1
Greenfields Petroleum Corporation
TSXV:GNF
Investor Update
Gum Deniz & Bahar Fields
Development in Azerbaijan
May 2013
www.Greenfields-Petroleum.com
PSG 1 Rig Drilling on
Platform 2 in Gum
Deniz Oil Field
Forward-Looking Statements
This presentation contains forward-looking statements. More particularly, this presentation contains statements concerning the anticipated future corporate plans and initiatives for Greenfields Petroleum Corporation (“Greenfields”). Some of the forward-looking statements can be identified by words such as “expects”, “anticipates”, “should”, “believes”, “plans”, “will” and similar expressions. Specifically, forward-looking statements in this presentation include the anticipated milestones schedule, the amount of anticipated net annual cash flow and the company’s drilling program. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Greenfields, including expectations and assumptions concerning timing of receipt of required shareholder, regulatory or third party approvals, the availability of equity investment, the ability to acquire assets, the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the application of regulatory and royalty regimes, the volatility of oil and gas prices, the receipt of cooperation from contractual counterparties where their assistance is required and prevailing commodity prices and exchange rates.
Although Greenfields believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Greenfields can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary shareholder, regulatory or other third party approvals to the planned transactions, risks associated with the availability of capital in the financial markets, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.
The forward-looking statements contained in this document may not be appropriate for other purposes and are made as of the date hereof and Greenfields does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Disclaimer
Greenfields’ securities are a highly speculative investment and are not intended as a complete investment program. They are designed only for sophisticated persons who can bear the economic risk of the loss of their investment in Greenfields and who have limited need for liquidity in their investment. There can be no assurance that Greenfields will achieve its investment objective. Target investment goals are not a guarantee of future returns.
The attached material is provided for informational purposes only as of the date hereof, is not complete, and may not contain certain material information about Greenfields, including important disclosures and risk factors associated with an investment in Greenfields. This information does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it. More complete disclosures and the terms and conditions relating to an investment in Greenfields will be contained in Greenfields’ subscription agreement and/or similar offering documents. Before making any investment, prospective investors should thoroughly and carefully review such documents with their financial, legal and tax advisors to determine whether an investment is suitable for them.
This document and its contents are confidential. It is being supplied to you solely for your information and may not be reproduced or forwarded to any other person, or published (in whole or in part) for any purpose.
Measurement
Where amounts are expressed on a barrel of oil equivalent (“BOE”) basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel. The term BOE may be confusing, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Currency
All amounts in this presentation are in US dollars unless otherwise noted.
Highlights
2012 Net Production
1,084 BOE/d
Current Production May 2013
1414 BOE/d
2013 Net Production
1,400 to 2,200 BOE/d
Debt
Zero
Convertible Debenture (GNF.DB) $23 Million
Yield:
9 percent
Conversion price:
$8.55 per share
Due:
May 2017
Net Reserves (P1+P2)*
5.7 MMBO
40.8 BCF
12.6 MMBOE
Asset Valuation PV10 (P1+P2)*
$118 million
*
GLJ Reserve Report December 31, 2012
3
Gum Deniz Oil Field in Bahar ERDPSA
Offshore South Caspian Sea
2013 Executive Summary
Drilling and Workover
Operations
Gum Deniz 715
well
completed in
April 2013 from platform #2 using
PSG 1 rig to develop the central
northern part of Gum Deniz oil
field.
(159 Meters oil pay) IP30 625 B/d
•
Gum Deniz 716
well drilling
•
Continued workover operations on Bahar gas field from platform #196
Seismic
•
2D Seismic acquisition and processing completed over Gum Deniz and Bahar Fields
•
Completion of the 3D seismic acquisition December 2012 over Bahar 2 exploration area
