Creating Shareholder Value Through Light Oil Resource Exploration & Development. March 2015 PDM: TSX.V

Transcription

1 Creating Shareholder Value Through Light Oil Resource Exploration & Development March 2015 PDM: TSX.V

2 Forward-Looking Statement FORWARD-LOOKING INFORMATION This presentation contains "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action. In particular, this presentation contains forward-looking information about planned activities, the opportunity in Powder Mountain, Bakken potential locations, Torquay potential, Bakken upside potential, potential Bakken drilling inventory, Hardy development economics and payout, and summary of opportunities. Powder Mountain made certain material assumptions in developing the forward-looking information in this presentation. The assessment and potential of areas upon which Powder Mountain is focused, relies on third party disclosures, internal estimates based on information currently in hand and analysis of publicly available information. Actual results may vary from the forward-looking information in this presentation. Material risk factors could cause actual results to differ materially from the forward-looking information in this presentation. For example, internal estimates are based on oil price which is currently demonstrating volatility and could change dramatically at any time. As well there is no assurance that the Corporation s evaluation of corporate and property acquisitions will result in the consummation of any acquisitions. Some of the forward-looking information in this presentation constitutes "future-oriented financial information" within the meaning of applicable securities legislation. The purpose of the future-oriented financial information in this presentation is to provide readers with data about Powder Mountain's prospective financial performance. The future-oriented financial information in this presentation may not be appropriate for other purposes. Powder Mountain assumes no obligation to update or revise the forward-looking information in this presentation, unless it is required to do so under applicable securities legislation. BOEs This presentation contains reference to "boes", which is an abbreviation of barrels of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boes may be misleading, particularly if used in isolation. 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. 2

3 Powder Mountain Capital Structure Symbol: PDM Exchange: TSXV As of: March 27, 2015 Share Price $0.28 Market Capitalization $13,472, Week High/Low $1.24/0.28 Basic Shares Issued 48,112,510 Stock options - $1.03/share 4,195,000 Fully Diluted 52,307,510 Working Capital (December 31, 2014) $23,881,000 ($0.50/sh) Management & Directors 10.0% Fully diluted (shares and options) 32 Degrees 14.4 million shares 30% basic 3

4 Powder Mountain: Building Shareholder Value Powder Mountain Overview Bakken and Torquay Focus Well-Capitalized with >$20MM in cash and no debt. Well positioned to take advantage of current market conditions Continued focus on existing core areas while evaluating multiple corporate and property acquisitions Light oil focused Geographically focused in Southeast Saskatchewan Large land base with over 50 net sections (32,100 ac) of land in SE Saskatchewan Led by an experienced management team and a strong multi-disciplinary board > 99% working interest and operatorship Existing Bakken light oil production (39 o API) MM barrels of oil per section (assigned by GLJ) 2.5% Crown Royalty up to 100 mmbbls (Per Well) Multi zone potential in Red River, and Ratcliffe intervals Secondary EOR potential 4

5 Bakken and Torquay Production Trend April 2014 Land Sale: 215 Sections for ~$28MM RONCOTT Husky CPG Vt well drilled CPG CPG Vt well drilled HARDY Powder Mountain Land February 2014 Land Sale: ~40 sections for $40MM Husky: 3 HZ Bakken wells drilled + 1 license Powder Mountain GORR Land CPG CanEra Acquisition CPG Canada USA Open Crown COTEAU LAKE HELLGAARD FLAT LAKE T-bird Acquisition Painted Pony Acquisition Acquisition by Steppe Area Activity Summary Powder Mountain >50 net sections of land at working interest >99% est MMbbls/section of original oil in place in the Bakken (GLJ est) Crescent Point** >960 net sections of land Q4/14 production ~8,100 boe/d Recent discovery of > 1 billion barrels of original oil in place Acquired CanEra, Painted Pony and T-bird Husky** Purchased 215 section of land in April 2014 Drilled 3 exploration Bakken HZ wells Active in Flat Lake and Oungre **based on publicly available information Powder Mountain Land Powder Mountain 3% GORR Land Crescent Point Land Crescent Point Land acquired from CanEra Open Crown Bakken Producers Husky Land Torquay Producers BKKN & TOQY Licences 5

6 Powder Mountain Property Overview (SE Saskatchewan) CPG Powder Mountain Hardy Bakken Development Property CPG Purcell acreage Land Base: 50.5 gross sections (50.2 net) Average Working Interest: >99% 3% GORR on >10 sections of land 2.5% Crown Royalty to 100 mmbbls (Per Well) Bakken light oil production at Hardy (39 API) Main objectives: Bakken and Torquay Open Crown CPG Secondary objectives: Red River, Winnipegosis, Birdbear, Ratcliffe expiry on majority of lands Abundant open crown within the fairway Powder Mountain Coteau Lake Exploration Property WI: 100% Ample 2D & 3D seismic control Substantial well control to delineate prospects Canada USA 6

