TSX-V: BBI February 2018

Transcription

1 February 2018

2 A Confluence of Positive Factors BLACKBIRD LIFE CYCLE MARKET CONDITIONS BLACKBIRD VALUE PROPOSITION Social License LARGE, CONTIGUOUS LAND BLOCK 134 GROSS SECTIONS Alberta Jurisdiction CASH ON HAND $21.3 MM (1) DELINEATED DRILLING SUCCESS Area Activity EGRESS AND MARKET ACCESS Operating History = Primary value drivers = Secondary value drivers Notes: (1) Working capital surplus as at October 31,

3 All Eyes on the Pipestone Corridor The Highest Value Montney A&D Directly Offsets Blackbird Industry Activity is Exploding in the Pipestone Corridor Seven Generations acquisition of Paramount Kakwa Sets a new high for undeveloped Montney land at $6.1 MM per section Paramount acquisition of Apache Transaction provides benchmark for Montney land value in the region Anticipated POU drilling will delineate the liquids rich corridor Plans for >300 well drilling program with growth potential to 76,000 boe/d (>30% condensate) Industry plans a major infrastructure investment at Pipestone through 2020 Five sour processing facilities & various condensate pipelines already sanctioned or in FEED stages E&P s require scale to strike a long term take-or-pay with midstreamers consolidation is upcoming NuVista plans >120 wells on 11 sections three miles west of Blackbird stacked pay boosts full-cycle economics Encana s Cube development reduces costs and improves economic recovery factors The Cube will become the industry standard for stacked pay development, Doug Suttles, Encana, Pres. & CEO Blackbird Pipestone One of the Most Actively Drilled Corridors in Canada New Blackbird drill to the north will validate the northern Wapiti lands Pipestone has been actively licensing and spudding wells Five (1.2 net) non-operated Blackbird wells extend the fairway to the east Velvet s W6 well, confirms the volatile oil window is prospective, validating all of Blackbird s lands Paramount s acquisition of Apache Montney lands Joint Interest 02/2-20 Recompletion 3-27 New Drill Re-completion 2-28 New Drill 2-20 Re-completion 13-4 Joint Interest Eastern Gathering System 3

4 The Pipestone Corridor Escalating Activity CNRL Bbls/MMcf Pipestone Bbls/MMcf (2) Pipestone 6 drilled NuVista >100 Bbls/MMcf (3) 6 MMcf/d and 600 bbls/d of condensate over final 24 hours of test /6-26 Kelt (4) 1,567 boe/d (64% oil, 20% NGLs and 16% gas) over a 5 day test BBI 02/6-26, Upper Peak 48hr rate 924 boe/d (CGR 591 bbls/mmcf) (5) BBI 2-28, Middle Peak 48hr rate 721 boe/d (CGR 251 bbls/mmcf) (5) BBI 15-21, Upper Peak 48hr rate 729 boe/d (CGR 257 bbls/mmcf) (5) Pipestone Upper, 72 hr Test 3.6 MMcf/d & 1000 Bbls condensate/day* 1-20 BBI 1-20, Upper 48hr test rate 1,054 boe/d (CGR 192 bbls/mmcf) (5) CNRL 13-7, Middle 299 Bbls/MMcf, (2) & 4-28 Montney Hz Drilled Shell >60 Montney Hz Licenced >40 Drilled Mid Montney W6 IP 180: CGR Avg MMcf/d Notes: *Public data within Montney Resource Play as of Aug 8, 2017, Prod. Mths is actual producing hours / 720 hours per month (2) unknown number of hours, condensate and gas volumes only in first month reported production (3) NuVista September 2017 Corporate Presentation (4) Kelt press release October 6, 2017 (5) See notes on initial production results on page 10 of this presentation. 4

5 The Pipestone Liquids-Rich Corridor BBI Mapping of Upper Montney Condensate Corridor (2) Encana s Mapping of Liquids-Rich Corridor (1) ~60 sections in Encana s Super Condensate Corridor (2) BBI Mapping of Middle Montney Condensate Corridor (2) Source: (1) Encana May 17, 2016 Montney Investor Event Presentation (slide 49); (2) Internal mapping by Blackbird; Represents analogous information. See Analogous Information in Advisories. 5

