2014.03.27_Jericho Corporate Presentation

Views:
 
     
 

Presentation Description

Jericho Oil Corporate Presentation

Comments

Presentation Transcript

PowerPoint Presentation:

Corporate Presentation April 2014 For discussion purposes only and does not constitute an offer to sell – Past performance is not indicative of future results – Actual production may not be as projected.

PowerPoint Presentation:

Forward Looking Statement Presentation and Reader Advisory This presentation includes certain statements that may be deemed forward-looking statements. All statements in this presentation, other than statements of historical facts, that address future events or developments that Jericho Oil Corporation (“JCO”) expects are forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking statements in this presentation include, but are not limited to, statements with respect to timing and completion of JCO’s exploration and development program on its Kansas oil leases.   Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Some of the risks and other factors could cause results to differ materially from those expressed in the forward-looking statements include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in commodity prices; governmental regulation of the oil and gas industry, including environmental regulation; geological, technical and drilling problems; unanticipated operating events; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for commodities; liabilities inherent in oil and gas exploration, development and production operations; changes in tax laws and incentive programs relating to the oil and gas exploration industry; and the other factors described in our public filings available at www.sedar.com . Readers are cautioned that this list of risk factors should not be construed as exhaustive. Although JCO believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Other than as required under applicable securities laws, JCO does not assume a duty to update these forward-looking statements. For more information on JCO, Investors should review JCO’s filings that are available at www.sedar.com .   Information and facts included in this presentation have been obtained from publicly available and published sources and where appropriate those sources have been cited in this presentation. JCO does not assume a duty to independently verify publicly available and published sources of information provided by arms length third parties.

PowerPoint Presentation:

Business Overview

PowerPoint Presentation:

Bring Modern Development Technology to Legacy Producing Fields Target Fractured Markets with High Ratio of Operators to Production Long-Life Conventional Oil Assets Repeatable and Consistent Development Strategy Focus on High Margin / Netback Oil Production Strategy

PowerPoint Presentation:

1 Represents Jericho’s 50% Working Interest in NI 51-101 PDP and PDNP reserves and excludes PUD reserves effective December 31, 2013; report by B.L. Whelan, P. Geo. 2 As of March 24, 2014 ³ Based on the company’s recently completed financing as announced on February 28, 2014 Acreage Proved Developed Reserves¹ Q4 – 2013 Production Symbol / Exchange Shares Outstanding² Warrants² Share Price ³ ~2,600 Acres 58,715 bbls 26 bopd JCO / TSX-V 37,051,366 primary 10,913,183 C$ 0.30 Market Capitalization C$ 11,115,409 Insider Ownership² 10% Company Overview

PowerPoint Presentation:

Strategic Focus Acquiring long-lived, onshore oil production in legacy, North America Oil Basins Exploiting productive assets through the implementation of primary and secondary oil recovery techniques Operating Strategy Opportunistically revitalize undervalued oil properties in fragmented, low-risk basins that have established production history through the application of proven, modern drilling, completion and recovery techniques Partner with on-the-ground operators with deep knowledge of basin geologies and drilling histories in each respective region Multi-faceted Team Management with over 25 years experience in the natural resources/energy sector Oil & Gas Consultant with successful development record in Jericho’s targeted basins Dedicated Operator with 10-year local operating experience in same play Jericho’s Opportunity: Overlooked & Undervalued Oil Fields Develop and Enhance Legacy Producing Oil Basins Basin Centric Platform

PowerPoint Presentation:

Repeatable Exploitation of Legacy Basins Across North America Addressable Market & Scalable Business Model : Jericho Oil focuses on: S hallow, vertical, low-risk , stripper oil wells that produce 10 bopd or less within: Historically producing, mature oil fields which have been neglected or abandoned Basin-centric focus allows economies of scale Estimated that stripper wells in North America may be accessing a reservoir which still holds two-thirds of its potential value¹ which can be unlocked through modern drilling techniques Stripper wells represent ~75-80% of the U.S. well count¹ and Comprise about 20% of U.S. oil & gas production¹ ¹ Interstate Oil and Gas Compact Commission Study, 2010 Current Jericho Oil Platform Addressable Markets Growth Oriented Platform

