td securities calgary energy conference...total 67 271 3,112 3,383 440,000 grizzly oil sands grizzly...
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TD Securities Calgary
Energy ConferenceJuly 2014
Forward-Looking Statements
Grizzly Oil Sands 2
Certain statements, estimates and financial information contained in this presentation ("Estimates") constitute forward-
looking statements or information. Such forward-looking statements or information involve known and unknown risks
and uncertainties that could cause actual events or results to differ materially from the Estimates or results implied or
expressed in such forward-looking statements. While presented with numerical specificity, the Estimates are based (i)
on certain assumptions that are inherently subject to significant business, economic, regulatory, environmental,
seasonal, and competitive uncertainties, contingencies and risks including, without limitation, assumptions of resource,
ability to obtain debt and equity financing, capital costs, construction costs, well production performances, operating
costs, commodity pricing, differentials, royalty structures, regulatory approvals, and other known and unknown risks, all
of which are difficult to predict and many of which are beyond the control of Grizzly Oil Sands ULC ("Grizzly"); and (ii)
upon assumptions with respect to future business decisions that are subject to change.
There can be no assurance that the Estimates or the underlying assumptions will be realized and that actual results of
operations or future events will not be materially different from the Estimates. Under no circumstances should the
inclusion of the Estimates be regarded as a representation, undertaking, warranty or prediction by Grizzly, or any other
person with respect to the accuracy thereof or the accuracy of the underlying assumptions, or that Grizzly will achieve
or is likely to achieve any particular results. The Estimates are made as of the date of this presentation and Grizzly
disclaims any intent or obligation to update publicly or to revise any of the Estimates, whether as a result of new
information, future events or otherwise. Recipients are cautioned that forward-looking statements or information are not
guarantees of future performance and, accordingly, recipients are expressly cautioned not to put undue reliance on
forward-looking statements or information due to the inherent uncertainty therein.
There are significant differences in the criteria associated with the classification of reserves, prospective resources and
contingent resources. Contingent resources and prospective resources estimates involve additional risks, specifically
the risk of not achieving commerciality and exploration risk, respectively, not applicable to reserves estimates. No
adjustments for these risks have been made in the groupings of reserves and recoverable resources.
All reference to dollars in this presentation should be assumed to refer to Canadian dollars, unless otherwise noted. All
references to reserves and or resources represent Grizzly’s interest in reserves and resources prior to the deduction of
Crown royalties, unless otherwise noted.
• > 800,000 net acres in the Athabasca and Peace River oil sands regions (100%
operated, nearly 100% WI) focused on SAGD development
• ~ 3.4 billion bbls of 2P+Contingent Resources(1) across more than 30 project areas
• Privately owned by Wexford Capital and Gulfport Energy Corporation
• Steam injection at Algar Lake Phase 1 commenced in February, 2014
• All 10 well pairs have achieved steam injection, with current production of
~1,000bbls/d
• First crude oil shipped from Windell to the U.S. Gulf Coast in June, 2014
• Windell truck-to-rail terminal at Conklin, Alberta is operational to ship Algar Lake
and 3rd party oil and receive diluent
• Design and permitting is advanced on the Paulina rail-to-barge terminal project, located on the lower Mississippi River in Louisiana
• Rail rate contracted with CN for 10 years
• Plan to have > 20 projects ready for SAGD development in the next 5 years, with
bitumen production potential of ~170,000 bbbls/d
• Grizzly’s “ARMS” development model enables repeatable and scalable project
development, reducing execution and financing risk
One of the Largest Oil Sands Land
Positions in Alberta
Algar Lake Current Operations
Using Rail to Consistently
Access Premium Markets
