Unconventional Natural Gas
A Compelling Case. A Clear Vision.
April 26, 2006
SPI
DISCLOSURE STATEMENT
The corporate information contained in this presentation
contains forward-looking forecast information. The reader is
cautioned that assumptions used in the preparation of such
information, although considered reasonably accurate by
Canadian Spirit Resources Inc. (CSRI) at the time of
preparation, may prove to be incorrect. The actual results
achieved during the forecast period will vary from the
information provided herein and the variations may be
material. Consequently, there is no representation by CSRI
that actual results achieved during the forecast period will be
the same in whole or in part as those forecast.
SPI
Overview
 Unconventional natural gas: One of the fastestgrowing sectors of North America's energy industry
 Canadian Spirit Resources: Focused on developing
1.0 tcf of unconventional natural gas from coal (NGC)
 A huge resource play: Farrell Creek, northeast British
Columbia, 40,000 + acres, 94% (average) owned by
CSRI, 80% of land includes deep rights, $30 million
invested to date
SPI
Current Status
 Six test holes drilled and cased
 Two holes fracture-stimulated
in the Gething Formation
 Both holes producing natural
gas and water
 Dedicated a test hole to
evaluate gas-bearing shales
SPI
Resource Potential: Farrell Creek
Sproule Associates Limited Preliminary Report
April 17, 2006:
Contingent gas-in-place resource potential
 Gething coals
12 – 16 bcf per section
 Gething shales
11 – 17 bcf per section
 Gates & Moosebar shales
SPI
7 – 8 bcf per section
Next Steps
 Measure production rates
 Develop pilot plan to drill and
complete more test holes
 Focus on engineering,
operational and marketing
aspects of developing a
commercial project
SPI
Fast Facts
(As at April 21, 2006) ($ Cdn)
Shares outstanding
Recent share price
Market cap
25.6 million
$5.00
$125 + million
Land
Contingent resource *
Gething coals
Gething shales
62 + sections (42,000 gross acres)
12 – 16 bcf/section
11 – 17 bcf/section
Total contingent resource*
1.4 – 2.0 tcf
Estimated recovery rate
60%
Market cap / recoverable mcf
$0.15 per mcf
Largest shareholder
Sprott Asset Management (16%)
* (Sproule Associates, Apr 17/06, Gething Formation only, Farrell Creek, B.C.)
SPI
Natural Gas from Coal (NGC)
 U.S. 10 years ahead of Canada
 Industry in Western Canada growing rapidly
 Production of unconventional gas similar to
production of conventional gas
 Typically, to economically produce natural gas from
coal, formation water must be removed first
SPI
A Compelling Case
NGC compared to conventional gas
 Coal can store up to 6 or 7 times more gas
 NGC well can have 3 times the life
 NGC recovery factors can be as high as 80%
SPI
A Clear Vision
 CSRI focused on
unconventional gas,
including NGC
 2002 regional NGC
assessment of WCSB
 Five-year plan: explore for
and develop 1.0 tcf of NGC
within five years in an
environmentally safe and
responsible manner
SPI
A Clear Vision (cont’d)
Within three years:
 Identified several large
resource plays
 Assembled high working
interest land position in
northeast B.C.
 Began evaluating productive
capability of principal
resource property
SPI
Coalbed Gas Potential in B.C.
CSRI area of interest
SPI
Farrell Creek, NE B.C.
CSRI Test Area
SPI
Farrell Creek Geology
SPI
Resource Overview
Gething Formation
 Multiple thin coal seams
 As many as 30 individual seams
 Net coal thickness: 25 – 50 feet
 Gas content: 230 – 550 scf/ton
 Shale, siltstone and sandstone
being evaluated
Contingent resource
SPI
 Coals
12 – 16 bcf/section
 Shales
11 – 17 bcf/section
Resource Overview
Moosebar/Gates (Shale Formation)
 Gas content
2.5 – 11 scf/ton
 Thickness
900 feet
 Cored
600+ feet
Additional prospects identified
 Bluesky, Cadomin, Halfway,
Baldonnel, Doig/Montney
Contingent resource
 Shales
SPI
7 – 8 bcf/section
Farrell Creek Potential
Land
62 + sections
Well spacing
4 – 8 wells per section
Risked well locations
200 – 400
Productivity per well
250 – 300 mcf/d
Potential production
50 – 120 mmcf/d
SPI
Farrell Creek 2006 Plan of Activities
 License 2 – 4 additional locations for summer
drilling program
 Prepare and submit Feasibility Plan during Q2 for
provincial government approval
 Raise up to $10 million during Q2 for pilot phase of
production
 Drill, complete and test up to 4 additional wells
 Initiate application to tie-in to Duke Energy pipeline
SPI
2006 Capital Program
($ million Cdn)
First Half (approved)
Second Half (estimated)
$3.6
9.0
$12.6
SPI
G & A expense
$1.4
Net cash resources
(Jan 1/06)
$8.0
Risks
 Farrell Creek productivity
 Equipment and service costs
 Commodity prices
SPI
Strategic Advantages
 Resource knowledge and expertise of technical team
 Energy development experience of management and
directors
 High working interest land position with multiple
prospective targets
SPI
In Summary
 Material land base of 62 + sections
 1.4 – 2.0 tcf (coals and shales, Gething only)
 Value/Market upside
 Additional potential (shallow and deep)
 Favorable commodity pricing
 200 mmcf/d capacity in nearby Duke Energy pipeline
SPI
A Compelling Case. A Clear Vision.
A company with its eye on the prize:
1.0 tcf of NGC
Canadian Spirit Resources Inc.
Suite 2610, Watermark Tower
530 8th Avenue S.W.
Calgary, Alberta T2P 3S8
Telephone (403) 539-5005
E-mail: info@csri.ca
TSX Venture: SPI
www.csri.ca
SPI