OTC: LRDC

We
believe the costs of implementing the UGD method are significantly lower than those presently experienced by other commonly used Enhanced
Oil Recovery (“EOR”) methods. We also estimate that we can materially increase the field oil production rate from prior periods
and recover amounts of oil equal to or greater than amounts previously recovered from selected mature fields. We intend to implement
the UGD method in oil fields with a minimum of 25 million barrels of estimated recoverable oil.

When
we acquire a targeted oil field, we will continue to operate the producing field and expect to generate revenue from doing so. Once we
have developed the underground chamber and the UGD method is prepared for operation, we will cap the conventional wells and begin UGD
production. We believe the effect of such operations should result in minimal disruption of oil production from our field investments.

On
June 14, 2011, we entered into several exclusive licensing and management agreements with Stranded Oil Resources Corporation, or SORC,
a wholly owned subsidiary of Alleghany Corporation, or Alleghany. to manage the acquisition and operation of mature oil fields in Kansas,
Wyoming and Louisiana, focused on the recovery of “stranded” oil from those mature fields primarily using UGD. We performed
those management services in exchange for a carried interest in SORC, a quarterly management fee and reimbursement from SORC for our
employee-related expenses. Such fees and reimbursements were effectively all of our revenues prior to our acquisition of SORC pursuant
to the closing of the Securities Purchase Agreement with Alleghany described below.

On
December 31, 2020, we entered into a Securities Purchase Agreement with Alleghany. Under that agreement, we purchased all of the issued
and outstanding shares of SORC. As consideration for the SORC shares, we paid Alleghany $72,678 in cash and agreed to pay Alleghany a
seven-year royalty of 5.0% of our future revenues and net profits from our oil, gas, gas liquids and all other hydrocarbon operations,
subject to certain adjustments. Currently, SORC is a wholly owned subsidiary of Laredo and is not conducting any ongoing operations. All
intellectual property generated by SORC prior to December 31, 2020, transferred with the stock purchase.

Secondary
to pursuing UGD projects is drilling conventional oil wells in Montana. Prior to purchasing the shares of SORC, while implementing UGD
projects for Allegheny, we gained specialized know-how, intellectual property and operational experience in evaluating, acquiring, operating
and developing oil and gas properties, as well as expertise in designing, drilling and producing conventional oil wells. Based upon that
know-how, we identified and acquired 45,246 gross acres, and 37,932 net acres, of mineral property interests in the State of Montana
in the Lustre and Midfork fields and the West Fork area. To develop our acquired mineral property acreage, we established relationships
with several organizations and investment groups, including the following entities: (1) Olfert 11-4 Holdings, LLC, (2) Texakoma Exploration
and Production, LLC, or Texakoma, (3) Erehwon Oil & Gas, LLC, or Erehwon, (4) an independent investor group through Hell Creek Crude
LLC, or HCC, and (5) West Fork Resources, LLC, or WFR. As of May 31, 2026, we and Texakoma have drilled five wells in the Lustre and
Midfork fields. None of these wells have been economically successful due primarily to encountering excess water due to lack of 3D seismic
information to which we now have access. Although we are continually attempting to raise additional funds to develop our other mineral
property interests that we have purchased in the area, our priority is seeking UGD projects globally and have abandoned most of the leased
mineral property interests acquired. We also disposed of our ownership in Hell Creek Crude LLC on November 15, 2025 and have terminated
any further drilling projects in the area. As of September 14, 2026, we have 2,945 net acres of mineral property interests located in
Montana.

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We
also have a 50% interest in the Cat Creek oil field, located west of our mineral rights described above, which is recorded with no value
on our financial statements.

Competition

Our
operating results are largely impacted by competition from other exploration and production companies in all areas of operation, including
the acquisition of mature fields. Our competitors include large, well-established companies with substantially more capital resources
than us.

Oil
and Gas Price Volatility

For
the last two years beginning on June 1, 2024, market prices for oil and gas have fluctuated broadly as oil and gas prices remain volatile.

Operating
Hazards and Uninsured Risks

Oil
and gas drilling activities are subject to many risks, including, but not limited to, the risk that those activities will not produce
commercially viable oil and gas reserves. The cost and timing of drilling, completing and operating wells is often uncertain and drilling
operations may be curtailed, delayed or canceled as a result of numerous factors, including low oil and gas prices, title problems, reservoir
characteristics, weather conditions, equipment failures, delays imposed by project participants, compliance with governmental requirements,
shortages or delays in the delivery of equipment and services and increases in the cost for such equipment and services. Our future oil
recovery activities may not be successful. If so, such failure may have a material adverse effect on our business, financial condition,
results of operations and cash flows.

