huntington exploration inc. (hei.v) stable production, low cost oil weighted portfolio february 2013
TRANSCRIPT
Huntington Exploration Inc. (HEI.V)
Stable Production, Low Cost Oil Weighted Portfolio
February 2013
Management Team
• Robert J Verhelst (B.A.) President & Chief Executive Officer Previously 11 years senior management experience (partner,
director, officer, RR) in several Western Canadian based Brokerage firms including 6 years as President and CEO of a US (FINRA)
regulated foreign broker dealer. Three years regional and national management team at CIBC. 5 years combined experience at the Alberta Securities Commission and Vancouver Stock Exchange.
• Elizabeth More (P Geol) Vice President ExplorationPreviously V/P Exploration Angle Energy , V/P Exploration Flagship
Energy, Encal Energy, Altana Exploration, Gulf Canada Resources
• J Timothy Bowes(MBA) Vice President Land & Business Development Previously President North American Oil & Gas , V/P Corp Finance
Yorkton Securities, Manager Land Numac Energy
Board of Directors
• Steve Harding (P Geol)President and CEO of Contact Exploration, previous VP EnCana,
Chief Geoscientist at Husky Oil and Gas
• Michael Binnion (CA)President and CEO of Questerre Energy Corp., previous President of Terranex and President/CEO of Flowing Energy
• Roger McMechan (P Eng)
Chief Operating Officer of Iskander, previous Executive VP and Director at Winstar Resources Ltd and Sr. Manager at PetroCanada
• Hubert Marleau (B Sc Econ)President and Co-founder of Palos Capital Corporation, previous
Executive level of Nesbitt Thomson Inc. and Levesque Beaubien Inc.
Huntington Overview – Oil and Gas Portfolio
• Huntington – a recapitalized Co.
• New Board elected• Mandate to place new oil and gas assets into the Company
• New assets secured March 2012• Poised for growth - oil and gas projects acquired
. Huntington’s asset base:• Legacy assets – light oil W4 AB
• Crown land sales – Deep Basin gas W5 AB
• PrivateCo asset acquisition – gas & heavy oil AB
Economics of all Huntington projects are favourable
Capital Structure
• Current Shares Issued and Outstanding 89,904,987
• Options Outstanding @ $.10 8,600,000
• Shareholders Warrants exercisable @ $.10 59,750,000
• Proforma Fully Diluted share structure 158,254,987
Huntington – Acquisition Highlights• Oil and gas portfolio secured in central Alberta in Q1 2012
• Low entry cost, low risk• 60 boe/d current production, low declines• land base: net 36 sections >95% undeveloped ; year round access• Oil/liquids weighted projects
• Low risk drill inventory - low API gravity oil• drill ready oil prospects with seismic coverage• Recompletions on existing gas wells plus new drills
• 2P Reserves:• Liquids 226.2 MSTB• Gas 2421 MMCF
• 2P NPV @10% $8,332,000 *
*Reliance Engineering Group Ltd Reserve Report completed March 1, 2012
Warwick – base production
Calgary
Edmonton
W5 W4
ALBERTA
Edmonton
Calgary
Huntington’s core focus areas are:
• Atlee/Bindloss (heavy oil) • Wizard Lk (gas)• Pine Creek (liquids rich gas)
Pine Ck W5
Wizard Lk W4
Atlee/Bindloss W4
Huntington’s Core Areas
W. Canada Basin plays – top tier RoR for W4 heavy oil projects (risked half cycle)
Warwick: Mannville Producing Gas Asset
Producing gas well (50% WI)
2D controlled drill location – Viking/SparkyWarwick - Glauc gas
storage
Shallow Multi-zone sand reservoirs
• Production from Mannville stacked sands at 700m depth
• Recompletion potential exists in uphole sands from two WI wells• Colony, Sparky, Viking targets
• Low cost to drill, complete and tie in • 2 sections at 50% WI, non-op
Existing Production Highlights
• One well produces 60 BOE/day• EUR range 0.5 – 1.5 BCF per well• Operating costs ~$5/boe
Vertical Well Forecast*
Capex D&C $500,000IRR 65%NPV 10 $643,000EUR 1240 MMcf
IP 750 mcf/day
* $3.25 AECO, CDN $
Atlee property - Ellerslie Oil ProspectLand and 3D seismic coverage
HEI land base
• 9.5 sections at 100% WI and 7.0 sections at 50% WI
• HEI operates 16.5 contiguous gross sections
• > 95% undeveloped land
• Offsetting Crown land available
• Year round drilling
3D seismic coverage
Huntington land – Ellerslie rights
Atlee property - Ellerslie Oil Prospect3D Amplitude map – Ellerslie sand porosity
Ellerslie reservoir• Target reservoir at 1025m depth;
