Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) ~~OF THE~~

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2011~~2012

Commission file number: 000-54162

LOGO

(Exact name of registrant as specified in its charter)


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

1160 Eugenia Place, Suite 100, Carpinteria, California USA 93013		Tel: 805.566.2900 Fax: 805.566.2917
(Address of principal executive offices)		(Registrant’s telephone number, including area code)

Securities registered or to be registered pursuant to Section 12(b) of the Act.


Title of each class		Name of each exchange on which registered
N/A		N/A

Securities registered or to be registered pursuant to Section 12(g) of the Act.


		Title of each class
		Common Shares, no par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ~~Yes~~ ¨ Yes No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ~~Yes~~ ¨ No Yes x No

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 Yes ¨ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ~~Yes~~ ¨ No Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference on Part III of this Form 10-K or any amendment to this Form10-K. ¨ x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of ~~June~~December 3027, ~~2011~~2012 based on the closing sales price of the Common Shares on the ~~Toronto~~NEX ~~Stock~~of ~~Exchange~~$0.10 per Common Share was $ ~~116~~6,~~879~~983,~~107~~440.

The number of Common Shares, without par value, outstanding on March 1411, ~~2012~~2013, was 69,834,396.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than April 30, 2012, in connection with the registrant’s 2012 Annual Meeting of Shareholders, are incorporated herein by reference into Part III of this Annual Report on form 10-K.

NIMIN ENERGY CORP.

FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

		Page
Introduction		3	3
Glossary of Terms		4	4
PART I
Items 1&2.	Business and Properties	9
Items 1.	Business		8
Item 1A.	Risk Factors	21	10
Item 1B.	Unresolved Staff Comments	27	10
Item 3.	Legal Proceedings	27
Item 2.	Properties		10
Item 4.	Mine Safety Disclosure	27
Item 3.	Legal Proceedings		10
PART II
Item 4.	Mine Safety Disclosure		10
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	28
PART II
Item 6.	Selected Financial Data	32
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		11
Item 7.	Management Discussion and Analysis of Financial Condition and Results of Operation	33
Item 6.	Selected Financial Data		14
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	47
Item 7.	Management Discussion and Analysis of Financial Condition and Results of Operation		17
Item 8.	Financial Statements and Supplementary Data	47	27
Item 9.	~~Changes~~Controls in and ~~Disagreements with Accountants on Accounting and Financial Disclosure~~Procedures	47	27
Item 9A.	Controls and Procedures	48
PART III
Item 9B.	Other Information	51
Item 10.	Directors, Executive Officers and Corporate Governance		29
PART III
Item 11.	Executive Compensation		35
Item 10.	Directors, Executive Officers and Corporate Governance	52
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters		48
Item 11.	Executive Compensation	52
Item 13.	Certain Relationships and Related Transactions, and Director Independence		49
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters	52
Item 14.	Principal Accountant Fees and Services		50
Item 13.	Certain Relationships and Related Transactions, and Director Independence	52
PART IV
Item 14.	Principal Accountant Fees and Services	52
Item 15.	Exhibits and Financial Statement Schedules		51
PART IV
	Signatures		54
Item 15.	Exhibits and Financial Statement Schedules	53
	Signatures	56

Note Regarding Forward-Looking Information

This Annual Report on Form 10-K contains certain forward-looking information, which is based upon the current internal expectations, estimates, projections, assumptions and beliefs of NiMin, as of the date of such statements or information. Words such as “plan”,” “expect”,” “project”,” “intend”,” “believe”,” “anticipate”,” “estimate”,” “may”,” “will”,” “potential”,” “proposed,” and other similar words, or statements that certain events or conditions “may” or “will” occur, are intended to identify forward-looking information. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking information. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Such forward -looking information in this Annual Report speaks only as of the date of this Annual Report.

Although NiMin believes that the expectations reflected in the forward -looking information are reasonable, there can be no assurance that such expectations will prove to be correct. NiMin cannot guarantee future results, levels of activity, performance or achievements. Some of the risks and other factors, some of which are beyond the control of NiMin which could cause results to differ materially from those expressed in the forward-looking information contained in this Annual Report, include, but are not limited to:

•Statements ~~general~~made ~~economic~~in ~~conditions~~this inReport regarding the ~~United~~payment ~~States~~of additional liquidating distributions and of the timing of the dissolution are forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties, ~~Canada~~and there can be no assurance that the expectations reflected in those statements will be realized or achieved. Such risks and ~~globally~~uncertainties include, without limitation, possible contingent liabilities and other obligations arising from the sale of the Company’s properties and previous operation of its business; and risks associated with the liquidation and dissolution of the Company, including, without limitation, settlement of the Company’s liabilities and the actual timing of the liquidating distributions and dissolution.

•The ~~industry~~Company’s ~~conditions,~~Board ~~including~~of ~~fluctuations~~Directors inwill need to make provision for the ~~price~~satisfaction of ~~oil~~all of the Company’s known and ~~natural~~unknown ~~gas;~~liabilities, which could substantially delay or limit the Company’s ability to make distribution in full to Shareholders.

•Amounts ~~liabilities~~available ~~inherent~~for the final distribution to Shareholders will depend on the amount the Board of NiMin determines are appropriate to be transferred to the Liquidating Trust, as defined herein, in ~~oil~~accordance with Delaware law, and ~~natural~~the ~~gas~~consideration ~~operations;~~received by NiMin for the sale of the beneficial ownership interests in the Liquidating Trust.

• governmental regulation of the oil and gas industry, including environmental regulation;

• geological, technical, drilling and processing problems and other difficulties in producing reserves;

• fluctuations in foreign exchange or interest rates;

• failure to realize anticipated benefits of acquisitions;

• unanticipated operating events which can reduce production or cause production to be shut-in or delayed;

• failure to obtain industry partner and other third-party consents and approvals, when required;

• competition for, among other things, capital, acquisitions of reserves, undeveloped land and skilled personnel;

• competition for and/or inability to retain drilling rigs and other services;

• the availability of capital on acceptable terms;

• the need to obtain required approvals from regulatory authorities; and

• the other factors disclosed under the heading Item 1.A—Risk Factors in this Annual Report.

The above summary of assumptions and risks related to forward-looking information has been provided in this Annual Report in order to provide readers with a more complete perspective on the future operations of the Company. Readers are cautioned that this information may not be appropriate for other purposes. The forward-looking information contained in this Annual Report is expressly qualified by the cautionary statements provided for herein. NiMin is not under any duty to update any of the forward-looking information after the date of this Annual Report or to conform such statements or information to actual results or to changes in the expectations of NiMin except as otherwise required by applicable laws.

GLOSSARY OF TERMS

In this document, unless the context otherwise requires, the following terms shall have the meanings set out below:

“AcquisitionCo” means NiMin Merger Co., a wholly-owned subsidiary of NiMin incorporated under the laws of the State of Delaware solely for the purpose of effecting the Reverse Triangular Merger in connection with the Merger Transaction.

“Board” means the board of directors of NiMin.

“CAA” means the U.S. federal Clean Air Act.

“Canadian Tax Act” means the Income Tax Act (Canada) and the regulations promulgated thereunder, as amended.

“Capital Pool Company” has the meaning ascribed thereto in the TSXV Policies.

“CERCLA” means the U.S. federal Comprehensive Environmental Response, Compensation and Liability Act.

“Cdn$” means Canadian dollars, the lawful currency of Canada.

“CMD” means Combined Miscible Drive ~~For~~for Heavy Oil Production, NiMin’s patented process for the extraction of heavy oil.

“CMD Project” means the EOR pilot project designed and implemented by NiMin for use in the Santa Margarita Formation, which utilizes CMD.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Common Shares” means the common stock in the capital of the Company subsequent to the completion of the Consolidation.

“Common Stock” means shares of common stock in the capital of Legacy.

“Computershare” means Computershare Trust Company of Canada.

“Consolidation” means the consolidation of common stock of NiMin based on the Consolidation Ratio.

“Consolidation Ratio” means the consolidation of the Preconsolidated Shares on the basis of one new Common Share for each three existing Preconsolidated Shares.

“CWA” means the U.S. federal Water Pollution Control Act, also known as the Clean Water Act.

“DD&A” means depreciation, depletion, amortization and accretion expense.

“Direct Share Exchange” means the exchange of Common Stock for Common Shares, immediately prior to the Reverse Triangular Merger and pursuant to the Share Exchange Agreement.

“EPA” means the U.S. Environmental Protection Agency.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exxon” means Exxon Corporation, the successor company to Humble Oil & Refining Company.

“EOR” means the enhanced oil recovery system used in the CMD Project.

“FERC” means the United States Federal Energy Regulatory Commission.

“G&A” means general and administrative expenses.

“Huddleston” means Huddleston & Co., Inc., petroleum and geological engineers of Houston, Texas.

“IPO” means the initial public offering of NiMin completed on November 7, 2007, pursuant to a Capital Pool Company prospectus filed in the provinces of Alberta, British Columbia and Ontario, in connection with the issuance of 1,200,000 Preconsolidated Shares at a per share price of Cdn$0.25 for gross proceeds of Cdn$300,000.

“IPO Escrow Agreement” means the escrow agreement dated September 27, 2007, among NiMin, Computershare as depositary, and the founding ~~shareholders~~Shareholders of NiMin.

“Krotz Springs Field” means the Krotz Springs oil field located in St. Landry Parish, Louisiana.

“Legacy” means Legacy Energy, Inc.

“Lender” means CLMG Corp., an administrative agent, and Beal Bank Nevada, as lender, under the Senior Loan.

“Letter of Intent” means the letter of intent dated May 25, 2009, between NiMin and Legacy and pursuant to which the parties agreed to effect the Merger Transaction.

“Macquarie Capital” means Macquarie Capital (USA) Inc.

“MD&A” means the Management Discussion and Analysis and Analysis of Financial Condition and Results of Operation included in this Annual Report as Item 7.

“Merger Agreement” means the definitive merger agreement dated July 17, 2009, among NiMin, Legacy and AcquisitionCo, relating to the Reverse Triangular Merger.

“Merger Transaction” means, collectively, the Direct Share Exchange and the Reverse Triangular Merger.

“NI 52-110” means National Instrument 52-110 – Audit Committees, of the Canadian Securities Administrators.

“~~NI 51-101~~NiMin” ~~means~~or ~~National~~the ~~Instrument~~“Company” ~~51-101~~means –NiMin ~~Standards~~Energy ~~of Disclosure for Oil and Gas Activities, of the Canadian Securities Administrators~~Corp.

“NiMin” means NiMin Energy Corp.

“NiMin Shareholders’ Meeting” means the special meeting of the holders of common stocks of NiMin, held on July 16, 2009, for the purpose of obtaining the approval of such holders in respect of certain matters relating to the Merger Transaction.

“Non-U.S. shareholder” means a holder of securities who, for U.S. federal income tax purposes, (i) is not a citizen or resident of the United States; (ii) is a corporation created or organized in or under the laws of a jurisdiction other than the United States or any state thereof (including the District of Columbia); (iii) is an estate the income of which is not subject to United States federal income tax regardless of its source; or (iv) is a trust, if a court within the United States cannot exercise primary supervision over its administration, and one or more non-U.S. persons have the authority to control all of the substantial decisions of that trust (and is not a trust which was in existence on August 20, 1996, was treated as a U.S. trust on August 19, 1996 and validly elected to continue to be treated as a U.S. trust).

~~“Olcese Formation”~~4 ~~means a formation within the Pleito Creek Field, situated at a measured depth of 5,250 feet, or approximately 1,500 feet below the Santa Margarita Formation.~~

thereof (including the District of Columbia); (iii) is an estate the income of which is not subject to United States federal income tax regardless of its source; or (iv) is a trust, if a court within the United States cannot exercise primary supervision over its administration, and one or more non-U.S. persons have the authority to control all of the substantial decisions of that trust (and is not a trust which was in existence on August 20, 1996, was treated as a U.S. trust on August 19, 1996 and validly elected to continue to be treated as a U.S. trust).

“OTC-BB” means the electronic quotation system operated by the Financial Industry Regulatory Authority, Inc. in the United States.

“OTCQX” means the electronic quotation system operated by OTC Markets Group, Inc. in the United States.

“Person” includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative.

“Plains” means Plains Marketing, L.P.

“Pleito Creek Field” means the Pleito Creek oil field located in Kern County, California.

“PLC” means private lending company.

“Preconsolidated Shares” means the common stocks of NiMin prior to completion of the Consolidation.

“Preferred Shares” means the preferred shares in the capital of NiMin.

“Private Placement” means the private placement completed in September 1, 2011, in respect to the offering of Units.

“Prospectus” means the prospectus of NiMin dated August 21, 2009 in respect of the offering of Units.

“Prospectus Offering” means the public offering of Units pursuant to the Prospectus.

“Qualifying Transaction” has the meaning ascribed thereto in the TSXV Policies.

“Loan Facility” means the loan facility entered into on April 25, 2007, with a maturity date of April 15, 2009, pursuant to which Legacy was able to obtain up to $15 million in loans.

“RCRA” means the U.S. federal Resource Conservation and Recovery Act.

“Regulation S” means Regulation S under the U.S. Securities Act.

“Registration Statement” means the registration statement on Form 20-F filed with the U.S Securities and Exchange Commission pursuant to section 12 (d) or (g) of the Securities Exchange Act of 1934 to register securities of foreign issuers.

“Reverse Triangular Merger” means the reverse triangular merger pursuant to which AcquisitionCo and Legacy merged, with Legacy, as the Surviving Corporation, becoming a wholly-owned subsidiary of NiMin.

“Santa Margarita Formation” means a geological formation within the Pleito Creek Field, situated at a measured depth of 3,700 feet.

“SEDAR” means the System for Electronic Document Analysis and Retrieval in Canada.

“SEC” means the U.S Securities and Exchange Commission.

“Senior Loan” means the credit agreement entered into on June 30, 2010, between Legacy and the Lender.

“Share Exchange Agreement” means the share exchange agreement that all Canadian resident Legacy stockholders had the option to enter into directly with NiMin in connection with the Direct Share Exchange, in lieu of participating directly in the Reverse Triangular Merger, but in connection with the Merger Transaction.

“Short Form Prospectus” means the prospectus of NiMin dated April 29, 2010 in respect to the offering of Common Shares.

“Short Form Prospectus Offering” means the public offering of Common Shares completed on May 6, 2010, pursuant to the Short Form Prospectus.

“Short-term Loan” means the $5,500,000 and Cdn$17,534,550 syndicated secured non-convertible loan pursuant to a loan agreement between the Company and a private lending company dated December 17, 2009.

6“Strategic Review” means management’s broad review of strategic alternatives aimed at maximizing Shareholders’ value. To assist in this review process, the Company has engaged Macquarie Capital as its financial advisor. The Company expects to consider and evaluate several alternatives, including strategic financing opportunities, asset divestitures, technology, licensing agreements, joint ventures and/or a corporate sale, merger or other business combination. There can be no assurance that this strategic review will result in a significant transaction.

“Strategic Review” means management’s broad review of strategic alternatives aimed at maximizing shareholders’ value. To assist in this review process, the Company has engaged Macquarie Capital as its financial advisor. The Company expects to consider and evaluate several alternatives, including strategic financing opportunities, asset divestitures, technology licensing agreements, joint ventures and/or a corporate sale, merger or other business combination. There can be no assurance that this strategic review will result in a significant transaction.

“Subsea TVD” means the depth of a formation as measured from sea level to the bottom of the borehole (or anywhere along its length) in a straight line that is perpendicular to the earth’s surface.

“Surviving Corporation” means the corporation surviving the merger of AcquisitionCo and Legacy.

“Technical Report” means, the technical report prepared by Huddleston dated January 30, 2012, entitled “Estimated Reserves as of January 1, 2012”.

“Texas Capital” means Texas Capital Bank, N.A.

“Texas Credit Agreement” means the credit agreement entered into between Legacy and Texas Capital, pursuant to which Texas Capital agreed to provide up to $50 million in loans to Legacy for use in connection with the development of Legacy’s oil and natural gas properties.

“TSX” means the Toronto Stock Exchange.

“TSX Option Plan” means the new stock option plan adopted by NiMin in connection with the completion of the Merger Transaction, which was approved at the NiMin Shareholders’ Meeting.

“TSXV” means the TSX Venture Exchange Inc.

“TSXV Policies” means the TSXV corporate finance manual, as amended from time to time.

“U.S. Person” has the meaning ascribed thereto under Regulation S of the U.S. Securities Act.

“U.S. Securities Act” means the United States Securities Act of 1933, as amended.

“Unit” means one unit of NiMin, comprised of one Unit Share and one Warrant.

“Unit Share” means one Common Share issued as part of a Unit.

“Warrant” means one Common Share purchase warrant of the Company, which, together with one Unit Share, comprises a Unit.

“Warrant Indenture” means the agreement dated August 28, 2009 between NiMin and Computershare in connection with the Warrants issued pursuant to the Prospectus Offering and relating to, among other things, the issuance and exercise of the Warrants.

“Wyoming Assets” means the fields located in the state of Wyoming which the Company ~~holds~~previously held a 97% weighted average working interest and iswas the operator ~~since~~from December 2009 – June 2012.

ABBREVIATIONS

Crude Oil and Natural Gas Liquids Natural Gas Bbl barrel Mcf thousand cubic feet Bbl/d barrels per day ~~MMcf~~Mcf/d ~~million~~thousand cubic feet ~~Mbbl~~per ~~thousands~~day ~~of barrels Bcf billion cubic feet MMbbl millions of barrels Btu British thermal unit~~ boe/d barrels of oil equivalent of natural gas and crude oil per day ~~Mcf/d thousand cubic feet per day~~ boe barrels of oil equivalent of natural gas and crude oil, unless otherwise indicated ~~Scf Standard cubic feet~~ bopd barrels of oil per day ~~Mboe bblw/d thousand boe barrels of water per day NGL natural gas liquids MMBtu million British thermal units Stb standard stock tank barrel Mstb thousand standard stock tank barrels~~

Production information is commonly reported in units of barrel of oil equivalent. A boe conversion ratio of 6 Mcf: 1 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. For purposes of calculating mixed company production, natural gas has been converted to a barrel of oil equivalent using a conversion rate of six thousand cubic feet being equal to one barrel of oil (6 Mcf: 1Bbl).

GLOSSARY OF TECHNICAL TERMS

API		measure of how heavy or light a petroleum liquid is in comparison to water as recognized by the American Petroleum Institute
CO2		carbon dioxide
EOR		enhanced oil recovery
LIBOR		London Inter-Bank Offer Rate, being the rate at which a bank will loan funds to another bank and which is often used as a benchmark for a bank’s loan activities
mD		“millidarcies” – a measure of units of permeability
WTI		West Texas Intermediate, also known as Texas Light Sweet – a type of light crude oil used as a benchmark in oil pricing


WTI		West Texas Intermediate, also known as Texas Light Sweet – a type of light crude oil used as a benchmark in oil pricing

Financial and Other Information

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in US Dollars (“$”). In this Annual Report, when we provide information as of the date of this Annual Report, we mean as of March 14 11, ~~2012~~2013.

PART I

ITEMS 1 ~~& 2~~. BUSINESS ~~AND PROPERTIES~~

NiMin Energy Corp. (“NiMin”,” “we” or the “Company”) 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. NiMin is~~ an oil and gas company ~~that is~~ engaged in the acquisition, development and production of oil and gas properties in the United States. ~~NiMin~~until ~~has~~June 30, ~~operated~~2012, aswhen anwe ~~exploration~~ceased ~~and~~to ~~production~~have ~~company~~oil ~~since late~~and ~~2006~~gas ~~and has principal~~ operations ~~in the Bighorn Basin, Wyoming and the San Joaquin Basin, California onshore areas of the United States~~.

~~Corporate~~The ~~Strategy~~annual and special meeting (the “Special Meeting”) of holders of Common Shares (“Shareholders”) 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 Energy Inc. (“Legacy”) pursuant to purchase and sale agreements for its Wyoming based oil and gas assets (“Wyoming Assets”) and California, based oil and gas assets (“California Assets”).

~~Our~~At ~~corporate strategy~~the isSpecial ~~to seek out~~Meeting, ~~investigate~~the Shareholders ~~and~~were ~~evaluate~~also ~~acquisition~~asked ~~opportunities~~to ~~for~~consider ~~oil~~ and ~~gas~~vote ~~properties,~~on ~~assets~~the ~~and~~voluntary ~~operations~~liquidation ~~situated~~and indissolution of the ~~United~~Company ~~States.~~pursuant Weto ~~target~~the ~~assets~~laws ~~that~~of ~~have~~the ~~significant~~Business ~~oil~~Corporations ~~and~~Act ~~natural~~(Alberta) ~~gas~~(the ~~resource~~“Winding ~~potential,~~Up”) ~~operatorship,~~ and ~~both~~the ~~conventional~~distribution ~~and EOR development potential. In addition~~ to ~~individual~~Shareholders ~~properties,~~of the wenet ~~may~~proceeds ~~source,~~of ~~investigate,~~the ~~and~~Sale ~~evaluate~~of ~~private~~Assets ~~and~~(less ~~public companies for~~ the ~~purpose~~settlement of ~~asset~~obligations ~~purchases~~of Legacy), ~~mergers~~and orcash ~~similar~~on ~~transactions. From time to time~~hand, we ~~have~~as ~~entered~~part ~~into~~of ~~discussions~~such ~~with~~liquidation ~~third~~and ~~parties~~dissolution ~~regarding~~after ~~acquisitions.~~satisfaction ~~Consummation~~ of anall ~~acquisition,~~liabilities ~~dependent~~of ~~upon~~ the ~~size~~Company, ~~location~~by ~~and~~way ~~nature~~ of ~~related~~a ~~operations,~~reduction ~~could~~of ~~result~~the instated ~~NiMin~~capital ~~revising~~of the ~~its~~Common ~~planned future activities~~Shares.

AsBoth ~~announced~~the onSale ~~November 21,~~of ~~2011,~~Assets weand ~~have engaged in~~ the ~~Strategic~~Winding ~~Review,~~Up ~~which~~were isapproved by the ~~broad~~Shareholders ~~review~~at ofthe ~~strategic~~Special ~~alternatives~~Meeting. ~~aimed~~In atorder ~~maximizing~~for the ~~shareholders’~~Company ~~value.~~to Tocomplete ~~assist~~the inWinding ~~this review process~~Up, wethe ~~have~~appropriate ~~engaged~~corporate ~~Macquarie~~steps ~~Capital~~were asrequired ~~our~~to ~~financial~~be ~~advisor.~~taken Wefor ~~expect~~the todissolution ~~consider~~ and ~~evaluate~~liquidation ~~several~~of ~~alternatives,~~Legacy ~~including~~which ~~strategic~~dissolution ~~financing~~was ~~opportunities,~~filed ~~asset~~in ~~divestitures, technology~~Delaware ~~licensing~~on ~~agreements~~September 17, ~~joint~~2012. ~~ventures~~Pursuant ~~and/or~~to athe ~~corporate~~approval ~~sale,~~of ~~merger~~the orSale ~~other~~of Assets, ~~business~~Legacy ~~combination.~~proceeded ~~There~~with ~~can~~the besale noof ~~assurance~~the ~~that~~Wyoming ~~the~~Assets ~~Strategic~~and ~~Review~~the ~~will~~California ~~result~~Assets, inas amore ~~significant~~particularly ~~transaction~~described below.

~~For~~On June 28, a2012, ~~summary~~Legacy ofcompleted ~~our~~its ~~financial~~previously ~~information,~~announced ~~including~~sale ~~revenues~~of ~~from~~its ~~external~~Wyoming ~~customers,~~Assets ~~information~~to onBreitBurn ~~loss~~Operating L.P., ~~long~~a wholly-~~lived~~owned ~~assets~~subsidiary of BreitBurn Energy Partners L.P. (“BreitBurn”), ~~and~~for total ~~assets,~~cash consideration of approximately ~~see~~$93 ~~Item~~million, being the original purchase price of approximately $98 million less approximately $5 million adjusted to account for preliminary purchase price adjustments. On August 630, –2012, ~~“Selected~~Legacy ~~Financial~~completed ~~Data”~~its final settlement with BreitBurn and ~~Item~~received approximately $2.3 8million –based ~~“Financial~~on ~~Statements~~the ~~and~~final ~~Supplementary~~purchase ~~Data”~~price adjustments.

~~Oil~~On June 29, 2012, Legacy completed its previously announced sale of its California Assets to Southern San Joaquin Production, LLC, for total cash consideration of approximately $26 million, being the original purchase price of approximately $27 million, less approximately $1 million, adjusted to account for preliminary purchase price adjustments. Pursuant to the terms of the purchase and ~~Natural~~sale ~~Gas~~agreement, ~~Properties~~$3 million of the $26 million purchase price paid on closing was deposited with an escrow agent until December 28, 2012, in connection with various indemnities contained therein. On August 30, 2012, Legacy completed its final settlement with Southern San Joaquin Production LLC and received $347,938 based on the final purchase price adjustments. On December 28, 2012, the $3 million was released to NiMin from the escrow account.

WeThe ~~operate~~Winding inUp ~~two~~and ~~primary~~the ondissolution ~~shore~~and ~~geographical~~liquidation ~~areas:~~of ~~California~~Legacy contemplates the orderly disposition of the assets, the orderly discharge of all outstanding liabilities, including all outstanding debt, and ~~Wyoming~~after the establishment of appropriate reserves, the distribution of cash to Shareholders in installments.

~~California~~On September 24, 2012, the Board declared an initial distribution to Shareholders of $1.01 per Common Share in connection with the Winding Up. The distribution was made as a return of capital to Shareholders of record at the close of business on October 9, 2012, and the stated capital of the Company was reduced accordingly. The distribution of $70,532,740 was paid on October 22, 2012.

~~The~~Upon ~~Pleito~~completion ~~Creek~~of ~~Field was discovered in 1951 by Exxon and is located along~~ the ~~south~~disposition ~~side~~ of ~~the~~all ~~San~~remaining ~~Joaquin~~assets ~~basin~~of inLegacy ~~Section 35,~~and ~~Township 11N, Range 21W, Kern County, California. Geologically,~~ the ~~Pleito~~ ~~Creek~~settlement ~~Field~~of isall aliabilities ~~faulted~~of ~~anticline with a steeply dipping north limb that rolls over into~~ the ~~Wheeler Ridge thrust fault. The Miocene-aged Santa Margarita sand is the primary producing reservoir in the Pleito Creek Field and is found at an~~ ~~average~~Company ~~measured depth of 4,000 feet~~ and ~~is on average 115 feet thick. The Olcese Formation~~Legacy, ~~a Miocene age marine sandstone reservoir, discovered at a measured depth of 5,250 feet approximately 1,250 feet deeper than~~ the ~~Santa~~Company ~~Margarita~~intends ~~Formation also~~to ~~produces~~distribute at the ~~Pleito~~net ~~Creek~~proceeds ~~Field.~~of ~~Since 1951,~~ the ~~Pleito~~liquidation ~~Creek~~and ~~Field~~dissolution ~~has~~of ~~produced~~both ~~2.36~~Legacy ~~MMbbls oil~~ and ~~oil expansion has been~~ the ~~field’s~~Company ~~primary~~to ~~drive~~Shareholders ~~mechanism with limited recoveries as a result of pilot~~ in~~-situ~~ ~~combustion~~one ~~operations conducted~~final bydistribution ~~Exxon.~~on ~~We hold~~ a ~~100%~~future ~~working~~date ~~interest~~which ~~and~~has ~~have~~not yet been ~~the operator of the Pleito Creek Field since September 2006~~determined.

~~Combined~~On October 10, 2012, Nimin voluntarily delisted the Common Shares from the TSX after the close of trading on October 22, 2012, and its listing ~~Miscible~~was ~~Drive~~transferred to the NEX, a separate board of the TSX Venture Exchange (~~CMD~~“NEX”), ~~Project~~effective –as ~~Pleito~~of ~~Creek~~opening ~~Field~~of the market on October 23, ~~California~~2012. From October 23, 2012 and onwards, the Common Shares trade on NEX under the symbol “NNN.H”.

~~CMD~~As isa anresult ~~enhanced~~of ~~oil~~the ~~recovery~~Shareholders’ ~~process designed~~approval toof ~~increase oil recovery by combining~~ the ~~effects~~Winding ~~of heat~~Up, ~~steam,~~the ~~and~~liquidation ~~CO2~~basis toof ~~reduce~~accounting ~~oil~~was ~~viscosity~~adopted effective ~~and increase reservoir pressure. In December 2010~~June 30, ~~the U~~2012.S. ~~Patent~~This ~~and~~basis ~~Trademark~~of ~~Office~~accounting ~~issued~~is aconsidered ~~patent~~appropriate towhen, ~~NiMin~~among ~~for~~other ~~its CMD process for enhanced oil recovery. In addition~~things, ~~we have~~liquidation ~~completed~~of ~~CMD~~a ~~patent~~company ~~applications~~is inimminent ~~Canada, Venezuela, Argentina~~ and ~~Ecuador.~~the net

As8 previously reported, our CMD technology has been successful in increasing production in California’s Pleito Creek Field by more than fifty percent. We believe that CMD is an economic method to increase oil recovery in many fields domestically and internationally.

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 December 31, 2012. Financial information presented as of and subsequent to June 30, 2012, includes a Consolidated Statement of Net Assets and a Consolidated Statement of Changes in Net Assets in Liquidation, as required under the liquidation basis of accounting. Financial information included for periods ending prior to June 30, 2012, is presented under the going concern basis of accounting. Therefore, financial information presented as of and for the six months ended December 31, 2012, is not comparable to financial information presented for prior periods.

Effective February 1, 2013, the Legacy Energy Liquidating Trust, a Delaware statutory trust (the “Liquidating Trust”), was established to provide for the transfer of certain assets of Legacy to the Liquidating Trust in order to satisfy any future unknown claims against Legacy following its dissolution and liquidation. NiMin is the sole owner of beneficial ownership interests in the Liquidating Trust. The Board of Directors of NiMin will fund the Liquidating Trust with assets, which will include $250,000 in cash. In addition, the Board will fund the liquidating trust with any other assets of Legacy that are not otherwise disposed of in liquidation which the Board deems to be reasonably likely to be sufficient to provide compensation for claims that have not been made known to Legacy or that have not arisen but that, based on facts known to Legacy and NiMin, may arise following dissolution, as required by Delaware law. On January 3, 2016, the Liquidating Trust will terminate by its terms and any remaining assets in the Liquidating Trust will be distributed to the owners of the beneficial interests.

NiMin has determined that the appropriate amount to fund the Liquidating Trust to meet unknown claims and the ongoing obligations of the Liquidating Trust is $250,000, which shall be funded prior to the dissolution of NiMin. NiMin intends to sell the beneficial ownership interests in the Liquidating Trust along with the patents in the CMD process and rights to an overriding royalty on non-producing properties to Pacific Oil and Gas LLC, a company owned by two directors of NiMin, for aggregate proceeds of $1,000 in order to complete the dissolution and liquidation of NiMin.

Management

Our corporate headquarters are located at 1160 Eugenia Place, Suite 100, Carpinteria, California. As of December 31, 2012, the Company had no employees but has retained five consultants to serve as Chief Executive Officer, Chief Financial Officer, Corporate Controller and two administrative employees. We also utilized the services of independent contractors to perform various other services.

Available Information

We file or furnish annual, quarterly and current reports, proxy statements and other documents with the SEC under the Exchange Act. The public may read and copy any materials that we file or furnish with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file or furnish electronically with the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov.

We also make available free of charge through our website, www.niminenergy.com, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

~~The patent issued to the Company covers the process of the injection of oxygen and water as foam to create CO2 and steam in the reservoir through wet combustion~~1. ~~The CO2 and steam increase reservoir pressure and significantly reduce oil viscosity making the oil substantially more mobile allowing it to flow rapidly into production wells~~A. Risk Factors

WeThe ~~have~~amount ~~identified~~and ~~many~~timing ~~oil~~of the ~~fields~~final ~~which~~liquidating ~~have~~distribution ~~reservoirs that we believe~~ to beour ~~high~~Shareholders ~~quality~~are ~~candidates~~subject ~~for~~to ~~the CMD process~~risks. ~~Reservoirs~~These ~~which~~risks ~~are~~include ~~considered~~those ~~candidates~~described ~~for~~below ~~the~~and ~~CMD~~may ~~process~~include ~~have~~additional ~~similar characteristics~~risks toand ~~reservoirs~~uncertainties ~~that~~not ~~are~~presently ~~targeted~~known ~~for~~to ~~CO2 or steam floods~~us. The ~~advantage~~amount ~~with~~and ~~the~~timing ~~CMD~~of ~~process,~~the ~~however,~~final isliquidating distribution ~~that~~to itour ~~can~~Shareholders could be ~~used~~materially inadversely ~~reservoirs~~affected ~~that~~by ~~are~~any ~~too~~of ~~deep~~these torisks. beThese ~~steam~~risks ~~flooded~~should ~~with~~be ~~conventional~~read ~~technology and~~ in ~~fields~~conjunction ~~which~~with ~~are~~the ~~relatively~~other ~~distant~~information ~~from~~in athis ~~source~~Annual ~~of CO2~~Report.

~~Wyoming~~The final liquidating distribution to Shareholders may be less than we currently estimate. In this Annual Report, we have estimated our net assets in liquidation and our net assets in liquidation per outstanding share, pursuant to requirements for liquidation accounting. These estimates will be affected by factors which may be outside of our control, including unforeseen contingent liabilities arising out of the sale of our properties or the previous conduct of our business and expenses we incur prior to the liquidation and dissolution of the Company. For instance, as of December 31, 2012, we have accrued for an asset retirement obligation of $203,861 related to the plugging of a well in Louisiana and if the expenses and liability related to such obligation are higher than we have estimated at the time of liquidation, the funds available for distribution to our Shareholders will be less. In addition, we have accrued for various expenses including professional fees and other costs related to the liquidation, and in the event the Company is not dissolved within the timeframe we have estimated, or if we encounter unforeseen circumstances that increase these fees and costs from our current estimates, the amount available for distribution to Shareholders will be less.

WeThe ~~hold~~dissolution aof ~~97%~~the ~~weighted~~Company ~~average~~could take ~~working~~longer ~~interest~~than ~~and~~we ~~are~~currently anticipate. Before the ~~operator~~Company ofcan be dissolved, the ~~Wyoming~~ ~~Assets~~Board ~~since~~will ~~December~~need ~~2009.~~to ~~The~~make ~~Wyoming~~provision ~~Assets~~for ~~produce~~the ~~oil~~satisfaction ~~from~~of all of the ~~Tensleep~~Company’s known and unknown liabilities, ~~Phosphoria~~the Company is seeking tax clearance in Canada, and all of the ~~Dinwoody~~Company’s ~~Formations~~remaining ~~which~~assets ~~are~~will ~~found~~need atto anbe ~~average~~liquidated. ~~measured~~If ~~depth~~any of ~~3,900~~these ~~feet.~~actions ~~The~~take ~~Tensleep~~longer ~~reservoir~~than isanticipated, athe ~~middle~~Company’s tocosts ~~upper~~could ~~Pennsylvanian~~increase, ~~aged sandstone;~~which ~~the~~would ~~Phosphoria~~decrease ~~reservoir~~the isamount aof ~~Permian~~cash ~~aged~~available ~~dolomitic~~for ~~limestone;~~distribution, and could delay or limit the ~~Dinwoody~~Company’s ~~reservoir~~ability isto amake ~~Lower~~the ~~Triassic~~final ~~aged~~distribution ~~dolomitic~~to ~~mudstone~~Shareholders.

~~Ferguson~~ITEM ~~Ranch~~1.B. ~~Field~~UNRESOLVED STAFF COMMENTS

~~Ferguson Ranch Field was discovered by Hunt Petroleum Corporation in~~Not ~~1963~~applicable. This field covers a total of 320 acres and has had total cumulative production of 5.3 MMbbls of 14º API oil. Ferguson Ranch Field is a fault bounded anticlinal trap. Ferguson Ranch Field is located on the western margin of the Big Horn Basin and is part of the Basin Margin Anticline Play.

~~Hunt~~ITEM ~~Field~~2. PROPERTIES

~~Hunt~~Following ~~Field~~the ~~was~~completion ~~discovered by Amax Petroleum Company in 1966. This field covers a total~~ of the ~~650~~sale ~~acres and has had a total cumulative production~~ of ~~0.9~~our ~~MMbbls~~Wyoming ofAssets ~~14º~~and ~~API~~our ~~oil.~~California ~~Hunt~~Assets, ~~Field~~we ishave ano ~~fault bounded~~other ~~anticlinal~~material ~~trap that produces~~ oil ~~from both the Tensleep~~ and ~~Phosphoria~~gas ~~formations~~properties. ~~Hunt~~We ~~Field~~currently islease ~~located~~our onoffice ~~the~~space, ~~western~~through ~~margin of~~ the ~~Big~~final ~~Horn~~dissolution ~~Basin and is part~~ of ~~the Basin Margin Anticline Play~~NiMin.

~~Willow~~ITEM ~~Draw~~3. ~~Field~~LEGAL PROCEEDINGS

~~Willow~~We ~~Draw~~are ~~Field~~not ~~was~~aware of ~~discovered~~any byclaims ~~Oil~~which ~~Development~~could ~~Company~~have ofa ~~Texas~~material inimpact ~~1972~~to our financial statements, and ~~located~~we indo ~~Park~~not ~~County,~~know ~~Wyoming~~of any material proceedings contemplated by governmental authorities. ~~This~~We ~~field~~are ~~covers~~not aaware ~~total~~of any material proceedings to which any director, officer or any of our 1affiliates,~~200~~ ~~acres~~any ~~and~~owner ~~has~~of ~~had~~record aor ~~total~~beneficially ~~cumulative~~of ~~production~~more than five percent of ~~2.50~~any ~~MMbbls~~class of ~~17º~~our ~~API~~voting ~~oil~~securities, or any associate of any such director, officer, our affiliates, or security holder, is a party adverse to us or our consolidated subsidiary or has a material interest adverse to us or our consolidated subsidiary.

~~Willow~~ITEM ~~Draw Field is a four-way anticlinal trap that produces oil from the Phosphoria and to a lesser extent the Dinwoody~~4. ~~Willow~~MINE ~~Draw~~SAFETY ~~Field is located on the western margin of the Big Horn Basin and is part of the Basin Margin Anticline Play.~~ DISCLOSURE

~~Sheep~~Not ~~Point Field~~ applicable.

Sheep Point Field was discovered by Douglas and Gauntt in 1957 and is also located in Park County, Wyoming, USA. This field covers a total of 300 acres and has had a total cumulative production of 0.70 MMbbls of 17º API oil. Sheep Point Field is a fault bounded anticlinal trap that produces oil from Phosphoria formation. Sheep Point Field is located on the western margin of the Big Horn Basin and is part of the Basin Margin Anticline Play.

Oil and Natural Gas Reserves Estimates

Huddleston prepared the Technical Report in accordance with SEC requirements. The rules require oil and gas reserve information to be reported by publicly held companies as supplemental financial data. The Technical Report, dated January 30, 2012, evaluates, as at January 1, 2012, our oil, NGL and natural gas reserves and is filed herewith as Exhibit 99.1.

The tables below are a summary of our oil and natural gas reserves and the net present value of future net revenue attributable to such reserves as evaluated in the Technical Report. The tables and information contained in this section are only summaries of the data contained in the Technical Report and as a result, may contain slightly different numbers than such report due to rounding. Also due to rounding, certain columns may not add exactly. The net present value of future net revenue attributable to our reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production costs,

~~development~~PART ~~costs,~~II other income, future capital expenditures, and well abandonment costs for only those wells assigned reserves by Huddleston. The net present value of future net revenue attributable to our reserves estimated by Huddleston do not represent the fair market value of those reserves. The recovery and reserve estimates of our oil and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein.

~~Table No.~~ITEM 15. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

~~Oil~~The Common Shares were listed on the TSX under the trading symbol “NNN” on September 4, 2009, and ~~Gas~~began ~~Reserves~~trading on ~~(1)~~September 8, 2009. Prior thereto, the Pre-consolidated Shares were listed on the TSXV under the trading symbol “NNI.P” beginning November 13, 2007.

							Years Ended December 31,
	2011						2010								2009
	California		Wyoming		Total		California		Louisiana (2)		Wyoming		Total		California		Louisiana (2)		Wyoming		Total
Proved developed:
Oil (MBbls)		931		3,451		4,382		838		109		2,680		3,627		432		79		1,335		1,847
Gas (MMcf)		—		—		—		—		436		—		436		—		823		—		824
Proved undeveloped:
Oil (MBbls)		2,222		9,318		11,540		1,976		64		7,965		10,005		1,359		102		5,743		7,205
Gas (MMcf)		—		—		—		—		79		—		79		—		80		—		79
Total proved:
Oil (MBbls)		3,153		12,769		15,922		2,814		173		10,645		13,631		1,791		182		7,078		9,051
Gas (MMcf)		—		—		—		—		515		—		515		—		903		—		903
Estimated future net cash flows (3)	$	167,172	$	362,600	$	529,771	$	101,102	$	8,473	$	303,279	$	412,854	$	50,879	$	8,948	$	182,503	$	242,330
Standarized measure of discounted future net cash flows (3) (4)	$	58,805	$	156,492	$	215,297	$	35,797	$	6,393	$	128,837	$	171,028	$	15,064	$	6,126	$	77,752	$	98,942

The Common Shares were voluntarily delisted from the Toronto Stock Exchange (“TSX”) after the close of trading on October 22, 2012 and its listing was transferred to the NEX, a separate board of the TSX Venture Exchange, effective as of market open on October 23, 2012. From and after October 23, 2012, NiMin’s Common Shares trade on the NEX under the symbol “NNN.H”.

~~Notes:~~The following table sets forth the reported high and low prices and the trading volume for the Common Shares on the TSX for the two most recent fiscal years and subsequently on the NEX for the most recent fiscal periods as reported by a public source we consider reliable.

~~(1)~~Trading ~~These~~Prices ~~numbers~~on ~~are~~TSX ~~net to NiMin’s working interest for the relevant properties.~~

(2) The Louisiana properties were sold on December 1, 2011 (see ITEM 7 – “MD&A – Liquidity and Capital Resources”).


	High (Cdn$)		Low (Cdn$)		Volume
October 1 to 22, 2012		1.09		1.06		541,056
3rd Quarter 2012		1.08		0.97		18,122,612
2nd Quarter 2012		1.05		0.75		23,183,507
1st Quarter 2012		1.04		0.63		6,806,670
4th Quarter 2011		1.13		0.53		9,041,546
3rd Quarter 2011		1.82		1.12		3,354,941
2nd Quarter 2011		2.15		1.54		6,775,231
1st Quarter 2011		2.65		1.54		13,306,222

~~(3)~~Trading ~~Expressed~~Prices inon ~~thousands~~NEX ~~of dollars.~~

(4) The prices of crude oil and natural gas used to estimate reserves in the table shown above were $84.75 per Bbl of oil for the year ended December 31, 2011 (benchmark prices to which differentials were applied to arrive at the prices used to estimate reserves for the year ended December 31, 2011 were $96.19 per Bbl of oil), $69.44 per Bbl of oil and $4.27 per Mcf of natural gas for the year ended December 31, 2010 (benchmark prices to which differentials were applied to arrive at the prices used to estimate reserves for the year ended December 31, 2010 were $79.43 per Bbl of oil and $4.38 per Mcf of natural gas), and $51.38 per Bbl of oil and $4.07 per Mcf of natural gas for the year ended December 31, 2009 (benchmark prices to which differentials were applied to arrive to the prices used to estimate reserves for the year ended December 31, 2009 were $61.03 per Bbl of oil and $4.20 per Mcf of natural gas).


