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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

Commission File No. 000-54162







LOGO

(Exact name of registrant as specified in its charter)







|                                |  |                    
|------------------------------- |  | -------------------
|Canada                          |  | 61-1606563         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)



|                                         |  |                                                    
|---------------------------------------- |  | ---------------------------------------------------
|1160 Eugenia Pl, Suite 100,              |  |                                                    
|Carpinteria, California USA 93013        |  | Tel: (805) 566 2900                                
|(Address of principal executive offices) |  | (Registrants telephone number,including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  | x
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes   ̈    No  x

69,834,396 shares, no par value, of the Registrants common stock were issued and outstanding as of August 9, 2012.









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INDEX



|                             |  |                                                                                       |    |  |    | 
|---------------------------- |  | ------------------------------------------------------------------------------------- | -- |  | -- | 
|PART 1FINANCIAL INFORMATION |  |                                                                                       | 3  | 
|ITEM 1.                      |  | FINANCIAL STATEMENTS (UNAUDITED)                                                      |    |  | 3  | 
|ITEM 2.                      |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS |    |  | 16 | 
|ITEM 3.                      |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |    |  | 26 | 
|ITEM 4.                      |  | CONTROLS AND PROCEDURES                                                               |    |  | 26 | 
|PART IIOTHER INFORMATION    |  |                                                                                       | 26 | 
|ITEM 1.                      |  | LEGAL PROCEEDINGS                                                                     |    |  |    | 
|ITEM 1A.                     |  | RISK FACTORS                                                                          |    |  | 26 | 
|ITEM 2.                      |  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                           |    |  | 26 | 
|ITEM 3.                      |  | DEFAULTS UPON SENIOR SECURITIES                                                       |    |  | 26 | 
|ITEM 4.                      |  | MINE SAFETY DISCLOSURES                                                               |    |  | 26 | 
|ITEM 5.                      |  | OTHER INFORMATION                                                                     |    |  | 26 | 
|ITEM 6.                      |  | EXHIBITS                                                                              |    |  | 27 | 
|SIGNATURES                   |  |                                                                                       | 28 | 



2



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PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Interim Consolidated Financial Statements of

NIMIN ENERGY CORP.

As at and for the periods ended June 30, 2012 and 2011

Expressed in US dollars



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NiMin Energy Corp.

Consolidated Statement of Net Assets as of June 30, 2012 (Liquidation Basis)

Consolidated Balance Sheet as of December 31, 2011 (Going Concern Basis)

(Expressed in U.S. dollars)



|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- |  | ----------------- | - | ----------- | -
|                                                                                                                                                      |  | June 30, 2012 |            |  | December 31, 2011 |  
|                                                                                                                                                      |  | (Unaudited)   |            |  |                   |  
|Assets                                                                                                                                                |  |               |            |  |                   |   |             |  
|Current assets:                                                                                                                                       |  |               |            |  |                   |   |             |  
|Cash and cash equivalents                                                                                                                             |  | $             | 81,950,992 |  |                   | $ | 3,811,028   |  
|Trade accounts receivable                                                                                                                             |  |               | 2,082,405  |  |                   |   | 3,131,004   |  
|Receivable from asset acquirers                                                                                                                       |  |               | 3,065,359  |  |                   |   |             |  
|Restricted investments                                                                                                                                |  |               | 3,928,002  |  |                   |   |             |  
|Prepaid expenses and well costs                                                                                                                       |  |               |            |  |                   |   | 311,922     |  
|Crude oil inventory                                                                                                                                   |  |               |            |  |                   |   | 149,553     |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Total current assets                                                                                                                                  |  |               | 91,026,758 |  |                   |   | 7,403,507   |  
|Debt issuance costs, net                                                                                                                              |  |               |            |  |                   |   | 3,497,867   |  
|Restricted investments                                                                                                                                |  |               |            |  |                   |   | 784,261     |  
|Equipment, net                                                                                                                                        |  |               |            |  |                   |   | 287,918     |  
|Crude oil and natural gas properties - full cost method                                                                                               |  |               |            |  |                   |   |             |  
|Proved properties, net                                                                                                                                |  |               |            |  |                   |   | 78,077,780  |  
|Unproved properties                                                                                                                                   |  |               |            |  |                   |   | 468,042     |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Total assets                                                                                                                                          |  | $             | 91,026,758 |  |                   | $ | 90,519,375  |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Liabilities and Stockholders Equity                                                                                                                  |  |               |            |  |                   |   |             |  
|Current liabilities:                                                                                                                                  |  |               |            |  |                   |   |             |  
|Accounts payable                                                                                                                                      |  | $             | 1,610,706  |  |                   | $ | 3,751,660   |  
|Accrued liabilities                                                                                                                                   |  |               | 723,503    |  |                   |   | 1,253,855   |  
|Accrued professional fees related to liquidation                                                                                                      |  |               | 3,964,723  |  |                   |   |             |  
|Accrued payroll related to liquidation                                                                                                                |  |               | 3,009,757  |  |                   |   |             |  
|Other costs related to liquidation                                                                                                                    |  |               | 562,943    |  |                   |   |             |  
|Income tax liability                                                                                                                                  |  |               | 2,478,263  |  |                   |   |             |  
|Asset retirement obligations                                                                                                                          |  |               | 762,328    |  |                   |   |             |  
|Commodity derivative liability                                                                                                                        |  |               |            |  |                   |   | 976,929     |  
|Current portion of long-term debt                                                                                                                     |  |               |            |  |                   |   | 4,050,000   |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Total current liabilities                                                                                                                             |  |               | 13,112,223 |  |                   |   | 10,032,444  |  
|Long-term debt                                                                                                                                        |  |               |            |  |                   |   | 31,950,000  |  
|Asset retirement obligations                                                                                                                          |  |               |            |  |                   |   | 1,180,661   |  
|Options                                                                                                                                               |  |               |            |  |                   |   | 136,773     |  
|Warrants                                                                                                                                              |  |               |            |  |                   |   | 235,134     |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Total liabilities                                                                                                                                     |  | $             | 13,112,223 |  |                   | $ | 43,535,012  |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Commitments and contingencies                                                                                                                         |  |               |            |  |                   |   |             |  
|Stockholders equity:                                                                                                                                 |  |               |            |  |                   |   |             |  
|Common stock, no par value, unlimited shares authorized, 69,834,396 issued and outstanding as of June 30, 2012 and
69,834,396 as of December 31, 2011 |  |               |            |  |                   |   | 108,758,460 |  
|Additional paid in capital                                                                                                                            |  |               |            |  |                   |   | 12,177,534  |  
|Accumulated deficit                                                                                                                                   |  |               |            |  |                   |   | (73,951,631 | )
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Total stockholders equity                                                                                                                            |  |               |            |  |                   |   | 46,984,363  |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Total liabilities and stockholders equity                                                                                                            |  | $             |            |  |                   | $ | 90,519,375  |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Net assets in liquidation (Note 2)                                                                                                                    |  | $             | 77,914,535 |  |                   |   |             |  
|                                                                                                                                                      |  |               |            |  |                   |   |             |  
|Net assets in liquidation per outstanding share                                                                                                       |  | $             | 1.12       |  |                   |   |             |  

See accompanying notes to consolidated financial statements.



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NiMin Energy Corp.

Consolidated Statements of Operations and Comprehensive Income (Going Concern Basis)

(Expressed in U.S. dollars)

(Unaudited)



|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|---------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---------- | ---------------------------- |  | - | ---------------------------- | - |  | - | ---------- | -
|                                                     |  | Three monthsended June 30,2012 |            |   | Three monthsended June 30,2011 |   |            | Six monthsended June 30,2012 |  |   | Six monthsended June 30,2011 |  
|Crude oil and natural gas revenues                   |  | $                              | 4,836,963  |   |                                | $ | 5,704,103  |                              |  | $ | 10,985,590                   |   |  | $ | 10,936,376 |  
|Expenses:                                            |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Operating costs                                      |  |                                | 2,140,088  |   |                                |   | 2,907,296  |                              |  |   | 4,257,619                    |   |  |   | 4,904,535  |  
|General and administrative                           |  |                                | 3,923,296  |   |                                |   | 1,576,382  |                              |  |   | 6,043,260                    |   |  |   | 4,110,066  |  
|Liquidation related expenses                         |  |                                | 7,537,423  |   |                                |   |            |                              |  |   | 7,537,423                    |   |  |   |            |  
|Depreciation, depletion, amortization, and accretion |  |                                | 799,536    |   |                                |   | 778,955    |                              |  |   | 1,697,361                    |   |  |   | 1,569,988  |  
|Loss / (Gain) on crude oil derivative contracts      |  |                                | (875,373   | ) |                                |   | (1,501,662 | )                            |  |   | (189,507                     | ) |  |   | 1,133,309  |  
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|                                                     |  |                                | 13,524,970 |   |                                |   | 3,760,971  |                              |  |   | 19,346,156                   |   |  |   | 11,717,898 |  
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Income (loss) from operations                        |  |                                | (8,688,007 | ) |                                |   | 1,943,132  |                              |  |   | (8,360,566                   | ) |  |   | (781,522   | )
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Interest income                                      |  |                                | 5,741      |   |                                |   | 14,542     |                              |  |   | 10,673                       |   |  |   | 27,170     |  
|Interest expense                                     |  |                                | (5,058,031 | ) |                                |   | (1,352,032 | )                            |  |   | (6,443,178                   | ) |  |   | (2,630,690 | )
|Foreign exchange (loss) gain                         |  |                                |            |   |                                |   | (299       | )                            |  |   | (438                         | ) |  |   | 164,589    |  
|Change in fair value of options                      |  |                                | 562,542    |   |                                |   | 63,176     |                              |  |   | 296,519                      |   |  |   | 63,176     |  
|Change in fair value of warrants                     |  |                                | 458,960    |   |                                |   | 3,175,483  |                              |  |   | 235,134                      |   |  |   | (1,394,054 | )
|Other                                                |  |                                | (25,427    | ) |                                |   | (13,178    | )                            |  |   | (22,818                      | ) |  |   | (95,058    | )
|Other Reclamation Costs                              |  |                                | (659,115   | ) |                                |   |            |                              |  |   | (659,115                     | ) |  |   |            |  
|Gain on sale of oil & gas properties and equipment   |  |                                | 46,280,232 |   |                                |   |            |                              |  |   | 46,280,232                   |   |  |   |            |  
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|                                                     |  |                                | 41,564,902 |   |                                |   | 1,887,692  |                              |  |   | 39,697,009                   |   |  |   | (3,864,867 | )
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Income (loss) before taxes                           |  |                                | 32,876,895 |   |                                |   | 3,830,824  |                              |  |   | 31,336,443                   |   |  |   | (4,646,389 | )
|Income tax expense                                   |  |                                | 2,478,263  |   |                                |   |            |                              |  |   | 2,478,263                    |   |  |   |            |  
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net Income (loss) and comprehensive income (loss)    |  |                                | 30,398,632 |   |                                |   | 3,830,824  |                              |  |   | 28,858,180                   |   |  |   | (4,646,389 | )
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Basic and diluted income (loss) per share            |  | $                              | 0.44       |   |                                | $ | 0.06       |                              |  | $ | 0.41                         |   |  | $ | (0.07      | )
|                                                     |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  

See accompanying notes to consolidated financial statements.



