Corporate Presentation. December 2012

Transcription

1 Corporate Presentation December 2012

2 Corporate Presentation Table of Contents 1. Corporate Summary 2. Grand Rapids Overview 3. Hoole Project Details 4. Exploration Portfolio Appendices A. Management and Director Biographies B. Forward Looking Statements Advisory 1

3 Corporate Summary 2

4 Highlights High Quality Oil Sands Asset Base 100% ownership of over 202,000 net acres of oil sands leases Cavalier s oil sands and Carbonate bitumen assets have best estimate discovered exploitable bitumen in place ( DEBIP ) of 3.2 Bbbls and undiscovered exploitable bitumen in place ( UEBIP ) of 4.5 Bbbls (1) Eagles Nest acquisition provides additional upside with discovered bitumen in place ( DBIP ) of 0.4 Bbbls and undiscovered bitumen in place ( UDBIP ) of 1.6 Bbbls (1) Best estimate economic contingent resources of 760 MMbbls (B-tax 10% NPV best estimate of $2.5 billion) (2) in the Grand Rapids at Hoole with additional contingent resources of 492 MMbbls in the Carbonates at Saleski and elsewhere (3) Cavalier expects to recognize probable reserves in Q Assets are in areas which are currently seeing significant development activity Near Term Production from Large Resource Position at Hoole Multi phase Grand Rapids project with expected production capacity of 80,000+ bbl/d by 2022 Submitted 10,000 bbl/d Phase 1 application in November 2012 with first production expected in 2016 Significant Upside in Bitumen Carbonates Resource at Saleski and Other Lands Best estimate 1.6 Bbbls DEBIP and 4.5 Bbbls UEBIP with best estimate contingent resources of 492 MMbbls (3) Offsetting Laricina s producing pilot at Saleski that has recently demonstrated peak production of 1,200 bbl/d from a single well-pair (4) Cavalier expects to develop its carbonates following broader industry commercialization/optimization Strong Management Team and Board Combined with Highly Experienced and Successful Shareholder Experience building large oil projects, with over $5 billion executed on in a variety of operating and business environments History of executing value enhancing transactions that have generated material returns and liquidity for shareholders Opportunity for additional growth through strategic acquisitions Paramount Resources Ltd. ( Paramount ), Cavalier s current shareholder, has a proven track record of creating significant value in the oil sands across multiple transactions over the past decade (e.g. NAOSC and MEG) Cavalier is a private pure play in situ oil sands company with a very strong management team and is partnered with a highly experienced shareholder See forward looking statement advisory for disclosure on resource info and definitions. 1. McDaniel reports effective June 30, 2012, October 31, 2011 and April 30, Hoole volumes and NPV as per McDaniel report effective June 30, Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective October 31, Laricina September 2012 corporate presentation. 3

5 Corporate Snapshot Background Cavalier Asset Portfolio Overview In November 2011, Paramount contributed seed capital and all of its oil sands and carbonate bitumen assets to Cavalier Cavalier has a 100% working interest in its main project areas Cavalier has 75MM shares outstanding, 100% owned by Paramount Cavalier is targeting to produce 80,000+ bbl/d from the Grand Rapids formation at its Hoole property with significant additional development potential from its portfolio of exploration lands (includes carbonates properties adjacent to and on trend with the Laricina / Osum Saleski project, Eagles Nest and Christina Lake) New capital to be raised to fund ongoing development and the evaluation of opportunities for the achievement of greater scale in core areas with plans to remain private through initial development phase Cavalier is led by Dr. Will Roach, former President and CEO of UTS Energy Corporation (sold to Total E&P Canada Ltd. for $1.5 billion in 2010 plus the spinout of SilverBirch, which was sold for an additional $500 million in 2012) Contingent Resource Summary Contingent Resources (1) Low Best High Asset Estimate Estimate Estimate MMbbls MMbbls MMbbls Hoole (2) Saleski Carbonates (3) Other Carbonate Leases (3) See forward looking statement advisory for disclosure on resource info and definitions. 2. Hoole volumes are economic contingent resources as per McDaniel report effective June 30, Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective October 31,

6 Hoole Project Overview Significant Resource Base with Attractive Economics Best estimate DEBIP of 1.6 Bbbls with best estimate economic contingent resources of 760 MMbbls (1) Before tax 10% net present value of $2.5 billion (best estimate) (1) Targeting the laterally continuous and homogeneous Grand Rapids formation Use of proven SAGD technology expected to result in strong operating netbacks across a wide range of oil prices Proximal to high grade road networks, power and gas infrastructure and substantial announced bitumen takeaway and diluent return capacity Multi phase project with estimated total production capacity of 80,000+ bbl/d by 2022 Growth opportunities through strategic acquisitions Entering Development Stage and Near Term Production Potential Filed regulatory application in November 2012 for 10,000 bbl/d Phase 1 with first production expected in 2016 A portion of contingent resources at Phase 1 are expected to be recognized as probable reserves in Q Delineation drilling for Phase 1 completed in 2010 (74 wells) Environmental modeling complete and water source/disposal is selected, subject to regulatory approval Preliminary front end engineering and design work completed Risk mitigation strategy being implemented through construction of modularized components built off-site Ability to truck production volumes for Phase 1 until area pipeline infrastructure is built 1. Hoole volumes and NPV as per McDaniel report effective June 30, See forward looking statement advisory for disclosure on resource info and definitions. Hoole is targeted to be a material 80,000+ bbl/d project located in the core of the Grand Rapids resource play with near term production expected and multiple opportunities for achievement of greater scale 5

