Professional Documents
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Highlights
Natural Gas
Gordon Creek, Utah Adjacent to Utahs largest gas field Drunkards Wash Currently 8 Bcf Proven Reserves + 19 Bcf Probable Reserves Potential to increase conventional reserves to 250 Bcf Mancos Shale major additional reserve potential through the adoption of modern completion techniques 2011 NI 51-101 valuation of US$38 million
CO2
Known CO2 Pool (estimated 140 BCF 1.3 TCF) Potential Markets (EOR, Oilfield Service, Food & Beverage) Major Commercial Value Potential
Oil
Powder River Basin, Wyoming oil exploration
5000 acres in emerging prolific Niobrara oil shale trend Surrounded by EOG Niobrara 2010 horizontal drilling 2011 test well with Niobrara oil shows
Duschene County, Utah acquiring land on emerging prolific green river oil shale play
Drunkards Wash
(APC: NYSE)
(COP: NYSE)
Cumulative Gas Production: 815 BCF Expected Recoverable Reserves: 1,250 BCF 225,000 net acres 204 MMCfe/day
815 Bcf to date 610 wells 1.25 Tcf projected 2.0 Bcf/well based on 4 wells per section Thunderbird Gordon Creek Field
Drunkards Wash
> 6500 ASL 4.3 Bcf to date 11 wells (3 on production) > 250 potential locations
Highlights
Management
David Evans P. Geol. Ph.D Chairman
Gordon Creek borders Drunkards Wash, Utahs most prolific natural gas field
Low royalty rates, land costs and operating costs Recent completion of REX pipeline lowering Rockies pricing differential Utah named one of the top business friendly jurisdictions in the world (2010 Fraser Institute study) Favorable US CDN Exchange rate favors US operations
Recent focus on the commercial value of the Gordon Creek CO2 potential resource Increasing oil focus, gaining entry into two new prolific oil plays
GAS (MMCF)
Reserve Category
Proved Reserves Proved Developed Producing Proved Developed Non-Producing Proved Undeveloped
2008
2009
2010
2011
5,422.8
11,865.3
8,755.2
20,977.7
9,311.1
21,651.1
7,457.3
18,515.0
17,288.1 29,732.9
13,903.2 10,860.2
30,926.2
11,241.8
25,972.3
9,761.4
31,191.3 40,593.1
42,168.0
35,733.8
2008
2009
PV10 MM US$
2010
PV10 MM US$
2011
PV10 MM US$
Reserve Category
Proved Reserves Proved Developed Producing Proved Developed Non-Producing Proved Undeveloped
PV10 MM US$
12.053
19.999
10.107
30.993
13.765
35.952
9.580
28.343
32.052
46.753
41.100
25.959
49.717
24.370
37.923
20.540
78.805
67.059
74.087
58.463
26
25
32-170
3 00
34
D-8 E-2
31
32
34
35
36
31
32 32-616
33
33-515
33-516
34
34-513
35
36
31
32
33
B-1
B-3
35
36
2-5R 1-5R 06-488 06-437 05-411 05-410 4-409 04-469
36
31 0 0
0 A-2 330
1 1
02-406 01-402 D-1 A-3 D-2 D-3
B-12
00
3
D-5
34
35
37
1
Gordon Creek
6 1 2
3-5
37
00 33
B-2
50
B-9
D-6
00
E-1 36 H-1
B-11 A-1
D-4 A-1
A-2
5
4-5R 3-4R
4
4-4R
6 06-489
6-306
5
5-304
4
5-305 03-301 4-302 4-303 09-296 09-295 10-294
02-405 2
340
A-1
D-6
D-7
4
D-8
3
A-5
A-7
38
03-414
A-6
2 A-8
00
H-2
00
8-297
37
11
12
4-7
10
11
12
7-472
