Repeatable Resource Play. Presentation. October 2011 TSX-V: TFA.A

Transcription

1 Repeatable Resource Play Presentation October 2011 TSX-V: TFA.A

2 Disclaimers Forward Looking Statements: This presentation contains forward looking statements and forward looking information regarding the proposed McMullen initial and longer-term development program including, without limitation, the number and type of wells to be drilled,availability of sufficient funds, receipt of necessary approvals and timing thereof, costs thereof, and forecast results relating thereto, the results of the Corporation's programs and operations being similar to those of analogous properties and estimated rates of return associated with the Corporation's proposed programs. Statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitably produced in the future. Operational forward looking information is based on management's expectations regarding future growth, results of operations, production, future commodity prices and foreign exchange rates, future capital and other expenditures (including the amount, nature and sources of funding thereof), plans for and results of drilling activity, environmental matters, business prospects and opportunities and future economic conditions. Readers are cautioned that assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Forward looking statements involves significant known and unknown risks and uncertainties. Reference is made to Trafina's revised annual information form for the year ended December 31, 2010 dated April 8, 2011 for a description of some of the risks that could affect the Company's future results and could cause results to differ materially from those expressed in the Company's forward looking statements. The forward looking statements contained in this presentation are made as at the date hereof and, except as required by applicable securities laws, Trafina does not undertake any obligation to update publicly or otherwise any such statements. Basis of Presentation and Cautionary Statement: Information in this presentation expressed in boes is derived by converting natural gas to oil in the ratio of six thousand cubic feet (Mcf) of natural gas to one barrel (bbl) of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References in this presentation to Estimated Discovered Oil-Initially-In-Place were evaluated by McDaniel & Associates Consultants Ltd. (McDaniel) in a report dated April 1, 2011 with an effective date of March 31, 2011 prepared in accordance with National Instrument Standards of Disclosure for Oil and as Activities (NI ) and the Canadian Oil and as Evaluation Handbook (COEH) utilizing the following definitions: Low Estimate: This is considered to be a conservative estimate. It is likely that the actual quantities will exceed the low estimate. If probabilistic methods are used, there should be at least a 90% probability (P90) that the quantities will equal or exceed the low estimate; Best Estimate: This is considered to be the best estimate. It is equally likely that the actual quantities will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50% probability (P50) that the quantities will equal or exceed the best estimate; High Estimate: This is considered to be an optimistic estimate. It is unlikely that the actual quantities will exceed the high estimate. If probabilistic methods are used, there should be at least a 10% probability (P10) that the quantities will equal or exceed the high estimate. References in this presentation to Heavy Oil Reserves were evaluated by McDaniel & Associates Consultants Ltd. (McDaniel) in a report dated October 11, 2011 with an effective date of October 1, 2011 prepared in accordance with National Instrument Standards of Disclosure for Oil and as Activities (NI ) and the Canadian Oil and as Evaluation Handbook (COEH). 2

3 Company Profile Stock exchange Ticker symbol Shares outstanding Basic Warrants (exercisable at $0.45 expires October 21, 2012) Options (average exercise price of $0.37) Fully diluted TSX Venture TFA.A 55,690,562 25,715,000 3,585,000 84,990,562 Shares as per SEDI Warrants Options Total % of fully diluted Insiders, employees & consultants 14,854,868 4,505,885 3,585,000 22,945,753 27% 3

4 Directors Donald J. Douglas - President and CEO of United Inc. Russell J. Kalmacoff - President of Rockmount Corp. Robert W. Lamond (Chairman) - Chairman of Humboldt Capital Corporation Kelly J. Ogle - President and CEO of Trafina Energy Ltd. C.A. (Tony) Teare - Executive Vice President, CFO and a Director of Humboldt Capital Corporation Roland T. Valentine - Independent businessman 4

5 Management Kelly J. Ogle President and CEO 30 years of experience building oil and gas companies from the ground up, including Upper Lake, DiamondTree, Ranchgate, Connacher, Ranchero, Opal and Carmanah ary Taylor, CA Vice President of Finance & CFO 18 years of accounting experience in the oil and gas industry, including serving as controller at Upper Lake, Diamond Tree and Blue Mountain Ben VanRootselaar, P.Eng. Vice President of Engineering 32 years in the oil and gas industry, including 15 years of experience in facilities, reservoir, joint ventures and operations at an intermediate company Ed Marcinew, P. eol. Vice President of Exploration 27 years in the oil and gas industry, including VP Exploration at Peregrine Energy and Ranchgate and Exploration eologist at Dominion Exploration 5

6 Operations Overview McMullen 100% working interest in 33 sections (21,120 acres) of heavy oil prospects Rangeview/Divide 90% working interest in 37.1 gross (33.4 net) sections (17,825 net acres) of oil prospects Wetaskiwin 10% to 100% working interest in 39 gross (18.7 net) gas wells (7,544 net acres) 6

7 Who are we? Oil at Rangeview / Divide in southwest Saskatchewan Heavy oil at McMullen in northeast Alberta Stable gas at Wetaskiwin 7

8 Strategy - Decision to become oily 12% Oil Natural gas 26% 2009 Average Production 2010 Average Production Trafina starting taking steps in 2009 to exploit existing and acquired assets to become a junior oil producer. Trafina plans to be greater than 50% oil production. 33% Month Average Production (estimate) 8

9 9 It s all about McMullen

10 McMullen What do we have? Significant land position Prospective for Wabiskaw heavy oil cold production Develop area using POD drilling PEACE RIVER OIL SANDS ATHABASCA OIL SANDS McMullen Edmonton Calgary Significant resource potential 10

11 McMullen Oil Initially-In-Place (OIIP) ESTIMATED DISCOVERED OIL INITIALLY-IN-PLACE (1) AS OF MARCH 31, 2011 (McDaniel & Associates Consultants Ltd.) Category/Level of Certainty Discovered OIIP (MMBbl) Low Estimate 254 Best Estimate 303 High Estimate (1) Discovered Oil Initially-in-Place is that quantity of oil that is estimated, as of a given date, to be contained in known accumulations prior to production. OIIP is the most specific category of resources that can be assigned at this stage because there is insufficient data available at this time to sub classify. The data required to sub classify is data such as viscosity and flow test data that will be obtained when the vertical wells are drilled. There is no certainty that it will be commercially viable to produce any portion of the resources.

