September 1 2010 The Aggressive Dual Growth Strategy Short term lower risk heavy oil development drilling in Western Canada Inventory of low cost re entry candidates Medium term hi

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September 1 2010 The Aggressive Dual Growth Strategy Short term lower risk heavy oil development drilling in Western Canada Inventory of low cost re entry candidates Medium term hi Powered By Docstoc
					September 1, 2010
The Aggressive, Dual Growth Strategy


 Short-term: lower-risk heavy oil development drilling in
 Western Canada
    Inventory of low-cost re-entry candidates
 Medium-term: high return Nova Scotia reef
 oil exploration
 Long-term: very high return Nova Scotia shale
 gas development
Market Snapshot


 TSX-V: FEN
 Public listing in December 2008
 Shares outstanding
    Basic            91,735,912
    Fully diluted    112,082,777
 Management/insider ownership: 50%
 Current share price: $0.18 (August 25, 2010)
 Management Team – Broad and Deep

          Management                Prior Company Experience                    Expertise

Tom Lester, BA, MBA                35 years: Northridge Petroleum,      Finance, public issuer
President, CEO, CFO and Director   Calvalley Petroleum                  reporting

Ian Shook, B.Sc.                   20 years: PanCanadian/EnCana –       Geophysics – WCSB and
                                   Gulf of Mexico, Atlantic Canada,     international/frontier
VP Exploration                     Western Canada, international        exploration/development

Larry Spitzer                      45 years: Dresser Atlas, Imperial,
                                                                        WCSB exploration
                                   Husky, Bow Valley, Dominion –
Exploration Manager                                                     conventional oil/gas; heavy
                                   Colorado shale gas, Milk River
Western Canada                                                          oil, shale gas, CBM
                                   shale gas, CBM
Paul Patton, P.Geol.               25 years: Shell, Omega, Home Oil,    Geology – WCSB
Exploration Manager                WAHA (Libyan National Oil Co.),      unconventional oil/gas;
Eastern Canada                     Petro Canada, Blue Parrot            international exploration
Crosby Cook, P.Eng.                5 years: Choice, Jed Oil,            Production and drilling
President CG Engineering           One Earth                            engineering

                                   25+ years: Encal, Anderson,          Operations, reservoir,
Greg Neufeld, P. Eng.
                                   Slave River                          drilling engineering
Non-Management Directors

                                    Experience                            Area of Expertise

                                                                     Diversified asset
                  35 years, former senior VP Emera Inc.; Nova
Wayne Rousch                                                         management, finance,
                  Clearinghouse, Cambria Energy Inc.
                                                                     engineering

                  25 years, CFO Meridian Directional Services;
Douglas Porter                                                       Finance, business valuations
                  Director, Manson Creek Resources

W. Brett Wilson   30 years, Chairman Prairie Merchant                Finance, equity, mergers &
Chairman          Corporation, Co-Founder First Energy Capital       acquisitions

                  20+ years,Partner, Tingle Merrett; Former          Oil & gas securites,
Scott Reeves      Partner, Bennett Jones; Member of advisory         corporate governance,
                  board to TSX Venture Exchange                      financing

                  20 years, President of Compass Compression         Facilities engineering,
John Forgeron     Services Ltd.; Imperial Oil Operations, Enerflex   financing, mergers and
                  Systems Ltd.                                       acquisitions
Corporate Strengths

 Broad experience base – ability to tackle our diverse portfolio
 Heavy oil program – short-term, low risk production growth strategy
 Current production of 250+ boe/d; forecast to continue growing through
 remainder of 2010
 Highly experienced field staff in Alberta, Saskatchewan and Nova Scotia
 Financial discipline – know how to stretch a dollar
 No debt
 Tax pools of $5.0 million
Corporate Strategies and Execution

               Corporate Strategy                                             Execution

                                                        740,000 acre Alton Block in Nova Scotia prospective for
Secure ownership of major assets with opportunity for   reef oil and shale gas.
world class growth and high returns
                                                        Acquired 460,000 acre Beech Hill Block.


                                                        Selected exploration expertise based on assets.
Build management team with technical expertise
                                                        Over 125 years combined experience.


                                                        W. Brett Wilson joined Board Q2 2010.
Assemble a visionary Board of Directors
                                                        High functioning multi-disciplined Board.


                                                        $3.2 million Q4 2009 and $4.4 million Q2 2010.
Raise equity to enable early-stage operations
                                                        Access to additional funding.


