Corporate Presentation December, 2011 Disclaimer FORWARD LOOKING - - PowerPoint PPT Presentation

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Corporate Presentation December, 2011 Disclaimer FORWARD LOOKING - - PowerPoint PPT Presentation

Corporate Presentation December, 2011 Disclaimer FORWARD LOOKING INFORMATION: This presentation contains certain forward-looking statements relating, but not limited, to DEEP Earth Energy Production Corp. s expectations, intentions, plans and


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Corporate Presentation December, 2011

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Disclaimer

FORWARD LOOKING INFORMATION: This presentation contains certain forward-looking statements relating, but not limited, to DEEP Earth Energy Production Corp.’s expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intent”, “estimate”, “may” and “will” or similar words suggesting future outcomes or

  • ther expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking

information may include reserve and resource estimates, estimates of future production, costs of capital projects and timing of commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish estimated resources and reserves, the recovery of resources varying from estimates, capital and operating costs varying significantly from estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Shareholders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and

  • ther factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Shareholders are

cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. DEEP Earth Energy Production Corp. undertakes no obligation to update publicly or

  • therwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect

this information, except as required by law. This caution is provided in accordance with the requirements of Parts 4A and 4B of National Instrument 51-102 Continuous Disclosure Obligations, respecting disclosure of forward looking information. STATUORY RIGHTS OF INVESTORS: Securities legislation in certain of the provinces and territories of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. The right may be exercised within two business days after receipt or deemed receipt of a prospectus,

  • ffering memorandum or any amendment thereto. In several of the provinces, securities legislation further provides a purchaser with

remedies for rescission or, in some jurisdictions, revisions of the price or damages if the offering document, or any amendment thereto, contains a misrepresentation or is not delivered to the purchaser, provided that such remedies for rescission, revision of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for the particulars

  • f these rights or consult with a legal advisor.
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Geothermal Worldwide

Global installed geothermal power is 10,700 MW, in 24 countries, supplying 60 million people with renewable energy Overall potential global geothermal power capacity is 190,000 MW

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Source: Islandbanki United States Geothermal Energy Market Report

Mature technology – dates back to early 1900’s

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Saskatchewan Electricity Landscape

  • SaskPower – provincial utility owns & operates system
  • 3,500 MW capacity from SaskPower-owned assets
  • Forecasting 2.4% annual growth in load demand
  • New supply forecast:
  • 1,000 MW by 2015
  • 1,100 MW for period 2016 – 2023
  • 1600 MW for period 2024 – 2033
  • Entire generation system to be rebuilt or replaced by 2033
  • Select highlights of SaskPower’s action plan:
  • Encourage small-scale renewable energy power production
  • Pursue new generation technologies
  • Evaluate supply options including renewable fuel power generation opportunities

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Source: 2010 SaskPower Annual Report

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  • Encourages renewable energy production by:
  • Streamlining power purchasing for small and medium-sized

“clean power” producers

  • Creating ongoing opportunity - RFP for 50 MW / year
  • Fixing contract price for production and guaranteeing

interconnection

  • $101.98/MWh for 2014, increasing at 2% per year
  • DEEP’s application for a 5.0 MW geothermal

project was selected in the 2011 lottery

  • Equivalent to ~ 5000 households

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Green Options Partners Program

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Power supply option and approximate cost per kWh:

Generation option Base load, intermittent or peak? Cost per kilowatt hour (kWh) Biomass Base load $0.06 to $0.11 Coal Base load $0.07 to $0.10 $0.08 to $0.13 with Carbon Capture Cogeneration Base load $0.07 to $0.12 Hydroelectric Base load and peak $0.07 to $0.10 Imports Base load and peak Variable Natural gas Base load and peak $0.08 to $0.13 Nuclear Base load $0.08 to $0.10 Solar Intermittent $0.43 to $1.80 Wind Intermittent Large $0.06 to $0.10 Small $0.12 to $0.22 Micro $0.27 to $0.57

Source: SaskPower Website

GEOTHERMAL Base load $0.06 to $0.08

Source: Islandbanki United States Geothermal Energy Market Report

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Rafferty Project – 5,920 acres

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Geothermal Power

  • Heat is recovered from water recycling through the

system and converted to electricity

  • Continuous heat supply means that with proper

engineering geothermal systems can run indefinitely

  • The ultimate renewable resource!

