INVESTOR PRESENTATION Q3 2014

Transcription

1 INVESTOR PRESENTATION Q TSX-V: BBI Blackbird Energy Inc.

2 Disclaimer T h e T S X V e n t u r e E x c h a n g e d o e s n o t a c c e p t r e s p o n s i b i l i t y f o r t h e a d e q u a c y or a c c u r a c y of t h e i n f o r m a t i o n c o n t a i n e d h e r e i n. This presentation may contain certain forward-looking statements, including management s assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond Blackbird Energy Inc. s ( Blackbird ) control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Blackbird s actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that Blackbird will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Blackbird or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this presentation are made as at the date of this presentation and Blackbird does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. The terms bbls, bbls/d, boe, boes or boes/d may be misleading, particularly if used in isolation. A boe (barrel of oil equivalent) conversion ratio of 6 mcf per one (1) boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. 2

3 Blackbird s Corporate Strategy In early 2013, BBI set out to create the next junior Montney producer. Our initial focus was to build a sizeable Montney position in a highly prospective area by being ahead of the curve. BBI has successfully executed Phase 1 of this strategy. In 2013 and 2014, BBI was early and built a large 36 section, contiguous land position (117 total sections) of multi zone Montney acreage in the Elmworth area. Blackbird is focused on the Upper and Middle Montney. BBI s land acquisitions were timely given the industry successes in both the Upper and Middle Montney around and moving towards BBI s Elmworth lands. BBI is now preparing to moving into Phase 2 of this strategy Drill to delineate, derisk and define the liquids rich Upper and Middle Montney in Elmworth Continue to add Montney potential lands in and around Elmworth Continue to monetize remaining non-core assets 3

4 Corporate Profile Ticker BBI (TSXV) Shares Basic ~201 mm Fully Diluted ~240 mm Insider Holdings (Board and Management) (Basic) ~25% Cash on hand (Post Closing of Bigstone Disposition) ~$10 mm Total Debt ($165k convertible per share) ~$0.6 mm Market Capitalization (based on $0.365 per BBI share) ~$73.4 mm 4

5 Management Garth Braun CEO/President and Director: Mr. Braun brings to the company more than 30 years of diversified business background in the following sectors: oil and gas, finance, and real estate. Mr. Braun gained extensive experience in the operations of an international oil and gas company where he served as CEO and Chairman. Mr. Braun previously was a principal of a private real estate development company that completed over a $1 billion in development. Darrell Denney COO and Director: Mr. Denney is a Registered Engineering Technologist with over 30 years of diversified oil and gas industry experience including production, exploitation, drilling and completions. His focus over the last 12 years has been operations and management of small private E&P companies that were eventually sold to respected intermediate oil and gas companies (Dorado Energy sold to Wildstream Exploration, Denim Exploration sold to Northrock Resources, Invasion Energy sold to Wiser Oil and Gas) Mr. Denney prior to this period of time worked for Dome Petroleum, Amoco, and Phillips Petroleum. Most recently, Mr. Denney was President of Ruger Energy Inc., a small private company focused on oil production and exploration in Saskatchewan. Mr. Denney is a member of the Alberta Society of Engineering Technologists. Ralph Allen, P.Geo. Vice President Exploration: Mr. Allen is expert in Shale and Unconventional Resources. Involved as a consultant in various horizontal projects since Registered Petroleum Geologist with 36 years experience in the Western Canadian Sedimentary Basin and exposure to a wide range of Shale projects globally. Previously taught a Shale Resource Evaluation course to companies such as Chevron, Shell, Marathon, Statoil etc. in Houston and London. Joshua Mann Vice President Business Development: Mr. Mann brings a wealth of capital markets and business development experience through advising companies in the oil & gas, services, technology and agricultural industries. Mr. Mann was formerly an investment banker at Stifel Nicolaus Weisel where during his time with the firm was part of team that assisted corporate issuers in raising over $3 billion in capital. Randy Schmautz Vice President Drilling and Completions: Mr. Schmautz is a Registered Engineering Technologist with over 35 years of experience in the Western Canadian Sedimentary Basin. Mr. Schmautz has designed, executed and directed drilling and completion operations on over three hundred and fifty wells over the past sixteen years. During the past two years, Mr. Schmautz has been responsible for all Duvernay drilling and completions engineering and operations targeting the Duvernay at Trilogy Energy Corp. Prior thereto, Mr. Schmautz was Director, Drilling and Completions at Progress Energy Resources Corp. from 2008 until 2012, where he presided over a capital budget of between $120 million to $240 million per annum, targeting the Montney. Craig Wiebe Consulting Geologist: Mr. Wiebe is a Professional Geologist with over 20 years exploration and development experience, the majority being with unconventional resource plays. He was responsible for establishing a dominant position in a multi TCF gas play for a major oil and gas exploration and production company, as well as cofounding a successful startup company that was one of the first to develop the Montney with horizontal multi-stage fracs. Mr. Wiebe has extensive knowledge of the Montney throughout B.C. and Alberta and also brings considerable operational expertise, having been directly involved with drilling several hundred horizontal wells. 5

