<SEC-DOCUMENT>0001144204-15-015601.txt : 20150312
<SEC-HEADER>0001144204-15-015601.hdr.sgml : 20150312
<ACCEPTANCE-DATETIME>20150312133446
ACCESSION NUMBER:		0001144204-15-015601
CONFORMED SUBMISSION TYPE:	424B5
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20150312
DATE AS OF CHANGE:		20150312

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			EnerJex Resources, Inc.
		CENTRAL INDEX KEY:			0000008504
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				880422242
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B5
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-199030
		FILM NUMBER:		15695369

	BUSINESS ADDRESS:	
		STREET 1:		4040 BROADWAY, SUITE 508
		CITY:			SAN ANTONIO
		STATE:			TX
		ZIP:			78209
		BUSINESS PHONE:		210-451-5545

	MAIL ADDRESS:	
		STREET 1:		4040 BROADWAY, SUITE 508
		CITY:			SAN ANTONIO
		STATE:			TX
		ZIP:			78209

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MILLENNIUM PLASTICS CORP
		DATE OF NAME CHANGE:	20000525

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AURORA CORP
		DATE OF NAME CHANGE:	19990825
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B5
<SEQUENCE>1
<FILENAME>v404280_424b5.htm
<DESCRIPTION>424B5
<TEXT>
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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; color: red; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>PROSPECTUS SUPPLEMENT</B></FONT></TD>
    <TD STYLE="width: 20%; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 30%; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Filed Pursuant to Rule
    424(b)(5)</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(TO PROSPECTUS DATED NOVEMBER 17, 2014)&nbsp;</FONT></TD>
    <TD STYLE="line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Registration No. 333-199030</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;<IMG SRC="tlogo.jpg" ALT=""></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>763,547 Shares of Common
Stock</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>1,242.17099</B> <B>Shares of Series
B Convertible Preferred Stock</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are offering directly to
select accredited investors up to&nbsp;763,547 shares
of common stock, par value $0.001 per share (the &ldquo;common stock&rdquo;), and
up to&nbsp;1,242.17099 shares of our series B
convertible preferred stock, par value $0.001 per share (the &ldquo;series B preferred stock&rdquo;) which are
convertible into&nbsp;709,812 shares of common stock.
The common stock will be sold at a negotiated price of $1.75 per share and the series B preferred
stock will be sold at a negotiated price of
$1,000 per share.  For a more detailed
description of the common stock and preferred stock, see the section entitled &quot;Description of Securities We
Are Offering&quot; beginning on page S-22 of this prospectus supplement.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have retained
Northland Securities, Inc. and Euro Pacific Capital, Inc. as our placement agents to use their reasonable best efforts to solicit
offers to purchase the securities in this offering. The placement agents have no obligation to buy any of the securities from
us or to arrange for the purchase or sale of any specific number or dollar amount of the securities. We expect that delivery of
the securities being offered pursuant to this prospectus supplement and the accompanying prospectus will be made to purchase on
or about March 13, 2015.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Investing in our securities involves
a high degree of risk. See &quot;Risk Factors&quot; beginning on page&nbsp;7 of this prospectus for factors you should consider
before buying our securities.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our common stock is listed on the
NYSE under the symbol &quot;ENRJ,&quot; and our 10% Series A Cumulative Redeemable Perpetual Preferred Stock is listed under
the symbol &quot;ENRJPR.&quot; On March 11, 2015, the last reported sale price of our common stock and Series A preferred
stock on the NYSE was $1.93 and $14.42, respectively. There is no established public trading market for the
series B preferred stock, and we do not expect a market to develop. We do not intend to apply to list the series B preferred
stock on any securities exchange.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of March 11, 2015, the aggregate
market value of our outstanding common stock held by non-affiliates, or public float, was approximately $11,333,881.52, based
on 7,643,114 shares of outstanding common stock, of which approximately 4,348,381 shares were held by affiliates, and a price
of $3.44 per share, which was the last reported sale price of our common stock on the NYSE on February 9, 2015. Prior to this
offering, the value of all securities we have offered pursuant to General Instruction 1.B.6. of Form S-3 in the last 12
calendar months is $0.00</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">TABLE OF CONTENTS</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">Prospectus Supplement</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>



<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="width: 90%; line-height: 115%"><A HREF="#a_001"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ABOUT THIS PROSPECTUS SUPPLEMENT</FONT></A></TD>
    <TD STYLE="width: 2%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 8%; font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">S-1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="line-height: 115%"><A HREF="#a_002"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">WHERE YOU CAN FIND MORE INFORMATION</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">S-1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%"><A HREF="#a_003"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">INFORMATION INCORPORATED BY REFERENCE</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT>S-1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="line-height: 115%"><A HREF="#a_004"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT>S-2</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%"><A HREF="#a_005"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">THE OFFERING</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT>S-3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="line-height: 115%"><A HREF="#a_006"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ABOUT ENERJEX RESOURCES, INC.</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT>S-6</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%"><A HREF="#a_007"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">RISK FACTORS</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center">S-8<FONT STYLE="font: 10pt Times New Roman, Times, Serif"></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="line-height: 115%"><A HREF="#a_008"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">USE OF PROCEEDS</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT>S-21</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="#a_026">PLAN OF DISTRIBUTION</A></FONT></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center; padding-top: 0; padding-right: 0; padding-left: 0">&nbsp;S-21</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="#SDS">DESCRIPTION OF SECURITIES WE ARE OFFERING</A></FONT></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT>S-22</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="line-height: 115%"><A HREF="#a_010"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">LEGAL MATTERS</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT>S-26</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="line-height: 115%"><A HREF="#a_011"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">EXPERTS</FONT></A></TD>
    <TD STYLE="line-height: 115%">&nbsp;</TD>
    <TD STYLE="font: 10pt/115% Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</FONT>S-26</TD></TR>
</TABLE>


<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">Prospectus</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

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    <TD STYLE="vertical-align: top; width: 92%; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_012"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ABOUT THIS PROSPECTUS SUPPLEMENT</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; width: 8%; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_013"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">WHERE YOU CAN FIND MORE INFORMATION</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_014"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">INFORMATION INCORPORATED BY REFERENCE</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_015"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_016"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ABOUT ENERJEX RESOURCES,&nbsp;INC.&nbsp;</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">3</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_017"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">RISK FACTORS</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_018"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">USE OF PROCEEDS</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">14</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_019"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">THE SECURITIES WE MAY OFFER</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">14</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_020"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">DESCRIPTION OF CAPITAL STOCK</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">4</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_021"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">DESCRIPTION OF WARRANTS</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">16</FONT></TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_022"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">DESCRIPTION OF UNITS</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">16</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_023"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">PLAN OF DISTRIBUTION</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">17</TD></TR>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_024"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">LEGAL MATTERS</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">18</FONT></TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; line-height: 115%"><A HREF="#a_025"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">EXPERTS</FONT></A></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">18</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>We have not authorized anyone to
provide you with information different from that contained or incorporated by reference in this prospectus or any accompanying
prospectus supplement or free writing prospectus, and we take no responsibility for any other information that others may give
you. This prospectus is not an offer to sell, nor is it a solicitation of an offer to buy, the securities in any jurisdiction
where the offer or sale is not permitted. You should not assume that the information contained in this prospectus or any prospectus
supplement or free writing prospectus is accurate as of any date other than the date on the front cover of those documents, or
that the information contained in any document incorporated by reference is accurate as of any date other than the date of the
document incorporated by reference, regardless of the time of delivery of this prospectus or any sale of a security. Our business,
financial condition, results of operations and prospects may have changed since those dates.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As permitted by the rules and regulations
of the Securities and Exchange Commission (the &quot;SEC&quot;), the registration statement of which this prospectus forms&nbsp;a
part includes additional information not contained in this prospectus. You may read the registration statement and the other reports
we file with the SEC at the SEC's website or at the SEC's offices described below under the heading &quot;Where You Can Find More
Information.&quot; Before investing in our securities, you should read this prospectus and any accompanying prospectus supplement
or free writing prospectus, as well as the additional information described under &quot;Where You Can Find More Information&quot;
and &quot;Information Incorporated by Reference.&quot;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">References to the &quot;Company,&quot;
&quot;EnerJex,&quot; &quot;we,&quot; &quot;our&quot; and &quot;us&quot; in this prospectus are to EnerJex Resources,&nbsp;Inc.
and its consolidated subsidiaries, unless the context otherwise requires. This document includes trade names and trademarks of
other companies. All such trade names and trademarks appearing in this document are the property of their respective holders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_001"></A><B>ABOUT THIS PROSPECTUS SUPPLEMENT</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This prospectus supplement and
the accompanying prospectus are part of a &quot;shelf&quot; registration statement on Form S-3, registration statement
number 333-199030, that we filed with Securities and Exchange Commission on November 17, 2014, and that was declared
effective on February 25, 2015 (the Registration Statement). Under this shelf process, we may sell any combination of
securities described in the accompanying prospectus in one or more offerings, up to the total dollar amounts appearing on the
cover of the Registration Statement. This prospectus supplement describes the specific details regarding this offering,
including the price, the amount of our common stock and preferred stock being offered, the risks of investing in
our common stock and preferred stock, and other items.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This document is in two parts.&nbsp;
The first part is this prospectus supplement, which contains specific information about the terms of the offering, including the
types, amounts and prices of the securities being offered and the plan of distribution. This prospectus supplement may also add,
update or change information contained in the accompanying prospectus and the documents incorporated by reference. This prospectus
supplement may be updated or supplemented. The second part is the accompanying prospectus, which gives more general information,
some of which may not apply to this offering. Generally, when we refer to this &ldquo;prospectus,&rdquo; we are referring to both
documents combined.&nbsp; To the extent the information contained in this prospectus supplement differs or varies from the information
contained in the accompanying prospectus or any document filed prior to the date of this prospectus supplement and incorporated
by reference, the information in this prospectus supplement will control.&nbsp; You should read carefully both this prospectus
supplement and the accompanying prospectus together with the additional information about us to which we refer you in the section
of this prospectus supplement entitled &ldquo;Where You Can Find More Information.&rdquo;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">You should rely only on the information
contained or incorporated by reference in this prospectus supplement and accompanying prospectus. We have not authorized any other
person to provide you with different information. If anyone provides you with different or inconsistent information, you should
not rely on it. This prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any state in which
the offer or sale is not permitted. You should not assume that the information appearing in this prospectus supplement, accompanying
prospectus or any document incorporated by reference is accurate as of any date other than its date, regardless of the time of
delivery of the prospectus or prospectus supplement or any sale of securities. Our business, financial condition, results of operations
and prospects may have changed since those dates.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This prospectus supplement contains
summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents
for complete information.&nbsp; All of the summaries are qualified in their entirety by the actual documents.&nbsp; Copies of
some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the
registration statement of which this prospectus supplement is a part, and you may obtain copies of those documents as described
below under the heading &ldquo;Where You Can Find More Information.&rdquo;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_002"></A><B>WHERE YOU CAN FIND MORE INFORMATION</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We file annual, quarterly and special
reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information
that we file at the SEC's public reference room at 100&nbsp;F Street, N.E., Washington, District of Columbia 20549. Please call
the SEC at 1-800-SEC-0330 for more information on the public reference room. Our SEC filings are also available to the public
from commercial retrieval services and at the website maintained by the SEC at <I>www.sec.gov</I> . The reports and other information
filed by us with the SEC are also available at our website. The address of the Company's website is <I>www.enerjexresources.com
</I>. Information contained on our website or that can be accessed through our website is not incorporated by reference into this
prospectus.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_003"></A><B>INFORMATION INCORPORATED
BY REFERENCE</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The SEC allows us to incorporate information
into this prospectus &quot;by reference,&quot; which means that we can disclose important information to you by referring you
to another document that we file separately with the SEC. The information incorporated by reference is deemed to be part of this
prospectus, except for any information superseded by information contained directly in this prospectus. These documents contain
important information about the Company and its financial condition, business and results.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are incorporating by reference the
Company's filings listed below and any additional documents that we may file with the SEC pursuant to Section&nbsp;13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;) on or after the date hereof and
prior to the termination of any offering, except we are not incorporating by reference any information furnished (but not filed)
under Item&nbsp;2.02 or Item&nbsp;7.01 of any Current Report on Form&nbsp;8-K and corresponding information furnished under Item&nbsp;9.01
as an exhibit thereto:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 94%; padding-right: 0.8pt; text-align: justify; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    Company's Annual Report on Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2013 (the &quot;2013 Form&nbsp;10-K&quot;),
    filed with the SEC on March 28, 2014;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    Company's Quarterly Report on Form&nbsp;10-Q for the quarters ended March&nbsp;31, 2014, June 30, 2014, and September 30,
    2014, filed with the SEC on May&nbsp;13, 2014, August 13, 2014 and November 14, 2014;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the Definitive
    Proxy Statement on Schedule 14A, filed with the SEC on July 23, 2014;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    Company's Current Reports on Form&nbsp;8-K filed on May 14, 2014, May 27, 2014, June 2, 2014, June 3, 2014, June 13, 2014,
    June 17, 2014, June 17, 2014, June 20, 2014, June 23, 2013, July 21, 2014, August 15, 2014, August 25, 2014, October 15,
    2015, November 17, 2014, January 6, 2015, and January 20, 2015 (except     that     any portions thereof which are furnished
    and     not     filed     shall     not be     deemed     incorporated);</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 94%; padding-right: 0.8pt; text-align: justify; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    description of our common stock contained in our Form&nbsp;8-A filed on June 12, 2014, including any amendments or reports
    filed for the purpose of updating the description; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; text-align: justify; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    description of our 10% Series A Cumulative Redeemable Preferred Stock contained in our Form&nbsp;8-A filed on June 13, 2014,
    including any amendments or reports filed for the purpose of updating the description.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We will provide, without charge, to
each person, including any beneficial owner, to whom a copy of this prospectus has been delivered a copy of any and all of the
documents referred to herein that are summarized in this prospectus, if such person makes a written or oral request directed to:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">EnerJex Resources,&nbsp;Inc.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">4040 Broadway, Suite 508</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">San Antonio, TX 78209</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">Attn: Robert G. Watson, Jr.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">(210)&nbsp;451-5545</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Exhibits to the filings will not be
sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus and any accompanying
prospectus supplement.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><A NAME="a_004"></A><B>DISCLOSURE REGARDING
FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.05pt">This prospectus contains &ldquo;forward-looking
statements&rdquo; within the meaning of Section&nbsp;27A of the Securities Act and Section&nbsp;21E of the Exchange Act. All statements
in this prospectus, other than statements of historical facts, which address activities, events or developments that we expect
or anticipate will or may occur in the future, including such things as future capital expenditures, growth, product development,
sales, business strategy and other similar matters are forward-looking statements. You can identify forward-looking statements
by terminology such as &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;would,&rdquo; &ldquo;could,&rdquo; &ldquo;should,&rdquo;
&ldquo;expect,&rdquo; &ldquo;intend,&rdquo; &ldquo;plan,&rdquo; &ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;estimate,&rdquo;
&ldquo;predict,&rdquo; &ldquo;potential,&rdquo; &ldquo;continue&rdquo; or the negative of these terms or other similar expressions
or phrases. These forward-looking statements are based largely on our current expectations and assumptions and are subject to
a number of risks and uncertainties, many of which are beyond our control. Actual results could differ materially from the forward-looking
statements set forth herein as a result of a number of factors, including, but not limited to, our products&rsquo; current state
of development, the need for additional financing, changes in our business strategy, competition in various aspects of our business,
the risks described under &ldquo;Risk Factors&rdquo; beginning on page S-8 of this prospectus and other risks
detailed in our reports filed with the Securities and Exchange Commission, or the SEC. In light of these risks and uncertainties,
all of the forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that
the actual results or developments anticipated by us will be realized. We undertake no obligation to update or revise any of the
forward-looking statements contained in this prospectus. All forward-looking statements attributable to us are expressly qualified
in their entirety by these cautionary statements.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_005"></A><B>THE OFFERING</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 27%; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Common
    stock offered by us</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; width: 63%; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">We
    are offering 763,547 shares of common stock.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Preferred stock
    offered by us</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">We are offering
    1,242.17099 shares of series B preferred stock, convertible into 709,812 shares of common stock, at an initial conversion
    price of $1.75 per share. Holders of the Series&nbsp;B preferred stock shall be entitled receive the same dividends actually
    paid with regard to shares of common stock, when, as and if declared, on an as-converted to common stock basis. Subject to
    standard exceptions, until the date immediately following 10 consecutive trading days during which (i) the volume weighted
    average prices exceeds $4.30, and (ii) the daily trading volume exceeds 200,000 shares per day, the conversion price of the
    series&nbsp;B preferred stock is subject to full ratchet anti-dilution adjustment in the event we issue any convertible debt
    or equity below the then-current conversion. Series&nbsp;B preferred stock will rank above all other outstanding classes of
    stock other than our Series A preferred stock with respect to dividend rights and liquidation. &nbsp;Series&nbsp;B preferred
    stock has no voting rights except as otherwise provided in the certificate of designation or required by law. </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Common stock
    outstanding before this offering</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">7,643,114</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Common Stock
    outstanding after this offering (assuming no conversion of the series&nbsp;B preferred stock)</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,406,661</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Use of proceeds</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">We intend to
    use the net proceeds from this offering for general working capital purposes. See &ldquo;Use of Proceeds&rdquo; on page&nbsp;S-21.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Market for
    the common stock and series&nbsp;B preferred stock</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Our common
    stock is quoted and traded on NYSE Market under the symbol &ldquo;ENRJ.&rdquo; However, there is no established public trading
    market for the offered series&nbsp;B preferred stock, and we do not expect a market to develop. In addition, we do not intend
    to apply to list the series&nbsp;B preferred stock on any securities exchange.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">Risk Factors</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt/115% Times New Roman, Times, Serif">You should
    read the &ldquo;Risk Factors&rdquo; section of this prospectus supplement and in the documents incorporated by reference in
    this prospectus supplement for a discussion of factors to consider before deciding to purchase our securities.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 27%; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Recent Developments:</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 63%; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Our
    reserve engineer consultant has confirmed that the oil and gas reserve report for the calendar year ended December 31, 2014,
    will show a decline in our proved developed producing reserves below the figure shown in the reserve report that
    such reserve engineer consultant rendered for the calendar year ended December 31, 2013. &nbsp;The total present value of
    our proved reserves as of December 31, 2013 was approximately $102 million.&nbsp;&nbsp;We believe the value of our proved
    reserves is likely to be approximately $64 million.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">While under applicable
    SEC guidelines we will report the present value of our reserves based upon the average month-end price of oil for each of
    the 12 months in the calendar year ended December 31, 2014, actual market values dropped precipitously in the last calendar
    quarter of 2014, so the value of our reserves as calculated by the terms of our credit facility will be lower.&nbsp;&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Under the terms
    of our secured credit facility, the value of our available reserves is the primary factor that defines our &quot;borrowing
    base,&quot; which is the maximum amount that we are entitled to borrow under that secured credit facility.&nbsp;&nbsp;Because
    of the pending reduction in the reported amount of our available reserves, the borrowing base under our credit agreement is
    likely to be reduced to between $18.0 million and $20.0 million, which is less than the currently outstanding unpaid principal
    balance of our loan in the amount of $23.5 million. That shortfall will result in a material default by us under the terms
    of the credit agreement, and our secured lender will require that we develop an acceptable plan to bring the principal balance
    below the borrowing base.&nbsp;&nbsp;Even after completing this financing, we believe it is likely that the outstanding principal
    balance of our secured credit facility will exceed by approximately $1.0 million the sum of our borrowing base and the amount
    of our liquid assets.&nbsp;&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Our secured lender
    may require that we address this shortfall with a plan that includes amortizing monthly debt service payments, which, in turn,
    is likely to require that we suspend payment of cash dividends on our series A preferred stock.&nbsp;&nbsp;If our secured
    lender does not approve our plan for addressing that issue, then the lender may exercise its default remedies under the documents
    evidencing and securing our credit facility, including foreclosure of the lien securing our loan. </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">By reason of that
    shortfall, it is likely that our auditors will issue a going concern qualification to their audit opinion letter for the period
    ended December 31, 2014.&nbsp;&nbsp;&nbsp;The issuance of such a qualified audit opinion letter is likely to be a material
    default under our credit agreement.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">There is a risk of
    a decline in the value of our common stock after we disclose in our filings with the United States Securities     and
    Exchange Commission the material reduction in the amount and the value of our available oil and gas reserves, the fact
    that the outstanding principal balance of our secured credit facility will exceed the borrowing base under that credit
    facility,     the potential issuance by the auditors of a going concern qualification to their audit opinion letter, and a
    possible suspension in     the payment of cash dividends on our series A preferred stock.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Anticipated 2014
    Revenue and Expense</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">We presently expect
    our revenues for the calendar year ended December 31, 2014, to be between $14 million and $15 million and our expenses for
    that period to be between $13 million and $14 million.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Other Recent Developments</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">In addition to having
    pursued this offering, we currently are evaluating a number of strategic initiatives, including but not limited to
    potential acquisitions, mergers and sales of non-core assets. The Company holds a minority interest in a corporation that
    is expected to close on a sale of its principal assets in approximately 30 days which is expected to generate approximately
    $1.5 million to us during 2015.</FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">NYSE Market Symbol</FONT></TD>
    <TD STYLE="vertical-align: bottom; line-height: 115%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">ENRJ</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The number of shares of common stock
outstanding after this offering as reflected in the table above is based on the actual number of shares outstanding as of March
10, 2015, which was 7,643,114, and does not include, as of that date:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27.5pt; text-indent: -13.2pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.3pt"></TD><TD STYLE="width: 13.2pt"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">236,000
                                         shares of our common stock issuable upon the exercise of outstanding stock options under
                                         our 2014 Incentive Plan, having a weighted average exercise price of $9.33 per share;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27.5pt; text-indent: -13.2pt">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Calibri, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 14.3pt"></TD><TD STYLE="width: 13.2pt; text-align: left"><FONT STYLE="font-family: Symbol">&#183;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">709,812 shares of common stock
                                                                                                                               issuable upon conversion of the series&nbsp;B preferred stock to be issued in this offering, at an initial conversion price
                                                                                                                               of $1.75 per share;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 27.5pt; text-indent: -13.2pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 13.2pt">Unless otherwise stated, outstanding
share information throughout this prospectus supplement excludes such outstanding options and series&nbsp;B preferred stock available for issuance.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 14.3pt; text-indent: 13.2pt">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_006"></A><B>ABOUT ENERJEX RESOURCES,&nbsp;INC.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Overview</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We operate as an independent exploration
and production company focused on the acquisition and development of oil and natural gas properties located in the mid-continent
region of the United States.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our primary business objective is to
increase our oil and natural gas production, reserves, and cash flow in a manner that is accretive for our shareholders by acquiring
and developing properties that have low production decline rates and offer abundant drilling opportunities with low risk profiles.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We drilled 48 oil wells in 2013 with
a 100% success rate, and our ratio of proved reserves to production is 32.8 years based on our annualized production volumes for
the three months ended December 31, 2013. For the six months ended March 31, 2014, we reactivated multiple oil and natural gas
wells in our Adena Field Project and initiated natural gas production under a new sales contract. In addition, we successfully
completed workovers on eight natural gas wells in our Niobrara Project.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of June 30, 2014, we owned oil and
natural gas leases covering more than 90,000 net acres in Kansas, Colorado, Nebraska, and Texas, of which approximately 64% is
held by production. We have identified more than 500 drilling locations on this acreage from which we expect to recover commercial
quantities of oil and natural gas.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our total net proved oil and natural
gas reserves as of December 31, 2013 were 5.8 million barrels of oil equivalent (Boe), of which 77% was oil. Of the 5.8 million
Boe of total proved reserves, approximately 49% were classified as proved developed producing, approximately 17% were classified
as proved developed non-producing, and approximately 34% were classified as proved undeveloped. The total PV10 (present value)
of our proved reserves as of December 31, 2013 was $102.4 million.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Strategy</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The principal elements of our business
strategy are to:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 91%; padding-right: 0.8pt; text-align: justify; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Develop
    Our Existing Properties</I> . We plan to increase our oil and natural gas production, reserves, and cash flow by developing
    our extensive inventory of drilling locations that we have identified on our existing properties.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 63pt; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 91%; padding-right: 0.8pt; text-align: justify; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Maximize
    Operational Control</I> . We seek to operate and maintain a substantial working interest in the majority of our properties.
