Focused on the Acquisition of Non-Operated Oil and Gas Assets

Transcription

1 Focused on the Acquisition of Non-Operated Oil and Gas Assets

2 Introduction ReOil Energy( ReOil ) is a privately held oil & gas company headquartered in Denver, Colorado Highly experienced professionals from across the energy sector with operating, technical and senior management expertise across all targeted basins Extensive and long standing industry relationships with top-tier operators providing access to attractive acquisition and joint venture opportunities ReOil has been created to acquire and manage a portfolio of non-operated working interests ( NOWI ) in de-risked unconventional resource plays in U.S. unconventional basins Disciplined geographic focus with large resource potential, well known and understood asset base No conventional plays, no high risk exploratory drilling Diversification through exposure to multiple operators, resource plays and commodities ReOil is seeking acquisition opportunities up to $250 million to acquire nonoperated producing and development properties 2

3 Strategy Focused On An Underserved Buyers Market Focus on assets that meets ReOil s proprietary Basin Profile Resource Metrics Based upon rigorous technical and professional evaluation Opportunity to enhance value through management s technical and commercial expertise Target investments of $75 million or greater Proved Developed ( PDP ) and Proved Undeveloped ( PUD ) properties Build scale in premier plays with strong rates of return Acquire significant acreage positions to increase leverage with operators Partner with proven top-tier operators we know and trust who are financially committed to the resource play Visibility into future capital expenditure development strategy Proved operational and financial track record Build long term, mutually beneficial partnerships 3

4 Basin Strategy Compelling Resource Opportunities ReOil is actively evaluating opportunities in the Bakken, Wattenberg, Uinta and Permian Basin along with the regional areas of the Eagleford, Granite Wash and Marcellus/Utica Capital allocation among such basins is expected to be equally weighted Highest IRR US Shale Plays * De-Risked Basins * Basins with remaining risk & reserve variance Concerns Targeted operators demonstrate low cost operations, improved EUR and recovery capability, increase pad drilling, consolidation of infrastructure, economies of scale and financing capability Smart, experienced buying combined with long term vision ReOil has targeted these initial basins based upon its proprietary Basin Resource Metric Profile along with calling on a network of strong industry relationships Source: Credit Suisse Research (2/13) and Jefferies Presentation 4

5 Targeted Focus Areas U.S. Unconventional Shale Plays Bakken Utica/Marcellus Uinta Niobrara Permian Granite Wash Eagleford Target Buy Areas 5

6 ReOil Energy Highly experienced and accomplished management team with extensive experience in unconventional oil and gas development projects across multiple U.S. shale plays Exclusive use of the powerful and propriety EPLogic evaluation tool Diversified, low-risk asset strategy with project level capital deployment Target joint venture partners with attractive land positions Extensive experience in structuring strategic and innovative deal structures that create value for all participants Knowledge based decision making along with a quick-to-move capital deployment strategy will be highly attractive to potential industry partners Long standing network and industry relationships providing access to lucrative opportunities in advance of a widely distributed sales process 6

7 ReOil Corporate Structure ReOil Energy Partners ReOrient Group Management Team EPLogic & Technical Review Fund Raising and Investor Relations John Wallace, Managing Partner Vince Connelly, General Partner John Karns, General Partner Jason Boyer, Managing Partner Brad Ainslie, Managing Partner Brett McGonegal, Managing Partner 7