7
7-473 18-1035
9
09-178 09-111 D5 16-143 10-112
10
10-15-34
11
11-114 12-538 11-113 14-122 15-176 14-121 13-120
12 12-537
39 0
3-7
F-2SWD
9
B-2
10
11
A-16
8-300 8-1018
4000
F-1 1
A-14
U2
00
14
13
18 4-18 TB
18-1A
17
16
15
15-499 15-500
14
13-475
13
13-447
18-435
18
18-1037
17
16
15-142 15
15-88
14
13-91
13
13-92 18-93
18
17
U1 U3
1-19 TB
2-20 TB 1-20R
22-502 22-501
14-476
14-477 23-478
24-446
17-147
20-152 16-1031
16-146
D-4
22-76
24-3-16
24-01-15
19-77 19-532
40
23 24
24-183
18-182
17-148
16-145
22-89
14-75 23-4-20
14-74
014S010E
1
16
15
14
00
39
12 13
A-1
A-9 A-12
38 0
23
2419-14-8(A) TB
42-24 19-14-8(B) TB
19
20
4-20R 29-14-8 TB
21
22
1
23
24-1005 23-423
24
19
19-151
20
1 21-184 20-901
21-90
21
36 0
23-2-19 23-1026
22
22-185 22-186 23-14-21
23
23-9-22
24
24-16-18 24-12-17 24-902 19-14-12
19
19-533 30-78
20-850 20 1
21
22
3 60
2-29 TB GC1 TB
21-35
39 0
24-387 25-390
24-1004 30-195 1
29-154
41-25
27-457 26-424
26-393
25-389 25-392
26
25
U5
1-30 TB
30
3-30R 4-30R
3-29R
29
28
27-3
27
27-458 27-520 34-493
26
26-395 34-456 26-394 35-396
26-1007
25
30-1062
30
37
26-6-24 00 M-1
1 1
3500
38 0 0
29
29-194 28-191
28
1 27-188 28-192
27
27-9-30
26
26-16-8
25
25-11-7 26-1055
30-5-13
30
30-125
29
28-860 29-531 29-549 32-127
28
28-861
27
26
25
43-25
1-31R
25-391A 25-391
26-11-25 35-3-26
35
36
31
4-31R
00
38
00
37
02-168 9-452D 11-245 7-307 11-244 1-247 12-243 11-1103 12-242 12-1110 8-231 07-234 5-224 8-230 9-228 9-227 10-219
00
10-1-36
1-1132
39
15S007E
15 22
24-444
24-443
18-1179 19-496
19-337
14-64
23-106
40 0
17-240 17-241
3 500
34 0 0
31 34 35 36
32
33
34
J-1
35
36
A-1
3 60 0
3 70 0
360 0
3 2
34-518 3-32R
35-397 34-434
35-1-9 35-10-27
32-529
32
33
34
35
35-248
36
36-4
31
D-9
32
34
34-9-32
35
36
36-11-11 2-46 1-43 31-12-10 1-42
31
32-128 31-79 31-1 6-39 31-1 6-38 5-94 6-414 6-40
32
32-438
33
34
35
36
35-1080
6-207
32-160 5-206
12
1-1129 03-213
38
1-A
00
7 3 70 0 12
10-174
3
12-323
2
02-169
6-223
D3-0
5
05-225
4
4-226
4-218
3
03-214 10-1154 3-215
2-48
1
1-44 1-1130
5
5-96
4-129
4
04-494 10-649 04-130
2-49 11-51
11-50
7-58
8-97 09-413
1 1-A
10
11
0 3 60
10
10-525
10-250 11-441
11
11-1106 11-324 0 0 35 12-322
12
7
07-84 18-308 13-326 7-235 18-236
8-232
9
1 9-229
Drunkards Wash
10-1155 09-329
D8
12-1160 12-54
09-450 10-695
10
11
11-1158 11-52
12
12-55
7-57 7-60
7 7-1229
8-100
09-412 9-1237
09-453
10
11
12
10-526
11-53
12-56
12-16
41-16
14-62 11-1159
14-61
17-102
10-696 15-674
H1
18 14 13
17
015S008E
21 22 22-466
15-528D 27-545
16
15
14
1-16
1-15
34-15
13
13-419
18-495
18
17
14-416 14-417
17-1175 18-237
015S009E
21-401
16
15
14
14-63
13-68 13
13-67 13-1167
16-132 17-103 17
15-675
18
17-133 20-287
015S010E
21-83
16
15
14
13
20-334 20-333
19 23
20
15-422
23
3 50 0
24
23-467 15-8-30-11 26-482
23-468
24
24-448 19-497
19 19-1181
20-1183 19-338 25-459 30-485 19-1182 30-484 20-335
20 17-1177
20-336
21
21-331 28-319
32-21 21-332
22-22 13-22
1 23-107
22
32-22
34-22 14-23
23
19-104