    We believe the ability to control our drilling inventory will provide us with the opportunity to more efficiently allocate
    capital, manage resources, control operating and development costs, and utilize our experience and knowledge of oil and gas
    field technologies.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 91%; padding-right: 0.8pt; text-align: justify; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Pursue
    Selective Acquisitions and Joint Ventures</I> . We believe our local presence in Kansas, Colorado, Nebraska, and Texas makes
    us well-positioned to pursue selected acquisitions and joint venture arrangements.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 91%; padding-right: 0.8pt; text-align: justify; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Reduce
    Unit Costs Through Economies of Scale and Efficient Operations.</I> As we increase our oil and natural gas production and
    develop our existing properties, we expect that our unit cost structure will benefit from economies of scale. In particular,
    we anticipate reducing unit costs through greater utilization of our existing infrastructure over a larger number of wells.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 91%; padding-right: 0.8pt; text-align: justify; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Reduce
    Oil Price Risk</I> . We seek to minimize the risk to our business of a decline in future oil prices by entering into derivative
    or physical hedging arrangements with respect to a portion of our anticipated future oil production.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We were formerly known as Millennium
Plastics Corporation and were incorporated in the State of Nevada on March 31, 1999. We abandoned a prior business plan focusing
on the development of biodegradable plastic materials. In August 2006, we acquired Midwest Energy, Inc., a Nevada corporation,
pursuant to a reverse merger. After the merger, Midwest Energy became a wholly owned subsidiary, and as a result of the merger
the former Midwest Energy stockholders controlled approximately 98% of our outstanding shares of common stock. We changed our
name to EnerJex Resources, Inc. in connection with the merger, and in November 2007 we changed the name of Midwest Energy (now
our wholly owned subsidiary) to EnerJex Kansas, Inc. All of our current operations are conducted through EnerJex Kansas, Inc.,
Black Raven Energy, Inc., and Black Sable Energy, LLC, and our leasehold interests are held in our wholly owned subsidiaries Black
Raven Energy, Inc., Adena, LLC, Black Sable Energy, LLC, Working Interest, LLC, and EnerJex Kansas, Inc.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Recent Developments</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Our 2014 oil and gas
reserve report will show a material decline in our estimated reserves, which will have adverse implications to our balance sheet.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 12pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our 2014 oil and
gas reserve report will show a material decline in our estimated reserves compared to the 2013 oil and gas reserve attached
as an exhibit to our 2013 annual report on Form 10-K filed on March 28, 2014. The total present value (&quot;PV10&quot;) of
our proved reserves as of December 31, 2013 was approximately $102 million. &quot;PV10&quot; as determined under SEC
guidelines means the estimated future gross revenue to be generated from the production of proved reserves, net of estimated
production and future development and abandonment costs, using prices and costs in effect at the determination date, before
income taxes, and without giving effect to non-property related expenses, discounted to a present value using an annual
discount rate of 10% in accordance with the guidelines of the SEC. We believe the value of our proved reserves as of December
31, 2014 is likely to be approximately $64 million. There are numerous uncertainties inherent in
estimating quantities of proved oil and natural gas reserves and in projecting future rates of production and timing of
development expenditures, including many factors beyond our control. Further, reserve engineering is a subjective process of
estimating underground accumulations of oil and natural gas that cannot be measured in any exact way, and the accuracy of any
reserve estimate is a function of the quality of available data and of engineering and geological interpretation and
judgment. As a result, estimates made by different engineers often vary from one another.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Estimates of quantities
of proved reserves and their PV10 value are affected by changes in crude oil and gas prices, because estimates are based on prevailing
prices at the time of their determination. In September 2014, the price of oil began a sharp decline, and the approximately 50%
decline in the price of oil resulted in a decline in our oil reserve estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The reduction in our reserve
estimates is anticipated to be very significant, and would change the schedule of any further production and development drilling.
Those reductions in the values of our reserves also would have adverse implications on our balance sheet and operating results,
most specifically to the carrying value of our oil and natural gas properties and the results of our depletion expense. Accordingly,
reserve estimates are generally different, and often materially so, from the quantities of oil and natural gas that are ultimately
recovered. Furthermore, estimates of quantities of proved reserves and their PV10 value may be affected by changes in crude oil
and gas prices because the Company&rsquo;s estimates are based on prevailing prices at the time of their determination.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">&nbsp;<I>We anticipate
that our 2014 oil and gas reserve report, when issued, will cause a material reduction in our borrowing base under our revolving
credit facility, resulting in us being significantly overdrawn on our credit facilities.</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">As of the date
of this prospectus supplement, we are in compliance with all financial covenants imposed on our business by our lenders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">However, our maximum
borrowings under our credit facility are subject to reduction based upon a borrowing base calculation, which is re-determined
using updated reserve reports. If, as we now believe, our final 2014 reserve report will show materially reduced available reserves
as discussed above, then our borrowing base will be similarly reduced. Such a reduction will likely show that we are overdrawn
on our credit facilities, and therefore not in compliance with the financial covenants imposed by our lenders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">Our current estimate
of our borrowing base, based upon the preliminary findings of our consultants preparing our oil and gas reserve report, is that
we may be overdrawn on our credit facilities by between $3.5 million and $5.5 million.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Other Recent Developments</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In addition to having pursued this offering, the Company currently
is evaluating a number of strategic initiatives, including but not limited to potential acquisitions, mergers and sales of non-core
assets. The Company holds a minority interest in a corporation that is expected to close on a sale of its principal assets in approximately
30 days which is expected to generate approximately $1.5 million to us during 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_007"></A><B>RISK FACTORS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>An investment in our securities involves
a high degree of risk. Before making an investment decision, you should carefully consider the risks described below, as well
as the risks described under the caption &quot;Risk Factors&quot; in our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31,
2013 and the other filings we make with the SEC pursuant to Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act, which
we have incorporated herein by reference. Our business, financial condition, results of operations and cash flows could be materially
adversely affected by any of these risks, and the market or trading price of our securities could decline due to any of these
risks. In addition, please read &quot;Disclosure Regarding Forward-Looking Statements&quot; in this prospectus, where we describe
additional uncertainties associated with our business and the forward-looking statements included or incorporated by reference
in this prospectus. Please note that additional risks not presently known to us or that we currently deem immaterial may also
impair our business and operations.</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Risks Related to Recent Developments</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Our 2014 oil and gas reserve
report will show a material decline in our estimated reserves, which will have adverse implications to our balance sheet.</I></B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We believe that our 2014
oil and gas reserve report will show a material decline in our estimated reserves. There are numerous uncertainties inherent in
estimating quantities of proved oil and natural gas reserves and in projecting future rates of production and timing of development
expenditures, including many factors beyond our control. For example, estimates of quantities of proved reserves and their PV10
value are affected by changes in crude oil and gas prices, because estimates are based on prevailing prices at the time of their
determination. Further, reserve engineering is a subjective process of estimating underground accumulations of oil and natural
gas that cannot be measured in any exact way, and the accuracy of any reserve estimate is a function of the quality of available
data and of engineering and geological interpretation and judgment. As a result, estimates made by different engineers often vary
from one another.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The reduction in our reserve
estimates is anticipated to be very significant, and would change the schedule of any further production and development drilling.
Any potential revisions due to an overstatement of the Company's oil and natural gas reserves would also have adverse implications
on our balance sheet and operating results, most specifically to the carrying value of our oil and natural gas properties and
the results of our depletion expense. Accordingly, reserve estimates are generally different, and often materially so, from the
quantities of oil and natural gas that are ultimately recovered. Furthermore, estimates of quantities of proved reserves and their
PV10 value may be affected by changes in crude oil and gas prices because the Company&rsquo;s estimates are based on prevailing
prices at the time of their determination.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>&nbsp;We
anticipate that our 2014 oil and gas report, when issued, will cause a material reduction in our borrowing base under our revolving
credit facility, resulting in us being significantly overdrawn on our credit facilities.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">As of the date
of this prospectus supplement, we are in compliance with all financial covenants imposed on our business by our lenders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in; text-align: justify">However, our maximum
borrowings under our credit facility are subject to reduction based upon a borrowing base calculation, which is re-determined
using updated reserve reports. If, as we believe, our 2014 reserve report will when issued show a materially reduced available
reserves as discussed above, our borrowing base will be similarly reduced. Such a reduction will likely show that we are overdrawn
on our credit facilities and therefore not in compliance with the financial covenants imposed by our lenders.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our current estimate of our borrowing
base, based upon the preliminary findings of our consultants preparing our oil and gas reserve report, is that we may be overdrawn
on our credit facilities by between $3.5 million and $5.5 million.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Any plan that our lender will impose to reduce our
excess borrowings under our secured credit facilities may require that we make amortizing payments to our secured lender, which
may limit our ability to pay other expenses in the ordinary course and may require that we suspend payments of dividends on our
series A preferred stock.</I></B><BR>
<BR>
</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we become overdrawn on our secured
credit facility, as we currently expect, our lender will impose a plan that we reduce the amount of that overdraft. Any such plan
may include an adjustment in the interest rate on our secured credit facilities and a requirement for regular monthly amortizing
payments. Any such plan would likely require, among other things, that we apply our net cash flow to repayment of the principal
of our secured credit facilities, limit our ability to pay our ordinary operating expenses as they become due, limit our production
activities, and may require that we suspend payment of dividends on our series A preferred stock. All of those factors will adversely
affect the results of our operations and our stock price.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>With respect to our 2014 financial statements, our
auditors are likely to issue an audit opinion that is qualified by a &ldquo;going concern&rdquo; qualification, which may adversely
affect our ability to raise further capital.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As a result of the reduction in the
value of our available reserves that we expect to be reflected in our final reserve report for the year ended December 31, 2014,
we will be overdrawn on our secured credit facilities as of that date. To cure the overdraft in our credit facilities, we may
need to raise additional equity capital. The overdraft under our credit facilities, and any plan that our secured lender may impose
as a consequence of that overdraft, is likely to cause our auditors to issue an audit opinion that is qualified by a &ldquo;going
concern&rdquo; exception that questions whether we can continue to operate as a going concern. Any &ldquo;going concern&rdquo;
qualification, in turn, likely would be a default under our secured credit facilities, and could adversely affect the interest
rate on our secured credit facility and our ability to raise further capital.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>With respect to our 2014 financial statements, we
expect to incur write-downs of the carrying value of our oil and gas properties, which would adversely impact our earnings.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Because we expect our final reserve
report for the year ended December 31, 2014 to reflect a material reduction in our available reserves, we expect that we will
effect a write-down in the carrying value of our oil and gas properties that will adversely affect our earnings. We review the
carrying value of our oil and gas properties under the full-cost accounting rules of the SEC on a quarterly basis. This quarterly
review is referred to as a ceiling test. Under the ceiling test, capitalized costs, less accumulated amortization and related
deferred income taxes, may not exceed an amount equal to the sum of the present value of estimated future net revenues (adjusted
for cash flow hedges) less estimated future expenditures to be incurred in developing and producing the proved reserves, less
any related income tax effects. In calculating future net revenues, current prices and costs used are those as of the end of the
appropriate quarterly period. Such prices are utilized except where different prices are fixed and determinable from applicable
contracts for the remaining term of those contracts, including the effects of derivatives qualifying as cash&nbsp;flow hedges.
Two primary factors impacting this test are reserve levels and current prices, and their associated impact on the present value
of estimated future net revenues. Revisions to estimates of oil and gas reserves and/or an increase or decrease in prices can
have a material impact on the present value of estimated future net revenues. Any excess of the net book value, less deferred
income taxes, is generally written off as an expense. Under SEC regulations, the excess above the ceiling is not expensed (or
is reduced) if, subsequent to the end of the period, but prior to the release of the financial statements, oil and gas prices
increase sufficiently such that an excess above the ceiling would have been eliminated (or reduced) if the&nbsp;increased prices
were used in the calculations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Risks Related to our Business</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Current volatile market conditions and significant
fluctuations in energy prices may continue indefinitely, negatively affecting our business prospects and viability.</I></B></P>

<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The oil and gas markets are very volatile,
and we cannot predict future oil and natural gas prices. Historically, oil and natural gas prices have been volatile and are subject
to fluctuations in response to changes in supply and demand, market uncertainty and a variety of additional factors that are beyond
our control. Any substantial decline in the price of oil and natural gas will likely have a material adverse effect on our planned
operations and financial condition. The amount of any royalty payment we receive, if any, from the production of oil and gas from
our oil and gas interests will depend on numerous factors beyond our control.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Declining economic conditions
and worsening geopolitical conditions could negatively impact our business</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our operations are affected by local,
national and worldwide economic conditions.&nbsp;&nbsp;Markets in the United States and elsewhere have been experiencing extreme
volatility and disruption for more than 5 years, due in part to the financial stresses affecting the liquidity of the banking
system and the financial markets generally.&nbsp;&nbsp; The consequences of a potential or prolonged recession may include a lower
level of economic activity and uncertainty regarding energy prices and the capital and commodity markets.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In addition, actual and attempted terrorist
attacks in the United States, Middle East, Southeast Asia and Europe, and war or armed hostilities in the Middle East, the Persian
Gulf, North Africa, Iran, North Korea or elsewhere, or the fear of such events, could further exacerbate the volatility and disruption
to the financial markets and economy.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">While the ultimate outcome and impact
of the current economic conditions cannot be predicted, a lower level of economic activity might result in a decline in energy
consumption, which may materially adversely affect the price of oil and gas, our revenues, liquidity and future growth.&nbsp;&nbsp;Instability
in the financial markets, as a result of recession or otherwise, also may affect the cost of capital and our ability to raise
capital.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>The oil and natural gas business involves numerous
uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our development, exploitation and exploration
activities may be unsuccessful for many reasons, including weather, cost overruns, equipment shortages and mechanical difficulties.
Moreover, the successful drilling of a well does not ensure a profit on investment. A variety of factors, both geological and
market-related, can cause a well to become uneconomical or only marginally economical. In addition to their cost, unsuccessful
wells can hurt our efforts to replace reserves.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.4in">The oil and natural gas business involves
a variety of operating risks, including:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unexpected
    operational events and/or conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">reductions
    in oil and natural gas prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">limitations
    in the market for oil and natural gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">adverse
    weather conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">facility
    or equipment malfunctions;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Calibri, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">title
    problems;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">oil
    and gas quality issues;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">pipe,
    casing, cement or pipeline failures;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">natural
    disasters;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">fires,
    explosions, blowouts, surface cratering, pollution and other risks or accidents;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">environmental
    hazards, such as oil spills, pipeline ruptures and discharges of toxic gases;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">compliance
    with environmental and other governmental requirements; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">uncontrollable
    flows of oil or natural gas or well fluids.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">If we experience any of these problems,
it could affect well bores, gathering systems and processing facilities, which could adversely affect our ability to conduct operations.
We could also incur substantial losses as a result of:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Calibri, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">injury
    or loss of life;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">severe
    damage to and destruction of property, natural resources and equipment;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">pollution
    and other environmental damage;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">clean-up
    responsibilities;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">regulatory
    investigation and penalties;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">suspension
    of our operations; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">repairs
    to resume operations.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Because we use third-party drilling
contractors to drill our wells, we may not realize the full benefit of worker compensation laws in dealing with their employees.
Our insurance does not protect us against all operational risks. We do not carry business interruption insurance at levels that
would provide enough funds for us to continue operating without access to other funds. For some risks, we may not obtain insurance
if we believe the cost of available insurance is excessive relative to the risks presented. In addition, pollution and environmental
risks generally are not fully insurable. If a significant accident or other event occurs and is not fully covered by insurance,
it could impact our operations enough to force us to cease our operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Drilling wells is speculative, and any material inaccuracies
in our forecasted drilling costs, estimates or underlying assumptions will materially affect our business.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Developing and exploring for oil and
natural gas involves a high degree of operational and financial risk, which precludes definitive statements as to the time required
and costs involved in reaching certain objectives. The budgeted costs of drilling, completing and operating wells are often exceeded
and can increase significantly when drilling costs rise due to a tightening in the supply of various types of oilfield equipment
and related services. Drilling may be unsuccessful for many reasons, including geological conditions, weather, cost overruns,
equipment shortages and mechanical difficulties. Moreover, the successful drilling of an oil or gas well does not ensure a profit
on investment. Exploratory wells bear a much greater risk of loss than development wells. Substantially all of our wells drilled
through March 31, 2014&nbsp;have been development wells and a majority of the wells drilled by Black Raven have been considered
by Black Raven to be development wells. A variety of factors, both geological and market-related, can cause a well to become uneconomical
or only marginally economic. Our initial drilling and development sites, and any potential additional sites that may be developed,
require significant additional exploration and development, regulatory approval and commitments of resources prior to commercial
development. If our actual drilling and development costs are significantly more than our estimated costs, we may not be able
to continue our business operations&nbsp;as proposed and would be forced to modify our plan of operation.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Development of our reserves, when established,
may not occur as scheduled and the actual results may not be as anticipated. Drilling activity and lack of access to economically
acceptable capital may result in downward adjustments in reserves or higher than anticipated costs. Our estimates will be based
on various assumptions, including assumptions over which we have no control and assumptions required by the SEC relating to oil&nbsp;and
gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. We have limited control over
our operations that affect, among other things, acquisitions and dispositions of properties, availability of funds, use of applicable
technologies, hydrocarbon recovery efficiency, drainage volume and production decline rates that are part of these estimates and
assumptions and any variance in our operations that affects these items within our control may have a material effect on reserves.
&nbsp;The process of estimating our oil and gas reserves is extremely complex, and requires significant decisions and assumptions
in the evaluation of available geological, geophysical, engineering and economic data for each reservoir. Our estimates may not
be reliable enough to allow us to be successful in our intended business operations. Our actual production, revenues, taxes, development
expenditures and operating expenses will likely vary from those anticipated. These variances may be material.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Unless we replace our oil and natural gas reserves,
our reserves and production will decline, which would adversely affect our cash flows and income.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Unless we conduct successful development,
exploitation and exploration activities or acquire properties containing proved reserves, our proved reserves will decline as
those reserves are produced. Producing oil and gas reservoirs generally are characterized by declining production rates that vary
depending upon reservoir characteristics and other factors. Our future oil and gas production, and, therefore our cash flow and
income, are highly dependent on our success in efficiently developing and exploiting our current reserves and economically finding
or acquiring additional recoverable reserves. We may be unable to make such acquisitions because we are:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Calibri, Helvetica, Sans-Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unable
    to identify attractive acquisition candidates or negotiate acceptable purchase contracts with them;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unable
    to obtain financing for these acquisitions on economically acceptable terms; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 11pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">outbid
    by competitors.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we are unable to develop, exploit,
find or acquire additional reserves to replace our current and future production, our cash flow and income will decline as production
declines, until our existing properties would be incapable of sustaining commercial production.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our decision to acquire a property will depend in
part on the evaluation of data obtained from production reports and engineering studies, geophysical and geological analyses and
seismic and other information, the results of which are often incomplete or inconclusive.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our reviews of acquired properties can
be inherently incomplete because it is not always feasible to perform an in-depth review of the individual properties involved
in each acquisition. Even a detailed review of records and properties may not necessarily reveal existing or potential problems,
nor will it permit a buyer to become sufficiently familiar with the properties to assess fully their deficiencies and potential.
