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VincentEnergyGroup.com

DIRECT PARTICIPATIONOIL & GAS (DPOG)Two Well Prospect - Lavaca County, Texas

INCOME & GROWTH STRATEGY WITH UNPARALLELED TAX ADVANTAGES

Vincent Energy is a fully integrated, energy division of Vincent Companies, involved in the acquisition and direct ownership of oil and gas wells primarily located in the sweet crude oil-rich Texas Gulf Coast Basin.

The focus is on providing unparalleled tax advantages coupled with the potential for strong growth and long-term monthly income.

PRODUCING TOMORROW’SENERGY...TODAY

A MESSAGE FROM THE FOUNDERSVincent Companies

Direct Participation Oil & Gas (DPOG) investments serve many high-net-worth investors’ interests due to the potential for: • Unparalleled tax bene�ts

• Higher income rates in a low interest rate environment

• Improved portfolio diversi�cation created by the non-correlation with stocks and other �nancial assets

• A reduction of risk created by a secondary DPOG bene�t, favorable tax treatment on income received.

Instead of owning shares in an oil & gas corporation, DPOG investors own production created by speci�c wells with certain physical locations. Ownership includes operating expense, that’s where the potential tax bene�t applies. “Direct” means investors participate directly in cash �ows produced by exploration and production without intermediary business expense associated with common stock ownership.

You’re probably not an oil & gas expert. Vincent Energy bridges the gap between you and the oil wells. We aim to grow the wealth of accredited investors by combining decades of

knowledge and experience with that of our oil & gas principals, partners, and senior executives. Vincent Energy is guided by a simple philosophy: “Identify opportunity, manage risk, and create value.” Vincent conservatively assumes a risk management approach combined with a creative approach to oil & gas exploration and production.

DPOG is not for everybody. Rather, it is for accredited investors who recognize the potential for the future of oil & gas operations in the U.S., desire the potential of strong, long term returns as well as unparalleled tax bene�ts.

We are ready to introduce you to Direct Participation Oil & Gas so you can consider participating in two of America’s most important domestic and export products.

Best Regards,

Dale Creed Francis & Ryan Lit�nCo-Founders & Managing Partners

“Our mission is to continue to create value-added investments for clients by capitalizingon our diversi�ed experience to identify and invest in high-growth opportunities.”

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1A descriptive summary of the project and economic potential ofthe immediate area.

Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 - 3A detailed analysis of the ownership participation of both the industrypartners and private investors.

Anatomy of a DPOG Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4An illustrative time-line of the project from concept to cash �ow.

Prospect Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 - 12An in-depth overview of the geological merits of the project.

Tax Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 - 18An informative look into the powerful tax advantages that improveproject economics.

TABLE OF CONTENTS

Investments in oil and gas involve a substantial risk of loss. You should

therefore carefully consider whether such investments are appropriate for

you in light of your �nancial situation. This hypothetical illustration is not

intended as investment, tax or legal advice. Any discussion involving an

o�ering provided by Vincent Energy is quali�ed in its entirety by the

information included in the speci�c o�ering’s disclosure documents and

supplements (collectively, the “Memorandum”). Any solicitation of an

o�er may be made only by delivery of the Memorandum and to

accredited investors only. The above values are for illustrative purposes

only. All projections above are based upon assumptions and not the

actual results. Production rates and market pricing could vary materially

from those projected. There are signi�cant risks associated with oil and

gas ventures, and there is no assurance we will participate in a productive

well. Please read the private placement memorandum in its entirety.

Corporate Headquarters250 Prairie Center Drive, Suite 335

Eden Prairie, MN 55344

(612) 424-8650

[email protected]


Vincent Energy with its partners propose to drill a Two Well Prospect in Lavaca County, Texas, approximately midway between San Antonio and Houston. These two superior prospects were generated in-house and were developed through intensive geological and geophysical studies of two unique and rare opportunities to develop proven, but never produced, structures. Our partner, a thirteen-year veteran energy developer whose senior management have over 150 years of combined oil and gas experience, will manage the majority interest and serve as the Licensed Operator of Record.

