Colville Lake Presentation July 2019 Di Discl claimer Paramount - - PowerPoint PPT Presentation

Colville Lake Presentation July 2019

Di Discl claimer

Paramount Resources Ltd. ("Paramount"), has taken all reasonable care in producing and publishing the information contained in this

• presentation. Material in this presentation may still contain technical or other

inaccuracies, omissions, or typographical errors, for which Paramount assumes no responsibility. Paramount does not warrant or make any representations regarding the use, validity, accuracy, completeness or reliability of any claims, statements or information in this presentation. Under no circumstances, including, but not limited to, negligence, shall Paramount be liable for any direct, indirect, special, incidental, consequential, or other damages, including loss of profits, arising from your use, or inability to use, the material in this

• presentation. The information is not a substitute for independent professional

advice and your own further due diligence before making any investment

• decisions. Furthermore, you may not modify or reproduce in any form,

electronic or otherwise, any information in this presentation, except for personal use unless you have obtained our express permission.

2

MG MGM M Energy History

• MGM Energy was spun out of Paramount Resources Ltd. in 2007 and

became a stand alone publicly traded company

• Land base in the Sahtu Settlement Region and in the Inuvialuit

Settlement Region

• Delays in the Mackenzie Valley Gas Project resulted in Paramount

Resources Ltd. purchasing MGM Energy in 2014

• MGM Energy continues to exist as a wholly owned subsidiary of

Paramount Resources Ltd.

• Paramount bought Apache Canada in 2017

3

MG MGM M Energy 2014 to Curr rrent

• MGM has been conducting annual well head inspections and an

annual environmental program

• Well head inspections are reported to the Office of the Regulator of

Oil and Gas Operations (OROGO)

• Local contractors have included Kalo Stantec and Canadian

Helicopters.

• Other local services have been Monitors and Accommodations

4

Ma Mackenzie Valley Corri rridor

5

• 2010 Mackenzie Valley Pipeline approved
• 2014 Paramount Resources Ltd. purchases MGM Energy
• 2016 Approvals for MacKenzie Gas Project extended to 2022
• Dec 29, 2017 MacKenzie Gas Project joint venture cancelled by

Imperial Oil resources, Conoco Phillips Canada, ExxonMobil Canada, and the Aboriginal Pipeline Group

Ma Mackenzie Pipeline Timeline

6

Do Dollars Spent to Da Date by Paramount Resource ces Ltd., Ap Apache Canada Ltd and MGM Energy gy

Area Spending Type

Colville Lake Maunoir Ridge Nogha Turton Lake Other Colville Lake Area

MGM/PRL Total 22,096,794 21,850,483 26,535,507 6,671,131 5,000,000 82,153,915 ACL Total 17,386,816 21,850,483 26,053,575 6,671,131

• 71,962,005

Total MGM/PRL/ACL Spend 39,483,610 43,700,965 52,589,082 13,342,262 5,000,000 154,115,920 Field

7

Ma Maunoir C-34: 34: Cam ambrian ian Oil il Disc iscovery

8

Cambrian Oil: 235 bopd Net Pay: 13.4 m; Porosity: 15.4%; Sw: 32%

Re Resource – Ma Maunoir Ri Ridge

9

Ma Maunoir St Structure

10

Colville D-45 D&A Maunoir C-34 Cambrian Oil 235 BOPD Location: A-67 Primary (Lateral Continuity) Location: E-35 Contingent (Closure) Closure: 7 - 8 sections 6.7 miles

No Nogha St Structures, , NWT

11

• 1150
• 1100
• 1050
• 1000
• 950

Subsea Depth (m ss) O-35 K-14 O-47 C-49 M-17 B-23 Mt. Clark Nogha Structure Nogha Fault System West Nogha Structure Bele Fault System

Bele Structure SDL 23

*zone not frac’d

*42 mcf Proterozoic 3.5 mmcf/d + condensate

BELE (170 BCF)

• W. NOGHA

NOGHA *Tstm *Wet *Wet 1.9 mmsf/d 1.7 mmsf/d 5 mmsf/d

Suspended Suspended

Probable G/W

No Nogha St Structure, , NWT

12

Central Mackenzie Discoveries

• Nogha Gas (100% working interest)
• 212 bcf mean gross contingent resource
• Maunoir Oil (100% working interest)
• 235 bbl/d test (C-34)
• East Mackay Shale Oil (62.5% interest)
• 1,000 MMBO in place

Central Mackenzie Land

• EL 474 & 475 (50% interest)
• 171,890 hectares (gross)
• EL 473 (100% interest)
• 82,643 hectares
• EL 487 (25% interest)
• 84,504 hectares (gross)
• East Mackay (62.5% interest)
• 82,100 hectares (gross)
• Nogha M Blocks (50% interest)
• 60,000 hectares (gross)
• Nogha Crown Lands (100% interest)
• 80,240 hectares
• Acquired in July 2010

Ce Central Mackenzi zie Valley y Assets

13

• MGM Energy owns and controls meaningful volumes of natural gas:
• Internal Estimates of Resources
• MGM Energy is the operator of all discoveries.