6 The Pipestone Liquids-Rich Corridor Four distinct intervals A A m Doig/Upper Montney Upper Montney A W W6 02/ W W W6 BBI 2-20 BBI 6-26 ECA 4-9 Pipestone BBI 02/2-20 BBI 5-26 BBI 2-20 East A Middle Montney F t Lower Montney Gamma Ray (Green), Bulk Density (Gray) Note: Sourced from Accumap. Potential Turbidites in Lower Montney 6

7 Blackbird s Pipestone Resource Blackbird s Lands with Proved Reserves Booked Blackbird s Lands with Proved + Probable Reserves Booked sections booked 16.5 sections booked (9.0% of land booked) (14.4% of land booked) 1P Reserves: 28,578 mboe 2P Reserves: 54,373 mboe 1P NPV10: $167 million 2P NPV10: $395 million Reserves and Resources Booked in Only Two of Four Highly Prospective Intervals Note: From Blackbird s July 31, 2017 reserve report prepared by Blackbird s independent reserves evaluator, McDaniel and Associates Consultants Ltd. 7

8 Development and Delineation Program Northern Multi-Interval Delineation Block (Tie-In ~2019) Western Development Block (Tied-In) 9 12 BBI Producing Wells BBI Active Operations BBI Proposed Locations Eastern Multi-Interval Delineation Block (Tie-In ~Q1 2018) Producing Wells W6 (Middle) Tied-in/producing W6 (Upper) Tied-in/producing W6 (Middle) Tied-in/producing 102/ W6 (Upper) Tied-in/producing (recompletion) 02/ W6 (Upper) Tied-in/producing W6 (Upper) Tied-in/producing (recompletion) W6 (Middle) Tied-in/producing W6 (Upper) Tied-in/producing 8 Active Operations W6 (Middle) Test results before the end of February W6 (Upper) Test results before the end of March W6 (Upper) Non-op: drilled, completed, tested W6 (Middle) Non-op: drilled, completed, tested W6 (Middle) Non-op: drilled, completed, tested W6 (Middle) Non-op: drilled, completed, tested W6 (Middle) Non-op; drilled, completed, tested W6 (Middle) Non-op; drilled, completed, tested 8

9 Current Well Summary Well Operated or Non- Operated Working Interest (%) Montney Interval Measured Depth (meters) Lateral Length (meters) Number of Intervals Proppant (tonnes) W6 Operated 100 Middle 4,734 2, ,805 Tied-in / producing W6 Operated 100 Upper 4,621 1, ,695 Tied-in / producing W6 Operated 100 Middle 4,660 2, ,223 Tied-in / producing 102/ W6 Operated 100 Upper 4,598 2, ,650 Tied-in / producing 02/ W6 Operated 100 Upper 4,808 2, ,193 Tied-in / producing W6 Operated 100 Upper 4,120 1, ,170 Tied-in / producing W6 Operated 100 Middle 4,942 1, ,521 Tied-in / producing W6 Operated 100 Upper 4,590 2, ,040 Tied-in / producing W6 Operated 100 Middle 4,885 2, ,008 Test results before the end of February W6 Operated 100 Upper 4,604 2, ,500 Test results before the end of March W6 Non-Operated 17.9 Upper 5,350 2, ,053 Drilled, completed and tested W6 Non-Operated 37.5 Middle 5,615 3, ,682 Drilled, completed and tested W6 Non-Operated 20 Middle 5,320 2, ,605 Drilled, completed and tested W6 Non-Operated 24 Middle 5,260 2, ,591 Drilled, completed and tested W6 Non-Operated 20 Middle 4,720 2, ,565 Drilled, completed and tested W6 Non-Operated 20 Middle 5,012 2, ,687 Drilled, completed and tested Status 9

10 Production (boe/d) Recent IP30 and Test Results IP30 (1)(2)(3)(4) Well Condensate (bbl/d) Natural Gas (mcf/d) NGLs (bbl/d) CGR (5) (bbls/mmcf) Total (boe/d) % Load Water Recovered (6) Lateral Length (meters) 02/ W6 (Upper Montney) W6 (Middle Montney) W6 (Upper Montney) 475 1, % 2, , % 1, , % 1, Hour Test Rates (1)(2)(3)(4) 1,200 1,000 Natural Gas (boe/d) NGLs (bbl/d) Condensate (bbl/d) / W6* (Upper Montney) W6* (Middle Montney) W6* (Upper Montney) W6** (Upper Montney) Notes: The Company cautions that short-term test rates are not necessarily indicative of long-term well or reservoir performance or of ultimate recovery. See "Short Term Test Rates" at the end of this presentation. (1) Production from these wells has been restricted at times due to third party processing capacity limitations and water injection limitations; (2) Numbers may not add due to rounding; (3) All disclosed production rates and volumes are presented net of any load water; (4) All volumes are based on field estimated production data; (5) CGR includes condensate and NGL production; (6) Load water is not included in any of the other volumes reported; *Represents peak 48 hour rate over initial 30 days on production; **Represents production over the final 48 hours over an 11 day test. 10

