Liquid Rich Montney Natural Gas Resource Play In the Deep Basin - West Central Alberta Q3 2012
Forward-looking Statement Certain information and statements contained in this presentation contain forward-looking information or statements ( forward looking statements ) within the meaning of applicable securities laws. In particular and without limiting the foregoing, there are statements regarding Donnybrook Energy Inc. s (the Corporation ) the timing of expected production, the timing of testing and completion results, exploration, development, drilling plans, number of drilling locations, initial production estimates, anticipated recovery rates, payout rates, finding costs, reserve additions per well, capital expenditures, success rates, cash flow potential and resource targets. All forward-looking statements contained herein that are not clearly historical in nature constitute forward-looking statements, and the words may, will, should, could, expect, plan, intend, anticipate, believe, estimate, propose, predict, potential, continue, or the negative of these terms or other comparable terminology are generally intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or event to differ materially from those anticipated in such forward-looking statements. Forward-looking statements include, but are not limited to, references to oil and natural gas production levels; capital expenditure programs; the quantity and composition of oil and natural gas reserves; projections or commodity prices and costs; supply and demand for oil and natural gas; expectations regarding the Corporation s ability to raise capital and to continually add reserves through acquisition, exploration and development and treatment under governmental regulatory regimes and tax laws. Although the Corporation believes that the expectations reflected in any forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate and the Corporation s actual results could differ materially from those anticipated in these forward-looking statements. These factors are based on currently available information and include, but are not limited to: volatility in the market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; geological, technical, drilling and processing problems; fluctuations in foreign exchange or interest rates; health, safety and environmental risks; stock market volatility; global economic events or conditions; and other factors, many of which are beyond the control of the Corporation. The Corporation has made assumptions regarding: the impact of increasing competition; the general stability of the economic and political environment in which the Corporation operates; the timely receipt of any required regulatory approvals; the ability of the Corporation to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which the Corporation has an interest to operate the field in a safe, efficient and effective manner; the ability of the Corporation to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Corporation to secure adequate product transportation; future oil and natural gas prices; currency exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully market its oil and natural gas products. As such, readers are cautioned not to place undue reliance on forward-looking statements as no assurance can be provided as to future results, levels of activity or achievements. This risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available under the Corporation s profile at www.sedar.com. Past performance of the Corporation referred to in this presentation is shown for illustrative purposes only, does not guarantee future results of the Corporation and is not meant to forecast, imply or guarantee the future performance of the Corporation, which will vary. Readers are cautioned that the foregoing list of factors affecting forward-looking statements is not exhaustive. Furthermore, the forward-looking information and statements are made as of the date of this presentation, and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking information or statements, whether as a result of new information, future events or otherwise, expect as required by applicable law. The forwardlooking statements contained in this presentation are expressly qualified by this cautionary statement. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency for the individual products at the wellhead. Such disclosure of boe s may be misleading, particularly if used in isolation. 2
Corporate Highlights Significant focused land position established totalling 46 gross section 23 net; (29,440 gross acres/14,720 net acres) in the liquids rich Montney formation Drilling to date has de-risked over 2/3 of overall land package Q4 2012 production projected to reach approximately 600 boe per day Donnybrook is debt free PVBT 10 (at April 30, 2012) Total Proved plus Probable and Best Estimate Contingent Resource totals $111.4MM (see Table on page 9) Donnybrook has producing properties located at Resthaven- Simonette and Bigstone, two of the most actively drilled Montney plays in Alberta. Industry partners/competitors in the area including Celtic, Cequence, Trilogy, Delphi, Athabasca and CNRL 3
Deep Basin Resource Plays Target: Montney 20+ BCF/section 1,200,000 bbls NGLs/section Core Areas: Resthaven Simonette Bigstone 4
Montney Trend Kaybob Analog / Simonette Montney Comparison 5