Assemble land base in Western Canada with low-risk      Entered several oil-focused joint ventures in Alberta.
opportunities to grow oil production                    Acquired heavy oil lands in Saskatchewan.
Highly Focused Core Areas




    Alberta




              Saskatchewan


                             Nova Scotia
Production Growth – On Target

                      Forent Average Daily Production              Oil      Gas BOE

       300



       250



       200



       150
   /
   E
   O
   B
   d

       100



        50



         0
             Jan-10   Feb-10   Mar-10   Apr-10   May-10   Jun-10   Jul-10    Aug-10
Growing a Western Canada
Production Growth Areas



                     ALBERTA                 SASKATCHEWAN




                                    Heavy oil: 2 infill
                      EDMONTON      drilling locations
           Ferrybank
                                         Mervin
                       Blackfoot                          Key play: well re-entry and
          Caroline      Provost        LLOYDMINSTER       optimization program
                       Huxley


                         Richdale
             CALGARY



                                                                             Oil
                                                                             Gas
                                                                             Focus Growth Area
Mervin Heavy Oil:
Key to Short-term Production Growth

  One section – 100% working interest and operatorship
  6 metres pay thickness
  Shallow well depths (600 metres)
  $190,000 per well to re-enter and complete vs. $500,000
  to drill and complete
  Price of heavy oil gives property attractive economics
Mervin, Saskatchewan:
A Key Cash Generating Asset


                              Mature area with prior
                              production and existing
                              infrastructure
                              Abandoned by majors
                              after area watered out
                              Known geology:
                              production from Waseca
                              formation
 100% Forent Land
 Held by Husky
 Wells
Mervin, Saskatchewan: Reviving a Low-Risk
Existing Play through Re-entry
                         2010
                         Q1: – Acquired land

                         Q2: – Technical evaluation of property

                             – Acquired regulatory approvals and
                               landowner/industry permissions

                             – Re-entered and re-perforated
                               2a and 2c wells (May)
                   7C
                             – Re-perforating 1a, 1c and 3a wells
                               (June)

                             – Increase production from all wells

100% Forent Land         Q3: – Re-enter and re-perforate two
Held by Husky                  additional wells (September)
Wells
                             – Switch to higher rate pumps
Phase I
Phase II                     – Evaluate results and define
                               next steps
Heavy Oil: Great Economics

$120.00                                                          Pool re-activated by Forent

$100.00



 $80.00



 $60.00        Pool abandoned

 $40.00



 $20.00



  $0.00
          1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

                         Edmonton Light     Hardisty Heavy/WSC    Differential
  Mervin Per Well Economics
Heavy oil wellhead price             $60.00/bbl
       Less:
       Royalties                     $15.63/bbl
       Operating costs               $20.00/bbl
       Netback field price           $24.37/bbl
                                                            Mervin Daily Oil Production
                                             140

                                             120

Cost to re-enter, complete and put           100
on-production: $190,000/well (vs.        B
                                         b    80
new well cost of $500,000)               l
                                         /    60
Per well payout: 6 months                d
                                              40

                                              20

                                               0
                                                   Apr-10   May-10      Jun-10     Jul-10   Aug-10
Nova Scotia:
High Return Opportunity

 Early stage oil project with relatively low entry cost (~$10 million)
 Higher risk, higher reward shale gas opportunity
 Two targets:
    Medium term:
          200 square mile oil reef fairway with potential for 10-15 reefs
          100% WI
          Operatorship
    Longer-term:
          240 square miles shale gas fairway
          100% WI
          Operatorship
Nova Scotia:
Oil and Gas Targets



                                                              Beech Hill
                                   Prince Edward Island
                                                                Block
                         New
                      Brunswick



                                                             Alton Block

                                                                           Sable Island



                                          Nova
                                          Scotia




                      100% Forent Land             Oil Refinery
                      Main Gas Pipeline
Nova Scotia: Forent’s Land Position
Compared to the Leduc Oilfield



                                                                            Edmonton
                         Fort
                       McMurray
                                                                          Acheson
 Peace River



Grande
Prairie
                                                                          Leduc


               Edmonton

                                                                  Wizzard Lake
                                                                  Wizard Lake
                    Red Deer



                   Calgary                                      Bonnie Glen
                                         Forent Alton Block
                          Medicine Hat
                  Lethbridge
                                                              Westerose
   Nova Scotia:
   Gays River Fairway

Established oil play due to
source, seal and reservoir
rocks exposed at surface

28 Gays River reefs occur
at surface

10-15 targets to be
defined by gravity
gradiometry, 2D,
geochemistry



                              Nova Scotia   Forent Alton Block    12 miles



                                                                 100% Forent Land
                                                                 2D Seismic
     Nova
     Scotia
Gays River Petroleum System


