Deep Wells: 6Total New Wells: 32 or $3.36 million

2014 Capex to be funded from partially from equity financing & balance from free cash flow from operations:Shallow Wells: 39Deep Wells: 6Total New Wells: 45 or $4.50 million

As per the current portfolio mix, no new deep wells drilling & completion cost to be incurred after 2014. * Drilling & Completion Cost



PRODUCTION HIGHLIGHTS

PRODUCTION RATE (est.)Production*:Shallow Well 12 BOPDDeep Well 20 BOPD

Total Cumulative Production (bbls):2012 29,7602013 169,6322014 481,1822015 981,6962016 1,691,733

* Realistic case scenarioOperational Wells = Commissioned Wells x Capacity Utilization



FINANCIAL HIGHLIGHTS

REVENUE GROWTHIncrease in Revenue•Revenue is expected to increase significantly for period ending 2013 as 52 new wells build in 2012 and 2013 become fully operational.

•Revenue is dependent on bringing wells online in a timely manner, reducing downtime and running an efficient drilling and production program.

POSITVE CASH FLOWPositive Cash Flow•Positive cash flow is expected by Q4 2013

•Development of future wells from 2014 to be funded from cash flow from operations.

•Operating cash flow is dependent on minimizing/avoiding cost over runs related to drilling and completion cost and maintaining minimum production cost on an ongoing basis.



FINANCIAL HIGHLIGHTS

NET INCOME INCREASEIncrease in Net Income•Positive net income (and EPS) expected from period ending 2013 as 52 new wells build in in the period between 2012 and 2013 become fully operational.

•Net Income expected to increase from $2,690,346 to $22,768,196 for years ending 2013 and 2016, respectively, as new wells become fully operational at a higher capacity utilization .

Earnings Per Share (EPS) Growth:•EPS is expected to grow at a steady rate from 2013 onwards as Company expands and grows its production assets and bring projects on time and in budget, thus avoiding cost overruns.

•The Company estimates to issue additional 14,000,000 shares for funding and to compensate consultants/employees.

•EPS from 2012 is calculated based on 80,890,866 shares issued and outstanding.



E&P ASSETS (OKLAHOMA)

PHILLIPS County: Rogers County, OKAcres: 150 Operator: PEMCO Type of well: Shallow Depth: 600 to 700 ftRec. Reserve: 647,008 bbls (1)

Geology: Bartlesville sand formation

LOOKING AHEAD (2012 – 2013)The Company plans to invest approx. $527,130 for development and production of

•2 wells by Q4 2012, $175,710 •4 wells by Q1 2013, $351,420

(1) Joel Friedman, 11/2011 Independent Geologist Report, where average recoverable rate on Phillips is calculated to be 4,313 bbls per acre.

(2) Drilling & Completion Cost as per Company’s estimate

OPERATIONSNWTR WI: 75.00%Royalty: 17.50%Avg. Start-up (2): $88,000 per well

New Wells 2012: 22013: 4

CAPEX (Q4 2012 to Q1 2013): $527,130Payback: Q2 2014Daily Production per well: 12 BOPD



E&P ASSETS (OKLAHOMA)

GLASS County: Rogers County, OKAcres: 80Operator: PEMCO Type of well: Shallow Depth: 600 to 700 ftRec. Reserve: 297,907 bbls (1)

Geology: Bartlesville sand formation

LOOKING AHEAD (2012 – 2013)The Company plans to invest approx. $527,130 for development and production of


(1) Joel Friedman, 08/2012 Independent Geologist Report, where average recoverable rate on Glass is calculated to be 3,724 bbls per acre.


OPERATIONSNWTR WI: 75.00%Royalty: 17.50%Avg. Start-up (2) : $88,000 per well

New Wells 2012: 2 2013: 4

CAPEX (Q4 2012 to Q1 2013): $527,130Payback: Q2 2014Daily Production per well: 12 BOPD



E&P ASSETS (TEXAS)

SWENSON County: Jones County, TXAcres: 161Operator: Royal Texan EnergyType of well: DeepDepth: 1,000 to 3,000 ftRec. Reserve: 88,677 bbls (1)

Geology: Swastika & Flippen Sand, Gunsight Lime

LOOKING AHEAD (2012 – 2013)The Company plans to invest approx. $716,848 for development and production of:


(1) Quint Lindsey, 08/2011 Independent Geologist Report, where average recoverable rate on Swenson/Reves/McLellan is calculated to be 223,290 bbls/405 acres = 551 bbls per acre.



