Mon, 1 Dec 2008|
Okay up next -- in terra energy and independent exploration development production company with a focus on advanced technologies. Based in Calgary owned -- -- -- present. Thank you. Thanks for coming to listen to the story -- tarot reader relatively. New company just over eighteen months old and also -- relatively small when you look at us and compare us to the other companies. They're producing here today. When we presented here last year we were roughly around -- -- -- browser day of production and was still around 300 barrels production. What's changed is you know organic growth strategy now is focused on nonconventional. Resources place. Typically using horizontal drilling and multi -- tracks in type convinced terrorism laws. We just drove first. Horizontal well. You know front -- play and selfless captured we -- primary -- and -- and play this. Just -- the first -- -- on stream as I speak them and we should have some pretty good results here was in the next -- -- weeks. So core focus is on the -- invasion. We have. Not reserves in place as many as 250 million barrels of VoIP in place on properties that we currently known in the -- -- -- There's additional land available and we have a land acquisition strategy under way. I was with success of course with these -- plays -- -- is either highly reputable. And we have over seventy locations horizontal well locations. -- -- -- -- -- -- Movement of information on. Reserves and and we relatively small city one point six million dollars -- -- And -- conventional program is pretty much we're not doing the conventional oil and gas exploration at this time. I've included some financial slides in this presentation which you can look at -- -- time but you'll just note that total enterprise values. Is now less than fifteen million dollars over -- very small. Bank -- to five point three million dollars and we have credit facility of six million -- Again -- just flip through these financial slides of interest on this particular one and -- asset value is. Is if you take care to. 67 cents and we currently traded to around twenty cents. Molecular -- else. Very undervalued and -- in this market. -- core. Areas. We have four core areas basically two -- them into -- and we have a Bach and play -- we're accumulating land in the -- -- scotsman and the listeners who. And now -- project is in frontier which is -- -- -- Plavix. Bill president and CEO who talk a little more about. And then we have. To it to areas and Alberta where we're developing and intentional -- developing type gas. Results play. And we have a little bit production and in in southeast. So that alternative to -- to tell you -- up projects. So -- mentioned we are very much focused on non non conventional resource play assets at this point in time. I will deal very briefly with her legacy assets we continue to try and extract as much value -- those opportunities avail. But we're typically through farm -- as opposed to. It's just distracting us from our non conventional activity. So Breton as our key production property 150 barrels of -- there million barrels of reserves. There's. Development locations there they are on our -- screen that not necessarily something will be a key focus. Judy creek we have farm vote in place with respect to that outset. Today. We've drilled one well with respect that -- -- and we will continue on. With. An additional well. As yet we haven't results from the first well. This in itself could be -- company maker for us it's just a little higher risk so we've chosen to proceed. With other. People's activity. -- -- -- is one of -- -- properties. Again relatively small production but to a great opportunity for infill drilling with horizontal wells. So moving on really non conventional side of our opportunity portfolio. I don't think I need to get into the technical nature too terribly much with respect to what we're attempting to -- horizontal well technology with multi stage fracturing. Probably not not quite old news but in Canada at least it is I think in its infancy in terms of its application. We hear about the major plays in the Martin -- northeast BC. And clearly mostly basin on the block and that there is. Numerous other areas where this -- technology is just starting to be employed. Again. Only to refer to this slide I don't need to describe what a resource play is I don't think that this audience either. Again the one key difference perhaps for us that sets us a -- apart is we believe this technology is optical not just in classic non conventional. -- super tiny to shield -- but -- in. Areas of resource is well proven within Alberta and Saskatchewan. But has been some commercial with simple previous technologies vertical wells specifically. So we are very much positioning ourselves and large resource bases clearly -- please type opportunities. We are at a relatively shallow depth again these can be conventional reservoirs -- our cost base is somewhat. Less than maybe you're seeing in some of the bigger. -- -- -- -- -- -- and because we're going back and there areas that haven't previously exploited our access to infrastructure is relatively cheap to. And the key of the strategy of course is the choir acquire massive pieces of land. We are in -- Wilson basis basin with two active resource plays. The -- Sean Dolan and the -- The -- and is well founded as soon as 50000 barrels audiences got chewing coming out of that