the n ext oil · 2014-02-05 · the n ext tie conve n tion oil 6 canadian crude oil production next...

THE nExT fronTiEr in unconvEnTional oil1ExcEpTional sHarEHoldEr rETurns in a rising pETrolEum markET

June 2013

THE nExT fronTiEr in unconvEnTional oil2

invEsTmEnT HigHligHTs

more on the nExT page

DEVELOPMENT & PRODUCTION PLAN – Strata is progressing forward with its USD $365 million five-phase capital plan to produce 56,000 barrels (bbls) per day by 2019

PHASE 1 UNDER WAY – Engineering exploration and pre-production development of Cadotte holdings

LAND POSITION – 52,480 acres (87.6 sections) in Peace River region

WORKING INTEREST is 100% Strata’s

WORLD CLASS RESOURCE

NPV USD $1.3 Billion (10% disc.) over 20yrs (Cadotte Central)

28% Internal Rate of Return (Cadotte Central)

3.41 Billion bbls in place

887 Million bbls recoverable


invEsTmEnT HigHligHTs ( continued )

nExT | our business

TREMENDOUS UPSIDE – High side estimates

Up to NPV USD $1.9 Billion for Cadotte Central Project with 36% IRR (disc. 10%)

High probability of exceeding 26% recovery rate with existing and new technology

Cadotte West, 22 Cold-flow potential exists in Bluesky/Gething

Price of oil rising ($150/bbl?)

Great value amongst peers

RecoverableResource1 (barrels)

Shares Outstanding(fully diluted)

Share price(June 2013)

MarketCapitalization

Recoverablebarrels per share

Deemed marketvalue per barrel

Strata Oil & Gas

887 million

106.7 million

$0.14

~$15 Million

8

$0.02

Laricina Energy

4.6 billion

72.4 million

$42.50*

~$3 Billion

64

$0.67

comparison

1 Contingent & prospective resources * As per Aug 2011 financing


our businEss

nExT | world’s oil reserves

Company: Strata Oil & Gas was incorporated in the US in Nov 1998, moved headquarters to Calgary, Alberta in 2005 and incorporated under Canadian law

Sector: Heavy oil (carbonate hosted bitumen deposits) exploration and production in Alberta’s Peace River area

Goal: Provide exceptional shareholder returns in a rising petroleum market, by focusing on high-value carbonate-hosted bitumen deposits

* as of June 4, 2013


World’s oil rEsErvEs

nExT

1.258 Trillion bbls proved oil reserves

Canada holds 15% of the world’s reserve - 335 Billion bbls

crude bitumen – 315 Billion bbls

crude oil – 19.7 Billion bbls

Source: Alberta Energy and Utilities Board, British Petroleum - 2008

315

Canada Saudi Arabia Iraq Venezuela Russia U.S.

World Oil Reserves

260

11378

6022

( billions of barrels )


canadian crudE oil producTion

nExT | alberta oil faCts

Currently produces 3.3 Million bbls/day

There are an estimated 50.7 Billion bbls in oil sands that are not under active development

Source: May 2005 – Alberta Energy and Utilities Board, British Petroleum -2008

5000

4500

4000

3500

3000

2500

2000

1500

1000

500

0

1990 1995 2000 2005 2010 2015 2020

Oil Sands In-Situ

Oil Sands Mining

Conventional Heavy

Conventional Light

(000’s barrels/day)


albErTa oil facTs

nExT | peaCe river oil sands area

Growing production with approximately 1.4 Million bbls/day with 176 Billion bbls of proven oil reserves: crude bitumen – 171 Billion bbls crude oil – 1.5 Billion bbls

Peace River Oil Sands holds over 188 Billion bbls of Oil

Long life resource Typically 30 year reserve life with minimal declines Only 3% of initial established reserves produced to date 69% of possible oil sands areas are available for exploration and

leasing

Crude Bitumen production expected to more than double to 3.5 million bbls/day by 2020.

Attractive royalty and tax regime - Alberta Energy Innovation Strategy offers royalty offsets of up to $200 million over 5 years to pilot projects that use new, innovative technology to development of oil and gas reserves

Source: May 2005 – Alberta Energy and Utilities Board


pEacE rivEr oil sands arEa

nExT | land position

The Peace River Oil Sands area covers 11,052 sections (2.37 million hectares)

Historic Bitumen exploration and production has focused on Bluesky and Gething Formations, Cretaceous-age clastic sediments

