NW Montana An emerging unconventional tight oil play New Resource - - PowerPoint PPT Presentation

NW Montana An emerging unconventional tight oil play

New Resource Play in S. Alta & NW Montana

• In 2009 the play was discovered in Glacier County, NW Montana with

discovery wells drilled by Anschutz, Newfield & Rosetta, all 3 companies hold significant acreage positions on the Blackfeet Reservation in Glacier County

• IFR owns title to fee-simple mineral lands covering 17,000* acres in the

heart of the play on the Blackfeet Reservation

• In Q2/10 the play was extended into Southern Alberta, industry has spent
• ver $145 million to acquire 566,000 acres between the Montana border

and Claresholm, Alberta

• There are in excess of 60 wells licensed in Montana & Alberta ~

2011 & 2012 will provide steady news flow as this play un-folds

* Final acreage to be determined by title opinion

What Rosetta has said …..

• Drilled 8 vertical delineation wells ~ Williston Basin analog
• 2 wells on strike 28 miles apart ~ Riverbend 12-13 and Gunsight 31-16
• 1 well 8 miles downdip ~ Riverbend W 7- 4
• Drilled a north east extension and encountered thickening Banff and Bakken

intervals ~ Big Rock 29 – 13

• Drilled 2 middle of area wells which established continuity ~ Little Rock Coulee

27 – 16 and Fee Gauge 19 – 1

• Confirmed significant oil hydrocarbons in place and over-pressured reservoirs
• 13 – 15 MMBOE per square mile (640 acres) of resource in place
• “ Rosetta’s 11-well vertical drilling program to assess the commerciality of the play across

its approximately 300,000-acre position in NW Montana is nearing completion. As of March 31, 2011 8 vertical wells had been drilled with operations underway on the ninth and tenth vertical wells”

• “During the second quarter of 2011, one additional vertical well is planned. Based on

encouraging vertical well results, Rosetta will spud the first of three horizontal wells in the second quarter”

What Newfield has said ….

• Q1,2011 & year end operations review
• “To date, Newfield has drilled seven vertical wells, completed and

placed on production two horizontal wells, and is preparing to drill an eighth vertical well. All of the wells to date have encountered oil. Newfield has 280,000 net acres in the play, located in Glacier County, Montana”

• “Multiple prospective geological formations throughout the acreage

are planned for evaluation ~ significant upside”

• “Prospective Formations include ~ Lodgepole, Bakken, Three Forks

and Nisku”

A township is 6 square miles 35 wells licensed @ 5/2011

Prospective Targets

• Lodgepole
• Bakken
• Three Forks
• Nisku
• Cone ~ 2nd White Specks

~ 6 sq miles

“IFR acreage sits in the overpressure fairway which will increase the chance for natural reservoir fracturing which should result in better flow rates and an increase in recoverable reserves”

Is the play similar to North Dakota?

• The play is a multi zone hydrocarbon

saturated large continuous petroleum system with good quality reservoir rocks sitting above and below source rocks.

• The reservoirs have abnormally high

pressures and no free water.

• Major investment firms report that the play

could be analogous to the Bakken – Three Forks play in N. Dakota & Saskatchewan.

“Barrier to entry for juniors”

32 wells licensed at 4/2011

NW Montana Players (May 2011)

Company Majors

Shares O/S Million

Price $/share

Market Cap

B = billion M million

Wells Licensed County Anschutz (Private) Private N/A Private 9 Glacier Newfield (NFX-Z) 134 75.00 14 B 13 Glacier Stone (SGY-Z) 47 30.00 1.4 B

JV - NFX

Glacier Rosetta (ROSE-Q) 52 44.00 2.2 B 14 Glacier

Quicksilver (KWK-Z)

168 14.00 2.3 B Pondera

Juniors

Mountainview MVW-TSX-V

53+ 2.00

106 M

Pondera/Teton

Primary (PIE – TSX-V)

146 0.75 110 M Pondera/Teton

Vecta (VER – TSX-V)

73+ 0.20 14 M Pondera/Toole

Guardian (GX-TSX-V)

46+ 0.11 5 M Glacier/Pondera IFR (IFR – TSX-V) 59 0.11 6 M Offset wells Glacier

Southern Alberta Players (May 2011)

Company Majors

Shares O/S Million Price $/share Market Cap

B – billion M million

Wells Licensed Area Crescent Point (CPG-T) 269 47.00 12 B 6 1 million acres Murphy (MUR-Z) 192 72.00 14 B 6

Blood & Del Bonita

Nexen (NXY-T) 526 25.00 13 B 3 Granum Shell (RDS-Z) 72.00 125 B 4 Montana Border

Juniors

Argosy (GSY-T) 20 2.50 50 M 3 Claresholm Bowood (BWD-TSXV) 275 0.50 137 M 2 Blood Dee Three (DTX-T) 63 4.25 267 M 3 Lethbridge Legacy (LEG-T) 143 15.00 2.4 B JV-BWD Blood 10 wells by others

Montana Mineral Titles ~ Key Attributes

• No expiries
• Leases granted to Anschutz & Newfield ~ expiries 2014 – 2016
• Current royalties range from 12.50% to 18.75%
• 15% royalty equals +/- 26% working interest
• Excellent exposure to Anschutz, Newfield & Rosetta drilling programs
• No upfront capital required for seismic, drilling or facilities
• IFR lands are being de-risked by offsetting drilling programs

Revenue Sources

• Royalty income
• Pool or unitize acreage with option to participate in drilling
• Drill 100% net revenue lease
• Re-lease acreage with an increase in price per acre and royalty
• Re-capture land and farm-out with increased royalty + carried interest

IFR’s Strategy is

• Increase acreage position on the play
• Monitor well testing results
• High-grade acreage for drilling
• Participate in drilling joint wells with current operators
• Form joint ventures for future drilling