Corporate Presentation May 2013
Corporate Presentation Table of Contents 1. Corporate Summary 2. Grand Rapids Overview 3. Hoole Project Details 4. Exploration Portfolio Appendices A. Management and Director Biographies B. Forward Looking Statements Advisory 1
Corporate Summary 2
Highlights High Quality Oil Sands Asset Base • 100% ownership of over 202,000 net acres of oil sands leases • Cavalier’s oil sands and Carbonate bitumen assets have best estimate discovered exploitable bitumen in place (“DEBIP”) of 3.2 Bbbls and undiscovered exploitable bitumen in place (“UEBIP”) of 4.5 Bbbls (1) − Eagles Nest asset provides additional upside with discovered bitumen in place (“DBIP”) of 0.4 Bbbls and undiscovered bitumen in place (“UDBIP”) of 1.6 Bbbls (1) • Assets are in areas which are currently seeing significant development activity Near Term Production from Large Resource Position at Hoole • Multi phase Grand Rapids project with expected production capacity of 80,000+ bbl/d by 2023 • Probable reserves of 93 MMbbls (B-tax 10% NPV of $379 million) and additional best estimate economic contingent resources of 719 MMbbls (B-tax 10% NPV best estimate of $1.9 billion) (2) • Submitted 10,000 bbl/d Phase 1 application in November 2012 with first production expected in 2017 Significant Upside in Bitumen Carbonates Resource at Saleski and Other Lands Best estimate 1.6 Bbbls DEBIP and 4.5 Bbbls UEBIP with best estimate contingent resources of 492 MMbbls (3) • • Offsetting Laricina’s producing pilot at Saleski that has recently demonstrated peak production of 1,200 bbl/d from a single well-pair (4) • Cavalier expects to develop its carbonates following broader industry commercialization/optimization Strong Management Team and Board Combined with Highly Experienced and Successful Shareholder • Experience building large oil projects, with over $5 billion executed on in a variety of operating and business environments • History of executing value enhancing transactions that have generated material returns and liquidity for shareholders • Opportunity for additional growth through strategic acquisitions • Paramount Resources Ltd. (“Paramount”), Cavalier’s current shareholder, has a proven track record of creating significant value in the oil sands across multiple transactions over the past decade (e.g. NAOSC and MEG) Cavalier is a private pure play in situ oil sands company with a very strong management team and a highly experienced shareholder _______________ See forward looking statement advisory for disclosure on reserves and resource information and definitions. 1. McDaniel reports effective December 31, 2012, October 31, 2011 and April 30, 2010. 3 2. Hoole volumes and NPV as per McDaniel report effective December 31, 2012. 3. Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective October 31, 2011. 4. Laricina April 2013 corporate presentation.
Corporate Snapshot Background Cavalier Asset Portfolio Overview • In November 2011, Paramount contributed seed capital and all of its oil sands and carbonate bitumen assets to Cavalier • Cavalier has a 100% working interest in its main project areas • Cavalier has 75MM shares outstanding, 100% owned by Paramount • Cavalier is targeting to produce 80,000+ bbl/d from the Grand Rapids formation at its Hoole property with significant additional development potential from its portfolio of exploration lands − Includes carbonates properties adjacent to and on trend with the Laricina / Osum Saleski project, Eagles Nest and Christina Lake • New capital to be raised to fund ongoing development and Reserves and Contingent Resource Summary (1) the evaluation of opportunities for the achievement of greater scale in core areas Reserves Contingent Resources • Cavalier plans to remain private through initial Probable Low Best High Asset Undev. Estimate Estimate Estimate development phase MMbbls MMbbls MMbbls MMbbls • Cavalier is led by Dr. Will Roach, former President and Hoole (2) 93 511 719 903 CEO of UTS Energy Corporation Saleski Carbonates (3) - - 380 567 − Other Carbonate Leases (3) UTS was sold to Total E&P Canada Ltd. for $1.5 billion - - 111 184 in 2010 plus the spinout of SilverBirch, which was sold for an additional $500 million in 2012 _______________ 1. See forward looking statement advisory for disclosure on reserves and resource information and definitions. 4 2. Hoole volumes are probable undeveloped reserves and economic contingent resources as per McDaniel report effective December 31, 2012. 3. Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective October 31, 2011.
