Bearcat #4 Well Multi-Zone Drilling Prospect

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Bearcat #4 Well
Multi-Zone Drilling Prospect
**Anticipated Drilling August 2014**
Forward Looking Statement
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This presentation may contain certain forward-looking statements, including management’s assessment of future plans and
operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties,
certain of which are beyond the Corporation’s control. Such risks and uncertainties include, without limitation, risks associated with oil
and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity
prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to
retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to
access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States
and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and
regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified
personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of
companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory
authorities. The Corporation’s actual results, performance or achievements could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the
Corporations will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent
forward looking statements, whether written or oral, attributable to the Corporation or persons acting on its behalf are expressly
qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this Presentation
are made as at 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 statements, whether as a result of new information, future events or otherwise, except as may
be required by applicable securities laws.
Lease Acquisition & Drilling Location
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
The operator Martin Energies, LLC has acquired an oil and gas lease, from the Ballinger
Independent School Board in Runnels County, Texas

This acreage may be pooled with additional acquired acreage or drilled under Texas Railroad
Commission State-wide rules providing for exceptions to subacreage leases.
Bearcat #4 Well
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 The Bearcat #4 well will be
drilled in Runnels County which
is located in Ballinger Texas.
 This is a low risk, premium
location. Several offset wells
have been significant
producers.
 This is a multi-zone Prospect
with the Gardner Lime at
4200’ being the primary
objective . Secondary
objectives are the Jennings at
3900’ and the Palo Pinto Lime
at 3350’
Copyright Nov 2013
Geological Discussion




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The Ballinger Prospect is situated in the West-central portion of Texas and is known to be a
region of multi-zone potential.
The Primary Zone of interest is the Gardner Lime. No fewer than 14 different zones which
have produced hydrocarbons in the area will be drilled through on the way to the Gardner
Lime.
Existing well control indicates that we can realistically anticipate encountering hydrocarbons in
the Jennings Sand and the Palo Pinto Lime which are above the Gardner Lime at the Bearcat
#4 location.
The trapping mechanism in this region is low relief structures. When porosity and structure
coincide, it is possible to trap hydrocarbons. Operators generally have found low relief
structures to be more prolific than high relief structures due to greater areal extent of the
reservoirs. The shallower zones have similar trapping mechanisms.
Geological Discussion Continued
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PRIMARY AND SECONDARY TARGETS:


The GARDNER LIME and the PALO PINTO have been productive in the nearest offsetting wells,
within 800’ of the proposed Bearcat #4 location. These offsetting wells were drilled and
produced during the 1980’s. The JENNINGS SAND has a very strong log show on the nearest
offset well and is almost certainly hydrocarbon bearing.
Several other zones appear to have potential but have not been tested or perforated at any of
the offsetting locations. These zones will be closely monitored during the drilling and logging
process.
Production Zone
Depth
Potential Reserves
Primary and
in bbls
Secondary Targets
The Gardner Lime
4045 ft
30,000
Primary
The Palo Pinto Lime
3350ft
30,000
Secondary
The Jennings Sands
3970ft
30,000
Secondary
The Jennings Lime
3870ft
30,000
To be monitored
The Gardner Sand
4120ft
50,000
To be monitored
IN THE NEWS
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 Bearcat #2 – In March, 1984, the Bearcat #2 well
made the news. Upon completion it flowed back at 156
barrels of oil with an impressive but unknown amount of
casing head gas during the first 24 hours. This well
produced 16318 BO in the first 10 months plus an
undetermined amount of natural gas.
 Smelley #2 – was drilled and completed in the
Gardner lime and flowed 245 barrels of oil during the
first 24 hours of production and only required a small
500 gallon acid treatment. This well produced 13793 BO
in the first 14 months and 29,519 BO in the first 26
months plus natural gas.
 The Four Parcels well – was drilled and completed in
the Gardner Lime and flowed at 180 barrels of oil
during its first 24 hours of production. It produced 13318
BO in the first 17 months.
With the crash in oil prices in the late 1980’s the
previous operator shut down its drilling program and sold
their lease.
Bearcat #2
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Copyright Nov 2013
Smelley #2
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Copyright Nov 2013
Four Parcels Cum Production
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Copyright Nov 2013
Offset Wells Monthly Production
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OFFSET WELLS monthly production
3500
3000
2500
2000
1500
1000
500
0
1
2
3
4
5
6
7
8
FOUR PARCELS #1
9
10
BEARCAT #2
11
12
13
SMELLEY #2
14
15
16
17
18
Offset Wells Cum Production
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OFFSET WELLS cum production
25000
20000
15000
10000
Assuming $100/bbl oil with
$65/bbl netback, if Bearcat
#4 resembles anyone of the
offset wells, Payout will occur
in 6 months to 13 months.
5000
0
1
2
3
4
5
6
7
8
FOUR PARCELS #1
9
10
BEARCAT #2
11
12
13
SMELLEY #2
Copyright January 2012
14
15
16
17
18
Prime Locations




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Two prime locations remain un-drilled and the current operator Martin
Energy, LLC has returned to finish an infill drilling program that was
interrupted by unfavourable market conditions in the late 1980’s
The Bearcat #4 well is the first of these two locations.
The Bearcat #4 well is staked one location west of the Four Parcels well
and is expected to be in the middle of the Gardner lime structure,
therefore containing a thicker pay zone, and could prove to be a
spectacular completion and producer.
The Bearcat #4 well is expected to have a better developed Jennings
Sand, as well as the Palo Pinto and should be well positioned to contain
good porosity. A minimum of three pay zones are expected to produce
from this location.
Payout Summary
BBLS / DAY
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REVENUE / DAY
W.I DAY
DAYS TO PAYOUT
10
$900
$720
928
20
$1800
$1,440
464
30
$2700
$2,160
309
40
$3600
$2,880
232
50
$4500
$3,600
186
60
$5400
$4,320
155
70
$6300
$5,040
133
80
$7200
$5,760
116
90
$8100
$6,480
103
100
$9000
$7,200
93
The above chart is based upon the average oil price of $90.00 per barrel and
100% working interest (80% NRI).
Payout Summary continued
WELL TOTAL
REVENUE
W.I
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INVESTMENT RETURN
15,000
$1,350,000
$1,080,000
216%
20,000
$1,800,000
$1,440,000
287%
25,000
$2,250,000
$1,800,000
359%
30,000
$2,700,000
$2,160,000
431%
35,000
$3,150,000
$2,520,000
503%
40,000
$3,600,000
$2,880,000
575%
The above chart estimates “return on investment” based on total production over
the life of the well. It is possible for a well to have multiple pay zones, which would
further enhance the payout potential. The offsetting wells produced 26,000 to
46,000 BO
Interested Investors
FOR ADDITIONAL INFORMATION PLEASE CONACT:
Jack Bal – President
Email: jack@cardiffenergy.com
Telephone: 604 306 5285
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