•
Mobilizing equipment for 3D acquisition over all of Gum Deniz oil field
Share Structure
5
TSX-Venture Symbol: GNF
Shares Price (05/20/2013): $3.60
52-Week High/Low: $6.25/$3.20
Shares Outstanding: 15.56 MM
Options: 1.3 MM @ avg. $7.18 per share
Fully Diluted: 16.7 MM
Market Capitalization: ~$60 MM
Director & Officer Ownership 23%
6
Bahar Gas Field
•
4.3 TCF (1.3 TCF rem.)
•
Under re-development
Shah Deniz Field
•
25 TCF Field under development by BP
TOTAL announced field discovery (2011)
•
500+ feet of net gas pay
•
5 to 10 TCF in POD
Shallow Water Guneshli Field
•
1.3 BBO, 3.6 TCF
BE 2 Exploration Area
3D Seismic Processing Underway
Azeri-Chirag-Guneshli Field
•
6.8 BBO, 8.8 TCF
N
Oil and Gas Fields South Caspian Sea
Greenfields Petroleum’s Bahar ERDPSA Project offshore Azerbaijan
Giant fields in a mature oil & gas area
BAKU
Gum Deniz Oil Field
•
210 MBO (329 MBO rem.)
•
Under re-development
7
Satellite View of Gum Deniz Oil Field
Island Office Complexes
Gum Denizi Field Causeways
Gum Denizi Field Platforms
Bahar Gas Field
7.5 miles south
Gum Deniz Oil Field
8
•
Cumulative production of
210 MMBBL
of oil and 581 BCF of gas
•
Average cumulative production per well of
556 MBO
•
OOIP of 2.16 BBO within 13 vertically stacked pays
•
API Gravity
32 to 46 degrees
New Platform Locations
Gum Deniz Field Type Log – Gum Deniz 456
•
15 separate vertical pays zones are found across the field.
•
Established production over a stratigraphic interval of more
than 1,580 meters.
•
Most producing zones display permeabilities of 100 to 230
md and porosity ranging between 15-25%.
•
Most wells have multiple pay zones.
•
Estimate of over 2 billion barrels of OOIP.
QP-SV_BU -90 50 N05-SV 0.20 100 NQK 1.40 0.60 2000 3000 -2 0 0 0 -3 0 0 0 VI SP X VIII V NKP PK KaS VII KS IX 0 1000 2000 0.000 1000.000 2000.000 0. 11.81 Offset: Gum-Deniz 456 Gum-Deniz 504 99 m 0 1000 2000Horizon KS
Horizon V
Horizon VI
Horizon VII
Horizon VIII
Horizon IX
Horizon X
Horizon SP
Horizon NKP
Horizon PK
Horizon KAS
2,000 meters
3,000 meters
2,500 meters
3,500 meters
Established Field Pays
714 744 743 712 713 748 745 715 716 749 759 750 754 755 753 752 751 747 717 746 2 756 757 763 209 208 760 761 762 BE-10
Gum Deniz Platform and Development Well Locations
Initial 20 Development Wells from Existing Platforms (total of 37 wells)
Net Pays Ranging from
55-352 meters/well
Net Pays Ranging from
67-262 meters/well
Net Pays Ranging from
73-220 meters/well
PSG 3 Rig
being mobilized
for drilling in 2013
PSG 1 Rig drilling
GD 716 well
GD 715
(159 Meters Pay)
IP30 = 625BOPD
BE-10 new platform
concept to be replaced
with additional 10 slots
on Platform 2
GD-715 SP Sand
11
Total Depth: 3587 MD (3491 TVD)
Major Oil Pays logged
(SLB ELAN):
Bal-VII:
11 m
Bal-VIII:
13 m
Bal-IX:
30 m
Bal-X:
16 m
SP:
13 m
NKP:
36 m
PK:
21 m
TOTAL:
159 m
Testing and Completion Program
•
Completed in PK, NKP and SP intervals
•
Initial rates 1000 to 700 BOPD
•
(~10% BS&W)
•
IP 30: 625 BOPD (high wax build up)
•
Drilling days: 60 (Testing days: 50)
Perforations
Gross Pay Interval: 59 m (NKP)
Net Pay: 36 m (NKP)
M
u
d
l
o
g
s
h
o
w
SW <5 0% Perf orati ons3947
PSI
3905
PSI
XPT
press
ure
12
Gum Deniz Oil Field Phase I Development
Development Drilling Plan
Existing Platforms (37 Wells)
New Platforms (50 Wells)
Total New Wells 87
Seismic Surveys
•
Previous Spec 2-D acquired in
1995 by Western
(grey lines)
•
140 line km of 2D seismic
(yellow lines)
•
88 sq. km (includes Socar 3D)
full fold coverage 3D
(green
area)
•
New 3-D planned for Gum Deniz
oil field in July 2013 : 200 sq.
