investor presentation ( updated february 15, 2013 ) a proven, disruptive technology for hydrocarbon...
TRANSCRIPT
![Page 1: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/1.jpg)
INVESTOR PRESENTATION
(Updated February 15, 2013)
A P R O V E N , D I S R U P T I V E T E C H N O L O G Y F O RH Y D R O C A R B O N E X P L O R A T I O N
![Page 2: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/2.jpg)
Disclaimer and Forward-looking Statements
This presentation is not intended to be used as an Offering Document.
The information contained in this document may include forward-looking statements including opinions, assumptions, estimates and expectations of future prospects for the Company and financial projections. When used in this document, the words "anticipate," "believe", "estimate," "expect," "intend," "may," "project," "plan," "will," "should" and similar expressions are intended to be among the statements that identify forward-looking statements.
Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable; there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, volatility of oil and natural gas prices, changes in the oil and gas industry, the Company’s ability to implement corporate strategies and obtain financing, the state of capital markets, operating and technology risks, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities.
Neither the TSX-Venture nor the OTC Exchanges accept responsibility for the adequacy
or accuracy of any information contained in this document.
2
![Page 3: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/3.jpg)
3
NXT Energy Solutions Inc. is a service provider to the upstream Oil & Gas Industry:
SFD ® Survey System
Engaged in exploration reconnaissance.
We identify and rank high-potential prospect leads using a unique airborne survey method.
www.nxtenergy.comA Canadian Public Company
![Page 4: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/4.jpg)
4
NXT’s method will identify the best oil and gas prospects
10 times faster, and at up to1/20 the cost of seismic….
Onshore / Offshore
SFD ® “Stress Field Detection”
SFD® (Patent Pending)
![Page 5: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/5.jpg)
5
A Disruptive Technology with Global Impact
SFD signal over Rubiales Field, Colombia
500 million bbls Rec.
SFD signal over Ladyfern Field, Canada
1.62 Trillion cu. ft. Rec.
SFD® Anomaly
Ladyfern Field Signal Response
SFD® Anomaly
Rubiales Field Signal Response
![Page 6: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/6.jpg)
SFD® System
Exploration spectrum
Aeromagnetics& Gravity
Hi-Res Aeromag
2-D Seismic
3-D Seismic
Drilling
SFD®
Inferred knowledge of Trap & Reservoir detail steadily increases
Gravity Gradiometry
Reconnaissance
Prospect LevelBasin Level Well Level
Prospect Identification Prospect Verification
The resolution of an SFD ® survey significantly surpasses other remote sensing techniques
6
![Page 7: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/7.jpg)
7
Focus is the key
Cost
Time
Risk
E&P Success =
LOW FINDING COSTS
REDUCES
SFD®: Fast Tracks the Exploration Process
EnvironmentalFootprint
![Page 8: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/8.jpg)
The aircraft
Cessna 560 Citation jet
(fly at 10,000 feet, 300 mph)
The SFD Sensors
2 systems of quantum devices
Data recording equipment
(2,000 cycles / second)
Aircraft positioning system
GPS based, tracks flight lines
SFD® Data Acquisition System(Versatile and rapid deployment)
8
![Page 9: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/9.jpg)
SFD ® grid (2x2) miles
2D-Seismic
What will $5.0 Million get you?
9
SFD® - More focused information, quicker and with no environmental footprint
Area = 2,000 square miles
2D Seismic SFD0
500
1000
1500
2000
2500
Line Miles
![Page 10: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/10.jpg)
10
SH min
SH max
Gravity field is distorted by stress
Discontinuities affect regional/local stress distribution
changes in stress orientationentering reservoir
SFD® responds to perturbations in the gravity field related to changes in stress direction
![Page 11: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/11.jpg)
Recent scientific advancements
validate the premise of using
quantum devices for
potential field surveys.
What’s New?
DARPA* Research Note, September 20, 2012:
“. . . micro-scale inertial sensors work like a focault pendulum. (the) sensors send out vibrations (and) the precession of a standing wave is measured . . .”
*Defense Advanced Research Projects Agency
Institute for Quantum Computing (IQC)University of Waterloo; Facility Opening – September 2012:
“. . . Research at IQC aims to harness (the) unique properties of quantum mechanics to build unprecedented technologies, such as . . . highly efficient sensors . . .”
11
SFD ® - A Quantum Technology
![Page 12: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/12.jpg)
SFD® Product
A recommended target map of anomalies identified by SFD® interpretation, rated on both reservoir and trap characteristics.
From this SFD® based Prospectivity map, seismic can be tailored to maximize results and minimize cost.
12
100 miles
100
mile
s
![Page 13: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/13.jpg)
Colombia example – the Quifa blockTested by Drilling
‘Blind Test’ Results
SFD ® identifies 4 leads
All verified by seismic
A – 100 million bbl
F - 100 million bbl
B - drills 100 ft wet sand
X - un-drilled
X
AF
B
X
13
![Page 14: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/14.jpg)
Example of NXT Survey ResultsLlanos Basin, Colombia (2009-2012):
NXT conducted 10 surveys for 5 clients
totalling more than 7,000 line kilometers
Wells drilled on SFD recommended leads
11 12
CommercialWells7 0
PredictionSuccess Rate64% 100%
Estimated 1.26 Billion BBL OOIP
4 Field Discoveries
Wells drilled in areas rejected by SFD
14
SFD® Recommendations vs. Discovery
![Page 15: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/15.jpg)
15
Highlights of the PEMEX 2012 SFD survey project:
• initial survey covered vast area (over 100,000 sq. km)
• covered varying geological areas and the Gulf of Mexico (e.g. salt traps)
• the survey was designed to assess SFD correlation with existing geophysical data and producing fields and to identify new exploration prospects
• the total project with recommendations was delivered in only 4 months
• PEMEX is assessing the potential for new SFD surveys for 2013
• PEMEX requested NXT to co-author a technical paper, which includes SFD / seismic correlation.
