Latin American Oil and Gas Investment Opportunity
August 2013
Confidential – For Discussion & General Information Purposes Only
Disclaimers and Cautionary Statements
This presentation requires the management of Avanti to make judgments, estimates and assumptions about the information provided
and contains certain forward-looking statements, all of which are subject to the usual risk factors and uncertainties associated with
the oil & gas exploration and production business. The information contained herein is provided “as is” without any warranties.
While Avanti believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the
actual outcome may be materially different owing to factors beyond Avanti’s control or within Avanti’s control where, for example,
Avanti decides on a change of plan or strategy.
Avanti undertakes no obligation to revise any information provided herein to reflect any changes in Avanti’s expectations or any
change in circumstances, events or Avanti’s plans and strategy.
The recipient of this document acknowledges and agrees that he or she, or any relevant institution, will not trade Avanti shares for a
period of at least three months after receipt of this presentation.
Confidential – For Discussion & General Information Purposes Only
2
Table of Contents: Avanti Overview and Strategy
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
3
I
Avanti: At a Glance
I
Avanti Energy Inc. (“Avanti”)
TSX-V Company formed 2013
CEO – John McIntyre
VP E&P – Timothy Berge
VP Commercial Affairs – Mark Frascogna
Avanti Exploration, LLC
Avanti Exploration SA, LLC
US Company
Colombia Initiatives
Country Manager
Brazil Initiatives
Country Manager
Miguel Ramirez
Ricardo Salomão
Confidential – For Discussion & General Information Purposes Only
Joint Venture
US Company
Specialized in field re-development
Owners – John McIntyre & Bud Knell
US Field
Re-development
(Joint Venture)
200+ Bopd
4
The Avanti Management Team – Over 160 Years of Global Oil & Gas Experience
John McIntyre
President and CEO

Geoscientist with over 27 years of domestic and international experience, including major field development, acquisitions and divestitures,
and successful exploration play and prospect generation with material discoveries


Most recently was Senior Vice President – International at Forest Oil
Former President and General Manager of Maxus Indonesia, where he was responsible for over 100,000 barrels of oil per day of production
and more than 1,200 employees
Previous roles include Joint Venture Manager for Maxus Argentina and Exploration Manager for Maxus Rockies & Mid-Continent

Timothy Berge
Vice President,
Exploration &
Production
Mark Frascogna
Vice President,
Commercial Affairs
Miguel Ramirez
Colombia Country
Manager
Ricardo Salomão
Brazil Country
Manager
I




Over 25 years of exploration and development experience globally with a special focus on Latin America
Former Chief Geophysicist for Forest Oil International


Experienced international business developer and manager with over 27 years of industry experience
Former Italy Country Manager at Forest Oil where he generated and managed an Italian portfolio of oil & gas permits, application, and
development activities, including a 60 bcfg development project and a 90 million Euro take or pay gas contract with ENI
Managed several European development projects for Calpine Natural Gas Co., including a 400 MW site for a US$220 million power plant
and an €80 million bid to acquire an ENI E&P subsidiary, for which he was a co-leader

Served as Geological and Geophysics Manager for Forest Oil Alaska
Previous roles include Lead Geophysicist for Exxon Ventures CIS and exploration evaluation in Lower Magdalena, Colombia





Over 44 years of exploration experience in Latin America, primarily with ExxonMobil
Served as Manager of Central and South America for Exxon Exploration Company where he oversaw Exxon’s regional exploration efforts


Over 37 years of experience in Brazil with Petrobras where he held various senior roles
Former CEO of Associated Gas Transportation Company (TAG), a 6,645 km natural gas pipeline system in Brazil; managed operations that
produced EBITDA of US$435 million in his last year as CEO
Served as CEO of Brazil-Bolivia Pipeline Transportation Company (TBG), the largest pipeline in South America with 3,150 km of pipeline;
oversaw operations that generated EBITDA of US$300 million in his last year as CEO
Served as Petrobras M&A and New Business Manager



Held various additional senior roles with ExxonMobil, including Country Exploration Manager roles for Colombia, Mexico, and Peru
Former Professor of Petroleum Geology at Universidad Nacional de Colombia and Universidad de América in Bogotá
Currently serves as President of the American Association of Petroleum Geologists for Latin America
Most recently served as Dean of Petrobras Corporate University
Confidential – For Discussion & General Information Purposes Only
5
The Avanti Board of Directors
John McIntyre
Director

Geoscientist with over 27 years of domestic and international experience, including major field development, acquisitions and divestitures,
and successful exploration play and prospect generation with material discoveries


Most recently was Senior Vice President – International at Forest Oil
Former President and General Manager of Maxus Indonesia, where he was responsible for over 100,000 barrels of oil per day of production
and more than 1,200 employees
Previous roles include Joint Venture Manager for Maxus Argentina and Exploration Manager for Maxus Rockies & Mid-Continent

Bud Knell
Director
Karl Kotmeier
Director
Brent Lokash
Director
Rob Gamley
Director

A petroleum engineer with more than 33 years of diverse oil and gas experience, including numerous technical, supervisory and managerial
positions in a wide range of areas within an E&P company

Served as Senior Vice President of Forest Oil, which consistently included annual capital budgets of US$100+ million, net daily production
of over 40,000 barrels of oil equivalent and management of hundreds of platforms and 30+ onshore fields




Over 20 years of experience in corporate finance, retail brokerage and corporate administration
Founding director and president of Rockgate Capital Corp., a public company listed on the TSX


Attorney with over 17 years of experience in administrative and commercial law in Canada
Former director of The Neptune Society, Inc., a public company listed on the OTCBB and one of the largest cremation companies in the
U.S.
Served as President and CEO of Clearly Canadian Beverage Corporation





Rommel Gallo
Director*
I
Director and officer of Bama Gold Corp. and Falkirk Resources Corp., public companies listed on the TSX-V
Founder and principal of Contact Financial Corp, a western Canadian investor relations and corporate communications service provider
Mr. Lokash served as President of Strata Minerals Inc., a publicly listed company on the TSX-V, from 2009 to 2011; currently serves as a
director
Over 10 years of investor relations, sales, and marketing experience
Currently a Senior Account Executive at Contact Financial Corp., a western Canadian investor relations and corporate communications
service provider
Mr. Gamley was a senior manager at one of Vancouver’s largest restaurant and entertainment services business from 2001 to 2009

Has been involved in over US$20 billion of financial advisory and capital raising roles across industries as an investment banker and
attorney, including more than US$15 billion in the energy industry

Previously worked at Citigroup’s Global Energy Investment Banking Group and Wells Fargo’s Energy Investment Banking Group, where he
provided financial and strategic advisory services to energy companies around the world with a particular focus on Latin America