8 ReOil Energy Management Team Name Bio Role John Wallace Past President & COO of Delta Petroleum, VP of Exploration for United States Exploration, Founder/Pres of Dual Resources., Founder/Pres of The Esperanza Corp., Co-Founder of Intrepid Acquisitions and various technical acquisition positions with Energetics Resources. Supervised operations in the Gulf Coast, East Texas, Permian, Panhandle, DJ, Williston, Powder, Green River, Uintah, Paradox, Piceance and San Juan basins. Mr. Wallace has drilled and developed horizontal and directional unconventional wells in each of the core acquisition areas with the exception of the Marcellus/Utica. Mr. Wallace has developed operated assets that totaled over 650 million barrels equivalent of proven reserves. Mr. Wallace has acquired 37 producing property acquisitions with a majority emphasis on non-operated producing assets. BS in Geology. Acquisition generation and coordination Vince Connelly John Karns Present Owner of VFC Company, LLC an independent oil and gas company involved in lease acquisitions, and E&P since Operated and drilled wells in the DJ Basin and the Overthrust in Nevada. Partnered with other E&P companies and drilled wells in Central Kansas Uplift, Mississippi Lime in Oklahoma, and DJ Basin in Nebraska and Colorado. Fourth generation in the oil and gas business. Former First VP Institutional Research of the Robinson- Humprey Company. BA Finance from SMU, Dallas, TX. Former VP of Business Development and Program Management at Rivet Software. Former CFO at Mojofiti, Inc. Founder of ContentFast, LLC. Institutional analyst and portfolio manager at Smith Barney. Partner/Portfolio Manager at Denver Investment Advisors. CFA charter holder. MBA. General Partner. Business Development & Marketing Accounting, Reporting Treasury 8

9 ReOrient Group Limited Name Bio Role Jason Boyer Brad Ainslie Executive Managing Director and Vice Chairman of RFM. Mr. Boyer is responsible for the day to day management and business development of the Group s various initiatives and brings over 17 years of experience in institutional financial markets to the job. Prior to joining the Group, Mr. Boyer relocated to Hong Kong in 2004 to create and build Cantor Fitzgerald HK Capital Markets. He successfully developed, managed, and expanded all aspects ofthebusinessinasia,rapidlygrowingthefirmto offerafullrangeof financial services. Honors Degree in Business from the University of Western Ontario. Executive Managing Director and Head of Global Markets of RFM. Mr. Ainslie has over 11 years of experience in equity markets and is responsible for managing and growing the Group s equity businesses globally. Prior to RFM, Mr. Ainslie was a Managing Director at Cantor Fitzgerald HK Capital Markets and co-head of the Equity Sales and Trading desk. Prior to moving to Hong Kong, he worked in New York with Cantor Fitzgerald s Equity Trading desk and atmorganstanleywhereheadvisedandtradedonbehalfofthefirm sprivate clients. Economics degree from Bates College in Lewiston Maine. Managing Director Fund Raising, divestiture and Investor Relations Brett McGonegal Executive Managing Director and Chief Executive Officer of RFM. Mr. McGonegal manages and oversees the Group s main businesses and brings over 15 years of industry experience to the group. Previously was Managing Director at Cantor Fitzgerald HK Capital Markets and co-head of the Equity Sales and Trading desk. Prior to Cantor Fitzgerald, Mr. McGonegal managed the Institutional IPO business for Charles Schwab Capital Markets as a Senior Managing Director and also helped form Etrade s Capital Markets Institutional Sales and Trading businesses in New York. BA degree from Hobart College. Investor Relations 9

10 EPLogic Evaluation Analysis EPLogic is a proprietary software tool integrating production analysis, reserve engineering, and financial modelling Production Explorer Reserves Explorer Pro Forma Explorer Fast, Accurate, Comprehensive and Flexible Analysis EPLogic has engineered and developed proprietary software that enables a small team of professionals to analyze and evaluate massive amounts of data in a highly efficient manner EPLogic is uniquebecauseitallows theentireteamtointeractonasingle issuewhileeachmember is able to analyze and contribute from their own expert viewpoint A core advantage this working paradigm offers is the ability to quickly navigate issues that traditionally require a team to adjourn and rework solutions prior to further discussion Evolving software development is a part of the entire evaluation process which translates into a significantly reduced cycle time for design improvements 10