New Wells 2012: 22013: 2

CAPEX (Q4 2012 to Q1 2013): $716,848 Payback: Q2 2014Daily Production per well: 20 BOPD

Reserve Depletion: Q4/2015



E&P ASSETS (TEXAS)

REVESCounty: Jones County, TXAcres: 84Operator: Royal Texan EnergyType of well: DeepDepth: 1,000 to 3,000 ftRec. Reserve: 46,487 bbls (1)







New Wells 2012: 22013: 2





E&P ASSETS (TEXAS)

MCLELLANCounty: Jones County, TXAcres: 160Operator: Royal Texan EnergyType of well: DeepDepth: 1,000 to 3,000 ftRec. Reserve: 88,126 bbls (1)







New Wells 2012: 22013: 2





E&P ASSETS (TEXAS)

TRICECounty: Shackelford County, TXAcres: 580Operator: Royal Texan EnergyType of well: ShallowDepth: 700 ftRec. Reserve (1) : 39,570 bblsGeology: Swastika & Flippen Sand, Gunsight Lime



(1) Bobby McCoy, 02/2012 Independent Geologist Report



New Wells 2012: 22013: 3

CAPEX (Q4 2012 to Q4 201 3): $439,275 Payback: Q4 2014Daily Production per well: 12 BOPD



E&P ASSETS (TEXAS)

MORANCounty: Shackelford County, TXAcres: 680Operator: Royal Texan EnergyType of well: ShallowDepth: 700 ftRec. Reserve (1) : 183,837 bbls, 3.72 bcf natural gasGeology: Swastika & Flippen Sand, Gunsight Lime



(1) Bobby McCoy, 02/2012 Independent Geologist Report, average recovery of 1,214 boe per acre.



New Wells 2012: 22013: 3

CAPEX (Q4 2012 to Q4 201 3): $439,275 Payback: Q2 2014Daily Production per well: 12 BOPD

Production ramp up 2014 to 2016 for oil & gas.



E&P ASSETS (KANSAS)

B&W RANCHCounty: Chautauqua County, KansasAcres: 1,700Operator: Pioneer Oil/Carroll EnergyType of well: ShallowDepth: 1,000 – 1,800 ftRec. Reserve: 9,141,823 (1)

Geology: Weiser Sands and some Wayside


•3 wells by Q4 2012, $263,565 •6 well by Q1 2013, $527,130

(1) Joel Friedman, 07/2012 Independent Geologist Report, where avg. reserve of both B&W and Smith is estimated to be 12,099,472 bbls for 2,250 acres.



New Wells 2012: 32013: 6




E&P ASSETS (KANSAS)

SMITHCounty: Chautauqua County, KansasAcres: 550Operator: Pioneer Oil/Carroll EnergyType of well: ShallowDepth: 1,000 – 1,800 ftRec. Reserve: 2,957,649 (1)

Geology: Weiser Sands and some Wayside


•3 wells by Q4 2012, $263,565 •6 well by Q1 2013, $527,130

(1) Joel Friedman, 07/2012 Independent Geologist Report, where avg. reserve of both B&W and Smith is estimated to be 12,099,472 bbls for 2,250 acres.



New Wells 2012: 32013: 6




E&P ASSETS (PENNSYLVANIA)

WELLSBOROCounty: Tioga, PAAcres: 25Operator: TBDMinerals: Natural Gas (NG) Rec. Reserve: TBD (1)

Geology: Pennsylvania Marcellus shaleSurrounding: Approx. 50,000 wells deliver more

than 158 billion ft3 of NG. NWTR WI: 100%

(1) Study being conducted by a Major in and around the property.

LOOKING AHEAD (Q4 2012)Currently a subsidiary of a major oil & gas company (‘Major’) is conducting a geophysical seismic survey in search of natural gas reserves and has obtained permission from the Company to enter the property (See attached contract).

Subject to and conditioned upon successful development and drilling program by the Major, the Company expects to receive following consideration from the Major against the usage of the property:

-Rent on land usage and/or-Royalty from gas reserves



PROFORMA

GOING FORWARD

Additional shares issued for equity financing and to compensate consultants/employees.

Statements of Operations (P&L)

2010 2011 2012 2013 2014 2015 2016Number of Wells Operational 1 2 22 54 99 154 219 Revenues $ 9,687 78,544 2,529,600 11,189,760 24,921,024 37,519,226 52,149,341

Expenses Depreciation and depletion 1,763 2,054 33,000 270,000 495,000 770,000 1,095,000 General and administrative 792,003 259,360 250,000 750,000 1,000,000 1,250,000 1,250,000 Intangible drilling and completion costs - 40,541 2,305,242 3,359,502 4,501,617 4,832,025 5,710,575 Gain on sale of oil lease - (25,000) - - - - - Oil and gas production 21,410 55,463 574,483 2,671,264 5,964,384 9,023,280 12,590,126 Total expenses 815,176 332,418 3,162,725 7,050,766 11,961,001 15,875,305 20,645,701

