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| For the Fiscal Year Ended December 31, 2016 |   | Commission File No. 0-22750 |
|---------------------------------------------|--------|-----------------------------|
| California                                                    |   | 33-0224120                          |
|---------------------------------------------------------------|--------|-------------------------------------|
| (State or other jurisdiction ofincorporation or organization) |   | (I.R.S. EmployerIdentification No.) |

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| PART I               |               |                                                                                                                               |
|----------------------|--------------------|------------------------------------------------------------------------------------------------------------------------------------|
|                 | Item 1             | Description of Business                                                                                                            | 1 |
|                 |               | Plan of Business                                                                                                                   | 2 |
|                 |               | Competition, Markets and Regulation                                                                                                | 3 |
|                 | Item 1A            | Risk Factors                                                                                                                       |   |
|                 | Item 1B       | Unresolved Staff Comments                                                                                                          |   |
|                 | Item 2             | Description of Property                                                                                                            | 4 |
|                 |               | Northern California                                                                                                                | 4 |
|                 |               | Developed and Undeveloped Leasehold Acreage                                                                                        | 4 |
|                 |               | Gross and Net Productive Wells                                                                                                     | 4 |
|                 |               | Drilling Activities                                                                                                                | 5 |
|                 |               | Production                                                                                                                         | 5 |
|                 |               | Net Proved Oil and Natural Gas Reserves                                                                                            | 6 |
|                 | Item 3             | Legal Proceedings                                                                                                                  | 6 |
|                 | Item 4        | Mine Safety Disclosures                                                                                                            | 6 |
| PART II              |               |                                                                                                                               |
|                 | Item 5             | Market for Common Equity and Related Stockholder Matters                                                                           | 7 |
|                 |               | Dividends                                                                                                                          | 7 |
|                 |               | Recent Sales of Unregistered Securities                                                                                            | 7 |
|                 | Item 6             | Management’s Discussion and Analysis of financial Condition and Results of Operations                                        | 7 |
|                 |               | Critical Accounting Policies                                                                                                       | 8 |
|                 |               | Results of Operations for the Twelve Months Ended December 31, 2015, as Compared to the Twelve Months Ended December 31, 2014 | 10 |
|                 |               | Capital Resources and Liquidity                                                                                                    | 12 |
|                 |               | Changes in Reserve Estimates                                                                                                       | 13 |
|                 | Item 7             | Qualitative and Quantitative Disclosures About Market Risk                                                                         | 13 |
|                 | Item 8             | Financial Statements                                                                                                               | 13 |
|                 | Item 9   | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                                               | 14 |
|                 | Item 9A            | Controls and Procedures                                                                                                            | 14 |
|                 |               | Disclosure Controls                                                                                                                | 14 |
|                 |               | Management Report on Internal Control over Financial Reporting                                                                     | 14 |
|                 |               | Changes in Internal Control over Financial Reporting                                                                               | 15 |
|                 |               | Limitations on Effectiveness of Controls                                                                                           | 15 |
| PART III             |               |                                                                                                                               |
|                 | Item 10            | Directors and Executive Officers of the Registrant                                                                                 | 16 |
|                 | Item 11            | Executive Compensation                                                                                                             | 18 |
|                 | Item 12            | Security ownership of Certain Beneficial Owners and Management                                                                     | 20 |
|                 | Item 13            | Certain Relationships and Related Transactions                                                                                     | 21 |
|                 | Item 14            | Principal Accountant Fees and Services                                                                                             | 22 |
| PART IV              |               |                                                                                                                               |
|                 | Item 15            | Exhibits and Financial Statement Schedules                                                                                         | 23 |
| SIGNATURES           | 24                 |
| FINANCIAL STATEMENTS | F-1                |

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|             |   | Developed   |     |   | Undeveloped |   |
|------------------|--------|-------------|----------|--------|-------------|--------|
|             |   | Gross Acres |     |   | Net Acres   |   |   | Gross Acres |   |   | Net Acres |   |
| California       |   |        | 5,092.76 |   |        |   | 3,778.97 |   |   |   | 11,432.00 |   |   |   | 3,308.42 |   |
| All Other States |   |        | 3,083.12 |   |        |   | 1,634.58 |   |   |   | 7,721.00 |   |   |   | 6,859.00 |   |
| Total            |   |        | 8,175.88 |   |        |   | 5,413.55 |   |   |   | 19,153.00 |   |   |   | 10,167.42 |   |
|        |   | Gross Wells |   |   | Net Wells |   |
|-------------|--------|-------------|--------|--------|-----------|--------|
| Natural Gas |   |        | 41.00  |   |      |   | 18.24 |   |
| Oil         |   |        | 5.00   |   |      |   | .36 |   |
| Total       |   |        | 46.00  |   |      |   | 18.60 |   |

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|   |   |               |   |   |   |   |           |   |   |         |   |   |         |   |   |   |   |
|--------|--------|--------------------|--------|--------|--------|--------|----------------|--------|--------|--------------|--------|--------|--------------|--------|--------|--------|--------|
| Year   |   | Type of Well(a)    |   |   |   |   | Gross Wells(b) |   |   | Net Wells(e) |   |
|   |   |     |   | Total  |   |   | Producing(c)   |   |   | Dry(d)       |   |   | Producing(c) |   |   | Dry(d) |   |
|   |   |               |   |   |   |   |           |   |   |         |   |   |         |   |   |   |   |
| 2015   |   | Exploratory        |   |   | 2      |   |           |   | 1      |         |   |   | 1            |   |   |   | 0.5172 |   |   |   | 0.5243 |   |
|        |   | Developmental      |   |   | 2      |   |           |   | 1      |         |   |   | 1            |   |   |   | 0.3933 |   |   |   | 0.4725 |   |
|   |   |               |   |   |   |   |           |   |   |         |   |   |         |   |   |   |   |   |   |   |   |   |
| 2016   |   | Exploratory        |   |   | 2      |   |           |   | 2      |         |   |   | -            |   |   |   | 0.3613 |   |   |   | - |   |
|        |   | Developmental      |   |   | 1      |   |           |   | 1      |         |   |   | -            |   |   |   | 0.2097 |   |   |   | - |   |
| a) | An exploratory well is one that is drilled in search of new oil and natural gas reservoirs, or to test the boundary limits of a previously discovered reservoir. A developmental well is one drilled on a previously known productive area of an oil and natural gas reservoir with the objective of completing that reservoir. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| b) | Gross wells represent the number of actual wells in which Royale Energy owns an interest. Royale Energy's interest in these wells may range from 1% to 100%. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| c) | A producing well is one that produces oil and/or natural gas that is being purchased on the market. |
|----|-----------------------------------------------------------------------------------------------------|
| d) | A dry well is a well that is not deemed capable of producing hydrocarbons in paying quantities. |
|----|-------------------------------------------------------------------------------------------------|
| e) | One "net well" is deemed to exist when the sum of fractional ownership working interests in gross wells or acres equals one. The number of net wells is the sum of the fractional working interests owned in gross wells expressed as a whole number or a fraction. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |   | 2016   |    |   | 2015   |   |
|--------------------------------|--------|--------|---------|--------|--------|--------|
| Net volume                     |   |   |    |   |   |   |
| Oil (BBL)                      |   |   | 193     |   |   |   | 403 |   |
| Gas (MCF)                      |   |   | 232,539 |   |   |   | 363,168 |   |
| MCFE                           |   |   | 233,697 |   |   |   | 365,586 |   |
|                           |   |   |    |   |   |   |   |   |
| Average sales price            |   |   |    |   |   |   |   |   |
| Oil (BBL)                      |   | $      | 12.11   |   |   | $      | 46.11 |   |
| Gas (MCF)                      |   | $      | 2.31    |   |   | $      | 2.75 |   |
|                           |   |   |    |   |   |   |   |   |
| Net production costs and taxes |   | $      | 594,241 |   |   | $      | 1,000,769 |   |
|                           |   |   |    |   |   |   |   |   |
| Lifting costs (per MCFE)       |   | $      | 2.54    |   |   | $      | 2.74 |   |

