Q3 Q3 20 2012 Presentation 24 October 2012 This presentation is provided for information purposes only. It should not be used or considered as an offer to sell or a solicitation of an offer to buy any securities. Any opinions expressed are subject to change without prior notice. Although all reasonable care has been taken to ensure that the information herein is not misleading, Crudecorp makes no representation or warranty expressed or implied as to its accuracy or completeness. Neither Crudecorp, its employees, nor any other person connected with it, accepts any liability whatsoever for any direct or consequential loss of any kind arising out of the use or reliance on the information in this presentation. This presentation is prepared for general circulation and general information.
Q3 Highlights Sales Oil sale of 6,043 bbls in Q3 (4,450 in Q2) Average oil price USD 98.14/ bbl in Q3 (USD 100.34 in Q2) Construction Construction for initial cyclic steam operations completed 16 injection wells and 4 production wells drilled Commenced steam flood on 8 October Post 30.09 Received entire loan amount of the USD 30 million from Credit Suisse Company now fully funded 2
Financial Highlights Q3 2012 Q3 2011 % change Oil sale (bbls) 6 043 2 093 189 % Achieved Oil Price ($/bbl) 98,14 102,3 -4 % Revenues, MUSD 0,422 0,173 144 % COGS, MUSD -0,661 -0,180 267 % OPEX (other opex and salary), MUSD -0,598 -0,847 -29 % Other expenses*, MUSD -3,157 EBITDA, MUSD -3,994 -0,855 367 % Depreciation, MUSD -0,693 -0,152 356 % Capital expenditure, MUSD 7,920 5,246 51 % Net cash from operating activities (as per 30.09), MUSD -2,406 -0,904 166 % Cash position (as per 30.09), MUSD 10,404 10,142 3 % Book equity (as per 30.09), MUSD 29,590 25,871 14 % Unaudited * Provision of calculated loss compared to MTM value (market to market) on Credit Suisse facility 3
Profit & Loss (MUSD) Q3 2012 Q3 2011 Comment Revenues 0,422 0,173 Increase in revenues due to production from additional wells. Production cost -0,661 -0,180 Larger steaming volumes and higher activity Salaries -0,465 -0,473 Change in principles, actual salary for Q3 2012 is KUSD 606. Depreciation -0,693 -0,152 Increased fixed assets Other operating expenses -0,133 -0,375 Q3 2012 is credited with KUSD 458 due to accruals of costs related to loan Other expenses* -3,157 Calculated loss om MTM value on Oil swap agreement Credit Suisse facility Operating profit / EBIT -4,687 -1,007 Net financial items -2,558 0,967 Material variations due to change in USD/NOK exchange rate Taxes -0,013 0 Paid tax for 2011 Net profit/(loss) -7,258 -0,040 Unaudited 4
Balance Sheet Assets (MUSD) 30.09.2012 31.12.2011 Comment Fixed Assets 32,9 15,6 Increase due to investments for oil production Production Rights in oil field 8,0 7,5 Other non-current assets 2,3 0,3 Third parties' share of investments (10 % owners) Note 6 in interim report Total non-current assets 43,2 23,3 Total Current Assets 12,0 15,4 Decrease in cash due to increased investments for oil production Total assets 55,2 38,7 Equity and Liabilities (MUSD) 30.09.2012 31.12.2011 Comment Equity 29,6 36,2 Long Term Debt 22,8 1,7 Credit Suisse, bond issue, derivatives and liability to previous owner Short Term Debt 2,8 0,8 As per 30.09.12: 2,3 MUSD consists of accounts payable Total equity and liabilities 55,2 38,7 Unaudited 5
Cash Flow Cash flow from operating activities 30.09.2012 30.09.2011 2011 Cash flow from operations -2,373 -0,904 -0,961 Interest paid -0,02 0 0 Taxes paid -0,01 0 0 Net cash from operating activites -2,406 -0,904 -0,961 Cash flow from investing activities Purchase of tangible fixed assets -17,766 -9,188 -14,834 Loans to third parties -1,998 0 0 Net cash flow from investing activities -19,763 -9,188 -14,834 Cash flow from financing activities Issue of ordinary shares 16,601 28,456 Bond Issue 3,685 Credit Suisse facility 15,000 Net cash from financing activities 18,685 16,601 28,456 Net change in cash, cash equivalents and bank overdrafts -3,485 6,508 12,662 Cash, cash equivalents and bank overdrafts as of 1 January 14,757 3,511 3,511 Exchange rate gain-/loss on cash, cash equivalents and bank overd -0,869 0,122 -1,415 Cash, cash equivalents and bank overdrafts at end of period 10,404 10,142 14,757 Unaudited 6