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NiMin Energy Corp.

Consolidated Statements of Cash Flows (Going Concern Basis)

(Expressed in U.S. dollars)

(Unaudited)



|                                                                                          |  |                              |             |   |                              |   |             |  
|----------------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ---------------------------- | - | ----------- | -
|                                                                                          |  | Six MonthsEnded June 30,2012 |             |   | Six MonthsEnded June 30,2011 |  
|Cash flows from operating activities:                                                     |  |                              |             |   |                              |   |             |  
|Net Income (loss)                                                                         |  | $                            | 28,858,180  |   |                              | $ | (4,646,389  | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                              |             |   |                              |   |             |  
|Depreciation, depletion, amortization, and accretion                                      |  |                              | 1,697,361   |   |                              |   | 1,569,988   |  
|Change in fair value of options                                                           |  |                              | (296,519    | ) |                              |   | (63,176     | )
|Change in fair value of warrants                                                          |  |                              | (235,134    | ) |                              |   | 1,394,054   |  
|Unrealized foreign exchange (gain) loss                                                   |  |                              |             |   |                              |   | (164,589    | )
|Gain on sale of oil & gas properties                                                      |  |                              | (46,377,296 | ) |                              |   |             |  
|Stock-based compensation                                                                  |  |                              | 2,289,567   |   |                              |   | 1,334,068   |  
|Unrealized (gain) loss on crude oil derivative contracts                                  |  |                              |             |   |                              |   | 356,446     |  
|Write down of fixed assets                                                                |  |                              | 82,731      |   |                              |   |             |  
|Loss on sale of non-oil & gas properties                                                  |  |                              | 97,064      |   |                              |   |             |  
|Non-cash interest expense                                                                 |  |                              | 3,497,867   |   |                              |   | 398,424     |  
|(Increase) decrease in assets:                                                            |  |                              |             |   |                              |   |             |  
|Trade accounts receivable                                                                 |  |                              | 1,061,589   |   |                              |   | (1,345,021  | )
|Prepaid expenses                                                                          |  |                              | 311,922     |   |                              |   | 173,706     |  
|Crude oil inventory                                                                       |  |                              | 149,553     |   |                              |   | 53,069      |  
|Increase (decrease) in liabilities:                                                       |  |                              |             |   |                              |   |             |  
|Accounts payable and accrued liabilities                                                  |  |                              | 7,850,251   |   |                              |   | 1,060,203   |  
|Asset retirement obligation                                                               |  |                              | 659,114     |   |                              |   |             |  
|                                                                                          |  |                              |             |   |                              |   |             |  
|Net cash provided by (used in) operating activities                                       |  |                              | (353,751    | ) |                              |   | 120,783     |  
|                                                                                          |  |                              |             |   |                              |   |             |  
|Cash flows from investing activities:                                                     |  |                              |             |   |                              |   |             |  
|Purchase of and expenditures on crude oil and natural gas properties                      |  |                              | (1,579,255  | ) |                              |   | (11,213,640 | )
|Sale of oil & gas properties                                                              |  |                              | 119,245,819 |   |                              |   |             |  
|Purchase of equipment                                                                     |  |                              |             |   |                              |   | (63,699     | )
|Increase in restricted investments                                                        |  |                              | (3,143,741  | ) |                              |   |             |  
|                                                                                          |  |                              |             |   |                              |   |             |  
|Net cash provided by (used in) investing activities                                       |  |                              | 114,522,823 |   |                              |   | (11,277,339 | )
|                                                                                          |  |                              |             |   |                              |   |             |  
|Cash flows from financing activities:                                                     |  |                              |             |   |                              |   |             |  
|Repayment of long-term debt                                                               |  |                              | (36,000,000 | ) |                              |   |             |  
|Repurchase of options                                                                     |  |                              | (29,108     | ) |                              |   |             |  
|Proceeds from issuance of common shares (net of costs)                                    |  |                              |             |   |                              |   | 7,736,015   |  
|                                                                                          |  |                              |             |   |                              |   |             |  
|Net cash provided by (used in) financing activities                                       |  |                              | (36,029,108 | ) |                              |   | 7,736,015   |  
|                                                                                          |  |                              |             |   |                              |   |             |  
|Change in cash and cash equivalents during the period                                     |  |                              | 78,139,964  |   |                              |   | (3,420,541  | )
|Cash and cash equivalents at beginning of the period                                      |  |                              | 3,811,028   |   |                              |   | 9,490,005   |  
|Foreign exchange on cash and cash equivalents                                             |  |                              |             |   |                              |   | 164,589     |  
|                                                                                          |  |                              |             |   |                              |   |             |  
|Cash and cash equivalents at end of the period                                            |  | $                            | 81,950,992  |   |                              | $ | 6,234,053   |  
|                                                                                          |  |                              |             |   |                              |   |             |  
|Supplemental disclosure of cash flow information:                                         |  |                              |             |   |                              |   |             |  
|Cash paid for interest                                                                    |  | $                            | 2,945,444   |   |                              | $ | 2,231,507   |  
|Cash paid for income tax expense                                                          |  | $                            |             |   |                              | $ |             |  

See accompanying notes to consolidated financial statements.



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NiMin Energy Corp.

Consolidated Statements of Stockholders Equity (Going Concern Basis)

Six months ended June 30, 2012

(Expressed in U.S. dollars)



|                                     |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|------------------------------------ |  | ------------ | ---------- |  | ------------------------ | - | ----------- | ------------------ |  | - | ------------------------- | - |  | - | ----------- | - |  | - | ---------- | -
|                                     |  | Common Stock |            |  | AdditionalPaid inCapital |   |             | AccumulatedDeficit |  |   | Total StockholdersEquity |  
|                                     |  | Shares       |            |  | Amount                   |   |             |                    | 
|Balance at December 31, 2010         |  |              | 61,690,977 |  |                          | $ | 93,107,905  |                    |  | $ | 9,861,010                 |   |  | $ | (70,891,787 | ) |  | $ | 32,077,128 |  
|                                     |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Exercise of options                  |  |              | 29,999     |  |                          |   | 59,411      |                    |  |   | (21,022                   | ) |  |   |             |   |  |   | 38,389     |  
|Exercise of warrants                 |  |              | 5,354,800  |  |                          |   | 8,483,372   |                    |  |   |                           |   |  |   |             |   |  |   | 8,483,372  |  
|Reclassified from warrant liability  |  |              |            |  |                          |   | 4,258,164   |                    |  |   |                           |   |  |   |             |   |  |   | 4,258,164  |  
|Reclassified to options liability    |  |              |            |  |                          |   |             |                    |  |   | (1,025,463                | ) |  |   | 169,804     |   |  |   | (855,659   | )
|Issuance of common stock             |  |              | 2,758,620  |  |                          |   | 3,166,057   |                    |  |   | 844,488                   |   |  |   |             |   |  |   | 4,010,545  |  
|Stock issuance cost                  |  |              |            |  |                          |   | (316,449    | )                  |  |   | (87,371                   | ) |  |   |             |   |  |   | (403,820   | )
|Stock-based compensation expense     |  |              |            |  |                          |   |             |                    |  |   | 2,605,892                 |   |  |   |             |   |  |   | 2,605,892  |  
|Net loss                             |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   | (3,229,648  | ) |  |   | (3,229,648 | )
|                                     |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Balance at December 31, 2011         |  |              | 69,834,396 |  |                          |   | 108,758,460 |                    |  |   | 12,177,534                |   |  |   | (73,951,631 | ) |  |   | 46,984,363 |  
|                                     |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Options repurchased                  |  |              |            |  |                          |   | (29,108     | )                  |  |   |                           |   |  |   |             |   |  |   | (29,108    | )
|Exercise of warrants                 |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Reclassified from warrant liability  |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Reclassified to options liability    |  |              |            |  |                          |   |             |                    |  |   | (188,466                  | ) |  |   |             |   |  |   | (188,466   | )
|Issuance of common stock             |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Stock issuance cost                  |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Stock-based compensation expense     |  |              |            |  |                          |   |             |                    |  |   | 2,289,567                 |   |  |   |             |   |  |   | 2,289,567  |  
|Net Income                           |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   | 28,858,180  |   |  |   | 28,858,180 |  
|                                     |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  
|Balance at June 30, 2012 (Unaudited) |  |              | 69,834,396 |  |                          | $ | 108,729,352 |                    |  | $ | 14,278,635                |   |  | $ | (45,093,451 | ) |  | $ | 77,914,535 |  
|                                     |  |              |            |  |                          |   |             |                    |  |   |                           |   |  |   |             |   |  |   |            |  

See accompanying notes to consolidated financial statements.



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NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



|1 | Description of the Business
|- | ---------------------------

NiMin Energy Corp. (the Company or NiMin) was incorporated under the name NiMin Capital Corp. under the Business Corporations Act (Alberta) on May 31, 2007. The Company
changed its name to NiMin Energy Corp. on September 3, 2009, and consolidated its shares on the basis of one new post-consolidation share (Common Share) for each three existing common shares.

The principal business of the Company is conducted through its wholly owned subsidiary, Legacy Energy, Inc. (Legacy), a
Delaware corporation that was engaged in the exploration, development, and production of crude oil and natural gas properties in the states of California and Wyoming, until the sale, of its assets.

The annual and special meeting (the Special Meeting) of holders (Shareholders) of common shares of the Company
(Common Shares) was held on June 26, 2012. At the Special Meeting, in addition to annual items of business, shareholders were asked to consider and vote on, among other things, special resolutions approving: (i) the proposed
sale of all or substantially all of the Companys assets (the Sale of Assets) including those assets held by NiMins wholly-owned subsidiary, Legacy pursuant to purchase and sale agreements with respect to its Wyoming based
assets and California based assets.

At the Special Meeting, the shareholders were also asked to consider and vote on the
voluntary winding up and dissolution of the Company pursuant to the laws of the Business Corporations Act (Alberta) (the Winding Up )and the distribution to shareholders of the net proceeds of the Sale of Assets (less the settlement of
obligations of Legacy,) and cash on hand, as part of such liquidation and dissolution after satisfaction of all liabilities of the Company, by way of a reduction of the stated capital of the common shares of the Company.

Both the Sale of Assets and the Winding Up were approved by the shareholders at the Special Meeting. Legacy is a wholly owned subsidiary
of NiMin and therefore, in order for the Company to complete the Winding Up, the appropriate corporate steps must also occur for the dissolution and liquidation of Legacy. Pursuant to the approval of the Sale of Assets, Legacy proceeded with the
sale of the Wyoming oil and gas assets and the California oil and gas assets all as more particularly described below.

The
Winding Up and the dissolution and liquidation of Legacy contemplates the orderly disposition of the assets, the orderly discharge of all outstanding liabilities, including all outstanding debt, and after the establishment of appropriate reserves,
the distribution of cash to shareholders in installments.