Geologically, this area is widely known for considerable oil and gas production from both horizontal wells and deep, high-pressured wells. In only the last 25 years, Lavaca County alone has produced in excess of 42 million barrels of oil and approximately 1.5 trillion cubic feet of gas. In recent years, the Midway Sand Channel has proven itself as one of the most impressively productive formations in the area and has drawn the attention of several shrewd and resourceful exploration �rms. Luckily, this high-impact target sand has remained mostly unexplored because of its depth and historic challenges in managing the immense pressures at these depths. This has created an enormous opportunity for astutely managed and well equipped companies.

Our two prospect wells will each be located adjacent to two separate, previously drilled, Key Wells that encountered seemingly substantial Midway Channel Sand structures. Both Key Wells were overcome by a combination of intense pressures and poor engineering and were incapable of recovering any of the realized reserves. The prospect wells will twin both of these conceptual Key Wells and apply state-of-the-art drilling and completion procedures.

In summary, the Two Well Prospect is a meticulously crafted, managed-risk development project. It is a project keenly aimed at capitalizing on the powerful combination of proven reserves and exciting monthly cash �ow potential. Our team is proud to present these two prospects, for which we have painstakingly worked to create and arduously secure for their superb placement on an emerging trend. The added advantage of drilling into veri�ed structures drastically improves our probability of establishing an expandable footing on this trend.

Vincent Energy and its partners anticipate drilling the prospect wells consecutively beginning in May 2019. With a substantiated geological concept and exciting economics, further enhanced by valuable tax bene�ts, we expect the joint venture to fund quickly. Therefore, should you have any immediate questions, please don’t hesitate to call or email us.

Best Regards,

Dale Creed Francis & Ryan Lit�nCo Founders & Managing Partners

EXECUTIVE SUMMARY

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PARTNERSHIPProject Participants

Vincent Energy and its predecessors have engaged in oil and gas exploration and production since 2006. Vincent Energy and its a�liates are a family-owned holding company focused on developing its ever growing portfolio of oil and gas working interests, mineral interests and private equity investments. Vincent Energy’s primary focus is on acquiring early-stage Texas Gulf Coast exploration prospects, mineral interests and strategic land opportunities.

Energy Equities, IncEnergy Equities Incorporated, founded in 1994, is a Texas corporation and a licensed oil and gas operator in the state of Texas. Their business specialization is the active pursuit of participation in oil and gas prospects located in areas of proven production that meet their stringent research criteria. Through both their extensive study and third-party reservoir analysis of the prospect, Energy Equities, Inc., along with private and institutional investors, has elected to participate as a substantial working interest partner of the project with Vincent Energy as the Joint Venture Manager and the Operator of Record.

Joint VentureThe Joint Venture is a vehicle speci�cally organized to allow private investors to directly participate in the drilling for oil and gas in Texas. This structure allows individuals and corporations the possibility of converting Federal and State income tax liability, combined with investment capital, into potential long term monthly income, while maintaining a comfortable distance from liability.

Twenty-three units of participation in this joint venture are allocated for quali�ed investors.


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Review ProspectFor Potential

Acquire and interpretseismic data

Research courthouse foravailable acreage

Provide title on lease

Purchase leaseSecure project partnersDrill site preparation

Preparegeological maps

Negotiate with mineralowner for lease

Drill well Run and cement casing Stimulate well(acidize or frac)

Log wellPerforate zone

of interest

Execute and forward divisionorder and title opinion to

oil and gas purchaser

Vincent Energy receivespayment from purchaser

Purchaser schedules monthlyrevenue payments

Stake locationPrepare project

presentation

Test wellBuild production facilityPrepare division orderand title opinion

Begin oil and gas salesInstall production

equipment

Investors ReceiveRevenues

ANATOMY OF A DIRECT PARTICIPATION OIL & GAS (DPOG) PROJECT

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PROSPECT SUMMARY

PROSPECTLOCATOR MAPLavaca County, Texas

PROSPECT

TEXAS GULF COAST BASIN

Active Operations

Lavaca County

Regional Oil & Gas Facts

There are 480 oil and gas producing leases in Lavaca County run by 60 operating companies that have drilled over 1,600 wells.

Lavaca County produced 4,783,177 barrels of oil and almost 25 billion cubic feet of natural gas in 2018.