• 3D seismic coverage (24 km2) shot in 2010 has identified several potential drill locations
• Analogue production immediately west
• Vertical IP rates 40 b/d - no frac 11-12 degree API oil
• OOIP 5.3MMBbls/half section; Significant in place oil resource
• Pools have 4 - 8 infill locations;
inventory 15+ locations
proposed initial well locations
channel cut/trap features
Vertical Well Forecast*
Capex D&C $550,000IRR 57%NPV 10 $472,000EUR 54 MboeIP 40 bopd
* $60/bbl flat price, CDN $
Bindloss property - Glauconitic Oil Prospect
Glauconitic sand reservoir
• Reservoir at 800m depth; 3-5m net pay, > 20% porosity
• HEI operates 8.5 gross sections at 100% WI
• Vertical wells define channel trend; low risk drills supported by available 2D seismic
• Analog production in immediate area with IP rates > 40 b/day
no frac, 13 degree API oil
• Ellerslie channel sands secondary target
Huntington land – Glauconite rights
Cum 69,855 Bbls
Cum 38,482 Bbls
Cum 19,477 Bbls
Horizontal Well Forecast* Capex $1,000,000IRR 50%NPV 10 $1,300,000EUR 88,000bblIP 80bbl/d
* $60/bbl flat price, CDN $
Mannville well control shown
proposed re-entry / drill locations
Wizard Lake property – Mannville resource gas prospect
Upper Mannville sand reservoirs
• Regionally extensive, liquids rich gas-charged sands up to 31m gross thickness
• Extensive 3D seismic coverage is available
• Excellent application for horizontal drilling
• HEI operates 3 gross sections at 100% WI
• Ample processing and infrastructure
• 10-12 BCF/section with potential for 4HZ/section
• Additional acreage in area to be acquired in2013;
Room to grow land holdings at low cost
6-32: Mannville production IP 1.7Mmcf/dtarget zone
Upper Mannville channel Net Pay >9% porosity (m)
Horizontal Well Forecast* Capex $1,800,000IRR 73%NPV 10 $1,700,000EUR 340MboeIP 2Mmcf/d
* $3.25 AECO,$CDN, 22 Bbls / 1Mmcf liquids
Pine Creek W5 property – gas prospectsBluesky Resource and High Impact Leduc opportunity
Bluesky production map
* $3.25 AECO, CDN $ 50 Bbls/1Mmcf liquids
Bluesky Reservoir
• Excellent Bluesky opportunity de-risked by offsetting industry HZ wells • IP 4-6 MMCF/day with NGL’s
• Reservoir continuity over Huntington’s land
Leduc Reservoir
• 50 bcf Leduc anomaly identified from industry 3D on 100% WI lands
Horizontal Well Forecast - Bluesky*
Capex $5,000,000IRR 100%NPV 10 $6,829,000EUR 860 MboeIP 4Mmcf/d + NGL
Location of Leduc anomaly on industry 3D seismic
NI 51-01 Reserve Report as at Mar 1 2012
Reserves identified at Atlee, Provost, Warwick and Pine Creek properties
Forward Looking Statements
Disclaimer This presentation contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements"). In particular, this presentation contains forward looking statements pertaining to the following: business plans and strategies; the 2012/13 capital budget; the potential exploration success; expectations regarding the ability to raise capital and to add to reserves through exploration and development; and treatment under governmental regulatory regimes. Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to Huntington Exploration and its shareholders. Forward-looking statements are based on Huntington Exploration current beliefs as well as assumptions made by, and information currently available to, Huntington Exploration concerning anticipated financial performance, business prospects, strategies, regulatory developments, future commodity prices, future production levels, the ability to obtain equipment in a timely manner to carry out exploration activities, the ability to market natural gas successfully to customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through exploration activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward looking statements will not be achieved. These factors include, but are not limited to risks associated with oil and gas exploration, financial risks, substantial capital requirements, bank financing, government regulation, environmental, prices, risks may not be insurable and reserves estimates. The forward-looking statements contained in this presentation are made as of the date hereof and Huntington Exploration does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward looking statements contained herein are expressly qualified by this cautionary statement.