Inspections may not always be performed on every well, and environmental problems, such as ground water contamination, plugging
or orphaned well liability are&nbsp;not necessarily observable even when an inspection is undertaken.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>We must obtain governmental permits and approvals
for drilling operations, which can result in delays in our operations, be a costly and time consuming process, and result in restrictions
on our operations.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Regulatory authorities exercise considerable
discretion in the timing and scope of well drilling permit issuances in the region in which we operate. Compliance with the requirements
imposed by these authorities can be costly and time consuming and may result in delays in the commencement or continuation of
our exploration or production operations and/or fines. Regulatory or legal actions in the future may materially interfere with
our operations or otherwise have a material adverse effect on us. In addition, we are often required to prepare and present to
federal, state or local authorities data pertaining to the effect or impact that a proposed project may have on the environment,
threatened and endangered species, and cultural and archaeological artifacts. Accordingly, the well drilling permits we need may
not be issued, or if issued, may not be issued in a timely fashion, or may involve requirements that restrict our ability to conduct
our operations or to do so profitably.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Cost and availability of drilling rigs, equipment,
supplies, personnel and other services could adversely affect our ability to execute on a timely basis our development, exploitation
and exploration plans.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Shortages or an increase in cost of
drilling rigs, equipment, supplies or personnel could delay or interrupt our operations, which could impact our financial condition
and results of operations. Drilling activity in the geographic areas in which we conduct drilling activities may increase, which
would lead to increases in associated costs, including those related to drilling rigs, equipment, supplies and personnel and the
services and products of other vendors to the industry. Increased drilling activity in these areas may also decrease the availability
of rigs. We do not have any contracts for drilling rigs and drilling rigs may not be readily available when we need them. Drilling
and other costs may increase further and necessary equipment and services may not be available to us at economical prices.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our exposure to possible leasehold defects and potential
title failure could materially adversely impact our ability to conduct drilling operations.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We obtain the right and access to properties
for drilling by obtaining oil and natural gas leases either directly from the hydrocarbon owner, or through a third party that
owns the lease. The leases may be taken or assigned to us without title insurance. There is a risk of title failure with respect
to such leases, and such title failures could materially adversely impact our business by causing us to be unable to access properties
to conduct drilling operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>We operate in a highly competitive environment and
our competitors may have greater resources than do we.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The oil and natural gas industry is
intensely competitive and we compete with other companies, many of which are larger and have greater financial, technological,
human and other resources. Many of these companies not only explore for and produce crude oil and/or natural gas, but also carry
on refining operations and market petroleum and other products on a regional, national or worldwide basis. Such companies may
be able to pay more for productive oil and properties and exploratory prospects or define, evaluate, bid for and purchase a greater
number of properties and prospects than our financial or human resources permit. In addition, such companies may have a greater
ability to continue exploration activities during periods of low oil and gas market prices. Our ability to acquire additional
properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties
and to consummate transactions in a highly competitive environment. If we are unable to compete, our operating results and financial
position may be adversely affected.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Oil and natural gas prices are volatile. Future volatility
may cause negative change in our cash flows which may result in our inability to cover our operating or capital expenditures.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our future revenues, profitability,
future growth and the carrying value of our properties is anticipated to depend substantially on the prices we may realize for
our oil and natural gas production. Our realized prices may also affect the amount of cash flow available for operating or capital
expenditures and our ability to borrow and raise additional capital.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Oil and natural gas prices are subject
to wide fluctuations in response to relatively minor changes in or perceptions regarding supply and demand. Historically, the
markets for oil and natural gas have been volatile, and they are likely to continue to be volatile in the future. Among the factors
that can cause this volatility are:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Commodities
    speculators;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">local, national
    and worldwide economic conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">worldwide or regional
    demand for energy, which is affected by economic conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the domestic and
    foreign supply of oil and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">weather conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">natural disasters;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">acts of terrorism;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">domestic and foreign
    governmental regulations and taxation;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">political and economic
    conditions in oil producing countries, including those in the Middle East and South America;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">impact of the U.S.
    dollar exchange rates on oil prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the availability
    of refining capacity;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">actions of the
    Organization of Petroleum Exporting Countries, or OPEC, and other state controlled oil companies relating to oil price and
    production controls; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the price and availability
    of other fuels.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">It is impossible to predict oil and
gas price movements with certainty. A drop in prices may not only decrease our future revenues on a per unit basis but also may
reduce the amount of oil and gas that we can produce economically. A substantial or extended decline in oil and gas prices may
materially and adversely affect our future business enough to force us to cease our business operations. In addition, our reserves,
financial condition, results of operations, liquidity and ability to finance and execute planned capital expenditures will also
suffer in such a price decline.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Lower prices for oil and natural gas reduce demand
for our services and could have a material adverse effect on our revenue and profitability.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Benchmark crude prices peaked at over
$140 per barrel in July 2008 and then declined to approximately $92 per barrel at year-end 2012. During 2013, the benchmark for
crude prices fluctuated between $85 per barrel and $110 per barrel. Demand for our services depends on oil and natural gas industry
activity and expenditure levels that are directly affected by trends in oil and natural gas prices. In addition, demand for our
services is particularly sensitive to the level of exploration, development and production activity of and the corresponding capital
spending by, oil and natural gas companies. Any prolonged reduction in oil and natural gas prices could depress the near-term
levels of exploration, development, and production activity. Perceptions of longer-term lower oil and natural gas prices by oil
and natural gas companies could similarly reduce or defer major expenditures given the long-term nature of many large-scale development
projects. Lower levels of activity result in a corresponding decline in the demand for our services, which could have a material
adverse effect on our revenue and profitability. Additionally, these factors may adversely impact our financial position if they
are determined to cause an impairment of our long-lived assets.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our business is affected by local, national and worldwide
economic conditions and the condition of the oil and natural gas industry.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Recent economic data indicates the rate
of economic growth worldwide has declined significantly from the growth rates experienced in recent years. Current economic conditions
have resulted in uncertainty regarding energy and commodity prices. In addition, future economic conditions may cause many oil
and natural gas production companies to further reduce or delay expenditures in order to reduce costs, which in turn may cause
a further reduction in the demand for drilling services. If conditions worsen, our business and financial condition may be adversely
impacted.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our business involves numerous operating hazards,
and our insurance and contractual indemnity rights may not be adequate to cover our losses.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our operations are subject to the usual
hazards inherent in the drilling and operation of oil and natural gas wells, such as blowouts, reservoir damage, loss of production,
loss of well control, punch throughs, craterings, fires and pollution. The occurrence of these events could result in the suspension
of drilling or production operations, claims by the operator and others affected by such events, severe damage to, or destruction
of, the property and equipment involved, injury or death to drilling personnel, environmental damage and increased insurance costs.
We may also be subject to personal injury and other claims of drilling personnel as a result of our drilling operations. Operations
also may be suspended because of machinery breakdowns, abnormal operating conditions, failure of subcontractors to perform or
supply goods or services and personnel shortages.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Damage to the environment could result
from our operations, particularly through oil spillage or extensive uncontrolled fires. We may also be subject to property, environmental
and other damage claims by host governments, oil and natural gas companies and other businesses operating offshore and in coastal
areas, as well as claims by individuals living in or around coastal areas.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As is customary in our industry, the
risks of our operations are partially covered by our insurance and partially by contractual indemnities from our customers. However,
insurance policies and contractual rights to indemnity may not adequately cover losses, and we may not have insurance coverage
or rights to indemnity for all risks. Moreover, pollution and environmental risks generally are not fully insurable. If a significant
accident or other event resulting in damage to our drilling units, including severe weather, terrorist acts, war, civil disturbances,
pollution or environmental damage, occurs and is not fully covered by insurance or a recoverable indemnity from a customer, it
could adversely affect our financial condition and results of operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our business is subject to numerous governmental laws
and regulations, including those that may impose significant costs and liability on us for environmental and natural resource
damages.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Many aspects of our operations are affected
by governmental laws and regulations that may relate directly or indirectly to the contract drilling industry, including those
requiring us to control the discharge of oil and other contaminants into the environment or otherwise relating to environmental
protection. Countries where we currently operate have environmental laws and regulations covering the discharge of oil and other
contaminants and protection of the environment in connection with operations. Additionally, our operations and activities in the
United States and its territorial waters are subject to numerous environmental laws and regulations, including the Clean Water
Act, the OPA, the Outer Continental Shelf Lands Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Clean Air Act, the Resource Conservation and Recovery Act and MARPOL. Failure to comply with these laws and regulations may
result in the assessment of administrative, civil and criminal penalties, the imposition of remedial obligations, the denial or
revocation of permits or other authorizations and the issuance of injunctions that may limit or prohibit our operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Laws and regulations protecting the
environment have become more stringent in recent years and may in certain circumstances impose strict liability, rendering us
liable for environmental and natural resource damages without regard to negligence or fault on our part. These laws and regulations
may expose us to liability for the conduct of, or conditions caused by, others or for acts that were in compliance with all applicable
laws at the time the acts were performed. The application of these requirements, the modification of existing laws or regulations
or the adoption of new laws or regulations relating to exploratory or development drilling for oil and natural gas could materially
limit future contract drilling opportunities or materially increase our costs. In addition, we may be required to make significant
capital expenditures to comply with such laws and regulations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In addition, some financial institutions
are imposing, as a condition to financing, requirements to comply with additional non-governmental environmental and social standards
in connection with operations outside the United States, such as the Equator Principles, a credit risk management framework for
determining, assessing and managing environmental and social risk in project finance transactions. Such additional standards could
impose significant new costs on us, which may materially and adversely affect us.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Changes in U.S. federal laws and regulations, or in
those of other jurisdictions where we operate, including those that may impose significant costs and liability on us for environmental
and natural resource damages, may adversely affect our operations.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If the U.S. government amends or enacts
new federal laws or regulations, our potential exposure to liability for operations and activities in the United States and its
territorial waters may increase. Although the Oil Pollution Act of 1990 provides federal caps on liability for pollution or contamination,
future laws and regulations may increase our liability for pollution or contamination resulting from any operations and activities
that the Company may have in the United States and its territorial waters including punitive damages and administrative, civil
and criminal penalties. Additionally, other jurisdictions where we operate have modified, or may in the future modify, their laws
and regulations in a manner that would increase our liability for pollution and other environmental damage.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our financial condition may be adversely affected
if we are unable to identify and complete future acquisitions, fail to successfully integrate acquired assets or businesses we
acquire, or are unable to obtain financing for acquisitions on acceptable terms.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The acquisition of assets or businesses
that we believe to be complementary to our exploration and production operations is an important component of our business strategy.
We believe that acquisition opportunities for EnerJex, such as the merger with Black Raven, may arise from time to time, and that
any such acquisition could be significant. At any given time, discussions with one or more potential sellers may be at different
stages. However, any such discussions may not result in the consummation of an acquisition transaction, and we may not be able
to identify or complete any acquisitions. We cannot predict the effect, if any, that any announcement or consummation of an acquisition
would have on the trading price of our securities. Our business is capital intensive and any such transactions could involve the
payment by us of a substantial amount of cash. We may need to raise additional capital through public or private debt or equity
financings to execute our growth strategy and to fund acquisitions. Adequate sources of capital may not be available when needed
on favorable terms. If we raise additional capital by issuing additional equity securities, existing stockholders may be diluted.
If our capital resources are insufficient at any time in the future, we may be unable to fund acquisitions, take advantage of
business opportunities or respond to competitive pressures, any of which could harm our business.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Any future acquisitions could present
a number of risks, including:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    risk of using management time and resources to pursue acquisitions that are not successfully completed;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the risk of incorrect
    assumptions regarding the future results of acquired operations;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the risk of failing
    to integrate the operations or management of any acquired operations or assets successfully and timely; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the risk of diversion
    of management's attention from existing operations or other priorities.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we are unsuccessful in completing
acquisitions of other operations or assets, our financial condition could be adversely affected and we may be unable to implement
an important component of our business strategy successfully. In addition, if we are unsuccessful in integrating our acquisitions
in a timely and cost-effective manner, our financial condition and results of operations could be adversely affected.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>The loss of some of our key executive officers and
employees could negatively impact our business prospects.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our future operational performance depends
to a significant degree upon the continued service of key members of our management as well as marketing, sales and operations
personnel. The loss of one or more of our key personnel could have a material adverse effect on our business. We believe our future
success will also depend in large part upon our ability to attract, retain and further motivate highly skilled management, marketing,
sales and operations personnel. We may experience intense competition for personnel, and we cannot assure you that we will be
able to retain key employees or that we will be successful in attracting, assimilating and retaining personnel in the future.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Failure to employ a sufficient number of skilled workers
or an increase in labor costs could hurt our operations.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We require skilled personnel to operate
and provide technical services to, and support for, our drilling units. In periods of increasing activity and when the number
of operating units in our areas of operation increases, either because of new construction, re-activation of idle units or the
mobilization of units into the region, shortages of qualified personnel could arise, creating upward pressure on wages and difficulty
in staffing. The shortages of qualified personnel or the inability to obtain and retain qualified personnel also could negatively
affect the quality and timeliness of our work. In addition, our ability to expand operations depends in part upon our ability
to increase the size of the skilled labor force.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Risks Related to EnerJex</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Ownership of our common stock is highly concentrated,
and such concentration may prevent other stockholders from influencing significant corporate decisions and may result in conflicts
of interest that could cause our stock price to decline.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Prior to this offering, EnerJex's
directors and executive officers, together with their respective affiliates, beneficially own or control more than 50% of the
Company (see the section entitled &quot;Voting Securities&quot; beginning on page 6 of our Definitive Proxy Statement on
Schedule 14A filed with the SEC on July 23, 2014 for more information on the ownership of the Company). Accordingly,
these directors, executive officers and their affiliates, acting individually or as a group, have substantial influence over
the outcome of a corporate action requiring stockholder approval, including the election of directors, any merger,
consolidation or sale of all or substantially all of our assets or any other significant corporate transaction. West Coast
Opportunity Fund, LLC (&quot;WCOF&quot;), which owns approximately 45% of our issued and outstanding voting securities, and
Montecito Venture Partners, LLC (&quot;MVP&quot;), which owns approximately 6%<FONT STYLE="line-height: 115%"><SUP> </SUP></FONT>of
our issued and outstanding voting securities, are parties to an irrevocable voting and proxy agreement, by which MVP granted
to WCOF a proxy to vote MVP's shares with regard to the election of our board of directors. That irrevocable voting and
proxy agreement gives WCOF the power to elect a majority of the members of our board of directors. These stockholders also
may exert influence in delaying or preventing a change in control of the Company, even if such change in control would
benefit the other stockholders of the Company. In addition, the significant concentration of stock ownership may affect
adversely the market value of EnerJex's common stock and Series A preferred stock due to investors' perception that conflicts
of interest may exist or arise.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>We are exempt from certain governance requirements
applicable to other listed companies, and therefore our board will not consist of a majority of &quot;independent directors,&quot;
and our audit committee will not have three &quot;independent&quot; members.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The listing standards for the NYSE MKT
on which our shares of common stock and Series A preferred stock are listed for trading generally require that the boards of directors
of listed companies consist of a majority of &quot;independent directors,&quot; and that a listed company's audit committee must
have three independent members. We are a &quot;controlled company&quot; because WCOF and MVP own more than 50% of our issued and
outstanding voting securities and are parties to an irrevocable voting and proxy agreement that gives WCOF a proxy to vote MVP's
shares, which will give WCOF control of the election of a majority of the members of our board of directors. As a result, we are
exempt from the requirement that a majority of our directors be &quot;independent directors.&quot; At present, only two of our
five directors are &quot;independent directors.&quot; In addition, because we are a &quot;smaller reporting company,&quot; as
such terms are used in the listing standards for the NYSE MKT, our audit committee is not required to have three independent members.
At present, our audit committee consists of two persons, both of whom are independent directors.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">After
this offering, we will no longer be a controlled company and will therefore be subject to the NYSE MKT listing standards
requiring a majority of independent directors.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Anti-takeover provisions in our charter and bylaws
may prevent or frustrate attempts by stockholders to change the board of directors or management and could make a third-party
acquisition of the company difficult.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our amended and restated articles of
incorporation and bylaws, as amended, contain provisions that may discourage, delay or prevent a merger, acquisition or other
change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise receive
a premium for their shares. These provisions could limit the price that investors might be willing to pay in the future for shares
of our common stock, and have a negative effect on the price at which shares of our Series A preferred stock will trade.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>We have sustained losses in the
past, and our future profitability is subject to many risks inherent in the oil and natural gas exploration and production industry.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our prospects must be considered in
light of the risks, expenses and difficulties frequently encountered in establishing and maintaining a business in the exploration
and production industry. There is nothing conclusive at this time on which to base an assumption that our business operations
will prove to be successful or that we will be able to operate profitably. Our future operating results will depend on many factors,
including:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 11pt Calibri, Helvetica, Sans-Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    future prices of oil and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to
    raise adequate capital;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">success of our
    development and exploration efforts;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to
    manage our operations cost effectively;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">effects of our
    hedging strategies;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">demand for oil
    and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the level of our
    competition;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to
    attract and maintain key management, employees and operators;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">transportation
    and processing fees on our facilities;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">fuel conservation
    measures;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">alternate fuel
    requirements or advancements;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">government regulation
    and taxation;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">technical advances
    in fuel economy and energy generation devices; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to
    efficiently explore, develop and produce sufficient quantities of marketable oil and gas in a highly competitive and speculative
    environment while maintaining quality and controlling costs.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">To achieve profitable operations, we
must, alone or with others, successfully execute on the factors stated above, along with continually developing ways to enhance
our production efforts. Despite our best efforts, we may not be successful in our development efforts or obtain required regulatory
approvals. There is a possibility that&nbsp;some of our wells may never produce oil or gas in sustainable or economic quantities.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We will need additional capital in the
future to finance our planned growth, which we may not be able to raise or may only be available on terms unfavorable to us or
our stockholders, which may result in our inability to fund our working capital requirements and harm our operational results.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have and expect to continue to have
substantial capital expenditure and working capital needs. We will need to rely on cash flow from operations and borrowings under
our credit facility or raise additional cash to fund our operations, pay outstanding long-term debt, fund our anticipated reserve
replacement needs and implement our growth strategy, or respond to competitive pressures and/or perceived opportunities, such
as investment, acquisition, exploration, work-over and development activities.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If low oil and gas prices, operating
difficulties, constrained capital sources or other factors, many of which are beyond our control, cause our revenues or cash flows
from operations to decrease, we may be limited in our ability to spend the capital necessary to complete our development, production
exploitation and exploration programs. If our resources or cash flows do not&nbsp;satisfy our operational needs, we will require
additional financing, in addition to anticipated cash generated from our operations, to fund our planned growth. Additional financing
might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable
terms, our ability to fund our operations, take advantage of opportunities, develop or enhance our business or otherwise respond
to competitive pressures would be significantly limited. In such a capital restricted situation, we may curtail our acquisition,
drilling, development, and exploration activities or be forced to sell some of our assets on an untimely or unfavorable basis.&nbsp;&nbsp;Our
current plans to address a drop in crude oil prices are to maintain hedges covering a portion of our expected future oil production
and to reduce both capital and operating expenditures to a level equal to or below cash flow from operations.&nbsp;&nbsp;However,
our plans may not be successful in improving our results of operations and liquidity.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we raise additional funds through
the issuance of equity or convertible debt securities, the percentage ownership of our stockholders would be reduced, and these
newly issued securities might have rights, preferences or privileges senior to those of existing stockholders, including rights
that are senior to those of holders of our Series A preferred stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Approximately 34% of our total proved reserves as
of December 31, 2013 consist of undeveloped reserves, and those reserves may not ultimately be developed or produced.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our estimated total proved PV10
(present value) before tax of reserves as of December 31, 2013 was $102 million, versus $60.8 million as of December 31,
2012.&nbsp;&nbsp;We presently expect the present value of our proved reserves to be approximately $64 million as of December
31, 2014. Of the 5.8 million net barrels of oil equivalent at December 31, 2013, approximately 49% are proved
developed producing, approximately 17% are classified as proved developed non-producing and approximately 34% are classified
as proved undeveloped.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Assuming we can obtain adequate capital
resources, we plan to develop and produce all of our proved reserves, but ultimately some of these reserves may not be developed
or produced. Furthermore, not all of our undeveloped reserves may be ultimately produced in the time periods we have planned,
at the costs we have budgeted, or at all.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Because we face uncertainties in estimating proved
recoverable reserves, you should not place undue reliance on such reserve information.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our reserve estimates and the future
net cash flows attributable to those reserves at December 31, 2013 were prepared by MHA Petroleum Consultants LLC, an independent
petroleum consultant.&nbsp;&nbsp;There are numerous uncertainties inherent in estimating quantities of proved reserves and cash
flows from such reserves, including factors beyond our control and the control of these independent consultants and engineers.
