NW Montana An emerging unconventional tight oil play
New Resource Play in S. Alta & NW Montana In 2009 the play was discovered in Glacier County, NW Montana with discovery wells drilled by Anschutz, Newfield & Rosetta, all 3 companies hold significant acreage positions on the Blackfeet Reservation in Glacier County IFR owns title to fee-simple mineral lands covering 17,000* acres in the heart of the play on the Blackfeet Reservation In Q2/10 the play was extended into Southern Alberta, industry has spent over $145 million to acquire 566,000 acres between the Montana border and Claresholm, Alberta There are in excess of 60 wells licensed in Montana & Alberta ~ 2011 & 2012 will provide steady news flow as this play un-folds * Final acreage to be determined by title opinion
What Rosetta has said ….. Drilled 8 vertical delineation wells ~ Williston Basin analog 2 wells on strike 28 miles apart ~ Riverbend 12-13 and Gunsight 31-16 1 well 8 miles downdip ~ Riverbend W 7- 4 Drilled a north east extension and encountered thickening Banff and Bakken intervals ~ Big Rock 29 – 13 Drilled 2 middle of area wells which established continuity ~ Little Rock Coulee 27 – 16 and Fee Gauge 19 – 1 Confirmed significant oil hydrocarbons in place and over-pressured reservoirs 13 – 15 MMBOE per square mile (640 acres) of resource in place “ Rosetta’s 11-well vertical drilling program to assess the commerciality of the play across its approximately 300,000-acre position in NW Montana is nearing completion. As of March 31, 2011 8 vertical wells had been drilled with operations underway on the ninth and tenth vertical wells” “During the second quarter of 2011, one additional vertical well is planned. Based on encouraging vertical well results, Rosetta will spud the first of three horizontal wells in the second quarter”
What Newfield has said …. Q1,2011 & year end operations review “To date, Newfield has drilled seven vertical wells, completed and placed on production two horizontal wells, and is preparing to drill an eighth vertical well. All of the wells to date have encountered oil. Newfield has 280,000 net acres in the play, located in Glacier County, Montana” “Multiple prospective geological formations throughout the acreage are planned for evaluation ~ significant upside” “Prospective Formations include ~ Lodgepole, Bakken, Three Forks and Nisku”
Prospective Targets Lodgepole Bakken Three Forks Nisku Cone ~ 2 nd White Specks A township is 6 square miles 35 wells licensed @ 5/2011
~ 6 sq miles
“IFR acreage sits in the overpressure fairway which will increase the chance for natural reservoir fracturing which should result in better flow rates and an increase in recoverable reserves”
Is the play similar to North Dakota? The play is a multi zone hydrocarbon saturated large continuous petroleum system with good quality reservoir rocks sitting above and below source rocks. The reservoirs have abnormally high pressures and no free water. Major investment firms report that the play could be analogous to the Bakken – Three Forks play in N. Dakota & Saskatchewan.
“Barrier to entry for juniors” 32 wells licensed at 4/2011
NW Montana Players (May 2011) Price Company Shares O/S Market Wells County $/share Million Cap Licensed Majors B = billion M million Anschutz (Private) Private N/A Private 9 Glacier Newfield (NFX-Z) 134 75.00 14 B 13 Glacier JV - NFX Stone (SGY-Z) 47 30.00 1.4 B Glacier Rosetta (ROSE-Q) 52 44.00 2.2 B 14 Glacier Quicksilver (KWK-Z) 168 14.00 2.3 B 0 Pondera Juniors Mountainview MVW-TSX-V 53+ 2.00 106 M 0 Pondera/Teton Primary (PIE – TSX-V) 146 0.75 110 M 0 Pondera/Teton Vecta (VER – TSX-V) 73+ 0.20 14 M 0 Pondera/Toole Guardian (GX-TSX-V) 46+ 0.11 5 M 0 Glacier/Pondera IFR (IFR – TSX-V) 59 0.11 6 M Offset Glacier wells
Southern Alberta Players (May 2011) Company Shares O/S Price Market Wells Area Million $/share Cap Licensed Majors B – billion M million Crescent Point (CPG-T) 269 47.00 12 B 6 1 million acres Murphy (MUR-Z) 192 72.00 14 B 6 Blood & Del Bonita Nexen (NXY-T) 526 25.00 13 B 3 Granum Shell (RDS-Z) 72.00 125 B 4 Montana Border Juniors Argosy (GSY-T) 20 2.50 50 M 3 Claresholm Bowood (BWD-TSXV) 275 0.50 137 M 2 Blood Dee Three (DTX-T) 63 4.25 267 M 3 Lethbridge Legacy (LEG-T) 143 15.00 2.4 B JV-BWD Blood 10 wells by others
Montana Mineral Titles ~ Key Attributes No expiries Leases granted to Anschutz & Newfield ~ expiries 2014 – 2016 Current royalties range from 12.50% to 18.75% 15% royalty equals +/- 26% working interest Excellent exposure to Anschutz, Newfield & Rosetta drilling programs No upfront capital required for seismic, drilling or facilities IFR lands are being de-risked by offsetting drilling programs Revenue Sources Royalty income Pool or unitize acreage with option to participate in drilling Drill 100% net revenue lease Re-lease acreage with an increase in price per acre and royalty Re-capture land and farm-out with increased royalty + carried interest
IFR’s Strategy is Increase acreage position on the play Monitor well testing results High-grade acreage for drilling Participate in drilling joint wells with current operators Form joint ventures for future drilling
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