You are on page 1of 23
AGM June 19, 2014
AGM June 19, 2014
AGM June 19, 2014
AGM June 19, 2014

AGM

June 19, 2014

Highlights - Introduction

Highlights - Introduction • Eastern Canadian E&P Company with significant upside potential & sustainability • Three
Highlights - Introduction • Eastern Canadian E&P Company with significant upside potential & sustainability • Three

Eastern Canadian E&P Company with significant upside potential & sustainability

Three high-impact prospects at various stages of maturity, total of ~ 800,000 net acres

McCully production generates positive cash flow & premium netbacks

Focused on de-risking plays, acquiring partners for high- impact prospects & prudent financial management as we demonstrate upside

Corridor is well-positioned:

  • - No debt

  • - Working capital (May 2014 ~ $39 M)

  • - Catalysts for significant upside

Anticosti 330,000 Net Acres Old Harry 250,000 Net Acres Southern New Brunswick 225,000 Net Acres
Anticosti
330,000 Net Acres
Old Harry
250,000 Net Acres
Southern New
Brunswick
225,000 Net Acres

Three High Impact Prospects

Three High Impact Prospects • • • Anticosti Macasty shale prospect has 34 Bboe gross undiscovered
Three High Impact Prospects • • • Anticosti Macasty shale prospect has 34 Bboe gross undiscovered

Anticosti Macasty shale prospect has 34 Bboe gross undiscovered resources of petroleum (best estimate); Corridor has 21.67% interest in Anticosti joint venture

Corridor’s Old Harry offshore prospect is one of the largest identified geological structures offshore NFLD

New Brunswick Frederick Brook shale

- 67 TCF gross discovered unrecoverable resources of shale gas

Three High Impact Prospects • • • Anticosti Macasty shale prospect has 34 Bboe gross undiscovered
Three High Impact Prospects • • • Anticosti Macasty shale prospect has 34 Bboe gross undiscovered
Three High Impact Prospects • • • Anticosti Macasty shale prospect has 34 Bboe gross undiscovered

2014 Capital program at McCully expected to increase production and further demonstrate FB shale potential

Infrastructure in Place East Coast

Infrastructure in Place East Coast 3
Infrastructure in Place East Coast 3
Infrastructure in Place East Coast 3

Corridor N.B. Assets

Corridor N.B. Assets • Corridor’s N.B. as sets connected to Boston markets and LNG facility in
Corridor N.B. Assets • Corridor’s N.B. as sets connected to Boston markets and LNG facility in

Corridor’s N.B. assets connected to Boston markets and LNG facility in N.B.

Premium Netbacks

  • - Q1 2013 av $7.35

  • - Q1 2014 av $12.46

50% of base production forward sold @ US$11.74 for November 2014 to March 2015

Premiums in Maritimes & Boston to remain strong through 2018

Potential for East Coast LNG Export terminal

  • - Repsol’s Canaport facility in N.B.

  • - Pieridae’s proposed LNG facility in Goldboro, N.S.

Ability to source additional opportunities in the region

  • - CNG, LNG, Storage, etc.

Corridor N.B. Assets • Corridor’s N.B. as sets connected to Boston markets and LNG facility in

North East Gas Prices

North East Gas Prices • Anticipate elevated premium to Henry Hub for next several years •
North East Gas Prices • Anticipate elevated premium to Henry Hub for next several years •
North East Gas Prices • Anticipate elevated premium to Henry Hub for next several years •

• Anticipate elevated premium to Henry Hub for next several years • Anticipate supply short fall for market in Maritimes served by MNP • CNG & demand growth in Maritimes & NE pushing up supply shortfall • Forward Prices based in Platt’s Gas Daily, May 13, 2014

5

McCully/F.B. Shale Exploration & Development Area

McCully/F.B. Shale Exploration & Development Area • Approximately 225,000 net • acres in N.B. Frederick Brook
McCully/F.B. Shale Exploration & Development Area • Approximately 225,000 net • acres in N.B. Frederick Brook

Approximately 225,000 net

acres in N.B. Frederick Brook shale gas:

  • - 67 TCF gross discovered unrecoverable resources

Producing ~10 mmcf/d gross from McCully area

  • - Hiram Brook gas – McCully Field 98.3 BCF 2P gross reserves

  • - ~25 year reserve life index (GLJ estimate)

  • - $1.60 NPV @ 10/SH on 2P

Advancing F.B. Shale potential

through 2014 program N.B. Government supportive:

  • - Oil/Gas Env Protection Plan

  • - New, competitive Royalty Regime

  • - N.B. Industrial Base requires supply

McCully/F.B. Shale Exploration & Development Area • Approximately 225,000 net • acres in N.B. Frederick Brook

2014 New Brunswick Completion Program

2014 New Brunswick Completion Program • Goal is to increase production from our NB operations and
2014 New Brunswick Completion Program • Goal is to increase production from our NB operations and

Goal is to increase production from our NB operations and “prove up” Frederick Brook shale

Re-enter and frac 4 existing wells, including 6 to 7 shale intervals & 3 Hiram Sand intervals

Tie in wells to the production

gathering system and produce for the winter season Also fracture Green Road B-41 well

at Elgin Program runs from Jun to Nov

Seeking to provide additional Frederick

Brook production curves Total cost of 2014 program $24.5 MM

(includes Green Road, additional workovers & miscellaneous McCully field work)

F-58 Monthly Production and Forecast

2014 New Brunswick Completion Program • Goal is to increase production from our NB operations and

Annual decline = 1.8% Produced (01/14) = 364 mmscf EUR = 1.2 Bscf Single 11 tonne water frac IP = 400 mscf/d

Planned Fracture Stimulations

Planned Fracture Stimulations • E-67B 3177-3245 m Lo wer Frederick Brook • E-67B 3102-3170 m Lo
Planned Fracture Stimulations • E-67B 3177-3245 m Lo wer Frederick Brook • E-67B 3102-3170 m Lo

E-67B 3177-3245 m Lower Frederick Brook

E-67B 3102-3170 m Lower Frederick Brook

E-67B 2980-3060 m Upper Frederick Brook

E-67B 2900-2945 m Upper Frederick Brook

J-76

2980-3045 m Upper Frederick Brook

J-76

2870-2940 m Upper Frederick Brook

P-67

2590 m Hiram Brook B Sand

P-76

2670-2735 m Upper Frederick Brook

L-37

2450 m Hiram Brook G Sand

L-37

2727 m Hiram Brook G Sand

B-41

2027-2031 m Upper Frederick Brook (Elgin)

Planned Fracture Stimulations • E-67B 3177-3245 m Lo wer Frederick Brook • E-67B 3102-3170 m Lo

Frederick Brook Shale Highlights

Frederick Brook Shale Highlights • Proven producibility - G-41 well IP@ 12 mmcf/d - F-58 well
Frederick Brook Shale Highlights • Proven producibility - G-41 well IP@ 12 mmcf/d - F-58 well

Proven producibility

  • - G-41 well IP@ 12 mmcf/d

  • - F-58 well producing for 5 yrs @ low decline from small frac

Up to 1100 m in gross thickness

Upside in overlying sands

O-59 Elgin vertical well has min 8 frac candidates

Connected to M&NP & LNG Terminal

J.V. Opportunity for Pilot plant at Elgin @ $100 to $150 M to commercialize F.B. play

Frederick Brook Shale Highlights • Proven producibility - G-41 well IP@ 12 mmcf/d - F-58 well
Anticosti Macasty Liquids-Rich Shale Highlights • Over 1.5 million gross acres licensed (~ 0.3 million net

Anticosti

Macasty Liquids-Rich Shale Highlights

Anticosti Macasty Liquids-Rich Shale Highlights • Over 1.5 million gross acres licensed (~ 0.3 million net

Over 1.5 million gross acres

licensed (~ 0.3 million net acres)

Thickness of Macasty Shale ranges from 31 to 92 metres

Large areas within liquids window

> 4% average TOC

estimate)

34 billion bboe gross

undiscovered resources (best

Similar to Ohio Utica shale

Quebec Gov’t supports the responsible development of hydrocarbons and the Anticosti J.V. program underway this summer

Anticosti 330,000 Net Acres Old Harry 250,000 Net Acres Southern New Brunswick 225,000 Net Acres
Anticosti
330,000 Net Acres
Old Harry
250,000 Net Acres
Southern New
Brunswick
225,000 Net Acres

Anticosti Strategic Partnership $100M Program

Anticosti Strategic Partnership $100M Program Limited 41.4% 58.6% Partnership 20.7% 29.3% Limited Partnership 21.7% 28.3% $1.9M
Anticosti Strategic Partnership $100M Program Limited 41.4% 58.6% Partnership 20.7% 29.3% Limited Partnership 21.7% 28.3% $1.9M
Limited 41.4% 58.6% Partnership 20.7% 29.3% Limited Partnership 21.7% 28.3% $1.9M 21.7% 21.7% Limited Partnership 35.0%
Limited
41.4%
58.6%
Partnership
20.7%
29.3%
Limited
Partnership
21.7%
28.3%
$1.9M
21.7%
21.7%
Limited
Partnership
35.0%
21.7%

