On November 2, 2011, we granted 200,000 stock options to our CFO. The options vest annually over five years beginning on November 2, 2012 and are exercisable until November 1, 2021 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 87% and a call option value of $0.7352, was $147,039, and is being amortized over the implied service term, or vesting period, of the options. The Company recognized $4,901 of compensation expense during the year ended December 31, 2011.

On November 2, 2011, we granted 133,000 stock options to our COO. The options vest annually over five years beginning on November 2, 2012 and are exercisable until November 1, 2021 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 87% and a call option value of $0.7352, was $97,781, and is being amortized over the implied service term, or vesting period, of the options. The Company recognized $3,259 of compensation expense during the year ended December 31, 2011.

On November 2, 2011, we granted 10,000 stock options to an employee. The options vest annually over five years beginning on November 2, 2012 and are exercisable until November 1, 2021 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 87% and a call option value of $0.7352, was $7,352, and is being amortized over the implied service term, or vesting period, of the options. The Company recognized $245 of compensation expense during the year ended December 31, 2011.

On November 2, 2011, we granted 100,000 stock options to one of our Directors. The options vest annually over five years beginning on November 2, 2012 and are exercisable until November 1, 2021 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 87% and a call option value of $0.7352, was $73,519, and is being amortized over the implied service term, or vesting period, of the options. The Company recognized $2,451 of compensation expense during the year ended December 31, 2011.

On October 26, 2011, we granted 1,000,000 stock options to Kenneth DeCubellis, our new Chief Executive Officer. The options vest annually over five years beginning on October 26, 2012 and are exercisable until October 25, 2021 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 88% and a call option value of $0.7456, was $745,587, and is being amortized over the implied service term, or vesting period, of the options. The Company recognized $24,853 of compensation expense during the year ended December 31, 2011.

On August 4, 2011, we granted 10,000 stock options to a new employee. The options vest annually over five years beginning on August 4, 2012 and are exercisable until August 3, 2021 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 86% and a call option value of $0.7436, was $7,436, and is being amortized over the implied service term, or vesting period, of the options. The Company recognized $620 of compensation expense during the year ended December 31, 2011.

On February 22, 2011, we granted 500,000 stock options to James Moe, our chief financial officer. The options vest annually over three years beginning on March 14, 2012 and are exercisable until February 21, 2021 at an exercise price of $1.65 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 108% and a call option value of $1.3661, was $683,070, and is being amortized over the implied service term, or vesting period, of the options. The Company recognized $180,256 of compensation expense during the year ended December 31, 2011.

On July 26, 2011, we issued a total of 3,071,250 warrants as part of a Securities Purchase Agreement with multiple accredited investors that purchased a total of 6,142,500 units at a price of $1.00 per Unit consisting of one share of our common stock and a five-year warrant to purchase one-half of one share of the Company’s common stock for a total of 3,071,250 shares at an exercise price of $1.50 per share. The Company may redeem outstanding warrants prior to their expiration, at a price of $0.01 per share, provided that the volume weighted average sale price per share of Common Stock equals or exceeds $2.50 per share for ten (10) consecutive trading days ending on the third business day prior to the mailing of notice of such redemption and provided that a resale registration statement with respect to exercise of the warrants is declared effective. In addition, we issued warrants to the agents to purchase an aggregate of 307,125 shares of the Company’s common stock at an exercise price of $1.00 per share to the Agents. Net proceeds to the Company from the sale of the Units, after deducting selling commissions and offering expenses, were approximately $5.6 million. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

On May 2, 2011, we entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with certain lenders (collectively, the “Lenders” and individually a “Lender”) and Prenante5, LLC, as agent for the Lenders (PrenAnte5, LLC, in such capacity, the “Agent”). The facility provides $10 million in financing to be made available for drilling projects on the Company’s North Dakota Bakken and Three Forks position. The facility will be available for a period of three years over which time we may draw on the line seven times, pay the line down three times, and terminate the facility without penalty one time. The facility sets the minimum total draw at $500,000 and requires Ante5, upon each draw, to provide the Lender with a compliance certificate that, along with other usual and customary financial covenants, states that Ante5 has at least twelve months interest coverage on its balance sheet in cash.

In connection with the closing of the Credit Agreement on May 2, 2011, the Company issued to each Lender a five-year warrant to purchase a number of shares of the Company’s common stock equal to an amount determined by multiplying 500,000 by such Lender’s commitment percentage. The warrants vest on the earlier of the 1 year anniversary of the grant date (May 2, 2012) or when 50% of the LOC has been advanced, and are exercisable until May 1, 2016 at an exercise price of $0.95 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 97% and a call option value of $0.7837, was $391,872, and is being amortized over the three year life of the credit agreement. The Company recognized a total of $87,084 of interest expense during the year ended December 31, 2011.