Reserve engineering is a subjective process of estimating underground accumulations of oil and gas that can be economically extracted,
which cannot be measured in an exact manner. The accuracy of an estimate of quantities of reserves, or of cash flows attributable
to these reserves, is a function of the available data, assumptions regarding future oil and gas prices, expenditures for future
development and exploitation activities, and engineering and geological interpretation and judgment. Reserves and future cash
flows may also be subject to material downward or upward revisions based upon production history, development and exploitation
activities and oil and gas prices. Actual future production, revenue, taxes, development expenditures, operating expenses, quantities
of recoverable reserves and value of cash flows from those reserves may vary significantly from the assumptions and estimates
in our reserve reports. Any significant variance from these assumptions to actual figures could greatly affect our estimates of
reserves, the economically recoverable quantities of oil and gas attributable to any particular group of properties, the classification
of reserves based on risk of recovery, and estimates of the future&nbsp;net cash flows. In addition, reserve engineers may make
different estimates of reserves and cash flows based on the same available data. The estimated quantities of proved reserves and
the discounted present value of future net cash flows attributable to those reserves included in this report were prepared by
MHA Petroleum Consultants LLC&nbsp;in accordance with rules of the Securities and Exchange Commission, or SEC, and are not intended
to represent the fair market value of such reserves.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The present value of future net cash
flows from our proved reserves is not necessarily the same as the current market value of our estimated reserves. We base the
estimated discounted future net cash flows from our proved reserves on prices and costs. However, actual future net cash flows
from our oil and gas properties also will be affected by factors such as:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">geological
    conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">assumptions governing
    future oil and gas prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">amount and timing
    of actual production;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">availability of
    funds;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">future operating
    and development costs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">actual prices we
    receive for oil and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">changes in government
    regulations and taxation; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">capital costs of
    drilling new wells.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The timing of both our production and
our incurrence of expenses in connection with the development and production of our properties will affect the timing of actual
future net cash flows from proved reserves, and thus their actual present value. In addition, the 10% discount factor we use when
calculating&nbsp;discounted future net cash flows may not be the most appropriate discount factor based on interest rates in effect
from time to time and risks associated with our business or the oil and gas industry in general.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>The differential between the New York Mercantile Exchange,
or NYMEX, or other benchmark price of oil and gas and the wellhead price we receive could have a material adverse effect on our
results of operations, financial condition and cash flows.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The prices that we received for our
oil production in Texas, Colorado and Kansas are typically based on a discount to the relevant benchmark prices, such as NYMEX,
that are used for calculating hedge positions. In Colorado, the prices that we receive for our natural gas production is based
upon local market conditions but generally we receive a discount to Henry Hub. The difference between the benchmark price and
the price we receive is called a differential. We cannot accurately predict oil and gas differentials. Production increases from
competing North American producers, in conjunction with limited refining and pipeline capacity, have gradually widened this differential.
Recent economic conditions, including volatility in the price of oil and gas, have resulted in both increases and decreases in
the differential between the benchmark price for oil and gas and the wellhead price we receive. These fluctuations could have
a material adverse effect on our results of operations, financial condition and cash flows by decreasing the proceeds we receive
for our oil and gas production in comparison to what we would receive if not for the differential.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>In order to exploit successfully our current oil and
gas leases and others that we acquire in the future, we will need to generate significant amounts of capital.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The oil and natural gas exploration,
development and production business is a capital-intensive undertaking. In order for us to be successful in acquiring, investigating,
developing, and producing oil and gas from our current mineral leases and other leases that we may acquire in the future, we will
need to generate an amount of capital in excess of that generated from our results of operations. In order to generate that additional
capital, we may need to obtain an expanded debt facility and issue additional shares of our equity securities. There can be no
assurance that we will be successful in ether obtaining that expanded debt facility or issuing additional shares of our equity
securities, and our inability to generate the needed additional capital may have a material adverse effect on our prospects and
financial results of operations. If we are able to issue additional equity securities in order to generate such additional capital,
then those issuances may occur at prices that represent discounts to our trading price, and will dilute the percentage ownership
interest of those persons holding our shares prior to such issuances. Unless we are able to generate additional enterprise value
with the proceeds of the sale of our equity securities, those issuances may adversely affect the value of our shares that are
outstanding prior to those issuances.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>A significant portion of our potential future reserves
and our business plan depend upon secondary recovery techniques to establish production. There are significant risks associated
with such techniques.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We anticipate that a significant portion
of our future reserves and our business plan will be associated with secondary recovery projects that are either in the early
stage of implementation or are scheduled for implementation subject to availability of capital. We anticipate that secondary recovery
will affect our reserves and our business plan, and the exact project initiation dates and, by the very nature of waterflood operations,
the exact completion dates of such projects are uncertain. In addition, the reserves and our business plan associated with these
secondary recovery projects, as with any reserves, are estimates only, as the success of any development project, including these
waterflood projects, cannot be ascertained in advance. If we are not successful in developing a significant portion of our reserves
associated with secondary recovery methods, then the project may be uneconomic or generate less cash flow and reserves than we
had estimated prior to investing the capital. Risks associated with secondary recovery techniques include, but are not limited
to, the following:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">higher
    than projected operating costs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">lower-than-expected
    production;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">longer response
    times;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">higher costs associated
    with obtaining capital;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unusual or unexpected
    geological formations;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">fluctuations in
    oil and gas prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">regulatory changes;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">shortages of equipment;
    and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">lack of technical
    expertise.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If any of these risks occur, it could
adversely affect our financial condition or results of operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Any acquisitions we complete are subject to considerable
risk.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Even when we make acquisitions that
we believe are good for our business, any acquisition involves potential risks, including, among other things:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the
    validity of our assumptions about reserves, future production, revenues and costs, including synergies;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">an inability to
    integrate successfully the businesses we acquire;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a decrease in our
    liquidity by using our available cash or borrowing capacity to finance acquisitions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a significant increase
    in our interest expense or financial leverage if we incur additional debt to finance acquisitions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the assumption
    of unknown liabilities, losses or costs for which we are not indemnified or for which our indemnity is inadequate;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the diversion of
    management's attention from other business concerns;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">an inability to
    hire, train or retain qualified personnel to manage the acquired properties or assets;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the incurrence
    of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring
    charges;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unforeseen difficulties
    encountered in operating in new geographic or geological areas; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">customer or key
    employee losses at the acquired businesses.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Due to our lack of geographic
diversification, adverse developments in our operating areas would materially affect our business.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We currently only lease and operate
oil and natural gas properties located in Kansas, Colorado, Nebraska and Texas. As a result of this concentration, we may be disproportionately
exposed to the impact of delays or interruptions of production from these properties caused by significant governmental regulation,
transportation capacity constraints, curtailment of production, natural disasters, adverse weather conditions or other events
which&nbsp;impact this area.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>We are not the operator of some
of our properties and we have limited control over the activities on those properties.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are not the operator of our Mississippian
Project, and our dependence on the operator of this project limits our ability to influence or control the operation or future
development of this project. Such limitations could materially adversely affect the realization of our targeted returns on capital
related to exploration, drilling or production activities and lead to unexpected future costs.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>We may suffer losses or incur
liability for events for which we or the operator of a property have chosen not to obtain insurance.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our operations are subject to hazards
and risks inherent in producing and transporting oil and gas, such as fires, natural disasters, explosions, pipeline ruptures,
spills, and acts of terrorism, all of which can result in the loss of hydrocarbons, environmental pollution, personal injury claims
and other damage to our and others' properties. As protection against operating hazards, we maintain insurance coverage against
some, but not all, potential losses. In addition, pollution and environmental risks generally are not fully insurable. As a result
of market conditions, existing insurance policies may not be renewed and other desirable insurance may not be available on commercially
reasonable terms, if at all. The occurrence of an event that is not covered, or not fully covered, by insurance could have a material
adverse effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our hedging activities could result in financial losses
or could reduce our available funds or income and therefore adversely affect our financial position.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">To achieve more predictable cash flow
and to reduce our exposure to adverse fluctuations in the prices of oil and gas, we have entered into derivative contracts through
June 30, 2016 for approximately 236,000 barrels of crude oil. The settlement of and the mark to market of these contracts could
result in both realized and unrealized hedging losses. For the year ended December 31, 2013, we incurred realized and unrealized
hedging losses of approximately $740,000. The extent of our commodity price exposure is related largely to the effectiveness and
scope of our derivative activities. For example, the derivative instruments we may utilize may be based on posted market prices,
which may differ significantly from the actual crude oil prices we realize in our operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our actual future production may be
significantly higher or lower than we estimate at the time we enter into derivative transactions for such period. If the actual
amount is higher than we estimate, we will have greater commodity price exposure than we intended. If the actual amount is lower
than the nominal amount that is subject to our derivative financial instruments, we might be forced to satisfy all or a portion
of our derivative transactions without the benefit of the cash flow from our sale or purchase of the underlying physical commodity,
resulting in a substantial diminution of our liquidity. As a result of these factors, our derivative activities may not be as
effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility
of our cash flows. In addition, while we believe our existing derivative activities are with creditworthy counterparties, continued
deterioration in the credit markets may cause a counterparty not to perform its obligation under the applicable derivative instrument
or impact their willingness to enter into future transactions with us.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our business depends in part on processing facilities
owned by others. Any limitation in the availability of those facilities could interfere with our ability to market our oil and
gas production and could harm our business.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The marketability of our oil and gas
production will depend in part on the availability, proximity and capacity of pipelines and oil processing facilities. The amount
of oil and gas that can be produced and sold is subject to curtailment in certain circumstances, such as pipeline interruptions
due to scheduled and unscheduled maintenance, excessive pressure, physical damage or lack of available capacity on such systems.
The curtailments arising from these and similar circumstances may last from a few days to several months. In many cases, we will
be provided only with limited, if any, notice as to when these circumstances will arise and their duration. Any significant curtailment
in pipeline capacity or the capacity of processing facilities could significantly reduce our ability to market our oil and gas
production and could materially harm our business.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our reserves are subject to the risk of depletion
because many of our leases are in mature fields that have produced large quantities of oil and gas to date.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A significant portion of our operations
are located in or near established fields in Kansas, Colorado, Nebraska, and Texas. As a result, many of our leases are in, or
directly offset, areas that have produced large quantities of oil and gas to date.&nbsp;&nbsp;As such, our reserves may be negatively
impacted by offsetting wells or previously drilled wells, which could significantly harm our business.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Our lease ownership may be diluted
due to financing strategies we may employ in the future.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">To accelerate our development efforts,
we may take on working interest partners who will contribute to the costs of drilling and completion operations and then share
in any cash flow derived from production. In addition, we may in the future, due to a lack of capital or other strategic reasons,
establish joint venture partnerships or farm out all or part of our development efforts. These economic strategies may have a
dilutive effect on our lease ownership and could significantly reduce our operating revenues.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>We may face lease expirations on leases that are not
currently held-by-production.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have numerous leases that are not
currently held-by-production, some of which have near term lease expirations and are likely to expire. Although we believe that
we can maintain our most desirable leases by conducting drilling operations or by negotiating lease extensions, we can make no
guarantee that we can maintain these leases.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>We are subject to complex laws and regulations, including
environmental regulations, which can adversely affect the cost, manner or feasibility of doing business.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Development, production and sale of
oil and gas in the United States are subject to extensive laws and regulations, including environmental laws and regulations.
We may be required to make large expenditures to comply with environmental and other governmental regulations. Matters subject
to regulation include, but are not limited to:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 11pt Calibri, Helvetica, Sans-Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="width: 3%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="width: 88%; padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">location
    and density of wells;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the handling of
    drilling fluids and obtaining discharge permits for drilling operations;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">accounting for
    and payment of royalties on production from state, federal and Indian lands;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">bonds for ownership,
    development and production of oil and gas properties;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">transportation
    of oil and gas by pipelines;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">operation of wells
    and reports concerning operations; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 12pt; line-height: 115%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Symbol">&#183;</FONT></TD>
    <TD STYLE="padding-right: 0.8pt; line-height: 115%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">taxation.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 2.25pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Under these laws and regulations, we
could be liable for personal injuries, property damage, oil spills, discharge of hazardous materials, remediation and clean-up
costs and other environmental damages. Failure to comply with these laws and regulations also may result in the suspension or
termination of our operations and subject us to administrative, civil and criminal penalties. Moreover, these laws and regulations
could change in ways that substantially increase our costs. Accordingly, any of these liabilities, penalties, suspensions, terminations
or regulatory changes could materially adversely affect our financial condition and results of operations enough to possibly force
us to cease our business operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our operations may expose us to significant costs
and liabilities with respect to environmental, operational safety and other matters.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may incur significant costs and liabilities
as a result of environmental and safety requirements applicable to our oil and gas production activities. We may also be exposed
to the risk of costs associated with Kansas Corporation Commission, the Texas Railroad Commission, and the Colorado Oil and Gas
Conservation Commission, requirements to plug orphaned and abandoned wells on our oil and gas leases that were previously drilled
by third parties. In addition, we may indemnify sellers or lessors of oil and gas properties for environmental liabilities they
or their predecessors may have created. These costs and liabilities could arise under a wide range of federal, state and local
environmental and safety laws and regulations, including regulations and enforcement policies, which have tended to become increasingly
strict over time. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and
criminal penalties, imposition of cleanup and site restoration costs, liens and to a lesser extent, issuance of injunctions to
limit or cease operations. In addition, claims for damages to persons or property may result from environmental and other impacts
of our operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Strict, joint and several liability
may be imposed under certain environmental laws, which could cause us to become liable for the conduct of others or for consequences
of our own actions that were in compliance with all applicable laws at the time those actions were taken. New laws, regulations
or enforcement policies could be more stringent and impose unforeseen liabilities or significantly increase compliance costs.
If we are not able to recover the resulting costs through insurance or increased revenues, our ability to operate effectively
could be adversely affected.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our ability to use net operating loss carryforwards
to offset future taxable income may be subject to certain limitations</I>.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.05pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We currently have net operating loss
carryforwards that may be available to offset future taxable income. However, changes in the ownership of our stock (including
certain transactions involving our stock that are outside of our control) could result (or may have already resulted) in an &ldquo;ownership
change&rdquo; within the meaning of Section&nbsp;382 of the Internal Revenue Code of 1986, as amended, which may significantly
limit our ability to utilize our net operating loss carryforwards. To the extent an ownership change has occurred or were to occur
in the future, it is possible that the limitations imposed on our ability to use pre-ownership change losses could cause a significant
net increase in our U.S. federal income tax liability and could cause U.S. federal income taxes to be paid earlier than otherwise
would be paid if such limitations were not in effect.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Failure to maintain effective internal controls in
accordance with Section&nbsp;404 of the Sarbanes-Oxley Act could have a material adverse effect on the trading price of our common
stock and Series A preferred stock.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Section&nbsp;404 of the Sarbanes-Oxley
Act of 2002 requires our management to assess the effectiveness of its internal control over financial reporting and to provide
a report by its registered independent public accounting firm addressing the effectiveness of our internal control over financial
reporting. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a framework for companies to assess
and improve their internal control systems. If we are unable to assert that our internal control over financial reporting is effective
or if our registered independent public accounting firm is unable to express an opinion on the effectiveness of the internal controls
or identifies one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence
in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on the trading price of
our common stock and Series A preferred stock. If we fail to maintain the adequacy of our internal controls, we may not be able
to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance
with Section&nbsp;404 of the Sarbanes-Oxley Act. Failure to achieve and maintain effective internal control over financial reporting
could have an adverse effect on the trading price of our common stock and Series A preferred stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>A small number of customers account for a significant
portion of our revenues, and the loss of one or more of these customers could materially adversely affect our financial condition
and results of operations.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We derive a significant portion of our
revenues from a small number of customers. Our financial condition and results of operations could be materially and adversely
affected if any one of these customers interrupts or curtails their activities, fail to pay for the services that have been performed,
terminate their contracts, fail to renew their existing contracts or refuse to award new contracts and we are unable to enter
into contracts with new customers on comparable terms. The loss of any of our significant customers could materially adversely
affect our financial condition and results of operations.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>We are exposed to the credit risks of our key customers,
including certain affiliated companies, and certain other third parties, and nonpayment by these customers and other parties could
adversely affect our financial position, results of operations and cash flows.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are subject to risks of loss resulting
from nonpayment or nonperformance by our customers. Any material nonpayment or nonperformance by key customers and certain other
third parties could adversely affect our financial position, results of operations and cash flows. If any key customers or other
parties default on their obligations to us, our financial results and condition could be adversely affected. Furthermore, some
of these customers and other parties may be highly leveraged and subject to their own operating and regulatory risks.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B><I>Our operations might be interrupted by the occurrence
of a natural disaster or other catastrophic event.</I></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Natural disasters or other catastrophic
events could disrupt our operations or those of our strategic partners, contractors and vendors. We might suffer losses as a result
of business interruptions that exceed the coverage available under our and our contractors' insurance policies or for which we
or our contractors do not have coverage. Any natural disaster or catastrophic event could have a significant negative impact on
our operations and financial results, and could delay our efforts to identify and execute any strategic opportunities.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_008"></A><B>USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We estimate that the net proceeds from
the sale of the securities we are offering will be approximately $2.736 million,
assuming that we sell all of the securities we are offering, after deducting estimated offering expenses payable by us.&nbsp; </P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;We intend to use the net proceeds
from this offering for general working capital purposes. We have not determined the amounts we plan to spend on the areas listed
above or the timing of these expenditures. As a result, our management will have broad discretion to allocate the net proceeds
from this offering. Pending application of the net proceeds as described above, we intend to invest the net proceeds of this offering
in short-term, investment-grade, interest-bearing securities.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_026"></A>PLAN OF DISTRIBUTION</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We are offering the securities on
a best efforts basis through Northland Capital Markets and Euro Pacific Capital, Inc. (&ldquo;Euro Pacific&rdquo;), the
placement agents. Northland Capital Markets and Euro Pacific have agreed to act as placement agent for the sale of up
to&nbsp;763,547 shares of common stock and
1,242.17099 shares of series B preferred stock, subject to the terms and conditions
contained in a placement agency agreement between us and the placement agents. The placement agents are not purchasing or
selling any securities under this prospectus supplement or the accompanying prospectus, nor are they required to arrange for
the purchase or sale of any specific number or dollar amount of shares.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The placement agents propose to arrange
for the sale to one or more purchasers of the securities offered pursuant to this prospectus supplement and the accompanying prospectus
directly through stock purchase agreements between the purchasers and us. There is no minimum number of shares that must be sold
as a condition to closing this offering; the actual number of shares sold in this offering is not presently determinable.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We negotiated the offering price for
the shares in this offering with prospective investors. The factors considered in determining the price included the recent market
price of our common stock, the general condition of the securities market at the time of this offering, the history of, and the
prospects for the industry in which we compete, our past and present operations and our prospects for future revenues.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The placement agency agreement provides
that the obligations of the placement agents and the investors are subject to certain conditions precedent, including the absence
of any material adverse changes in our business (to the extent not disclosed) and the receipt of customary legal opinions, letters
and certificates.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We will pay the placement
agents an aggregate placement agent fee equal to 8% of the gross proceeds of the sale of securities in the offering. In
addition to the placement agent fee to be paid by us, we have agreed to reimburse the placement agent for certain of their
out-of-pocket expenses incurred in connection with this offering, including the reasonable fees and disbursements of counsel
retained by the placement agent with our consent and the reasonable travel and related expenses of the placement agent, which
aggregate amount of such expenses reimbursed by us will not exceed $40,000 without our further approval. In connection with
the successful completion of this offering, for the price of $50, the placement agents may purchase a five-year warrant
to purchase shares of our common stock equal to 6.0% of the shares sold in this offering and the concurrent private placement
at an exercise price of $2.75. Except as disclosed in this
prospectus supplement, the placement agents haves not received and will not receive from us any other item of compensation or
expense in connection with this offering considered by the Financial Industry Regulatory Authority to be an item of value.
