DIVERSIFIED OIL & GAS PRODUCTION, DEVELOPMENT AND EXPLORATION Corporate Presentation | 2019
FORWARD LOOKING STATEMENTS In the interest of providing Fortem shareholders and potential investors with information regarding Fortem, including management's assessment of Fortems’ future plans and operations, certain statements made by the presenter and contained in these presentation materials (collectively, this "presentation") are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). The forwardlooking statements contained in this presentation speak only as of the date of this presentation and are expressly qualified by this cautionary statement. The information contained in this presentation does not purport to be all-inclusive or to contain all information that potential investors may require. Specifically, this presentation contains forward-looking statements relating to, but not limited to: our business strategies, plans and objectives; our target to fund our capital program and cash dividends from internally generated funds from operations; our dividend policy; our ability to mitigate the volatility in Western Canadian Select price differentials by transporting our crude oil to market using railways; our three key resource plays (Canada- Godin & Compeer, United States (Utah)- Moenkopi, Mancos), our operational plans for 2019, including oil and natural gas production and capital expenditures, the allocation of our capital budget by area and the number of wells to be drilled by area; our oil and natural gas production for 2019 and production growth rates; our production mix for 2019; our production by region for 2019; reserves and reserves life index; single well economics at Godin, Compeer, Moenkopi, Mancos, including drilling and completion costs, initial production rates, liquids weighting, capital efficiency ratio and the oil price at which the projects break-even; our liquidity and financial capacity; the sufficiency of our financial resources to fund our operations; the sensitivity of our 2019 funds from operations to changes in West Texas Intermediate oil prices, heavy oil differentials, natural gas prices and Canada-United States foreign exchange rates; the existence, operation and strategy of our risk management program, including the portion of future exposures that have been hedged; the pricing benchmarks used for our liquids production; operating netbacks for our Canadian and American assets. Cash dividends on our common shares are paid at the discretion of our Board of Directors and can fluctuate. In establishing the level of cash dividends, the Board of Directors considers all factors that it deems relevant, including, without limitation, the outlook for commodity prices, our operational execution, the amount of funds from operations and capital expenditures and our prevailing financial circumstances at the time. Although Fortem believes that the expectations and assumptions upon which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Fortem can give no assurance that they will prove to be correct. These forward-looking statements are based on certain key assumptions regarding, among other things: petroleum and natural gas prices and pricing differentials between light, medium and heavy gravity crude oil; well production rates and reserve volumes; our ability to add production and reserves through our exploration and development activities; capital expenditure levels; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labour and other industry services; the amount of future cash dividends that we intend to pay; interest and foreign exchange rates; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; our ability to develop our crude oil and natural gas properties in the manner currently contemplated; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Fortem at the time of preparation, may prove to be incorrect.
TABLE OF CONTENTS COMPANY OVERVIEW 4 FLOWCHART 6 NET ASSET VALUE 7 MANAGEMENT TEAM 8 TECHNICAL TEAM 9 COLONY ENERGY – GODIN 12 BIG LAKE ENERGY – COMPEER 27 BLACK DRAGON ENERGY – MOENKOPI 31 ROLLING ROCK RESOURCES – MANCOS 35 COMPOSITE FORECAST 38 CITY OF GOLD 39