	High (Cdn$)		Low (Cdn$)		Volume
December 2012		0.11		0.095		1,180,315
November 2012		0.10		0.090		992,070
October 23 to 31, 2012		0.10		0.095		538,302

~~Our~~The ~~estimates~~Common ofShares ~~proved~~were ~~reserves~~traded ~~consist~~on ofthe ~~proved~~OTC-BB ~~developed~~under ~~reserves,~~the ~~proved undeveloped~~symbol ~~reserves~~NEYYF atbeginning ~~December~~March 3111, 2011~~, 2010 and 2009 and changes in proved reserves during the last three years are included in Note 19 of our Consolidated Financial Statements~~. ~~Also included in Note 19 are our estimates of future net cash flows and discounted future net cash flows from proved reserves.~~

~~Proved~~The ~~Undeveloped~~following ~~Reserves~~table sets forth the reported high and low prices and the trading volume for the Common Shares on the OTC-BB for the most recent fiscal year as reported by a public source we consider reliable.

InTrading ~~general,~~Prices ~~once~~on ~~proved undeveloped reserves are identified, they are scheduled into our development plans. Normally, we plan to develop our proved undeveloped reserves within two years. In some~~OTC-BB instances, larger development programs such as the infill drilling program in Wyoming or full field development at Pleito Creek were spread out beyond two years to optimize capital allocation and facility utilization.

At December 31, 2011 total proved undeveloped reserves increased from 10,018 Mboe to 11,540 Mboe. This increase is due to: (i) conversion of probable reserves to proved reserves in Wyoming and California as a result of our successful 2011 development program; and (ii) identification of secondary reserves in the Hunt and Sheep Point fields in Wyoming.


	High ($)		Low ($)		Volume
4th Quarter 2012		1.11		0.10		4,761,038
3rd Quarter 2012		1.09		0.96		5,619,436
2nd Quarter 2012		1.05		0.76		6,791,237
1st Quarter 2012		1.03		0.62		2,681,038

AtThe ~~December 31,~~Company’s ~~2010~~Common ~~total~~Shares ~~proved~~were ~~undeveloped~~traded ~~reserves~~on ~~increased~~the ~~from~~OTCQX ~~7,218~~under ~~Mboe~~the tosymbol ~~10,018~~NEYYF ~~Mboe. This~~beginning ~~increase is due to: (i)~~October ~~conversion of~~22, ~~probable reserves to proved reserves in Wyoming as a result of our successful 2010 development program; and (ii) positive results from the CMD project in California~~2009.

AtThe ~~December 31,~~Common ~~2009,~~Shares ~~total~~were ~~proved~~subsequently ~~undeveloped~~delisted ~~reserves increased~~ from ~~1,889~~the ~~Mboe~~OTCQX toeffective 7Monday,~~218~~ ~~Mboe.~~July ~~This increase is due to: (i) the acquisition of the Wyoming Assets which added 5~~23,~~742~~ ~~Mboe; and (ii) technical revisions to the Louisiana and California assets which reduced the reserves by 413 Mboe~~2012.

The ~~Technical~~following ~~Report indicates~~table ~~that~~sets forth the ~~four~~reported ~~Wyoming~~high ~~fields,~~and ~~Ferguson~~low ~~Ranch,~~prices ~~Hunt, Sheep Point~~ and ~~Willow~~the ~~Draw~~trading ~~have~~volume afor ~~combined~~the ~~9,318~~Common ~~Mbbl~~Shares ofon ~~reserves defined as “proved undeveloped”. Of these reserves, 4,257 Mbbl are associated with a planned infill drilling program constituting 62 wells amongst~~ the ~~four~~OTCQX ~~fields. Of~~for ~~these 62 infill wells, a total of 54 locations will be drilled in 2012 and 2013 with~~ the ~~remaining~~two 8most ~~wells~~recent ~~to follow in 2014. The remaining 5,061 Mbbl are associated with~~fiscal ~~the~~years ~~implementation~~as ofreported ~~waterflood~~by ~~projects~~a atpublic ~~Ferguson~~source ~~Ranch,~~we ~~Hunt~~consider ~~and Sheep Point~~reliable. ~~The Ferguson Ranch waterflood was initiated in 2012 and the Hunt and Sheep Point waterfloods are scheduled to start in 2013.~~

~~The~~Trading ~~Technical~~Prices Report also indicates that the Pleito Creek field in California has 2,222 Mbbl of reserves defined as “proved undeveloped”. These reserves are captured by 15 infill Santa Margarita wells, 4 Olcese wells and further development of the CMD project. It is anticipated that during 2012 and 2013, the 19 infill wells will be drilled. The CMD project will be expanded in 2013 with the re-initiation of oxygen injection and the installation of on~~-site~~ ~~oxygen~~OTCQX ~~extraction facilities.~~

Controls Over Reserve Estimates


	High ($)		Low ($)		Volume
July 1 to 22, 2012		1.01		0.96		3,568,430
2nd Quarter 2012		1.05		0.76		6,791,237
1st Quarter 2012		1.03		0.62		2,681,038
4th Quarter 2011		1.09		0.50		5,161,545
3rd Quarter 2011		1.94		1.07		1,641,780
2nd Quarter 2011		2.24		1.55		2,798,738
1st Quarter 2011		2.74		1.55		5,363,610

~~Our~~As ~~policies and practices regarding internal controls over the recording~~ of reserves are structured to objectively and accurately estimate our oil and gas reserves quantities and present values in compliance with the SEC’s regulations and US GAAP. Compliance in reserves bookings is the responsibility of our Board’s Reserves Committee. Our controls over reserve estimates included retaining HuddlestonMarch ~~& Co~~11, ~~Inc. as our independent petroleum and geological engineering firm. We provided information about our oil and gas properties~~2013, ~~including~~there ~~production~~were ~~profiles~~69, ~~prices and costs~~834,396 ~~to Huddleston~~holders ~~and they prepare their own estimates~~ of ~~the~~record ~~reserves attributable to our properties. All~~ of ~~the~~Common ~~information regarding reserves in this Annual Report is derived from the Technical Report prepared by Huddleston~~Shares. The principal engineer at Huddleston who is responsible for preparing our reserve estimates has over 30 years of experience in the oil and gas industry and is a Texas Licensed Professional Engineer. Further, professional qualifications include a degree in petroleum engineering as well as being a member of the Society of Petroleum Engineers. The Huddleston & Co., Inc. engineering firm is a Texas Registered Engineering Firm. The Reserves Committee of our Board of Directors meets with management, including the Chief Operating Officer and Chief Executive Officer to discuss matters and policies including those related to reserves.

There are numerous uncertainties inherent in estimating quantities of proved reserves, including many factors beyond our control or the control of the reserve engineers. Reserve engineering is a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact manner. The accuracy of any reserve or cash flow estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Estimates by different engineers often vary, sometimes significantly. In addition, physical factors, such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors, such as an increase or decrease in product prices that renders production of such reserves more or less economic, may justify revision of such estimates. A significant reduction in our proved reserves may result in a full cost ceiling limitation and/or an accelerated depletion rate. Accordingly, reserve estimates could be different from the quantities of oil and gas that are ultimately recovered (See ITEM 1.A – “Risk Factors”).

Estimated reserves shown for the producing properties have been projected on the basis of the extrapolation of performance data where there was sufficient data to suggest a performance trend. A significant percentage of the completions have extensive production histories and provide substantial data with respect to performance trends. In some cases the information suggests that recent well intervention work has been performed. In such cases we have considered prior historical performance in estimating future reserves. Projections for recently drilled wells have been prepared on the basis of early performance data and/or well tests with consideration for the performance trends observed in those wells with long production histories.

~~Production~~Liquidating ~~Volumes,~~Distribution ~~Average~~Policy ~~Prices and Average Production Costs~~

~~Table~~On NoSeptember 24, 2012, the Board declared an initial distribution to Shareholders of $1.01 per Common Share in connection with the Winding Up. The distribution was made as a return of capital to Shareholders of record at the close of business on October 29, 2012, and the stated capital of the Company was reduced accordingly. The distribution of $70,532,740 was paid on October 22, 2012.

~~Production~~Additional liquidating distributions are subject to a number of risks and uncertainties. Such risks and uncertainties include, ~~Prices~~without limitation, possible contingent liabilities and ~~Production~~post-closing ~~Costs~~indemnification and other obligations arising from the sale of the Company’s properties; and risks associated with the liquidation and dissolution of the Company, including, without limitation, settlement of the Company’s liabilities in dissolution, the amount of income earned on the Company’s cash and cash equivalents and short-term investments during the liquidation period, and the actual timing of the liquidating distributions. The Board will need to make provision for the satisfaction of all of the Company’s known and unknown liabilities, which could substantially delay or limit the Company’s ability to make distribution in full to Shareholders.

	Years ended December 31,
	2011		2010		2009
Production (1)
Oil (Bbls)		350,483		258,990		127,769
Gas (Mcf)		160,070		290,218		428,054
Total BOE		377,161		307,360		199,111
Net Production (2)
Oil (Bbls)		274,496		212,868		117,895
Gas (Mcf)		110,848		208,068		318,330
Total BOE		292,971		247,546		170,950
		($)		($)		($)
Received Prices
Oil ($/Bbl)		86.44		67.30		54.29
Gas ($/Mcf)		4.09		4.55		4.15
BOE ($/BOE)		82.06		61.00		43.76
Sales
Oil		30,296,617		17,430,834		6,936,793
Gas		654,135		1,319,145		1,777,087
Total Sales		30,950,752		18,749,979		8,713,880
Royalties
Oil		6,445,562		4,350,219		1,805,466
Gas		199,505		370,561		409,625
Total Royalties		6,645,067		4,720,781		2,215,091
Net Revenues
Oil		23,851,055		13,080,615		5,131,327
Gas		454,630		948,583		1,367,462
Total Net Revenues		24,305,685		14,029,198		6,498,789
Production Cost		11,565,565		9,116,563		5,162,936
Average per BOE volumes(1) ($/BOE)		30.66		29.66		25.93
Average per Net BOE volumes (2) ($/BOE)		39.48		36.83		30.20

Certain Canadian Federal Income Tax Consequences

~~Notes:~~The following general summary describes the material Canadian federal income tax consequences applicable to a holder of our Common Shares who, for purposes of the Income Tax Act (Canada) (the “ITA”), is a resident of the United States and is not a resident or deemed to be a resident of Canada, is not affiliated with the Company, did not acquire any Common Shares by virtue of employment, is not a financial institution, partnership or a trust, holds our Common Shares as capital property, and does not, and is not deemed to use or hold, any Common Shares in connection with carrying on a business in Canada, and who qualifies for benefits under the Canada-United States Tax Convention (1980), as amended (the “Treaty”) (each such holder, a “US Holder”). Special rules, which are not discussed in this summary, may apply to a US Holder that is an insurer carrying on business in Canada and elsewhere.

This summary is based upon the current provisions of the ITA, the regulations thereunder (1the “Regulations”), ~~These~~the Treaty, ~~numbers~~and ~~are~~the ~~net~~current publicly announced administrative and assessing policies of Canada Revenue Agency and all specific proposals (the “Tax Proposals”) to ~~NiMin’s~~amend ~~working~~the ~~interest~~ITA, ~~before~~Regulations ~~royalties~~or Treaty announced by the Minister of Finance (Canada) prior to the date hereof. This description is not exhaustive of all possible Canadian federal income tax consequences and, except for the ~~relevant~~Tax ~~properties~~Proposals, does not take into account or anticipate any changes in law, whether by legislative, governmental or judicial action, and does not, except for the Treaty, take into account any income tax laws or considerations of any province or territory of Canada or foreign tax considerations, which may differ significantly from those discussed herein. This summary assumes that the Tax Proposals will be enacted in their form as of the date hereof.

~~(2)~~The ~~These~~following ~~numbers~~discussion ~~are~~is ~~net~~for general information only and is not intended to ~~NiMin’s~~be, ~~net~~and ~~revenue~~should ~~interests~~not ~~after~~be ~~royalties~~construed ~~for~~to be, legal or tax advice to any holder of Common Shares of the ~~relevant~~Company ~~properties~~and no opinion or representation with respect to the Canadian federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of Common Shares should consult with their own tax advisors about the federal, provincial and foreign tax consequences of purchasing, owning and disposing of Common Shares.

Disposition of Common Shares

Generally, a US Holder will only be subject to tax under the ITA in respect of any capital gain realized on a disposition of Common Shares if, at the time of disposition, the Common Share is, or is deemed to be, “taxable Canadian property” (as defined in the ITA), and not “treaty-protected property” (as so defined), of the US Holder.

The Common Shares generally should not constitute taxable Canadian property of a US Holder provided that the Common Share did not at any time during the 60-month period preceding the disposition, directly or indirectly derive more than 50% of its fair market value from, or from any combination of, (i) real or immoveable property situated in Canada, (ii) “Canadian resource property” (as defined in the ITA), (iii) “timber resource property” (as so defined), and (iv) options in respect of interests in, or for civil law rights in, any of the properties listed in items (i) to (iii), whether or not such properties exist, and the Common Share is not otherwise deemed to be taxable Canadian property.

~~Present~~A ~~Activities~~Common ~~and~~Share ~~Productive~~should ~~Wells~~generally constitute treaty-protected property of a US Holder provided that, at the time of its disposition, any income or gain arising from the disposition would be exempt from Canadian federal income tax under the Treaty. The Treaty provides that a gain derived from the disposition by a resident of the United States of a share of a company that is a resident of Canada for the purposes of the Treaty generally will not be taxable in Canada unless the value of the share derives principally from the real property situated in Canada.

A US Holder’s capital gain (or capital loss) from an actual or deemed disposition of a Common Share that is taxable Canadian property and is not treaty-protected property will generally be the amount, by which the US Holder’s proceeds of disposition exceed (or are exceeded by) the aggregate of the adjusted cost base of the Common Share and any reasonable costs of disposition. The ~~following~~US Holder ~~table~~will ~~sets~~be ~~forth~~required to include one half of any capital gain so arising (“taxable capital gain”) in the ~~wells~~US weHolder’s ~~have~~taxable ~~drilled~~income earned in Canada for the year of disposition, and ~~completed~~will ~~during~~be entitled to deduct one half of any capital loss (“allowable capital loss”) so arising from taxable capital gains realized in the ~~periods~~year ~~indicated.~~on ~~All~~dispositions of taxable Canadian property that are not treaty-protected property and, to the extent not so deductible against such ~~wells~~taxable capital ~~were~~gains ~~drilled~~realized in any of the ~~United~~three ~~States:~~preceding taxation years or any subsequent taxation year, in the circumstances and to the extent described in the ITA.

~~Table~~US NoHolders should consult their own tax advisors regarding whether or not their Common Shares may be taxable Canadian property or treaty-protected property. 3

~~Wells~~Dividends ~~Drilled~~

	Years Ended December 31,
	2011				2010				2009
	Gross (1)		Net (2)		Gross (1)		Net (2)		Gross (1)		Net (2)
Development:
Oil		10		9.43		10		10		1		1
Gas		—		—		—		—		—		—
Non-productive		—		—		—		—		—		—
Total		10		9.43		10		10		1		1
Exploration:
Oil		—		—		—		—		—		—
Gas		—		—		—		—		1		0.2
Non-productive		—		—		—		—		1		0.7
Total		—		—		—		—		2		0.9
Total Drilling:
Oil		10		9.43		10		10		1		1
Gas		—		—		—		—		1		0.2
Non-productive		—		—		—		—		1		0.7
Total		10		9.43		10		10		3		1.9

The Company will be required to withhold Canadian federal income tax (“Withholding Tax”) from any dividend that is, or is deemed to be, paid to a US Holder on the US Holder’s Common Shares. The rate of Withholding Tax under the ITA is 25% of the gross amount of the dividend, but should generally be reduced to 15% for the US Holders under the Treaty.

~~Notes:~~ITEM 6. SELECTED FINANCIAL DATA

~~(1)~~The ~~“Gross”~~selected financial ~~wells~~data ~~means~~of the ~~number~~Company for the period ended June 30, 2012 and the fiscal years ended December 31, 2011, and 2010, has been derived from the audited annual consolidated financial statements of ~~wells~~the Company. The information contained in ~~which~~the ~~NiMin~~selected ~~has~~financial adata ~~working~~is ~~interest~~qualified orin aits ~~royalty~~entirety ~~interest~~by ~~that~~reference ~~may~~to the Company’s consolidated financial statements and related notes included in ITEM 8 – Financial Statements, and should be ~~convertible~~read toin aconjunction ~~working~~with such ~~interest~~financial statements and with the information appearing in ITEM 7. – MD&A. The audited financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

~~(2)~~In ~~“Net”~~addition, ~~wells~~as ~~means~~a result of the ~~aggregate~~Shareholders’ ~~number~~approval of ~~wells~~the ~~obtained~~Winding byUp ~~multiplying~~of ~~each~~the ~~gross~~Company, ~~well~~the byliquidation ~~NiMin’s~~basis ~~percentage~~of accounting ~~working~~was ~~interest~~adopted ~~therein~~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 December 31, 2012. Financial information presented below as of and subsequent to June 30, 2012, include a Consolidated Statement of Changes in Net Assets in Liquidation, as required under the liquidation basis of accounting.

As at December 31, 2011, we had an interest in 48 gross(1) (46.58 net( 2)) producing and 20 gross(1) (19.35 net( 2)) non- producing oil and natural gas wells as follows:

Table No. 4

Productive Wells

	Producing								Non-Producing
	Oil				Natural Gas				Oil				Natural Gas
	Gross(1)		Net(2)		Gross(1)		Net(2)		Gross(1)		Net(2)		Gross(1)		Net(2)
Wells
California		9.00		9.00		—		—		9.00		9.00		—		—
Wyoming		39.00		37.52		—		—		11.00		10.35		—		—
Total		48.00		46.52		—		—		20.00		19.35		—		—

Notes:

(1) “Gross” wells refers to the number of wells in which NiMin has a working interest or a royalty interest that may be convertible to a working interest.

(2) “Net” wells means the aggregate number of wells obtained by multiplying each gross well by NiMin percentage working interest therein.

As at the date of this Annual Report we had no commitments to provide a fixed and determinable quantity of oil or gas in the near future under existing contracts or agreements.

~~The~~Selected ~~following~~Financial ~~table~~Data ~~sets forth our gross and net acres of properties at December 31, 2011:~~

Table No. 5


	Six months ended June 30, 2012 ($)			Year ended December 31, 2011(1) ($)			Year ended December 31, 2010(1) ($)

Revenues		10,985,590			24,305,685			14,029,198
Production expense		(4,257,619	)		(11,565,565	)		(9,116,563	)
Gain (loss) on derivative contracts		189,507			(753,053	)		(708,032	)
General & administrative expenses		(6,043,260	)		(7,894,479	)		(7,888,736	)

Liquidation related expenses		(7,537,423	)		—			—
Interest income		10,673			44,595			54,070
Interest expense		(6,443,178	)		(5,406,133	)		(7,108,109	)
Foreign exchange gain (loss)		(438	)		(26,101	)		6,617
Other		(22,818	)		(196,649	)		248,734
Other reclamation costs		(659,115	)		—			—
Gain on sale of oil & gas properties and equipment		46,280,232			—			—

DD&A		(1,697,361	)		(3,507,669	)		(3,190,905	)

Change in fair value of warrants		235,134			1,062,208			1,674,053

Change in fair value of options		296,519			707,513			—

Income (loss) before income taxes		31,336,443			(3,229,648	)		(11,999,673	)
Income tax expense		2,478,263			—			386,772

Net income (loss)		28,858,180			(3,229,648	)		(12,386,445	)

Net income (loss) per share - basic and diluted		0.41			(0.05	)		(0.21	)

~~Net~~Note: ~~Acres of Properties~~

		DEVELOPED PROPERTIES
		(acres)
LOCATION	Gross(1)		Net(2)
California		245		245
Wyoming		2,241		2,174
TOTAL		2,486		2,419

(1)

Audited

	UNDEVELOPED PROPERTIES
	December 31,2011($)			December 31,2010($)
		(acres)
Working Capital (Deficiency)		(2,628,937	)		5,239,836
LOCATION	Gross(1)			Net(2)		Expiration of material leases
Stockholders’ equity		46,984,363			32,077,128
California		429			429		January 10, 2013
Long-term Debt		31,950,000			36,000,000
Wyoming		1,181			1,181		June 30, 2015
Total Assets		90,519,375			81,908,408
TOTAL		1,610			1,610
Dividends		—			—
Common Stock		108,758,460			93,107,905
Number of Shares Outstanding		69,834,396			61,690,977

Notes:

(1) “Gross Acres” are the total acres in which NiMin has or had an interest.

(2) “Net Acres” is the aggregate of the total acres in which NiMin has or had an interest multiplied by its working interest percentage held therein.

~~Costs~~NiMin ~~Incurred~~Energy Corp.

~~Table~~Statement ~~No.~~Summary of Changes in Nets Assets from June 630, 2012 to December 31, 2012

~~2011~~(Liquidation ~~Capital~~Basis) ~~Expenditure~~

	Incurred duringDecember 31,2011 (1)($ 000s)
Net Assets in Liquidation as of June 30, 2012	$	77,914,536
Property Costs
Increase (decrease) to net assets:
- Louisiana		19
Cash distribution to shareholders from July 1, 2012 to December 31, 2012		(70,532,740	)
- California		102
Investment income from July 1, 2012 to December 31, 2012		56,213
- Wyoming		128
Tax Adjustment from July 1, 2012 to December 31, 2012		1,019,447
Total Property Costs		249
Adjustments to assets from July 1, 2012 to December 31, 2012		(55,927	)
Drilling/Workovers
Adjustments to Liquidation accruals from July 1, 2012 to December 31, 2012		(528,868	)
- Louisiana		144
Costs incurred from July 1, 2012 to December 31, 2012		(85,255	)
- California		4,100
Foreign exchange adjustment from July 1, 2012 to December 31, 2012		49,512
- Wyoming		11,770
Net decrease to net assets:		(70,077,618	)
Total Drilling/Workovers		16,014
Net Assets in Liquidation as of December 31, 2012	$	7,836,918
Facilities
- Louisiana		—
- California		560
- Wyoming		1,698
Total Facilities		2,258
Total(2)		18,521

Notes:

(1) See ITEM 7- “MD&A—Capital Expenditures.”

(2) The Louisiana properties were sold on December 1, 2011 (see ITEM 7—“MD&A – Liquidity and Capital Resources”).

We have invested a total of $18.52 million in capital expenditures during the year ended December 31, 2011 as compared to our 2011 capital expenditures budget of approximately $21 million due to the expiration of the Warrants issued in connection with the Prospectus Offering completed on September 4, 2009. (See ITEM 7- “MD&A—Capital Expenditures” for a complete breakdown and analysis of our incurred capital expenditures during the years ended December 31, 2011, 2010 and 2009).

Subject to the results of the Strategic Review, and access to the capital markets, we plan to invest a total of $34.01 million in capital expenditures during 2012 (See ITEM 7 – “MD&A—Capital Expenditures”).

All capital program expenditures are discretionary and are restricted by the Senior Loan including compliance with any covenants or receiving waivers therefrom (See ITEM 7 – “MD&A—Liquidity and Capital Resources”). We review all capital expenditure programs on a regular basis and adjust spending based on factors such as changes in commodity prices, drilling and production results, and availability of funding. While we believe we have sufficient capital and liquidity to finance current operations through the next twelve months, our long-term liquidity depends on its ability to access the capital markets. There can be no assurance that we will be successful with any of these initiatives (See ITEM 1.A— “Risk Factors”).

~~Competitive~~ITEM 7. ~~Conditions~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The ~~oil~~following ~~and~~management’s ~~natural~~discussion ~~gas industry is highly competitive. We actively compete for reserve acquisitions, exploration leases, licenses~~ and ~~concessions~~analysis ~~and~~(“MD&A”) ~~skilled~~should ~~industry~~be ~~personnel~~read ~~with~~in ~~a substantial number~~conjunction ofwith other oil and natural gas companies, many of which have significantly greater financial resources than NiMin. Our competitors include major integrated oil and natural gas companies and numerous other independent oil and natural gas companies and individual producers and operators. Our competitors for the ~~acquisition,~~“Selected ~~exploration,~~Consolidated ~~production~~Financial ~~and~~Information” ~~development~~in ofItem 6 ~~oil~~above and ~~natural~~our ~~gas~~historical ~~properties,~~consolidated ~~and for capital to finance such activities, include companies that have greater~~ financial ~~and personnel~~statements ~~resources available to them than NiMin. Certain of our customers~~ and ~~potential customers are themselves exploring for oil and natural gas, and~~ the ~~results~~accompanying ofnotes ~~such~~included ~~exploration~~elsewhere ~~efforts could affect our ability to sell or supply oil or natural gas to these customers~~ in ~~the~~this ~~future.~~Annual ~~Our~~Report ~~ability to successfully bid~~ on ~~and~~Form acquire additional property rights, to discover reserves, to participate in drilling opportunities and to identify and enter into commercial arrangements with customers will be dependent upon developing and maintaining close working relationships with its future industry partners and joint venture operators and its ability to select and evaluate suitable properties and to consummate transactions in a highly competitive environment10-K. Oil and natural gas lease sales generally are a competitive bid process and we assess our interpretation of the value of such leases and then submit a bid. Field equipment availability is competitive and the prices of these goods and services can be volatile. We continue to gain access to equipment through prior agreements and contacts. We believe our distinct competitive advantage is through our scientific, integrated approach in generating drilling prospects.

~~Effect~~In ofthis ~~Government~~MD&A, ~~Regulations~~unless otherwise specified, all dollar amounts are expressed in US Dollars (“$”).

~~Our~~FORWARD-LOOKING ~~oil~~INFORMATION and natural gas exploration, development, production and related operations and activities are subject to extensive rules and regulations promulgated by federal, state and local governmental agencies. Because such rules and regulations are frequently amended or reinterpreted, we are unable to predict the future cost or impact of complying with such laws. Although the regulatory burden on the oil and natural gas industry increases our cost of doing business and, consequently, affects our profitability, these burdens generally do not affect us differently or to any greater or lesser extent than they affect other operators in the oil and natural gas industry with similar types, quantities, and locations of production. Failure to comply with such rules and regulations can result in substantial penalties. Regulatory issues related to oil and natural gas operations, title to its properties, and other environmental issues, affect our ability to explore for, develop and produce oil and natural gas in the United States. The general regulatory framework and specific issues related to our operations are set forth below.

~~Regulations~~This MD&A ~~Affecting~~contains ~~Production~~certain forward-looking information, which is based upon the current internal expectations, estimates, projections, assumptions and beliefs of NiMin, as of the date of such statements or information. Words such as “plan,” “expect,” “project,” “intend,” “believe,” “anticipate,” “estimate,” “may,” “will,” “potential,” “proposed,” and other similar words, or statements that certain events or conditions “may” or “will” occur, are intended to identify forward-looking information. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking information. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not occur. Such forward-looking information in this MD&A speaks only as of the date of this Annual Report.

~~All~~Although ~~of the~~NiMin ~~states~~believes inthat ~~which we operate generally require permits for drilling operations, drilling bonds, reports concerning operations, and impose other requirements related to~~ the ~~exploration,~~expectations ~~development~~reflected ~~and~~in production of oil and natural gas. Such states also have statutes and regulations addressing conservation matters, including provisions for unitization or pooling of oil and natural gas properties. The establishment of maximum rates of production from oil and natural gas wells, the ~~spacing, plugging,~~forward-looking ~~and~~information ~~abandoning of such wells, restrictions on venting, or flaring natural gas, and requirements regarding the rateability of production~~ are ~~also imposed. These laws and regulations may limit the amount of oil and natural gas we can produce from our wells and may limit the number of wells or the locations in which we can drill. Moreover~~reasonable, many states impose a production or severance tax with respect to the production and sale of oil and natural gas within their jurisdiction. States do not generally regulate wellhead prices or engage in other, or similar, direct regulation of production, but there can be no assurance that ~~this~~such expectations will ~~not~~prove to be ~~done in the future~~correct. ~~These~~NiMin ~~regulations~~cannot ~~apply~~guarantee tofuture usresults, ~~either~~levels ~~directly when we are the operator~~ of ~~a property~~activity, performance or ~~indirectly, when we are participating in activities operated by a third party~~achievements.

~~Regulation~~Statements made in this MD&A regarding the payment of ~~Sales~~additional liquidating distributions and of the timing of the dissolution are forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties, and there can be no assurance that the expectations reflected in those statements will be realized or achieved. Such risks and uncertainties include, without limitation, possible contingent liabilities and other obligations arising from the sale of the Company’s properties and previous operation of its business; and risks associated with the liquidation and dissolution of the Company, including, without limitation, settlement of the Company’s liabilities and the actual timing of the liquidating distributions and dissolution.

The ~~sales~~Board ~~prices~~will ofneed ~~oil,~~to ~~NGL,~~make ~~and~~provision ~~natural~~for ~~gas are presently not regulated, but rather are set by~~ the ~~market.~~satisfaction Weof ~~cannot~~all ~~predict,~~of ~~however, whether new legislation to regulate~~ the ~~price~~Company’s ofknown ~~energy~~and ~~commodities~~unknown ~~might be proposed~~liabilities, ~~what~~which ~~proposals,~~could ifsubstantially ~~any,~~delay ~~might~~or ~~actually~~limit ~~be enacted by~~ the ~~U.S.~~Company’s ~~Congress~~ability orto ~~the~~make distribution ~~various~~in ~~state~~full ~~legislatures~~to ~~and what effect, if any, such proposals might have on our operations~~Shareholders.

~~The~~Amounts ~~FERC~~available ~~regulates~~for ~~interstate~~the ~~natural~~final ~~gas~~distribution ~~transportation~~to ~~rates~~Shareholders ~~and~~will ~~service~~depend ~~conditions~~on ~~which~~the ~~affect~~amount the ~~marketing~~Board of NiMin ~~the~~determines ~~natural~~are ~~gas~~appropriate ~~we produce~~to asbe ~~well~~transferred asto the ~~revenues~~Liquidating weTrust, ~~receive~~as ~~for~~defined ~~sales~~herein, ofin ~~such~~accordance ~~production.~~with ~~The~~Delaware ~~price~~law, and ~~terms~~the ofconsideration ~~access~~received toby ~~pipeline~~NiMin ~~transportation~~for ~~are~~the ~~subject~~sale toof ~~extensive~~the ~~federal~~beneficial ~~and~~ownership ~~state~~interests ~~regulation.~~in ~~The~~the ~~FERC~~Liquidating ~~is continually proposing and implementing new rules and~~Trust. ~~regulations~~

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”) was an oil and gas company engaged in the acquisition, development and production of oil and gas properties in the United States until June 30, 2012, when we ceased to have oil and gas operations.

The annual and special meeting (the “Special Meeting”) of holders of Common Shares (“Shareholders”) 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 oil and gas assets (“Wyoming Assets”) and California based oil and gas assets (“California Assets”).

~~affecting~~At ~~interstate~~the ~~transportation.~~Special ~~Those~~Meeting, ~~initiatives~~the Shareholders were also ~~may~~asked ~~affect~~to consider and vote on the ~~interstate~~voluntary ~~transportation~~liquidation and dissolution of ~~natural~~the ~~gas~~Company ~~under~~pursuant ~~certain~~to ~~circumstances.~~the ~~The~~laws ~~stated~~of ~~purpose~~the ofBusiness ~~many~~Corporations ofAct ~~these~~(Alberta) ~~regulatory changes~~(the is“Winding toUp”) ~~promote~~and ~~competition~~the ~~among~~distribution to Shareholders of the ~~various~~net ~~sectors~~proceeds of the ~~natural~~Sale ~~gas~~of ~~industry.~~Assets We(less dothe ~~not~~settlement ~~believe~~of ~~that~~obligations weof Legacy), ~~will~~and becash ~~affected~~on byhand, ~~any~~as part of such ~~FERC~~liquidation ~~action~~and indissolution aafter ~~manner~~satisfaction ~~materially~~of ~~different~~all ~~than~~liabilities ~~any~~of ~~other~~the ~~natural~~Company, ~~gas~~by ~~producers~~way inof ~~our~~a ~~areas~~reduction of ~~operation~~ the stated capital of the Common Shares.

~~The~~Both ~~price received from~~ the ~~sale~~Sale of ~~oil~~Assets and ~~NGL~~the isWinding ~~affected~~Up were approved by the ~~cost~~Shareholders ofat ~~transporting~~the ~~such~~Special ~~products to market~~Meeting. ~~Interstate transportation~~In ~~rates~~order for ~~oil,~~the ~~NGL,~~Company ~~and~~to ~~other~~complete ~~products~~the ~~are~~Winding ~~regulated~~Up, by the ~~FERC.~~appropriate ~~The~~corporate ~~FERC~~steps ~~has~~were ~~established~~required anto be ~~indexing~~taken ~~system~~ for ~~such~~the ~~transportation~~dissolution ~~which~~and ~~allows~~liquidation ~~pipelines~~of toLegacy ~~take~~which andissolution ~~annual~~was ~~inflation-based~~filed ~~rate~~in ~~increase.~~Delaware Weon ~~are~~September 17, ~~not~~2012. ~~able~~Pursuant to ~~predict with~~the ~~any~~approval ~~certainty~~of ~~what~~the ~~effect,~~Sale ifof ~~any~~Assets, ~~these~~Legacy ~~regulations~~proceeded ~~will~~with ~~have~~the onsale ~~us,~~of ~~but~~ the ~~regulations~~Wyoming ~~may,~~Assets ~~over~~and ~~time, tend to increase transportation costs which may have~~ the ~~effect~~California ofAssets all ~~reducing~~as ~~wellhead~~more ~~prices~~particularly ~~for~~described ~~oil and NGL~~below.

~~Environmental~~On ~~Matters~~June 28, 2012, Legacy completed its previously announced sale of its Wyoming Assets to BreitBurn Operating L.P., a wholly-owned subsidiary of BreitBurn Energy Partners L.P. (“BreitBurn”), for total cash consideration of approximately $93 million, being the original purchase price of approximately $98 million less, approximately $5 million adjusted to account for preliminary purchase price adjustments. On August 30, 2012, Legacy completed its final settlement with BreitBurn and received approximately $2.3 million based on the final purchase price adjustments.

~~Our~~On ~~operations with respect to oil and natural gas exploration~~June 29, ~~production and related activities~~2012, ~~are~~Legacy ~~subject~~completed toits ~~numerous~~previously ~~and~~announced ~~changing~~sale ~~federal, state and local laws governing the discharge~~ of ~~materials~~its ~~into~~California ~~the~~Assets ~~environment~~to orSouthern ~~otherwise~~San ~~relating to environmental~~Joaquin ~~protection.~~Production, ~~These~~LLC ~~laws~~for ~~and~~total ~~regulations~~cash ~~may:~~consideration ~~(i) require the acquisition~~ of ~~certain~~approximately ~~permits~~$26 ~~prior~~million, tobeing ~~commencing certain activities or in connection with our operations; (ii) restrict or prohibit~~ the ~~types,~~original ~~quantities~~purchase ~~and~~price ~~concentration~~ of ~~substances~~ ~~that~~approximately we$27 ~~can release into the environment; (iii) restrict or prohibit the activities that could impact wetlands~~million, ~~endangered~~less orapproximately ~~threatened~~$1 ~~species~~million oradjusted ~~other protected areas or natural resources; (iv) require some degree of remedial action~~ to ~~mitigate~~account ~~pollution from former operations, such as pit cleanups and plugging abandoned wells; and (v) impose substantial liabilities~~ for ~~pollution~~preliminary ~~resulting~~purchase ~~from~~price ~~our operations~~adjustments. ~~Such~~Pursuant ~~laws~~to ~~and regulations may substantially increase~~ the ~~cost~~terms of ~~operations and may prevent or delay~~ the ~~commencement~~purchase ~~or continuation of a given project~~ and ~~thus~~sale ~~generally could have an adverse effect upon capital expenditures~~agreement, ~~earnings~~$3 ormillion ~~competitive position. Violation~~ of ~~these~~the ~~laws~~$26 ~~and~~million ~~regulations could~~purchase ~~result~~price inpaid ~~significant~~on ~~fines~~closing orwas ~~penalties.~~deposited ~~Some~~with ofan ~~our~~escrow ~~properties~~agent ~~are~~until ~~located in areas susceptible to destructive acts of nature~~December 28, ~~which~~2012 ~~may~~in ~~damage~~connection ~~facilities~~with ~~and~~various ~~cause~~indemnities ~~the~~contained ~~release of pollutants~~therein. ~~Environmental~~On ~~insurance~~August 30, ~~coverage~~2012, Legacy ~~maintained~~completed ~~by NiMin~~its orfinal ~~third-party~~settlement ~~operators~~with ~~may~~Southern ~~not~~San ~~fully~~Joaquin ~~insure~~Production ~~all~~LLC ofand ~~these~~received ~~risks.~~$347,938 ~~Although~~based on the ~~costs~~final ofpurchase ~~remedying~~price ~~such~~adjustments. ~~conditions~~On ~~may~~December 28, ~~be significant~~2012, wethe do$3 ~~not~~million ~~believe~~was ~~these~~released ~~costs~~to ~~would~~NiMin ~~have~~from athe ~~material~~escrow ~~adverse impact on our financial condition and operations~~account.

~~We believe that we are in substantial compliance with all current applicable environmental laws and regulations.~~ The ~~cost~~Winding ofUp ~~compliance with such laws~~ and ~~regulations~~the ~~has~~dissolution ~~not been material to date~~ and isliquidation ~~not~~of ~~expected~~Legacy tocontemplates bethe ~~material~~orderly ~~during~~disposition ~~2012.~~of Wethe doassets, ~~not~~the ~~believe~~orderly ~~that~~discharge weof ~~will~~all ~~be required to incur any material capital expenditures to comply with existing environmental requirements.~~outstanding ~~Nevertheless~~liabilities, ~~changes~~including inall ~~existing~~outstanding ~~environmental~~debt, ~~laws~~ and ~~regulations~~after ~~or in~~ the ~~interpretation~~establishment ~~thereof~~of ~~could~~appropriate ~~have a significant impact on our operations~~reserves, ~~as well as~~ the ~~oil~~distribution ~~and~~of ~~natural~~cash ~~gas~~to ~~industry~~Shareholders in ~~general and such changes cannot generally be anticipated~~installments. For instance, any change in environmental laws and regulations that result in more stringent and costly waste handling, storage, transport, disposal or clean-up requirements could have an adverse impact on our operations.

~~Global~~On ~~Warming~~September 24, 2012, the Board declared an initial distribution to Shareholders of $1.01 per Common Share in connection with the Winding Up. The distribution was made as a return of capital to Shareholders of record at the close of business on October 9, 2012, and ~~Climate~~the ~~Change~~stated capital of the Company was reduced accordingly. The distribution of $70,532,740 was paid on October 22, 2012.

~~Significant~~Upon ~~studies~~completion ~~and~~of ~~research~~the ~~have~~disposition ~~been~~of ~~devoted~~all toremaining ~~climate~~assets ~~change~~of ~~and~~Legacy ~~global warming,~~ and ~~climate~~the ~~change~~settlement ~~has~~of ~~developed~~all ~~into~~liabilities aof ~~major political issue in~~ the ~~United~~Company ~~States~~ and ~~globally.~~Legacy, ~~Certain research suggests that greenhouse gas emissions contribute to climate change and pose a threat to~~ the ~~environment.~~Company ~~Recent scientific research and political debate has focused in part on carbon dioxide and~~intends ~~methane incidental~~ to ~~oil~~distribute ~~and~~the ~~natural~~net ~~gas~~proceeds exploration and production. Many state governments have enacted legislation directed at controlling greenhouse gas emissions, and future state and federal legislation and regulation could impose additional restrictions or requirements in connection with our operations and favor use of ~~alternative~~the ~~energy~~liquidation ~~sources, which could increase operating costs~~ and ~~demand~~dissolution ~~for oil products. Depending on the legislation or regulatory program that may be adopted to address emissions~~ of ~~greenhouse~~both ~~gases,~~Legacy ~~we could be required to reduce greenhouse gas emissions resulting from its operations or could be required to purchase~~ and ~~surrender allowances for greenhouse gas emissions associated with its operations or~~ the ~~oil~~ ~~and~~Company ~~natural gas it produces. Although we do not anticipate that it would be impacted~~ to aShareholders ~~greater~~in ~~degree~~one ~~than~~final ~~other~~distribution ~~similarly~~on ~~situated producers of oil and natural gas,~~ a ~~stringent~~future ~~greenhouse~~date ~~gas~~which ~~control~~has ~~program~~not ~~could~~yet ~~have~~been ~~an adverse effect on our cost of doing business and could reduce the demand for the oil and natural gas that we produce~~determined.

~~Hazardous~~On ~~Substances~~October 10, 2012, Nimin voluntarily delisted the Common Shares from the TSX after the close of trading on October 22, 2012, and ~~Waste~~its listing was transferred to the NEX, a separate board of the ~~Handling~~TSX Venture Exchange (“NEX”), effective as of opening of the market on October 23, 2012. From October 23, 2012 and onwards, the Common Shares will trade on the NEX under the symbol “NNN.H”.

~~CERCLA~~As ~~imposes~~a ~~joint~~result ~~and~~of ~~several~~the ~~liability,~~Shareholders’ ~~without~~approval ~~regard~~of tothe ~~fault~~Winding orUp, ~~legality~~the liquidation basis of ~~conduct~~accounting was adopted effective June 30, on2012. ~~classes~~This basis of ~~persons~~accounting ~~who~~is ~~are~~ considered toappropriate bewhen, ~~responsible~~among ~~for~~other ~~the~~things, ~~release~~liquidation of a ~~hazardous~~company ~~substance~~is ~~into~~imminent and the ~~environment~~net realizable values of assets are reasonably determinable. ~~These~~Under ~~persons~~this ~~include~~basis ~~the~~of ~~owner~~accounting, orassets ~~operator~~are valued at their net realizable values and liabilities are stated at their estimated settlement amounts. Further, all costs of aliquidation ~~site~~are ~~where~~accrued aas ~~release~~of ~~occurs~~December 31, 2012. Financial information presented as of and ~~anyone~~subsequent ~~who~~to ~~disposes~~June 30, or2012, ~~arranges~~includes ~~for~~a Consolidated Statement of Net Assets and a Consolidated Statement of Changes in Net Assets in Liquidation, as required under the ~~disposal~~liquidation basis of aaccounting. ~~hazardous~~Financial ~~substance~~information included for periods ending prior to June 30, 2012, is ~~released~~presented atunder athe ~~site~~going concern basis of accounting. ~~Under~~Therefore, financial information presented as of and for the six months ended December 31, 2012, is not comparable to financial information presented for prior periods.

~~CERCLA,~~RESULTS ~~such~~OF ~~persons~~OPERATIONS ~~may~~AND beFINANCIAL ~~subject~~CONDITION to strict, joint and several liabilities for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. In addition, it is not uncommon for neighboring landowners and other third-parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment. While we generate substances in the course of our operations that may be regulated as hazardous substances, we have not received notification that we may be potentially responsible for cleanup costs under CERCLA.

~~The~~Results ~~RCRA and comparable state statutes regulate the generation, transportation, treatment, storage, disposal and cleanup~~ of ~~hazardous~~Operations ~~and non-hazardous~~— wastes. With the approval of the EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements. Drilling fluids, produced waters, and most of the other wastes associated with the exploration, development, and production of crude oil or natural gas are currently regulated under RCRA’s non-hazardous waste provisions. However, it is possible that certain oil and natural gas exploration and production wastes now classified as non-hazardous could be classified as hazardous wastes in the future. Any such change could result in an increase in our operating expenses, which could have a material adverse effect on our results of operations and financial position.