24
24-86
19 19-222
21
1-A 1 6 1
22
1
23
24
26-481
24-449 25-460
29-340
29-339
22-27
32-27 26-1197
30-289 2
4 3
1 5 1
30 27 26 25
29
28
27-689
27
27-690
26
26-464 25-461 25
25-462
30
30-487
29
29-342
28-320
28
27
27-269
26
26-256
26-1198
25
25-253 25-254
30-251
30
30-290
29
28
3
27
1
26
25
26-463
SWD-1 1 A-2
A-4
30-486
33-272
26-257
36-135 36-109
31-310 2
D-5
35-260
A-3
31
32-617D
32
32-277 33-274 05-278
33
33-275
34-271
34
34-259 35-262
35
35-263 36-136
36-137
33 0 0
36
31-311
31
32
33
34
35
36
D-6
4-1267 4-279
G-1 F-1
M-1
B-1
B-3
E-1
32-276 E-3
05-343
4-280 3-284
3-283
02-139 2-1264
F-2
G-2
2
K-1
B-2
1
B-4 E-2
E-4 3
05-344 5
05-345
04-281
4
4-282 3-285
3
03-286 10-317
1
1-425
16-8-7-21
02-140 11-314
D7 11-313
1 5-12
10
11
12
7 10 11 12
10
11
12
10
11
12
Technical Analysis
Study of completion practices, logs and statistical data for 140 wells in close proximity to Gordon Creek Coals and sands are equivalent and can be mapped from Drunkards Wash across Gordon Creek and beyond 140 wells divided into 73 wells with thicker sands and 67 mostly coal wells Statistical solution for gas contribution of sands and coals
Conclusions
Ferron sands and coals at Drunkards Wash continue through Gordon Creek Substantial by-passed pay at Gordon Creek as a result of differences in historical practices at Gordon Creek versus Drunkards Wash Best practice is to complete stimulate and simultaneously produce coals and sands with porosity > 7% and to produce associated water
K_FERRON
3550 (3912)
3450 (3587)
3600 (3862)
3500 (3537)
3650 (3812)
3550 (3487)
3700 (3762)
3600 (3437)
3750 (3712)
S BA K_ _M AL AR E IN
3800 (3662)
Sandstone Coal
443
685
216.5
194.8
1330
242.4
100 50 0
256.4
251.4
211.9
194.4
3 Years on Production
PAYOUT (MTHS)
IRR (%)
20 (Current Price)
0 0 1 2 3 4 5 6 7 8 9
Gordon Creek - Compared to a Ranking of the Various Natural Gas Shale Plays
$8.00
$7.00
$3.00
$2.00 $1.00 $0.00
* Economic Break Even Assumes 20% Before Tax Return on Capital and Excludes Sunk Costs (Acreage, overhead, etc.)
Well Parameters
To be conservative, we have assumed a 25% reduction in reserves and IP rates Average reserves of 1.45 Bcf per well First year average rate of 370 mcf/day raw gas Average SITLA, Fee or BLM Royalty = 16.5% Est. drill, complete, equip and tie-in $750,000 US Land acquisition cost per location $16,000 US Mainline cost per well $25,000 US
Conclusions
Full cycle break even price roughly $2.00 NYMEX $4.00 NYMEX flat price yields a 38.6% Internal Rate of Return $5.50 NYMEX yields a 66.9% IRR and a 18 month payout
2400 (5224)
Is an under pressured reservoir that can greatly benefit from advancements in Propane Fracturing technologies.
2500 (5124)
The OMIMEX STATE 18-1A at Gordon Creek tested 1 MMcf/d and came on un-stimulated at 270 Mcf/d. Large mud gas readings, and widespread gas shows all demonstrate the strong potential for widespread development of this shale gas reservoir.