Mr. Gallo earned an A.B. from Princeton University, a J.D. from Columbia University School of Law, and an M.B.A. from the University of
Chicago Booth School of Business
* Will be appointed a director of Avanti upon the closing of the Development Capital investment
Confidential – For Discussion & General Information Purposes Only
6
Avanti’s Two-Pronged Acquisition and Growth Strategy
I
Avanti will execute on a buy-and-build strategy where it will achieve growth through acquisitions using internally generated cash flows
Producing Assets
Exploration Assets
 Buy into low-risk assets with PUD drilling
 Acquire conventional acreage with
upside in Colombia and Brazil
unconventional upside in Colombia and
Brazil
 Partner with local operators with existing
 Target basins that are analogs to prolific
sales channels
basins in North America, such as the
 Acquire assets at a discount to market
Eagle Ford and Bakken
multiples
 Execute an initial work program to prove
 Execute a field development and
up assets
enhanced recovery program
 Farm out heavy capital expenditures and
 Grow production 2x-4x within 3 years
retain significant interest
 Realize upside within 2-4 years
The management team is well-positioned to successfully execute its strategy by applying its experience managing large
production projects (100,000+ Bopd), leading large business units in Brazil (US$435 million in annual EBITDA), and
overseeing Latin American exploration activities for a supermajor.
Confidential – For Discussion & General Information Purposes Only
7
Table of Contents: Avanti Overview and Strategy
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
8
II
Executive Summary: Investment Opportunity and Use of Funds
II
Immediate investment opportunity of US$2.5 million
Current Funding
Needs
Investment
Opportunity
 Avanti is seeking US$2.5 million of development capital (“Development Capital”) to finance the costs
associated with the evaluation of acquisition opportunities in Colombia and Brazil and partially fund
capital expenditures in Louisiana, which will provide incremental and immediate cash flows over Year 1
 This investment will be structured as a private placement of Avanti’s shares (“Development Capital
Offering”) at a mutually agreeable price per share
 The acquisition(s) and related capital expenditures, each expected to be in the range of US$60 –
Acquisition
Financing
US$100 million, will be financed by a lead private equity firm through a private placement offering of
Avanti’s equity shares (“Permanent Equity Offering”)
 The targeted offering price of the Permanent Equity Offering will be at a premium to the Development
Capital Offering
Sources and Uses
of Funds
(in USD)
Sources of Funds
Development Capital
Louisiana Assets Cash Flows
(1)
Total
Uses of Funds
$
2,500,000
325,000
$
2,825,000
Deal Evaluation Expenses:
LatAm-based Management & Tech Support
Subtotal
Louisiana Assets CapEx
Corporate G&A
Cash (2)
Total
(1) Based on current estimates; subject to change
(2) Represents cash left on the balance sheet at the end of the 12-month period
Confidential – For Discussion & General Information Purposes Only
9
$
U.S.-based Management & Tech Support
Data Acquisition
3rd Party Reserve Reports
Legal and Financial Fees
Travel Expenses
Miscellaneous
425,000
375,000
100,000
200,000
300,000
150,000
100,000
$
1,650,000
650,000
200,000
$
2,825,000
(1)
325,000
The Opportunity – Colombia and Brazil
II
Colombia – Investment Highlights
 World class onshore source rocks, reservoirs and attractive
unconventional potential
 High net backs
 Under-explored and low development risk
 Attractive fiscal and regulatory regime favorable to
investment
 Favorable
environment
companies like Avanti
for
small
independent
E&P
 Management expertise and experience in areas of interest
Brazil – Investment Highlights
 Current emphasis by majors and Petrobras on offshore
opportunities
provides
opportunities onshore
smaller
players
substantial
 Highly attractive conventional onshore potential in mature
basins with proven production history
 29 sedimentary basins with oil and gas potential (equal in
size to 10 times the area of Texas)
 Established and prolific production history (2.4+ million
barrels of oil equivalent per day projected in 2013)
 Favorable fiscal, regulatory, and operating environment
 Management team with proven Brazil track record
Confidential – For Discussion & General Information Purposes Only
10
Global Competitiveness
II
Colombia and Brazil offer some of the most attractive NPV/Bbl producing jurisdictions in the world
 The economics of oil production in Colombia and Brazil are more favorable than those of well-known plays in North America
Global Ranking
NPV/Bbl/USD
Paraguay
1
$22.5 - 30.0
Colombia Llanos Deep
2
$22.0 - 28.0
Colombia Llanos Plains
3
$21.5 - 27.5
Brazil Onshore
4
$18.0 - 24.0
Colombia Putumayo Foreland
5
$16.5 - 23.0
Colombia Llanos Heavy
6
$16.0 - 22.0
Colombia Putumayo Foothills
7
$15.5 - 21.5
Tunisia
8
$14.0 - 18.0
Morocco
9
$13.0 - 17.0
Madagascar
10
$12.0 - 16.0
India
11
$11.5 - 15.5
Guyana Onshore
12
$11.0 - 15.0
Brazil Shallow Water
13
$11.0 - 14.75
US GOM Shallow Water
13
$11.0 - 14.75
UK North Sea
15
$11.0 - 14.5
Peru Offshore
16
$10.5 - 14.0
Colombia Llanos Foothills
17
$10.0 - 14.0
US GOM Deep Water
18
$10.0 - 14.5
Colombia Putumayo Heavy
24
$8.0 - 12.0
Brazil Deepwater
25
$7.75 - 11.5
US Eagle Ford Oil
26
$7.5 - 11.0
US California
27
$8.0 - 10.5
US Permian
28
$7.5 - 10.5
US Niobrara
29
$7.0 - 10.0
US Bakken
30
$6.9 - 10.0
Producing Jurisdiction
Source: Tudor Pickering, 2011
Confidential – For Discussion & General Information Purposes Only
11
Table of Contents: Avanti Overview and Strategy
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
12
III
Avanti’s Bifurcated Colombia Strategy
III
(1) Low-risk Producing Assets
 Acquire or farm out of acreage held by other companies at
reasonable prices
 Grow production through field development and field
rehabilitation practices
 Target low-risk assets with substantial production upside
 Grow production 2x-3x within 3-4 years
 Avanti has already evaluated and declined several opportunities
and is currently evaluating 3 additional acquisition and joint
venture opportunities
(2) Conventional Acreage with Unconventional Upside
 Avanti has identified several blocks totaling 500,000 acres in
the oil rich La Luna in the Middle Magdalena Valley (VMM) and
Catatumbo basins
 Avanti will seek to acquire certain irregular blocks through direct
negotiations and bid rounds with Colombia’s Agencia Nacional
de Hidrocarburos (ANH), and others through acquisitions from
other companies
 The development strategy:
 High grade through pre-drilling and limited drilling efforts
 Farm out to larger companies for a carried interest during
the capital intensive phase of work programs
Exploration focus
Confidential – For Discussion & General Information Purposes Only
13
Joint venture focus
Avanti’s Colombia Shale Oil Opportunity
III
The La Luna play has the potential to be more prolific than the Eagle Ford, Bakken, and Vaca Muerta
Relatively Low-cost Acreage
($ in USD)
 La Luna is 3x-6x thicker than the Eagle Ford, Bakken and
Purchase
Price / Acre
Contract
Attractive Geology
Seller
Buyer
774
Canacol
ExxonMobil
Valle Mediano Magdalena 3 (VMM 3)
1,140
Canacol
Shell
Santa Isabel
3,004
Canacol
ConocoPhillips
Valle Mediano Magdalena 2 (VMM 2)
$
Vaca Muerta
 Developed with vertical wells at significant cost savings
relative to horizontal wells
 Horizontal drilling provides additional significant upside
 Enables higher recovery rates at lower costs
Source: Market research
La Luna’s Significant Acreage Price Appreciation Potential
Reservoir Well Comparison
($ in USD)
$16,000.0
$14,000.0
123% CAGR in Eagle Ford
acreage values from 2009 to 2012
$14,577.0
Bakken
Eagle Ford
Vaca Muerta
La Luna
7k - 11k
6k - 8k
5k - 7k
4k - 12k
$12,000.0
Depth (ft)
$10,000.0
Thickness (ft)
< 100
75 - 300
150 - 300
1200 - 1800
Porosity (%)
8 - 12
4 - 15
8 - 13
3 - 14
0.5 - 1.3
0.5 - 1.3
0.7 - 1.3
0.6 - 1.2
5 - 10
3-5
3-5
2-8
$8,000.0
Thermal maturity (Vro)
$6,000.0
$4,000.0
$2,000.0
$4,802.0
TOC (Wt. %)
$3,206.0
$1,310.0
$0.0
2009
2010
Bakken
2011
2012
Eagle Ford
Source: Canaccord Genuity. Represents land acreage transaction value (US$/acre)
Confidential – For Discussion & General Information Purposes Only
Source: Canacol Energy investor presentation. Represents Middle Bakken, Eagle Ford
(oil) and Vaca Muerta (oil)
14
The Majors Are Beginning to Exploit Colombia’s Shale Opportunity
Source: Canacol Energy Ltd. investor presentation
Confidential – For Discussion & General Information Purposes Only
15
III
Table of Contents: Avanti Overview and Strategy
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
16
IV
Avanti’s Bifurcated Brazil Strategy
IV
(1) Develop Low-risk Onshore Producing Fields
 Enter into a joint venture with Petrobras to develop select
mature onshore oilfields with material PUD drilling upside
 Petrobras currently holds hundreds of such potential fields
 Execute field rehabilitation and field development programs
 Grow production 2x-3x within 3-4 years
 Avanti is currently in discussions with Petrobras about highpotential fields
 The Avanti management team has already begun to evaluate
hundreds of fields and is in the process of identifying the best
10-15 fields
 Proposal to Petrobras to be submitted 4Q 2013
(2) Conventional Acreage with Unconventional Upside
Gomo Formation – Recôncavo Basin Highlights
 Acquire existing blocks in the Recôncavo basin, which

