Corridor Resources - 2012 AGM slides
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Transcript of Corridor Resources - 2012 AGM slides
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AGM 2012MAY 31, 2012
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Corridors Opportunities
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Atlantic Canadian Explorationand Production company withenormous resource potential
Commanding land position of1.5 million net acres in EasternCanada
Significant potential upsiderelated to high impact plays:
- New Brunswick shale gas
- Anticosti shale oil
- Old Harry Prospect
Existing cash flow has allowedCorridor to continue to progressopportunities with no debtduring period of weak gas
prices and challenging markets
Anticosti900,000 Net Acres
Old Harry250,000 Net Acres
Southern New Brunswick320,000 Net Acres
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Atlantic Canada Focused
Large, relatively unexplored area withsignificant resource potential
Retain leases/licences for majorprospects
Higher gas netbacks; existinginfrastructure tied to N.E. market
- premium to Henry Hub ~ $1.00 in2011 at Dracut, with heat content
premium 6%
Focus on gaining partners for our 3high-impact prospects
Ability to source additionalopportunities in the region
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Industry Challenges
Prolonged low N.A. natural gas pricing cycle created by supply overhang
Dry gas resource plays currently more challenging to farm-out
Challenging environmental & social acceptance issues for oil/gas industry
Eastern Canadian resource plays face high cost and lack of maturity
Numerous N.A. J.V. opportunities on market for potential partners creatingintensive competition for available capital
Junior oil & gas companies under significant market pressure
Resource plays the size of Corridors prospects require significant capitalresources and time to de-risk in order to demonstrate value potential
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2011 Summary
Completed the Anticosti Resource study by Sproule. Best estimate (Sproule) ofundiscovered Total Petroleum Initially in Place of 34 Bboe oil equivalent (20
Bboe net Corridor) Drilled Will DeMille O-59 in Elgin, N.B.
- Strong gas shows
- Good core results
- 8 potential frac intervals
Cash flowed $9MM in 2011; reduced G&A costs and capital program in 2011 inrecognition of low gas pricing period
Filed Old Harry Project Description for Exploration Well in early 2011- Due to multiple and lengthy regulatory processes, Corridor received
extension of drilling window to Jan 2016
Retention of licences in New Brunswick, Anticosti and Old Harry- 1.5 million net acres
Focused on partnering our major prospects; engaged Macquarie to assist withFrederick Brook Shale and Old Harry Prospect
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Over 300,000 net acres; highworking interests.
Frederick Brook Shale gas:- 67 TCF gross DiscoveredResources (best estimate)
Producing up to 13 mmcf/dgross from McCully area
- Hiram Brook gas McCully
Field 103 BCF 2P grossreserves- ~25 year reserve life index
Advancing F.B. Shale potentialwith on-going Elgin Program;completed O-59 drill Q4 2011
Recent N.B. Governmentannouncement on:
- Oil/Gas EnvironmentalProtection Plan
- New Royalty RegimeDiscussion Paper
McCully/Elgin Exploration andDevelopment Area
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McCully Plant
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Frederick Brook Attributes
Large, contiguous, high working interest~120,000 net acres
Best Estimate of gross Discovered Resourcesof 67 TCF (GLJ Petroleum Consultants Ltd. FrederickBrook Shale Gas Study 2009)
Frederick Brook shales 900 1,100 m ofgross thickness in a strike slip basin
Deep basin has thickened sediments strong possibility of being highly over-pressured
Will DeMille O-59 well has eight intervalsthat are potential frac candidates (core analysisindicates some intervals have exceptional permeabilityand porosity for a shale)
Plan to re-test B-41 (Apache well) in June
O-59 Potential Frac Intervals
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COMPARISONOFMAJORSHALEGASPLAYSTOTHEFREDERICKBROOKSHALE
FrederickBrook* Barnett Haynesville Marcellus HornRiver Utica
Age Mississippian Mississippian J urassic Devonian Devonian Ordovician
EstimatedBasinarea(mi2) 180 5,000 9000 95,000 4,200
Depth(m) 1,500 - 4,000 2,000-2,500 3,000-4,000 1,200-2,500 2,500 700-2,700
Thickness(m) 1100 45-250 60-110 15-75 140-180 30-1,050
TOC(%) 1 - 3 4.5 0.5-4.0 3-12 3-8 0.3-3.1
Porosity(%) 3 - 8 2.5-5.5 8-10 5.5-7.5 5 0.7-8.8
Permeability(nD) Up to 400** 250-300 700 200-300 300
Vitrinite Reflectance(Ro) 1.2 ++ 1.0 -2.0 1.1-3.0 2.2 1.0-3.1
Pressure(psi) 3,000 - 6,000 3,000 - 4,000 12,000 5,000 1,700 - 4,200
PressureGradient(psi/ft) 0.53 - 0.6 0.43 -0.50 0.7-0.9 0.4-0.7 0.6 0.46-0.5
DiscoveredResource(TCF)*** 67 327 717 1,500 700
Geomechanics (Brittleor
Ductile)Brittle Brittle Brittle Brittle Brittle Brittle
* FrederickBrookdatadeterminedbyCorridorResourcesandthirdpartyvendors
** Weatherfordanalyses(understatespermeabilities relativetootherlaboratories)
***Estimatesofothershalegasplayshavenotbeenpreparedin accordancewithNationalInstrument51-101;arebasedon
publicallyavailableinformationandrefertooriginalgasinplace (whichisnotaNationalInstrument51-101orCOGEterm).
