Eor May10 Oilfields Presentation
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Transcript of Eor May10 Oilfields Presentation
Forward-Looking Statements
Certain statements contained herein are forward-looking statements, including statements relating to Enhanced Oil
Resources’ operations; business prospects, expansion plans and strategies. Forward-looking information typically
contains statements with words such as “intends,” “anticipate,” “estimate,” “expect,” “potential,” “could,” “plan” or
similar words suggesting future outcomes. Readers are cautioned not to place undue reliance on forward-looking
information because it is possible that expectations, predictions, forecasts, projections and other forms of forward-looking
information will not be achieved by Enhanced Oil Resources. By its nature, forward-looking information involves
numerous assumptions, inherent risks and uncertainties. A change in any one of these factors could cause actual events or
results to differ materially from those projected in the forward-looking information. Although Enhanced Oil Resources
believes that the expectations reflected in such forward-looking statements are reasonable, Enhanced Oil Resources can
give no assurance that such expectations will prove to be correct. Forward-looking statements are 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 Enhanced Oil Resources and described in the forward-looking statements or
information. The forward-looking statements are based on a number of assumptions which may prove to be incorrect.
Readers should be aware that the list of factors, risks and uncertainties set forth above are not exhaustive. Readers should
refer to Enhanced Oil Resources' current filings, which are available at www.sedar.com, for a detailed discussion of these
factors, risks and uncertainties. The forward-looking statements or information contained in this news release are made as
of the date hereof and Enhanced Oil Resources undertakes no obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information, future events or otherwise, unless so required by
applicable laws or regulatory policies
TSX-V:EOR
www.enhancedoilres.com
3
Enhanced Oil Resources Inc. Stock Profile
• Market capitalization: $55MM*
• 149MM shares outstanding, 190MM shares fully diluted
• Trades on TSX-Venture Exchange under symbol EOR
• Average daily trading volume (3 Mos.): 150,000
* As of 05/03/10
TSX-V:EOR
www.enhancedoilres.com
4
Company Vision
To become a leading energy producer in the Permian Basin
through continued development of our resources of Oil,
Helium and CO2.
TSX-V:EOR
www.enhancedoilres.com
5
Corporate Profile
• Oil production growth via infill drilling, fracture stimulation, water flooding & CO2-enhanced oil recovery
– Average Q1 2010 production of 520 bopd
– CO2 Pilot flood at Company owned Milnesand San Andres Unit completed
– Approximately 28,000+ total gross acres with 250+ potential 20 acre locations
– Approximately 50 near term fracture stimulations of existing San Andres wells
– Potential reserves at 3 Company owned oil fields through WAG CO2 flooding is estimated at 50 to 60 mm barrels recoverable*
• Owner/operator of St. Johns Helium/CO2 field in AZ and NM, the largest undeveloped field of Helium and CO2 in North America
– In-place He/CO2 resource of 15 Tcf**. Proved + Probable reserves of 2.3 tcf
– Potential recoverable helium resource of 30 Bcf**
– Enough 2P reserves for 200mmcfpd pipeline for 30 years
• Cash on hand approximately $1.0MM. Debt Free
**Source: W.M. Cobb & Associates (2005,2008)
*Source: Advanced Resources Int. (2007,2008)
Operational Focus: Permian Basin
McElmo
Dome
Sheep
Mountain
Bravo
Dome
St. Johns
Jackson
DomePermian
Basin
Sources: DOE [2006] and industry sources
EOR Inc. Oilfields
EOR Inc. proposed pipeline
Denver
City
EOR St Johns Helium/CO2 Field
• 300 miles to EOR operated oil fields
• Construction to begin late 2014
• Completion expected in 2015
• Initial Target Rate: 200 MMcfpd +/-
• Potential 3rd party sales
• Helium Sales Agreement with Air Liquide
6 Tcf potential
200 MMcfpd (Phase 2)
EOR Permian Basin Oilfields• Current owner and Operator of 3 oilfields
• Currently producing 520 bopd Q1 2010
• CO2 pilot project at Milnesand resulted in 4mm
barrels (Proved + Probable) in Phase 1 project
• Potential reserves at Milnesand 14 mm barrels
• Potential reserves at Chaveroo 34 mm barrels
• Potential reserves at Crossroads 13 mm barrels
• CO2 Agreement with Kinder Morgan in place
• Delivery no later than 09/2012
6
TSX-V:EOR
www.enhancedoilres.com
7
2009 Financial & Operational Results
• Gross Revenues of $5.7 million, 33% increase from 2008
• Production of 264 BOPD, Entered 2010 at 520 BOPD (Q1/10 average)
• 66% operating margin per BOE
• Proved Developed reserves of 1 million BOE
• PV-10 of $30 million
• Proved + Probable reserves of 4.5 million BOE
• PV-10 of $61 million
• St Johns Arizona He/CO2 resource of 12 Tcf CO2 in place (50% -70% rec)
• St Johns Helium resource potential (phase 1) 8 Bcf
• St Johns Arizona Unit Agreement signed October 2009 (5 Years)
TSX-V:EOR
www.enhancedoilres.com
8
Reserve Growth through Technology Improvements
Current asset base of 3 oilfields has the potential to increase oil reserves from ~ 1mm barrels
(proved developed) oil recoverable to in excess of 50 mm barrels oil recoverable through
infill drilling and secondary/tertiary (CO2-EOR) recovery. Current production of 520 bopd
can be increased to over 8,000 bopd. Re-development of these assets to be implemented in
two phases.