WePeriod from ~~currently own or lease~~January 1, ~~and~~2012 ~~have~~to ~~in the past owned or leased~~December 31, ~~properties~~2012 ~~that for many years have been used for oil~~ and natural gas exploration, production and development activities. Although we use operating and disposal practices that are standard in the industry at the time such practices are used, petroleum hydrocarbons or wastes may have been disposed of or released on or under the properties owned or leased by us or on or under other locations where such wastes have been taken for disposal. In addition, some of these properties have been operated by third-parties whose treatment and disposal or release of petroleum hydrocarbons and wastes was not under our control. These properties and the ~~materials~~years ~~disposed~~ended ~~or released on them may be subject to CERCLA~~December 31, ~~RCRA~~2011 and ~~analogous U~~2010.S. ~~state laws. Under such laws, we could be required to remove or remediate previously disposed wastes or property contamination, or to perform remedial activities to prevent future contamination.~~

~~Air~~Crude oil and natural gas ~~Emissions~~sales

~~The~~Given ~~CAA~~that ~~and~~the ~~comparable~~sale ~~state laws regulate emissions~~ of ~~various~~Wyoming ~~air~~Assets ~~pollutants through air emissions permitting programs~~ and ~~the imposition~~California ofAssets ~~other~~closed ~~requirements.~~on ~~In addition~~June 28, ~~the~~2012 ~~EPA~~and ~~has~~June 29, ~~developed~~2012, ~~and continues to develop~~respectively, ~~stringent regulations governing emissions of toxic air pollutants at specified sources. These regulatory programs may require us to obtain permits before~~the ~~commencing~~associated ~~construction~~revenues onare aincluded ~~new~~in ~~source~~revenues ~~of air emissions,~~ and ~~may~~expenses ~~require~~for usthe toperiod ~~reduce~~ended ~~emissions~~June 30, ~~at existing facilities~~2012. ~~For example~~However, ~~on July 28, 2011,~~ the ~~EPA~~purchase ~~issued proposed rules that would subject all oil~~ and ~~gas~~sale ~~operations~~agreements ~~(production, processing,~~provide ~~transmission,~~adjustments ~~storage and distribution)~~ to ~~regulation~~the ~~under~~purchase ~~the~~price ~~New~~be ~~Source~~made ~~Performance~~related ~~Standards~~to ~~(“NSPS”)~~revenues and ~~National~~operating ~~Emission~~expenses ~~Standards~~ for ~~Hazardous~~the ~~Air Pollutants (“NESHAPS”) programs. The EPA proposed rules also~~period ~~include NSPS standards for completions~~ of ~~hydraulically~~April 1, ~~fractured~~2012 ~~gas~~through ~~wells.~~the ~~These~~closing ~~standards~~date ~~include~~of the ~~reduced~~sale ~~emission completion (“REC”) techniques developed in EPA’s Natural Gas STAR program along with pit flaring~~ of ~~gas not sent to~~ the ~~gathering line~~properties. ~~The~~As ~~standards would be applicable to newly drilled and fractured wells as well as existing wells that are refractured. Further~~such, the ~~proposed~~purchase ~~regulations~~price ~~under NESHAPS include maximum achievable control technology (“MACT”) standards for those glycol dehydrators and storage vessels at major sources~~ of ~~hazardous air pollutants not currently subject to MACT standards. We are currently evaluating~~ the ~~effect~~sale ~~these proposed rules could have on our business. EPA has indicated that it intends to adopt a final version~~ of the ~~proposed~~properties ~~rules sometime~~ in ~~the~~June ~~spring of~~ 2012. Aswas aadjusted ~~result,~~for werevenues ~~may be required to incur increased capital~~ and operating ~~costs.~~expenses ~~Additionally, U.S. federal and state regulatory agencies can impose administrative, civil and criminal penalties~~ for ~~non-compliance~~the ~~with~~period ~~air~~of ~~permits~~April 1 orthrough ~~other~~closing ~~requirements~~ date of the ~~federal~~sale ~~CAA~~of ~~and~~the ~~associated state laws and regulations~~properties.

~~Hydraulic~~For ~~Fracturing~~the six months ended June 30, 2012, we recorded gross revenues of $13.78 million. Given the Sale of Assets during the second quarter of 2012, the Company did not have any oil and gas revenues during the six months ended December 31, 2012.

~~Hydraulic fracturing~~For isthe anyear ~~important~~ended ~~and~~December 31, ~~common~~2011, ~~practice~~we ~~that~~recorded isgross ~~used~~revenues toof ~~stimulate~~$30.95 ~~production~~million, ofas ~~natural~~compared ~~gas~~to ~~and/or~~$18.75 ~~oil~~million ~~from~~for ~~dense~~the ~~subsurface~~year ~~rock~~ended December 31, ~~formations~~2010. ~~The~~Oil ~~hydraulic~~sales ~~fracturing~~as ~~process~~a ~~involves~~percentage ~~the~~of ~~injection~~total ofrevenue ~~water,~~during ~~sand,~~the ~~and~~year ~~chemicals~~ended ~~under~~December 31, ~~pressure into~~2011 ~~the~~as ~~formation~~compared to ~~fracture~~ the ~~surrounding~~same ~~rock~~period ~~and~~in ~~stimulate~~2010 ~~production.~~increased Wefrom ~~use~~93% ~~hydraulic~~to ~~fracturing~~98%. asOil ~~part~~volumes ofincreased ~~our~~by ~~operations.~~35% ~~Hydraulic~~to ~~fracturing~~960 ~~typically~~barrels isof ~~regulated~~oil byper ~~state~~day (“Bopd”) ~~oil~~ and ~~natural gas commissions, but~~ the ~~EPA~~price ~~has~~received ~~asserted federal~~increased ~~regulatory~~by ~~authority~~28% ~~pursuant~~ to ~~the~~$86.44 ~~Safe~~during ~~Drinking~~the ~~Water~~year ~~Act~~ended ~~over~~December 31, ~~certain~~2011, ~~hydraulic~~as ~~fracturing~~compared ~~activities~~to ~~involving~~ the ~~use~~same ofperiod ~~diesel~~in 2010. InNatural ~~addition,~~gas ~~legislation~~sales ~~has~~as ~~been~~a ~~introduced~~percentage ~~before~~of ~~Congress~~total torevenue ~~provide~~during ~~for~~the ~~federal~~year ~~regulation~~ended ofDecember 31, ~~hydraulic~~2011, ~~fracturing~~as ~~under~~compared to the ~~Safe~~same ~~Drinking~~period ~~Water~~in ~~Act~~2010 ~~and~~decreased from 7% to ~~require~~2%. ~~disclosure~~Natural ofgas ~~the~~volumes ~~chemicals~~decreased ~~used~~by in45% ~~the~~to ~~hydraulic~~439 thousand ~~fracturing~~cubic ~~process.~~feet Atof ~~the~~natural ~~state~~gas ~~level,~~per ~~several~~day ~~states~~(“Mcf/d”) ~~have~~and ~~adopted~~the orprice ~~are~~received ~~considering~~decreased ~~legal~~by ~~requirements~~10% ~~that~~to ~~could~~$4.09 ~~impose~~during ~~more~~the year ~~stringent~~ended ~~permitting~~December 31, ~~disclosure,~~2011 ~~and~~as ~~well~~compared ~~construction~~to ~~requirements~~the onsame ~~hydraulic~~period ~~fracturing~~in ~~activities~~2010. We ~~follow~~The ~~applicable~~increase ~~standard~~in ~~industry~~gross ~~practices~~revenues ~~and legal requirements~~ for ~~groundwater~~the ~~protection~~year inended ~~our~~December 31, ~~drilling~~2011, ~~and~~as ~~hydraulic~~compared ~~fracturing activities.~~to ~~Nonetheless,~~the ifsame ~~new~~period orduring ~~more~~2010, ~~stringent~~was ~~federal,~~mainly ~~state,~~due orto ~~local~~successful ~~legal~~drilling ~~restrictions~~and ~~relating~~work-overs toin Wyoming.

Crude Oil Derivative Contracts

Commodity price risk was 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 barrels of 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.

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. On December 31, 2011, we recognized $976,929 as a derivative liability on crude oil derivative contracts.

For the year ended December 31, 2011, the change in derivative contracts included a realized loss of $1.12 million and an unrealized gain of $365,109. For the year ended December 31, 2010, the change in derivative contracts included a realized gain of $501,255 and an unrealized loss of $1.21 million.

During the second quarter of 2012, the Company terminated and settled all derivative contracts as of May 17, 2012, and at December 31, 2012, did not carry derivative contracts on the balance sheet.

For the ~~hydraulic~~six ~~fracturing~~months ~~process~~ended ~~are~~June 30, ~~adopted in areas where we operate~~2012, wethe ~~could~~Company’s ~~incur~~change ~~potentially~~in ~~significant~~derivative ~~added~~contracts ~~costs~~included ~~to comply with such requirements, experience delays or curtailment in~~a ~~the~~realized ~~pursuit~~gain of ~~exploration~~$189, ~~development, or production activities, and perhaps even be precluded from drilling wells~~507.

InRoyalties addition, certain governmental reviews are either underway or being proposed that focus on environmental aspects of hydraulic fracturing practices. These ongoing or proposed studies, depending on their degree of pursuit and any meaningful results obtained, could spur initiatives to further regulate hydraulic fracturing under the federal Safe Drinking Water Act or other regulatory mechanisms.

ToCalifornia our knowledge, there have been no citations, suits, or contamination of potable drinking water arising from our fracturing operations. We do not have insurance policies in effect that are intended to provide coverage for losses solely related to hydraulic fracturing operations; however, we believe our general liability and excess liability insurance policies may cover third-party claims related to hydraulic fracturing operations and associated legal expenses in accordance with, and subject to, the terms of such policies.

~~Water~~The ~~Discharges~~Company paid a crude oil production fee consisting of 100% of the first 635.10 barrels of crude oil produced per month which commenced in 2008 and declined at a rate of 5.5% each year.

~~The~~For ~~CWA, and analogous U.S. state laws, impose restrictions and strict controls with respect to~~ the ~~discharge~~six ofmonths ended ~~pollutants~~June 30, ~~including spills and leaks of oil and other substances into state waters or waters of the United States~~2012, ~~including~~we ~~wetlands.~~recorded ~~The~~royalties ~~discharge~~in ofCalifornia ~~pollutants into regulated waters is prohibited, except~~ in ~~accordance with~~ the ~~terms~~amount of ~~a permit issued by EPA or an analogous state agency~~$1.31 United States federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and regulationsmillion.

~~Title~~For the year ended December 31, 2011, we recorded royalties in California in the amount of $2.19 million as compared to ~~Properties~~$1.68 million for the same period in 2010. The increase in royalties for the year ended December 31, 2011 was mainly due to higher realized commodity prices.

AsLouisiana is customary in the oil and natural gas industry, only a preliminary title review is conducted at the time we acquire properties we believe to be suitable for drilling operations. Prior to the commencement of drilling operations, a thorough title examination of the drill site tract is conducted and curative work is performed with respect to significant defects, if any, before proceeding with operations. This examination is generally done by the operator of the property which may or may not be NiMin. We believe the title to our leasehold properties is good and defensible in accordance with standards generally acceptable in the oil and natural gas industry subject to the exceptions that, in the opinion of the Company, do not detract substantially from its intended use of such properties.

~~The leasehold properties owned by the Company are subject to royalty, overriding royalty, and other outstanding interests~~Royalties ~~customary~~related ~~in the industry. All of our oil and natural gas operations are conducted on properties subject~~ to ~~mineral~~Louisiana ~~leases~~production ~~granted~~varied by ~~legal Persons~~property. ~~Royalties~~Effective are established in each oil and natural gas lease through negotiations between the lessor (mineral owner) and the lessee. Some operations in Wyoming are conducted on land with mineral rights owned by multiple ownersDecember 1, which interests have been contractually pooled or forcibly pooled by governmental authority into a unit. All of these owners are similarly treated based on their share of the unit so created. In addition2011, ~~when one lessee transfers an oil and natural gas lease to another,~~ the ~~transferee~~Company ~~may~~sold ~~reserve~~all anof ~~overriding~~its ~~royalty~~producing interest, ~~which overriding royalty interest is payable~~ in ~~addition~~Louisiana ~~to the royalty on the underlying lease. The leasehold properties may also be burdened by way of liens incident to operating agreements, current California~~ and ~~Wyoming~~no ~~state~~royalties ~~taxes,~~were ~~development~~recorded ~~obligations~~for ~~under~~the ~~oil~~six ~~and~~months ~~natural~~ended ~~gas leases~~June 30, ~~and other encumbrances, easements and restrictions~~2012. ~~We do not believe any of these burdens will materially interfere with our use of these properties.~~

~~Our~~For ~~Employees~~the year ended December 31, 2011, we recorded $842,900 in royalties representing an average rate of 29.56%, as compared to $870,564 representing an average rate of 26.88% for the year ended December 31, 2010. The increase in royalties was mainly due to higher realized commodity prices.

~~Our~~Wyoming corporate headquarters are located at 1160 Eugenia Place, Suite 100, Carpinteria, California. At December 31, 2011, we had 19 employees. Our future success will depend partially on our ability to attract, retain and motivate qualified personnel. We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages. We consider our relations with our employees to be good. We also utilize the services of independent contractors to perform various field and other services.

~~Available~~For ~~Information~~the six months ended June 30, 2012, we recorded $1.47 million in royalties in Wyoming representing an average rate of 16.12%.

WeFor ~~file or furnish annual, quarterly and current reports, proxy statements and other documents with~~ the ~~SEC~~year ~~under~~ended ~~the Exchange Act. The public may read and copy any materials that we file or furnish with the SEC at the SEC’s Public Reference Room at 100 F Street~~December 31, ~~N.E.~~2011, ~~Washington,~~we ~~D.C.~~recorded ~~20549~~$3.62 ~~The~~million ~~public~~in royalties ~~may~~in ~~obtain~~Wyoming ~~information~~representing onan ~~the~~average ~~operation~~rate of ~~the~~17.67%, ~~Public~~as ~~Reference~~compared ~~Room~~to by$2.12 ~~calling~~million ~~the~~or ~~SEC at 1-800-SEC-0330~~20.51% ~~Also,~~for the ~~SEC~~same ~~maintains~~period ain ~~website that contains reports, proxy and information statements, and other information regarding issuers, including us, that file or furnish electronically with the SEC~~2010. The ~~public~~increase ~~can~~in ~~obtain~~royalties ~~any~~was ~~documents~~mainly ~~that~~due weto ~~file~~higher ~~with~~realized ~~the~~commodity ~~SEC~~prices atand ~~www~~quantities produced.~~sec.gov.~~

Operating Costs

For the six months ended June 30, 2012, we incurred operating costs in the amount of $4.26 million and $996,327 in severance taxes.

For the year ended December 31, 2011, we incurred operating costs in the amount of $11.57 million, as compared to $9.12 million for the same period in 2010. During the year ended December 31, 2011, we incurred increased operating costs as compared to the same period in 2010 mainly due to: (i) higher production volumes in 2011; (ii) higher severance taxes paid in 2011 resulting from a 65% increase in oil and gas revenues for the year ended December 31, 2011; (iii) workovers performed in Wyoming during the year ended December 31, 2011; (iv) temporary production equipment rentals and contract labor expense; and (v) costs associated with the Krotz Springs Field and its maintenance due to the south Louisiana flooding.

Operating costs included severance taxes paid in Louisiana and Wyoming. There was 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 year ended December 31, 2011, we recorded $2.36 million in severance taxes, as compared to $1.32 million for the same period in 2010. The increase in severance taxes was mainly due to higher production volumes and commodity prices.

General and Administrative Expenses (“G&A”)

For the six months ended June 30, 2012, we recorded G&A expense, excluding stock based compensation (“SBC”), of $3.75 million.

WeFor ~~also~~the ~~make~~year ~~available~~ended ~~free of charge through our website~~December 31, ~~www.niminenergy.com~~ 2011, ~~our~~we ~~Annual~~recorded ~~Report~~G&A ~~on Form 10-K~~expense, ~~Quarterly~~excluding ~~Reports~~SBC onof ~~Form~~$5.29 ~~10-Q~~million, ~~Current~~as compared ~~Reports~~to on$5.17 ~~Form~~million ~~8-K~~for ~~and,~~the ifsame ~~applicable,~~period ~~amendments~~in to2010. ~~those~~This ~~reports~~increase ~~filed~~during orthe ~~furnished~~year ~~pursuant~~ended ~~to Section~~December ~~13(a)~~31, of2011 ~~the~~was ~~Exchange~~due ~~Act~~to ashigher ~~soon~~accounting asand ~~reasonably~~personnel ~~practicable after we electronically file such material with~~expense, oras ~~furnish~~compared it to, the ~~SEC~~same period in 2010.

Following the approval of the Winding Up, all outstanding unvested options became automatically vested and the Company recognized the remaining grant date fair value of approximately $1.A.7 ~~Risk~~million ~~Factors~~in the current period.

~~The~~For ~~business~~the ofsix ~~exploring~~months ~~for~~ended June 30, ~~developing~~2012, ~~and~~we ~~producing~~recorded ~~oil~~SBC ~~and~~in ~~natural gas is inherently risky. Oil and natural gas operations involve many risks which a~~the ~~combination~~amount of ~~experience, knowledge and careful evaluation may not be able to overcome~~$2.29 ~~There is no assurance that further commercial quantities of oil and natural gas will be discovered or acquired by NiMin~~million. ~~Investors should carefully consider the following risks and uncertainties.~~

IfFor wethe ~~have~~year ~~taxable~~ended ~~income~~December 31, 2011, we ~~may~~recorded beSBC ~~subject~~in tothe ~~both~~amount ~~Canadian~~of ~~and~~$2.61 ~~United~~million, ~~States~~as ~~federal~~compared ~~income~~to ~~tax~~$2.72 million for the same period in 2010. The decrease in SBC for the year ended December 31, 2011 as compared to the previous year was due to the forfeiture of options during 2011.

WeFor ~~should be treated as a U.S. corporation for U.S. federal income tax purposes. We are also a “taxable Canadian corporation” for purposes of~~ the ~~Canadian~~six ~~Tax~~months ~~Act.~~ended ~~As a result~~June 30, ~~if we have any taxable income (other than dividends from Legacy)~~2012, it may be subject to both Canadian and United States federal income tax on such income which would likely give rise to double tax because it is unlikely that tax paid to one country will be creditable against, or deductible in computing, the tax owed the other country. In addition, if we ~~pay~~recorded aliquidation ~~dividend~~related toexpenses aof ~~Non-U~~$7.S.54 ~~shareholder,~~million weprimarily ~~will~~related ~~be required~~ to ~~withhold~~accrued ~~U.S.~~professional ~~income tax at the rate of 30%~~fees, orand ~~such~~severance ~~lower~~and ~~rate~~payroll asrelated ~~may be provided in an applicable treaty~~payments.

~~Certain~~Depreciation, ~~federal~~Depletion, ~~income~~Amortization ~~tax deductions currently available with respect to oil~~ and ~~natural~~Accretion ~~gas~~Expense ~~exploration~~(“DD&A”) ~~and development may be eliminated as a result of future legislation.~~

~~President Obama’s~~We ~~budget~~followed ~~proposal for~~ the ~~fiscal~~full-cost ~~year~~method ~~2012 recommended the elimination~~ of ~~certain~~accounting ~~key United States federal income tax preferences currently available to oil~~ and ~~natural~~all ~~gas~~costs ~~exploration~~included ~~and~~in ~~production~~proved ~~companies.~~properties ~~These changes include, but are not limited to, (i) the repeal of the percentage depletion allowance for oil~~ and ~~natural~~all ~~gas~~future ~~properties, (ii) the elimination of current deductions for intangible drilling and~~ development costs ~~and~~along ~~(iii) the~~with ~~increase~~our intotal ~~the~~proved ~~amortization~~reserves ~~period~~determine ~~from two years to seven years for geophysical costs paid or incurred in connection with~~ the ~~exploration~~period’s ~~for,~~depletion ~~or development of, oil or natural gas within the United States~~cost.

ItFor isthe ~~unclear~~six ~~whether~~months ~~any~~ended ~~such changes will actually be enacted or~~June 30, ~~if enacted~~2012, ~~how~~we ~~soon~~recorded ~~any~~DD&A ~~such~~in ~~changes~~the ~~could~~amount ~~become effective. The passage~~ of any legislation as a result of the budget proposal or any other similar change in United States federal income tax law could affect certain tax deductions that are currently available with respect to oil and natural gas exploration and production$1.70 million.

WeFor ~~have~~the ayear ~~limited~~ended ~~operating~~December 31, ~~history~~2011, ~~and~~we arecorded ~~history~~DD&A in the amount of ~~losses~~$3.51 million, as compared to $3.19 million for the same period in 2010. The decrease in the DD&A rate per boe for the year ended December 31, 2011, was due to an increase in our proved reserves at December 31, 2011 (15,923 thousand boe (“Mboe”) in 2011, as compared to 13,717 Mboe in 2010).

WeChange ~~have~~in aFair ~~limited~~Value ~~operating~~of ~~history~~Warrants and ~~have~~Options ~~never operated at a profit. We cannot assure you that we will operate profitably in the future or provide a return on investment.~~

~~Exploration~~The ~~and~~exercise ~~production~~price ~~requires~~of ~~high~~certain ~~levels~~warrants was denominated in Canadian dollars, which was not the functional currency of ~~investment~~the Company. As a result, these warrants were classified as a liability on the balance sheet and ~~are~~recorded ~~subject~~at totheir ~~natural~~fair ~~hazards~~value at the end of each period and ~~other~~the ~~uncertainties~~change in fair value recognized in earnings.

~~Exploration~~During ~~and~~the ~~production~~year ~~activities~~ended December 31, ~~require~~2012, ~~high~~none ~~levels~~ of ~~investment and~~ the ~~cost~~issued ofwarrants ~~drilling~~were exercised, ~~completing~~and ordue ~~operating~~to ~~wells~~the ispending ~~often uncertain. Exploration~~liquidation, ~~production~~the ~~and~~Company ~~drilling~~valued ~~activities~~the ~~are~~warrants ~~subject~~based toon ~~natural~~the ~~and~~expected ~~operational~~cash ~~hazards~~distribution ~~and~~to ~~other~~Shareholders ~~uncertainties,~~as ~~including~~this ~~those~~represents ~~relating~~management’s tobest ~~the~~estimate ~~physical~~of ~~characteristics~~the value of anthe ~~oil~~underlying orequity ~~natural~~instruments ~~gas~~as ~~field~~of December 31, 2012. ~~After~~As ~~incurring~~the ~~significant~~warrants ~~costs,~~have ~~we may~~an beexercise ~~required~~price greater than the expected cash distribution to ~~curtail~~Shareholders, ~~delay~~the orvalue ~~cancel~~of ~~drilling~~the ~~operations~~warrants ~~because~~were ofdetermined to approximate zero. As a ~~variety~~result, a gain of ~~factors~~$235,134 ~~including~~was ~~unexpected~~recognized ~~drilling~~in ~~conditions,~~earnings ~~pressure~~during orthe ~~irregularities~~six inmonths ~~geological~~ended ~~formations~~June 30, ~~equipment~~2012. ~~failures~~As ora ~~accidents,~~result ~~adverse~~of ~~weather conditions~~the ~~and~~approval ~~compliance~~of ~~with~~the ~~governmental~~Winding ~~requirements~~Up in July 2012, ~~which~~2,188,970 ~~could~~of ~~adversely~~unexercised ~~affect~~warrants ~~our~~were ~~financial~~terminated, ~~condition~~leaving ~~and~~96,930 ~~results~~warrants ofoutstanding ~~operations~~related to Krescent Energy Partners LLC.

The exercise price of 2.70 million stock options relating to former employees that transitioned to a consulting role was denominated in Canadian dollars, which was not the functional currency of the Company (which was 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, 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.

~~Our~~As ~~patented~~a ~~and~~result ~~patent~~of ~~pending~~the ~~process~~approval ~~for~~of the ~~extraction~~Winding Up of ~~heavy~~the ~~oil~~Company, ~~may~~the ~~not~~Company ~~prove~~valued ~~successful~~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, had an exercise price ~~commercially~~greater ~~viable~~than orthe ~~result~~expected incash distribution to Shareholders, the ~~issuance~~value of the stock options were determined to approximate zero. Further, a ~~patent~~gain of $296,519 was recognized in earnings during the six months ended June 30, 2012. In addition, all stock options were terminated in July 2012.

WeInterest ~~have~~Income ~~filed patent applications in Canada, Argentina, Ecuador~~ and ~~Venezuela,~~Expense for the protection of our U.S. patented CMD process for extracting heavy oil by injecting oxygen and water as foam to create CO2 and steam in the reservoir through wet combustion. This process is designed to increase reservoir pressure and significantly reduce oil viscosity making the oil substantially more mobile so that it will flow more rapidly into production wells. There can be no assurance that our pending patent applications in these countries will result in the issuance of a patent to us, that patents issued to or licensed by us in the past or in the future will not be challenged or circumvented by competitors or that these patents will be found to be valid or sufficiently broad to preclude our competitors from introducing processes or technologies similar to those covered by our patent application.

~~Oil~~For ~~and~~the ~~natural~~six ~~gas~~months ~~prices~~ended ~~fluctuate significantly~~June 30, ~~and~~2012, ~~prolonged~~we ~~periods~~recorded interest expense of ~~low~~$6.44 ~~commodity~~million ~~prices~~($3.49 ~~may~~million ~~make~~non-cash) ~~exploration~~related orto ~~production~~the ~~activities~~Senior ~~uneconomical~~Loan.

~~Oil~~For ~~and~~the ~~natural gas~~year ~~prices~~ended ~~fluctuate~~December 31, ~~significantly in response to regional~~2011, ~~national~~we ~~and~~recorded ~~global~~interest ~~supply~~expense ~~and~~of ~~demand factors beyond our control~~$5.41 ~~Political~~million ~~and~~($906,569 ~~economic~~non-cash) ~~developments~~related ~~around~~to the ~~world~~Senior ~~can~~Loan ~~affect~~as ~~world~~compared ~~oil~~to ~~and~~$7.11 ~~natural~~million ~~gas~~($3.46 ~~supply~~million ~~and~~non-cash) ~~prices.~~for ~~Any~~the ~~prolonged~~same period ~~of low oil and natural gas prices could result~~ in a2010 ~~decision~~related ~~by us or our operators~~ to: ~~suspend~~(i) the orShort-term ~~terminate~~Loan ~~exploration~~ (ii) and~~/or~~ ~~development,~~the asSenior ~~it may become uneconomical to explore for and/or produce oil or natural gas at such prices~~Loan. ~~Prolonged~~ ~~periods~~The ofamortization ~~low oil and natural gas prices will adversely affect our revenues, results~~ of ~~operations~~debt ~~and~~issuance ~~financial~~cost ~~condition.~~related ~~In the past, crude oil and natural gas prices have been volatile, and we expect that volatility~~ to ~~continue. If~~ the ~~United~~Short-term ~~States~~Loan ~~experiences a sustained economic downturn or recession, oil~~ and ~~natural~~Senior ~~gas~~Loan ~~prices~~was ~~may~~included fall for an extended period of time, which may adversely affect our results of operations. Global economic growth drives demand for energy from all sources, including fossil fuels. A sustained reduction in ~~the~~interest ~~prices we receive for our oil and natural gas production could have a material adverse effect on our results of operations~~expense. ~~In addition, any worsening of domestic and global economic conditions could adversely affect our business and results of operations.~~

WeAs ~~may~~part ~~become~~of ~~liable~~the ~~for~~Winding ~~damages~~Up, ~~arising~~on ~~from~~June 28, ~~operating~~2012, the Company prepaid the entire amount of the Senior Loan and as a result, a prepayment penalty of 2% ~~natural~~representing ~~hazards~~$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 related to the Senior Loan was included in current period interest expense.

~~The~~For ~~ownership~~the ~~and~~six ~~operation~~months ofended ~~oil and natural gas wells~~June 30, ~~pipelines and facilities involves a number of operating and natural hazards which may result in blowouts~~2012, ~~environmental~~we ~~damage~~recorded ~~and~~interest ~~other~~income ~~unexpected or dangerous conditions resulting~~ in damage to our properties and possible liability to third parties. We intend to employ prudent risk management practices and maintain suitable liability insurance, where available. Such risks may not, in all circumstances be insurable or, in certain circumstances, NiMin may elect not to obtain insurance to cover specific risks due to the ~~high~~amount ~~premiums associated with such insurance or other reasons. The payment~~ of ~~such uninsured liabilities would reduce the funds available to us. The occurrence of a significant event that we are not fully insured against~~$10, ~~or the insolvency of the insurer of such event, could have a material adverse effect on our financial position, results of operations or prospects~~673. ~~Costs incurred to repair such damage or pay such liabilities could have a material adverse effect on us, our operations and our financial condition.~~

~~Our~~For ~~success~~the ~~will~~year beended December 31, 2011, we recorded interest income in ~~part~~the amount of $44,595 ~~dependent~~as oncompared to $54,070 for the ~~performance~~same ofperiod ~~our~~in ~~key~~2010. ~~technical~~Lower interest ~~staff~~income for the years ended December 31, 2011 and ~~managers~~2010 was due to a reduction in average interest-bearing cash balances and lower interest rates.

~~Successfully~~Income ~~exploring~~Tax for, developing and commercializing oil and natural gas interests depends on a number of factors, including the technical skill of the personnel involved. Our success will be, in part, dependent on the performance of our key technical staff and managers. Failure to retain our technical staff and managers, or to attract or retain additional key personnel, with the necessary skills and experience could have a materially adverse impact upon our growth and profitability. We do not carry key person insurance. In addition, we may not be the operator of certain oil and natural gas properties in which we acquire an interest, and in such cases, we will rely on the technical experience and performance of the operator’s personnel.

~~Demand~~In October 2012, the Company paid $1.80 million, for ~~drilling~~Federal U.S. and ~~related~~California ~~equipment~~purposes, ~~and~~relating ~~qualified~~to ~~personnel~~taxable ~~may~~gains ~~delay~~resulting ~~our~~from ~~exploration~~the sale of its oil and ~~development~~gas ~~activities~~properties in 2012. The Federal U.S. taxable income for regular income tax purposes was fully reduced by net operating loss carryforwards of $63,362,738. The Company’s deferred tax assets were previously subject to full valuation allowance.

~~Oil~~Foreign ~~and~~Currency ~~natural~~Exchange gas exploration and development activities are dependent on the availability of drilling and related equipment and qualified personnel in the particular areas where such activities will be conducted. Demand for such limited equipment and qualified personnel in certain areas may be high which may result in higher costs. If we are not able to obtain the drilling and related equipment and qualified personnel in an area as a result of high demand, we may be required to delay our exploration and development activities. In addition, the costs of qualified personnel and equipment in the areas where our assets are located are high due to the availability of, and demand for, such qualified personnel and equipment in these areas.

Our foreign exchange expense was derived from our cash balances denominated in Canadian dollars. For the six months ended June 30, 2012, we recorded a foreign exchange loss of $438.

For the year ended December 31, 2011, we recorded a foreign exchange loss of $26,101 as compared to $6,617 for the same period in 2010.

Liquidity and Capital Resources

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 disposition of all remaining assets of Legacy and the settlement of all liabilities of the Company and Legacy, the Company will distribute the net proceeds of the liquidation and dissolution of both Legacy and the Company to Shareholders remaining. NiMin’s wholly-owned subsidiary, Legacy Energy, Inc., a Delaware company, dissolved in accordance with the laws of Delaware on September 17, 2012.

~~Our~~As ~~future~~mentioned ~~oil~~above, ~~and~~the ~~natural~~Board ~~gas~~declared ~~reserves,~~an ~~production,~~initial ~~and~~distribution ~~cash~~to ~~flows~~Shareholders toof be$1.01 ~~derived~~per ~~therefrom~~Common ~~are~~Share ~~highly~~in ~~dependent~~connection onwith ~~our~~the ~~ability~~Winding Up of NiMin. The distribution was made as a return of capital to ~~successfully~~Shareholders ~~acquire~~of orrecord ~~discover~~at ~~new~~the ~~reserves~~close of business on October 9, 2012, and the stated capital of the Company was reduced accordingly. The distribution was paid on October 22, 2012.

~~Without~~The ~~the~~amount ~~continual~~and ~~addition~~timing of ~~new reserves,~~ any ~~existing reserves~~subsequent wedistributions ~~may~~to ~~have~~Shareholders ~~at any particular time and the production therefrom~~ will ~~decline over time as such existing reserves are exploited. A future increase in our reserves will~~ depend ~~not only~~ on ~~our~~a ~~ability~~number toof ~~develop~~factors, several ~~any~~of ~~properties~~which wecannot ~~may~~be ~~have~~determined ~~from time~~at tothis time, ~~but~~including ~~also~~the onultimate ~~our~~amount ~~ability~~of toour ~~select~~known, unknown, and ~~acquire~~contingent ~~suitable producing properties or prospects~~liabilities. WeAs ~~cannot~~a ~~assure~~result, ~~you~~the ~~that~~amount ~~our~~of ~~future~~cash ~~exploration~~remaining ~~and~~following ~~development~~completion ~~efforts~~of ~~will~~our ~~result~~liquidation ~~in the discovery~~ and ~~development~~dissolution ofcould ~~additional~~vary ~~commercial~~from ~~accumulations~~our ofcurrent ~~oil and natural gas~~estimates.

~~There~~Financial ~~are~~information ~~numerous~~presented ~~uncertainties~~as ~~inherent~~of and subsequent to June 30, 2012, includes a Consolidated Statement of Net Assets and a Consolidated Statement of Changes in ~~estimating~~Net ~~quantities~~Assets in Liquidation, as required under the liquidation basis of ~~oil~~accounting. Overall net assets in liquidation decreased from $77,914,536 ~~natural~~at ~~gas~~June 30, 2012 to $7,836,918 at December 31, 2012. The decrease was primarily related to a cash distribution to Shareholders of $70,532,740, changes in liquidation accruals related to professional fees and ~~NGL~~payroll of $1,192,227 and asset retirement obligations of $163,850. Furthermore, an ~~reserves~~increase in net assets was related to a tax adjustment of $1,019,447 and ~~cash~~changes ~~flows~~to accrued liabilities of $982,589. The remaining change in net assets related to beinvestment ~~derived~~income, ~~therefrom~~adjustments to assets, ~~including~~costs ~~many~~incurred, ~~factors~~and ~~beyond~~adjustments ~~our~~to ~~control~~other liquidation accruals during the six month period.

~~The~~Research ~~information concerning reserves~~ and ~~associated~~ ~~cash flow set forth in this Annual Report represents estimates only. In general~~development, ~~estimates~~patents ~~of economically recoverable oil~~ and ~~natural gas reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions~~licenses, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary from actual resultsetc. For those reasons, estimates of the economically recoverable oil and natural gas reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues expected therefrom prepared by different engineers, or by the same engineers at different times, may vary. Our actual production, revenues, taxes and development and operating expenditures with respect to our reserves will vary from estimates thereof and such variations could be material. Further, the evaluations are based, in part, on the assumed success of the exploitation activities intended to be undertaken in future years. The reserves and estimated cash flows to be derived therefrom contained in such evaluations will be reduced to the extent that such exploitation activities do not achieve the level of success assumed in the evaluation.

~~Estimates~~In ofDecember, ~~proved~~2010, ~~reserves~~the ~~that~~U.S. ~~may~~Patent ~~be developed~~ and ~~produced~~Trademark inOffice ~~the~~issued ~~future~~a ~~are~~patent ~~often based upon volumetric calculations and upon analogy~~ to ~~similar types~~NiMin offor ~~reserves~~its ~~rather~~CMD ~~than~~process ~~actual~~for ~~production~~enhanced ~~history~~oil recovery. ~~Estimates~~Our patent ~~based~~covers onthe ~~these~~process ~~methods~~of ~~are~~the ~~generally~~injection ~~less~~of ~~reliable~~oxygen ~~than~~and ~~those~~water ~~based~~as onfoam ~~actual~~to ~~production~~create ~~history.~~carbon ~~Subsequent~~dioxide ~~evaluation~~(“CO2”) ~~of the same reserves based upon production history~~ and ~~production~~ ~~practices~~steam ~~will result~~ in ~~variations in~~ the ~~estimated~~reservoir ~~reserves~~through ~~and~~wet ~~such variations could be material~~combustion. ~~Many~~Assets ofrelating ~~our~~to ~~producing~~the ~~wells~~CMD ~~have~~technology awere ~~limited~~written ~~production~~down ~~history and thus there is less historical production on which~~ to ~~base~~ the ~~reserves estimates.~~net Inrealizable ~~addition,~~value ~~a significant portion~~ of ~~our~~$0 ~~reserves~~within ~~may~~general ~~be attributable to a limited number of wells~~ and, ~~therefore,~~administrative aexpenses ~~variation in production results or reservoir characteristics in respect of such wells may have a significant impact upon~~on ~~our~~June 30, ~~reserves~~2012.

InOff-Balance ~~accordance~~Sheet ~~with~~Arrangements applicable securities laws, Huddleston has used constant price and cost estimates in calculating reserve quantities. Actual future net cash flows will be affected by other factors such as actual production levels, supply and demand for oil and natural gas, curtailments or increases in consumption by oil and natural gas purchasers, changes in governmental regulation or taxation and the impact of inflation on costs. Actual production and cash flows derived therefrom will vary from the estimates contained in the Technical Report, and such variations could be material. The Technical Report is based in part on the assumed success of activities we intend to undertake in future years. The reserves and estimated cash flows to be derived therefrom contained in the Technical Report will be reduced to the extent that such activities do not achieve the level of success assumed in the Technical Report.

~~Future~~We ~~price~~had ~~declines~~no ~~could~~off-balance ~~result~~sheet inarrangements aduring ~~reduction in~~ the ~~carrying~~six ~~value~~months ~~of our~~ended ~~proved~~June 30, ~~oil~~2012, and ~~natural~~the ~~gas~~year ~~properties~~ended December 31, ~~which~~2011, ~~could~~except ~~adversely~~for ~~affect~~the ~~our~~office ~~results~~lease ofobligations ~~operations~~which were outstanding during those respective periods.

~~Declines~~Critical inAccounting ~~commodity prices may result in having to make substantial downward adjustments to our estimated proved reserves. If this occurs~~Policies, orEstimates ~~if our estimates of production or economic factors change, accounting rules may require us to write-down, as a noncash charge to earnings, the carrying value of our proved oil~~ and ~~natural~~Liquidation ~~gas~~Form ~~properties for impairments. We are required to perform impairment tests on proved assets whenever events or changes in circumstances warrant a review~~ of ~~our~~Accounting proved oil and natural gas properties. To the extent such tests indicate a reduction of the estimated useful life or estimated future cash flows of our oil and natural gas properties, the carrying value may not be recoverable and therefore require a write-down. We may incur impairment charges in the future, which could materially adversely affect our results of operations in the period incurred.

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. 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 from December 31, 2012, through the liquidation of the Company. 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.

~~Approximately~~In 72preparing ~~percent~~financial ofstatements, ~~our~~we ~~total~~make ~~estimated~~informed ~~proved~~judgments ~~reserves~~and atestimates ~~December 31,~~that ~~2011~~affect ~~were~~the reported amounts ~~undeveloped,~~of assets and ~~those~~liabilities ~~reserves~~as ~~may~~of ~~not~~the ~~ultimately~~date beof ~~developed~~the financial statements and affect the reported amounts of revenues and expenses during the reporting period.

AtThe ~~December 31,~~amounts ~~2011,~~recorded ~~approximately~~for 72depletion ~~percent~~and depreciation of ~~our~~property ~~total estimated~~and ~~proved~~equipment, ~~reserves~~the ~~were~~accretion ~~undeveloped.~~expense ~~Recovery~~associated ofwith ~~undeveloped~~the ~~reserves~~asset ~~requires~~retirement ~~significant~~obligation ~~capital expenditures~~ and ~~successful~~the ~~drilling.~~cost ~~Our~~recovery ~~reserve~~assessments ~~data~~for ~~assumes~~property ~~that we can~~ and equipment ~~will~~were ~~make~~based ~~these~~on ~~expenditures~~estimates ~~and~~of ~~conduct~~proved ~~these~~reserves, ~~operations successfully.~~production ~~These~~and ~~assumptions,~~discount ~~however~~rates, ~~may~~oil ~~not~~and ~~prove~~natural ~~correct.~~gas ~~Our~~prices, ~~Technical~~future ~~Report~~costs ~~includes~~and ~~estimates~~other ofrelevant ~~total~~assumptions. ~~future~~The ~~development~~amount ~~costs~~recorded ~~over~~for the ~~next~~unrealized ~~five~~gain ~~years~~or ~~associated~~loss ~~with~~on ~~our~~financial ~~proved~~instruments ~~undeveloped~~was ~~reserves~~based on estimates of ~~approximately~~future ~~$109.23~~commodity ~~million.~~prices ~~Our ability~~and tovolatility. ~~develop~~The ~~proved~~recognition ~~reserves~~of isamounts ~~contingent~~in ~~upon~~relation ~~our~~to ~~cash~~stock-based ~~flow~~compensation ~~from~~requires ~~operations~~estimates ~~and~~related ~~obtaining~~to ~~adequate~~valuation ~~financing.~~of Instock ~~addition,~~options ~~under~~at the ~~SEC’s~~time ~~reserve~~of ~~rules,~~issuance ~~because~~or ~~proved~~modification. ~~undeveloped~~Future ~~reserves~~taxes ~~may~~require beestimates as ~~booked~~to ~~only~~the ifrealization ~~they~~of ~~relate~~future totax ~~wells scheduled~~assets toand bethe ~~drilled~~timing ~~within~~of ~~five~~reversal ~~years~~ of ~~the~~tax ~~date~~assets ofand ~~booking~~liabilities. By their nature, wethese ~~may~~estimates beare ~~required~~subject to ~~reclassify~~measurement touncertainty ~~probable~~and ~~any~~the ~~proved~~effect ~~undeveloped~~on ~~reserves~~the ~~that~~consolidated ~~are~~financial ~~not~~statements ~~developed~~from ~~within~~changes ~~this~~in ~~five~~such estimates ~~year~~in ~~timeframe~~future years could be significant.

WeOn ~~may~~an ~~require~~ongoing ~~additional~~basis, ~~financing~~we inreview ~~order~~estimates, including those related to ~~carry~~the ~~out~~impairment ~~our~~of long-lived ~~oil~~assets, contingencies and ~~natural~~income ~~gas~~taxes. ~~acquisition,~~Changes ~~exploration~~in facts and ~~development~~circumstances ~~activities~~may result in revised estimates and actual results may differ from these estimates.

~~Cash~~Pre-Liquidation ~~flow~~Accounting ~~from~~Policies our reserves may not be sufficient to fund our ongoing operating activities at all times and we may require additional financing in order to carry out our oil and natural gas acquisition, exploration and development activities. Failure to obtain such financing on a timely basis could cause us to forfeit our interest in certain properties, miss certain acquisition opportunities and reduce or terminate our operations. If revenues from our production activities decrease as a result of lower oil and natural gas prices or otherwise, it will affect our ability to expend the necessary capital to replace our reserves or to maintain our production. If our cash flow from operations is not sufficient to satisfy our capital expenditure requirements, we cannot assure you that additional debt or equity financing will be available to meet these requirements or available on favorable terms.

~~Failure~~Crude toOil ~~comply with governmental regulations may result in the imposition of fines or other penalties~~ and ~~the~~Natural ~~cost~~Gas ~~of compliance~~Properties ~~may be significant.~~

~~The~~We ~~oil~~accounted ~~and~~for ~~natural~~our ~~gas~~crude ~~industry~~oil ~~is subject to extensive governmental regulations pursuant to local, provincial~~ and ~~federal~~ ~~legislation.~~natural ~~See~~gas ~~ITEM 1~~producing –activities ~~Business~~under ~~Overview—“Effect of Government Regulations”. Because such rules and regulations are frequently amended or reinterpreted, NiMin is unable to predict~~ the ~~future~~ full-cost ormethod ~~impact~~ of ~~complying with such laws~~accounting. ~~Failure~~Accordingly, toall ~~comply~~costs incurred ~~may result~~ in the ~~imposition~~acquisition, ~~of fines or other penalties. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement~~exploration, ~~larger fines~~ and ~~liability~~development ~~and potentially~~of ~~increased~~proved ~~capital~~crude ~~expenditures~~oil and ~~operating costs. The discharge of oil,~~ natural gas orproperties, ~~other~~including ~~pollutants into~~ the ~~air,~~costs ~~soil~~of orabandoned ~~water~~properties, ~~may~~dry ~~give~~holes, ~~rise~~geological ~~to liabilities to governments~~ and ~~third~~geophysical ~~parties~~costs, and ~~may~~annual ~~require~~lease usrentals, towere ~~incur~~capitalized. ~~costs to~~All ~~remedy~~general ~~such~~corporate ~~discharge.~~costs ~~Should~~were weexpensed beas ~~unable~~incurred. toSales ~~fully~~or ~~fund~~other ~~the~~dispositions ~~cost~~ of ~~remedying~~crude anoil ~~environmental~~and ~~problem,~~natural wegas ~~could~~properties bewere ~~required~~accounted tofor ~~suspend~~as ~~operations~~adjustments orto ~~enter~~capitalized ~~into~~costs ~~interim compliance measures pending completion of the required remedy. Although we believe that we are in material compliance~~ with ~~current~~no ~~applicable~~gain ~~environmental~~or ~~regulations,~~loss werecorded ~~cannot~~unless ~~assure~~such ~~you~~sale ~~that~~would ~~environmental~~alter ~~laws will not result in a curtailment of production or a material increase in~~ the ~~costs of production, development~~relationship orbetween ~~exploration~~pool ~~activities~~cost orand ~~otherwise adversely affect our financial condition, results of operations or prospects~~reserves.