11 2017/2018 Moving Forward with a Clear Path Development Commercialization of Stage Reinforces the teams innovative approach New/enhanced GHA(s) Multiple binding Gas Handling Agreements 02/6-26 Completed and On-Stream Completed and On-Stream Recompleted and On-Stream 02/2-20 On-Stream Test results expected Feb/Mar W6 Recompletion Completion 3-27 Completion SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY INCREASING CORRIDOR MOMENTUM Significant industry well activity Five additional sour gas processing facilities and/or expansions planned 11

12 Processing Capacity (mmcf/d) Tidewater Agreement Sets the Stage for Future Growth Long Term Growth Five year term with option to extend; provides long term processing solution for both north and south of the Wapiti River Lower Cost Producer Blackbird has the option to acquire up to a 20% working interest in the facility, which would significantly reduce processing fee s enabling Blackbird to become a lower cost producer Enhanced Liquids Value Deep cut capability will allow Blackbird to obtain premium pricing for ethane, propane and all NGLs Strategic Fit Provides solution for processing, sweet gas storage and fuel gas needs; both companies have significant business interest in the Grande Prairie area Expected on-stream date of Q Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q

13 Meters Consistent Decrease in Drill times 0 Blackbird Days vs. Depth 1, to 17.5 days (62% improvement) 2,000 3,000 4, in in Days Days 5, in 17.5 Days Days 13

14 Completion Optimization 20 Days 20 Days STAGE Completions Sliding Sleeve Completion Program #1 (5-26 and 6-26) Plug & perf cluster Slickwater ~2,700 tonnes of proppant 1.4 tonnes / meter of proppant 40 meter cluster spacing Completion Program #2 (2-20) Sliding Sleeve CO2 (largest in N.A.) ~2,223 tonnes of proppant 1.1 tonnes/ meter proppant 28.5 meter spacing 6.5 Days STAGE Generation Four 8620 (2-28) Sliding Sleeve Slickwater ~3,521 tonnes of proppant 1.8 tonnes/ meter proppant 40 meter spacing STAGE Generation Four (3-27) Sliding Sleeve Slickwater ~4,500 tonnes of proppant ~2.0 tonnes / meter proppant ~37 meter spacing Higher Tonnage + Reduced Pump Time = Increased EUR and NPV 14

15 Value Delineation Curve / Acceleration Value $260 mm $2 mm BBI: net sections wells in corridor CGR s > 300 Bbls/MMcf (1) D&C $10mm $5.5mm Innovation: Stage NPV EUR 3 years 2 years <1 year Near - Term High Risk Notes: (1) Based on regional test data. Time Initial Production Ramp Up BBI Pilot Plant 10 mmcf/d GHA with Tidewater $84.8 mm Raised The Next Steps High Impact Development and Delineation Program Increased Processing / Takeaway Production Growth Through Expanded Egress Continued Land Aggregation Lower Risk 15

16 Corporate Social Responsibility Corporate Social Responsibility is critical to gain social license to operate in any community Tree Planting Program: focused on reclaiming boreal forest and replacing trees we take down; Planted 101,579 trees to date! Thank you Pareto for contributing towards the tree planting program Goal: 200,000 trees Movement to reduce flare volumes Reduction in water usage through technology Boring vs. cutlines Mitigation of traffic impact Extensive community consultation Noise mitigation Our plan gives us a significant competitive advantage as we develop our resource this is also the right way to do business 16

17 Corporate Snapshot Common Share Trading Symbol Warrant Trading Symbol Shares Basic Fully Diluted Insider Holdings (1) Market Capitalization 52 Week Range (1/31/2018).WT Share Price (1/31/2018) $0.33 Cash (2) Gross Acreage Net Acreage ~748 mm ~963 mm ~18% ~$247 mm ~$21 mm $ $ sections (85,760 acres) sections (73,280 acres) Notes: (1) Includes shares owned in third party portfolio that is managed by board member. (2) Working capital surplus as at October 31,

