Corporate Presentation. February 2017

Transcription

1 Corporate Presentation February 2017

2 Forward-looking Statements This presentation contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties, and are not guarantees of future performance of the Company. These risks and uncertainties could cause actual results and the Company s plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking statements are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. The Company assumes no obligation to update forward-looking information should circumstances or management s estimates or opinions change. 2

3 EXECUTIVE SUMMARY CE is a multifaceted company with three focuses: 1. A mid-stream supplier of water disposal services. 2. Development of a wellbore mining technology. 3. An energy/mineral explorer CE has an established water disposal business in northeast British Columbia and will continue to operate and expand this business as market demand and capital allow. CE has developed a wellbore mining technology that it believes can be applicable in at least 11 energy/mineral fields: coal, coalbed methane, diamonds, potash, phosphate, soda ash, gilsonite, uranium, heavy oil, geothermal, and fresh water wells. Patent has been applied for. The technology has yet to be tested in the field. The first tool has been built and we are preparing to bench test it on surface. CE will attempt to use its wellbore mining technology as leverage to earn equity interests in any and all of the targeted energy/mineral deposits. 3

4 Company History CE was formed in 2006 with the objective of exploiting oil and gas and coalbed methane ( CBM ) resources in NE British Columbia. A strategic acquisition in 2007 added the Montney Shale to CE s portfolio. Extensive exploration and delineation work was effected through three joint ventures With larger third parties established large gas resources in both the Shallow CBM and Montney formations The collapse of natural gas prices in mandated the shut-in of the CBM project in 2010 In 2012 the Company began researching and designing an innovative wellbore mining tool for the purpose of commercializing its Peace River CBM Project Continued low natural gas prices in North America led CE to sell its Montney rights and distribute as return of capital $12.2 million to shareholders in Development of the wellbore mining tool led to identification of opportunities in coal, coalbed methane, and multiple other minerals. CE had a water disposal well associated with the coalbed methane project that has been turned into a commercial disposal operation. 4

5 Water Disposal In November 2016, CE signed a one year contract for the provision of water disposal services to a large producer in northeast British Columbia. Water disposal operations generated average gross daily revenues of $7,400 over the first month of operation. CE projects long-term operating costs to be approximately $1,700 per day. CE has the contractual right to drill additional water disposal wells under approximately 35 sections owned by another energy company. Water disposal demand is cyclical and generally inversely related to drilling and completion activities; i.e., the greater the fracking activity, the less water disposal demand because produced water is recycled in the frack jobs. 5

6 Jet Cavitation Tool Development Developed by the Company to excavate cavities in subsurface coal seams to: Produce commercial quantities of coal via a wellbore Stimulate the production of natural gas from coal seams Simple four-step process: Jet cavitation tool accesses the resource through a small diameter vertical or horizontal wellbore Hydraulic and mechanical forces break up and granulate the resource The resource is circulated in a water slurry to the surface, where the resource is separated from the water and stockpiled Water is recirculated into the well in a closed-loop system The jet cavitation technology is predicated on component parts used routinely in industry, but has not yet been tested in the field The first tool is built and CE is working on securing an acceptable test project Patent applications have been filed 6

7 Jet Cavitation Mining Projected Advantages Access resources beyond the economic or physical reach of conventional mining techniques From smaller deposits From deeper deposits Through greater overburden cover Directionally under abandoned pit mines or lakes (without requiring drainage) Directionally following inclined ore bodies Reduced capex with simple, portable mining technique Lower operating costs and a shorter timeline to production Safer than conventional mining, with no subsurface personnel More efficient than mechanical mining with less country rock in the bulk ore, and olivine matrix breakdown through exposure to high-pressure, high-volume water More environmental, with smaller surface footprint and ability to back-fill tailings into the cavern More precise, allowing for precision mining of high-grade zones Less breakage of large stones and diamonds due to preferential erosion of the softer host kimberlite / olivine groundmass 7

8 Jet Cav Tool Projected Multiple Applications The jet cavitation tool is able to access resources that are beyond the reach of conventional mining techniques due to size, depth, concentration, or safety issues The tool has the potential to revolutionize certain aspects of the coalbed methane, coal, diamond mining and potash mining sectors CE plans to target known, proven resource deposits that are beyond the reach of conventional mining techniques CE has identified a number of CBM, diamond and potash deposits that are appropriate prospects for the jet cavitation tool CE has met with mining executives across a number of disciplines and generated significant interest for the jet cavitation tool CE intends to pursue these business opportunities with the objective of earning equity interests in resource projects or generating revenue through licensing of the technology 8