The estimated offering expenses payable by us, in addition to the placement agent fee of approximately $264,000, are
approximately $60,000, which includes our legal and accounting costs, the placement agents&rsquo; expenses and various other
fees associated with registering and listing the common shares. After deducting certain fees due to the placement agent and
our estimated offering expenses, we expect the net proceeds from this offering to be approximately $2.736 million, assuming
all securities offered are sold in this offering.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The placement agents may allow concessions,
or pay commissions, to other dealers participating in this offering.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>Closing</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We currently anticipate that
closing of the sale of the shares will take place on or about March 13,
2015.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>Indemnification</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We have agreed to indemnify the placement
agent against certain liabilities, including liabilities under the Securities Act of 1933, as amended, and liabilities arising
from breaches of representations and warranties contained in the placement agency agreement. We have also agreed to contribute
to payments the placement agent may be required to make in respect of such liabilities.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">In addition, we will indemnify the
purchasers against liabilities arising out of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by us in the stock purchase agreement or related documents or (b) any action instituted against a purchaser
by a third party (other than a third party who is affiliated with such purchaser) with respect to the offering, subject to certain
exceptions.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>Lock-Up</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We, along with our executive officers
and directors, have agreed to certain lock-up provisions with regard to future sales of our common stock and other securities
convertible into or exercisable or exchangeable for common stock for the period beginning on the closing date of the offering
and ending 90 days thereafter without the prior written consent of the placement agents</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>Trading Market</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Our common stock is listed on the NYSE
under the symbol &ldquo;ENRJ&rdquo;.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>Additional Information</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">In the ordinary course of its business,
the placement agents and their affiliates may actively trade or hold our securities or our loans for their own accounts or for
the accounts of customers and, accordingly, may at any time hold long or short positions in our debt or equity securities. The
placement agent and its affiliates have performed and may in the future perform various financial advisory and investment banking
services for us, for which they will receive customary fees and expenses.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Northland Capital Markets is the trade
name for certain capital markets and investment banking services of Northland Securities, Inc., member FINRA/SIPC.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="SDS"></A><B>DESCRIPTION OF SECURITIES WE ARE
OFFERING</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Our authorized capital stock consists
of 250,000,000 shares of common stock, $0.001 par value, and 25,000,000 shares of preferred stock, $0.001 par value, of which
2,000,000 shares have been designated series&nbsp;A redeemable convertible preferred stock, and shares have been designated series&nbsp;B
preferred stock.&nbsp; As of March 9, 2015, we had 7,643,114 shares of common stock, 318,630 shares of series A redeemable preferred
stock, and no shares of series B convertible preferred stock outstanding.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;In this offering, we
are offering a maximum of up to 763,547 shares of our common stock, and
up to 1,242.17099 shares of our series&nbsp;B convertible preferred
stock. The common stock will be sold at a negotiated price of $1.75 per
share, and the series&nbsp;B preferred stock will be sold at a price of $1,000 per share.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We will agree with the purchasers
that, subject to certain exceptions, commencing 12 months following the closing of this offering, until the date immediately
following 10 consecutive trading days during which (i) the volume weighted average prices exceeds $4.30, and (ii) the daily trading volume exceeds 200,000 shares per day, if
we issue securities at a price less than the purchase price of the common stock in this offering, we will issue to the
purchasers a warrant, without any further consideration, to purchase a number of shares of common stock equal to the
difference between (a) the number of shares of common stock, shares of common stock issuable upon conversion of the series B
preferred stock, and shares issuable upon exercise of the warrant that would have been issued in this offering and the
concurrent private placement at that lower purchase price and (b) the number of shares of common stock, shares of common
stock issuable upon conversion of the series B preferred stock, and shares of common stock issuable upon exercise of the
warrant that are issued in this offering and the concurrent private placement.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The common stock and series
B preferred stock issued in this offering will be sold pursuant to a securities purchase agreement with select accredited
investors. Under the securities purchase agreement, we will agree with the purchasers that while the shares
of series&nbsp;B preferred stock are outstanding, we will not effect or enter into an agreement to effect a
&ldquo;Variable Rate Transaction,&rdquo; which means a transaction in which we:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(i)</TD><TD>issue or sell any debt or equity securities that are convertible
                                         into, exchangeable or exercisable for, or include the right to receive, additional shares
                                         of common stock either (A)&nbsp;at a conversion price, exercise price or exchange rate
                                         or other price that is based upon, and/or varies with, the trading prices of or quotations
                                         for the shares of common stock at any time after the initial issuance of such debt or
                                         equity securities or (B)&nbsp;with a conversion, exercise or exchange price that is subject
                                         to being reset at some future date after the initial issuance of such debt or equity
                                         security or upon the occurrence of specified or contingent events directly or indirectly
                                         related to our business or the market for our common stock; or</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(ii)</TD><TD>enter into any agreement, including, but not limited to,
                                         an equity line of credit, whereby we may issue securities at a future determined price.</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">We will also agree to indemnify the
purchasers against certain losses resulting from our breach of any of our representations, warranties, or covenants under agreements
with the purchasers as well as under certain other circumstances described in the securities purchase agreement.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Common Stock</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The following description of our common
stock is a summary.&nbsp; It is not complete and is subject to and qualified in its entirety by our certificate of incorporation
and bylaws, both as amended, a copy of each of which has been incorporated as an exhibit to the registration statement of which
this prospectus supplement forms a part.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;Holders of our common stock are
entitled to one vote for each share on all matters submitted to a stockholder vote and may not cumulate their votes. Holders of
common stock are entitled to share in all dividends that our Board of Directors, or the Board, in its discretion, declares from
legally available funds. In the event of our liquidation, dissolution or winding up, each outstanding share entitles its holder
to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if
any, having preference over the common stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Holders of our common stock have no
conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to our common stock. The
rights of the holders of common stock are subject to any rights that may be fixed for holders of preferred stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Shares of common stock issued under
this prospectus supplement will be fully paid and nonassessable upon issuance.&nbsp; Our common stock is traded on NYSE Market
under the symbol &ldquo;ENRJ.&rdquo;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B>Series B Preferred Stock</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;The following is a brief summary
of our series&nbsp;B preferred stock and is subject to, and qualified in its entirety by, the Certificate of Designation of Preferences,
Rights and Limitations of Series&nbsp;B Convertible Preferred Stock which will be filed as an exhibit to a Current Report on Form&nbsp;8-K
with the Securities and Exchange Commission in connection with this offering.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Rank</I>. The series&nbsp;B
preferred stock will rank above all other outstanding classes of stock with respect to dividend rights and liquidation preferences
other than the our Series A preferred stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Dividends</I>. Holders of
the Series&nbsp;B preferred stock shall be entitled receive the same dividends actually paid with regard to shares of common stock,
when, as and if declared, on an as-converted to common stock basis. payable in cash out of legally available funds.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Liquidation</I>. Upon any
dissolution, liquidation or winding up, whether voluntary or involuntary, holders of series&nbsp;B preferred stock will be entitled
to receive distributions out of our assets, whether capital or surplus before any distributions shall be made on any other outstanding
classes of stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Conversion</I>. Each share
of series&nbsp;B preferred stock shall be convertible, at any time and from time to time at the option of the holder thereof,
into that number of shares of common stock determined by dividing the stated value of such series&nbsp;B preferred stock by the
conversion price. Each share of series&nbsp;B preferred stock has a stated value of $1,000. The conversion price initially is
$ per share of common stock and is subject to adjustment described below. This right to convert is limited by the beneficial ownership
limitation described below.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Beneficial Ownership Limitation</I>.
We shall not effect any conversion of series&nbsp;B preferred stock, and a holder shall have no right to convert any portion of
series&nbsp;B preferred stock, to the extent that, after giving effect to such conversion, such holder, together with such holder&rsquo;s
affiliates, and any persons acting as a group together with such holder or any such affiliate, would beneficially own in excess
of 9.9% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common
stock upon such conversion.&nbsp; Beneficial ownership of the holder and its affiliates will be determined in accordance with
Section&nbsp;13(d)&nbsp;of the Securities Exchange Act of 1934, as amended (Exchange Act), and the rules&nbsp;and regulations
promulgated thereunder.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><I>&nbsp;</I></P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><I>Conversion Price Adjustment:</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 63.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 63.5pt">&nbsp;<I>Stock Dividends and Stock
Splits</I>. If we pay a stock dividend or otherwise make a distribution payable in shares of common stock on shares of common
stock or any other common stock equivalents, subdivide or combine outstanding common stock, or reclassify common stock, the conversion
price will be adjusted by multiplying the then conversion price by a fraction, the numerator of which shall be the number of shares
of common stock outstanding immediately before such event, and the denominator of which shall be the number of shares outstanding
immediately after such event.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 63.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 63.5pt"><I>Anti-Dilution Protection; Subsequent
Equity Sales</I>.&nbsp; Subject to standard exceptions, until the date immediately following 10 consecutive trading days during
which (i) the volume weighted average prices exceeds $4.30, and
(ii) the daily trading volume exceeds 200,000 shares per day, if we sell or grant any option to purchase or sell or grant any
right to re-price or otherwise dispose of or issue any commons stock (or any security convertible into common stock) at a lower
price per share than the series&nbsp;B preferred stock conversion price, then the conversion price shall be reduced to match the
lower price.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><I>Rights Offerings</I>. If we issue
common stock equivalents or rights to purchase stock, warrants, securities or other property pro rata to holders of common stock,
a holder of series&nbsp;B preferred stock will be entitled to acquire, without regard to any limitations, subject to the beneficial
ownership limitation described above, such common stock equivalents or rights that such holder could have acquired if such holder
had held the number of shares of common stock issuable upon complete conversion of series&nbsp;B preferred stock immediately prior
to the date a record is taken for such issuance.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Pro Rata Distributions</I>.
If we declare or make any dividend or other distribution of our assets (or rights to acquire our assets) to holders of shares
of common stock, by way of return of capital or otherwise at any time after the issuance of this series&nbsp;B Preferred Stock,
then, in each such case, the holder of series&nbsp;B preferred stock shall be entitled to participate in such dividend or distribution
to the same extent that the holder of the series&nbsp;B preferred stock would have participated therein if the holder had held
the number of shares of common stock acquirable upon complete conversion of this series&nbsp;B preferred stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Fundamental Transaction</I>.
If we effect a fundamental transaction, then upon any subsequent conversion of series&nbsp;B preferred stock, the holder thereof
shall have the right to receive, for each share of common stock that would have been issuable upon such conversion immediately
prior to the occurrence of such fundamental transaction, the number of shares of the successor&rsquo;s or acquiring corporation&rsquo;s
common stock or of our common stock, if we are the surviving corporation, and any additional consideration receivable as a result
of such fundamental transaction by a holder of the number of shares of common stock into which series&nbsp;B preferred stock is
convertible immediately prior to such fundamental transaction. A fundamental transaction means: (i)&nbsp;our merger or consolidation
with or into another entity, (ii)&nbsp;any sale of all or substantially all of our assets in one transaction or a series of related
transactions, (iii)&nbsp;any tender offer or exchange offer allowing holders of our common stock to tender or exchange their shares
for cash, property or securities, and has been accepted by the holders of 50% or more of the outstanding common stock (iv)&nbsp;any
reclassification of our common stock or any compulsory share exchange by which common stock is effectively converted into or exchanged
for other securities, cash or property, or (v)&nbsp;consummation of a stock or share purchase agreement or other business combination
with another person whereby such other person acquires more than 50% of the outstanding shares of common stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Voting Rights</I>. Except
as otherwise provided in the Certificate of Designation or required by law, series&nbsp;B preferred stock shall have no voting
rights.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;<I>Fractional Shares</I>. No
fractional shares of common stock will be issued upon conversion of series&nbsp;B preferred stock. Rather, we shall, at our election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the conversion
price or round up to the next whole share.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;Shares of the series&nbsp;B preferred
stock issued under this prospectus will be fully paid and nonassessable upon issuance.&nbsp; There are no provisions restricting
repurchase or redemption of the series&nbsp;B preferred stock.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><B></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><I>&nbsp;</I></P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt"><B>PRIVATE PLACEMENT OF PREFERRED STOCK
AND WARRANTS<FONT STYLE="line-height: 115%"><SUP></SUP></FONT></B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Concurrently with the closing of
the sale of shares of common stock and series B preferred stock in this offering, we also expect to issue and sell to select
investors, 521.62076 shares of the series B preferred stock and warrants to purchase an aggregate of
1,771,428 shares of our common stock, at an initial exercise price
equal to $2.75 per share.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Each Warrant shall be initially exercisable
on the 6 month anniversary of the issuance date and have a term of exercise equal to 5 years from the date on which first exercisable.
Subject to limited exceptions, a holder of Warrants will not have the right to exercise any portion of its warrants if the holder,
together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of our common stock outstanding
immediately after giving effect to such exercise.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">Such securities will be issued and
sold without registration under the Securities Act, or state securities laws, in reliance on the exemptions provided by Section
4(a)(2) of the Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws.
Accordingly, investors may exercise those warrants and sell the underlying shares only pursuant to an effective registration statement
under the Securities Act covering the resale of those shares, an exemption under Rule 144 under the Securities Act, or another
applicable exemption under the Securities Act.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_010"></A><B>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The validity of the securities offered
hereby will be passed upon for us by Reicker, Pfau, Pyle &amp; McRoy LLP,&nbsp;Irvine, California. The placement agent has been
represented in connection with this offering by Faegre Baker Daniels LLP, Minneapolis, Minnesota.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_011"></A><B>EXPERTS</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">The consolidated financial statements
included in our annual report on Form&nbsp;10-K for the years ended December&nbsp;31, 2013 and 2012 and incorporated into this
prospectus by reference have been audited by L.L. Bradford LLP and Weaver, Martin &amp; Samyn LLP repectively,independent registered
public accounting firms, to the extent and for the period set forth in their report and are incorporated in this prospectus by
reference in reliance upon such report given upon the authority of them as experts in auditing and accounting.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; text-align: left; margin-bottom: 0"></P>


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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>PROSPECTUS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><IMG SRC="tlogo.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>$50,000,000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Units</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may offer and sell from time to time up to
$50,000,000 of any combination of the securities identified above. This prospectus provides you with a general description of the
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may offer and sell the securities described
in this prospectus and any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers,
or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities,
their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth,
or will be calculable from the information set forth, in the applicable prospectus supplement. See the sections of this prospectus
entitled &ldquo;About this Prospectus&rdquo; and &ldquo;Plan of Distribution&rdquo; for more information. No securities may be
sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering
of such securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This prospectus describes some of the general
terms that may apply to these securities and the general manner in which they may be offered. Each time we sell securities we will
provide a prospectus supplement that will contain specific information about the terms of the securities we are offering and the
specific manner in which we will offer the securities. The prospectus supplement may add to, update or change the information in
this prospectus. You should read this prospectus and any prospectus supplement carefully before you invest in our securities. This
prospectus may not be used to sell securities unless accompanied by a prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Investing in our securities involves a high
degree of risk. See &quot;Risk Factors&quot; beginning on page&nbsp;7 of this prospectus for factors you should consider before
buying our securities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our common stock is listed on the NYSE under
the symbol &quot;ENRJ,&quot; and our 10% Series A Cumulative Redeemable Perpetual Preferred Stock is listed under the symbol &quot;ENRJPR.&quot;
On November 14, 2014, the last reported sale price of our common stock and Series A preferred stock on the NYSE was $4.25 and $23.70,
respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of November 14, 2014, the aggregate market
value of our outstanding common stock held by non-affiliates, or public float, was approximately $13,591,985, based on 7,643,114
shares of outstanding common stock, of which approximately 4,445,000 shares were held by affiliates, and a price of $4.25 per share,
which was the last reported sale price of our common stock on the NYSE on November 14, 2014. Pursuant to General Instruction&nbsp;I.B.6
of Form&nbsp;S-3, in no event will we sell securities registered on this registration statement in a public primary offering with
a value exceeding more than one-third of our public float in any 12-month period held by non-affiliates so long as our public float
remains below $75&nbsp;million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><A NAME="a_012"></A>ABOUT THIS PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This prospectus is part of a registration statement
that we filed with the SEC utilizing a shelf registration process. Under the shelf registration process, we may offer, from time
to time, the securities or combinations of the securities described in this prospectus with a total offering price of up to $50,000,000.
Pursuant to General Instruction&nbsp;I.B.6 of Form&nbsp;S-3, in no event will we sell securities registered on this registration
statement in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period held
by non-affiliates so long as our public float remains below $75&nbsp;million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This prospectus provides you with a general
description of the securities we may offer. Each time we offer a type or series of securities, we will provide a prospectus supplement
or free writing prospectus that will contain specific information about the terms of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A prospectus supplement or free writing prospectus
may include a discussion of risks or other special considerations applicable to us or the offered securities. A prospectus supplement
or free writing prospectus may also add, update or change information contained in this prospectus. If there is any inconsistency
between the information in this prospectus and any related prospectus supplement or free writing prospectus, you must rely on the
information in the prospectus supplement or free writing prospectus. Please carefully read both this prospectus and the related
prospectus supplement or free writing prospectus in their entirety together with additional information described under the heading
&quot;Where You Can Find More Information&quot; in this prospectus. This prospectus may not be used to offer or sell any securities
unless accompanied by a prospectus supplement or free writing prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_013"></A><B>WHERE YOU CAN FIND MORE
INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any reports, statements or other information that we
file at the SEC's public reference room at 100&nbsp;F Street, N.E., Washington, District of Columbia 20549. Please call the SEC
at 1-800-SEC-0330 for more information on the public reference room. Our SEC filings are also available to the public from commercial
retrieval services and at the website maintained by the SEC at <I>www.sec.gov</I> . The reports and other information filed by
us with the SEC are also available at our website. The address of the Company's website is <I>www.enerjexresources.com</I> . Information
contained on our website or that can be accessed through our website is not incorporated by reference into this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_014"></A><B>INFORMATION INCORPORATED
BY REFERENCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The SEC allows us to incorporate information
into this prospectus &quot;by reference,&quot; which means that we can disclose important information to you by referring you to
another document that we file separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus,
except for any information superseded by information contained directly in this prospectus. These documents contain important information
about the Company and its financial condition, business and results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are incorporating by reference the Company's
filings listed below and any additional documents that we may file with the SEC pursuant to Section&nbsp;13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;) on or after the date hereof and prior to the
termination of any offering, except we are not incorporating by reference any information furnished (but not filed) under Item&nbsp;2.02
or Item&nbsp;7.01 of any Current Report on Form&nbsp;8-K and corresponding information furnished under Item&nbsp;9.01 as an exhibit
thereto:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the Company's Annual Report on Form&nbsp;10-K
for the fiscal year ended December&nbsp;31, 2013 (the &quot;2013 Form&nbsp;10-K&quot;), filed with the SEC on March 28, 2014;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the Company's Quarterly Report on Form&nbsp;10-Q
for the quarters ended March&nbsp;31, 2014, June 30, 2014, and September 30, 2014, filed with the SEC on May&nbsp;13, 2014, August
13, 2014 and November 14, 2014;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the Definitive Proxy Statement on Schedule
14A, filed with the SEC on July 23, 2014;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the Company's Current Reports on Form&nbsp;8-K
filed on May 14, 2014, May 27, 2014, June 2, 2014, June 3, 2014, June 13, 2014, June 17, 2014, June 17, 2014, June 20, 2014, June
23, 2013, July 21, 2014, August 15, 2014 and August 25, 2014 (except that any portions thereof which are furnished and not filed
shall not be deemed incorporated);</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the description of our common stock contained
in our Form&nbsp;8-A filed on June 12, 2014, including any amendments or reports filed for the purpose of updating the description;
and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the description of our 10% Series A Cumulative
Redeemable Preferred Stock contained in our Form&nbsp;8-A filed on June 13, 2014, including any amendments or reports filed for
the purpose of updating the description.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We will provide, without charge, to each person,
including any beneficial owner, to whom a copy of this prospectus has been delivered a copy of any and all of the documents referred
to herein that are summarized in this prospectus, if such person makes a written or oral request directed to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">EnerJex Resources,&nbsp;Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">4040 Broadway, Suite 508</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">San Antonio, TX 78209</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Attn: Robert G. Watson, Jr.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(210)&nbsp;451-5545</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Exhibits to the filings will not be sent, however,
unless those exhibits have specifically been incorporated by reference in this prospectus and any accompanying prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_015"></A>DISCLOSURE REGARDING
FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.05pt">This prospectus contains &ldquo;forward-looking
statements&rdquo; within the meaning of Section&nbsp;27A of the Securities Act and Section&nbsp;21E of the Exchange Act. All statements
in this prospectus, other than statements of historical facts, which address activities, events or developments that we expect
or anticipate will or may occur in the future, including such things as future capital expenditures, growth, product development,
sales, business strategy and other similar matters are forward-looking statements. You can identify forward-looking statements
by terminology such as &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;would,&rdquo; &ldquo;could,&rdquo; &ldquo;should,&rdquo; &ldquo;expect,&rdquo;
&ldquo;intend,&rdquo; &ldquo;plan,&rdquo; &ldquo;anticipate,&rdquo; &ldquo;believe,&rdquo; &ldquo;estimate,&rdquo; &ldquo;predict,&rdquo;
&ldquo;potential,&rdquo; &ldquo;continue&rdquo; or the negative of these terms or other similar expressions or phrases. These forward-looking
statements are based largely on our current expectations and assumptions and are subject to a number of risks and uncertainties,
many of which are beyond our control. Actual results could differ materially from the forward-looking statements set forth herein
as a result of a number of factors, including, but not limited to, our products&rsquo; current state of development, the need for
additional financing, changes in our business strategy, competition in various aspects of our business, the risks described under
&ldquo;Risk Factors&rdquo; beginning on page[&nbsp;&nbsp;&nbsp;] of this prospectus and other risks detailed in our reports filed
with the Securities and Exchange Commission, or the SEC. In light of these risks and uncertainties, all of the forward-looking
statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments
anticipated by us will be realized. We undertake no obligation to update or revise any of the forward-looking statements contained
in this prospectus. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_016"></A><B>ABOUT ENERJEX RESOURCES,&nbsp;INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We operate as an independent exploration and
production company focused on the acquisition and development of oil and natural gas properties located in the mid-continent region
of the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our primary business objective is to increase
our oil and natural gas production, reserves, and cash flow in a manner that is accretive for our shareholders by acquiring and
developing properties that have low production decline rates and offer abundant drilling opportunities with low risk profiles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We drilled 48 oil wells in 2013 with a 100%
success rate, and our ratio of proved reserves to production is 32.8 years based on our annualized production volumes for the three
months ended December 31, 2013. For the six months ended March 31, 2014, we reactivated multiple oil and natural gas wells in our
Adena Field Project and initiated natural gas production under a new sales contract. In addition, we successfully completed workovers
on eight natural gas wells in our Niobrara Project.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As of June 30, 2014, we owned oil and natural
gas leases covering more than 90,000 net acres in Kansas, Colorado, Nebraska, and Texas, of which approximately 64% is held by
production. We have identified more than 500 drilling locations on this acreage from which we expect to recover commercial quantities
of oil and natural gas.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our total net proved oil and natural gas reserves
as of December 31, 2013 were 5.8 million barrels of oil equivalent (Boe), of which 77% was oil. Of the 5.8 million Boe of total
proved reserves, approximately 49% were classified as proved developed producing, approximately 17% were classified as proved developed
non-producing, and approximately 34% were classified as proved undeveloped. The total PV10 (present value) of our proved reserves
as of December 31, 2013 was $102.4 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;As of the date of this prospectus, we
are in compliance with all financial covenants imposed on our business by our lenders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The principal elements of our business strategy
are to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 3%; font-size: 10pt"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 90%; font-size: 10pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Develop Our Existing Properties</I> . We plan to increase our oil and natural gas production, reserves, and cash flow by developing our extensive inventory of drilling locations that we have identified on our existing properties.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 63pt; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 90%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Maximize Operational Control</I> . We seek to operate and maintain a substantial working interest in the majority of our properties. We believe the ability to control our drilling inventory will provide us with the opportunity to more efficiently allocate capital, manage resources, control operating and development costs, and utilize our experience and knowledge of oil and gas field technologies.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 90%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Pursue Selective Acquisitions and Joint Ventures</I> . We believe our local presence in Kansas, Colorado, Nebraska, and Texas makes us well-positioned to pursue selected acquisitions and joint venture arrangements.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 90%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Reduce Unit Costs Through Economies of Scale and Efficient Operations.</I> As we increase our oil and natural gas production and develop our existing properties, we expect that our unit cost structure will benefit from economies of scale. In particular, we anticipate reducing unit costs through greater utilization of our existing infrastructure over a larger number of wells.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 90%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><I>Reduce Oil Price Risk</I> . We seek to minimize the risk to our business of a decline in future oil prices by entering into derivative or physical hedging arrangements with respect to a portion of our anticipated future oil production.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We were formerly known as Millennium Plastics
Corporation and were incorporated in the State of Nevada on March 31, 1999. We abandoned a prior business plan focusing on the
development of biodegradable plastic materials. In August 2006, we acquired Midwest Energy, Inc., a Nevada corporation, pursuant
to a reverse merger. After the merger, Midwest Energy became a wholly owned subsidiary, and as a result of the merger the former
Midwest Energy stockholders controlled approximately 98% of our outstanding shares of common stock. We changed our name to EnerJex
Resources, Inc. in connection with the merger, and in November 2007 we changed the name of Midwest Energy (now our wholly owned
subsidiary) to EnerJex Kansas, Inc. All of our current operations are conducted through EnerJex Kansas, Inc., Black Raven Energy,
Inc., and Black Sable Energy, LLC, and our leasehold interests are held in our wholly owned subsidiaries Black Raven Energy, Inc.,
Adena, LLC, Black Sable Energy, LLC, Working Interest, LLC, and EnerJex Kansas, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_017"></A>RISK FACTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><I>An investment in our securities involves
a high degree of risk. Before making an investment decision, you should carefully consider the risks described below, as well as
the risks described under the caption &quot;Risk Factors&quot; in our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31,
2013 and the other filings we make with the SEC pursuant to Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act, which
we have incorporated herein by reference. Our business, financial condition, results of operations and cash flows could be materially
adversely affected by any of these risks, and the market or trading price of our securities could decline due to any of these risks.
