June 3, 2014

Ms. Michelle R. Smith

National Association of Royalty Owners
Rockies Chapter
23851 County Road 61
Elbert, Colorado 80106

Dear Ms. Smith:

In accordance with your request, we have estimated future summary cash flows, both undiscounted and
discounted at an annual rate of 10 percent, related to expected horizontal well results in the Boulder County,
Colorado, area of Wattenberg Field, from both a working and royalty interest ownership position. The horizontal
well ownership incorporated in the estimates include: (1) 100 percent working interest with 87.5 percent revenue
interest, (2) 12.5 percent (
1
/
8
) royalty interest, (3) 100 percent working interest with 80.0 percent revenue interest,
and (4) 20.0 percent (
1
/
5
) royalty interest. The estimates summarized in this letter cover a range of expected total
oil and gas recoveries from undeveloped horizontal well locations in the Codell and Niobrara formations that are
assumed to be section length with 4,000 feet of completed horizontal lateral. Horizontal well development
demonstrated in Wattenberg Field has ranged from 8 wells per section (80-acre spacing) to 16 wells per section
(40-acre spacing). Summary cash flow estimates shown below are for single well estimates and groups of 8 wells
and 16 wells in order to see the cash flow potential for full section development. These estimates have been
prepared using constant price and cost parameters, as discussed in subsequent paragraphs of this letter. The
future cash flow, undiscounted and discounted, associated with each ownership position for the range of expected
per-well recoveries are:

Total
Per-Well Cash Flow Estimates for a Working Interest of 100% and Revenue Interest of 87.5% (M$)
Recovery Single Well 8 Wells 16 Wells
(MBOE) Undiscounted Disc. at 10% Undiscounted Disc. at 10% Undiscounted Disc. at 10%

200 02,281 0,448 18,249 03,586 036,498 07,173
250 04,272 1,723 34,175 13,783 068,350 27,566
300 06,300 2,995 50,402 23,958 100,803 47,915
350 08,355 4,263 66,838 34,104 133,675 68,208
400 10,414 5,520 83,310 44,158 166,621 88,315


Total
Per-Well Cash Flow Estimates for a Royalty Interest of 12.5% (M$)
Recovery Single Well 8 Wells 16 Wells
(MBOE) Undiscounted Disc. at 10% Undiscounted Disc. at 10% Undiscounted Disc. at 10%

200 1,255 0,833 10,038 06,666 20,075 13,331
250 1,568 1,017 12,541 08,139 25,082 16,278
300 1,881 1,200 15,048 09,603 30,096 19,206
350 2,195 1,383 17,559 11,060 35,118 22,120
400 2,507 1,563 20,056 12,502 40,112 25,003




Total
Per-Well Cash Flow Estimates for a Working Interest of 100% and Revenue Interest of 80.0% (M$)
Recovery Single Well 8 Wells 16 Wells
(MBOE) Undiscounted Disc. at 10% Undiscounted Disc. at 10% Undiscounted Disc. at 10%

200 1,601 0,00(10) 12,805 00,0(78) 025,610 00,(157)
250 3,406 1,154 27,246 09,233 054,491 18,466
300 5,248 2,316 41,982 18,530 083,963 37,059
350 7,111 3,473 56,891 27,785 113,782 55,570
400 8,998 4,629 71,980 37,034 143,960 74,067


Total
Per-Well Cash Flow Estimates for a Royalty Interest of 20.0% (M$)
Recovery Single Well 8 Wells 16 Wells
(MBOE) Undiscounted Disc. at 10% Undiscounted Disc. at 10% Undiscounted Disc. at 10%

200 2,007 1,342 16,056 10,735 32,112 21,470
250 2,508 1,637 20,066 13,095 40,131 26,190
300 3,010 1,930 24,081 15,441 48,162 30,882
350 3,512 2,221 28,094 17,769 56,187 35,538
400 4,013 2,511 32,106 20,091 64,211 40,182

Total per-well recoveries are expressed as thousands of barrels of oil equivalent (MBOE), determined using a
ratio of 6 thousand cubic feet of gas to one barrel of oil.