1. Source: GLJ Petroleum Consultants Ltd., as at December 31, 2013
Investment Highlights
Grizzly Oil Sands 3
Repeatable & Scalable
Development Model
• Completed Phase 1 construction and commissioning
• “First Oil” was achieved in April
• Current bitumen production is ~1,000 bbls/d
• Anticipate peak production of ~6,000 bbls/d by mid 2015
• Filed a 12,000 bbl/d regulatory development application in Q4 2013. First round of Supplemental Information Requests (SIRs) have been received
• Completed an 83 km 2D seismic program in Q1 2014. Processing of the data is well advanced and will be used to support a full field delineation drilling program
• Booked 345 mmbbl Contingent Resource(1)
• Acquired additional lands in the Peace River area
• Developed delineation drilling and seismic programs and plans for regulatory work
• Constructed and commenced operations at the Windell truck-to-rail terminal
• Shipped first crude oil to the U.S. Gulf Coast
• Completed design engineering and filed development permits for Paulina rail-to-barge terminal
• Currently in discussions with 3rd parties for transloading business at both terminals
4
Algar Lake
May River
Rail Strategy
Cadotte
1. Source: GLJ Petroleum Consultants Ltd., as at December 31, 2013
Accomplishments since
Last Conference
Grizzly Oil Sands
5
Grizzly Oil Sands Lease
Other Oil Sands Lease
Alberta Oil Sands Areas
Producing Project
Under Construction Thermal Project
City of
Peace River
City of
Fort McMurray
800,000+ Net Acres of Alberta
Oil Sands Leases
Exposure to All Play Types in Athabasca & Peace River
• Grizzly has a high quality resource based on Steam Assisted Gravity Drainage (“SAGD”) with additional upside using other reservoir recovery processes
• 3.4 billion bbls of 2P + Contingent Resources(1)
• Resources primarily located in low risk clastic reservoirs, with some exposure to the carbonates
• Two thirds of current lease position remains unexplored, which provides upside potential
6
1. Source: GLJ Petroleum Consultants Ltd. as at December 31, 2013; All Contingent Resources herein refer to “Best Estimate”.
Clastics (Existing Technologies) (1)
Proved
Reserves
(mmbbls)
2P Reserves
(mmbbls)
Contingent
Resources
(mmbbls)
2P Reserves
+ Contingent
Resources
(mmbbls)
Potential(1)
Plateau
Production
(bbls/d)
Operating
Algar Lake 67 114 35 149 21,000
Near-Term Development Projects
May River 0 157 662 819 120,000
Cadotte 0 0 345 345 34,000
Thickwood 0 0 114 114 18,000
Other Projects
Additional Growth Properties 0 0 1,769 1,769 230,000
Total Existing Technologies 67 271 2,925 3,196 423,000
Carbonates (Technology under Development) (1)
Additional Growth Properties 0 0 187 187 17,000
TOTAL 67 271 3,112 3,383 440,000
Grizzly Oil Sands
Grizzly Assets
Grizzly Development Portfolio
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LAND
CAPTURE
RESOURCE
DELINEATION
DEVELOPMENT
APPLICATION
FILED
PROJECT
DEVELOPMENT
APPLICATION RECEIVED
CONSTRUCTION 1ST OIL PROJECT
PERFORMANCE
DEMONSTRATED
HARVEST
TIME TO PRODUCTION
DE-RISKING OF ASSETS
Value
$ / BOE
2 billion barrels of resources on ~30+
properties
Cadotte
Thickwood
Algar Lake
Phase 2
Algar Lake
Phase 1
Windell Rail
Terminal
May River
Phase 1
Creating Value by Advancing Project Development
8
Property
# ARMS
Plants
Production
Potential
(bbls/d)(1)
2P Reserves +
Contingent
Resources(2)
(mmbbls) Status
Algar Lake Phase 1 1 6,000 50 Producing
Algar Lake Phase 2 1 6,000 50 Regulatory Approval Received
May River Phase 1 2 12,000 157Regulatory Application (filed Dec 2013) and 1
st round
of SIRs have been received
May River Full Field 12 90,000 662 Plan to file Regulatory Application by December 2016
Cadotte 7 50,000 345Plan to file Development Application by December
2016
Thickwood 1 5,000 50 Regulatory Application filed December 2012
Total 24 170,000 1,314
1. Management Estimates; 2. Source: GLJ Petroleum Consultants Ltd., as at December 31, 2013
Grizzly Project Development Portfolio
Attractive Scalable Development Portfolio
• Built and commissioned Grizzly’s 1st
ARMS Plant at Algar Lake
• Demonstrated that ARMS plant works
• Benefits of the ARMS development
model include:
• Scalable and manageable growth
to match reservoir development
requirements
• Improved redundancy and
operability
• Lower cost
• Lower project execution and
financing risk
9Grizzly Oil Sands
Grizzly’s ARMS Development Model
• Working on learnings from the first plant to apply to the next project
