Roil 6262013
- 1. INVESTOR PRESENTATION Confidential Material June 2013 OTCQX: ROIL
- 2. 1 DISCLAIMER FORWARD LOOKING STATEMENTS AND OTHER MATTERS THE FINANCIAL AND OPERATING PROJECTIONS CONTAINED HEREIN REPRESENT CERTAIN ESTIMATES OF RICHFIELD OIL AND GAS COMPANY (“RICHFIELD” OR THE “COMPANY”) AS OF THE DATE HEREOF. RICHFIELD’S INDEPENDENT PUBLIC ACCOUNTANTS HAVE NOT EXAMINED, REVIEWED OR COMPILED THE PROJECTIONS AND, ACCORDINGLY, DO NOT EXPRESS AN OPINION OR OTHER FORM OF ASSURANCE WITH RESPECT THERETO. FURTHERMORE, NEITHER RICHFIELD NOR ITS MANAGEMENT CAN GIVE ANY ASSURANCE THAT THE PROJECTIONS CONTAINED HEREIN ACCURATELY REPRESENT RICHFIELD’S RESULTS OF OPERATIONS OR FINANCIAL CONDITION. SOME OF THESE ASSUMPTIONS INEVITABLY WILL NOT MATERIALIZE AND UNANTICIPATED EVENTS MAY OCCUR THAT COULD AFFECT RICHFIELD’S RESULTS. THEREFORE, RICHFIELD’S ACTUAL RESULTS ACHIEVED DURING THE PERIODS COVERED BY THE PROJECTIONS WILL VARY AND MAY VARY MATERIALLY FROM THE PROJECTED RESULTS. THESE VARIATIONS COULD MATERIALLY AFFECT RICHFIELD’S ABILITY TO MAKE PAYMENTS WITH RESPECT TO ANY OF ITS OUTSTANDING AND/OR FUTURE DEBT SERVICE OBLIGATIONS. UNLESS OTHERWISE NOTED, THE FORECASTED INDUSTRY AND MARKET DATA CONTAINED IN THE ASSUMPTIONS FOR THE PROJECTIONS ARE BASED UPON MANAGEMENT ESTIMATES AND INDUSTRY AND MARKET PUBLICATIONS AND SURVEYS. THE INFORMATION FROM INDUSTRY AND MARKET PUBLICATIONS HAS BEEN OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE, BUT THERE CAN BE NO ASSURANCE AS TO THE ACCURACY OR COMPLETENESS OF THE INCLUDED INFORMATION. RICHFIELD HAS NOT INDEPENDENTLY VERIFIED ANY OF THE DATA FROM THIRD-PARTY SOURCES, NOR HAS RICHFIELD ASCERTAINED THE UNDERLYING ECONOMIC ASSUMPTIONS RELIED UPON THEREIN. THESE MATERIALS ARE BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND FOR USE AT THE PRESENTATION. THIS PRESENTATION AND THESE MATERIALS MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, BY ANY MEDIUM OR FOR ANY PURPOSE.
