Virtus Oil and Gas Corp Investor Presentation April 2017 Disclaimer - - PowerPoint PPT Presentation

Virtus Oil and Gas Corp

Investor Presentation April 2017

Extent of Information

This document has been prepared by Virtus Oil and Gas Corporation(“Virtus Oil” or “Company”). This Presentation, including the information contained in this disclaimer, does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither the Presentation, disclaimer not anything contained in such forms the basis of any contract or commitment. This Presentation does not take into account your individual investment objective, financial situation or particular needs. You must not act on the basis of any other matter contained in this Presentation but must make your own assessment

• f the Company.

No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained in this Presentation, including the accuracy, likelihood of the achievement or reasonableness of any forecast, prospects, returns or statements in relation to future matters contained in the Presentation (“Forward-looking statements”). Any such forward-looking statements that are contained in this Presentation or can be implied by the same are by their nature subject to significant uncertainties and contingencies associated with the oil and gas industry and are based on a number of estimates and assumptions that are subject to change ( and in many cases are outside the control of Virtus Oil and Gas and its directors) which may causes the actual results or performance of Virtus Oil and Gas to be materially different from any future results or performance expressed or implied by such forward-looking statements. To the maximum extent permitted by law, none of Virtus Oil and Gas’s, or related corporations, directors, employees, agents nor any

• ther person accepts and liability, including without limitation arising from fault or negligence, for any loss arising from use of this

Presentation or its content or otherwise arising in connection with it.

Exclusion of Financial Product Advice

This Presentation is for information purposes only and is not a prospectus or other offering under United States law or under any others laws in the jurisdictions where the Presentation might be available. Nothing herein constitutes investment, legal, tax or other advice. This Presentation is not a recommendation to acquire shares and has been prepared without taking into account the investment

• bjectives, financial situation or needs of individuals.

Independent Advice

You should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and seek appropriate advice, including, legal and taxation advice appropriate to your jurisdiction. Virtus Oil and Gas is not licensed to provide financial advice in respect of its shares.

Disclaimer

Introduction Strategy Challenges Forward Conclusion

1 2 3 4

History

Production/ Cash Flow/Self funding

• 90 boepd of existing production with ability to scale quickly

to 800 boepd by mid-2017 and 1,500 boepd by the end of 2017

• Restarting low cost conventional shut-in production
• Cash flow positive at current oil prices by Summer 2017.
• Projected Gross Revenue to go from $1 million annual run-

rate to $12 million annual run-rate with growth in production and modest uplift in oil prices Reserves

• 4.3mmboe oil & gas reserves certified by independent third

party

• PV-10 of $94 million
• Revenue of $137 million
• Ability to significantly expand reserve base over the next 12

months Key Infrastructure

• Includes affiliate-controlled gas plant (200 MMscfpd capacity)

and 25-mile pipeline

• Key infrastructure assets of former Delta Petroleum
• Assets represent over $295 million of cumulative capex

Platform for expansion

• First deal completed on March 2017
• Targeting significant production and cash flow growth:
• FYE 2017: 1,000 Bopd; FYE 2018: 3,000 Bopd; FYE 2019:

5,000 Bopd

• Production uplift to coincide with price recovery
• Over 250 drill sites with ability to grow production

Board appointments

• Ex Nevada Governor and US Oil and Gas executives with

proven track records of success

Key Benefits- Paradox Basin

Net Acreage NRI 1P 3P

Production

Squaw Canyon 160

82.50% 315 Mbo 315 Mbo

10 bopd Tin Cup

880 85.50% 1,730 Mbo 6,110 Mbo 20 bopd

Paradox Federal Unit* 21,271+/- 81.00% 2,100 Mbo 10,600 Mbo 60 bopd

Totals 22,311 4,145 Mbo 17,025 Mbo

90 bopd

* Paradox Federal Unit to be closed in 2017. LOI Signed

Transaction delivers reserve base of 4.2mmboe; FNOR $137 million PV-10, USD$94 million revenue

Company Assets

• 5.00

10.00 15.00 20.00 25.00 $45/bbl $55/bbl $65/bbl $70/bbl

Total Revenue USD (m)

90boepd 400boepd 600boepd 800boepd

• 1.00

2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 $45/bbl $55/bbl $65/bbl $70/bbl

Net Revenue USD (m)

90boepd 400boepd 600boepd 800boepd

Oil Price Revenue Scenarios USD (m) Production Scenarios USD (m)

Production/Revenue Scenarios

($10/bbl) ($10/bbl) (net VOIL) (net VOIL)

Company Assets with Midstream

• Sellers of Recent Acquisitions also own a gas plant and a

25-mile pipeline (200 MMscfpd capacity)

• Key infrastructure assets of former Delta Petroleum Corporation
• Assets represent over $295 million of cumulative capex
• Virtus Oil is in process of negotiating to acquire the legacy assets

tied to these prospects.