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Geothermal Power

Binary turbine technology

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Geothermal Power

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5 Megawatts = ~5000 households

Courtesy of TAS

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1,000 2,000 3,000 4,000 5,000 Solar PV Solar Concentrating Coal Geothermal Wind

0% 20% 40% 60% 80% 100%

Wind - Onshore Solar - PV Hydro - Small Scale Geothermal - Dual Flash Biomass - Combustion

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Sources: (1) Net Capacity Factor (%) averages for selected renewables, Glitnir Research

Baseload power generation

Base-Load

Geothermal v s. Other Renewables

Source: Islandbanki United States Geothermal Energy Market Report

Small foot print

Land Use

In acres/ 1 billion kWh

Power Availability (%)

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Panax Geothermal website

Hot Sedimentary Aquifer (HSA):

  • Heat stored in water (brine) in

existing reservoirs with natural permeability and porosity Volcanic Geothermal:

  • Geothermal resource in

fractures in non-permeable volcanic rock

Geothermal Reservoirs

COMPLICATED SIMPLE VS

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  • Target aquifers are the Winnipeg

and Deadwood Formations, directly above the Precambrian basement

  • Reservoir thickness of 150

metres

  • Depth of 3000 metres
  • ~120 degrees Celsius
  • Flow rates estimated at

80kg/sec

  • Offsets 30,000 metric tonnes of

CO2 annually

Petroleum Technology Research Centre

Project Details

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  • A vast sedimentary reservoir

that is continuous and repeatable over 1000s of square kilometres

  • Enormous data set derived

from oil and gas exploration since the 1950s

  • The resource is proven with

measured data

  • Predictable geology

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Williston Basin – Predictable Geology

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  • Bottom hole

temperature

  • Temperature gradient
  • Production/DST
  • Water chemistry
  • Real data points
  • Robust model
  • Basin is ‘structurally

benign’  Multiple data points increases confidence and reduces project risk 35,770 wells in SE Saskatchewan !

Williston Basin: an extensive dataset

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Rafferty Project – 5,920 acres

Excellent well control – low risk, predictable geology

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Geothermal Power “Farming”

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Large-scale 50 MW project Multiple 5 MW projects

Capital intensive Long lead times Less upfront capital Shorter time to commissioning “Grid friendly”

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  • Small projects in an area with the potential for 100s of MW of

repeatable baseload electrical production

  • Situated in a region that develops its local resources
  • extensive agriculture, and oil and gas development
  • Environmentally friendly – silent, small surface footprint
  • Like another common quonset structure on the prairie horizon

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Welcoming Location

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Saskatchewan Geothermal

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  • Excellent regulatory framework
  • Drill permitting and surface rights agreements - easy and quick
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Land Acquisition

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Lease of Space agreement from the Saskatchewan Ministry of Energy and Resources on an initial project area ~9 sections

  • f land, (5,920 acres)

Partnered with Petrobakken for exclusive rights to their non-oil bearing aquifers in SE Saskatchewan

  • May reduce drilling cost
  • Access to world class

drilling experience

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Development Budget

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  • Phase 1: Exploration - $3,900,000
  • Development Plan
  • Land Position
  • Permitting
  • Exploration Test
  • DEEP #1 well
  • Reservoir engineering and possible reservoir

enhancement

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Development Budget

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  • Phase 2: Production Drilling - $12,200,000
  • DEEP #2, 3 and 4 (production)
  • Two injection wells
  • Pipeline infrastructure
  • Phase 3: Plant Design - $200,000
  • Design
  • Permitting
  • Phase 4: Engineer, Procure & Construct – $12,500,000
  • Phase 5: Commercialization - $50,000
  • Total $28,500,000
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Directors & Management

  • Kirsten Marcia, P.Geo.: President, CEO & Director

Former VP of Exploration for Wescan Goldfields Inc., 13 years of mining exploration experience for TSX-listed resources companies (primarily diamonds, gold, coal, uranium)

  • Steve Halabura, P.Geo., F.E.C. (Hon.): Director & Non-Executive Board Chair

President and CEO, Concept Forge Inc., Partner HCF Mercantile Inc.

