Xun Forum Post #2 11/8/2014 Thank you ENGGEO fo

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Thank you ENGGEO for your post and questions in Post #1 above. We have replicated your post below:

Jerry: Hopefully the delivery and validation of the first million barrels of jet fuel is nearing validation by SGS. Can you perhaps answer the following: Does the process for selling to a buyer require the same or a similar sequence of certifications and validations such as tank inspection etc with another SGS report or does the report as prepared for the transfer to the JV by the supplier suffice for the sale from the JV to a buyer. Can you expand on this?

Question #1: Does the process for selling to a buyer require the same or a similar sequence of certifications and validations such as tank inspection etc with another SGS report or does the report as prepared for the transfer to the JV by the supplier suffice for the sale from the JV to a buyer. Can you expand on this?

Response #1: The process/procedures for selling a product differs from the process/procedures of buying the product. There may be some similar steps in the procedures. One of the similar steps in both sets of procedures is inspection and acceptance of the Quantity and Quality (Q&Q) of the product.

There are different points during the process that require Q & Q, some which must be provided by the Seller to XOM and in return XOM must provide to their Buyer (End Buyer). To mitigate Risk to XOM and the Financier, XOM requires the End Buyer to accept the Q & Q before the Financier pays for the product in order for XOM to obtain title of ownership. There is no risk to XOM or the Financier until the Seller provides Q & Q from a reputable independent testing firm, such as SGS, at the point of title transfer.

The End Buyer will also complete their own Q & Q before payment is made.

We thank you for your interest, support and faith in the Company.

Respectfully,

Xun Energy, Inc.
Jerry G. Mikolajczyk
President and CEO

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