Liquids Rich Montney Play - Canada Investor Presentation September 2017
DISCLAIMER This presentation has been prepared by Calima Energy Limited (Company), prove to be correct. Recipients of this presentation must make their own based on information available as at the date of this presentation. The investigations and inquiries regarding all assumptions, risks, uncertainties information in this presentation is provided in summary form and does not and contingencies which may affect the future operations of the Company contain all information necessary to make an investment decision. or the Company's securities. The purpose of this presentation is to provide general information about The Company does not purport to give financial or investment advice. No the Company and Calima. It is not recommended that any person makes account has been taken of the objectives, financial situation or needs of any investment decision in relation to the Company based solely on this any recipient of this document. Recipients of this document should presentation. This presentation does not necessarily contain all carefully consider whether the securities issued by the Company are an information which may be material to the making of a decision in relation appropriate investment for them in light of their personal circumstances, to the Company. Any investor should make its own independent including their financial and taxation position. assessment and determination as to the Company’s prospects prior to making any investment decision, and should not rely on the information in This presentation is presented for informational purposes only. It is not this presentation for that purpose. intended to be, and is not, a prospectus, product disclosure statement, offering memorandum or private placement memorandum for the purpose This presentation does not involve or imply a recommendation or a of Chapter 6D of the Corporations Act 2001. Except for statutory liability statement of opinion in respect of whether to buy, sell or hold securities in which cannot be excluded, the Company, its officers, employees and the Company. The securities issued by the Company are considered advisers expressly disclaim any responsibility for the accuracy or speculative and there is no guarantee that they will make a return on the completeness of the material contained in this presentation and exclude all capital invested, that dividends will be paid on the shares or that there will liability whatsoever (including in negligence) for any loss or damage which be an increase in the value of the shares in the future. may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. The Company accepts no This presentation contains certain statements which may constitute responsibility to update any person regarding any inaccuracy, omission or “forward - looking statements”. Such statements are only predictions and change in information in this presentation or any other information made are subject to inherent risks and uncertainties which could cause actual available to a person nor any obligation to furnish the person with any values, results, performance or achievements to differ materially from further information. those expressed, implied or projected in any forward-looking statements. No representation or warranty, express or implied, is made by the Company that the matters stated in this presentation will be achieved or 1
Corporate Summary ASX Code CE1 Ordinary Shares 490.5 M • Completion of farmin arrangements over the liquids-rich Montney play. Management Perf. Equity (1) 55.5 M • ASX listing – CE1. Market Capitalisation (2) $16.2 M • Havoc Partners team join Calima on Cash & Securities (no debt) (3) $7.5 M the board and management and as Enterprise Value (EV) $8.7 M shareholders. • Active work program and growth Board & Management own 22% strategy. (1) Includes performance shares, performance rights ($0.15) and options ($0.09 and $0.12). For details see prospectus dated June 30 2017 (2) Based on the closing price on July 30 2017 (3) Estimated cash balance at completion (pre-completion Montney investment ~$1.5 M) 2
TEAM HAS BUILT, GROWN AND SOLD SUCCESSFUL COMPANIES TOGETHER MONTNEY - A PREMIER NORTH AMERICAN LIQUIDS RICH ENERGY PLAY MONTNEY - STRONG INSTITUTIONAL AND INDUSTRY APPETITE FOR THE PLAY STABLE INVESTMENT DESTINATION LOW TECHNICAL RISK WITH EXCELLENT UPSIDE MANAGEMENT ALIGNED & MOTIVATED >20% OWNERSHIP SIGNIFICANT VALUE ARBITRAGE VS. MONTNEY PEERS 3