Aggressive exploration activity continues with 63 drilling permits issued in 2017 and 68 issued in 2018.

VincentEnergyGroup.com5

The Two Well Prospect consists of a pair of deep vertical wells, drilling into over-pressured formations, with both wells located in Lavaca County, Texas – The heart of the oil and gas rich Texas Gulf Coast Basin. Lavaca County is fortunate to be one of the few Texas counties to encompass the Midway Sand Channel with its recurring pockets of thick, porous and permeable sediment bearing the capability of yielding impressive oil and gas production. The Midway Sand is a high-value target that has luckily, because of its depth, remained largely unexplored. This characteristic makes the project a �tting objective for targeting virgin production rates and the added potential for future large scale development. The extreme high pressures of the deep Midway formation can also add to the sizable recovery rates and tremendous daily �ow rates realized in many nearby wells.

Recently, exploration for the Midway Sand has increased due to the current advancements of su�ciently high-resolution 3-D seismic data that can accurately map the serpentine Midway Channel. In addition, modern drilling and completion techniques are also a necessary specialization for successfully operating in this over-pressured environment. The amply explored and very proli�c Wilcox Formation, although also considered to be a deep formation, is shallower than the Midway and will be a secondary target in both of our prospects. The comprehensive development of the overlying Wilcox will also furnish numerous control points which are very valuable for more precise exploration and e�cient development of deeper targets, such as the Midway.

The company has identi�ed two drilling locations in this well-de�ned Midway Sand Channel and has con�rmed these locations with proprietary reprocessed high-resolution 3-D data. Near our prospect area, Midway production is exempli�ed by several key wells, all of which are found in this prehistoric channel. Located approximately 5 miles northeast of our prospects, the 1978 Exxon Koerth #1 discovery well resulted in the cumulative production of 20 billion cubic feet of gas and 361,000 barrels of oil - all from a relatively narrow Midway Channel window. In 2013, approximately 29 miles to the northeast of our prospects, Square Mile Energy Company drilled the Cannon #1 well speci�cally targeting the Midway Sand and has since produced over 10.7 billion cubic feet of gas and 528,499 barrels of oil. This discovery led to Square Mile’s enthusiastic and largely successful eastbound development of the Midway Channel Sand in the immediate area. Several other operators, such as Ballard Exploration and Trio Operating Company, followed moving westward and closer to our locations.

Our prospect wells are adjacent to two separate, previously drilled, wells that encountered seemingly substantial Midway Channel Sand structures. Both were unable to produce because of mechanical issues, either while drilling or during the completion phase. The following fold-out page illustrates our interpretation of the regional Midway Channel and the structures we will be penetrating, all of which are veri�ed with the Key Well Logs and our re�ned 3-D seismic mapping. Vincent Energy and its partners propose to successfully drill and test two twin wells, one adjacent to each of the prospect’s history Key Wells.

GEOLOGICAL SUMMARY

ExperienceThe “D” #1 Well (pictured to the right) is one of seven (7) wells that were successfully funded for drilling in calendar year 2018. This prospect required a directionally drilled well which was necessary to access the valuable resources trapped under the newly constructed Arbuckle Water Reservoir. Working hand-in-hand with the lower Colorado River Authority (LCRA), the governing body of the reservoir, our partners navigated the sensitive terrain to drill, test and complete for production the “D” #1, which began producing in February of 2019.

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Prospect 1The Prospect #1 Key Well encountered a signi�cant oil and “Gas Kick” in a zone concurrently with the Midway Channel Sand resulting in a loss of control of the well at approximately 11,120 feet in depth. This event is illustrated on the adjacent Well Log. The well remained uncontrollable for several weeks because the operator chose not to set intermediate control casing to the necessary depth, forcing them to aggressively pump heavier and heavier drilling mud in an e�ort to bring the well under control. When heavy mud control e�orts failed, cement was pumped and squeezed into the well to stop the runway �ow into the unprotected shallower sands. Then, and emergency liner was set to allow for the drilling to eventually resume. The well ultimately reached its intended Total Depth of 11,487 feet. Upon testing numerous intervals, which appeared in the logging process to have oil and gas, it was ultimately determined that these intervals have been severely damaged during the extreme measures taken to regain control of the well. Consequently, the deeper Midway sands were abandoned for the shallower pay sands of the regionally proli�c Wilcox Formation.