PowerPoint Presentation:

Capitalize on limited competition to develop legacy underdeveloped assets / fields overlooked and undervalued by larger industry players Local Operating T eam has developed assets in the Eastern Kansas region for over 15 years (drilled over 750 producers and injectors) Currently manages properties with over 400 bopd Jericho’s secured properties are similar in nature to the Local Operating Team’s previously developed assets; mature , under-developed, shallow leases with existing production and significant development opportunity In-fill and step out drilling program (vertical and horizontal) to realize proved, undeveloped reserves Increasing reserves “ through-the-drill-bit” Potential multi-zone stacked pay upside Maximize production through primary and secondary recovery techniques Enhance value through workovers, reactivation and well stimulation projects Efficient field-wide waterflood program applied to recover previously un-swept volumes Focused Asset Base (Previous Development) Building on Existing Local & Regional Network in East Kansas Long Term Conventional Basin Operation

PowerPoint Presentation:

First Re-Development Platform: Eastern Kansas

PowerPoint Presentation:

Two properties sourced, due- diligenced and secured by Jericho during Q4-2013 ~ 2,600 acres Current Production: ~51 bopd (Jericho - 50% Working Interest) 21 total leases, located within a hour’s drive Core Area of Operations Eastern Kansas Platform – Acquisitions Assets Acquired

PowerPoint Presentation:

Jericho’s assets are mature onshore oil fields which have had minimal exposure to advances in oilfield technology and improved operating and recovery techniques Workovers, reactivations and stimulations A cquisitions provide opportunities that include existing wellbore reworks, restimulations and re-activation Projects on acquisitions are inclusive of: acid treatments, fracture stimulations, adding wellbore perforations and reactivating temporarily abandoned wells Upgrading of infrastructure includes storage tanks, electric lines, roads, etc… Infill and step-out drilling (Vertical and Horizontal Wells) Conversion of Proved Undeveloped (PUD) Reserves to Proved, Developed, Producing (PDPs) Jericho’s infill drilling program will support continued growth in proved reserves and production volumes with low to moderate capital investment through 2.5 acre down spacing and 5-spot pattern optimization Step-out drilling provides opportunities to extend known field limits and expand productive horizons through the drilling of previously unidentified primary reserves Secondary Recovery (Waterflooding) Implement efficient, field-wide 5-spot waterflood program to un-flooded fields or fields with poorly executed prior waterfloods Phase 1 3-6 Months Phase 2 6-8 Months Phase 3 12-24 Months Eastern Kansas Platform – Systematic Asset Development Note: The timeline outlined above is subject to change due to factors, including, but not limited to weather –related delays.

PowerPoint Presentation:

40-Acre Well Spacing without pattern consistency (Drilled 1930’s – 1980’s) Optimized Spacing 2.5 Acres We apply a field-wide re-development (optimization) program to maximize profits from sub-1000 ft. reservoirs Densely drilled wells generate greater investor returns through more efficient reservoir drainage No communication between wellbores Jericho’s Value Creation 2,600 Drillable Acres 2.5 Acre Optimized Spacing + 1,000 Drillable Wells¹ ¹ There is no guarantee that all the wells will be commercially viable or will be a part of Jericho Oil’s future development plan Injector Well Producing Well Typical 160 Acre Spacing Unit Densely Spaced Wells Unlock Previously Untapped Reserves…

PowerPoint Presentation:

Payout ¹ Illustration assumes $90 / bbl, inclusive of an $8.50 differential accounting for transportation and crude quality; 15% average Landowner’s Royalty Interest; all dollar figures in $USD ² Assumes a 1:1 ratio of producers to injectors (target ratio in traditional 5-spot drilling pattern) …and Provide Enhanced Shareholder Value Through Strong Per Well Economics