12 McMullen - Area is heating up - The lay of the land Husky McMullen Total Production 2008 Husky CNRL 12 Based on public data

13 McMullen - Area is heating up - The lay of the land Husky McMullen Total Production 2009 Husky CNRL 13 Based on public data

14 McMullen - Area is heating up - The lay of the land Husky McMullen Total Production 2010 Husky CNRL 14 Based on public data

15 McMullen - Area is heating up - The lay of the land Husky McMullen Total Production Based on public data

16 McMullen Lay of the land Husky Operating to the northeast (field production currently exceeds 3,000 bopd) (1) TRAFINA RECEIVED PRSA APPROVAL TRAFINA HUSKY HUSKY CNRL CNRL Seven vertical wells averaged 35 bopd in July 2011 (1) new Husky pod currently producing 300 bpd (1). Commencement of in-situ combustion pilot project start-up expected Q CNRL has applied for a Primary Recovery Scheme (PRSA) east of the Trafina lands Surveyed three vertical well locations (1) Based on public data 16

17 17 McMullen How did we get here?

18 McMullen From prospect to production in less than one year November Q July-August 2011 August 2011 September 2011

19 McMullen - Initial Development Seven vertical well licences All-weather access road and surface locations are complete Drilled three vertical test wells in July 2011 (05-28, 11-28, 16-28) W4M 19

20 McMullen sample vertical test well data Ideal characteristics Trafina Pay >5 metres 8.5 metres Porosity >25% 32-34% Resistivity cutoff >20 Ohm Ohm Pressure >1,200 kpa 1,890-1,960 kpa Viscosity <50,000 cp 18,500-30,000 cp 20

21 McMullen Resulting reserves based on drilling vertical test wells Net Present Values of Future Net Revenue (McDaniel & Associates Consultants Ltd.) (as at October 1, 2011 based on forecast prices and costs) (before income tax) (000) Discount Factor Total Proved Total Probable Total Proved Plus Probable 0% $6,265 $8,985 $15,250 5% $5,408 $7,510 $12,918 10% $4,636 $6,313 $10,949 15% $3,948 $5,336 $9,284 20% $3,336 $4,535 $7,870 94% of Trafina's reserves are located in one section based on the results of drilling three vertical wells 6% are based on three additional wells to be drilled in the immediate area Summary of Heavy Oil Reserves (as at October 1, 2011 based on forecast prices and costs) Commodity Proved Probable Total P+P Oil & Liquids (Mbbls)

22 22 McMullen Where do we go from here?

23 McMullen Propose to drill and evaluate additional vertical wells Drill two additional vertical test wells proposed at & Evaluate well coring data and monitor production W4M 23

24 McMullen And or Drill POD Drill POD on vertical test well location to be determined after further well analysis Up to 8 slant wells per pod (estimated costs) Lease $0.1 MM Drill & Complete $3.6 MM Equip $0.9 MM Total (gross) $4.6 MM POD 24

25 25 McMullen Potential drilling impact over PRSA lands

26 McMullen Long-term drilling plans over PRSA lands (risked well count) R26 FC C R25W4 A A H U U H U H A A H H H K H U U UH H H H H H H C Max vertical drilling locations per section (total 36 vertical wells) H H H L 29 F C F 28 C F CK D A A C A L T77 F U 23 K LKLC K UKC LFK F FU KU U K L A F L L L T77 Assume 50% success (total 18 vertical wells) L K U U F LK L R26 LD V 6 K L L 4 R25W4 L 3 F L UV 2 L 8 slants (PODs) drilled off successful 18 vertical wells (total 144 slant wells + 18 vertical wells = 162 wells) Trafina Lands Trafina Received Primary Recovery Scheme (PRSA) Approval Repeatable resource play 26

27 27 Other Areas of Operation

28 Rangeview/Divide - Shaunavon & Madison Oil 90% W.I. in 37 sections Upper and Lower Shaunavon and Madison oil zones Multi-zone exploration potential in the Cretaceous and Mannville zones 28

29 Wetaskiwin stable gas production Horseshoe Canyon CBM, Belly River and Mannville formations 43% average working interest and 4,000 gross acres of land Area operators going to eight wells per section; another 84 potential locations Poised to take advantage of increase in gas prices 29

30 Why Trafina? Exciting pure play heavy oil prospect at McMullen Potential for exponential growth in reserves, production and cash flow Management group that recognizes business cycles 30

31 Partners Reservoir Engineers Auditors Banker Law Firm McDaniel & Associates Consultants Ltd. KPM National Bank of Canada Macleod Dixon LLP 31

32 Contact Trafina Energy Ltd. Suite 2210, th Avenue S.W. Calgary, AB T2P 3S8 Phone: Fax: info@trafinaenergy.com 32