THE nExT fronTiEr in unconvEnTional oil ExcEpTional sHarEHoldEr - - PowerPoint PPT Presentation

THE nExT fronTiEr in unconvEnTional oil

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ExcEpTional sHarEHoldEr rETurns in a rising pETrolEum markET

March 2011

THE nExT fronTiEr in unconvEnTional oil

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invEsTmEnT HigHligHTs

more on the nExT page

 DEVELOPMENT & PRODUCTION PLAN – Strata is progressing forward with its USD $250 million fjve-phase capital plan to produce 56,000 barrels (bbls) per day by 2017  PHASE 1 UNDER WAY – Engineering exploration and pre- production development of Cadotte holdings  LAND POSITION – 52,480 acres (87.6 sections) in Peace River region  WORKING INTEREST is 100% Strata’s  CADOTTE PROJECT – Best Estimate  NPV USD $1.3 Billion (10% disc.) at $85/bbl over 20yrs  28% Internal Rate of Return  1.99 Billion bbls in place  517 Million bbls recoverable

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invEsTmEnT HigHligHTs ( continued )

nExT | our business

 TREMENDOUS UPSIDE – High side estimates:  Up to NPV USD $1.9 Billion for Cadotte Project with 36% IRR (disc. 10%) at $95/bbl  High probability of exceeding 26% recovery rate with existing and new technology  Cadotte West resources untapped  Price of oil rising ($150/bbl?)  TECHNOLOGY – Exclusive licensing agreement with University of Alberta for proprietary “Steam over Solvent” recovery method

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• ur businEss

nExT | world’s oil reserves

 Company: Strata Oil & Gas was incorporated in the US in Nov 1998, moved headquarters to Calgary, Alberta in 2005 and incorporated under Canadian law  Sector: Heavy oil (carbonate hosted bitumen deposits) exploration and production in Alberta’s Peace River area  Goal: Provide exceptional shareholder returns in a rising petroleum market, by focusing on high-value carbonate-hosted bitumen deposits

* As of March 10, 2011

THE nExT fronTiEr in unconvEnTional oil

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World’s oil rEsErvEs

nExT | canadian crude oil production

 1.258 Trillion bbls proved oil reserves  Canada holds 15% of the world’s reserve - 335 Billion bbls  crude bitumen – 315 Billion bbls  crude oil – 19.7 Billion bbls

Source: Alberta Energy and Utilities Board, British Petroleum - 2008

315 Canada Saudi Arabia Iraq Venezuela Russia U.S.

World Oil Reserves

260 113 78 60 22

( billions of barrels )

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canadian crudE oil producTion

nExT | alberta oil facts

 Currently produces 3.3 Million bbls/day  There are an estimated 50.7 Billion bbls in oil sands that are not under active development

Source: May 2005 – Alberta Energy and Utilities Board, British Petroleum -2008

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 1990 1995 2000 2005 2010 2015 2020

Oil Sands In-Situ Oil Sands Mining Conventional Heavy Conventional Light

(000’s barrels/day)

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albErTa oil facTs

nExT | peace river oil sands area

 Growing production with approximately 1.1 Million bbls/day with 176 Billion bbls of proven oil reserves:  crude bitumen – 174 Billion bbls  crude oil – 1.6 Billion bbls  Peace River Oil Sands holds over 188 Billion bbls of Oil  Long life resource  Typically 30 year reserve life with minimal declines  Only 3% of initial established reserves produced to date  69% of possible oil sands areas are available for exploration and leasing  Attractive royalty and tax regime - Alberta Energy Innovation Strategy offers royalty offsets of up to $200 million over 5 years to pilot projects that use new, innovative technology to development of

• il and gas reserves

Source: May 2005 – Alberta Energy and Utilities Board

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pEacE rivEr oil sands arEa

nExT | land position

 The Peace River Oil Sands area covers 11,052 sections (2.37 million hectares)  Historic Bitumen exploration and production has focused on Bluesky and Gething Formations, Cretaceous-age clastic sediments  Recent Exploration addresses the Debolt Carbonate  Debolt is similar to the Grosmont play in the Wabasca area

THE nExT fronTiEr in unconvEnTional oil

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land posiTion

nExT | current land tenure

Source: EUB ST98-2006

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currEnT land TEnurE

nExT | cadotte project

82 Sections in Total in the Cadotte Area

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cadoTTE projEcT

nExT | major operators: cadotte area

 During 2006-2007 Strata drilled three wells on this block  Resource estimate for this block was announced in September, 2007

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major opEraTors: cadoTTE arEa

nExT | pre-feasibility study

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prE-fEasibiliTY sTudY

nExT | contingent resource estimate

 Prepared by Norwest Questa Engineering Corporation Feb 2008  Method of extraction utilized for study – Horizontal Cyclical Steam (HCS)  Norwest used effective OBIP* estimates rather than a gross OBIP (Gross OBIP is about 50% higher)  Shell’s Carmon Project pad and development block design used  Production schedule developed over 29 sections (each at 1sq mile)  Each pad includes 20 wells of 1,400 m length, each about 600 m in the vertical direction and 800 m horizontally  The pads are “brought on stream” over a four year build-up period