Total area – 10,000 sq. km

First oil discovered in 1939

6,000 wells drilled

86 producing fields

OIP – 6.3 billion Bbls (conventional)

OGIP – 3.2 TCf (conventional)

Cum. Production – 1.5 billion Bbls

34 degree API Light Oil

Oil Production – 41,000 Bbls/d

Natural Gas Production – 120 MMCf/d
possesses conventional and unconventional oil potential
 Preliminarily exploring opportunities in other basins such as the
Potiguar and Sergipe basins
 Participate with other partners in Brazil’s upcoming bid rounds
with emphasis on unconventional oil blocks
 High grade through pre-drilling and limited drilling efforts, and
farm out to larger companies for a carried interest
Confidential – For Discussion & General Information Purposes Only
17
Attractive Operating Netbacks in Brazil
IV
The attractive economics of mature onshore oil fields in Brazil and Avanti’s expertise in well rehabilitation and field development
provide potential Avanti investors significant upside
Operating Netbacks of Onshore Mature Areas of Oil Development in Brazil
(in USD)
Low Case
Base Case
High Case
Brent price per barrel
Price ber barrel in Brazil (1)
$
92.00
90.00
$
102.00
100.00
$
112.00
110.00
Landowner royalties @ 1% (2)
Royalties @ 10% (3)
Special participation percentage (4)
Abandonment fund
Operating costs (5)
Marketing / pipeline / treatment (6)
$
$
$
$
1.00
10.00
0.50
12.00
5.00
28.50
71.50
$
Total deductions
Operating netback before income tax
0.90
9.00
0.50
12.00
5.00
27.40
62.60
1.10
11.00
0.50
12.00
5.00
29.60
80.40
Note: Assumes 1,000 Bopd high gravity oil and 5 million barrels of recoverable oil
(1) Based on formula that is a weighted average of Brent and domestic sales
(2) Ranges from 0.5% to 1.0%
(3) Ranges from 5% to 10%
(4) Only applies to high volume fields
(5) Does not include overhead
(6) Some treatment, marketing, and possible pipeline costs were assumed but may not apply
Source: EIA, ANP, Tudor Pickering, Baker & McKenzie, Avanti SA
Confidential – For Discussion & General Information Purposes Only
18
$
$
$
$
Comparison: Gomo / Bakken
IV
The geology of the Gomo play in the Recôncavo Basin provides more potential than the Bakken
Note: Not to scale
Confidential – For Discussion & General Information Purposes Only
19
Table of Contents: Avanti Overview and Strategy
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
20
V
Avanti Investment Highlights
Oil & Gas Experience
Location: Colombia
Location: Brazil
Low-Risk Field
Development
Strategy
Unconventional
Upside
Extensive Local
Knowledge and
Experience
V

Management team with a combined 160 years of oil & gas experience in over 20 countries, including Colombia,
Brazil, Argentina, Peru, and Venezuela

Members of management have served as country managers and heads of large business and exploration units for
several global oil & gas companies




World class onshore source rocks and reservoirs that are largely unexplored




Prolific petroleum systems

Acquisition of low-risk producing assets with material production upside through the execution of well-established
field development and rehabilitation techniques

Creation of immediate value through a disciplined acquisition selection process aimed at paying reasonable prices
and partnering with the right companies

Acquisition of conventional acreage with unconventional upside in plays in Colombia and Brazil that are analogous
to world-class unconventional plays in North America

Execute a strategy of high grading1 through seismic and stratigraphic drilling and limited drilling and farming out to
larger players for capital-intensive work development




Management has over 60 years of exploration and production and business experience in Colombia and Brazil
Attractive fiscal and regulatory regime favorable to investment
La Luna play has the potential to outperform analogous plays in the United States such as the Eagle Ford
High net backs
Compelling low-risk conventional onshore potential with material upside
Significant unconventional upside in basins analogous to prolific basins in North America such as the Bakken
Welcoming oil & gas fiscal, regulatory and operating environment
Deep knowledge of the most attractive basins in Colombia and Brazil
Extensive oil & gas technical and business network in Colombia and Brazil
Significant prior P&L and production responsibility
(1) High grading is defined as a process to identify the best drilling locations in a block with the most upside; in the case of exploration, seismic testing is conducted, and/or a stratigraphic well is
drilled to evaluate the geology, identify the best drilling locations, and, as a result, increase the value of the block
Confidential – For Discussion & General Information Purposes Only
21
Table of Contents: Avanti Overview and Strategy
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
22
VI
Next Steps and Contact Information
VI
(1) Conference call with Avanti’s management team
Next Steps
(2) Virtual/electronic or live Questions & Answers session
(3) Overview of investment terms
(4) Funding of investment
For more information about Avanti and the investment opportunity, please contact:
 Rommel Gallo, Vice President:
 Office number: (713) 850-0086
 Mobile: (786) 371-6147
 E-mail address: rommel.gallo@fieldstone.com
 Steve Cook, President:
Contact
Information
 Office number: (713) 850-0082
 Mobile: (713) 502-9830
 E-mail address: steve.cook@fieldstone.com
 Andrew Barnes, Vice President:
 Office number: (713) 850-0084
 Mobile: (281) 804-5100
 E-mail address: andrew.barnes@fieldstone.com
Confidential – For Discussion & General Information Purposes Only
23
Table of Contents: Avanti Overview and Strategy
Appendix I
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
24
Appendix I
Illustrative Returns of a Buy-and-Build Strategy
Scenario Assumptions



Development Capital investment of US$2.5MM for a 30% interest in Avanti pre-funding of acquisition
Private equity firm acquires a 75% interest by investing US$60MM to finance the acquisition and development of producing assets and the development of acreage
Avanti acquires a 50% interest in producing assets with gross daily production of 2,000 bopd for US$35MM, implying a purchase price of US$35,000/bopd



Develop the assets by drilling new wells at a cost of US$4MM/well
Assumes US$50 of EBITDA per barrel on acquired production
Avanti acquires the right from the ANH to develop conventional blocks with unconventional potential


Avanti invests a total of US$18.625MM per block over a period of two years
By the third year, Avanti enters into a farm-out deal with a large player at the same terms similar to the Canacol/COP transaction




Avanti receives a bonus payment of US$26MM and retains a 30% interest in each block
Avanti re-invests cash flows into acquisitions of additional producing assets and the development of exploration
Exit at year 5 at 4x EBITDA
Well level assumptions are detailed on the next page
Financial Projections
Fiscal Year-End,
(in USD)
Year 1
Total average net daily production (Bbls/d)
EBITDA
$
Capital expenditures (1)
Bonus payments
Taxes
(26,394,687)
(2,515,682)
Total net cash flows
(1)
Year 2
928
17,787,654 $
$
Year 3
1,425
27,304,048 $
(33,113,657)
(3,861,573)
(11,122,716) $
Year 4
2,069
39,638,864 $
(23,325,390)
(5,606,068)
(9,671,181) $
Year 5
3,980
77,965,423 $
(82,669,661)
26,000,000
(13,494,063)
10,707,407 $
5,000
99,466,083
(51,006,124)
(18,228,816)
7,801,699 $
30,231,144
Includes growth and maintenance capex and acquisitions
Development Capital investment
Private Equity investment
Terminal value for Development Capital investor
Terminal value for Private Equity investor
Net cash flows to Development Capital and Private Equity
Development Capital
IRR
ROIC
PV-10
$
(2,500,000) $
(55,000,000)
-
$
(57,500,000) $
$
-
$
Private Equity
IRR
ROIC
PV-10
67.9%
13.4x
18,255,582
Confidential – For Discussion & General Information Purposes Only
$
25
-
$
$
-
$
$
-
$
33,435,801
334,358,014
$
367,793,816
43.4%
6.1x
$ 152,555,816
Appendix I
Well-level Assumptions
Unconventional Well Input Assumptions