6 Blackbird s Current Assets Core Focus Elmworth / East Wapiti Mantario Blackbird owns net sections of Montney / Deep Basin land prospective for condensate and liquids rich gas Lands are prospective for both Upper and Middle Montney Robust activity at recent land sales in close activity with sections fetching over $2.9 million per section Nearby Upper Montney drilling by Encana has yielded exceptional results Middle Montney development to the South and East by Chinook, Inception and NuVista has been extremely positive Non Core Assets Blackbird owns 100% of the 2.1 section Mantario Heavy Oil Project (new oil discovery) Hz development program to be initiated in Q Recently entered into farmout agreement (farmee pays 100% of two wells to earn 50% - no payout) Flaxcombe/Alsask Over 30.0 net sections of land with prospective targets in the Viking, and Mannville Ferrier/Watts /Pembina /Bromhead/Badger Non-operated low working interest properties Potential upside existing in Pembina property; Upside at Bromhead through development of Bakken /Three Forks 6

7 Elmworth, AB Condensate/Light Oil Trend (BBI Mapping) Encana 02/ W6 Middle Montney 1310 boe/d 3.8 mmcf/d 97.1 CGR, 29.3 Mpa 18.9% overpressured Capio/Kelt W6 1,347 Boepd WET This map: 381 Montney Hz licences 276 spudded Montney Hz 157 Montney Hz wells with reported production Terra W6 Test No H2S Encana, closest well to Blackbird Land; 1100 Boe/d (564 Bbls condensate/d) Birchcliff W6 Oil test - Upper & Middle Montney Field Condensate Light Oil Montney Hz Licences Montney Hz Spuds Montney Hz Producers Montney Vertical logs Belloy Vertical logs Inception Middle Montney prolific test + new Hz well NuVista W6 Middle Montney, condensate rich (128 Bbls/mmcf) & over-pressured NuVista W6 Middle Montney, IP 30 of 2,195 Boepd, overpressured (576 Bpd condensate mmcf) Wet Dry Gas Gas Chinook (CKE) New location Shell 1,172 Boepd Hz Chinook (CKE) Middle Montney Test 1,500 Boepd (500 Bopd & 6.3 mmcf/d) 7

8 Elmworth, AB Condensate/Light Oil Trend (BBI Mapping) W6 (ECA) IP boe/d Source NBF, GeoScout, Accumap

9 Elmworth, AB Blackbird Pre-Sept: Red, Newly Acquired: yellow Encana W6 Middle Montney 1310 boe/d 97.1 CGR, 29.3 Mpa 18.9% overpressured Encana W6 Hz Upper Montney 1,100 Boepd 30% over-pressured NuVista W6 Middle Montney, condensate rich (128 Bbls/mmcf) & over-pressured CKE Inception Middle Montney prolific test + new Hz well Sturgeon Lake Twp 69 Rge 5W5 Montney Sweet; 39 API oil 9

10 Elmworth and East Wapiti Targeting Middle and Upper Montney 100 % Working Interest in 117 sections with geological control from existing well logs and 3D seismic and excellent offsetting production. Upper Montney formation liquids rich (54 API) zone with meters of > 6% porosity mapped over entire acreage. The entire 200 metres of Montney is prospective with 3% or higher porosity but Sweet Spot with highest porosity and permeability is in the Upper Montney. Analog Upper Montney well 4-9 (204 Bbls/mmcf) operated by Encana 5 miles due west of our Elmworth land (being quadrupled currently). Total of 29 wells drilled into same Upper Montney resource zone in proximity. Middle Montney being exploited by NuVista, Inception, Chinook, Shell, CIOC. Inception and NuVista wells to the East and South of BBI have yielded exceptional liquids/gas ratios (>100 bbls/mmcf) Near proximity middle Montney tests appear to be sweet Recent land acquisitions have fetched in excess of $4500 per acre (~$2.9mm per section). 10

11 11 11 Stacked Resource Play Seventeen Potential Zones Horizontal resource potential in all zones CARDIUM DOE CREEK DUNVEGAN CADOTTE NOTIKEWIN FALHER The 14 Zones in BOLD produce within 6 miles of our land WILRICH BLUESKY Upper GETHING Elmworth CADOMIN NIKANASSIN CHARLIE LAKE Middle >200 metres HALFWAY DOIG MONTNEY ~200 m Lower WABAMUN DUVERNAY