*OBIP = Original Bitumen In Place

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conTingEnT rEsourcE EsTimaTE

nExT | pre-feasibility findings

Source: Norwest Corporation

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prE-fEasibiliTY findings

nExT | economic evaluation

RECOVERABLE PORTION OF CONTINGENT RESOURCE FOR THE CADOTTE AREA BY TARGET ZONE IN MILLIONS OF STOCK TANK BARRELS (MMSTB)

Source: Norwest Corporation

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Economic EvaluaTion

nExT | pre-feasibility findings

DIFFERENT OIL PRICE ASSUMPTIONS (USD $ BILLIONS)

Sproule and McDaniel and Associates forecast that Alberta Heavy Crude Oil will sell for USD $30 less than WTI

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prE-fEasibiliTY findings

nExT | cadotte development - capital plan

 Economically Viable  NPV (disc. 10%) of cash fmows before income taxes of USD $1.3 Billion (over initial 20yrs, producing only 360 million bbls of the total 517 million bbls available)  Daily Production Rate of 56,000 bbls per day  Based on a review of public data for similar projects  Product anticipated to be “dil-bit”, rather than synthetic crude oil  Transportation of bitumen via trucking or pipeline to Haig Lake terminal for transfer to the Rainbow Pipe Line which connects to the Edmonton refjneries

Source: Norwest Corporation

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cadoTTE dEvElopmEnT - capiTal plan

nExT | phase 1 – development strategy

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pHasE 1 dEvElopmEnT sTraTEgY

nExT | phase 1 – cadotte development

• I. CADOTTE

 Initial Drilling Program  Results Addressed Resource Evaluation & Pre-Feasibility Study  Production Testing  Determine Additional Drilling Locations  Water Survey  Submit Application for Pilot Plant

• II. CADOTTE WEST

 Preliminary Recognition of Resource Potential  Delineate Resource Through a Seismic / Drilling Program  Add to the Current Resource  Submit Applications for the Appropriate Extraction and Processing Methods

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pHasE 1 - cadoTTE dEvElopmEnT

nExT | leadership

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lEadErsHip

Ron Daems (President & CEO)  Extensive fjnancial and resource industry experience  Career has focused primarily on business development, strategic

planning and fjnancial analysis in the resource sector

 Currently engaged as President and CEO of Capex Energy Services, a

privately held company

 Previous experience: Portfolio Manager for a multinational investment

fjrm, founded and became the CEO of Emerging Business Solutions, a privately held business development company focused primarily on assisting startup companies in the resource sector

Pratt Barndollar (Director)  Experienced geophysicist who has served as senior geosciences

manager and interpreter for large and small oil companies

 Bachelor of Science degrees from Kansas State University, in

Geophysics and Civil Engineering

 Currently is Exploration Portfolio Manager at Talisman Energy  Previous experience: VP, Exploration of Napa Energy, Chief

Geophysicist and Exploration Portfolio Manager for Devon Energy, Senior Geophysicist for Samson Canada, Chief Geophysicist for Apache Canada, and Senior Explorer and Project Leader for Phillips Petroleum

nExT | forward looking statements

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forWard looking sTaTEmEnTs

nExT | contact information

This information may contain forward-looking statements about our exploration, production, and other operating and fjnancial plans. These statements are not guarantees of future performance, involve certain risks, uncertainties, and assumptions that are diffjcult to predict, and are based upon assumptions as to future events that may not prove accurate. Among the factors that could cause actual outcomes and results to differ materially are changes in petroleum prices; changes in refjning and marketing margins; potential failure to achieve, and potential delays in achieving, expected reserve or production levels from existing and future oil and gas development projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas; unsuccessful exploratory drilling activities; unexpected delays or diffjculties in constructing company facilities; general domestic and international economic and political conditions; the ability to meet government regulations; potential disruption or interruption of the Company’s facilities due to accidents or political events and other matters detailed in our publicly available fjlings with the Securities and Exchange Commission. Cautionary Note: As an oil and gas company, in our fjlings with the SEC we only disclose proved reserves that have been demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. However, in the information presented here, we may use certain terms such as “probable reserves”, “potential net recoverable reserves”, “barrels of oil”, “in-place”, “resource”, and “recoverable reserves” that we do not include in our fjlings with the SEC.

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conTacT informaTion

ADDRESS Strata Oil & Gas Ltd. #408, 918 –16th Avenue N.W. Calgary, Alberta T2M 0K3 EMAIL invest@strataoil.com PHONE (403) 237 5443 TOLL FREE 1 877 237 5443 FAX (403) 770 8882 WEBSITE www.strataoil.com