Catalysts for Growth Strategic Partnerships | Large Acreage Position - - PowerPoint PPT Presentation

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Catalysts for Growth Strategic Partnerships | Large Acreage Position - - PowerPoint PPT Presentation

Catalysts for Growth Strategic Partnerships | Large Acreage Position | Multi-zone Horizontal Oil Drilling Opportunities November 28, 2017 Disclaimers Reader Advisory A preliminary short-form prospectus containing important information relating


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November 28, 2017

Catalysts for Growth

Strategic Partnerships | Large Acreage Position | Multi-zone Horizontal Oil Drilling Opportunities

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SLIDE 2

Disclaimers

Reader Advisory A preliminary short-form prospectus containing important information relating to the securities of Point Loma Resources Ltd. has been filed with the securities regulatory authorities in each of the Provinces of Canada except Quebec. A copy of the preliminary short form prospectus, and any amendment, is required to be delivered to any investor that received this presentation and expressed an interest in acquiring the securities of Point Loma Resources Ltd. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued. The preliminary short-form prospectus is still subject to completion. This presentation does not provide full disclosure of all material facts relating to the securities offered under the preliminary short form prospectus. Investors should read the preliminary short form prospectus, the final short form prospectus and any amendment for disclosure of those facts, especially risk factors relating to the securities

  • ffered, before making an investment decision.

Forward-Looking Statements Certain statements contained in this presentation may constitute forward-looking information and statements. Forward- looking information and statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "could", "project", "predict", "propose", "potential", "targeting", "intend", "could", "might", "should", "believe", "budgeted", "scheduled" and "forecasts", and similar expressions and variations (including negative variations). All statements in this presentation, other than statements of historical fact, that address events or developments regarding Point Loma Resources Ltd. (the “Corporation” or “PLX”) that PLX expects to occur, including, without limitation, management's assessment of future plans and operations, the potential benefits to be derived from the proposed transactions, future acquisitions, timing of drilling and tie-in of wells, cash flow projections, pricing assumptions, productive capacity of new wells and productive capacity from different wells, expected production rates, drilling success rates, expected operating rates, facility plans, development and drilling opportunities, re-connection plans, facility optimization, expected licensee liability ratings and dates of commencement of production, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, applicable royalty rates and tax laws, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, availability and cost of labour and services, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, natural gas and oil tax incentives and deductions, hydraulic fracturing and climate change, and losses possible from any pending or future litigation. Many of these estimates and assumptions are based on factors and events that are not within the control of PLX and there is no assurance they will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements throughout the presentation. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Corporation's operations and financial results will be included in financial

  • reports. Furthermore, the forward-looking statements contained in this presentation are made as at the date of this presentation and the

Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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Disclaimers

Oil & Gas Disclosures Barrel of oil equivalents or 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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value. References in this document to production test rates, initial test production rates, and other short-term production rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for PLX. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, the Corporation cautions that the test results should be considered to be preliminary. This presentation discloses drilling locations in two categories: (i) proved locations; and (ii) potential drilling opportunities. Proved locations, which are sometimes collectively referred to as “booked locations”, are derived from the Corporation’s most recent independent reserves evaluation as of December 31, 2016 and account for drilling locations that have associated proven reserves, as applicable. Potential drilling opportunities are internal estimates based on the Corporation’s prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Potential drilling opportunities do not have attributed reserves or

  • resources. The Corporation has, based on the December 31, 2016 reserve report and management's current internal estimate, 3.4 net proved

locations and 70 identified potential drilling opportunities. Potential drilling opportunities have specifically been identified by management as an estimation of our multi-year experience in drilling activities based on evaluation of applicable geologic, seismic, and engineering, production and reserves data on prospective acreage and geologic formations. The drilling locations on which we actually drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results and other factors. While certain of the potential drilling opportunities have been de-risked by drilling of wells by the Corporation or other operators in close proximity to such potential drilling opportunities, the majority of other potential drilling opportunities are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and, if drilled, there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production. Type wells indicated herein are estimates based on common industry practices of reviewing analogous wells in reasonable proximity to the drilling

  • pportunities and defining a ‘type well’ by averaging production of the analogous wells for the first 24 months, or longer, as available from public
  • sources. These type wells have been prepared by a qualified reserves evaluator or auditor and do not represent ‘reserves’ as defined by NI 51-
  • 101. Well economics associated with these estimates are based on certain assumptions made by management based on current pricing, costs,

royalties, and are not intended to provide an estimate of future performance of wells or an estimate of reserves.

