corridor resources 2013 agm slides

7/28/2019 Corridor Resources 2013 AGM slides

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AGM 2013MAY 10, 2013


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Highlights - Introduction

Eastern Canadian E&P Companywith enormous upside potential &sustainability

Three high-impact plays at variousstages of maturity

TSX Symbol CDH- 88 million shares outstanding

Focused on de-risking plays,acquiring partners for high-impactprospects & maintainingsustainability as we emerge fromperiod of unusually low gas prices

Corridor is well-positioned:- No Debt- Premium netbacks/cash/workingcapital

- Catalysts for significant upsidepotential

Anticosti900,000 Net Acres

Old Harry250,000 Net Acres

Southern New Brunswick320,000 Net Acres

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Eastern Canada Focused

Large, relatively unexplored areawith significant resource potential

Commanding land position of ~1.5million net acres in Eastern Canada

Licenses for high-impact prospectsrange from approximately 4-8 years

New Brunswick Frederick Brook

shale- 67 TCF gross discovered resources of

shale gas (best estimate)

Anticosti shale prospect has 20 Bboenet undiscovered resources of

petroleum (best estimate); promisingresults from 2012 core program

Corridors Old Harry offshoreprospect is one of the largestidentified geological structuresoffshore NFLD

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2012 Financial Results

$ in thousands 2012 2011

Average gas price (Q4 $5.63/mscf) $4.05 $5.17

Production (mmscfpd) 9.0 11.5

Sales $14,795 $22,993

Net G&A 3,021 4,247

Production expenses 2,982 3,969

Capital expenditures 3,763 8,951

Cash flow from operations 1 4,404 9,250

Net loss2

(47,899) (79,585)Net working capital (cash $8M) 10,237 9,507

Notes: 1 Cash flow from operations is a non-IFRS measure. For a reconciliation to IFRS, see Non-IFRS Financial Measures inCorridors Q1 2013 MD&A

2 includes impairment losses of $56M & $90M relating to the McCully Field

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Q1 2013 Netback

Q1 2013 Q1 2012

Netback($/mscf)

Average gas price $10.19 $4.16

Transportation expense $ 1.23 $1.21

Royalty expense $ 0.65 $0.01

Production expense $ 0.96 $0.88

Netback $ 7.35 $2.06

Production (mmscfpd) 8.5 9.9

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Q1 2013 Financial Results

$ in thousands Q1 2013 Q1 2012

Sales $ 8,114 $ 4,156

Cash flow from operations1 5,261 1,290

Net working capital (cash $12.5M) 15,075 10,055

Net income/(loss) 2,529 (1,654)

Net income/(loss) per share

- Basic and diluted 0.029 (0.019)

Notes: 1 Cash flow from operations is a non-IFRS measure. For a reconciliation to IFRS, see Non-IFRS Financial Measuresin Corridors Q1 2013 MD&A

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2013 Outlook

$ in thousands 2013

Production (mmscfpd) - net 7.7

Netback($/mscf)

Average gas price (2012 actual $4.05/mscf) $ 6.70

Transportation expense 1.24

Royalty expense 0.18

Production expense 1.21Netback (2012 $1.88/mscf) $ 4.07

Sales $18,500

Net G&A 3,000

Cash flow from operations 1 8,300Capital expenditures 3,000

Net working capital 15,500

Note 1 Cash flow from operations is a non-IFRS measure. For a reconciliation to IFRS, see Non -IFRS Financial Measuresin Corridors Q1 2013 MD&A

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2012 Summary

Corridor completed Anticosti core program (with partner), including 3 stratigraphiccoreholes, with positive results indicating TOCs at 4% average

Reduced G&A costs and capital program in 2012 due to low gas prices to ensuresustainability

Corridors netback for Q4 2012 averaged $3.43/mmbtu versus $2.30/mmbtu inQ4 2011 due to higher premiums in New England market

Locked in Q1 2013 sales prices for 2/3 of McCully production at US$8.52/mmbtu

Maintained licenses in New Brunswick, Quebec and offshore NFLD (approximately1.3 million net acres) for Corridors high impact prospects with approximately 4-8years remaining

Corridors proven reserves for McCully of 57.6 BCF (Dec 2012) declined by 2%

(including production). GLJ has assigned a reserve life of over 25 years forCorridors 2P reserves at McCully

Corridor worked extensively with New Brunswick government to promoteadoption of best practices in their review of regulations (N.B. announced new regulationsearly 2013)

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2012 2013

Industry Challenges Corridors Status

Prolonged low N.A. natural gas pricingcycle created by supply overhang

Dry gas resource plays currently morechallenging to farm out

Challenging environmental & socialacceptance issues for oil/gas industry

Eastern Canadian resource plays face highcost and lack of maturity

Junior oil & gas companies undersignificant market pressure

Numerous N.A. J.V. opportunities onmarket for potential partners creating

intensive competition for available capital

Resource plays the size of Corridorsprospects require significant capitalresources and time to mature in order todemonstrate value potential

N.A. Supply/demand more balanced; N.A.pricing improving & higher N.E. premiums

Offset by N.E. premiums & infrastructureadvantages

Industry wide; N.B. Govt indicates localsupport for gas development; industryneeds gas supply in N.B.

