100/5-29-33-2W4 Well - Strongbow Resources Inc.

Report
Compeer Area Viking Resource
Play
Focus on Viking light oil resource
plays with new technology
Key Considerations
Certain statements in this presentation constitute forward-looking statements or forward-looking information within the meaning
of applicable securities laws (“forward-looking statements”). Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance or achievements of Strongbow Resources
Inc.(“Strongbow” or “the Company”), or developments in Strongbow’s business or in its industry, to differ materially from the
anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. In
particular, statements concerning oil and gas reserves may involve the implied assessment that the resources described can be
profitably produced in the future, based on certain estimates and assumptions. No independent third party has reviewed the
reasonableness of any such statements, estimates or assumptions. No member of the Strongbow represents or warrants that
such forward-looking statements will be achieved or will prove to be correct. Actual future results and operations could vary
materially from the forward-looking statements. Similarly, no representation or warranty is made that the assumptions on which
the forward-looking statements are based may be reasonable. No audit, review or verification has been undertaken by Strongbow
or an independent third party of the assumptions, data, results, calculations and forecasts presented or referred to herein. The
recipient acknowledges that neither it nor Strongbow intends that Strongbow act or be responsible as a fiduciary to the recipient,
its management, stockholders, creditors or any other person. Each of the recipient, by accepting and providing this Overview
Memorandum respectively, expressly disclaims any fiduciary relationship and agrees that the recipient is responsible for making
its own independent judgments with respect to any transaction and any other matters regarding this Overview Memorandum.
Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on
assumptions about future economic conditions and courses of action. Forward-looking statements may also include any
statement relating to future events, conditions or circumstances. Strongbow cautions you not to place undue reliance upon any
such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among
other things, changes in the resource market; the market focus of Strongbow’s revenue mix and margin targets; operations
priorities; and strategy for its products and solutions. The risks and uncertainties that may affect forward-looking statements
include, among others, the completion and integration of acquisitions, the possibility of technical, logistical or planning issues in
connection with deployments, the continuous commitment of Strongbow’s customers, demand for Strongbow’s assets and other
risks detailed from time to time in Strongbow’s filings with the Securities and Exchange Commission and Canadian provincial
securities regulators. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and
opinions, and the Company does not undertake any obligation to update forward-looking statements should assumptions related
to these plans, estimates, projections, beliefs and opinions change.
Jan 25, 2013
NASDAQ BB:STBR
<3>
Strongbow Energy Inc.
• 108,886,705 MM shares currently 80 % held
by insiders.
• Largest shareholder Holloman Corp: 30 MM
• Strong management team:
– Robert Martin CEO and President
– Doug MacLellan COO
– Herbert Schmidt Jr. CFO
Jan 25, 2013
NASDAQ BB:STBR
<3>
Development Plan
Phase 1 completed
• Drilled 5-29-33-2W4Hz Compeer Area of
Alberta.
• Earned 8 sections of land.
Phase 2
• Test 5-29-33-2W4 Hz
• drill 4 wells per section
• Development of Compeer up to 30 wells
Jan 25, 2013
NASDAQ BB:STBR
<3>
Metrics
COMPEER:
• Wells IP at 50 BOPD
• Capital of $940,000 per well
COMPEER VIKING OIL SUMMARY (BIT)
$/Bbl
CAPITAL
IRR
Revenue
NPV
10%
Risk Factor
ENPV
Net Reserves (Bbls)
Finding & Development Cost
Operating Cost/ bbl
Jan 25, 2013
$940,000
79%
$3,689,421
$1,654,294
95.00%
$1,571,579
48,821
Payout
Multiples
$75.57
$33.88
3.92
1.76
$32.19
1.67
$19.25
$14.43
NASDAQ BB:STBR
<3>
First Year Projections
2013
Revenue Summary - TOTAL
RESERVES (BBL)
RESERVES (MMCF)
RESERVES - BOE
Production (BBL)
Production (MCF)
BOE (8MCF/BOE)
BOEPD
Average Price ($/MCF) $
Average Price ($/BBL) $
PROUCT REVENUES ($000'S)
OIL
GAS
LIQUIDS
Total Production Revenues
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
0
0
0
300,000
12,000
2,300,000
294,600
12,000
2,294,600