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|   |   | 1st Qtr |   |   | 2nd Qtr |   |   | 3rd Qtr |   |   | 4th Qtr |   |
|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|
|   |   | High    |   |   | Low     |   |   | High    |   |   | Low     |   |   | High |   |   | Low |   |   | High |   |   | Low |   |
| 2015   |   |    | 2.16   |   |    |   | 1.55   |    |   |   | 1.82    |   |   |   | 1.15 |   |   |   | 1.27 |   |   |   | 0.63 |   |   |   | 0.81 |   |   |   | 0.30 |   |
| 2016   |   |    | 0.57   |   |    |   | 0.07   |    |   |   | 0.47    |   |   |   | 0.34 |   |   |   | 0.80 |   |   |   | 0.43 |   |   |   | 0.74 |   |   |   | 0.58 |   |

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|         |   | TotalObligations |    |   | 2017   |   |   | 2018-2019 |   |   | 2020    |   |   | Beyond |    |
|--------------|--------|------------------|---------|--------|--------|--------|--------|-----------|--------|--------|---------|--------|--------|--------|---------|
|         |   |             |    |   |   |   |   |      |   |   |    |   |   |   |    |   |   |
| Office Lease |   | $                | 612,562 |   |   | $      | 97,266 |      |   | $      | 242,537 |   |   | $      | 127,355 |   |   | $ | 145,404 |   |

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| Name                           |   | Age    |   |   | First Became Director or  Executive Officer |   | Positions Held           |
|--------------------------------|--------|--------|--------|--------|---------------------------------------------|--------|--------------------------|
|                           |   |   |   |   |                                        |   |      |
| Harry E. Hosmer                |   |   | 85     |   |                                        |   | 1986                     |   | Chairman of the Board |
| Donald H. Hosmer               |   |   | 61     |   |                                        |   | 1987                     |   | President of Business Development and Director |
| Stephen M. Hosmer              |   |   | 50     |   |                                        |   | 1996                     |   | President, Chief Financial Officer, Secretary and Director |
| Ronald L. Buck                 |   |   | 80     |   |                                        |   | -                        |   | Director |
| Jonathan Gregory (1)           |   |   | 51     |   |                                        |   | 2014                     |   | Chief Executive Officer and Director |
| Gary Grinsfelder (1), (2), (3) |   |   | 66     |   |                                        |   | 2007                     |   | Director |
| Ronald Verdier (1) (2) (3)     |   |   | 74     |   |                                        |   | 2015                     |   | Director |

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|                                   |   |   |   |       |    |   |   |   |   |              |   |   | All Other        |   |   |   |   |
|----------------------------------------|--------|--------|--------|------------|---------|--------|--------|--------|--------|-------------------|--------|--------|------------------|--------|--------|--------|--------|
| Name and Principal Position       |   | Year   |   | Salary (4) |    |   | Bonus  |   |   | Option Awards (1) |   |   | Compensation (2) |   |   | Total  |   |
|                                   |   |   |   |       |    |   |   |   |   |              |   |   |             |   |   |   |   |
| Jonathan Gregory, CEO (3) (4)          |   | 2016   |   | $          | 242,469 |   |   | $      | -      |              |   |   |             |   |   | $      | -      |   |   | $ | 242,469 |   |
|                                   |   | 2015   |   | $          | 70,823  |   |   | $      | -      |              |   |   |             |   |   | $      | -      |   |   | $ | 70,823 |   |
|                                   |   |   |   |       |    |   |   |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |
| Donald H. Hosmer                       |   | 2016   |   | $          | 282,533 |   |   | $      | -      |              |   |   |             |   |   | $      | 18,339 |   |   | $ | 300,872 |   |
|    President            |   | 2015   |   | $          | 177,084 |   |   | $      | -      |              |   |   |             |   |   | $      | 18,063 |   |   | $ | 195,147 |   |
|                                   |   | 2014   |   | $          | 230,192 |   |   | $      | 25,000 |              |   |   |             |   |   | $      | 6,906  |   |   | $ | 262,098 |   |
|                                   |   |   |   |       |    |   |   |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |
| Stephen M. Hosmer (4)                  |   | 2016   |   | $          | 207,693 |   |   | $      | -      |              |   |   |             |   |   | $      | 18,231 |   |   | $ | 225,924 |   |
|    President, & CFO |   | 2015   |   | $          | 230,192 |   |   | $      | -      |              |   |   |             |   |   | $      | 17,968 |   |   | $ | 248,160 |   |
|                                   |   | 2014   |   | $          | 230,192 |   |   | $      | 25,000 |              |   |   |             |   |   | $      | 18,906 |   |   | $ | 274,098 |   |

|  | (1) | In October 2014, Donald Hosmer and Stephen Hosmer (together with the other members of the board of directors) were each granted 20,000 options to purchase common stock at an exercise or base price of $5.00 per shares, which vested during 2015.  These options were granted for a period of 3 years and will expire on December 31, 2017.  At December 31, 2016, Royale Energy’s stock price, $0.62, was less than the weighted average exercise price, and as such the outstanding and exercisable stock options had no intrinsic value. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | All other compensation consists of matching contributions to the Company’s simple IRA plan, except for Donald H. Hosmer and Stephen M. Hosmer, who also received a $12,000 car allowance. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | During 2016 and 2015, Jonathan Gregory, Donald and Stephen Hosmer received a portion of their compensation in shares of common stock, valued at the closing market price on the date of grant, instead of cash.  In 2016, of the $242,469 paid to Jonathan Gregory, $141,814 was paid in cash and 386,178 shares of common stock were issued, valued at $100,655.  Of the $282,533 paid to Donald Hosmer, $190,595 was paid in cash and 609,702 shares of common stock were issued, valued at $91,938.  Of the $207,693 paid to Stephen Hosmer, $165,742 was paid in cash and 101,630 shares of common stock were issued, valued at $41,951.  In 2015,of the $70,823 paid to Jonathan Gregory, $21,581 was paid in cash and 108,644 shares of common stock were issued, valued at $49,242.  Of the $230,192 paid to Stephen Hosmer, $173,945 was paid in cash and 200,564 share of common stock were issued, valued at $56,247. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | Mr. Gregory was appointed CEO (principal executive officer) in 2015. |
|--|-----|----------------------------------------------------------------------|

| Options                |
|------------------------|
| Name                   |   | Number of securities underlying unexercised options  (#)  exercisable |   |   |   | Number of securities underlying unexercised options  (#)  unexercisable |   |   | Option exercise price  ($) |   | Option  expiration  date |
|                   |   |   |   |   |   |   |   |   |   |   |             |
| Jonathan Gregory       |   |   | 20,000 | (1 | ) |   |   | - |   |   | $ | 5.00 |   | 12/31/2017 |
| Donald H. Hosmer  |   |   | 20,000 | (1 | ) |   |   | - |   |   | $ | 5.00 |   | 12/31/2017 |
| Stephen M. Hosmer      |   |   | 20,000 | (1 | ) |   |   | - |   |   | $ | 5.00 |   | 12/31/2017 |
| (1)   | At the October 10, 2014 Board of Directors meeting, directors of Royale Energy were granted 20,000 options each to purchase common stock at an exercise price of $5.00 per share. These options have become exercisable and will expire on December 31, 2017.   |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  Name          |   | Fees earned or paid in cash or  Common Stock |    |   | Stock awards |   |   | Option awards |   |   | All Other Compensation (1) |   |   | Total  |   |
|---------------------|--------|----------------------------------------------|---------|--------|--------------|--------|--------|---------------|--------|--------|----------------------------|--------|--------|--------|--------|
|                |   | ($)                                          |    |   | ($)          |   |   | ($)           |   |   | ($)                        |   |   | ($)    |   |
| Harry E. Hosmer (2) |   | $                                            | 398,385 |   |         | $      | 0      |          |   | $      | 0                          |   |   | $      | 5,447  |   |   | $ | 403,832 |   |
| Gary Grinsfelder    |   | $                                            | 31,250  |   |         | $      | 0      |          |   | $      | 0                          |   |   |   | 0      |   |   | $ | 31,250 |   |
| Ronald Buck         |   | $                                            | 0       |   |         | $      | 0      |          |   | $      | 0                          |   |   |   | 0      |   |   | $ | 0 |   |
| Ronald Verdier      |   | $                                            | 25,000  |   |         | $      | 0      |          |   | $      | 0                          |   |   |   | 0      |   |   | $ | 25,000 |   |