Phase 1
Implement infill drilling and fracture stimulation of the San Andres reservoir at Milnesand
and Chaveroo fields followed by CO2 flooding via existing 5 Year CO2 contract.
Phase 2
Implementation of full field CO2 flooding at these and other fields from the Company’s St
Johns Helium and CO2 field in Arizona and New Mexico or through alternate gas contract.
TSX-V:EOR
www.enhancedoilres.com
9
Company Strategy
Build reserves and cash flow through Exploitation of existing assets,
Acquisition of new assets and Implementation of CO2 - Enhanced Oil Recovery.
Implement
• St Johns Helium/CO2 field
• 100 mmcfpd raw feedstock
liquid He plant (0.72% He)
• 200 mmcfpd Permian Basin
CO2 pipeline
• EOR - CO2 flooding
Acquire
• Maintain Oil Focus
• Oilfields with a strategic fit
to existing assets
• Develop a 2nd focal area
• Upside through reactivations
and facility improvements
• Miscible CO2 flood potential
Exploit
• 28,000 Net acres in
Permian Basin
• Recompletions
• Reactivations
• Frac existing wells
• Down spacing to 20 ac
• Up hole (new) zones
TSX-V:EOR
www.enhancedoilres.com
10
BOPD Production Growth
0
200
400
600
800
2006 2007 2008 2009 2010
BO
PD
Increase in Proved Reserves
0
1,000,000
2,000,000
3,000,000
2006 2007 2008 2009
Barrels
Oil
Increase in Proved Developed
Reserves
0
500,000
1,000,000
1,500,000
2006 2007 2008 2009
Recent Growth –Track RecordBUILD RESERVES and cash flow through Exploitation of existing assets,
Acquisition of new assets and Implementation of EOR-CO2 recovery.
Growth in 2P Reserves
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
2006 2007 2008 2009
2010 Goal* *
*2010 to date*
TSX-V:EOR
www.enhancedoilres.com
11
Reduction in Lease Operating
Costs
0
50
100
150
2008
Q1
2008
Q3
2009
Q1
2009
Q3
2010
Q1
$/b
oe
Cash Flow From Operations
-1500000
-1000000
-500000
0
500000
1000000
2009 Q1 2009 Q2 2009 Q3 2009 Q4 2010 Q1
Recent Growth –Track RecordBuild reserves and CASH FLOW through Exploitation of existing assets,
Acquisition of new assets and Implementation of EOR-CO2 recovery.