7 Overview of Carbonates Assets Growth Potential in an Emerging Resource Play Over 128,000 acres within the Carbonate portfolio located on the highly prospective Grosmont Carbonate Trend Cavalier s Carbonates Assets Holdings are located adjacent to the regional projects of Laricina, OSUM and Husky and proximate to those of several majors including Shell, ConocoPhillips and Suncor Best estimate 1.6 Bbbls DEBIP and 4.5 Bbbls UEBIP with best estimate contingent resource of 492 MMbbls (1) Advancement / selection of optimal extraction technologies by industry peers will set the pace for Cavalier s development of its Carbonates portfolio following Hoole advancement Ongoing development of new technologies by industry peers also expected to improve economics and recovery factors Increasing industry activity in the carbonates continues to prove up the resource potential of Cavalier s Properties 1. Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective October 31, See forward looking statement advisory for disclosure on resource info and definitions. 6

8 Cavalier s Current Shareholder Paramount Resources Highly Experienced and Successful Shareholder Paramount is TSX listed with a market capitalization of over $3.0B; insider ownership > 50% Founded in 1974 by Clayton Riddell, Chairman and CEO Strong history of creating shareholder value Paramount has spun-out three public entities: Perpetual Energy, Trilogy Energy and MGM Energy which have a combined market cap of $3.5 billion Paramount currently holds ~16% interest in Trilogy and ~14% interest in MGM Energy Proven, successful explorer and partner in oil sands, demonstrated by ~$1.0B in value realized over the past decade (excluding Cavalier): Acquired, successfully delineated and then sold leases in the southern Athabasca region which form the back bone of what today is MEG Energy s successful Christina Lake Project Partnered with North American Oil Sands Corp. ( NAOSC ) to combine and further delineate oil sands leases and to grow the asset base; ultimately becoming a shareholder of NAOSC through the contribution of Paramount s interests in the properties Statoil acquired NAOSC in 2007 for $2.2 billion; Paramount owned ~30% of NAOSC generating $680 million in cash proceeds Sold Paramount s delineated Surmont project to MEG Energy in 2007 for $300 million including $150 million in cash and 3.7 million MEG shares Service agreement in place between Paramount and Cavalier covering the provision of a wide range of services by Paramount including drilling and completions, land, marketing, accounting, human resources and community relations Paramount, Cavalier s current shareholder, has a proven track record of creating significant value in the oil sands across multiple transactions over the past decade 7

9 Management Team and Board of Directors Management William Roach, Ph.D., P.Eng. Chief Executive Officer and Director Martin Sandell, P.Eng. Chief Operating Officer Philip Moore, CFA Chief Financial Officer Jina Abells Morissette, LLB General Counsel & Corporate Secretary William Robinson, P.Geol. VP, Geoscience Jeff Peterson, MSc., P.Eng. Manager, Reservoir Engineering Experience Dr. Roach has 30 years of experience, more recently as President & CEO of UTS Energy between 2004 and the company s sale to Total in October Before then he held various positions with Husky Energy (where he oversaw all operational activities for the $2.3 billion White Rose east coast offshore project) as well as British Borneo and Royal Dutch Shell Mr. Sandell has over 30 years of experience and was formerly VP Engineering at UTS Energy until its sale in October He previously held senior engineering positions with Husky Energy and British Borneo Mr. Moore has 15 years of experience in capital markets, most recently as Managing Director, Investment Banking of Paradigm Capital. Prior thereto he held Director positions at Cormark Securities and BMO Nesbitt Burns Ms. Morissette has 15 years of legal experience in the oil and gas industry. Prior to joining Cavalier in 2012, she held similar positions at SilverBirch Energy from October 2010 through to its sale in April 2012 and UTS Energy from 2004 through to its sale in October 2010 and prior to that was Senior Legal Counsel of Husky Energy from 1999 to 2004 Prior to joining Cavalier in 2012, Mr. Robinson had approximately 10 years experience with Paramount Resources overseeing the exploration and delineation of its oil sands assets Mr. Peterson has 15 years of engineering experience. Prior to joining Cavalier in 2012 he held various roles including Team Lead, Saleski Development and Senior Reservoir Engineer, Germain at Laricina Energy where he was the co-inventor of a steam and solvent process currently in the patent review stage Paul Sudlow, P.Eng. Manager, Surface Facilities Mr. Sudlow has 15 years of experience in heavy oil facilities, primarily in in-situ projects. Prior to joining Cavalier in 2012, he was a project manager at IMV Projects where he managed projects for Cenovus, Laricina, Shell, CNRL and Devon and is the co-inventor of a steam generation technology Directors Current Role Public Company Directorships James Riddell Executive Chairman President and Chief Operating Officer, Paramount Resources, Chief Executive Officer, Trilogy Energy Big Rock Brewery, MGM Energy, Paramount Resources, Sonde Resources and Trilogy Energy Clayton Riddell Chief Executive Officer, Paramount Resources Alaris Royalty, Paramount Resources, Perpetual Energy, MGM Energy, Tourmaline Oil and Trilogy Energy Mitchell Shier General Counsel, Corporate Secretary & Manager, Land, Paramount Resources Trilogy Energy and Alaris Royalty Bernard Lee Chief Financial Officer, Paramount Resources Cavalier s executive team has a proven track record of creating value for shareholders and significant experience bringing large scale oil projects on stream 8