14

• Murray Gingras at University of Alberta has 2 grad students working
• n the Mt. Clark Formation
• NWT Geological Survey and GSC have done some recent regional

mapping

Cu Current Geological Work

15

• Norman Wells: Initial production (pre 1944) was dedicated to local

consumption and mining projects in Yellowknife

• Norman Wells: 1944-45 Canol Pipeline
• Norman Wells: 1985 to present Enbridge Pipeline
• MVGP

Hi Historical Markets

16

Cu Current Markets

17

With the MVGP postponed indefinitely there is no line of sight to a market.

MG MGM M Energy - En Environmen nment

• Environmental program results are reported to the Sahtu Land and

Water Board

• Environmental program has focused on terrain monitoring/sampling,

revegetation and invasive species elimination

18

19

Pr Project Sco cope Colville Lake Area

• Abandonment and Reclamation/Remediation activities
• Include activities including ice road building, service rig,

abandonment operations, camps and remediation/reclamation activities

• Leave operation options open so the Permit and/or Licence do not

need to be amended in the future

• Use the Licence and Permit for Colville as a template for other MGM

holdings in the Sahtu Settlement Area

20

• A Land Use Permit and Water Licence are required from the Sahtu

Land and Water Board (SLWB) to facilitate abandonment and reclamation activities. (5 year term with a extension or amendment for 2 years)

• MGM also requires approvals from OROGO (underway) for an

Operations Authorization and individual Authorities to Alter Condition

• f a Well

Re Regulatory Re Requirements

21

• Engagement Activitites started in Q1 of 2019 and will continue

through Q3 of 2019

• Apply for Regulatory approvals from OROGO and SLWB starting in Q2
• f 2019 (OROGO) and Q4 of 2019 (SLWB)
• Receive Regulatory approvals in Q1 of 2020
• Conduct abandonment/reclamation activities in 2021-2022 or 2022-

2023 winter season

• Monitoring in subsequent years

Pr Project Timeline

22

Pr Project Equipment for Construction and Ab Abandon

• nment

Type No. Trucks (e.g., vacuum water) 4 Front end loaders with optional attachments 4 Graders 4 Plough/auger truck 4 Pick-up trucks (personnel vehicles) 10 bulldozers 8 Trackhoe 2 Backhoe (rubber-tired) 2 Snow cats 6 Dump trucks 4 Snowmobiles (gasoline) 4 Snow making machines(s) and/or spray ice pump & monitor(s) 4 Accessory and support equipment (e.g., power generators, light towers, tanks) 6 Communication systems (e.g., radios) 20 Type No. Abandonment related equipment 40 Man Camp 1 Service rig 2 Service Rig Pump and tank 1 Spare Rig Pump 1 Catwalk & Pipe Racks 2 100 to 150 HP Boilers 3 Wellsite Shacks 3 Eline/Slick line unit combo unit 2 P-Tank unit with flare stack 1 Jet Cut equipment for cut and cap operations 1 Back Hoe for cut cap operation 1 Bed Truck for hauling equipment 2 Picker Truck for hauling equipment 2 Water tank truck for produced Fluid 2 Potable Water Trucks 2 Hydrovac truck 2 Vacuum Truck 2 Cement Pumpers 2 Cement Bulker 1 Heated insulated 63.56m3 tanks for fresh water 4 Heated insulated 63.56m3 tanks for produced water 2 Snow mobiles 2-4 Methanol Storage 10m3 1 Secondary containment for tanks 8

23

Pr Project Personal for Construction and Ab Abandon

• nment

Role Estimated Number of Personnel Abandonment supervisors 3 Rig managers 1 Rig personnel 4 Oilfield Trucking 2 Vacuum truck operators 2 Camp maintenance 2 Medical 1 Safety Coordinator 1 Environmental Monitor 1 Wildlife Monitor 1 Water Truck Operators 4 P-Tank-Test Crew 3 Logging/slickline Crew 3 Cement Pumper 3 Cement Bulker 1 Fuel farm attendant 1 Security/access control 1 Fuel truck driver 1 Role Estimated Number of Personnel Supervisor 2 Logistics supervisor 1 Equipment operators 20 Camp maintenance 2 Medical 2 Safety Coordinator 1 Environmental Monitor 1 Wildlife Monitor 1

24

Ex Exampl mples es of Equi quipmen pment

25

Co Concepts to Move Forward

26

OROGO HAS MANDATED THAT ALL WELLS MUST BE ABANDONED BY 2023, UNLESS THEY ARE ON PRODUCTION, OR HAVE A PLAN TO PRODUCE.

Ba Backup

28

Nogha M-17 Gas Analysis

29