COPIC April 2009
Investor Presentation
IOG – TSX.V
Rob Solinger, VP Finance & CFO
Ironhorse’s Advantages
balanced
growth mix
clean and simple
structure
low cost
producer
2
Corporate Overview
Listing
Shares outstanding
Management ownership
TSX-Venture: IOG
22 million basic
24 million fully diluted
25% basic
30% fully diluted
Market capitalization
$22 million
Net debt - March 31, 2009
$11 million
Current production
Enterprise value per flowing boe
1,350 boe/d
< $25,000 per boe/d
3
Management and
Senior Technical Team
Name
Title
Relevant Experience
Larry Parks
President & CEO
30 years
Rob Solinger
VP Finance & CFO
25 years
Bill Manley
VP Engineering
& Operations
30 years
Al Williams
VP Exploration
30 years
Cam Weston
VP Land
35 years
Jim Wilson
VP & Corporate Secretary
30 years
Jack Green
Manager Production
35 years
Wayne Beatty
Manager, Reserves & Special
Projects
30 years
Glenn Parrott
Senior Geologist
25 years
Ian Baker
Senior Geophysicist
35 years
4
Ironhorse’s Strategy
• Create shareholder value through combination of low-risk
development drilling and high-impact exploration.
• Growth to date fuelled by shallow gas development drilling
in Shackleton, Saskatchewan and prolific oil discovery at
Pembina, Alberta.
• Technical team developing high-impact drilling prospects in
central Alberta, southern Saskatchewan and NE British
Columbia
• Evaluating corporate and asset acquisitions which would
increase asset base and provide new exploration and focus
areas
5
Reserves and Asset Value Growth
Per GLJ Petroleum Consultants
Gross Reserves
(mboe)
Probable
4,230
Net Present Value before tax @ 10%
($ million)
2,058
48.7
2,513
Proved
608
32.1
1,257
79
10
69
316
2005
2006
1,905
2,172
941
1.1
2007
2008
• Added 2,109 mboe of reserves (1,700
mboe increase net of production) in
2008
• Management estimates Pembina oil
discovery may increase reserves 25%
2005
11.9
2006
2007
2008
• Total proved NPV @10% at Dec 31,
2008 - $34.7 million
• Management estimates Pembina oil
discovery may increase NPV @10%
by $22 million
6
2008 Highlights
• 100% drilling success
• 31 (15 net) new gas wells on production in Shackleton area
• 61% increase in average production to 1,079 boe/d (93%
natural gas weighted)
• Reserves additions of 2,109 mboe from infill drilling and
upward technical revisions, net of production
• 68% increase in total proved plus probable reserves,
net of production, for 2008
• Finding and development costs, including changes in future
capital, of $11.75 per boe proved plus probable
7
Q1 2009 Drilling Highlights
• CAPEX Q1/09 $6 million
• Drilled 32 (16 net) natural gas wells in Shackleton,
which converted 0.8 million boes from Proved
Undeveloped to Proved Producing reserves status as
at March 31st, 2009.
• Drilled two (0.4 net) Nisku oil discoveries in the
Pembina, Alberta area, which management estimates
will add up to 1.0 million boes to our reserves as at
March 31, 2009
• F&D including future capital, Q1 2009 below $10 per
boe
8
Sustained Production Growth
Gross wells on production - Shackleton
IOG production - boe/d
200
100
68
8
37
2006
2007
1,500
- 1,700
1,079
1,150
-1,250
2008
2009 F 2009 exit
670
202
2008
2009
Infill
• Q1/09 drilled and placed on
production 32 (16 net) gas wells
• Evaluating 100 potential infill
drilling locations
2006
2007
•
Shackleton winter drilling has
increased production to over 1,300
boe/d
•
Pembina will increase production by
600 to 800 boe/d in Q4/09
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Cash Flow
Cash Flow
($ Millions)
Cash Flow
($ per Share)
0.39
8.0
0.29
6.4
0.18
1.1
3.5
0.06
2006
2007
2008
2009 F
• Low cost structure provides superior
field netbacks – 2008 $25.74
• Operating costs for 2009 < $3.00
per boe
2006
2007
2008
2009 F
• Assumes average production of
1,150 boe/d, gas price of $5 per mcf
and oil price of $60Cdn per bbl
• P/CF ratio < 3.5 times
10
Solid Asset Base
with Significant Upside
• Increasing oil and gas reserves have continually improved
the value of our Company
• NAV per share at December 31, 2008 discounted at 10%
before tax using GLJ reserve report is $2.05
• Pembina could add up to $1.00 to NAV per share
• Steady cash flow and low cost operations enable Ironhorse
to continue exploration and development programs
• Under-leveraged balance sheet creates opportunity for
asset or corporate acquisitions for Ironhorse
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Three Focus Areas
Shackleton,
Saskatchewan
Resource gas
play
West Pembina,
Alberta
High-impact
prolific oil
Northeast,
British Columbia
Multi zone gas
potential
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Shackleton, Saskatchewan
25 Sections in the heart of the Milk River gas play
• We have a 50%
working interest in
25 sections
Company Leased Lands
Wells Drilled
Completed Pipeline
• 100 (50 net)
producing gas
wells producing 16
(8 net) mmcf per
day
T22
T21 R20
Gas Plant
Capacity: 20
Mmcf/d
R19 W3
• Own and operate
all infrastructure
keeps operating
costs below $0.45
per mcf