18 Appendix: IP 30, IP60, IP90 IP30 RESULTS (1) IP60 RESULTS (1) IP90 RESULTS (1) Well Montney Interval Raw Gas (2) Sales Gas (3) Condensate (3) NGLs (3) Total Liquids (3) Total Sales (3) CGR C5+/Raw (mmcf/d) (mmcf/d) (bbls/d) (bbls/d) (bbls/d) (boe/d) (bbls/mmcf) W6 Upper W6 Middle / W6 (4) Upper W6 Middle Notes:(1) First 720 hours of production excluding third party gas processing plant shut-downs of approximately 33 days and other periods where the wells were shut-in. (2) Based on fieldestimated production data. (3) Based on actual sales data. (4) Based on camera run performed, management estimates that this well was producing through a limited number of stages due to mechanical issues experienced in the wellbore during completion operations. Management is unable to determine the number of producing stages. Management believes that these results may not be indicative of the well s production potential. Well Montney Interval Raw Gas (2) Sales Gas (3) Condensate (3) NGLs (3) Total Liquids (3) Total Sales (3) CGR C5+/Raw (mmcf/d) (mmcf/d) (bbls/d) (bbls/d) (bbls/d) (boe/d) (bbls/mmcf) W6 Upper W6 Middle W6 Middle Notes:(1) First 1,440 hours of production excluding third party gas processing plant shut-downs of approximately 33 days and other periods where the wells were shut-in. (2) Based on field-estimated production data. (3) Based on actual sales data. Well Montney Interval Raw Gas (2) Sales Gas (3) Condensate (3) NGLs (3) Total Liquids (3) Total Sales (3) CGR C5+/Raw (mmcf/d) (mmcf/d) (bbls/d) (bbls/d) (bbls/d) (boe/d) (bbls/mmcf) W6 Upper W6 Middle Notes:(1) First 2,160 hours of production excluding third party gas processing plant shut-downs of approximately 33 days and other periods where the wells were shut-in. (2) Based on field-estimated production data. (3) Based on actual sales data. 18

19 Advisories Forward LookingStatements or Information and Additional Advisories Certain statements included in this presentation constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information concerning Blackbird Energy Inc. ( Blackbird or the Company ) in this presentation may include, but are not limited to, statements or information with respect to: guidance, forecasts, and related assumptions; the potential value of Blackbird's assets in the context of the current Paramount/Appache transaction; present and future industry activity in the Pipestone Corridor; the attributes and potential of the Montney; the number of prospective Montney intervals on Blackbird s lands; Blackbird's valuation at one of the greatest discounts to its RENAV within the Montney peer group; expected type curves; capital spending and availability of cash; the cost reduction, and drilling and completion optimization derived from use of the Stage Completions Inc. Bowhead II technology and the other benefits of the Stage Completions investment including priority access to the technology and growth potential of the minority interest investment; proposed processing options, commodity pricing; costs associated with operating in the oil and natural gas business; Blackbird's plans for a high impact delineation and development program, continued land aggregation, production growth through egress and increased processing and take-away; and the ability of Blackbird's corporate social responsibility initiatives to provide a significant competitive advantage. In addition, references to reserves and resources are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Blackbird believes that the expectations reflected in such forward-looking statements or information are reasonable; however, undue reliance should not be placed on forward-looking statements because Blackbird can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this presentation, assumptions have been made regarding, among other things: the impact of increasing competition; the timely receipt of any required regulatory approvals; the ability of Blackbird to retain and obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of Blackbird to operate in a safe, efficient and effective manner; the ability of Blackbird to obtain financing on acceptable terms; the timing and costs of operating Blackbird's business; the ability of Blackbird to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability of Blackbird to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Blackbird and described in the forward looking statements or information. These risks and uncertainties may cause actual results to differ materially from the forward looking statements or information. The material risk factors affecting Blackbird and its business are contained in Blackbird's Annual Information Form which is available at SEDAR at The forward looking statements or information contained in this presentation are made as of the date hereof and Blackbird undertakes no obligation to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise unless required by applicable securities laws. The forward looking statements or information contained in this presentation are expressly qualified by this cautionary statement. Additional Advisories This presentation contains statistical data, market research and industry forecasts that were obtained from government or other industry publications and reports or based on estimates derived from such publications and reports and management s knowledge of, and experience in, the markets in which Blackbird operates. Government and industry publications and reports generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. Often, such information is provided subject to specific terms and conditions limiting the liability of the provider, disclaiming any responsibility for such information, and/or limiting a third party s ability to rely on such information. None of the authors of such publications and reports has provided any form of consultation, advice or counsel regarding any aspect of, or is in any way whatsoever associated with, Blackbird. Further, certain of these organizations are advisors to participants in the Canadian oil and gas industry, and they may present information in a manner that is more favourable to that industry than would be presented by an independent source. Actual outcomes may vary materially from those forecast in such reports or publications, and the prospect for material variation can be expected to increase as the length of the forecast period increases. While management believes this data to be reliable, market and industry data is subject to variations and cannot be verified due to limits on the availability and reliability of data inputs, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any market or other survey. None of Blackbird nor its affiliates has independently verified any of the data from third party sources referred toin this presentation or ascertained the underlying assumptions relied upon by such sources. The outlook and guidance in this presentation has been provided to assist investors in analyzing Blackbird's anticipated development strategies and prospects and it may not be appropriate for other purposes and actual results could differ from theguidance provided herein. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the information contained in this presentation. 19