TSX-V:EOR
www.enhancedoilres.com
12
San Andres: 20 Acre Infill Program Economics
EOR Inc. has the potential for approximately 250 20 acre infill wells
• Capex per well - $500,000
• Initial Production – 30 to 40 BOPD
• Cum Oil per well - 38,000 bo
• NPV(10%) - $670,000 per well
• IRR - 63%
• 5 Year inventory of drilling locations at 20 acre spacing
• Peak production potential of 6,500 BOPD prior to CO2 injection
Milnesand: 20 Acre Infill Development Plan
Number of Wells Drilled Per Quarter
0
2
4
6
8
10
12
14
Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
8 Quarters of Infill Drilling Production
0
500
1000
1500
2000
2500
3000
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
BO
PD
15
Quarterly Cash Flow Before Drilling
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
$ P
er
Qu
art
er
(x1,0
00)
Quarterly Cash Flow Available After Drilling
-$1,000
-$500
$0
$500
$1,000
$1,500
$2,000
$2,500
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
$ P
er
Qu
art
er
(x 1
,000)
TSX-V:EOR
www.enhancedoilres.com
16
Milnesand San Andres Pilot CO2 Flood Cawley Gillespie Reserves Report Nov. 2009
• CO2 injection initiated September, 2008. Ceased injection August, 2009
• 5 spot pattern. 1 injector; 4 producers
• Peak output per pattern is expected to be 65-90 bopd (2 years)
• Over 100 patterns in Milnesand available under full flood development
• ARI in report Oct 07 estimated 17mm barrels recoverable under CO2
• ARI in report Feb 09 “Results to date match model very well”
• Cawley Gillespie Engineers - 2.2 mm barrels proved; 5 mm barrels probable
based on results of pilot to date for Phase 1 3,000 acre flood
• Phase 1 Peak production 3,500 BOPD in 4 years
• Flood response mirrors Denver City early time results; 14 mm barrels 3P for
6,000 acre field area
• Milnesand is adjacent to Chaveroo San Andres field (EOR 95% owned)
• ARI Chaveroo report Jan 07 estimated 34mm barrels recoverable under CO2
TSX-V:EOR
www.enhancedoilres.com
17
Enhanced Oil Resources Plan for 2010
• Exit 2010 with a rate of 1,000 bopd
• 5 well 20 acre infill drilling at Milnesand
• 5 fracture stimulations at Milnesand
• 5 well drilling commitment at St Johns He/CO2 field
• Start ROW permitting of 25 mile 6 inch CO2 pipeline to Company owned oilfields
• Start permitting for 100 mmcfpd raw feed gas liquid He plant at St Johns
TSX-V:EOR
www.enhancedoilres.com
18
Enhanced Oil Resources Offers
• Ground floor investment opportunity in large scale infill development and tertiary oil recovery projects with proven technology
• Multi Year inventory of 250 20 acre infill drilling opportunities
• Oil production upside through CO2-EOR from captured fields
• Tremendous leverage into additional CO2 –EOR opportunities
• Ground floor investment opportunity in largest undeveloped helium and CO2 field in North America
• Minimal Exploration Risk
TSX-V:EOR
www.enhancedoilres.com
19
Management
• Barry Lasker – President, CEO & Director
– 28 years oil & gas experience: geology/geophysics
– Former CEO Kestrel Energy, GHP Exploration, former asset manager BHP Petroleum, Esso Australia
• Kyle Willis – CFO
– 30+ years financial oil & gas experience
– Former CFO Harken USA, former CFO TransAtlantic Petroleum, DrillTube Int’l, Buttes Resources, Inc.
• Cynthia Newman – CAO
– 20+ years financial experience
– Former Controller Gulfsands Petroleum Plc., former Manager Financial Accounting, Dresser Inc.
• Jamie Hogue – Vice President Government Affairs
– Former Deputy Land Commissioner Arizona State Land Dept.
• Don Currie – Director Investor Relations
– 14 years with the Company
TSX-V:EOR
www.enhancedoilres.com
20
Directors
• Rod Eson – Chairman
– Co-Founder Venoco
– Founder & CEO Foothill Energy
• Tom Milne
– International finance
• Ed Parker
– 35+ years oil & gas experience
– El Paso, Burlington Northern, Burlington Resources
• John Dorrier
– Former CEO Gulfsands Petroleum Plc.
– Amoco, BHP Petroleum, Seven Seas Petroleum
• Barry Lasker – President and CEO
Corporate Information
Corporate Headquarters
Enhanced Oil Resources Inc.
One Riverway, Suite 610
Houston, TX 77056
Ph: 832.485.8500
Fx: 832.485.8506
www.enhancedoilres.com
Contact Us
Barry Lasker – President and CEO
Kyle Willis – CFO
Cynthia Newman – CAO
Don Currie – Director of IR
21