Cash flow is after deductions of our estimates of the owner's share of production taxes, ad valorem taxes, capital
costs, and operating expenses but before consideration of any income taxes. The cash flow has been discounted
at an annual rate of 10 percent, which is shown to indicate the effect of time on the value of money. Cash flow
presented in this report, whether discounted or undiscounted, should not be construed as being the fair market
value.

As requested, prices used in this report are based on the 12-month unweighted arithmetic average of the first-
day-of-the-month price for each month in the period January through December 2013. For oil and natural gas
liquids (NGL) volumes, the average West Texas Intermediate posted price of $96.94 per barrel is adjusted by field
for quality, transportation fees, and regional price differentials. For gas volumes, the average Henry Hub spot
price of $3.670 per MMBTU is adjusted by field for energy content, transportation fees, and regional price
differentials. All prices are held constant throughout the lives of the properties. Our estimates include a gas
shrinkage factor of 0.749, a gas-oil ratio of 8,300 cubic feet of gas per barrel of oil, and a NGL yield of 50.1 barrels
of NGL per million cubic feet of gas. The average adjusted product prices are $87.91 per barrel of oil, $39.34 per
barrel of NGL, and $3.791 per MCF of gas.

Operating costs used in the estimates are $5,170 per month and are based on our understanding of operating
costs in the area. As requested, operating costs are not escalated for inflation. The capital cost used in the
estimates for the section-length horizontal wells with 4,000 feet of completed lateral length is $4.7 million, and are
based on actual costs from recent activity. Capital costs are not escalated for inflation. As requested, our
estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the
properties.

The values shown in this letter are estimates only and should not be construed as exact quantities. Estimates of
total oil and gas recovery may increase or decrease as a result of market conditions, future operations, changes
in regulations, or actual reservoir performance. In addition to the primary economic assumptions discussed
herein, our estimates are based on certain assumptions including, but not limited to, that the wells will be
operated in a prudent manner, that no governmental regulations or controls will be put in place that would impact
the ability of the interest owner to recover the estimated volumes, and that our projections of future production will

prove consistent with actual performance. If the volumes are recovered, the cash flows therefrom and the costs
related thereto could be more or less than the estimated amounts. Because of governmental policies and
uncertainties of supply and demand, the sales rates, prices received for the volumes, and costs incurred in
recovering such volumes may vary from assumptions made while preparing these estimates.

For the purposes of these estimates, we used technical and economic data including, but not limited to, geologic
and production maps, analogous historical price and cost information, and property ownership interests. The
volumes in this letter have been estimated using deterministic methods; these estimates have been prepared in
accordance with generally accepted petroleum engineering and evaluation principles set forth in the Standards
Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of
Petroleum Engineers (SPE Standards). We used standard engineering and geoscience methods that we
considered to be appropriate and necessary in accordance with the 2007 Petroleum Resources Management
System definitions and guidelines. As in all aspects of oil and gas evaluation, there are uncertainties inherent in
the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only
informed professional judgment.

The data used in our estimates were obtained from National Association of Royalty Owners, various operators,
public data sources, and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as
accurate. Supporting work data are on file in our office. The technical persons responsible for preparing the
estimates presented herein meet the requirements regarding qualifications, independence, objectivity, and
confidentiality set forth in the SPE Standards. We are independent petroleum engineers, geologists,
geophysicists, and petrophysicists and are not employed on a contingent basis.

Sincerely,

NETHERLAND, SEWELL & ASSOCIATES, INC.
Texas Registered Engineering Firm F-2699


/s/ C.H. (Scott) Rees III
By:
C.H. (Scott) Rees III, P.E.
Chairman and Chief Executive Officer




/s/ Randolph K. Green
By:
Randolph K. Green, P.E. 72951
Vice President


Date Signed: June 3, 2014


RKG:LPM
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