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Point Loma

Snapshot

  • 3 new wells on production
  • Land consolidation in Paddle River area adds horizontal oil drilling opportunities

4 PLX:TSXV

Point Loma Resources Ltd. (TSXV:PLX) (“Point Loma” or, the “Company”) is a public oil and natural gas exploration and development company in Calgary, Alberta

Strategic Partnership Focused on Adding Oil Current Inventory

  • Over 160,000 net acres, deep inventory of multi-zone horizontal oil drilling
  • pportunities
  • 19.9% shareholder, Evenergy Company Limited (“Evenergy”), working with Point

Loma to develop a sizeable Canadian E&P business

  • Subsidiary of Zhongcheng Group, one of the largest privately owned petroleum

refinery, oil products and LPG distribution and retail companies in China

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SLIDE 5

Team

Experienced Governance & Energized Team Board of Directors

Steve Dabner, P. Geol., Chairman; Reserves & HSE Comm

  • Mr. Dabner has 33 years of industry experience, including founding roles as

President and Chief Executive Officer of Online Energy Inc., Trimox Energy

  • Inc. and Moxie Exploration Ltd.

Jianjun Cui, PhD Geoph.; Comp & Gov Comm, Reserves & HSE Comm

  • Mr. Cui has more than 20 years of senior management experience including

Senior Vice President of a Hong Kong listed company and Vice President of Mergers and Acquisitions for Sinochem Petroleum. Kevin Baker, Q.C.; Audit Comm; Comp & Gov Comm

  • Mr. Baker has served as a Director of Calfrac Well Services Ltd. since 2010.
  • Mr. Baker has also served as the President and Managing Director of Baycor

Capital Inc. a private merchant banker and CEO of ConleyMax Inc. Doug Dafoe, CA; Audit Comm

  • Mr. Dafoe is currently the Chief Executive Officer and President of Ember

Resources Inc. and Chairman of the Board of Xtreme Drilling and Coil Services Corp. Mr. Dafoe has 35 years industry experience. Jay Reid, B.Comm, LLB; Comp & Gov Comm

  • Mr. Reid is currently a partner at Burnet Duckworth and Palmer. Mr. Reid has
  • ver 26 years of industry experience. During the course of his career Mr. Reid

has acted as a Director or Officer of 19 public companies. Don Brown; Audit Comm; Reserves & HSE Comm

  • Mr. Brown is an independent businessman with over 30 years of industry

experience and formerly the President and Chief Executive Officer of Elkwater Resources Ltd. until July 2014. Terry Meek – President, CEO

  • Mr. Meek has 30+ years of experience in the conventional and unconventional
  • il & gas industry. Former founder, Executive VP and COO of Ember Resources
  • Inc. (2005-2011). Former founder, VP Engineering and COO of Thunder Energy

(1995- 2005), growing market capital to over $600 million from inception.

Management

Terry Meek, P.Eng., President, CEO

  • Bio in Board of Directors Section

Kevin Angus, P.Geoph., ICD.D, Vice President New Ventures

  • Mr. Angus has 30+ years of geotechnical experience and is also a director of

Painted Pony Petroleum. Former co-founder of three public oil and gas companies. Randall Boyd, CPA, CGA, Vice President Finance and CFO

  • Mr. Boyd is an experienced public CFO with 30+ years in the oil and gas
  • industry. His experience includes positions as CFO at Deventa Energy Inc.,

Masters Energy Inc. and other listed companies. Dan Boyko, P. Eng., Vice President, Engineering

  • Mr. Boyko has 30+ years of experience in the petroleum industry.

Former VP Business Development for Open Range Energy Corp. and a Petroleum Engineering consultant for multiple companies including NAL Resources. Brad Johnston , B.Comm – Vice President Land

  • Mr. Johnston has 18 years of experience in the oil and gas industry, both

internationally and in Western Canada and was VP Land for Carnaby Energy Ltd. Gordon Cameron – Corporate Secretary

  • Mr. Cameron is a partner at McCarthy Tétrault LLP. He has been a

practicing corporate lawyer for over 9 years and specializes in the areas of corporate finance, capital markets, corporate governance and mergers and acquisitions.