Hoole Project Overview Significant Resource Base with Attractive Economics • Probable reserves of 93 MMbbls (B-tax 10% NPV of $379 million) and best estimate economic contingent resources of 719 MMbbls (B-tax 10% NPV best estimate of $1.9 billion) (1) • Targeting the laterally continuous and homogeneous Grand Rapids formation • Use of proven SAGD technology is expected to result in strong operating netbacks across a wide range of oil prices • Proximal to high grade road networks, power and gas infrastructure and substantial announced bitumen takeaway and diluent return capacity • Multi phase project with estimated total production capacity of 80,000+ bbl/d by 2023 • Growth opportunities through strategic acquisitions Development Stage Project with Expected Near Term Production • Filed regulatory application in November 2012 for 10,000 bbl/d Phase 1 with first production expected in 2017 – 93 MMbbls of probable reserves (1) at Phase 1 were recognized in Q1 2013 as a result • Delineation drilling for Phase 1 completed in 2010 (74 wells) • Environmental modeling complete and water source/disposal is selected, subject to regulatory approval • Preliminary front end engineering and design work completed • Risk mitigation strategy being implemented through construction Hoole is targeted to be a material 80,000+ bbl/d of modularized components built off-site project located in the core of the Grand Rapids • Ability to truck production volumes for Phase 1 until area pipeline resource play with near term production expected infrastructure is built and multiple opportunities for achievement of greater scale _______________ 1. Hoole volumes and NPV as per McDaniel report effective December 31, 2012. 5 See forward looking statement advisory for disclosure on reserves and resource information and definitions.
Overview of Carbonates Assets Cavalier’s Carbonates Assets Growth Potential in an Emerging Resource Play • Over 128,000 acres within the Carbonate portfolio located on the highly prospective Grosmont Carbonate Trend • Holdings are located adjacent to the regional projects of Laricina, Osum and Husky and proximate to those of several majors including Shell, ConocoPhillips and Suncor • Best estimate 1.6 Bbbls DEBIP and 4.5 Bbbls UEBIP with best estimate contingent resource of 492 MMbbls (1) • Advancement / selection of optimal extraction technologies by industry peers will set the pace for Cavalier’s development of its Carbonates portfolio following Hoole advancement • Ongoing development of new technologies by industry peers also expected to improve economics and recovery factors Increasing industry activity in the carbonates continues to prove up the resource potential of Cavalier’s Properties _______________ 1. Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective 6 October 31, 2011. See forward looking statement advisory for disclosure on resource information and definitions.
Cavalier’s Current Shareholder Paramount Resources Highly Experienced and Successful Shareholder • Paramount is TSX listed with a market capitalization of ~$3 billion; insider ownership > 50% – Founded in 1974 by Clayton Riddell, Chairman and CEO • Strong history of creating shareholder value • Paramount has spun-out three public entities: Perpetual Energy, Trilogy Energy and MGM Energy which have a combined market cap of ~$3.5 billion − Paramount currently holds ~16% interest in Trilogy and ~14% interest in MGM Energy • Proven, successful explorer and partner in oil sands, demonstrated by ~$1.0B in value realized over the past decade (excluding Cavalier): – Acquired, successfully delineated and then sold leases in the southern Athabasca region which form the backbone of what today is MEG Energy’s successful Christina Lake Project – Partnered with North American Oil Sands Corp. (“NAOSC”) to combine and further delineate oil sands leases and to grow the asset base; ultimately becoming a shareholder of NAOSC through the contribution of Paramount’s interests in the properties – Statoil acquired NAOSC in 2007 for $2.2 billion; Paramount owned ~30% of NAOSC generating $680 million in cash proceeds – Sold Paramount’s delineated Surmont project to MEG Energy in 2007 for $300 million including $150 million in cash and 3.7 million MEG shares • Service agreement in place between Paramount and Cavalier covering the provision of a wide range of services by Paramount including drilling and completions, land, marketing, accounting, human resources and community relations Paramount, Cavalier’s current shareholder, has a proven track record of creating significant value in the oil sands across multiple transactions over the past decade 7
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