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DISCLAIMER
This document is a presentation of general background information about PentaNova Energy Corp., (“PentaNova” or the “Company”). The information contained herein has been prepared by the Company solely for information purposes and does not purport to be all-inclusive or to contain all the information that the recipient may desire or that may be required in order to properly evaluate the business, prospects or value of the Company. This material has been prepared solely for informational purposes and is not to be construed as a solicitation, an invitation, or an offer to buy or sell any securities and should not be treated as giving investment advice. Neither this material nor anything contained herein shall form the basis of any contract or commitment whatsoever. It is information in a summary form and does not purport to be complete. This presentation contains statements based on information from third-party sources, which has not been independently verified. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate. No representation or warranty either express or implied is made as to, and no reliance should be placed on future financial performance, or the fairness, validity, accuracy, or completeness of the information, statements or opinions contained herein including in relation to, statistical data, predictions, estimates
- r projections contained in this presentation, which are used for informational purposes only. It should not be regarded by recipients as a substitute for the exercise of their own judgment.
This presentation contains forward-looking information within the meaning of applicable securities laws, including Canadian securities laws and Section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward- looking information may relate to PentaNova’s future outlook and anticipated events or results and may include statements regarding the future financial position, production targets, sales projections, business strategy, budgets, projected costs, financial results and plans and objectives of PentaNova and the future condition of the oil and natural gas industry and regulatory environment in Colombia and Argentina, as well as other countries in Latin America, in general. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue”, “upside” or other similar expressions concerning matters that are not historical facts. Any “financial outlook” or “future oriented financial information” in this presentation, as defined by applicable securities laws, has been approved by management of the
- Company. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other circumstances.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of PentaNova to be materially different from any future results, performance or achievements expressed or implied by the forward-looking
- statements. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable based on information currently available to the Company’s management, the Company cannot guarantee future results or events. There can be no assurance that (i)
the Company has correctly measured or identified all of the factors affecting its business or the extent of their likely impact, (ii) the publicly available information with respect to these factors on which the Company’s analysis is based is complete or accurate, (iii) the Company’s analysis is correct or (iv) the Company’s strategy, which is based in part on this analysis, will be successful. The forward-looking statements contained herein should not be relied upon as representing PentaNova’s views as of any date subsequent to the date of this Presentation. Except as required by law, PentaNova will not update this information at any particular time and the Company, the placement agents and their respective affiliates, agents, directors, partners and employees assume no obligation to update or revise forward-looking statements should circumstances or management’s estimates or opinions change and accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this presentation or the content contained herein. All references to “$” herein means the currency of the United States, unless otherwise stated. Oil and Gas Reserves and Resources Information Information and statements in this presentation relating to reserves and resources are deemed to be forward-looking statements which are subject to certain risks and uncertainties, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. Certain information in this presentation may constitute “analogous information” as defined in National Instrument 51-101 (“NI 51-101”), including, but not limited to, information relating to areas with similar geological characteristics to the lands held by the Company. Such information is derived from a variety
- f publicly available information from government sources, regulatory agencies, public databases or other industry participants (as at the date stated therein) that the Company believes are predominantly independent in nature. The Company believes this information is relevant as it helps to define the
reservoir characteristics in which the Company may hold an interest. The Company is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor and in accordance with the the Canadian Oil and Gas Evaluation (“COGE”) Handbook. Such information is not an estimate of the reserves or resources attributable to lands held or to be held by the Company and there is no certainty that the reservoir data and economics information for the lands held by the Company will be similar to the information presented therein. The reader is cautioned that the data relied upon by the Company may be in error and/or may not be analogous to the Company’s land holdings. The Company has adopted the standard of 6 Mcf:1 bbl when converting natural gas to oil equivalent. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based roughly on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Reserves The oil and natural gas reserves of the Llancanelo properties in Argentina described herein and the related future net revenue attributable to such reserves were evaluated by Gaffney, Cline & Associates, Patagonia Oil Corp.’s independent reserves evaluator, in accordance with the requirements of NI 51-101 and the COGE Handbook, effective as of December 31, 2016. The oil and natural gas reserves of the Maria Conchita properties in Colombia described herein and the related future net revenue attributable to such reserves were evaluated by Petrotech, PentaNova’s independent reserves evaluator, in accordance with the requirements of NI 51-101 and the COGE Handbook, effective as of December 31, 2016. The determination of oil and gas reserves involves the preparation of estimates that have an inherent degree of associated uncertainty. Categories of proved, probable and possible reserves have been established to reflect the level of these uncertainties and to provide an indication of the probability of
- recovery. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. The reserves and associated cash flow information
set forth in this presentation are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquid reserves may be greater than or less than the estimates provided in this presentation. The discounted and undiscounted net present value
- f future net revenues attributable to reserves do not represent the fair market value of reserves. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of
aggregation. Resources This presentation includes certain evaluations of resources for the Llancanelo and Sur Rio Deseado Este properties in Argentina and the SN-9 Block in Colombia prepared by an internal qualified reserves evaluator. These evaluations were not prepared by a person “independent” of the Company as that term is defined under NI 51-101. These estimates were prepared in accordance with definitions and guidelines in the COGE Handbook and NI 51-101. The product types reasonably expected are shale gas and heavy crude oil resources. Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies affecting the classification as reserves versus resources relate to the following issues as detailed in the COGE Handbook: ownership considerations, drilling requirements, testing requirements, regulatory considerations, infrastructure and market considerations, timing of production and development, and economic requirements. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Not all technically feasible development plans will be
- commercial. The commercial viability of a development project is dependent on the forecast of fiscal conditions over the life of the project. For contingent resources, the risk component relating to the likelihood that an accumulation will be commercially developed is referred to as the “chance of development.”
For contingent resources the chance of commerciality is equal to the chance of development. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. The economic status of the resources is undetermined. Not all exploration projects will result in discoveries. The chance that an exploration project will result in the discovery of petroleum is referred to as the “chance of discovery.” Thus, for an undiscovered accumulation the chance of commerciality is the product of two risk components: the chance of discovery and the chance of development. With respect to discovered resources (including contingent resources), there is uncertainty that it will be commercially viable to produce any portion of the resources. With respect to undiscovered resources (including prospective resources), there is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. The estimates of the resources provided in this presentation are estimates only and there is no guarantee that the estimated resources will be recovered. Actual shale gas and heavy crude oil resources may be greater or less than the estimates provided in this presentation, and the difference may be material.