THE MONTNEY PLAY • Covers an extensive area (130,000 km 2 ) of British Columbia and Alberta. • Estimated remaining 449 Tcf of gas, 14.4 bn bbls of condensate and 1.1 bn bbls of oil (1) . • Is the most active play in Canada with C$5.2 Bn in investment in 2017 rising to C$7.5 Bn in 2022 (2) . • Current production is 6.3 bcfed (including 247,000 bbld For condensate and other liquids) which is predicted to more detailed than double by 2022 (2) . map see Slide 6 • Siltstone play offering better productivity than shale plays. • Thicker than most other unconventional plays (200-300 m) allowing for multi-layer completions from one surface location. • Ideal rock properties for fracture stimulation resulting in enhanced productivity. • Breakeven costs in the liquids rich window of the Montney play (US$1.69/mcfe) are amongst the most competitive in North America, delivering excellent returns at current prices (2) . (1) The Ultimate Potential For Unconventional Petroleum From The Montney Formation Of British Columbia and Alberta, National Energy Board, November 2013 (2) Wood Mackenzie Unconventional Service, Montney Key Play Report, April 2017 4
WHY THE MONTNEY? – PROVEN PERFORMANCE YTD INDEXED SHARE PERFORMANCE BY BASIN Montney Permian Bakken Marcellus Eagle Ford DJ Basin 250 Indexed Share Price Performance 200 150 100 50 0 Data: Bloomberg, compiled by Enercom www.enercominc.com “ The super liquids rich window of the Montney in British Columbia will emerge as one of the top plays in Western Canada and perhaps in North America.” BMO Capital Markets Research Note 5
MONTNEY – CALIMA LANDS FARMIN • Calima has completed a farmin with TSV-Montney Ltd and Cumulative WI Earned Stage Latest Date TMK-Montney Ltd (TSV/TMK) to acquire up to 55% of the Contributions (cumulative) Calima Lands. 1 C$5 M 20% (20%) 01 Aug 2018 • C$10.5 M invested in the Calima Lands by TSV/TMK. 2 C$12 M 17.5% (37.5%) 28 Feb 2019 3 C$25 M 17.5 % (55%) 28 Feb 2020 • Calima will fund a three stage earn-in. • Stage 1 (C$5 M): Stage Activities 1 Acreage acquisition, 3D seismic, Drill planning C$1.5 M invested already. 2 Drill and complete one x 2,000 m Hz well Anticipate full-spend by early 2018. 3 Drill and complete two x 2,000 m Hz wells • Stages 2 & 3 (C$20 M): Entry to stages two and three are at our election. Three-well drilling campaign anticipated 2H 2018 • Calima also owns 11.2% of the issued share capital of TMK, resulting in a fully diluted economic interest of 57%. 6
MONTNEY – LAND SALES 2011 ONWARDS • Activity associated with the Montney unconventional play 2011 2013 has spread progressively north eastward. • Prior to 2013 the Montney was predominantly a dry gas play. • Since 2013 most of the activity has been focussed on the liquids rich part of the play. • The liquids potential of the Calima Lands was identified in 2013 using a proprietary geoscience work flow. • TSV/TMK started acquiring land in the Caribou area in 2014 moving ahead of industry trends (average land cost $130/acre). • The Calima Lands now lie within the accepted limits of the Montney liquids rich play. 2015 AUGUST 2017 • In July 2017 a single parcel of land covering 14,000 acres attracted a record bid of $77 M ($5,600/acre) • In August 2017 industry requested that a large contiguous acreage parcel of c. 100,000 acres to the east of the Calima Lands be included in an upcoming land sale. • This is notable because of its very large size and its potential to extend the Montney play eastwards. 2017 Montney Horizontal LAND SALES Production Well 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 2017 August 2017 Montney Acreage Limit $ = C$ 7
MONTNEY – CALIMA LANDS • Calima has the right to earn 55% of an acreage position referred to as the Calima Lands, located in a liquids-rich window of the CNRL Montney play in British Columbia. Black Swan • Acreage position currently comprises 75 Sections covering Saguaro Resources Progress Energy 51,455 acres. Chinook Energy • Calima Lands acquisition guided by proprietary geoscience Painted Pony workflow which enabled low-cost licensing ahead of Todd Energy mainstream industry activity. Kelt Exploration Arc Resources Acquisition phase to continue during 2017. Polar Star • 3D seismic over the core of the Calima Lands. • Extensive historical well database More than 60 well penetrations through the Montney within 35 km. Vertical well penetrations through the Montney in and around the Calima Lands demonstrate that the section is analogous to adjacent production. • Plan to drill three horizontal wells in the winter of 2018/19. 2017 Montney Wells Pre- 2017 Montney Wells For map location see Slide 4 8
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