5

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Basic Shares Outstanding(2) 42,078,907 Fully Diluted Shares Outstanding 46,028,907 Insider Ownership (Basic / Fully Diluted) 44% / 47% Management Ownership (Basic / Fully Diluted) 7.0% / 11.0% Market Capitalization (Basic)(1) $12,202,000 Convertible Debenture – Matures on June 28, 2021(2) $2,500,000 Strong Alignment with Shareholders/Investors: Management Average Cost – per share $0.55-0.59

Notes: (1)

  • Nov. 24 2017 closing price per share

(2) Terms of convertible debenture - 3.0% interest with conversion price of $0.50 per share

TSXV – PLX Share Price (Nov 24, 2017) $0.29

Capital Structure

6 PLX:TSXV

Current production Oil/Gas weighting 660 boe/d 25%/75%

  • No Bank Debt
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SLIDE 7

Point Loma

Overview and Strategy

  • Point Loma has captured a relatively

significant position on the highly prospective multi-zone Mannville to Mississippian fairway of West Central Alberta

  • Over 160,000 net acres with

significant shallow to medium depth horizontal drilling inventory (> 250 net drilling opportunities)

  • Consolidation acquisitions have been

at relatively low industry metrics

  • Growth strategy via organic drilling

across relatively large land base and

  • pportunistic accretive acquisitions
  • Working to unlock value for

successful exit strategy and generate shareholder return

7 PLX:TSXV

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Point Loma

Deep Drilling and Recompletion Inventory

PADDLE RIVER

  • Development horizontal oil
  • Water injection/ process
  • ptimization
  • Land consolidation

WEST COVE

  • 3D Seismic Program
  • Develop Nordegg Hz oil
  • Banff land acquired, exploration
  • pportunity

WILDWOOD

  • Ostracod Hz oil new

development

  • Ellerslie Hz exploration

LEAMAN

  • Glauconite oil/gas recompletions
  • Jurassic oil recompletions

WHITECOURT

  • Ellerslie oil Hz opportunity
  • Wilrich oil Hz opportunity
  • Nordegg, Pekisko oil potential

8 PLX:TSXV

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Multiple Zone Oil and Liquids Rich Gas Fairway

Upper Mannville Inventory

Blackspur Bonavista Tourmaline Cenovus Cardinal Vermillion Petrus Manitok

Industry Success Significant Horizontal Opportunity Base Zone Bypass drilling Opportunities

(1)

Follow-up Opportunities(1) Glauconite 17 104 Other Upper Mannville 15 90

Assumptions Drill - $1000k Complete - $900k Tie-in - $300k 20 stage frac

(1)See Disclaimers for additional definitions of locations and opportunities. Follow up

  • pportunities are wells on industry standard spacing that may result from a successful

drilling opportunity.

Month Month 18 Regional Horizontal Wells – Oil and Gas Production By Well

  • Over 5,500 well penetrations in

the area have identified our bypass opportunities

9 PLX:TSXV

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SLIDE 10

Multiple Zone Oil and Liquids Rich Gas Fairway

Lower Mannville Inventory

Industry Success Significant Horizontal Opportunity Base

  • Over 5,500 well penetrations in

the area have identified our bypass opportunities

(1)See Disclaimers for additional definitions of locations and opportunities. Follow up

  • pportunities are wells on industry standard spacing that may result from a successful

drilling opportunity.

Assumptions Drill - $1000k Complete - $700k Tie-in - $300k 15 stage frac

Blackspur Bonavista Tourmaline Cenovus Cardinal Vermillion Petrus Manitok

Zone Bypass drilling Opportunities

(1)

Follow up Opportunities(1) Ostracod 19 121 Ellerslie 5 30

Month Month 6 Regional Horizontal Wells – Oil and Gas Production

10 PLX:TSXV

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Multiple Zone Oil and Liquids Rich Gas Fairway

Jurassic Inventory

Industry Success Significant Horizontal Opportunity Base Zone Bypass drilling Opportunities

(1)

Follow-up Opportunities(1) Rock Creek 3 18 Nordegg 8 58

(1)See Disclaimers for additional definitions of locations and opportunities. Follow up

  • pportunities are wells on industry standard spacing that may result from a successful

drilling opportunity. Sinopec Surge New Star Long Run

Assumptions Drill - $1000k Complete - $500k Tie-in - $300k 37 Regional Horizontal Wells – Oil and Gas Production