10 Grand Rapids Overview 9

11 Grand Rapids Resource Overview Key Attributes of the Grand Rapids Developable using proven SAGD drilling and completion techniques Laterally continuous sand body provides for repeatable surface development template Homogenous reservoir enables more predictable drilling and well production profiles Ostensibly no occurrence of top, middle or bottom water in core area; contributes to better reservoir performance and steam oil ratios Competent extensive top seal Reservoir depth of ~250m permits use of established drilling and completion techniques Grand Rapids Shore Face Large, laterally continuous, homogeneous shore face sand in the Grand Rapids formation is the cornerstone of Cavalier s asset base Grand Rapids Cross Section 10

12 Grand Rapids Industry Activity Grand Rapids Formation Generating Significant Interest Industry peers have already applied for Grand Rapids SAGD projects totaling over 450,000 bbl/d of production capacity (1) : Cenovus: 180,000 bbl/d (pilot achieved first oil in Q and filed commercial application in December 2011) Laricina: 155,000 bbl/d (commercial application filed Q4 2011); First 5,000 bbl/d commercial phase under construction (first steam scheduled for Q2 2013) BlackPearl: 80,000 bbl/d (pilot achieved first oil in Q and filed commercial application in May 2012) Koch: 40,000 bbl/d (10,000 bbl/d commercial application filed) Area Pipeline Infrastructure (1) Laricina s Stony Mountain Pipeline is expected to be in service mid-2015 and mid-2016, for crude and diluents respectively Capacity of up to 200,000 bbl/d for blended crude oil and 70,000 bbl/d for diluent TransCanada & PetroChina s Grand Rapids Pipeline project is expected to be in service by early 2017 Capacity of up to 900,000 bbl/d for crude oil and 330,000 bbl/d for diluent The Plains Midstream Rainbow Pipeline and the Pembina Nipisi pipeline are routed approximately 100 km to the west and have terminals at Nipisi 1. All based on publicly available information. Hoole is targeted to be a material 80,000+ bbl/d project located in the core of the Grand Rapids resource play with opportunities for achievement of greater scale 11

13 Grand Rapids Project Comparison (1) Well Log Locations Map Operator Laricina (1) Cenovus (2) Cavalier (3) BlackPearl (4) Project Germain Pelican Hoole BlackRod Peak Core Φ 34% 30% 30% 30% K 2 6 D 1 4 D 1 4 D 1 5 D D 200m 225m 250m 300m H (up to) 24m 25m 27m 26m Oil Saturation 75% 65% 65% 60% Viscosity 1,370,000cp >1,000,000cp 200,000 2,000,000cp na Rf 55% 62% 52% 65% Resource (Best Est.) 1,770 mmbbls 1,600 mmbbls 760 mmbbls 658 mmbbls Pilot Yes Yes N/A Yes On Production Date 2013 Operating 2016 Operating Application Date Nov Apr Nov May All based on publicly available information. 12

14 Grand Rapids Reservoir Comparison Grand Rapids Resource Overview McMurray Resource Overview 1. Source: Cenovus Christina Lake McMurray. 13

15 Hoole Project Details 14

16 Management Hoole Net Pay Mapping Grand Rapids Reservoir Continuity Large, laterally continuous, homogeneous shore face sand in the Grand Rapids formation Laterally continuous sand body provides for repeatable surface development template Homogenous reservoir enables more predictable drilling and well production profiles Ostensibly no occurrence of top, middle or bottom water in core area; contributes to better reservoir performance and steam oil ratios 15

17 Hoole Phase 1 Layout & Development Philosophy Early Infrastructure Already Present Hoole has easy surface access from existing high grade road networks and is proximal to existing power and gas infrastructure Reduces capital spending and facility development time Advanced Development Plans Central processing facility and well pad locations identified (see map from application at left) Sizing of Facilities and Equipment Surface facilities designed for conservative steam-oilratios ( SORs ) and liquids handling assumptions Facility size a function of desired steam generation capacity with oil production a derivative of steam Utilize largest modularized size for evaporator and corresponding drum boilers Limit field construction activities throughout plant site by utilizing modularization wherever feasible Conventionality Use proven execution strategies and methods Phase 1 to use steam only, with allowances to easily add solvent in the future Focus on Capital Efficiencies Controlling spending and execution risks through 100% ownership in main operating areas 16

18 Hoole Phase 1 Phase 1 Schedule Submitted application in November 2012 and began frontend engineering Expect regulatory approval in Q and begin site preparation, module fabrication and drilling initial wellpairs Assuming approval, complete construction and begin first steam in H First production from Phase 1 is expected in 2016 Phase 1 Capital Requirements ($MM) (1) Phase 1 capital costs estimated at approximately $45,000/bbl/d: Facilities / Infrastructure $345 - $365 Drilling & Completions Total $450 - $475 Phase 1 Development Philosophy Use proven execution strategies and methods Phase 1 to use steam only, with allowances to easily add solvent in the future Surface facilities designed for conservative cumulative SORs (2), GORs (3) and liquids handling assumptions Utilize largest modularized size for evaporator and corresponding drum boilers Limit field construction activities throughout plant site by utilizing modularization wherever predictable Provides data and better information for optimizing future phases Standalone and not expandable, but designed to integrate with future phases The capital cost intensity of $45,000/bbl/d quoted above assumes an SOR of 3.5; stronger reservoir performance is expected to reduce this number Construction costs can be mitigated through the incorporation of modularized components built off site Phase 1 sized for steam capacity; capital cost intensity of approximately $45,000/bbl/d based on conservative cumulative SOR 1. Management s estimate based on Pre-FEED engineering and Class 4 Estimates, stated in 2012 dollars. 2. Cumulative steam oil ratios ( CSOR ) is the cumulative ratio of steam injected (in cold water equivalent) to oil produced from a SAGD well pair or Project over the life of the scheme. 3. Gas Oil Ratio. 17