In addition, please read &quot;Disclosure Regarding Forward-Looking Statements&quot; in this prospectus, where we describe additional
uncertainties associated with our business and the forward-looking statements included or incorporated by reference in this prospectus.
Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and
operations.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Declining economic conditions and worsening
geopolitical conditions could negatively impact our business</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our operations are affected by local, national
and worldwide economic conditions.&nbsp;&nbsp;Markets in the United States and elsewhere have been experiencing extreme volatility
and disruption for more than 5 years, due in part to the financial stresses affecting the liquidity of the banking system and the
financial markets generally.&nbsp;&nbsp; The consequences of a potential or prolonged recession may include a lower level of economic
activity and uncertainty regarding energy prices and the capital and commodity markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In addition, actual and attempted terrorist
attacks in the United States, Middle East, Southeast Asia and Europe, and war or armed hostilities in the Middle East, the Persian
Gulf, North Africa, Iran, North Korea or elsewhere, or the fear of such events, could further exacerbate the volatility and disruption
to the financial markets and economy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">While the ultimate outcome and impact of the
current economic conditions cannot be predicted, a lower level of economic activity might result in a decline in energy consumption,
which may materially adversely affect the price of oil and gas, our revenues, liquidity and future growth.&nbsp;&nbsp;Instability
in the financial markets, as a result of recession or otherwise, also may affect the cost of capital and our ability to raise capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>The oil and natural gas business involves numerous uncertainties
and operating risks that can prevent us from realizing profits and can cause substantial losses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our development, exploitation and exploration
activities may be unsuccessful for many reasons, including weather, cost overruns, equipment shortages and mechanical difficulties.
Moreover, the successful drilling of a well does not ensure a profit on investment. A variety of factors, both geological and market-related,
can cause a well to become uneconomical or only marginally economical. In addition to their cost, unsuccessful wells can hurt our
efforts to replace reserves.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">The oil and natural gas business involves a variety
of operating risks, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unexpected operational events and/or conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">reductions in oil and natural gas prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">limitations in the market for oil and natural gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">adverse weather conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">facility or equipment malfunctions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">title problems;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">oil and gas quality issues;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">pipe, casing, cement or pipeline failures;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">natural disasters;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">fires, explosions, blowouts, surface cratering, pollution and other risks or accidents;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">environmental hazards, such as oil spills, pipeline ruptures and discharges of toxic gases;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">compliance with environmental and other governmental requirements; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">uncontrollable flows of oil or natural gas or well fluids.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">If we experience any of these problems, it could
affect well bores, gathering systems and processing facilities, which could adversely affect our ability to conduct operations.
We could also incur substantial losses as a result of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">injury or loss of life;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">severe damage to and destruction of property, natural resources and equipment;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">pollution and other environmental damage;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">clean-up responsibilities;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">regulatory investigation and penalties;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">suspension of our operations; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">repairs to resume operations.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Because we use third-party drilling contractors
to drill our wells, we may not realize the full benefit of worker compensation laws in dealing with their employees. Our insurance
does not protect us against all operational risks. We do not carry business interruption insurance at levels that would provide
enough funds for us to continue operating without access to other funds. For some risks, we may not obtain insurance if we believe
the cost of available insurance is excessive relative to the risks presented. In addition, pollution and environmental risks generally
are not fully insurable. If a significant accident or other event occurs and is not fully covered by insurance, it could impact
our operations enough to force us to cease our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Drilling wells is speculative, and any material inaccuracies
in our forecasted drilling costs, estimates or underlying assumptions will materially affect our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Developing and exploring for oil and natural
gas involves a high degree of operational and financial risk, which precludes definitive statements as to the time required and
costs involved in reaching certain objectives. The budgeted costs of drilling, completing and operating wells are often exceeded
and can increase significantly when drilling costs rise due to a tightening in the supply of various types of oilfield equipment
and related services. Drilling may be unsuccessful for many reasons, including geological conditions, weather, cost overruns, equipment
shortages and mechanical difficulties. Moreover, the successful drilling of an oil or gas well does not ensure a profit on investment.
Exploratory wells bear a much greater risk of loss than development wells. Substantially all of EnerJex's wells drilled through
March 31, 2014&nbsp;have been development wells, while a majority of the wells drilled by Black Raven have been considered by Black
Raven to be development wells. A variety of factors, both geological and market-related, can cause a well to become uneconomical
or only marginally economic. Our initial drilling and development sites, and any potential additional sites that may be developed,
require significant additional exploration and development, regulatory approval and commitments of resources prior to commercial
development. If our actual drilling and development costs are significantly more than our estimated costs, we may not be able to
continue our business operations&nbsp;as proposed and would be forced to modify our plan of operation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Development of our reserves, when established,
may not occur as scheduled and the actual results may not be as anticipated. Drilling activity and lack of access to economically
acceptable capital may result in downward adjustments in reserves or higher than anticipated costs. Our estimates will be based
on various assumptions, including assumptions over which we have no control and assumptions required by the SEC relating to oil&nbsp;and
gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. We have limited control over
our operations that affect, among other things, acquisitions and dispositions of properties, availability of funds, use of applicable
technologies, hydrocarbon recovery efficiency, drainage volume and production decline rates that are part of these estimates and
assumptions and any variance in our operations that affects these items within our control may have a material effect on reserves.
&nbsp;The process of estimating our oil and gas reserves is extremely complex, and requires significant decisions and assumptions
in the evaluation of available geological, geophysical, engineering and economic data for each reservoir. Our estimates may not
be reliable enough to allow us to be successful in our intended business operations. Our actual production, revenues, taxes, development
expenditures and operating expenses will likely vary from those anticipated. These variances may be material.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Unless we replace our oil and natural gas reserves, our reserves
and production will decline, which would adversely affect our cash flows and income.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Unless we conduct successful development, exploitation
and exploration activities or acquire properties containing proved reserves, our proved reserves will decline as those reserves
are produced. Producing oil and gas reservoirs generally are characterized by declining production rates that vary depending upon
reservoir characteristics and other factors. Our future oil and gas production, and, therefore our cash flow and income, are highly
dependent on our success in efficiently developing and exploiting our current reserves and economically finding or acquiring additional
recoverable reserves. We may be unable to make such acquisitions because we are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts with them;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unable to obtain financing for these acquisitions on economically acceptable terms; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">outbid by competitors.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we are unable to develop, exploit, find or
acquire additional reserves to replace our current and future production, our cash flow and income will decline as production declines,
until our existing properties would be incapable of sustaining commercial production.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our decision to acquire a property will depend in part on
the evaluation of data obtained from production reports and engineering studies, geophysical and geological analyses and seismic
and other information, the results of which are often incomplete or inconclusive.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our reviews of acquired properties can be inherently
incomplete because it is not always feasible to perform an in-depth review of the individual properties involved in each acquisition.
Even a detailed review of records and properties may not necessarily reveal existing or potential problems, nor will it permit
a buyer to become sufficiently familiar with the properties to assess fully their deficiencies and potential. Inspections may not
always be performed on every well, and environmental problems, such as ground water contamination, plugging or orphaned well liability
are&nbsp;not necessarily observable even when an inspection is undertaken.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>We must obtain governmental permits and approvals for drilling
operations, which can result in delays in our operations, be a costly and time consuming process, and result in restrictions on
our operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Regulatory authorities exercise considerable
discretion in the timing and scope of well drilling permit issuances in the region in which we operate. Compliance with the requirements
imposed by these authorities can be costly and time consuming and may result in delays in the commencement or continuation of our
exploration or production operations and/or fines. Regulatory or legal actions in the future may materially interfere with our
operations or otherwise have a material adverse effect on us. In addition, we are often required to prepare and present to federal,
state or local authorities data pertaining to the effect or impact that a proposed project may have on the environment, threatened
and endangered species, and cultural and archaeological artifacts. Accordingly, the well drilling permits we need may not be issued,
or if issued, may not be issued in a timely fashion, or may involve requirements that restrict our ability to conduct our operations
or to do so profitably.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Cost and availability of drilling rigs, equipment, supplies,
personnel and other services could adversely affect our ability to execute on a timely basis our development, exploitation and
exploration plans.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Shortages or an increase in cost of drilling
rigs, equipment, supplies or personnel could delay or interrupt our operations, which could impact our financial condition and
results of operations. Drilling activity in the geographic areas in which we conduct drilling activities may increase, which would
lead to increases in associated costs, including those related to drilling rigs, equipment, supplies and personnel and the services
and products of other vendors to the industry. Increased drilling activity in these areas may also decrease the availability of
rigs. We do not have any contracts for drilling rigs and drilling rigs may not be readily available when we need them. Drilling
and other costs may increase further and necessary equipment and services may not be available to us at economical prices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our exposure to possible leasehold defects and potential title
failure could materially adversely impact our ability to conduct drilling operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We obtain the right and access to properties
for drilling by obtaining oil and natural gas leases either directly from the hydrocarbon owner, or through a third party that
owns the lease. The leases may be taken or assigned to us without title insurance. There is a risk of title failure with respect
to such leases, and such title failures could materially adversely impact our business by causing us to be unable to access properties
to conduct drilling operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>We operate in a highly competitive environment and our competitors
may have greater resources than do we.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The oil and natural gas industry is intensely
competitive and we compete with other companies, many of which are larger and have greater financial, technological, human and
other resources. Many of these companies not only explore for and produce crude oil and/or natural gas, but also carry on refining
operations and market petroleum and other products on a regional, national or worldwide basis. Such companies may be able to pay
more for productive oil and properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of
properties and prospects than our financial or human resources permit. In addition, such companies may have a greater ability to
continue exploration activities during periods of low oil and gas market prices. Our ability to acquire additional properties and
to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate
transactions in a highly competitive environment. If we are unable to compete, our operating results and financial position may
be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Oil and natural gas prices are volatile. Future volatility
may cause negative change in our cash flows which may result in our inability to cover our operating or capital expenditures.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our future revenues, profitability, future growth
and the carrying value of our properties is anticipated to depend substantially on the prices we may realize for our oil and natural
gas production. Our realized prices may also affect the amount of cash flow available for operating or capital expenditures and
our ability to borrow and raise additional capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Oil and natural gas prices are subject to wide
fluctuations in response to relatively minor changes in or perceptions regarding supply and demand. Historically, the markets for
oil and natural gas have been volatile, and they are likely to continue to be volatile in the future. Among the factors that can
cause this volatility are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Commodities speculators;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">local, national and worldwide economic conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">worldwide or regional demand for energy, which is affected by economic conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the domestic and foreign supply of oil and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">weather conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">natural disasters;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">acts of terrorism;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">domestic and foreign governmental regulations and taxation;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">political and economic conditions in oil producing countries, including those in the Middle East and South America;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">impact of the U.S. dollar exchange rates on oil prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the availability of refining capacity;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">actions of the Organization of Petroleum Exporting Countries, or OPEC, and other state controlled oil companies relating to oil price and production controls; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the price and availability of other fuels.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">It is impossible to predict oil and gas price
movements with certainty. A drop in prices may not only decrease our future revenues on a per unit basis but also may reduce the
amount of oil and gas that we can produce economically. A substantial or extended decline in oil and gas prices may materially
and adversely affect our future business enough to force us to cease our business operations. In addition, our reserves, financial
condition, results of operations, liquidity and ability to finance and execute planned capital expenditures will also suffer in
such a price decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Lower prices for oil and natural gas reduce demand for our
services and could have a material adverse effect on our revenue and profitability.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Benchmark crude prices peaked at over $140 per
barrel in July 2008 and then declined to approximately $92 per barrel at year-end 2012. During 2013, the benchmark for crude prices
fluctuated between $85 per barrel and $110 per barrel. Demand for our services depends on oil and natural gas industry activity
and expenditure levels that are directly affected by trends in oil and natural gas prices. In addition, demand for our services
is particularly sensitive to the level of exploration, development and production activity of and the corresponding capital spending
by, oil and natural gas companies. Any prolonged reduction in oil and natural gas prices could depress the near-term levels of
exploration, development, and production activity. Perceptions of longer-term lower oil and natural gas prices by oil and natural
gas companies could similarly reduce or defer major expenditures given the long-term nature of many large-scale development projects.
Lower levels of activity result in a corresponding decline in the demand for our services, which could have a material adverse
effect on our revenue and profitability. Additionally, these factors may adversely impact our financial position if they are determined
to cause an impairment of our long-lived assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our business is affected by local, national and worldwide
economic conditions and the condition of the oil and natural gas industry.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Recent economic data indicates the rate of economic
growth worldwide has declined significantly from the growth rates experienced in recent years. Current economic conditions have
resulted in uncertainty regarding energy and commodity prices. In addition, future economic conditions may cause many oil and natural
gas production companies to further reduce or delay expenditures in order to reduce costs, which in turn may cause a further reduction
in the demand for drilling services. If conditions worsen, our business and financial condition may be adversely impacted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our business involves numerous operating hazards, and our
insurance and contractual indemnity rights may not be adequate to cover our losses.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our operations are subject to the usual hazards
inherent in the drilling and operation of oil and natural gas wells, such as blowouts, reservoir damage, loss of production, loss
of well control, punch throughs, craterings, fires and pollution. The occurrence of these events could result in the suspension
of drilling or production operations, claims by the operator and others affected by such events, severe damage to, or destruction
of, the property and equipment involved, injury or death to drilling personnel, environmental damage and increased insurance costs.
We may also be subject to personal injury and other claims of drilling personnel as a result of our drilling operations. Operations
also may be suspended because of machinery breakdowns, abnormal operating conditions, failure of subcontractors to perform or supply
goods or services and personnel shortages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Damage to the environment could result from
our operations, particularly through oil spillage or extensive uncontrolled fires. We may also be subject to property, environmental
and other damage claims by host governments, oil and natural gas companies and other businesses operating offshore and in coastal
areas, as well as claims by individuals living in or around coastal areas.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As is customary in our industry, the risks of
our operations are partially covered by our insurance and partially by contractual indemnities from our customers. However, insurance
policies and contractual rights to indemnity may not adequately cover losses, and we may not have insurance coverage or rights
to indemnity for all risks. Moreover, pollution and environmental risks generally are not fully insurable. If a significant accident
or other event resulting in damage to our drilling units, including severe weather, terrorist acts, war, civil disturbances, pollution
or environmental damage, occurs and is not fully covered by insurance or a recoverable indemnity from a customer, it could adversely
affect our financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our business is subject to numerous governmental laws and
regulations, including those that may impose significant costs and liability on us for environmental and natural resource damages.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Many aspects of our operations are affected
by governmental laws and regulations that may relate directly or indirectly to the contract drilling industry, including those
requiring us to control the discharge of oil and other contaminants into the environment or otherwise relating to environmental
protection. Countries where we currently operate have environmental laws and regulations covering the discharge of oil and other
contaminants and protection of the environment in connection with operations. Additionally, our operations and activities in the
United States and its territorial waters are subject to numerous environmental laws and regulations, including the Clean Water
Act, the OPA, the Outer Continental Shelf Lands Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Clean Air Act, the Resource Conservation and Recovery Act and MARPOL. Failure to comply with these laws and regulations may
result in the assessment of administrative, civil and criminal penalties, the imposition of remedial obligations, the denial or
revocation of permits or other authorizations and the issuance of injunctions that may limit or prohibit our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Laws and regulations protecting the environment
have become more stringent in recent years and may in certain circumstances impose strict liability, rendering us liable for environmental
and natural resource damages without regard to negligence or fault on our part. These laws and regulations may expose us to liability
for the conduct of, or conditions caused by, others or for acts that were in compliance with all applicable laws at the time the
acts were performed. The application of these requirements, the modification of existing laws or regulations or the adoption of
new laws or regulations relating to exploratory or development drilling for oil and natural gas could materially limit future contract
drilling opportunities or materially increase our costs. In addition, we may be required to make significant capital expenditures
to comply with such laws and regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In addition, some financial institutions are
imposing, as a condition to financing, requirements to comply with additional non-governmental environmental and social standards
in connection with operations outside the United States, such as the Equator Principles, a credit risk management framework for
determining, assessing and managing environmental and social risk in project finance transactions. Such additional standards could
impose significant new costs on us, which may materially and adversely affect us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Changes in U.S. federal laws and regulations, or in those
of other jurisdictions where we operate, including those that may impose significant costs and liability on us for environmental
and natural resource damages, may adversely affect our operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If the U.S. government amends or enacts new
federal laws or regulations, our potential exposure to liability for operations and activities in the United States and its territorial
waters may increase. Although the Oil Pollution Act of 1990 provides federal caps on liability for pollution or contamination,
future laws and regulations may increase our liability for pollution or contamination resulting from any operations and activities
that the Company may have in the United States and its territorial waters including punitive damages and administrative, civil
and criminal penalties. Additionally, other jurisdictions where we operate have modified, or may in the future modify, their laws
and regulations in a manner that would increase our liability for pollution and other environmental damage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our financial condition may be adversely affected if we are
unable to identify and complete future acquisitions, fail to successfully integrate acquired assets or businesses we acquire, or
are unable to obtain financing for acquisitions on acceptable terms.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The acquisition of assets or businesses that
we believe to be complementary to our exploration and production operations is an important component of our business strategy.
We believe that acquisition opportunities for EnerJex, such as the merger with Black Raven, may arise from time to time, and that
any such acquisition could be significant. At any given time, discussions with one or more potential sellers may be at different
stages. However, any such discussions may not result in the consummation of an acquisition transaction, and we may not be able
to identify or complete any acquisitions. We cannot predict the effect, if any, that any announcement or consummation of an acquisition
would have on the trading price of our securities. Our business is capital intensive and any such transactions could involve the
payment by us of a substantial amount of cash. We may need to raise additional capital through public or private debt or equity
financings to execute our growth strategy and to fund acquisitions. Adequate sources of capital may not be available when needed
on favorable terms. If we raise additional capital by issuing additional equity securities, existing stockholders may be diluted.
If our capital resources are insufficient at any time in the future, we may be unable to fund acquisitions, take advantage of business
opportunities or respond to competitive pressures, any of which could harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">Any future acquisitions could present a number
of risks, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the risk of using management time and resources to pursue acquisitions that are not successfully completed;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the risk of incorrect assumptions regarding the future results of acquired operations;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the risk of failing to integrate the operations or management of any acquired operations or assets successfully and timely; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the risk of diversion of management's attention from existing operations or other priorities.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we are unsuccessful in completing acquisitions
of other operations or assets, our financial condition could be adversely affected and we may be unable to implement an important
component of our business strategy successfully. In addition, if we are unsuccessful in integrating our acquisitions in a timely
and cost-effective manner, our financial condition and results of operations could be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>The loss of some of our key executive officers and employees
could negatively impact our business prospects.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our future operational performance depends to
a significant degree upon the continued service of key members of our management as well as marketing, sales and operations personnel.
The loss of one or more of our key personnel could have a material adverse effect on our business. We believe our future success
will also depend in large part upon our ability to attract, retain and further motivate highly skilled management, marketing, sales
and operations personnel. We may experience intense competition for personnel, and we cannot assure you that we will be able to
retain key employees or that we will be successful in attracting, assimilating and retaining personnel in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Failure to employ a sufficient number of skilled workers or
an increase in labor costs could hurt our operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We require skilled personnel to operate and
provide technical services to, and support for, our drilling units. In periods of increasing activity and when the number of operating
units in our areas of operation increases, either because of new construction, re-activation of idle units or the mobilization
of units into the region, shortages of qualified personnel could arise, creating upward pressure on wages and difficulty in staffing.