| (1)   | Other compensation paid to Harry E. Hosmer in 2016 consisted of payments for medical and dental insurance coverage. |
|-----------------|---------------------------------------------------------------------------------------------------------------------|

| (2)   | Harry E. Hosmer’s compensation in 2016 includes cash payments of $73,317 and compensation of $325,068, which was paid by the issuance of 889,192 shares of Royale’s common stock.  The stock was valued at the closing market prices on the dates immediately preceding their issuance. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| i) | each person who is known by Royale to own beneficially more than 5% of the outstanding shares of each class of equity securities; |
|----|-----------------------------------------------------------------------------------------------------------------------------------|

| ii) | each director of Royale Energy; and |
|-----|-------------------------------------|

| iii) | all directors and officers of Royale as a group.  Except pursuant to applicable community property laws and except as otherwise indicated, each shareholder identified in the table possesses sole voting and investment power with respect to its or his shares.  The holdings reported are based on reports filed with the Securities and Exchange Commission and the Company by the officers, directors and 5% shareholders pursuant to Section 16 of the Securities Exchange Act of 1934. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  Shareholder (1)                 |   | Number (2) |      |   | Percent |   |
|---------------------------------------|--------|------------|-----------|--------|---------|--------|
|                                  |   |       |      |   |    |   |
| Harry E. Hosmer, (2) (3)              |   |       | 1,569,319 |   |    |   | 7.187 | % |
|                                  |   |       |      |   |    |   |   |   |
| Donald H. Hosmer, (2) (3)             |   |       | 1,495,864 |   |    |   | 6.850 | % |
|                                  |   |       |      |   |    |   |   |   |
| Stephen M. Hosmer, (2) (3) (4)        |   |       | 1,378,229 |   |    |   | 6.306 | % |
|                                  |   |       |      |   |    |   |   |   |
| Ronald L. Buck (5)                    |   |       | 84,688    |   |    |   | 0.388 | % |
|                                  |   |       |      |   |    |   |   |   |
| Jonathan Gregory, (2)                 |   |       | 460,267   |   |    |   | 2.108 | % |
|                                  |   |       |      |   |    |   |   |   |
| Gary Grinsfelder, (2)                 |   |       | 146,093   |   |    |   | 0.669 | % |
|                                  |   |       |      |   |    |   |   |   |
| Ronald Verdier (6)                    |   |       | 51,257    |   |    |   | 0.235 | % |
|                                  |   |       |      |   |    |   |   |   |
| All officers and directors as a group |   |       | 5,185,717 |   |    |   | 23.640 | % |

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|                | Year |   | # of fractional interests |   |   | Amount |   |
|----------------|------|--------|---------------------------|--------|--------|--------|--------|
| Donald Hosmer  | 2016 |   |                      | 1      |   |   | $      | 1,556 |   |
|                | 2015 |   |                      | 2      |   |   | $      | 3,143 |   |
|                | 2014 |   |                      | 4      |   |   | $      | 18,692 |   |
| Stephen Hosmer | 2016 |   |                      | 1      |   |   | $      | 1,556 |   |
|                | 2015 |   |                      | 4      |   |   | $      | 4,389 |   |
|                | 2014 |   |                      | 4      |   |   | $      | 7,714 |   |
| Hosmer Trust   | 2016 |   |                      | 1      |   |   | $      | 1,556 |   |
|                | 2015 |   |                      | 4      |   |   | $      | 5,633 |   |
|                | 2014 |   |                      | 3      |   |   | $      | 9,985 |   |

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|               |   | 2016   |    |   | 2015   |   |
|--------------------|--------|--------|---------|--------|--------|--------|
| Audit fees (1)     |   | $      | 139,413 |   |   | $      | 121,258 |   |
| Tax fees (2)       |   |   | -       |   |   |   | - |   |
| All other fees (3) |   | $      | 18,638  |   |   | $      | 54,638 |   |
| Total              |   | $      | 158,051 |   |   | $      | 175,896 |   |

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| · | should not be treated as categorical statements of fact, but rather as a way of allocating the risk among the parties if those statements prove to be inaccurate;                                      |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                   |
| · | have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; |
|   |                                                                                                                                                                                                   |
| · | may apply standards of materiality in a way that is different from the way investors may view materiality; and                                                                                         |
|   |                                                                                                                                                                                                   |
| · | were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.                                |
| 1.   | Financial Statements.  See Index to Financial Statements, page F-1 |
|----------------|------------------------------------------------------------------------------|
| 2.   | Schedules.  Supplemental Information About Oil and Gas Producing Activities (Unaudited) begins on page F-22. |
|----------------|------------------------------------------------------------------------------------------------------------------------|
| 3.   | Exhibits.  Certain of the exhibits listed in the following index are incorporated by reference. |
|----------------|-----------------------------------------------------------------------------------------------------------|

| 2.1      | Amended and Restated Agreement and Plan of Merger among Royale Energy, Inc., Royale Energy Holdings, Inc., Royale Merger Sub, Inc., Matrix Merger Sub, Inc., and Matrix Oil Management Corporation, incorporated by reference to Exhibit 2.1, Annex A to Royale Energy’s Registration Statement on Form S-4 filed February 14, 2017. |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.2      | Form of Preferred Exchange Agreement with the holders of all of the Matrix Preferred Interests, incorporated by reference to Exhibit 2.2, Annex B to Royale Energy’s Registration Statement on Form S-4 filed February 14, 2017.                                                                                                     |
| 2.3      | Form of LP Exchange Agreement between Royale Energy, Inc., Royale Energy Holdings, Inc., and holders of LP Interests of Matrix Investments, L.P. other than Preferred LP Interests, incorporated by reference to Exhibit 2.3, Annex C to Royale Energy’s Registration Statement on Form S-4 filed February 14, 2017.                 |
| 2.4      | Form of LP Exchange Agreement between Royale Energy, Inc., Royale Energy Holdings, Inc., and holders of LP Interests of Matrix Las Cienegas Limited Partnership, incorporated by reference to Exhibit 2.4, Annex D to Royale Energy’s Registration Statement on Form S-4 filed February 14, 2017.                                    |
| 2.5      | Form of LP Exchange Agreement between Royale Energy, Inc., Royale Energy Holdings, Inc., and holders of all LP Interests of Matrix Permian Investments, L.P. , incorporated by reference to Exhibit 2.5, Annex E to Royale Energy’s Registration Statement on Form S-4 filed February 14, 2017.                                      |
| 2.6      | Form of Matrix Operator Stock Exchange Agreement between Royale Energy, Inc., Royale Energy Holdings, Inc., and the holders of all outstanding common stock of Matrix Oil Corporation, incorporated by reference to Exhibit 2.6, Annex F to Royale Energy’s Registration Statement on Form S-4 filed February 14, 2017.              |
| 2.7      | Form of Section 351 Plan of Merger and Exchange, incorporated by reference to Exhibit 2.7, Annex G to Royale Energy’s Registration Statement on Form S-4 filed February 14, 2017.                                                                                                                                                    |
| 2.8      | This Amendment No. 1 to the Amended and Restated Agreement and Plan of Merger dated March 30, 2017, incorporated by reference to Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                    |
| 3.1      | Restated Articles of Incorporation of Royale Energy, Inc., incorporated by reference to Exhibit 3.1 of Royale Energy’s Form 10-Q filed August 14, 2009.                                                                                                                                                                              |
| 3.2      | Amended and Restated Bylaws of Royale Energy, Inc., incorporated by reference to Exhibit 3.2 of Royale Energy’s Form 10-K filed March 27, 2009.                                                                                                                                                                                      |
| 21.1     | Subsidiaries, incorporated by reference to Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                                                          |
| 23.1     | Consent of SingerLewak L.L.P., incorporated by reference to Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                                         |
| 31.1     | Rule 13a-14(a), 115d-14(a) Certification, filed herewith.                                                                                                                                                                                                                                                                                  |
| 31.2     | Rule 13a-14(a), 115d-14(a) Certification, filed herewith.                                                                                                                                                                                                                                                                                  |
| 31.3     | Rule 13a-14(a), 115d-14(a) Certification, filed herewith.                                                                                                                                                                                                                                                                                  |
| 32.1     | Section 1350 Certification, filed herewith.                                                                                                                                                                                                                                                                                                |
| 32.2     | Section 1350 Certification, filed herewith.                                                                                                                                                                                                                                                                                                |
| 32.3     | Section 1350 Certification, filed herewith.                                                                                                                                                                                                                                                                                                |
| 99.1     | Report of Netherland Sewell & Associates, Inc., incorporated by reference to Royale Energy’s Amendment to the Annual Report on Form 10-K/A filed April 4, 2017.                                                                                                                                                                  |
| 101.INS* | XBRL Instance Document , previously filed with Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                                                      |
| 101.SCH* | XBRL Taxonomy Extension Schema , previously filed with Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                                              |
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase , previously filed with Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                                |
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase , previously filed with Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                                 |
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase , previously filed with Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                                      |
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase , previously filed with Royale Energy’s Annual Report on Form 10-K filed March 31, 2017.                                                                                                                                                                                          |