Source rock: Lacustine Horton
shales and marine Macumber
laminar carbonate with vitrinite
reflectance values in oil window
28 Gays River patch reefs/
build-ups occur at outcrop:
     Average 411 acres each
     28 metres average
     thickness
     9% porosity
Seal rock: Carols Corner
Anhydrite is 50-400 metres thick
Gays River Reef Oil Play:
Mapping the Prize

 Gravity gradiometry
 will map basement
 highs where reefs
 have propagated           $1.5 MM
 2D seismic and
 surface geochemistry
 will allow high grading
 of drillable prospects
 (estimate 10-15
 reef targets)             $2.0 MM
                                     Analogous reefs: Gulf of Mexico
 Drilling program to
 start Fall 2011           $6.0 MM
Alton Gays River Reef Oil Play:
Size of the Prize

 Potential Reserves
 Our technical review, assessment and audit of the plays and anticipated prospects
 underlying the Alton Block indicate that all the parameters required for a viable petroleum
 system are present, and the potential prospects, if delineated through the proposed
 geotechnical methods, should provide medium- to high-risk exploration targets” –
 Sproule Associates Ltd. on the Alton Block – March 12, 2008



            OOIP per reef                                  31.4 mmbbls
            Recoverable reserves (20%)                     6.3 mmbbls
            Unrisked NAV ($25/bbl)                         $160 Million
            Est. 10-15 reefs within fairway                $1.6-2.4 Billion
            Risked NAV (@10% COS)                          $160-240 Million
  Long-term Strategy:
  Horton Shale Gas
Triangle awarded production license
from Nova Scotia government on
Windsor Block

Third-party report estimates up to
69 tcf OGIP in Horton shale on
Windsor Block

Forent estimates 4 Bcf/section RGIP

Recent shale gas success in Horton
equivalent in New Brunswick
                                       Triangle Windsor Block   Forent Alton Block        12 miles
Recent NB land acquisition with work
commitment of $47 million
                                                                                     100% Forent Land
Plans: Drill additional delineation                                                  2D Seismic
wells and shoot supplementary 2D
seismic for resource assessment.
Identify partner by mid/late 2011.
                                          Nova
                                          Scotia
  Bringing It All Together

                  • Technical evaluation
                  • Regulatory approvals
                  • Landowner/industry
                    permissions
                  • Re-entered/re-
 W
 e
 n
 r
 t
 s                  perforated 2a
                                             • Re-enter/      • 1 new drill
      C
      n
      i
      l
      d
      O
      a             and 2c wells
                                               re-perforate
                                               3 wells        • Evaluate results
                  • Re-perforating 1a,       • 1 new drill    • Define next steps
• Acquired land     1c, 3a wells

        Q1                 Q2                       Q3                 Q4                 Q1                      Q2
                                         2010                                                          2011
                                     • Acquire                 • Process survey     • Design/permit      • Shoot 2D seismic
                                       gravity/magnetic          data (Oct. to        2D seismic           (April to May)
                                       gradiometry survey        Nov.)              • Landowners         • Define targets
                                                              • Interpret survey      Consultation         (June to July)
                                                                data (Dec.)           (Nov. to Feb.)     • Drill (Sept/Oct)

  c
  S
  a
  v
  o
  N
  i
  t
2010 Forecast

 Production
    Average Q2 daily production rate: 150 boe per day
 Cash flow
    2010/2011                           $0.65/3.0 MM
 Commodity prices
    Heavy oil                          $60.00 per bbl
    Natural gas                         $3.50 per mcf
 Debt                                             Nil
A Good Time to Invest in Forent

 Short-term value play; visionary explorers for huge,
 long-term upside
 Capital spending supported by Western Canada
 production base
 Ability to self-fund definition phase of Nova Scotia reef
 oil and shale gas targets
 Prudent management with patience
Disclaimer
Principled Team. Focused Strategy.
Tremendous Opportunities.


          Tom Lester, B.A., MBA              Ian Shook, BSc.
 Forent
          President ,CEO, CFO & Director     VP Exploration
 Energy   Office: 403.262.9444               Office: 403.262.9444
          Cell: 403.669.8984                 Cell: 403.473.8792
          E-mail: tlester@forentenergy.com   E-mail: ishook@forentenergy.com




          Forent Energy Ltd.
          Suite 400, 333 - 11th Ave SW
          Calgary, AB
          T2R 1L9

				
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