september 2015 - citadel...
TRANSCRIPT
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Forward Looking Statements
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This presentation contains forward-looking statements, including without limitation those statements regarding Citadel’s ability to
exploit mining concessions. The statements and discussions contained in this presentation that are not historical facts constitute
forward-looking statements, which can be identified by the use of forward-looking words such as "believes," "expects," "may,"
"intends," "anticipates," "plans," "estimates" and analogous or similar expressions intended to identify forward-looking statements.
Citadel wishes to caution the reader of this presentation that these forward-looking statements and estimates as to future
performance, estimates as to future valuations and other statements contained herein regarding matters that are not historical facts,
are only predictions, and that actual events or results may differ materially. Citadel cannot assure or guarantee you that any future
results described in this presentation will be achieved, and actual results could vary materially from those reflected in such forward-
looking statements. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance
that may arise after the date of this presentation, other than as may be required by applicable law or regulation. Reserve and
Resource Disclosure: Securities and Exchange Commission (“SEC”) rules prohibit a publicly-reporting oil and gas company from
including oil and gas resource estimates in its filings with the SEC, except proved, probable and possible reserves that meet the SEC’s
definition of such terms. Estimates of non-proved and non-probable reserves included herein are not based on SEC definitions and
guidelines and may not meet specific definitions of reserves or resource categories within the meaning of the SPE/SPEE/WPC
Petroleum Resource Management System.
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Executive Summary
Simple Capital Structure (OTCQB: COIL) 38.1MM shares issued (48.1MM fully diluted including options) $3.0MM in debt With Private Equity Investor - Plan to convert to equity $500k bridge loan Insider Ownership ~16MM Shares
Founder & CEO: Armen Nahabedian – 4th Generation Oilman Extensive database & knowledge provide first-mover advantage Experienced operator with boots on the ground advantage United States Marine 1999 – 2003; Infantry veteran of Iraq war
CFO: Phil McPherson – 11 Years as a Small Cap E&P Analyst Noted expert on California E&P companies Wall Street Journal “Best on the Street”; Multiple “5-Star” awards
Two Projects Under Development Kern Bluff: Large Scale Re-Development / Steam Flood Opportunity Yowlumne Exploration: Two Seismically Defined Exploration Prospects
COIL: An Exploration & Production Company Focused on California
The Next Great California Independent
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Commodity Price Cycle: Are we at a Bottom?
Perfect Storm of Too Much Oil & Tepid Demand Over $250 Billion of E&P Projects Cancelled to date. U.S. Rig Count down to ~800 from ~1600 Empirically Production will Decline – Key Question is When? Once the cycle turns, oil prices will move faster and higher than people estimate.
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Kern County California: Heart of California Oil
Yowlumne Area
Kern Bluff Area
Largest Producing County in the United States ~ 400,000 BOPD
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Kern Bluff Oil Field: Discovered in 1944 by Shell
Acquired Kern Bluff in July for $2MM in cash & 6MM shares of Common Stock.
Field Estimated to Hold over 60 Million Barrels of Oil in Place on 1,100 Acres.
o 169 Vertical Wells drilled from 1950’s to 1980’s have recovered ~12 Million barrels or 20%
o Similar fields in this area have achieved recovery levels exceeding 40%
o Current well spacing equates to ~2.5 acres. Analogous fields down spaced to ~1 acre.
o 60 New Vertical locations identified
o Ideal for Horizontal Development – 30 identified locations
$500k CAPEX during first 120 days
o Rework 7 vertical wells, 1 horizontal well & upgrade facilities
– Production has increased from 8 BOPD to ~ 50 BOPD from first 2 reworks
– Expect all 8 wells on production by end of October
2016 Estimated CAPEX of $4MM
o 20 Additional Rework opportunities
o Drill 10 New Vertical Wells & 4 Horizontal Wells
o Increase Production Facility Capacity to accommodate 1,000 BOPD
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Original Production Facilities
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Original Field Development: 2.5 acre Spacing
Existing Horizontal
Proposed Horizontal
75-25% Drainage Map (existing wells)
Proposed Vertical Well
20 Vertical Locations
6 Horizontal Locations
280 – Acre NB Lease 29 Idle Wells
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Kern Bluff Geology:
Three Separate Oil Zones
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Proposed Horizontal Locations: Transition Zone
17 Identified Horizontal Locations
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Investment Summary:
Commodity Price Cycle at or Near the Bottom
Citadel Able to Buy a Distressed Asset while other Companies Forced to Sell
Low-Risk Exploitation
Potentially 20MM Barrels Recoverable
Next 120 Days: Harvest Low Hanging Fruit, i.e. Workovers
Build a solid base of production
Achieve economies of scale to reduce operating costs
2016 Use Cash flow and Debt to accelerate Production Growth
Potentially 10 New Vertical Wells & 4 New Horizontal Wells
Increase Facility Capacity to accommodate 1,000 BOPD
Focused on Execution & Production Growth
Pure play on California Oil & Higher Oil Prices
Significant Backing from Private Equity Energy Investor – Long Term View
The Best Place to Find Oil – Is where it has already been found.
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WHAT’S OLD IS NEW
Headquarters: 417 31st St. Unit A Newport Beach, CA 92663 949-612-8040 Phil McPherson, CFO [email protected]
Geologic Office: 408 Bryant Circle Ojai, CA 93023 805-910-5369 Armen Nahabedian, CEO [email protected]
www.citadelexploration.com
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