The Chico Martinez Oil field in California Location Reserve estimates o Crudecorp is now developing the Etchegoin sands in the Chico Martinez property at depth of 400 – 1000 feet o Most probable STOIIP estimated to 50.5 MMBbls San Joaquin Basin west of Bakersfield, California – Competent Person’s Report by Gaffney, Cline and Associates – 0.6 MMBbls (approx 1.1%) already produced – Current planned development addresses 28% of STOIIP – More of the Etchegoin STOIIP to be developed when cash flow is established, and more knowledge has been gained from the reservoir CHICO MARTINEZ CHICO MARTINEZ CHICO MARTINEZ CHICO MARTINEZ OIL FIELD OIL FIELD OIL FIELD OIL FIELD Chico Martinez Oil field 1P 2P 3P (gross reserves)* Gross Field Oil Reserves (MMBbls) 3.35 4.79 5.22 Key facts *1P:Probable, 2P: Probable+Proven, 3P: Probable+Proven+Possible • Location: San Joaquin Basin west of Bakersfield, California • 2P production in 2015 is estimated at 2,390 bopd, with current o 5 independent engineering studies (1988-2008) development plan (28% of STOIIP). (from GCA report) estimate oil in place in the Etchegoin formation between • Intention is to develop the rest of the field (100% of STOIIP), thereby 55 and 63.5 MMBbls, with potential recovery of 32 -67% lifting production rates and extending field life • Current 10 years, but potential for 25-30 year field life • Operating cost USD 20 - 25 per bbl (in 2014) o 3D seismic shows upside potential for discoveries in existing • NRI is 77.7% to Crudecorp (net after royalty) field and lower formations on lease (Monterey formation) 7
Initial development through Cyclic Steam Circulation The “Huff and puff” method Initial development through “Huff and Puff” Permanent steam flood to reservoir to be established Phase 2a Phase 2b-4 Dummy picture Steam flooding Cyclic steam injection Continous steam injection Steam is injected into a production well. Steam is injected into a dedicated injection Heats up adjacent oil to well bore and well. Heats up the entire reservoir and produce water and oil back. oil flows to production well. 8
Q3 activity A 7-phased development plan is currently in place Growth through investments in extra production wells Phase 3 – 4 Phase 1 Phase 2 A-B Phase 5-7 • Cold production • From Cyclic Steam • Steam flood • Steam flood to Steam flood expansion • 18 (18) prod. wells expansion • 4 (30) prod. wells • 60 – 72 prod. wells • 8 (8) injection wells • 8 (18) injection wells • 48 injection wells 2014-2016 Operational Operational Operational Q1/Q2-2013 Q3 activity o Drilled 16 injection wells and 4 production wells o Performed 1 st cyclic steam stimulation of wells. o Steaming operations limited by drilling operations and issues related to steaming permit o All steaming permits received, and all conditions to steaming met 9
Project fully funded Phase 1 - 4 As of Sept Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2012 2013 2013 2013 2013 2014 2014 Wells $ 11 216 238 7 876 283 3 000 000 Surface Equipment 23 715 689 4 553 443 100 000 500 000 215 000 Pipeline $ 750 000 750 000 Water Treatment and 3rd Steam Gen. $ 3 500 529 3 000 000 1 000 000 $ SUM 34 931 928 12 429 726 3 100 000 500 000 750 000 4 250 529 3 215 000 1 000 000 Project Total $ 60 177 183 • Remaining investments as per 30.09.12 is 25 MUSD • The planned investments in water treatment and 3rd steam generator will be revaluated in Q1 2012 (may not be required if production respons is better than planned). 10
Simplified well lay-out in Chico Martinez Crudecorp has drilled and is now North producing from two patterns (in red) The new production grids w/ injectors Producing wells (in green) is being drilled Q3 and Q4 (on corners) ‘Northern (red) pattern ’ was cyclic Injection wells steamed in July and produced in (in middle of grid) August and September In October , ‘hot shot ’ ( short cyclic Fault line injection) in Southern Pattern and steam flood in 8 injectors. Northern Pattern was put back on cyclic steam (no production contribution in North). In Q4, more wells will be added for both cyclic and continous steam injection 11
Production rates going forward Future production rates will depend on; 1. Amount of steam injected 2. How rapid production response from reservoir to continous steam injection 3. Steam to oil ratio (amount of steam injected to amount of oil produced) 1. Steam injection rates will increase 2. Production response from reservoir Engineering predictions are from a few months to one year, before the steam-flood takes full effect. 3. Steam to oil ratio (SOR) During production testing, SOR at Chico Martinez has been 7-8. Various studies predicts a long term SOR between 5-8.
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