Appendix
SE Alberta Cretaceous plays
Huntington W4 properties area
Atlee property - Ellerslie Oil ProspectType log: Ellerslie channel sand
Ellerslie channel sandPerforated, no fracCUM 1,264 Bbls oil
Mid-Mannville channel sandSecondary target zone
GR – Neutron density porosity GR – SP resistivity
Vertical well
• Ellerslie is a seismically identified oil resource
• > 5MM Bbls OOIP – 320 ac (1/2 section)
15% sand porosity cutoff – 6m net pay
GR - Neutron density por. SP - resistivity
Glauconitic sands Perforated, no fracCUM 43,978 Bbls oil
Atlee property - Ellerslie Oil ProspectType log: Glauconitic sands
15% sand porosity cutoff
Vertical well
• Prolific oil production from vertical wells in immediate area
Atlee property - Economics & Reserves
Vertical Well Forecast*
Capex $550,000
IRR 57%
NPV 10 $472,000
EUR 54 Mboe
IP 40 bopd
* $60/bbl flat price, CDN $
• Significant oil resource in place• Superior economics with heavy oil drilling program
Bindloss property - Glauconitic Oil ProspectType log: Glauconitic sand
Glauconitic sandtarget zone
GR - Neutron density porosity3.5m net pay 15% cutoff
GR – SP resistivity
02/6-12-22-5W4 - Vertical well
• Type well in section 12 – HEI 100% WI
• Cum 38,482 Bbls oil
Bindloss property - Glauconitic Oil ProspectType log: Glauconitic sand
Glauconitic sandtarget zone
GR - sonic GR – SP Elog
• vertical well in section 12: 100% WI
• Cum 19,477 Bbls oil; final rate 8 bopd
• Abd pressure 7900 SITP (Nov 2003) 8700 BH pressure, 13.8 degree API oil
11-12-22-5W4 - Vertical well
15% sand porosity cutoffSonic log
Bindloss property - Economics & Reserves
* $60/bbl flat price, CDN $
• Significant oil resource – ¼ section • Superior economics with heavy oil drilling program
Horizontal Well Forecast* Capex $1,000,000IRR 50%NPV 10 $1,300,000EUR 88,000bblIP 80bbl/d
Wizard Lake property – Mannville production
HEI Wizard Lake 6-32-48-27W4 Mannville gas production - cum gas 0.125 BCF
Wizard Lake property – Mannville productionHEI Wizard Lake 6-32-48-27W4/4 Mannville gas productionIP 1.7 Mmcf/day - cum gas 0.125 BCF
Mid-Mannville channels• 31m gross pay > 6% porosity• Top channel perf’d in 2007:
1348-50m• Excellent HZ drilling
candidate
Glauconite equivalent sand• 11m gross pay > 6% porosity• Excellent HZ drilling candidate
SP-Induction
Lower CH
6% por.
GR – ND por.
Sample description : 9-32 offset well – Mid-Mnvl SSFine-coarse grained sands, oil/condy stained
Upper CH
Glauc equiv
Wizard Lake property - Mannville Economics & Reserves
* $3.25 AECO flat price used
Horizontal Well Forecast*
Capex $1,800,000
IRR 73%
NPV 10 $1,700,000
EUR 340Mboe
IP 2Mmcf/d
• Significant gas resource – ½ section
Original gas-In-Place calculations