Upon completion of the Sale of the Wyoming Assets and California
Assets as described further below, the disposition of all remaining assets of Legacy and the settlement of all liabilities of the Company and Legacy, the Company intends to distribute the net proceeds of the liquidation and dissolution of both
Legacy and the Company to shareholders in one or more distribution installments.

On June 28, 2012, Legacy completed its
previously announced sale of its assets in Wyomings Big Horn Basin (the Wyoming Assets) to BreitBurn Operating L.P., a wholly-owned subsidiary of BreitBurn Energy Partners L.P. (NASDAQ: BBEP), for total cash consideration of
approximately US$93 million, being the original purchase price of approximately US$98 million less approximately US$5 million adjusted to account for preliminary purchase price adjustments.

On June 29, 2012, Legacy completed its previously announced sale of its assets in Californias San Joaquin Basin (the
California Assets) to Southern San Joaquin Production, LLC for total cash consideration of approximately US$26 million, being the original purchase price of approximately US$27 million, less approximately US$1 million adjusted to account
for preliminary purchase price adjustments. Pursuant to the terms of the purchase and sale agreement, US$3 million of the US$26 million purchase price paid on closing has been deposited with an escrow agent through December 31, 2012 in
connection with various indemnities contained therein.



|2 | Basis of Presentation
|- | ---------------------

The unaudited interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange
Commissions, or the SEC, Regulation S-X. Accordingly, it does not include all of the information required by generally accepted accounting principles in the U.S., or U.S. GAAP, for complete financial statements. The consolidated balance sheet
at December 31, 2011, was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP. In the opinion of management, the accompanying financial information contains all adjustments,
consisting of normal recurring adjustments, necessary to present fairly the Companys unaudited consolidated



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NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



financial statements of interim periods. These unaudited consolidated financial statements should be read in conjunction with the Companys Annual Report on Form 10-K for the year ended
December 31, 2011, or the 2011 10-K. Operating results for any interim period, are not necessarily indicative of the results that may be expected for the full year.

As a result of the shareholders approval of the Winding Up of the Company, the liquidation basis of accounting was adopted effective June 30, 2012. This basis of accounting is considered appropriate
when, among other things, liquidation of a company is imminent and the net realizable values of assets are reasonably determinable. Under this basis of accounting, assets are valued at their net realizable values and liabilities are stated at their
estimated settlement amounts. Further, all costs of liquidation are accrued as of June 30, 2012.

Given that the
respective property sales transactions closed on June 28, 2012 and June 29, 2012, the associated revenues during the quarter are included in revenues and expenses for the period ending June 30, 2012. However, the purchase and sale agreements provide
adjustments to the purchase price be made related to revenues and operating expenses for the period of April 1, 2012 through the closing date of the sale of the properties. As such, the purchase price of the sale of the properties in June 2012, have
been adjusted for revenues and operating expenses for the period of April 1 through closing date of the sale of the properties.

The conversion to liquidation basis of accounting required management to make significant estimates and judgments. In order to record
assets at estimated net realizable value and liabilities at estimated settlement amounts under the liquidation basis of accounting, the Company recorded the following adjustments to record its assets at net realizable value as of June 30, 2012,
the date of adoption of the liquidation basis of accounting:



|                                                       |  |                    |         | 
|------------------------------------------------------ |  | ------------------ | ------- | 
|                                                       |  | As of June 30,2012 |        
|Adjust assets and liabilities to net realizable value: |  |                    |         | 
|Write down of fixed assets (i)                         |  | $                  | 82,731  | 
|Write off of other assets                              |  | $                  | 152,070 | 
|                                                       |  |                    |         | 
|Total                                                  |  | $                  | 234,801 | 
|                                                       |  |                    |         | 



| | (i) | Assets relating to the CMD technology were written down to the net realizable value of zero within general and administrative expenses.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------

Accrued Cost of Liquidation

Under the liquidation basis of accounting, the Company has accrued for the estimated costs to be incurred in liquidation, as follows:



|                      |  |                    |           | 
|--------------------- |  | ------------------ | --------- | 
|                      |  | As of June 30,2012 |          
|Lease obligation      |  | $                  | 62,943    | 
|Professional fees     |  |                    | 3,964,723 | 
|Payroll related costs |  |                    | 3,009,757 | 
|Other                 |  |                    | 500,000   | 
|                      |  |                    |           | 
|Total                 |  | $                  | 7,537,423 | 
|                      |  |                    |           | 

The Company will continue to incur operating costs and receive income on its cash investments from
June 30, 2012 through the liquidation of the Company (the Liquidation Period). On a regular basis, we evaluate our assumptions, judgments and estimates that can have a significant impact on our reported net assets in liquidation
based on the most recent information available to us, and when necessary make changes accordingly. Actual costs and income may differ from our estimates, which might reduce net assets available in liquidation to be distributed to shareholders.

The Winding Up and the dissolution and liquidation of Legacy continue to be assessed and the exact amount and timing of any
initial and subsequent distributions to shareholders can only be determined upon completion of the orderly disposition of assets and orderly discharge of all liabilities. Once management of the Company have completed those required steps, current
estimates will be revised to reflect actual numbers. The numbers reflected in the balance sheet and the estimated $1.12 net assets in liquidation per outstanding share include management estimates made as of June 30, 2012 and do not necessarily
reflect the final dollars that may be available to the Company for distribution to shareholders. Any distribution amounts can only be calculated upon completion of all the dispositions, discharges and determinations of reserves. The amounts to be
reserved will be based on a determination by the board of directors, derived from consultation with management and outside experts, if the board of directors determines that it is advisable to retain such experts, and a review of, among other
things, estimated contingent costs of the Winding Up and the dissolution and liquidation of Legacy.



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NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



These unaudited interim consolidated financial statements of the Company are presented
in U.S dollars.



|3 | Restricted Investments
|- | ----------------------

Restricted Investments at June 30, 2012 relate primarily to approximately $928,002 held in bonds for the right to operate in the states of
California and Wyoming. Additionally, pursuant to the terms of the purchase and sale agreement for the California Assets, US$3 million of the US$26 million purchase price paid on closing has been deposited in escrow and is required to be held by the
escrow agent through December 31, 2012 until various indemnities contained in the purchase and sale agreement have been fulfilled. The funds held by the escrow agent are invested in a money market account.



|4 | Senior Loan
|- | -----------

On
June 30, 2010, the Company entered into a senior secured loan (the Senior Loan) in the amount of $36 million from a U.S. based institutional private lender (the Lender). The Company borrowed $36 million subject to an
original issuer discount of 7.5%, a commitment fee of 1%, a placement fee of 1% and a transaction fee of 3%. Debt issuance costs of $4.9 million were incurred and were being amortized to net income under the effective interest method. The Senior
Loan had a 12.5% fixed interest rate and a term of five years. Interest was payable quarterly beginning September 30, 2010.

As part of the Winding Up of the Company, on June 28, 2012, the Company prepaid the entire amount of the Senior Loan and as a result,
a prepayment penalty of 2% representing $707,705 was applied in addition to the accrued interest of $1,118,853 and principal of $36,000,000. The remaining unamortized debt issuance cost of $3.23 million as of June 28, 2012, related to the
Senior Loan, was written off and is included in current period interest expense.



|5 | Share Capital
|- | -------------



| | a. | Authorized and Outstanding
| | -- | --------------------------

Common Shares

NiMin is authorized to issue an unlimited number of Common Shares. As of June 30, 2012, and December 31, 2011, 69,834,396 Common Shares were issued and outstanding.

Preferred Shares

NiMin is also authorized to issue an unlimited number of Preferred Shares issuable in series. As of June 30, 2012, no Preferred Shares have been issued.



| | b. | Stock Option Plan
| | -- | -----------------

The
Company established a stock option plan as approved by the shareholders whereby options to purchase Common Shares may be granted to the Companys directors, officers, employees and consultants. The exercise prices of stock options are
denominated in Canadian dollars. The number of Common Shares issuable under the Companys stock option plan cannot exceed 15% of the issued and outstanding common shares of the Company. The exercise price of each option equals the market price
of the Companys stock on the date of grant and the option has a maximum life of ten years. The vesting period is determined by the Board of Directors at the time of grant. Options issued by the Company generally vest one-third on the first,
second, and third anniversary of the date of grant. Following the approval of the Winding Up of the Company, all outstanding unvested options became automatically vested and the Company recognized the remaining grant date fair value of approximately
$1.7 million in the current period.



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NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



The following table sets forth a reconciliation of the stock option activity for the
period ended June 30, 2012, and December 31, 2011:



|                                                   |  |                  |           |   |                                      |   |      | 
|-------------------------------------------------- |  | ---------------- | --------- | - | ------------------------------------ | - | ---- | 
|                                                   |  | Number of shares |           |   | WeightedAverage ExercisePrice (CDN$) |  
|Stock options outstanding at December 31, 2010     |  |                  | 7,355,000 |   |                                      |   | 1.25 | 
|                                                   |  |                  |           |   |                                      |   |      | 
|Options exercised(i)                               |  |                  | (29,999   | ) |                                      |   | 1.25 | 
|Options forfeited                                  |  |                  | (105,000  | ) |                                      |   | 1.64 | 
|Options issued                                     |  |                  | 2,000,000 |   |                                      |   | 1.44 | 
|                                                   |  |                  |           |   |                                      |   |      | 
|Stock options outstanding at December 31, 2011(ii) |  |                  | 9,220,001 |   |                                      |   | 1.24 | 
|                                                   |  |                  |           |   |                                      |   |      | 
|Options exercised                                  |  |                  |           |   |                                      |   |      | 
|Options forfeited                                  |  |                  | (60,000   | ) |                                      |   | 1.61 | 
|Options repurchased                                |  |                  | (600,000  | ) |                                      |   | 1.00 | 
|Options issued                                     |  |                  |           |   |                                      |   |      | 
|                                                   |  |                  |           |   |                                      |   |      | 
|Stock options outstanding at June 30, 2012(ii)     |  |                  | 8,560,001 |   |                                      | $ | 1.29 | 
|                                                   |  |                  |           |   |                                      |   |      | 



| | (i) | The intrinsic value of the exercised options during 2011 was CDN $33,299.
| | --- | -------------------------------------------------------------------------

| | (ii) | The 2.70 million stock options relating to former employees were modified upon transition to a consulting role in 2011 and first quarter of 2012 to allow for
continued vesting. The resulting $310,309 and $104,483 was recognized as incremental stock-based compensation expense during the year ended December 31, 2011 and the six months ended June 30, 2012, respectively. As the related options are
denominated in Canadian dollars, which is not the functional currency of the Company (which is the U.S. dollar), the vested options are classified as a liability on the balance sheet and recorded at their fair value at the end of each period and the
change in fair value is recognized in earnings.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Following the approval of the Winding Up of the Company, the
respective option liabilities described above were fair valued to zero with $296,519 recorded as a credit to the change in the fair value of options.

