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