PowerPoint Presentation:

Transport - $8 / bbl 3, 4 OPEX³ - $15 / bbl ¹ Assumes $90 / bbl USD oil pricing ² Assumes a 17.5% average royalty and 1.0% Ad Valorum taxes ³ Management estimates based on operator’s prior experience in the Eastern Kansas region. There is no guarantee Jericho Oil will achieve these results in the future. 4 Includes historic crude quality discounts Royalties & Taxes Operating & Transportation Costs High Netbacks $50/ bbl Netback Predictable Profitability Will establish hedging program designed to protect high oil margins / netbacks Favorable royalties should allow Jericho Oil to generate consistently strong netbacks Repeatable Development Strategy Deployment of capital builds economies of scale and maximizes shareholder value Inventory of drillables account for future high margin cash flows Jericho Produced BBL $90/ bbl Royalties & Taxes² = $17 / bbl Indicative East Kansas Economics¹ - $ / Barrel

PowerPoint Presentation:

Operational Overview

PowerPoint Presentation:

Characterization Location Douglas County, KS Acreage 650 Acres Well Spacing Optimization 2.5 acre spacing Shallow Formation Depth ~600 – 800’ TVD Indicative Economics¹ Gross Acquisition Price $700 Thousand Jericho Ownership 50% WI, 42.25% NRI Drilling & Completion Costs $25,000 - $50,000 Dry-hole Cost $10,000 – 15,000 Operating Expenses ($ /bbl) $12 .00 - $18.00 Annual Production Decline Rate ~ 5 – 7% Marketing Multiple oil purchaser options ¹ Economics represent the operator’s experience in the region and may not be indicative of future field economics; amounts in $USD ² Represents Jericho’s 50% Working Interest in NI 51-101 PDP and PDNP reserves and excludes PUD reserves effective December 31, 2013; report by B.L. Whelan, P. Geo. ³ Jericho’s stated probable (P2) and possible (P3) reserves were evaluated by an independent qualified reserves evaluator (B.L. Whelan P. Geo.) based on limited historical data, are considered preliminary and subject to revision.   Jericho expects to define its probable and possible reserve estimates with greater certainty  on completion of its current drilling and development program E- Kan 1 Lease Acquisitions E- Kan 1 - Asset Characteristics and Economics

PowerPoint Presentation:

2Q-2014 3Q-2014 4Q-2014 1Q-2015 Shut-In non-productive wells Rework existing wellbores Upgrade existing infrastructure Permit, drill and equip 15 producers and 15 injectors Begin infrastructure enhancements to connect new wells and bring on new production Permit, drill and equip 15 producers and 15 injectors Continue infrastructure enhancements to connect new wells Evaluate and drill additional locations, if economical Begin implementing waterflood on drilled sections Continue implementing field-wide waterflood Transition to steady-state operating mode Phase 1 Phase 2 Phase 3 Q2-2015 ¹ Represents Jericho’s 50% Working Interest in NI 51-101 PDP and PDNP reserves and excludes PUD reserves effective December 31, 2013 ; report by B.L. Whelan, P. Geo. Note: The timeline outlined above is subject to change due to factors, including, but not limited to weather –related delays. E- Kan 1 – Timeline, Production & Reserves

PowerPoint Presentation:

Characterization Location Miami and Linn County, KS Acreage 2,038 Acres Well Spacing Optimization 2.5 acre spacing Shallow Formation Depth ~600 – 800’ TVD Indicative Economics¹ Gross Acquisition Price $4.25 million Jericho Ownership 50% WI, 43.6% NRI Drilling & Completion Costs $25,000 - $50,000 Dry-hole Cost $10,000 – 15,000 Operating Expenses ($ / bbl) $12 .00 - $18.00 Annual Production Decline Rate ~ 5 – 7% Marketing Multiple oil purchaser options E- Kan 2 Lease Acquisitions E- Kan 2 - Basin Characteristics and Economics ¹ Economics represent the operator’s experience in the region and may not be indicative of future field economics; amounts in $USD ² Represents Jericho’s 50% Working Interest in NI 51-101 PDP and PDNP reserves and excludes PUD reserves effective December 31, 2013; report by B.L. Whelan, P. Geo. ³ Jericho’s stated probable (P2) and possible (P3) reserves were evaluated by an independent qualified reserves evaluator (B.L. Whelan P. Geo.) based on limited historical data, are considered preliminary and subject to revision.   Jericho expects to define its probable and possible reserve estimates with greater certainty  on completion of its current drilling and development program

