Athabasca Resources
Athabasca Resources Limited
Investor Overview
Overview & Strategy
Santiago Investor Conference
21 June 2014
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Athabasca Resources
Athabasca Oil Sands - Overview
The Chard Field:
•
The Chard Leases contain 31 contiguous sections (gross 19,840 acres/ 81 km2)
•
240 million barrels of oil in place within the McMurray formation.
•
Infrastructure in place: Public highway and railroad crossing the field. Chard is close to
existing 3rd party facilities for crude-synthetic oil conversion for transportation in
pipelines.
•
Active area with producing units in the area (20 miles) such as Statoil, EnCana,
ConocoPhillips, Nexen/ PetroCanada, PetroBank, Devon, Meg Energy and Cenovus
Energy.
•
Athabasca farm-in 50% of four licenses currently owned by Nordic Petroleum ASA.
Source: DeGolyer & MacNaughton 2012
Athabasca Resources
Canadian Oil Sands – The 3rd Largest Oil Reserve In The World
•
Canadian Oil Sands makes Canada no. 3 among reserve holders of
hydrocarbons in the world.
•
175 billion barrels ultimately recoverable reserves.
•
Current oil sands production has risen to more than 1.5 million barrels
per day.
•
By 2024 oil sands production is projected to 3.7 million barrels per day,
and in situ is expected to deliver nearly two-thirds of that increase.
•
Strategic proximity to the US, the world’s largest oil market.
•
Stable political environment.
•
Oil Sands is the fastest growing source of oil in Canada:
Source: www.eia.gov/emeu/cabs/Canada; Canadian Association of Petroleum producers; MIT Technology Review, January 2012;
www.oilsands.infomine.com/commodities; www.en.wikipedia.org/wiki/Athabasca_oil_sands
Athabasca Resources
Athabasca – A Part Of The Chard Field
Middle Channel
• Geology:
o
McMurray Sand Formation:
Upper, Middle & Lower channels
o
Upper channel thickness:
between
5– 7m
o
Middle channel thickness:
between
3 – 30 m
o
Lower channel thickness:
between 10 – 50 m
o
Formation Depth:
between 200 – 360 m
o
Gravity estimated:
API 9 - 12
o
Porosity:
27 – 35 %
o
Oil Saturation:
Approx. 70 – 75 %
o
Permeability:
2 – 6 Darcy
• Heavy Oil :
Lower Channel
• Channel identification on the map:
Source: DeGolyer & MacNaughton 2012
o
Green:
indicates layers above 10 m
o
Red:
indicates layers above 8 m
o
Layers above 5 meters:
indicated with a 5 m line
o
Section with above 8 meters:
7 sections on the western side of
the leases holds the majority of the oil
Athabasca Resources
Facts - The Chard Field Has Oil Resources in Place
•
50% ownership with a 2.5% overriding royalty.
•
31 sections (81 km2). Third party evaluated
bitumen in place of 240 million barrels.
•
•
Resources confirmed by commissioned
geological studies by geologist DeGolyer &
MacNaughton in 2012 based on logs originally
drilled for gas extraction and water.
•
•
•
•
•
127 MM Bbl of oil with thickness above 8
meters.
70 MM Bbl with thickness 10 meters and
more.
•
Current SAGD recovery rate in the industry is
currently up to 60%.
•
DeGeolyer & MacNaughton has estimated a
recovery level of 31% - 48% for Chard.
High level:
Mid level:
Low level:
60 MM Bbl at 48% recovery
28 MM Bbl at 40% recovery
21 MM Bbl at 31% recovery
•
A staged development of the land will be based on
proven extraction technologies such as CSS,
SAGD, THAI or Electrodes or a combination
thereof.
•
The immediate work program is expected to
include 8 core wells.
•
The work program that will take place on 7 of the
31 sections has the following objectives:
DeGolyer & MacNaughton estimate 240 MM
Bbl Original Oil In Place (OOIP), whereof:
•
DeGolyer & MacNaughton has therefore
estimated the following contingent resources:
Source: DeGolyer & MacNaughton 2012; www.oilsands.infomine.com/commodities
•
•
•
to learn more about the contingent resources
to verify the quality of the oil
to prepare for pilot programme.