Recent Exploration addresses the Debolt Carbonate

Debolt is similar to the Grosmont play in the Wabasca area


land posiTion

nExT

Source: EUB ST98-2006


currEnT land TEnurE

nExT | Cadotte proJeCt

82 Sections in Total in the Cadotte Area


cadoTTE projEcT

nExT | maJor operators: Cadotte area

During 2006-2007 Strata drilled three wells on this block

Resource estimate for this block was announced in September, 2007

Contingent Resource designation, April 2010

Cadotte West Resource Evaluation completed 2013

Cadotte West Cold-flow study underway


major opEraTors: cadoTTE arEa

nExT | maJor bitumen resourCe


major biTumEn rEsourcE

nExT | stratigraphy

3.41 Billion bbls of bitumen (most likely estimate)

Ore zone thickness exceeds 10 metres and 10wt%

High continuity between wells

High concentration of bitumen per section

Bedded platform carbonate and cretaceous oil sands


sTraTigrapHy

nExT | drill hole loCations


drill HolE locaTions

nExT | typiCal wireline log

Winter 2006-2007 (29 sections)


Typical WirElinE log

nExT | Cross seCtion


cross sEcTion

nExT | PrE-fEASiBiliTy STUdy


cadoTTE cEnTral prE-fEasibiliTy sTudy

nExT | petroleum initially in plaCe

Prepared by Norwest Questa Engineering Corporation Feb 2008

Method of extraction utilized for study – Horizontal Cyclical Steam (HCS)

Norwest used effective OBIP* estimates rather than a gross OBIP (Gross OBIP is about 50% higher)

Shell’s Carmon Project pad and development block design used

Production schedule developed over 29 sections (each at 1sq mile)

Each pad includes 20 wells of 1,400 m length, each about 600 m in the vertical direction and 800 m horizontally

The pads are “brought on stream” over a four year build-up period

*OBiP = Original Bitumen in Place


pETrolEum iniTially in placE

nExT | reCoverable resourCe estimate

Source: Norwest Corporation

Cadotte Block (51 sections) Millions of Barrels (MMSTB)

Low Estimate Low Estimate Most Likely Estimate High EstimateFormation

Bluesky/Gething

Debolt

Elkton

TOTAL

N/A 275 545 682

1,436 2,100 2,157 2,534

N/A N/A 709 1,008

1,436 2,375 3,411 4,225

10 wt% grade &10 m thick. minimum

8 wt% grade &10 m thick. minimum 8 wt% grade minimum


rEcovErablE rEsourcE EsTimaTE

nExT | eConomiC evaluation

RECOVERABLE PORTION OF CONTINGENT AND PROSPECTIVE RESOURCE FOR THE CADOTTE AREA BY TARGET ZONE IN MILLIONS OF STOCK TANK BARRELS (MMSTB)


Formation Low Estimate Most Likely Estimate High Estimate

Bluesky/Gething 47 142 259

Debolt 571 561 963

Elkton N/A 184 383

TOTAL 404 887 1,605


Economic EvaluaTion ( updated 2010 )

nExT | PrE-fEASiBiliTy fiNdiNgS

DIFFERENT OIL PRICE ASSUMPTIONS (USD $ BILLIONS)

Sproule and Mcdaniel and Associates forecast that Alberta Heavy Crude Oil will sell for USd $30 less than WTi


prE-fEasibiliTy findings (cadoTTE cEnTral)

nExT | Carbonate Comparisons

Economically Viable

NPV (disc. 10%) of cash flows before income taxes of USD $1.3 Billion (over initial 20yrs, producing only 360 million bbls of the total 517 million bbls available)

Daily Production Rate of 56,000 bbls per day

Based on a review of public data for similar projects

Product anticipated to be “dil-bit”, rather than synthetic crude oil

Transportation of bitumen via trucking or pipeline to Haig Lake terminal for transfer to the Rainbow Pipe Line which connects to the Edmonton refineries



carbonaTE comparisons

nExT | suCCess in Cadotte

source: norwest Corp.

PROPERTY

Depth of Top Zone (m)

Zone thickness (m)

Net Pay Thickness (m)

Average Porosity (%)

Avg. Horizontal Permeability (mD)

Average Water Saturation (%)

Average Oil Saturation (%)

Original Formation Pressure (kPa)

Original Formation Temperature ( C)

Bitumen Gravity ( API)

Bitumen Density (kg/m3)

Bitumen Viscosity at Res. Temp (cP)

UPPERGROSMONT

ORE 1

285

30 - 34

12

19

400

25

75

1400

10 - 11

7

1.037

1,800,000

CADOTTEDEBOLT

ORE

451 - 597

27 - 29

10 - 19

+24

500

7 - 37

67 - 93

4100

17 - 20

9

1.007

650,000 - 1,770,000


succEss in cadoTTE

nExT | CAdOTTE dEvElOPMENT – CAPiTAl PlAN

Grosmont (Buffalo Creek & Maclean) and the Debolt (Cadotte) formations have heterogeneous characteristics

Net pay thickness, porosity, permeability, and other properties in the two formations are very similar

Debolt is more desirable due to higher reservoir pressure and temperature which would cause a lower viscosity in bitumen

“Breccia zones” or “Bitumen Breccia” are reported in both cases

CSS recovery method generated highest production levels in Grosmont;