  • Al Zack: CFO & Director

Principal and COO of HCF Mercantile, former President and CEO PrimeWest Mortgage

  • Alison Thompson: Director

VP of Corporate Relations for Alterra Power, Chair of the Canadian Geothermal Energy Assn., and ExCo Member of the International Energy Agency's Geothermal Implementing Agreement

  • Rob Theoret, B.Comm., CIM: Director

Principal and President/CEO of HCF Mercantile Inc., Director and CFO of Admiralty Oils Ltd.

  • Jeffrey Green: Director

Managing Partner, Jovian Asset Management Inc.

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Directors & Management

  • Borealis GeoPower: Project Management

Jay Dick: 30 years of geothermal project management, consulting and operations around the world, with an extensive background in both geothermal resource exploration, drilling and production, as well as power plant development Tim Thompson: 11 years of corporate strategy consulting with Booz & Co. and CRA International; 8 years in the Pipeline business, covering Facilities Planning, Regulatory, Budgets, and Major projects for TransCanada and Union Gas Craig Dunn: a pioneer leader in geothermal energy exploration and development initiatives in Canada with over 9 years experience in geological consultations

  • Dr. Daniel Yang (nee Pribnow): A globally acclaimed leader in the geothermal

energy engineering field, owning more than 20 years of experience leading large- scale international exploration and development programs in the oil & gas industry and geothermal sectors

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  • Ron Waldman: Business Advisor

Chairman (former President and CEO) of Great Western Brewing Company, former Manager of Corporate Finance at KPMG, former President of Beverage Central Inc., a family-owned Coca Cola franchise

  • Jamie McIntyre: Government and Environmental Technical Advisor

20 years in the mining and nuclear energy business and former Cameco VP

  • Tim Galbreath: Land Advisor

26 years in Petroleum Land Management, currently Land Manager to Equal Energy

  • Legal Counsel:

William A. Nickel - McDougal Gauley LLP Dan Anderson – MacPherson Leslie & Tyerman LLP

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Capital Structure

CURRENT CAPITAL STRUCTURE: Shares 11,045,000 Options (10%) Issued: 885,000 Open: (219,500) Founders Warrants 900,000 Fully diluted 13,959,500 Net working capital (Q4) ~$300,000 Debt nil

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Private placement of Flow-through shares and Non Flow-Through units

  • Issue: Up to a maximum aggregate of CND$5,000,000

comprised of: (i) Up to a maximum of CND$750,000 in flow-through shares (ii) Up to a maximum of CND$4,250,000 in non-flow-through units

  • Issue Price: CND$0.25 per flow-through share

CND$0.25 per non-flow-through unit Units are comprised of one (1) non-flow-through common share and one (1) warrant to purchase one- half of one non-flow-through common, exercisable at $0.35

Current Financing

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Summary:

  • Timing is everything!

The geothermal resource has been identified and confirmed at the same time the technology is available

  • A baseload power solution for the Province
  • Competitively priced against traditional energy like coal and natural

gas

  • Opportunity to invest in a project that has the long term ability to

become a commercial utility

  • Predictable and well known geology – huge laterally extensive

sedimentary aquifer - 100s of megawatts potentially available

  • Mature and reliable technology – not a science project
  • A strong business model of small, repeatable power plants
  • Silent and minimal environmental footprint with 30,000 tonnes of CO2
  • ffset annually

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300-110 21st Street East Saskatoon, SK S7K 0B6 P: (306) 651-5194 E: kmarcia@deepcorp.ca www.deepcorp.ca