TriAxon Oil Corporation

TriAxon Oil Corp.
May 2013
2013 AGM
CONFIDENTIAL
© 2013 TriAxon Oil Corp. All rights reserved.
1
Forward Looking Statements
Forward Looking Statements:
Certain of the information provided in this presentation may constitute "forward‐looking statements“ or “forward looking information” within the meaning of applicable securities legislation, which are collectively referred to herein as “forward looking statements”. The reader is cautioned that assumptions used in the preparation of such information although considered to
cautioned that assumptions used in the preparation of such information, although considered to be reasonable at the time of preparation of such information, may prove to be incorrect. Forward‐
looking statements in this presentation include, but are not limited to, statements with respect to: the capital expenditure plan, potential reserves and future production with respect to current assets of the Corporation and other future expenditures and developments affecting the business, prospects, financial condition and other aspects of the Corporation to which this presentation pertains. The actual results of the specific items described in this presentation, and the Corporation's operations generally, may differ materially from what is projected in such forward looking statements. Although such statements are based upon the best judgments of TriAxon management as of the date of this presentation, significant deviations in magnitude, timing and g
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, g
g
,
g
other factors may result from business risks and uncertainties including, without limitation, the accuracy of reserves estimates, general market and economic conditions, technical factors, commodity prices, environmental and weather risks, industry competition, availability of qualified personnel and management, the Corporation's dependence on third parties and other factors, many of which are beyond the control of the Corporation Consequently no representation can be
many of which are beyond the control of the Corporation. Consequently, no representation can be, or is being, made with respect to accuracy of the projections or the ability of the Corporation to achieve the projected results. The reader is cautioned not to place undue reliance on the forward‐
looking statements contained in this presentation. © 2013 TriAxon Oil Corp. All rights reserved.
2
Executive Summary
Established in May of 2010 raised $78M with a focused strategy
Established in May of 2010, raised $78M, with a focused strategy:
• Goal to grow light oil production to 1,000 – 3,000 bbl/day, with large remaining well inventory that can achieve a recycle ratio > 2
• Diversify over three areas adopting Diversify over three areas adopting “Shell”
Shell horizontal well risk model
horizontal well risk model
• Minimize rate of production decline per well by targeting deeper (>2,000 mTVD) large OOIP light oil reservoirs
– One area in an existing low decline conventional light oil pool (Viking)
– Two areas more exploratory (Viking and Bakken)
T
l t
(Viki
d B kk )
Successes and Challenges:
• Assembled land position in an expensive time (2010), tighter oil plays are complex/tricky, expensive and thus require time/capital to de‐risk
• Harmattan Viking : inv $47M, legacy light oil pool, increased WI from 31% to 64.19%, reduced royalty burden from 12.5% to 8.4%, 4 hz wells required to resolve learning curve, large well inventory established with recycle ratio > 2
y
y
• Crossfield Viking: inv $31M, exploration play, lower Viking D proved liquid rich gas, upper Viking E oil charged, 5 hz wells drilled, de‐risked by farming out, still unfolding but believe close to unlocking (fracturing methodology critical)
• O
Oungre Bakken: inv $2M, exploration play, offsetting Operators (Husky, CPG and CanEra) have been kk
i $2
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l
ff
i O
(H k C G d C
)h
b
highly successful with some of the best Bakken wells in Canada, internal mapping very encouraging (it is time to drill)
© 2013 TriAxon Oil Corp. All rights reserved.
3
Corporate Profile and Plan
18 M th St t i Pl
18 Month Strategic Plan:
Common Share Info:
h
f
Shares (millions)
• Engineering: resolve optimal multistage fraccing methodology for each area
• Financial: demonstrate assets can grow cash flow organically at a compound annual growth rate > 10%
• Business: maximize WI, minimize royalty burdens and minimize Op costs (> $40 netback target)
• Well Inventory: Well Inventory: De‐risk existing un‐booked light De risk existing un booked light
Options / Warrants (millions)
3.1 / 8.2
Mgt / Director Ownership (%)
19
Production / Reserves / Land:
Q1/13 Avg Prod (boe/d)
Oil / Liquids Weighting (%)
/ q
g
g( )
Reserves 1P / 2P (mmboe)
Total Land (net acres)
•
Tax Pools ($mm)
Working Capital ($mm), Mar 31/13
2. Crossfield Viking (> 44 hz wells)
Capital Expenditure Plan (2013):
3. SE Sask Bakken (40 hz wells)
Total Capital ($mm)
Production: ggrow from 400 to >1000 Boe/d
/
1.74 / 2.31
26,247
$ 103.7
$ 11.0
$ (0.8)
$7.8
$0.2
Wells Tie Ins Facilities ($mm)
Wells, Tie‐Ins, Facilities ($mm)
$7 6
$7.6
Gross Wells (Hz)
4
84
Property Acq and Land ($mm)
other
© 2013 TriAxon Oil Corp. All rights reserved.