km
(
dark green area
)
13
2012 2-D
Re-Processed
Spec 2-D
2012 3-D in
Processing and
Interpretation
Gum Deniz Oil Field
East-West Line 1104
Seismic shows structural high up dip to
east of productive wells
Productive
Interval
Untested trap on
downthrown side
of fault
Lowest Known oil
15
Representative Seismic Time Structure
Map
(Near X Horizon)
Contour Interval 50 MS (~60 meters)
Gum Deniz Oil Field
Produced 208 MMBO
Bahar Gas Field
4.2 TCF + 84 MMBC Produced
•
Zones IX and X are major
developed pay zones in
both fields
•
Undeveloped area in
Gum
Deniz Field
is potentially
larger than the developed
field area which has
cumulative production of
208 MMBO
HKO -2341
LKO -4054
HKG -4227
Potential
development
area
LKG -4675
Potential
development
area
Phase II Potential Gum Deniz Locations – PK Formation
Gum Deniz
PK Well Locations
(20 acre spacing)
Net Pay (CI: 5m)
•
New seismic has
identified many new well
locations to be drilled in
future phases
Phase I
14 PK development wells
(out of 87 wells)
Lowest known PK oil
Phase II
257 PK development wells
License
Boundary
December 2012
16
Bahar Gas Field
•
Cumulative production of
4.3 TCF
, 84.0 MMBBL of condensate
•
Average cumulative production per well of
31.2 BCF of gas
&
0.6 MMBBL of condensate
•
OGIP of
7.53 TCFG
in 12 vertically stacked reservoirs
SPBL 70 -10.0 RT 0.20 100 POR 0.25 -0.10 4000 5000 -3 0 0 0 -4 0 0 0 -5 0 0 0 5472.0 SPBL 70 -10.0 RT 0.20 100 3000 4000 -3 0 0 0 -4 0 0 0 4681.0 NKP VII VIII V IX KS NKG X SP VI PK I VIII X SP IX VII I V VI 0 1000 2000 0.000 1000.000 2000.000 0. 11.81 Offset: Bahar 019 Bahar 185 1906 m 0 1000 2000
Horizon I
Horizon V
Horizon VI
Horizon VII
Horizon VIII
Horizon IX
Horizon X
Horizon SP
Horizon NKP
3,500 meters
4,000 meters
4,500 meters
5,000 meters
•
12 pay zones inside the 1,675 meters stratigraphic interval.
•
Total net sand pay in a well can exceed over 300 meters.
•
Most wells have multiple pay zones and many behind pipe
zones yet to be perforated.
18
Rig and Seismic Activities
Well # 209 drilling at Bahar Field in the Caspian Sea
Activity
2013
Gum Deniz
Drilling
5-6*
Workovers
5
Bahar
Recompletions
5 - 7
• Add additional slots on existing Gum
Deniz platforms
•
Acquiring 3D Seismic Program
(200 SQ KM) in Gum Deniz
•
Process and interpret 2012
3D Seismic Program (95 SQ KM)
•
Evaluate exploratory opportunities
in BE 2 exploration area
* Note: drilling schedule is impacted by the start of
PSG 1 Rig Drilling
on Platform 2 in
Gum Deniz Oil Field
Greenfields 2013 Capital Program
19
* 2013 GNF net revenues $38 MM
19
Item
$ Million
Drilling/Completions
$32.0
Recompletions/Workovers
$7.1
Platforms and Facilities
$5.0
3D Seismic Program
$4.7
Safety and Marine
$0.8
Other
$0.5
Total
$50.1
Drilling
&
Completions
Recompletions
& Workovers
Platforms
& Facilities
3D Seismic
Revised Capital Program
•
Emphasis on oil drilling (adding second drilling rig) and workovers
•
Gas recompletions simplified (defer fishing jobs)
Phase I Program*
-
to develop 29.8 MMBO (1.5% of OOIP) and 226.3 BCF (3% of OGIP)(gross)
Field
Recompletions
Development Drilling 12/31/2011 Producing
Gum Deniz 29
87
27
Bahar
40 8 11
Total
69 95
38
Typical Projected Gross Reserves Per Well*
Field
Recompletion
Drilling
Production Rates
Gum Deniz 135 MBO
320 MBO
220 B/d
Bahar
3.2 BCF
7.0 BCF
3.0 MMscf/d
Costs ($MM) 0.3 to 1.8
6 to 13
Future Programs
To be determined based on results of 2D and 3D seismic programs
*based on the GLJ Reserves Report 12-31-2011
Bahar Oil and Gas Development Program -
Next Five Years
Greenfields Petroleum
- Growth Engine
•