19 Hoole Full Field Development Plan Hoole Phase 1 application filed with the Energy Resources Conservation Board ( ERCB ) and the Alberta Environment and Sustainable Resource Development ( AESRD ) on November 7, 2012 Phase 2 and 3 capital costs estimated at $1.4 billion and $1.3 billion, respectively (including facilities, drilling and completions) Management has a track record of delivering large scale projects on time and on budget 18

20 Exploration Portfolio 19

21 Exploration Portfolio Platform for Long Term Growth in Resource and Production Potential Best estimate of over 1.6 Bbbls DEBIP and 4.5 Bbbls UEBIP (1) across six primary project areas, five of which have had no delineation carried out by Cavalier or Paramount Eagles Nest provides additional upside with DBIP of 0.4 Bbbls and UDBIP of 1.6 Bbbls (1) Multiple play types including Carbonates, Wabiskaw and McMurray channels Eagles Nest located immediately north / northwest of BP / Value Creation s 1.8 Bbbl Terre de Grace Project and Athabasca s 1.9 Bbbl Birch Project (2) Small, but highly prospective block located immediately north of Devon s 105,000 bbl/d Jackfish Project (2) Control over pace of development with 100% ownership of 239 sections of land Exploration Assets (1) Exploration portfolio provides resource growth potential through delineation of 100% owned leases 1. Carbonates volumes as per McDaniel report effective October 31, 2011; Eagles Nest volumes as per McDaniel report effective April 30, See forward looking statement advisory for disclosure on resource info and definitions. 2. All based on publicly available information. 20

22 Carbonate Assets Growth Potential in an Emerging Resource Play Over 128,000 acres within the Carbonate portfolio located on the highly prospective Grosmont Carbonate Trend Holdings are located adjacent to the regional projects of Laricina, OSUM and Husky and proximate to those of several majors including Shell, ConocoPhillips and Suncor Cavalier s leases, other than Saleski, have had very little delineation carried out on them historically At Saleski, Cavalier has drilled 11 delineation wells, cased one well for testing and shot five seismic lines Best estimate 1.6 Bbbls DEBIP and 4.5 Bbbls UEBIP with best estimate contingent resource of 492 MMbbls (1) Offsetting Laricina pilot at Saleski has shown promising results to date Recent well-pair demonstrated a peak production test rate of 1,200 bbl/d and forecast second cycle SOR of 3.5 to 4.5 (2) Advancement / selection of optimal extraction technologies by industry peers will set the pace for Cavalier s development of its Carbonates portfolio following Hoole advancement Laricina and OSUM have 2.9 Bbbls of contingent resources at the Saleski Project with first commercial production targeted in late 2015 (2) Husky has 10.0 Bbbls of contingent resources at Saleski with first production targeted in 2016 (3) OSUM has 1.8 Bbbls of contingent resources at its Saleski East and West Projects (4) Ongoing development of new technologies by industry peers also expected to improve economics and recovery factors Cavalier s Carbonates Assets 1. Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective October 31, See forward looking statement advisory for disclosure on resource info and definitions. 2. Laricina September 2012 corporate presentation. 3. Husky October 2012 corporate presentation. 4. Osum July 2012 corporate presentation. 21

23 Grosmont Carbonates Recent Industry Activity (1) Laricina / Osum - Saleski Joint Venture Results from the 1,800 pilot project have been successful to date, proving production potential from both the Grosmont C and D zones and demonstrating commerciality through production rates of 1,200 bbl/d from a single well-pair Submitted an update to its phase one (10,700 bbl/d) application in October 2012 to reflect change from a traditional dual-well SAGD design to a single horizontal well cyclic SAGD process ( CSS ), first production is expected in late 2015 Osum - Saleski East and West Completed phase one delineation at Saleski East with plan to file a 60,000 bbl/d commercial application in 2013 and first production expected in 2018 Royal Dutch Shell - North Field Actively carrying out appraisal and exploration activities and applied for regulatory approval of the North Field pilot in late 2007 Plans to test proprietary in-situ extraction and upgrading technology targeting the Upper Ireton formation Husky - Saleski Husky is actively delineating its acreage and plans to select a pilot project location by 2013 with first production expected in 2016 Sunshine - Harper Sunshine received approval for a 1,000 bbl/d CSS pilot at harper in 2009 with first production from the pilot in 2011 which demonstrated the mobility of bitumen under thermal stimulation. Production tests are ongoing 1. All based on publicly available information. 22