Our
operations are subject to hazards and risks inherent in drilling for and producing and transporting petroleum products, including fires,
natural disasters, explosions, encountering formations with abnormal pressures, blowouts, craterings, and pipeline ruptures and spills.
Any of these events may result in the loss of hydrocarbons, environmental pollution, personal injury claims and other damage to our properties
and those of others. We maintain insurance against some, but not all, of the risks described above. In particular, the insurance we maintain
does not cover claims relating to failure of title to oil leases, loss of surface equipment at well locations, business interruption,
loss of revenue due to low commodity prices or loss of revenues due to well failure. The occurrence of any such event that is not covered,
or not fully covered, by insurance that we maintain or may acquire, could have a material adverse effect on our operations.

Governmental
Regulation

Oil
and natural gas exploration, production, transportation and marketing activities are subject to extensive laws, rules and regulations
promulgated by federal and state legislatures and agencies, including but not limited to the Mine Safety and Health Administration, or
MSHA, the Federal Energy Regulatory Commission, or FERC, the Environmental Protection Agency, or EPA, the Bureau of Land Management,
BLM, and various other federal or state regulatory agencies. Our failure to comply with any such laws, rules and regulations may result
in substantial penalties, including the delay or prohibition of our operations. The legislative and regulatory burden on the oil industry
described above increases our cost of doing business.

State
regulatory agencies, as well as the federal government when we operate on federal or Indian lands, require permits for drilling operations,
drilling bonds and reports, and impose other requirements relating to the exploration and production of oil and gas. There are also statutes
or regulations addressing conservation matters, including provisions for the unitization or pooling of oil and natural gas properties,
the establishment of maximum rates of production from wells and the regulation of spacing, plugging and abandonment of such wells. In
each jurisdiction, we may need exceptions to some applicable regulations requiring regulatory approval. All of these matters could affect
our operations.

Environmental
Matters

The
oil industry is subject to extensive and changing federal, state and local laws and regulations relating to environmental protection,
including the generation, storage, handling, emission, transportation and discharge of materials into the environment, as well as safety
and health. The recent trend in environmental legislation and regulation is generally toward stricter standards, and this trend is likely
to continue. These laws and regulations may require a permit or other authorization before construction or drilling commences, and for
certain other activities, limit or prohibit access, seismic acquisition, construction, drilling and other activities on certain lands
lying within wilderness and other protected areas, impose substantial liabilities for pollution resulting from its operations, and require
the reclamation of certain lands.

The
permits that are required for oil and gas operations are subject to revocation, modification and renewal by issuing authorities.

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Federal
regulations require certain owners or operators of facilities that store or otherwise handle petroleum products to prepare and implement
spill prevention, control countermeasures and response plans relating to the possible discharge of oil into surface waters. The Oil Pollution
Act of 1990, or OPA, contains numerous requirements relating to the prevention of and response to oil spills into waters of the United
States. For onshore and offshore facilities that may affect waters of the United States, the OPA requires the operator to demonstrate
the financial ability to respond to discharges. Regulations are currently being developed under federal and state laws concerning oil
pollution prevention and other matters that may impose additional regulatory burdens on participants in the oil and gas industry. In
addition, the Clean Water Act and analogous state laws require permits to be obtained to authorize discharge into surface waters or to
construct facilities in wetland areas. The Clean Air Act of 1970 and its subsequent amendments impose permit requirements and necessitate
certain restrictions on point source emissions of volatile organic carbons (nitrogen oxides and sulfur dioxide) and particulates with
respect to certain of our operations. The EPA and designated state agencies have in place regulations concerning discharges of storm
water runoff and stationary sources of air emissions. These programs require covered facilities to obtain individual permits, participate
in a covered group or seek coverage under an EPA general permit. A number of agencies, including but not limited to MSHA, the EPA, the
BLM, and similar state commissions, have adopted regulatory guidance in consideration of the operational limitations on oil and gas facilities
and their potential to emit pollutants.

Facilities

Our
principal executive office is located at 2021 Guadalupe Street, Ste. 260, Austin, Texas 78705.

Personnel

As
of May 31, 2026, we had seven full-time employees and no part-time employees.

Website
Access

We
make available on our web site our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K,
and all amendments to those reports, as soon as reasonably practicable after we file such reports electronically with the Securities
and Exchange Commission. Information on our website is not included as part of this report.