Athabasca Resources
Athabasca Is Located Close To Other Oil Sands Exploration
Companies In Athabasca
Athabasca Resources’ Chard Field
ATHABASCA
RESOURCES
Source: The Terracon Group
Meg Energy’s Christina
Lake field is approx 15
km south of Chard and
is currently producing in
the same formation as
Chard Meg Energy has
2P reserves of 1.7bn
barrels in 80 sections
Athabasca Resources
Surrounding Area Is Covered By Active Oil Sands Companies
•
MEG Energy – Christina Lake (just south of Chard)
Currently producing 26 400 bpd from 8 API bitumen. Expanding to 210.000 bpd by 2020.
Upgrading facility nearby and pipeline to Edmonton.
•
EnCana – Christina Lake
8 API bitumen. Estimated start of production 2013. Capacity 120.000 bpd
•
Conoco Phillips - Surmount Phase I (north of Chard)
Production start 2008. 27.000 bpd.
•
ConocoPhillips - Surmount Phase II
7-9 API. Engineering underway. Estimated start of production 2013. Capacity 83.000 bpd.
•
Jacos - Hanging stone (north west of Chard)
Demo project. Production start 1999. Capacity 10.000 bpd initially increasing to 100.000
bopd
•
Petrobank - May River Phase I. (south of Chard)
Demonstration plant. Using toe-to-heel air injection (THAI) technology. Production has
started. Initial capacity of 10.000 bpd after start-up phase. Ultimate production up to
100.000 bpd.
•
Devon - Jackfish I
Operating. Capacity 35.000 bpd. Jackfish II. (South of Chard). Under construction.
Estimated start of production 2011. Capacity 35.000 bpd. Plan upgrade to 100.000 bopd
•
Statoil. Kai Kos Dehseh – Leismer
Estimated start of production in 2Q 2011. Initial production 10 000 rising to 20 000 bopd at
year-end. Production estimated at 80 000 bopd by 2016 and to top 200.000 bpd on projects
currently applied for. Can reach 300 000 bopd according to partner PTTEP after 2018.
Source: Public presentations and announcements from the respective companies listed above and
www.albertacanada.com/documents/AOSID_QuarterlyUpdate_Winter2011.pdf
Fields
Current
Planned
Production Production
BOPD
BOPD
MEG Energy
EnCana
ConocoPhillips
Jacos
PetroBank
Devon
Statoil
26,000
0
27,000
10,000
10,000
35,000
15,000
210,000
120,000
27,000
10,000
100,000
100,000
250,000
Total (approx)
123,000
817,000
Athabasca Resources
Chard Oil Sands Is An ”In Situ” Project
•
About 80% of the oil sands in Alberta are buried too deep below the
surface for open pit mining. This oil must be recovered by in situ
techniques.
•
Production from in situ is already being preferred to open pit mining
and will in the future be replacing mining as the main source of
bitumen production from the oil sands.
•
Chard is an in situ project ("in situ" is Latin for "in place“) that may
be recoverable using one or more of the following technologies:
CSS, SAGD, THAI or Electrodes.
•
Using drilling technology, heat is introduced (using steam,
electrodes or other methods) into the oil sand deposit to lower the
viscosity of the bitumen.
•
The hot bitumen migrates towards producing wells, bringing it to the
surface while the sand is left in place.
•
SAGD can produce a smooth, even production that can be as high
as 70% to 80% of oil in place in suitable reservoirs.
Source: www.eia.gov/emeu/cabs/Canada ; www.oilsands.infomine.com/commodities/nd; MIT Technology Review, January 2012;
http://en.wikipedia.org/wiki/Steam-assisted_gravity_drainage
CSS TECHNOLOGY
Athabasca Resources
New Technologies Provides Access To Thinner Layers &
Incentives Are In Place To Promote Further Innovation
Year
~1985
~1995
Major In Situ Technologies
CSS - Cyclic Steam Stimulation
• Several technologies rely on steam to heat and soften the bitumen underground allowing it to flow to production wells. CSS and is considered economic only
in very high-grade, relatively homogeneous oil sands reservoirs. Recovery factor is estimated to be approximately 20%- 25%.