ADepletion ~~defect~~and inDepreciation ~~title to our properties could result in a reduction of our revenues.~~

~~Although~~Depletion weof ~~intend~~crude tooil ~~conduct~~and ~~title~~natural ~~reviews~~gas ~~according~~properties was computed under the unit-of-production method where by the ratio of production to ~~industry~~proved ~~standards~~reserves, after royalties, determined the proportion of ~~prior~~depletable costs to ~~purchasing~~be ~~most~~expensed ~~oil~~in ~~and~~each ~~natural~~period. ~~gas~~Costs ~~producing~~associated with unevaluated properties orwere ~~commencing~~excluded from the ~~drilling~~full-cost ofpool ~~wells,~~until ~~such~~a ~~title~~determination ~~reviews~~was domade ~~not~~whether ~~guarantee~~proved ~~that~~reserves ancan ~~unforeseen~~be ~~defect~~attributable into the ~~chain~~related ofproperties. ~~title~~Unevaluated properties ~~will~~were ~~not~~evaluated ~~arise~~at least annually to ~~defeat~~determine ~~our~~whether ~~claim~~the ofcosts ~~title.~~incurred ~~Any~~should ~~such~~have ~~title defect~~been ~~which~~classified ~~could~~to ~~result~~the infull-cost apool and thereby subject to amortization. A significant reduction in ~~the~~our ~~revenue~~proved wereserves ~~receive~~may have resulted in an accelerated depletion rate.

~~Certain~~Reserves ofwere ~~our~~determined ~~directors~~by ~~also~~an ~~serve~~independent asreserves ~~directors~~engineering ~~and/or~~firm. ~~officers~~Volumes ofwere converted to equivalent units ~~other~~using ~~natural~~the ~~resources~~ratio ~~companies,~~of ~~which~~one ~~may~~barrel ~~give~~of ~~rise~~oil to ~~conflicts~~six thousand cubic feet of natural gas.

~~Certain~~Depreciation of ~~our~~equipment ~~directors~~was ~~are~~provided ~~also~~for ~~directors~~on ~~and/or officers of corporations which are in competition to our interests. For example, Mr. Bayley is also~~ a ~~director of American Vanadium Corp., Bearing Resources Ltd., Cypress Hills Resources Corp., Esperanza Silver Corporation, Eurasian Minerals, Inc.,~~straight-line ~~Kirkland~~basis ~~Lake~~over Gold Inc., Kramer Capital Corp., Sprott Resource Lending Corp. and TransAtlantic Petroleum Corp. In addition, Mr. Peneycad is also a director of Parex Resources Inc., Canadian Wireless Trust and R Split III Corp. Such associations may give rise to conflicts of interests from time to time. In particular, Cypress Hills Resources Corp., TransAtlantic Petroleum Corp. and Parex Resources Inc. are also involved in the ~~oil~~useful ~~and~~life ~~gas~~(5 ~~exploration, development and production business which leads~~ to ~~the~~10 ~~possibility~~years) ~~that such companies could compete with us for the acquisition~~ of prospects. No assurances can be given that opportunities identified by such individuals will be provided to us. Such conflicts must be disclosed in accordance with, and are subject to such other procedures and remedies as applicable under the ~~applicable corporate legislation~~asset.

Impairment of oil and gas properties

We performed a full-cost ceiling test on proved crude oil and natural gas properties in which the capitalized costs were not allowed to exceed their related estimated future net revenues of proved reserves discounted at 10%, net of tax considerations. Costs associated with unevaluated properties were excluded from the full-cost pool until a determination was made whether proved reserves can be attributable to the related properties. Unevaluated properties were evaluated at least annually to determine whether the costs incurred should have been classified to the full-cost pool and thereby subject to amortization. A significant reduction in our proved reserves may have resulted in a full cost ceiling limitation.

Equipment was reviewed for impairment whenever events or changes in circumstances indicate such impairment may have occurred. An impairment was recognized when the estimated undiscounted future net cash flows of an asset was less than its carrying value. If an impairment occurred, the carrying value of the impaired asset was reduced to fair value.

~~Delays~~Asset inRetirement ~~payments~~Obligations ~~to us could reduce the amount of cash flow available for our business in a given period and expose us to additional third-party credit risks.~~

We ~~could~~recognized bea ~~subject~~liability tofor ~~delays~~the inpresent ~~receiving~~value ~~payments~~of ~~from~~all ~~operators~~legal ~~and~~obligations ~~oil and~~associated ~~gas~~with ~~purchasers~~the ~~for~~retirement ~~a number~~ of ~~reasons.~~tangible, Welong-lived ~~may~~assets ~~experience delays in payments by purchasers of oil~~ and ~~natural~~capitalized ~~gas~~an toequal usamount oras toa ~~the~~cost ~~operators~~ of ~~our~~the ~~properties and delays by operators in remitting payment to us~~asset. InThe ~~addition, payments between these~~cost ~~parties~~associated ~~may~~with ~~be delayed due to restrictions imposed by lenders, accounting delays, delays in~~ the ~~sale~~abandonment orobligation ~~delivery~~was ofincluded ~~products, delays~~ in the ~~connection~~computation of ~~wells to a gathering system~~depreciation, ~~adjustment for prior periods~~depletion, oramortization ~~recovery~~and byaccretion. ~~the~~The ~~operator~~liability ~~of expenses~~accreted ~~incurred~~until inwe ~~the~~settle ~~operation of~~ the ~~properties~~obligation. ~~Any~~We ofused ~~these~~a ~~delays~~credit-adjusted ~~could~~risk-free ~~reduce~~interest ~~the~~rate ~~amount of cash flow available for our business~~ in aits calculation ~~given~~of ~~period~~asset ~~and~~retirement ~~expose~~obligations ~~us to additional third-party credit risks~~(“ARO”).

AnRevisions ~~extreme~~to ~~winter~~the ororiginal ~~wet~~estimated ~~spring~~liability ~~may~~would ~~result~~have resulted in ~~limited~~an increase ~~access~~or decrease to the ARO liability and, asrelated acapitalized ~~result,~~costs. ~~reduced~~Actual ~~operations~~costs orincurred aupon ~~cessation~~settlement of ~~operations~~the asset retirement obligation were charged against the obligation to the extent of the liability recorded.

~~The~~Estimates ~~level~~for offuture ~~activity~~abandonment ~~in the oil~~ and ~~natural~~reclamation ~~gas~~costs ~~industry~~were isbased ~~influenced~~on byhistorical ~~seasonal~~costs ~~weather~~to ~~patterns.~~abandon ~~Municipalities~~ and ~~provincial~~reclaim ~~transportation departments~~similar ~~enforce road bans that restrict the movement of drilling rigs and other heavy equipment during periods of wet weather~~sites, ~~thereby~~taking ~~reducing~~current ~~activity~~costs ~~levels~~into consideration. ~~Also,~~The ~~certain~~liability ~~oil~~was ~~and~~based ~~natural~~on ~~gas~~our ~~producing~~net ~~areas~~interest ~~are located~~ in ~~areas that are inaccessible other than during~~ the ~~winter~~respective ~~months because the ground surrounding the~~ sites ~~in these areas consists of swampy terrain~~. ~~Seasonal factors and unexpected weather patterns may lead to declines in our exploration and production activity.~~

~~Our~~Income ~~Senior~~Tax ~~Loan includes restrictions that may make it difficult for us to successfully execute our business strategy or to compete in our industry with companies not similarly restricted.~~

~~Our~~Deferred ~~Senior~~tax ~~Loan~~assets ~~agreement~~and ~~contains~~liabilities ~~several~~are ~~covenants~~recognized ~~that~~for ~~restrict~~the ~~our~~future ~~operating activities,~~tax ~~including~~consequences ~~provisions~~attributable ~~pursuant~~ to ~~which~~differences webetween ~~are~~the ~~required~~financial tostatement ~~meet~~carrying amounts ~~certain~~of ~~financial~~existing ~~based~~assets ~~covenants~~and ~~including~~liabilities ~~the~~and ~~limitation~~their ofrespective ~~total~~tax ~~capital~~bases. ~~expenditures~~Deferred totax anassets ~~amount~~and noliabilities ~~greater~~are ~~than~~measured ~~$25~~using ~~million~~enacted ~~for~~tax ~~the~~rates ~~year~~expected ~~ended~~to ~~December 31,~~apply ~~2012. The~~to ~~facility~~taxable ~~has~~income ain ~~material~~the ~~adverse~~years ~~change~~in ~~clause~~which ~~relating~~those totemporary ~~financial~~differences ~~stability~~are ~~and~~expected ~~for~~to be ~~which~~recovered ~~the~~or ~~Lender~~settled. ~~can~~The ~~ultimately~~effect ~~demand~~on ~~immediate~~deferred ~~repayment~~tax inassets ~~the~~and ~~event~~liabilities of ~~default.~~a ~~For~~change ~~the~~in ~~period~~enacted ~~ended~~tax ~~December 31,~~rates ~~2011,~~is ~~the~~recognized ~~Company~~in ~~was~~income in ~~compliance with~~the ~~all~~period ~~covenants~~that includes the enactment date.

We ~~cannot~~do ~~assure~~not ~~you~~have ~~that~~any weunrecognized ~~will~~tax ~~remain~~benefits inother ~~compliance~~than ~~with~~those ~~the~~for ~~covenants~~which ~~under~~a ~~the~~valuation ~~Senior~~allowance ~~Loan~~has been provided thereon. IfOur policy is that we ~~are~~recognize ~~unable~~interest toand ~~meet the~~penalties ~~requirements~~accrued ofon ~~the~~any ~~Senior~~unrecognized tax ~~Loan~~benefits oras ~~any~~a ~~new~~component ~~financial~~of ~~transaction~~income ~~that~~tax weexpense. ~~may~~We ~~enter~~did ~~into,~~not wehave ~~may~~any beaccrued ~~required~~interest toor ~~seek~~penalties ~~waivers~~associated ~~from~~with ~~the~~any ~~Lender~~unrecognized ~~and~~tax ~~there~~benefits, isnor nowere ~~assurance~~any ~~that~~tax-related ~~such~~interest ~~waivers~~expense ~~would~~recognized beduring ~~granted~~2012, 2011 or 2010.

~~The~~Commodity Lender has been provided with security over all of our assets. If we are unable to pay our debt service charges or we otherwise commit an event of default, our lender may foreclose on or sell our properties. The proceeds of any such sale would be applied to satisfy amounts owed to the Lender and ~~other~~Derivative ~~creditors~~Instruments ~~and only the remainder, if any, would be available to us.~~

InDerivative instruments were recognized as either assets or liabilities in the ~~event~~balance ~~certain~~sheet ~~parties~~at ~~fail~~fair tovalue. ~~meet~~The accounting for changes in the fair value of derivative instruments depended on their ~~contractual~~intended ~~obligations~~use toand usresulting hedge designation. For derivative instruments designated as hedges, ~~such~~the ~~failures~~changes ~~could~~in ~~have~~fair value were recorded in the balance sheet as a ~~material~~component ~~adverse~~of ~~effect~~accumulated other comprehensive income (loss). Changes in the fair value of derivative instruments not designated as hedges were recorded as a gain or loss on usderivative ~~and~~contracts ~~our~~ in the consolidated statements of operations. We did not designate its derivative financial instruments ~~position~~as hedging instruments and, as a result, recognized the change in a derivative’s fair value currently in earnings.

~~We are or may be exposed to third-party credit risk through our contractual arrangements with our current or future~~Fair ~~joint~~value ~~venture~~measurements partners, marketers of our petroleum and natural gas production and other parties. In the event such entities fail to meet their contractual obligations to us, such failures could have a material adverse effect on us and our financial condition. In addition, poor credit conditions in the industry and of joint venture partners may impact a joint venture partner’s willingness to participate in our ongoing capital program, potentially delaying the program and the result of such program until we find a suitable alternative partner.

~~Hedging~~We ~~transactions~~categorized our assets and ~~receivables~~liabilities ~~expose~~that uswere tomeasured ~~counterparty~~at ~~credit~~fair ~~risk.~~value, based on the priority of the inputs to the valuation techniques. The three levels of the fair value measurement hierarchy were as follows:

~~Our~~Level ~~hedging~~1: ~~transactions~~Unadjusted ~~expose us to risk of financial loss if a counterparty fails to perform under a contract. We use master agreements~~quoted ~~which~~prices ~~allow us,~~ in ~~the~~active ~~event~~markets ofthat ~~default,~~were toaccessible 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~~measurement ofdate ~~election.~~for ~~We also monitor the creditworthiness of our counterparty on an ongoing basis. However~~identical, ~~the~~unrestricted ~~current~~assets disruptions occurring in the financial markets could lead to sudden changes in a counterparty’s liquidity, which could impair their ability to perform under the terms of the hedging contract. We are unable to predict sudden changes in a counterparty’s creditworthiness or ~~ability to perform~~liabilities. 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.

Level 2: Quoted prices in markets that were not active, or inputs which were observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Measured based on prices or valuation models that required inputs that were both significant to the fair value measurement and less observable for objective sources (i.e. supported by little or no market activity).

Financial assets and liabilities were classified based on the lowest level of input that was significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement required judgment, which may affected the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company considered

~~The~~ active ~~adoption~~markets ofas ~~derivatives~~those ~~legislation~~in orwhich ~~regulations~~transactions ~~related~~for tothe ~~derivative~~assets ~~contracts~~or ~~could~~liabilities ~~have~~occur anin ~~adverse impact~~sufficient onfrequency ~~our~~and ~~ability~~volume to ~~hedge~~provide ~~risks~~pricing ~~associated~~information ~~with~~on ~~our~~an ~~business~~ongoing basis. ~~Recent~~For ~~legislation~~assets onand ~~certain~~liabilities carried ~~transactions~~at ~~involving~~fair ~~derivatives~~value, ~~may~~the ~~affect~~Company ~~the~~measured ~~use~~fair ofvalue ~~derivatives~~under inthe ~~hedging~~following ~~transactions.~~levels:

Some of our customers are 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, financial position, future results of operations, or future cash flows. 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. In addition, such events might force such customers to reduce or curtail their future use of our products and services, which could have a material adverse effect on our results of operations and financial condition. For the year ended December 31, 2011, approximately 92% of our oil revenue was from two customers. 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.


Financial Instrument		Level
Cash and cash equivalents		Level 1
Restricted investments		Level 1
Long-term debt		Level 2
Commodity derivative		Level 2
Warrants and options		Level 3

WeStock-Based ~~may~~Compensation ~~never achieve a level of profitability that would permit payment of dividends or making other forms of distributions to our stockholders.~~

We ~~have~~measured ~~never~~and ~~paid~~recognized acompensation ~~dividend~~expense ~~nor~~for ~~made~~all ashare-based ~~distribution~~payment onawards, ~~any~~including ofemployee ~~our~~stock ~~securities~~options, based on estimated fair values. ~~Subject~~ toThe value of the ~~results~~portion of the ~~Strategic~~award ~~Review,~~that ~~given~~was ultimately ~~the~~expected ~~stage~~to ofvest ~~our~~was ~~development~~recognized ~~and~~as ~~our~~an ~~history~~expense ofon ~~losses,~~a itstraight-line ~~will~~basis ~~likely~~over bethe arequisite ~~long~~vesting period. ofWe ~~time~~estimated ~~before~~the wefair ~~could~~value beof instock aoption ~~position~~awards toon ~~make~~the ~~dividends~~date orof ~~distributions~~grant tousing ~~our~~an ~~investors~~option-pricing model. ~~The~~We ~~payment~~used the Black-Scholes Model as its method of ~~any~~valuation ~~future~~for ~~dividends~~share-based byawards. usOur ~~will~~determination beof atfair ~~the~~value ~~sole~~of ~~discretion~~share-based payment awards on the date of grant using the Black-Scholes Model was affected by NiMin’s ~~Board~~stock price, as well as assumptions regarding a number of subjective variables. InThese ~~this~~variables ~~regard~~included, webut ~~currently~~are ~~intend~~not limited to, ~~retain~~our ~~earnings~~expectation toof ~~finance~~NiMin’s stock price volatility over the ~~expansion~~term of ~~our~~the ~~business~~awards, ~~and~~as dowell ~~not~~as ~~anticipate~~actual ~~paying~~and ~~dividends~~projected inexercise ~~the~~and ~~foreseeable~~forfeiture ~~future~~activity. The fair value of ~~Our~~options ~~Senior~~granted ~~Loan~~to ~~prohibits~~consultants, to the ~~declaration~~extent ofunvested ~~dividends~~due to required services not having been fully performed, was determined on subsequent reporting dates.

WeForeign ~~may~~Currency beTransactions ~~subject to growth-related risks including capacity constraints and pressure on our internal systems and controls.~~

~~Our~~The ~~business~~consolidated ~~strategy~~financial isstatements toare ~~continue~~presented toand measured ~~grow~~in U.S. dollars, as substantially all of our ~~business~~operations ~~and~~are ~~prospects~~located in the United States of America. ~~Our~~Transactions ~~ability~~and ~~to effectively~~balances ~~manage~~using ~~growth~~Canadian ~~will~~dollars ~~require~~are usexpressed toin ~~continue~~U.S. todollars ~~implement~~whereby monetary assets and ~~improve~~liabilities ~~our~~are ~~operations~~expressed ~~and~~at ~~financial~~the period ~~systems~~end exchange rate, non-monetary assets and toliabilities ~~expand~~are expressed at historical exchange rates, ~~train~~and revenue and ~~manage~~expenses ~~our~~are ~~employee~~expressed ~~base.~~at ~~Our~~the ~~inability~~average toexchange ~~effectively~~rate ~~manage~~for ~~future~~the ~~growth~~period. ~~could~~Foreign ~~have~~exchange agains ~~material~~and ~~adverse impact~~losses onare ~~our~~included ~~business,~~in ~~operations~~the consolidated ~~and~~statements ~~prospects~~of operations.

We cannot predict the impact of changing demand for oil and natural gas products.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, and technological advances in fuel economy and energy generation devices could reduce the demand for crude oil and other liquid hydrocarbons. Any major changes in the demand for oil and natural gas products may have a material adverse effect on our business, financial condition, results of operations and cash flows.

If we are unable to compete effectively, we may lose existing customers or fail to attract new customers, which could have an adverse effect on our results of operations.

We actively compete for acquisitions, leases, licenses, options, concessions, claims, skilled industry personnel and other related interests with a substantial number of other companies, many of which have significantly greater experience and financial resources than we have. Our ability to successfully bid on and acquire additional property rights to participate in opportunities and to identify and enter into commercial arrangements with other parties is dependent upon developing and maintaining close working relationships with our industry partners and joint venture operators and our ability to select suitable properties and to consummate transactions in a highly competitive environment. A decrease in demand for oil and natural gas caused by any number of factors could cause competition among oil and natural gas producers to intensify, potentially resulting in downward pressure on oil and natural gas prices and adversely affecting our results of operations.

The market price of our Common Shares may be subject to wide price fluctuations.

The market price of our Common Shares may be subject to wide fluctuations in response to many factors, including variations in our operating results, divergence in financial results from analysts’ expectations, changes in earnings estimates by stock market analysts, changes in our business prospects, general economic conditions, changes in mineral reserve or resource estimates, results of exploration, legislative changes, and other events and factors outside of our control. In addition, stock markets have from time to time experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could adversely affect the market price for our Common Shares.

~~Some~~ITEM of8. ~~our~~FINANCIAL ~~properties~~STATEMENTS ~~are~~AND ~~located~~SUPPLEMENTARY ~~in areas susceptible to destructive acts of nature.~~ DATA

~~Some~~Our offinancial ~~our~~statements ~~properties~~ are ~~located~~stated in ~~areas~~U.S. ~~susceptible~~Dollars ~~to destructive acts of nature, which may damage facilities~~ and ~~cause~~are ~~the~~prepared ~~release~~in ofaccordance ~~pollutants. Environmental~~with ~~insurance coverage maintained by NiMin or third-party operators may not fully insure all of these risks (See ITEM 1~~U.S. –generally ~~“Business~~accepted ~~Overview~~accounting –principles ~~Environmental Matters”~~(GAAP).

~~Our~~The ~~producing~~financial ~~properties~~statements ~~are~~and ~~located~~notes ~~substantially~~thereto inrequired ~~the~~under ~~Bighorn~~Item 8 ~~Basin,~~of ~~Wyoming~~this ~~and~~annual ~~the~~report ~~San~~are ~~Joaquin~~attached ~~Basin,~~hereto ~~California,~~and ~~making~~found usimmediately ~~vulnerable~~following tothe ~~risks associated~~signature ~~with~~page ~~operating~~of inthis ~~limited~~Form ~~geographic~~10K ~~areas.~~annual report.

~~Our~~ITEM ~~producing properties are geographically concentrated in the Bighorn Basin, Wyoming and the San Joaquin Basin, California~~9. AtCONTROLS ~~December 31,~~AND 2011, substantially all of our total estimated proved reserves were attributable to properties located in these areas. As a result of this concentration, we may be disproportionately exposed to the impact of regional supply and demand factors, delays or interruptions of production from wells in these areas caused by governmental regulation, processing or transportation capacity constraints, market limitations, drought related conditions or interruption of the processing or transportation of oil, natural gas or natural gas liquids. PROCEDURES

~~ITEM 1.B. UNRESOLVED~~(a) ~~STAFF~~Disclosure ~~COMMENTS~~Controls and Procedures

~~Not~~Our Chief ~~applicable~~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 annual report on Form 10-K.

~~ITEM~~Based on the evaluation, management concluded that as of December ~~3. LEGAL~~31, ~~PROCEEDINGS~~2012, the Company’s disclosure controls and procedures continue to be ineffective because of the material weaknesses as described in Management’s Report on Internal Control over Financial Reporting.

We(b) ~~are~~Management’s ~~not~~Report ~~aware~~on ofInternal ~~any claims~~Control ~~which~~over ~~could~~Financial have a material impact to our financial statements, and we do not know of any material proceedings contemplated by governmental authorities. We are not aware of any material proceedings to which any director, officer or any of our affiliates, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, our affiliates, or security holder, is a party adverse to us or our consolidated subsidiary or has a material interest adverse to us or our consolidated subsidiary. Reporting

~~ITEM 4~~Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in rule 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, the CEO and CFO, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal controls over financial reporting includes those policies and procedures that (i) ~~MINE~~pertain to the maintenance of records which in reasonable detail accurately and ~~SAFETY~~fairly ~~DISCLOSURE~~reflect the transactions and disposition of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.

~~Not~~Because ~~applicable~~of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In evaluating the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012, management used the criteria established in the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the criteria established by COSO, management (with the participation of the CEO and the CFO) identified the following material weaknesses in the Company’s internal control over financial reporting as of December 31, 2012, which arose from the limited number of number of staff at the Company and the inability to achieve proper segregation of duties:

•

The Company lacked effective controls for ensuring the accuracy of reporting over significant account balances, including the review, approval, and documentation of related transactions and account reconciliations.

~~PART~~As IIa result of these material weaknesses, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control – Integrated Framework issued by COSO.

~~ITEM 5.~~(c) ~~MARKET~~Changes ~~FOR~~in ~~REGISTRANT’S~~Internal ~~COMMON~~Control ~~EQUITY,~~Over ~~RELATED~~Financial ~~STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~ Reporting

~~The~~There ~~Common Shares~~ were ~~listed~~no onchanges ~~the~~in ~~TSX under~~ the ~~trading~~Company’s ~~symbol~~internal ~~“NNN”~~control onover ~~September 4,~~financial ~~2009~~reporting ~~and~~during ~~began~~the ~~trading on~~year ~~September~~ended December 831, ~~2009. Prior thereto~~2012, ~~the~~that ~~Preconsolidated~~have ~~Shares~~materially ~~were~~affected ~~listed~~or onare ~~the~~reasonably ~~TSXV~~likely ~~under~~to materially affect, the ~~trading~~Company’s ~~symbol~~internal ~~“NNI.P”~~control ~~beginning~~over ~~November 13,~~financial ~~2007~~reporting.

The following table sets forth the reported high and low prices and the trading volume for the Common Shares on the TSX for the two most recent fiscal periods as reported by a public source we consider reliable.

Table No. 7

Trading Prices on TSX

	0000000000	0000000000		0000000000
	High (Cdn$)	Low (Cdn$)	Volume
4th Quarter 2011	1.13	0.53		9,041,546
3rd Quarter 2011	1.82	1.12		3,354,941
2nd Quarter 2011	2.15	1.54		6,775,231
1st Quarter 2011	2.65	1.54		13,306,222
4th Quarter 2010	1.88	1.11		4,755,534
3rd Quarter 2010	1.40	0.90		5,958,757
2nd Quarter 2010	1.77	0.91		5,015,513
1st Quarter 2010	1.47	1.10		2,062,113

The Company’s Common Shares are traded on the OTCQX under the symbol NEYYF since October 22, 2009. The following table sets forth the reported high and low prices and the trading volume for the Common Shares on the OTCQX for the two most recent fiscal periods as reported by a public source we consider reliable.

Table No. 8

Trading Prices on OTCQX

	0000000000	0000000000		0000000000
	High ($)	Low ($)	Volume
4th Quarter 2011	1.09	0.50		5,161,545
3rd Quarter 2011	1.94	1.07		1,641,780
2nd Quarter 2011	2.24	1.55		2,798,738
1st Quarter 2011	2.74	1.55		5,363,610
4th Quarter 2010	1.85	1.09		4,602,604
3rd Quarter 2010	1.22	0.88		637,187
2nd Quarter 2010	1.60	0.88		1,488,052
1st Quarter 2010	1.41	1.13		674,560

The Company’s Common Shares are traded on the OTC-BB under the symbol NEYYF since March 11, 2011. The following table sets forth the reported high and low prices and the trading volume for the Common Shares on the OTC-BB for the most recent fiscal period as reported by a public source we consider reliable.

~~Table~~PART ~~No. 9~~III

~~Trading~~ITEM ~~Prices~~10. onDIRECTORS, ~~OTC-BB~~EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

	High ($)		Low ($)		Volume
4th Quarter 2011		1.09		0.50		5,161,545
3rd Quarter 2011		1.94		1.07		1,641,780
2nd Quarter 2011		2.24		1.55		2,798,738
March, 2011		2.37		1.93		1,182,262

Directors and Executive Officers

~~The~~Set ~~Common~~forth ~~Shares~~below ~~were~~is ~~listed~~information onregarding ~~the~~each ~~TSX~~of ~~under~~ the ~~trading symbol “NNN” on September 4, 2009 and began~~ ~~trading~~executive onofficers ~~September 8,~~of ~~2009.~~NiMin ~~Prior thereto, the Preconsolidated Shares were listed on the TSXV under the trading symbol “NNI.P”. The Common Shares are also listed on the OTCQX~~ and ~~under~~each ~~the~~member ~~symbol~~of ~~NEYYF since October 22, 2009 and on OTC-BB under~~ the ~~symbol~~Board ~~NEYYF~~as ~~since~~of March 11, ~~2011.~~2013:

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. The net proceeds of the Private Placement are being used to advance our interest in our oil and gas properties in California and Wyoming and for general corporate purposes.


Name	Positions	Age	Date First Elected or Appointed a Director or Officer
Clarence Cottman III⁽¹⁾	Chairman, Chief Executive Officer and Director	57	September 2009
Jonathan S. Wimbish	Chief Financial Officer	42	September 2009
D. Scott Dobson⁽⁵⁾	Chief Operating Officer⁽⁵⁾	39	January 2011
Brian E. Bayley^{(1) (3)(4)}	Director	60	September 2009
William Gumma⁽²⁾⁽³⁾	Director	65	June 2011
W.A. (Alf) Peneycad^(1)(2)(3)(4)	Director	66	September 2009
Robert L. Redfearn^{(2)(3) (4)}	Director	78	September 2009

OnNotes: ~~March 13, 2012, the last reported sales price of our Common Shares on the TSX, OTCQX and OTC-BB was CDN$0.79, USD$0.80 and USD$0.80 per share, respectively.~~

As(1) ofMember ~~March 13, 2012, there were 69,834,396 holders~~ of ~~record~~the ofcorporate ~~our~~governance ~~Common Shares~~committee.

~~Dividend~~(2) ~~Policy~~Member of the reserves committee.

We(3) ~~have~~Member ~~not previously paid cash dividends on our Common Shares. Subject to the results~~ of the ~~Strategic~~compensation ~~Review, we do not intend to pay in the foreseeable future, cash dividends on our Common Shares~~committee. Covenants contained in our Senior Loan restrict the payment of dividends on our Common Shares. We currently intend to retain all future earnings to fund the development and growth of our business. Any payment of future dividends will be at the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that our board of directors deems relevant.

~~Certain~~(4) ~~Canadian~~Member ~~Federal~~of ~~Income~~the ~~Tax~~audit ~~Consequences~~ committee.

The following general summary describes the material Canadian federal income tax consequences applicable to a holder of our Common Shares who is a resident of the United States and is not a resident, or deemed to be a resident of Canada for purposes of the Income Tax Act (~~Canada~~5) ~~(the~~D. ~~“ITA”),~~Scott ~~that~~Dobson ~~qualifies~~was ~~for~~initially ~~benefits~~appointed ~~under~~Vice ~~the~~President ~~Canada-United~~Operations ~~States~~in ~~Convention~~January ~~(1980),~~2011 ~~as amended (the “Treaty”)~~ and issubsequently ~~not~~was ~~affiliated~~promoted with the Company, did not acquire our Common Shares by virtue of employment, is not a financial institution, partnership or a trust, holds our Common Shares as capital property, and does not use or hold, and is not deemed to ~~use~~Chief orOperating ~~hold,~~Officer ~~his or her Common Shares~~ in ~~connection~~September ~~with~~2011. ~~carrying on a business in Canada (a “Non-Resident of Canada Holder”)~~Mr. ~~Special~~Dobson ~~rules,~~resigned ~~which are not discussed~~ in ~~this summary~~August, ~~may apply to a Non-Resident of Canada Holder that is an insurer carrying on business in Canada and elsewhere~~2012.

~~This~~Clarence ~~summary~~Cottman isIII based upon the current provisions of the ITA, the regulations thereunder (the “Regulations”), the current publicly announced administrative and assessing policies of Canada Revenue Agency and all specific proposals (the “Tax Proposals”) to amend the ITA and Regulations announced by the Minister of Finance (Canada) prior to the date hereof. This description is not exhaustive of all possible Canadian federal income tax consequences and, except for the Tax Proposals, does not take into account or anticipate any changes in law, whether by legislative, governmental or judicial action, nor does it take into account any income tax laws or considerations of any province or territory of Canada or foreign tax considerations, which may differ significantly from those discussed herein. This summary assumes that the Tax Proposals will be enacted in their form as of the date hereof.

Chairman, CEO and Director

Clarence Cottman III is Chairman, CEO, and Director of NiMin. Mr. Cottman has over 30 years of experience in the oil and gas industry with a focus on joint ventures, acquisitions and project development. He was on the Advisory Board to Nanes Balkany Partners, a hedge fund investor in small publicly traded energy companies. Mr. Cottman has held various senior management positions at Etrion Corporation (formerly PetroFalcon Corporation), Benton Oil & Gas and Sun E&P. He has negotiated numerous oil and gas contracts and arranged multiple energy financings in both North America and overseas. He holds a BA from Rochester Institute of Technology and an MBA from the University of Rhode Island. Mr. Cottman is a Certified Professional Landman. The Board believes that Mr. Cottman’s expertise and experience in the oil and gas industry is valuable to the Board.

Jonathan S. Wimbish, CFA

Chief Financial Officer

Jonathan Wimbish, CFA is Chief Financial Officer for NiMin. Prior to joining Legacy in 2007, which became a wholly-owned subsidiary of NiMin in 2009, Mr. Wimbish was a Portfolio Manager, Managing Director and Co-Founder of Marketus, LLC, an equity-based hedge fund management company. He managed all energy investments from its founding in 2002. Mr. Wimbish was also a Managing Director and Portfolio Manager at ING Furman Selz Asset Management and Analyst with Husic Capital. He began his career at MasterCard International and held roles of increasing responsibility including; Internal Auditor and Manager of Strategic Planning. Mr. Wimbish holds a BA in Economics from UCLA, an MBA from Columbia Business School and is a CFA Charterholder.

The following discussion is for general information only and is not intended to be, nor should it be construed to be, legal or tax advice to any holder of Common Shares of the Company and no opinion or representation with respect to the Canadian Federal Income Tax consequences to any such holder or prospective holder is madeD. ~~Accordingly,~~Scott ~~holders and~~Dobson ~~prospective holders of Common Shares should consult with their own tax advisors about the federal, provincial and foreign tax consequences of purchasing, owning and disposing of common shares.~~

~~Dividends~~Former Chief Operating Officer

~~Canadian~~Scott ~~withholding~~Dobson ~~tax~~was atnamed ~~a rate~~Chief ofOperating ~~25%~~Officer ~~(subject~~on toSeptember 1, ~~reduction~~2011, ~~under~~and ~~the~~resigned ~~provisions~~in ofAugust, ~~any~~2012. ~~applicable~~Previously, ~~income~~Mr. Dobson ~~tax~~served ~~treaty~~as orVice ~~convention)~~President ~~will~~of beOperations. ~~payable~~Mr. Dobson onwas ~~dividends~~named ~~paid~~Vice President orof ~~credited~~Operations in January, or2011. ~~deemed~~Mr. Dobson tohas beover ~~paid~~15 oryears ~~credited~~experience onin the ~~Common~~oil ~~Shares,~~and togas industry and began his career as a ~~Non-Resident~~production ofand ~~Canada~~reservoir ~~Holder.~~engineer Bywith Burlington Resources in Farmington, New Mexico where he was ~~virtue~~responsible offor ~~Article~~drilling, Xcompletion and project improvement of ~~the~~large ~~Treaty~~development programs. From 2008 to 2011, Mr. Dobson was the ~~rate~~Operations Manager of ~~withholding~~Legacy, ~~tax~~the onwholly-owned ~~dividends~~subsidiary ~~paid~~of orNiMin, ~~credited~~and towas ~~residents~~instrumental in the execution of the Company’s ~~United~~business ~~States~~model isand ~~generally~~success. ~~limited~~From to2001 ~~15%~~until of2008, ~~the~~Mr. Dobson ~~dividend~~worked ~~(or~~for 5%Merit Energy Company in ~~the~~Dallas, ~~case~~Texas ofwhere ~~certain~~his ~~corporate~~primary ~~shareholders~~role ~~beneficially~~was ~~owning~~Region atManager. As Region Manager, he directed the operation and development of oil and gas ~~least~~properties ~~10%~~in 9 of the ~~Company’s~~13 ~~voting~~states ~~shares)~~in which Merit had assets, including Wyoming. Mr. Dobson graduated from Montana Tech with a Bachelor of Science degree in Mining Engineering.

~~The~~Brian ~~Company has not, and subject to the results of the Strategic Review, does not anticipate issuing dividends~~E. Bayley

~~Where~~Director the Company acquires Common Shares from a Non-Resident of Canada Holder (unless we acquire the Common Shares in the open market in the manner in which shares would normally be acquired by any member of the public), such acquisition will result in a deemed dividend to the Non-Resident of Canada Holder equal to the amount by which the consideration paid by us exceeds the paid-up capital of such Common Shares. The amount of such deemed dividend will be subject to withholding tax as described above.

~~Disposition~~Brian E. Bayley holds an MBA from Queen’s University. Mr. Bayley is currently a director and Resource Lending Advisor for Sprott Resource Lending Corp. (formerly Quest Capital Corp.), a TSX and NYSE Amex listed resource lending corporation. Prior thereto, Mr. Bayley also held the following positions with Quest Capital Corp.: President and Chief Executive Officer from May 2009 to September 2010; Co-Chairman from January 2008 to May 2009; President from July 2003 to January 2008; and Chief Executive Officer from July 2003 to March 2008. Mr. Bayley has been the President and a director of ~~Common~~Ionic ~~Shares~~Management Corp., a private management company, since December 1996. He has also served as a director and/or officer of numerous other public companies. The Board believes that Mr. Bayley’s experience and his independence from management make him a valuable member of the Board.

~~Generally,~~William aGumma Non-Resident of Canada Holder will not be subject to tax under the ITA in respect of any capital gain realized on a disposition of Common Shares provided that such shares do not constitute, and are not deemed to constitute, “taxable Canadian property” of the Non-Resident of Canada Holder. As long as the Common Shares are then listed on a “designated stock exchange” (which includes the TSX) the Common Shares generally will not constitute taxable Canadian property of a Non-Resident of Canada Holder, unless: (a) at any time during the 60-month period preceding the disposition, the Non-Resident of Canada Holder, persons not dealing at arm’s length with such Non-Resident of Canada Holder or the Non-Resident of Canada Holder together with all such persons, owned 25% or more of the issued shares of any class or series of the capital stock of the Company; and (b) more than 50% of the fair market value of the Common Shares was derived, directly or indirectly, from a combination of: (i) real or immoveable property situated in Canada; (ii) “Canadian resource property” (as such term is defined in the ITA); (iii) “timber resource property” (as such term is defined in the ITA); or (iv) options in respect of interests in, or for civil law rights in, any such properties whether or not the property exists.

ADirector Non-Resident of Canada Holder’s capital gain (or capital loss) in respect of Common Shares (that constitute or are deemed to constitute taxable Canadian property) from a disposition or deemed disposition is the amount, if any, by which the taxpayers proceeds of disposition exceed (or are exceeded by) the aggregate of the adjusted cost basis of such Common Shares and any reasonable expenses of disposition. One half of a capital gain (the “taxable capital gain”) is included in income, and one half of a capital loss in a year (the “allowable capital loss”) is deductible from taxable capital gains realized in the same year. The amount by which a shareholder’s allowable capital loss exceeds his taxable capital gains in a year may be deducted from a taxable capital gain realized by the shareholder in the three previous or any subsequent year, in the circumstances and to the extent described in the ITA.

~~Non~~Bill Gumma has over 30 years of oil and gas experience, and has been responsible for worldwide exploration and production activities, including pioneering projects in the United States, Russia, and Venezuela. Since 2010, Mr. Gumma has been the Managing Director at Chisholm Partners, LLC, an independent energy resource development company. From June 2003 until September 2009, Mr. Gumma served as President and CEO of PetroFalcon Corporation, now Etrion Corporation, a natural resource company formerly focused on oil and gas operations in Venezuela. He also worked in both engineering and exploration capacities at Shell USA and Amoco Oil Co. Additionally, Mr. Gumma served as Chief Geophysicist-~~Resident~~International for Maxus Energy Corp. and as an executive officer and Director for Benton Oil and Gas Co., now Harvest Natural Resources. Mr. Gumma holds a Bachelor of ~~Canada~~Science ~~Holders~~degree ~~whose~~in ~~Common~~engineering ~~Shares~~from ~~may~~the beColorado ~~taxable~~School of ~~Canadian~~Mines ~~property~~and ~~should~~a ~~consult~~Master ~~their~~of ~~own~~Science ~~tax~~degree ~~advisors~~in geophysics from Oregon State University. The Board believes that Mr. Gumma’s expertise and experience in the oil and gas industry is valuable to the Board.

W.A. (Alf) Peneycad

Director

Alfred Peneycad is a graduate of Queen’s University Law School. He serves as a director of several public companies, including Parex Resources Inc., a Calgary-based oil and gas company with operations in Colombia and Trinidad & Tobago. Mr. Peneycad recently retired from Petro-Canada where he served as Vice-President, General Counsel and Chief Compliance Officer. Mr. Peneycad spent 28 years at Petro-Canada and while there, played a lead role in the acquisition of several major companies in Canada, the US and internationally. The Board believes that Mr. Peneycad’s experience and his independence from management make him a valuable member of the Board.

Robert L. Redfearn

Director

Robert L. Redfearn is a graduate of Tulane University (B.B.A., J.D.), specializing in oil and gas related law. In 1979, Mr. Redfearn became a founding partner of Simon, Peragine, Smith & Redfearn, L.L.P., where he represents clients in mergers of

~~Comparison~~ business and acquisitions of ~~Cumulative~~oil ~~Return~~and gas properties, financing, complex litigation and arbitrations related to oil and gas, environmental concerns and banking and securities. Prior to founding Simon, Peragine, Smith & Redfearn, L.L.P., Mr. Redfearn was an attorney at Deutsch, Kerrigan and Stiles, a New Orleans based law firm, where his practice centered around the oil and gas industry. Mr. Redfearn was employed in the legal department of Humble Oil & Refining Company (now Exxon Corporation). The Board believes that Mr. Redfearn’s experience and his independence from management make him a valuable member of the Board.

~~The~~Corporate ~~following~~Governance graph compares the percentage change in the cumulative shareholder return over the last five years of our Common Shares (assuming a $100 investment was made on September 4, 2009, the date on which the Corporation’s Common Shares were listed on the Toronto Stock Exchange) and the cumulative total return of the S&P/TSX Composite Index and the S&P/TSX Capped Energy Index.

~~ASSUMES $100 INVESTED ON SEPTEMBER 4, 2009~~ General

~~ASSUMES~~The ~~DIVIDEND~~Board ~~REINVESTED~~recognizes that effective corporate governance is an essential element for the effective and efficient operation of the Company. The Company strives to ensure that its corporate governance policies and practices provide for effective stewardship of the Company. The Company’s corporate governance practices are the responsibility of the Board and the Board has delegated certain responsibilities to develop and monitor the Companys’ corporate governance practices to the Corporate Governance Committee.

~~FISCAL~~This ~~YEAR~~Statement ~~END~~of ~~DEC~~Corporate Governance Practices sets out the Board’s corporate governance practices pursuant to National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) and National Policy 58-201 – Corporate Governance Guidelines (“NP 58-201”). ~~31,~~The ~~2011~~Company’s corporate governance practices are generally consistent with the practices and guidelines set out in NI 58-101 and NP 58-201.

~~(Expressed~~Board inof ~~Canadian~~Directors ~~dollars)~~

	12/31/2009		12/31/2010		12/31/2011
NiMin Energy Corp		112		132		51
S&P/TSX Composite		108		127		99
S&P/TSX Capped Energy		104		116		116

The Board, which is responsible for supervising the management of the business and affairs of the Company, is currently comprised of five (5) directors. The majority of the members of the Board are independent within the meaning of NI 58-101, other than Clarence Cottman III, the Chairman of the Board and the CEO of the Company.

The Board facilitates its exercise of independent supervision over management by ensuring that a majority of directors qualify as independent directors pursuant to NI 58-101 and by establishing committees which are comprised of a majority of independent directors and in the case of the Audit Committee, is comprised entirely of independent directors.

The following table sets forth the directors of the Company who are presently directors of other reporting issuers (or equivalent).


Name of Director		Name of Other Issuers
Brian E. Bayley		Kramer Capital Corp. Cypress Hills Resource Corp. Esperanza Silver Corporation Eurasian Minerals Inc. Kirkland Lake Gold Inc. Sprott Resources Lending Corp.(formerly Quest Capital Corp.) American Vanadium Corp. (formerly Rocky Mountain Resources Corp.) Bearing Resources Ltd. TransAtlantic Petroleum Corp.
W.A. (Alf) Peneycad		Parex Resources Inc. Canadian Wireless Trust R Split III Corp.