At June 30, 2012, stock options to purchase Common Shares were exercisable as follows:



| |  |                               |           |  |              |  |           |                                     |  |   |                               |  |  |  |      | 
| |  | ----------------------------- | --------- |  | ------------ |  | --------- | ----------------------------------- |  | - | ----------------------------- |  |  |  | ---- | 
| |  | Number of Options Outstanding |           |  | Exerciseable |  |           | WeightedAverageExercise Price(CDN$) |  |   | AverageContractualLife(Years) | 
| |  |                               | 8,560,001 |  |              |  | 8,560,001 |                                     |  | $ | 1.29                          |  |  |  | 6.58 | 



| | (i) | The average contractual life represents the original remaining contractual life as of June 30, 2012. Subsequent to quarter end, all outstanding options were cancelled
as discussed in Note 8.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During the current quarter, due to the Winding Up of the Company, the Company valued the
outstanding stock options

based on the expected cash distribution to shareholders as this represents managements best
estimate on the valuation of the underlying equity instruments as of June 30, 2012. As the stock options have an exercise price greater than the expected cash distribution to shareholders, the value of the stock options was determined to
approximate zero.

As of June 30, 2012, there was no unrecognized compensation cost related to non-vested share-based
compensation arrangements granted under the Companys option plan.



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NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



|                          |  |                           |            |   |                                                        |  |      | 
|------------------------- |  | ------------------------- | ---------- | - | ------------------------------------------------------ |  | ---- | 
|                          |  | Number of UnvestedOptions |            |   | Weighted-Average Grant-Date Fair Valueper Option(CDN$) | 
|Balance December 31, 2010 |  |                           | 4,933,333  |   |                                                        |  | 1.25 | 
|                          |  |                           |            |   |                                                        |  |      | 
|Vested                    |  |                           | (2,744,990 | ) |                                                        |  | 1.22 | 
|Granted                   |  |                           | 2,000,000  |   |                                                        |  | 0.66 | 
|Forfeited                 |  |                           | (105,000   | ) |                                                        |  | 0.95 | 
|                          |  |                           |            |   |                                                        |  |      | 
|Balance December 31, 2011 |  |                           | 4,083,343  |   |                                                        |  | 0.99 | 
|                          |  |                           |            |   |                                                        |  |      | 
|Vested                    |  |                           | (4,023,343 | ) |                                                        |  | 0.99 | 
|Granted                   |  |                           |           |   |                                                        |  |     | 
|Forfeited                 |  |                           | (60,000    | ) |                                                        |  | 0.94 | 
|                          |  |                           |            |   |                                                        |  |      | 
|Balance June 30, 2012     |  |                           |           |   |                                                        |  |      | 
|                          |  |                           |            |   |                                                        |  |      | 

When stock options are exercised, the Company issues common shares from the pool of authorized shares.



| | c. | Warrants
| | -- | --------

Each warrant is
exercisable by the holder thereof to acquire one Common Share at any time before the expiration date, after which time the warrants expire and become null and void.

Each whole U.S. Warrant issued in connection with the Private Placement is exercisable for a period of 36 months from September 1, 2011, at an exercise price of USD $1.60. The U.S. Warrants were
subject to a hold period of four months plus one day from the date of issue.

The following table sets forth a reconciliation
of the warrant activity for the periods ended June 30, 2012, and December 31, 2011:



|                                          |  |                    |            |   |                       |  |         |                                     |  |   |      | 
|----------------------------------------- |  | ------------------ | ---------- | - | --------------------- |  | ------- | ----------------------------------- |  | - | ---- | 
|                                          |  | Number of Warrants |            |   | EquityComponentAmount |  |         | WeightedAverage ExercisePrice(CDN$) | 
|Warrants outstanding at December 31, 2010 |  |                    | 12,349,341 |   |                       |  |        |                                     |  |   | 1.58 | 
|                                          |  |                    |            |   |                       |  |         |                                     |  |   |      | 
|Warrants exercised                        |  |                    | (5,354,800 | ) |                       |  |        |                                     |  |   | 1.55 | 
|Warrants expired                          |  |                    | (6,087,951 | ) |                       |  |        |                                     |  |   | 1.55 | 
|Warrants issued(i)                        |  |                    | 1,379,310  |   |                       |  | 844,488 |                                     |  |   | 1.65 | 
|                                          |  |                    |            |   |                       |  |         |                                     |  |   |      | 
|Warrants outstanding at December 31, 2011 |  |                    | 2,285,900  |   |                       |  | 844,488 |                                     |  |   | 1.79 | 
|                                          |  |                    |            |   |                       |  |         |                                     |  |   |      | 
|Warrants exercised                        |  |                    |           |   |                       |  |        |                                     |  |   |     | 
|Warrants expired                          |  |                    |           |   |                       |  |        |                                     |  |   |     | 
|Warrants issued                           |  |                    |           |   |                       |  |        |                                     |  |   |     | 
|                                          |  |                    |            |   |                       |  |         |                                     |  |   |      | 
|Warrants outstanding at June 30, 2012     |  |                    | 2,285,900  |   |                       |  | 844,488 |                                     |  | $ | 1.79 | 
|                                          |  |                    |            |   |                       |  |         |                                     |  |   |      | 



| | (i) | The weighted average exercise price of the U.S. Warrants is USD$1.60 and is herein expressed in Canadian dollar equivalent using the closing foreign exchange rate at
December 31, 2011.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During second quarter of 2012, pursuant to the Winding Up of the Company, the Company
valued the warrants based on the expected cash distribution to shareholders as this represents managements best estimate on the valuation of the underlying equity instruments as of June 30, 2012. As the warrants have an exercise price
greater than the expected cash distribution to shareholders, the value of the warrants were determined to approximate zero.



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NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



The following table summarizes NiMins warrants exercisable at June 30, 2012:



|                     |  |                    |           |  |                               |   |      | 
|-------------------- |  | ------------------ | --------- |  | ----------------------------- | - | ---- | 
|Expiration Date      |  | Number of Warrants |           |  | ExercisePrice per share(CDN$) |  
|March 10, 2016       |  |                    | 581,590   |  |                               |   | 1.72 | 
|October 15, 2017     |  |                    | 325,000   |  |                               |   | 2.48 | 
|September 1, 2014(i) |  |                    | 1,379,310 |  |                               |   | 1.60 | 
|                     |  |                    |           |  |                               |   |      | 
|                     |  |                    | 2,285,900 |  |                               | $ | 1.79 | 
|                     |  |                    |           |  |                               |   |      | 



| | (i) | The weighted average exercise price of the U.S. Warrants is USD $1.60 and is herein expressed in Canadian dollar equivalent using the closing foreign exchange rate at
September 30, 2011.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | Per Share Amounts
| | -- | -----------------

Basic
earnings (loss) per share are computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share are calculated using the treasury stock method to
determine the dilutive effect of the stock options. The treasury stock method assumes that the proceeds received from the exercise of in the money stock options and warrants are used to repurchase commons shares at the average market
price during the period. The weighted average number of shares assumed to be outstanding was as follows:



|                                          |  |                            |            |  |                          |   |            |      |  |   |            |  |  |   |            |  
|----------------------------------------- |  | -------------------------- | ---------- |  | ------------------------ | - | ---------- | ---- |  | - | ---------- |  |  | - | ---------- | -
|                                          |  | Three months endedJune 30, |            |  | Six months endedJune 30, |  
|                                          |  | 2012                       |            |  | 2011                     |   |            | 2012 |  |   | 2011       | 
|Net income (loss)                         |  | $                          | 30,398,632 |  |                          | $ | 3,830,824  |      |  | $ | 28,858,180 |  |  | $ | (4,646,389 | )
|Basic and diluted shares outstanding(i)   |  |                            | 69,834,396 |  |                          |   | 66,737,876 |      |  |   | 69,834,396 |  |  |   | 65,685,876 |  
|Income (loss) per basic and diluted share |  | $                          | 0.44       |  |                          | $ | 0.06       |      |  | $ | 0.41       |  |  | $ | (0.07      | )



| | (i) | For the three and six months ended June 30, 2012, 10.8 million stock options and warrants were excluded from the diluted loss per share calculation. For the
three and six months ended June 30, 2011, 8,120,001 stock options and warrants were excluded from the diluted loss per share calculation. Potential common shares from the exercise of stock options and warrants were excluded from the diluted
loss per share calculation because their effect was anti-dilutive as a result of the options and warrants being out of the money for the three and six months ended June 30, 2012, and the Companys net loss for the six months ended
June 30, 2011.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6 | Income Taxes
|- | ------------

At June 30,
2012, the Company had estimated an income tax liability of $2,478,263 relating to taxable gains resulting from the sale of its oil and gas properties in the current period. The difference between the federal tax statutory rate of 35% and the
effective tax rate of 7.9% is due to the current tax liability being offset by deferred tax assets of $23,634,056 related to the net operating loss carryforwards that were previously subject to full valuation allowance.



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NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



|7 | Financial Instruments
|- | ---------------------



| | a. | Fair Value
| | -- | ----------

The
Companys financial instruments consist of cash and cash equivalents, trade accounts receivable, restricted investments, warrants, short-term debt, and accounts payable and accrued liabilities. For all periods presented, the fair value of the
commodity derivative was obtained from the counterparty and therefore was considered level 2. Due to the pending liquidation, the Company valued the warrants based on the expected cash distribution to shareholders as this represents
managements best estimate on the valuation of the underlying equity instruments as of June 30, 2012. As the warrants have an exercise price greater than the expected cash distribution to shareholders, the value of the warrants are
determined to approximate zero.



| | b. | Credit Risk
| | -- | -----------

Credit risk
is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companys receivables from joint venture partners and from crude oil and natural
gas marketers.

The majority of the Companys receivables are within the oil and gas industry, primarily from its industry
partners. The receivables are not collateralized. To date, the Company has experienced minimal bad debts, and has no allowance for doubtful accounts. The majority of the Companys cash and cash equivalents are held by two financial
institutions, one in the U.S. and the other in Canada. As of June 30, 2012, and December 31, 2011, the accounts receivable balances are primarily all from the sale of oil and gas and post-close adjustments from the sale of its oil and gas
properties. All receivables are current and therefore, no provision was determined to be required.

Our hedging transactions
expose us to risk of financial loss if a counterparty fails to perform under a contract. We use master agreements which allow us, in the event of default, to elect early termination of all contracts with the defaulting counterparty. If we choose to
elect early termination, all asset and liability positions with the defaulting counterparty would be net settled at the time of election. We also monitor the creditworthiness of our counterparty on an ongoing basis. We are unable to predict sudden
changes in a counterpartys creditworthiness or ability to perform. Even if we do accurately predict sudden changes, our ability to negate the risk may be limited depending upon market conditions. If the creditworthiness of our counterparty,
deteriorates and results in its nonperformance, we could incur a significant loss.

The adoption of derivatives legislation or
regulations related to derivative contracts could have an adverse impact on our ability to hedge risks associated with our business. Recent legislation on certain transactions involving derivatives may affect the use of derivatives in hedging
transactions.

Some of our customers may be experiencing, or may experience in the future, severe financial problems that have
had or may have a significant impact on their creditworthiness. We cannot provide assurance that one or more of our customers will not default on their obligations to us or that such a default or defaults will not have a material adverse effect on
our business or financial position. Furthermore, the bankruptcy of one or more of our customers, or some other similar proceeding or liquidity constraint, might make it unlikely that we would be able to collect all or a significant portion of
amounts owed by the distressed entity or entities.

