Equus Subsidiary, Morgan E&P, Acquires 4,747 Net Acres in the Bakken

Enters Into a Purchase and Sale Agreement With Pro Energy I

HOUSTON, May 22, 2023 (GLOBE NEWSWIRE) -- Equus Total Return, Inc. (NYSE: EQS) (“Equus” or the “Company”) today announced the closing of a Purchase and Sale Agreement (“PSA”) between Morgan E&P, LLC, (“Morgan”), a wholly-owned subsidiary of Equus, and Pro Energy I, LLC (“Pro Energy”). Pursuant to the PSA, Morgan has acquired 4,747.52 net acres, in the Bakken/Three Forks formation in the Williston Basin of North Dakota.

In addition to other terms and conditions, including a payment of $500,000, Morgan is required to drill and complete a minimum of six wells within 18 months of receiving the first drilling permits. The average cost of drilling a new horizontal well is approximately $8.0 million. Morgan will receive an average net revenue interest (“NRI”) of 80% in the production of any wells drilled.

The founders of Pro Energy have been involved in the successful drilling of over 1,800 horizontal wells in the Williston Basin over a ten-year span. Together, they have guided the transition of drilling and completions techniques from Generation I (“Gen I”) wells to the most recent Generation VI (“Gen VI”) wells.

Morgan engaged the petroleum engineering firm of Cawley, Gillespie & Associates, Inc. (“CG&A”) to review and provide a reserve analysis of the asset using forward strip pricing as at May 16, 2023.

Using a discount rate of 10% (PV 10 Valuation) the values of proved undeveloped, probable, and possible reserves associated with the project are $6,444,503, $14,780,023, and $37,628,872, respectively.

CG&A has confirmed forty-eight (48) gross drilling locations, resulting in approximately fifteen (15) net drilling locations. As additional net acreage and working interests are acquired, the resulting number of net drilling locations and associated reserves is expected to increase accordingly. Neither CG&A nor Morgan can guarantee any amounts that may be recoverable from these properties. However, based on a historical analysis of the geologic strata that are the subject of Morgan’s development rights, CG&A has noted the estimated ultimate recovery (“EUR”) from a single well is expected to be approximately 811,475 barrels of oil equivalent.