The shortages of qualified personnel or the inability to obtain and retain qualified personnel also could negatively affect the
quality and timeliness of our work. In addition, our ability to expand operations depends in part upon our ability to increase
the size of the skilled labor force.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Risks Related to EnerJex</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Ownership of our common stock is highly concentrated, and
such concentration may prevent other stockholders from influencing significant corporate decisions and may result in conflicts
of interest that could cause our stock price to decline.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">EnerJex's directors and executive officers,
together with their respective affiliates, beneficially own or control more than 50% of the Company (see the section entitled &quot;Voting
Securities&quot; beginning on page 4 of our Definitive Proxy Statement on Schedule 14A filed with the SEC on July 23, 2014 for
more information on the ownership of the Company). Accordingly, these directors, executive officers and their affiliates, acting
individually or as a group, have substantial influence over the outcome of a corporate action requiring stockholder approval, including
the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant
corporate transaction. West Coast Opportunity Fund, LLC (&quot;WCOF&quot;), which owns approximately 45% of our issued and outstanding
voting securities, and Montecito Venture Partners, LLC (&quot;MVP&quot;), which owns approximately 6% of our issued and outstanding
voting securities, are parties to an irrevocable voting and proxy agreement, by which MVP granted to WCOF a proxy to vote MVP's
shares with regard to the election of our board of directors. That irrevocable voting and proxy agreement gives WCOF the power
to elect a majority of the members of our board of directors. These stockholders also may exert influence in delaying or preventing
a change in control of the Company, even if such change in control would benefit the other stockholders of the Company. In addition,
the significant concentration of stock ownership may affect adversely the market value of EnerJex's common stock and Series A preferred
stock due to investors' perception that conflicts of interest may exist or arise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>We are exempt from certain governance requirements applicable
to other listed companies, and therefore our board will not consist of a majority of &quot;independent directors,&quot; and our
audit committee will not have three &quot;independent&quot; members.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The listing standards for the NYSE MKT on which
our shares of Series A Preferred Stock will be listed for trading generally require that the boards of directors of listed companies
consist of a majority of &quot;independent directors,&quot; and that a listed company's audit committee must have three independent
members. We are a &quot;controlled company&quot; because WCOF and MVP own more than 50% of our issued and outstanding voting securities
and are parties to an irrevocable voting and proxy agreement that gives WCOF a proxy to vote MVP's shares, which will give WCOF
control of the election of a majority of the members of our board of directors. As a result, we are exempt from the requirement
that a majority of our directors be &quot;independent directors.&quot; At present, only two of our five directors are &quot;independent
directors.&quot; In addition, because we are a &quot;smaller reporting company,&quot; as such terms are used in the listing standards
for the NYSE MKT, our audit committee is not required to have three independent members. At present, our audit committee consists
of two persons, both of whom are independent directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Anti-takeover provisions in our charter and bylaws may prevent
or frustrate attempts by stockholders to change the board of directors or management and could make a third-party acquisition of
the company difficult.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our amended and restated articles of incorporation
and bylaws, as amended, contain provisions that may discourage, delay or prevent a merger, acquisition or other change in control
that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their
shares. These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock,
and have a negative effect on the price at which shares of our Series A preferred stock will trade.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>We have sustained losses in the past,
and our future profitability is subject to many risks inherent in the oil and natural gas exploration and production industry.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our prospects must be considered in light of
the risks, expenses and difficulties frequently encountered in establishing and maintaining a business in the exploration and production
industry. There is nothing conclusive at this time on which to base an assumption that our business operations will prove to be
successful or that we will be able to operate profitably. Our future operating results will depend on many factors, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the future prices of oil and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to raise adequate capital;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">success of our development and exploration efforts;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to manage our operations cost effectively;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">effects of our hedging strategies;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">demand for oil and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the level of our competition;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to attract and maintain key management, employees and operators;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">transportation and processing fees on our facilities;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">fuel conservation measures;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">alternate fuel requirements or advancements;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">government regulation and taxation;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">technical advances in fuel economy and energy generation devices; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">our ability to efficiently explore, develop and produce sufficient quantities of marketable oil and gas in a highly competitive and speculative environment while maintaining quality and controlling costs.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">To achieve profitable operations, we must, alone
or with others, successfully execute on the factors stated above, along with continually developing ways to enhance our production
efforts. Despite our best efforts, we may not be successful in our development efforts or obtain required regulatory approvals.
There is a possibility that&nbsp;some of our wells may never produce oil or gas in sustainable or economic quantities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We will need additional capital in the future
to finance our planned growth, which we may not be able to raise or may only be available on terms unfavorable to us or our stockholders,
which may result in our inability to fund our working capital requirements and harm our operational results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have and expect to continue to have substantial
capital expenditure and working capital needs. We will need to rely on cash flow from operations and borrowings under our credit
facility or raise additional cash to fund our operations, pay outstanding long-term debt, fund our anticipated reserve replacement
needs and implement our growth strategy, or respond to competitive pressures and/or perceived opportunities, such as investment,
acquisition, exploration, work-over and development activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If low oil and gas prices, operating difficulties,
constrained capital sources or other factors, many of which are beyond our control, cause our revenues or cash flows from operations
to decrease, we may be limited in our ability to spend the capital necessary to complete our development, production exploitation
and exploration programs. If our resources or cash flows do not&nbsp;satisfy our operational needs, we will require additional
financing, in addition to anticipated cash generated from our operations, to fund our planned growth. Additional financing might
not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable
terms, our ability to fund our operations, take advantage of opportunities, develop or enhance our business or otherwise respond
to competitive pressures would be significantly limited. In such a capital restricted situation, we may curtail our acquisition,
drilling, development, and exploration activities or be forced to sell some of our assets on an untimely or unfavorable basis.&nbsp;&nbsp;Our
current plans to address a drop in crude oil prices are to maintain hedges covering a portion of our expected future oil production
and to reduce both capital and operating expenditures to a level equal to or below cash flow from operations.&nbsp;&nbsp;However,
our plans may not be successful in improving our results of operations and liquidity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we raise additional funds through the issuance
of equity or convertible debt securities, the percentage ownership of our stockholders would be reduced, and these newly issued
securities might have rights, preferences or privileges senior to those of existing stockholders, including rights that are senior
to those of holders of our Series A preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Approximately 34% of our total proved reserves as of December
31, 2013 consist of undeveloped reserves, and those reserves may not ultimately be developed or produced.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our estimated total proved PV10 (present value)
before tax of reserves as of December 31, 2013 was $102 million, versus $60.8 million as of December 31, 2012.&nbsp;&nbsp;&nbsp;Of
the 5.8 million net barrels of oil equivalent at December 31, 2013, approximately 49% are proved developed producing, approximately
17% are classified as proved developed non-producing and approximately 34% are classified as proved undeveloped.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Assuming we can obtain adequate capital resources,
we plan to develop and produce all of our proved reserves, but ultimately some of these reserves may not be developed or produced.
Furthermore, not all of our undeveloped reserves may be ultimately produced in the time periods we have planned, at the costs we
have budgeted, or at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Because we face uncertainties in estimating proved recoverable
reserves, you should not place undue reliance on such reserve information.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our reserve estimates and the future net cash
flows attributable to those reserves at December 31, 2013 were prepared by MHA Petroleum Consultants LLC, an independent petroleum
consultant.&nbsp;&nbsp;There are numerous uncertainties inherent in estimating quantities of proved reserves and cash flows from
such reserves, including factors beyond our control and the control of these independent consultants and engineers. Reserve engineering
is a subjective process of estimating underground accumulations of oil and gas that can be economically extracted, which cannot
be measured in an exact manner. The accuracy of an estimate of quantities of reserves, or of cash flows attributable to these reserves,
is a function of the available data, assumptions regarding future oil and gas prices, expenditures for future development and exploitation
activities, and engineering and geological interpretation and judgment. Reserves and future cash flows may also be subject to material
downward or upward revisions based upon production history, development and exploitation activities and oil and gas prices. Actual
future production, revenue, taxes, development expenditures, operating expenses, quantities of recoverable reserves and value of
cash flows from those reserves may vary significantly from the assumptions and estimates in our reserve reports. Any significant
variance from these assumptions to actual figures could greatly affect our estimates of reserves, the economically recoverable
quantities of oil and gas attributable to any particular group of properties, the classification of reserves based on risk of recovery,
and estimates of the future&nbsp;net cash flows. In addition, reserve engineers may make different estimates of reserves and cash
flows based on the same available data. The estimated quantities of proved reserves and the discounted present value of future
net cash flows attributable to those reserves included in this report were prepared by MHA Petroleum Consultants LLC&nbsp;in accordance
with rules of the Securities and Exchange Commission, or SEC, and are not intended to represent the fair market value of such reserves.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The present value of future net cash flows from
our proved reserves is not necessarily the same as the current market value of our estimated reserves. We base the estimated discounted
future net cash flows from our proved reserves on prices and costs. However, actual future net cash flows from our oil and gas
properties also will be affected by factors such as:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">geological conditions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">assumptions governing future oil and gas prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">amount and timing of actual production;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">availability of funds;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">future operating and development costs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">actual prices we receive for oil and gas;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">changes in government regulations and taxation; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">capital costs of drilling new wells.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The timing of both our production and our incurrence
of expenses in connection with the development and production of our properties will affect the timing of actual future net cash
flows from proved reserves, and thus their actual present value. In addition, the 10% discount factor we use when calculating&nbsp;discounted
future net cash flows may not be the most appropriate discount factor based on interest rates in effect from time to time and risks
associated with our business or the oil and gas industry in general.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>The differential between the New York Mercantile Exchange,
or NYMEX, or other benchmark price of oil and gas and the wellhead price we receive could have a material adverse effect on our
results of operations, financial condition and cash flows.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The prices that we received for our oil and
gas production in Kansas are typically based on a discount to the relevant benchmark prices, such as NYMEX, that are used for calculating
hedge positions. In Texas, the prices that we receive for our oil and gas production are currently based on a premium to NYMEX.
In Colorado, the prices that we receive for our oil and gas production are based upon a discount to NYMEX and the prices we receive
for our natural gas production is based upon local market conditions but generally we receive a discount to Henry Hub. The difference
between the benchmark price and the price we receive is called a differential. We cannot accurately predict oil and gas differentials.
In recent years for example, production increases from competing Canadian and Rocky Mountain producers, in conjunction with limited
refining and pipeline capacity from the Rocky Mountain area, have gradually widened this differential. Recent economic conditions,
including volatility in the price of oil and gas, have resulted in both increases and decreases in the differential between the
benchmark price for oil and gas and the wellhead price we receive. These fluctuations could have a material adverse effect on our
results of operations, financial condition and cash flows by decreasing the proceeds we receive for our oil and gas production
in comparison to what we would receive if not for the differential.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>In order to exploit successfully our current oil and gas leases
and others that we acquire in the future, we will need to generate significant amounts of capital.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The oil and natural gas exploration, development
and production business is a capital-intensive undertaking. In order for us to be successful in acquiring, investigating, developing,
and producing oil and gas from our current mineral leases and other leases that we may acquire in the future, we will need to generate
an amount of capital in excess of that generated from our results of operations. In order to generate that additional capital,
we may need to obtain an expanded debt facility and issue additional shares of our equity securities. There can be no assurance
that we will be successful in ether obtaining that expanded debt facility or issuing additional shares of our equity securities,
and our inability to generate the needed additional capital may have a material adverse effect on our prospects and financial results
of operations. If we are able to issue additional equity securities in order to generate such additional capital, then those issuances
may occur at prices that represent discounts to our trading price, and will dilute the percentage ownership interest of those persons
holding our shares prior to such issuances. Unless we are able to generate additional enterprise value with the proceeds of the
sale of our equity securities, those issuances may adversely affect the value of our shares that are outstanding prior to those
issuances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>A significant portion of our potential future reserves and
our business plan depend upon secondary recovery techniques to establish production. There are significant risks associated with
such techniques.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We anticipate that a significant portion of
our future reserves and our business plan will be associated with secondary recovery projects that are either in the early stage
of implementation or are scheduled for implementation subject to availability of capital. We anticipate that secondary recovery
will affect our reserves and our business plan, and the exact project initiation dates and, by the very nature of waterflood operations,
the exact completion dates of such projects are uncertain. In addition, the reserves and our business plan associated with these
secondary recovery projects, as with any reserves, are estimates only, as the success of any development project, including these
waterflood projects, cannot be ascertained in advance. If we are not successful in developing a significant portion of our reserves
associated with secondary recovery methods, then the project may be uneconomic or generate less cash flow and reserves than we
had estimated prior to investing the capital. Risks associated with secondary recovery techniques include, but are not limited
to, the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">higher than projected operating costs;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">lower-than-expected production;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">longer response times;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">higher costs associated with obtaining capital;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unusual or unexpected geological formations;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">fluctuations in oil and gas prices;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">regulatory changes;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">shortages of equipment; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">lack of technical expertise.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If any of these risks occur, it could adversely
affect our financial condition or results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Any acquisitions we complete are subject to considerable risk.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Even when we make acquisitions that we believe
are good for our business, any acquisition involves potential risks, including, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the validity of our assumptions about reserves, future production, revenues and costs, including synergies;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">an inability to integrate successfully the businesses we acquire;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a decrease in our liquidity by using our available cash or borrowing capacity to finance acquisitions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a significant increase in our interest expense or financial leverage if we incur additional debt to finance acquisitions;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which our indemnity is inadequate;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the diversion of management's attention from other business concerns;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">an inability to hire, train or retain qualified personnel to manage the acquired properties or assets;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">unforeseen difficulties encountered in operating in new geographic or geological areas; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">customer or key employee losses at the acquired businesses.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Due to our lack of geographic diversification,
adverse developments in our operating areas would materially affect our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We currently only lease and operate oil and
natural gas properties located in Kansas, Colorado, Nebraska and Texas. As a result of this concentration, we may be disproportionately
exposed to the impact of delays or interruptions of production from these properties caused by significant governmental regulation,
transportation capacity constraints, curtailment of production, natural disasters, adverse weather conditions or other events which&nbsp;impact
this area.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>We are not the operator of some of our
properties and we have limited control over the activities on those properties.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are not the operator of our Mississippian
Project, and our dependence on the operator of this project limits our ability to influence or control the operation or future
development of this project. Such limitations could materially adversely affect the realization of our targeted returns on capital
related to exploration, drilling or production activities and lead to unexpected future costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>We may suffer losses or incur liability
for events for which we or the operator of a property have chosen not to obtain insurance.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our operations are subject to hazards and risks
inherent in producing and transporting oil and gas, such as fires, natural disasters, explosions, pipeline ruptures, spills, and
acts of terrorism, all of which can result in the loss of hydrocarbons, environmental pollution, personal injury claims and other
damage to our and others' properties. As protection against operating hazards, we maintain insurance coverage against some, but
not all, potential losses. In addition, pollution and environmental risks generally are not fully insurable. As a result of market
conditions, existing insurance policies may not be renewed and other desirable insurance may not be available on commercially reasonable
terms, if at all. The occurrence of an event that is not covered, or not fully covered, by insurance could have a material adverse
effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our hedging activities could result in financial losses or
could reduce our available funds or income and therefore adversely affect our financial position.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">To achieve more predictable cash flow and to
reduce our exposure to adverse fluctuations in the prices of oil and gas, we have entered into derivative contracts through June
30, 2016 for approximately 236,000 barrels of crude oil. The settlement of and the mark to market of these contracts could result
in both realized and unrealized hedging losses. For the year ended December 31, 2013, we incurred realized and unrealized hedging
losses of approximately $740,000. The extent of our commodity price exposure is related largely to the effectiveness and scope
of our derivative activities. For example, the derivative instruments we may utilize may be based on posted market prices, which
may differ significantly from the actual crude oil prices we realize in our operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our actual future production may be significantly
higher or lower than we estimate at the time we enter into derivative transactions for such period. If the actual amount is higher
than we estimate, we will have greater commodity price exposure than we intended. If the actual amount is lower than the nominal
amount that is subject to our derivative financial instruments, we might be forced to satisfy all or a portion of our derivative
transactions without the benefit of the cash flow from our sale or purchase of the underlying physical commodity, resulting in
a substantial diminution of our liquidity. As a result of these factors, our derivative activities may not be as effective as we
intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash
flows. In addition, while we believe our existing derivative activities are with creditworthy counterparties, continued deterioration
in the credit markets may cause a counterparty not to perform its obligation under the applicable derivative instrument or impact
their willingness to enter into future transactions with us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our business depends in part on processing facilities owned
by others. Any limitation in the availability of those facilities could interfere with our ability to market our oil and gas production
and could harm our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The marketability of our oil and gas production
will depend in part on the availability, proximity and capacity of pipelines and oil processing facilities. The amount of oil and
gas that can be produced and sold is subject to curtailment in certain circumstances, such as pipeline interruptions due to scheduled
and unscheduled maintenance, excessive pressure, physical damage or lack of available capacity on such systems. The curtailments
arising from these and similar circumstances may last from a few days to several months. In many cases, we will be provided only
with limited, if any, notice as to when these circumstances will arise and their duration. Any significant curtailment in pipeline
capacity or the capacity of processing facilities could significantly reduce our ability to market our oil and gas production and
could materially harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our reserves are subject to the risk of depletion because
many of our leases are in mature fields that have produced large quantities of oil and gas to date.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 39.65pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A significant portion of our operations are
located in or near established fields in Kansas, Colorado, Nebraska, and Texas. As a result, many of our leases are in, or directly
offset, areas that have produced large quantities of oil and gas to date.&nbsp;&nbsp;As such, our reserves may be negatively impacted
by offsetting wells or previously drilled wells, which could significantly harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Our lease ownership may be diluted due
to financing strategies we may employ in the future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">To accelerate our development efforts, we may
take on working interest partners who will contribute to the costs of drilling and completion operations and then share in any
cash flow derived from production. In addition, we may in the future, due to a lack of capital or other strategic reasons, establish
joint venture partnerships or farm out all or part of our development efforts. These economic strategies may have a dilutive effect
on our lease ownership and could significantly reduce our operating revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>We may face lease expirations on leases that are not currently
held-by-production.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We have numerous leases that are not currently
held-by-production, some of which have near term lease expirations and are likely to expire. Although we believe that we can maintain
our most desirable leases by conducting drilling operations or by negotiating lease extensions, we can make no guarantee that we
can maintain these leases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>We are subject to complex laws and regulations, including
environmental regulations, which can adversely affect the cost, manner or feasibility of doing business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Development, production and sale of oil and
gas in the United States are subject to extensive laws and regulations, including environmental laws and regulations. We may be
required to make large expenditures to comply with environmental and other governmental regulations. Matters subject to regulation
include, but are not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">location and density of wells;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the handling of drilling fluids and obtaining discharge permits for drilling operations;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">accounting for and payment of royalties on production from state, federal and Indian lands;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">bonds for ownership, development and production of oil and gas properties;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">transportation of oil and gas by pipelines;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">operation of wells and reports concerning operations; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">taxation.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 2.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Under these laws and regulations, we could be
liable for personal injuries, property damage, oil spills, discharge of hazardous materials, remediation and clean-up costs and
other environmental damages. Failure to comply with these laws and regulations also may result in the suspension or termination
of our operations and subject us to administrative, civil and criminal penalties. Moreover, these laws and regulations could change
in ways that substantially increase our costs. Accordingly, any of these liabilities, penalties, suspensions, terminations or regulatory
changes could materially adversely affect our financial condition and results of operations enough to possibly force us to cease
our business operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our operations may expose us to significant costs and liabilities
with respect to environmental, operational safety and other matters.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may incur significant costs and liabilities
as a result of environmental and safety requirements applicable to our oil and gas production activities. We may also be exposed
to the risk of costs associated with Kansas Corporation Commission, the Texas Railroad Commission, and the Colorado Oil and Gas
Conservation Commission, requirements to plug orphaned and abandoned wells on our oil and gas leases that were previously drilled
by third parties. In addition, we may indemnify sellers or lessors of oil and gas properties for environmental liabilities they
or their predecessors may have created. These costs and liabilities could arise under a wide range of federal, state and local
environmental and safety laws and regulations, including regulations and enforcement policies, which have tended to become increasingly
strict over time. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal
penalties, imposition of cleanup and site restoration costs, liens and to a lesser extent, issuance of injunctions to limit or
cease operations. In addition, claims for damages to persons or property may result from environmental and other impacts of our
operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Strict, joint and several liability may be imposed
under certain environmental laws, which could cause us to become liable for the conduct of others or for consequences of our own
actions that were in compliance with all applicable laws at the time those actions were taken. New laws, regulations or enforcement
policies could be more stringent and impose unforeseen liabilities or significantly increase compliance costs. If we are not able
to recover the resulting costs through insurance or increased revenues, our ability to operate effectively could be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>We may incur substantial write-downs of the carrying value
of our oil and gas properties, which would adversely impact our earnings.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We review the carrying value of our oil and
gas properties under the full-cost accounting rules of the SEC on a quarterly basis. This quarterly review is referred to as a
ceiling test. Under the ceiling test, capitalized costs, less accumulated amortization and related deferred income taxes, may not
exceed an amount equal to the sum of the present value of estimated future net revenues (adjusted for cash flow hedges) less estimated
future expenditures to be incurred in developing and producing the proved reserves, less any related income tax effects. In calculating
future net revenues, current prices and costs used are those as of the end of the appropriate quarterly period. Such prices are
utilized except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts,
including the effects of derivatives qualifying as cash&nbsp;flow hedges. Two primary factors impacting this test are reserve levels
and current prices, and their associated impact on the present value of estimated future net revenues. Revisions to estimates of
oil and gas reserves and/or an increase or decrease in prices can have a material impact on the present value of estimated future
net revenues. Any excess of the net book value, less deferred income taxes, is generally written off as an expense. Under SEC regulations,
the excess above the ceiling is not expensed (or is reduced) if, subsequent to the end of the period, but prior to the release
of the financial statements, oil and gas prices increase sufficiently such that an excess above the ceiling would have been eliminated
(or reduced) if the&nbsp;increased prices were used in the calculations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our ability to use net operating loss carryforwards to offset
future taxable income may be subject to certain limitations</I> .</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.05pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We currently have net operating loss carryforwards
that may be available to offset future taxable income. However, changes in the ownership of our stock (including certain transactions
involving our stock that are outside of our control) could result (or may have already resulted) in an &ldquo;ownership change&rdquo;
within the meaning of Section&nbsp;382 of the Internal Revenue Code of 1986, as amended, which may significantly limit our ability
to utilize our net operating loss carryforwards. To the extent an ownership change has occurred or were to occur in the future,
it is possible that the limitations imposed on our ability to use pre-ownership change losses could cause a significant net increase
in our U.S. federal income tax liability and could cause U.S. federal income taxes to be paid earlier than otherwise would be paid
if such limitations were not in effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Failure to maintain effective internal controls in accordance
with Section&nbsp;404 of the Sarbanes-Oxley Act could have a material adverse effect on the trading price of our common stock and
Series A preferred stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Section&nbsp;404 of the Sarbanes-Oxley Act of
2002 requires our management to assess the effectiveness of its internal control over financial reporting and to provide a report
by its registered independent public accounting firm addressing the effectiveness of our internal control over financial reporting.