Conventional Well Input Assumptions



Capital cost per well of US$12 million
Annual exploration expenditures for new property of US$9.3 million
Expected bonus payments for new exploration properties of US$26
million
Company will receive 30% of well cash flows after farm-out
Well production assumptions:
 Initial production flow of 2,000 Bbls/d
 Production decline rate of 60% in Year 1
 Annual production decline rate of 20% after Year 1
Pricing assumptions:
 WTI crude oil price of US$100.00/Bbl and premium of US$5.00/Bbl
 Realized oil price of US$105.00/Bbl
Expected costs:
 LOE of US$14.00/Bbl
 Transportation costs of US$6.00/Bbl
 Royalties as a % of revenue of 8%
 Additional profits tax as a % of revenue of 18%
 Income tax rate of 33%
Confidential – For Discussion & General Information Purposes Only


26
Capital cost per well of US$4 million
A 50% interest in conventional producing properties
Well production assumptions:
 Acquired production of 2,000 Bbls/d
 New wells with initial production flow of 450 Bbls/d
 Annual production decline rate of 14% in Years 1 and 2
 Annual production decline rate of 12% in Years 3 and 4
 Annual production decline rate of 10% after Year 4
EBITDA per Bbl of US$50.00
Expected costs:
 Maintenance capex of US$15.00/Bbl
 Depreciation & amortization expense of US$30.00/Bbl
 Income tax rate of 33%
Table of Contents: Avanti Overview and Strategy
Appendix II
SUMMARY OVERVIEW
I.
Avanti Overview and Strategy…………………………………………………………………….3
II.
Avanti Investment Opportunity……………………………………………………………...........8
III.
Colombia Strategy………………………………………………………………………………...12
IV.
Brazil Strategy……………………………………………………………………………………..16
V.
Investment Highlights……………………………………………………………………………..20
VI.
Next Steps and Contact Information…………………………………………………………….22
SUPPLEMENTAL INFORMATION
I.
Appendix 1: Illustrative Financial Projections…………………………………………………..24
II.
Appendix 2: Avanti’s Comparable Companies…………………………………………...........27
Confidential – For Discussion & General Information Purposes Only
27
Pacific Rubiales Energy – Current Overview
Company Overview
Current Management Team
Ronald Pantin, Chief Executive Officer and Director
 Petroleum engineer with over 23 years of experience in the Venezuelan
oil industry
 Began his career at Maraven, an affiliate of PDVSA, where he held
various positions and was responsible for about 1 million barrels of oil
production per day
José Francisco Arata, President and Executive Director
 Has over 31 years in the mineral and oil exploration industry in Latin
America
 CEO and co-founder of Pacific Stratus Energy, a wholly owned
subsidiary of Pacific Rubiales
Carlos Perez, Chief Financial Officer
 CPA with over 30 years in the oil and gas industry
 Previously held senior positions at various Venezuelan companies
Luis Andres Rojas, Senior Vice President of Production
 Over 31 years of experience in the Venezuelan energy sector
 Previously held many executive positions including President of PDVSA
Intevep, Vice President of PDVSA Gas and President of CADAFE
Jairo Lugo, Senior Vice President of Exploration
 Over 31 years of experience in the oil and gas industry, specifically
hydrocarbon exploration project management
 Prior experience with PDVSA in which he developed the skills to
explore all types of basins
Trading Statistics
Share Price
US$20.78
Market Cap
US$6.7B
Enterprise Value
US$8.5B
TEV/LTM EBITDA
4.0x
TEV/Current Production (US$/Bopd)
US$66,264
TEV/2P Reserves (US$/Boe)
US$16.5
Operating Overview
2P Reserves
513.7 MMBoe
Current Production
127.6 MBoe/d
Locations
Colombia: Cesar Rancheria, Catatumbo,
Cordillera, Llanos, Caguan, Putumayo and
Magdalenas Basins
Peru: Marañon Basin
Guatemala: Peten and Amatique Basins
Brazil: Santos Basin
Market data as of 8/08/2013, LTM as of 6/30/2013
Trading History
Indexed Share Price
Appendix II
600
500
400
300
200
100
0
Stated Strategy
290.20
107.64
Date
Pacific Rubiales Energy Corp.
S&P 500 Energy Index
Sources: Public filings, CapitalIQ
Confidential – For Discussion & General Information Purposes Only
28
 Focus on growth opportunities in all hydrocarbon basins in Colombia,
eastern Peru and Guatemala
 Maximize future production prospects though exploration activities
 Achieve sustainable growth in production, exploration portfolio and
market share
 Enhance shareholder value through the acquisition, exploration and
development of prospective oil and gas exploration assets and areas
 Analyze various projects to diversify portfolio in Latin America
Pacific Rubiales Energy – Initial Stages
Appendix II
Initial Management Team
Initial Board of Directors
Ronald Pantin, Chief Executive Officer and Director
German Efromovich, Director
 Entrepreneur with businesses in shipping, drilling rig leasing and
manufacturing, oil and aviation
 Previous experience in the Brazilian oil industry
John Zaozirny, Director
 Serves as counsel of the law firm McCarthy Tetrault
 Serves as Chairman of the Board at Pengrowth Energy Corp., an
intermediate Canadian oil and natural gas producer
Augusto Lopez, Director
 Serves as Managing Partner of Latino Americana de Consultores de
Negocios, a consulting firm
 Serves on the Board of Directors of various firms across all industries
Jaime Perez Branger, Director
 Over 18 years of experience in the financial services industry
 Founding partner of Andino Capital Markets, a Latin American
investment bank
Gordon Keep, Director
 Over 20 years in corporate finance with experience in mergers and
acquisitions, financings and public company administration
Ronald Pantin, Chief Executive Officer and Director
Carlos Perez, Chief Financial Officer
Luis Andres Rojas, Chief Operating Officer
Eduardo Lima, Senior Vice President of Business Development
 Mechanical engineer with over 25 years of experience in oil and gas
 Previously employed by PDVSA where he was in charge of heavy oil
projects in the Orinoco Belt and joint ventures with large oil companies
Sally Eyre, Senior Vice President of Corporate Development
 Many years of experience as an executive officer at various Canadian
resources companies
 Previously served as President, CEO and Director of TLC Ventures
Corp.
Early Investors
Private Placement Offering, May 2007
 Several large investors, US$421.9MM
Initial Strategy
 To enhance shareholder value through acquisition, exploration and
development of highly prospective oil and gas exploration areas
 To analyze various projects to diversify its portfolio, principally in Latin
America but also worldwide
Confidential – For Discussion & General Information Purposes Only
29
Pacific Rubiales Energy – Capital Raise History
Date
Appendix II
Capital Raise History
5/30/2007
Raised $421.9MM in equity through a private placement to fund the Rubiales acquisition, the acquisition of Major International Oil and for
ongoing exploration and development of heavy crude oil operations in Colombia
3/12/2009
Oleoductos de los Llanos Orientales S.A., 35% owned by Pacific Rubiales, closed a $250.0MM debt facility from Banco de Bogota for a
Rubiales-Monterrey Oil Pipeline
6/3/2009
Received $250.0MM senior secured revolving credit facility from a syndicate of banks including BNP Paribas, Calyon and Banco Davivienda
S.A. to fund 2009 capital expenditures
11/10/2009
Raised $442.0MM in senior unsecured notes with a fixed-income offering to repay $250.0MM credit facility and for general corporate
purposes
4/27/2010
Received $250.0MM senior unsecured revolving credit facility to be used to replace existing smaller facilities and to support short and long
term revolving credit needs
4/13/2011
Increased the undrawn, unsecured revolving credit facility to $350.0MM which is to be used to take advantage of opportunities in the
Colombian E&P sector that may arise
12/12/2011
Raised $300.0MM from the issuance of senior unsecured notes to fund general business activities, including acquisitions and investments in
oil and gas sector assets and related infrastructure
9/28/2012
Received $400.0MM and $300.0MM Colombian peso equivalent revolving credit facilities to be used to repay existing facility and to finance
working capital needs and capital expenditures
3/28/2013
Raised $1.0B in senior unsecured notes to be used for repayment of outstanding short term indebtedness and for general corporate