If required, independent directors meet without members of management present during the course of each regularly scheduled Board meeting.

~~ITEM 6~~As noted above, the Chair of the Board (“Chair”) is not an independent director. ~~SELECTED~~While ~~FINANCIAL~~the Board ~~DATA~~has no formal procedures in place to provide leadership to its independent directors, the Chair ensures that the independent directors have appropriate opportunities to discuss issues at each Board meeting, question executive officers, management and others regarding any and all matters of importance to the Board and the Company.

~~The~~Board ~~selected financial data~~ of ~~the~~Leadership Company for the fiscal years ended December 31, 2011, 2010, 2009, 2008 and 2007 has been derived from the audited annual consolidated financial statements of the Company. The information contained in the selected financial data is qualified in its entirety by reference to the Company’s consolidated financial statements and related notes included in ITEM 8 – Financial Statements, and should be read in conjunction with such financial statements and with the information appearing in ITEM 7. – MD&A. The audited financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”).

~~Table~~Clarence NoCottman III serves as the Chairman and Chief Executive Officer of NiMin. The Board has not deemed it necessary to separate the positions of Chairman and Chief Executive Officer or name a lead independent director because the Board values Mr. 10Cottman’s business acumen, industry knowledge, ethics and leadership as Chairman and because NiMin’s independent directors under its existing board leadership structure have been diligent in their oversight responsibility with respect to management. This oversight includes actively advising and providing direction to management, reviewing and approving management’s strategic plans and business objectives, and overseeing NiMin’s financial performance and compliance with legal and regulatory obligations. Additionally, the independent directors meet, from time to time as they deem appropriate, without management in attendance at both the Board and committee levels.

~~Selected~~Audit ~~Financial~~Committee ~~Data~~

	Year endedDecember31, 2011(1)($)			Year endedDecember31, 2010(1)($)			Year endedDecember31, 2009(1)($)			Year endedDecember31, 2008(1)($)			Year endedDecember31, 2007(1)($)
Revenues		24,305,685			14,029,198			6,498,789			10,674,567			4,946,242
Production expense		(11,565,565	)		(9,116,563	)		(5,162,936	)		(3,183,106	)		(765,016	)
Gain (loss) on derivative contracts		(753,053	)		(708,032	)		(300,778	)		—			—
General & administrative expenses		(7,894,479	)		(7,888,736	)		(6,826,661	)		(5,734,454	)		(3,070,790	)
Interest income		44,595			54,070			78,127			472,746			821,676
Interest expenses		(5,406,133	)		(7,108,109	)		(228,131	)		(442,451	)		(921,330	)
Foreign exchange gain (loss)		(26,101	)		6,617			(385,626	)		(538	)		(499,924	)
Other		(196,649	)		248,734			—			(111,975	)		(1,014	)
DD&A		(3,507,669	)		(3,190,905	)		(3,351,753	)		(3,393,333	)		(1,076,064	)
Change in fair value of warrants		1,062,208			1,674,053			(3,523,543	)		—			—
Change in fair value of options		707,513			—			—			—			—
Impairment of oil and natural gas properties		—			—			(6,313,633	)		(35,872,167	)		—
Loss before income taxes		(3,229,648	)		(11,999,673	)		(19,516,145	)		(37,590,711	)		(566,220	)
Income tax expense		—			386,772			232,824			11,300			—
Net loss		(3,229,648	)		(12,386,445	)		(19,748,969	)		(37,602,011	)		(566,220	)
Net loss per share—basic and diluted		(0.05	)		(0.21	)		(0.47	)		(1.07	)		(0.02	)

The Audit Committee is a committee of the Board established for the purpose of overseeing the accounting and financial reporting process of the Company and annual external audits of the consolidated financial statements.

~~Note:~~Audit Committee Charter

~~(1)~~The ~~Audited~~Audit Committee has set out, in a written policy, its responsibilities and composition requirements in fulfilling its oversight in relation to the Company’s internal accounting standards and practices, financial information, accounting systems and procedures. The Audit Committee charter is provided in Appendix A attached hereto.

	December 31,2011($)			December31, 2010($)		December31, 2009($)			December31, 2008($)		December31, 2007($)
Working Capital (Deficiency)		(2,628,937	)		5,239,836		(16,446,170	)		13,487,399		27,218,575
Stockholders’ equity		46,984,363			32,077,128		31,670,532			38,304,807		54,720,474
Long-term Debt		36,000,000			36,000,000		—			—		617,767
Total Assets		90,519,375			81,908,408		64,900,896			42,146,268		62,199,388
Dividends		—			—		—			—		—
Common Stock		108,758,460			93,107,905		83,106,467			72,861,988		53,930,045
Number of Shares		69,834,396			61,690,977		52,410,977			37,301,656		33,316,392

Composition of the Audit Committee

The Audit Committee consists of Brian E. Bayley (Chair), W. A. (Alf) Peneycad, and Robert L. Redfearn. All members of the Audit Committee have been determined to be independent and all members are considered to be financially literate. A member of an Audit Committee is independent if the member has no direct or indirect material relationship with the Company which could, in the view of the Board, reasonably interfere with the exercise of a member’s independent judgment. An individual is financially literate if he/she has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. Mr. Bayley is considered to be the Audit Committee Financial Expert within the meaning of the SEC rules and regulations.

Relevant Education and Experience of Audit Committee Members

Brian E. Bayley

Brian E. Bayley holds an MBA from Queen’s University. Mr. Bayley is currently a director and Resource Lending Advisor for Sprott Resource Lending Corp. (formerly Quest Capital Corp.), a TSX and NYSE Amex listed resource lending corporation. Prior thereto, Mr. Bayley also held the following positions with Quest Capital Corp.: President and CEO from May 2009 to September 2010; Co-Chairman from January 2008 to May 2009; President from July 2003 to January 2008; and CEO from July 2003 to March 2008. Mr. Bayley has been the President and a director of Ionic Management Corp., a private management company, since December 1996. He has also served as a director and/or officer of numerous other public companies.

W. A. (Alf) Peneycad

Alfred Peneycad is a graduate of Queen’s University Law School. He serves as a director of several public companies, including Parex Resources Inc., a Calgary-based oil and gas company with operations in Colombia and Trinidad & Tobago. Mr. Peneycad recently retired from Petro-Canada where he served as Vice-President, General Counsel and Chief Compliance Officer. Mr. Peneycad spent twenty-eight (28) years at Petro-Canada and while there, played a lead role in the acquisition of several major companies in Canada, the US and internationally.

~~ITEM~~Robert 7L. ~~MANAGEMENT’S~~Redfearn ~~DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION~~

~~The~~Robert ~~following~~L. ~~discussion~~Redfearn ~~and~~is ~~analysis~~a ~~should~~graduate beof ~~read~~Tulane University (B.B.A., J.D.), specializing in ~~conjunction~~oil ~~with~~and gas related law. Prior to joining Deutsch, Kerrigan and Stiles, a New Orleans based law firm, where his practice centered around the ~~“Selected~~oil ~~Consolidated~~and ~~Financial~~gas ~~Information”~~industry and included representation of clients in ~~Item 6~~mergers ~~above~~of businesses and ~~our~~acquisitions ~~historical~~of ~~consolidated~~oil ~~financial~~and gas properties, financings, complex litigation and arbitrations related to oil and gas, environmental ~~statements~~concerns, and ~~the~~banking ~~accompanying~~and ~~notes~~securities, ~~included~~Mr. Redfearn ~~elsewhere~~was employed in ~~this~~the ~~Annual~~legal ~~Report~~department onof ~~Form~~Humble ~~10-K~~Oil & Refining Company (now Exxon Corporation). In 1979, Mr. Redfearn became a founding partner of Simon, Peragine, Smith & Redfearn, L.L.P., where he continues his representation of clients as reflected above.

~~Overview~~Reliance on the Exemption in Subsection 3.3(2) or Section 3.6

WeAt ~~are~~no antime ~~oil~~since ~~and~~the ~~gas~~commencement ~~company~~of ~~engaged in~~ the ~~acquisition,~~Company’s ~~development~~most ~~and~~recently ~~production~~completed offinancial ~~oil~~year ~~and~~has ~~gas properties in~~ the ~~United~~Company ~~States.~~relied ~~We have operated as~~on anthe ~~exploration~~exemptions ~~and~~in ~~production~~Subsection ~~company~~3.3(2) ~~since~~or ~~late~~Section 3.6 ~~2006~~of ~~and~~National ~~have~~Instrument ~~principal~~52-110 ~~operations~~– inAudit ~~the~~Committees ~~Bighorn~~(“NI ~~Basin,~~52-110”) ~~Wyoming and the San Joaquin Basin, California.~~

~~Oil~~Reliance ~~and~~on ~~Gas~~Section 3.8 ~~Sales Report~~

~~Table~~At ~~No.~~no time since commencement of the Company’s most recently completed financial year has the Company relied on Section 113.8 of NI 52-110.

~~Average~~Audit ~~daily~~Committee ~~production~~Oversight ~~sold by region (1)~~

	Year		Year		Year
	Ended		Ended		Ended
	December		December		December
	31, 2011		31, 2010		31, 2009
Louisiana (2)
Oil—Bbl/d		59		66		81
Gas—Mcf/d		439		795		1173
Total Louisiana (boe/d)		133		199		277
California
Oil—Bbl/d		201		218		239
Gas—Mcf/d		0		—		—
Total California (boe/d)		201		218		239
Wyoming (3)
Oil—Bbl/d		700		426		29
Gas—Mcf/d		—		—		—
Total Wyoming (boe/d)		700		426		29
Total Oil (Bbl/d)		960		710		350
Total Gas (Mcf)		439		795		1,173
Total (boe/d)		1,033		842		546

At no time since the commencement of the Company’s most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board.

~~Notes:~~Pre-Approval Policies and Procedures

~~(1)~~The ~~These~~Audit ~~numbers~~Committee ~~are~~approves ~~net~~the engagement terms for all audit and non-audit services to ~~NiMin~~be provided by the Company’s ~~working~~accountants ~~interest~~before ~~for~~such services are provided to the ~~relevant~~Company ~~properties~~or any of its subsidiaries.

The Audit Committee approved one hundred percent (2100%) of ~~The~~the ~~Louisiana~~services provided ~~properties~~to ~~were~~the ~~sold~~Company onand ~~December~~its 1,subsidiaries ~~2011~~described ~~(see~~in ~~ITEM 7—~~“~~MD&A~~External –Auditor ~~Liquidity~~Service ~~and~~Fees ~~Capital~~(By ~~Resources”~~Category)” below.

~~(3)~~Auditors Use ~~Wyoming average volumes in 2009 are based on 14 days~~ of ~~production~~Non-Permanent ~~and~~Employees ~~averaged over the entire applicable period.~~

None of the hours expended by KPMG LLP on its engagement to audit the Company’s financial statements for the fiscal year ended December 31, 2012, were performed by persons other than full-time permanent employees of KPMG LLP.

Audit Committee Report

The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2012 with management and with KPMG LLP, the Company’s independent accountants. The Audit Committee has also discussed with KPMG LLP the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee received from KPMG LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG LLP’s communications with the Audit Committee concerning independence, and has discussed with KPMG LLP its independence from the Company.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 2012 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, filed with the SEC.

~~Crude~~Submitted ~~oil~~by ~~and~~the ~~natural~~Audit ~~gas~~Committee ~~sales~~of the Board Brian E. Bayley (Chair) W. A. (Alf) Peneycad Robert L. Redfearn

~~For~~Corporate ~~the~~Governance ~~year~~Committee ended December 31, 2011, we recorded gross revenues of $30.95 million, as compared to $18.75 million for the year ended December 31, 2010. Oil sales as a percentage of total revenue during the year ended December 31, 2011 as compared to the same period in 2010 increased from 93% to 98%. Oil volumes increased by 35% to 960 Bopd and the price received increased by 28% to $86.44 during the year ended December 31, 2011 as compared to the same period in 2010. Natural gas sales as a percentage of total revenue during the year ended December 31, 2011 as compared to the same period in 2010 decreased from 7% to 2%. Natural gas volumes decreased by 45% to 439 Mcf/d and the price received decreased by 10% to $4.09 during the year ended December 31, 2011 as compared to the same period in 2010. The increase in gross revenues for the year ended December 31, 2011 as compared to the same period during 2010, is mainly due to successful drilling and work-overs in Wyoming.

~~For~~The ~~the~~Corporate ~~year~~Governance ~~ended~~Committee ~~December 31,~~is ~~2010,~~responsible wefor ~~recorded~~making ~~gross~~recommendations ~~revenues of $18.75 million, as compared~~ to ~~$8.71~~the ~~million~~Board ~~for~~concerning the ~~year~~overall ~~ended~~governance ~~December 31, 2009. Oil sales as a percentage~~ of ~~total revenue during~~ the ~~year~~Company ~~ended~~and ~~December 31,~~assists ~~2010 as compared to~~ the ~~same~~Board ~~period~~ in ~~2009~~the ~~increased~~discharge ~~from~~of ~~80%~~the toBoard’s ~~93%. Oil~~duties ~~volumes~~with ~~increased~~respect ~~by 103%~~ to ~~710~~the ~~Bopd~~adopting and ~~the~~compliance ~~price~~with ~~received~~the ~~increased~~Code byof ~~24%~~Business toConduct ~~$67.30~~and ~~during~~Ethics, ~~the~~mandates, ~~year~~position ~~ended~~descriptions ~~December 31,~~and ~~2010~~all asother ~~compared~~governance topolices of the ~~same~~Company. ~~period~~Included in ~~2009.~~its ~~Natural~~mandate ~~gas~~is ~~sales~~the asresponsibility ato ~~percentage~~develop ~~of total revenue during~~ the ~~year ended~~Company’s ~~December 31,~~approach ~~2010~~to asgovernance ~~compared~~issues, toset ~~the~~corporate ~~same~~governance ~~period~~guidelines infor ~~2009~~the ~~decreased~~Board ~~from~~and ~~20%~~assume toresponsibility ~~7%.~~for ~~Natural~~administration ~~gas~~of ~~volumes~~the ~~decreased~~Company’s byresponse ~~32%~~ to ~~795~~those ~~Mcf/d~~guidelines ~~and~~for the ~~price~~determination ~~received~~of ~~increased~~conflicts byof ~~9% to $4~~interest.55 ~~during~~During ~~the year ended December 31~~2012, ~~2010 as compared to~~ the ~~same~~Corporate ~~period~~Governance inCommittee ~~2009~~held no meetings. The ~~increase~~corporate ingovernance ~~gross~~matters ~~revenues~~of ~~for~~ the ~~year~~Company ~~ended~~were ~~December 31,~~addressed ~~2010~~by ~~as compared to~~ the ~~same~~entire ~~period~~board ~~during 2009, is attributable~~ to ~~higher~~ensure ~~realized~~that ~~commodity~~matters ~~prices, the acquisition~~ of ~~producing~~corporate ~~fields~~governance inwere ~~the~~addressed ~~state~~where ~~of Wyoming in December 2009, new drilling and work-overs in Wyoming~~necessary.

~~Crude~~Compensation ~~Oil~~Committee ~~Derivative Contracts~~

OnThe ~~November 11,~~Compensation Committee ~~2011,~~is weresponsible ~~entered~~for ~~into~~determining athe ~~swap~~overall ~~contract~~compensation tostrategy ~~minimize~~of the ~~variability~~Company inand ~~cash~~administering ~~flows~~the ~~due~~Company’s toexecutive ~~price~~compensation ~~movements~~program. inAs ~~crude~~part ~~oil.~~of Weits ~~agreed~~mandate, ~~to economically~~the ~~hedge~~Compensation Committee approves the ~~future~~appointment ~~sales~~and remuneration of ~~100~~the ~~barrels~~Company’s ofexecutive ~~NYMEX~~officers, ~~WTI~~including ~~crude~~the ~~oil~~Company’s ~~per~~Named ~~day~~Executive atOfficers aidentified ~~fixed~~in ~~price~~the ofSummary ~~$96~~Compensation Table.75 ~~starting~~The ~~January 1,~~Compensation ~~2012~~Committee is also responsible for areviewing ~~period~~the Company’s compensation policies and guidelines generally. See, “Statement of 12Executive ~~months~~Compensation – Compensation Discussion and Analysis – Compensation Governance”.

OnCode ~~December 20, 2010, we agreed to economically hedge the future sales~~ of ~~125~~Ethics 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 January 4,~~The ~~2010,~~Board wehas ~~agreed~~adopted toa ~~economically~~Code ~~hedge~~of ~~the~~Business ~~future~~Conduct ~~sale~~and Ethics (“Code of Conduct”) 7applicable to directors,~~500~~ ~~barrels~~officers, employees and consultants of ~~NYMEX~~the ~~WTI~~Company. ~~crude~~A ~~oil~~copy ~~per~~of ~~month~~the atCode aof ~~fixed~~Conduct ~~price~~is provided to each of ~~$85~~the above persons.10 ~~per~~A ~~barrel~~copy ~~for~~of athe ~~period~~Code of 24Conduct ~~months~~can be found on www.sedar.com.

OnNomination ~~April 1, 2009, we agreed to economically hedge the future sale~~ of ~~3,000~~Directors ~~barrels of NYMEX WTI crude oil per month at a fixed price of $56.85 per barrel for a period of 9 months.~~

WeThe doBoard, acting ~~not~~as ~~designate~~a ~~our~~whole, ~~derivative~~is ~~financial~~responsible ~~instruments~~for asproposing ~~hedging~~new ~~instruments~~nominees ~~for~~to ~~accounting~~the ~~purposes~~Board and for assessing the performance of directors on an ongoing basis. Factors considered for nominees include an appropriate mix of skills, knowledge and experience in business and a history of achievement. Directors are required to have available time to devote to the duties of the Board. The majority of directors comprising the Board must qualify as independent directors. The Board has not appointed a ~~result~~nominating committee to assess the effectiveness of the Board as a whole, wethe ~~recognize~~Committees and the ~~current~~contribution ~~change~~of individual directors, provided however, from time to time the Chairman of the Board surveys the Board to provide feedback on the effectiveness of the Board, following which the Chairman recommends changes to enhance the performance of the Board based on the survey feedback. The Board also reviews the composition and size of the Board and tenure of directors in aadvance ~~derivative~~of annual general meetings when directors are most commonly elected by the Company’s ~~fair~~shareholders, ~~value~~as inwell ~~earnings~~as when individual directors indicate that their terms may end or that their status may change. AtThe ~~December 31~~Board takes into account the number of directors required to carry out the duties of the Board effectively, ~~2011~~and to maintain a diversity of view and experience. The Board will evaluate candidates recommended by the shareholders in the same manner as candidates recommended by other sources, weusing criteria, ~~recognized~~if ~~$976~~any,~~929~~ asdeveloped aand ~~derivative~~approved ~~liability~~by onthe ~~crude~~Board, ~~oil~~from ~~derivative~~time ~~contracts~~to time.

Royalties and Production Taxes

California

For the years ended December 31, 2011, 2010 and 2009, we paid royalties on oil production sold from the Pleito Creek Field located in Kern County, California. Royalties for production extracted below 3,000 feet subsea are 25% and for production extracted from above 3,000 feet subsea are 20%. During the same periods, we also paid a production fee consisting of 635.10 barrels of oil per month which

~~commenced~~Compensation in 2008 and declines at a rate of 5.5% each year. For the year ended December 31, 2011, the production fee rate was 535.90 barrels of oil per month. For the year ended December 31, 2010, the production fee rate was 567.10 barrels of oil per month. For the year ended December 31, 2009, the production fee rate was 600.10 barrels of oil per month.

~~For~~The ~~the~~Compensation ~~year~~Committee, ~~ended~~comprised ~~December 31,~~solely ~~2011~~of independent directors, weis ~~recorded~~responsible ~~royalties~~for inproviding ~~California~~recommendations into the ~~amount~~Board in respect of: ~~$2.19~~(i) compensation ~~million~~policies asfor ~~compared~~senior tomanagement $1and directors of the Company; (ii) human resource policies and practices; and (iii) incentive and perquisite plans.68 ~~million~~The ~~for~~Compensation Committee has the ~~same~~ability ~~period~~to engage independent advisors in ~~2010~~order to fulfill its mandate. The ~~increase~~Company’s compensation inpackage ~~royalties~~is ~~for~~comprised ~~the year~~primarily ~~ended~~of ~~December 31~~salary, ~~2011~~cash isincentive ~~mainly~~bonuses ~~due~~and the ability to ~~higher~~participate ~~realized~~in ~~commodity~~the ~~prices~~Stock Option Plan. See the description following the heading “Executive Compensation – Compensation Discussion and Analysis”.

~~For~~Assessment ~~the year ended December 31, 2010, we recorded royalties in California in the amount~~ of ~~$1.68~~Directors ~~million as compared to $1.29 million for the same period in 2009. The increase in royalties for the year ended December 31, 2010 is mainly due to higher realized commodity prices.~~

~~Louisiana~~The process of assessing Board effectiveness is carried out through an informal process of engagement and dialogue between the Chair and the individual directors. Also the Board monitors the adequacy of information given to directors, the communications between the Board and management and the strategic direction and processes of the Board and its Committees in order to satisfy itself that the Board, its Committees and its individual directors are performing effectively. A formal assessment process may be considered if the size of the Board is expanded.

~~Royalties~~ITEM ~~on our Louisiana production varied by property~~11. ~~For~~EXECUTIVE the year ended December 31, 2011, we recorded $842,900 in royalties representing an average rate of 29.56%, as compared to $870,564 representing an average rate of 26.88% for the year ended December 31, 2010. The increase in royalties is mainly due to higher realized commodity prices. COMPENSATION

~~For~~Statement ~~the year ended December 31,~~of ~~2010,~~Executive weCompensation ~~recorded~~– ~~$870,564~~Compensation inDiscussion ~~royalties~~and ~~representing~~Analysis an average rate of 26.88%, as compared to $784,472 representing an average rate of 22.37% for the year ended December 31, 2009. The increase in royalties is mainly due to higher realized commodity prices.

OnCompensation ~~December 1,~~Committee ~~2011,~~Report ~~we sold our Louisiana properties (see ITEM 7—“MD&A – Liquidity and Capital Resources”).~~

~~Wyoming~~The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this report with management. Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this report.

~~For~~COMPENSATION ~~the~~COMMITTEE ~~year~~Brian ~~ended December 31, 2011, we recorded $3~~E.62 ~~million~~Bayley inWilliam ~~royalties~~Gumma ~~in Wyoming representing an average rate of 17~~W.~~67%,~~ ~~as compared to $2~~A.12 ~~million~~Peneycad orRobert 20L.~~51%~~ ~~for~~Redfearn ~~the same period in 2010. The increase in royalties is mainly due to higher realized commodity prices.~~ (Chair)

~~For~~Overview the year ended December 31, 2010, we recorded $2.12 million in royalties in Wyoming representing an average rate of 20.51%, as compared to $143,261 or 21.42% for the same period in 2009. Royalties during 2009 represent 14 days of expense as the properties were acquired in December 2009.

~~Operating~~The ~~Costs~~Compensation Committee is responsible for determining the overall compensation strategy of the Company, administering the Company’s executive compensation program, making recommendations to the Board regarding compensation including incentive and equity-based compensation, reviewing and approving corporate goals and objectives relevant to the Chief Executive Officer, for proposals for the compensation of the executive officers, management and directors, for evaluations of performance to determine compensation, for employee benefit and retirement plans and all other matters related to compensation. The Compensation Committee is also responsible for reviewing the Company’s compensation policies and guidelines generally.

~~Table No. 12~~Objectives of Compensation Program

~~Average~~It ~~Operating~~is ~~costs~~the ~~per~~objective ~~BOE~~of the executive compensation program to attract and retain highly qualified and experienced individuals to serve as executive officers and to align incentive compensation to performance and shareholder value. It is the goal of the Compensation Committee to endeavor to ensure that the compensation of executive officers is sufficiently competitive to achieve the objectives of the executive compensation program. The Compensation Committee gives consideration to the Company’s long-term interests and quantitative financial objectives, as well to the qualitative aspects of the individual’s performance and achievements.

	Year ended		Year ended		Year ended
	December 31,		December 31,		December 31,
	2011		2010		2009
	($)		($)		($)
Operating costs		11,565,565		9,116,563		5,162,936
Average operating costs per boe		30.66		29.66		25.93

For the year ended December 31, 2011, we incurred operating costs in the amount of $11.57 million, as compared to $9.12 million for the same period in 2010. During the year ended December 31, 2011, we incurred increased operating costs as compared to the same period in 2010 mainly due to: (i) higher production volumes in 2011, (ii) higher severance taxes paid in 2011 resulting from a 65% increase in oil and gas revenues for the year ended December 31, 2011, (iii) workovers performed in Wyoming during the year ended December 31, 2011, (iv) temporary production equipment rentals and contract labor expense; and (v) costs associated with the Krotz Springs Field and its maintenance due to the south Louisiana flooding.

~~For~~Risks ~~the year ended December 31, 2010, we incurred operating costs in the amount~~ of ~~$9.12~~Compensation ~~million,~~Policies as compared to $5.16 million for the same period in 2009. During the year ended December 31, 2010, we incurred increased operating costs as compared to the same period in 2009 mainly due to: (i) our newly acquired Wyoming Assets which added a total of $1.23 million during the three months ended December 31, 2009 and ~~$2.80~~Practices ~~million during the year ended December 30, 2010 to the overall total increase in operational costs; and (ii) increased operating costs in California associated with the CMD.~~

~~Operating~~The ~~costs~~Company’s ~~included~~compensation ~~severance~~program ~~taxes~~is ~~paid~~designed into ~~Louisiana~~provide ~~and~~executive ~~Wyoming.~~officers ~~There~~incentives isfor nothe ~~severance~~achievement ~~tax~~of innear-term ~~the~~and ~~state~~long-term ofobjectives, ~~California~~without motivating them to take unnecessary risk. ~~Severance~~As ~~taxes~~part inof ~~Louisiana~~its ~~consist~~review and discussion of ~~12.5%~~executive oncompensation, ~~gross~~the ~~oil~~Compensation ~~sales~~Committee ~~and~~noted ~~$0.164~~the ~~per~~following ~~Mcf~~facts ofthat ~~gas~~discourage ~~sales.~~the ~~For~~Company’s executives from taking unnecessary or excessive risk: (i) the ~~year~~Company’s ~~ended~~operating ~~December~~strategy and related compensation philosophy; (ii) 31the effective balance, ~~2011~~in each case, webetween ~~recorded~~cash ~~$2.36~~and ~~million~~equity inmix, ~~severance~~near-term, ~~taxes~~and long-term focus, ascorporate ~~compared~~and individual performance, and financial and non-financial performance; and (iii) the Company’s approach to $1performance evaluation and compensation provides greater rewards to an executive officer achieving both short-term and long-term agreed upon objectives.32 ~~million~~Based ~~for~~on this review, the ~~same~~Compensation ~~period in~~Committee ~~2010.~~believes ~~The~~that ~~increase~~the inCompany’s ~~severance~~total ~~taxes~~executive iscompensation ~~mainly~~program ~~due~~does tonot ~~higher~~encourage ~~production~~executive ~~volumes~~officers ~~and~~to ~~commodity~~take ~~prices~~unnecessary or excessive risk.

~~For~~Role ~~the~~of ~~year~~Executive ~~ended December 31,~~Officers ~~2010, we recorded $1.32 million~~ in ~~severance~~Compensation ~~taxes,~~Decisions ~~as compared to $422,786 for the same period in 2009. The increase in severance taxes in 2010 is mainly due to the Wyoming Assets in December 2009.~~

~~General~~The Compensation Committee receives and ~~Administrative~~reviews ~~Expenses~~recommendations of the Chief Executive Officer (and President, as applicable) relating to the general compensation structure and policies and programs for the Company and the salary and benefit levels for the executive officers.

~~Table~~Elements ~~No. 13~~of Compensation

~~Average~~The ~~G&A~~executive ~~per~~compensation ~~BOE~~program is comprised of three (3) principal components: base salaries, cash bonuses and stock options which are, collectively, designed to provide a combination of cash and equity–based compensation to effectively retain and motivate the executive officers to achieve the corporate goals and objectives. These elements contain both short-term incentives comprised of cash payments by way of base salaries and bonuses and long-term incentives by way of equity-based compensation. Other components of the executive compensation program include perquisites and other personal benefits. Each component of the executive compensation program is addressed separately below.

	Year ended		Year ended		Year ended
	December		December		December
	31, 2011		31, 2010		31, 2009
	($)		($)		($)
G&A expense before stock-based compensation		5,288,587		5,172,115		3,881,464
Average per boe		14.02		16.83		19.49
Stock-based compensation (“SBC”)		2,605,892		2,716,621		2,945,197
Average per boe		6.91		8.84		14.79
G&A		7,894,479		7,888,736		6,826,661
Average per boe		20.93		25.67		34.29

The amount for each element of the Company’s executive compensation program is determined based upon compensation levels provided by the Company’s competitors as well as upon the discretion of the Board, as described below. Each element of the Company’s executive compensation program contributes to an overall compensation package, which is designed to provide both short-term and long-term financial incentives to the executive officers and to thereby assist the Company to successfully implement its strategic plans. The Compensation Committee annually assesses how each element fits into the overall compensation package.

~~For~~Compensation ~~the~~Committee ~~year~~Interlocks ended December 31, 2011, we recorded G&A expense, excluding SBC of $5.29 million, as compared to $5.17 million for the same period in 2010. This increase during the year ended December 31, 2011 is due to higher accounting and ~~personnel~~Insider ~~expense,~~Participation ~~as compared to the same period in 2010.~~

~~For~~The ~~the~~Compensation ~~year~~Committee ~~ended~~is ~~December 31,~~comprised ~~2010, we recorded G&A expense, excluding SBC~~ of $5Messrs.17 ~~million~~Redfearn (Chair), ~~as compared to $3.88 million for the same period in 2009. This increase during the year ended December 31~~Bayley, ~~2010~~Gumma, isand ~~mainly~~Peneycad, ~~due~~none ~~to:~~of ~~(i) higher~~whom ~~personnel~~are ~~expense;~~employees ~~(ii) additional~~or ~~expenses~~current ~~related~~or toformer ~~preparation~~officers of the ~~Registration~~Company, ~~Statement;~~or ~~and~~had ~~(iii) higher~~any ~~accounting~~relationship ~~and~~with ~~legal~~the ~~services~~Company ~~associated~~required ~~with~~to ~~being~~be aotherwise ~~U.S.~~disclosed ~~and Canadian registered public company~~herein.

WeCompensation ~~use~~Governance ~~the grant date fair-value-based method of accounting for SBC and recognizes compensation cost using the straight-line method over the requisite service period for the entire award for stock options.~~

~~For~~The ~~the~~policies ~~year~~and ~~ended~~practices ~~December 31,~~adopted ~~2011,~~by ~~we recorded SBC in~~ the ~~amount~~Board ~~of $2.61 million, as compared~~ to ~~$2.72~~determine ~~million~~compensation ~~for~~of the ~~same~~Company’s ~~period~~executive inofficers ~~2010.~~and ~~The decrease~~directors inis ~~SBC~~described ~~for~~under “Statement ~~the~~of ~~year~~Executive ~~ended~~Compensation ~~December 31,~~– ~~2011~~Compensation asDiscussion ~~compared~~and toAnalysis” ~~the~~and ~~previous~~“Director ~~year~~Compensation” ~~is due to forfeiture of options during 2011~~respectively.

For the year ended December 31, 2010, we recorded SBC in the amount of $2.72 million, as compared to $2.95 million for the same period in 2009. The decrease in SBC for the year ended December 31, 2010 as compared to the previous year is due to the immediate recognition of expected future costs on cancelled options and additional grants during 2009.

~~Depreciation,~~The ~~Depletion~~Compensation Committee is comprised of four independent directors (being Messrs. Redfearn (Chair), Bayley, ~~Amortization~~Gumma and ~~Accretion~~Peneycad). ~~Expense~~The skills and experience of each Committee member in executive compensation that is relevant to his responsibilities and the making of decisions on the suitability of the Company’s compensation policies and practices are as follows:

Table No. 14


Robert L. Redfearn, Chair		Mr. Redfearn has a breadth of experience as a director and officer and has addressed compensation matters for companies’ executive officers.

Brian E. Bayley		Mr. Bayley has served as a director of numerous public companies and is currently a director of three (3) TSX listed companies, serving on the Compensation Committee of the board of directors of two (2) of those companies. Mr. Bayley has worked with compensation consultants and advisors in designing and implementing compensation programs for executive officers of public companies.

William Gumma		Mr. Gumma has a breadth of experience as a director and officer and has experience setting compensation at one other public company.

W. A. (Alf) Peneycad		Mr. Peneycad has been an independent businessman since 2006. Previously, Mr. Peneycad was Vice President, General Counsel and Chief Compliance Officer for Petro-Canada from 2003 to 2006, and Vice President, General Counsel and Corporate Secretary of Petro-Canada prior to 2003. Mr. Peneycad attended the Institute of Corporate Directors receiving an ICD.D designation. Mr. Peneycad is a director for several other Canadian public companies including Parex Resources Inc., Canadian Wireless Trust, and R Split III Corp. where he holds positions on the Audit, Finance, Corporate Governance and Human Resource Committees. Mr. Peneycad currently serves as the Chairman of the Corporate Governance and Compensation Committee for Parex Resources Inc.

~~Average~~The ~~DD&A~~Compensation ~~per~~Committee ~~BOE~~is responsible for determining the overall compensation strategy of the Company and administering the Company’s executive compensation program. As part of its mandate, the Compensation Committee approves the appointment and remuneration of the Company’s executive officers, including the Company’s Named Executive Officers identified in the Summary Compensation Table. The Compensation Committee is also responsible for reviewing the Company’s compensation policies and guidelines generally.

	Year ended		Year ended		Year ended
	December		December		December
	31, 2011		31, 2010		31, 2009
	($)		($)		($)
DD&A expense		3,507,669		3,190,905		3,351,753
Average per boe		9.30		10.38		16.83

Base Salaries

WeSalaries ~~follow~~for executive officers are reviewed annually based on corporate and personal performance and on individual levels of responsibility and are set to be competitive with industry levels. Salaries of the ~~full-cost~~executive ~~method~~officers are not determined based on benchmarks or a specific formula. Consideration is given to compensation packages that may be available to such executive officers from other employment opportunities and commercially available data on salaries disclosed by competitors and peers. The Compensation Committee submits its recommendation to the Board as to salary of ~~accounting~~the Chief Executive Officer and ~~all~~as ~~costs~~applicable, ~~included~~the inPresident. ~~proved~~The ~~properties~~Compensation Committee considers, and, ~~all~~if ~~future~~thought ~~development~~appropriate, ~~costs~~also submits to the Board recommendations for salaries for the other executive officers based ~~along~~on ~~with~~those ~~our~~salaries ~~total~~recommended ~~proved~~by ~~reserves~~the ~~determine~~Chief Executive Officer and as applicable, the ~~period’s~~President. ~~depletion~~As ~~cost~~stated above, base salaries are established to be competitive in order to attract and retain highly qualified and experienced individuals.

~~For~~Bonus ~~the~~and ~~year~~Bonus ~~ended~~Goals December 31, 2011, we recorded DD&A in the amount of $3.51 million, as compared to $3.19 million for the same period in 2010. The decrease in the DD&A rate per BOE for the year ended December 31, 2011, is due to an increase in our proved reserves at December 31, 2011 (15,923 Mboe in 2011, as compared to 13,717 Mboe in 2010).

~~For~~In 2010, the ~~year~~Company ~~ended~~adopted ~~December 31,~~a ~~2010,~~bonus weprogram ~~recorded~~including ~~DD&A~~annual inbonus goals which are to be reviewed annually by the ~~amount of~~Board $3and the Compensation Committee.19 ~~million~~There are two (2) categories of bonus goals each having its own weighted value: (i) operational goals, aswhich ~~compared~~focus toon ~~$3.35~~safety, ~~million~~production, ~~for~~proved ~~the~~reserved ~~same~~growth ~~period~~and incost ~~2009~~control and (ii) financial goals, which focus on controls, public reporting and market recognition. The ~~decrease~~operational ingoals ~~DD&A~~were ~~rate~~applied ~~per~~to ~~BOE~~Mr. Dobson ~~for~~and the financial ~~year~~goals ~~ended~~were ~~December~~applied to Mr. ~~31,~~Wimbish. ~~2010,~~Operational asand ~~compared~~financial goals were applied to ~~the~~Mr. Cottman. ~~same~~Provided ~~period~~that inbonus ~~2009~~goals were met, isexecutive ~~due~~officers towould anbe ~~increase~~entitled into ~~the~~a ~~total~~cash ~~proved~~bonus ~~reserves due~~of up to: twenty-five percent (i25%) ~~conversion~~ of the ~~probable~~individual’s ~~reserves~~base tosalary. ~~proved~~In ~~reserves~~the inevent ~~Wyoming~~that asbonus agoals ~~result~~were ofexceeded, ~~our~~the ~~successful~~Compensation ~~2010~~Committee ~~development~~may ~~program;~~at ~~and~~its discretion award an amount up to an additional twenty-five percent (ii25%) ~~positive~~of ~~results~~an ~~from~~individual’s ~~the~~base ~~CMD~~salary ~~project~~to inan ~~California~~executive officer. Additional bonus payments above fifty percent (50%) of base salary may be awarded

Change in Fair Value of Warrants and Options

The exercise price of certain warrants is denominated in Canadian dollar 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 year ended December 31, 2011, 5,354,800 warrants were exercised. At December 31, 2011, the fair value of the warrant liability was $235,134, with a gain of $1.06 million recognized in earnings during the year ended December 31, 2011. At December 31, 2010, the fair value of the outstanding warrants was $5.63 million, with a gain of $1.67 million recognized in earnings during the year ended December 31, 2010. At December 31, 2009, the fair value of the outstanding warrants was $7.38 million, with a charge of $3.52 million recognized in earnings during the year ended December 31, 2009. The fair value of the warrants is calculated using the Black-Scholes Model.

We continue to classify the remaining balance of warrants issued prior to September 4, 2009, as additional paid in capital warrants where the issue date fair value of the original equity classified warrant is greater than the fair value of the liability of the underlying warrant at the balance sheet date.

The exercise price of 1.5 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 999,998 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.

At December 31, 2011, the fair value of the options liability was $136,773 with a gain of $707,513 recognized in earnings during the year ended December 31, 2011. The fair value of the options is calculated using the Black-Scholes Model.

~~Reduction~~ at the discretion of ~~Carrying~~the ~~Value~~Compensation Committee for extraordinary effort and achievement. The Board exercises its discretion, upon recommendations received from the Compensation Committee, regarding the payment of ~~Proved~~bonuses ~~Oil~~based upon employee merit and ~~Natural~~the ~~Gas~~payment ~~Properties~~thereof, if any, is determined by the Board. In making these decisions and in exercising this discretion, the Board recognizes extraordinary efforts made to enhance the value of the Company’s asset base and any extraordinary success that has been achieved in implementing the Company’s business plans as a result of such efforts, including significant production and reserve additions.

~~Under~~For ~~the~~2011 ~~full cost method of accounting~~performance, ~~capitalized~~Mr. Dobson ~~oil~~received ~~and~~a ~~gas~~cash ~~property~~bonus ~~costs less accumulated depletion and net~~ of ~~deferred income taxes may not exceed an amount equal to the present value~~$50,000, ~~discounted~~or ~~at 10~~25%, of ~~estimated~~his ~~future~~base ~~net~~salary, ~~revenues~~for ~~from~~accomplishing ~~proved oil and gas reserves plus~~ the ~~cost~~operational ~~of unproved properties not subject to amortization (without regard to estimates of fair value) or estimated fair value, if lower of unproved properties that are subject to amortization~~goals. During ~~2009~~2011, none weof ~~reduced~~ the ~~carrying~~financial ~~values~~goals ofwere ~~certain~~achieved ~~of our proved oil~~ and ~~natural gas properties by $6~~Messrs.31 ~~million~~Cottman ~~due to full-cost ceiling limitations. This reduction was recognized in the first quarter of 2009~~ and ~~resulted~~Wimbish ~~from~~did anot ~~significant~~receive ~~decrease in the full cost ceiling~~bonuses. ~~The~~During ~~lower~~2012, ~~ceiling~~none ~~value~~of ~~largely resulted from~~ the ~~effects~~financial ofgoals ~~sharp~~were ~~declines~~achieved ~~in oil, natural gas,~~ and ~~NGL~~no ~~prices~~bonuses ~~compared to prices in previous periods. There~~ were ~~no impairments to our proved oil and natural gas properties during 2011 or 2010~~paid.

~~Interest~~Stock ~~Income and~~Option ~~Expense~~Plan

~~For~~The Compensation Committee also administers the ~~year~~incentive ~~ended~~stock option ~~December 31,~~plan ~~2011,~~that weis ~~recorded~~designed ~~interest~~to ~~expense~~provide ofa $5long-term incentive that is aligned with shareholder value.41 ~~million~~The ~~($906,569~~Compensation ~~non-cash)~~Committee ~~related~~makes recommendations to the ~~Senior~~ ~~Loan,~~Board asregarding ~~compared~~the number of options to ~~$7.11~~be ~~million~~granted ~~($3.46~~to ~~million~~each ~~non-cash)~~executive ~~for~~officer ~~the~~based ~~same~~on ~~period~~the level inof ~~2010~~responsibility ~~related~~and ~~to:~~experience ~~(i)~~ of the ~~Short-term~~individual, ~~Loan;~~the ~~(ii) and~~performance of the ~~Senior~~individual ~~Loan.~~and ~~The~~the ~~amortization~~number of ~~debt~~stock ~~issuance~~options ~~cost~~previously ~~related~~granted to the ~~Short-term~~individual. ~~Loan~~The Compensation Committee regularly reviews and ~~Senior~~where appropriate adjusts the number ~~Loan~~of isoptions ~~included~~granted into ~~interest~~executive ~~expense~~officers. ~~For~~The Compensation Committee sets the ~~year~~number ~~ended~~of ~~December 31,~~options ~~2009,~~as weappropriate ~~recorded~~designed ~~interest~~to ~~expense~~attract ofand ~~$228,131~~retain qualified and talented executive officers. ~~Interest~~Other ~~expense~~than ~~recorded~~set inforth ~~2009~~above, ~~was~~recommendations ~~due~~with respect to the payment ~~Short-term~~of ~~Loan~~bonuses are not based on a specific formula or benchmarks.

~~For~~Perquisites the year ended December 31, 2011, we recorded interest income in the amount of $44,595 as compared to $54,070 for the same period in 2010. For the year ended December 31, 2010, we recorded interest income in the amount of $54,070 as compared to $78,127 for the same period in 2009. Lower interest income for the years ended December 31, 2011 and ~~2010~~Other isComponents ~~due to a reduction in average interest-bearing cash balances and lower interest rates.~~

~~Income~~Other ~~Tax~~components of compensation include perquisites and personal benefits as determined by the Compensation Committee and recommended to the Board that are consistent with the overall compensation strategy. There is no specific formula or benchmarks for assessing how perquisites or personal benefits are utilized in the total compensation package. The Company does not provide any pension or retirement benefits to its executive officers.

~~At December 31,~~Severance 2011, we had estimated non capital losses of approximately $96.48 million available to reduce future taxable income. The benefit of these losses has not been recognized as a full valuation allowance has been taken. As a result of available deductions and ~~our~~Consulting ~~planned~~Payments capital expenditures for 2011, we do not expect to pay income taxes in 2011. At December 31, 2010, we had estimated non capital losses of approximately $76.6 million available to reduce future taxable income. At December 31, 2009, we had estimated non capital losses of approximately $54.90 million available to reduce future taxable income.