SAGD - Steam Assisted Gravity Drainage
• SAGD are considered economic only in very high-grade, relatively homogeneous oil sands reservoirs. Thermally, SAGD is twice as efficient as the older
cyclic steam stimulation (CSS) process, and it results in far fewer wells being damaged by high pressure. Recovery factor is estimated to recover up to 60%
and is cheaper to operate than CSS. Most major Canadian oil companies operating in the Athabasca region are using or plan to use SAGD.
VAPEX - Vapor Extraction Process
• Similar to SAGD but instead of steam, hydrocarbon solvents are injected into the upper well to dilute the bitumen and allow it to flow into the lower well.
ET-DSP Electro Thermal Dynamic Stripping Process
• The recovery factor was over 75%, energy used per barrel was 23% less than anticipated and peak production rates were better than expected.
~2005
~2009
IETP
THAI - Toe to Heel Air Injection
• Has the potential to recover 70-80 percent of bitumen-in-place versus 20-60 % from current in-situ CSS and SAGD technologies.
• Thinner reservoirs (less than 10 meters) can be a target for THAI® as only one horizontal well is required compared to two horizontal wells with SAGD and is
less sensitive to the presence of top or bottom water.
Steam Flooding – In Combination with SAGD
• Enhances the recovery by up to 20% and is currently being tested in by Sinopec in China in thin layers >5 meters.
Innovative Energy Technologies Program
Alberta’s Innovative Energy Technologies Program (IETP) offers royalty adjustments of up to $10 million per pilot project that demonstrates the use of new or
innovative technologies to increase environmentally sound recovery of existing reserves and encourages responsible development of new oil.
Source: www.energy.alberta.ca/OilSands/pdfs/FactSheet_OilSands.pdf, http://en.wikipedia.org/wiki/Steam-assisted_gravity_drainage; McDaniel & Associates
Consultants Ltd. (McDaniel THAI® Transition Report); www.e-tengergy.com: Sinopec China
Athabasca Resources
OIL RECOVERY SERVICES LTD (ORS)
WHAT DOES ORS DO?
Oil Production
Tar Sands and
Heavy Oil
Environmental
remediation
Waste Oil
Recovery
The ORS
solution
offers an end
to end
service
platform
 Proven technology platform: ORS offers a complete
and unique solution to recover bitumen and oil in situ
from heavy oil and tar sands using environmentally
friendly organic enzymes.
Water
Separation
and
remediation
Sand
Separation
and in situ
backfilling
 Cost effective solution: The ORS technology has
applications in Enhanced Oil Recovery and Waste
Water Remediation.
 Environmentally
friendly/low
risk
operation:
Environmentally friendly technology that will revolutionise
production of oil from tar sands in Athabasca and
elsewhere.
Athabasca Resources
OIL RECOVERY SERVICES LTD (ORS)
HOW DOES OUR TECHNOLOGY WORK?
Surfactant
Injection
Removal
through dialysis
Circulation
• Heavy Solids.
• Reduce the product viscosity.
• Break down wax and
asphaltene deposits.
• Suspend colloids and insoluble
waste in emulsion.
Oil and/or
Bitumen
delivered to
market
• Tar Sands are treated with
high
pressure
injection
systems to apply surfactant in
situ
using
• Oxidised Metal.
• Water Coalescence.
• Small Particle Removal.
engineering
solution similar to SAGD.
• No water or steam is used.
OUR BESPOKE ORGANIC SURFACTANTS ARE BOTH
SAFE AND FAST ACTING.
UP TO 400 TIMES MORE EFFICIENT THAN STEAM.
Athabasca Resources
1-3 Year Growth Strategy – Upgrade, Acquire, Produce
Working Assumptions
1. Upgrading
–
Upgrade existing contingent resources through a Work Program that will include laboratory testing,
commission 3rd party reserve report and begin field development program for pilot production.
2. Acquire
–
Evaluate neighboring and/ or strategic acreage for possible purchase or farm-in to grow portfolio of
resources and reserves.
3. Establish pilot production
–
–
–
Pursue tests and establish a small production development for up to 1,000 Bbls/day to prove
economic recoverable reserves.
Continue to upgrade the licences by further core drilling program.