Offset by higher netbacks & infrastructureadvantages, growing demand

Corridor has sustainability, no debt andsignificant potential upside

Corridor has sustainability, no debt andmassive high-impact prospects that offer

advantages to potential partners Requires sustainability & retention of

licenses and strategic advantages

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Corridor N.B. Assets Corridors New Brunswick gas assets

connected to M&NP with access topremium N.E. markets and Repsols

LNG facility in N.B. Premium netbacks due to strong basis

differential. Q1 2013 netback averaged$7.35/mmbtu, and premiums for gasin Maritimes & N.E. expected to be

strong for foreseeable future Existing cash flow allows Corridor

sustainability, while sourcing partners

Potential for LNG Export terminal atRepsols Canaport LNG facility optimum East Coast option significant arbitrage potential and10 BCF storage

Potential for LNG export terminal atGoldboro (Pieridae Energy Proposal)

Ability to source additional

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Infrastructure in Place

East Coast

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North East Gas Prices

Anticipate elevated premium to Henry Hub for next several years Anticipate supply short fall for market in Maritimes served by MNP CNG & demand growth in Maritimes pushing up supply shortfall

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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 mature our prospects within available capital

Maximize cash flow and ensure we optimize value of McCully assets

Evaluate and implement program of additional production at McCully fromboth Hiram Brook and F.B. Shale due to premium prices

Continue to promote export potential for LNG from Atlantic Canadabecause of existing infrastructure and location advantages as well as otheropportunities such as CNG that will promote commercialization of F.B.

Shale

Continue to advance regulatory approvals and social licenses for Corridorprospects in various appropriate jurisdictions

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Over 300,000 net acres in N.B.;high working interests

Frederick Brook shale gas:- 67 TCF gross discovered

resources (best estimate)

Producing up to 12 mmcf/d grossfrom McCully area

- Hiram Brook gas McCully

Field 94.5 BCF 2P grossreserves- ~25 year reserve life index

(GLJ estimate)

Advancing F.B. Shale potentialthrough stimulation programs atMcCully and/or Elgin, 1st half of

2014 Recent N.B. Government

announcements on :- Oil/Gas Environmental

Protection Plan- Supports natural gas

exploration/development in N.B.

McCully/F.B. Shale Exploration

& Development Area

McCully Plant

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Frederick Brook Shale

Highlights

Proven producibility, peaking at12 mmcf/d from Green Roadwell

Up to 600 bcf potentialresources of shale gas persection (TerraTek analysis)

Up to 1100 m in grossthickness

Upside in overlying sands

Connected to M&NP & LNG

Terminal premium marketpotential for export

Next stage includes pilot plantdevelopment at Elgin ~$150MM

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AnticostiMacasty Liquids-Rich Shale Highlights

Over 1.5 millioncontinuous gross acreslicensed

Large areas of the Islandwithin the liquids window

Schlumberger

petrophysics estimates80% Soil and 6% effectiveporosity

Depth 2300 6500 feet

34 billion bboe grossundiscovered resources ofpetroleum (best estimate)

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AnticostiMacasty Shale Oil Large UntestedLiquids

Thickness of MacastyShale ranged from 31 to92 metres on 3 coreholes

drilled in 2012 program

Coreholes show 4%average TOC

Additional analysis

expected soon (rockparameters & maturation studies)

Similar to Ohio Utica shale

Quebec Govt indicatessupport for oil exploration/development on Anticosti

Next stage includes:- Appraisal program to

demonstrate oil/gasproduction - $50+ MM

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Old Harry Highlights One of the largest undrilled geological

structures in Eastern Canada (43,000acres/67 sq miles) under simple four-way

closure

Several direct hydrocarbon indicatorsidentified: satellite seepage slicks,frequency anomalies, amplitude

anomalies, and AVO anomalies Over 1,000 km of modern 2-D seismic

available

Structures aerial extent and potentialreservoir thickness presents huge

opportunity for billion barrel oil ormulti TCF gas discovery

Basin Modeling indicates light oil (~55API) was initially generated and couldbe filling the structure

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Old Harry Prospect Highlights

Potential for good primaryreservoir in Bradelle Formation

Very thick secondary reservoir,Brion Island Formation

Thick light-oil source rock

NFLD exploration well targetedfor 2015/2016, pendingapprovals

Corridor has identified drilling

assets available in the 2015-2016 window

20Miles

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Old Harry Regulatory Summary Corridor submitted its Old Harry Exploratory

Drilling Project Description and Environmental

Assessment (E.A.) to the C-NLOPB in February2011

C-NLOPB eventually (with Federal Environment

Ministers recommendation) decided that a Strategic

Environmental Assessment (SEA) for NFLD side ofGulf was required; expected to be completed 2nd

Qtr 2013

Corridors E.A. and drilling permits now expectedto be completed in late 2013

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 2014 20


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corridor resources 2013 agm slides

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