~~Foreign~~On ~~Currency~~January 24, ~~Exchange~~2012, the Board decided not to renew the employment contract of Dr. Sven Hagen, President, as a means to streamline management. Effective January 24, 2012, Dr. Hagen was no longer a director or officer of the Company or Legacy. In connection therewith, the Company and Dr. Hagen entered into a separation agreement dated January 24, 2012 pursuant to which the Company agreed to provide Dr. Hagen with the following severance benefits:

~~Our~~• ~~foreign~~Aggregate ~~exchange~~severance ~~expense is derived from our cash balances denominated in Canadian dollars. For the year ended December 31, 2011, we recorded a foreign exchange loss~~ of $26120,~~101. For the year ended December 31~~000, ~~2010,~~payable ~~we recorded a foreign exchange gain of $6,617. For the year ended December 31, 2009, the Company recorded a loss~~ in ~~foreign~~equal ~~exchange~~monthly ofinstallments ~~$385,626.~~during 2012;

•

Monthly reimbursement of health and dental insurance premiums in the amount of $1,414.26 through September 15, 2012; and

•

Accelerated vesting of 400,001 options, with an exercise price of Cdn $1.25 that would have otherwise vested on September 4, 2012.

Messrs. Cottman and Wimbish were employed by Legacy under employment agreements dated April 29, 2008, amended January 1, 2009 and December 12, 2011, respectively. Mr. Dobson was employed by Legacy under an employment contract dated January 1, 2012. These agreements specified base salaries of at least $200,000 per annum. These employment agreements included change of control provisions which entitled the executives to receive severance payments in connection with the Sale of Assets. The severance payments were equal to three (3) times the executive’s base salary in the case of Messrs. Cottman and Wimbish and two (2) times the executive’s base salary in the case of Mr. Dobson. The executives were also entitled to receive continued coverage, for a period of not more than two (2) years in all employer life, accidental death, medical and dental insurance plans.

~~Capital~~The ~~Expenditures~~following table sets forth the amounts paid to each of the Named Executive Officers as a result of a change of control upon consummation of the Sale of Assets.

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


Name	Severance⁽¹⁾ ($)		Other⁽²⁾ ($)		Total ($)
Clarence Cottman III		750,000		140,885		890,885
Jonathan S. Wimbish		660,000		119,932		779,932
D. Scott Dobson		440,000		51,923		491,923

~~Table~~Notes: ~~No. 15~~

~~Capital~~(1) ~~Expenditures~~The base salary for Messrs. Cottman, Wimbish, and Dobson was $250,000, $220,000 and $220,000 respectively, at the time of the Sale of Assets. The severance amount listed in the table above, represent (3) times such base salary for Messrs. Cottman and Wimbish and (2) times such base salary for Mr. Dobson.

	Incurred		Incurred		Incurred
	during		during		during
	December 31,		December 31,		December 31,
	2011		2010		2009
	($000s)		($000s)		($000s)
Property Costs
- Louisiana		19		68		827
- California		102		244		273
- Wyoming		128		361		27,040
Total Property Costs		249		673		28,140
Drilling/Workover		—		—		—
- Louisiana		144		49		3,809
- California		4,100		421		3,201
- Wyoming		11,770		9,647		—
Total Drilling/Workover		16,014		10,117		7,010
Facilities		—		—		—
- Louisiana		—		—		—
- California		560		253		2,790
- Wyoming		1,698		304		—
Total Facilities		2,258		556		2,790
Total Capital Expenditures (1)		18,521		11,347		37,940

(2)	The “Other” amount listed above represents the payment of tax-adjusted health, dental and life insurance benefits for Messrs. Cottman, Wimbish, and Dobson for the two (2) years, and unused vacation and sick days.

~~Note:~~Following the completion of the Sale of Assets, and in connection with the Winding Up, all employees of Legacy were terminated, and the Board of Directors approved retention of Messrs. Cottman and Wimbish as consultants to complete the dissolution and liquidation of Legacy and the Winding Up. Messrs. Cottman and Wimbish will be paid $20,833 and $18,333 per month respectively. One half of this monthly fee was paid from August 2012 through December 2012. The remaining half will be paid out in one lump sum upon the Winding Up of the Company. The consulting fees are equivalent to the base salary each was receiving prior to the Sale of Assets.

~~(1)~~Performance ~~The~~Graph ~~Louisiana properties were sold on December 1, 2011 (see ITEM 7—“MD&A—Liquidity and Capital Resources”).~~

~~Our~~The ~~drilling~~following ~~and~~graph ~~work-over~~compares ~~capital~~the ~~expenditures~~percentage ~~during~~change ~~2011~~in ~~were focused primarily on~~ the ~~Wyoming~~cumulative ~~Assets~~shareholder ~~and~~return ~~secondarily~~over on the ~~Pleito~~ ~~Creek~~last ~~Field~~three in(3) years ~~California.~~of ~~Additional~~the ~~capital~~(post-consolidated) Common ~~costs~~Shares ~~for~~of ~~oil~~the ~~and~~Company ~~gas~~(assuming ~~properties~~a ~~include~~Cdn$100 ~~legal~~investment ~~fees~~was ~~associated~~made ~~with~~on ~~the Wyoming properties~~January 1, ~~geological~~2010) and ~~geophysical~~the ~~data~~cumulative ~~acquisition,~~total ~~and~~return ~~lease~~of ~~acquisition~~the ~~and~~S&P/TSX ~~rental~~Composite ~~expenses~~Index.

LOGO

Capital expenditures associated with Louisiana properties during December 31, 2011, included the recompletion of the Jeffers well in Acadia Parish.

Capital expenditures associated with California properties during December 31, 2011, included the drilling and completion of two new wells and capital workovers on two existing wells.

Capital expenditures associated with Wyoming properties during December 31, 2011, included the drilling and completion of three wells at Hunt Field, three wells at Sheep Point Field and two wells at Willow Draw Field, facility expansion at Willow Draw Field and waterflood implementation at Ferguson Ranch Field. In addition, 2011 capital expenditures included: (i) completion costs associated with four wells at Willow Draw Field and one well at Ferguson Ranch Field which were drilled in the fourth quarter of 2010 and (ii) the implementation of polymer treatments at Willow Draw Field and (iii) facility expansion at Willow Draw Field and waterflood construction at Ferguson Ranch Field.

~~Additional~~ASSUMES ~~capital~~$100 ~~expenditures~~INVESTED ~~for~~ON ~~oil~~JANUARY ~~and~~1, ~~gas~~2010 ~~properties include geological and geophysical data acquisition and lease acquisition and rental expenses.~~

~~Our~~ASSUMES ~~drilling~~DIVIDEND ~~and~~REINVESTED work-over capital expenditures during 2010 were focused primarily on the Wyoming assets and secondarily on the Pleito Creek Field in California. The majority of expenditures in Wyoming were at the Ferguson Ranch Field for drilling. Expenditures in California were for a work-over performed at the Pleito Creek Field. Additional capital costs for oil and gas properties include legal fees associated with the acquisition of the Wyoming properties, geological and geophysical data acquisition, and lease acquisition and rental expenses.

~~During~~FISCAL ~~the~~YEAR ~~year~~END ~~ended~~DEC. ~~December~~ 31, ~~2010,~~2012 operational activity in Wyoming included: (i) ten new wells drilled (six on production at December 31, 2010 and four wells awaiting production); (ii) two work-overs; and (iii) three polymer treatments.

~~During~~(Expressed ~~2009, we spent $827,453~~ in ~~property~~Canadian ~~costs~~dollars) ~~required to generate, evaluate and acquire new projects in Louisiana. Property costs also include leasehold costs generated by our existing properties.~~

Drilling costs in Louisiana during the year ended December 31, 2009, included the completion of two additional producing wells, the Trahan and the Jeffers.


	12/31/2010		12/31/2011		12/31/2012
NiMin Energy Corp.		118		46		7	⁽¹⁾
S&P/TSX Composite		118		107		115
S&P/TSX Capped Energy		112		95		91

InNotes: ~~2009, we designed, implemented and initiated the CMD Project on our Pleito Creek Field located in Kern County, California.~~

~~During~~(1) ~~2009,~~This wereflects ~~completed~~ the ~~construction~~initial ofdistribution anto ~~injection~~Shareholders ~~facility~~paid ~~and it is currently operational for the CMD process. Five horizontal gravel packed wells and one injection well were drilled~~ in ~~conjunction~~October ~~with the CMD Project~~2012.

~~Significant~~As ~~Acquisition~~described above under the “Compensation Discussion and Analysis – Elements of Compensation”, the Company’s executive compensation program consists of a combination of cash and equity based compensation. When determining compensation, the Compensation Committee and the Board consider a number of factors, one of which is corporate performance. As a result there is no direct correlation between the trend shown in the performance graph and the trend in compensation to executive officers reported over the same period.

OnOption ~~December 17,~~Based ~~2009, we acquired the Wyoming Assets. The purchase price for the Wyoming Assets was $27.17 million of which $22 million was funded by~~Awards ~~a loan syndicated by a private lending company (“PLC”), and the remainder from our working capital. The effective date for the acquisition was December 1, 2009.~~

~~The~~For ~~following~~a ~~table~~description ~~details~~of the ~~purchase~~process ~~price~~that ~~allocation~~the ~~for~~Company uses to grant option-based awards to executive officers including the ~~Wyoming~~role ~~Assets:~~of the Compensation Committee, see the description under “Statement of Executive Compensation – Compensation Discussion and Analysis – Elements of Compensation”.

~~Table~~Summary ~~No. 16~~Compensation

~~Net~~Securities ~~Value~~legislation requires the disclosure of ~~Wyoming~~compensation received ~~Assets~~by each “Named Executive Officer” of the Company for the most recently completed financial year. “Named Executive Officer” is defined by the legislation to mean (i) each of Chief Executive Officer and Chief Financial Officer of the Company (ii) each of the Company’s three (3) most highly compensated executive officers, or the three (3) most highly compensated individuals acting in a similar capacity, other than the Chief Executive Officer and Chief Financial Officer, at the end of the most recently completed financial year and whose total compensation exceeds Cdn $150,000, and (iii) any additional individual for whom disclosure would have been provided under (ii) but for the fact that the individual was not serving as an executive officer of the Company at the end of the most recently completed financial year end of the Company.

Fair value of assets acquired:
Inventory	$	78,763
Equipment		50,000
Crude oil and natural gas properties		27,472,671
Asset retirement obligations		(428,326	)
Total net assets acquired	$	27,173,108

“Executive Officer” is defined by the legislation to mean (i) the chair, vice-chair or president of the Company, (ii) a vice-president of the Company in charge of a principal business unit, division or function including sales, finance or production, or (iii) an individual performing a policy-making function in respect of the Company.

The following table sets forth a summary of all compensation for services paid during the financial years ended December 31, 2012, ~~Capital~~2011 ~~Expenditure~~and ~~Budget~~2010 for Clarence Cottman III, Chief Executive Officer (“CEO”) (appointed in September 2009), Dr. E. Sven Hagen, former President (appointed in September 2009 and resigned January 24, 2012), Jonathan S. Wimbish, Chief Financial Officer (“CFO”) (appointed in September 2009), and D. Scott Dobson, former Chief Operating Officer (“COO”) (appointed Vice President of Operations in January 2011 and promoted to COO in September 2011) and resigned in August, 2012 (collectively, the “Named Executive Officers” for the years set out therein).

~~The~~SUMMARY ~~following~~COMPENSATION ~~table~~TABLE ~~provides information regarding our 2012 capital expenditure budget:~~

Table No. 17

Option-based awards
($)

Non-equity incentive
plan compensation
($)

Name and principal
position

Year

Salary
($)

Share-
based
awards
($)

Options
Granted⁽¹⁾⁽²⁾
($)

Replacement
Options ($)

Annual
incentive
plans⁽⁶⁾

Long
term
incentive
plans

Pension
value
($)

All other
compensation
($)⁽⁷⁾

Total
compensation
($)

Clarence Cottman III⁽³⁾⁽⁷⁾

2012

145,833

Nil

942,968

⁽⁸⁾

1,088,801

CEO

2011

250,154

Nil

16,648

266,802

2010

230,000

Nil

130,000

Nil

13,874

373,874

Dr. E. Sven Hagen⁽³⁾⁽⁴⁾

President

2012

2011
2010

Nil
240,155
230,000

Nil

Nil
Nil

Nil

Nil
Nil

Nil

Nil
95,000

Nil

Nil
Nil

Nil

Nil
Nil

132,726

14,868
13,314

⁽⁸⁾

132,726

255,023
338,314

Jonathan S. Wimbish⁽³⁾

CFO

2012

2011
2010

128,333

220,035
200,000

Nil

Nil
Nil

Nil

100,000

Nil

Nil
Nil

Nil

Nil
Nil

825,765

11,227
11,079

⁽⁸⁾

954,098

231,262
311,079

D. Scott Dobson⁽⁵⁾

2012

128,333

Nil

509,923

⁽⁸⁾

638,256

COO

2011

204,605

Nil

275,658

Nil

50,000

Nil

8,187

538,450

~~2012~~Notes: ~~Capital Expenditure Budget~~

	2012
	Capital
	Expenditures
	Budget
	($000s)
Drilling/Workovers
- California		11,120
- Wyoming		21,954
Total Drilling/Workovers		33,074
Facilities
- Wyoming		940
Total Facilities		940
Total Capital Budget		34,014

(1)

The value of the option-based awards represents the fair value, on the date of grant, of awards under the Stock Option Plan of the Company. The grant date fair value has been calculated using the Black-Scholes Model and reflects assumptions for risk-free interest rate, expected life, expected stock price volatility and expected dividend yield. (See Consolidated Financial Statements – Note 10.) All options were terminated in July 2012.

~~Highlights~~(2) ~~for~~The ~~the~~2011 ~~planned~~stock ~~2012~~option ~~Capital~~were ~~Expenditure~~awarded ~~Budget~~in ~~include:~~Canadian dollars and exercise prices are also in Canadian dollars. The $ figures are based on an exchange rate as at January 10, 2011 of Cdn $1.00 = $1.006, January 25, 2011 of Cdn $1.00 = $1.0053 and November 23, 2011 of Cdn $1.00 = $0.959. All options were terminated in July 2012.

•(3) ~~Eighteen~~Appointed ~~new~~as ~~wells~~a Named Executive Officer of the Company on September 4, 2009 in ~~Wyoming~~connection with completion of the Legacy Acquisition. Dr. Hagen resigned as an officer and director of the Company on January 24, 2012.

•(4) ~~Nine~~Dr. ~~workovers~~Hagen onalso ~~existing~~served ~~well~~as indirectors ~~Wyoming~~of the Company for the years listed. All of the compensation paid to Mr. Cottman and Dr. Hagen relate to their positions as Named Executive Officers and none of their compensation relates to their roles as directors.

•(5) ~~Eight~~Mr. ~~new~~Dobson ~~wells~~was named COO on September 1, 2011. Previously, Mr. Dobson served as Vice President of Operations. Mr. Dobson was named Vice President of Operations in ~~California~~January, 2011. He previously served as Operations Manager. Mr. Dobson resigned in August, 2012.

•(6) ~~Facility~~In ~~upgrades~~2012, Mr. Dobson was paid a cash bonus of $50,000 for achievement of the performance goals established under the 2011 bonus plan. In 2011, Messrs. Cottman, Hagen and Wimbish were each paid a cash bonus of $130,000, $95,000 and $100,000, respectively, for their extraordinary services in ~~Wyoming~~2010.

~~Subject~~(7) toIncludes ~~the~~perquisites ~~results~~and ofbenefits ~~the~~including ~~Strategic~~Company ~~Review,~~paid ~~and~~premiums ~~access~~for ~~to the capital markets~~health, wedental ~~plan~~and tolife ~~invest a total of $34~~insurance.~~01 million in capital expenditures during 2012.~~

~~All capital program expenditures are discretionary and are restricted by the Senior Loan including compliance with any covenants or receiving waivers therefrom~~ (~~see ITEM 7—“MD&A—Liquidity and Capital Resources”~~8). WeIncludes ~~review~~severance ~~all capital expenditure programs on a regular basis~~ and ~~adjust~~consulting ~~spending~~compensation ~~based on factors such~~ as changes in commodity prices, drilling and production results, and availability of funding. While we believe we have sufficient capital and liquidity to finance current operations through the next twelve months, our long-term liquidity depends on our ability to access the capital markets. There can be no assurance that we will be successful with any of these initiatives (See ITEM 1.A—“Risk Factors”). follows:

Liquidity and Capital Resources


	Severance		Consulting

Mr. Cottman	$	890,885	$	52,083
Dr. Hagen	$	132,726	$	Nil
Mr. Wimbish	$	779,932	$	45,832
Mr. Dobson	$	491,923	$	18,000

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

~~Table~~Incentive ~~No. 18~~Plan Awards

~~Cash~~The ~~Flows~~table below supplements the Summary Compensation Table by providing additional information about plan-based compensation for the financial year ended December 31, 2012.

	Year endedDecember 31,2011(1)($)			Year endedDecember 31,2010(1)($)			Year endedDecember 31,2009(1)($)
Cash flows (used in) provided by operating activities		(713,122	)		(984,623	)		(2,461,948	)
Cash flows (used in) investing activities		(17,094,341	)		(11,829,708	)		(37,947,610	)
Cash flows provided by financing activities		12,128,486			19,162,118			33,016,558
Increase (decrease) in cash and cash equivalents		(5,678,977	)		6,347,787			(7,393,000	)
Cash and cash equivalents at beginning of year		9,490,005			3,142,218			10,535,218
Cash and cash equivalents at end of year		3,811,028			9,490,005			3,142,218

Name

Grant
Date

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards

Estimated Future Payouts Under
Equity Incentive Plan Awards

All
Other
Stock
Awards:
Number
of
Shares
of Stock

All Other
Option
Awards:
Number of
Securities
Underlying
Options

Exercise
or Base
Price of
Option
Awards
Cdn $

Grant
Date
Fair
Value of
Stock
and
Option
Awards
$

Threshold
$

Target
$

Maximum
$

Threshold

Target

Maximum

Clarence Cottman, III

—

E. Sven Hagen

—

Jonathan S. Wimbish

—

D. Scott Dobson

—

~~Note:~~Outstanding Share-Based Awards and Option-Based Awards

~~(1)~~The ~~Audited~~following table sets forth information in respect of all share-based awards and option-based awards outstanding at the end of the financial year ended December 31, 2012 to the Named Executive Officers of the Company.

~~During~~Outstanding ~~the~~Share-Based ~~year~~Awards ~~ended December 31, 2011, our cash balance decreased by $5.68 million, primarily due to $18.52 million invested in oil~~ and ~~natural gas properties and equipment offset by the proceeds of $1 million received for the divestiture of oil and gas properties~~Option-Based inAwards Louisiana and a decrease in restrictive investments of $19,208. Cash flows from financing activities of $12.13 million were from the exercise of warrants and the sale of common shares during the period.

Option-based Awards

Share-based Awards

Name

Number of
securities
underlying
unexercised
options⁽⁶⁾
(#)

Option
exercise
price
Cdn ($)

Option expiration
date⁽⁶⁾

Value of
unexercised
in-the-money
options⁽¹⁾
($)

Number of
shares or units
of shares that
have not
vested
(#)

Market or
payout value
of share-based
awards that
have not
vested
($)

Clarence Cottman III⁽²⁾⁽⁵⁾
CEO

Nil

September 4, 2019

—

Nil

Dr. E. Sven Hagen^(2)(3)(5)
President

Nil

December 31, 2012

—

Nil

Jonathan S. Wimbish⁽²⁾
CFO

Nil

September 4, 2019

—

Nil

D. Scott Dobson⁽⁴⁾
COO

Nil

September 4, 2019

January 10, 2016

January 25, 2016

November 23, 2016

—

Nil

~~Effective~~Notes: 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.

~~During~~(1) ~~the~~The ~~year~~closing ~~ended~~market ~~December 31,~~price ~~2010,~~of ~~our cash balance increased by $6.35 million, primarily due to $10.07 million from~~ the ~~sale of~~ Common Shares ~~and~~on ~~net~~December ~~proceeds~~27, ~~of $31.11 million from long-term borrowings~~2012, ~~$11.83~~being ~~million~~the oflast ~~investment~~trading day in ~~oil~~the ~~and~~2012 ~~natural~~calendar ~~gas~~year, ~~properties~~was ~~and~~Cdn $220.~~02 million of short-term debt repayments.~~ 10

On(2) ~~June 30, 2010,~~Appointed weas ~~entered~~a ~~into~~Named ~~the~~Executive ~~Senior~~Officer ~~Loan in the amount~~ of ~~$36 million from~~ the ~~Lender.~~Company Weon ~~borrowed~~September ~~$36 million subject to an original issue discount of 7.5%~~4, a2009 ~~commitment~~in ~~fee~~connection ofwith ~~1%,~~completion ~~a placement fee~~ of ~~1% and a transaction fee of 3%. At our request and subject to approval by~~ the ~~Lender,~~Legacy ~~the Senior Loan availability may be increased by $39 million, up to $75 million, to provide additional development capital~~Acquisition.

~~The~~(3) ~~Senior Loan has a 12~~Dr.5% ~~fixed~~Hagen ~~interest~~resigned ~~rate~~as President and a ~~term~~director ofon ~~five~~January ~~years. Interest is payable quarterly beginning September 30~~24, ~~2010. Principal is payable quarterly beginning June 29,~~ 2012 ~~in the following annual amounts:~~ .

~~Table~~(4) 19Mr. Dobson was named COO on September 1, 2011. Previously, Mr. Dobson served as Vice President of Operations. Mr. Dobson was named Vice President of Operations in January, 2011. He previously served as Operations Manager. Mr. Dobson resigned in August, 2012.

Senior Loan Principal Repayments

2012	$	4,050,000
2013		5,400,000
2014		6,750,000
2015		19,800,000
	$	36,000,000

The Senior Loan is secured by all of our assets. The loan may be repaid after June 30, 2013 without a pre-payment penalty or make whole provision. Prior to June 30, 2012, in the event of prepayment, we will be required to pay a make whole provision compensating the Lender for all unpaid interest. From July 1, 2012 to June 30, 2013, a 2% prepayment premium will be assessed on any outstanding principal being repaid in excess of the scheduled repayments noted above.

We(5) ~~used~~Mr. ~~the~~Cottman ~~net proceeds of the Senior Loan to repay the existing Short-term Loan of $22 million~~ and ~~the remaining proceeds are to be utilized for the capital expenditure program at the Company’s properties in Wyoming and California~~Dr. WeHagen ~~are~~also ~~required~~served toas ~~meet~~directors ~~certain financial based covenants under the terms~~ of ~~this facility including: (i) total capital expenditures were limited to an amount no greater than $12 million from~~ the ~~date~~Company ofduring the ~~loan~~financial ~~until December 31, 2010; (ii) total capital expenditures are limited to an amount no greater than $25 million for the~~ year ~~ended~~ ~~December 31, 2011. (iii) total capital expenditures are limited to an amount no greater than $25 million for the year~~ ended December 31, 2012. ~~The~~All ~~facility~~of ~~has~~the acompensation ~~material~~paid ~~adverse change clause relating~~ to ~~financial~~Mr. ~~stability~~Cottman and ~~for~~ ~~which~~Dr. ~~the~~Hagen ~~lender~~relate ~~can~~to ~~ultimately~~their ~~demand~~positions ~~immediate~~as ~~repayment~~Named inExecutive ~~the~~Officers ~~event~~and none of ~~default.~~their Atcompensation ~~December 31,~~relates ~~2011,~~to wetheir ~~were~~roles inas ~~compliance with all financial based covenants~~directors.

On(6) ~~May 16,~~All ~~2010,~~options wewere ~~completed~~terminated ~~the~~in ~~Short~~July ~~Form Prospectus Offering of Common Shares at an offering price of CDN $1~~2012.~~25 per share. The Company issued 9,200,000 Common Shares for aggregate gross proceeds of CDN $11,500,000 or USD $11,018,492, net of CDN $989,260 or USD $947,840 of offering costs.~~

~~During~~Incentive ~~the~~Plan ~~year~~Awards ~~ended December 31,~~– ~~2009,~~Value ~~our~~Vested ~~cash~~or ~~balance~~Earned ~~declined~~During ~~by $7.39 million primarily due to~~ the ~~acquisition~~Year of the Wyoming Assets for $27.17 million funded partially from the Short-term Loan of $22 million, and $10.85 million invested in oil and natural gas properties and equipment and $11.02 million received from the issuance of Common Shares. On December 17, 2009, we entered into the Short-term Loan with a private lending company, whereby the PLC syndicated a loan to the Company in an aggregate amount of US$5,500,000 and Cdn$17,534,550 (US$ 16,713,738) for the acquisition of the Wyoming Assets. Concurrent with the advances, the Company issued 2,566,666 Common Shares at an attributed price of Cdn $1.15 (US$1.07) per share which was recorded as prepaid interest expense, to be amortized over the term of the loan. We also paid a structuring fee in cash in the amount of US$120,000. Interest on the outstanding principal amount was calculated daily and compounded monthly and payable on a monthly basis at 12% per annum. The principal amount, together with all accrued unpaid interest was due December 17, 2010. The loan was able to be repaid at any time without pre-payment penalty. The loan was secured by a fixed and floating charge debenture which provided the PLC a security interest in all of our present and after-acquired real and personal property. The PLC loan was paid in full on June 30, 2010 from borrowings under the Senior Loan.

InThe ~~September~~following ~~2009,~~table wesets ~~completed~~forth ainformation ~~public~~in ~~offering~~respect of ~~Units,~~the ~~each~~value ~~consisting~~vested ofor ~~one~~earned ~~Common~~during ~~Share~~the ~~and one warrant to acquire one Common Share for an offering price of Cdn $1.25 per Unit (USD $1.13). The~~ Company’s ~~issued~~financial ~~11,324,900~~year ~~Units~~ended ~~for aggregate gross proceeds of Cdn $14~~December 31,~~156,125~~ or2012 ~~USD $13,078,573, net~~ of ~~Cdn~~option-based $2awards,~~265,671~~ ~~or USD $2,085,777 of offering costs. The Warrants had a term of two years from the date of issuance, and each Warrant was exercisable into one common~~ share-based atawards ~~a price of CDN $1.55 per share. NiMin issued 11.44 million of these warrants~~ and non-equity ~~5.35 million~~incentive ~~were~~plan ~~exercised~~compensation ~~during the two year term~~ for ~~gross~~Named ~~proceeds of~~Executive ~~Cdn$8.3~~Officers ~~million. The remaining 6.09 million warrants expired without being exercised. Offering costs include a fee~~ of ~~4.5% on Cdn $3,273,625 of Units sold by a sub-agent, payable in 117,851 Units issued on~~ the ~~same terms and conditions as the Units issued pursuant to this offering~~Company.

~~Since~~Value ~~inception,~~Vested weor ~~have~~Earned ~~financed our operations from public and private sales~~ of ~~equity~~Incentive ~~and~~Plan ~~debt,~~Awards and revenues from sales of oil and gas reserves. While we believe we have sufficient capital and liquidity to finance current operations through the next twelve months, our long-term liquidity depends on our ability to access the capital markets. Our ability to develop proved reserves is contingent upon our cash flow from operations and obtaining adequate financing. However, if we are unable to obtain financing and do not believe we can develop these reserves pursuant to our plan, then these reserves will be reclassified to probable (See ITEM 1.A – “Risk Factors”).

~~Research~~during ~~and development,~~the ~~patents~~Financial ~~and~~Year ~~licenses~~Ended December 31, ~~etc.~~2012

In December, 2010, the U.S. Patent and Trademark Office issued a patent to NiMin for its CMD process for enhanced oil recovery. As reported in the third quarter of 2010, our CMD technology has been successful in significantly increasing production in California’s Pleito Creek Field. Our patent covers the process of the injection of oxygen and water as foam to create CO2 and steam in the reservoir through wet combustion. The CO2 and steam increase reservoir pressure and significantly reduce oil viscosity making the oil substantially more mobile allowing it to flow rapidly into production wells. The CMD process is currently being used on the Santa Margarita Formation at the Pleito Creek Field.


Name	Option-based awards – Value vested during the year ($)	Share -based awards – Value vested during the year ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Clarence Cottman III⁽¹⁾⁽³⁾ CEO	Nil	Nil	Nil
Dr. E. Sven Hagen⁽¹⁾⁽³⁾ President	Nil	Nil	Nil
Jonathan S. Wimbish⁽¹⁾ CFO	Nil	Nil	Nil
D. Scott Dobson⁽²⁾ COO	Nil	Nil	Nil

Notes:

(1)	Appointed as a Named Executive Officer of the Company on September 4, 2009 in connection with completion of the Legacy Acquisition.

(2)	Mr. Dobson was named COO on September 1, 2011. Previously, Mr. Dobson served as Vice President of Operations. Mr. Dobson was named Vice President of Operations in January, 2011. He previously served as Operations Manager. Mr. Dobson resigned in August, 2012.

(3)	Mr. Cottman and Dr. Hagen also served as directors of the Company during the financial year ended December 31, 2012. All of the compensation paid to Mr. Cottman and Dr. Hagen relate to their positions as Named Executive Officers and none of their compensation relates to their roles as directors.

None of the Named Executive Officers exercised any vested option-based awards during 2012 and all options were terminated in July 2012.

Pension Plan Benefits

Defined Benefit Plans Table

The Company does not have a pension or retirement plan.

Deferred Compensation Plans

The Company does not have a deferred compensation plan.

Director Compensation

The Compensation Committee reviews and makes recommendations to the Board with respect to compensation of the Board and committee members. Directors who are employees of the Company receive no compensation for service as members of the Board. Directors who are not also employees (“Non-Employee Directors”) are entitled to receive compensation.

From time to time Non-Employee Directors are also granted options. Pursuant to our policies, we also reimburse our directors for reasonable expenses incurred in the performance of their duties, including reimbursement for air travel and hotel expenses.

~~Trend~~Director ~~information~~Compensation Table

~~Over~~The ~~the~~following ~~past~~table ~~few~~sets ~~years,~~forth ~~the~~information ~~prices for crude oil and natural gas have been increasingly volatile and we expect this volatility to continue. Prolonged increases or decreases~~ in ~~the~~respect ~~price~~ of ~~oil~~all ~~could significantly~~amounts ~~impact~~of ~~us.~~compensation ~~There~~provided ~~is a strong relationship between energy commodity prices and access~~ to ~~both~~the ~~equipment~~directors ~~and~~during ~~personnel. High commodity prices also affect~~ the ~~cost~~Company’s ~~structure~~financial ofyear ~~services~~ended ~~which may impact our ability to accomplish drilling~~December 31, ~~completion~~ ~~and equipping goals~~2012.

Off-Balance Sheet Arrangements

Name⁽¹⁾

Fees earned
($)

Share-
based
awards
($)

Option-
based
awards
($)

Non-equity
incentive
plan
compensation
($)

Pension
value
($)

All other
compensation
($)

Total
($)

Brian E. Bayley⁽²⁾

85,000

—

Nil

85,000

W. A. (Alf) Peneycad⁽²⁾

85,000

—

Nil

85,000

Robert L. Redfearn⁽²⁾

85,000

—

Nil

85,000

William Gumma⁽³⁾

85,000

—

Nil

85,000

WeNotes: ~~had no off-balance sheet arrangements during the years ended December 31, 2011, 2010 and 2009 except for the office lease obligations noted below.~~

~~Tabular~~(1) ~~disclosure~~Compensation for Mr. Cottman, CEO and a director of ~~contractual~~the ~~obligations~~Company and Dr. Hagen, President and a director of the Company during the Company’s financial year ended December 31, 2012, has been previously provided under “Summary Compensation”.

~~Table~~(2) ~~No. 20~~Appointed as a director of the Company on September 4, 2009 in connection with the completion of the Legacy Acquisition.

~~Contractual~~(3) ~~Obligations~~Elected as a director of ~~December 31~~the Company on June 24, 2011 .

	Total($)		Less than 1year($)		1-3 years($)		4 -5 years($)		More than 5years($)
Accounts payable and accrued liabilities		5,005,515		5,005,515		—		—		—
Commodity derivative liability		976,929		976,929		—		—		—
Office lease obligations		155,808		117,778		37,230		800		—
Interest payable on long-term debt		12,304,459		4,372,746		6,760,480		1,171,233		—
Long-term debt (principal)		36,000,000		4,050,000		12,150,000		19,800,000		—
Total contractual obligations		54,442,711		14,522,968		18,947,710		20,972,033		—

Outstanding Share-Based Awards and Option-Based Awards

~~Critical~~The ~~Accounting~~following ~~Policies~~table sets forth information in respect of all share-based awards and ~~Estimates~~option-based awards outstanding at the end of the financial year ended December 31, 2012 to the directors of the Company.

InOutstanding ~~preparing~~Share-Based ~~financial~~Awards ~~statements, we make informed judgments~~ and ~~estimates~~Option-Based ~~that~~Awards ~~affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period.~~

The amounts recorded for depletion and depreciation of property and equipment, the accretion expense associated with the asset retirement obligation and the cost recovery assessments for property and equipment are based on estimates of proved reserves, production and discount rates, oil and natural gas prices, future costs and other relevant assumptions. The amount recorded for the unrealized gain or loss on financial instruments is based on estimates of future commodity prices and volatility. The recognition of amounts in relation to stock-based compensation requires estimates related to valuation of stock options at the ~~time~~end of ~~issuance or modification. Future taxes require estimates as to~~ the ~~realization~~Financial ofYear ~~future~~Ended ~~tax assets and the timing of reversal of tax assets and liabilities. By their nature~~December 31, ~~these estimates~~2012 ~~are subject to measurement uncertainty and the effect on the consolidated financial statements from changes in such estimates in future years could be significant.~~

On an ongoing basis, we review estimates, including those related to the impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

Option-based Awards

Share-based Awards

Name⁽⁴⁾

Number of
securities
underlying
unexercised
options⁽⁵⁾
(#)

Option
exercise
price
(Cdn$)

Option expiration
date⁽⁵⁾

Value of unexercised
in-the-money options
(Cdn $)⁽¹⁾

Number of
shares or units
of shares that
have not vested
(#)

Market or
payout value of
share-based
awards that
have not vested
($)

Brian E. Bayley⁽²⁾

Nil

September 4, 2019

January 25, 2016

—

Nil

W. A. (Alf) Peneycad⁽²⁾

Nil

September 4, 2019

January 25, 2016

—

Nil

Robert L. Redfearn⁽²⁾

Nil

September 4, 2019

January 25, 2016

—

Nil

William Gumma⁽³⁾

Nil

December 1, 2019

June 24, 2016

—

Nil

~~Crude~~Notes: ~~Oil and Natural Gas Properties~~

We(1) ~~account~~The ~~for~~closing ~~our~~market ~~crude~~price ~~oil~~of ~~and natural gas producing activities under~~ the ~~full-cost~~Common ~~method~~Shares ofon ~~accounting.~~December ~~Accordingly~~27, ~~all~~2012, ~~costs~~being ~~incurred in~~ the ~~acquisition,~~ ~~exploration,~~last ~~and~~trading ~~development~~day of ~~proved crude oil and natural gas properties, including~~ the ~~costs~~2012 ofcalendar ~~abandoned properties~~year, ~~dry~~was ~~holes,~~Cdn ~~geological and geophysical costs, and annual lease rentals, are capitalized~~$0. ~~All general corporate costs are expensed as incurred~~10. Sales or other dispositions of crude oil and natural gas properties are accounted for as adjustments to capitalized costs with no gain or loss recorded unless such sale would alter the relationship between pool cost and reserves.

(2)	Appointed as a director of the Company on September 4, 2009 in connection with the completion of the Legacy Acquisition.

(3)	Elected as a director of the Company on June 24, 2011.

(4)	Compensation for Mr. Cottman, CEO and a director of the Company and Dr. Hagen, President and a director of the Company during the Company’s financial year ended December 31, 2012, has been previously provided under “Summary Compensation”.

(5)	All options were terminated in July 2012.

~~Depletion~~Incentive ~~and~~Plan ~~Depreciation~~Awards – Value Vested or Earned During the Year

~~Depletion~~The offollowing ~~crude~~table ~~oil~~sets ~~and~~forth ~~natural~~information ~~gas~~in ~~properties~~respect isof ~~computed under~~ the ~~unit-of-production~~value ~~method~~vested ~~where~~or byearned ~~the~~during ~~ratio~~Nimin’s offinancial ~~production~~year toended ~~proved reserves~~December 31, ~~after~~2012 ~~royalties, determines the proportion~~ of ~~depletable costs to be expensed in each period. Costs associated with unevaluated properties are excluded from the full~~option-~~cost~~based ~~pool~~awards, until a determination is made whether proved reserves can be attributable to the related properties. Unevaluated properties are evaluated at least annually to determine whether the costs incurred should be classified to the fullshare-~~cost~~based ~~pool~~awards and ~~thereby~~non-equity ~~subject~~incentive toplan ~~amortization.~~compensation Afor ~~significant~~directors ~~reduction~~of inthe ~~our proved reserves may result in an accelerated depletion rate~~Company.

~~Reserves are determined by an independent reserves engineering firm. Volumes are converted to equivalent units using the ratio of one~~Value ~~barrel~~Vested ofor ~~oil~~Earned ~~to six thousand cubic feet~~ of ~~natural~~Incentive ~~gas.~~Plan Awards

~~Depreciation~~during ~~of equipment is provided for on a straight-line basis over~~ the ~~useful life~~Financial (5Year toEnded 10December 31, ~~years)~~2012 ~~of the asset.~~

Impairment of oil and gas properties


Name⁽³⁾	Option-based awards – Value vested during the year ($)	Share-based awards – Value vested during the year ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Brian E. Bayley⁽¹⁾	Nil	Nil	Nil
W. A. (Alf) Peneycad⁽¹⁾	Nil	Nil	Nil
Robert L. Redfearn⁽¹⁾	Nil	Nil	Nil
William Gumma⁽²⁾	Nil	Nil	Nil

WeNotes: perform a full-cost ceiling test on proved crude oil and natural gas properties in which the capitalized costs are not allowed to exceed their related estimated future net revenues of proved reserves discounted at 10%, net of tax considerations. Costs associated with unevaluated properties are excluded from the full-cost pool until a determination is made whether proved reserves can be attributable to the related properties. Unevaluated properties are evaluated at least annually to determine whether the costs incurred should be classified to the full-cost pool and thereby subject to amortization. A significant reduction in our proved reserves may result in a full cost ceiling limitation.

~~Equipment~~(1) isAppointed ~~reviewed~~director ~~for~~of ~~impairment whenever events or changes in circumstances indicate such impairment may have occurred. An impairment is recognized when~~ the ~~estimated~~Company ~~undiscounted~~on ~~future~~September ~~net~~4, ~~cash~~2009 ~~flows~~in ofconnection anwith ~~asset are less than its carrying value. If an impairment occurs,~~ the ~~carrying~~completion ~~value~~ of the ~~impaired~~Legacy ~~asset is reduced to fair value~~Acquisition.

~~Asset~~(2) ~~Retirement~~Elected ~~Obligations~~as a director of the Company on June 24, 2011.

~~We recognize~~(3) aCompensation ~~liability~~ for ~~the~~Mr. ~~present~~Cottman, ~~value~~CEO ofand ~~all~~a ~~legal~~director ~~obligations~~of ~~associated with~~ the ~~retirement~~Company ~~of tangible, long-lived assets~~ and ~~capitalizes~~Dr. anHagen, ~~equal~~formerly ~~amount~~a asPresident and a ~~cost~~director of the ~~asset.~~Company ~~The~~during ~~cost associated with~~ the ~~abandonment~~Company’s ~~obligation~~financial ~~is included~~year inended ~~the~~December ~~computation of depreciation~~31, ~~depletion~~2012, ~~amortization~~has ~~and~~been ~~accretion.~~previously ~~The~~provided ~~liability~~under ~~accretes until we settle the obligation. We use a credit-adjusted risk-free interest rate in its calculation of asset retirement obligations (~~“~~ARO~~Summary Compensation”).

~~Revisions~~Securities toAuthorized ~~the~~for ~~original~~Issuance ~~estimated~~Under ~~liability~~Equity ~~would~~Compensation ~~result~~Plans in an increase or decrease to the ARO liability and related capitalized costs. Actual costs incurred upon settlement of the asset retirement obligation are charged against the obligation to the extent of the liability recorded.

~~Estimates~~The ~~for~~following ~~future~~table ~~abandonment~~sets ~~and~~forth ~~reclamation~~information ~~costs~~as ~~are~~at ~~based~~December 31, on2012 ~~historical~~with ~~costs~~respect to ~~abandon~~the ~~and~~Company’s ~~reclaim~~compensation ~~similar~~plans ~~sites,~~under ~~taking~~which ~~into~~equity ~~consideration~~securities ~~current~~of ~~costs.~~the ~~The~~Company ~~liability~~are isauthorized ~~based~~for ~~on our net interest in the respective sites~~issuance.

~~Income~~Plan ~~Tax~~Category Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights Weighted-averageexercise price ofoutstanding options,warrants and rights ($) Number of securitiesremaining availablefor future issuanceunder equitycompensation plans(excluding securitiesreflected in column(a)) Equity compensation plans approved by securityholders Nil Nil Nil Equity compensation plans not approved by securityholders Nil Nil Nil Total Nil Nil Nil

~~Deferred~~Stock ~~tax~~Option ~~assets~~Plan and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in enacted tax rates is recognized in income in the period that includes the enactment date.

WeAs doof ~~not have~~December 31, ~~any~~2012, ~~unrecognized~~no ~~tax~~options ~~benefits~~issued ~~other~~pursuant ~~than~~to ~~those~~the ~~for~~Stock ~~which~~Option aPlan ~~valuation~~were ~~allowance has been provided thereon~~outstanding. ~~Our~~The ~~policy~~Company isdoes ~~that~~not wehave ~~recognize interest and penalties accrued on~~ any ~~unrecognized~~intention ~~tax benefits as a component~~ of ~~income~~issuing ~~tax expense. We did not have~~ any ~~accrued~~further ~~interest~~options orpursuant ~~penalties~~to ~~associated~~the ~~with~~Stock ~~any~~Option ~~unrecognized~~Plan and ~~tax~~NiMin ~~benefits,~~has ~~nor~~delisted ~~were~~from ~~any~~TSX ~~tax-related~~and ~~interest~~currently ~~expense~~trades ~~recognized~~on ~~during 2011, 2010 or 2009~~NEX.

On July 16, 2009, management of “NiMin” obtained shareholder approval for the adoption of the Stock Option Plan in compliance with the rules and regulations of the TSX. A copy of the Stock Option Plan is attached to the Management Information Circular of the Company, dated June 17, 2009, available on the internet under the Company’s SEDAR profile at www.sedar.com.

The Stock Option Plan was designed to advance the interests of “NiMin” by encouraging employees, officers, directors and consultants to have equity participation in “NiMin” through the acquisition of Common Shares. Options granted under the Stock Option Plan may

~~Commodity~~ be “Incentive Stock Options” or “Non Qualified Stock Options”. An “Incentive Stock Option” is an option that satisfies the requirements of, and ~~Derivative~~contains ~~Instruments~~the limitations and restrictions set forth in, Section 422 of the United States Internal Revenue Code of 1986, as amended (“Code”) and the regulations thereunder, and a “Non Qualified Stock Option” is an option which is not an Incentive Stock Option. Pursuant to the Stock Option Plan, Common Shares representing fifteen percent (15%) of the issued and outstanding Common Shares of the Company, from time to time, will be reserved for issuance under the Stock Option Plan. The maximum number of Common Shares which may be issued by the Company pursuant to the exercise of Incentive Stock Options shall be limited to that number of Common Shares as is equal to fifteen percent (15%) of the issued and outstanding Common Shares from time to time.

