Information Memorandum

Transcription

1 Information Memorandum Energy - Liquid-Rich Duvernay Opportunity in the Heart of Greater Kaybob Duvernay Regional Phase Windows owns a substantial asset base (more than five townships of 100% working interest lands) in the Duvernay, strategically located in the most desirable part of the Duvernay fairway in Alberta. DUVERNAY Waskahigan is offering 135,040 acres (54,016 Ha, 211 sections) of contiguous 100% WI land in the heart of the Alberta Duvernay Shale play, focused in the Greater Kaybob area, ~200 km west of Edmonton s lands are larger licenses which require only a few wells to validate and continue acreage Industry has spent almost $2 billion acquiring Duvernay land rights in the area via Crown land sales in the last five years Fir Complex Kaybob South Windfall Leduc Complex Development activity has been dramatic with almost 150 wells targeting the Duvernay licensed or drilled in the last three years lands lie strategically in the fairway where free condensate yields range to over 300 bbl/mmcf and NGL yields approach 150 bbl/mmcf Duvernay activity Well Land With three pilot wells drilled, the assets are well positioned to move into full field development, offering a new entrant or existing player a strategic advantage in dominating a key liquid-rich resource play in the Western Canadian Sedimentary Basin Wild River Sub Basin Black Oil Volatile Oil Retrograde Gas Wet Gas Dry Gas Stratigraphy British Columbia Western Canada Alberta Fort McMurray Bituminous Shale (Duvernay & equivalent) All Other Facies (Duvernay Time equiv.) Saskatchewan North Duvernay Edmonton Calgary Kilometres Miles WCSB Atlas fig 12.17

2 Greater Kaybob - Tightly Held Land with Intense Drilling Activity T66 Major Land Holders and Duvernay Activity R17 R15 T66 The top ten Duvernay landowners in the Greater Kaybob area are indicated on the map, illustrating that the lands are very tightly held, limiting new entry opportunities These top ten companies control the Duvernay landbase, and account for over 90% of the well activity, as shown in the table below Recent pertinent transactions include Exxon s ($3B) acquisition of Celtic Exploration and Encana s ($2.2B) joint venture with PetroChina. Exxon and Encana-PetroChina both have significant Duvernay holdings at Kaybob Simonette Waskahigan Fir Complex Wild River Whitecourt Windfall Leduc Complex Top Duvernay Operators by Well Count Operator Map Location Producing Standing Colour & Drilling HZ Total Exxon (Celtic) Shell Trilogy Husky Oil Athabasca Encana-PetroChina Chevron Alta Enrg Partners ConocoPhillips Others Total R27 R17 Alta Energy Partners Athabasca Chevron ConocoPhillips Encana-PetroChina Exxon (Celtic) Husky Oil Shell Trilogy Source: Various Corporate Presentations

3 Greater Kaybob - The Eagle Ford of the North - Liquid-Rich, High Pressure with Excellent Deliverability HIGH PRESSURE The Duvernay is highly over pressured in the Greater Kaybob area, with pressures as high as 11 Kpsi (76 mpa), resulting in excellent deliverability Pressure gradients are expected to range from 0.7 to 0.9 psi/ft on acreage (15.8 to 20.3 kpa/m) Regional assessment of fluids in Leduc reservoirs (sourced from Duvernay) indicate reservoir pressures should be well above dew point pressures in the Greater Kaybob area. This mitigates the risk of dropping out liquids in the reservoir Comparative Pressure Depth Plot Duvernay Yields/Leduc Condensate Production R17 Waskahigan Depth Range of Lands W5 Vertical Duvernay Test Produced Fir Complex Kaybob South Windfall Leduc Complex LIQUID-RICH The map to the left shows Duvernay free condensate yields which range from 3 to 1,300 bbl/mmcf s lands are well situated to benefit from strong condensate yields of up to 300+ bbl/mmcf Further, Leduc pinnacle reef liquid production in the Wild River area indicates that the Duvernay shales here have a liquid component Deep Cut Gas Plants NGTL (Nova) and Alliance Mainlines Wild River Sub Basin R W5 was completed in the Duvernay in 2008 and flowed free condensate validating liquid potential on the western edge of s acreage The Greater Kaybob area is served by two major deep cut plants and two major export pipelines, as shown on the map

4 Waskahigan - Large Duvernay Land Position Where Liquid Yields Exceed 300 bbl/mmcf Waskahigan Area Activity Map W5 Type Log W5 Shell Multi-Well Pads Black Oil Shell Producers CTD 27 Mbbl in 2 months Athabasca W5 HZ 45 m Volatile Oil Type Log Encana Activity 300 bbl/mmcf Athabasca W5 450 bbl/mmcf Condensate 3 Yoho Wells ~712 bbl/d Condensate Athabasca W5 250 bbl/mmcf W5 s Waskahigan block covers 10,880 net acres (4,352 Ha, 17 sections) and is surrounded by extensive Duvernay development with excellent results to date. s lands are in the heart of the volatile oil window, with free condensate yields of >300 bbl/mmcf expected Encana s vertical well ( W5) tested 200 Mcf/d with 300 bbl/mmcf of condensate. The offsetting horizontal well ( W5) tested 2.7 MMcf/d with 200 bbl/mmcf of condensate Athabasca s W5 well tested at 5 MMcf/d with 450 bbl/d of condensate (> 50 o API). Their W5 well yielded 250 bbl/mmcf of free condensate (55 API) over the first 80 days of production, with a flowing wellhead pressure of 2,900 psi (20 mpa) Yoho Resources reports total liquid yields from three wells in the area of bbl/mmcf, of which approximately 65% is free condensate Further north and east, Shell has been very active with multi-well pad licenses. Their two (confidential) wells in township W5 have cumulative production of 119 MMcf with 27 Mbbl condensate (two months production) The Duvernay at Waskahigan is 45 metres thick, with excellent porosity, highlighted in red on the log above from the W5 vertical well, which is adjacent to Athabasca s horizontal well at W5

