Presentation outline Company & Market Overview Oil Shale Red Leaf & EcoShale Process Liquids Rich Montney, Resthaven, Alberta Light Oil Bakken/Torquay, Antler, Saskatchewan St. Lawrence Lowlands, Quebec Outlook Investment…
Company overview Developing oil shale to create shareholder value Three existing projects with goal of adding net recoverable resources in excess of several hundred million barrels Licensing proprietary process to recover oil from…
Asset overview Nonconventional Oil Utah & Wyoming Commercialization project in Utah with Total Early stage project in Wyoming Eastern Saskatchewan 100,000 net acres overlying an established deposit Conventional Southeast…
Financial overview Operating and Financial Results Six months ended June 30, 2012 Working capital () 47.4 million Debt Nil Cash Flow from operations () 4.5 million Production (boe/d) 625 Oil weighting 85% Revenue (/boe) 77.08…
Market overview Nonconventional has become the new conventional Conventional production in North America being replaced by nonconventional oil and gas Resource capture has become a priority for super majors and international…
Market overview Energy paradigm shift has created engineering innovation Steam Assisted Gravity Drainage (SAGD) process invented in early 1970s has revolutionized oilsands recovery over the last ten years Provincial energy…
Oil Shale 8
Oil shale Fine grained sedimentary rock rich in organic matter known as kerogen Kerogen formed from decaying organic material by heat and pressure in environment similar to conventional oil Different from shale oil (i.e.…
Oil shale Heating in absence of air to produce oil from kerogen known as retorting Produces natural gas, hydrogen, condensate, oil and spent shale Either done on surface or subsurface Processes to extract oil from shale are…
EcoShale Insitu capsule process Innovative approach that moves the machines to the rocks instead of moving the rocks to the machines Incorporates benefits and avoids challenges of both surface and subsurface processes…
EcoShale Mine plan Strip Mining Process Preliminary site preparation Overburden is stripped, sorted and stockpiled for construction material (design requires overburden) Ore bench is stripped to base of the ore Stripped site…
Saskatchewan oil shale 100% interest in over 100,000 acres Drilled 10 wells on Arborfield block this winter Analysis of core indicates recoveries between 1020 gallons/ton with select intervals of up to 1620 gallons/ton within…
Wyoming oil shale Questerre to earn 20% on 5,120 acre farmin on private lands with Red Leaf holding a 80% interest Red Leaf estimates 800 million barrels of oil in place Approximately 100 million barrels in place per square…
Red Leaf investment US40 million investment in Red Leafs equity financing Additional 3 million investment made recently Represents approximately 6% of the equity; company has no debt Nonexclusive option to license Red Leaf…
Total joint venture Total to fund 80% of costs estimated at US200 million to demonstrate commercial scalability of EcoShale InCapsule Process on Red Leafs Utah acreage (EPS Phase) Total to fund an additional 80% of costs…
Scaling from pilot to commercial by 2014 Targeting first oil production from a large scale capsule by 2014 Several key risk mitigation activities planned in four main categories to be completed by Q2 2013: Capsule Construction…
Scaling from pilot to commercial by 2014 18
Rationale for strategy Opportunity fits corporate strategy of high impact unconventional oil License to proprietary process is a competitive advantage to capturing large oil resources at low cost Risk mitigation through partners…
Liquids Rich Montney Resthaven, Alberta 20
Resthaven New core area in west central Alberta acquired through farmin and Crown land sales at competitive prices Acquisition cost of 1,800/ha with recent land sales at 4,500/ha Montney play is approximately 500 km long and…
Discovery well Results from first tested interval in the Montney zone in line with industry activity 40% condensate and NGL rates better than expected Production test supports robust economics for play Type well projected at…
Growth potential Questerre is currently targeting one of three prospective intervals in the Upper Montney Each interval estimated at 18 Bcf and 2 million barrels recoverable resource Entire zone is approximately 100m thick All…
Bakken/Torquay Light Oil Antler, Saskatchewan 24
Antler Established light oil asset targeting Wawota Torquay/Bakken resource play Exploration Area NPV10/bbl as at December 31, 2011 of 20,000 acres 45.60/bbl based on 2P reserves of 2.1 million barrels and 96.3 million NPV10…
Waterflood MAIN Secondary recovery scheme has POOL been successfully applied in adjacent Bakken/Torquay pool in SINCLAIR Manitoba with a projected WATERFLOOD ONGOING increase in recovery from 9% to between 16%24% Low energy…
Conventional asset strategy Goal is to increase production from conventional assets to achieve target of 1,500 boe/d by end of Strategic Environmental Assessment in Quebec Grow conventional assets to 225450 million in value to…
St. Lawrence Lowlands, Quebec 28
Where Questerre is currently 18 Tcf prospective recoverable resource on acreage 4.4 Tcf net to Questerre Premium gas market industrial consumers paying 5.50/mcf Tenure recently extended to 2021 In advanced piloting phase 29
Prerequisites for development Strategic Environmental Assessment underway over next eighteen months Complete advanced piloting phase and sweet spot identification Establish hydrocarbon legislation Achieve social acceptability…
Outlook 31
Outlook Advance oil shale projects Red Leaf scheduled to begin field work on Utah pilot with Total later this year Evaluation of Pasquia Hills core data to assess oil shale potential of acreage Commence field work and resource…
Investment summary Oil shale projects offer opportunity to capture significant oil resources Strong Mega discovery in Utica shale with long land tenure portfolio Nonconventional light oil resource play in Saskatchewan and liquids rich…
Appendix 34
Management and Board Management Board Michael Binnion, President & Chief Executive Les Beddoes, Jr. Officer International explorationist Former VP Exploration, Bow Valley Energy Inc.; Victoria, John Brodylo, VP Exploration (Nexen)…
EcoShale Process Excavation Initial excavation for laboratory assay samples and material for bench scale process assessment. Tan colored band in photo center is the Mahogany Marker, a volcanic tuft deposit just above the richest oil…
EcoShale Process Excavation Excavation for field pilot. The near portion of the excavation provides a space for excavated shale to be returned, encapsulated and roasted. The center of the shot shows the start of a steel bulkhead…
EcoShale Process Excavation Early stage of pilot construction with steel bulkhead nearly completed, Bentonite Amended Soil (BAS) encapsulation layer around perimeter, and Flex Crete insulation blocks (not used in production). A…
EcoShale Process Capsule Construction Partially completed capsule construction showing shale to be roasted (from excavation), heating pipes, and thermocouple placement on/in heating pipes and in shale (under mounds of shale…
EcoShale Process Capsule Construction Top of shale to be roasted, with perforated gas recovery pipe system. The shale bed in the capsule contains, from the bottom up, a liquid drain system, 4 feet of shale, a layer of 2 heating pipe…
EcoShale Process Capsule Construction The shale to be roasted is covered with insulation, as on the sides and bottom of the capsule (Flex Crete Insulation block shown here in the field pilot, shale gravel insulation to be used in…
Ecoshale Process Finished Site Steel bulkhead support structure showing burners, blowers, liquid and gas recovery external system components, combustion air and fuel (propane) supply and mixing systems, and instrumentation external…
EcoShale Process Finished Site Tank farm for storage of produced shale oil and fire protection water. Tanks are insulated, heated and oil contents are protected by replenished internal nitrogen atmosphere. 43
EcoShale Process Finished Site Additional site features are visible in this overview, including equipment for condensing liquids from produced gas, separating water from produced shale oil liquids, and flaring of produced…
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