Georgia Basin Energy
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Transcript Georgia Basin Energy
Unconventional Natural Gas
A Compelling Case. A Focused Vision.
June 2007
Trading Symbol: SPI – TSX Venture Exchange
Website: www.csri.ca
DISCLOSURE STATEMENT
The corporate information contained in this presentation
contains forward-looking forecast information. The reader is
cautioned that assumptions used in the preparation of such
information, although considered reasonably accurate by
Canadian Spirit Resources Inc. (“CSRi”) at the time of
preparation, may prove to be incorrect. The actual results
achieved during the forecast period will vary from the
information provided herein and the variations may be
material. Consequently, there is no representation by CSRi
that actual results achieved during the forecast period will be
the same in whole or in part as those forecast.
Farrell Creek Area
CORPORATE INFORMATION
Listed – SPI (TSX Venture Exchange)
Working capital surplus - $1.5mm (March 31). No debt.
28,833,082 shares outstanding
2,471,000 options outstanding – average strike price = $2.40
3,200,00 warrants outstanding – strike price = $2.50
(expiring August 11, 2007)
Management and directors own 2.4% (Basic)
Directors: George W. Watson (Chairman)
J.R. Richard Couillard
Donald R. Gardner
Phillip D.C. Geiger
Philip H. Grubbe
Robert P. Winnitoy
OVERVIEW
Acquired 40,000 acres of Shallow Rights
75% of land also has deep rights
Eight test holes drilled to date
Four test holes have been fracture stimulated
Independent estimate of 1.8 tcf of discovered
resource for the shallow Gething, Gates and
Moosebar Formations
Deeper formations are also prospective
CURRENT STATUS
Have recently established mechanical reliability
on pumping units
Implemented field changes to reduce costs
Flowing wells while reducing reservoir pressure
and determine a production response on three
of four test holes
Trailer mounted compressor to be utilized to complete
this test
CURRENT STATUS
c-083 – Shut-in – deliverability test complete
b-092 – Flowing – currently the best producing well
to date
b-003 – Flowing from upper zone – bridge plug
wedged between zones
b-002 – Flowing with only 22 meters perforated lowest capital cost well to date
d-093 – Drilled and cased - preparing to stimulate
RESULTS
VALUATION
$Million
1.00
140
280
420
560
12+
0.75
105
210
315
420
9
$/share
$/mcf
0.50
70
140
210
280
5
0.25
35
70
105
140
1
10
20
30
40
Recovery Factor ( % )
Assumes 1.4 tcf of Gas-in-Place (Sproule) and 45 million fully diluted shares
PRELIMINARY ECONOMIC DATA
Capital
Target: Less than $1 million to drill, case and fracture
stimulate
Production
Target: 200-300 mcf/d from vertical wells
B.C. Crown Royalty (new Net Profits Interest)
Designed for unconventional gas
2% royalty on gross revenue until capital pool payout
Capital pool includes previous 3 years of historical cost
Propose taking applications this September
PROPOSED BASE PROGRAM
Deliverability Testing
Timing (March 30 to June 30, 2007)
Continue to flare three test holes to establish consistent run
time (upward production trend)
Currently b-092 is the best well (100 to 150 mcf/d)
Install trailer mounted compressor
Shut in c-083 and continue to monitor b-002 and b-003
Move trailer mounted compressor equipment from b-092 to b-002
Issues:
Flaring limitations (on b-092 test hole)
Applied for extension
Goal:
Reduce back pressure to increase gas rate
Target +/- 200 mcf/d on the b-092 test hole with the use of
the trailer mounted compressor
PROPOSED BASE PROGRAM
Tie-in Evaluation
Timing (June 2007)
Determine in parallel
Tie-in options
Industry Partner – Short term solution
Will take raw gas for compressor fuel
Initiate discussions
Spectra Energy (formerly Duke Energy) – Long term
solution
Must meet sales gas specification
Equipment availability
Costs to tie-in
PROPOSED BASE PROGRAM
Apply best completion techniques
Timing (July to August 2007)
Fracture stimulate d-093
Flow back and drawdown pressure with trailer mounted compressor
Continue to monitor b-092 and b-002
Move trailer mounted compressor as required
Issues:
How much will the rate increase
Government approval – flaring
Goal:
Target 400 mcf/d by the end of August 2007 on two test holes
(b-092 and d-093)
PROPOSED BASE PROGRAM
Prepare for tie-in and add production
Timing (August to October 2007)
Finalize pipeline access
Start construction
Convert test holes to production wells
Drill three vertical wells
Spacing
Consider drilling one directional well
Continue to evaluate results to finalize a Phase I
development program
PROPOSED BASE PROGRAM
Tie-in for cash flow
Timing (October to mid December 2007)
Tie-in the following producing wells
b-092
d-093
Possibility to tie-in up to five additional wells
Goal:
Target total production of 1 million cubic feet per day
and increasing
ADDITIONAL POTENTIAL
Shallow Rights – (Surface to base of Cadomin)
Substantial availability of B.C. Crown lands
Land swap/Farm-in potential
GeoMet “Strategic Process”
Infrastructure co-operation
Formations
Moosebar and Bluesky
ADDITIONAL POTENTIAL
Deep Rights – (Below base of Cadomin to basement)
Land swap/Farm-out potential
Activity in Farrell Creek Area
NorthPoint Energy Ltd.
Talisman Energy Inc.
Triumph Pacific Oil & Gas Corp.
Others
Formations
Nordegg/Fernie, Halfway, Doig/Montney, Debolt
2007 FUNDING PLAN
Confirm productivity and economics
$3 million private placement
June 2007
Capital program June – August 2007
Production and reserves
$15 – $30 million
September 2007
Capital program September 2007 – September 2008
CONCLUSIONS
Farrell Creek Project
Large discovered resource – 1.8 tcf on existing lands
Expect production in early 2008
Large number of potential locations
Prospective deep rights/multi-zone potential
Year round road and pipeline accessibility
Long Reserve Life Index (low decline)
FARRELL CREEK LOCATION
FARRELL CREEK LANDS
CSRI
T85
EnCana
Talisman
T84
GeoMet/CEP/Triumph
T83
T82
T81
93-O-16
R26
R25
R24
R23
FARRELL CREEK PILOT PROJECT
Canadian Spirit Resources Inc.
Suite 1950, Ford Tower
633 6th Avenue S.W.
Calgary, Alberta T2P 2Y5
Telephone (403) 539-5005
E-mail: [email protected]
TSX Venture: SPI
www.csri.ca