purposes
Confidential – For Discussion & General Information Purposes Only
30
Pacific Rubiales Energy – M&A History
Date
Appendix II
M&A Activity
5/25/2007 Acquired 75% stake in Meta Petroleum Ltd. for $250.0MM and the remaining stake in October 2007
7/16/2007 Acquired Major International Oil S.A. for $0.4MM
11/12/2007 Acquired Pacific Stratus Energy Ltd. for $690.2MM
7/8/2008
Acquired Kappa Energy Holdings Ltd. for $168.0MM
7/17/2008
Acquired Blocks CP-6 in consortium with Talisman Oil & Gas for a total investment of $49.4MM and CP-1 from the ANH for a total investment of $31.1MM, both of
which are in the Llanos Basin
11/10/2008
Awarded 100% working interest in CPO1 Block of the Llanos Basin for a minimum investment of $9.6MM, 40% in CPO12 Block, 62.5% in CPO14 Block, 100%
working interest in SSJN3 in the Sinu San Jacinto Basin for a minimum investment of $23.0MM, 50% in SSJN7 and 60% in CR1 of the Cesar-Rancheria Basin
6/23/2010
Awarded 3 blocks in the Putumayo Basin: 50% of TEA CAG 5, 60% of E&P CAG 6 and 60% of E&P PUT 9; 100% of TEA COR 24 in the Cordillera Basin with a total
investment of $9.6MM and 100% of the LLA 7 and LLA 55 Blocks in the Llanos Basin with total investment of $13.1MM in each
11/10/2010 Acquired a 33% stake in Oleoducto Bicentario de Colombia for $95.7MM
3/31/2011 Acquired 50% stake in Maurel & Prom SA, which includes stakes in blocks Sabanero, Muisca, SSJN-9, CPO-17 and COR-15, for $66.0MM
1/18/2012 Acquired working interest in the Cerrito Block from PetroMagdalena Energy Corp. for $7.4MM
4/27/2012 Acquired 49% stake in the Z-1 exploration and development block from BPZ Resources for $150.0MM in cash
6/5/2012
Acquired PetroMagdalena Energy Corp., including 19 properties in five onshore basins in Colombia, for $292.1MM
7/12/2012 Acquired remaining 45% stake in Peru block 135 and 138 from Petrodorado Energy Ltd. for $15.2MM
7/24/2012 Acquired 40% stake in onshore Portofino exploration block from Petrolera Monterrico S.A. for $25.7MM
9/18/2012
Acquired 35% working interest in the Karoon Blocks in the Santos Basin: S-M-1101, S-M-1102, S-M-1037 and S-M-1156 from Karoon Gas Australia Ltd. for $40.0MM
plus well carry costs of up to $140.0MM
10/9/2012 Acquired 5% stake in Blue Advanced Colloidal Fuels Corp. from Pacific Coal Resources Ltd. for $5.0MM
11/19/2012 Acquired C&C Energia Ltd., including four development blocks in the Llanos Basin, for $500.4MM
4/26/2013 Acquired an additional 350.0MM shares in CGX Energy Inc. for a 63.2% stake in the E&P company operating in Guyana
5/16/2013 Acquired an additional 350.0MM shares in CGX Energy Inc. for a 63.2% stake in the E&P company operating in Guyana
Confidential – For Discussion & General Information Purposes Only
31
Gran Tierra Energy Inc. – Current Overview
Company Overview
Current Management Team
Trading Statistics
Share Price
US$6.58
Market Cap
US$1.9B
Enterprise Value
US$1.6B
TEV/LTM EBITDA
3.2x
TEV/Current Production (US$/Bopd)
US$67,480
TEV/2P Reserves (US$/Boe)
US$29.7
Operating Overview
2P Reserves
53.2 MMBoe
Current Production
23.4 MBoe/d
Locations
Argentina: Noroeste and Neuquén Basins
Colombia: Catatumbo, Llanos, Cauca,
Putumayo, Sinu and Magdalenas Basins
Brazil: Recôncavo and Camamu Basins
Peru: Marañon and Ucayali Basins
Market data as of 8/08/2013, LTM as of 6/30/2013
Trading History
350
Indexed Share Price
Appendix II
300
250
200
190.50
150
152.71
100
Dana Coffield, President, Chief Executive Officer and Director
 Previously served as VP of the Middle East Unit for EnCana Corp.
 Held various senior management positions at Alberta Energy Company
including petroleum exploration operations in 5 countries
James Rozon, Chief Financial Officer
 Previous experience in accounting and finance at various American and
Canadian oil and gas companies
 Served as Controller of Sound Energy Trust, a public oil and gas trust
and Energy Exploration Technologies, a public E&P company
Shane O’Leary, Chief Operating Officer
 Engineer with over 30 years of working in oil and gas in North America,
the Middle East, Africa, South America and Latin America
 Served as President, CEO, COO and Director at First Calgary
Petroleum and led the company to be ultimately sold for US$1.3B
 Previously experience with EnCana, Petrobras and BP/Amoco
Duncan Nightingale, President of Gran Tierra Energy Colombia
 Over 30 years of experience managing exploration programs,
development and production operations, new business ventures,
portfolio management and strategic planning at BP, Arco and Nexen
Rafael Orunesu, President of Gran Tierra Energy Argentina
 Previous experience at Pluspetrol participating in numerous evaluation
and asset purchase and sale transactions in Latin America
Júlio César Moreira, President of Gran Tierra Energy Brasil
 Has over 25 years of experience working for international companies in
Brazil and the USA holding senior positions at Brookfield Brasil,
Metallurg Inc. and Petrobras
Carlos Monges, President of Gran Tierra Peru
 Previously served as Petrolifera’s country manager in Peru, responsible
for the exploration of 3 onshore blocks
50
Stated Strategy
0
Gran Tierra Energy, Inc.
Date
 To establish a portfolio of drilling opportunities to exploit underdeveloped
reserves in order to grow production
 To undertake exploration drilling in order to grow future reserves
S&P 500 Energy Index
Sources: Public filings, CapitalIQ
Confidential – For Discussion & General Information Purposes Only
32
Gran Tierra Energy Inc. – Initial Stages
Appendix II
Initial Management Team
Initial Board of Directors
James Hart, Chief Financial Officer, Vice President and Director
Jeffrey Scott, Chairman and Director
 Has extensive oil and gas management experience serving as
President of Postell Energy Co. Ltd., a private oil and gas company
 Director of Saxon Energy Services, High Plains Energy and Suroco
Energy Inc., all of which are publicly traded companies
Verne Johnson, Director
 Spent his entire career in the petroleum industry and has held senior
positions at Paragon Petroleum Ltd., ELAN Energy Inc., Ziff Energy
Group and Enerplus Resources Group
 Board member of various publicly traded oil and gas companies
Walter Dawson, Director
 Founded and served as President, CEO and Director of Computalog
Gearhart Ltd., focused on wellbore logging tools technology
 CEO and Chairman of Saxon Energy Services, a publicly traded firm
Nadine Smith, Director
 Previous experience in investment banking at NC Smith & Co. and The
First Boston Corporation and in management consulting at McKinsey &
Co.
 Served as President and CEO of Enidan Capital Corp., an investment
company and President of Aegis Asset Management Inc.
Dana Coffield, President and Chief Executive Officer
James Hart, Chief Financial Officer, Vice President and Director
 Previously served as an internal consultant with EnCana Corp.
providing business analysis for international and corporate clients
 Prior experience as Treasurer of Gulfstream Resources, an
international oil and gas company with focus in the Middle East
Max Wei, Vice President of Operations
 Reservoir engineer with over 25 years of project management
experience for oil and gas exploration and production in various
countries in North America, Europe, Asia and Latin America
 Previous experience at Bechtel Petroleum, EnCana, Shell Canada,
Imperial Oil and Marathon Canada
Rafael Orunesu, Vice President of South America
Early Investors
Private Placement Offering of US$75.0MM, June 2006
Significant Investors
 Castlerigg Master Investments Ltd., US$2.00MM
 CD Capital Management, LLC, US$1.0MM
 Enable Growth Partners LP, US$1.4MM
 Greywolf Capital Management LP, US$10.0MM
 Millennium Global Investments Ltd., US$5.0MM
 U.S. Global Investors Inc., US$4.7MM
 Nite Capital Management, US$1.3MM
 Second City Capital Partners, US$1.1MM
 Vitel Ventures Corp., US$1.0MM
 Whalehaven Capital Fund Ltd., US$1.0MM
Initial Strategy
 To establish a portfolio of producing properties, development and
exploration opportunities, through selective acquisitions, to provide a
base for future growth
 To acquire under-developed assets to replenish and maintain a
substantial inventory of drilling prospects