~~Derivative~~Under ~~instruments~~the ~~are~~Stock ~~recognized~~Option asPlan, ~~either~~stock ~~assets~~options ormay ~~liabilities~~be ingranted ~~the~~to ~~balance~~employees, ~~sheet~~officers, atdirectors ~~fair~~and ~~value~~consultants of the Company and designated affiliates. ~~The~~However, ~~accounting~~Incentive ~~for~~Stock ~~changes~~Options inmay only be granted to employees of the ~~fair~~Company ~~value~~(including officers) or its subsidiaries. In determining the terms of ~~derivative~~each ~~instruments~~grant ~~depends~~of onstock ~~their~~options, ~~intended~~consideration is given to ~~use~~the participant’s present and ~~resulting~~potential ~~hedge~~contribution ~~designation~~to the success of the Company. ~~For~~The ~~derivative~~exercise ~~instruments~~price ~~designated~~per asCommon ~~hedges,~~Share is not to be less than the ~~changes~~market inprice ~~fair~~of ~~value~~the ~~are~~Common ~~recorded~~Shares at the time of the grant (one-hundred and ten percent (110%) of market price in the ~~balance~~case ~~sheet~~of asan Incentive Stock Option granted to a ~~component~~person ofwho ~~accumulated~~owns ~~other~~more ~~comprehensive~~than ~~income~~ten percent (~~loss~~10%) of the issued and outstanding Common Shares). ~~Changes~~If inthe market price is determined by the Board to be less than the “fair market value” of the Common Shares on the date of option, the Board may increase the exercise price for such option to an amount deemed to satisfy the minimum exercise price requirements in the Stock Option Plan. The exercise period ~~derivative~~for ~~instruments~~each stock option is not ~~designated~~to asbe ~~hedges~~more ~~are~~than ~~recorded~~ten asyears (five (5) years in the case of an Incentive Stock Option granted to a ~~gain~~person orwho ~~loss~~owns onmore ~~derivative~~than ~~contracts~~ten inpercent (10%) of the ~~consolidated~~issued ~~statements~~and ofoutstanding ~~operations~~Common Shares). WeOptions domay ~~not~~be ~~designate~~granted subject ~~its~~to ~~derivative~~vesting ~~financial~~requirements. ~~instruments~~The asmaximum ~~hedging~~number ~~instruments~~of Common Shares issuable to: (i) insiders pursuant to the Stock Option Plan and any other security based compensation arrangements of the Company is limited to ten percent (10%) of the total number of Common Shares then outstanding; and (ii) the maximum number of Common Shares issuable to insiders, aswithin aany ~~result~~one (1) year period, pursuant to the Stock Option Plan and any other security based compensation arrangements of ~~recognizes~~the Company is limited to ten percent (10%) of the ~~change~~total innumber aof ~~derivative’s~~Common Shares then outstanding. The maximum aggregate fair market value ~~currently~~of Common Shares, with respect to which Incentive Stock Options are first exercisable by an employee in any ~~earnings~~calendar year, cannot exceed $100,000.

~~Fair~~Except ~~value~~as ~~measurements~~otherwise set out below, the Board shall seek shareholder and regulatory approval for any amendments to the Stock Option Plan. The Board may discontinue the Stock Option Plan at any time without first obtaining shareholder approval, provided that, without the consent of a participant, such discontinuance may not in any manner adversely affect the participant’s rights under any option granted under the Stock Option Plan. The Board may, subject to receipt of requisite regulatory approval, where required, and without further shareholder approval, in its sole discretion make the following amendments or modifications to the Stock Option Plan and to any outstanding option granted pursuant to the Stock Option Plan:

We(a) ~~categorize~~curing ~~our~~any ~~assets~~ambiguity, ~~and~~error ~~liabilities~~or ~~that~~omission ~~are~~in ~~measured~~the atStock ~~fair~~Option ~~value,~~Plan ~~based~~or oncorrecting ~~the~~or ~~priority~~supplementing ofany ~~the~~provision ~~inputs~~of to the ~~valuation~~Stock ~~techniques.~~Option ~~The~~Plan ~~three levels~~that ofis ~~the~~inconsistent ~~fair~~with ~~value~~any ~~measurement~~other ~~hierarchy~~provision ~~are~~of asthe ~~follows:~~Stock Option Plan;

~~Level~~(b) 1:reflecting ~~Unadjusted~~changes ~~quoted~~to ~~prices~~applicable insecurities ~~active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.~~ laws;

~~Level~~(c) 2:changing ~~Quoted~~the ~~prices~~termination inprovisions ~~markets~~of ~~that are~~an ~~not~~option ~~active,~~ or ~~inputs~~the ~~which~~Stock ~~are~~Option ~~observable,~~Plan ~~either~~which ~~directly~~do ornot ~~indirectly,~~entail ~~for~~an ~~substantially~~extension ~~the~~beyond ~~full term of~~ the ~~asset~~original orexpiry ~~liability.~~ date;

~~Level~~(d) 3:including ~~Measured~~the ~~based~~addition onof ~~prices~~a orcashless ~~valuation~~exercise ~~models~~feature, ~~that~~payable ~~required~~in ~~inputs~~cash ~~that~~or ~~are~~securities, ~~both~~which ~~significant~~provides tofor ~~the~~a ~~fair~~full ~~value~~deduction ~~measurement~~of ~~and~~the ~~less~~number ~~observable~~of ~~for~~underlying ~~objective~~securities ~~sources~~from ~~(i.e.~~the ~~supported~~Stock byOption ~~little~~Plan ~~or no market activity).~~ reserve;

~~Financial~~(e) ~~assets~~ensuring ~~and liabilities are classified based on the lowest level of input~~ that ~~is significant to~~ the ~~fair~~options ~~value measurement.~~granted ~~Our~~under ~~assessment of~~ the ~~significance~~Stock ofOption aPlan ~~particular~~will ~~input~~comply towith ~~the~~any ~~fair~~provisions ~~value~~respecting ~~measurement~~income ~~requires~~tax ~~judgment, which may affect the valuation of the fair value of assets~~ and ~~liabilities~~other ~~and~~laws ~~their~~in ~~placement~~force ~~within the fair value hierarchy levels. The Company considers active markets as those~~ in ~~which~~any ~~transactions~~country ~~for the assets~~ or ~~liabilities~~jurisdiction ~~occur~~of inwhich ~~sufficient~~a ~~frequency~~participant ~~and~~may ~~volume~~from time to ~~provide~~time ~~pricing~~be ~~information~~resident onor ana ~~ongoing~~citizen; ~~basis. For assets~~ and ~~liabilities carried at fair value, the Company measures fair value under the following levels:~~

Financial Instrument	Level
Cash and cash equivalents		Level 1
Restricted investments		Level 1
Long-term debt		Level 2
Commodity derivative		Level 2
Warrants and options		Level 3

(f)

amending or modifying, subject to the consent of the participant affected thereby, any outstanding option granted to a non insider, in any manner to the extent that the Board would have had the authority to initially grant the option as so modified or amended, including without limitation, to change the date or dates as of which, or the price at which, an option becomes exercisable; provided, however, that the consent of the participant shall not be required where the rights of the participant are not adversely affected, and for greater certainty, no amendment to an Incentive Stock Option may be made by the Board, without the consent of the participant, if such amendment would cause the Incentive Stock Option to no longer qualify as an Incentive Stock Option.

Stock-Based Compensation

We measure and recognize compensation expense for all share-based payment awards, including employee stock options, based on estimated fair values. The value of the portion of the award that is ultimately expected to vest is recognized as an expense on a straight-line basis over the requisite vesting period. We estimate the fair value of stock option awards on the date of grant using an option-pricing model. We use the Black-Scholes Model as its method of valuation for share-based awards. Our determination of fair value of share-based payment awards on the date of grant using the Black-Scholes Model is affected by NiMin’s stock price, as well as assumptions regarding a number of subjective variables. These variables include, but are not limited to, our expectation of NiMin’s stock price volatility over the term of the awards, as well as actual and projected exercise and forfeiture activity. The fair value of options granted to consultants, to the extent unvested due to required services not having been fully performed, is determined on subsequent reporting dates.

Foreign Currency Transactions

These consolidated financial statements are presented and measured in U.S. dollars, as substantially all of our operations are located in the United States of America. Transactions and balances using Canadian dollars are expressed in U.S. dollars whereby monetary assets and liabilities are expressed at the period end exchange rate, non-monetary assets and liabilities are expressed at historical exchange rates, and revenue and expenses are expressed at the average exchange rate for the period. Foreign exchange gains and losses are included in the consolidated statements of operations.

~~Business~~Notwithstanding ~~combinations~~the foregoing, the Company shall obtain requisite shareholder approval in respect of amendments to the Stock Option Plan to the extent such approval is required by any applicable laws or regulations. The Company may not amend an Incentive Stock Option if such amendment would cause the Incentive Stock Option to fail to meet the requirements of Section 422 of the Code and the regulations thereunder.

WeThe ~~record~~Stock ~~identifiable~~Option ~~assets,~~Plan ~~liabilities,~~provides ~~non-controlling~~that ~~interests,~~where ~~and~~the ~~goodwill~~option ~~acquired~~expires inor is adeemed ~~business~~to ~~combination~~expire atduring ~~“fair~~a ~~value”~~period byof ~~applying~~time ~~the~~imposed ~~acquisition~~by ~~method.~~the ~~Accordingly, transaction~~Company ~~costs~~upon ~~related~~certain todesignated ~~acquisitions~~persons ~~are~~during ~~recorded~~which asthose apersons ~~reduction~~may ofnot ~~earnings~~trade in ~~the~~any ~~period~~securities ~~they~~of ~~are~~the ~~incurred~~Company ~~and~~(a ~~costs~~“Black ~~related~~Out toPeriod”) ~~issuing~~or ~~debt~~within orforty-eight ~~equity~~(48) hours ~~securities~~after any ~~that~~Black ~~are~~Out ~~related~~Period toends, the ~~transaction~~option ~~are~~shall ~~recognized~~not inbe ~~accordance~~deemed ~~with~~to ~~other applicable~~expire ~~rules~~until ~~under~~the ~~U.S.~~day ~~GAAP.~~that ~~Non-controlling~~is ~~interests~~ten (~~previously~~10) business ~~referred~~days tofrom asthe ~~minority~~last ~~interests)~~day ~~are~~of ~~treated~~the asBlack aOut ~~separate~~Period. ~~component~~However, ofno ~~equity,~~Incentive ~~not~~Stock asOption amay ~~liability~~be orexercised ~~other~~after ~~item~~the ~~outside~~expiration of ~~permanent~~ten (10) years ~~equity~~from the date such option is granted.

~~Recently~~No ~~Issued~~options ~~Accounting~~granted ~~Pronouncements~~under the Stock Option Plan are assignable or transferable, otherwise than by will or by the laws of descent and distribution, except with the consent of the Company. In addition, no Incentive Stock Option may be assigned or transferred unless such assignment or transfer is permissible under Section 422 of the Code (or successor provisions) and the regulations thereunder. Financial assistance is not provided by the Company to any participants under the Stock Option Plan.

InUnless ~~June~~terminated ~~2011,~~earlier by the ~~Financial Accounting Standards~~ Board ~~issued ASU No. 2011-05~~, ~~“Comprehensive~~the ~~Income~~Stock ~~(Topic~~Option ~~220):~~Plan ~~Presentation~~will ofremain ~~Comprehensive Income”~~in ~~(“ASU~~effect ~~No. 2011-05”).~~until Inall ~~ASU~~options ~~No. 2011-05,~~granted anunder ~~entity has~~ the ~~option~~Stock toOption ~~present~~Plan ~~the~~have ~~total~~been ofexercised ~~comprehensive~~or ~~income~~forfeited, ~~the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income~~ or inhave ~~two separate but consecutive statements~~expired. ~~In both choices~~However, anno ~~entity is required to present each component of net income along with total net income, each component of other comprehensive income~~new ~~along~~options ~~with~~may abe ~~total~~granted ~~for~~under ~~other~~the ~~comprehensive~~Stock ~~income,~~Option ~~and~~Plan amore ~~total~~than ~~amount~~ten ~~for comprehensive income. The amendments in ASU No.~~(10) ~~2011-05~~years dofrom ~~not change~~ the ~~items~~date ~~that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. They also do not change~~ the ~~presentation~~Stock ofOption ~~related~~Plan ~~tax~~was ~~effects,~~originally ~~before~~adopted ~~related~~by ~~tax effects, or~~ the ~~portrayal or calculation of earnings per share~~Board. The amendments in ASU No. 2011-05 should be applied retrospectively. The amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The amendments do not require any transition disclosures. This update is not expected to have a material impact on our consolidated financial statements.

~~ITEM~~Indebtedness ~~7.A.~~of ~~QUANTITATIVE~~Directors ~~AND~~and ~~QUALITATIVE~~Executive ~~DISCLOSURES~~Officers ~~ABOUT MARKET RISK~~

~~Commodity~~The ~~Price~~aggregate ~~Risk~~indebtedness to the Company of all officers, directors, employees and any former officers, directors and employees of the Company outstanding as at December 31, 2012 was zero.

~~Our~~Financial ~~primary~~Instruments market risk is market changes in oil and natural gas prices. Commodity prices for petroleum and natural gas are impacted by world economic events that dictate the levels of supply and demand. During the years ended December 31, 2011, 2010 and 2009, we entered into swap contracts to minimize the variability in cash flows due to price movements in crude oil (See Item 7 – “MD&A – Crude Oil and Derivative Contracts”).

AtThe ~~December 31,~~Company ~~2011,~~does wenot ~~recognized~~have ~~$976,929~~a aspolicy that would prohibit a Named ~~derivative~~Executive ~~liability~~Officer onor ~~crude~~director ~~oil~~from ~~derivative~~purchasing financial instruments, including prepaid variable forward contracts., Asequity swaps, collars or units of ~~December 31,~~exchange ~~2011~~funds, ifthat ~~oil~~are ~~prices~~designed ~~had~~to ~~been~~hedge ~~higher~~or byoffset ~~$1.00~~a ~~per~~decrease ~~Bbl~~in ~~with~~market ~~all~~value ~~other~~of equity ~~variables~~securities granted as compensation or held, ~~constant~~directly or indirectly, by the ~~net~~Named ~~change~~Executive inOfficer ~~the~~or ~~fair~~director. ~~value~~However, ofmanagement ~~the~~is ~~commodity~~not ~~derivative~~aware ~~liability~~of ~~would~~any ~~have~~Named ~~been~~Executive ~~higher~~Officer byor ~~approximately~~director ~~$128,100~~purchasing such an instrument.

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 favourable price movements. We may, from time to time, add incremental derivatives to hedge additional production, restructure existing derivative contracts or enter into new transactions to modify the terms of current contracts in order to realize the current value of our existing position.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements are stated in U.S. Dollars and are prepared in accordance with U.S. generally accepted accounting principles (GAAP).

The financial statements and notes thereto required under Item 8 of this annual report are attached hereto and found immediately following the signature page of this Form 10K annual report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

ITEM 9 12.A. ~~CONTROLS~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND ~~PROCEDURES~~MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

The following table sets forth information as of the date of the Annual Report with respect to the beneficial ownership of Common Shares held by each person known by the Company to beneficially own or exercise control or direction over, directly or indirectly, more than five percent (a5%) of ~~Disclosure~~the ~~Controls~~voting rights attached to all outstanding Common Shares, each of the Company’s directors and ~~Procedures~~all executive officers and directors as a group.

AsExcept ~~required~~as byotherwise ~~Rule~~noted, information ~~13a-15(b)~~in ~~under~~ the ~~Securities~~following ~~Exchange~~table ~~Act~~is as of ~~1934~~March 11, as2013. ~~amended~~The ~~(the~~number ~~“Exchange~~of ~~Act”),~~shares asbeneficially ofowned ~~the~~by ~~end~~each ofperson ~~the~~or ~~period~~entity ~~covered~~is bycalculated ~~this~~pursuant ~~Annual~~to ~~Report~~rules onpromulgated ~~Form~~by ~~10-K,~~ the ~~Company’s~~ ~~management~~SEC. ~~conducted~~Under anthose ~~evaluation~~rules, ~~under~~a ~~the~~person ~~supervision~~or ~~and~~entity ~~with~~is ~~the~~considered ~~participation~~to beneficially ofown ~~the~~all ~~Company’s~~shares ~~Chief~~for ~~Executive~~which ~~Officer~~the ~~(“CEO”)~~person ~~and~~or ~~Chief~~entity ~~Financial~~has ~~Officer~~sole ~~(“CFO”),~~or ~~regarding~~shared ~~the~~voting ~~effectiveness~~or ofdispositive ~~the design~~power, and ~~operation~~all ofshares that the ~~Company’s~~person ~~disclosure~~or ~~control~~entity ~~and~~has ~~procedures,~~the asright ~~defined~~to inacquire ~~Rules~~within ~~13a-15(e)~~60 ~~and~~days ~~15d-15(e)~~after ~~under~~March 11, ~~the Exchange Act~~2013.

Based on the evaluation, management concluded that as of December 31, 2011, the Company’s disclosure controls and procedures were not effective because of the material weaknesses described in Management’s Report on Internal Control over Financial Reporting.


Name and Address of Beneficial Owner	Number of Shares Beneficially Owned⁽¹⁾		Percentage of Common Stock Outstanding⁽²⁾
5% Stockholders⁽³⁾

Indaba Capital Management, LLC One Letterman Drive Building D, Suite DM700 San Francisco, CA 94129		10,942,757		15.67	%

Credit Suisse (Canada)		6,999,700		10.02	%
Richard C. McKenzie, Jr. 118 John Street Greenwich, CT 06803		4,585,500		6.57	%

Executive Officers & Directors⁽⁵⁾
Clarence Cottman, III⁽⁴⁾		2,153,400		3.08	%
Jonathan S. Wimbish⁽⁴⁾		533,242			*
Brian E. Bayley⁽⁴⁾		155,000			*
W.A. Peneycad⁽⁴⁾		130,000			*
Robert L. Redfearn⁽⁴⁾		173,000			*
William Gumma⁽⁴⁾		67,150			*
All executive officers and directors as a group (6 persons)⁽⁴⁾		3,211,792		4.59	%

~~(b)~~* ~~Management’s~~Represents ~~Report~~less onthan ~~Internal~~1% ~~Control over~~of ~~Financial~~the ~~Reporting~~ class.

~~Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in rule 13a-15~~(f1) ~~and~~The ~~15d-15(f)~~inclusion ~~under~~of ~~the~~any ~~Exchange~~Common ~~Act.~~Shares ~~Internal~~deemed ~~control~~beneficially ~~over~~owned ~~financial~~does ~~reporting~~not isconstitute aan ~~process~~admission ~~designed~~of ~~by,~~beneficial orownership ~~under the supervision~~ of, ~~the~~those ~~CEO~~shares. ~~and~~Unless ~~CFO~~otherwise indicated, toeach ~~provide~~person ~~reasonable~~or ~~assurance~~entity ~~regarding~~has ~~the reliability~~sole ofvoting ~~financial~~or ~~reporting~~dispositive ~~and~~power ~~the preparation of financial statements for external purposes in accordance~~ with ~~generally~~respect ~~accepted accounting principles. Internal controls over financial reporting includes those policies and procedures that (i) pertain~~ to the ~~maintenance~~Common ofShares ~~records~~identified ~~which in reasonable detail accurately and fairly reflect the transactions and disposition of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded~~ as ~~necessary to~~being ~~permit~~beneficially ~~preparation~~owned ofby ~~financial statements in accordance with generally accepted accounting principles, and~~ that ~~receipts~~person ~~and expenditures of the Company are being made in accordance with authorizations of management and directors of the issuer; and (iii) provide reasonable assurance regarding prevention~~ or ~~timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements~~entity.

~~Because~~(2) ofPercentage ~~its~~ownership ~~inherent~~calculations ~~limitations,~~are ~~internal~~based ~~control~~on ~~over~~69,834,396 ~~financial~~common ~~reporting~~shares ~~may~~outstanding ~~not~~as ~~prevent~~of orMarch ~~detect~~11, ~~misstatements~~2013. ~~Also, projections~~Any ofshares ~~any~~that ~~evaluation~~a ofperson ~~effectiveness~~or entity has the right to ~~future~~acquire ~~periods~~within 60 days after March 11, 2013 are ~~subject~~deemed to ~~the~~be ~~risk~~outstanding ~~that~~for ~~controls~~the ~~may~~purpose ~~become~~of ~~inadequate~~calculating ~~because~~the percentage of ~~changes~~outstanding incommon ~~conditions,~~shares orowned by that person or entity, but not for the ~~degree~~purpose of ~~compliance~~calculating ~~with~~ the ~~policies~~percentage orownership ~~procedures~~of ~~may~~any ~~deteriorate~~other person or entity.

A(3) ~~material~~The ~~weakness~~information isas ato ~~deficiency,~~the orCommon aShares ~~combination~~beneficially ofowned, ~~deficiencies~~controlled inor ~~internal~~directed, ~~control~~not ~~over~~being ~~financial~~within ~~reporting,~~the ~~such~~knowledge ~~that~~of ~~there~~the isCompany, ~~a reasonable~~has ~~possibility~~been ~~that~~obtained aby ~~material~~the ~~misstatement~~Company offrom ~~the~~publicly ~~company’s~~disclosed ~~annual~~information and/or ~~interim~~furnished ~~financial~~by ~~statements~~the ~~will~~shareholder ~~not~~listed beabove ~~prevented~~as orof ~~detected~~March on11, ~~a timely basis~~2013.

In evaluating the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, management used the criteria established in the Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (~~“COSO”~~4). ~~Based~~Represents ononly ~~the~~Common ~~criteria~~Shares established by COSO, management (with the participation of the CEO and the CFO) identified the following material weaknesses in the Company’s internal control over financial reporting as of December 31, 2011, which arose from the limited number of number of staff at the Company and the inability to achieve proper segregation of duties: owned.

•(5) The ~~Company~~executive ~~lacked~~officers ~~effective~~and ~~controls~~directors ~~for~~hold ~~ensuring~~this ~~the~~position ~~accuracy~~as of ~~reporting over significant account balances, including~~ the ~~review,~~date ~~approval, and documentation~~ of ~~related~~this ~~transactions~~Annual ~~and account reconciliations~~report.

•Transactions ~~The~~by ~~Company lacked sufficient accounting resources with~~ the ~~necessary~~Company’s ~~technical~~Directors ~~experience~~ and ~~knowledge.~~Executive Officers

AsThere ahave ~~result~~been ofno transactions ~~these material weaknesses, there were misstatements~~ in ~~asset~~Common ~~retirement~~Shares ~~obligations,~~by ~~derivatives,~~directors ~~share-based~~and ~~compensation,~~executive ~~warrants~~officers ~~and income~~of ~~taxes~~NiMin inwithin the ~~preliminary~~sixty ~~consolidated~~(60) days ~~financial statements that were corrected~~ prior to ~~issuance of~~ the ~~Company’s~~date ~~consolidated financial statements. Additionally, there is a reasonable possibility that a material misstatement~~ of ~~the Company’s~~this ~~annual or interim consolidated financial statements would not be prevented or detected on a timely basis~~report.

As Section 16(a) ~~result~~Beneficial ofOwnership ~~these material~~Reporting ~~weaknesses,~~Compliance management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2011, based on the criteria established in Internal Control – Integrated Framework issued by COSO.

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, persons who beneficially own more than ten percent of a registered class of our equity securities, and certain other persons to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (“SEC”), and to furnish the Company with copies of the

~~KPMG~~ forms. ~~LLP~~Our directors, ~~the~~executive ~~Company’s~~officers ~~independent~~and ~~registered~~greater ~~public~~than ~~accounting~~ten ~~firm~~percent beneficial owners were not required to comply with such filing requirements during 2011, ~~has~~but ~~issued~~became ansubject ~~attestation~~to ~~report~~such filing requirements in 2012. Messrs. Cottman, Wimbish, and Dobson filed a Form 3 on ~~the~~January 11, ~~effectiveness~~2012. ofMessrs. ~~internal~~Hagen, ~~control~~Gumma, ~~over~~and ~~financial~~Redfearn ~~reporting~~filed a Form 3 on January 13, ~~which~~2012. isMessrs. ~~set~~Bayley ~~forth~~and ~~below~~Peneycad filed a Form 3 on January 18, 2012. Each became subject to the filing requirement on January 1, 2012.

~~(c)~~ITEM ~~Changes~~13. inCERTAIN ~~Internal Control~~RELATIONSHIPS ~~Over~~AND ~~Financial~~RELATED ~~Reporting~~TRANSACTIONS, AND DIRECTOR INDEPENDENCE

~~There~~Each ~~were~~director noand ~~changes~~officer who has a material interest of any kind in any existing or proposed transaction or agreement with the Company is required to abide by the disclosure requirements set out in Section 120 of the “Business Corporations Act (Alberta) (“ABCA”)”, and must comply with the steps set out in the Company’s ~~internal~~Code ~~control~~of ~~over~~Conduct, ~~financial~~including: ~~reporting~~(a) disclosing ~~during~~ the ~~quarter~~nature and extent of his or her ~~ended~~interest ~~December~~to the Board at the meeting at which a proposed contract or transaction in which the director or officer has an interest is first considered or at the first meeting after the director or officer becomes interested; (b) ~~31,~~upon ~~2011~~the request of the Board upon it being advised of the conflict, ~~that~~excusing ~~have~~him ~~materially~~or ~~affected~~herself from all Board or ~~are~~Committee ~~reasonably~~deliberations ~~likely~~in torespect ~~materially~~of ~~affect,~~the existing or proposed transaction or agreement; (c) abstaining from voting in respect of the ~~Company’s~~existing ~~internal~~or proposed ~~control~~transaction ~~over~~or ~~financial~~agreement ~~reporting~~in which the director or officer has a material interest; and (d) abiding by all of the requirements set out in section 120 of the ABCA.

~~(d)~~Furthermore, ~~Remediation~~directors, ~~Plan~~officers, ~~for~~management ~~Material~~and ~~Weakness~~employees of the Company are not permitted to take steps contrary to the best interests of the Company and each member of management and employees shall conduct their business affairs in ~~Internal~~a ~~Control~~manner ~~Over~~that ~~Financial~~ensures ~~Reporting~~their private or personal interests do not conflict with the interests of the Company, including conflicts relating to personal, financial or other gain. Prior to acknowledging compliance with the Company’s Code of Conduct, and at any time when a conflict arises, directors, officers, management and employees are required to report in writing their existing or potential conflicts of interest to the Chairman of the Corporate Governance Committee.

~~Management~~For the year ended December 31, in2012, ~~coordination~~2011 ~~with~~and 2010 there were related party legal fee transactions. For the ~~input~~year ended December 31, ~~oversight~~2009, ~~and~~the ~~support~~Company ofentered ~~our~~into ~~Audit~~a ~~Committee~~credit agreement with a private lending company (the “PLC”) in which Brian E. Bayley, ~~has~~a ~~identified~~director of the ~~following~~Company, ~~measure~~is tothe ~~strengthen~~President ~~our~~of ~~internal control~~the ~~over~~PLC. ~~financial~~The ~~reporting~~transaction was recorded at the amount negotiated and agreed to ~~address~~(the “Short-term Debt”) by the ~~material~~two ~~weaknesses~~(2) parties. ~~described~~On ~~above~~June 30, 2010, the Company paid in full the interest and principal outstanding on the Short-term Debt.

~~Enhance~~Management, with the ~~quarterly~~assistance ~~and~~of ~~annual review~~advisors, ~~processes~~sought potential purchasers of the beneficial interests of the Liquidating Trust, the patents for ~~significant~~the CMD process and ~~complex~~the ~~matters~~right byto ~~engaging~~an ~~external~~existing ~~accounting~~overriding ~~specialists~~royalty toon ~~support~~non-producing properties (“Remaining Assets’). Ultimately Management and its advisors concluded that the ~~Company~~could not find an arm’s ~~financial~~length ~~closing~~purchaser ~~and~~for ~~reporting~~the ~~process~~Remaining Assets. Management ~~External~~and ~~accounting~~the ~~specialists~~Board ~~will~~considered ~~assist~~the inrequirements of the ~~preparation~~dissolution of ~~account reconciliations~~NiMin and ~~assist~~management inintroduced ~~performing~~a ~~research~~proposed onnon-arm’s ~~complex~~length ~~accounting~~purchaser ~~matters,~~for ~~which~~the ~~will~~Remaining ~~allow~~Assets. ~~for~~Pacific Oil and Gas LLC is a ~~more~~private ~~effective~~company ~~review~~owned toby Clancy Cottman and Bill Gumma, two directors of the Companyu. The Board discussed the attributes of this potential purchase and sale. The Independent members of the Board confirmed with management that the terms of the purchase and sale and the assets/liabilities to be ~~performed~~placed bywithin the ~~Company~~Liquidating Trust and the Remaining Assets were the same as had been presented to arm’s ~~accounting~~length ~~management~~potential purchasers. Management also confirmed that no additional benefits would accrue to the non-arm’s length purchaser that had not been made available to other potential purchasers. The Company agreed to sell the Remaining Assets to Pacific Oil and Gas LLC for aggregate proceeds of $1,000.

~~Management~~In ~~intends~~addition thereto, the Company has adopted a disclosure policy to ~~continue~~ensure the communications to ~~monitor~~the ~~internal~~investing ~~controls~~public about the Company are timely, factual and ~~progress~~accurate onand ~~the~~broadly ~~remediation~~disseminate ~~step~~in accordance ~~identified~~with ~~above~~applicable legal and regulatory requirements, and ifan ~~further~~insider ~~improvements~~trading orand ~~enhancements~~reporting ~~are~~policy ~~identified~~in order to summarize the insider trading restrictions to which directors, ~~take~~officers, ~~steps~~consultants and employees of the Company are under applicable securities legislation, and to ~~implement~~provide ~~such~~a policy governing investments in the Company shares and the reporting thereof which is consistent with applicable legislation and the goals of the Company and a whistleblower protection policy with ~~improvements~~respect to the reporting of violation of accounting and auditing irregularities, ethics violations or ~~enhancements~~other violations.

~~Management~~Furthermore ~~believes~~ the ~~measure described above, once designed and operating effectively, will strengthen our~~Board ~~internal~~considers ~~control~~that ~~over~~fiduciary ~~financial~~duties ~~reporting.~~placed Ason ~~the~~individual ~~evaluation~~directors ~~and~~pursuant ~~work~~ to ~~improve~~corporate ~~our~~legislation ~~internal~~and ~~control~~common ~~over financial reporting continues~~law, weand ~~may~~the ~~determine~~conflict toof ~~take~~interest ~~additional~~provisions ~~measures~~under orcorporate ~~determine~~legislation towhich ~~modify,~~restricts oran inindividual ~~appropriate~~director’s ~~circumstances~~participation ~~not to~~in ~~complete,~~decisions of the ~~remediation~~Board ~~measure~~in ~~described~~which ~~above.~~the ~~The~~director ~~Company~~has ~~cannot~~an ~~provide~~interest, ~~assurance~~also ~~that~~ensure ~~these remediation efforts will be successful or~~ that the ~~Company’s~~Board ~~internal~~operates ~~control~~independently ~~over~~of ~~financial~~management ~~reporting~~and ~~will~~in bethe ~~effective~~best asinterests ~~a result~~ of ~~these efforts~~shareholders.

~~REPORT~~ITEM OF14. ~~INDEPENDENT~~PRINCIPAL ~~REGISTERED PUBLIC~~ ACCOUNTING ~~FIRM~~FEES AND SERVICES

~~The~~External ~~Board~~Auditor ofService ~~Directors~~Fees ~~and~~(By ~~Stockholders~~Category) ~~of NiMin Energy Corp.:~~

WeThe ~~have~~following ~~audited~~table discloses the ~~internal~~fees ~~control~~billed ~~over~~to ~~financial reporting of NiMin Energy Corp. (~~the Company) ~~as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued~~ by ~~the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for~~ its ~~assessment~~external ofauditor ~~the effectiveness~~during ~~of internal control over financial reporting, included in~~ the ~~accompanying~~last ~~Management’s~~two ~~Report on Internal Control over Financial Reporting~~ (~~Item 9A(b~~2)~~. Our responsibility is to express an opinion on the Company’s internal control over~~ financial ~~reporting~~years: ~~based on our audit.~~

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


Financial Year Ended	Audit Fees⁽¹⁾($)		Audited Related Fees⁽²⁾ ($)		Tax Fees⁽³⁾ ($)		All Other Fees⁽⁴⁾ ($)
2012		475,500		—		155,356		—
2011		511,236		—		33,902		—

ANotes: company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

~~Because~~(1) ofTotal ~~its~~Audit ~~inherent~~Fees ~~limitations,~~for ~~internal~~the ~~control over~~ financial ~~reporting~~year ~~may~~ended ~~not~~2012 ~~prevent~~were ~~or detect misstatements. Also~~$475,500 ~~projections~~which ofincluded ~~any~~liquidation ~~evaluation~~accounting offees ~~effectiveness~~related to ~~future~~the ~~periods~~dissolution ~~are~~of ~~subject to~~ the ~~risk~~Company. ~~that~~Total ~~controls~~Audit ~~may~~Fees ~~become~~for ~~inadequate~~the ~~because~~financial ofyear ~~changes~~ended in2011 ~~conditions~~included $13,326 orrelated ~~that~~to ~~the~~audit ~~degree~~services ofperformed ~~compliance~~in connection with the ~~policies~~2011 orPrivate ~~procedures may deteriorate~~Placement.

A(2) ~~material~~The ~~weakness~~aggregate isfees abilled ~~deficiency,~~for orassurance aand ~~combination~~related ofservices ~~deficiencies, in internal control over financial reporting, such~~ that ~~there~~are isreasonably ~~a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Material weaknesses~~ related to the ~~lack~~performance of ~~effective controls for ensuring~~ the ~~accuracy~~audit ofor ~~reporting over significant account balances, including the~~ review, ~~approval, and documentation~~ of ~~related transactions and account reconciliations and; lack of sufficient accounting resources with~~ the ~~necessary technical experience and knowledge have been identified and included in management~~Company’s ~~assessment.~~financial We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of NiMin Energy Corp. and subsidiary as of December 31, 2011, and the related consolidated statements ~~of operations~~ and ~~comprehensive~~are ~~loss,~~not ~~stockholders’~~disclosed ~~equity, and cash flows for the year then ended. These material weaknesses were considered~~ in ~~determining~~ the ~~nature,~~“Audit ~~timing,~~Fees” and extent of audit tests applied in our audit of the 2011 consolidated financial statements, and this report does not affect our report dated March 14, 2012, which expressed an unqualified opinion on those consolidated financial statementscolumn.

In(3) ~~our~~The ~~opinion,~~aggregate ~~because~~fees ofbilled ~~the~~for ~~effect~~tax ~~of the aforementioned material weaknesses on the achievement of the objectives of the control criteria~~compliance, ~~NiMin Energy~~tax ~~Corp.~~advice ~~has~~and ~~not~~tax ~~maintained~~planning effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commissionservices.

~~/s/~~(4) ~~KPMG~~The ~~LLP~~aggregate fees billed for professional services other than those listed in the other three (3) columns.

~~Los~~Reliance ~~Angeles,~~on ~~California~~certain exemptions

~~March~~During the most recently completed financial year, the Company has not relied on the exemptions in Section 142.4, ~~2012~~ 3.2, 3.4 and 3.5 or an exemption from NI 52-110.

ITEM 9.B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information responsive to Item 401, 405, 406 and 407 of Regulation S-K to be included in our definitive Proxy Statement for our 2012 Annual Meeting of Shareholders, to be filed within 120 days of December 31, 2011, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “2012 Proxy Statement”), is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information responsive to Item 402 and 407 of Regulation S-K to be included in our 2012 Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

The information responsive to Item 201(d) and 403 of Regulation S-K to be included in our 2012 Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Equity Compensation Plans

At December 31, 2011, a total of 9,220,001 Common Shares were authorized for issuance under our equity compensation plan. In the table below, we describe certain information about these shares and the equity compensation plan which provides for their authorization and issuance. You can find descriptions of our stock incentive plan under Note 10 of the Notes to Consolidated Financial Statements included in ITEM 8—“Financial Statements and Supplementary Data.”

Table No. 21

Securities Authorized for Issuence

Under Equity Compensation Plans

	Number of securities to beissued upon exercise ofoutstanding options		WeightedAverageExercise Price(CDN$)		Number of securitiesremaining available forfuture issuance under equitycompensation plans(excluding securities reflectedin column (a))
Equity compensation plan approved by security holders (1)		9,220,001		1.24		26,645
Equity compensation plan not approved by security holders		Nil		Nil		Nil
Total		9,220,001		1.24		26,645

Note:

(1) See Note 10 of the Notes to Consolidated Financial Statements included in ITEM 8 – “Financial Statements and Supplementary Data.”

The remaining information responsive to Items 404 and 407 of Regulation S-K to be included in our 2012 Proxy Statement is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information responsive to Item 9(e) of Schedule 14A to be included in our 2012 Proxy Statement is incorporated herein by reference.

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

~~3.1~~EXHIBITS ~~Articles of Incorporation of NiMin Energy Corp., as amended*.~~

3.2 Bylaws of NiMin Energy Corp*.


3.1		Articles of Incorporation of NiMin Energy Corp., as amended*.

3.2		Bylaws of NiMin Energy Corp*.

4.1		Form of Share Certificate of Common Shares of NiMin Energy Corp*.

10.1		Agreement and Plan of Merger by and among NiMin Capital Corp., NiMin Merger Co. and Legacy Energy, Inc. dated as of July 17, 2009*.

10.2		Credit Agreement by and among Legacy Energy, Inc., NiMin Energy Corp., CLMG Corp., and Certain Lenders, dated as of June 30, 2010*.

10.3		2009 Stock Option Plan, effective September 4, 2009*.

10.4		Form of Stock Option Agreement*.

10.5		Warrant Indenture between NiMin Capital Corp. and Computershare Trust Company of Canada dated August 28, 2009*.

10.6		Employment Agreement by and between Legacy Energy, Inc. and Clarence Cottman, III dated as of April 29, 2008*.

10.7		Amendment to Employment Agreement by and between Legacy Energy, Inc. and Clarence Cottman III dated as of January 1, 2009*.

10.8		Employment Agreement by and between Legacy Energy, Inc. and E. Sven Hagan dated as of April 29, 2008*.

10.9		Amendment to Employment Agreement by and between Legacy Energy, Inc. and E. Sven Hagan dated as of January 1, 2009*.

10.10		Employment Agreement by and between Legacy Energy, Inc. and Jonathan S. Wimbish dated as of April 29, 2008*.

10.11		Amendment to Employment Agreement by and between Legacy Energy, Inc. and Jonathan S. Wimbish dated as of January 1, 2009*.

10.12		Employment Agreement by and between Legacy Energy, Inc. and Rick McGee dated as of April 29, 2008*.

10.13		Amendment to Employment Agreement by and between Legacy Energy, Inc. and Rick McGee dated as of January 1, 2009*.

10.14		Credit Agreement between Legacy Energy, Inc. and Texas Capital Bank, N.A. dated June 23, 2008*.

10.15		Second Amended and Restated Schedule to the ISDA 1992 Master Agreement between BP Corporation North America, Inc. and Legacy Energy, Inc. dated June 30, 2010*.

10.16		CPC Escrow Agreement among NiMin Capital Corp., Computershare Trust Company of Canada and each of the Securityholders named in the Escrow Agreement, dated as of September 27, 2007*.

10.17		Intercreditor Agreement among BP Corporation North America, Inc., Legacy Energy, Inc., NiMin Energy Corp., and CLMG Corp. dated as of June 30, 2010*.

10.18		Guaranty Agreement by NiMin Energy Corp. in favor of BP Corporation North America, Inc. dated June 30, 2010*.

10.19		Wyoming Loan*.

10.20		Purchase and Sale Agreement by and between Vernon E. Faulconer, Inc., and Legacy Energy, Inc. Dated November 10, 2009*.

10.21		Agency Agreement dated effective April 29, 2010 among NiMin, Legacy and Thomas Weisel Partners Canada, Inc.*

10.22		ISDA Master Agreement between B.P. Corporation North America, Inc. and Legacy dated April 1, 2009*.

~~4.1~~51 ~~Form of Share Certificate of Common Shares of NiMin Energy Corp*.~~

10.1 Agreement and Plan of Merger by and among NiMin Capital Corp., NiMin Merger Co. and Legacy Energy, Inc. dated as of July 17, 2009*.

10.2 Credit Agreement by and among Legacy Energy, Inc., NiMin Energy Corp., CLMG Corp., and Certain Lenders, dated as of June 30,2010*.

10.3 2009 Stock Option Plan, effective September 4, 2009*.

10.4 Form of Stock Option Agreement*.

10.5 Warrant Indenture between NiMin Capital Corp. and Computershare Trust Company of Canada dated August 28, 2009*.

10.6 Employment Agreement by and between Legacy Energy, Inc. and Clarence Cottman, III dated as of April 29, 2008*.

10.7 Amendment to Employment Agreement by and between Legacy Energy, Inc. and Clarence Cottman III dated as of January 1, 2009*.

10.8 Employment Agreement by and between Legacy Energy, Inc. and E. Sven Hagan dated as of April 29, 2008*.

10.9 Amendment to Employment Agreement by and between Legacy Energy, Inc. and E. Sven Hagan dated as of January 1, 2009*.

10.10 Employment Agreement by and between Legacy Energy, Inc. and Jonathan S. Wimbish dated as of April 29, 2008*.

10.11 Amendment to Employment Agreement by and between Legacy Energy, Inc. and Jonathan S. Wimbish dated as of January 1, 2009*.

10.12 Employment Agreement by and between Legacy Energy, Inc. and Rick McGee dated as of April 29, 2008*.

10.13 Amendment to Employment Agreement by and between Legacy Energy, Inc. and Rick McGee dated as of January 1, 2009*.

10.14 Credit Agreement between Legacy Energy, Inc. and Texas Capital Bank, N.A. dated June 23, 2008*.

10.15 Second Amended and Restated Schedule to the ISDA 1992 Master Agreement between BP Corporation North America, Inc. and Legacy Energy, Inc. dated June 30, 2010*.

10.16 CPC Escrow Agreement among NiMin Capital Corp., Computershare Trust Company of Canada and each of the Securityholders named in the Escrow Agreement, dated as of September 27, 2007*.

10.17 Intercreditor Agreement among BP Corporation North America, Inc., Legacy Energy, Inc., NiMin Energy Corp., and CLMG Corp. dated as of June 30, 2010*.

10.18 Guaranty Agreement by NiMin Energy Corp. in favor of BP Corporation North America, Inc. dated June 30, 2010*.

10.19 Wyoming Loan*.


10.23		Amended and Restated Schedule to the ISDA Master Agreement between BP Corporation North America, Inc., and Legacy, dated January 4, 2010*.

10.24		Purchase and Sale Agreement among Legacy Energy, Inc., NiMin Energy Corp. and Southern San Joaquin Production, LLC dated April 26, 2012**

10.25		Purchase and Sale Agreement among Legacy Energy, Inc., NiMin Energy Corp. and Breitburn Operating L.P. dated April 24, 2012***

10.26		First Amendment to Credit Agreement dated as of May 18, 2012 by and among Legacy Energy, Inc., NiMin Energy Corp., CLMG Corp., as administrative agent and the lenders party to the Credit Agreement dated as of June 30, 2010****

21.1		List of Subsidiaries*.

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.

10101.20INS: ~~Purchase~~XBRL ~~and~~Instance ~~Sale~~Document ~~Agreement~~101.SCH: byXBRL ~~and~~Taxonomy ~~between~~Extension ~~Vernon~~Schema EDocument 101.CAL: ~~Faulconer,~~XBRL ~~Inc.,~~Taxonomy ~~and~~Extension ~~Legacy~~Calculation ~~Energy,~~Linkbase ~~Inc~~Document 101.DEF: ~~Dated~~XBRL ~~November~~Taxonomy ~~10,~~Extension 2009*Definition Linkbase Document 101.LAB: XBRL Taxonomy Extension Label Linkbase Document 101PRE: XBRL Taxonomy Extension Presentation Linkbase Document

10.21 Agency Agreement dated effective April 29, 2010 among NiMin, Legacy and Thomas Weisel Partners Canada, Inc.*

10.22 ISDA Master Agreement between B.P. Corporation North America, Inc. and Legacy dated April 1, 2009*.

10.23 Amended and Restated Schedule to the ISDA Master Agreement between BP Corporation North America, Inc., and Legacy, dated January 4, 2010*.

21.1 List of Subsidiaries*.

23.1 Consent of Huddleston & Co., Inc.**

31.1 Certification of the Principal Executive Officer as required by rule 15d-14(a)**.

31.2 Certification of the Principal Financial Officer as required by rule 15d-14(a)**.

32.1 Certification required by rule 15d-14(b)**.

99.1 Estimated Reserves and Revenues, Proved Reserves Only, As of January 1, 2012 prepared by Huddleston & Co., Inc. dated January 30, 2012**.