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) provides a framework for companies to assess and improve
their internal control systems. If we are unable to assert that our internal control over financial reporting is effective or if
our registered independent public accounting firm is unable to express an opinion on the effectiveness of the internal controls
or identifies one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence
in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on the trading price of our
common stock and Series A preferred stock. If we fail to maintain the adequacy of our internal controls, we may not be able to
ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance
with Section&nbsp;404 of the Sarbanes-Oxley Act. Failure to achieve and maintain effective internal control over financial reporting
could have an adverse effect on the trading price of our common stock and Series A preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>A small number of customers account for a significant portion
of our revenues, and the loss of one or more of these customers could materially adversely affect our financial condition and results
of operations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We derive a significant portion of our revenues
from a small number of customers. Our financial condition and results of operations could be materially and adversely affected
if any one of these customers interrupts or curtails their activities, fail to pay for the services that have been performed, terminate
their contracts, fail to renew their existing contracts or refuse to award new contracts and we are unable to enter into contracts
with new customers on comparable terms. The loss of any of our significant customers could materially adversely affect our financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>We are exposed to the credit risks of our key customers, including
certain affiliated companies, and certain other third parties, and nonpayment by these customers and other parties could adversely
affect our financial position, results of operations and cash flows.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We are subject to risks of loss resulting from
nonpayment or nonperformance by our customers. Any material nonpayment or nonperformance by key customers and certain other third
parties could adversely affect our financial position, results of operations and cash flows. If any key customers or other parties
default on their obligations to us, our financial results and condition could be adversely affected. Furthermore, some of these
customers and other parties may be highly leveraged and subject to their own operating and regulatory risks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Our operations might be interrupted by the occurrence of a
natural disaster or other catastrophic event.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Natural disasters or other catastrophic events
could disrupt our operations or those of our strategic partners, contractors and vendors. We might suffer losses as a result of
business interruptions that exceed the coverage available under our and our contractors' insurance policies or for which we or
our contractors do not have coverage. Any natural disaster or catastrophic event could have a significant negative impact on our
operations and financial results, and could delay our efforts to identify and execute any strategic opportunities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_018"></A><B>USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Unless we specify otherwise in a prospectus
supplement, we intend to use the net proceeds from our sale of the securities under this prospectus for general corporate purposes,
which may include making additions to our working capital, funding future acquisitions, or for any other purpose we describe in
the applicable prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_019"></A><B>THE SECURITIES WE MAY
OFFER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The descriptions of the securities contained
in this prospectus summarize all the material terms and provisions of the various types of securities that we may offer. The particular
terms of the securities offered by any prospectus supplement will be described in that prospectus supplement. If indicated in an
applicable prospectus supplement, the terms of the securities may differ from the terms summarized below. An applicable prospectus
supplement will also contain information, where applicable, about material U.S. federal income tax considerations relating to the
securities, and the securities exchange, if any, on which the securities will be listed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may sell from time to time, in one or more
offerings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="width: 90%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">common stock;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">preferred stock;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">warrants; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">units.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we issue securities at a discount from their
original stated principal or liquidation amount, then, for purposes of calculating the total dollar amount of all securities issued
under this prospectus, we will treat the initial offering price of the securities as the total original principal or liquidation
amount of the securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This prospectus may not be used to sell securities
unless it is accompanied by a prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_020"></A><B>DESCRIPTION OF CAPITAL
STOCK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">For all matters submitted to a vote of EnerJex
stockholders, each holder of EnerJex common stock is entitled to one vote for each share registered in the holder's name on EnerJex's
books. EnerJex common stock does not have cumulative voting rights. The holders of a majority of the shares of EnerJex common stock
can elect all of the directors standing for election. Subject to limitations under Nevada law and preferences that may be applicable
to any then outstanding preferred stock, holders of EnerJex common stock are entitled to receive ratably those dividends, if any,
as may be declared by the EnerJex board of directors out of legally available funds. Upon the liquidation, dissolution or winding
up of EnerJex, the holders of EnerJex common stock will be entitled to share ratably in the net assets legally available for distribution
to stockholders after the payment of all of EnerJex's debts and other liabilities, subject to the prior rights of any preferred
stock then outstanding. All shares of outstanding EnerJex common stock are fully paid and nonassessable. Holders of EnerJex common
stock do not have preemptive or subscription rights, and they have no right to convert their EnerJex common stock into any other
securities. There are no redemption or sinking fund provisions applicable to the EnerJex common stock. The rights, preferences
and privileges of the holders of EnerJex common stock are subject to the rights of the holders of any series of preferred stock
which EnerJex may designate in the future. EnerJex's articles of incorporation and bylaws do not restrict the ability of a holder
of EnerJex common stock to transfer the holder's shares of EnerJex common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our common stock is currently quoted on the
NYSE MKT under the trading symbol &ldquo;ENRJ&rdquo; and our Series A preferred stock is currently quoted on the NYSE MKT under
the trading symbol &ldquo;ENRJPR&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The EnerJex board of directors is authorized,
without approval of EnerJex stockholders subject to any limitations prescribed by law, to issue up to an aggregate of 25 million
shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed
upon the preferred stock, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences.
The rights of the holders of EnerJex common stock and Series A preferred stock (with the prior approval of the holders of a majority
of the issued and outstanding shares of the Series A preferred stock) will be subject to, and may be adversely affected by, the
rights of holders of any preferred stock that may be issued in the future. The EnerJex board of directors could authorize the issuance
of shares of preferred stock with terms and conditions more favorable than the EnerJex common stock or Series A preferred stock
(with the prior approval of the holders of a two-thirds of the issued and outstanding shares of the Series A preferred stock) and
with rights that could adversely affect the voting power or other rights of holders of the EnerJex common stock or Series A preferred
stock. Prior to issuance of shares of each series of undesignated preferred stock, the EnerJex board of directors is required by
the Nevada Revised Statutes and EnerJex's amended and restated articles of incorporation to adopt resolutions and file a Certificate
of Designations with the Secretary of State of the State of Nevada, fixing for each such series the designations, powers, preferences,
rights, qualifications, limitations and restrictions of the shares of such series. If such new series of preferred stock has rights
that are senior or equal to those of the Series A preferred stock with respect to dividends or liquidation proceeds, then the terms
of such new series must be approved by holders of two-thirds of the issued and outstanding shares of Series A preferred stock.
Issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes,
could have the effect of delaying, deferring or preventing a change in control of EnerJex.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Anti-Takeover Effects of Provisions of EnerJex's Amended and
Restated Articles of Incorporation and Bylaws and Nevada Law</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Some provisions of EnerJex's amended and restated
articles of incorporation and bylaws and Nevada law contain provisions that could make the following transactions more difficult:
an acquisition of EnerJex by means of a tender offer; an acquisition of EnerJex by means of a proxy contest or otherwise; or removal
of EnerJex's incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish
or could deter transactions that EnerJex stockholders may otherwise consider to be in their best interest or in EnerJex's best
interests, including transactions that might result in a premium over the market price for EnerJex's shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">These provisions, summarized below, are designed
to discourage coercive takeover practices and inadequate takeover bids. These provisions also are designed to encourage persons
seeking to acquire control of EnerJex to first negotiate with the EnerJex board of directors. The EnerJex board of directors believes
that the benefits of increased protection of its potential ability to negotiate with the proponent of an unfriendly or unsolicited
proposal to acquire or restructure EnerJex outweigh the disadvantages of discouraging these proposals because negotiation of these
proposals could result in an improvement of their terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Amended and Restated Articles of Incorporation and Amended
and Restated Bylaws</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following provisions in EnerJex's amended
and restated articles of incorporation and bylaws could delay or discourage transactions involving an actual or potential change
in control or change in EnerJex's management, including transactions that EnerJex stockholders may otherwise consider to be in
their best interest or in EnerJex's best interests, including transactions that might result in a premium over the market price
for EnerJex's shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 94%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I>Authorized But Unissued Capital Stock.</I></B> &nbsp;&nbsp;EnerJex has shares of common stock and undesignated preferred stock available for future issuance without stockholder approval. EnerJex may use these additional shares for a variety of corporate purposes, including for future public offerings to raise additional capital or to facilitate corporate acquisitions or for payment as a dividend on its capital stock. &nbsp;The existence of unissued and unreserved capital stock may enable the EnerJex board of directors to issue shares to persons friendly to current management that could render more difficult or discourage a third-party attempt to obtain control of EnerJex by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of EnerJex's management. &nbsp;In addition, the ability to authorize undesignated preferred stock makes it possible for the EnerJex board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of EnerJex. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of EnerJex.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I>Stockholder Meetings.</I></B> &nbsp;&nbsp;EnerJex's amended and restated bylaws provide that a special meeting of stockholders may be called only by EnerJex's chairman of the board, president and chief executive officer, or by the EnerJex board of directors.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I>Requirements for Advance Notification of Stockholder Nominations and Proposals.</I></B> &nbsp;&nbsp;EnerJex's amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the EnerJex board of directors or a committee of the EnerJex board of directors.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I>No Cumulative Voting Rights.</I></B> &nbsp;&nbsp;EnerJex's amended and restated articles of incorporation and bylaws do not provide for cumulative voting rights. The holders of a majority of the shares of common stock entitled to vote in any election of directors, voting together as a single class, can elect all of the directors standing for election.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B><I>Nevada Anti-Takeover Law</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">As a Nevada corporation, EnerJex is subject
to Section&nbsp;78.411 to 78.444 of the Nevada Revised Statutes. This law prohibits a publicly-held Nevada corporation from engaging
in any business combination with any interested stockholder for a period of three years following the date that the stockholder
became an interested stockholder unless:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 94%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85&nbsp;percent of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">on or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Section&nbsp;78-416 of the Nevada Revised Statues
defines &quot;business combination&quot; to include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 94%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">any merger or consolidation involving the corporation and the interested stockholder;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">any sale, transfer, pledge or other disposition of 10&nbsp;percent or more of the corporation's assets involving the interested stockholder;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">in general, any transaction that results in the issuance or transfer by the corporation of any of its stock to the interested stockholder; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Limitation of Liability and Indemnification</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">EnerJex's amended and restated articles of incorporation
contains certain provisions permitted under the Nevada Revised Statutes relating to the liability of directors. The provisions
eliminate a director's liability for monetary damages for a breach of fiduciary duty, except in circumstances involving wrongful
acts, such as the breach of a director's duty of loyalty or acts or omissions that involve intentional misconduct or a knowing
violation of law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In addition, EnerJex's amended and restated
articles of incorporation contain provisions to indemnify EnerJex's directors and officers to the fullest extent permitted by the
Nevada Revised Statutes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Transfer Agent and Registrar</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The transfer agent and registrar for EnerJex
common stock and Series A preferred stock is Standard Registrar &amp; Transfer Co., Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_021"></A>DESCRIPTION OF WARRANTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may issue warrants for the purchase of shares
of our common stock or preferred stock. We may issue warrants independently or together with other securities, and the warrants
may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement
to be entered into between us and the investors or a warrant agent. The following summary of material provisions of the warrants
and warrant agreements are subject to, and qualified in their entirety by reference to, all the provisions of the warrant agreement
and warrant certificate applicable to a particular series of warrants. The terms of any warrants offered under a prospectus supplement
may differ from the terms described below. We urge you to read the applicable prospectus supplement and any related free writing
prospectus, as well as the complete warrant agreements and warrant certificates that contain the terms of the warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The particular terms of any issue of warrants
will be described in the prospectus supplement relating to the issue. Those terms may include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="width: 85%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the number of shares of common stock or preferred stock purchasable upon the exercise of warrants to purchase such shares and the price at which such number of shares may be purchased upon such exercise;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the designation, stated value and terms (including, without limitation, liquidation, dividend, conversion and voting rights) of the series of preferred stock purchasable upon exercise of warrants to purchase preferred stock;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the terms of any rights to redeem or call the warrants;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the date on which the right to exercise the warrants will commence and the date on which the right will expire;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">United States Federal income tax consequences applicable to the warrants; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">any additional terms of the warrants, including terms, procedures, and limitations relating to the exchange, exercise and settlement of the warrants.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Holders of equity warrants will not be entitled:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="width: 85%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">to vote, consent or receive dividends;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">receive notice as stockholders with respect to any meeting of stockholders for the election of our directors or any other matter; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">exercise any rights as stockholders of EnerJex.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Each warrant will entitle its holder to purchase
the number of shares of preferred stock or common stock at the exercise price set forth in, or calculable as set forth in, the
applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants
may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable prospectus
supplement. After the close of business on the expiration date, unexercised warrants will become void.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A holder of warrant certificates may exchange
them for new warrant certificates of different denominations, present them for registration of transfer and exercise them at the
corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement. Until any warrants
to purchase common stock or preferred stock are exercised, the holders of the warrants will not have any rights of holders of the
underlying common stock or preferred stock, including any rights to receive dividends or payments upon any liquidation, dissolution
or winding up on the common stock or preferred stock, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_022"></A>DESCRIPTION OF UNITS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may issue units consisting of any combination
of the other types of securities offered under this prospectus in one or more series. We may evidence each series of units by unit
certificates that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. Each unit agent
will be a bank or trust company that we select. We will indicate the name and address of the unit agent in the applicable prospectus
supplement relating to a particular series of units.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The following description, together with the
additional information included in any applicable prospectus supplement, summarizes the general features of the units that we may
offer under this prospectus. You should read any prospectus supplement and any free writing prospectus that we may authorize to
be provided to you related to the series of units being offered, as well as the complete unit agreements that contain the terms
of the units. Specific unit agreements will contain additional important terms and provisions and we will file as an exhibit to
the registration statement of which this prospectus is a part, or will incorporate by reference from another report that we file
with the SEC, the form of each unit agreement relating to units offered under this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If we offer any units, certain terms of that
series of units will be described in the applicable prospectus supplement, including, without limitation, the following, as applicable:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD STYLE="width: 85%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the title of the series of units;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">identification and description of the separate constituent securities comprising the units;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the price or prices at which the units will be issued;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">the date, if any, on and after which the constituent securities comprising the units will be separately transferable;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">a discussion of certain United States federal income tax considerations applicable to the units; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&bull;</FONT></TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">any other terms of the units and their constituent securities.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><A NAME="a_023"></A>PLAN OF DISTRIBUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may sell the securities covered by this prospectus
from time to time in one or more offerings. Registration of the securities covered by this prospectus does not mean, however, that
those securities will necessarily be offered or sold.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may sell the securities separately or together:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 90%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">through one or more underwriters or dealers in a public offering and sale by them;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">directly to investors, including our affiliates and stockholders, or in a rights offering;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">through agents; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">through any combination of any of these methods of sale.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may sell the securities from time to time:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="width: 90%; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">in one or more transactions at a fixed price or prices, which may be changed from time to time;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">at market prices prevailing at the times of sale;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">in &quot;at the market offerings,&quot; within the meaning of Rule&nbsp;415(a)(4) of the Securities Act of 1933, as amended (the &quot;Securities Act&quot;), to or through a sales agent or market maker or into an existing trading market, on an exchange or otherwise;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">at prices related to such prevailing market prices; or</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">at negotiated prices.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Each time we sell securities covered by this
prospectus, we will describe the method of distribution of the securities and the terms of the offering in the prospectus supplement
or free writing prospectus. Any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may engage in at-the-market offerings into
an existing trading market in accordance with Rule&nbsp;415(a)(4) under the Securities Act, and we may also sell securities through
a rights offering, forward contracts or similar arrangements. In any distribution of subscription rights to stockholders, if all
of the underlying securities are not subscribed for, we may then sell the unsubscribed securities directly to third parties or
may engage the services of one or more underwriters, dealers or agents, including standby underwriters, to sell unsubscribed securities
to third parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">If underwriters are used in the sale of any
securities, the securities will be acquired by the underwriters for their own account and may be resold from time to time in one
or more transactions described above. The securities may be either offered to the public through underwriting syndicates represented
by managing underwriters, or directly by underwriters. Generally, the underwriters' obligations to purchase the securities will
be subject to conditions precedent and the underwriters will be obligated to purchase all of the securities if they purchase any
of the securities. We may use underwriters with whom we have a material relationship. We will describe in the prospectus supplement
or free writing prospectus, naming the underwriter, the nature of any such relationship.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may designate agents to sell the securities.
Unless otherwise specified in connection with any particular sale of securities, the agents will agree to use their best efforts
to solicit purchases for the period of their appointment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may authorize underwriters, dealers or agents
to solicit offers by certain purchasers to purchase the securities from us at the public offering price set forth in the prospectus
supplement or free writing prospectus pursuant to delayed delivery contracts providing for payment and delivery on a specified
date in the future. The contracts will be subject only to those conditions set forth in the prospectus supplement or free writing
prospectus, and the prospectus supplement or free writing prospectus will set forth any commissions we pay for solicitation of
these contracts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may enter into derivative transactions with
third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the
applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use
securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock,
and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The
third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement or
in a post-effective amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Underwriters, dealers and agents may be entitled
to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments made by the underwriters, dealers or agents, under agreements between us and the underwriters, dealers
and agents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We may grant underwriters who participate in
the distribution of securities an option to purchase additional securities to cover over-allotments, if any, in connection with
the distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Underwriters, dealers or agents may receive
compensation in the form of discounts, concessions or commissions from us or our purchasers, as their agents in connection with
the sale of securities. These underwriters, dealers or agents may be considered to be underwriters under the Securities Act. As
a result, discounts, commissions or profits on resale received by the underwriters, dealers or agents may be treated as underwriting
discounts and commissions. The prospectus supplement or free writing prospectus will identify any such underwriter, dealer or agent
and describe any compensation received by them from us. Any initial public offering price and any discounts or concessions allowed
or re-allowed or paid to dealers may be changed from time to time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Any common stock or preferred sold pursuant
to a prospectus supplement or free writing prospectus will be listed for trading on the NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Any underwriter may engage in over-allotment
transactions, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation&nbsp;M under
the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions
permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short covering
transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions.
Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer
are purchased in a covering transaction to cover short positions. T hose activities may cause the price of the securities to be
higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time. We make no
representation or prediction as to the direction or magnitude of any effect that such transactions may have on the price of the
securities. For a description of these activities, see the information under the heading &quot;Underwriting&quot; or &quot;Plan
of Distribution&quot; in the applicable prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Underwriters, broker-dealers or agents who may
become involved in the sale of the common stock may engage in transactions with and perform other services for us in the ordinary
course of their business for which they receive compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_024"></A><B>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Reicker, Pfau, Pyle &amp; McRoy LLP will pass
upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf of EnerJex. Additional
legal matters may be passed upon for us, or any underwriters, dealers or agents, by counsel that we will name in the applicable
prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_025"></A><B>EXPERTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The financial statements of EnerJex as of December&nbsp;31,
2013, and for the year ended December&nbsp;31, 2013, incorporated in this prospectus by reference, and the effectiveness of EnerJex's
internal control over financial reporting as of December&nbsp;31, 2013, has been audited by L.L. Bradford &amp; Company, LLC, an
independent registered public accounting firm, as stated in their reports. Such financial statements have been so incorporated
in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The financial statements of EnerJex as of December&nbsp;31,
2012, and for the year ended December&nbsp;31, 2012, incorporated in this prospectus by reference, and the effectiveness of EnerJex's
internal control over financial reporting as of December&nbsp;31, 2012, has been audited by Weaver, Martin, &amp; Samyn, LLC, an
independent registered public accounting firm, as stated in their reports. Such financial statements have been so incorporated
in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The information incorporated in this prospectus
by reference, as of December&nbsp;31, 2013 and 2012 relating to EnerJex&rsquo;s estimated quantities of oil and gas reserves is
derived from reserve reports prepared by MHA Petroleum Consultants LLC. This information is included in this prospectus in reliance
upon such firm as experts in matters contained in the reports.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 45; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>_______________________________________________________________________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>ENERJEX RESOURCES, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"><B>763,547 Shares of Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>1,242.17099 Shares of Series B Convertible Preferred
Stock</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Northland Capital Markets</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Euro Pacific Capital Group, Inc.</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>_______________________________________________________________________</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