This suggests that the success that was experienced in the historic tests of the Grosmont formation may also be found in the Debolt at Cadotte


cadoTTE cEnTral dEvElopmEnT - capiTal plan

nExT | PHASE 1 – dEvElOPMENT STrATEgy


pHasE 1 dEvElopmEnT sTraTEgy

nExT | PHASE 1 – CAdOTTE dEvElOPMENT

I. CADOTTE

Initial Drilling Program

Results Addressed Resource Evaluation & Pre-Feasibility Study

Production Testing

Determine Additional Drilling Locations

Water Survey

Submit Application for Pilot Plant

II. CADOTTE WEST

Preliminary Recognition of Resource Potential

Delineate Resource Through a Seismic / Drilling Program

Add to the Current Resource

Submit Applications for the Appropriate Extraction and Processing Methods


pHasE 1 - cadoTTE dEvElopmEnT

nExT | Cadotte development timeline


cadoTTE dEvElopmEnT TimElinE

nExT | west Cadotte loCation map

2013 2014 2015 2016 2017 2018+

ProductionTesting

Water Survey

Pilot DesignEngineering

PlantApplication

PlantConstruction Production

Cadotte WestTesting


WEsT cadoTTE locaTion map

nExT | leadership

West Cadotte Geology

Data sources are from existing drilling information

Bluesky/Gething, Debolt, and Elkton ore zones on the leases

Drilling reports bitumen in the ore zones

Baytex, PennWest, Murphy Oil are Cold-Flow producing from Bluesky/Gething formation


lEadErsHipRon Daems (President & CEO) Extensive financial and resource industry experience Career has focused primarily on business development, strategic planning and

financial analysis in the resource sector Currently engaged as President and CEO of Capex Energy Services, a privately

held company Previous experience: Portfolio Manager for a multinational investment firm, founded

and became the CEO of Emerging Business Solutions, a privately held business development company focused primarily on assisting startup companies in the resource sector

Dr. Michael J. Ranger (Director) Experienced petroleum consultant with a prolific career providing services to an

array of the world’s largest oil companies PhD. in Petroleum Geology from the University of Alberta, a MSc. Degree in

Sedimentary Geology from Memorial University of Newfoundland, and a BSc. Geology from Concordia University

Currently is independent petroleum consultant and is a director of Canadex Resources Ltd. Recent major contracts include: Ross Smith Energy Group, Golder Associates, Laracina Energy, Nexen, Statoil, Murphy Oil, Norwest Consulting, Sinopec, Oilsands Quest, Talisman, ConocoPhillips, Japan Canada Oil Sands, Marathon, Paramount Energy, Athabasca Oil Corp., Kennecott Canada, Total Canada, OPTI Canada, Koch Canada, Syncrude Canada, Quadrise, Hatch Engineering

Previous experience: Scientific Advisory Board of Gushor Inc. from 2007 to 2009, and as a senior geologist at Gulf Canada Resources between 1977 and 1985

Professional affiliations include the American Association of Petroleum Geologists; Canadian Society of Petroleum Geologists; and the Canadian Well Logging Society

nExT | investment potential


invEsTmEnT poTEnTial

nExT | forward looking statements

CADOTTE CENTRAL HIGH SIDE ESTIMATES

NPV USD $1.9 Billion (10% disc.) with 36% IRR at $95/bbl

High probability of exceeding 26% recovery rate with existing and new technology

Price of oil expected to exceed $150/bbl

WEST CADOTTE REGION

Bluesky/Gething, Debolt, and Elkton ore zones on the leases

Drilling reports bitumen in the ore zones

Cold-Flow production in neighboring properties


forWard looking sTaTEmEnTs

nExT | ContaCt information

This information may contain forward-looking statements about our exploration, production, and other operating and financial plans. These statements are not guarantees of future performance, involve certain risks, uncertainties, and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Among the factors that could cause actual outcomes and results to differ materially are changes in petroleum prices; changes in refining and marketing margins; potential failure to achieve, and potential delays in achieving, expected reserve or production levels from existing and future oil and gas development projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas; unsuccessful exploratory drilling activities; unexpected delays or difficulties in constructing company facilities; general domestic and international economic and political conditions; the ability to meet government regulations; potential disruption or interruption of the Company’s facilities due to accidents or political events and other matters detailed in our publicly available filings with the Securities and Exchange Commission.

Cautionary Note: As an oil and gas company, in our filings with the SEC we only disclose proved reserves that have been demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. However, in the information presented here, we may use certain terms such as “probable reserves”, “potential net recoverable reserves”, “barrels of oil”, “in-place”, “resource”, and “recoverable reserves” that we do not include in our filings with the SEC.


conTacT informaTionADDRESS Strata Oil & Gas Ltd.

#408, 918 –16th Avenue N.W.

Calgary, Alberta T2M 0K3

EMAIL [email protected]

PHONE (403) 237 5443

TOLL FREE 1 877 237 5443

FAX (403) 775 0461

WEBSITE www.strataoil.com

the n ext oil · 2014-02-05 · the n ext tie conve n tion oil 6 canadian crude oil production next...

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