  • Over 5,500 well penetrations in

the area have identified our bypass opportunities Month Month

11 PLX:TSXV

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SLIDE 12

Duvernay West Shale Basin

Land Position on Emerging Play

Recent land sale activity surrounding Point Loma land base Positive analogous horizontal well results in east shale basin Point Loma has 16,524 acres ( 13,105 net) prospective Duvernay rights

Point Loma Map Area

West Shale Basin East Shale Basin

Edmonton Red Deer

2017 Duvernay land sales (up to Nov 8th) November 22 to December 20 2017 postings PLX Duvernay WI

12 PLX:TSXV

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Point Loma

A History of Creative Deals That Add Value

  • Paddle River Assets – July 2016
  • $2.5M shares and $3.0M Debenture,

$14,000/boepd, $3.76/boe TP

  • 135 boepd increased to over 400 boepd

by Sept. 2016

  • Re-connected to new facility to unlock

potential value

  • Ascent Energy
  • $500k shares, $12,500/boepd, $4.85/boe

TP

  • Whitecourt (Judy Creek prev.) Assets
  • $1.78M shares, $3,950/boepd, $0.78/boe

TP

  • Additional suspended previously

producing wells of approx. 640 boepd with plans to reconnect in 2018 to unlock potential value

  • Paddle River Assets – August 2017
  • Suspended wells purchased for $0.3M
  • Re-activate key well Nov. 2017
  • Adds further horizontal drilling
  • pportunities
  • Paddle River Assets – November 2017
  • Two transactions for $0.4M consolidate

area development

  • Improves facility optimization
  • Adds further horizontal drilling
  • pportunities

13 PLX:TSXV

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SLIDE 14

Water contact

Ostracod A Pool Cum oil 540 mstb Cum gas 3.0 Bcf Acquired and plan tp initiate production of 12-4-56-7W5 well connected to PLX system PLX plans to re-enter and complete 02/1-32Hz to the north Point Loma has entered into agreements to acquire additional lands; now 80% WI in lands 4-31Hz is being converted to water injection as part

  • f our full field

development Up to 16 horizontal development opportunities

02/1-32Hz sidetrack plan 16-29Hz PUD location 4-31Hz

Paddle River Acquisitions

Consolidation of Area WI for Mannville Light Oil 14

Hz unbooked opportunity

PLX:TSXV

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SLIDE 15

Paddle River (Lower Mannville) Ostracod A

Type Well Economics (1)

Key Assumptions

(1)See Disclaimers for additional definitions of type wells, locations and opportunities.

Capital Drill - $1.0M Complete - $0.7M Tie-in - $0.3M 20 stage frac

RoR (%) NPV 10 ($M) Payout (yrs) >50 $1,250 1.6

Month 5 Paddle River Ostracod A Horizontal Wells – Oil and Gas Production 10-15 Stages Oil Production Gas Production Pricing WTI - $55/bbl AECO - $2.50/GJ Flat price forecast

15

Significant Development Opportunity Base

PLX:TSXV

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SLIDE 16

Paddle River Facilities

Optimization Plan Facility plan

  • Construct central tankage, treating for

Paddle River lower Mannville oil development

  • Add flowline capacity
  • Utilize existing well as water injector
  • Save on emulsion/water trucking
  • Support reservoir pressure

Results

  • Additional development of the

area could result in significant savings

  • Future drilling could also

benefit from facility upgrades 16 PLX:TSXV

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SLIDE 17

West Cove Development

Nordegg Oil and Gas Development and Banff Oil Exploration

5-31Hz recompletion confirms upper section Nordegg oil/gas Follow up Nordegg Hz Well with 16 potential development opportunities Existing 3D seismic available for purchase and Point Loma is permitting additional coverage to delineate the opportunities 8 new sections acquired on Banff/Nordegg trend

3D trade seismic Banff pool Nordegg pool 5-31 Hz 15-31 Hz

  • pportunity

17 PLX:TSXV

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SLIDE 18

Paddle River Facility

Re-activation Plans and Increased NGL Recovery

Point Loma Land

Previously suspended production targeted for re-activation in 2018. Approximately 1.5 mmcfd (net) additional volume and estimated incremental 100 bpd NGL’s

18

Previously producing wells

PLX:TSXV

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SLIDE 19

Leaman Glauconite and Jurassic

Recomplete and Drilling Opportunities Glauconite sand Jurrasic channel 19

Glauconite sands with analogous pay are available for recompletion and potential production and development Jurassic oil opportunities are also present and indicated with analogous pay sections Potential to recomplete December 2017 and follow up on success