The
term
discovered
resources is
equivalent
to
discovered
original
gas-
in-
place(OGIP)
Gas Shale Comparison
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Taken from other publically available resources
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Anticosti Island Highlights
1.5 MM gross acres of Macasty (Utica-equivalent) shale held in long-term licenses
Shale is well distributed over the Island
Core analysis shows good porosity andpermeability - thin turbidities and fracturesmay enhance permeability
Undiscovered Petroleum Initially-in-Place
Best Estimate of 34 Bboe (20 Bboe net toCorridor) Study conducted by Sproule
The Utica has become an exciting oil andgas play in the northeastern US (e.g. presentland valuations are in the $10,000+ per acre
range) A Schlumberger comparison between the
Anticosti Chaloupe #1 well and the OhioOSGS CO2 #1 Utica well indicates thatporosities, permeabilities and hydrocarbonsaturations are very similar
Chaloupe #1 Macasty Shale Oil Advisor Results
80% Oil Saturation
4-6% Effective Oil-Filled Porosity
40meters
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Macasty-Utica Visual Comparison
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Chaloupe #1
Macasty(Anticosti)
Utica/Point Pleasant(Ohio)
OGS CO2 #1
40meters
Porosity3-5%
Porosity4-6%
TOC2-4%
TOC
2-5%
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Exceptional Core Data
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Old Harry Highlights Opportunity to evaluate one of the largest
undrilled geological structures in EasternCanada (43,000 acres/67 sq miles) under
simple four-way closure Two target horizons: Bradelle and Brion
Island formations
Several direct hydrocarbon indicatorsidentified: satellite seepage slicks,
frequency anomalies, amplitude anomalies,and AVO anomalies
Over 1000 km of modern 2-D seismicavailable
Structures aerial extent and potential
reservoir thickness presents hugeopportunity for billion barrel oil or multiTCF gas discovery
Basin Modeling indicates light oil (~55 API)was initially generated and could be filling
the structure12
20Mil
es
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Old Harry Regulatory Summary Corridor submitted its Old Harry Exploratory
Drilling Project Description and E.A. to theC-NLOPB in February 2011
C-NLOPB eventually (with Federal EnvironmentMinisters recommendation) decided that a Strategic
Environmental Assessment (SEA) for NFLD side ofGulf was required; expected to be completed Q12013
Corridors Environmental Assessment (EA) anddrilling permits now expected to be processed in2013
Due to lengthy regulatory processes, Corridor wasgranted extension of drilling window (Phase I oflicence) to Jan 2016
The Quebec and Federal Governments signed anaccord in Mar 2011 to jointly regulate the offshoreon Quebecs side of the Gulf
Quebec has completed SEA and is expected to
decide on opening sections of Quebec side of theGulf for oil and gas activities in 2013
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Strategic Priorities
Advance our three high impact prospects by sourcing J.V. arrangements
Maintain licenses for Corridors high impact prospects
Continue to de-risk our prospects within limits of capital constraints
Maintain cash flow and ensure we optimize value of McCully assets.
Investigate developing export potential for LNG from Atlantic Canadaemploying existing infrastructure and location advantages and otheropportunities such as CNG that will promote commercialization of F.B.Shale
Gain regulatory permit approvals and social licenses for Corridor prospectsin various appropriate jurisdictions
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2011 Financial Results
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$ in thousands 2011 2010
Revenues $23,993 $29,558
Cash flow from operations $9,250 $13,250
Net G&A $4,247 $4,716
Capital expenditures $8,951 $21,006
Net working capital $9,507 $ 4,002
Production (mmscfpd) 11.5 13.2
Net loss $(79,585) $(6,912)
Net loss per share- Basic and diluted $(0.899) $(0.078)
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Q1 2012 Financial Results
$ in thousands Q1 2012 Q1 2011
Revenues $ 4,156 $ 8,024
Cash flow from operations $ 1,290 $ 3,572
Capital expenditures $ 787 $ 705
Net working capital $ 10,055 $ 9,586
Net loss $ (1,654) $ (2,178)
Net loss per share
- Basic and diluted $ (0.019) $(0.025)
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Q1 2012 Netback
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Q1 2012 Q1 2011
Production (mmscfpd) 9.9 12.7
($/mscf)
Average gas price $4.16 $6.75
Transportation expense $1.21 $1.48
Royalty expense $0.01 $0.29
Production expense $0.88 $0.98
Netback $2.06 $4.00
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2012 Outlook
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$ in thousands 2012
Production (mmscfpd) - net 9.0
Revenues $14,000
($/mscf)
Average gas price $3.70
Transportation expense $1.19
Royalty expense $0.01
Production expense $1.12
Netback $1.38
Net G&A $ 3,600
Cash flow from operations $ 2,500
Capital expenditures $ 1,500
Net working capital $10,500
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