*	Incorporated by reference to Exhibits to the Company’s Registration Statement (file No.000-54162).

** ~~Filed~~Incorporated ~~herewith~~by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 2, 2012.

54*** Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 30, 2012.

****	Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 24, 2012

WHERE TO FIND ADDITIONAL INFORMATION

Additional information, including directors’ and officers’ remunerations, principal holders of the Company’s securities, options to purchase securities and interests of insiders in material transactions is contained in the Company’s management information circular relating to its most recent annual meeting of shareholders of the Company. Additional financial information is contained in the Company’s financial statements and management’s discussion and analysis for its most recently completed financial year. Additional information relating to the Company may be found on SEDAR at www.sedar.com or the Company’s website at www.niminenergy.com.

Additional copies of this Annual Report, the materials listed in the preceding paragraph, any interim financial statements which have been issued by the Company and any other document incorporated herein by reference will be available upon request by contacting the Company at its offices at 1160 Eugenia Place, Suite 100, Carpinteria, California 90313, Phone: (805) 566-2900 or Fax: (805) 566-2917.

5553

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registration has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NIMIN ENERGY CORP. (Registrant)
NIMIN ENERGY CORP.
(Registrant)
By:		/S/ CLARENCE COTTMAN III
Chief Executive Officer Date: March 14, 2012
		Chief Executive Officer
Date: March 7, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ CLARENCE COTTMAN III	Chief Executive Officer and Director	March 14, 2012
By:	/s/ CLARENCE COTTMAN III	Chief Executive Officer	March 7, 2013
By: /s/ JONATHAN WIMBISH	Chief Financial Officer & Principal Accounting Officer	March 14, 2012
By:	/s/ JONATHAN WIMBISH	Chief Financial Officer & Principal Accounting Officer	March 7, 2013
By: /s/ DANIEL S. DOBSON	Chief Operations Officer	March 14, 2012
By:	/s/ BRIAN BAYLEY	Director	March 7, 2013
By: /s/ BRIAN BAYLEY	Director	March 14, 2012
By:	/s/ WILLIAM GUMMA	Director	March 7, 2013
By: /s/ WILLIAM GUMMA	Director	March 14, 2012
By:	/s/ W. ALF PENEYCAD	Director	March 7, 2013
By: /s/ ROBERT REDFEARN	Director	March 14, 2012
By:	/s/ ROBERT REDFEARN	Director	March 7, 2013

5654

Consolidated Financial Statements of

NIMIN ENERGY CORP.

As at and for the years ended December 31, ~~2011~~2012, ~~2010,~~2011 and ~~2009~~2010

Expressed in US dollars

~~Report~~REPORT ofOF ~~Independent~~INDEPENDENT ~~Registered~~REGISTERED ~~Public~~PUBLIC ~~Accounting~~ACCOUNTING ~~Firm~~FIRM

The Board of Directors and Stockholders

NiMin Energy Corp.:

We have audited the accompanying consolidated ~~balance~~statement ~~sheet~~of net assets in liquidation (liquidation basis) of NiMin Energy Corp. and subsidiary (the Company) as of December 31, 2012, and the related consolidated statement of changes in net assets in liquidation (liquidation basis) for the period June 30, 2012 through December 31, 2012. We have also audited the consolidated balance sheet of the Company as of December 31, 2011, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the ~~year~~period ~~then~~of January 1, 2012 through June 30, 2012 and the year ended December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our ~~audit~~audits.

We conducted our ~~audit~~audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our ~~audit~~audits ~~provides~~provide a reasonable basis for our opinion.

InAs ~~our~~described ~~opinion,~~in Note 1 to the consolidated financial statements ~~referred to above present fairly~~, ~~in all material respects,~~ the ~~financial~~shareholders ~~position~~ of NiMin Energy Corp. approved asa plan of ~~December~~liquidation on June 3126, ~~2011,~~2012. ~~and~~As ~~the~~a ~~results of~~result, ~~its~~the ~~operations~~Company ~~and~~changed ~~cash~~its ~~flows~~basis ~~for~~of ~~the~~accounting ~~year~~effective ~~then~~June 30, ~~ended~~2012, infrom ~~conformity~~the ~~with~~going-concern ~~U.S. generally~~to ~~accepted~~a ~~accounting~~liquidation ~~principles~~basis.

WeIn ~~have~~our ~~also audited~~opinion, inthe ~~accordance~~consolidated ~~with~~financial ~~the~~statements ~~standards~~referred ofto ~~the~~above ~~Public~~present ~~Company~~fairly, ~~Accounting~~in ~~Oversight~~all ~~Board~~material ~~(United States)~~respects, ~~NiMin~~the ~~Energy~~consolidated ~~Corp.’s~~net ~~internal~~assets ~~control~~in ~~over~~liquidation ~~financial~~(liquidation ~~reporting~~basis) as of December 31, ~~2011~~ 2012, ~~based~~the onconsolidated ~~criteria~~changes ~~established~~in net assets in ~~Internal~~ ~~Control~~liquidation –for ~~Integrated~~the ~~Framework~~period ~~issued~~of byJune 30, 2012 to December 31, 2012, the ~~Committee~~consolidated financial position of ~~Sponsoring~~NiMin ~~Organizations~~Energy Corp. and subsidiary as of December 31, 2011, and the ~~Treadway~~results ~~Commission,~~of their operations and ~~our~~cash ~~report~~flows ~~dated~~for ~~March~~the period from January 141, 2012 to June 30, ~~expressed~~2012 anand ~~adverse~~the ~~opinion~~year onended ~~the~~December 31, ~~effectiveness~~2011, ofin ~~the~~conformity ~~Company’s internal~~with ~~control~~U.S. generally ~~over~~accepted ~~financial~~accounting ~~reporting~~principles.

/s/ KPMG LLP

Los Angeles, California

March 1411, ~~2012~~2013

256

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of NiMin Energy Corp.

We have audited the accompanying consolidated financial statements of NiMin Energy Corp., which comprise the consolidated ~~balance sheet as at December 31, 2010 and the consolidated~~ statements of operations and comprehensive loss, cash flows and stockholders’ equity for ~~each of~~ the ~~years in the two-~~year ~~period~~ ended December 31, 2010, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with United States generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our ~~audits~~audit. We conducted our ~~audits~~audit in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained ~~in our audits~~ is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated ~~financial position of NiMin Energy Corp. as at December 31, 2010 and its consolidated~~ results of operations and ~~its~~ consolidated cash flows ~~for each~~ of ~~the~~NiMin ~~years~~Energy inCorp for the ~~two-~~year ~~period~~ ended December 31, 2010 in accordance with United States generally accepted accounting principles.

/s/ KPMG LLP

Chartered Accountants

Calgary, Canada

March 24, 2011

457

NiMin Energy Corp.

Consolidated ~~Balance~~Statement ~~Sheets~~of Net Assets as of December 31, 2012 (Liquidation Basis)

Consolidated Balance Sheet as of December 31, 2011 ~~and~~(Going ~~December 31,~~Concern ~~2010~~Basis)

(Expressed in U.S. dollars)

	2011			2010
	2012			2011
Assets
Current assets:
Cash and cash equivalents	$	39,~~811~~657,~~028~~306		$	93,~~490~~811,~~005~~028
Trade accounts receivable		3,131,004			1,823,667
Other accounts receivable		60,129			—
Prepaid expenses and well costs		311,922			262,210
Income tax receivable		329,185			—
Crude oil inventory		149,553			241,375
Trade accounts receivable		—			3,131,004
Other assets		—			1,798
Prepaid expenses and well costs		—			311,922
Total current assets		7,403,507			11,819,055
Crude oil inventory		—			149,553
Debt issuance costs		3,497,867			4,404,436
Total current assets		10,046,620			7,403,507
Restricted investments		784,261			803,469
Debt issuance costs		—			3,497,867
Equipment		287,918			348,498
Restricted investments		—			784,261
Crude oil and natural gas properties—full cost method
Equipment, net		—			287,918
Proved properties, net		78,077,780			64,055,964
Crude oil and natural gas properties - full cost method
Unproved properties		468,042			476,986
Proved properties, net		—			78,077,780
Total assets	$	90,519,375		$	81,908,408
Unproved properties		—			468,042
Total assets	$	10,046,620		$	90,519,375
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	371,~~751,660~~654		$	43,~~580~~751,~~128~~660
Accrued liabilities		~~1,253,855~~—			1,~~069~~253,~~564~~855
Commodity derivative liability		976,929			929,527
Accrued professional fees related to liquidation		1,481,470			—
Current portion of long-term debt		4,050,000			—
Other costs related to liquidation		452,717			—
Total current liabilities		10,032,444			6,579,219
Asset retirement obligations		203,861			—
Long-term debt		31,950,000			36,000,000
Commodity derivative liability		—			976,929
Asset retirement obligations		1,180,661			1,309,789
Current portion of long-term debt		—			4,050,000
Non-current commodity derivative liability		—			310,757
Total current liabilities		2,209,702			10,032,444
Options		136,773			—
Long-term debt		—			31,950,000
Warrants		235,134			5,631,515
Asset retirement obligations		—			1,180,661
Total liabilities		43,535,012			49,831,280
Options		—			136,773
Warrants		—			235,134
Total liabilities	$	2,209,702		$	43,535,012
Commitments and contingencies
Stockholders’ equity:
Common stock, no par value, unlimited shares authorized, issued and outstanding 69,834,396 as of December 31, 2011 and 61,690,977 as of December 31, 2010		108,758,460			93,107,905
Common stock, no par value, unlimited shares authorized, 69,834,396 issued and outstanding as of December 31, 2012 and 69,834,396 as of December 31, 2011					108,758,460
Additional paid in capital		~~12,177,534~~			912,~~861~~177,~~010~~534
Accumulated deficit		~~(73,951,631~~	)		(7073,~~891~~951,~~787~~631	)
Total stockholders’ equity		~~46,984,363~~			3246,~~077~~984,~~128~~363
Total liabilities and stockholders’ equity	$	~~90,519,375~~		$	8190,~~908~~519,~~408~~375
Net assets in liquidation (Note 2)	$	7,836,918
Net assets in liquidation per outstanding share	$	0.11

See accompanying notes to consolidated financial statements.

~~Approved~~58 ~~by the Board of Directors~~

(signed) “Clarence Cottman III” (signed) “Brian Bayley” Director Director

NiMin Energy Corp.

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

For the six months ended June 30, 2012 and the years ended December 31, 2011, ~~2010~~ and ~~2009~~2010

(Expressed in U.S. dollars)

	2011			2010			2009
	Six months endedJune 30
Petroleum and natural gas revenues	$	24,305,685		$	14,029,198		$	6,498,789
	2012			2011			2010
Crude oil and natural gas revenues	$	10,985,590		$	24,305,685		$	14,029,198
Expenses:
Operating costs		114,~~565~~257,~~565~~619			911,~~116~~565,~~563~~565			59,~~162~~116,~~936~~563
General and administrative		76,~~894~~043,~~479~~260			7,~~888~~894,~~736~~479			67,~~826~~888,~~661~~736
Depreciation, depletion, amortization, and accretion		3,507,669			3,190,905			3,351,753
Liquidation related expenses		7,537,423			—			—
Impairment of oil and natural gas properties		—			—			6,313,633
Depreciation, depletion, amortization, and accretion		1,697,361			3,507,669			3,190,905
Loss on crude oil derivative contracts		753,053			708,032			300,778
(Gain) Loss on crude oil derivative contract		(189,507	)		753,053			708,032
		23,720,766			20,904,236			21,955,761
		19,346,156			23,720,766			20,904,236
Income (loss) from operations		584,919			(6,875,038	)		(15,456,972	)
Income (loss) before other items		(8,360,566	)		584,919			(6,875,038	)
Interest income		4410,~~595~~673			5444,~~070~~595			7854,~~127~~070
Interest expense		(56,~~406~~443,~~133~~178	)		(75,~~108~~406,~~109~~133	)		(~~228~~7,~~131~~108,109	)
Foreign exchange gain (loss)		(~~26,101~~438	)		6(26,~~617~~101	)		~~(385~~6,~~626~~617	)
Change in fair value of options		~~707~~296,~~513~~519			—707,513			—0
Change in fair value of warrants		1235,~~062,208~~134			1,~~674~~062,~~053~~208			(31,~~523~~674,~~543~~053	)
Other		(~~196~~22,~~649~~818	)		~~248~~(196,~~734~~649	)		—248,734
		(3,814,567	)		(5,124,635	)		(4,059,173	)
Other Reclamation Costs		(659,115	)		—			—
Loss before income taxes		(3,229,648	)		(11,999,673	)		(19,516,145	)
Gain on sale of oil & gas properties and equipment		46,280,232			—			—
Income tax expense		—			386,772			232,824
		39,697,009			(3,814,567	)		(5,124,635	)
Net loss and comprehensive loss		(3,229,648	)		(12,386,445	)		(19,748,969	)
Income (loss) before taxes		31,336,443			(3,229,648	)		(11,999,673	)
Basic and diluted loss per share	$	(0.05	)	$	(0.21	)	$	(0.47	)
Income tax expense		2,478,263			—			386,772
Net income (loss) and comprehensive income (loss)		28,858,180			(3,229,648	)		(12,386,445	)
Basic and diluted income (loss) per share	$	0.41		$	(0.05	)	$	(0.21	)

See accompanying notes to consolidated financial statements.

659

NiMin Energy Corp.

Consolidated Statements of Cash Flows (Going Concern Basis)

For the six months ended June 30, 2012 and the years ended December 31, 2011, ~~2010,~~ and ~~2009~~2010

(Expressed in U.S. dollars)

	2011			2010			2009
	Six Months EndedJune 30,2012			2011			2010
Cash flows from operating activities:
Net loss	$	(3,229,648	)	$	(12,386,445	)	$	(19,748,969	)
Net Income (loss)	$	28,858,180		$	(3,229,648	)	$	(12,386,445	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Adjustments to reconcile net Income (loss) by (used in) operating activities:
Depreciation, depletion, amortization, and accretion		31,~~507~~697,~~669~~361			3,~~190~~507,~~905~~669			3,~~351~~190,~~753~~905
Impairment of crude oil and gas properties		—			—			6,313,633
Change in fair value of options		(296,519	)		(707,513	)		—
Change in fair value of options		(707,513	)		—			—
Change in fair value of warrants		(235,134	)		(1,062,208	)		(1,749,034	)
Change in fair value of warrants		(1,062,208	)		(1,749,034	)		3,523,543
Unrealized foreign exchange (gain) loss		—			—			(189,718	)
Unrealized foreign exchange (gain) loss		—			(189,718	)		213,738
Gain on sale of oil & gas properties		(46,377,296	)		—			—
Stock-based compensation		2,~~605~~289,~~892~~568			2,~~716~~605,~~621~~892			2,~~945~~716,~~197~~621
Unrealized (gain) loss on crude oil derivative contracts		~~(365~~82,~~109~~731	)		1(365,~~240,284~~109	)		—1,240,284
Non-cash interest expense		906,569			3,461,205			—
Write down of fixed assets		97,064			—			—
Non-cash interest expense		3,497,867			906,569			3,461,205
(Increase) decrease in assets:
Trade accounts receivable		(1,~~307~~061,~~337~~589	)		(~~313~~1,~~908~~307,337	)		(~~550~~313,~~411~~908	)
Prepaid expenses		~~(49~~311,~~712~~922	)		(~~450~~49,~~841~~712	)		60(450,~~660~~841	)
Crude oil inventory		91149,~~822~~553			~~(20~~91,~~481~~822	)		3(20,~~043~~481	)
Other assets		~~1,797~~			~~274~~1,~~500~~797			~~(243~~274,~~625~~500	)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities		(17,~~105~~850,~~344~~251	)		3(1,~~242~~105,~~289~~344	)		13,~~669~~242,~~490~~289
Net cash used in operating activities		(713,122	)		(984,623	)		(2,461,948	)
Asset retirement obligation		659,114			—			—
Net cash provided by (used in) operating activities		(353,750	)		(713,122	)		(984,623	)
Cash flows from investing activities:
Purchase of and expenditures on crude oil and natural gas properties		(181,~~044~~579,~~984~~255	)		(1118,~~234~~044,~~812~~984	)		(1011,~~845~~234,~~772~~812	)
Business combination of Wyoming Assets		—			—			(27,173,108	)
Divestiture of crude and natural gas properties		—			1,000,000			—
Divestiture of crude and natural gas properties		1,000,000			—			—
Sale of oil & gas properties		119,245,819			—			—
Purchase of equipment		~~(68,564~~—	)		(~~111~~68,~~427~~564	)		—(111,427	)
Cash acquired in merger		—			—			271,270
Increase in restricted investments		(3,143,741	)		19,208			(483,469	)
(Increase) decrease in restrictive investments		19,208			(483,469	)		(200,000	)
Net cash provided by (used in) investing activities		114,522,823			(17,094,340	)		(11,829,708	)
Net cash used in investing activities		(17,094,341	)		(11,829,708	)		(37,947,610	)
Cash flows from financing activities:
Issuance of long-term debt		—			31,109,718			—
Repayment of long-term debt		(36,000,000	)		—			—
Issuance of short-term debt		—			—			22,000,000
Repayment of short-term debt		—			—			(22,024,020	)
Exercise of warrants and options		8,521,761			—			—
Issuance of long-term debt		—			—			31,109,718
Repayment of short-term debt		—			(22,024,020	)		—
Repurchase of options		(29,108	)		—			—
Proceeds from issuance of common shares (net of costs)		3,606,725			10,076,420			11,016,558
Exercise of warrants and options		—			8,521,761			—
Net cash provided by financing activities		12,128,486			19,162,118			33,016,558
Proceeds from issuance of common shares (net of costs)		—			3,606,725			10,076,420
Change in cash and cash equivalents during the period		(5,678,977	)		6,347,787			(7,393,000	)
Net cash provided by (used in) financing activities		(36,029,108	)		12,128,486			19,162,118
Cash and cash equivalents at beginning of the period		9,490,005			3,142,218			10,535,218
Change in cash and cash equivalents during the period		78,139,965			(5,678,976	)		6,347,787
Cash and cash equivalents at end of the period	$	3,811,028		$	9,490,005		$	3,142,218
Cash and cash equivalents at beginning of the period		3,811,028			9,490,005			3,142,218
Cash and cash equivalents at end of the period	$	81,950,993		$	3,811,029		$	9,490,005
Supplemental disclosure of cash flow information:
Cash paid for interest	$	42,~~500~~945,~~000~~444		$	34,~~608~~500,~~293~~000		$	~~228~~3,~~131~~608,293
Cash paid for income tax expense	$	—		$	~~386,772~~—		$	~~232~~386,~~824~~772

See accompanying notes to consolidated financial statements.

760

NiMin Energy Corp.

Consolidated Statements of Stockholders’ Equity (Going Concern Basis)

~~Years~~For the six months ended June 30, 2012 and the years ended December 31, 2011, ~~2010,~~ and ~~2009~~2010

(Expressed in U.S. dollars)

	Common Stock
	Shares		Amount			AdditionalPaid ~~inCapital~~in Capital			AccumulatedDeficit			TotalStockholders’Equity
Balance as of December 31, 2008		37,301,656	$	72,861,988		$	4,199,192		$	(38,756,373	)	$	38,304,807
Balance at December 31, 2009		52,410,977	$	83,106,467		$	7,069,407		$	(58,505,342	)	$	31,670,532
Issued to NiMin Capital Corp. shareholders		1,066,665		196,450									196,450
Issuance of common stock		11,442,751		9,296,549			3,782,024						13,078,573
Reclassified to liabilities							(3,857,006	)					(3,857,006	)
Stock issuance costs				(2,085,777	)								(2,085,777	)
Stock-based compensation expense							2,945,197						2,945,197
Issued to PLC		2,566,666		2,813,495									2,813,495
Sale of common stock		33,239		23,762									23,762
Net loss										(19,748,969	)		(19,748,969	)
Balance at December 31, 2009		52,410,977		83,106,467			7,069,407			(58,505,342	)		31,670,532
Exercise of options		80,000		74,552									74,552
Warrants expired													—
Reclassified from warrant liability							74,982						74,982
Issuance of common stock		9,200,000		11,018,492									11,018,492
Stock issuance cost				(1,091,606	)								(1,091,606	)
Stock-based compensation expense							2,716,621						2,716,621
Net loss										(12,386,445	)		(12,386,445	)
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							(188,467	)					(188,467	)
Issuance of common stock													—
Stock issuance cost													—
Stock-based compensation expense							2,289,568						2,289,568
Net Income										28,858,180			28,858,180
Balance at June 30, 2012		69,834,396	$	108,729,352		$	14,278,635		$	(45,093,451	)	$	77,914,536

See accompanying notes to consolidated financial statements.

861

NiMin Energy Corp.

Consolidated Statement of Changes in Nets Assets in Liquidation as of December 31, 2012 (Liquidation Basis)

(Expressed in U.S. dollars)


Net Assets in Liquidation as of June 30, 2012	$	77,914,536

Increase (decrease) to net assets:
Cash distribution to shareholders from July 1, 2012 to December 31, 2012		(70,532,740	)
Investment income from July 1, 2012 to December 31, 2012		56,213
Tax Adjustment from July 1, 2012 to December 31, 2012		1,019,447
Adjustments to assets from July 1, 2012 to December 31, 2012		(55,927	)
Adjustments to Liquidation accruals from July 1, 2012 to December 31, 2012		(528,868	)
Costs incurred from July 1, 2012 to December 31, 2012		(85,255	)
Foreign exchange adjustment from July 1, 2012 to December 31, 2012		49,512

Net decrease to net assets:		(70,077,618	)

Net Assets in Liquidation as of December 31, 2012	$	7,836,918

See accompanying notes to the consolidated financial statements.

NiMin Energy Corp.

Notes to Consolidated Financial Statements

~~December 31,~~(Expressed ~~2011,~~in ~~2010~~U.S. ~~and~~dollars) ~~2009~~

1 Description of the Business ~~and Reorganization~~

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~~ Shares”) for each three existing ~~common~~Common ~~shares~~Shares.

The principal business of the Company iswas conducted through its wholly owned subsidiary, Legacy Energy, Inc. (“Legacy”), a Delaware ~~corporation~~company 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 in June 2012.

aThe annual and special meeting (the “Special Meeting”) ~~Reverse~~of ~~Triangular~~holders ~~Merger~~(“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.

OnAt ~~July 17,~~the ~~2009~~Special Meeting, ~~NiMin~~the ~~Capital~~Shareholders ~~Corp.~~were ~~entered~~also ~~into~~asked ato ~~merger~~consider and ~~agreement~~vote ~~with~~on ~~Legacy~~the ~~whereby~~voluntary ~~NiMin~~winding ~~Capital~~up ~~Corp.~~and ~~acquired~~dissolution ~~Legacy~~of inthe ~~a reverse~~Company ~~triangular~~pursuant ~~transaction~~to ~~effected~~the bylaws ~~way~~ of athe ~~merger~~Business Corporations Act (Alberta) (the “~~Merger~~Winding Up”). ~~NiMin~~and ~~Capital~~the ~~Corp.~~distribution ~~incorporated~~to ~~NiMin~~Shareholders ~~Merger~~of ~~Corp.~~the ~~(“AcquisitionCo”),~~net aproceeds ~~wholly~~of ~~owned~~the ~~U.S.~~Sale ~~subsidiary~~of ~~under~~Assets (less the ~~laws~~settlement of ~~the~~obligations ~~State~~ of ~~Delaware,~~ ~~solely~~Legacy) ~~for~~and ~~the~~cash ~~purpose~~on ofhand, ~~effecting~~as ~~the~~part ~~proposed~~of ~~merger~~such ~~under~~liquidation ~~which~~and ~~Legacy~~dissolution ~~would~~after ~~merge~~satisfaction ~~with~~of ~~AcquisitionCo~~all ~~and~~liabilities asof the ~~surviving~~Company, ~~corporation~~by ~~would~~way ~~become~~of a ~~wholly-owned~~reduction ~~subsidiary~~of the stated capital of ~~NiMin.~~the Common Shares of the Company.

OnBoth ~~September 4, 2009,~~ the ~~Company~~Sale ~~acquired~~of ~~100%~~Assets ofand the ~~issued~~Winding ~~and~~Up ~~outstanding~~were ~~securities~~approved ofby ~~Legacy~~the byShareholders at the ~~issuance~~Special ofMeeting. ~~37,301,656 Common~~In ~~Shares~~order infor the ~~Merger.~~Company to Ascomplete the ~~surviving~~Winding ~~corporation~~Up, ~~Legacy became a wholly-owned subsidiary of~~ the ~~Company.~~appropriate ~~The~~corporate ~~Company~~steps ~~issued~~were arequired ~~sufficient~~to ~~number~~be oftaken ~~securities~~for to the ~~holders~~dissolution ofand ~~securities~~liquidation of Legacy. ~~such~~Pursuant ~~that~~to ~~control of~~ the ~~Company~~approval ~~passed to the former security holders~~ of ~~Legacy. As~~ the ~~former~~Sale ~~shareholders~~ of Assets, Legacy ~~controlled~~proceeded ~~greater~~with ~~than~~the ~~50%~~sale of the ~~Company~~Wyoming ~~upon~~oil ~~completion~~and ofgas assets and the ~~Merger,~~California ~~the~~oil ~~Merger~~and ~~was~~gas ~~accounted~~assets ~~for~~all as amore ~~reverse~~particularly ~~take-over~~described ~~of the Company~~below.

~~Prior~~On toJune 28, ~~the Merger~~2012, ~~NiMin~~Legacy ~~Capital~~completed ~~Corp.~~its previously ~~consolidated~~announced sale of its ~~common~~assets ~~shares,~~in ~~options,~~Wyoming’s ~~and~~Big ~~warrants~~Horn onBasin (the ~~basis~~“Wyoming ofAssets”) ~~one~~to ~~new~~BreitBurn ~~common~~Operating ~~share~~L.P., ~~option,~~ ora ~~warrant~~wholly-owned ~~for~~subsidiary ~~three~~of ~~existing~~BreitBurn ~~common~~Energy ~~shares,~~Partners ~~options~~L.P. (NASDAQ: BBEP “BreitBurn”), orfor ~~warrants~~total cash consideration of ~~NiMin~~approximately ~~Capital~~$93 ~~Corp.~~million, ~~The~~being ~~shareholders~~the original purchase price of ~~Legacy~~approximately ~~received~~$98 ~~one~~million ~~Common~~less ~~Share~~approximately of$5 ~~the~~million ~~Company~~adjusted into ~~exchange~~account for ~~each~~preliminary ~~one~~purchase ofprice ~~their~~adjustments. ~~Legacy~~On ~~shares~~August 30, of2012, ~~common~~Legacy ~~stock.~~completed ~~Holders of~~its ~~outstanding~~final ~~options~~settlement ~~and~~with ~~warrants~~BreitBurn ofand ~~Legacy~~ received ~~replacement~~approximately ~~options~~$2.3 ~~and~~million ~~warrants~~based ofon the ~~Company~~final purchase price adjustments.

InOn June 29, ~~connection~~2012, ~~with~~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 $26 ~~Merger~~million, being the ~~Common~~original ~~Shares~~purchase price of ~~NiMin~~approximately $27 million, ~~which~~less ~~previously~~approximately ~~traded~~$1 onmillion ~~the~~adjusted ~~TSX~~to ~~Venture~~account ~~Exchange~~for ~~(“TSX-V”)~~preliminary ~~under~~purchase price adjustments. Pursuant to the ~~stock~~terms ~~trading~~of ~~symbol~~the ~~NNI.P~~purchase and sale agreement, ~~were~~$3 ~~listed~~million onof the ~~Toronto~~$26 million ~~Stock~~purchase ~~Exchange~~price ~~(“TSX”)~~paid ~~under~~on ~~the~~closing ~~stock~~had ~~trading symbol~~been ~~“NNN”.~~deposited ~~The~~with ~~Common~~an ~~Shares~~escrow ~~were~~agent ~~delisted~~until ~~from~~December 28, ~~trading~~2012 onin ~~the~~connection ~~TSX-V~~with atvarious ~~the~~indemnities ~~closing~~contained ontherein. ~~September~~On August 330, ~~2009~~2012, toLegacy ~~facilitate~~completed its final settlement with Southern San Joaquin Production LLC and received $347,938 based on the ~~listing~~final ofpurchase price adjustments. On December 28, 2012, the ~~Common~~$3 ~~Shares~~million onwas released to NiMin from the ~~TSX~~escrow account.

~~Control~~The ofWinding ~~the~~Up ~~combined~~and ~~companies passed to~~ the ~~former~~dissolution ~~shareholders~~and liquidation of Legacy ~~and~~contemplates ~~therefore~~the ~~Legacy~~orderly isdisposition ~~considered~~of the ~~accounting acquirer. Consequently~~assets, the ~~consolidated~~orderly ~~balance~~discharge ~~sheets~~of all ~~and~~outstanding ~~consolidated~~liabilities, ~~statements~~including ofall ~~operations~~outstanding debt, and ~~cash~~after ~~flows~~the ~~include~~establishment ~~Legacy’s results~~ of ~~operations,~~appropriate ~~deficit~~reserves, ~~and cash flows from inception and~~ the ~~Company’s~~distribution ~~results~~ of ~~operations and~~ cash ~~flows beginning~~to ~~September 4,~~Shareholders ~~2009~~in installments.

At63 ~~the date of the Merger, the fair values of the net assets of NiMin were as follows:~~

Cash and cash equivalents	$	271,270
Accounts receivable		6,888
Accounts payable and accrued liabilities		(81,708	)
Net assets acquired	$	196,450

NiMin Energy Corp.

Notes to Consolidated Financial Statements

~~December~~(Expressed ~~31,~~in ~~2011,~~U.S. ~~2010~~dollars) ~~and 2009~~

b)On ~~Principles~~September 24, 2012, the Board declared an initial distribution to Shareholders of ~~Accounting~~$1.01 per Common Share. The distribution was made as a return of capital to Shareholders of record at the close of business on October 9, 2012, and the stated capital of the Company was reduced accordingly. The distribution of $70,532,740 was paid on October 22, 2012.

AsUpon ~~Legacy~~completion isof the ~~acquirer~~disposition ~~for~~of ~~accounting~~all ~~purposes,~~remaining assets of Legacy and the ~~accompanying~~settlement ~~financial~~of all ~~statements~~liabilities of the Company ~~presented~~and ~~prior~~Legacy, the Company intends to ~~September 4,~~ ~~2009~~distribute ~~are~~the ~~those~~remaining net proceeds of ~~Legacy.~~the ~~Therefore~~liquidation ~~after~~and ~~the~~dissolution ~~Merger,~~of ~~references~~both toLegacy “and the Company” orto ~~“NiMin”~~Shareholders ~~refer~~into toone ~~the~~final ~~consolidated~~distribution ~~entity~~on ~~and~~a ~~prior~~future todate ~~September 4,~~which ~~2009~~has ~~refer~~not toyet been ~~Legacy~~determined.

NiMin’s wholly-owned subsidiary, Legacy Energy, Inc., a Delaware company, dissolved in accordance with the laws of Delaware on September 17, 2012.

On October 10, 2012, Nimin voluntarily delisted its Common Shares from the Toronto Stock Exchange (“TSX”) after the close of trading on October 22, 2012, the date on which NiMin’s initial distribution was “payable” and its listing was transferred to the NEX, a separate board of the TSX Venture Exchange, effective as of opening of the market on October 23, 2012. From October 23, 2012 and onwards, NiMin’s Common Shares trade on the NEX under the symbol “NNN.H”.

The Company announced that the Common Shares of the Company were subsequently delisted from the OTCQX effective Monday, July 23, 2012.

2	Basis of Presentation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.GAAP”) and include the accounts of the Company, its wholly-owned subsidiary and the Company’s proportionate interest in Joint Interest Activities. All inter-company balances and transactions have been eliminated upon ~~consolidation.~~

3consolidation. ~~Significant Accounting Policies~~

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 December 31, 2012. Financial information presented as of and subsequent to June 30, 2012, includes a Consolidated Statement of Net Assets and a Consolidated Statement of Changes in Net Assets in Liquidation, as required under the liquidation basis of accounting. Financial information included for periods ending prior to June 30, 2012,

is presented under the going concern basis of accounting. Therefore, financial information presented as of and for the year ended December 31, 2012, is not comparable to financial information presented for prior periods.

Given that the respective property sales transactions closed on June 28, 2012, and June 29, 2012, the associated revenues are included in revenues and expenses for the period ended 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 was adjusted for revenues and operating expenses for the period of April 1 through closing date of the sale of the properties.

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

The conversion to liquidation basis of accounting requires management to make significant estimates and judgments in order to record assets at estimated net realizable value and liabilities at estimated settlement amounts.

NiMin Energy Corp.

Notes to Consolidated Financial Statements

(Expressed in U.S. dollars)

Under the liquidation basis of accounting, the Company recorded the following adjustments to record its assets at net realizable value.


Adjust assets to net realizable value:
Write down of fixed assets(i)	$	(82,731	)
Write off of other assets		(152,070	)

Total as of June 30, 2012	$	(234,801	)

Adjust assets to net realizable value:
Write off of other assets		(55,927	)

Total as of December 31, 2012	$	(290,728	)

(i)

Assets relating to the CMD technology were written down to the net realizable value 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:


Accrued Liquidation Costs	Balances as of June 30, 2012		Adjustments to accrual		Payments			Balances as of December 31, 2012
Lease obligation	$	62,943	$	—	$	(62,943	)	$	—
Professional fees		3,964,723		908,005		(3,391,258	)		1,481,470
Payroll related costs		3,009,757		34,222		(3,043,979	)		—
Other		500,000		136,564		(183,847	)		452,717

Total	$	7,537,423	$	1,078,791	$	(6,682,027	)	$	1,934,187

The Company will continue to incur operating costs 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 further distribution(s) 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 statement of net assets and the estimated $0.11 net assets in liquidation per outstanding share include management estimates made as of December 31, 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.

NiMin Energy Corp.

Notes to Consolidated Financial Statements

(Expressed in U.S. dollars)

3	Pre-Liquidation Accounting Policies

Crude Oil and Natural Gas Properties and Equipment

The Company accounts for its crude oil and natural gas producing activities under the full-cost method of accounting. Accordingly, all costs incurred in the acquisition, exploration, and development of proved crude oil and natural gas properties, including the costs of abandoned properties, dry holes, geological and geophysical costs, and annual lease rentals, ~~are~~were capitalized. All general corporate costs ~~are~~were expensed as incurred. Sales or other dispositions of crude oil and natural gas properties ~~are~~were accounted for as adjustments to capitalized costs with no gain or loss recorded unless such sale would significantly alter the relationship between pool cost and reserves.

Depletion and Depreciation

Depletion of crude oil and natural gas properties iswas computed under the unit-of-production method whereby the ratio of production to proved reserves, after royalties, ~~determines~~determined the proportion of depletable costs to be expensed in each period. Costs associated with unevaluated properties ~~are~~were excluded from the full-cost pool until a determination iswas made whether proved reserves can be attributable to the related properties. Unevaluated properties ~~are~~were evaluated at least annually to determine whether the costs incurred should behave been classified to the full-cost pool and thereby subject to amortization. Reserves ~~are~~were determined by an independent reserves engineering firm. Volumes ~~are~~ were converted to equivalent units using the ratio of one barrel of oil to six thousand cubic feet of natural gas. A significant reduction in our proved reserves may result in an accelerated depletion rate.

Depreciation of equipment iswas provided for on a straight-line basis over the useful life (5 to 10 years) of the asset.

Impairment of Long-lived Assets

The Company ~~performs~~performed a full-cost ceiling test on proved crude oil and natural gas properties in which the capitalized costs ~~are~~were not allowed to exceed their related estimated future net revenues of ~~proved~~ proved reserves discounted at 10%, net of tax considerations. When calculating reserves, the Company conformed to SEC rules under “Modernization of Oil and Gas Reporting” for pricing and used constant prices which were adopted by the SEC in in December of 2008.

Equipment iswas reviewed for impairment whenever events or changes in circumstances indicate such ~~impairment~~ impairment may have occurred. Impairment iswas recognized when the estimated undiscounted future net cash flows of an asset were less than its carrying value. A significant reduction in our proved reserves have resulted in a full cost ceiling limitation. If an impairment occurred, the carrying value of the impaired asset was reduced to fair value.

10d. Revenue Recognition

Petroleum and natural gas sales were recognized as revenue when the commodities were delivered and title has passed to the purchasers and collection was reasonably assured.

NiMin Energy Corp.

Notes to Consolidated Financial Statements

~~December~~(Expressed ~~31,~~in ~~2011,~~U.S. ~~2010~~dollars) ~~and 2009~~

net cash flows of an asset are less than its carrying value. A significant reduction in our proved reserves may result in a full cost ceiling limitation. If an impairment occurs, the carrying value of the impaired asset is reduced to fair value.

d. Revenue Recognition

Petroleum and natural gas sales are recognized as revenue when the commodities are delivered and title has passed to the purchasers and collection is reasonably assured.

Joint Interest Activities

Certain of the Company’s exploration, development and production activities ~~are~~were conducted jointly with other entities and accordingly the consolidated financial statements reflect only the Company’s proportionate interest in such activities.

Asset Retirement Obligations

The Company ~~recognizes~~recognized a liability for the present value of all legal obligations associated with the retirement of tangible, long-lived assets and ~~capitalizes~~capitalized an equal amount as a cost of the asset. The cost associated with the abandonment obligation iswas included in the computation of depreciation, depletion, amortization and accretion. The liability ~~accretes~~accreted until the Company settles the obligation. The Company uses a credit-adjusted risk-free interest rate in its calculation of asset retirement obligations (“ARO”).

Revisions to the original estimated liability would ~~result~~have resulted in an increase or decrease to the ARO liability and related capitalized costs. Actual costs incurred upon settlement of the asset retirement obligation ~~are~~were charged against the obligation to the extent of the liability recorded.

Estimates for future abandonment and reclamation costs ~~are~~were based on historical costs to abandon and reclaim similar sites, taking ~~into~~currents ~~consideration~~costs ~~current~~into ~~costs~~consideration. The liability iswas based on the Company’s net interest in the respective sites.

Crude Oil Inventory

Unsold crude oil production iswas carried in inventory at the lower of cost, generally applied on a first-in, first-out (“FIFO”) basis, or net realizable value, and ~~includes~~included costs incurred to bring the inventory to its existing condition.

Use of Estimates

In preparing financial statements, management makes informed judgments and estimates that affect the reported amounts of assets and liabilities as of the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period.

The amounts recorded for the depletion and depreciation of property and equipment, the accretion expense associated with the asset retirement obligation and the cost recovery assessments for property and equipment ~~are~~were based on estimates of proved reserves, production and discount rates, oil and natural gas prices, future costs and other relevant assumptions. The amount recorded for the unrealized gain or loss on financial instruments iswas based on estimates of future commodity prices and volatility. The recognition of amounts in relation to stock-based compensation and the fair ~~value~~ value of warrants ~~requires~~required estimates related to valuation of stock options and warrants. Future taxes ~~require~~required estimates as to the realization of future tax assets and the timing of reversal of tax assets and liabilities. By their nature, those estimates were subject to measurement uncertainty and the effect on the consolidated financial statements from changes in such estimates in future years could have been significant.

11On an ongoing basis, management reviewed estimates, including those related to the impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may have resulted in revised estimates and actual results may have differed from those estimates.

NiMin Energy Corp.

Notes to Consolidated Financial Statements

~~December~~(Expressed ~~31,~~in ~~2011,~~U.S. ~~2010~~dollars) ~~and 2009~~

assets and liabilities. By their nature, these estimates are subject to measurement uncertainty and the effect on the consolidated financial statements from changes in such estimates in future years could be significant.

On an ongoing basis, management reviews estimates, including those related to the impairment of long-lived assets, contingencies and income taxes. Changes in facts and circumstances may result in revised estimates and actual results may differ from these estimates.

Income Taxes

Deferred tax assets and liabilities ~~are~~were recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in enacted tax rates is recognized in income in the period that includes the enactment date. The Company does not have any unrecognized tax benefits. The Company does not believe there will be any material changes in its unrecognized tax positions over the next twelve months. The Company’s policy is that it recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. The Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any tax-related interest expense recognized during ~~2011~~2012, ~~2010~~2011 or ~~2009~~2010.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents and therefore classifies them with cash.

k. ~~Accounts~~Commodity ~~Receivable~~Derivative Instruments

~~The Company’s~~Derivative ~~accounts~~instruments ~~receivable~~were ~~primarily~~recognized ~~consists~~as ofeither ~~amounts~~assets ~~owed~~or toliabilities in the ~~Company~~balance bysheet ~~customers~~at fair value. The accounting for ~~sales~~changes ofin ~~crude~~the ~~oil,~~fair ~~natural~~value ~~gas~~of ~~and~~derivative ~~refined~~instruments ~~products~~depends ~~under~~on ~~varying~~their ~~credit~~intended use ~~arrangements~~and resulting hedge designation. ~~The~~For ~~allowance~~derivative ~~for~~instruments ~~doubtful~~designated ~~accounts~~as ishedges, the ~~Company’s best~~changes ~~estimate~~in offair value were recorded in the ~~amount~~balance ofsheet ~~probable~~as ~~credit~~a ~~losses~~component onof ~~these~~accumulated ~~receivables~~other comprehensive income (loss). ~~The~~Changes ~~Company~~in ~~reviews~~the ~~this~~fair ~~allowance~~value ~~for~~of derivative ~~adequacy~~instruments atnot ~~least~~designated ~~quarterly~~as ~~and~~hedges ~~bases~~were ~~its~~recorded ~~assessment~~as a gain or loss on aderivative ~~combination~~contracts in the consolidated statements of ~~current~~operations. ~~information~~The ~~about~~Company did not designate its ~~customers~~derivative ~~and~~financial ~~historical write-off~~instruments ~~experience.~~as Ashedging atinstruments ~~December 31~~and, ~~2011~~as ~~and~~a result, ~~2010~~recognized the ~~Company~~change ~~had~~in noa ~~allowance~~derivative’s ~~for~~fair ~~doubtful~~value ~~accounts~~currently in earnings.

l. ~~Commodity~~Fair ~~Derivative~~Value ~~Instruments~~Measurements

~~Derivative~~The ~~instruments~~Company ~~are~~categorizes ~~recognized~~its ~~as either~~ assets orand liabilities inthat ~~the~~were ~~balance~~measured ~~sheet~~ at fair value., ~~The~~based ~~accounting~~on ~~for changes in~~ the ~~fair~~priority ~~value~~ of ~~derivative~~the ~~instruments~~inputs ~~depends~~to onthe ~~their intended~~valuation ~~use and resulting hedge designation~~techniques. ~~For~~The ~~derivative~~three ~~instruments~~levels ~~designated as hedges, the changes in fair value are recorded in the balance sheet as a component~~ of ~~accumulated other comprehensive income (loss). Changes in~~ the fair value ~~of derivative~~measurement ~~instruments~~hierarchy ~~not~~were ~~designated~~ as ~~hedges~~follows: are recorded as a gain or loss on derivative contracts in the consolidated statements of operations. The Company does not designate its derivative financial instruments as hedging instruments and, as a result, recognizes the change in a derivative’s fair value currently in earnings.


Level 1:		Unadjusted quoted prices in active markets that were accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:		Quoted prices in markets that were not active, or inputs which were observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3:		Measured based on prices or valuation models that required inputs that were both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

Financial assets and liabilities were classified based on the lowest level of input that was significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement required judgment, which may have affected the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company considered active markets as those in which

NiMin Energy Corp.

Notes to Consolidated Financial Statements

~~December~~(Expressed ~~31,~~in ~~2011,~~U.S. ~~2010~~dollars) ~~and 2009~~

m transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. ~~Fair~~For ~~Value~~assets ~~Measurements~~

Large accelerated filer

Accelerated filer

Non-accelerated filer

Filing Compare · NiMin Energy Corp.