Confidential – For Discussion & General Information Purposes Only
33
Gran Tierra Energy Inc. – Capital Raise History and M&A History
Date
Appendix II
Capital Raise History
6/21/2006
7/5/2006
Raised $65MM in equity to fund the Argosy and Vinalar acquisitions
Raised an additional $10MM in equity to fund two acquisitions in Colombia and Argentina
Date
M&A Activity
3/31/2006
6/8/2006
Acquired Argosy Energy International LP for $41.5MM
Acquired Block 122 in Peru from PeruPetro S.A. with total financial commitment of $5.0MM
6/21/2006
Acquired 50% interest with a farm-in agreement in the El Vinalar Block in Argentina from Golden Oil Corporation for $1.0MM
11/7/2006
Acquired a 93% participation in the Valle Morado Block, 100% interest in the Santa Victoria Block and the remaining 50% interests in the Nacatimbay and Ipaguazu Blocks, all located
in Argentina, for $2.1MM from Compania General Combustibles S.A.
12/6/2006
Acquired 75% interest in the El Chivil and Surubi blocks in Argentina from Compania General Combustibles S.A. and the remaining 25% interests of the minority partners for $2.8MM
7/23/2007
Acquired two TEAs in the Putumayo Basin located near the Orito Field from the ANH
8/1/2007
Acquired a 40% stake in Azar Block in the Putumayo Basin in a farmout arrangement
11/2/2007
Sold 20% of Talora Block to Avalon Oil and Gas Inc. for $0.8MM and 15% of Mecaya block for $1.5MM, both of which are in the Putumayo Basin
7/28/2008
Acquired Solana Resources Ltd. For $755.9MM
3/31/2009
Sold Solana Resources' 70% stake in Guachiria Norte, Guachiria and Guachiria Sur Blocks, all located in the Llanos Basin, for $7.0MM
12/17/2009
Sold 15% working interest in Mecaya Block to Delavaco Energy Inc. and 40% interest in Rio Magdalena to Alange Energy Corp. for a combined value of $2.8MM
8/30/2010
Acquired 70% working interest in Blocks REC-T-129, -142, -155 and -224 in the onshore Reconcavo Basin through a farm-in agreement with Alvorada Petróleo S.A.
12/21/2010
Acquired 25% stake in Sierra Nevada license in Colombia from Petrolifera Petroleum Ltd. for $10.0MM
1/17/2011
Acquired Petrolifera Petroleum Ltd. from Connacher Oil and Gas Ltd. for $210.2MM
6/11/2012
Acquired 40% in block 95 of the Marañon Basin from Global Energy Development for $5.4MM
10/5/2012
Acquired remaining 80% interest in Blocks 123 and 129 in the Marañon Basin
5/16/2013
Won bids to acquire Blocks REC-T-86, 117 and 118 in the Reconcavo Basin
Confidential – For Discussion & General Information Purposes Only
34
Petrominerales – Current Overview
Appendix II
Company Overview
Current Management Team
Cory C. Ruttan, President and Chief Executive Officer
 Chartered Accountant with experience holding senior management
positions at various investment firms
 Previously served as Director of Corporate Finance and Investor
Relations, Senior VP and CFO of Petrobank Energy and Resources
Kelly Sledz, Chief Financial Officer
 Chartered Accountant with over 15 years in tax and finance
 Previously held senior management positions at First Calgary
Petroleums Ltd. and Mega West Energy Corp., both of which are
publicly listed companies
John Coch, Chief Operating Officer
 Served as VP of Operations and COO of Trident Exploration Corp., a
natural gas exploration company, where he achieved best in class
operating costs
Erik Lyngberg, Vice President of Exploration
 Previously served as Senior Geologist at Newport Petroleum and as a
geologist at HCO Energy/Pinnacle Resources, Westcoast
Petroleum/Numac Energy and Shell Canada
 Prior experience in each of Petrobank’s business units
Trading Statistics
Share Price
US$5.50
Market Cap
US$467.2MM
Enterprise Value
US$1.1B
TEV/LTM EBITDA
2.2x
TEV/Current Production (US$/Bopd)
US$49,144
TEV/2P Reserves (US$/Boe)
US$29.5
Operating Overview
2P Reserves
35.9MMBoe
Current Production
21.5 MBoe/d
Locations
Colombia: Llanos, Putumayo and
Magdalenas Basins
Peru: Ucayali Basin
Brazil: Recôncavo and Tucano Basins
Market data as of 8/08/2013, LTM as of 6/30/2013
Trading History
Stated Strategy
Indexed Share Price
400
350
300
250
200
150
115.98
100
50
46.69
0
Petrominerales Ltd
Date
S&P 500 Energy Index
Sources: Public filings, CapitalIQ
Confidential – For Discussion & General Information Purposes Only
35
To focus on delivering high impact exploration success building net asset
value and generating attractive total returns for shareholders through the
following strategies:
 Material growth in reserves through the execution of a balanced,
diversified exploration drilling program
 Maintain a multi-year drilling inventory of exploration prospects by
continually adding to land position and acquiring high quality 3D seismic
over those lands
 Explore and develop large heavy oil resource accumulations
 Rapidly convert new discoveries into production and cash flow
 Internally funded growth through cash flow generation from established
assets
 Providing a dividend yield to investors
Petrominerales – Initial Stages
Appendix II
Initial Management Team
Initial Board of Directors
John D. Wright, President, Chief Executive Officer and Director
Alastair MacDonald, Director
 Former CEO of Triathalon Ltd. and Western Isles Ltd., both financial
advisory firms
Kenneth McKinnon, Director
 Previously served as Corporate Secretary, VP of Finance and CFO of
Petrobank
 Prior experience analyzing financial statements and understanding
internal controls and procedures for financial reporting
Ernesto Sarpi, Director
 Held various managerial positions with ENI’s Agip Division, including
Portfolio and Joint Venture Manager at Agip UK, an energy company
 Currently a self-employed consultant
Enrique Umaña-Valenzuela, Director
 Previous experience in private practice as a trade and investment
consultant with involvement in family land developing activities
 Held various positions working with the Colombian government
including International Adviser to the Minister of Defense and Minister
Counselor of the Colombian Embassy of Colombia
Geir Ytreland, Director
 Geologist with over 30 years of experience in the international
petroleum industry
 Previous experience with Norsk Hydro’s exploration activities in SE
Asia, Africa, Europe, the Middle East and Latin America
John D. Wright, President, Chief Executive Officer and Director
 Petroleum engineer and Chartered Financial Analyst with over 25 years
of experience in the oil industry
 Serves as the President of Petrobank Energy and Resources Ltd.
Corey C. Ruttan, Chief Financial Officer
Jack F. Scott, Executive Vice President
 Engineer with many years serving on the senior management team of
several oil and gas companies
 Opened and managed offices of 2 oil companies in Cuba
Early Investors
Private Placement Offering, August 2007
 Several large investors, US$59.0MM
Private Placement Offering, November 2007
 Several large investors, US$100.0MM
Initial Strategy
 To realize near term cash flow from exploitation opportunities by
applying modern North America technical and business models to
mature, but under-exploited, Colombian properties formerly owned by
Ecopetrol
 To further grow through opportunity driven exploration on the
Corporation’s undeveloped properties in immature areas of Colombia
Confidential – For Discussion & General Information Purposes Only
36
Petrominerales – Capital Raise History and M&A History
Date
Appendix II
Capital Raise History
9/13/2007
Raised $61.0MM in equity to fund the acceleration of exploration and delineation drilling on the Corcel Block and to reduce bank debt
12/6/2007
Raised $100.0MM through private placement of convertible notes to fund general corporate purposes, including acceleration of drilling, seismic and
development plans
8/25/2010
Raised $550.0MM in convertible notes to fund oil and gas exploration and development opportunities in Colombia and Peru
6/12/2012
Raised $400.0MM in senior unsecured convertible notes to expand its debt maturity profile, minimize dilution and secure inexpensive working capital
12/20/2012
Undrawn credit facility increased to $250.0MM by a syndicate of banks to keep on hand and for possible repurchase of convertible debt issued in 2010
Date
M&A Activity
11/19/2008
Acquired 55% working interest in Block 126 in the Ucayali Basin for $0.6MM from Veraz Petroleum Ltd. and a third party