1 BCF 48 mstb, 0.9 BCF

PLX:TSXV

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SLIDE 20

Wildwood (Lower Mannville) Ostracod

New Oil Opportunity

Thick Ostracod sand section, 5+m

  • ver 9% porosity

Point Loma was successful at the recent landsale for sections 17 and 20. Ostracod sand has produced 2.6 mbbls in Section 17 Hz opportunity identified with potential for several follow-up opportunities

20 PLX:TSXV

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SLIDE 21

Wildwood (Lower Mannville) Ostracod

New Oil Opportunity

15-10-54-9W5 Hz exploration well licensed Potential for up to 10 follow up opportunities contingent on success

21 PLX:TSXV

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SLIDE 22

Thorsby

Tie-in Glauconite and Complete and Tie-in Sparky

Successful Sparky wells - Blackspur

103/11-18-49-1W5 Glauconite well (drilled 2015) now on production 9-18-49-1W5 Sparky well on extended flow test Opportunity to develop in two zones with multi-well potential

Oil Gas

6 Regional Sparky Horizontal Wells – Oil and Gas Production

Pipeline to area facility 9-18 Sparky Hz

22 PLX:TSXV

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SLIDE 23

Stacked Mannville sands are prospective throughout the Whitecourt area Horizontal development and vertical recompletions identified targeting gas and liquids Nordegg oil, Pekisko

  • il potential

Whitecourt

Horizontal Oil and Gas Opportunities 23

Point Loma WI Nordegg Oil Potential Upper Mannville Trends Pekisko Oil Potential Point Loma Working Interest

PLX:TSXV

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SLIDE 24

Thornbury

Q1 2018 Re-activation Opportunities Allow for Cost Growth

  • Current production of 500 mcfd net,

80% WI in gas compression facility

  • Q1 2018 phase 1 approved plan re-

activate 1.2 mmcfd net

  • Q1 2018 phase 2 proposed plan re-

activate 0.6 mmcfd and 2.0 mmcfd 3rd party gas

  • Capital phase 1, $0.4M net

Phase 1 Phase 1 Algar 12-28 Compressor

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Phase 2

PLX:TSXV

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SLIDE 25

Why Point Loma (PLX)?

Large Acreage Position, Strategic Partnerships, Increasing Oil Production, Deep Inventory

  • Experienced Management/Board aligned with investors; Average

Cost Management between $0.55 to $0.59/share

  • Strategic Partnership with Evenergy intended to position PLX to

become a key E&P player

  • Over 250 net section land position with multi-zone plays
  • Restarting Volumes via Infrastructure Changes at Paddle and

Thornbury

  • Increasing Oil and NGL production to try to generate higher revenue
  • Potential drilling inventory with over 250 follow-up opportunities
  • Unconventional Duvernay Shale land position within the oil window

25 PLX:TSXV

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SLIDE 26

Attractive Valuation Currently for Investors

Point Loma Trades at Discount to Energy Peers 26 PLX:TSXV

Production

  • Mkt. Cap.

EV boe/d EV/boe/d Land (Net) Company ($MM) ($MM) 2017E 2018E 2017E 2018E Acres Sections Altura Energy Inc. $45.7 $44.7 1,165 1,675 38,333 $ 26,661 $ 75,441 118 Traverse Energy Ltd. $39.9 $40.4 785 1,175 51,419 $ 34,352 $ 181,000 283 Point Loma Resources Ltd. $11.8 $12.2 609 1,700 20,108 $ 7,198 $ 160,000 250 Source: Bloomberg, Mackie Research Capital

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SLIDE 27

Contact Information

Head Office

2000, 350 – 7 Avenue SW Calgary, Alberta T2P 3N9 403-705-5051

Contacts

Terry Meek, President, CEO 403-705-5051, e444 tmeek@pointloma.ca Kevin Angus, Vice President New Ventures 403-705-5051, e440 kangus@pointloma.ca Randall Boyd, Vice President Finance, Chief Financial Officer 403-705-5051, e443 rboyd@pointloma.ca

Corporate Services

Legal Counsel McCarthy Tétrault Reserve Engineers McDaniel & Associates Consultants Ltd. Auditors KPMG LLP Transfer Agent Computershare Investor Services

27 PLX:TSXV