12 Exceptional Results Driving Robust Development Encana W6 Middle Montney 1310 Boe/d Encana, (Green) 46 Hz drilled to date, another 50 new Hz locations CNRL new Hz location NuVista W6 Middle Montney, condensate rich (128 Bbls/mmcf) & over-pressured Encana, closest well to Blackbird Land; 1100 Boe/d (564 Bbls condensate/d) Blackbird Land Terra 6-7 Test No H2S Birchcliff Test Inception Middle Montney prolific test + new Hz well Chinook (CKE) New location W6 from W6 CIOC, (Solid Blue) 10 Hz drilled to date, another 6 new Hz locations Chinook (CKE) Test 1,500 Boepd (500 Bopd & 6.3 mmcf/d) NuVista W6 Middle Montney, IP 30 of 2,195 Boepd, overpressured (576 Bpd condensate mmcf) Blackbird Land in Red: 100% Working Interest, 200 metre thick Montney Resource, Vertical Depth 2300 to 2500 metres, Hz wells used in the economic runs Paramount; W6; max 806 Boepd in LOWER Montney, (4.22 mmcf/d & 103 Bbls/mmcf) 12

13 Birchcliff W6 Test Middle & Upper Montney Appears Sweet Montney Timeline Birchcliff W6; 10.5 sections of Montney continued for 5 years Zone Middle Middle Middle Middle Middle Middle Middle Middle Middle to Oct 2017 by this Middle & Upper Montney perf & frac test in a vertical well perf Middle Montney & do 13 swabs - no H2S detected additional 8 swabs from Middle Montney - no H2S detected tonne Gel Frac Middle Montney - spearhead with 1.0 cubic m of 15% acid % (8000 ppm) H2S detected after frac also on 14th - flow test for 8.0 hours - Flow rate total mmcf/d or ~660 mcf/d per m of perfs Shut-in tubing side & vent casing side for total of 1 hr % (8000 ppm) H2S detected surge flow well for 45 minutes TSTM but H2S now 2.0% (20,000 ppm) prepare to pull recorders both tubing and casing side are SWEET (zero H2S) for Middle Montney completion bleed off tubing - sweet both sides (tubing & casing) W6 -> prepare to suspend Middle Montney & test Upper Montney Upper perf and frac Upper Montney - no swab post perf - right to frac also spearhead with 1.0 cubic m of 15% acid Upper tonne Gel frac put away - 0.1% (1000 ppm) H2S detected Upper flow test for 22.5 hours % (8000 ppm) H2S detected Upper continue to flow for 6 hrs - gas rate mmcf/ (514 mcf/d per m of perfs) % (8000 ppm) H2S detected Upper prepare for flow test Upper flow for 21 hrs - rate 564 mcf/d - rec 49.6 rate of Boep/d per m of perfs -2.0% (20,000 ppm) H2S detected Upper fluid recovered is now 51.3 API condensate % (20,000 ppm) Upper recover recorders - plugged off - no data - run new recorders for 2.5 hrs - Upper Upper return a year later - H2S readings decreased to 0.92% (9200 ppm) Upper snub tubing out of hole - H2S readings % (3 ppm) - almost zero Upper no H2S readings recorded but held documented safety meeting with noted H2S as a hazard - Upper vented well all day - again no H2S readings noted - should have reported if any present 13

14 Elmworth, AB Infrastructure Blackbird Land Elmworth, Pipeline infrastructure: Sour capable lines - Green Sweet Lines - Red SemCam - Blue Alliance Black 14

15 Elmworth In Focus Prolific Upper Montney Wells Moving Toward BBI CNRL, IP 222 Bopd, 50 API Conoco 15 Montney Hz drilled, 5 new locations Encana 02/ W6 Middle Montney 1310 boe/d 97.1 CGR, 29.3 Mpa 18.9% overpressured Three additional wells drilled from same pad) Encana 4-9 Hz; 1100 Boe/d 564 Bbls condensate/d & 3.0 mmcf/d Encana, (Green) 96 locations Blackbird s Land 5 latest Encana Montney Hz licences Hz wells used in the economic runs 15