7 Hardy Bakken Development Property CPG 5-8 Well 30 day IP: 71 bopd 60 day IP: 99 bopd CPG 4-7 Well: Awaiting Completion Well 30 day IP: 91 bopd 60 day IP: 28 bopd Well 30 day IP: 18 bopd 60 day IP: 29 bopd (completion issues) NEW 5A4-16 Well: 30 day IP: 112 bopd 7-9 original show well 4-16 Well 30 day IP: 104 bopd 60 day IP: 118 bopd 8 gross sections (7.7 net), Average working interest: 95.6% (65-100%) Producing high quality light Bakken oil, averaging > 39 API Bakken is the primary objective with Torquay potential being assessed Also identified potential in the Red River formation GLJ resource assessment (April 2012) assigned average of mmbbls/section, original oil in place to the Bakken 1 Bakken horizontal development well drilled and placed on production in January This well had a 30 day IP rate of 112 bopd which is in line with expectations. Potential for up to 26 gross (24.8 net) locations at 4 wells/section on existing land base *IP data in barrels of oil per day (bopd) 7

8 Hardy Area: Hardy Type Curve Vs. Actual Production 129,000 bbls (Total Proved + Probable) Assigned by GLJ (Sept. 2013) Well is currently tracking EUR of 152,000bbls *Template EUR: 152 mbbls (8% Recovery Factor) 1 st Year Decline Rate: >70% 2 nd Year Decline Rate: >30% 3 rd Year Decline Rate: < 15% 8

9 Bakken Upside Potential: Enhanced Oil Recovery (Waterflood) Powder Mountain Waterflood Potential Incremental Recovery Factor: 8 10 % Additional Reserves Per Section: Mbbls CapEx Per Section: $4.0 MM (1 Injector + Infrastructure) Potential Benefits of Waterflood Potential increased recovery factors on large oil resource in place. Lower F&D costs and higher recycle ratio. Lower decline rates with higher reserve life index 9

10 Hardy Development Economics: WTI (US $) Vs. CapEx. Sensitivity Internal estimates of 152Mbbls recoverable per well (8% RF), comparing capital costs on a minimum 3 well summer program versus flat commodity pricing. 10

11 Hardy Area: Development Summer Pad Drilling: Estimated Payout (Years) Internal estimates using 152Mbbls recoverable per well (8% RF) with a minimum 3 well summer program, comparing pipeline infrastructure (run using flat commodity pricing). 11

12 Coteau Lake Exploration Property 42.5 sections (100% WI) Horizontal well in the Bakken (never completed) showing oil staining, gas shows and porosity Majority of land held to Bakken and Torquay are primary light oil objectives (est. 39 API oil) Bakken core showing oil staining Good Well Control Bakken Horizontal Well Secondary potential identified in the Ratcliffe Drilled 1 vertical well through the Torquay to acquire samples for further analysis. This well was then horizontally drilled and completed in the Bakken and was deemed uneconomic due to high water cuts. Canada USA 12

13 Summary of Opportunity Well-capitalized with over $20Mm in cash and no debt. Continued focus on existing core areas while evaluating multiple corporate and property acquisitions Exposure to Bakken and Torquay light oil assets over a large focused land base in Southeast Saskatchewan Multi-zone potential throughout land base. Secondary enhanced oil recovery through water flood. Substantial available open crown along the trend for growth opportunities Attractive prospective drilling economics in higher price environments. Prospects qualify for the Saskatchewan Deep Royalty credit of 2.5% to 100 mmbbls (Per Well). 13

14 Powder Mountain Management Bruce Murray B.Comm: President, Chief Executive Officer, Director Mr. Murray brings over 34 years of experience in various positions with emerging, junior and senior oil and gas companies. He was a cofounder of Purcell Energy Ltd. (TSX) which was sold in 2005 to Prairie Schooner and Crescent Point for $150 Million. Mr. Murray was President and Director of Tenergy Ltd. (TSX), which was sold in January 2006 for $92 Million to First Reserve, a US private equity firm, and Quintanna Oil and Gas. Mr. Murray graduated in 1979 from the University of Calgary with a Bachelor of Commerce degree. Daniel Tiberio, Petroleum Eng. Tech: Chief Operating Officer Mr. Tiberio has over 22 years of experience in oil and gas, exploitation and optimization of assets in Western Canada. Along with working for major oil and gas producers such as CNRL, Rio Alto and Norcen Energy Ltd, Mr. Tiberio has spent the last 8 years working for junior oil and gas companies. He has held both management and officer positions with junior companies, most recently Monterey Exploration Ltd. which sold to Pengrowth Energy Trust, along with Tenergy Ltd, and Purcell Energy. John Newman, FCPA: Chief Financial Officer Mr. Newman has 33 years experience in the oil and gas industry, both domestically and internationally. He was a co-founder of Reliable Energy Ltd. (TSX-V) which was sold to Crescent Point in Mr. Newman was CFO at Amarok Energy, Zodiac Exploration and Destiny Resources. He began his career in 1978 with Coopers and Lybrand, Chartered Accountants before joining Schlumberger in the UK, in Mr. Newman received a Bachelor of Business from the Western Australian Institute of Technology in 1978 and is a Fellow of CPA Australia. Jessica Metez, P.Geol.: Vice President Exploration Ms. Metez has over 10 years of experience primarily focused on resource and unconventional reservoirs in Western Canada. The majority of Ms. Metez's career has been spent with Pengrowth Energy Corporation in the Northeast BC, Horn River and Montney areas. Ms. Metez holds a Bachelor of Science Degree in Geology from the University of Calgary and is a member of the Association of Professional Engineers and Geoscientists of Alberta. 14