Anticosti Exploration Program

Anticosti Exploration Program Go / No-Go Decision From Board of Directors Commercial Discovery? Initial Exploration Program
Anticosti Exploration Program Go / No-Go Decision From Board of Directors Commercial Discovery? Initial Exploration Program
Go / No-Go Decision From Board of Directors Commercial Discovery? Initial Exploration Program Confirmatory Exploration Program
Go / No-Go Decision From Board of Directors
Commercial Discovery?
Initial Exploration Program
Confirmatory Exploration Program
Development Program
 

2014: 15-18 core holes

Additional multi-frac wells &

 

Program

   

-

Objectives: Confirm Macasty shale characteristics; select drill & frac locations

feasibility studies

• To be determined by the Operating Committee

2015: 3 multi-frac horizontal wells

 
 

- Objectives: Delineate oil/condensate

potential; test 3 wells

Costs
Costs

Budgeted at $55M, but not to exceed $60M

A..

Stratigraphic program limited at $25M

• To be determined by Operating Committee

• To be determined by Operating Committee

Funding
Funding

$55 - $60 M to be entirely funded by RQ and M&P

• Initial $40-$45M to be funded by RQ & M&P • Pro rata basis thereafter

Pro rata basis

Old Harry Highlights

Old Harry Highlights • One of the largest undrilled geological structures in Eastern Canada under simple
Old Harry Highlights • One of the largest undrilled geological structures in Eastern Canada under simple

One of the largest undrilled geological structures in Eastern Canada (43,000 acres/67 sq miles) under simple four-way closure

Several direct hydrocarbon indicators identified: satellite seepage slicks, frequency anomalies, amplitude anomalies, and AVO anomalies

Over 1,000 km of modern 2-D seismic available

Structure’s aerial extent and potential reservoir thickness with 2 target intervals presents opportunity for billion barrel oil or multi TCF gas discovery

Basin Modeling indicates light oil (~55 API) was initially generated and could be filling the structure

20 Miles
20 Miles

Old Harry Highlights (cont’d)

Old Harry Highlights (cont’d) • NFLD well currently targeted for 2015/2016, pending approvals • Corridor submitted
Old Harry Highlights (cont’d) • NFLD well currently targeted for 2015/2016, pending approvals • Corridor submitted

NFLD well currently targeted for 2015/2016, pending approvals

Corridor submitted its Old Harry Exploratory Drilling Project Description and Environmental Assessment (E.A.) to the C-NLOPB in Feb 2011

C-NLOPB updated SEA completed Apr 14; & it concludes exploration & development activities can be undertaken

C-NLOPB indicates additional consultation is required before EA can be completed

Quebec Gov’t supports exploration of Old Harry prospect pending completion of impact studies and negotiations with Federal Gov’t in 2015

Exploration programs on the Quebec side will not proceed until post 2015

Old Harry Highlights (cont’d) • NFLD well currently targeted for 2015/2016, pending approvals • Corridor submitted

Q1 2014 YTD Netback

Q1 2014 YTD Netback Q1 2014 Q1 2013 Netback ($/mscf) Average gas price $ 16.80 $10.19
Q1 2014 YTD Netback Q1 2014 Q1 2013 Netback ($/mscf) Average gas price $ 16.80 $10.19
 

Q1 2014

Q1 2013

Netback ($/mscf) Average gas price

$ 16.80

$10.19

Transportation expense

$ 1.43

$ 1.23

Royalty expense

$

1.69

$ 0.65

$

1.22

$ 0.96

Production expense Netback

$ 12.46

$ 7.35

Production (mmscfpd)

7.6

8.5

Forward Sale Agreements:

  • - Nov 14 to Mar 15 average of 4,000 mmbtupd at a price of US$11.74/mmbtu

Q1 2014 YTD Financial Results

Q1 2014 YTD Financial Results $ in thousands Q1 2014 Q1 2013 Sales $ 11,713 $
Q1 2014 YTD Financial Results $ in thousands Q1 2014 Q1 2013 Sales $ 11,713 $

$ in thousands

Q1 2014

Q1 2013

Sales

$ 11,713

$

8,114

Cash flow from operations 1

8,073

5,311

Net working capital (cash $21.3M)