11 Track Record Acquisition Type NOWI OWI OWI OWI OWI Royalty General Discussion Acquired a 37.5% WI in 18 wells producing gas wells. Development drilling opportunities in over 60 wells. Acquisition Size ($MM) Internal Rate Acq Cost CapEx Total Size of Return $25 $57 $82 27% Summary of Non-Operated Acquisitions $25 $57 $82 27% Acquireda 100% WI in >60 wells in 17 different fields in and around the Wattenberg Field of eastern Colorado. Drilled and developed 90 wells with 100% success rate Acquired a 100% WI in 24 Spacing units in the Bakken Horizontal Play of North Dakota. Exploitation drilling opportunities in 72 wells Acquireda 100% WI in ~30 wells in 7 different fields. Drilled and developed 28 wells with 94% success rate Acquired 20,200 net acres and drilled 196 producing resource play wells with no dry holes $37 $35 $72 45% $21 $324 $345 $74 $32 $106 24% $404 $675 $1,079 25% Summary of Operated Acquisitions $536 $1,066 $1,602 26% Acquisition of 121 royalty acquisitions in the Bakken in the Williston Basin and the Wattenberg Field of Colorado $11 $0 $11 40% Summary of Royalty Acquisitions $11 $0 $11 40% Total All Acquisitions $572 $1,123 $1,695 26% Economic projections are based on the NYMEX forward curves at the time of purchase. The above transactions are still producing and developing and IRR calculations are therefore only projections. 11

12 Acquisition Parameters ReOil is aggressively looking for non-marketed transaction opportunities to acquire non-operated assets in proven developed resource plays in strategically targeted unconventional basins Acquisition opportunities target a total initial investment comprised of acquisition costs plus development capital expenditures of $75 million or greater. The development capital expenditures amount carries a three year obligation. Acquisition requirements include the following: De-risked resource play with low individual well reserve variance Predictable geologic characteristics Proven operator with strong historical track record Operator with conservative long term hedging strategies and a strong balance sheet Unsolicited or bilateral negotiations Proved Developed component of 30% of initial acquisition valuation 3-5 year development drilling plan in place Total rate of return 20% 12

13 Investment Process Acquisition Timing 6 Weeks Initial Financial Review Complete land review and title inspection Title Analysis Land review and title inspection Initial Reserve Review Complete land review and title inspection Engineering & Reserve Analysis reserve forecasts & projections Operator Review Complete land review and title inspection Marketing Analysis Full Contract Review Operations Analysis Operator Financial Review 3 Month Total Process 6 Weeks Economic Projections and investment Committee Approval Acquisition Closing 13

14 Summary ReOil Energy is targeting acquisition opportunities of non-operated working interest assets that meet our predetermined acquisition parameters ReOil is well capitalized and has expressed desire to acquire over $1 billion in oil and gas assets with each individual acquisition ranging from $100 -$250 million in size ReOil will execute on its strategy to position itself as an industry partner with a managed approach while still requiring full transparency and updates ReOil has proven management experience along with a multi-decade industry network which will allow for a positive and highly productive relationship with industry partners throughout the life of the investment 14

15 Corporate Contact Information ReOil Energy 1600 Broadway Suite 1350 Denver, CO (303) To discuss any transaction proposals please contact Vince Connelly at 15

16 Disclaimer The contents of this Presentation are intended solely as an introduction to a potential transaction described herein and is for your internal use only. Without limiting the generality of the foregoing, this Presentation does not purport to describe all of the risks associated with a potential transaction. By accepting and using this Presentation, you are deemed to represent and warrant to ReOil Energy and its affiliates and representatives (collectively ReOil ) that you are able to make your own evaluation of its contents andthatyouarenotrelyingonreoilforanysuchpurposes. Theinformation and opinionspresented in thispresentation havebeen obtained and derived fromsources believed by ReOil to be accurate, but ReOil cannot and does not make any representation or warranty with respect to it or its accuracy, completeness, sufficiency, appropriateness for your purposes or timeliness. ReOil disclaims, to the extent permitted by applicable law or regulation, all liability for any use you or your advisers make of the contents of this Presentation. ThisPresentationandallinformationandopinionscontainedorexpressedin it,asthecasemaybe,arethe property of ReOil. You may not use any portion of this Presentation except for your, or your authorized representatives or agents, internal use, and you may not otherwise distribute any portion of this Presentation to a third party, other than your authorized agents or representatives, without the written authorization of ReOil. ReOilandthelogo aretrademarksofreoilenergyandyoumaynotuseanyofthe service marks, copyright or other notices (whether or not from ReOil Energy ) in this Presentation for any purpose, or alter, remove or otherwise use any of them without the written permission of ReOil or any relevant third party owner. 16