Cryptogaz Ventures Ltd. P r i v a t e a n d C o n f i d e n t i a l / A u g u s t 1 5 , 2 0 1 9 1
Cryptogaz Ventures Ltd. Confidential Information & Assumptions Strictly Private and Confidential While the information contained herein is believed to be accurate and reliable by CRYPTOGAZ VENTURES LTD. (“the Company” or “Crypto”), or its agents, employees, officers, directors, shareholders or associated entities makes no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. This document is not an offer, recommendation or solicitation to buy or sell securities, nor is it an official confirmation of terms. This document is not meant to be and should not be distributed to any other parties. In furnishing this document, the Company reserves the right to amend or replace the document at any time and undertake no obligation to provide the recipient with access to any additional information. In all cases, prospective investors should conduct their own investigation and analysis of the Company and the data described herein. By accepting this document, the recipient hereof agrees to treat the information contained herein as strictly confidential. 2
Cryptogaz Ventures Ltd. Confidential Information & Assumptions Strictly Private and Confidential Assumptions: Unless otherwise stated in this Presentation, the models herein contained are based on the following: • US$1 = CAD$1.25 • 1 Bitcoin = US$10,000 • All dollar amounts stated in this Presentation are Canadian dollars unless otherwise indicated. • Bitcoin: The Company’s current focus is on the Bitcoin cryptocurrency. The models herein contained relate to Bitcoin and not other crypto-currencies. Presentation Contents: If you new to Crypto-currency you are directed to review the Appendix first, which should give you the basics in order to move forward in your review of the CryptoGaz business model. 3
CryptoGaz Ventures Ltd. Business Summary CryptoGaz is on a mission to help the oil industry reduce routine flaring of natural gas. We are passionate about creating solutions that benefit the environment, local communities and energy Environmental and Economic producers. Our goal is to decrease the uneconomic and anti-environmental flaring and venting of Interests Protected the natural gas and see the natural gas utilized for a purpose. Our company will use that natural gas to generate electric power at the well site and “mine” for crypto-currency (i.e. Bitcoin) using that electricity. • It is uneconomic to produce natural gas at current prices. • Provincial regulations often requiring the conservation (sale) of natural gas or the shut-in of the The Problem Uneconomic & Not well. • Shutting-in a well exposes the oil and gas company to provincially regulated environmental Environmental obligations. • On some occasions oil and gas companies are permitted to flare their gas production—releasing green-house gases into the environment. • CryptoGaz constructs power generators and Bitcoin miner operations on the well site. Thereby turning an un-useable product (natural gas) into a valuable product (Bitcoins). • CryptoGaz provides oil and gas companies with a fast, low cost and simple solution to natural gas The Solution Bitcoin Mining flaring or uneconomic natural gas production. Our service lets operators preserve or regain regulatory compliance, maintain existing production and facilitate future development. In turn through our use of the natural gas we are able to generate returns by “mining” for crypto currencies. • CryptoGaz has completed its pilot project for a capital cost of $29,888. It has “mined” Pilot Project; Complete CAD$17,954 worth of Bitcoin from one Natural Gas well over 60 days. Mining Contract Total forecast 12 month revenues from CryptoGaz’s current contracts is $2.01 million and EBITDA Revenue $2.01 Million of $852,907. 4
CryptoGaz Ventures Ltd. Share Offering and Capital Structure CryptoGaz is offering common shares by way of private placement: • Price per share: $1.00 • Number of shares being offered: 500,000 Offering • Percentage interest in CryptoGaz offered: 50% • Closing date: September 30, 2019 All funds to be utilized to complete “mines” on existing sites. No funds will be used to compensate management. Shareholders Number of Current Current Percentage Shares/warrants Percentage Percentage after Offering Capital Structure Founder 400,000 shares 100% 80% 40% Employees & 100,000 warrants* N/A 20% 10% Consultants Offered Shares 500,000 shares N/A N/A 50% * Employees and consultants are entitled to 100,000 common shares (currently represented by the warrants) upon the Company having cash flow of $75,000 for 2 consecutive months. This is forecast to occur in December 2019. Go forward return to the investors is contemplated to be either a potential transaction to • Exit Strategy Dividend / Go Public take the Company public or pay dividends to the shareholders. Forecast cash flow shows available cash on deposit with the company of $500,000 as of June 1, 2020. Employees and consultants are not entitled to compensation unless and until the Company • Management Compensation has cash flow of over $50,000 per month. 5
CryptoGaz Ventures Ltd. T h e P r o b l e m : Natural Gas Crisis Environmental Damage Alberta Gas Companies lose money at this price 6
CryptoGaz Ventures Ltd. T h e P r o b l e m : Natural Gas Crisis You don’t need a sophisticated computer model to understand Following the failure of Trident Exploration Corp. last April, this gap means the city-owned utility has been hemorrhaging Medicine Hat’s decision should serve as a wake-up call to money. the acute issues facing the sector, particularly shallow gas producers. Facing such economics — and an expected cash loss of $35 million this year from its natural gas and petroleum resources By the time the 2,000 wells are abandoned, the city unit’s division — the city is throwing in the towel on the lion’s share of total production is expected to fall to about 2,500 boe per its producing gas wells. day, only a quarter of the level seen four years ago. Medicine Hat officials announced Wednesday the division will “We have been producing for over 100 years and we’ve had abandon more than 2,000 of its 2,600 active wells over the next a great experience in the gas business, but the last three, three years and accelerate abandonment and remediation work. four, five years have been very difficult for us,” said Maynes. The city’s natural gas and petroleum resources division will eventually shrink from about 105 field and office employees to “We could just not see ourselves returning to profitability.” around 25 to 40 staff, although some may be redeployed by the city. The decision comes as larger trends are swirling about the industry. With the shale gas revolution in the United States The decision wasn’t made lightly, said Brad Maynes, the city’s in the past decade, production in North America continues How precarious is the state of Alberta’s natural gas commissioner of energy and utilities. to rise. industry these days? “We are very proud of our gas history and our legacy . . . The city On Thursday, the U.S. Energy Information Administration Just take a look at the City of Medicine Hat, proudly known as has benefited so much from gas over the years,” Maynes said in reported natural gas production south of the border set a the Gas City, which has owned its own petroleum production an interview. new monthly record in August of more than 91 billion cubic arm for more than a century. feet per day, up eight per cent from a year ago. “We said to our residents, you should be very, very proud of this Today, it’s producing about 6,500 barrels of oil equivalent (boe) history, but we have to evolve to a new reality.” Production has risen even as benchmark U.S. gas prices per day from shallow natural gas and oil fields in southern have dropped this summer, averaging US$2.37 per million Alberta and Saskatchewan. Natural gas has long provided energy, created jobs and British thermal units in July. generated wealth in Medicine Hat. Its petroleum assets have The average cost of its gas production is about $2.78 per contributed more than $600 million to Medicine Hat’s treasury In Canada, development of the massive Montney natural thousand cubic feet (mcf). The spot price for gas at the AECO over the past four decades, the city said. gas and liquids formation has also had an effect, bringing on hub closed Thursday at 80 cents per mcf, about $2 below U.S. large supplies of low-cost production. benchmark prices. 7 But part of the industry is facing a fiery test these days. (Continued)
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