The paper will be presented at the June 2013 Congreso Mexicano del Petroleo in Mexico.
Importance? – PEMEX, 4th largest world-wide E&P, further validating the use of SFD!
SFD® - Growing Industry Acceptance
Note: Summary in lieu of confidential slides contained in live presentation
![Page 16: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/16.jpg)
16
SFD Case Example 8
Canadian PlainsNatural Fractures in Shale
Horn River, British Columbia
![Page 17: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/17.jpg)
17
SFD Case Example 8
Canadian PlainsNatural Fractures in Shale
Horn River, British Columbia
Directional drilling
Flight direction
![Page 18: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/18.jpg)
Alaska - NPRA
Potential SFD Survey Areas
New Frontiers - Alaska Onshore Exploration
A
B
Proposed Survey ‘A’
~ 5,000 square miles
3 X 3 mile grid survey$5.5 million approximate cost
Proposed Survey ‘B’
~ 2,000 square miles
3 X 3 mile grid survey$2.5 million approximate cost
Each delivered in 4 months!
18
![Page 19: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/19.jpg)
19
Source: Spears Oilfield Market Report, 2010; Barclay’s Original E&P Spending Survey, 2010; NXT Market Analysis
$12 BillionGlobal Geophysics
Market
2010 E&P Market:
$447 Billion1% = $120 million
A Vast Market Opportunity
2012 $11.4 Million 0.09%
2013 $20 Million 0.17%
2014 $40 Million 0.33%
NXT Revenue Targets
Best Previous Year - $5.3 Million
![Page 20: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/20.jpg)
Offices/Agents2012 Ongoing Projects
20
![Page 21: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/21.jpg)
21
2012 – A Record Year - $11 million
Summary of recent contracts and near-term pipeline objectives.
Near-termObjectives
Status Location US$ Value
Completed Colombia, Guatemala $ 3.5 million
Completed Argentina $ 1.65 million
Completed Mexico $ 5.8 million
Completed Belize $0.5 million
Underway Q1-13 South Asia $ 2.66 million
Pipeline Central & Latin America $ 10 million
Pipeline Asia $3 - $8 million
Pipeline Mediterranean $4 - $6 million
![Page 22: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/22.jpg)
1. Service Fees
2. Data SalesIn Colombia alone, over 40,000 km of proprietary data have been acquired.Additional data added with each new survey
3. RoyaltyExisting GORR contracts in Canada (Pengrowth ~ BC Horn River Basin; Alberta ~ Swan Hills)
4. Vertical ExpansionEquity ownership in prospectsLong term service contracts
Current and Future Revenue Streams
22
![Page 23: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/23.jpg)
23
Capitalization
TSX-V: SFD, OTCBB: NSFDF
Capitalization - Shares Outstanding (millions)39.5 Common shares issued
10.0* Convertible Preferred shares (convert at 1:1, mature Dec 31, 2015)
3.1 Stock options (average exercise price $0.85)
4.5 Warrants (US $1.20 exercise, expire from March 8 to May 4, 2014)
57.1 Fully diluted # of shares
D&O Insider Ownership – 15.9% Basic, 32% Fully diluted
52 Week High/Low: $0.59 - $1.17
Debt-Free Balance Sheet ~ $4.0 million cash
• Does not represent debt or debt service…converts 1:1 to common on achievement of milestones
(2 million of the total are currently convertible)
![Page 24: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/24.jpg)
24
Management Non-Executive Directors
Advisory Board
George LiszicaszChairman & CEO
Greg Leavens, C.A.
Chief Financial Officer
Andy Steedman, M.B.A
V-P Operations
Grafton Withers, M.B.A
V-P Marketing & Sales
Charles SelbyCaledonian Royalty Corporation
Mickey Abougoush Teknica Overseas Ltd.
Tom ValentineNorton Rose LLP
Krishna VathyamPetrodorado Energy
John AgeeBusiness Advisor
Dr. George IuscoRepsol
Dr. Cleveland JonesState Univ. of Rio De Janeiro
Dr. Arief BudimanUniv. of Calgary, Canada
Extensive public company experience
Solid global management experience
Outstanding scientific credibility
Board, Management and Advisors
![Page 25: INVESTOR PRESENTATION ( Updated February 15, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION](https://reader038.vdocuments.us/reader038/viewer/2022110320/56649c925503460f9494d15f/html5/thumbnails/25.jpg)
SFD ® Highlights
25
• Rapid and Cost-Effective
• Onshore and Offshore Surveys
• Commercially Proven and Profitable
• Vast Market Opportunity
• Quantum Technologies are the Future
THANK YOU !
NXT Contact Information
Main Telephone +1-403-264-7020
Email: [email protected]
Website: www.nxtenergy.com
Head Office Address
1400, 505 – 3rd Street SW
Calgary, Alberta, Canada, T2P3E6