Vincent Energy, alongside our partners propose to successfully drill and test a twin well to the Prospect Key Well.

Seismic Structure Contour MapEstimated Reserves: 420,000 BO & 21,000,000 MCFG

Wells that did not drill deep enough to reach the Midway Sand have been removed from the above map for legibility purposes.

Prospect Key WellSkelly Henderson #1 (ca. 1962)

Well Log

Prospect Key WellSkelly Henderson #1 (ca. 1962)

Casing Design

10,367’

Set 7” IntermediateCasing to 10,367’,

too shallow forproper protection.

Cautionary casingprogram calls for

Intermediate Casingto be set to the

necessary depth of11,000’ in order to

maintain well control.

Set 5,5’ Emergency Linerfrom 10,367’ - 11,321’

after well wasunder control.

11,321’

11,487’3.5” Production Liner

“Gas Kick”

Drill-StemTested at

11,336’ - 11,354’and recovered

oil & mud.

Perforated at11,373’ - 11,377’and �owed 186

units of gasper day.

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Prospect 2

The Prospect #2 also experienced a “Gas Kick” when unexpected and uncontrollable gas �ow occured at 13,177 feet, the middle of the Midway Sand. The well lost drilling-mud circulation into shallower sands because the operator chose not to set intermediate casing to the depth required to maintain control. The force of the heavier downward mud, against the upward pressure of the oil and gas, pushed the drilling mud into the unprotected shallower, less pressured zones. Rig personnel observed a 12-foot gas �are during these operations. Ultimately, the well had to be injected with a kill weight “Heavy Mud Pill” to immediately stop the �ow of gas. After regaining control of the well, drilling continued and it reached its intended Total Depth of 14,165 feet. The well was then tested between 13,162 - 13,172 feet, which is concurrent with the Midway Sand Channel. Test results �owed at a rate of 1.4 million cubic feet of gas per day and 10 barrels of oil per day. However, these rates were unsustainable due to restricted �ow and formation damage caused by the “Well Killing” process.

Vincent Energy and it’s partners propose to successfully drill and test a twin well to the Prospect Key Well.

Wells that did not drill deep enough to reach the Midway Sand have been removed from the above map for legibility purposes.

Prospect Key WellDreyfus Barnes #2 (ca. 1999)

Well Log

Prospect Key WellDreyfus Barnes #2 (ca. 1999)

Well Log

Set 7 5/8” IntermediateCasing to 10,143’ , too

shallow for properprotection.

Cautionary casing program callsfor Intermediate Casing to be

set to the necessary depthof 13,000’ in order to

maintain well control.

Set 5.5” linear, in lieu ofextending the intermediateCasing, from 10,143’ - 13,088’.

3.5” Production Liner

��

Seismic Structure Contour MapEstimated Reserves: 560,000 BO & 28,000,000 MCFG

“Gas Kick”

10,143’

13,088’

14,165’ 8

Authority For Expenditure (AFE)

Prepared by Vincent Energy for Joint Venture RRC#567496DATE: 20/20/2019 LEASE: Barnes & Lester FIELD: Midway FieldAFE DESCRIPTION: Two-Well Prospect (11,750 ft. and 13,500 ft.) Wells COUNTY/STATE: Lavaca County, Texas

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Operator’s Insurance

12

TAX BENEFITSUnparalleled By Any Other Investment Type

Although not the main reason to participate, one of the most powerful tools for accredited investors to reduce their taxable “ordinary income,” also known as “active income,” and the tax bene�ts inherent in oil and gas exploration ventures. These bene�ts are not only real, they were purposely created by Congress in an attempt to strengthen America’s global energy position. Since the tax bene�ts were created to promote investment, they are designed to enhance economics and substantially reduce the “at risk” dollars of a project. In other words, your tax dollars would be working for you.