15 Powder Mountain Board of Directors Mitch Putnam, P.Geol : Chairman Founding Partner of 32 Degrees Capital. Prior to founding the firm, Mr. Putnam was the founder and Director of Glacier Energy Ltd.; the founder, Director and VP Exploration of Ice Energy Ltd.; the founder, VP Exploration of Avalanche Energy Ltd.; and VP Exploration of Colony Energy Ltd. He currently serves on the Board of Directors of Sitka Exploration Ltd. and HPC Energy Services. Mr. Putnam holds a Bachelor of Science Degree in Geology from the University of Alberta and is a member of the Association of Professional Engineers, Geologists, and Geophysicists of Alberta. Bruce Murray, B.Comm See management bio Gregg Smith Mr. Smith was PetroBakken s former President and Chief Operating Officer upon the company s inception in August 2009 when Petrobank combined its Canadian Business Unit (CBU) with TriStar Oil & Gas Ltd. to create PetroBakken. He joined Petrobank as Vice President in March of 2003 and was promoted to Senior Vice President and Chief Operating Officer of Petrobank s CBU in September Prior to joining Petrobank, Mr. Smith worked for Esso Resources, Westcoast Petroleum, Numac Energy, HCO Petroleum, Pinnacle Resources, Newport Petroleum and Hunt Oil Company of Canada Inc., in various positions. Mr. Smith graduated in 1983 from the University of British Columbia with a Bachelor of Science (Honours) degree in Geophysics. Larry Evans, P.Eng Founding Partner of 32 Degrees Capital. Prior to founding the firm, Mr. Evans was the founder and Chairman of Glacier Energy Ltd.; the founder, CEO and President of Ice Energy Ltd; the founder, CEO and President of Avalanche Energy Ltd.; and the Chief Executive Offer and President of Colony Energy Ltd. He currently serves on the Board of Directors of Arriva Energy Ltd., Corval Energy Ltd., and Platino Energy Corp. Mr. Evans holds a Bachelor of Science Degree in Engineering from the University of Manitoba and is a member of the Association of Professional Engineers, Geologists, and Geophysicists of Alberta. Massimo Geremia Over 21 years of experience in the Oil and Gas, Real Estate and Finance. Mr. Geremia is currently the President and CEO of Manitok Energy which he cofounded. Prior to starting Manitok, Mr. Geremia held vary positions with Birchcliff Energy, Equatorial Energy and Boardwalk Equities and has a finance background. 15

16 Powder Mountain Board of Directors Continued Sam Ingram, Q.C. Over 35 years of management experience in senior legal, corporate and business matters for internationally diversified resource and energy companies involved in the exploration and production of oil and gas, thermal coal, nickel, cobalt and electricity. Most notably, Mr Ingram was Senior Vice-President, General Counsel and Corporate Secretary of Sherritt International Corporation from 1995 to Prior thereto, Mr. Ingram was the Senior Vice- President, General Counsel and Corporate Secretary for Canada Northwest Energy Limited. Trent Baker, CA, CFA Trent Baker is Vice President and Partner at 32 Degrees Capital and has been with the firm since He currently serves on the board of Ignite Energy Services. In addition, he is an observer on the board of directors of Arriva Energy, Alder Ridge Resources, HPC Energy Services and Markwater Handling Systems. Prior to joining 32 Degrees, he worked in the audit practice at KPMG. Trent is a graduate from Queens University (2003) and is a chartered accountant and CFA charter holder. 16

17 Contact Us Powder Mountain Energy Ltd Suite 300, th Avenue SW Calgary, Alberta T2P 05S Telephone: Facsimile: Website: Investor Relations Bruce Murray President and CEO Telephone: Facsimile: bmurray@powdermtnenergy.com John Newman CFO Telephone: Facsimile: jnewman@powdermtnenergy.com 17