----

Table of Contents

|                 |   | Royale Energy, Inc.                                   |
|----------------------|--------|-------------------------------------------------------|
|                 |   |                                                  |
| Date: April 28, 2017 |   | /s/ Jonathan Gregory                                  |
|                 |   | Jonathan Gregory                                      |
|                 |   | Chief Executive Officer (Principal Executive Officer) |
| Date: April 28, 2017 |   | /s/ Stephen M. Hosmer                                        |
|----------------------|--------|--------------------------------------------------------------|
|                 |   | Stephen M. Hosmer                                            |
|                 |   | Chief Financial Officer (Principal Accounting Officer)  |

----

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| REPORT OF SINGERLEWAK LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-2    |
|--------------------------------------------------------------------------|--------|
|                                                                     |   |
| BALANCE SHEETS                                                           | F-3    |
|                                                                     |   |
| STATEMENTS OF COMPREHENSIVE LOSS                                         | F-5    |
|                                                                     |   |
| STATEMENTS OF STOCKHOLDERS’ DEFICIT                                | F-6    |
|                                                                     |   |
| STATEMENTS OF CASH FLOWS                                                 | F-7    |
|                                                                     |   |
| NOTES TO FINANCIAL STATEMENTS                                            | F-8    |
|                                                                     |   |
| SUPPLEMENTAL INFORMATION ABOUT OIL AND GAS PRODUCING ACTIVITIES          | F-22   |

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|                                                                                                  |   | 2016   |      |   | 2015   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                                  |   |   |      |   |   |   |
| ASSETS                                                                                                |   |
| Current Assets:                                                                                       |   |   |      |   |   |   |
| Cash                                                                                                  |   | $      | 4,994,598 |   |   | $      | 3,763,819 |   |
| Other Receivables, net                                                                                |   |   | 676,647   |   |   |   | 381,192 |   |
| Revenue Receivables                                                                                   |   |   | 303,528   |   |   |   | 147,936 |   |
| Prepaid Expenses                                                                                      |   |   | 63,308    |   |   |   | 114,036 |   |
|                                                                                                  |   |   |      |   |   |   |   |   |
| Total Current Assets                                                                                  |   |   | 6,038,081 |   |   |   | 4,406,983 |   |
|                                                                                                  |   |   |      |   |   |   |   |   |
| Other Assets                                                                                          |   |   | 610,779   |   |   |   | 730,844 |   |
|                                                                                                  |   |   |      |   |   |   |   |   |
| Oil And Gas Properties (Successful Efforts Basis), Real Property and Equipment and Fixtures, net |   |   | 1,733,424 |   |   |   | 6,532,478 |   |
|                                                                                                  |   |   |      |   |   |   |   |   |
| Total Assets                                                                                          |   | $      | 8,382,284 |   |   | $      | 11,670,305 |   |

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|                                                                                                                                                                                     |   | 2016   |        |   | 2015   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                                                                                                                                                     |   |   |        |   |   |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                                    |   |
| Current Liabilities:                                                                                                                                                                     |   |   |        |   |   |   |
| Accounts Payable and Accrued Expenses                                                                                                                                                    |   | $      | 2,469,245   |   |   | $      | 2,937,226 |   |
| Cash Advances on Pending Transactions                                                                                                                                                    |   |   | 1,580,000   |   |   |   | - |   |
| Current Portion of Long-Term Debt                                                                                                                                                        |   |   | -           |   |   |   | 30,528 |   |
| Deferred Drilling Obligations                                                                                                                                                            |   |   | 7,894,001   |   |   |   | 8,415,528 |   |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Total Current Liabilities                                                                                                                                                                |   |   | 11,943,246  |   |   |   | 11,383,282 |   |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Noncurrent Liabilities:                                                                                                                                                                  |   |   |        |   |   |   |   |   |
| Asset Retirement Obligation                                                                                                                                                              |   |   | 952,110     |   |   |   | 1,096,179 |   |
| Note Payable, less current portion                                                                                                                                                       |   |   | -           |   |   |   | 1,416,325 |   |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Total Noncurrent Liabilities                                                                                                                                                             |   |   | 952,110     |   |   |   | 2,512,504 |   |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Total Liabilities                                                                                                                                                                        |   |   | 12,895,356  |   |   |   | 13,895,786 |   |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Stockholders' Deficit:                                                                                                                                                                   |   |   |        |   |   |   |   |   |
| Convertible Preferred Stock, Series AA, No Par Value, 147,500 Shares Authorized;  0 and 46,662 Shares Issued and Outstanding, at December 31, 2016 and 2015, Respectively      |   |   | -           |   |   |   | 136,149 |   |
| Common Stock, No Par Value, 30,000,000  Shares Authorized; 21,836,033 and 16,396,579 Shares Issued and Outstanding, at December 31, 2016 and 2015, respectively |   |   | 41,265,449  |   |   |   | 39,272,429 |   |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Accumulated Deficit                                                                                                                                                                      |   |   | (45,778,521 | )      |   |   | (41,634,059 | ) |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Total Stockholders' Deficit                                                                                                                                                              |   |   | (4,513,072  | )      |   |   | (2,225,481 | ) |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
|                                                                                                                                                                                     |   |   |        |   |   |   |   |   |
| Total Liabilities and Stockholders' Deficit                                                                                                                                              |   | $      | 8,382,284   |   |   | $      | 11,670,305 |   |