16 Elmworth, AB Encana Upper Montney Development moving towards BBI Encana 02/ W6 ;1310 boe/d, 97.1 CGR, 29.3 Mpa, 18.9% overpressured ECA 3-14; max mmcf/d, max CGR 73.2 Bbls/mmcf ECA 02/4-14; max mmcf/d, max CGR 77.9 ECA 13-7; max mmcf/d, max CGR: zero ECA 13-32; max mmcf/d, max CGR: 30.4 ECA 1-3; max mmcf/d, max CGR 42.8 ECA 13-29; max mmcf/d, max CGR: 36.7 ECA 4-8; max mmcf/d, max CGR 10.2 ECA 1-13; max mmcf/d, max CGR 49.2 ECA 13-8; max mmcf/d, max CGR 29.0 ECA 3-18; max 4.5 mmcf/d, max CGR 92.8 ECA 13-7; max 4.5 mmcf/d, max CGR 92.6 ECA 9-12; max 4.3 mmcf/d, max CGR 97.4 ECA 5-6; max mmcf/d, max CGR 52.6 ECA 3-27; max mmcf/d, max CGR 24.7 ECA 7-26; max mmcf/d, max CGR 61.7 ECA 2-26; max mmcf/d, max CGR 20.2 ECA 6-13; max mmcf/d, max CGR 52.1 Blackbird s Land ECA 4-9; max 3.0 mmcf/d, max CGR 204 ECA 3-10; max mmcf/d, max CGR 13.3 Note: Includes only wells on production of over 1 month; initial Maximum condensate gas ratios (CGR) in bbs/mmcf 16

17 Elmworth, AB NuVista Middle Montney Development Moving Towards BBI NuVista 2-9; Upr, max mmcf/d, max CGR 54.2 Bbls/mmcf NuVista 14-4; Mid, max mmcf/d, max CGR 21.9 Encana 4-9 Hz; 1100 Boe/d NuVista 13-3; Mid, max mmcf/d, max CGR 3.64 South edge of BBI land NuVista 2-13, LWR, w/o completion NuVista 1-7, Mid, w/o completion Inception well + new Location NuVista 15-28; Mid, max mmcf/d, max CGR 1.54 NuVista, 8-5 Mid, max 2.5 mmcf/d, Max CGR 58.2 NuVista W6 Middle Montney, condensate rich (128 Bbls/mmcf) & over-pressured NuVista 5-24; Mid, 1 MTH max mmcf/d, max CGR 2.40 NuVista 16-21; Mid, max mmcf/d, max CGR NuVista 9-22; Mid, max mmcf/d, max CGR 36.2 NuVista, 9-1 Mid, w/o tie-in NuVista 8-15; Upr, max mmcf/d, max CGR 62.6 NuVista 16-19; Mid, above type curve max 4.6 mmcf/d, max CGR Hz wells used in the economic runs NuVista has drilled 11 Middle Montney, 2 Upper and 1 Lower Hz wells on this map, and has another 5 locations licenced. Mid = Middle Montney, Upr = Upper Montney. Lwr = Lower NuVista W6 Middle Montney, IP 30 of 2,195 Boepd, overpressured (576 Bpd condensate mmcf) CGR: Condensate Gas Ratios in Bbls per mmcf 17

18 18 Elmworth, AB Key Upper and Middle Montney Wells Encana Montney Hz, 204 Bbls Condensate per mmcf (1,100 boe/d; 50% liquids), 30% over-pressured Key BBI W6 vertical well B Blackbird, 36 sections A C Inception Prolific Test Well Encana W6 Middle Montney 1310 boe/d 97.1 CGR, 29.3 Mpa 18.9% overpressured NuVista NuVista W6 Middle Montney, condensate rich (128 Bbls/mmcf) & over-pressured SHELL; 5-24 Hz 1,172 Boepd Mid Montney Hz, 45.5 API oil, 20% over-pressured

19 Encana Blackbird Inception 19 B Blackbird, 28 sections Multi-zone Montney A C NuVista Lower Montney 2-13 Encana; W6 Blackbird W6 Inception W6 A B C D3, D4 & D5 Upper Montney: Encana & NuVista D2 Middle Montney: NuVista D1 Lower Montney NuVista W6

20 Elmworth, AB High Graded Upper Montney Sweet Spot Terra 6-7 Test No H2S Encana W6 Hz, 1100 Boe/d, 30% over-pressured Birchcliff W6 Upper Montney Test of 564 mcf/d & 18 Boepd of 49.6 API condensate SHELL 6% porosity cutoff used for Sweet Spot 20

21 Elmworth, AB Middle Montney Thickness Encana W6 Middle Montney 1310 boe/d, 97.1 CGR ENCANA Blackbird Land in Red Contour interval: 1 metre Inception Middle Montney prolific test + new Hz well 21