Continue Development of Gum Deniz Oil Field
– Gross Undeveloped Reserves of ~300 MMB
– 2013 3D seismic in rehabilitation area to define field extension areas
•
Continue Development at Bahar Gas Field
– Gross Undeveloped Reserves of 1.14 TCF
– Improved gas pricing linked to European markets 2018
•
Exploration
potential in Bahar 2 Area
– Located between two giant fields (25 TCF and 5 TCF)
– Proprietary 3D Seismic program in 2012
– Offsets recent multi-TCF field discovery by Total and SOCAR
Greenfields Petroleum Corporation
CHF Investor Relations
John Harkins – President & CEO
Robin Cook - Senior Account Manager
Phone: (832) 234-0810
Phone: (416) 868-1079 Ext. 228
Facsimile: (832) 234-0823
Facsimile: (416) 868-6198
John.Harkins@greenfieldspetroleum.com
Robin@chfir.com
www.greenfields-petroleum.com
Contact Information
Operations in Gum Deniz oil field and Bahar gas field
23
Greenfields Petroleum Reserves - Year End 2012
Greenfields
Net Interest
Proved
Producing
Proved
Developed
Proved
Undeveloped
Total
Proved
Total
Probable
Total 2P
Oil Mbbls
306
686
2,693
3,685
1,457
5,142
Gas MMcf
3,316
20,073
5,876 29,265
11,567
40,832
Total NGL
26
220
142
388
240
628
Total BOE
Mbbls
885
4,251
3,815
8,951
3,624
12,575
NPV 10%
$M
10,574
18,359
19,734 48,667
69,031
117,698
*
GLJ Reserve Report December 31, 2012
Greenfields Petroleum Contingent Reserves
Greenfields Net
Interest
Total
Proved
Total
Probable
Total 2P
Total
Possible
Total 3P
Oil Mbbls
3,685
1,457
5,142
2,970
8,111
Gas MMcf
29,265
11,567
40,832
4,753
45,585
Total NGL
388
240
628
147
775
Total BOE
Mbbls
8,951
3,624
12,575
3,908
16,484
NPV 10%
$M
48,667
69,031
117,698
84,439
202,137
*
GLJ Reserve Report December 31, 2012
26
Strategic Redirection –
Focus on Oil Production and Reduce Costs
Well # 209 drilling at Bahar Field in the Caspian Sea
Drilling
• Focus on Shallower Targets
• Savings of $1.7MM/well (-2 weeks
drilling time)
• Evaluating twinning wells to develop
multiple reservoirs
• Add second drilling rig in Gum Deniz
(PSG 3 rig)
• Tendering for additional 1500 HP rig
Recompletions / Workovers
Gum Deniz
• Adding 5 oil workovers
• Evaluating shallow gas potential (40 Meters)
• Comingle with existing production
Bahar
• Deferring fishing jobs
• Focus on recompletions with SOCAR 80 rig
(upgraded)
• Significant savings on platform refurbishment
costs
Greenfields 2013 Capital Program
27
* 2013 GNF net revenues $38 MM
27
Item
$ Million
Drilling/Completions
$32.0
Recompletions/Workovers
$7.1
Platforms and Facilities
$5.0
3D Seismic Program
$4.7
Safety and Marine
$0.8
Other
$0.5
Total
$50.1
Drilling
&
Completions
Recompletions
& Workovers
Platforms
& Facilities
3D Seismic
Revised Capital Program
•
Emphasis on oil drilling (adding second drilling rig) and workovers
•
Gas recompletions simplified (defer fishing jobs)
Contractor Production Forecast (Gross Project)
Key Factors for Production Growth
Assumptions in Forecasts
New Wells produce at 220 BOPD, risked at 90 percent success
Workover / recompletion risked at 50 percent success
Fishing jobs risked at 20 percent success
Key Production Risks
Negative
•
Mobilization and start of drilling with PSG 3 rig
•
Slower drilling times
•
Bahar platform refurbishment timing
Positive
•
Better than expected IP rates
•
Higher rate of success on workovers GD and Bahar
•
Gum Deniz shallow gas potential
Contractor Production Forecast (Gross Project)
Drilling Curve GD 715 Well
Drilling Curve GD 716 Well
Gum Deniz 3D Seismic - 2013
200 square kilometers covering Gum Deniz oil field (fully migrated) and the east extension
(partial fold).
