CORPORATE PRESENTATION Annual General Meeting May 2011
The key to a successful energy company begins with acquiring a strong asset base and employing talented and motivated staff to develop and produce those assets
Business Structure As of May 20, 2011 Two public companies three unique investments Shares outstanding - 106.3 million Market cap TSX:PBG - 1.9 billion (HBU/Archon share 0.1 billion) Market cap TSX:PBN - 3.1 billion (PBG share =…
Reserves & Resources Petrobank controls a substantial resource base Company Interest 2010 2P PetroBakken 2P reserves increased by Reserves and Best Estimate 18% in 2010 to 171.4 million boe Reserves Contingent Resources mmboe 750…
PetroBakken: Developing resource plays to drive long term growth
PBN:TSX PetroBakken Summary Generating value through oil resource plays Repeatable organic growth combined with an attractive dividend yield 2011 forecast exit rates of 46,000 49,000 boepd based on 900 million capital program Our…
PBN:TSX We are Focused on Resource Plays A resource play has the following characteristics: Significant hydrocarbon accumulations in low permeability reservoirs Broad areal extent providing repeatable drilling opportunities Minimal…
PBN:TSX A Resource Play Well Each well creates positive shareholder value Targeting capital payback to be less than 2 years Generates 25+ year revenue stream post payback of capital 250 Typical Bakken Well 200 Primary Recovery…
PBN:TSX Development of a Resource Play 35,000 Ten Year Bakken Development Project (4 years 90 wells/yr then 45 wells/yr thereafter) 30,000 Actual Bakken 25,000 production 20,000 Boepd 15,000 10,000 5,000 0 0…
PBN:TSX Growing a Resource Play Company Multiple 10 Year Resource Plays Resource Play Production Resource Play Cardium Bakken Conventional Plays Time 11 TSX : PBN
PBN:TSX Opportunity Portfolio Focused strategy with concentrated assets Q1 Production Mix Multi-year growth 13% Gas prospects 87% Oil & Over 1.1 million net acres Liquids of undeveloped land Over 2,150 low risk Q1 Production by…
PBN:TSX Operational Highlights Industry leading operating netbacks Q1 2011: 52.42/boe (average US94.10 WTI) We capture 75% of any increase to WTI Hedging with WTI collars provides some downside price protection up to 25% of…
PBN:TSX 2011 Capital Forecast Business Drilling Capital 2011 exit production expected to be Units (Net Wells) (millions) between 46,000 49,000 boepd Bakken 80 (1) Since most of our production is from 205 (2) wells drilled in the past…
PBN:TSX Financial Highlights Funds flow from operations 2010: 646 million (3.51/basic share + 11% over 2009) Q1 2011: 173 million (0.92/basic share) 0.96/share per annum dividend (paid monthly) 177 million paid in 2010 US750 mm…
PBN:TSX Why PetroBakken We have a high-quality land base and a strategically focused team able to execute and successfully develop resource plays for long-term growth in production and cash flow We continue to leverage the latest…
Archon Technologies is developing innovative solutions for in-situ thermal recovery of heavy oil and oil sands with the potential for global reach
Archon Technologies Developing an integrated THAI (Toe-to-Heel Air Injection) Solution To date, 8 registered patents and patents pending Received new patent for enhanced in-situ combustion in Russia in December 2010 and Mexico in…
Archons Commercial Potential Royalty & licensing fees for capital free revenue License technology to third parties Potential for royalties and/or exposure to additional resource Progress with international agreements 5 year…
Global Potential THAI - technology to access vast global resources 1 or more THAI & EOR patents issued to Archon Technologies Patents currently pending in 32 countries Estimated heavy oil and bitumen resources 1 trillion…
Whitesands is our Heavy Oil Business Unit
Heavy Oil Assets / Planned THAI Projects Potential for 25,000 bbl/d production with currently planned projects Alberta oil sands 1.7 Trillion bbls Heavy oil 21 Billion bbls Our properties 23 23
THAI Projects Reservoir Comparison Future projects are located in higher quality reservoirs than Conklin Project Shale Cap Rock Kerrobert May River Very thick, high quality Thick, high quality Waseca Channel McMurray Oil Sands…
THAI Cross Section McDaniel evaluated of THAI exploitable bitumen at 20% greater than SAGD Starting from a cross section analogous to Athabasca oil sands McDaniels evaluation determined that the SAGD well placement THAI process…
THAI Process Small foot print, easily repeatable design 26
Produced Oil Quality Using THAI THAI upgraded oil receives higher field revenue Start-up Transition Steady state (cold production) (mixed production) (THAI production) 24 22 20 Changes introduced to operating procedures…
Kerrobert Project Production from Pad 1 began on May 16 Waseca Heavy Oil Channel Trend 11 12 8 9 10 5 6 7 1 2 3 4 Injector Well Producer Well THAI reserves assigned by McDaniel Central Processing Facility 3P…
Kerrobert Expansion Timeline All wells expected to be on production by mid-July 29
Kerrobert Project April 24, 2011 30
Plover Area Land Acquisitions Land purchases provide repeatable Kerrobert-type projects Plover Petrobank lands Acquired Luseland Signed PSA Kerrobert 31
Dawson THAI Project Third reservoir type to be developed using THAI Development of initial two well THAI project to start Q2 2011 Submit 10,000 bopd Mobile Bluesky Resource capacity project to ERCB and Reservoir Alberta…
Dawson Cross Section Dawson has high quality Bluesky resources 33
May River/Conklin Project Area Located in a core in-situ oil sands development area DAWSON MAY RIVER Petrobank area 1 May River phase 1 2 Conklin pilot In-situ project 73 sections of oil sands leases, 100% (46,240…
May River Reservoir Compared to Conklin Reservoir Superior May River reservoir compared to Conklin May River Conklin Superior quality oil sands 35
May River 10,000 bopd Project Design One Build Many engineering Accomplished: Phase-1 (10,000 bopd) application filed on December 18, 2008 Received Alberta Environment (AENV) approval contingent on ERCB approval FEED Pending:…
Petrobanks Value
Why Petrobank Proven strategy for value creation Long term, patient, strategic planning Focused on creation of value Petrominerales is a real example of the success of our approach 38
Petrobanks Value Undervalued resources in each of Petrobanks businesses Premium light oil, resource plays in the western Canadian sedimentary basin Innovative, in-situ thermal production technology with global reach…
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