Creating Shareholder Value Through Light Oil Resource Exploration & Development
March 2015
PDM: TSX.V
Forward-Looking Statement
2
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.
Powder Mountain Capital Structure
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Symbol:
PDM
Exchange:
TSXV
As of:
March 27, 2015
Share Price
$0.28
Market Capitalization
$13,472,000
52 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
Powder Mountain: Building Shareholder Value
4
Powder Mountain Overview
•
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
Bakken and Torquay Focus
•
> 99% working interest and operatorship
•
Existing Bakken light oil production (39
oAPI)
•
7.5-8.0 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
Bakken and Torquay Production Trend
5
Powder Mountain LandPowder Mountain 3% GORR Land
Crescent Point Land
Crescent Point Land acquired from CanEra
Open Crown
Husky Land Torquay Producers
BKKN & TOQY Licences Bakken Producers
**based on publicly available information
Area Activity Summary
• Powder Mountain
• >50 net sections of land at working interest >99%
• est 7.5-8.0 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
Husky: 3 HZ Bakken wells
drilled + 1 license April 2014 Land Sale: 215
Sections for ~$28MM Powder Mountain GORR Land RONCOTT CPG Vt well drilled CPG Vt well drilled Powder Mountain Land COTEAU LAKE HARDY CanEra Acquisition
February 2014 Land Sale: ~40 sections for $40MM
Painted Pony Acquisition T-bird Acquisition Acquisition by Steppe HELLGAARD FLAT LAKE CPG CPG CPG Husky Open Crown Canada USA
Powder Mountain Property Overview
(SE Saskatchewan)
•
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
•
Secondary objectives: Red River, Winnipegosis, Birdbear,
Ratcliffe
•
2016-2020 expiry on majority of lands
•
Abundant open crown within the fairway
•
Ample 2D & 3D seismic control
•
Substantial well control to delineate prospects
6
Powder Mountain Coteau Lake Exploration Property WI: 100% Powder Mountain Hardy Bakken Development Property Purcell acreage Open Crown Canada USA CPG CPG CPGHardy Bakken Development Property
•
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 7.5 – 8.0 mmbbls/section, original oil in
place to the Bakken
•
1 Bakken horizontal development well drilled and
placed on production in January 2015. 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
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*IP data in barrels of oil per day (bopd)
CPG 4-7 Well: Awaiting Completion
4-16 Well 30 day IP: 104 bopd 60 day IP: 118 bopd
11-32 Well 30 day IP: 91 bopd 60 day IP: 28 bopd CPG 5-8 Well 30 day IP: 71 bopd 60 day IP: 99 bopd
14-17 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
Hardy Area: Hardy Type Curve Vs. Actual Production
*Template EUR: 152 mbbls (8% Recovery Factor)
1
stYear Decline Rate: >70%
2
ndYear Decline Rate: >30%
3
rdYear Decline Rate: < 15%
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• 129,000 bbls (Total Proved + Probable)Assigned by GLJ (Sept. 2013)
Bakken Upside Potential: Enhanced Oil Recovery
(Waterflood)
Powder Mountain Waterflood Potential
Incremental Recovery Factor:
8 – 10 %
Additional Reserves Per Section: 600 – 700 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
Hardy Development Economics:
WTI (US $) Vs. CapEx. Sensitivity
10
Internal estimates of 152Mbbls recoverable per well (8% RF), comparing capital costs on a minimum 3
well summer program versus flat commodity pricing.
Hardy Area: Development Summer Pad Drilling:
Estimated Payout (Years)
11
Internal estimates using 152Mbbls recoverable per well (8% RF) with a minimum 3 well summer
program, comparing pipeline infrastructure (run using flat commodity pricing).
Coteau Lake Exploration Property
•
42.5 sections (100% WI)
•
Majority of land held to 2017-2020
•
Bakken and Torquay are primary light
oil objectives (est. 39 API oil)
•
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.
12
Good Well Control
Horizontal well in the Bakken (never completed) showing oil staining, gas shows and
porosity Bakken core showing oil staining 08-30 Bakken Horizontal Well Canada USA
Summary of Opportunity
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•
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).
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
co-founder 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 2012. 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 1981.
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.
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 2008. 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 co-founded. Prior to starting Manitok, Mr. Geremia held vary positions with Birchcliff Energy, Equatorial Energy and Boardwalk Equities and has a finance background.
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 2006. 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 2007. 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.