horizon. As we speak galore Sean and one is more of an emerging play it's the -- 45 years ago perhaps where there's now up to quality thousand barrels of data coming out of that play. But only since probably 2006. So we have positioned ourselves fairly nicely with significant -- base in -- -- shall speak to him. And of course the -- -- in fiscal version is very attractive for horizontal drilling. The -- -- and trend. Extends for. Miles it is -- regionally. Ideologically defined area. Again we -- that technology. There's been a 116. Wells drilled in lower -- in 2008 alone again evidence of its emerging potential. The two largest. Operators in the area report. Opportunity up to -- 800 wells in the area within the last that we got there's. You know we we think we've got fifty to seventy locations pretty well founded. This. Within our lands again his -- mentions some 250. Sorry 250 million barrels of oil in place. Relatively low recovery factor something in the order 5% of -- last about twelve million barrels full -- occurred -- Reserve bases. The lord the frontier area we started with relatively small area of land the two and three quarters sections. We expanded just this. This fall with a major opposition of the vote to cross -- glances with it -- -- 50% partnership. -- first horizontal well has been drilled through that partnership and as of tomorrow. She should be on pump -- -- give you any any rates but to all things. Encourage. And we continue to see great opportunity continues development are well cost again are not. Not in that -- deep. Cost free agent with 2.2 million dollars per well. And again with relatively little recovery factor given the nature of the fact that there's. 220 million barrels of oil in place -- section -- -- you don't need very significant recovery factor assumption be that you can recover. 175200000. Barrels -- well here. We're looking at a development that is most typically in about five well her perception sort of development strategy. This just very quickly give you a sense of varies sources is long from one -- in the area sort of thing it's seventy -- of frustration feet. Little gross oil -- And it is regionally extensive. This is well founded there's numerous vertical well and patients. There is there is Vera and very little theological -- physical. Risk here. The risk is associated only with to deliver ability of the wells and from what we understand within other. -- success of other operators that risk is proving to be fairly favorable as well. Our economics are very robust. Again partly -- product to the favorable for its fiscal regime but also product. A high chance of success. Our base case economics contemplate a hundred barrels a day of oil we know that there's wells out there -- -- doing three times but as of these case we stick with -- hundred. Barrels a day for the sake of -- planning 175000. Barrels per well his -- 50% rate of return in about five million dollars and analysis. Pretty significant relative to the fact that -- ten million dollar market cap company at this point. And -- it is a year now. -- -- -- piece of course caught playing 150 barrels a day of oil which is you know somewhat less than 300 barrels a day that we know -- -- out there. Of course just becomes more robust. The other point to note is that the economics are relatively insensitive to land costs. People are paying up for the land up there when you're drilling -- wells per section you can afford do you. And we not faced with the geological risk of course the economics -- around fairly nicely so narrow band on the economics. -- -- -- opportunity significant programs to be very profitable. As a bit of a representation I -- of but we think the potential here is the size of the prize if you like we just put together a long range plan. Demonstrating. You know for your development in this opportunity this is within our existing -- this is in the fifty -- Seventy well inventory that we already have and we could see ourselves wrapping up to -- And exceed 400 barrels a day which is four times our current size or growth potentially significant -- with relatively more artists. Development drilling programs at about six to to twelve wells per year. It's highly scalable course so we could accelerate -- decelerate. You know living within our means. It again in the net so we are delivering. Close to fifty million dollars of net shareholder value. Our second. -- -- the base and opportunity is in the Bakken. And I'm sure everybody has pretty good knowledge of the Bakken and just gotten probably -- the hottest area if you like for the -- his it's breeder. Area called -- field it's actually a number of different fields. But generally known as you field area. And this is so simple. Now ice but I so packed and out from these has got through provincial government and it shows the extension of the block and she's got to. We have recently acquired about 3000 acres -- of this of play. And relatively cheap cost them and and see a lot of potential here for continuing. Growth. Again just typical law offices regionally extensive there's no secret of the fact that this stuff covers most good portion of the whole province of southern just got -- And and the geological risk again it's Israel in mind there's -- -- ten to fifteen barrels of oil in place perception. With this. With this deposit and production expectations are in the hundred to 200 virility. Sort of range. -- long