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|                                                                     |   | 2016   |       |   | 2015   |   |
|--------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Revenues:                                                                |   |   |       |   |   |   |
| Sale of Oil and Gas                                                      |   | $      | 538,631    |   |   | $      | 1,018,928 |   |
| Supervisory Fees and Other                                               |   |   | 675,208    |   |   |   | 694,160 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Total Revenues                                                           |   |   | 1,213,839  |   |   |   | 1,713,088 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Costs and Expenses:                                                      |   |   |       |   |   |   |   |   |
| General and Administrative                                               |   |   | 2,614,502  |   |   |   | 3,181,571 |   |
| Lease Operating                                                          |   |   | 594,241    |   |   |   | 1,000,769 |   |
| Delay Rentals                                                            |   |   | -          |   |   |   | 448,313 |   |
| Lease Impairment                                                         |   |   | 2,071,849  |   |   |   | 424,163 |   |
| Well Equipment Write Down                                                |   |   | 19,151     |   |   |   | 60,960 |   |
| Bad Debt Expense                                                         |   |   | -          |   |   |   | 536,538 |   |
| Legal and Accounting                                                     |   |   | 627,577    |   |   |   | 558,471 |   |
| Marketing                                                                |   |   | 294,522    |   |   |   | 326,143 |   |
| Depreciation, Depletion and Amortization                                 |   |   | 283,874    |   |   |   | 400,813 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Total Costs and Expenses                                                 |   |   | 6,505,716  |   |   |   | 6,937,741 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Gain on Turnkey Drilling Programs                                   |   |   | 460,210    |   |   |   | 2,330,969 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Loss from Operations                                                     |   |   | (4,831,667 | )      |   |   | (2,893,684 | ) |
|                                                                     |   |   |       |   |   |   |   |   |
| Other Income (Expense):                                                  |   |   |       |   |   |   |   |   |
| Interest Expense                                                         |   |   | (114,159   | )      |   |   | (86,088 | ) |
| Gain on Sale of Assets                                                   |   |   | 483,394    |   |   |   | 968,956 |   |
| Gain on Settlement of Accounts Payable                                   |   |   | 341,751    |   |   |   | - |   |
| Loss on Disposal of Assets                                               |   |   | (23,781    | )      |   |   | - |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Loss Before Income Tax Expense                                           |   |   | (4,144,462 | )      |   |   | (2,010,816 | ) |
|                                                                     |   |   |       |   |   |   |   |   |
| Provision for Income Taxes                                               |   |   | -          |   |   |   | - |   |
| Net Loss                                                            |   |   | (4,144,462 | )      |   |   | (2,010,816 | ) |
|                                                                     |   |   |       |   |   |   |   |   |
| Basic Loss Per Share                                                     |   |   | (0.22      | )      |   |   | (0.13 | ) |
|                                                                     |   |   |       |   |   |   |   |   |
| Diluted Loss Per Share                                              |   |   | (0.22      | )      |   |   | (0.13 | ) |
|                                                                     |   |   |       |   |   |   |   |   |
| Other Comprehensive Income (Loss)                                        |   |   |       |   |   |   |   |   |
| Unrealized Loss on Equity Securities                                     |   |   | -          |   |   |   | - |   |
| Less: Reclassification Adjustment for Losses Included in Net Income |   |   | -          |   |   |   | (6,503 | ) |
|                                                                     |   |   |       |   |   |   |   |   |
| Other Comprehensive Gain (Loss) before tax                               |   |   | -          |   |   |   | 6,503 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Other Comprehensive Gain (Loss), net of tax                              |   |   | -          |   |   |   | 6,503 |   |
|                                                                     |   |   |       |   |   |   |   |   |
| Comprehensive Loss                                                  |   |   | (4,144,462 | )      |   |   | (2,004,313 | ) |

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|                                                                                                |   |                                  |       |   |      |   |       | Preferred Stock                       |   |   |                                       |   |   |   |     |   |   |   |
|-----------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|--------|-----------|--------|------------|---------------------------------------|--------|--------|--------------------------------------------|--------|--------|--------|----------|--------|--------|--------|
|                                                                                                |   | Common Stock                          |       |   | Series AA |   |       |                                  |   |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   |   |     |
|                                                                                                |   | Number of SharesIssued andOutstanding |       |   |      |   |       | Number of SharesIssued andOutstanding |   |   |                                       |   |   |   |     |   |   |   |
|                                                                                                |   |                                  |       |   |      |   |       | AccumulatedDeficit                    |   |   |                                       |   |
|                                                                                                |   | Amount                                |       |   | Amount    |   |       |                                  |   | Total  |                                       |
| Balance,  December 31, 2014                                                               |   |                                  | 14,945,789 |   |      | $      | 38,352,370 |                                  |   |   | 46,662                                     |   |   | $      | 136,149  |   |   | $      | (39,623,243 | ) |   | $ | (6,503 | ) |   | $ | (1,141,227 | ) |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock PrivatePlacement Sale                                                                  |   |                                  | 701,397    |   |      | $      | 490,116    |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   | 490,116 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Director’s Stock Option Grant                                                                 |   |                                  |       |   |      |   | 86,877     |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   | 86,877 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock RDO Private Placement Sale                                                             |   |                                  | 485,486    |   |      |   | 199,195    |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   | 199,195 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock Issued to Executives in lieu ofCompensation                                            |   |                                  | 263,907    |   |      |   | 143,871    |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   | 143,871 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available for Sale Securities – Reclassification Adjustment for Losses Included in Net Income |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   | 6,503 |   |   |   | 6,503 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                                                                            |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   | (2,010,816 | ) |   |   |   |   |   |   | (2,010,816 | ) |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,  December 31, 2015                                                               |   |                                  | 16,396,579 |   |      | $      | 39,272,429 |                                  |   |   | 46,662                                     |   |   | $      | 136,149  |   |   | $      | (41,634,059 | ) |   | $ | - |   |   | $ | (2,225,481 | ) |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock Private Placement Sale                                                                 |   |                                  | 3,027,070  |   |      |   | 1,160,885  |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   | 1,160,885 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Stock Issued to Executives in lieu of Compensation                                           |   |                                  | 2,335,461  |   |      |   | 645,986    |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   | 645,986 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of Common Stock in Settlement of AP                                                        |   |                                  | 76,923     |   |      |   | 50,000     |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   | 50,000 |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred Series AA Converted to Common Stock                                                       |   |                                  | 23,331     |   |      |   | 136,149    |                                  |   |   | (46,662                                    | )      |   |   | (136,149 | )      |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                                                                            |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   | (4,144,462 | ) |   |   |   |   |   |   | (4,144,462 | ) |
|                                                                                                |   |                                  |       |   |      |   |       |                                  |   |   |                                       |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,  December 31, 2016                                                               |   |                                  | 21,859,364 |   |      | $      | 41,265,449 |                                  |   |   | -                                          |   |   | $      | -        |   |   | $      | (45,778,521 | ) |   | $ | - |   |   | $ | (4,513,072 | ) |