Estimated total cost: $14.9 Million
Limit of extended area
Limit of present concession
33
Limit of partial fold area
Limit of partial fold area
Bahar 2 Exploration Area
Zone VIII Time Structure
CI= 20 milliseconds
Extracted Amplitudes
Amplitudes between VIII
and X Horizons
VIII horizon shows good
correlation of high amplitude
anomalies to selected best
producing wells in Bahar gas
Background Information
36
"R"-factor
SOCAR Share (%)
Contractor Parties' Share
(%)
0.00 < R < 1.25
40.0
60.0
1.25 < R < 2.00
50.0
50.0
2.00 < R < 2.75
70.0
30.0
2.75 < R< 3.00
80.0
20.0
3.00 < R
90.0
10.0
Attractive Fiscal Terms
•
25 year term + 5 year extension
•
100% cost recovery
•
Royalty 5% for 1
st
three years (10 % thereafter)
•
No income tax
•
All oil and gas exportable
COMPENSATORY
PRODUCTION
(Royalty)
less
SALES REVENUE
less
OPERATING
COSTS
Balance
PROFIT OIL
COST OIL
“R” FACTOR /
SPLIT OF
REVENUE
CAPITAL
COSTS PLUS
FINANCE
COSTS
less
SOCAR
CONTRACTOR PARTIES
80%
20
%
SOA
BAHAR ENERGY
PRODUCTION
Bahar ERDPSA Revenue Entitlements
Bahar ERDPSA Revenue Entitlements
Greenfields has a highly experienced team with proven track records starting & developing public and
private oil and gas companies.
The Greenfields Team
Executive Management
Over 35 years of experience in geology, negotiations and directing corporate
development (Stratum, Jubliant, Enron Oil and Gas International, Elf
Aquitaine, Monsanto and Santa Fe).
Over 30 years experience in engineering, operations & business development
(Exxon, Union Texas, Arco/BP, FIOC, Hurricane, Anadarko and GFI Oil & Gas
Corporation).
Over 30 years experience in negotiations, finance & business development
(Amoco, TransCanada Pipelines & Anadarko).
Over 35 years of finance and senior management positions in energy industry.
George Greene
VP Technical
Richard
MacDougal
Chief Operating Officer
John Harkins
Chief Executive Officer
Wayne Curzadd
Chief Financial Officer
Successful track record of capturing opportunities and executing developments.
Board of Directors
Michael Hibberd
Chairman
Chairman of Heritage Oil Plc. and Canacol Energy Ltd., Co-Chairman at Sunshine
Oil Sands Ltd., Director of Montana Exploration Corp. and Pan Orient Energy Corp.
Garry Mihaichuk
Director
Previously senior officer of TransCanada Pipelines Ltd., Amoco Corporation and
Husky Energy Inc.
Jerry Clark
Director
Over 35 years of diverse experience in the energy industry, having served in
various senior management/executive officer positions at Amoco, Shell, Reliant
Resources, Output Exploration, GFI, and most recently Ciris Energy.
John Harkins
Director
Richard MacDougal
Director
Alex Warmath
Director
Greenfields Management
Team Members
40
Former CTO Greenfields Petroleum. Over 35 years of experience in geology and
business development (Tenneco, Apache, Enron Oil and Gas International,
Anadarko and GFI Oil & Gas Corporation).
Bahar ERDPSA Market and Transportation Systems
GAS
Sold to SOCAR Take or Pay Contract
Wellhead Price: US$3.96/MCF
Recent Gas Pipeline Developments
•
Azerbaijani-Turkish Trans-Anatolia gas
pipeline project (TANAP), officially
launched on June 26, 2012
•
The Governments of Azerbaijan
Georgia and Turkey have agreed to
develop a 1.5 BCF/d pipeline from
Azerbaijan to Turkey
•
SOCAR and BP are planning on
building and operating the pipeline
•
Construction to start 2014 and gas
delivery by 2018
OIL
All volumes sold to SOCAR Marketing
- pipeline shipped to Novarossiysk (or Supsa)
- liftings every 6 to 10 days
Wellhead Price : Brent (less US$6/BBL)
Nabucco West Transportation Systems
Recent Gas Pipeline
Developments
•
Shah Deniz gas producers’
consortium in Azerbaijan
announced that it has selected
the Nabucco-West pipeline
project to be the route for
Caspian gas into Central Europe
(January 10, 2013)
•
Nabucco-West –
Bulgaria/Turkey to Vienna
•
Azerbaijan Gas could be priced
at European gas prices by 2018
42
Diameter: 48” Diameter
Material: Steel
Wall thickness: 20-36 mm
Burial Depth: Minimum 1,0m
Pressure: 100 bar
Control: two Control Centers
In-Country Control Centers ( ICCC):
Sofia, Bulgaria; Medias, Romania; Budapest, Hungary; Baumgarten, Austria
Compressor stations: Estimated at 11
