THE NEXT WAVE IN THE ILLINOIS BASIN

Transcription

1 THE NEXT WAVE IN THE ILLINOIS BASIN Themes Low Risk High Margins Opportunity through Joint Venture Ron Prefontaine TSX.V: SXE ASX: SXA

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3 Key Management with operations capability Tim Hoops Managing Director/President Colorado School of Mines: BSc. in Geol. Engineering U of Colorado: MSc. In Global Energy Management 36 years petroleum industry experience, 20+ years director of ASX listed company Dr. Ira Pasternack VP of Exploitation 34 years experience with Amoco, EnCana and others MS and PhD in Geology from Colorado School of Mines David Hettich CFO/VP of Land Registered Petroleum Landman BBA in Banking and Financial Economics from University of North Dakota 3

4 Why is Strata-X in the Illinois Basin? 4.3 billion barrels produced Most wells drilled over 50 years ago Multiple light oil accumulations identified Significant light oil resources remain and can be exploited profitably (1) ISGS accessed 2/20/14 Photos from: (R) Library of Congress: Farm Security Administration and (L) Illinois State Geological Survey 4

5 Illinois Basin Key Attributes Low Cost Shallow Turnkey drilling New technology applied to known oil fields Comprehensive technical and land databases Strata-X focus area Map Ref: USGS Low Cost High Margins Low Risk 1. Type Well economics figures are from reports prepared by Chapman Petroleum Engineers Ltd (October 2, 2014) following analysis of the available technical data including the geological and geophysical interpretation presented to them by Strata-X, information from relevant nearby wells or analogous reservoirs and the proposed program for the project. This information originally appeared in a Company News Release dated 2 October (DS-4) See Disclaimer at the end of this presentation. 5

6 Strata-X Targeting multiple light oil Plays Aux Vases Fm. Over 400 MMBLS produced Bypassed pay Needs pressure maintenance Middle Miss Completing tighter rock than had been previously attempted Bypassed pay? Lingle Fm. 500 square mile light oil accumulation Three low risk/high margin light oil projects 6

7 Low risk bypassed pay Oil fields Water/polymer Flood Projects Aux Vases Producing Fairway 400 million barrels Strata-X s First Attempt is successful 1.28 mmbbl 2P Reserves net to Strata-X 1 Anticipate 600 bopd peak waterflood production 1 Strata-X Acreage Area Requires pressure support Total cost is ~$20/bbl reservoir to refinery 12 additional follow-up projects New Techniques Better Technologies Higher recoveries 1) DS-3 (See Disclaimer at the end of this presentation) 7

8 Established Large Oil Accumulation 236 mmbbls PIIP net to Strata-X acreage 1 The Lingle is a Large Light oil Resource Initial Proof of Concept - Completed First proof of concept reaches over 300 bopd G & OCM Gas OCM G & OCM First appraisal well pre-drill vertical in September 8 mile step out from initial well Development Will allow for and reclassification Exploitation of reserves Continuous Drilling Program 368 MBO 236 MBO OCM Numerous O, G & OCM 5-98 BOPD 4-28 BOPD BOPD First 7 stage stimulated Proof of concept well reached over 300 bopd BOPD First Appraisal First appraisal well: 15 stage stimulated horizontal well, 8 mile step out Proof of concept Approx. 6 mi Large accumulation, concept proved, appraisal with better completions 8

9 Drill and Case < $2 million Perf and Plug vs Sliding Sleeve Frac vs Acid Wash Improved Flows Rates Expected from Appraisal Well Proof of concept Appraisal and development $7 to $11 per barrel from reservoir to refinery costs (using $35 to $60 per barrel oil price) Higher reservoir Pressure than proof of concept area ~ high recovery 9

10 What Strata-X has Achieved Strategic 100% of 41,000 net acres First mover advantages Confirmed first By-Passed Pay Oil Field 1.2 mmbbl net oil 1 12 additional follow-up projects Proof of concept on 500 sq mi accumulation First lateral reached 300 bopd Expect better results on appraisal/dev laterals Workover Rig on Burkett 5-34HOR Concept Proved: Reserves to Increase with increasing Production to Follow 1) DS-3 (See Disclaimer at the end of this presentation) 2) DS-1, DS-2 (See Disclaimer at the end of this presentation) 10

11 Illinois Basin Elements for Success in Place Proven leadership and management team Multiple shallow light oil targets very large resources Applying new methods in old areas Low production, transport and services costs Fast payback even at current oil prices Established quality land holdings First mover advantages - technical and land databases Low risk High margins Real growth potential 11

12 THE NEXT WAVE IN THE ILLINOIS BASIN Themes Low Risk High Margins Opportunity through joint venture TSX.V: SXE ASX: SXA THANK YOU more information at 12