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|                                                                        |   | 2016   |       |   | 2015   |   |
|-----------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                        |   |   |       |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                       |   |   |       |   |   |   |
| Net (Loss)                                                                  |   | $      | (4,144,462 | )      |   | $      | (2,010,816 | ) |
| Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities: |   |   |       |   |   |   |   |   |
| Depreciation, Depletion, and Amortization                                   |   |   | 283,874    |   |   |   | 400,813 |   |
| Lease Impairment                                                            |   |   | 2,071,849  |   |   |   | 424,163 |   |
| Gain on Sale of Assets                                                      |   |   | (483,394   | )      |   |   | (968,956 | ) |
| Gain on Turnkey Drilling Programs                                           |   |   | (460,210   | )      |   |   | (2,330,969 | ) |
| Gain on Settlement of Accounts Payable                                      |   |   | (341,751   | )      |   |   | - |   |
| Loss on Disposal of Assets                                                  |   |   | 23,781     |   |   |   | - |   |
| Bad Debt Expense                                                            |   |   | -          |   |   |   | 536,538 |   |
| Stock-Based Compensation                                                    |   |   | 645,986    |   |   |   | 230,749 |   |
| Realized Loss on Equity Securities                                          |   |   | -          |   |   |   | 6,503 |   |
| Well Equipment and Other Assets Write Down                                  |   |   | 19,151     |   |   |   | 60,960 |   |
| (Increase) Decrease in:                                                     |   |   |       |   |   |   |   |   |
| Other & Revenue Receivables                                             |   |   | (451,047   | )      |   |   | 1,187,810 |   |
| Prepaid Expenses and Other Assets                                           |   |   | 151,642    |   |   |   | (236,615 | ) |
| Increase (Decrease) in:                                                     |   |   |       |   |   |   |   |   |
| Accounts Payable and Accrued Expenses                                       |   |   | (587,050   | )      |   |   | (1,273,360 | ) |
| Net Cash Used by Operating Activities                                       |   |   | (3,271,631 | )      |   |   | (3,973,180 | ) |
|                                                                        |   |   |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                       |   |   |       |   |   |   |   |   |
| Expenditures for Oil And Gas Properties                                     |   |   | (2,058,357 | )      |   |   | (3,753,134 | ) |
| Proceeds from Turnkey Drilling Programs                                     |   |   | 3,980,499  |   |   |   | 5,433,476 |   |
| Proceeds from Sale of Assets                                                |   |   | 1,286,236  |   |   |   | 2,334,537 |   |
| Net Cash Provided by Investing Activities                                   |   |   | 3,208,378  |   |   |   | 4,014,879 |   |
|                                                                        |   |   |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                       |   |   |       |   |   |   |   |   |
| Cash Advances From Investors                                                |   |   | 1,580,000  |   |   |   | - |   |
| Principal Payments on Long-Term Debt                                        |   |   | (1,446,853 | )      |   |   | (29,031 | ) |
| Proceeds from Issuance of Common Stock                                      |   |   | 1,160,885  |   |   |   | 689,310 |   |
|                                                                        |   |   |       |   |   |   |   |   |
| Net Cash Provided by Financing Activities                                   |   |   | 1,294,032  |   |   |   | 660,279 |   |
| Net Increase in Cash                                                        |   |   | 1,230,779  |   |   |   | 701,978 |   |
|                                                                        |   |   |       |   |   |   |   |   |
| Cash at Beginning of Year                                                   |   |   | 3,763,819  |   |   |   | 3,061,841 |   |
|                                                                        |   |   |       |   |   |   |   |   |
| Cash at End of Year                                                         |   | $      | 4,994,598  |   |   | $      | 3,763,819 |   |
|                                                                        |   |   |       |   |   |   |   |   |
| Cash Paid for Interest                                                      |   | $      | 48,325     |   |   |   | 86,088 |   |
|                                                                        |   |   |       |   |   |   |   |   |
| Cash Paid for Taxes                                                         |   | $      | 2,100      |   |   |   | 1,000 |   |
|                                                                        |   |   |       |   |   |   |   |   |
| Supplemental Schedule of Non-Cash Investing and Financing Transactions:     |   |   |       |   |   |   |   |   |
| Conversion of Series AA Stock to Common Stock                               |   | $      | 136,149    |   |   | $      | - |   |
| Reclassification Adjustment for Losses Included in Net Income               |   | $      | -          |   |   | $      | (6,503 | ) |
| Warrants Issued with Common Stock                                           |   | $      | 156,205    |   |   | $      | - |   |

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|                                            |   | For the Year Ended December 31, 2016 |       |
|-------------------------------------------------|--------|--------------------------------------|------------|
|                                            |   | Loss(Numerator)                      |       |   | Shares(Denominator) |   |   | Per-ShareAmount |   |
| Basic Loss Per Share:                           |   |                                 |       |   |   |   |   |   |   |
| Net loss available to common stock              |   | $                                    | (4,144,462 | ) |   |   | 19,185,896 |   |   | $ | (0.22 | ) |
|                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Loss Per Share:                                 |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities and stock options |   |                                 |       |   |   |   | - |   |   | $ | - |   |
|                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Net loss available to common stock              |   | $                                    | (4,144,462 | ) |   |   | 19,185,896 |   |   | $ | (0.22 | ) |
|                                            |   | For the Year Ended December 31, 2015 |       |
|-------------------------------------------------|--------|--------------------------------------|------------|
|                                            |   | Loss(Numerator)                      |       |   | Shares(Denominator) |   |   | Per-ShareAmount |   |
| Basic Loss Per Share:                           |   |                                 |       |   |   |   |   |   |   |
| Net income available to common stock            |   | $                                    | (2,010,816 | ) |   |   | 15,194,534 |   |   | $ | (0.13 | ) |
|                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Loss Per Share:                                 |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities and stock options |   |                                 |       |   |   |   | - |   |   | $ | - |   |
|                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Net loss available to common stock              |   | $                                    | (2,010,816 | ) |   |   | 15,194,534 |   |   | $ | (0.13 | ) |

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|   |   | Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|
|   |   | Level 2: Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. Level 3: Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                      |   | 2016   |       |   | 2015   |   |
|-----------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Oil and Gas                                               |   |   |       |   |   |   |
|                                                      |   |   |       |   |   |   |
| Producing properties, including intangible drilling costs |   | $      | 3,755,705  |   |   | $      | 5,217,637 |   |
| Undeveloped properties                                    |   |   | 307,158    |   |   |   | 2,381,564 |   |
| Lease and well equipment                                  |   |   | 4,128,178  |   |   |   | 4,339,122 |   |
|                                                      |   |   | 8,191,041  |   |   |   | 11,938,323 |   |
| Accumulated depletion, depreciation and amortization      |   |   | (6,468,279 | )      |   |   | (7,656,731 | ) |
|                                                      |   |   |       |   |   |   |   |   |
|                                                      |   | $      | 1,722,762  |   |   | $      | 4,281,592 |   |
| Commercial and Other                          |   | 2016   |       |   | 2015   |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                          |   |   |       |   |   |   |
| Real estate, including furniture and fixtures |   | $      | -          |   |   | $      | 2,266,050 |   |
| Vehicles                                      |   |   | 40,061     |   |   |   | 118,061 |   |
| Furniture and equipment                       |   |   | 1,089,648  |   |   |   | 1,120,760 |   |
|                                          |   |   | 1,129,709  |   |   |   | 3,504,871 |   |
| Accumulated depreciation                      |   |   | (1,119,047 | )      |   |   | (1,253,985 | ) |
|                                          |   |   | 10,662     |   |   |   | 2,250,886 |   |
|                                          |   | $      | 1,733,424  |   |   | $      | 6,532,478 |   |

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|                  |   | 2016   |      |   | 2015   |   |
|-----------------------|--------|--------|-----------|--------|--------|--------|
|                  |   |   |      |   |   |   |
| Acquisition - Proved  |   | $      | -         |   |   |   | 69,446 |   |
| Acquisition- Unproved |   | $      | -         |   |   |   | 113,749 |   |
| Development           |   | $      | 1,210,261 |   |   |   | 672,651 |   |
| Exploration           |   | $      | 2,603,209 |   |   |   | 1,845,585 |   |
|                                                                                                    |   | 12 Months Ended December 31, |   |
|---------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                                                    |   | 2016                         |   |   | 2015 |   |
| Beginning balance at January 1                                                                          |   | $                            | -      |   |   | $ | - |   |
|                                                                                                    |   |                         |   |   |   |   |   |   |
| Additions to capitalized exploratory well costs  pending the determination of proved reserves |   | $                            | -      |   |   | $ | 85,640 |   |
|                                                                                                    |   |                         |   |   |   |   |   |   |
| Reclassifications to wells, facilities, and equipment based on the determination of proved reserves     |   | $                            | -      |   |   | $ | (85,640 | ) |
|                                                                                                    |   |                         |   |   |   |   |   |   |
| Ending balance at December 31                                                                           |   | $                            | -      |   |   | $ | - |   |
|                                                            |   | 2016   |       |   | 2015   |   |
|-----------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                            |   |   |       |   |   |   |
| Oil and gas sales                                               |   | $      | 538,631    |   |   |   | 1,018,928 |   |
| Production related costs                                        |   |   | (594,241   | )      |   |   | (1,449,082 | ) |
| Lease Impairment                                                |   |   | (2,071,849 | )      |   |   | (424,163 | ) |
| Depreciation, depletion and amortization                        |   |   | (283,874   | )      |   |   | (400,813 | ) |
|                                                            |   |   |       |   |   |   |   |   |
| Results of operations from producing and exploration activities |   | $      | (2,411,333 | )      |   |   | (1,255,130 | ) |
| Income Taxes (Benefit)                                          |   |   | -          |   |   |   | - |   |
|                                                            |   |   |       |   |   |   |   |   |
| Net Results                                                     |   | $      | (2,411,333 | )      |   |   | (1,255,130 | ) |

