Developing Energy in Western Newfoundland

Developing Energy in Western Newfoundland

Welcome to Developing Energy in Western Newfoundland

History Foothills Capital created Black Spruce Exploration. Foothills Capital provides Investment capital/management expertise to the energy sector Experience with liquid-rich shale basins (oil, condensate and gas)/hydraulic fracturing, in Bakken/ND, Piceance Creek/CO, Marcellus Shale/PA, Haynesville Shale/AR, and Barnett Shale/TX.

Industry Experience Bayridge Resources

Executive Team W. T. David Murray Senior executive with 25 years finance and operations experience in oil and gas sector. David also serves on the Board of Directors. Derek Sullivan Over 20 years experience in the fishing and oil and gas industries in the Health- Safety-Environment field Mark Voorhies Senior Executive with international business experience with Fortune 500 oil & gas accounts Diane Hooven Over 20 years finance experience, 11 years in oil and gas Kirk S, Boote P. Eng Over 30 years in Management, Governance, Oil & Gas Operations, Reserves Management and Reservoir Engineering Dianne Noseworthy., an M.Sc. in Geology from MUN and worked with Hibernia, Shell, NATO, and the Canada- Newfoundland and Labrador Offshore Petroleum Board.

Board of Directors We have experience. Robert Bertram, MBA Former. Exec. VP, Ont. Teachers Pension Plan Board ($108 B), Director for Nexen Inc., Officer of the Order of Canada Brent Lohnes, P.Eng. General Mgr./Engineer for Hess Corporation, North Dakota, (1,200 wells) Bakken oil-in-shale deposit (over 100,000 bbls per day/800 employees) Donald C. Lowe, M.Sc., P.Eng. Senior exec./board member, Bombardier; Director, Alberta Natural Gas; Bayridge Resourc- es; HSBC Bank of Canada; Pratt & Whitney Ian F.T. Kennedy, P.Eng, P.Geol. Geologist & mining engineer, veteran of the petroleum/ mining industries, past Chair of Ryerson in Toronto Thom Zaugg, P.Eng. Senior Dir., Strategic Development for Petro Canada and Manager, Industrial Markets/Gulf Oil Leo Power, MBA, Masters in Oil & Gas Studies Exec. Chairman, Ptarmigan Energy, a NL oil/gas exploration company focused on offshore western Newfoundland

The Opportunity Participate with Black Spruce Exploration in developing the immense energy reserves of Western Newfoundland.

Our Focus Western Newfoundland has undervalued and underestimated energy resources BSE is here to prove their Commercial potential Slide 13

Exploration Plan Phase I - Obtain regulatory approval for conventional well drilling - Begin with drilling on Garden Hill, Enegi license (PL2002-01A) - Intention to drill at least one well in each of the three SPE licenses, earning BSE 40% interest in 1070 and 1097R, and a 32% interest in 1120 (subject to hydraulic fracturing guidelines implementation) - Potential for Significant Discovery License (SDL) application in success case scenario for each exploration license - Project budget of $60 Million Phase II - Seismic shoot for 2014 in EL 1120 - Further capital raise $100 Million 10

Two-phase farmin agreement Jan/2013 Exploration Licenses: 1070 1120 1097R Phase 1 Phase 2 4 wells = a 50% working interest additional 8 wells = up to a 60% working interest Non-conventional shale oil prospects (Onshore-to-offshore) BSE s 60% WI Est. Recoverable: Approx. 434,746 acres 581 MMbbls

Agreement on May 31, 2013 Exploration Licenses: 1120 1127 1128 100% working interest in EL- 1120 (deep rights), 1127 & 1128 Conventional offshore oil prospects Est. Recoverable: 249 MMbbls (P50, NI 51-101) from two evaluated prospects in EL 1120 Area: Approx. 1,186,348 acres

Agreement on June 4, 2013 Exploration Program: 93-103 03-105 100% working interest in EP 93-103/03-105, Deer Lake Basin Conventional & Non-conventional onshore oil & gas prospects Currently no reserve estimate. Area: Approx. 159,188 acres

Two-phase farmin agreement June/2013 Exploration Licenses: 1070 1116 PL 2002-01(A) Phase 1 Phase 2 4 wells and 1 workover = a 50% working interest additional 8 wells = a 60% working interest Conventional & Non-conventional oil & gas prospects (onshore/offshore) Est. Recoverable: 29.7 MMbls (BSE s 60% WI) Total Risk Resources Area: Approx. 579,099 acres

2,359,381 acres with BSE as Operator BSE by the Numbers: SPE = 434,746 acres PE = 1,186,348 acres DLOG = 159,188 acres Enegi = 579,099 acres

Where We Are Today Operation Update: - Head office officially opened on Sept 11/Corner Brook - Finalizing business agreements - Regulatory applications - Acquisition of drilling rig, a first for western NL - Drilling rig arrival November/2013 - Secure warehouse space for pipe facility - Proposed offshore 2D/3D seismic program

A Word on Well Stimulation There are over 200,000 hydraulically fractured wells in Canada and not one case of drinking water contamination from stimulation fluid. -CAPP BSE s Green Point Shale wells are at the proof of concept phase. The hydraulic fracturing we are planning takes place in near vertical wells. Stimulation is restricted to very small intervals and has restricted penetration when compared to standard industry horizontal fracturing.

Stages: Oil-in-shale Development BSE Rig: Hydraulic Fracturing: Production: 4-6 weeks 1 week 20+ years Green Point is an oil-in-shale development and not a gas-in-shale project. he resources are not under pressure and will need to be pumped to the surface.

Employment Opportunities The BSE vision for western Newfoundland can be a catalyst for the future of a new industry. Doing it right takes time. This is how we do things. We have experience. We first research. We invest. We do business with stakeholders. As Operator, we will realize the project s potential. Year 1 - Exploration Drilling Year 2 - Further drilling (appraisal and development) Year 3 onwards - Development and production Employment opportunities will increase with each phase.

Safety & Responsibilities NL projects subject to the most stringent regulatory agencies in the world. C-NLOPB, NL Dept of Natural Resources, NL Dept of Environment & Conservation Our priority is safety... for people, for the environment, for our assets, and for the production. We understand why this region is so valued and special. We take care we use best practices. BSE develops projects in a safe and environmentally responsible manner or we won t do it. -VP Derek Sullivan Meeting The Public Corner Brook Rotary

The BSE Difference We have a unifying vision + The resources and capital + Knowledge through experience -we have done this before + We have done due diligence -we know what this will take BSE Board has over 100 years combined energy sector experience Recent alliances mean diverse plays: Offshore, Onshore, Conventional and Unconventional

Opportunity Carpe Diem There are opportunities here for experienced businesses. We must co-exist or else we won t exist. - Sam Hoddinott, Hawkes Bay Western Newfoundland deserves this opportunity. Meeting the public: Lark Harbour