9 Jet Cavitation Tool Coalbed Methane Creation of cavities in gas-bearing coal seams has been demonstrated in multiple CBM fields to be one of the most effective stimulation techniques for gas production Potential to create a second revenue stream by transferring commercial quantities of coal to the surface Ideal prospect is in high-rank, high gas content, compressed coal seams Jet cavitation tool would significantly improve coal mining safety by degassing coal seams before mining personnel enter the area, reducing the chance of explosions Significant opportunities with Chinese CBM projects China hosts the world s third largest CBM resource base, much of it high-rank, high gas content, low permeability coals China has implemented incentive programs to stimulate CBM production, with the objective of increasing natural gas usage in the country China also hosts the largest shale gas resource of any country worldwide, providing additional opportunities Meetings with Chinese coal and CBM executives have generated significant interest in the jet cavitation tool 9

10 Jet Cavitation Tool Diamond Mining Jet cavitation tool is ideal for thick, vertical ore deposits Diamonds are often found in vertical kimberlite pipes that are too small or too deeply buried to be commercially developed by conventional mining techniques Jet cavitation micro mining technique can be performed with great accuracy and conducted through thick overburden deposits without having to strip the overburden rock Dramatically reduces upfront capex requirements and shortens the timeline to commercial production Jet cavitation tool can follow inclined ore bodies and slant drill under abandoned strip mines or water bodies 10

11 Jet Cavitation Tool Potash Mining Potash is mined by two primary methods: Conventional underground tunnel mining Solution mining Much of the global potash resource is found in deposits too deep to be tunnel mined, and solution mining becomes marginal CE s jet cavitation technology can access these deeper potash deposits via multi-lateral, horizontal wells, combining both mechanical and solution mining techniques 11

12 Leadership Team Name Title Experience John Proust Chairman, Director President, J. Proust & Associates Inc. Over 30 years experience advising public and private companies on debt and equity financing, mergers and acquisitions and corporate restructuring. Currently serves on the boards of various TSX-V listed issuers. Benjamin M. Jones Vince Boon Eileen Au President & CEO, Director Chief Financial Officer Corporate Secretary Founder of Peace River Project. 38 years in oil and gas exploration and production, including last 12 years focused on unconventional gas in northeast British Columbia. BS Mechanical Engineering. A Chartered Accountant with more than 20 years of experience including financial reporting for Canadian and US listed companies, strategic planning, tax planning, corporate governance, due diligence. Extensive senior management experience in a variety of public companies in the areas of finance and compliance. Kyle Burnett Director Chairman, CEO/President of Burnett Petroleum Company, Magnolia Petroleum Company and Arcadia Operating, LLC. as well as a board member for Arcadia Exploration and Production Company. 34 years in oil and gas exploration and production. Jonathan Bahnuik Director Approximately 10 years of experience in oil and gas law. Has represented the Company since 2006 and has an intimate knowledge of the Company s assets and history. Win Purifoy Director Co-founder and co-manager of Cibolo Capital Partners. Cibolo founded Senderra RX Partners in 2010, a Texas-based Specialty Pharmacy, operating in all 50 states, with 15,000 prescribing physicians. Founder of Value Added Communications. Over 30 years of experience in sourcing, structuring and managing equity investments in energy, agriculture, medical, technology, printing, real estate, financial services, and telecom. Co-founder of Canada Energy Partners in

13 Company Overview Shares Options Warrants Fully Diluted 90,394,534 2,120, ,514,534 Management and Directors own ~19.6% on a fully diluted basis Average trading volume (Q1-2016): 10,000 shares/day Canada Energy Partners Inc. Suite Burrard St Tel: Vancouver, BC info@canadaenergypartners.com Canada V7X 1J1 Website: 13

14 Appendix A - Water Disposal Risk Factors Reservoir failure; inability of the aquifer to accept any more water Mechanical failure of the wellbore. Market failure; no further commercial water demand for the service. Withdrawal of regulatory permits for water disposal. 14

15 Appendix B Cavitation & CBM For illustrative purpose only and does not reflect the CE JetCav Equipment. 15

16 Appendix B1 Cavitation & CBM San Juan Basin New Mexico In the fairway zone, gas production from cavity completions exceeds that from hydraulic fracture stimulations by 10 times. SPE Average San Juan cavity radius = 5 We are confident jetcav can give us greater than 5 cavity radius. 16

17 Appendix B2 Cavitation & CBM GEOMECHANICS OF CAVITY SUCCESS The poro-elasticity of coal leads to cleat closure under stress. Cavitation relieves and redistributes the stress in the coal thereby opening the cleats and stimulating methane production. 17

18 Coal Value ($M) Appendix B3 Coal Mining Economics $800 50' Net Coal 67' Net Coal 100' Net Coal $700 $600 $500 $400 Net Value of Cavitated Coal Vs Radius Based Upon $150/ Metric Tonne at Prince Rupert $300 $200 $100 $ Jet Radius (ft) 18