20 Advisories Independent Reserves Evaluation Estimates of the Company's reserves and contingent resources and the net present value of future net revenue attributable to the Company's reserves and contingent resources as at March 1, 2017, are based upon the reports that were prepared by McDaniel & Associates Consultants Ltd. ( McDaniel ), dated March 24, The estimates of reserves and contingent resources provided in this document are estimates only and there is no guarantee that the estimated reserves or contingent resources will be recovered. Actual reserves and contingent resources may be greater than or less than the estimates provided in this in this document, and the differences may be material. The estimates of reserves or contingent resources and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. Estimates of net present value of future net revenue attributable to the Company's reserves and contingent resources do not represent the fair market value of the Company's reserves and contingent resources and there is uncertainty that the net present value of future net revenue will be realized. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Blackbird's reserves, contingent resources and prospective resources will be attained and variances could be material. There is uncertainty that it will be commercially viable to produce any portion of the contingent resources that are described herein. Note Regarding Oil and Gas Metrics Blackbird has adopted the standard of 6 Mcf:1 bbl when converting natural gas to boes. Condensate and other natural gas liquids ( NGLs ) are converted to boes at a ratio of 1 bbl:1 bbl. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based roughly on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the Company's sales point. Given the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio at 6 Mcf: 1 bbl may be misleading as an indication of value. OilandGas Definitions Terms that are used in this news release that are not otherwise defined herein are provided below: Low estimate contingent resources, referred to herein as 1C, is a classification of estimated resources described in the Canadian Oil and Gas Evaluation Handbook, which is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual quantities recovered will be greater or less than the best estimate. Resources in the best estimate case have a 90% probability that the actual quantities recovered will equal or exceed theestimate. Best estimate contingent resources, referred to herein as 2C, is a classification of estimated resources described in the Canadian Oil and Gas Evaluation Handbook, which is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual quantities recovered will be greater or less than the best estimate. Resources in the best estimate case have a 50% probability that the actual quantities recovered will equal or exceed theestimate. High estimate contingent resources, referred to herein as 3C, is a classification of estimated resources described in the Canadian Oil and Gas Evaluation Handbook, which is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual quantities recovered will be greater or less than the best estimate. Resources in the best estimate case have a 10% probability that the actual quantities recovered will equal or exceed theestimate. Contingent resources are the quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies are conditions that must be satisfied for a portion of contingent resources to be classified as reserves that are: (a) specific to the project being evaluated; and (b) expected to be resolved within a reasonable timeframe. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. There is no certainty that it will be commercially viable to produce any portion of the contingent resources or that Blackbird will produce any portion of the volumes currently classified as contingent resources. The estimates of contingent resources involve implied assessment, based on certain estimates and assumptions, that the resources described exists in the quantities predicted or estimated, as at a given date, and that the resources can be profitably produced in the future. The risked net present value of the future net revenue from the contingent resources does not represent the fair market value of the contingent resources. Actual contingent resources (and any volumes that may be reclassified as reserves) and future production therefrom may be greater than or less than the estimates provided herein. Developed producing reserves are those gross reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. Developed non-producing reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date of resumption of production is unknown. Developed reserves are those gross reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low expenditure (for example, when compared tothe cost of drilling a well) to put thereserves on production. The developed category may be subdivided into producing and non-producing. Gross means (i) in relation to the Company's interest in production or reserves, its "company gross reserves", which are the Company's working interest (operating or non-operating) share before deduction of royalties and without including any royalty interests of the Company; and (ii) in relation to wells, the total number of wells in which the Company has an interest. Net means, in relation to the Company's interest in wells or lands, the number of wells obtained by aggregating the Company's working interest in each of its gross wells. 20