22 Engineering and Development Area Summary Elmworth the hot play Wells with Public Completion and Production Data Well Count First 3 Months % Oil With Public Data Daily Prod. Average Liquids Boe/d Sinopec Daylight % Elmworth % Encana % Elmworth % Nuvista % Elmworth % Karr % Wapiti % Kelt % Karr % CIOC % Karr % CNRL % Albright % Karr % Source: RJ, Geoscout, Canadian Discovery, Xi Technologies 22

23 Where We Are Going Creating the next junior Montney producer with the goal of delineating and de-risking both the Upper and Middle Montney Focusing on being ahead of the curve with land acquisitions of repeatable and scalable plays Aggressively pursuing growth through the drill bit in the Montney while building a substantial resource in multiple zones Building a strong focused portfolio of oil and gas projects targeting the Montney fairway Ground floor opportunity to invest in one of the PREMIER Montney fairways 23

24 Board of Directors Garth Braun CEO/President and Director: Mr. Braun brings to the company more than 30 years of diversified business background in the following sectors: oil and gas, finance, and real estate. Mr. Braun gained extensive experience in the operations of an international oil and gas company where he served as CEO and Chairman. Mr. Braun previously was a principal of a private real estate development company that completed over a $1 billion in development. Darrell Denney COO and Director: Mr. Denney is a Registered Engineering Technologist with over 30 years of diversified oil and gas industry experience including production, exploitation, drilling and completions. His focus over the last 12 years has been operations and management of small private E&P companies that were eventually sold to respected intermediate oil and gas companies (Dorado Energy sold to Wildstream Exploration, Denim Exploration sold to Northrock Resources, Invasion Energy sold to Wiser Oil and Gas) Mr. Denney prior to this period of time worked for Dome Petroleum, Amoco, and Phillips Petroleum. Most recently, Mr. Denney was President of Ruger Energy Inc., a small private company focused on oil production and exploration in Saskatchewan. Mr. Denney is a member of the Alberta Society of Engineering Technologists. Sean Campbell Director: Director: Mr Campbell has over 15 years experience in the oil and gas industry and presently serves as VP and Founder of Suretech Completions Ltd. a subsidiary of a major international oil and gas service company. Prior to that he was President and founder of Suretech Tool Services Inc. a private company specializing in innovative and leading edge downhole tool design. Mr. Campbell is an expert in the engineering and design of downhole liner packer systems used in essentially all horizontal well multi stage fracturing completions. William Macdonald Director: Mr. Macdonald's general corporate and securities practice has been focused on Canadian, U.S., Asian and crossborder public offerings, private and institutional financings (including U.S. private investment in public equity, or PIPE transactions), stock exchange listings, reverse takeovers and mergers and acquisitions. Ron Schmitz CFO and Director: Mr. Schmitz is the Principal and President of ASI Accounting Services Inc., which has provided administrative, accounting and office services to public and private companies since July Mr. Schmitz has been a director, Chief Financial Officer or Executive VP of Gold Canyon Resources Inc. (TSX-V: GCU) since April In addition, Mr. Schmitz has been a director or Chief Financial Officer of various public companies since 1997 and currently is the Chief Financial Officer for several public companies. William C. Macdonald Director: Mr. Macdonald has over thirty years of petroleum land management experience in Western Canada. He is currently the President of Bilmac Resources, an oil and gas consulting firm that provides land management support to various clients, and specializes in the capitalization of private oil and gas start-up companies. Most recently Mr. Macdonald served on the board of Alexander Energy Ltd. and chaired the special committee that sourced and finalized a recapitalization arrangement with the team of Spartan Energy, delivering to Alexander shareholders an approximate six times lift. In 1997, Mr. Macdonald co-founded Avalanche Energy Limited, a private oil and gas company, which was sold in late 2000 for approximately 10 times its initial share price. Mr. Macdonald was also previously Land Manager at Hardy Oil and Gas Limited, a private subsidiary of Hardy PLC ( ) and a senior negotiator at Amerada Hess Corporation. He became a member of the Canadian Association of Petroleum Landmen in 1980, attained his P. Land designation in April 1989, and remains an active member of the Association 24

25 Contact Information Head Office: Suite 2200, th Avenue SW Calgary, Alberta, Canada T2R 3M3 Reserves: GLJ Petroleum Consultants Legal: Macdonald Tuskey Auditors: Davidson & Company Stock Exchange: TSX Venture Exchange Contact: Garth Braun, President & CEO (587) or gbraun@blackbirdenergyinc.com Joshua Mann, VP Business Development (403) or josh@blackbirdenergyinc.com Investor Relations: Brisco Capital Partners Corp. Scott Koyich, (403) or skoyich@briscocapital.com 25

26 Notes 26