PowerPoint Presentation:

2Q-2014 3Q-2014 4Q-2014 1Q-2015 Shut-In non-productive wells Rework existing wellbores Upgrade existing infrastructure Permit, drill and equip 20 producers and 20 injectors Permit, drill and equip 20 producers and 20 injectors Begin infrastructure enhancements to connect new wells and bring on new production Continue infrastructure enhancements to connect new wells Evaluate and drill additional locations, if economical Begin implementing waterflood by completed section Continue implementing field-wide waterflood Transition to steady-state operating mode Q2-2015 E- Kan 2 – Timeline, Production & Reserves Phase 1 Phase 2 Phase 3 ¹ Represents Jericho’s 50% Working Interest in NI 51-101 PDP and PDNP reserves and excludes PUD reserves effective December 31, 2013 ; report by B.L. Whelan, P. Geo. Note: The timeline outlined above is subject to change due to factors, including, but not limited to weather –related delays.

PowerPoint Presentation:

Bring Modern Development Technology to Legacy Producing Fields Target Fractured Markets with High Ratio of Operators to Production Long-Life Conventional Oil Assets Repeatable and Consistent Development Strategy Focus on High Margin / Netback Oil Production Strategy

PowerPoint Presentation:

Appendix

PowerPoint Presentation:

Waterflooding is a form of secondary recovery that repressurizes the reservoir by injecting water to push oil volumes to producing wellbores Primary recovery results from depletion of natural reservoir pressure and typically recovers 10-25% of original oil in place (“OOIP”) Water injection replaces the reservoir pressure lost during primary recovery and may produce an additional 10-20% or more of the OOIP “5-Spot” Waterflood Pattern Displacement of Oil by Waterflood Waterflood Overview

PowerPoint Presentation:

BOPD Time Elapsed Waterflood Life Primary Production Secondary Production ------------------------------------------------------------- ----------------------------------------------------- Start Water Injection » « Production Response Reservoir Fill-Up Illustrative Waterflood Response & Growth

PowerPoint Presentation:

Allen Wilson President, Chief Executive Officer and Director Allen was appointed President, CEO and a director of the Company in September 2011. He brings extensive capital markets and corporate development experience to Jericho. Allen has been a successful investor, fundraiser and business development strategist for the past 20 years, working primarily with micro-cap companies at all stages of growth. He possesses a far-reaching network of relationships across North America and Europe. Allen has been a director of Shasta Gold Corp., a private gold mining company, since October 2010 and a director of Newcastle Energy Corp. since February 2013. Robin Peterson , CGA, CPA (Canada) Chief Financial Officer Robin was appointed Chief Financial Officer of Jericho Oil in December 2013. He has current Canadian public company reporting experience with U.S. oil operations and brings extensive financial, compliance and cost management expertise to Jericho. Robin has been a director of Newcastle Energy Corp. since June 2013. Management Team

PowerPoint Presentation:

Allen Wilson (see management bios) Stephen Kenwood, P.Geo . Stephen joined the board of directors of the Company in September 2011. He serves as a geological and management consultant to various public and private companies. He is a registered member of the Association of Professional Engineers and Geoscientists of British Columbia. Stephen received a B. Sc. (Geology) degree from the University of British Columbia in 1987. He has experience in the area of advanced project development, as a geologist with Cominco, Ltd. on the Snip gold project, as a project geologist at the Eskay Creek deposit for Prime Exploration Ltd., and as a project geologist on the Petaquilla copper-gold porphyry deposit in Panama. Stephen currently a director of a number of TSX listed companies. Nicholas W. Baxter Nicholas joined the board of directors of the Company in September 2011. He has a 24 year career in international resource exploration and development. He has served President & CEO of Eurasia Energy Limited (EUENF:OTCQB) since November 2005. Originally trained as a geophysicist, Nicholas received a Bachelor of Science (Honors) from the University of Liverpool in 1975 and has worked on geophysical survey and exploration projects in the U.K., Europe, Africa and the Middle East. He was COO and a director of A&B Geoscience Corporation from 1985 to 2003, where under his guidance the company secured the first onshore production sharing agreement in Azerbaijan in 1998. A&B became controlled by a private Swiss oil trading firm in 2002. Nicholas worked as an independent upstream oil and gas consultant from 2002 to 2004 before joining Eurasia. He has served as a director of Eurasia Energy since March 2005. Gerald R. Tuskey   Gerald joined the board of directors of the Company in January 2013. For the past 21 years, he has worked as a self-employed corporate/securities lawyer based in Vancouver, British Columbia. Before establishing his own independent practice, Gerald was employed as an associate lawyer by firms in Calgary and Vancouver. He has 28 years’ experience in providing securities and corporate law counsel to a wide variety of domestic and international publicly traded clients. Gerald has acted as an officer and director of various public venture companies and takes primary responsibility for Jericho’s corporate and regulatory filings and compliance . Board of Directors

PowerPoint Presentation:

Reserves : Estimated remaining quantities of petroleum anticipated to be commercially recoverable from known subsurface accumulations based on the analysis of historical drilling, geological, geophysical, and engineering data Proved Reserves: Estimated quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods and government regulations – “ Reasonable certainty ” is intended to express a high degree of confidence that quantities will be recovered –usually equal to a 90% or greater probability that the estimated quantities of petroleum will be recovered Probable Reserves: Estimated quantities of petroleum which analysis of geological and engineering data suggests are more likely than not to be recoverable – meaning there should be at least a 50% probability that the estimated quantities of petroleum will be recovered Possible Reserves: Estimated quantities of petroleum which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves – meaning there should be at least a 10% probability that the estimated quantities of petroleum will be recovered Working Interest (“WI”): A percentage of ownership in an oil and gas lease granting the owner the right to explore, drill and produce oil and gas from a tract of property. Working interest owners are obligated to pay a corresponding percentage of the cost of leasing, drilling producing and operating a well or unit. The Working interest owner receives their share of the production revenue after the royalty owners have taken their share and after expenses have been deducted Net Revenue Interest (“NRI”): A share of gross production after all burdens, such as royalty and overriding royalty, have been deducted from the working interest. It is the percentage of gross production that each party actually receives Total Vertical Depth (‘TVD’): The end of the well, measured by the length of pipe required to reach the bottom Barrels of Oil Per Day (“BOPD”): A common unit / abbreviation of the measurement of a volume of crude oil. The volume of a stock tank barrel is equivalent to 42 U.S. gallons Barrel (“Bbl”): An abbreviation of oilfield barrel. A volume of 42 U.S. gallons Source: Society of Petroleum Engineers (“SPE”) and Nontechnical guide to Petroleum Geology, Exploration, Drilling and Production (Norman J. Hyne, Ph.D.) Glossary of Key Terms

PowerPoint Presentation:

Address: Corporate Office Jericho Oil Corporation 888 Dunsmuir Street, 11 th Floor Vancouver, BC, V6C 3K4 Email: investorrelations@jerichooil.com Website: www.jerichooil.com TSX-V: JCO Director, Investor Relations: Tony Blancato Phone: 604.343.2725 Director, Corporate Communications: Adam Rabiner Phone: 604.868.7881 Contact Us

authorStream Live Help