In the event of a Lender default (i.e. failure to fund its pro rata commitment), the interest rate on such defaulting Lender’s advances (but not on any non-defaulting Lender’s advances) is automatically reduced from 19% to 12% per annum, and the Company has all other remedies available at law or in equity. In addition, if the Lender default occurs prior to the earlier to occur of (i) May 2, 2012, or (ii) the date the defaulting Lender has made advances in an amount greater than fifty percent (50%) of its commitment amount, the Company is entitled to cancel all of the defaulting Lender’s then-outstanding warrant and shares of Company common stock issued or issuable upon the exercise of the warrant.

On November 16, 2010 the Company granted 100,000 stock options as compensation to a newly appointed Director for service on the Board of Directors in 2010. The options vest annually over three years and are exercisable until November 15, 2020 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 198% and a call option value of $0.8256, was $82,558, and is being amortized over the implied service term, or vesting period of the options. The Company recognized $27,520 and $3,440 of compensation expense during the year ended December 31, 2011 and the period from inception (April 9, 2010) to December 31, 2010, respectively.

On November 15, 2010 the Company granted 500,000 stock options as compensation to a newly appointed Chief Operating Officer. The options vest annually over three years and are exercisable until November 14, 2020 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 198% and a call option value of $0.8157, was $407,870, and is being amortized over the implied service term, or vesting period of the options. The Company recognized $135,956 and $16,995 of compensation expense during the year ended December 31, 2011 and the period from inception (April 9, 2010) to December 31, 2010, respectively.

On November 12, 2010 the Company granted 1,000,000 stock options as compensation to the former Chief Executive Officer and existing Chairman of the Board of Directors. The options vest annually over three years and are exercisable until November 11, 2020 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 198% and a call option value of $0.8452, was $845,183, and is being amortized over the implied service term, or vesting period of the options. The Company recognized $281,728 and $35,216 of compensation expense during the year ended December 31, 2011 and the period from inception (April 9, 2010) to December 31, 2010, respectively.

On November 12, 2010 the Company granted 100,000 stock options as compensation to a newly appointed Director for service on the Board of Directors in 2010. The options vest annually over three years and are exercisable until November 11, 2020 at an exercise price of $1.00 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 198% and a call option value of $0.8452, was $84,518, and is being amortized over the implied service term, or vesting period of the options. The Company recognized $28,172 and $3,522 of compensation expense during the year ended December 31, 2011 and the period from inception (April 9, 2010) to December 31, 2010, respectively.

On April 26, 2010 the Company granted a total of 300,000 stock options as compensation for service on the Board of Directors in 2010 to each of its three Directors in equal increments of 100,000 options. The options vest annually over three years and are exercisable until April 25, 2020 at an exercise price of $0.30 per share based on the average of the bid and ask price of the Company’s common stock over the five day period beginning on the first day the common stock was traded on the “Pink Sheets”. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 204% and a call option value of $0.1947, was $58,425, and is being amortized over the vesting period of the options. The Company recognized $18,328 and $18,327 of compensation expense during the year ended December 31, 2011 and the period from inception (April 9, 2010) to December 31, 2010, respectively. One of the Directors resigned on November 12, 2010, as such, 100,000 options were cancelled.

In accordance with the spin-off on April 16, 2010, each option to purchase shares of Ante4, Inc. (“Ante4”) common stock that was held by a director, officer or employee of Ante4 and was outstanding on the distribution date (an “Original Ante4 Option”) was replaced with both an adjusted Ante4 stock option and a stock option to purchase one share of Ante5 common stock for each share of Ante4 common stock underlying the original Ante4 stock option. The terms are generally intended to preserve the intrinsic value of the original option. As such, the strike prices were adjusted using the ratio of the intrinsic value of one share of Ante5 common stock that was distributed to the intrinsic value of each share of Ante4 common stock at the time of the spin-off. The ratio of the closing share prices on the first trading day for Ante5, July 1, 2010, relative to the closing share price of Ante4 preceding the distribution date of June 14, 2010 resulted in an allocation of 6.35% of the original strike prices of the Ante4 options to the Ante5 options. A total of 269,000 options were carried over in the spin-off with strike prices between $0.03 and $0.92 per share, exercisable over ten years, expiring from August 9, 2014 through May 20, 2019. All options that were carried over were fully vested.

The Black-Scholes option pricing model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. During the year ended December 31, 2011 and the period from April 9, 2010 (inception) to December 31, 2010, there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.

The weighted average fair value of options granted with exercise prices at the current fair value of the underlying stock during the year ended December 31, 2011 and the period from April 9, 2010 (inception) to December 31, 2010 was $1.16 and $0.81 per option, respectively.