COMPANY OVERVIEW CORPORATE PRESENTATION 2019 Fortem Resources Inc (“the company”) is a diversified natural resource company mainly focused on high potential, low risk oil and gas projects in North America and Internationally. Fortem has five wholly-owned subsidiaries named Colony Energy, Black Dragon Energy, Rolling Rock Resources, Big Lake Energy and City of Gold. This unique structure allows Fortem to act as a holding company, treating its subsidiaries as a “basket of lucrative assets”. It also gives Fortem many strategic options to raising capital and limit share dilution, while unlocking huge value for its shareholders. The company may also undertake public spin-outs of its subsidiaries, while maintaining a substantial interest in each project. Fortem’s subsidiaries, collectively hold over 350,000 acres of prolific oil and gas fields with proven reserves, production and an immense opportunity for future development. The company has performed extensive geological studies, seismic and evaluations (NI 51-101 reports prepared by Apex Engineering and Deloitte) to the properties to ensure the right drilling locations were chosen for future development. Colony Energy (Godin Property) has been selected as the company’s first choice for its 2019 drilling campaign be cause of its low- risk, favorable economics and comparable data to neighboring major “ CNRL ” (Canadian Natural Resources Ltd). CNRL produces 88,000 barrels per day from its Brintnell field about 9 miles east of Colony’s Godin field. Over 1000 wells (without fracking) can be drilled on the Godin property of 64,000 acres (100 sections). In addition to further development, Rolling Rock Resources is also planning to enhance its production rates to its 50 wells by performing low-cost work-overs and improving overall cashflows. .4
COMPANY OVERVIEW CONTINUED CORPORATE PRESENTATION 2019 Along with the company’s fantastic oil and gas plays, Fortem has come across a very rare Gold mining exploration opportunity called City of Gold, located in Myanmar, South Asia, which covers 465 square kilometers of a prolific gold mining field. The company has appointed a highly qualified team with over 30 years in the minerals industry to assist with day to day operations. Fortem’s resilient management was fortunate to lead the company in the right direction during the oil market downturn and selectively accumulated ready-made projects from companies who were forced to sell. Fortem’s experienced and knowledgeable team have helped guide and position the company to withstand low oil prices, while still maintaining profitability and benefiting extremely from rising oil prices. Fortem Resources is determined to deliver great success through its highly qualified team who bring, experience, knowledge, track records, hard work and dedication. This will serve the company well and contribute to generate strong shareholder value. For more in-depth information about our company assets, please continue to read the corporate presentation. .5
FORTEM RESOURCES FLOWCHART CORPORATE PRESENTATION 2019 FORTEM RESOURCES INC. TSXV symbol – FTM OTCQB symbol – FTMR CAPIT PITAL STR STRUCTURE Issued & Outstanding 122,071,156 100% 100% 100% 100% 100% BLACK ROLLING COLONY BIG LAKE CITY OF Reserved for Insurance 2,600,000 DRAGON LLC ROCK LLC ENERGY LLC ENERGY LLC GOLD LLC UTAH UTAH CANADA CANADA MYANMAR Fully Diluted 124,671,156 Float 14,605,802 75% WI 100% WI 70% WI 165,000 ACRES 64,000 ACRES 465 SQ KM MOENKOPI GODIN MYANMAR O&G O&G GOLD Insider Position 65% RESOURCES RESOURCES MINING *as of May 14, 2019 75% WI 100% WI 131,032 ACRES 5,120 ACRES MANCOS COMPEER O&G O&G RESOURCES RESOURCES .6
NET ASSET VALUE (NAV) CORPORATE PRESENTATION 2019 OI OIL GAS AS ECON CONOMICS Ca Capit ital l Gross Net Net Gross Net Net Costs Co sts NPV NP V 0 NPV NP V 10 NPV NP V 15 Payout P/I @ 10% Scen enari ario (MMBO) (MMBO) (BCF CF) (BCF CF) ($MM) ($MM) ($MM) ($MM) (Yea Years rs) (Ra Rati tio) Fortem 75.9 65.3 227.0 Cdn 2,427.0 Cdn 1,476.0 Cdn 1,173.0 Cdn 2.7 7.9 Optioned 100% WI 173.2 148.9 538.7 Cdn 6,026.6 Cdn 3,092.5 Cdn 2,284.3 Cdn 3.9 8.2 GOD GODIN IN Total 249.1 214.2 765.7 Cdn 8,453.6 Cdn 4,568.5 Cdn 3,457.3 Cdn Per share $70.45 $38.97 $28.81 100% WI 0.59 0.53 12.6 Cdn 18.99 Cdn 9.08 Cdn 6.22 Cdn 3.1 0.82 COMPEER COM Per share $0.16 $0.08 $0.05 75% WI 1.7 1.4 9.2 US 52.5 US 3.19 US 25.9 US 1.1 3.8 MOE OENKOPI Per share $0.44 $0.27 $0.22 75% WI 0.24 0.18 2.1 1.64 1.09 US 7.89 US 4.04 US 3.01 US 1 3.72 MAN ANCOS Per share $0.07 $0.03 $0.02 .7
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