5 Whitecourt and - The Sweet Spot - Excellent Deliverability and Liquid Content (Exxon) Celtic W5 75 bbl/mmcf Longest Producing Duvernay Whitecourt and Activity Map Whitecourt W5 Total Yield 79 bbl/mmcf* W5 Total Yield 101 bbl/mmcf* Wet Gas W5 Total Yield 165 bbl/mmcf* 50 bbl/mmcf (Exxon) Celtic W5 94 bbl/mmcf Trilogy W5 80 bbl/mmcf Currently the Best Rate in the Duvernay R17W5 Husky Activity W5 237 bbl/mmcf Retrograde Gas s Whitecourt and lands are in three contiguous blocks covering 52,480 net acres (20,992 Ha, 82 sections) s initial pilot wells were short horizontals (~1,000 m), yet show some of the stronger rates in the play. s W5 well placed only six of eight fracs, but is still above the average well. Increasing well length and number of fracs to optimize performance is the next step for full field development The superior performance of this area is supported at Whitecourt where the lands are immediately offset by some of the longest producing and best rate wells in the play The lands are expected to be in the wet gas/retrograde gas window as evidenced by the high free condensate yield (50 bbl/mmcf) in s W5 well. Liquid yields are expected to increase to the east Producing Day Raw Gas Production (Mcf/d) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Normalized Duvernay Production Wells W5: 1134m Length + 10 Fracs* W5: 1386m Length + 13 Fracs* W5: 1558m Length + 7 Fracs* W5: 1736m Length + 25 Fracs* Horizontal Well Average W5: 1130m Length + 6 Fracs* W5: 1020m Length + 8 Fracs* W5: 960m Length + 6 Fracs* Normalized Production From Peak Rate (Months) * Successful Fracs Duvernay Whitecourt and Type Logs Chevron Activity Dry Gas W5 HZ 60 m W5 HZ R17W5 * Total yields based on assumed Deep Cut NGL recovery Whitecourt

6 Wild River - Large Contiguous Land Block with Thick, Porous Duvernay Shale W5 Type Log Wild River Sub-Basin Activity Map W5 Leduc Pinnacle CTD 208 bbl cnd Encana Vertical Tested Gas (Nov 2012) Daily Oil Bulletin 70 m Type Log Encana Hz License Leduc Pinnacle CTD 3,663 bbl cnd Dry Gas Wet Gas Leduc Pinnacle CTD 872 bbl cnd W5 s Wild River acreage is contiguous covering 71,680 net acres (28,672 Ha, 112 sections) Free condensate yields in the order of 10 bbl/mmcf are projected based on historic liquid production from Leduc pinnacle reefs The Duvernay at W5 is 70 metres thick, and shows a profile typical of organic-rich shales; irradiated gamma-ray and heightened resistivity Colour-filled density porosity highlights the excellent storage capacity of the reservoir with some of the largest OGIP values in the trend

7 Additional Resource Play Opportunity in the Montney R2 R1W6 R27 Montney Activity at Kaybob R17 R15 MONTNEY 49,920 acres (19,968 ha, 78 sections) of 100% Montney rights are included on the lands The Montney at Kaybob produces both liquid-rich gas and oil Montney The land tenure in the Montney is similar to the Duvernay which offers ample time to develop the resource Since 2011, almost 400 wells have been licensed in the Montney with much of the new activity proximal to the acreage (Exxon) Celtic W5 HZ CTD: 711 MMcf IP: 5.7 MMcf/d (11/04) Rate: 430 Mcf/d (13/01) As of January 2013, these new wells are producing MMcf/d of gas and 16.2 Mbbl/d of oil and free condensate New Montney Production R2 R1W6 R27 NEXT STEPS Apache W5 HZ CTD: 1,106 MMcf IP: 8.4 MMcf/d (12/04) Rate: 2.9 MMcf/d (13/01) Interested parties should execute a confidentiality agreement by contacting Ian Van Staalduinen at ( ian.van@bmo.com) or Wendy Smith Low at ( wendy.smithlow@bmo.com) Virtual data room access will be provided to those executing a confidentiality agreement Presentations will occur in Calgary to interested parties The virtual data room will open early to mid May 2013 with presentations to take place in Calgary later in May 2013 R17 Subcrop R Data As Of: Producing Wells: 245 Injecting Wells: 0 New (since 2011) Montney Wells From: To: Unit(M\A): API Date (Month/Years) PRD Cal-Day Avg GAS Mcf/Day Cum PRD OIL 5,401,844.9 Bbl PRD Well Count PRD Cal-Day Avg CND Bbl/Day Cum PRD GAS 77,431,422.6 Mcf PRD Cal-Day Avg OIL Bbl/Day Cum PRD CND 498,328.6 Bbl

8 DISCLAIMER This Information Memorandum (the IM ) has been prepared by BMO Nesbitt Burns Inc. ( BMO Capital Markets ) from information furnished by the management of Energy Inc. ( or the Company ) and other sources and is being delivered for the sole purpose of providing recipients with an overview of in connection with a possible sale transaction (the Transaction ). Unless the context indicates otherwise, references in this presentation to or the Company include, for presentation purposes only, the partnership interests held by TEI and its subsidiaries. Such use of or the Company to refer to these partnership interests does not constitute a waiver by Energy Inc. or such partnership of its separate legal status, for any purpose. The sale process will be conducted in accordance with the procedures provided to interested parties. 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