• Commenced reservoir steam injection at
Algar Lake Phase 1 in February, 2014
• Steam is currently being circulated
through all 10 well pairs, expected to be
converted to “SAGD” production mode
by the end of August
• Current production is ~1,000 bbls/d
• Full production ramp up expected by the
end of Q2/2015
• GLJ has assigned 114 mmbbls of 2P
Reserves and 35 mmbbls of Contingent
Resources
• Algar Lake Phase 2 regulatory approval
is in hand
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T88
T87
T86
T85
T84
T83
T82
T81
R8W4R10R11R12R13R14
Grizzly Oil Sands
Algar Lake Property ~ 12,000 bbls/d
18m
Devonian
11
Algar Lake Reference Well
AB-16-10-85-12W4
Single Clean Channel Sand
• Up to 22 metres thick bitumen pay
• No bottom water or top gas
• 18+ metre thick bitumen pay outside of the initial development area
Wabiska
Wabiskaw-D
McMurray
Devonian
Gamma Ray Logs Over Horizontal Production Well Trajectories
12Excellent Reservoir Quality over Entire Well Length
Algar Lake Reservoir Quality
13
• ~50,000 acres of 100% W.I. oil sands leases
• 12,000 bbls/d development application filed and 1st round of SIRs have been received
• Adjacent to industry leading SAGD projects including Statoil KKD project and close to Jackfish, Christina Lake and CNRL Kirby projects
• Located ~10 km away from Grizzly’s Windell truck-to-rail terminal
• 96 km 2D full field seismic
• 59 km 3D full field seismic
• GLJ has assigned 157 mmbbls of 2P reserves and 662 mmbbls of Contingent Resources
Grizzly Oil Sands
May River Property ~ 100,000 bbls/d
14
GLJ Best Estimate Net Continuous Bitumen Pay
08-18-077-08 40 metres Net Continuous Pay
• Multiple stacked channel system
• Analogous to nearby Cenovus, Devon, MEG and Statoil projects
• Up to 40 metres thick bitumen pay with continuous cap rock
• High permeability sands should deliver bitumen at steam-oil ratios in the 2.2 to 2.8 range
Grizzly Oil Sands
819 MM Barrels of High Quality
Recoverable Bitumen
15
• 100% W.I. in ~50,000 acres
• GLJ has assigned 345 mmbbls of Contingent Resources
• Up to 18 metres clean, homogeneous net continuous pay in Belloy formation
Grizzly Oil Sands
Cadotte Property ~ 50,000 bbls/d
Bluesky
Belloy
• Rail provides consistent and flexible
access to coastal markets offering
Brent pricing
• Diluent requirements are 50% lower
on rail (railbit) than pipeline
• Condensate back-haul opportunities
from the U.S.Gulf Coast are available
to resource diluent requirements at
lower cost
16
Potential markets for bitumen transport via rail
Potential Rail Transportation Routes
Grizzly Oil Sands
Rail Transportation Strategy
17
Windell Terminal Site – Conklin, AB
Paulina Terminal Site - Louisiana
• Windell Rail Terminal - Operational
• First crude oil shipped to the U.S. Gulf Coast in June,
2014
• Located adjacent to our May River site, and in close
proximity to 160,000 bbls/d of existing and 1.5 MMbbls/d
of planned industry bitumen production
• Capacity can be expanded to unit train facility of railbit
loading and condensate receiving
• Short pipeline opportunities to access local bitumen
production
• Paulina Terminal – Permitting underway
• Located near 8 complex refineries on the Mississippi
River with refining capacity of 2.4 MMbbls/d
• 350 rail car fleet leased for 10 years
• Both terminals are located on CN main line. Grizzly has
executed 10-year rate contract with CN
• Grizzly is in negotiations with 3rd parties to handle volumes at both facilities
Grizzly Oil Sands
Grizzly’s Rail Transportation Strategy
• Demonstrate Algar Lake reservoir and ARMS plant performance by executing a
successful production ramp
• Achieve positive cash flow by year end
• Advance the 12,000 bbls/d May River development application
• Process 2D seismic data, which will be used to direct future core hole drilling to
support the filing of a “full field” development application in 2016
• Prepare ARMS design and execution plan based on Algar project experience
• Conduct detailed reservoir physical and simulation studies
• Delineation and regulatory work plans for 2015 execution
• Advance Thickwood regulatory development application
• Establish rail transportation capability, efficient blending metrics and access to
markets that transact based on world oil prices
• Receive development permits, contract third party business, sanction and construct
Paulina
18
Algar Lake
May River
Thickwood
Rail Strategy
Cadotte
Grizzly Oil Sands
2014 Business Plan Highlights