The shale market revolution and the resulting changing industry fundamentals affect Bakken Resources Inc.  Because the Company does not operate wells on its acreage, it is highly dependent on its operators to drill and produce new wells.

Shale oil wells are unique because of the sharp production declines which occur after initial production.  A typical shale well produces 83% of its reserves within the first three years of production. The sharp production decline characteristics of shale oil and natural gas wells necessitates the acquisition of new reserves.

These new reserves can be new producing wells in existing acreage or the acquisition of new reserves.  Because the Company cannot control the drilling and producing on existing acreage, acquiring new assets may be the best course to guarantee new reserves are attained.

The Company has significant concentration risk. All of the Company’s revenue inures from the Bakken basin.  Nearly 90% of the Company’s revenue comes from oil produced by one operator, Oasis Petroleum.  These concentrations create considerable risk to the Company and its shareholders. A significant short and long-term goal of the Company is to reduce this risk by diversifying its mineral asset portfolio.  The acquisition of new producing and non-producing mineral assets could result in diversification of the Company’s mineral assets, reduction of risk, and the creation of an asset portfolio which would ensure that the Company’s reserves continue to grow, in turn , creating long-term shareholder value.