Gain/Loss from operations (805,489) (253,874) (633,125) 4,138,994 12,960,023 21,643,921 31,503,639 Income/Loss before income tax (809,046) (377,624) (633,125) 4,138,994 12,960,023 21,643,921 31,503,639 Provision for income tax 800 829 829 1,448,648 4,536,008 7,575,372 11,026,274 Net Income/Loss $ (809,846) (378,453) (633,954) 2,690,346 8,424,015 14,068,548 20,477,366 Basic and diluted net loss per share $ (0.01) (0.01) (0.01) 0.03 0.10 0.17 0.25 Weighted average no. of shares outstanding 63,058,374 64,174,026 80,890,866 80,890,866 80,890,866 80,890,866 80,890,866

For the Year Ended December 31,



PROFORMA

GOING FORWARD

Consolidated Statements of Cash Flows

2011 2012 2013 2014 2015 2016Cash Flows from Operating Activities:Reconciliation of net loss to net cash used in operating activities:Net Income/Loss $ (378,453) (633,954) 2,690,346 8,424,015 14,068,548 20,477,366 Adjustment to reconcile net loss to net cash used in operating activities: Depreciation and depletion 2,054 33,000 270,000 495,000 770,000 1,095,000 Bad debt expense 5,000 - - - - - Investor relations expenses - - - - - - Gain on sale of oil property (25,000) - - - - - Loss on sale of marketable securities 120,000 - - - - -Changes in operating assets and liabilities: Accounts receivable (9,541) (207,912) (919,706) (2,048,303) (3,083,772) (4,286,247) Prepaid expenses and other assets (144,193) (63,254) (141,015) (239,220) (317,506) (412,914) Accounts payable 7,418 259,950 579,515 983,096 1,304,820 1,696,907 Accrued expenses 93,750 31,627 70,508 119,610 158,753 206,457 Net cash used in operating activities (328,965) (580,543) 2,549,647 7,734,198 12,900,843 18,776,568

Cash Flows From Investing Activities:Purchase of note receivable - - - - - -Payment of deposits for business acquisition (35,000) - - - - -Purchase and capitalized cost of oils and gas properties, net (71,285) (2,305,242) (3,359,502) (4,501,617) (4,832,025) (5,710,575)Proceeds from sale of oil property 25,000 - - - - -Net cash used in investing activities (81,285) (2,305,242) (3,359,502) (4,501,617) (4,832,025) (5,710,575)




PROFORMA

GOING FORWARD

Consolidated Statements of Cash Flows

2011 2012 2013 2014 2015 2016

Cash Flows From Financing Activities:Proceeds from sale of common stock 75,998 5,500,000 - - - -

Proceeds from notes payable 100,000 - - - - -

Proceeds from related party advances 213,000 - - - - -

Repayments of related party advances (72,000) - - - - -Repayments of notes payable to a related party - - - - - -Repayment of oil, gas and mineral obligations - - - - - -Net cash provided by financing activities 316,998 5,500,000 - - - -

Net increase (decrease) in cash and cash equivalents (93,252) 2,614,215 (809,855) 3,232,581 8,068,818 13,065,993

Cash and cash equivalents, beginning of the period 109,655 16,403 2,630,618 1,820,763 5,053,344 13,122,162

Cash and cash equivalents, end of the period $ 16,403 2,630,618 1,820,763 5,053,344 13,122,162 26,188,155

Supplemental disclosures of cash flow information: Cash paid for income taxes $ 829 829 1,448,648 4,536,008 7,575,372 11,026,274




CONTACT

REGISTERED OFFICEJAVAN KHAZALIPresident/CEONew Western Energy Corporation

204 Truman, Suite 204Irvine, CA 92620Phone: (949) 435-0977Fax: (949) [email protected]

TRANSFER AGENTGLOBEX TRANSFER, LLC

780 Deltona Blvd., Suite 202Deltona, FL 32725Phone:+1 813 344 4490Fax:+1 386 267 [email protected]

LEGAL COUNSELWILLIAM B. BARNETTAttorney/PrincipalBarnett & Linn

23945 Calabasas Road, Suite 115Calabasas, CA 91302Phone: (818) 436-6410Fax: (818) [email protected]

AUDITORSALBERG & COMPANY, P.A.

2295 NW Corporate Blvd., Suite 240Boca Raton, FL 33431-7328Phone: 561-995-8270Fax: [email protected]

BANKWELLS FARGO

420 Montgomery Street San Francisco, CA 94104

new western energy exploration & production growth nwtr corporate presentation august 2012 new...

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