Exhibit 10.24.1



 





 


March 21, 2012


 


Greg Franklin


Osage Energy Corporation


100 Park Avenue. Suite 1040


Oklahoma City, OK 73102


 


Dear Mr. Franklin:


 


As requested
we have prepared an economic and reserve appraisal report of Proved Developed Producing (PDP-Water Flood) & Proved Behind Pipe
(BP) reserves to the interests of Osage Energy Corporation in Hopper-Osage Lease (Twin Creek Field), Osage County, Oklahoma.
A summary based on Unescalated pricing case effective December 31, 2011 is as follows:


 


	EFFECTIVE 
DATE	 	RESERVE 
TYPE	 	NET BBLS	 	 	NET MCF	 	 	FUTURE NET 
REVENUE ($)	 	 	DISCOUNTED 
FNR ($)@10%	 
	12-31-2011	 	Proved producing 
(PDP) 
(Water flood)	 	 	46,196	 	 	 	-0-	 	 	 	1,775,876	 	 	 	837,736	 
	12-31-2011	 	Proved Behind 
Pipe (BP)	 	 	66,997	 	 	 	200,980	 	 	 	5,616,240	 	 	 	4,034,002	 
	TOTAL	 	 	 	 	113,193	 	 	 	200,980	 	 	 	7,392,116	 	 	 	4,871,738	 



 


EVALUATION
METHODOLOGY


 


GENERAL:


 


Detailed
results of our evaluation for new wells is presented in the form of a summary report with One Line Well Information showing Gross/Net
Oil & Gas Production, Future Cash Flow, Lease Operating Expenses, Production taxes, Discounted Cash Flow at 10%. Individual
lease/well economic sheets provide detail economics, remaining reserves, production curves and also the location of the lease/well
and other pertinent data.


 


This
report has been prepared on a Before Income Tax basis and does not give consideration to salvage value, depletion or taxes other
than those specifically mentioned. Also no encumbrances against or debits owed on the properties have been considered. All ownership
interests, Lease Operating Expenses and product pricing have been furnished by Osage Energy Corporation.


 



    	 



    	 



    

  


ENGINEERING:


 


Oil and gas reserves were estimated
by use of production performance curves and material balance calculations where applicable. If insufficient production history
available to evaluate by curves, estimates were made by using analogous, nearby producing reservoirs, and/or volumetric calculations.
Verbal production information provided by Osage Energy Corporation is used in the evaluation. Perforated interval and proposed
BP zone interval is marked on the logs where available and log calculations were made. Drainage areas were estimated based on the
well density in the sections where wells are completed. BHP data is gathered from offset wells producing from similar reservoir.
For all the Behind Reserves, we have assumed a production start date and estimated work over costs. Reserves estimated in this
report are very subjective and should be revised up/down based on all the information including any production history after completion.
All methods used to project reserves are industry accepted petroleum reservoir evaluation methods.


 


OIL, GAS PRICING AND LEASE OPERATING
EXPENSES:


 


An
Oil Price of $90.00/BBL, Gas Price of $2.75/MCF and current Lease Operating Expenses are used in this report. Prices and Lease
Operating Expenses are not escalated.


 


Every
effort was made to forecast the best possible estimate of future producible oil and gas reserves. However, the accuracy of any
reserve estimate is a function of the quality of available data and of judgment. While reserve estimates presented in this report
arc believed to be reasonable, they should be accepted with the understanding that future operations or subsequent reservoir performance
or more accurate data received subsequent to the preparation of this report may justify a revision of these estimates either upward
or downward.


 


All
descriptions, information and other materials ("DATA") included in this report arc solely for convenience purposes and
any reliance on or use of such data is at your own risk and you should conduct your own due diligence. The Reddy Petroleum Company
and its associates make no warranties or representations, express or implied, as to the accuracy or correctness of data presented
in this report or to the quality or quantity of the hydrocarbon reserves attributed to the Behind Pipe and Incremental Reserves,
or the ability of any property to produce hydrocarbons.


 


We appreciate
the opportunity of preparing this evaluation and, if you have any questions or need additional information, please advice.


 


Respectfully submitted.


 


REDDY PETROLEUM COMPANY


 


	By:		 
	 	Raja P. Reddy	 
	 	Petroleum Consultant	 
	 	Petroleum Engineer