24 Saleski Carbonates Overview 15 sections of land with best estimate 1.2 Bbbls DEBIP and O.1 UEBIP (1) Five seismic lines shot 11 delineation wells drilled; one well cased for testing Saleski Grosmont Reservoir: Porosity = 21 %, k = 1-10 D Vuggy porosity Depth = 300m, h = up to 50m, Pressure = 1300 kpa Viscosity ~ 200,000 cp Depletion Options: Cyclic Steam Stimulation SAGD Thermal Solvents Cavalier s Saleski assets are offsetting Laricina and Osum s Saleski project 1. As per McDaniel report effective October 31, See forward looking statement advisory for disclosure on resource info and definitions. 2. Laricina public disclosure. 23

25 Eagles Nest Overview 36 sections of land purchased in early 2012 out of CCAA (former Oil Sands Quest) 6 legacy gas wells point to McMurray and Wabiskaw oil sands potential McDaniel engineering report effective April 2010 assigns a best estimate of 0.4 Bbbls of DBIP and 1.6 Bbbls of UDBIP (1) Currently evaluating seismic data to validate mapping and plan additional seismic and drilling Control over pace of development with 100% ownership of land Proximal to Industry SAGD Projects (2) Terre de Grace (75% BP, 25% Value Creation) 400,000 bbl/d production capacity Approvals in place for 10,000 bbl/d pilot project Birch (Athabasca) 155,000 bbl/d production capacity Application for 12,000 bbl/d SAGD project to be filed by the end of 2012 Birch Mountain (SilverWillow) Originally acquired by UTS before its sale to Total Seismic program to commence winter 2012/ As per McDaniel report effective April 30, See forward looking statement advisory for disclosure on resource info and definitions. 2. All based on publicly available information. 24

26 Christina/Kirby Overview Small, but highly prospective land position located immediately south of Devon s 105,000 bbl/d Jackfish and Cenovus 30,000 bbl/d Kirby West Projects and north of Devon / BP s Pike Project Potential for future small modular SAGD development options Jackfish (Devon) (1) 105,000 bbl/d capacity through three equal size phases (Jackfish 1, 2, & 3) Jackfish 1 has top tier operating performance with 2.69 cumulative SOR Jackfish 2 began producing in June 2011 Jackfish 3 construction is 45% complete Pike (BP/Devon) (1) 109,000 bbl/d capacity First phase application filed June 2012 Kirby West (Cenovus) (1) 30,000 bbl/d capacity Application expected to be filed in All based on publicly available information. 25

27 Appendix A Management and Director Biographies 26

28 Management and Director Biographies Dr. Will Roach, President & Chief Executive Officer and Director Dr. William Roach became Chief Executive Officer of Cavalier Energy Inc, in November Prior to that, Dr. Roach served as Chief Executive Officer of Calera in Los Gatos, California. Prior to Calera Dr. Roach was the President & Chief Executive Officer of UTS Energy where he led the Corporation's executive team and was responsible for maximizing the value growth opportunities for UTS shareholders. UTS was sold to Total E&P Canada Ltd. for $1.5 billion in 2010 plus the spinout of SilverBirch, which was sold to Teck Resources Ltd. for an additional $500 million in 2012 While at UTS, Dr. Roach oversaw the successful identification, acquisition and development of a significant portfolio of oil sands leases interspaced with, and ultimately coveted by, a number of the active super majors in the area (including Exxon Mobil, Shell and Total) growing the market capitalization from $50 million to $2.0 billion in six years UTS created significant value by delineating attractively acquired exploration lands at Frontier/Equinox and Lease 421 In June 2007, UTS sold a 50% interest in Equinox to Teck for $200 million; in November 2009, UTS sold its 50% interest in Lease 421 for $250 million to ExxonMobil/Imperial Oil In January 2012, SilverBirch (UTS Frontier/Equinox focused spin-out) was acquired by Teck for ~$500 million Dr. Roach has a successful 25 year track record directing and managing the design, construction and delivery of large capital-intensive national and international upstream oil and gas projects. Dr. Roach worked internationally for Shell, British-Borneo, and Husky Energy on the East Coast of Canada. Dr. Roach is a Professional Engineer in Canada and the UK and holds a Bachelor of Science in Metallurgy and a Ph.D. in Physical Metallurgy 27

29 Management and Director Biographies Martin Sandell Chief Operating Officer Mr. Martin Sandell joined Cavalier Energy at its foundation in November Prior to that he was VP Engineering at N-Solv Corp, where he was responsible for the development of the company s in-situ solvent technology pilot project, and VP Engineering of UTS Energy, where he managed the company s interests in the Fort Hills project. Mr. Sandell s successful track record spans over 30 years as a technical professional and manager, primarily in the design, construction and delivery of offshore and onshore oil and gas projects and in field operations. His projects include Husky s White Rose project off the Canadian east coast and major international projects in the Gulf of Mexico deepwater and in the UK and Norwegian North Sea. Mr. Sandell is a registered Professional Engineer in Alberta and a Chartered Engineer in the UK and holds a Bachelor of Science in Chemical Engineering. Philip Moore Chief Financial Officer Mr. Moore joined Cavalier Energy in June 2012 as CFO. He has over 15 years of energy investment banking experience and has extensive experience in capital raising and advising Canadian and international clients across a broad range of merger and acquisition and financial advisory mandates. Prior to joining Cavalier, Mr. Moore was Managing Director of Energy Investment Banking at Paradigm Capital, Director of Energy Investment Banking at Cormark Securities (formerly Sprott Securities Inc.) and prior to that he was with BMO Nesbitt Burns. Mr. Moore has a Bachelor of Commerce with a major in Finance from the University of Calgary and is a Chartered Financial Analyst and a member of the Association for Investment Management and Research. 28

