Virtus Oil and Gas Corp

Transcription

1 Virtus Oil and Gas Corp Investor Presentation April 2017

2 Disclaimer Extent of Information This document has been prepared by Virtus Oil and Gas Corporation( Virtus Oil or Company ). This Presentation, including the information contained in this disclaimer, does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither the Presentation, disclaimer not anything contained in such forms the basis of any contract or commitment. This Presentation does not take into account your individual investment objective, financial situation or particular needs. You must not act on the basis of any other matter contained in this Presentation but must make your own assessment of the Company. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained in this Presentation, including the accuracy, likelihood of the achievement or reasonableness of any forecast, prospects, returns or statements in relation to future matters contained in the Presentation ( Forward-looking statements ). Any such forward-looking statements that are contained in this Presentation or can be implied by the same are by their nature subject to significant uncertainties and contingencies associated with the oil and gas industry and are based on a number of estimates and assumptions that are subject to change ( and in many cases are outside the control of Virtus Oil and Gas and its directors) which may causes the actual results or performance of Virtus Oil and Gas to be materially different from any future results or performance expressed or implied by such forward-looking statements. To the maximum extent permitted by law, none of Virtus Oil and Gas s, or related corporations, directors, employees, agents nor any other person accepts and liability, including without limitation arising from fault or negligence, for any loss arising from use of this Presentation or its content or otherwise arising in connection with it. Exclusion of Financial Product Advice This Presentation is for information purposes only and is not a prospectus or other offering under United States law or under any others laws in the jurisdictions where the Presentation might be available. Nothing herein constitutes investment, legal, tax or other advice. This Presentation is not a recommendation to acquire shares and has been prepared without taking into account the investment objectives, financial situation or needs of individuals. Independent Advice You should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and seek appropriate advice, including, legal and taxation advice appropriate to your jurisdiction. Virtus Oil and Gas is not licensed to provide financial advice in respect of its shares.

3 Key Benefits- Paradox Basin 1 Production/ Cash Flow/Self funding Reserves Key Infrastructure of existing production with ability to scale quickly Introduction to 800 by mid-2017 and 1,500 by the end of 2017 Restarting low cost conventional shut-in production Cash flow positive at current oil prices by Summer Projected Gross Revenue to go from $1 million annual run- Strategy to $12 million annual run-rate with growth in production and modest uplift in oil prices 4.3mmboe oil & gas reserves certified by independent third party Challenges - PV-10 of $94 million Forward - Revenue of $137 million Ability to significantly expand reserve base over the next 12 months 4 History Conclusion Includes affiliate-controlled gas plant (200 MMscfpd capacity) and 25-mile pipeline - Key infrastructure assets of former Delta Petroleum - Assets represent over $295 million of cumulative capex Platform for expansion Board appointments First deal completed on March 2017 Targeting significant production and cash flow growth: - FYE 2017: 1,000 Bopd; FYE 2018: 3,000 Bopd; FYE 2019: 5,000 Bopd Production uplift to coincide with price recovery Over 250 drill sites with ability to grow production Ex Nevada Governor and US Oil and Gas executives with proven track records of success

4 Company Assets Net Acreage NRI 1P 3P Production Squaw Canyon % 315 Mbo 315 Mbo 10 bopd Tin Cup % 1,730 Mbo 6,110 Mbo 20 bopd Paradox Federal Unit* 21,271+/ % 2,100 Mbo 10,600 Mbo 60 bopd Totals 22,311 4,145 Mbo 17,025 Mbo 90 bopd Transaction delivers reserve base of 4.2mmboe; FNOR $137 million PV-10, USD$94 million revenue * Paradox Federal Unit to be closed in LOI Signed

5 Production/Revenue Scenarios Oil Price Revenue Scenarios USD (m) Total Revenue USD (m) ($10/bbl) (net VOIL) - $45/bbl $55/bbl $65/bbl $70/bbl Production Scenarios USD (m) ($10/bbl) (net VOIL) Net Revenue USD (m) $45/bbl $55/bbl $65/bbl $70/bbl

6 Company Assets with Midstream

7 Pipeline and Gas Plant Sellers of Recent Acquisitions also own a gas plant and a 25-mile pipeline (200 MMscfpd capacity) - Key infrastructure assets of former Delta Petroleum Corporation - Assets represent over $295 million of cumulative capex - Virtus Oil is in process of negotiating to acquire the legacy assets tied to these prospects.