Convert contingent resources to reserves.
4. Establish production facility
–
–
–
Establish production wells targeting initial best case production figures.
Continue exploration on the licenses.
Continue the organic and acquisitive growth.
Source: Company Analysis
Athabasca Resources
Management Team & Board
Julian Hamilton Barns, aged 54, Founder Director
Julian Hamilton Barns qualified as a Solicitor in England and Wales in 1984 and in Hong Kong in 1992 having graduated in Business Law in
London. He has specialized in corporate law since qualification and has acted for many international clients in the corporate finance and mergers and
acquisitions sectors with particular focus on the oil and gas and natural resources industries. He has extensive Northern American clients and business
connections.
Conditional upon completion of the Private Placing, the following individuals have agreed to join the Board:
Atul Gupta, aged 50, Director
Atul Gupta served as CEO of Burren Energy Plc until 2008. He has worked in the international upstream oil and gas industry for over 25 years. He
serves on a number of boards. He holds a Bachelors degree in chemical engineering from Cambridge University and a Masters degree in petroleum
engineering from Heriot-Watt University in Edinburgh Scotland.
Richard Bonnycastle, aged 78, Director
Richard Bonnycastle has been the Chairman and the President of Cavendish Investments Limited since 1968. He also serves as the Chairman of the
Harvest Fund Inc. He currently holds substantial investments in numerous private and public companies and sits on the board of many of these
companies. He has wide ranging experience as a corporate financier and adviser in the oil and gas industry with particular focus in Canada.
Other Directors with suitable skills and experience will be appointed during the IPO Process.
Athabasca Resources
Joint Operating Committee Will Control The Work Program
Nordic Petroleum AS
Athabasca Resources Ltd
100%
Nordic Americas Inc *
Joint
Operating
Agreement/
Committee
(JOA)
Norwegian Oil Sands
Corp**
50%
50%
Chard
=
4 Licences
*): Nordic Americas Inc is a licensed operator and Nordic America and Athabsaca Resources Limited will each be presented at the JOA Committee
**): Norwegian Oil Sands Corp acquired the three licences from Keppoc Energy Ltd and Pan Pacific Land Corporation on the in October 2007
Athabasca Resources
Use Of Funds
Use of funds
Paid-in Capital*
£5,000,000
• Acquire 50% of the Leases & Pay initial work program
£1,950,000
• AIM listing and advisory fees
£ 600,000
• Working capital for 18 months
£ 500,000
Working Capital / Acquisition and Due Diligence
£ 1,950,000
Assumption: 1 USD = 1 CAD = 0.64 GBP
*): Based on an equity raise of £4 million
Athabasca Resources
Company Details & Corporate Advisors
Registered Office
Athabasca Resources Limited
Tudor Court
Vaendre Close
Castleton Cardiff
CF3 2UZ
Reg. Number: 08
Description:
ISIN:
SEDOL:
Web:
London Office
Athabasca Resources Limited
117 Waterloo Road
SE1 8 UL
Phone
Phone :
Fax:
+44 7768 461528
+44-20-7921 0070
+44-20-7902 1133
Legal Counsel
McGuire Woods London LLP
11 Pilgrim Street
London EC4V 6RN
Auditors
MSCM LLP
An independent Firm associated w/
Moore Stephens International Limited
701 Evans Avenue, 8th Floor
Toronto ON M9C 1A3, Canada
Kingston Smith
Devonshire House
60 Goswell Road
London, EC1M 7AD
England
Nomad & Broker
ZAI Corporate Finance Limited
1 Hobhouse Court
Suffolk Street
St James’s
London, SW1Y 4HH
Bank
Barclays Bank Plc
City of Cardiff Branch
Registrars
TBA
Independent Reserve Engineers
DeGolyer & MacNaughton Canada Limited
1430-311 Sixth Avenue,
Calgary, AB T2P 3H2
Canada
Financial PR
TBA
Athabasca Resources
Appendix
Athabasca Resources
Athabasca’s Location Among Current Oil Sands Projects
Athabasca’s Oil Sands
Assets
Athabasca Resources
Athabasca Resources
Geological Overview: Middle & Lower Channel
Source: DeGolyer & MacNaughton 2012