Crude Oil Markets, Rail & Pipeline Takeaway Capacity: Western Canada International Prospects John Zahary - Sunshine Oilsands Ltd.

Transcription

1 HKSE Stock Code: 2012 Crude Oil Markets, Rail & Pipeline Takeaway Capacity: Western Canada International Prospects John Zahary - October 2012

2 Disclaimer This presentation (the "Presentation") contains forward-looking information relating to, among other things, (a) the future financial performance and objectives of Corporation Corporation. Such information may be identifiable by the terminology used, such as, but not limited to "plan," "anticipate," "predicts", "projects", "believes", "seeks", "intends," "expects," "estimate," "budget," "forecast," "will," "may," "should," "would," or other similar wording. The forward-looking statements are based on the future events. The forward-looking information is subject to numerous known and unknown risks, uncertainties, and other factors, most of which are beyond the control of the Corporation, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such information. Readers and prospective investors are cautioned not to place undue reliance on any forward-looking information contained in this Presentation. The Corporation undertakes no obligation to update or revise forward-looking information contained in this Presentation, whether as a result of new information, future events, or disclose the occurrence of unanticipated events or otherwise. All information and material included in this Presentation is current unless otherwise stated. Please be cautioned that all forward-looking information contained in this Presentation is expressly qualified by this cautionary statement. October 2012 Confidential 1

3 Objectives Review of global and domestic crude oil pricing situation Impact of regional oversupply in inland North America Importance of getting access to edge of North America to market oil at world (Brent) pricing Opportunities for Canadian Oil Energy October 2012 Confidential 2

4 World Oil Supply / Demand Production / in MMbpd Sullom Voe Cushing Oklahoma 8.1 Bonny Nigeria Dubai Singapore Mexico Asia is the major global importer of oil World Crude Oil Pricing Benchmarks Source: BP Statistical Review of World Oil Energy June 2012 October 2012 Confidential 3

5 2011 NA Production / Consumption in MMbpd Anchorage North America is an oil importer led by USA demand Canada is a net oil exporter with significant exports out of Western Canada Prince Rupert Canada 3.5 Fort McMurray Edmonton Vancouver Calgary Regina WinnipegThunder 18.8 Bay Montreal Halifax Minneapolis/ Ottawa St Paul 7.8 Toronto New York San F rancisco Los Angeles Phoenix 2.3 U.S.A. Houston St Louis Cushing Oklahoma New Orleans Mexico Mexico City Miami Source: BP Statistical Review of World Oil Energy June 2012 October 2012 Confidential 4

6 World Benchmarks Recent price disconnect between WTI and Brent reflects regional oversupply of crude in local inland North America World Crude Oil Pricing Benchmarks * 28 Sept 2012 Brent $ WTI $91.35 * October 2012 Confidential 5

7 2011 North American Production / Consumption in MMbpd 5 $20/bbl = $40 B / year Discount Anchorage This is a major impact on the economy in this area Prince Rupert $110/bbl (Brent) Canada Fort McMurray Edmonton Vancouver Calgary Regina WinnipegThunder $90/bbl Bay Montreal Halifax Minneapolis/ Ottawa (WTI) St Paul Toronto New York San F rancisco Los Angeles Phoenix U.S.A. St Louis Cushing Oklahoma $110/bbl (Brent) Houston Mexico Mexico City New Orleans $110/bbl (Brent) Miami Source: BP Statistical Review of World Oil Energy June 2012 October 2012 Confidential 6

8 Existing Infrastructure Existing Major Pipelines Existing Major Railroads Cushing Cushing Source: CAPP Crude Oil Forecast, Markets & Pipeline Expansions June 2012 Source: commodity markets Growth in transportation on railways has helped (now around 600 Kbpd in North America; 150 Kbpd in Canada) but more needed Pipeline projects that get Western Canadian crude access to tidewater needed October 2012 Confidential 7

9 New Pipeline Projects Currently at 150K bbl/d to Asia Source: CAPP Crude Oil Forecast, Markets & Pipeline Expansions June 2012 October 2012 Confidential 8

10 Western Canada Oil Production and World Oil Demand Canadian production continues to increase Asia represents the growth market for increasing oil sands production MMbbl/d Primary Global Oil Demand by Region OECD ex. North America China / India North America Non-OECD ex. China / India MMbbl/d 2011A 2020E CAGR Conventional % Mining Oil Sands % In Situ Oil Sands % Total Oil Sands % MMbbl/d Western Canadian Oil Production Forecast (%) Total % Source Canadian Association of Petroleum Producers Crude Oil Production Forecast June A 2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E Western Canadian Conventional Oil Production Mining Oil Sands In Situ Oil Sands Oil Sands % of Total Production Source EIA International Energy Outlook 2011 and CAPP Crude Oil Forecast June 2012 excludes pentanes/condensates October 2012 Confidential 9

11 Which Markets Should Canada Target Characteristics of an ideal market With Canadian crude selling at discounted prices, this costs the Canadian economy billions and billions of dollars per year in direct and indirect losses USA offers many benefits but strong opportunities exist in Asia 30,000 28,000 26,000 24,000 22,000 20,000 18,000 30,000 28,000 26,000 24,000 22,000 20,000 18,000 USA Consumption MMbpd ASIA Consumption MMbpd Source: BP Statistical Review of World Oil Energy June 2012 October 2012 Confidential 10

12 USA/Asia Underproduce vs Demand with Concentrated Imports Asian demand relatively close to Canadian supply Oil Sands Persian Gulf 8.1 Supply China 28.3 Demand China Korea Japan Canada USA 18.8 United 7.8 States 1.9 MMbbl/d Mid East South America Source Canadian Association of Petroleum Producers October 2012 Confidential 11