24,571

15,075

Net income

4,009

2,529

Net income per share - Basic and diluted

0.045

0.029

Note:

1

“Cash flow from operations” is a non-IFRS measure. For a reconciliation to IFRS, see “Non-IFRS Financial Measures” in Corridor’s Q1 2014 MD&A

2014 Outlook

2014 Outlook $ in thousands 2014 Production (mmscfpd) - net 8.0 Revenues $28.0 ($/mscf) Average gas
2014 Outlook $ in thousands 2014 Production (mmscfpd) - net 8.0 Revenues $28.0 ($/mscf) Average gas

$ in thousands

2014

Production (mmscfpd) - net

8.0

Revenues

$28.0

($/mscf) Average gas price

$9.25

Transportation expense

$1.42

Royalty expense

$0.50

$1.45

Production expense Netback

$5.88

Net G&A

$ 3.5

Cash flow from operations (1)

$ 15.0

Capital expenditures

$ 27.2

Net working capital

$ 18.6

Note:

“Cash flow from operations” is a non-IFRS measure. For a reconciliation to IFRS, see “Non-IFRS Financial Measures” in Corridor’s Q1 2014 MD&A

1

CDH 2-Yr Performance

CDH 2-Yr Performance • Shares outstanding ~ 88 mm • Options outstanding ~ 3.5 mm •
CDH 2-Yr Performance • Shares outstanding ~ 88 mm • Options outstanding ~ 3.5 mm •
CDH 2-Yr Performance • Shares outstanding ~ 88 mm • Options outstanding ~ 3.5 mm •

Shares outstanding

~

88 mm

Options outstanding

~

3.5 mm

Cash position (May 31)

$ 37 M

Market Cap (Jun 14)

$192 M

Social Responsibility

Social Responsibility • Corridor is engaged in building trust- based relationships in the communities where it
Social Responsibility • Corridor is engaged in building trust- based relationships in the communities where it

Corridor is engaged in building trust- based relationships in the communities where it operates, including:

Building Partnerships: Active member of business and community groups to further understanding of the industry

Community Outreach: Liaison Committee,

Ongoing Stakeholder Consultations

Environmental Partnerships: Ducks Unlimited,

Nature Conservancy of Canada, NS Nature Trust, Kennebecasis Watershed Restoration Committee

Charitable Donations: over 40 organizations in the communities where we operate, awards of 30 education scholarships

Environmental Partnerships

Community Sponsorship
Community
Sponsorship

Community Outreach

Strategic Priorities / Catalysts

Strategic Priorities / Catalysts Corridor has sustainability combined with excellent upside potential : • Implement 2014
Strategic Priorities / Catalysts Corridor has sustainability combined with excellent upside potential : • Implement 2014

Corridor has sustainability combined with excellent upside potential:

Implement 2014 N.B. Program to increase production & further demonstrate deliverability from F.B. Shale

Maximize cash flow & optimize value of McCully assets including continued recognition of strong pricing for Corridor production in Boston market

Potential LNG export facilities located in N.B. (Repsol) and N.S. (Pieridae) emphasize Corridor’s strategic location advantage and promote commercialization of Frederick Brook Shale

Progress on Anticosti J.V. 2-year program; undertake extensive coring program in Summer/Fall 2014 and 3 well drill and frac program planned for 2015

Focus on advancing Corridor’s high impact prospects by sourcing J.V. arrangements & using CDH working capital

Maintain licenses for Corridor’s high impact prospects

Continue to advance government and stakeholder relations, social responsibility and regulatory agendas in various jurisdictions

Disclaimer

Disclaimer Forward Looking Information Disclosure • This presentation contains certain forward-looking statements and forward-looking information (collectively
Disclaimer Forward Looking Information Disclosure • This presentation contains certain forward-looking statements and forward-looking information (collectively

Forward Looking Information Disclosure

This presentation contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes. In particular, this presentation contains forward-looking statements pertaining to the following: the potential and characteristics of its properties; business plans and strategies; potential for LNG export; ability to source additional opportunities; the quantity of natural gas, oil and natural gas liquids reserves and resources; support and treatment under governmental regulatory regimes; exploration and development plans and the cost of such plans; estimates of production, revenues, average gas price, transportation expense, production expense, netback, net G&A, cash flow from operations, capital expenditures, net working capital; and projected elevated premiums.

Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to the Company and its shareholders. Forward-looking statements are based on the Company's current beliefs as well as assumptions made by, and information currently available to, the Company including information concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas and oil commodity prices, exchange rates, future natural gas production levels, the ability to obtain equipment in a timely manner to carry out development activities, the ability to market natural gas successfully to current and new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, the ability to add production and reserves through development and exploration activities and the terms of agreements with third parties. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Unknown risks and uncertainties include, but are not limited to: risks associated with oil and gas exploration, substantial capital requirements and financing, prices, markets and marketing, government regulation, third party risk, environmental, hydraulic fracturing, dependence on key personnel, co-existence with mining operations, availability of drilling equipment and access, risks may not be insurable, variations in exchange rates, expiration of licenses and leases, reserves and resources estimates, development and/or acquisition of oil and natural gas properties, trading of common shares, seasonality, competition, management of growth, conflicts of interest, issuance of debt, title to properties and hedging. Further information regarding these factors and additional factors may be found under the heading "Risk Factors" in the Annual Information Form for the year ended December 31, 2012. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive.

Certain of the forward-looking statements in this presentation may constitute "financial outlooks" as contemplated by National Instrument 51-102 Disclosure Obligations, including information related to the Henry Hub forward price and forecast average premium of Corridor , under the heading “2014 Outlook“ on Silde #17, which is provided for the purpose of estimating Corridor’s future revenues, net working capital and cash flow from operations for 2014. Please be advised that the financial outlook in this presentation may not be appropriate for purposes other than the one stated above.

The forward-looking statements contained in this presentation are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Oil and Gas Disclosure

The term "boe" refers to barrels of oil equivalent. All calculations converting natural gas to crude oil equivalent have been made using a ratio of six mscf of natural gas to one barrel of crude equivalent. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of six mscf of natural gas to one barrel of crude oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Disclaimer, (cont’d)

Disclaimer, (cont’d) Resources Disclosure • "discovered resources " is that quantity of petroleum that is estimated,
Disclaimer, (cont’d) Resources Disclosure • "discovered resources " is that quantity of petroleum that is estimated,

Resources Disclosure

"discovered resources" is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place includes production, reserves, and contingent resources; the remainder is unrecoverable.

"undiscovered resources" refers to those quantities of petroleum that are estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially-in-place is referred to as prospective resources, the remainder as unrecoverable. Undiscovered resources carry discovery risk. There is no certainty that any portion of these resources will be discovered. If discover ed, there is no certainty that it will be commercially viable to produce any portion of the resources. A recovery project cannot be defined for this volume of undiscovered petroleum initially-in-place at this time.

"discovered unrecoverable petroleum initially-in-place", the equivalent of "discovered unrecoverable resources", refers to that portion of discovered petroleum initially-in-place which is estimated, as of a given date, not to be recoverable by future development projects. A portion of these quantities may become recoverable in the future as commercial circumstances change or technological developments occur; the remaining portion may never be recovered due to the physical/chemical constraints represented by subsurface interaction of fluids and reservoir rocks;

Resources do not constitute, and should not be confused with, reserves. Actual reserves and resources will vary from the reserve and resource estimates, and those variations could be material. There is no certainty that it will be economically viable to produce any portion of the resources.

The resources assessment referred to in Slides #2 & #6 was completed by GLJ Petroleum Consultants Ltd. effective June 1, 2009, as modified on March 25, 2014, setting forth certain information regarding discovered unrecoverable resources of Corridor's interests in the Frederick Brook shale formation. The best estimate is the value that best represents the expected outcome with no optimism or conservatism. There is no certainty that it will be commercially viable to produce any portion of these discovered resources.

The reserves estimates referred to in Slide #6 was prepared by GLJ dated February 12, 2014 with an effective date of December 31, 2013 and a preparation date of February 12, 2014 setting forth certain information relating to certain natural gas, crude oil and natural gas liquids reserves of Corridor properties, specifically the McCully Field and the Caledonia Field, and the net present value of the estimated future net reserves associated with such reserves.

The resources assessment referred to in Slides #2 and #10 was prepared by Sproule Associates Limited effective June 1, 2011, as modified November 19, 2013, setting forth certain

information regarding total petroleum initially-in-place of the Macasty shale formation on Anticosti Island. The best estimate reflects the probability that the quantity actually in place is equal to or greater than the estimate is 50%. These resources are reported as Bboe to reflect uncertainty of hydrocarbon type across the island. A recovery project cannot be defined for this volume or undiscovered resources. There is no certainty that any portion of these resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any of these resources.

For further information on Corridor's resources and reserves, see the Annual Information Form for the year ended December 31, 2013.