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Shackleton, Saskatchewan
Evaluating 100 potential infill locations
Ironhorse Leased Land
Husky Land
Enerplus Land
•
Currently have one gas
well per quarter section
•
Offsetting lands have
been down spaced to
two or more wells per
quarter section
•
Can drill infill wells to
maximize utilization of
existing facilities
14
Pembina, Alberta
Prolific Nisku oil wells
Ironhorse Nisku oil discoveries at
9-5 and 14-5-50-6W5
analogous to 13-2-50-6 W6
Company Leased
Lands
•
18.75% working interest
•
Cost to tie-in and implement
water flood $12 ($2.3 net)
mm
•
Initial restricted flow rates
from two wells 800 - 1,000
(net 170) boe/d
•
Unrestricted flow rates 3,000
– 5,000 (750 net) boe/d
•
Oil in place estimated by
management at 11 million
bbls, recoverable oil with
water flood 5 – 6 (1 net)
million bbls
•
Unrisked NPV @ 10%
assuming WTI $50/bbl is
$115 ($22 net) mm
6” gas line
6” oil line
4” oil line
West Energy Nisku Oil Well
13-2-50-6 W6
20 m. pay
>2,800 boe/d (Jan/09)
> 1 million bbls of oil to date
Inner Bank
Margin
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Northeast, British Columbia
multizone potential
•
•
Structural Trend
Bluesky, Gething, Baldonnel, Charlie
Lake, Halfway & Montney
Baldonnel and Halfway
Trend
•
•
•
Baldonnel and
Halfway
Charlie Lake Trend
•
Company Leased
Lands
50% working interest
Identified drilling locations with
multizone potential on a
regional structure including
potential resource play
Targeting initial production rates
of 1.5 mmcf/day and reserves of
1.5 to 2.0 bcf/well for multizone
wells
Expect to drill first well late 2009
Gross cost to drill and complete
estimated at $1.5 MM
Upside potential for resource
plays could add significant
additional reserves to Ironhorse
16
Low Cost Structure
Creates Superior Recycle Ratio
Field Netback for 2008
Oil equivalent
($ per boe)
Natural gas
($ per mcf)
Sales price
$45.45
$7.58
Royalties
17.42
2.90
2.29
0.38
Field Netback
$25.74
$4.30
2P - F&D cost
$11.75
$1.96
Operating costs
Recycle Ratio
2.2 times
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Taking Advantage of the Down Cycle
• Sufficient financial resources in 2009 to undertake a $10
million capital program
• Shackleton and Pembina drilling program in Q1 2009 has
been completed under budget
• $14.5 million existing credit facility
– Will be positively impacted by recent drilling successes
– $11 million net debt at March 31, 2009
leaving $3.5 million for flexible growth options
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Full Cycle Exploration & Development
• Technical and management team have the experience and
track record to increase shareholder value
• Enhance shareholder value through exploration,
acquisitions and timely dispositions
• Significant seismic data base to exploit
• Our technical team has experience and success in W5
central Alberta, Saskatchewan and NE British Columbia
• We are actively generating prospects and evaluating
acquisitions
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Summary
• Ironhorse is solid value with
significant upside
• Continued production and reserve
growth with ongoing development
of Shackleton and Pembina
• High impact prospects
• Management and technical team
with a proven track record
• Financial strength to drill and
acquire
balanced
growth mix
clean and simple
structure
low cost
producer
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Further Information
Rob Solinger, VP Finance & CFO
Bill Manley, VP Engineering & Operations
(403) 355-3620
ir@ihorse.ca
www.ihorse.ca
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Forward-Looking Statements
Certain information regarding Ironhorse Oil & Gas Inc. (“Ironhorse”) included in this
presentation including management’s assessment of production rates, timing of capital
expenditures and on-stream dates, and anticipated revenues and costs relating to the
operations of Ironhorse constitutes forward-looking information. This information is
subject to risks, uncertainties and assumptions that may be difficult to predict. Actual
results may differ and the difference may be material.
Readers are cautioned that any such forward-looking information are not guarantees of
future performance and that the factors mentioned and other factors not mentioned may
materially affect the performance of Ironhorse’s future operations. Furthermore,
information presented herein is dated at the time prepared and Ironhorse does not
undertake any obligation to updated publicly or to revise any of the forward-looking
information, whether as a result of new information, future events or otherwise, except
as required by applicable legislation.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. In
accordance with NI 51-101, a boe conversion ratio for natural gas of 6 mcf: 1 boe has
been used which is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalence at the wellhead.
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