12/4/2008
Awarded Blocks 25 and 31 in the Llanos Basin from the ANH
12/9/2009
Acquired Pan Andean Resources for $29.0MM
6/23/2010
Acquired Blocks 15 and 59 in the Llanos Basin for a combined work commitment of $34.2MM
10/13/2010
Acquired an additional 25% stake in Block 126 in the Ucayali Basin for $14.8MM from Veraz Petroleum
11/2/2010
Petrominerales is spun out to Petrobank shareholders to become 100% independent
6/21/2011
Acquired 5% stack in Oleoducto Central S.A. for $281.0MM
12/7/2011
Acquired 75% interest in Alvorada Petro, a Brazilian operating entity, for $36.9MM
6/4/2012
Acquired Veraz Petroleum for $6.6MM and the remaining 20% working interest in Blocks 126, 141 and 161 in the Ucayali Basin
5/6/2013
Acquired 87.5% interest in Canguaro Block in the Llanos Basin of Colombia for $16.0MM from the ANH
5/17/2013
Acquired 100% interest in Block REC-T 106 and Block TUC-T 177, in the Reconcavo Basin, and 75% interest in Block REC-T 107, in the Tucano Basin,
from the ANP
Confidential – For Discussion & General Information Purposes Only
37
C&C Energia Ltd. – Current Overview (Acquired by Pacific Rubiales)
Company Overview*
Current Management Team
Randy McLeod, Chief Executive Officer and President
 Professional engineer with 30 years of experience in the oil and gas
industry
 Previously served as the COO of C&C Energia and C&C Barbados,
CEO and COO of BP Energy Canada and Head of Exploration and
Production of BP Canada
Tomas Villamil, Executive Vice President of Exploration
 Petroleum geologist with nearly 15 years of industry experience
 Previously employed by Ecopetrol, Conoco Colombia and Lukoil
Overseas Colombia where he was responsible for opportunities in
Colombia and Latin America
Kenneth Hillier, Chief Financial Officer
 Chartered Accountant with 13 years of experience in the oil and gas
industry
 Previously served as CFO of Verenex Energy Inc., a public oil and gas
company
 Prior experience at Nexen Inc., where he was responsible for
operations in various countries including Colombia and Brazil
Tyler Rimbey, Vice President of Business Development
 Previously served as the Senior Vice President of Global Oil Trading at
BP Canada and President of BP Canada Energy Trading Company
Trading Statistics
Share Price
US$9.50
Market Cap
US$615.9MM
Enterprise Value
US$558.8MM
TEV/LTM EBITDA
2.7x
TEV/Current Production (US$/Bopd)
US$48,915
TEV/2P Reserves (US$/Boe)
US$30.4
Operating Overview
2P Reserves
18.4MMBoe
Current Production
11.4 MBoe/d
Locations
Colombia: Putumayo, Middle Magdalena
and Llanos Basins
Market data as of 1/3/2013, LTM as of 9/30/2012; Reflects acquisition values
Trading History
Stated Strategy
250
Indexed Share Price
Appendix II
200
150
141.39
134.35
100
 To develop producing oil assets by appraising and developing existing
discoveries and exploring in areas assessed by management to be of
low to moderate risk
50
0
5/25/2010
11/25/2010
5/25/2011
11/25/2011
5/25/2012
11/25/2012
Date
C&C Energia Ltd.
S&P 500 Energy Index
*In December 2012, Pacific Rubiales acquired C&C Energia for a transaction value of US$500.4MM. Under the terms of the agreement, a new exploration company, Platino Energy, was formed of which Pacific Rubiales holds a 5% ownership interest. C&C Energia
transferred its Middle Magdalena and Putumayo assets, US$80.0MM cash and its executive management team to Platino. The transaction values C&C Energia at approximately US$7.50 per share and Platino at US$2.00 per share for a combined value of US$9.50
per share. Each share of C&C Energia was exchanged for 1 share of Platino and 0.35 share of Pacific Rubiales. The above figures are recorded at the time of transaction.
Sources: Public filings, CapitalIQ
Confidential – For Discussion & General Information Purposes Only
38
C&C Energia Ltd. – Initial Stages
Appendix II
Initial Management Team
Initial Board of Directors
Richard A. Walls, President, Chief Executive Officer and Director
 Previously served as President and CEO of Fairquest Energy Ltd., a
public oil and natural gas company
 Currently the President of RAW Energy Ltd., a private investment firm
Randy McLeod, Chief Operating Officer
Kenneth Hillier, Chief Financial Officer
Tomas Villamil, Executive Vice President of Exploration
Victor Hugo Franco Tomayo, General Manager
 Reservoir engineer with over 25 years of industry experience
 Prior experience at Argosy Energy International as an Engineering
Manager, Ecopetrol and Texas Petroleum Company of Colombia
Richard A. Walls, President, Chief Executive Officer and Director
Larry G. Evans, Director
 Founder and Partner of 32 Degrees Capital, a private equity firm
specializing in early stage private oil and gas companies
Norman Mackenzie, Director
 30 years of experience in the oil & gas industry
 Spent 7 years working as an independent consultant in the oil and gas
industry
 Former President and CEO of Raptor Capital Corporation, an exploration
and development company
Michael Stewart, Director
 Previously held a variety of senior executive positions in the Canadian oil
and gas industry over the past 36 years
 Serves on the Board of Directors of various energy firms
Carl Tricoli, Director
 Founder and Managing Partner at Denham Capital Management LP
 Previous experience as VP of Enron and President of Black Hawk
Resources, a private oil and gas company
Andrew L. Evans, Director
 Serves as a Senior VP at ARC Financial Group, a private equity firm
 14 years of operating experience at Chevron
Early Investors
Private Placement Offering, June 2006
 Network Capital Management, US$12.74MM
Private Placement Offering, May 2007
 Sowood Capital Management LP, US$32.50MM
Initial Public Offering, May 2010
 Denham Capital Management, 26% ownership
 ARC Energy Fund, 11% ownership
Initial Strategy
 To develop producing oil assets by appraising and developing existing
discoveries and exploring in areas assessed by management to be of
low to moderate risk
Confidential – For Discussion & General Information Purposes Only
39
C&C Energia Ltd. – Capital Raise History and M&A History
Date
Appendix II
Capital Raise History
6/30/2006
Raised $14.2MM in funding from Network Capital Management to fund initial drilling program over the next 8-10 months
3/31/2007
Raised $32.5MM in funding from Sowood Capital Management to fund the drilling program of 8 wells
4/30/2008
Raised $14.9MM in funding from a private placement transaction; use of funds not disclosed
5/14/2010
Completed an IPO of $96.5MM with share price of $8.37 of which Denham Capital served as selling shareholder, proceeds used for drillings and completions on existing
properties, expansion of existing facilities and pipelines, acquisition of new seismic and geological data and potential expenditures on land acquistions
5/25/2010
Raised $12.6MM in equity funding from 5 investors to be used as payment to persons named as executive officers, directors or promoters
3/25/2011
Raised $104.3MM in equity from a follow-on offering to fund the acquisition of certain oil and gas properties in Colombia
Date
2006
March 2007
M&A Activity
Acquired Private Participating Interests (PPI) in two blocks, Catguas and Carbonera, in Catatumbo Basin and 30% PPI in Cachicamo Block in Llanos Basin
Purchased 100% PPI in the Cravoviejo and Coati Blocks and 50% PPI in the Pajaro Pinto Block of the Llanos Basin
December 2007
Assigned 60% PPI in Coati block to another partner
December 2008
Withdrew from its PPI in the Catguas and Carbonera Blocks
2009
Traded 50% PPI in Pajaro Pinto Block for 50% PPI in the Morpho Block in the Middle Magdalena Basin
2009
Acquired 90% PPI in Andaquies TEA and relinquished the Mandarina Block
December 2009
Acquired PPI in Llanos-19 Block in the Llanos Basin
December 2010
Reacquired 60% PPI in the Coati Block
2009
Acquired 30% PPI in the Cachicamo Block
2010
Aquired remaining 40% Participating Interest for the operation and ownership of the Coati Block
March 25, 2011
January 10, 2012
Acquired the remaining 70% stake in Cachicamo E&P Block and remaining 50% stake in Pajaro Pinto Exploration Block from Ramshorn International Ltd. for $89.0MM
Acquired remaining 10% working interest in Andaquies Block from a minority partner