21 Advisories Probable reserves are those additional gross reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Proved reserves are those gross reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. In this presentation, proved plus probable reserves are also referred to as 2P reserves. Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on: (i) analysis of drilling, geological, geophysical and engineering data; (ii) the use of established technology; and (iii) specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of certainty associated with the estimates. Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (for example, when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves classification (proved, probable) to which they are assigned. Analogous Information Certain information in this document may constitute "analogous information" as defined in National Instrument Standards of Disclosure for Oil and Gas Activities ("NI "), including, but not limited to, information relating to areas, wells and/or operations that are in geographical proximity to or on-trend with prospective lands held by Blackbird and production information related to wells that are believed to be on trend with Blackbird's properties. Such information has been obtained from government sources, regulatory agencies or other industry participants, each of which is independent of Blackbird. Management of Blackbird believes the information may be relevant to help define the reservoir characteristics in which Blackbird may hold an interest and such information has been presented to help demonstrate the basis for Blackbird's business plans and strategies. However, to Blackbird s knowledge, such analogous information has not been prepared in accordance with NI and the Canadian Oil and Gas Evaluation Handbook and Blackbird is unable to confirm that the analogous information was prepared by a qualified reserves evaluator or auditor. Blackbird has no way of verifying the accuracy of such information. There is no certainty that the results of the analogous information or inferred thereby will be achieved by Blackbird and such information should not be construed as an estimate of future production levels. Such information is also not an estimate of the reserves or resources attributable to lands held or to be held by Blackbird and there is no certainty that the reservoir data and economics information for the lands held or to be held by Blackbird will be similar to the information presented herein. The reader is cautioned that the data relied upon by Blackbird may be in error and/or may not be analogous to such lands to be held by Blackbird. Initial Production Rates Any references in this document to test rates, flow rates, initial and/or final raw test or production rates, early production, test volumes and/or "flush" production rates are useful in confirming the presence of hydrocarbons, however, such rates are not necessarily indicative of long-term performance or of ultimate recovery. Such rates may also include recovered "load" fluids used in well completion stimulation. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for Blackbird. In addition, the Montney is an unconventional resource play which may be subject to high initial decline rates. Such rates may be estimated based on other third party estimates or limited data available at this time and are not determinative of the rates at which such wells will continue production and decline thereafter. Short TermTest Rates The Company cautions that short-term test rates are not necessarily indicative of long-term well or reservoir performance or of ultimate recovery. Such rates are preliminary in nature and may not be representative of stabilized on-stream production rates. Actual results will differ from those realized during a short term measurement period, and the difference may be material. Production over a longer period will also experience natural decline rates, which can be high in the Montney play. Short-term test rates cannot be relied upon as providing assurance of longer term production. Information Regarding Disclosure on Reserves The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves or resources will be recovered. Volumes of reserves have been presented based on a company interest basis which includes Blackbird's royalty interests without deducting royalties payable by the Company. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties, due to the effects of aggregation. Where discussed herein "NPV 10%" represents the net present value (net of capex) of net income discounted at 10%, with net income reflecting the indicated oil, liquids and natural gas prices and IP rate, less internal estimates of operating costs and royalties. It should not be assumed that the future net revenues estimated by Blackbird's independent reserve evaluators represent the fair market value of the reserves, nor should it be assumed that Blackbird's internally estimated value of its undeveloped land holdings or any estimates referred to herein from third parties represent the fair market value of the lands. 21

22 Blackbird Energy Inc. Blackbird Energy Inc. 400, th Avenue SW Calgary, Alberta T2P 2T8 Garth Braun Chairman, CEO & President Tel: ext. 101 Cell: gbraun@blackbirdenergyinc.com Allan Dixon Business Development Manager Tel: ext. 103 Cell: adixon@blackbirdenergyinc.com 22