Status & Presentation

Transcription

1 Status & Presentation June 21 st 2010 Annual General Meeting Development of gas discovery, upgrading of resources to reserves and low risk exploration 1

2 Oppsummering 2009/ /10 - A Challenging Year, but with an increase of values in the ground Raised 1/3 of necessary funding for work program 2009 Preparatory work for the winter season has left the company with short term debt to suppliers. Unsuccessful in raising sufficient capital during the course of 2009 Gas discovery Carmangay - can be commercialized by drilling three new shallow wells (cheaper than well #1) production from 4 wells Gas discovery Carmangay good returns at the current low gas prices incentive measures introduced by the authorities Gas discovery Carmangay sweet natural gas from dry coal bed methane formation (not water saturated) long constant production life with low operating costs Chard oil sand increase in value with higher oil price and an increase in acreage prices to about the double since acquistion Chard oil sand several acquisition approaches, some serious but some seeking to exploit the company's situation 2

3 Introduction Investment opportunity; New equity NOK mill Objective; Core wells and gas development very good returns Priority # 1: Drill core wells on heavy oil license in Alberta, which is expected to upgrade significant amounts of oil from resource category to reserves- expected significant value growth in NAV Priority #2: Develop gas discovery in Carmangay to production, which even with the current weak gas prices provides good yields and cash flow Priority # 3: New exploration areas low risk exploration for gas/oil Approved as operator in Alberta and have operated drilling activities Experienced Management with an extensive network and track record Exit strategy: Sale, Dividend, Merger or Listing will be considered. 3

4 Company Overview: Oil & Gas Assets CANADA Oil sand resources: Chard; Discovered heavy oil resources of 300 mill barrels in place in Athabasca Oil sands, (almost acres of land) surrounded by several majors (Statoil, Esso, Conoco) and medium sized projects both producing and under development. Conventional resources: Carmangay ; gas discovery south of Calgary (640 acres land)* Mega Pyramid ; conventional oil and gas producing area, northwest in Alberta ( acres of land) available for renewal. ARCTIC DIVESTITURE CANDIDATES Svalbard: Several rights Blåhuken (35 mill barrels prospective), Bellsund (8,5 mill) and Hopen (180 mill). Greenland: Disko/Nussuaq (West Greenland) and North East Greenland; Non exlusive exploration rights * 1 acres correspond to approx. 4 mål/dekar land 4046,86 m2 to be exact 4

5 Company Overview: Business Outlook and Utilisation of New Equity Positive view towards the market outlook and oil & gas industry. Expected increase in onshore activities Board approved work program weighted towards cash flow and increased asset values Increased value after development of resources to reserves - significant value growth in NAV and increased support from capital markets Expected to give the company positive cash flow - cover ongoing operations, administration and development 5

6 Petroleum Assets: Chard Oil Sands Ownership 100 % as regards Heavy Oil Resources, with a 2.5% overriding royalty to sellers on Crown land. 31 sections (81 km2) third party evaluated resources of about 300 million barrels of heavy oil in place in two layers of thickness up to m each depth about m. Resources are discovered in the well known McMurray formation by 29 existing wells on Nordic lands. Degrees API estimated in the range Resources confirmed by commissioned geological studies by DeGolyer and MacNaughton (2008) and Sogning (2007). Preliminary field development plan in place. New technology, reliable suppliers and project partners evaluated. To be revised once core well samples are analysed and new data studied. 6

7 Chard Oil Sands Nordic Petroleum s Location 7

8 Athabasca bitumen resources are valued at $0.25 to $0.75/Bbl of a company s published contingent resource (P50) estimate, or if one is not available then apply a 15% recovery factor to the reported discovered resource estimate. The 15% recovery factor is below the standard 35-55% recovery factor applied to SAGD projects in an attempt to err on the conservative side. Acreage positions are valued at $5,000 to $15,000 per acre. The low end of the range is based on the PetroChina/Athabasca Oil Sands JV, and the high end of the range is based on UTS recent asset sale. *Method detailed by Canaccord Genuity for

9 Statistical production well analysis 9

10 Oil sand upside analysis 10

11 Chard Drilling of Core Wells Map taken from DeGolyer & MacNaughton and Sogning studies Upper and lower McMurray formations are shown and indicated by green and blue lines The green area indicates presence of hydrocarbons according to Sogning All proposed Nordic core wells locations are indicated in dark blue with further potential locations in red. Dark blue core wells to be drilled during Q Statoil appraisal well is given by purple logo. According to Stone Petroleum and Meg Energy hydrocarbons may extend east of the proposed Statoil appraisal well. Estimated oil boundaries Green lines: DeGolyer Blue line: Sogning 11

12 Petroleum Assets: Carmangay Gas Discovery first well Longco Q Location: Township Carmangay Long Coulee Area Working Interest : % well #1 and 65 % well #2-4 Farm-in Agreement with Partners: First Well Investment: Skyway Ltd. (37,5 % - local joint venture partners) and Norwegian Petroleum (62,5 %) First Well Carried Interest: 35% Zargon Energy Trust (lease owner) Section development non carried: Norwegian Petroleum (65%) Zargon Energy Trust (35 %) Operator: Norwegian Petroleum Inc. (Nordic Subsidiary) Estimated Total Reserves: 3-5 Bscf recoverable reserves per 4 well section (CBM gas is renewable) Future potential of producing oil in deeper zones, ref. test of well 12 see appendix