Pipeline and Gas Plant

Value* Delivered in Recent Deals

Asset Potential Value Comments 1P Reserves $94,000,000 PV-10 Gas Plant $ 5,000,000

Based on Revenue and Inventory of items in closing

Pipeline $40,000,000

Based on Revenue Potential and Capex Spent by Delta to permit across BLM, State and County Lands

Total $139,000,000 ALL STOCK TRADE

Virtus Investment

The Company has acquired proven assets in the Paradox Basin. These assets were bought with company stock and needed workover capital as the Seller had deferred maintenance during the recent decline in oil prices. Virtus Management has identified de-risked

• pportunities for re-entry and workover wells. As of March 2017, The

Company began to bring these existing wells back on production. The company has recently spent ~$100k in costs to repair a water disposal well and replaced two pumps on wells that are now ready for production.

Downside Case Base Case

Upside Case 30 Days- 250 boepd 60 Days- 500 boepd 90 Days- 1,000 boepd 120 Days-1,100 boepd 150 Days 1,300 boepd 30 Days- 200boepd 60 Days- 400 boepd 90 Days- 750 boepd 120 Days-900 boepd 150 Days 1,200 boepd 30 Days- 100 boepd 60 Days- 250 boepd 90 Days- 400 boepd 120 Days-600 boepd 150 Days 800 boepd

Virtus has identified 10 wells needing workovers from pump jack changes, flow lines installed, valves replaced, etc. Capital of ~$3 million will be used to work-over these

• wells. The company is flexible with respect to structure in accommodating the right
• investors. Options include but are not necessarily limited to: i) Stock Issuance; ii) Debt

tied to Production (VPP); iii) Direct Equity Investment; and iv) a combination of all of the

• above. The company has excellent well control in the area along with an extensive

Reserve Report from Ralph E. Davis and Baker Hughes Analytical Review and Study.

De-Risked Upside for Production

Increased Density Drilling Potential

bopd Mcfd Revenue LOE Net Rev G&A CapEx Working Capital

2017* 1,100 2,100 6,828,000 1,005,000 5,823,000 466,000 5,528,000 6,000,000 2018 2,000 2,300 26,262,000 2,187,000 24,075,000 960,000 6,000,000 2019 2,600 4,200 44,216,000 2,187,000 42,029,000 1,320,000 12,000,000 2020 3,100 5,900 57,818,000 2,187,000 55,631,000 1,800,000 12,000,000

* Eight months of production in 2017 Oil price increases from $52/bbl to $65/bbl Gas price $3.00 Mcf CapEx from $6MM from Investment and balance from cash flow Drill Six Horizonal wells in 2018 Drill Four Offsets in 2019 Drill Four Offsets in 2020

A capital investment of $6 million for drilling increases the company’s production significantly and the cash flow generated from this investment can fund ten additional work-over projects and the drilling of fourteen new wells by 2020.

Virtus Board and Management

Dan Green - Director and Executive

• Petroleum

Engineer with

• ver

37 years

• f

Professional Experience in Oil and Gas Industry. President of Pacific Energy & Mining Company an oil and gas operator.

• Previously President of Western Energy Inc., an

independent oil company that was publicly traded which held leases in Utah and Kansas.

• Bachelor of Science in Mineral Engineering with

Minor in Geology from Colorado School of Mines.

Brett A. Murray - Senior VP B.D./Land and Director

• Based in Denver and has over 12 years’ experience

in the Oil and Gas Industry including the last two years as Chief Operating Officer for publicly traded Virtus Oil and Gas Corporation,

• Senior Management for Gunnison Energy

Corporation, Sundance Energy Australia Limited (ASX: SEA), Anschutz Exploration and Anadarko Petroleum Corporation.

• Bachelor of Arts in Communications from Kansas

Wesleyan University. Member of AAPL and RMMLF

James Gibbons - Independent Director

• Former Governor of the State of Nevada, Former

Member of the United States Congress, Attorney,

• Fighter Pilot in the United States Air Force, an Air

Line Pilot, Geologist and a Hydrologist.

• Bachelor of Science and Master of Science from

University of Nevada, Reno and a JD from Southwestern University.

Dale Larsen- Consultant/ Future BoD

• Over 36 Years as Professional Engineer
• BoD for Denver Petroleum Club, Board of Advisors

with Western Energy Alliance, and Committee member for Colorado Oil and Gas Association (COGA)

• Bachelor of Science in Geological Engineering from

South Dakota School of Mines

• Author of multiple writings for Society of Professional

Engineers (SPE)

2020

2019

2018

2017

2017: 2nd Quarter-500 boepd 2017: 4th Quarter- 1,500 boepd 2018: 2,000 boepd 2019: 2,600 boepd 2020: 3,100+ boepd Net to Company

Goals for Virtus Oil

virtusoil.com