Donnybrook Resthaven-Simonette Area Montney Activity New Montney locations DEI 4-27 Test 1.5 mmcf/d 250 bbls oil/d 500 BOED Test (vertical) 480 mcf/d DEI 1-27 Q1 2013 12 inch pipeline to Keyera plant Production 5mmcf/d 240 bbls NGL/d 1,040 BOED (January 11) DEI 1-27 Test 3.5 mmcf/d Test 14.7 mmcf/d 265 bbls NGL/d 3,252 BOED DEI 4-14 Test 8.9 mmcf/d 40 bbls oil/d 1,520 BOED DEI 13-22 Test 6.4 mmcf/d 265 bbls NGL/d 1,124 BOED Test 14.4 mmcf/d 114 bbls NGL/d 2,418 BOED Test (6 stage) 5mmcf/d 6 Test (vertical) 500 mcf/d
Donnybrook Fir/Bigstone Area Montney Activity New Montney locations DEI 3-29 Test 4.3 mmcf/d 295 bbls NGL/d 1,011 BOED DEI 15-32 Test 1.1 mmcf/d 50 bbls NGL/d 233 BOED To KA Gas plant Delphi Test 16 mmcf/d 800 bbls NGL/d 8,360 BOED Delphi Test 10.3 mmcf/d 515 bbls NGL/d 2,163 BOED DEI #4 Q1 2013 Delphi Test 12.5 mmcf/d 770 bbls NGL/d 2,850 BOED To K3 Gas plant DEI 13-33 Q1 2012 Drilled awaiting test results Delphi Compression and Dehydration Facility Test 13.1 mmcf/d 655 bbls NGL/d 2,620 BOED Test 3.5 mmcf/d 250 bbls NGL/d 810 BOED 7 Test 15 mmcf/d 750 bbls NGL/d 3,115 BOED
Bigstone and Resthaven-Simonette Recent Operations DEI Bigstone Hz 13-33-60-22 W5M well (DEI: 25%) has been drilled to total measured depth of 5,336 metres with a 2,590 metre horizontal length in the Montney with test results expected in August 2012 Surface production facilities located at 03-29-60-22 W5M and 1.6 miles of 8 inch pipeline to the Delphi s Energy Corp. operated gas gathering system tie-in point has been completed and production from the DEI Bigstone Hz 14-29 and Hz 15-32 wells commenced in June and July 2012 with initial combined gross volumes estimated at 3.4 mmcf and 225 bbls of condensate and NGLs per day (333 boe per day net) A fourth Montney extended reach horizontal Donnybrook operated drilling location has been surveyed and is anticipated to spud by Q1 2013 (DEI: 50%) The Simonette Hz 1-11-61-27 W5M well (DEI: 50%) located in the southeast portion of the 33 section (16.5 net) contiguous land block was put on production in spring 2012. Total net production at Simonette is currently approximately 250 boe per day The Donnybrook operated 11-27-61-2 W6M (11-27) Resthaven well has been production tested in-line intermittently at rates of 1 mmcf and 60 barrels of condensate per day 8
Reserve and Economic Contingent Resources (Montney) as at April 30, 2012 The Independent Resource Study covers a portion Donnybrook s Montney interest land of 46 gross sections (22.66 net sections) TOTAL PROVED PLUS PROBABLE TOTAL PPP TOTAL PROVED Oil Equivalent (Mboe) Bigstone Area 587 1,217 1,601 Simonette Area 2,649 4,714 5,994 Total 3,237 5,931 7,595 PVBT10 (M$) Bigstone Area $6,121 $11,437 $15,497 Simonette Area $25,866 $48,341 $66,427 Total $31,986 $59,778 $81,924 LOW ESTIMATE CONTINGENT RESOURCES BEST ESTIMATE CONTINGENT RESOURCES HIGH ESTIMATE CONTINGENT RESOURCES Oil Equivalent (Mboe) Bigstone Area 0 2,442 5,581 Simonette Area 0 3,971 12,918 Total 0 6,413 18,499 PVBT10 (M$) Bigstone Area 0 $19,562 $44,837 Simonette Area 0 $31,989 $111,840 Total 0 $51,551 $156,677 Also refer to Donnybrook s Press Release dated May 28, 2012 for more information 9
A Proven High-Quality Team David Patterson has raised in excess of $160 million for resource companies, with over 25 years of experience in the industry. Malcolm Todd has over 25 years of experience in senior positions with private and publicly traded oil and natural gas companies with operations in Alberta and British Columbia. Two of these companies were acquired by senior Canadian companies. Murray Scalf has experience building oil and natural gas exploration and production companies in Alberta over the past 25 years; many of these entities were ultimately acquired by senior Canadian companies. Terry Skilnick is a geologist with over 12 years of experience successfully identifying economic resource opportunities. Three junior oil and natural gas companies have been built on his qualified recommendations and insight. Robert Todd has over 25 years of experience in senior positions with private and publicly traded natural resource companies. Two of these companies were acquired by senior Canadian companies. 10
Summary Opportunity Overview Management team with a proven track record The Deep Basin Montney Resource play in Alberta is economically competitive with any play in North America Significant volumes of condensate and natural gas liquids associated with dry gas production Acquired interests in 46 gross sections (23 net) of Montney rights prospective for liquid-rich natural gas Land position includes 32 sections gross (16 sections net) of Duvernay rights and 45 sections gross (23 sections net) of Nordegg rights Early cash flow potential and easy tie-in due to extensive infrastructure in the immediate area Geologic risk has been reduced in the Montney Project areas by recent Donnybrook and industry successes Q4 2012 projected target production rate to reach approximately 600 boe per day 11
Capital Structure Shares Outstanding 193,636,066 Stock Options (weighted avg $0.273 per share) 17,158,500 Fully Diluted 210,794,566 Directors, officers and associates hold ~30% of current shares issued and outstanding TSXV: DEI www.donnybrookenergy.ca 12
Appendix - Deep Basin Montney Players 13
Corporate Information Officers and Directors David Patterson Chairman and Director Malcolm Todd President, CEO, and Director Murray Scalf COO and Director Robert Todd - CFO Randy Kwasnicia Director Ken Stephenson Director Colin Watt Director Engineer: Fekete Engineering Software & Services (Calgary, Alberta) GLJ Petroleum Consultants Ltd. (Calgary, Alberta) Bank: ATB Financial (Calgary, Alberta) Legal: Borden Ladner Gervais LLP. (Calgary, Alberta) Transfer Agent: Computershare Limited 14