13 Sunshine Oilsands One of the largest holders of Oil Sands Leases in the Athabasca Region with 1.2 million acres and ~70 Billion Barrels of Total Petroleum-Initially-in-Place We are a Major Developer of Oil Sands Resources, targeting 200,000 bbl/d Production from our first three project areas and 1 million bbl/d Capability Our Management and Technical Teams Have Extensive Experience in Oil Sands Project Development and Execution to Production We are Supported by Several Prominent Asian Entities such as Sinopec, China Investment Corporation, Bank of China, China Life and Orient Group, as well as North American Institutions and Retail October 2012 Confidential 12

14 Resource Base Provides Significant Growth Opportunity ~70 Billion Barrels of Total Oil in Place; 1.2 MM acres; P+P Reserves 445 million bbls +Best Estimate Contingent 4.96 billion bbls Currently Less Than One Year From First Steam on First Commercial Development Production Capacity of >1MM bbls per day High Growth Portfolio of Assets Composed of Clastic and Carbonate Oil Sands Cc Ch T Su I Ce Sh B Cp Cn Sy H ~100% Ownership in All Leases (1) Assets Located Close to Several High Profile International Oil Companies Plans to Develop at Prudent Pace Reflecting a Strong Balance Sheet Leases in the Athabasca Oil Sands Region A K CDN $200 million syndicated credit facility closed on October 11, Notes 1. With the exception of shared formations which represent 0.7% of total land holdings October 2012 Confidential 13

15 Operational Accomplishments Recoverable Resources (Bn bbl) (1) 6 Track Record of Building Scale Acres (2) 2,000,000 Recent Developments First 10,000 bbl/d SAGD phase at West Ells approved and under construction ,000,640 1,000,640 1,085,747 1,156,377 1,189, ,800,000 1,600,000 1,400,000 1,200,000 1,000,000 West Ells under construction as at June 30, 2012 Procurement of long lead equipment 100% complete Secondary equipment 80% complete Filed regulatory application for a 10,000 bbl/d SAGD phase at Thickwood Filed regulatory application for a 10,000 bbl/d SAGD phase at Legend Lake Planning two commercial applications to be filed in 2013 to expand capacity to 200,000 bbl/d Source 107, Best Estimate Contingent 2P Reserves Land Position Note 1. Recoverable resource defined as 2P Reserves + Best Estimate Contingent Resources 2. 1 Hectare = acres; we currently hold 467,969 hectares of leases (including all Oil Sands Leases and PNG Licenses) , , , ,000 - Progressing alliance / joint venture arrangements with Sinopec/China Investment Corp and others Pursuing further activity at Harper Grosmont Carbonate pilot and progressing carbonate development plans for commercial applications Project Area EIA (Environmental Impact Assessments) for West Ells, Legend Lake & Thickwood are underway, and detailed baseline environmental data collection is expected to be complete by Q Pursuing cold flow developments at Muskwa, Harper, Goffer, Godin and others Updated Reserve/Resource Report (May 31, 2012) October 2012 Confidential 14

16 Hold ~70 Billion Barrels of Total Petroleum-Initially-in-Place Summary of Our Asset Portfolio (1) Property / Asset Type First Steam * Ultimate Capacity * (bbl/d) Total Petroleum- Initially-in-Place (1) Recoverable Resources (MMbbl) (MMbbl) PV10 (C$MM) (2) West Ells ,000 1, ,248 Thickwood ,000 1, Legend Lake ,000 1, Other Clastics 200,000 17,806 2,152 2,163 Total Clastics 400,000 22,695 4,050 6,022 Harper Carbonates 200,000 10, Other Carbonates 400,000 35, ,599 Total Carbonates ,000 46,130 1,345 1,739 Muskwa Cold Flow Currently Producing Total Combined 1,000,000 68,894 5,400 7,775 Base Case Clastic Assets * Management Estimates for First Steam and Capacity Note 1. ources defined as 2P Reserves + Best Estimate Contingent Resources 2. Pre- October 2012 Confidential 15

17 Combined Capacity Accelerated Base Clastic Assets Additional Clastic Assets Carbonates Note: Recoverable Resources defined as 2P Reserves + Best Estimate Contingent Resources as per GLJ and D&M May Sunshine has identified development potential for 970,000 bopd production capacity by 2026, each project type is identified as either accelerated base case clastics, other additional clastics or carbonates. The colored segments show the production capacity of the assets; The Base Case Clastics at West Ells, Legend Lake and Thickwood are based on accelerated corporate development plan to reach production capacity of 200,000 bopd by 2019; Additional Clastic Development Assets are based on the Competent Persons best estimate contingent resource development plans, with an additional production capacity potential of 190,000 bopd by 2026; The Carbonate unconstrained development plan reaches production capacity of 580,000 bopd by 2024; and be compressed to 25 years. October 2012 Confidential 16

18 Conclusions Western Canadian crude suffering discount due to regional oversupply Ongoing pipeline and rail projects when built will allow Western Canadian crude access to world oil prices With Western Canadian oil production, led by oil sands, growing, Asia represents an ideal market to diversify and increase sales October 2012 Confidential 17

19 AUDITORS Deloitte & Touche LLP LEGAL COUNSEL EVALUATION ENGINEERS REGISTRAR & TRANSFER AGENT INVESTOR CONTACTS McCarthy Tetrault LLP (Canada) Freshfields Bruckhaus Deringer (HK) GLJ Petroleum Consultants Limited DeGolyer and McNaughton Canada Limited Alliance Trust Company (Canada) Computershare Hong Kong Investor Services Limited (HK) John Zahary, President & CEO David Sealock, Executive VP, Corporate Operations Suite 1020, 903, 8 Avenue SW, Calgary, Alberta, Canada T2P 0P