During the three and six months ended June 30, 2012, 100% of the
Companys production was sold to two customers, Plains Marketing LP and Marathon Oil Company. However, the Company does not believe that the loss of a purchaser would materially affect the Companys business because there are numerous
purchasers in the area in which the Company sells its production. For the three and six months ended June 30, 2012 and 2011, purchases by the following companies exceeded 10% of the total oil and gas revenues of the Company.



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##### Table of Contents

NiMin Energy Corp.

Notes to Interim Consolidated Financial Statements

June 30, 2012 and 2011



|                     |  |                                    |           |  |                                  |   |           |      |  |   |           |  |  |   |           | 
|-------------------- |  | ---------------------------------- | --------- |  | -------------------------------- | - | --------- | ---- |  | - | --------- |  |  | - | --------- | 
|                     |  | For the three months endedJune 30, |           |  | For the six months endedJune 30, |  
|                     |  | 2012                               |           |  | 2011                             |   |           | 2012 |  |   | 2011      | 
|Plains Marketing LP  |  | $                                  | 1,503,418 |  |                                  | $ | 728,983   |      |  | $ | 3,334,125 |  |  | $ | 1,726,249 | 
|Marathon Oil Company |  | $                                  | 3,333,545 |  |                                  | $ | 2,614,860 |      |  | $ | 7,651,465 |  |  | $ | 6,133,684 | 



| | c. | Derivatives
| | -- | -----------

Commodity
price risk is the risk that the future cash flows will fluctuate as a result of changes in commodity prices. Commodity prices for crude oil and natural gas are impacted by world economic events that dictate the levels of supply and demand.

In January of 2010, the Company entered into a derivative financial contract for 7,500 Bbls of NYMEX West Texas Intermediate
(NYMEX WTI) crude oil production per month at a fixed rate of $85.10 per barrel until December 2012.

In
December 2010, the Company entered into a derivative financial contract for 125 Bbls of oil per day for 2011 and 250 Bbls of oil per day for 2012 at a fixed rate of $90.40 per barrel.

In November 2011, the Company entered into a derivative financial contract for 100 Bbls of oil per day for 2012 at a fixed price of $96.75
per barrel.

At March 31, 2012, the Company recognized $1.34 million as a derivative liability on crude oil derivative
contracts. At December 31, 2011, the Company recognized $976,929 as a derivative liability on crude oil derivative contracts.

For the three months ended June 30, 2012, the Companys change in derivative contracts included a realized gain of $875,373. For the three months ended June 30, 2011, the Companys
change in derivative contracts included a realized loss of $531,070 and an unrealized gain of $2.03 million.

For the six
months ended June 30, 2012, the Companys change in derivative contracts included a realized gain of $189,507. For the six months ended June 30, 2011, the Companys change in derivative contracts included a realized loss of
$776,863 and an unrealized loss of $356,446.

During the current quarter, the Company terminated and settled all derivative
contracts as of May 17, 2012, and at June 30, 2012, carried no liability.



|8 | Subsequent Events
|- | -----------------

Pursuant to Section 3.5 of the Companys stock option plan, the Company completed the sale of all or substantially all of the
Companys assets and, as such, terminated all unexercised options under the plan in July of 2012. This event had no impact to the Companys consolidated statement of net assets.

As a result of the approval of the Winding Up of the Company, management terminated 2,188,970 unexercised warrants outstanding at June 30,
2012. This event had no impact to the Companys consolidated statement of net assets.



15



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##### Table of Contents

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION

The following management discussion and analysis (MD&A) should be read in conjunction with the
Companys Annual Report on Form 10-K as amended from time to time, (Annual Report) and filed with the United States Securities and Exchange Commission (SEC) on March 14, 2012, our interim consolidated financial
statements for the periods ended June 30, 2012 and 2011, and our historical consolidated financial statements and the accompanying notes included elsewhere in the Annual Report.

In this MD&A, unless otherwise specified, all dollar amounts are expressed in US Dollars ($).

FORWARD LOOKING STATEMENT

This MD&A may include certain statements and information
that may be deemed to be forward -looking statements within the meaning of applicable securities laws, which may include, but which are not limited to, statements with respect to the objectives, financial conditions, results of
operations and business of the Company. The use of any of the words expect , anticipate,  continue, should, will believe plan intend ongoing
estimate may project or similar expressions are intended to identify forward-looking statements. These statements may also be in respect of operating costs, general and administrative expenses, applicable and
future tax liabilities, contractual obligations, the proposed distributions to shareholders, the dissolution and liquidation of both Legacy or the Company, future plans, objectives and results. Forward-looking statements involve numerous risks and
uncertainties. Estimates and forward-looking statements are based on assumptions of future events and actual results may vary from these estimates. The actual results could differ materially from those anticipated in these forward-looking statements
as a result of the following risk factors and as set forth elsewhere in this MD&A: (i) timing and risks associated with the disposition of the remaining final assets and finalization and payment of remaining liabilities; (ii) timing and risks
associated with the finalization of outstanding statement of adjustments for the sale of the assets completed in June 2012; (iii) timing and risks associated with the final steps in dissolution and wind up of Legacy and NiMin; (iv) timing and risks
associated with the initial and other distributions of cash to the shareholders of NiMin; (v) other factors discussed under the heading risks and uncertainties and (vi) the factors discussed under risk factors in our Annual
Report. These factors should not be construed as exhaustive. The forward-looking statements contained in this MD&A are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking
statements contained herein or in any other documents filed with Canadian or U.S. securities authorities whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. Readers are cautioned
that expectations, estimates, projections and assumptions used in the preparation of such forward-looking statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be
placed on forward-looking statements. The forward -looking statements are expressly qualified by this cautionary statement.

BOE
Presentation

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of
six thousand cubic feet of natural gas (mcf): one barrel of oil (bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Overview

NiMin Energy Corp.
(NiMin, we or the Company) is an oil and gas company engaged in the acquisition, development and production of oil and gas properties in the United States. We have operated as an exploration and production company
since late 2006 and have principal operations in the Bighorn Basin, Wyoming and the San Joaquin Basin, California.



16



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##### Table of Contents

The annual and special meeting (the Special Meeting) of holders (Shareholders) of
common shares of the Company (Common Shares) was held on June 26, 2012. At the Special Meeting, in addition to annual items of business, shareholders were asked to consider and vote on, among other things, special resolutions approving
the proposed sale of all or substantially all of the Companys assets (the Sale of Assets) including those assets held by NiMins wholly-owned subsidiary, Legacy pursuant to purchase and sale agreements with respect to its
Wyoming based assets and California based assets.

At the Special Meeting, the shareholders were also asked to consider and vote on the
voluntary winding up and dissolution of the Company pursuant to the laws of the Business Corporations Act (Alberta) (the Winding Up ) and the distribution to shareholders of the net proceeds of the Sale of Assets (less the settlement of
obligations of Legacy,) and cash on hand, as part of such liquidation and dissolution after satisfaction of all liabilities of the Company, by way of a reduction of the stated capital of the common shares of the Company.

Both the Sale of Assets and the Winding Up were approved by the shareholders at the Special Meeting. Legacy is a wholly owned subsidiary of NiMin and
therefore, in order for the Company to complete the Winding Up, the appropriate corporate steps must also occur for the dissolution and liquidation of Legacy. Pursuant to the approval of the Sale of Assets, Legacy proceeded with the sale of the
Wyoming oil and gas assets and the California oil and gas assets all as more particularly described below.

The Winding Up and the dissolution
and liquidation of Legacy contemplates the orderly disposition of the assets, the orderly discharge of all outstanding liabilities, including all outstanding debt, and after the establishment of appropriate reserves, the distribution of cash to
shareholders in installments.

Upon completion of the Sale of the Wyoming Assets and California Assets as described further below, the
disposition of all remaining assets of Legacy and the settlement of all liabilities of the Company and Legacy, the Company intends to distribute the net proceeds of the liquidation and dissolution of both Legacy and the Company to shareholders in
one or more distribution installments.

On June 28, 2012, Legacy completed its previously announced sale of its assets in Wyomings Big
Horn Basin (the Wyoming Assets) to BreitBurn Operating L.P., a wholly-owned subsidiary of BreitBurn Energy Partners L.P. (NASDAQ: BBEP), for total cash consideration of approximately US$93 million, being the original purchase price of
approximately US$98 million less approximately US$5 million adjusted to account for preliminary purchase price adjustments.

On June 29, 2012,
Legacy completed its previously announced sale of its assets in Californias San Joaquin Basin (the California Assets) to Southern San Joaquin Production, LLC for total cash consideration of approximately US$26 million, being the
original purchase price of approximately US$27 million, less approximately US$1 million adjusted to account for preliminary purchase price adjustments. Pursuant to the terms of the purchase and sale agreement, US$3 million of the US$26 million
purchase price paid on closing has been deposited with an escrow agent through December 31, 2012 in connection with various indemnities contained therein.

Oil and Gas Sales Report

Average daily production sold
by region(1)



|                         |  |                                |     |  |                                |  |     |                              |  |  |                              |  |  |  |     | 
|------------------------ |  | ------------------------------ | --- |  | ------------------------------ |  | --- | ---------------------------- |  |  | ---------------------------- |  |  |  | --- | 
|                         |  | Three MonthsEnded June 30,2012 |     |  | Three MonthsEnded June 30,2011 |  |     | Six MonthsEnded June 30,2012 |  |  | Six MonthsEnded June 30,2011 | 
|Louisiana(2)             |  |                                |     |  |                                |  |     |                              |  |  |                              |  |  |  |     | 
|Oil - Bbl/d              |  |                                |    |  |                                |  | 57  |                              |  |  |                             |  |  |  | 66  | 
|Gas - Mcf/d              |  |                                |    |  |                                |  | 457 |                              |  |  |                             |  |  |  | 517 | 
|Total Louisiana (boe/d)  |  |                                |    |  |                                |  | 133 |                              |  |  |                             |  |  |  | 152 | 
|California(3)            |  |                                |     |  |                                |  |     |                              |  |  |                              |  |  |  |     | 
|Oil - Bbl/d              |  |                                | 228 |  |                                |  | 150 |                              |  |  | 242                          |  |  |  | 157 | 
|Gas - Mcf/d              |  |                                |    |  |                                |  |    |                              |  |  |                             |  |  |  |    | 
|Total California (boe/d) |  |                                | 228 |  |                                |  | 150 |                              |  |  | 242                          |  |  |  | 157 | 
|Wyoming(3)               |  |                                |     |  |                                |  |     |                              |  |  |                              |  |  |  |     | 
|Oil - Bbl/d              |  |                                | 615 |  |                                |  | 647 |                              |  |  | 652                          |  |  |  | 652 | 
|Gas - Mcf/d              |  |                                |    |  |                                |  |    |                              |  |  |                             |  |  |  |    | 
|Total Wyoming (boe/d)    |  |                                | 615 |  |                                |  | 647 |                              |  |  | 652                          |  |  |  | 652 | 
|Total Oil (Bbl/d)        |  |                                | 843 |  |                                |  | 854 |                              |  |  | 894                          |  |  |  | 875 | 
|Total Gas (Mcf)          |  |                                |    |  |                                |  | 457 |                              |  |  |                             |  |  |  | 517 | 
|Total (boe/d)            |  |                                | 843 |  |                                |  | 930 |                              |  |  | 894                          |  |  |  | 961 | 

Notes:



|(1) | These numbers are net to NiMins working interest for the relevant properties.
|--- | ------------------------------------------------------------------------------

|(2) | The Louisiana properties were sold on December 1, 2011 (see Liquidity and Capital Resources).
|--- | -----------------------------------------------------------------------------------------------

|(3) | The Wyoming and California properties were sold on June 28, 2012 and June 29, 2012, respectively.
|--- | -------------------------------------------------------------------------------------------------



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##### Table of Contents

Crude oil and natural gas sales

Given that the respective property sales transactions closed on June 28, 2012 and June 29, 2012, the associated revenues during the quarter are included in revenues and expenses for the period ending June
30, 2012. However, the purchase and sale agreements provide adjustments to the purchase price be made related to revenues and operating expenses for the period of April 1, 2012 through the closing date of the sale of the properties. As such, the
purchase price of the sale of the properties in June 2012, have been adjusted for revenues and operating expenses for the period of April 1 through closing date of the sale of the properties.

