Recovery Energy's primary focus is on growing revenue, cash-flow and reserves through unconventional drilling of the various prospective oil horizons on its leasehold and conventional drilling of the “J” and Wykert sandstones. The Company’s asset base is comprised of current production and reserves from the “J” sandstone, and current production from non-operated unconventional horizontal Niobrara wells. Company leasehold possesses extensive potential for other multi-horizon hydrocarbon-bearing formations.

Recovery Energy is continuously evaluating its geologic and reserve recovery potential and has identified numerous drilling locations for multi-horizon unconventional opportunities and lower-risk conventional drilling targets. Of primary interest are the potentially high-yield multi-horizon hydrocarbon-bearing formations including the emerging Niobrara Oil Shale, Codell Sandstone, Greenhorn Limestone, Permian Admire and Pennsylvanian Desmoines horizons, and low-risk conventional offsets to existing production in the “J” and Wykert sandstones. See E&P Spotlight.

Unconventional Drilling Activity: Multi-Horizon Unconventional Opportunities Across the DJ Basin

Recovery Energy’s acreage position throughout the northern DJ Basin gives the company significant exposure to multi-horizon unconventional hydrocarbon-bearing formations.

Geologic and 3D seismic analysis has identified numerous unconventional horizontal drilling locations, including Niobrara, Codell, Greenhorn, and Paleozoic horizons. The de-risking process in the Niobrara and Codell horizon plays is following a similar evolution to all other shale plays. Recovery Energy’s analysis of other potentially prolific targets, including the Greenhorn and Paleozoic unconventional potential, is also underway.

Recovery Energy’s Multi-Horizon Unconventional Potential:

 Niobrara: Burgeoning resource play seeing significant drilling activity in numerous areas. Hybrid shale/carbonate reservoir deposited in deep marine environment with areal variations in mineralogical content and tectonic overprint.

 Codell Sandstone: Historical productive interval in the Wattenberg Field, currently seeing horizontal development in and outside of core area. Provides multi-lateral upside with Niobrara. Have identified unconventional Codell play on leasehold in Goshen Co, Wyoming.

 Greenhorn Limestone: Largely unexplored resource play, similar to Niobrara. Significant free oil recoveries (DST’s), mud gas shows, and geochemical data establish potential.

 Pennsylvanian: Shows and conventional production from porous carbonates, and core and DST shows from black shales indicate unconventional shale exploitation potential in shale-rich “sweet spots” on company leasehold.

Conventional Drilling Activity: A Foundation on Current Production and Cash-flow

Recovery Energy has been producing oil from the “J” sandstone, the primary producing horizon in the DJ Basin from the 1940s through 1970s, since 2009. Thirty-five operated wells produce approximately 350+ BOE/d from the “J”, giving the Company a grass roots presence in the DJ Basin.

The modernization of the “J” Sandstone play, utilizing current frac technology, has expanded historical fluvial facies exploration in this established and proven producing basin into relatively undeveloped marine facies. The marine facies doesn’t have as high a porosity and permeability as the fluvial facies, but can be oil saturated and is amenable to current frac techniques. Geologic data indicate that Recovery Energy’s acreage is well-positioned to exploit both fluvial and marine facies potential.

The Wykert Sandstone produces conventionally from the Kleinholz and Terrestrial fields, which can be extended onto adjacent Recovery Energy leasehold in Kimball County, Nebraska. Additional Wykert (and Cassa Sandstone) potential has been identified in Goshen County, Wyoming. Also, unconventional potential exists in the lower Permian Admire Group.

The excellent economics and the low cost, low risk attributes of the “J” and Wykert sandstones give foundational value to Recovery Energy.

Recovery Energy holds approximately 140,000 gross acres, 125,000 net acres of mostly long-term leasehold in the Denver-Julesburg Basin, in Banner, Kimball and Scotts Bluff Counties in Nebraska; Carbon, Goshen, Laramie and Platt Counties in Wyoming, and Adams, Arapahoe, Washington and Weld Counties, in Colorado. The company continues to evaluate additional DJ Basin acquisitions on an ongoing basis.