3 Forks

May 17, 2016

Dear Shareholders;

On Monday, May 2, 2016, Three Forks closed an acquisition to acquire a 75% working interest in the Fuller Reservoir, a mature, shallow (3,000’) oil field in Fremont County, Wyoming. This step marks a milestone in the Company’s attempt to return to active ownership in the oil and gas sector. As you know, the Company has been involved in a major effort to restructure, rationalize assets and re-launch itself over the past 18 months. The Board of Directors, led by Tom Ness (Acting President), has successfully taken the Company through this transition amid the longest and most persistent decline in oil prices in recent history. They brought us to the “re-launch pad” this past May 2nd.

Fuller Reservoir is a solid, low risk oilfield acquisition that we were able to make in the currently depressed oil market environment. It was an acquisition that was accomplished using available funds from Three Forks and required no issuance of debt. In order to accomplish this, we had to look for a smaller acquisition that we could afford with available funds. In this case, not only were we able to make the acquisition but we still have enough remaining cash to restore and grow production that has been shut-in simply due to lack of maintenance. As such, the acquisition will provide sufficient cash flow to fund the Company, albeit sparingly, through the end of 2017. While we feel Fuller is a good “starter kit,” we will have to make additional acquisitions to grow the Company to a larger size in order to achieve critical mass. We are developing a strategy which will achieve this goal. We also believe that the oil markets have bottomed and that there are additional acquisitions that can be made under favorable valuation terms.

The strategy behind the Fuller acquisition was to acquire proved developed producing (PDP) reserves at currently low market prices and then invest a limited amount of funds to restore production that has been curtailed due to low oil prices. Low cash flows, which were inadequate to maintain production over the past year and a half, have been a persistent problem for many operators. We believe that the value of the Fuller PDP reserves at year-end 2016 could be significantly higher than our acquisition price, assuming we hit our forecasted production and price targets for 2016.

So where do we go from here? The next step will be to execute on our development plan at Fuller while we identify one or two additional assets similar to Fuller Reservoir. This will take a bit longer, since we will likely have to secure an external source of funding or utilize third party capital through an industry partner, but demonstrating results at Fuller should help our process. Funding in the current environment is still challenging for oil and gas companies, but not impossible. Once we build a solid and diversified production base of approximately 200 barrels of oil per day, we believe we can focus on a slightly larger acquisition using traditional capital markets and accelerate our growth.

In conclusion, I would like to comment on one last element of our strategy that is often overlooked but is critically important in the current industry environment – control of costs. Not only do we need to pay attention to operating costs and strive to be the low cost producer, but we need to manage corporate overhead as well. We have to design the Company for a “new era” environment where we have to be profitable in a $40 - $50 per barrel oil price. In a practical sense, this means that we need to be smart about how we incur and structure our costs. It also means that we need to concentrate more on financial returns and not volumes produced or revenue growth alone.

As a follow-up to this Shareholder Letter, I would like to invite all Three Forks shareholders to participate in a conference call, which we will host on Wednesday, June 1, 2016 at 10am mountain, 11am Central, 12 noon eastern time. The call in number is (712) 755 7031 and the meeting ID is: 630-516-375.

Thank you again for your support of the Board of Directors during this challenging period. We hope that our future communications will be positive and constructive as we take the tangible steps necessary to rebuild and grow the Company.


Karl Arleth
Acting CEO
On behalf of the Board of Directors of Three Forks Inc.

Forward-Looking Statements
This news release includes statements that may constitute "forward-looking" statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.  Forward looking statements are statements that are not historical facts and are generally, but not always, identified by word such as "expects," "plans," "anticipates," "believes," "intends," "estimates," projects," "potential" and similar expressions. Forward-looking statements in this document include statements regarding the Company's plans and expectations to improve its asset base and raise additional capital; plans to attract permanent management and board members; plans to update shareholders; and plans to increase value.  Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in the prices of oil and gas, uncertainties inherent in estimating quantities of oil and gas reserves and projecting future rates of production and timing of development activities, competition, operating risks, acquisition risks, liquidity and capital requirements, the effects of governmental regulation, adverse changes in the market for the Company's oil and gas production, dependence upon third-party vendors, and other risks.