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|                                               |   | 2016   |      |   | 2015   |   |
|----------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Asset retirement obligation, Beginning of the year |   | $      | 1,096,179 |   |   | $      | 804,206 |   |
| Liabilities incurred during the period             |   |   | 90,000    |   |   |   | 321,560 |   |
| Settlements                                        |   |   | (10,498   | )      |   |   | (68,360 | ) |
| Sales                                              |   |   | (229,465  | )      |   |   | - |   |
| Accretion expense                                  |   |   | 5,894     |   |   |   | 38,773 |   |
|                                               |   |   |      |   |   |   |   |   |
| Asset retirement obligation, End of year           |   | $      | 952,110   |   |   | $      | 1,096,179 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2016   |   |   | 2015   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |
| On December 24, 2013, Royale Energy, Inc. entered into an agreement between the Company, as buyer, and North Island Financial Credit Union as seller, for the purchase of commercial property in San Diego, California, for a purchase price of $2,000,000, of which $500,000 was paid in cash on the date of purchase, and $1,500,000 was borrowed from AmericanWest Bank, NA, with a note secured by the property being purchased.  The note carries an interest rate of 5.75% until paid in full.  Royale will pay this loan in 119 regular payments of $9,525 each and one balloon payment estimated at $1,150,435. Royale’s first payment was due February 1, 2014, and all subsequent payments are due on the same day of each month after that. Royale’s final payment will be due on January 1, 2024, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Stephen M Hosmer, President, CFO is named as a personal guarantor of the loan. The loan agreement contains certain covenants that, among other things, Royale must maintain a ratio of EBITDA-Debt Service Coverage in excess of 1.50 to 1.00.  At December 31, 2015, Royale was not in compliance with this covenant, but obtained a forbearance from the bank from terms of that covenant to May 26, 2016.  In June 2016, the sale of the building was completed and the related principal and interest payments were paid in full. |   | $      | -      |   |   | $      | 1,446,853 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Total Long Term Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $      | -      |   |   | $      | 1,446,853 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Less Current Maturity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | -      |   |   | $      | 30,528 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Long Term Debt Less Current Portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $      | -      |   |   | $      | 1,416,325 |   |

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|                                    |   | 2016   |        |   | 2015   |   |
|-----------------------------------------|--------|--------|-------------|--------|--------|--------|
| Deferred Tax Assets (Liabilities):      |   |   |        |   |   |   |
| Statutory Depletion Carry Forward       |   | $      | 474,250     |   |   | $      | 555,093 |   |
| Net Operating Loss                      |   |   | 5,392,208   |   |   |   | 4,651,428 |   |
| Other                                   |   |   | 1,255,372   |   |   |   | 1,247,829 |   |
| Share-Based Compensation                |   |   | 104,388     |   |   |   | 96,536 |   |
| Capital Loss / AMT Credit Carry Forward |   |   | 18,915      |   |   |   | 18,915 |   |
| Charitable Contributions Carry Forward  |   |   | 13,102      |   |   |   | 21,644 |   |
| Allowance for Doubtful Accounts         |   |   | 886,056     |   |   |   | 887,418 |   |
| Oil and Gas Properties and Fixed Assets |   |   | 5,922,031   |   |   |   | 4,980,324 |   |
|                                    |   | $      | 14,066,322  |   |   | $      | 12,459,187 |   |
| Valuation Allowance                     |   |   | (14,066,322 | )      |   |   | (12,459,187 | ) |
| Net Deferred Tax Asset                  |   | $      | -           |   |   | $      | - |   |
|                                            |   | 2016   |       |   | 2015   |   |
|-------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                            |   |   |       |   |   |   |
| Tax (benefit) computed at statutory rate of 34% |   | $      | (1,400,617 | )      |   | $      | (683,678 | ) |
|                                            |   |   |       |   |   |   |   |   |
| Increase (decrease) in taxes resulting from:    |   |   |       |   |   |   |   |   |
|                                            |   |   |       |   |   |   |   |   |
| State tax / percentage depletion / other        |   |   | 937        |   |   |   | 957 |   |
| Other non-deductible expenses                   |   |   | 624        |   |   |   | 1,478 |   |
| Change in valuation allowance                   |   |   | 1,399,056  |   |   |   | 681,243 |   |
| Provision (benefit)                             |   | $      | -          |   |   | $      | - |   |

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|                                             |   | 2016   |   |   | 2015   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                             |   |   |   |   |   |   |
| Current tax provision (benefit) – federal  |   | $      | -      |   |   |   | - |   |
| Current tax provision (benefit) – state    |   |   | -      |   |   |   | - |   |
| Deferred tax provision (benefit) – federal |   |   | -      |   |   |   | - |   |
| Deferred tax provision (benefit) – state   |   |   | -      |   |   |   | - |   |
|                                             |   |   |   |   |   |   |   |   |
| Total provision (benefit)                        |   | $      | -      |   |   |   | - |   |

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| Year Ended   |   |   |    |
|--------------|--------|--------|---------|
| December 31, |   |   |    |
|         |   |   |    |
| 2017         |   | $      | 97,266  |   |
| 2018         |   | $      | 119,286 |   |
| 2019         |   | $      | 123,251 |   |
| 2020         |   | $      | 127,355 |   |
| 2021         |   | $      | 131,602 |   |
| Thereafter   |   | $      | 13,802  |   |
|         |   |   |    |   |
|  Total  |   | $      | 612,562 |   |

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|                                                           |   | 2016   |    |      | 2015   |   |
|----------------------------------------------------------------|--------|--------|---------|-----------|--------|--------|
|                                                           |   |   |    | Weighted- |   |   |   |   | Weighted- |   |
|                                                           |   |   |    | Average   |   |   |   |   | Average |   |
|                                                           |   |   |    | Exercise  |   |   |   |   | Exercise |   |
|                                                           |   | Shares |    |      | Price  |   |   | Shares |   |   | Price |   |
|                                                           |   |   |    |      |   |   |   |   |
| Options                                                        |   |   |    |      |   |   |   |   |
| Outstanding and Exercisable at Beginning of Year               |   |   | 100,000 |      |   | $      | 5.00 |   |   |   | 281,308 |   |   | $ | 3.25 |   |
| Granted or Vested                                              |   |   | -       |      |   |   | - |   |   |   | 100,000 |   |   |   | 5.00 |   |
| Exercised                                                      |   |   | -       |      |   |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                                                      |   |   | -       |      |   |   | - |   |   |   | (281,308 | ) |   |   | - |   |
|                                                           |   |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Options Outstanding and Exercisable at Year End                |   |   | 100,000 |      |   | $      | 5.00 |   |   |   | 100,000 |   |   | $ | 5.00 |   |
|                                                           |   |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average Fair Value of Options Granted During the Year |   | $      | -       |      |   |   |   |   |   | $ | - |   |   |   |   |   |
|                            |   | 2016   |   |   | 2015       |   |
|---------------------------------|--------|--------|--------|--------|------------|--------|
|                            |   |   |   |   | Weighted-  |   |   |   |   |   | Weighted- |   |
|                            |   |   |   |   | Average    |   |   |   |   |   | Average |   |
|                            |   |   |   |   | Grant-Date |   |   |   |   |   | Grant-Date |   |
|                            |   | Shares |   |   | Fair Value |   |   | Shares |   |   | Fair Value |   |
|                            |   |   |   |   |       |   |   |   |   |   |   |   |
| Non-vested Stock Options        |   |   |   |   |       |   |   |   |   |   |   |   |
| Non-vested at Beginning of Year |   |   | -      |   |       | $      | - |   |   |   | 105,000 |   |   | $ | 0.97 |   |
| Granted                         |   |   | -      |   |       |   | - |   |   |   | - |   |   |   | - |   |
| Reinstated                      |   |   | -      |   |       |   | - |   |   |   | - |   |   |   | - |   |
| Vested                          |   |   | -      |   |       |   | - |   |   |   | 90,000 |   |   |   | 0.97 |   |
| Expired or Forfeited            |   |   | -      |   |       |   | - |   |   |   | 15,000 |   |   |   | 0.97 |   |
|                            |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Non-vested at End of Year       |   |   | -      |   |       | $      | - |   |   |   | - |   |   | $ | - |   |