8 Value* Delivered in Recent Deals Asset Potential Value Comments 1P Reserves $94,000,000 PV-10 Gas Plant $ 5,000,000 Based on Revenue and Inventory of items in closing Pipeline $40,000,000 Based on Revenue Potential and Capex Spent by Delta to permit across BLM, State and County Lands Total $139,000,000 ALL STOCK TRADE

9 Virtus Investment The Company has acquired proven assets in the Paradox Basin. These assets were bought with company stock and needed workover capital as the Seller had deferred maintenance during the recent decline in oil prices. Virtus Management has identified de-risked opportunities for re-entry and workover wells. As of March 2017, The Company began to bring these existing wells back on production. The company has recently spent ~$100k in costs to repair a water disposal well and replaced two pumps on wells that are now ready for production.

10 De-Risked Upside for Production Virtus has identified 10 wells needing workovers from pump jack changes, flow lines installed, valves replaced, etc. Capital of ~$3 million will be used to work-over these wells. The company is flexible with respect to structure in accommodating the right investors. Options include but are not necessarily limited to: i) Stock Issuance; ii) Debt tied to Production (VPP); iii) Direct Equity Investment; and iv) a combination of all of the above. The company has excellent well control in the area along with an extensive Reserve Report from Ralph E. Davis and Baker Hughes Analytical Review and Study. Downside Case Base Case Upside Case 30 Days Days Days Days Days Days Days Days Days Days 1, Days Days Days- 1, Days-1, Days 1,300

11 Increased Density Drilling Potential A capital investment of $6 million for drilling increases the company s production significantly and the cash flow generated from this investment can fund ten additional work-over projects and the drilling of fourteen new wells by bopd Mcfd Revenue LOE Net Rev G&A CapEx Working Capital 2017* 1,100 2,100 6,828,000 1,005,000 5,823, ,000 5,528,000 6,000, ,000 2,300 26,262,000 2,187,000 24,075, ,000 6,000, ,600 4,200 44,216,000 2,187,000 42,029,000 1,320,000 12,000, ,100 5,900 57,818,000 2,187,000 55,631,000 1,800,000 12,000,000 * Eight months of production in 2017 Oil price increases from $52/bbl to $65/bbl Gas price $3.00 Mcf CapEx from $6MM from Investment and balance from cash flow Drill Six Horizonal wells in 2018 Drill Four Offsets in 2019 Drill Four Offsets in 2020

12 Virtus Board and Management Dan Green - Director and Executive Petroleum Engineer with over 37 years of Professional Experience in Oil and Gas Industry. President of Pacific Energy & Mining Company an oil and gas operator. Previously President of Western Energy Inc., an independent oil company that was publicly traded which held leases in Utah and Kansas. Bachelor of Science in Mineral Engineering with Minor in Geology from Colorado School of Mines. James Gibbons - Independent Director Former Governor of the State of Nevada, Former Member of the United States Congress, Attorney, Fighter Pilot in the United States Air Force, an Air Line Pilot, Geologist and a Hydrologist. Bachelor of Science and Master of Science from University of Nevada, Reno and a JD from Southwestern University. Brett A. Murray - Senior VP B.D./Land and Director Based in Denver and has over 12 years experience in the Oil and Gas Industry including the last two years as Chief Operating Officer for publicly traded Virtus Oil and Gas Corporation, Senior Management for Gunnison Energy Corporation, Sundance Energy Australia Limited (ASX: SEA), Anschutz Exploration and Anadarko Petroleum Corporation. Bachelor of Arts in Communications from Kansas Wesleyan University. Member of AAPL and RMMLF Dale Larsen- Consultant/ Future BoD Over 36 Years as Professional Engineer BoD for Denver Petroleum Club, Board of Advisors with Western Energy Alliance, and Committee member for Colorado Oil and Gas Association (COGA) Bachelor of Science in Geological Engineering from South Dakota School of Mines Author of multiple writings for Society of Professional Engineers (SPE)

13 Goals for Virtus Oil : 2 nd Quarter : 4 th Quarter- 1, : 2, : 2, : 3,100+ Net to Company 2020

14 virtusoil.com