For the three months ended June 30, 2012, we recorded gross revenues of $6.09 million, as compared to $7.39 million for the three months ended June 30, 2011. Oil sales as a percentage of total
revenue during the three months ended June 30, 2012, as compared to the same period in 2011 increased from 98% to 100%. Oil volumes decreased by 2% to 843 barrels of oil per day (Bopd) and the price received decreased by 13% to
$80.23 during the three months ended June 30, 2012, as compared to the same period in 2011. All of the Companys natural gas sales are derived from its Louisiana properties. Effective December 1, 2011, the Company sold all of its
producing interest in Louisiana (see Liquidity and Capital Resources) and no natural gas sales were recorded for the three months ended June 30, 2012. The decrease in gross revenues for the three month ended June 30,
2012, as compared to the same period during 2011, is mainly due to lower average prices and a reduction in drilling efforts and work-overs in California and Wyoming.

For the six months ended June 30, 2012, we recorded gross revenues of $13.78 million, as compared to $14.06 million for the six months ended June 30, 2011. Oil sales as a percentage of total
revenue during the six months ended June 30, 2012, as compared to the same period in 2011 increased from 97% to 100%. Oil volumes increased by 2% to 894 Bopd and the price received decreased by 1% to $85.56 during the six months ended
June 30, 2012, as compared to the same period in 2011. All of the Companys natural gas sales are derived from its Louisiana properties. Effective December 1, 2011, the Company sold all of its producing interest in Louisiana (see
Liquidityand Capital Resources) and no natural gas sales were recorded for the three months ended June 30, 2012. The decrease in gross revenues for the six month ended June 30, 2012, as compared to the same period
during 2011, is mainly due to lower average prices and a reduction in drilling efforts and work-overs in California and Wyoming.

Crude Oil
Derivative Contracts

Commodity price risk is the risk that the future cash flows will fluctuate as a result of changes in commodity
prices. Commodity prices for crude oil and natural gas are impacted by world economic events that dictate the levels of supply and demand.

In
January of 2010, the Company entered into a derivative financial contract for 7,500 Bbls of NYMEX West Texas Intermediate (NYMEX WTI) crude oil production per month at a fixed rate of $85.10 per barrel until December 2012.

On December 20, 2010, we agreed to economically hedge the future sales of 125 barrels of NYMEX WTI crude oil per day at a fixed price of $90.40
starting January 1, 2011 for a period of 12 months and 250 barrels of NYMEX WTI crude oil per day at a fixed price of $90.40 starting January 1, 2012 for a period of 12 months.

On November 11, 2011, we entered into a swap contract to minimize the variability in cash flows due to price movements in crude oil. We agreed to economically hedge the future sales of 100 barrels of
NYMEX WTI crude oil per day at a fixed price of $96.75 starting January 1, 2012 for a period of 12 months.

At March 31, 2012, the
Company recognized $1.34 million as a derivative liability on crude oil derivative contracts. At December 31, 2011, the Company recognized $976,929 as a derivative liability on crude oil derivative contracts.

We do not designate our derivative financial instruments as hedging instruments for accounting purposes and, as a result, we recognize the current change
in a derivatives fair value in earnings. At June 30, 2012, we recognized $0 as a derivative liability on crude oil derivative contracts. At December 31, 2011, we recognized $976,929 as a derivative liability on crude oil derivative
contracts.

For the three months ended June 30, 2012, the change in derivative contracts included a realized gain of $875,373. For the
three months ended June 30, 2011, the change in derivative contracts included a realized loss of $531,070 and an unrealized gain of $2.03 million.

For the six months ended June 30, 2012, the Companys change in derivative contracts included a realized gain of $189,507. For the six months ended June 30, 2011, the Companys change
in derivative contracts included a realized loss of $776,863 and an unrealized loss of $356,446.



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##### Table of Contents

During the current quarter, the Company terminated and settled all derivative contracts as of May 17,
2012, and at June 30, 2012, carried no liability.

Royalties

California

We pay a crude oil production fee (Production Fee)
consisting of 100% of the first 635.10 barrels of crude oil produced per month which commenced in 2008 and declines at a rate of 5.5% each year. For the three and six months ended June 30, 2012, the Production Fee rate was 506.40 barrels of oil
per month. For the three and six months ended June 30, 2011, the Production Fee was 535.90 barrels of oil per month. During the same periods, we also paid an overriding royalty applicable after the Production Fee which for the three months
ended June 30, 2012, averaged 28.48% and 30.27% for the same period in 2011. For the six months ended June 30, 2012, the overriding royalties averaged 28.23% and 28.91% for the same period in 2011.

For the three months ended June 30, 2012, we recorded royalties in California in the amount of $598,659 as compared to $454,039 for the same period
in 2011. The increase in royalties during the three month ended June 30, 2012, is mainly due to higher oil production volumes and realized commodity prices.

For the six months ended June 30, 2012, we recorded royalties in California in the amount of $1.31 million as compared to $840,888 for the same period in 2011. The increase in royalties during the
three month ended June 30, 2012, is mainly due to higher oil production volumes and realized commodity prices.

Louisiana

Royalties related to Louisiana production varied by property. Effective December 1, 2011, the Company sold all of its producing interest
in Louisiana (see Liquidityand Capital Resources) and no royalties were recorded for the three and six months ended June 30, 2012. For the three months ended June 30, 2011, we recorded $230,663 in royalties representing
an average rate of 31.34%. For the six months ended June 30, 2011, we recorded $489,675 in royalties representing an average rate of 30.85%.

Wyoming

For the three months ended June 30, 2012, we recorded $651,319 in
royalties in Wyoming representing an average rate of 16.34%, as compared to $996,932 or 19.36% for the same period in 2011. The decrease in royalties is mainly due to lower realized commodity prices.

For the six months ended June 30, 2012, we recorded $1.47 million in royalties in Wyoming representing an average rate of 16.12%, as compared to
$1.79 million or 18.75% for the same period in 2011. The decrease in royalties is mainly due to lower realized commodity prices.

Operating
Costs



|                                |  |                                |           |  |                                |  |           |                              |  |  |                              |  |  |  |           | 
|------------------------------- |  | ------------------------------ | --------- |  | ------------------------------ |  | --------- | ---------------------------- |  |  | ---------------------------- |  |  |  | --------- | 
|                                |  | Three monthsended June 30,2012 |           |  | Three monthsended June 30,2011 |  |           | Six monthsended June 30,2012 |  |  | Six monthsended June 30,2011 | 
|                                |  | ($)                            |           |  | ($)                            |  |           | ($)                          |  |  | ($)                          | 
|Operating costs                 |  |                                | 2,140,088 |  |                                |  | 2,907,296 |                              |  |  | 4,257,619                    |  |  |  | 4,904,535 | 
|Average operating costs per boe |  |                                | 28.20     |  |                                |  | 34.35     |                              |  |  | 26.45                        |  |  |  | 28.19     | 

Given that the respective property sales transactions closed on June 28, 2012 and June 29, 2012, the associated revenues
during the quarter are included in revenues and expenses for the period ending June 30, 2012. However, the purchase and sale agreements provide adjustments to the purchase price be made related to revenues and operating expenses for the period of
April 1, 2012 through the closing date of the sale of the properties. As such, the purchase price of the sale of the properties in June 2012, have been adjusted for revenues and operating expenses for the period of April 1 through closing date of
the sale of the properties. For the three month ended June 30, 2012, we incurred operating costs in the amount of $2.14 million, as compared to $2.91 million for the same period in 2011. During the three months ended June 30, 2012, we incurred
decreased operating costs as compared to the same period in 2011 mainly due to lower activity in the current period due to the pending sale transactions and higher production equipment rentals and contract labor expense in the previous year.





19



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##### Table of Contents

For the six month ended June 30, 2012, we incurred operating costs in the amount of $4.26 million, as
compared to $4.90 million for the same period in 2011. During the six months ended June 30, 2012, the decrease in operating costs as compared to the same period in 2011 is primarily related to the decrease in activity in the current period.

Operating costs included severance taxes paid in Louisiana and Wyoming. There is no severance tax in the state of California. Severance taxes
in Louisiana consist of 12.5% on gross oil sales and $0.164 per Mcf of gas sales. For the three months ended June 30, 2012, we recorded $433,181 in severance taxes, as compared to $613,155 for the same period in 2011. The decrease in severance
taxes during the three months ended June 30, 2012 is mainly due to lower production volumes and commodity prices. For the six months ended June 30, 2012, we recorded $996,327 in severance taxes, as compared to $1.12 million for the same
period in 2011. The decrease in severance taxes during the six months ended June 30, 2012, is mainly due to lower production volumes and commodity prices.

