CEO Update: Thank you fischerman1940 for your p

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Thank you fischerman1940 for your post and questions in Post #8 and #9 above.

We have replicated your posts below:

Post #8:

Dear Jerry,

Just a couple questions:

1. I have noticed that the price of oil has been on a bit of a rally lately. I believe between the encouraging articles about a production freeze within OPEC, Iran aging infrastructure limiting their production for now, and China’s increase in purchasing of oil, it seems that oil may have found a bottom . I was curious if there has been an increase in deals from buyers or suppliers in regards to oil and oil derivatives given the encouraging developments in the oil market.

2. In December, production of Rice Well #15 was temporarily shut in. Based on WTI pricing around that time, oil was around $40 per barrel. I was wondering what price range WTI needs to be in for Rice Well #15 to resume production? Also, what is required, both process and cost, to bring Rice Well #15 back into production?

3. Last update there were a few deals in the works pertaining to copper. I was wondering if there were any updates on these deals.

4. Lastly, on the Xun Energy homepage for quotes, there are quotes for aluminum, gold, silver, platinum, and palladium. I understand why the other quotes, such as natural gas, WTI, Brent and copper, are there, but what is the connection between the above commodity quotes and Xun Energy?

Thank you for your time and efforts in both getting the company successful and having this forum to ask questions. Hopefully soon, we will be celebrating the closing of the first deal.

Take Care.

Post #9:

My apologies, I have the wrong time frame for Rice Well #15.

Based on looking through previous posts, it was in September 2015 that Rice Well #15 was temporarily shut in, not December 2015. Around this time, WTI prices were in the mid $40 range.

Question #1: I have noticed that the price of oil has been on a bit of a rally lately. I believe between the encouraging articles about a production freeze within OPEC, Iran aging infrastructure limiting their production for now, and China’s increase in purchasing of oil, it seems that oil may have found a bottom . I was curious if there has been an increase in deals from buyers or suppliers in regards to oil and oil derivatives given the encouraging developments in the oil market.

Response to #1: Based on our experience over the last several months, the demand for crude oil has been strong and in our opinion, greater than the supply of crude oil. Based on requests/inquiries for crude oil to us, the demand is greater than 10 million barrels of crude oil per month.

Question #2 and #3: In December, production of Rice Well #15 was temporarily shut in. Based on WTI pricing around that time, oil was around $40 per barrel. I was wondering what price range WTI needs to be in for Rice Well #15 to resume production? Also, what is required, both process and cost, to bring Rice Well #15 back into production?

Response to #2 and #3: Over the last 16 days, WTI crude oil prices has fluctuated between $33.40 and a high of $37.50 for Tier one crude oil pricing from our buyer, Ergon. Link: ergon.com/prices?viewpost=16-050+ This price range are lower than what we need to cover our operating costs and generate a profit.

The Rice Well #15 has been shut in now for several months and to start it up, we would have to have cash reserved to cover the costs of hauling and treating 100 to 300 barrels of water before it starts producing oil. Even at best, the Rice Well will produce less than a barrel of oil a day and between 5 to 7 barrels of water per day. It costs roughly $5 to $6 per barrel for water to be treated and disposed depending on the hauling costs. The WTI crude oil pricing is too volatile to start up Rice Well #15, and we would have to have a steady price of not less than $45 to $50 per barrel for us to consider starting the well again.

Question #4: Last update there were a few deals in the works pertaining to copper. I was wondering if there were any updates on these deals.

Response to #4: We are focused on a couple of crude oil transactions and a couple of copper wire scrap transactions. They are in various stages. We encountered a delay in the copper wire scrap as we made a change from the Chile supplier to another supplier.

THERE ARE NO ASSURANCES THAT ANY OF THE CRUDE OIL TRANSACTIONS OR THE SCRAP COPPER WIRE TRANSACTIONS WILL CLOSE. THERE ARE NO ASSURANCES THAT SHOULD ANY OF THE TRANSACTIONS CLOSE, THAT THE TRANSACTION WILL BE PROFITABLE.

Question #5: Lastly, on the Xun Energy homepage for quotes, there are quotes for aluminum, gold, silver, platinum, and palladium. I understand why the other quotes, such as natural gas, WTI, Brent and copper, are there, but what is the connection between the above commodity quotes and Xun Energy?

Response to #5: The addition of the extra quotes is to fill the screen with informative quotes that is easy for visitors to view as well as by management. Xun Oil Marketing’s mission is physical commodity trades which not only includes petroleum products but also medals, semi-precious and precious metals, durable goods, etc. The Company has been approached by buyers of gold and aluminum and we are in the process of sourcing these physical commodities.

THERE ARE NO ASSURANCES THAT ANY OF THE PHYSICAL COMMODITY TRANSACTIONS WILL CLOSE. THERE ARE NO ASSURANCES THAT SHOULD ANY OF THE TRANSACTIONS CLOSE, THAT THE TRANSACTION WILL BE PROFITABLE.


DISCLAIMER: SUBJECT TO SAFE HARBOR CLAUSE.


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

Respectfully,

Xun Energy, Inc.

Jerry G. Mikolajczyk
President and CEO

Safe Harbor

The statements contained in this post may not be historical fact, are forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The forward-looking statements contained herein are based on current expectations that involve a number of risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” "projects" or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The Company wishes to caution the reader that its forward-looking statements that are historical facts are only predictions. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these projections and other forward-looking statements are based upon a variety of assumptions relating to the business of the Company, which, although considered reasonable by the Company, may not be realized. Because of the number and range of assumptions underlying the Company’s forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond the reasonable control of the Company, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this report. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. Therefore, the actual experience of the Company and the results achieved during the period covered by any particular forward-looking statements may differ substantially from those projected. Consequently, the inclusion of forward-looking statements should not be regarded as a representation by the Company or any other person that these estimates and projections will be realized. The Company’s actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate. There is no guarantee that the Company will close on the financing or close on the acquisition of the producing oil and gas leases.

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