SUPPLEMENTAL RESERVES INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2012

SUPPLEMENTAL RESERVES INFORMATION (UNAUDITED):

SUPPLEMENTAL RESERVES INFORMATION (UNAUDITED)

NOTE 23 — SUPPLEMENTAL RESERVES INFORMATION (UNAUDITED)

The Company’s net proved oil and natural gas reserves as at December 31, 2012, have been estimated by a third-party petroleum engineer.

All estimates are in accordance generally accepted petroleum engineering and evaluation principles and definitions and with guidelines established by the SEC. All of the Company’s reserves are located in the United States of America and accounted for under one cost center.

The Company’s policies and practices regarding internal control over the estimating of reserves are structured to estimate objectively and accurately its oil and natural gas reserve quantities and present values in compliance with SEC regulations and accounting principles generally accepted in the United States of America. The Company does not yet maintain an internal staff of petroleum engineers and geosciences professionals. The data used in the Company’s reserve estimation process is based on historical results for production, oil and natural gas prices received, lease operating expenses and development costs incurred, ownership interest and other required data. Historical oil and gas prices, lease operating expenses, and ownership interests are provided by and verified by the Company’s acting chief financial officer.

The consulting petroleum engineer responsible for the preparation of the Company’s reserve report has a Bachelor of Arts degree in Physics and a Bachelor of Science degree in petroleum engineering from two major universities and has experience in preparing economic evaluations and reserve estimates. He meets the requirements regarding qualifications, objectivity and confidentiality set forth in the Standards Pertaining to the Engineering and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers.

The following reserve estimates were based on existing economic and operating conditions. Oil prices were calculated using a 12-month average price. Operating costs, production and ad valorem taxes and future development costs were based on current costs with no escalation.

There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting the future rates of production and timing of development expenditures. The following reserve data represents estimates only and should not be construed as being exact. Moreover, the present values should not be construed as the current market value of the Company's oil and gas reserves or the costs that would be incurred to obtain equivalent reserves.

Proved Oil and Gas Reserves at December 31, 2012 (unaudited)

Crude Oil

BBL

Natural Gas

Mcf

Gross Reserves

Net Reserves

17,034

12,776

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Standardized Measure of Discounted Future Net Cash Flows (unaudited)

The Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves (“Standardized Measures”) does not purport to present the fair market value of a company's oil and gas properties. An estimate of such value should consider, among other factors, anticipated future prices of oil and gas, the probability of recoveries in excess of existing proved reserves, the value of probable reserves and acreage prospects, and perhaps different discount rates. It should be noted that estimates of reserve quantities, especially from new discoveries, are inherently imprecise and subject to substantial revision.

Reserve estimates were prepared in accordance with standard SEC guidelines. The future net cash flow for December 31, 2012, was computed using a 12-month average price. Costs and prices were held constant and were not escalated over the life of the property. No deduction has been made for interest or general corporate overhead. The annual discount of estimated future cash flows is defined, for use herein, as future cash flows discounted at 10% per year, over the expected period of realization.

The Company emphasizes that reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. It is reasonably possible that, because of changes in market conditions or the inherent imprecision of these reserve estimates, that the estimates of future cash inflows, future gross revenues, the amount of oil and gas reserves, the remaining estimated lives of the oil and gas properties, or any combination of the above may be increased or reduced in the near term. If reduced, the carrying amount of capitalized oil and gas properties may be reduced materially in the near term.

Standardized measure of discounted future net cash flows related to proved reserves:

Proved

Producing

Gross Oil Reserves, BBL

Net Oil Reserves, BBL

Net Revenue

Net Severance and Ad Valorem Tax

Net Lease Cost

Net Cash Flow

Present Worth @ 10%

17,034

12,776

$1,165,280

$53,603

$336,858

$774,819

$481,617

In May 2014, the Company sold all of its interest in its sole producing oil and gas property. See “Sale of Oil and Gas Lease” under Note 24 – Subsequent Event.

All Energy Corp 10-K