Bakken Resources Inc - 2016 Annual Report

2016 ANNUAL REPORT The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.

W I L L I A M A R T H U R WA R D

DEAR SHAREHOLDERS, Each year-end is an opportunity to reflect on the year that was and to look forward to the years to come.

2016 was a year of recovery: market conditions, industry fundamentals, and Company focus Rock Bottom. Market volatility began in mid-2014 and continued into 2016. The industry and market had to hit rock bottom before rebounding. Since hitting lows in February, oil and natural gas prices had rebounded by more than 115% by year’s end. Along with the price rebound, political turmoil, and supply volatility had stabilized by year’s end, which created a strong sense of optimism going into 2017.

Rock Solid. Even with the market instability that defined early 2016, the Company realized record crude oil and natural gas production volumes. By year’s end, more than 20 new producing wells came on line, increasing oil (47%) and natural gas (97%) production to record levels. The Company also has over 20 wells in various stages of completion, with potentially more than 100 total producing wells anticipated in 2017.

We anticipate that the price rebound combined with increasing production levels will stimulate revenue and profitability in 2017.

Building Longevity. One key to business longevity is long-term planning and investing. Domestic oil production is characterized by sharp, quick production declines; these declines necessitate continual replacement of produced reserves. Our long-term goal is to acquire producing assets that offer geographic and product diversity as well as longevity.

Currently, the Company’s “asset base” generates revenues solely from the Bakken shale play, with 90% of those revenues coming from oil production. By acquiring assets in multiple oil and natural gas producing basins, risk and production characteristics can be addressed, and asset longevity increased. The addition of natural gas assets could further lower overall risk.

Commitment. This year the Company will be focused on capital investment in new producing assets and moving forward beyond litigations that have persisted with a contained group of individuals.

The Board of Directors and management of Bakken Resources are dedicated and determined to creating long-term value for you, the shareholders, through vision, planning, and sound execution. We diligently study the market to identify the best opportunities meeting our stringent investment criteria to generate long-term value in even the most volatile markets.

Thank you for your continued support. We look forward to growth and success during 2017.

DAN ANDERSON CFO/DIRECTOR

DR. SOLANGE CHARAS DIRECTOR/AUDIT COMMITTEE CHAIR

HERMAN LANDEIS DIRECTOR

KAREN MIDTLYNG CORPORATE SECRETARY/DIRECTOR

DOUG WILLIAMS, CPA DIRECTOR/AUDIT COMMITTEE MEMBER

BILL BABER DIRECTOR

Price volatility in the crude oil and natural gas markets has been a reality for the past 100 years. Bakken Resources Inc. has the assets and the long-term vision to invest, grow, and thrive in these market conditions.

FINANCIAL PERFORMANCE 2016 2015 2014

RESERVES Crude Oil (brls) 48,322,403 53,624,580

57,238,767

Natural Gas (Mcf) 73,377,156 80,603,008

84,265,294

PRODUCTION Crude Oil (brls) 5,302,177 3,614,187

3,308,202

Natural Gas (Mcf) 7,225,852 3,662,286

3,280,820

AVERAGE PRICES FOR THE YEAR

Crude Oil (brls) $39.06 $43.01

$85.20

Natural Gas (Mcf) $2.29

$6.92

$2.31

REVENUE (NET) $626,995 $868,042

$1,635,854

EXPENSES ($2,586,179) $1,740,721

($4,292,680)

Net Income (Loss) Before Taxes ($2,058,210) ($865,504)

$5,938,252

Income Taxes $448,536 $196,773

($1,958,600)

NET INCOME (LOSS)

($1,609,674)

($668,731)

$3,979,652

TOTAL ASSETS

$6,658,546

$6,632,120

$8,353,585

TOTAL LIABILITIES $423,220 $189,245

$1,244,292

SHAREHOLDER EQUITY $6,235,326

$7,109,293

$6,442,875

DISCLAIMER: Certain statements in the letter and online annual report are “forward-looking statements” within the meaning of Private Litigation Securities Reform Act of 1995.

These forward-looking statements are based on certain assumptions and reflect our current expectations of future events. As a result, forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of the factors that could cause actual results to differ materially from current expectations are discussed in the “Risk Factors” section of our 2016 annual report as well as in other materials that we from time to time file with, or furnish to, the U.S. Securities and Exchange Commission. It is not possible to anticipate all risk factors, and investors should not consider any list of such factors to be an exhaustive list of all risks or uncertainties. There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. Except as may be required by applicable law, we disclaim any intention or obligation to update or revise any forward-looking statements.

COMPANY PROFILE Bakken Resources Inc. is a Nevada Corporation whose headquarters are located in Helena, Montana. We are an energy company actively engaged in oil and gas resource royalty plays located in the United States. Our current operations are principally focused in proven, producing oil and gas shales primarily in the Bakken region of western North Dakota. Our mineral assets are primarily non-working interests.

In an industry defined by cycles, we are building a company to endure for the long-term.

Our long-term strategy is defined by growth and diversity in proven reserves.

Diversity creates opportunity to profit when commodity prices are high, profit when they are low, and minimize risk. Our long-term approach creates opportunities to secure proven reserves at deep discounts.

www. b a k ke n re s o u rce s i n c .co m

PO Box 1839

Helena, Montana 59624