Non-GAAP Disclosures and Definitions

PV-10

PV-10 is the estimated future net cash flows from proven reserves, discounted at an annual rate of 10 percent before giving effect to income taxes. Under SEC guidelines, the commodity prices used in the December 31, 2012 and December 31, 2011 PV-10 estimates were based on the 12-month un-weighted arithmetic average of the first day of the month prices for the period January 1, 2012 through December 31, 2012 and January 1, 2011 through December 31, 2011, respectively. Prices are adjusted for transportation fees and regional price differentials. For crude oil and NGL volumes, the average West Texas Intermediate posted price of $91.21 per barrel was used to calculate PV-10 at December 31, 2012 and $92.71 at December 31, 2011. For natural gas volumes, the average Henry Hub spot price of $2.76 per million British thermal units (“MMBTU”) was used to calculate PV-10 at December 31, 2012 and $4.12 at December 31, 2011. All prices were held constant throughout the estimated economic life of the properties.

PV-10 is a non-GAAP financial measure, as defined under Regulation G of the rules and regulations of the Securities and Exchange Commission, and generally differs from standardized measure, the most directly comparable GAAP financial measure, because it does not include the effect of income taxes on discounted future net cash flows. PV-10 is a useful measure for investors as it is based on prices and discount factors that are consistent for all entities and can be used to evaluate proved reserves on a more comparable basis. Midstates’ management uses PV-10 when assessing the potential return on investment related to its oil and gas properties and acquisitions. However, PV-10 is not a substitute for the standardized measure of discounted future net cash flows. Midstates’ PV-10 and the standardized measure of discounted future net cash flows do not purport to present the fair value of the Company’s proved oil and natural gas reserves.

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