November 28, 2017
Catalysts for Growth
Strategic Partnerships | Large Acreage Position | Multi-zone Horizontal Oil Drilling Opportunities
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
Strategic Partnerships | Large Acreage Position | Multi-zone Horizontal Oil Drilling Opportunities
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
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
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.
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
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
royalties, and are not intended to provide an estimate of future performance of wells or an estimate of reserves.
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
Loma to develop a sizeable Canadian E&P business
refinery, oil products and LPG distribution and retail companies in China
Steve Dabner, P. Geol., Chairman; Reserves & HSE Comm
President and Chief Executive Officer of Online Energy Inc., Trimox Energy
Jianjun Cui, PhD Geoph.; Comp & Gov Comm, Reserves & HSE Comm
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
Capital Inc. a private merchant banker and CEO of ConleyMax Inc. Doug Dafoe, CA; Audit Comm
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
has acted as a Director or Officer of 19 public companies. Don Brown; Audit Comm; Reserves & HSE Comm
experience and formerly the President and Chief Executive Officer of Elkwater Resources Ltd. until July 2014. Terry Meek – President, CEO
(1995- 2005), growing market capital to over $600 million from inception.
Terry Meek, P.Eng., President, CEO
Kevin Angus, P.Geoph., ICD.D, Vice President New Ventures
Painted Pony Petroleum. Former co-founder of three public oil and gas companies. Randall Boyd, CPA, CGA, Vice President Finance and CFO
Masters Energy Inc. and other listed companies. Dan Boyko, P. Eng., Vice President, Engineering
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
internationally and in Western Canada and was VP Land for Carnaby Energy Ltd. Gordon Cameron – Corporate Secretary
practicing corporate lawyer for over 9 years and specializes in the areas of corporate finance, capital markets, corporate governance and mergers and acquisitions.
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)
(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
Current production Oil/Gas weighting 660 boe/d 25%/75%
significant position on the highly prospective multi-zone Mannville to Mississippian fairway of West Central Alberta
significant shallow to medium depth horizontal drilling inventory (> 250 net drilling opportunities)
at relatively low industry metrics
across relatively large land base and
successful exit strategy and generate shareholder return
PADDLE RIVER
WEST COVE
WILDWOOD
development
LEAMAN
WHITECOURT
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
drilling opportunity.
Month Month 18 Regional Horizontal Wells – Oil and Gas Production By Well
the area have identified our bypass opportunities
Industry Success Significant Horizontal Opportunity Base
the area have identified our bypass opportunities
(1)See Disclaimers for additional definitions of locations and opportunities. Follow up
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
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
drilling opportunity. Sinopec Surge New Star Long Run
Assumptions Drill - $1000k Complete - $500k Tie-in - $300k 37 Regional Horizontal Wells – Oil and Gas Production
the area have identified our bypass opportunities Month Month
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
$14,000/boepd, $3.76/boe TP
by Sept. 2016
potential value
TP
TP
producing wells of approx. 640 boepd with plans to reconnect in 2018 to unlock potential value
area development
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
development Up to 16 horizontal development opportunities
02/1-32Hz sidetrack plan 16-29Hz PUD location 4-31Hz
Hz unbooked opportunity
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
Significant Development Opportunity Base
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
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
Previously producing wells
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
Thick Ostracod sand section, 5+m
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
15-10-54-9W5 Hz exploration well licensed Potential for up to 10 follow up opportunities contingent on success
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
6 Regional Sparky Horizontal Wells – Oil and Gas Production
Pipeline to area facility 9-18 Sparky Hz
Stacked Mannville sands are prospective throughout the Whitecourt area Horizontal development and vertical recompletions identified targeting gas and liquids Nordegg oil, Pekisko
Point Loma WI Nordegg Oil Potential Upper Mannville Trends Pekisko Oil Potential Point Loma Working Interest
80% WI in gas compression facility
activate 1.2 mmcfd net
activate 0.6 mmcfd and 2.0 mmcfd 3rd party gas
Phase 1 Phase 1 Algar 12-28 Compressor
Phase 2
Production
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
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