30 Management and Director Biographies Jina Abells Morissette General Counsel, Corporate Secretary Ms. Abells Morissette has 15 years experience as a lawyer in the oil and gas industry. She was previously Vice President, Legal and Administration & Corporate Secretary SilverBirch Energy Corp where she worked from the company s inception in 2010 until its ultimate takeover by Teck Resources via plan of arrangement. Prior to that she was the Vice President, General Counsel & Corporate Secretary UTS Energy, which she joined in She was involved with the successful defence of a hostile takeover bid and was an integral part of the executive team that ultimately sold UTS. Prior to joining UTS, Ms. Abells Morissette was employed at Husky Energy Inc., working for the Canadian Offshore and International Business Group. While at Husky she worked primarily on the White Rose Project, an off-shore project located off the coast of Newfoundland and Labrador. She has a Bachelor of Administration with a major in marketing from the University of Regina and a LL.B. from the University of Saskatchewan. William Robinson Vice President Geoscience Prior to joining Cavalier, Mr. Robinson oversaw the exploration and delineation of Paramount's Western Athabasca oil assets from 2002 to Mr. Robinson was responsible for the delineation, and involved with the sale of, assets from Paramount to both MEG and NAOSC, and was seconded into NAOSC prior to the sale of Paramount s interest. Mr. Robinson obtained his Bachelor of Science degree in Geology from the University of Calgary in 2002 and is a member of APEGA. 29

31 Management and Director Biographies Jeff Peterson Manager Reservoir Engineering Mr. Peterson has over 15 years in the energy and resource industries. Prior to joining Cavalier in 2012, he spent 6 years at Laricina Energy Ltd. focused on the reservoir engineering, overall project development and regulatory aspects of the Laricina s Germain and Saleski projects, in the Grand Rapids clastics and Grosmont carbonate formations. In addition he spent time at Laricina in the Innovation and New technology / EOR groups focused on the development and evaluation of leading edge solvent additive and other enhanced oil recovery processes. Mr. Peterson was a technical specialist in Trican Well Services from 2004 to 2006 focusing on the design and execution of large hydraulic fracturing treatments throughout the Western Canadian Sedimentary Basin. From 1997 to 2004 his work focused on geomechanics issues related to oil and gas, mining and construction projects at various locations throughout the world. Mr. Peterson holds a Masters of Science in Engineering from the University of Alberta (Rock Mechanics) and is a member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta, Society of Petroleum engineers, and the Canadian Heavy Oil Association. He served on the board of Directors of the Canadian then Calgary Sections of the Society of Petroleum Engineers including the role of Section Chairman in In 2009 Mr. Peterson was the lead author on the paper which received the R.M. Butler Memorial award for the best paper presented at the Canadian International Petroleum Conference. He is also listed as the co-inventor in the patent application titled Method for Viscous Hydrocarbon Production Incorporating Steam and Solvent Cycling. 30

32 Management and Director Biographies James H.T. Riddell Executive Chairman Mr. Riddell joined Paramount Resources Ltd. in 1991, has been a director since 2000 and President and Chief Operating Officer since Graduated from Arizona State University with a BSc in Geology (1989) and from the University of Alberta with a Master of Science degree in Geology (1993). Clayton H. Riddell Director Mr. Riddell is Chairman of the Board and Chief Executive Officer of Paramount where he has been an executive officer since the company s formation. Until June 2002 he was also President of Paramount. Mr. Riddell graduated from the University of Manitoba with a BSc (Honours) degree in Geology. He received the J.C. Sproule Memorial Plaque from the Canadian Institute of Mining (1994), the Stanley Slipper Gold Medal from The Canadian Society of Petroleum Geologists (1999), an Honorary Doctor of Science degree from the University of Manitoba (2004), and Outstanding Explorer award from the American Association of Petroleum Geologists (2004). In 2006, Mr. Riddell was inducted to the Calgary Business Hall of Fame and in 2008 he was made an Officer of the Order of Canada. Bernard K. Lee Director Mr. Lee has been Chief Financial Officer of Paramount since Prior thereto, Mr. Lee held a variety of senior positions with Alberta Energy Company Ltd. and its successor EnCana Corporation, the last senior position being Vice President & Corporate Advisor, Business Ventures, Corporate Development. E. Mitchell Shier Director Mr. Shier is General Counsel, Corporate Secretary and Manager, Land of Paramount, which he joined in From 2002 until 2009, Mr. Shier practiced oil and gas and commercial law as a partner with Heenan Blaikie LLP and remains counsel to that firm. Prior to 2002, he practiced as a partner with other major law firms in Calgary. Mr. Shier obtained his Bachelor of Science degree from the University of Calgary in 1981, his Bachelor of Laws from the University of Alberta in 1984 and his Master of Laws in Environmental and Natural Resources Law from the University of Calgary in