General and Administrative Expenses (G&A)



|                                            |  |                                |           |  |                                |  |           |                              |  |  |                              |  |  |  |           | 
|------------------------------------------- |  | ------------------------------ | --------- |  | ------------------------------ |  | --------- | ---------------------------- |  |  | ---------------------------- |  |  |  | --------- | 
|                                            |  | Three monthsended June 30,2012 |           |  | Three monthsended June 30,2011 |  |           | Six monthsended June 30,2012 |  |  | Six monthsended June 30,2011 | 
|                                            |  | ($)                            |           |  | ($)                            |  |           | ($)                          |  |  | ($)                          | 
|G&A expense before stock-based compensation |  |                                | 2,177,665 |  |                                |  | 938,760   |                              |  |  | 3,753,693                    |  |  |  | 2,775,998 | 
|Average per boe                             |  |                                | 28.70     |  |                                |  | 11.09     |                              |  |  | 23.32                        |  |  |  | 15.96     | 
|Stock-based compensation (SBC)            |  |                                | 1,745,631 |  |                                |  | 637,622   |                              |  |  | 2,289,567                    |  |  |  | 1,334,068 | 
|Average per boe                             |  |                                | 23.01     |  |                                |  | 7.53      |                              |  |  | 14.22                        |  |  |  | 7.67      | 
|                                            |  |                                |           |  |                                |  |           |                              |  |  |                              |  |  |  |           | 
|G&A                                         |  |                                | 3,923,296 |  |                                |  | 1,576,382 |                              |  |  | 6,043,260                    |  |  |  | 4,110,066 | 
|                                            |  |                                |           |  |                                |  |           |                              |  |  |                              |  |  |  |           | 
|Average per boe                             |  |                                | 51.70     |  |                                |  | 18.63     |                              |  |  | 37.55                        |  |  |  | 23.63     | 

For the three months ended June 30, 2012, we recorded G&A expense, excluding SBC, of $2.18 million, as compared
to $938,760 for the same period in 2011. For the six months ended June 30, 2012, we recorded G&A expense, excluding SBC, of $3.75 million, as compared to $2.78 million for the same period in 2011. This increase during the three and six
months ended June 30, 2012, is primarily due to higher legal and accounting costs related to the Winding Up of the Company.

Following
the approval of the Winding Up of the Company, all outstanding unvested options became automatically vested and the Company recognized the remaining grant date fair value of approximately $1.7 million in the current period.

For the three months ended June 30, 2012, we recorded SBC in the amount of $1.75 million, as compared to $637,622 for the same period in 2011. The
increase in SBC for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011, is due to all of the outstanding unvested options automatically vesting in the current period as a result of the approval of the
Winding Up of the Company.

For the six months ended June 30, 2012, we recorded SBC in the amount of $2.29 million, as compared to $1.33
million for the same period in 2011. The increase in SBC for the six months ended June 30, 2012, as compared to the three months ended June 30, 2011, is due to all of the outstanding unvested options automatically vesting in the current
period as a result of the approval of the Winding Up of the Company.



|                             |  |                                |           |  |                                |  |   |                              |  |  |                              |  |  |  |   | 
|---------------------------- |  | ------------------------------ | --------- |  | ------------------------------ |  | - | ---------------------------- |  |  | ---------------------------- |  |  |  | - | 
|                             |  | Three monthsended June 30,2012 |           |  | Three monthsended June 30,2011 |  |   | Six monthsended June 30,2012 |  |  | Six monthsended June 30,2011 | 
|                             |  | ($)                            |           |  | ($)                            |  |   | ($)                          |  |  | ($)                          | 
|Liquidation related expenses |  |                                | 7,537,423 |  |                                |  |  |                              |  |  | 7,537,423                    |  |  |  |  | 



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##### Table of Contents

For the three and six months ended June 30, 2012, we recorded liquidation related expenses of $7.54
million primarily comprising of accrued professional fees, and severance and payroll related payments.

Depreciation, Depletion,
Amortization and Accretion Expense (DD&A)



|                |  |                                |         |  |                                |  |         |                              |  |  |                              |  |  |  |           | 
|--------------- |  | ------------------------------ | ------- |  | ------------------------------ |  | ------- | ---------------------------- |  |  | ---------------------------- |  |  |  | --------- | 
|                |  | Three monthsended June 30,2012 |         |  | Three monthsended June 30,2011 |  |         | Six monthsended June 30,2012 |  |  | Six monthsended June 30,2011 | 
|                |  | ($)                            |         |  | ($)                            |  |         | ($)                          |  |  | ($)                          | 
|DD&A expense    |  |                                | 799,536 |  |                                |  | 778,955 |                              |  |  | 1,697,361                    |  |  |  | 1,569,988 | 
|Average per boe |  |                                | 10.54   |  |                                |  | 9.20    |                              |  |  | 10.55                        |  |  |  | 9.03      | 

We follow the full-cost method of accounting and all costs included in proved properties and all future development costs
along with our total proved reserves determine the periods depletion cost.

For the three months ended June 30, 2012, we recorded
DD&A in the amount of $799,536 which was relatively consistent when compared to $778,955 for the same period in 2011.

For the six months
ended June 30, 2012, we recorded DD&A in the amount of $1.68 million which was relatively consistent when compared to $1.57 million for the same period in 2011.

Change in Fair Value of Warrants and Options

The exercise price of certain warrants is
denominated in Canadian dollars which is not the functional currency of the Company. As a result, these warrants are classified as a liability on the balance sheet and recorded at their fair value at the end of each period and the change in fair
value recognized in earnings.

During the three and six months ended June 30, 2012, none of the issued warrants were exercised, and due
to the pending liquidation, the Company valued the warrants based on the expected cash distribution to shareholders as this represents managements best estimate of the value of the underlying equity instruments as of June 30, 2012. As the
warrants have an exercise price greater than the expected cash distribution to shareholders, the value of the warrants were determined to approximate zero. Further, a gain of $458,960 and $235,134 was recognized in earnings during the three and six
months ended June 30, 2012, respectively.

During the three months ended June 30, 2011, 174,800 warrants were exercised and a total
of 5,020,900 warrants were exercised during the six months ended June 30, 2011. At June 30, 2011 the fair value of the outstanding warrants was $2.82 million, with a gain of $3.18 million recognized in earnings during the three months
ended June 30, 2011, and a charge of $1.39 million recognized in earnings during the six months ended June 30, 2011.

The exercise
price of 2.70 million stock options relating to former employees that transitioned to a consulting role is denominated in Canadian dollars, which is not the functional currency of the Company (which is the U.S. dollar). As a result, the
applicable 2.20 million vested options were classified as a liability on the balance sheet and recorded at their fair value at the end of each period with the change in fair value recognized in earnings. Following the approval of the Winding Up
of the Company, all outstanding unvested options became automatically vested and the Company recognized the remaining grant date fair value of approximately $1.7 million in the current period.

As a result of the approval of the Winding Up of the Company, the Company valued the stock options based on the expected cash distribution to
shareholders as this represents managements best estimate of the valuation of the underlying equity instruments as of June 30, 2012. As the stock options at June 30, 2012 have an exercise price greater than the expected cash distribution
to shareholders, the value of the stock options were determined to approximate zero. Further, a gain of $562,542 and $296,519 was recognized in earnings during the three and six months ended June 30, 2012, respectively.



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Interest Income and Expense

For the three months ended June 30, 2012, we recorded interest expense of $5.06 million ($3.23 million non-cash) related to the Senior Loan (as define herein, see Liquidity and Capital
Resources), as compared to $1.35 million ($230,253 non-cash) for the same period in 2011 related to the Senior Loan. For the six months ended June 30, 2012, we recorded interest expense of $6.44 million ($3.49 million non-cash)
related to the Senior Loan (as define herein, see Liquidity and Capital Resources), as compared to $2.63 million ($398,424 non-cash) for the same period in 2011 related to the Senior Loan.

As part of the Winding Up of the Company, on June 28, 2012, the Company prepaid the entire amount of the Senior Loan and as a result, a prepayment
penalty of 2% representing $707,705 was applied on in addition to the accrued interest of $1,118,853 and principal of $36,000,000. The remaining unamortized debt issuance cost of $3.23 million related to the Senior Loan is included in current period
interest expense.

For the three months ended June 30, 2012, we recorded interest income in the amount of $5,741 as compared to $14,542
for the same period in 2011. For the six months ended June 30, 2012, we recorded interest income in the amount of $10,673 as compared to $27,170 for the same period in 2011. Lower interest income for the three and six months ended June 30,
2012 and 2011 is due to a reduction in average interest bearing cash balances and lower interest rates.

Income Tax

At June 30, 2012, the Company had estimated an income tax liability of $2.48 million relating to taxable gains resulting from the sale of its oil and
gas properties in the current period. The estimated income tax liability was curtailed from the $6.5 million to $8.1 million liability range provided at the Companys Special Meeting due to updated information including but not limited to, 2012
estimated tax losses and alternative minimum tax adjustments. Further, the difference between the federal tax statutory rate of 35% and the effective tax rate of 7.9% is due to the current tax liability being offset by deferred tax assets related to
the net operating loss carryforwards that were previously subject to full valuation allowance.

Foreign Currency Exchange

Our foreign exchange expense is derived from our cash balances denominated in Canadian dollars. For the three months ended June 30, 2012, we recorded
a foreign exchange loss of $0 as compared to $299 for the same period in 2011. For the six months ended June 30, 2012, we recorded a foreign exchange loss of $438 as compared to a foreign exchange gain of $164,589 for the same period in 2011.



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Operations Review

The following tables provide information regarding our capital expenditures incurred during the periods presented:

Capital Expenditures



|                         |  |                                             |     |  |                                     |  |       | 
|------------------------ |  | ------------------------------------------- | --- |  | ----------------------------------- |  | ----- | 
|                         |  | 2012AmendedCapitalExpendituresBudget($000s) |     |  | Incurredthrough June 30,2012($000s) | 
|Property Costs           |  |                                             |     |  |                                     |  |       | 
|- California             |  |                                             |     |  |                                     |  | 19    | 
|- Wyoming                |  |                                             |     |  |                                     |  | 24    | 
|                         |  |                                             |     |  |                                     |  |       | 
|Total Property Costs     |  |                                             |     |  |                                     |  | 43    | 
|Drilling/Workovers       |  |                                             |     |  |                                     |  |       | 
|- Louisiana              |  |                                             |     |  |                                     |  |       | 
|- California             |  |                                             |     |  |                                     |  | 172   | 
|- Wyoming                |  |                                             | 216 |  |                                     |  | 898   | 
|                         |  |                                             |     |  |                                     |  |       | 
|Total Drilling/Workovers |  |                                             | 216 |  |                                     |  | 1,070 | 
|                         |  |                                             |     |  |                                     |  |       | 
|Facilities               |  |                                             |     |  |                                     |  |       | 
|- Louisiana              |  |                                             |     |  |                                     |  |       | 
|- California             |  |                                             |     |  |                                     |  | 63    | 
|- Wyoming                |  |                                             | 255 |  |                                     |  | 403   | 
|                         |  |                                             |     |  |                                     |  |       | 
|Total Facilities         |  |                                             | 255 |  |                                     |  | 466   | 
|                         |  |                                             |     |  |                                     |  |       | 
|Total Capital Budget     |  |                                             | 471 |  |                                     |  | 1,579 | 
|                         |  |                                             |     |  |                                     |  |       | 

On April 24, 2012 and April 26, 2012, the Company signed definitive Purchase and Sale Agreements for the sale
of its oil and gas assets in Wyoming and California. As a result, the 2012 Capital Expenditures Budget was amended. On June 28, 2012 and June 29, 2012, the Company completed its sale of its oil and gas properties in Wyoming and California
respectively.

Through June 30, 2012, the Company incurred approximately $1.58 million of capital expenditures, of which $378,698 related
to net capital related charges included in post close adjustments with the respective buyers of the Companys oil and gas properties.