term perspective just. Noting the size of the prize within lands that are immediately within the area that we of our focus and -- readily available. We can -- see ourselves tripling our current production level of giving up too close -- thousand barrels a day and again adding about 35 million dollars -- -- -- last resource play. Is actually out play in in Alberta. As I mentioned earlier we see huge opportunity within Albert -- it's to me and each within. The Canadian oil and gas industry were juniors will be well placed. Applying this technology to. Conventional plots like conventional reservoirs where in -- -- commercials with with other forms of completion technology. So we've been building a land base in and around the gas play in central Alberta areas generally known as -- to us. And we have plans that we would follow up after acquiring a significant piece of land -- -- wells drilled. There is significant -- in place again collectively these. Of gas in place. Per well are sort perception. And recoveries to 2.2 -- per well and again. I would know the recovery being somewhat similar to what you see that -- -- and about two v.s for well. Our costs are in order to and half million dollars -- well -- economics. Become. Pretty favorable. I actually envision -- somewhat trivial low cost -- supplier of oil and gas by virtue of that. Lesser -- cost. In our developments. Again resource -- well established this is an area that has been drilled vertically. Not extensively but widely enough but -- that again the resources well proven. There has been evidence of some vertical production in the area as well so again it demonstrates the fact that this is just a sub commercial -- war. With the whole technology vertical wells but the -- is well known. Our economic -- favorable. I compare that to the vertical -- said it was some commercial we don't really achieve any form of economics with the vertical but. In terms of our perspective. Deliverables from -- is -- well. We have agreed to return about 30%. Or greater -- -- again we're delivering what five million dollars -- some. The it was sure you've heard all Canadians line of them current -- fiscal regime -- this is still burdened with. With the murder regimes it's. Expected to unfold and January 1 2009 but still we generate -- economics. Long term perspective adding. Significant production here we could see ourselves ramping up over. That's for years drilling. Six wells per year. Adding you know 4005000. -- easy day. Bettering spending in the order of ten to twenty million dollars a year to facility that drilling and in the end of -- 55 million dollars this year. Again relative to a market -- fairly significant growth. And -- not. Turn it back to -- Thank you bill I didn't mention that term -- joined us about six months ago from Canada and we -- on -- to help us execute on. -- horizontal. Resource -- strategies room. And bills had a lot to do with putting this this plan that -- presented to you today together. This the shuttle's slide just shows. Share prices to talk -- and we traded around twenty cents. And it just shows that the implied value -- on conventional assets which of them. The 101000 -- because we have an interest in frontier almost commonplace. Now Bakken lands and -- -- -- lands. And the market is not giving us invaluable. For those assets into this just shows and of about. Eighty cents a share we would get. Some bad news for those assets and and again we're just -- the first horizontal well and we're looking at that. Coming on stream somewhere around fifty -- -- long term business plan just as an indication of where we see this company going -- long term players were not. We're not here just to build a little company and -- who wanna build -- significant oil and gas company over the next five years. And immediate target is -- -- 5000 -- today. Business plan just leading up to the first half of 2008. We have a capital budget for 2009 -- 1010 million dollars which this is quite small. And that ten million dollars will be spent on -- about six horizontal wells announced on of them play in selfless scotsman. And on drilling first world you know -- play you know there. And and the balance would be spent on on farmlands in the three resorts -- I think the -- normally leave you with today though is that we have more from a conventional oil and gas companies to. And -- -- company we're very we're very very small 300 barrels a day. But I think -- -- we come back you'll see a huge change. There's no recognition in the market. Presently of what we're doing. We see huge opportunity. And now company from an investor standpoint. We are well established in the -- and basin over 101000 acres and -- -- -- of them play. Seventy. Locations to drill we're just under 50% working interest in those locations. 250 million barrels of oil that were exposed to on that project. And so I think. The one thing I'd like to to leave you with ten million dollar capital program in 2009. Enough cash flow is probably gonna be somewhere around three to four million dollars for. 2009 and so we have a short -- -- which we're gonna have to -- so. We're looking at doing some work -- -- balance she's here over the next two to three months so that we can finance the plan that that there was enough money to. So thank you very much for coming to listen to a story and will be in the -- through and he wants to. To -- the -- story with us thank you.