13 Drilling Operation Q m depth in 3 days according to budget and on time. Rig owner Ensign - Champion #39 Rig Used in Drilling Longco Ensign Energy Services Inc. is Canada's second largest land-based drilling contractor and third largest well servicing contractor. Ensign provides oilfield services in North America. 13

14 Attractive and developed area with multiple gas & oil producing wells. Carmangay Gas Discovery Existing production and commercial infrastructure in place with available capacity, as seen in map. CBM production online within Vulcan county. Available pipeline and terminal capacity nearby. 14

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16 Petroleum Assets: Mega Pyramid Total of acres or m2 available for renewal In a conventional oil and gas producing area Much of the areas oil and gas deposits are located on soft ground known as muskeg, which is most easily accessed when the ground is frozen. Area surrounded by multiple gas and conventional oil producing wells Oil and gas sales infrastructure already in place with pipelines, roads and processing facilities nearby Reserve estimates of gas up to Bscf Existing seismic acquired 16 Possible shale gas resources in deeper zones, key opportunity dependent upon financing

17 Petroleum Assets: Arctic Licenses All Arctic Licenses have been defined as divestiture candidates Svalbard main licenses: Kongress Ishøgda/Blåhuken (Joker structure, Prospective 35 million barrels oil) Bellsund (Prospective 8,5 mil barrels oil) Billefjorden / Sassen (rights to be reactivated) Hopen Prospective 180 mill barrels (Courtcase because of nature preserve regulation protecting from activities on the island). Greenland: Two exploration licenses: Disko/Nussuaq (West-Greenland) North East-Greenland 17

18 Outlook: Work Program and CAPEX Completion* Amount month/year NOK 1. Appraisal & Sampling Wells on Chard 06/ mill 2. Carmangay development drilling of 3 new wells Completion and Production from 4 wells financing dep mill 3. Mega Pyramid, Minimum Commitment 02/11 0,7 mill 4. Purchase of New Exploration Acreage 09/ mill 5. Minimum Working Program Svalbard 12/ mill General Adm. and Corporate Management Norway and Canada: 5.0 mill Budgetary funding need: Approx. NOK 9-25 mill* * The development program may be conducted in stages depending on financing 18

19 Outlook: Economics After CAPEX investment Adjusted Asset Values/Equity per share Creation of values per share NOK 0,90 1,75 per share (6 12 times pre market value) which means highly improved market value of equity per share (dividend or basis for new funding based on bank loans) Net available cash flow: Expected net revenues* in CAD$ from 4 gas wells section (60% W.I. av. shown in table) around first well 16-25, high/low case (futures curve for low/risked gas price in CAD$ used): Graph showing production rates per day (scf) over years for one well in High and Low cases High Peak Low Peak * Net revenue is gross revenue minus OPEX, Land lease, VAT and Royalty Case CAD / Year H Gross Rev H Net Revenue L Gross Rev L Net Revenue Gas price CAD 4,00 4,89 5,78 6,67 7,56 Carmangay cash flow 19

20 Outlook: Strategies for Future Growth Financing of further growth (credits, farm-outs, divestitures). Equity based financing until positive cash flow is created by developing our Carmangay gas discovery and our conventional assets. Thereafter operating loans, credit facilities will be focus. Oil Sands; After cores are drilled and reserves defined, action toward Sale, Farm-out or Joint Venture will be considered for future financing. Conventional oil and gas; Further exploration on new purchased land + seek for purchase of existing production covered by established cash flow and partly by bank loans. Coal bed methane; As for Conventional oil and gas, above. The recently announced royalty and regulation changes will encourage increased petroleum investment in Alberta. Our asset values are expected to increase substantially. 20

21 Ongoing negotiations Offers with regard to cash acquisition of Chard license - not good enough according to market value of license Negotiating potential farm-in on Chard - funding of work program for the project in return for ownership percentage in the license Demerger of Chard (Norwegian Oil Sands) to a new company where Nordic has an ownership - the new company is capitalized only by the new partner to carry out work program Negotiations with large investors for direct investment in the company 21

22 Investment Summary Asset Portfolio Growth Potential CBM discovery in Carmangay Chard oil sands Mega Pyramid conventional and shale gas New opportunities Arctic assets Build up revenues with gas production. Upgrade existing resources to reserves. Develop project portfolio to focus on actively developing commercially viable areas. Decrease risk development in stages and partnerships. Organizational Development Secure basis for E&P human resource base in Calgary. Demand and supply forward curve implies improved market for gas years to come. Prepare for further expansion from Experienced Management Management team has experience in establishing and growing several startups into successful E&P companies. Local area expertise and knowledge with a vast network of contacts. Exceptional technical knowledge of proven and innovative operational methods and results. 22

23 First well Longco 1625 successfully drilled and logged Feb