~372
Financial:
oil drilling inventory (> 100), diversified over three Banking Facility, CIBC ($mm)
areas (gross)
1. Harmattan Viking (> 22 hz wells)
44.4
$0
4
TriAxon Assets – Light Oil Plays
TriAxon Total
TriAxon Total
~ 372 boe/day (Q1 2013 Avg), 84% oil > 350 mmbbl
53.75 sec (net)
> 100 hz’s (gross)
(g
)
Production:
OOIP:
Total Land:
Drilling Locations:
g
Edm onton
Calgary
Regina
West Central Alberta Viking
West Central Alberta, Viking
Production:
OOIP:
Total Land:
Drilling Locations:
Drilling Locations:
~ 372 boe/day
> 300 mmbbl
48.75 sec (net)
> 66 hz’ss (gross)
> 66 hz
(gross)
© 2013 TriAxon Oil Corp. All rights reserved.
SE Saskatchewan, Bakken
Production
OOIP:
Total Land:
Drilling Locations:
5
0 boe/day
> 50 mmbbl
5 sec (net)
~ 40 hz’s (gross)
Alberta Viking: Harmattan
TriAxon’ss Position:
TriAxon
Position:
• Production (net) , 335 boe/day, 90% oil
• TriAxon operates, avg 64.19% WI in the g
( g y
Harmattan East Viking Unit (legacy light oil pool)
• ~2,200mTVD depth, primarily Crown land; 31 (19.5 net) sections
• Large OOIP (~110 mmbbl, 37
OO (
0
bbl 3 o API) )
partially waterflooded pool, RF < 12%
• 3 x MSHF hz wells producing
All‐in
All
in well cost target $5.0mm
well cost target $5 0mm
Learning curve challenges resolved
Upside: id
• > 22 (gross) potential infill hz wells; 5 PUD’s booked
• 200‐300 mmboe reserves per hz well IP30 > 150 bopd
• Type curve economics: Recycle Ratio > 2
© 2013 TriAxon Oil Corp. All rights reserved.
6
SE Saskatchewan Bakken: Oungre
TriAxon’s Position:
• Current (net) production 0 bopd
• 50% WI, 10 gross (5 net) Crown sections
ti
• ~2,300m TVD depth qualifies for 100,000 bbl hz well Crown Royalty holiday
• All‐in well cost $3.0 million
Upside: • 40 wells (20 net) at 4 wells/sec
0 ll (20
)
ll /
 Reserves 100‐200 mmbbl/well
 IP30 of 120‐300 bopd/well
• Offset wells drilled by other area Operators (initial production results exceed Viewfield Bakken type curves)
• Type curve economics: Recycle Ratio > 2.5
Type curve economics: Recycle Ratio > 2 5
• Additional deeper prospective target: Torquay
© 2013 TriAxon Oil Corp. All rights reserved.
7
Alberta Viking: Crossfield
TriAxon’ss Position:
TriAxon
Position:
• TriAxon operates, avg 72% WI, 28.25 (net) sections
,
p p
y
• ~2,200mTVD depth primarily Crown land
• 5 hz wells drilled, 2 on production.
 All‐in well hz cost ~ $4.5mm
• Current (net) production ~37 boe/day
• Farmed out to another Operator, two Viking E hz commitment wells
• First Viking E hz proved uneconomic (unsuitable multi‐stage fraccing technique chosen):
lti t
f
i t h i
h
)

2nd Viking E hz well planned with different frac methodology
Upside: • Extensive hydrocarbon charged fairway
• Upper Viking E interval prospective for light oil
• Liquid rich gas play (NGL at > 100 bbl/MMscf) in the lower Viking D interval
© 2013 TriAxon Oil Corp. All rights reserved.
8
Alberta Viking: Crossfield
Viking E Mapping:
• Viking E contains the oil
© 2013 TriAxon Oil Corp. All rights reserved.
E
D
9
TriAxon Team
TriAxon Management
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•
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•
Jeff Saponja
Dale Cugnet
Colin Flanagan
Andy Magee
Rob Hari
Ken Buckley
Peter Guyan
Ron Welsh
Board of Directors
President & CEO
Chief Financial Officer
Chief Operating Officer
VP Exploration
VP Operations
VP Land
VP New Ventures
VP Production
TriAxon Staff
• Jennifer Scharnau Controller
• Carol Shannon
Production Technologist
© 2013 TriAxon Oil Corp. All rights reserved.
10
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Jamie Biluk
Ian Bruce
D N
Don
Nelson
l
Jeff Saponja