289,362
12,000
2,289,362
284,281
12,000
2,284,281
579,353
12,000
2,579,353
869,172
12,000
2,869,172
1,153,897
12,000
3,153,897
1,133,680
12,000
3,133,680
1,114,070
12,000
3,114,070
1,395,048
12,000
3,228,381
1,671,196
12,000
3,671,196
0
0
0
0
0
0
0
0
5,400
0
5,400
180
5,238
0
5,238
175
5,081
0
5,081
169
4,928
0
4,928
164
10,181
0
10,181
339
15,275
0
15,275
509
20,217
0
20,217
674
19,610
0
19,610
654
19,022
0
19,022
634
23,851
0
23,851
795
$
80.35 $
$
80.35 $
-
-
-
80.35
$
$
$
80.35 $
$
80.35 $
$
80.35 $
80.35
434
434
421
421
408
408
396
396
818
818
$
$
80.35
$
$
$
80.35 $
$
80.35 $
80.35
$
$
80.35
1,227
1,227
1,624
1,624
1,576
1,576
1,528
1,528
1,916
1,916
Deduct:
Crow n Royalties
Other Royalties
Total Royalties
-
-
43
43
87
42
40
82
41
37
78
40
34
74
82
75
156
123
112
235
162
147
309
158
135
293
153
125
278
192
158
350
Resource Property Incom e
-
-
347
339
331
322
662
992
1,315
1,283
1,251
1,567
Less: Operating Costs
Transportation Costs
Field Operating Costs - Wells
G& A Costs - Wells
Total Operating Costs - Wells
Facility Operating
Total Operating Costs
-
-
27
6
33
33
26
6
32
32
25
6
31
31
25
6
31
31
51
12
63
63
76
18
94
94
101
24
125
125
98
24
122
122
95
24
119
119
119
30
149
Net Incom e (Loss) from Operations
-
-
314
307
299
292
599
898
1,190
1,161
1,132
1,417
149
Average Cash Flow per BOE
$
64.28
$
64.68
$
65.06
$
65.43
$
64.98
$
64.97
$
65.05
$
65.42
$
65.76
$
65.68
Operating Costs per BOE
$
6.11
$
6.15
$
6.18
$
6.22
$
6.18
$
6.18
$
6.19
$
6.22
$
6.26
$
6.26
Average Net Back per BOE
$
58.17
$
58.54
$
58.88
$
59.21
$
58.80
$
58.79
$
58.87
$
59.19
$
59.50
$
59.42
Jan 25, 2013
NASDAQ BB:STBR
<3>
Annual Projected Cash Flow and
Capital Summary
Jan 25, 2013
YEAR
2013
2014
2015
2016
2017
2018
Annual Net
Incom e
7,608
31,003
25,851
21,732
21,732
19,080
Capital
16,920
12,220
NASDAQ BB:STBR
<3>
Viking Light Oil
Dodsland
Compeer
Jan 25, 2013
NASDAQ BB:STBR
<3>
Viking Light Oil
1. Large OOIP/potential to expand play. Estimated of 6.0 billion barrels of original oil in place
places the Viking play second only to the Cardium in terms of magnitude among emerging tight oil
plays. There is potential for significant expansion of the play.
2. Attractive per-well economics,. Estimated IRRs of 57% and breakeven of US$34.00/bbl, Viking
Drilling and completion cost much lower than Cardium or Bakken
3. Well delineated/low geological risk. Initially discovered in the 1950s, Viking oil pools in southwest
Saskatchewan and SE Alberta have been well delineated with vertical drilling, and hence there is little
geological risk associated with the play.
4. Upside to technology/cost reductions. As with most tight oil and tight gas plays that are exploitable
using horizontal multi-stage fraccing, continued technological innovations to completion techniques
have the potential to increase recovery factors and improve economics. In the case of Viking, the impact
of expected cost reductions on per-well economics is magnified, because drilling costs for these
relatively shallow wells are already significantly lower."
Jan 25, 2013
NASDAQ BB:STBR
<3>
Compeer Area
Penn-West Esther
Area – Viking Hz
Production
Jan 25, 2013
NASDAQ BB:STBR
Dodsland
10
Regional Viking
Trends
Provost
Compeer Local High
Esther
Jan 25, 2013
NASDAQ BB:STBR
Dodsland
11
Compeer Area Viking Oil – Development Plan
Viking HZ MSF
Type Well Curve
Assumptions
Oil recovery per well = 2.9
million Bbls/section divided
by ultimately up to 4
wells/section * 10% Rf =
72,625 Bbls/HZ
Locations
Gas recovery per well =
2.9 Bcf/section divided by
ultimately up to 4
wells/section * 20% Rf = 141
MMcf/HZ
Average (risked) IP of 8
HZ MSF Viking wells is
equal to 46 bbl/d oil & 145
Mcf/d (average over life
GOR of 4,000 Scf/bbl)
Jan 25, 2013
NASDAQ BB:STBR
12
Compeer Area Viking Oil
100/5-29-33-2W4 Well
5 m of net pay
20 % porosity
Sw = 30%
 So= 20%
Bo = 1.1
34 o API
2.9 Million Bbls per Section
2.9 Bcf per Section
TYPE LOG
100/5-29-33-2W4
Jan 25, 2013
NASDAQ BB:STBR
13
Compeer Area
• Alberta Crown Royalty: 7.5% on each new Horizontal oil well for
18 months or 50,000 Bbls (HONWRR). 0% to 40% based on flow
rate and price thereafter.
• Farmin on Harvest Petroleum: subject to a sliding scale overriding
royalty of 5 to 15%. Earned 8 sections after first well drilled.
• Development Well costs are estimated to be $450,000 and
$400,000 for completion and multistage frac.
Jan 25, 2013
NASDAQ BB:STBR
14
STRONGBOW RESOURCES INC.
Suite 700, 815 8th Ave SW.
Calgary, Alberta
T2P 3P2
Tel: (403) 269-9550
Jan 25, 2013
NASDAQ BB:STBR
15

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