Liquidity and Capital Resources

Sale
of Assets and Winding Up

The annual and special meeting (the Special Meeting) of holders (Shareholders) of common
shares of the Company (Common Shares) was held on June 26, 2012. At the Special Meeting, in addition to annual items of business, shareholders were asked to consider and vote on, among other things, special resolutions approving the
proposed sale of all or substantially all of the Companys assets (the Sale of Assets) including those assets held by NiMins wholly-owned subsidiary, Legacy pursuant to purchase and sale agreements with respect to its Wyoming
based assets and California based assets.

At the Special Meeting, the shareholders were also asked to consider and vote on the voluntary
winding up and dissolution of the Company pursuant to the laws of the Business Corporations Act (Alberta) (the Winding Up ) and the distribution to shareholders of the net proceeds of the Sale of Assets (less the settlement of
obligations of Legacy,) and cash on hand, as part of such liquidation and dissolution after satisfaction of all liabilities of the Company, by way of a reduction of the stated capital of the common shares of the Company.

Both the Sale of Assets and the Winding Up were approved by the shareholders at the Special Meeting. Legacy is a wholly owned subsidiary of NiMin and
therefore, in order for the Company to complete the Winding Up, the appropriate corporate steps must also occur for the dissolution and liquidation of Legacy. Pursuant to the approval of the Sale of Assets, Legacy proceeded with the sale of the
Wyoming oil and gas assets and the California oil and gas assets all as more particularly described below.



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The Winding Up and the dissolution and liquidation of Legacy contemplates the orderly disposition of the
assets, the orderly discharge of all outstanding liabilities, including all outstanding debt, and after the establishment of appropriate reserves, the distribution of cash to shareholders in installments.

Upon completion of the Sale of the Wyoming Assets and California Assets as described further below, the disposition of all remaining assets of Legacy and
the settlement of all liabilities of the Company and Legacy, the Company intends to distribute the net proceeds of the liquidation and dissolution of both Legacy and the Company to shareholders in one or more distribution installments.

On June 28, 2012, the Company completed its previously announced sale of its assets in Wyomings Big Horn Basin (the Wyoming
Assets) to BreitBurn Operating L.P., a wholly-owned subsidiary of BreitBurn Energy Partners L.P. (NASDAQ: BBEP), for total cash consideration of approximately US$93 million, being the original purchase price of approximately US$98 million less
approximately US$5 million adjusted to account for preliminary purchase price adjustments.

On June 29, 2012, the Company completed its
previously announced sale of its assets in Californias San Joaquin Basin (the California Assets) to Southern San Joaquin Production, LLC for total cash consideration of approximately US$26 million, being the original purchase price
of approximately US$27 million less approximately US$1 million adjusted to account for preliminary purchase price adjustments. Pursuant to the terms of the purchase and sale agreement, US$3 million of the US$26 million purchase price paid on closing
has been deposited with an escrow agent for a period of 6 months in connection with various indemnities contained therein.

The following
table summarizes our cash flows for the periods presented.



|                                                      |  |                                  |             |   |                                  |  |            |                                |  |  |                                |   |  |  |             |  
|----------------------------------------------------- |  | -------------------------------- | ----------- | - | -------------------------------- |  | ---------- | ------------------------------ |  |  | ------------------------------ | - |  |  | ----------- | -
|                                                      |  | Three monthended June 30,2012($) |             |   | Three monthended June 30,2011($) |  |            | Six monthended June 30,2012($) |  |  | Six monthended June 30,2011($) |  
|Cash flows (used in) provided by operating activities |  |                                  | (1,086,183  | ) |                                  |  | 2,476,631  |                                |  |  | (353,751                       | ) |  |  | 120,783     |  
|Cash flows (used in) provided by investing activities |  |                                  | 115,987,775 |   |                                  |  | (7,244,555 | )                              |  |  | 114,522,823                    |   |  |  | (11,277,339 | )
|Cash flows (used in) provided by financing activities |  |                                  | (36,029,108 | ) |                                  |  | 130,245    |                                |  |  | (36,029,108                    | ) |  |  | 7,736,015   |  
|                                                      |  |                                  |             |   |                                  |  |            |                                |  |  |                                |   |  |  |             |  
|Increase (decrease) in cash and cash equivalents      |  |                                  | 78,872,484  |   |                                  |  | (4,637,679 | )                              |  |  | 78,139,964                     |   |  |  | (3,420,541  | )
|Cash and cash equivalents at beginning of year        |  |                                  | 3,078,508   |   |                                  |  | 10,935,207 |                                |  |  | 3,811,028                      |   |  |  | 9,490,005   |  
|Foreign exchange on cash and cash equivalents         |  |                                  |            |   |                                  |  | (299       | )                              |  |  |                               |   |  |  | 164,589     |  
|                                                      |  |                                  |             |   |                                  |  |            |                                |  |  |                                |   |  |  |             |  
|Cash and cash equivalents at end of year              |  |                                  | 81,950,992  |   |                                  |  | 6,297,229  |                                |  |  | 81,950,992                     |   |  |  | 6,234,053   |  
|                                                      |  |                                  |             |   |                                  |  |            |                                |  |  |                                |   |  |  |             |  



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In September 2011, we completed the Private Placement of 2,758,620 Units of the Company at a purchase price
of CDN$1.45 per Unit for gross proceeds of CDN$3,999,999 or USD $4,010,545, net of CDN $267,224 or USD $267,928 of agents fees.

Effective
December 1, 2011, we completed the divestiture of the Companys non-operated and non-core interests in producing oil and gas properties located in the southern onshore region of Louisiana for a total of $1 million.

On June 28, 2012 and June 29, 2012, the Company completed its sale of its oil and gas properties in Wyoming and California for USD $93 million
and USD $26 million, respectively. Total cash considerations are subject to post close adjustments.

On June 30, 2010, the Company
entered into a senior secured loan (the Senior Loan) in the amount of $36 million from a U.S. based institutional private lender (the Lender). The Company borrowed $36 million subject to an original issuer
discount of 7.5%, a commitment fee of 1%, a placement fee of 1% and a transaction fee of 3%. Debt issuance costs of $4.9 million were incurred and were being amortized to net income under the effective interest method. The Senior Loan had a 12.5%
fixed interest rate and a term of five years. Interest was paid quarterly beginning September 30, 2010.

As part of the Winding Up of the
Company, on June 28, 2012, the Company prepaid the entire amount of the Senior Loan and as a result, a prepayment penalty of 2% representing $707,705 was applied on in addition to the accrued interest of $1,118,853 and principal of $36,000,000.

Research and development, patents and licenses, etc.

In December, 2010, the U.S. Patent and Trademark Office issued a patent to NiMin for its CMD process for enhanced oil recovery. Our patent covers the process of the injection of oxygen and water as foam
to create carbon dioxide (CO2) and steam in the
reservoir through wet combustion. Assets relating to the CMD technology were written down to the net realizable value of $0 within general and administrative expenses.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements during the three
months ended June 30, 2012 and 2011, except for the office lease obligations noted below.

Critical Accounting Policies and Estimates

Managements Discussion and Analysis of Financial Condition and Results of Operations are based upon our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For
a detailed discussion of our critical accounting policies, please refer to our Annual Report. The Company adopted the liquidation basis of accounting effective June 30, 2012. This basis of accounting is considered appropriate when, among other
things, liquidation of a company is imminent and the net realizable values of assets are reasonably determinable. Under this basis of accounting, assets are valued at their net realizable values and liabilities are stated at their estimated
settlement amounts. The Company will continue to incur operating costs and receive income on its cash investments from June 30, 2012 through the liquidation of the Company throughout the Liquidation Period. On a regular basis, we
evaluate our assumptions, judgments and estimates that can have a significant impact on our reported net assets in liquidation based on the most recent information available to us, and when necessary make changes accordingly. Actual costs and income
may differ from our estimates, which might reduce net assets available in liquidation to be distributed to shareholders.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

Our
primary market risk is market changes in oil and natural gas prices. Commodity prices for crude oil and natural gas are impacted by world economic events that dictate the levels of supply and demand. During the year ended December 31, 2011, we
entered into swap contracts to minimize the variability in cash flows due to price movements in crude oil (See Item 2  MD&A  Crude Oil and Derivative Contracts).

At June 30, 2012, we recognized $0 as a derivative liability on crude oil derivative contracts as all contracts were fully settled.

The objective of the use of derivative financial instruments is to achieve more predictable cash flows in an environment of volatile oil and gas prices
and to manage its exposure to commodity price risk. While the use of these derivative instruments limits the downside risk of adverse price movements, these instruments may also limit our ability to benefit from Favorable price movements.

ITEM 4. CONTROLS AND PROCEDURES



| | (a) | Disclosure Controls and Procedures
| | --- | ----------------------------------

Our
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) conducted an evaluation regarding the effectiveness of the design and operation of the Companys disclosure control and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (Exchange Act) as of the end of the period covered by this quarterly Report on Form 10-Q.

Based on the evaluation, management concluded that as of June 30, 2012, the Companys disclosure controls and procedures continue to not be effective because of the material weaknesses as
described in Managements Report on Internal Control over Financial Reporting in our annual report on Form 10-K for the year ended December 31, 2011, as amended from time to time, and filed with the SEC on March 14, 2012.



| | (b) | Changes in Internal Control Over Financial Reporting
| | --- | ----------------------------------------------------

There were no changes in the Companys internal control over financial reporting during the quarter ended June 30, 2012, that have materially affected or are reasonably likely to materially
affect, the Companys internal control over financial reporting.

PART II  OTHER INFORMATION



|ITEM 1A. | RISK FACTORS
|-------- | ------------

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None



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ITEM 6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

EXHIBITS



|     |  |                                                                                                                                                                                                                                   
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | First Amendment to Credit Agreement dated as of May 18, 2012 (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed May 24, 2012).                                                                    
|     | 
|10.2 |  | Purchase and Sale Agreement among Legacy, Inc., NiMin Energy Corp. and Breitburn Operating L.P. dated April 24, 2012 (incorporated by reference to Exhibit 10.1 of the Current Report
on Form 8-K filed April 30, 2012).          
|     | 
|10.3 |  | Purchase and Sale Agreement among Legacy, Inc., NiMin Energy Corp. and Southern San Joaquin Production, LLC. dated April 26, 2012 (incorporated by reference to Exhibit 10.1 of the
Current Report on Form 8-K filed May 2, 2012).
|     | 
|31.1 |  | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                               
|     | 
|31.2 |  | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                               
|     | 
|32.1 |  | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                   



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NIMIN ENERGY CORP.

(Registrant)

|                      |  |  |  |     |  |                             |  |                           
|--------------------- |  |  |  | --- |  | --------------------------- |  | --------------------------
|                      |  |  | 
|Dated: August 9, 2012 |  |  |  | By: |  | /s/    CLARENCE COTTMAN
III
|                      |  |  |  |     |  |                             |  | Clarence Cottman III      
|                      |  |  |  |     |  |                             |  | Chief Executive Officer   
|                      |  |  |  |    
|                      |  |  |  |     |  | By:                         |  | /s/    JONATHAN S.
WIMBISH
|                      |  |  |  |     |  |                             |  | Jonathan S. Wimbish       
|                      |  |  |  |     |  |                             |  | Chief Financial Officer   



28