Corporate Presentation December 2012
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 acquisition provides additional upside with discovered bitumen in place (“DBIP”) of 0.4 Bbbls and undiscovered bitumen in place (“UDBIP”) of 1.6 Bbbls (1) • Best estimate economic contingent resources of 760 MMbbls (B-tax 10% NPV best estimate of $2.5 billion) (2) in the Grand Rapids at Hoole with additional contingent resources of 492 MMbbls in the Carbonates at Saleski and elsewhere (3) − Cavalier expects to recognize probable reserves in Q1 2013 • 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 2022 • Submitted 10,000 bbl/d Phase 1 application in November 2012 with first production expected in 2016 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 is partnered with a highly experienced shareholder _______________ See forward looking statement advisory for disclosure on resource info and definitions. 1. McDaniel reports effective June 30, 2012, October 31, 2011 and April 30, 2010. 3 2. Hoole volumes and NPV as per McDaniel report effective June 30, 2012. 3. Carbonates volumes are contingent resources (technology under development) as per McDaniel report effective October 31, 2011. 4. Laricina September 2012 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 the Contingent Resource Summary evaluation of opportunities for the achievement of greater scale in core areas with plans to remain private through initial Contingent Resources (1) development phase Low Best High Asset Estimate Estimate Estimate • Cavalier is led by Dr. Will Roach, former President and CEO MMbbls MMbbls MMbbls of UTS Energy Corporation (sold to Total E&P Canada Ltd. Hoole (2) 552 760 949 for $1.5 billion in 2010 plus the spinout of SilverBirch, which Saleski Carbonates (3) - 380 567 was sold for an additional $500 million in 2012) Other Carbonate Leases (3) - 111 184 _______________ 1. See forward looking statement advisory for disclosure on resource info and definitions. 4 2. Hoole volumes are economic contingent resources as per McDaniel report effective June 30, 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 • Best estimate DEBIP of 1.6 Bbbls with best estimate economic contingent resources of 760 MMbbls (1) Before tax 10% net present value of $2.5 billion (best estimate) (1) • • Targeting the laterally continuous and homogeneous Grand Rapids formation • Use of proven SAGD technology 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 2022 • Growth opportunities through strategic acquisitions Entering Development Stage and Near Term Production Potential • Filed regulatory application in November 2012 for 10,000 bbl/d Phase 1 with first production expected in 2016 – A portion of contingent resources at Phase 1 are expected to be recognized as probable reserves in Q1 2013 • 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 Hoole is targeted to be a material 80,000+ bbl/d • Risk mitigation strategy being implemented through construction project located in the core of the Grand Rapids of modularized components built off-site resource play with near term production expected • Ability to truck production volumes for Phase 1 until area pipeline and multiple opportunities for achievement of infrastructure is built greater scale _______________ 1. Hoole volumes and NPV as per McDaniel report effective June 30, 2012. 5 See forward looking statement advisory for disclosure on resource info 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 info and definitions.
Cavalier’s Current Shareholder Paramount Resources Highly Experienced and Successful Shareholder • Paramount is TSX listed with a market capitalization of over $3.0B; 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 back bone 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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