33 Appendix B Forward Looking Statements Advisory 32

34 Forward Looking Statements Advisory Certain statements in this presentation constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "expect", "plan", "intend", "propose", or similar words suggesting future outcomes or an outlook. Forward looking information in this presentation includes, but is not limited to: expected production volumes and the timing thereof; planned exploration and development expenditures, and the timing thereof; exploration, development and expansion plans and strategies for Cavalier s properties; anticipated capital and financing requirements and access to capital; project economics, and comparisons to other oil sands projects, estimated production profiles and scope and the timing thereof; planned Hoole development schedules and costs, including cash flow profiles; resources estimates and estimates of when probable reserves will be recognized; predicted recovery factors including steam oil ratios and cumulative steam oil ratios; construction and startup timelines and schedules; anticipated development activity in areas where Cavalier assets are located; expected pipeline capacity and ability to transport production when pipeline capacity is not available; business strategies and objectives; operating and other costs and strategies to reduce or mitigate such costs; and expected regulatory review and approvals and the timing and the outcome thereof. Such forward-looking information is based on a number of assumptions which may prove to be incorrect. The following assumptions have been made, in addition to any other assumptions identified in this presentation: future crude oil, bitumen and natural gas prices; general economic and business conditions; the ability of the Company to obtain required capital to finance its exploration, development and operations; the ability of the Company to obtain equipment, services, supplies and personnel in a timely manner to carry out its activities; the ability of the Company to market its oil and natural gas successfully to current and new customers; estimates of input and labour costs for an oil sands project; the ability of the Company to secure adequate product transportation and storage; the ability of the Company to successfully apply oil sands technology and to capitalize on improvements thereto; the ability of the Company to obtain project success including obtaining production volumes, steam oil ratios, capital and operating costs consistent and timing with expectations; the timely receipt of required regulatory approvals and the scope of such approvals; estimated timelines being met in respect of the development of the Hoole oil sands properties; application and success of oil sands technologies; access to capital markets and other sources of funding; and currency exchange and interest rates. 33

35 Forward Looking Statements Advisory Although the Company believes that the expectations reflected in such forward looking information is reasonable, undue reliance should not be placed on it, as the Company can give no assurance that such expectations will prove to be correct. Forward-looking information is 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 the Company and described in the forward looking information. These risks and uncertainties include, but are not limited to: fluctuations in crude oil, bitumen and natural gas prices, foreign currency exchange rates and interest rates; the uncertainty of estimates and projections relating to future revenue, future production, costs and expenses including project cost overruns; the ability to secure adequate product processing, transportation and storage; operational risks in exploring for, developing and producing bitumen, crude oil and natural gas; the ability to obtain equipment, services, supplies and personnel in a timely manner; potential disruption or unexpected technical difficulties in designing, developing, expanding or operating the Company s projects; risks and uncertainties involving the geology of bitumen, crude oil and gas deposits; the uncertainty of resources estimates; changes to the status or interpretation of laws, regulations or policies; the receipt and timing of governmental or regulatory approvals; title defects; aboriginal land claims; ability to fund projects; environmental compliance and requirements; general business, economic and market conditions; the effects of weather; and other risks and uncertainties described elsewhere in this presentation and in Paramount s other filings with Canadian securities authorities, including Paramount s Annual Information Form. The foregoing list of risks is not exhaustive. Additional information concerning these and other factors which could impact Cavalier and Paramount are included in Paramount s most recent Annual Information Form. The forward-looking information contained in this presentation is made as of the date hereof and, except as required by applicable securities law, Cavalier and Paramount undertake no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise. 34

36 Forward Looking Statements Advisory Oil and Gas Measures and Definitions: This presentation contains disclosure of certain results of (i) an updated independent evaluation of the Company s DEBIP and economic contingent bitumen resources from the Grand Rapids formation within the Company s Hoole oil sands property as of June 30, 2012 by McDaniel & Associates Consultants Ltd. ("McDaniel") (ii) an independent evaluation of the Company's Saleski and other carbonate bitumen assets as of October 31, 2011 by McDaniel (collectively, the McDaniel Evaluations ). "Contingent resources" are those quantities of bitumen resources estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but are classified as a resource rather than a reserve due to one or more contingencies, such as the absence of regulatory approvals, detailed design estimates or near term development plans. There is no certainty that it will be commercially viable to produce any portion of the contingent resources. For Cavalier, contingencies which must be overcome to enable the reclassification of bitumen contingent resources as reserves include finalization of plans for the initial development of the Hoole oil sands properties, regulatory application submission with no major issues raised, access to capital markets and other sources of funding, and intent to proceed by the Company evidenced by a development plan with major capital expenditures. "Economic contingent resources" are those contingent bitumen resources that are currently economically recoverable based on specific forecasts of commodity prices and costs. There is no certainty that it will be commercially viable to produce any portion of the economic contingent resources. Contingent Resources (Technology Under Development) are those quantities of bitumen estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but are classified as a resource rather than a reserve due to one or more contingencies, such as the absence of regulatory approvals, detailed design estimates or near term development plans. There is no certainty that it will be commercially viable to produce any portion of the Contingent Resources. For the Saleski property and the Other Carbonate Leases, because of the lack of demonstrated commercial SAGD production within carbonate reservoirs, the recoverable resources assigned are contingent upon successful application of SAGD to the subject reservoir or a reasonable analog. The successful implementation of SAGD technology in carbonate reservoirs is a significant contingency associated with these assignments that separate them from typical McMurray clastic SAGD contingent and prospective resources, where the technology has been proven effective. In addition to the technical contingency, additional contingencies applicable to the carbonate resources include being in the early evaluation stage, the economic viability of development and the absence of regulatory approvals. The economic status of these resources are undetermined. "Best estimate" is considered to be the best estimate of the quantity of resources that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. Those resources that fall within the best estimate have a 50 percent confidence level that the actual quantities recovered will equal or exceed the estimate. "Low estimate" is considered to be a conservative estimate of the quantity of resources that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. Those resources at the low end of the estimate range have the highest degree of certainty a 90 percent confidence level that the actual quantities recovered will equal or exceed the estimate. "High estimate" is considered to be an optimistic estimate of the quantity of resources that will actually be recovered. It is unlikely that the actual remaining quantities of resources recovered will meet or exceed the high estimate. Those resources at the high end of the estimate range have a lower degree of certainty a 10 percent confidence level that the actual quantities recovered will equal or exceed the estimate. The volume of economic contingent resources disclosed represents the Company s share of recoverable volumes before the deduction of royalties. 35