For high income individuals that �nd themselves paying at the highest Federal income tax bracket (+/- 45% when factoring in State income tax), it is an unpro�table choice to simply pay the tax bill and lose these dollars with no hope of recovery. For example, a tax bill of $45,000 on income of $100,000 would be a complete loss of $45,000. On the other hand, by risking $55,000 out of a $100,000 investment (since your tax bill should be reduced by $45,000), you will instead create an opportunity to own partial ownership of an oil and gas well, with minimal risk capital that can produce long term cash �ow.


What is at risk if Ido not participate:

What is at risk if Ido participate:

45%

55%

45%

55%

Tax DollarsGONE

DollarsYou Keep

Tax Dollars

At Risk

Tax Dollars

You Keep

*Note: We recommend that you check with your tax professional as to how this may a�ect you.13

How It Works

Every investor’s situation is unique, therefore the example above is for illustrative purposes only and uses an example of a combined Federal and State income tax �gure of 45%. If your State income tax is above 8%, there is a high probability that your tax incentives could further enhance the economics. The following pages contain a concurring opinion with regard to these oil and gas tax bene�ts from Havel & Company, LLP (a professional accounting �rm established in 1980). Their team has been a vital partner to our company, having processed thousands of annual tax documents for hundreds of our investors across the country over the past decade. You will �nd a sample K-1, a familiar and widely used IRS document, used by our �rm to convey tax write-o�s and income. The Joint Venture’s Federal SS-4 Form veri�es our prospects autonomy and legal formation.

Example tax treatment for 1 unit of participation in the Two Well Prospect:

Additional “at risk” dollars -vs- paying taxes: $28,981.40

$1,000,000 gross income- $289,814.00 dry hole at risk

$710,186.00 taxable income45% tax rage

$319,583.70 tax liability

$130,416.30 tax savings

actual at risk after tax savings:$159,397.70

$1,000,000 gross income- $0.00 investment

$1,000,000 taxable income45% tax rage

$450,000.00 tax liability

$0.00 tax savings

Your additional tax bill:$130,416.30

1. Active vs. Passive Income

The Tax Reform Act of 1986 introduced into the Tax Code the concepts of “Passive” income and “Active” income. The Act prohibits the o�setting of losses from Passive activities against income from Active activities. The Tax Code speci�cally states that a Working Interest in an oil and gas well is not a passive activity; therefore, deductions can be utilized to o�set income from salaries, business, portfolio, capital gains, etc. (See Section 469(c)(3) of the Tax Code).

2. Intangible Drilling Cost (IDC) Deduction

The intangible expenditures of drilling (labor, chemicals, drilling costs, etc.), which are the combined Subscription & Acquisition Funds and the Drilling and Testing Funds, are considered “Intangible Drilling Costs (IDC)”, and are 100% deductible in the year in whichincurred. For example, a $100,000investment, of which $75,000 comprises the two installments mentioned above, could yield up to $75,000 in tax deductions during the �rst year of the venture. These deductions are available in the year in which the investment was made, even if the well does not start drilling until March 31 of the following year. Additional deductions will be generated in the completion of a successful well (See Section 263 (c) of the Tax Code).

3. Tangible Drilling Cost Tax (TDC) Deduction

The amount of the investment allocated to the necessary equipping of a successful well, “the Tangible Drilling Costs (TDC),” are also 100% tax deductible. In the previous example, the remaining tangible costs (or approximately 25% of the Completion Funds of $25,000), may also be deductedthrough straight line depreciation over a �ve to seven-year period.

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Accountant’s Opinion

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Accountant’s Opinion

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Example Form K-1

*Note: We recommend that you check with your tax professional as to how this may a�ect you.

Example Schedule C (Form 1040)

*Note: We recommend that you check with your tax professional as to how this may a�ect you.18

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For More Information & Site Updates, Please Visit: www.VincentEnergyGroup.com

View the most recent project and site updates, interactive maps, current news, contact information and more.

Exclusive access for clients!

QUESTIONS:Example Schedule C (Form 1040)

*Note: We recommend that you check with your tax professional as to how this may a�ect you.

For More Information & Site Updates, Please Visit: www.VincentEnergyGroup.com

View the most recent project and site updates, interactive maps, current news, contact information and more.

Exclusive access for clients!

QUESTIONS:

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Corporate Headquarters250 Prairie Center Drive, Suite 335

Eden Prairie, MN 55344

(612) 424-8650

[email protected]


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