Liquid Rich Natural Gas Resource Plays In the Deep Basin - Northwestern Alberta

Transcription

1 Liquid Rich Natural Gas Resource Plays In the Deep Basin - Northwestern Alberta

2 Deep Basin Resource Play in Northwestern Alberta Donnybrook Energy Inc. is an emerging Canadian oil and natural gas company focused on the Montney and Bluesky formations in the Deep Basin, Northwestern Alberta. The Deep Basin liquid rich natural gas resource play is rapidly establishing itself as one of the premier economic resource plays in North America.

3 A Proven High-Quality Team David Patterson has raised in excess of $120 million for resource companies, with over 25 years of experience in the industry. Malcolm Todd has over 25 years of experience in senior positions with private and publicly traded oil and natural gas companies with operations in Alberta and British Columbia. Recently, two of these companies were acquired by senior Canadian companies. Murray Scalf has experience building oil and natural gas exploration and production companies in Alberta over the past 25 years; many of these companies were ultimately acquired by senior Canadian companies. Terry Skilnick is a geologist with over 12 years of experience successfully identifying economic resource opportunities. Three junior oil and natural gas companies have been built on his qualified recommendations and insight. Robert Todd has over 25 years of experience in senior positions with private and publicly traded natural resource companies. Recently, two of these companies were acquired by senior Canadian companies.

4 The Opportunity Key Drivers Alberta Natural Gas Deep Drilling Program incentives New Well Royalty structure Significant volumes of natural gas liquids associated with natural gas production The Deep Basin in Alberta is economically competitive with any play in North America.

5 Deep Basin Play Targets: Montney targeting liquid rich natural gas of 20+ BCF/section 500,000 bbls NGL/section Valhalla Grand Prairie Bluesky targeting liquid rich natural gas of BCF/section 400,000 bbls NGL/section Ansell

6 Growing land base in Western Canada Acquired working interests in 32 gross sections (24 net sections) prospective for Montney or Bluesky liquid rich natural gas resource development in the Deep Basin. Actively negotiating, posting and bidding for additional petroleum and natural gas rights in the Montney and Bluesky Formations.

7 Ansell Area: Expect to license first well Q4 2010; Q Donnybrook location Daylight Bluesky Data Points Initial production rates for Bluesky horizontal gas wells in the area are 4 million cubic feet per day, plus 180 barrels of associated natural gas liquids per day. (845 boe/d) Reserves in the area are estimated at BCF per section; 3 wells can be drilled per section. Donnybrook is pursuing additional opportunities in the area. Finding costs: < $5 BOE

8 Deep Valley - Montney Project Area Donnybrook s Current land position = 23 sections gross (15 sections net) Potential current inventory of 46 drilling locations (23 net) Unleased Crown Montney Formation rights = 20 sections Expiring, off-setting lands = 30 Sections Expect to drill in Q4/2010 or Q1/2011 the Company s first Montney horizontal well. Potential Initial Production rates of 8-10 million cubic feet per day plus associated natural gas liquids (1,500-1,900 BOED per day). Significant land position in place with ongoing land acquisitions program planned throughout Finding costs: <$4/BOE Targeting 20+ bcf/section Targeting 500,000 bbls ngls/section

9 Deep Basin Players

10 Horizontal Well Completion Donnybrook Horizontal Well Location A A Montney gas test Montney +30 metres By-pass pay, Montney sand D & A Producing vertical Montney gas well (800 mcf/d) Horizontal completion with multi-stage frac stimulation Targeting 20+ BCF/ Section Targeting 500,000 bbls ngls/section

11 Grand Prairie Horizontal Bluesky gas well Donnybrook lands potential location Other operators in the area have recently announced successful Bluesky horizontal wells with initial production rates in excess of 3 million cubic feet per day of gas, plus associated natural gas liquids of 60 barrels per day (560 boe/ day). Finding costs: <$7 BOE Donnybrook is evaluating open Crown lands in the area as well as pursuing farm-in opportunities. Bluesky vertical producers

12 Completion of Bluesky Well - Valhalla 2.2 BcF 3.2 BcF 2.0 BcF Donnybrook Bluesky Nearby infrastructure allows for easy tie-in. A cased well situated on the property will be reentered, perforated, fracture stimulated, and tested.

13 Minor Properties Holds various working interests in 23.5 sections (6 sections net) of lands primarily located in the Michichi Penhold area. Production from the area is approximately 55 boe/d.

14 Averages Per Resource Play ZONE PAYOUT PER WELL PER MONTH CAPEX $/WELL BOE RESERVES/WELL FINDING PER BOE Cardium (Oil) 32 months $3,000, ,000 $24/bbl Bakken (Oil) 15 months $2,500, ,000 $16.66/bbl Shaunovon (Oil) 15 months $2,000, ,000 $16/bbl Bluesky (Gas) 8 months $4,500,000 1,000,000 $5/bbl Montney (Gas) Shallow Montney (Gas) Deep 18 months $3,000, ,000 $6/bbl 15 months $6,000,000 1,500,000 $4.00/bbl The resource plays pursued by Donnybrook require the lowest capital expenditures per barrel in the Western Canadian Sedimentary Basin.

15 Summary Opportunity Overview Management team with a proven track record The Deep Basin in Alberta is economically competitive with any play in North America Significant volumes of natural gas liquids associated with dry gas production Acquired interests in twenty-three sections (Montney) and three sections (Bluesky) Early cash flow potential and easy tie-in due to extensive infrastructure in the immediate area

16 Capital Structure Shares Outstanding 122,951,946 Stock Options 11,975,000 Warrants 32,345,983 Fully Diluted 167,272,929 Directors, officers and associates hold 30% of current shares outstanding. TSXV: DEI

17 Appendix - The Technology Horizontal wells with multi-stage frac stimulation can yield 7x more natural gas than conventional vertical drilling. Capex Vertical completion = $3 Million (average) Capex Horizontal completion = $5+ Million (average) Conventional Well Horizontal Well with multi-stage frac

18 Cautionary Statement This presentation contains forward looking information. The reader is cautioned that assumptions used in the preparation of such information, although considered accurate at the time of preparation, may prove incorrect. The actual results may vary materially from the information provided herein. Consequently, there is no representation by Coastport Capital that actual results achieved will be the same as those forecast. This presentation is not an offer to sell, nor a solicitation of an offer to purchase, any securities. You should speak with your investment advisor. NI requires that we make the following disclosure: we use oil equivalents (boe) to express quantities of natural gas and crude oil in a common unit. A conversion ratio of 6 mcf of natural gas to 1 barrel of oil is used. Boe may be misleading, particularly if used in isolation. The conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.