November 19, 2012 C&C Energia Ltd. acquired by Pacific Rubiales Energy Corp. for $500.4MM
Confidential – For Discussion & General Information Purposes Only
40
Canacol Energy Ltd. – Current Overview
Appendix II
Company Overview
Current Management Team
Charle A. Gamba, Chief Executive Officer, President and Director
 Geologist with over 20 years working in the upstream industry
 Previously served as CEO of Canacol Energy Inc. and VP of
Exploration for Occidental Oil & Gas Company in Colombia
George Gramatke, Chief Financial Officer
 Chartered Accountant with 20 years of experience in domestic and
international finance and accounting
 Previously served as a Partner at PricewaterhouseCoopers in Russia
Mark Holliday, Chief Operating Officer
 Drilling engineer with 25 years of experience in the international oil and
gas industry
 Previously served as the VP of Operations at Petrominerales Ltd.
Mark Teare, Vice President of Exploration
 Previously held various positions at many different Canadian energy
firms operating in Latin America
 Prior experience serving on the senior management team of EnCana
Trading Statistics
Share Price
US$4.07
Market Cap
US$352.5MM
Enterprise Value
US$453.1MM
TEV/LTM EBITDA
11.4x
TEV/Current Production (US$/Bopd)
US$48,370
TEV/2P Reserves (US$/Boe)
US$13.8
Operating Overview
2P Reserves
32.8 MMBoe
Current Production
9.4 MBoe/d
Locations
Colombia: Llanos, Caguan-Putumayo,
Magdalenas and Cordilleras Basins
Guyana: Takutu Basin
Ecuador: Oriente Basin
Stated Strategy
Market data as of 8/08/2013, LTM as of 6/30/2013
 To drill up development assets in Colombia and Ecuador, the two focus
countries, in order to increase production and cash flow
 To participate in the execution of a significant unconventional oil
exploration program alongside large, well-funded operating partners
such as: ConocoPhillips Colombia Ventures, ExxonMobil Exploration
Colombia and Shell Colombia
Trading History
Indexed Share Price
700
600
500
400
300
200
145.54
139.81
100
0
Date
Canacol Energy Ltd
S&P 500 Energy Index
Sources: Public filings, CapitalIQ
Confidential – For Discussion & General Information Purposes Only
41
Canacol Energy Ltd. – Initial Stages
Appendix II
Initial Management Team*
Initial Board of Directors
Charle A. Gamba, President, Chief Executive Officer and Director
David Mears, Chairman and Director
 Co-founder and former CEO of BrazAlta Resources Corp.
 Instrumental in the firm’s early funding stages
Lou MacEachern, Director
 Founding Director of PetroKazakhstan Inc.
 Board member of various TSX listed companies
Lyle Dunkley, Director
 Chartered Accountant with over 25 years in the oil and gas industry
 Previously served as CFO of Poco Petroleums Ltd.
Stuart Hensman, Director
 Previously served as Chairman and CEO of Scotia Capital (USA) Inc.
Michael Hibberd, Director
 Prior experience in international energy project planning and capital
markets
 Serves on the Board of Directors of many Canadian energy companies
Alvaro Barrera, Director
 Petroleum engineer with previous experience as an international
consultant specializing in natural gas, oil, oil derivatives and refining
 Over 30 years of experience in the Colombian and Ecuadorian energy
industries
Jason Bednar, Director
 Chartered Accountant with previous experience as the CFO of Pan
Orient Energy, a Canadian company focused on southeast Asia
Charle A. Gamba, President, Chief Executive Officer and Director
Craig Nieboer, Chief Financial Officer
 Chartered Accountant with over 10 years of international consulting
experience in the energy industry
Mark Holliday, Chief Operating Officer
Dr. Arthur Halleran, Vice President of Exploration
 Co-founder of Canacol Energy
 Geologist with over 27 years of international petroleum exploration
experience
Early Investors
Gemini Oil & Gas Advisors LLP, 2009
 Gemini Oil and Gas Fund II LP, US$9.0MM
EnCap Investments L.P., 2012
 Through the acquisition of Shona Energy Co., EnCap received 3.9%
ownership of Canacol
Initial Strategy
 To use excess cash flows from producing assets to invest in high
potential exploration assets
*Current version of Canacol was born in 2008 with BrazAlta Resources’ acquisition of Canacol Inc.; BrazAlta had been operating since 2005
Confidential – For Discussion & General Information Purposes Only
42
Canacol Energy Ltd. – Capital Raise History
Date
Appendix II
Capital Raise History
2/5/2009
Raised $0.4MM in secured debt for continuing working capital purposes
4/17/2009
Raised $9.0MM in funding from Gemini Oil and Gas Fund II L.P. to finance the drilling and development of wells in the Rancho Hermoso and Enterrios fields
and the drilling of delineation wells in the Capella Field
5/28/2009
Raised $5.4MM in equity to fund its drilling program in Colombia
7/23/2009
Raised $0.4MM in equity to finance the drilling and work over program at Rancho Hermoso and Enterrios oil fields in Colombia, the drilling of a horizontal well
at its non-operated Capella field and part of the Takutu exploration contract
9/10/2009
Raised $3.7MM in convertible unsecured subordinate debt to finance the remaining commitment to acquire 35% working interest in its onshore exploration
block in Guyana and for its Tamarin E&P contract
10/15/2009
Raised $39.8MM in equity to fund its exploration and development program in Colombia, Guyana and Brazil, reduce indebtedness and for general corporate
purposes
4/28/2010
Raised $49.4MM in equity to fund seismic acquisition and drilling of exploration wells in Colombia, the drilling of a second well on the Takutu block, the
acquisition of new exploration blocks in Colombia and the repayment of debt
5/20/2010
Raised $7.6MM in equity funding to finance the seismic acquisition and drilling of exploration wells in Colombia, the drilling of a second well on the Takutu
Block, the acquisition of new exploration blocks in Colombia and the repayment of debt
7/12/2010
Raised $38.2MM with the issuance of convertible unsecured subordinated debentures to replenish working capital and to terminate investment agreements
with Gemini Oil and Gas on the Rancho Hermoso, Enterrios and Capella oil fields
2/8/2011
Raised $48.0MM in a follow-on equity offering to finance 4 additional wells in the Rancho Hermoso Field, the acceleration of exploration programs on COR 11
Block in the Cordillera Basin and E&P contracts in Colombia
6/8/2012
Received $200.0MM credit facility, which will replace the firm's current gas plant credit facility
4/3/2013
Received $140.0MM senior secured 5 year term loan which will be used to repay existing term loan, finance the Shona acquisition, repay existing credit
facility and to fund future capital expenditures
Confidential – For Discussion & General Information Purposes Only
43
Canacol Energy Ltd. – M&A History
Appendix II
Date
M&A Activity
6/9/2008
BrazAlta Resources Corp. acquired Canacol Energy Inc. for $22.9MM
8/29/2008
Acquired Rancho Hermoso S.A., which includes the Rancho Hermoso and Enterrios oil fields in the Llanos Basin, from Sparrow Financial Inc.
5/14/2009
Acquired 35% stake in Petroleum Prospecting License in the Takutu Basin from Groundstar Resources Ltd. For $3.5MM
5/4/2010
Awarded the Cedrela Exploration and Production Contract, located in the Putumayo-Caguan basin, by the ANH
11/9/2011
Acquired Carrao Energy Ltd., which includes four blocks in the Llanos Basin, one block in the Portofino basin and three blocks in the Middle Magdalena
basin, in a stock for stock transaction
3/13/2012
Acquired the remaining 10% stake in Santa Isabel Contract from Green Power Sucursal Colombia for $2.0MM
2/14/2012
Acquired an additional 9% stake in LLA 23 Contract from Trayectoria Oil & Gas and Petrolera Monterrico for $2.5MM
4/17/2012
Acquired Petroleum Prospecting License related to 7800 km 2 of oil and gas exploration block in Takutu Basin from Sagres Energy
7/3/2012
Acquired 35% working interest in the El Triunfo Block in the Llanos Basin from Sagres Energy Inc.
10/15/2012
Acquired Shona Energy Company for $165.6MM
2/27/2013
Entered into a farmout agreement with ConocoPhillips for the exploration and development of Canacol's Santa Isabel E&P contract in the Middle
Magdalena Basin
Confidential – For Discussion & General Information Purposes Only
44