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|                                          |   | 2016      |   |   | 2015      |   |
|-----------------------------------------------|--------|-----------|--------|--------|-----------|--------|
|                                          |   |      |   |   |      |   |   |   |   |   |   |   |
|                                          |   | Oil (BBL) |   |   | Gas (MCF) |   |   | Oil (BBL) |   |   | Gas (MCF) |   |
| Proved developed and undeveloped reserves:    |   |      |   |   |      |   |   |   |   |   |   |   |
| Beginning of period                           |   |      | 3,600  |   |      |   | 2,510,700 |   |   |   | 1,781 |   |   |   | 4,131,806 |   |
| Revisions of previous estimates               |   |      | 2,446  |   |      |   | 74,983 |   |   |   | (178 | ) |   |   | (1,323,750 | ) |
| Production                                    |   |      | (193   | )      |      |   | (232,539 | ) |   |   | (403 | ) |   |   | (363,168 | ) |
| Extensions, discoveries and improved recovery |   |      | -      |   |      |   | 112,265 |   |   |   | - |   |   |   | 48,912 |   |
| Purchase of minerals in place                 |   |      | -      |   |      |   | - |   |   |   | 2,400 |   |   |   | 16,900 |   |
| Sales of minerals in place                    |   |      | -      |   |      |   | (450,488 | ) |   |   | - |   |   |   | - |   |
|                                          |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Proved reserves end of period                 |   |      | 5,853  |   |      |   | 2,014,921 |   |   |   | 3,600 |   |   |   | 2,510,700 |   |
|                       |   | 2016      |   |   | 2015      |   |
|----------------------------|--------|-----------|--------|--------|-----------|--------|
|                       |   |      |   |   |      |   |   |   |   |   |   |   |
|                       |   | Oil (BBL) |   |   | Gas (MCF) |   |   | Oil (BBL) |   |   | Gas (MCF) |   |
| Proved developed reserves: |   |      |   |   |      |   |   |   |   |   |   |   |
|                       |   |      |   |   |      |   |   |   |   |   |   |   |
| Beginning of period        |   |      | -      |   |      |   | 2,174,100 |   |   |   | 587 |   |   |   | 3,786,785 |   |
|                       |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| End of period              |   |      | 5,823  |   |      |   | 1,699,997 |   |   |   | - |   |   |   | 2,174,100 |   |
|                         |   | 2016      |   |   | 2015      |   |
|------------------------------|--------|-----------|--------|--------|-----------|--------|
|                         |   |      |   |   |      |   |   |   |   |   |   |   |
|                         |   | Oil (BBL) |   |   | Gas (MCF) |   |   | Oil (BBL) |   |   | Gas (MCF) |   |
| Proved undeveloped reserves: |   |      |   |   |      |   |   |   |   |   |   |   |
|                         |   |      |   |   |      |   |   |   |   |   |   |   |
| Beginning of period          |   |      | 3,600  |   |      |   | 336,600 |   |   |   | 1,194 |   |   |   | 345,021 |   |
|                         |   |      |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| End of period                |   |      | -      |   |      |   | 314,925 |   |   |   | 3,600 |   |   |   | 336,600 |   |

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| • | Estimates are made of quantities of proved reserves and the future periods during which they are expected to be produced based on year-end economic conditions.                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The estimated future production of proved reserves is priced on the basis of year-end prices.                                                                                                                       |
| • | The resulting future gross revenue streams are reduced by estimated future costs to develop and to produce proved reserves, based on year-end estimates. Estimated future development costs by year are as follows: |
| 2017       |   | $      | 467,400 |   |
|------------|--------|--------|---------|--------|
| 2018       |   |   | -       |   |
| 2019       |   |   | 34,000  |   |
| Thereafter |   |   | 55,100  |   |
|       |   |   |    |   |
| Total      |   | $      | 556,500 |   |
|                                                     |   | 2016   |       |   | 2015   |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                     |   |   |       |   |   |   |
| Future cash inflows                                      |   | $      | 5,270,400  |   |   |   | 6,962,900 |   |
| Future production costs                                  |   |   | (1,744,200 | )      |   |   | (3,066,200 | ) |
| Future development costs                                 |   |   | (556,500   | )      |   |   | (662,800 | ) |
| Future income tax expense                                |   |   | (890,910   | )      |   |   | (970,170 | ) |
|                                                     |   |   |       |   |   |   |   |   |
| Future net cash flows                                    |   |   | 2,078,790  |   |   |   | 2,263,730 |   |
|                                                     |   |   |       |   |   |   |   |   |
| 10% annual discount for estimated timing of cash flows   |   |   | (595,518   | )      |   |   | (704,014 | ) |
|                                                     |   |   |       |   |   |   |   |   |
| Standardized measure of discounted future net cash flows |   | $      | 1,483,272  |   |   |   | 1,559,716 |   |
|                                                     |   |   |       |   |   |   |   |   |
| Sales of oil and gas produced, net of production costs   |   | $      | (55,272    | )      |   |   | (155,847 | ) |
|                                                     |   |   |       |   |   |   |   |   |
| Revisions of previous quantity estimates                 |   |   | 120,833    |   |   |   | (5,089,087 | ) |
| Net changes in prices and production costs               |   |   | (253,313   | )      |   |   | (2,238,956 | ) |
| Sales of minerals in place                               |   |   | (402,900   | )      |   |   | - |   |
| Purchases of minerals in place                           |   |   | -          |   |   |   | 6,000 |   |
|                                                     |   |   |       |   |   |   |   |   |
| Extensions, discoveries and improved recovery            |   |   | 184,476    |   |   |   | 36,000 |   |
| Accretion of discount                                    |   |   | 296,970    |   |   |   | 220,000 |   |
|                                                     |   |   |       |   |   |   |   |   |
| Net change in income tax                                 |   |   | 32,762     |   |   |   | 2,166,567 |   |
|                                                     |   |   |       |   |   |   |   |   |
| Net increase (decrease)                                  |   | $      | (76,444    | )      |   |   | (5,055,323 | ) |

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| Future development cost of:   |   | 2017   |    |   | 2018   |   |   | 2019   |   |
|-------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| Proved developed reserves     |   | $      | -       |   |   | $      | -      |   |   | $ | - |   |
| Proved non-producing reserves |   |   | 124,700 |   |   |   | -      |   |   |   | 34,000 |   |
| Proved undeveloped reserves   |   |   | 342,700 |   |   |   | -      |   |   |   | - |   |
|                          |   |   |    |   |   |   |   |   |   |   |   |   |
| Total                         |   | $      | 467,400 |   |   | $      | -      |   |   | $ | 34,000 |   |
| 2016 |   | $ | 243,583 |   |
|------|--------|---|---------|--------|
| 2015 |   | $ | -       |   |
| 2014 |   | $ | 549,236 |   |