37 Forward Looking Statements Advisory Oil and Gas Measures and Definitions (cont d): Discovered Exploitable Bitumen In Place or DEBIP is the estimated volume of bitumen, as of a given date, which is contained in a subsurface stratigraphic interval of a known accumulation that meets or exceeds certain reservoir characteristics, such as minimum continuous net pay, porosity and mass bitumen content. For the Hoole oil sands property, the presence of these characteristics is considered necessary for the commercial application of known recovery technologies. For the Saleski property and the Other Carbonate Leases, these volumes have been constrained to areas that have a minimum thickness of 10 meters of substantially clean, continuous predominantly bitumen-saturated carbonate with log porosity meeting a minimum of 10 percent and bitumen saturation greater than 50 percent, respectively and with both competent top and lateral reservoir containment. These carbonate bitumen resources are constrained to one mile in area around known data points that penetrate the zone and possess definitive geophysical log data. Discovered Exploitable Bitumen in Place for the Saleski property and the Other Carbonate Leases may be assigned outside of the one mile area if reservoir continuity between offsetting delineation is expected. The technology required to economically produce bitumen from carbonate formations is currently in the development stage and has not been proven on a commercial scale. There is no certainty that it will be commercially viable to produce any portion of the resources from the Hoole oil sands property, the Saleski property or the Other Carbonate Leases. Undiscovered Exploitable Bitumen In Place or UEBIP is the volume of petroleum estimated, as of a given date, to be contained in accumulations yet to be discovered. These resources are mapped using known data points penetrating the zone and possess definitive geophysical log data along with seismic data and regional mapping. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. This presentation contains certain disclosures of net present values ("NPV") from the McDaniel Evaluations. The NPVs disclosed represent the Company s share of future net revenue, before the deduction of income tax from the economic contingent bitumen resources in the Grand Rapids formation within the Hoole oil sands properties. The calculation considers such items as revenues, royalties, operating costs, abandonment costs and capital expenditures. Royalties were calculated based on Alberta s Royalty Framework applicable to oil sands projects in Alberta. The calculation does not consider financing costs and general and administrative costs. The NPVs were calculated assuming natural gas is used as a fuel for steam generation. Revenues and expenditures were calculated based on McDaniel s forecast prices and costs as of June 30, The estimated net present value of economic contingent resources disclosed does not represent fair market value. 36

38 Forward Looking Statements Advisory Oil and Gas Measures and Definitions (cont d): This presentation contains disclosure of certain results of an independent evaluation of discovered bitumen in place ( DBIP ) and undiscovered bitumen in place ( UDBIP ) prepared by McDaniel dated July 20, 2010 for the Eagles Nest area of Northern Alberta. McDaniel prepared a report that provides estimates for volumes of DBIIP and UDBIP for the assets in the Eagle s Nest area (the Report ). As a result of this assessment, McDaniel has estimated the DBIP and UDBIP resource to be about 0.4 million barrels and 1.6 million barrels, respectively. The Report, effective April 30, 2010, was prepared in accordance with National Instrument Standards of Disclosure for Oil and Gas Activities ( NI ) and the Canadian Oil and Gas Evaluation Handbook as published by the Society of Petroleum Evaluation Engineers (Calgary Chapter) and the Petroleum Society of Canada (the COGE Handbook ). There is no certainty that the Company s assets located at Eagle s Nest will produce any portion of the volumes currently classified as discovered resources or undiscovered resources. The primary contingencies which currently prevent the classification of the discovered or undiscovered resources disclosed above as reserves consist of: current uncertainties around the specific scope and timing of the development of the Eagle s Nest assets; uncertainty regarding the presence, extent or quality of cap rock; lack of regulatory approvals for such projects; the uncertainty regarding marketing plans for production from the subject areas; improved estimation of project costs; commodity price fluctuations, timing, costs estimates and final approval of the Board of Directors. The term Discovered Bitumen in Place (equivalent to discovered resources) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered bitumen in place includes production, reserves, and contingent resources; the remainder is unrecoverable. Undiscovered Bitumen in Place (equivalent to undiscovered resources) is that quantity of bitumen that is estimated, as of a given date, to be contained in accumulations yet to be discovered. The definition is taken from the COGE Handbook. DBIP is currently the most specific resource category assignable to the Eagle s Nest assets. McDaniel was unable to classify the discovered resources into one of the subcategories because development projects could not be defined for the discovered resource volumes at this time. It is yet to be determined what recovery process will be applied in Eagle s Nest due to current uncertainty of cap rock integrity. There is no certainty that it will be commercially viable to produce any portion of those discovered resources. Discovered resources do not constitute, and should not be confused with, reserves. 37