Gamma Ray 0-150 API
2550 (5074)
2600 (5024)
Gas Detector
Stage 1
15,000 500 11,250 (15 wells) 2,000 (5 wells) 700 14,450 (550) 1,169 to 1,399 760 to 909 37.7 to 52.0 29.0 to 40.0 66.7 to 92.0
Stage 2
10,000 450 26,250 (35 wells) 2,250 28,950 18,950 2,964 to 3,713 1,927 to 2,413 150.8 to 208.0 ____ _-______ 150.8 to 208.0
ASSUMPTIONS
Production per well 350 to 450 mcf/day Reserves per well of 1.45 to 2.0 bcf Netback of $2.25 per mcf assuming NYMEX price of $4.00 per mcf
47
387 to 462
995 to 1240
Summary acquire 31 sections, work over 5 existing wells, drill 50 new wells and build 8 mile main pipeline to add net Thunderbird; 1826+ boe/day and 119.9+ bcf of 2P reserves (141.5+ bcf of 1P reserves) Total Capital - $43.4 million ($18.4 million net Thunderbird)
Status Quo
P&NG Value @ 10% (CDN MM$) P&NG Value @ $1.50/mcf (CDN MM$) Working Capital (CDN MM$) Debt (CDN MM$) Shares Outstanding (Millions) Asset Value/Share (Basic) (CDN $) Asset Value/Share (F.D.) (CDN $)
Stage 1 -
Stage 2 -
43.9*
100.0 +
15.5 10.0 80.0 $0.55 1.6 10.0 81.0 $1.13
226.2
(9.1)/0.3** 10.0 82.7 $2.50
$0.50
$0.85
$1.77
* January 2011 NI 51-101 Valuation (Proforma Closing Sandstorm Funding) ** Assuming exercise of all warrants (Fully Diluted)
Known Gordon Creek CO2 Pool 3rd Party studies conducted by the USGS, the DOE and others estimate CO2 reserves between 140 BCF and 1.3 TCF Gordon Creek exploration wells drilled in 1960s and 1970s tested between 4.5 and 17.5 mmcf/day Food and Beverage Oil Field Operations (Fracking) Enhanced Oil Recovery (EOR) Uinta Basin Current estimated EOR value of $25 per ton ($1.50/MCF) $25 million+ in potential annual sales (at 1 million tons/year)
Potential Markets
Commercial Value
Prolific Green River Shale Oil Play New Practices Typical well first year average oil rate in excess of 200 barrels per day Vertical well depths 5000 to 8000 cost $1.0 to $1.2 million
Duchesne, Utah
Land Acquisition Mode Freehold lands and Ute Tribe own large tracts of land here.
Weston County, WY
Lands are highly prospective for the new Niobrara horizontal oil shale play 2011 test well with Niobrara oil shows Further testing and/or horizontal drilling required to assess
Donkey Creek North Brennan Olds Duvall Ranch Donkey Creek Slattery
Thornton
Multiple horizons with oil potential Adjacent fields have produced over 100 million barrels of oil and 40 BCF of gas to date, including:
Coyote Creek
Market Summary
Market Summary TSX-V: Shares Outstanding: Net Asset Value Per Share TBD 80 Million $43.9 million * $0.55
Based on 2011 NI 51-101 Reserve Report Proforma Closing of Sandstorm Metals & Energy Ltd. Funding
Certain information contained in this presentation has been obtained from generally recognized, third-party sources and has not been verified independently by the Company. Certain statements contained in this presentation may constitute forward-looking statements which involve risks and uncertainties that could cause actual events or results to differ materially from the estimated or anticipated events or results implied or expressed in such forward-looking statements. Statements contained herein reflect the current internal projections, expectations and beliefs of the Company based on information currently available to the Company, and the Company assumes no obligation to update or revise these statements. The Company, nor any of its respective affiliates or representatives, does not make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein or any other written or oral communication made available in connection herewith. Only those representations and warranties that are made in a definitive written agreement relating to a Transaction, when and if executed, shall have any legal effect. This presentation does not purport to contain all of the information required to evaluate all of the factors that may be relevant to an interested party considering a Transaction with the Company. The ability of the Company to execute its growth initiatives as described in this presentation is dependant upon the Company obtaining sufficient additional capital resources, however there can be no assurance that such growth initiatives will be successful even if such additional capital resources are obtained. Interested parties must rely upon their own due diligence, investigation, review and analysis, and should consult such persons own professional advisors in connection with any transaction involving the Company. The information contained herein is for informational purposes only, and this document is not to be construed under any circumstances to be (a) an offering or solicitation for the sale of securities; (b) a recommendation to purchase, sell or hold any securities; (c) or an offering memorandum as contemplated by applicable securities laws.
Organization
Corporate Information
Listed TSX Venture Exchange: Symbol TBD
Calgary Office
Suite 800, 555 4th Avenue SW Calgary, Alberta T2P 3E7 Tel: 403-453-1608 Fax: 403-453-1609
Vancouver Office
Suite 401 533 Smithe Street Vancouver, BC V6B 6H1 Tel: 604-707-0373 Fax: 604-707-0378
www.thunderbirdenergy.com