- 4. 3 INVESTMENT HIGHLIGHTS • Demonstrated a unique ability to identify, evaluate and develop undercapitalized assets • Found in excess of 1 BBoe of reservoirs in the UT / WY overthrust belt • Pioneered the dewatering production methods now in use throughout Kansas and Oklahoma, by many operators Strong Management Team with Proven Track Record • Award-winning geologists with over 208 years of combined experience in analyzing drilling and development opportunities in Kansas and Utah • Experts in exploring for and producing from reservoirs that are not in capillary pressure equilibrium and subject to damage from standard drilling techniques • Expertise in overthrust geology in Rockies Best in Class Geological Team • Fields with long production histories and significant well control • Documented pay in areas with low historical recovery due to antiquated methods • Significant inventory of low-cost, high-return behind pipe and offset opportunities Low Risk Assets • Database of over 300,000 wells – most comprehensive Kansas dataset • Allows for rapid identification and evaluation of potential acquisitions • Proven strategy originally developed by the Richfield management team Proprietary Database and Research Technology • 1,656 MBoe Proved Reserves (95% oil) - 5,447 MBoe 2P Reserves (91% oil) • $33.9 million Proved PV-10 ($158.3 million 2P PV-10) • Additional unbooked potential in horizontal Mississippian well locations • World class upside in Utah acreage in the Navajo Sandstone, Mancos Shale, Mississippian, and other formations Liquids-Rich Asset Base with Significant Upside Potential Superior Well Economics • Well costs range from $0.25 - $0.50 million, with 26 MBoe EUR per zone • Additional performance-based upside of 80 MBoe per well in the Arbuckle Formation • Re-work and new drill type wells produce IRR’s of 329% and 126%, respectively
- 5. 4 HIGHLY EXPERIENCED MANAGEMENT TEAM • 27 years in managing all aspects of oil company development, including geological analysis, design and implementation of advanced engineering, field management and finance • Founder & CEO of publicly traded HEGCO Canada, an oil & gas exploration company (1995-2000), Iron Thunder Drilling (1998), Nemaha Services (1991), Hewitt Energy Group, Inc. (1988), and New Century Petroleum (1986) Douglas C. Hewitt: President and CEO • Practiced law since 1980, over 17 years experience advising oil and gas companies in all areas including leasing, environmental and regulatory compliance and securities matters • Practiced law with Dexter & Dexter Attorneys at Law from 2004 to 2008 • Served as the General Counsel and CFO of HEGCO Canada, Inc. from 1997 to 2002 Mike A. Cederstrom: General Counsel and Corporate Secretary George T. Ulrich: Controller • 28 years experience in public and private companies in senior accounting roles, including 15 years with Iomega Corporation • Significant experience in SEC reporting and filings for public companies • Over 30 years in public accounting and CFO positions for the oil and gas and financial services industries, internationally • Served as an officer and director for numerous private and public companies • Lead roles in acquisitions, divestitures, turnaround situations and start-up businesses Glenn G. MacNeil: CFO and Director David K. Detton: Land and Legal • Licensed Utah attorney since 1976, former partner in two of the 100 largest U.S. law firms • Managed land teams for over $1 B in acquisitions of oil & gas companies • Managed company’s recent acquisitions of over 12,000 acres of mineral rights and 10,000 acre feet of water rights Alan D. Gaines: Chairman of the Board of Directors • 30 years experience as an energy investment and merchant banker, and has participated in the raising of debt and equity financing in excess of $100 billion • Chairman, and Founder of Dune Energy, Inc. since its formation in May 2001 through April 2011 and CEO form inception though May 2007
- 6. 5 BEST IN CLASS TECHNICAL TEAM • From 2007 to 2009, served as SVP of Exploration for Hunter Energy, LLC • From 1990 to present, has served as President of Safford Exploration - resulted in the discovery of the 1 MMBO Thief Creek Field in the Wyoming Thrust Belt for Anshutz Corp. • From 1976 - 1990 worked for Chevron, supervised the development of Whitney Canyon - Carter Creek fields, and served as District Geologist of the Mid-Continent District Monty Hoffman: Production Geologist • Over 50 years of oil and gas experience • Currently with Safford Exploration, where he served with the team responsible for the discovery of the 1 MMBO Thief Creek Field in the Wyoming Thrust Belt • From 1956 to 1989, served as a geologist for Chevron where he was part of the team who discovered Ryckman Creek (1976), Painter Reservoir (1977), East Painter Reservoir (1978), Whitney Canyon-Carter Creek (1977), and Glasscock Hollow (1980) fields Paul Lamerson: Consulting Geologist Raina Powell: Production Geologist Jeremiah J. Burton: Geologist • From 1976 - 1990 worked for Chevron in various roles, including the geologic negotiations with partners in Painter and East Painter fields • Since 1990, has served as a Staff Geologist for Safford Exploration, Inc. • Experience in several Wyoming basins, in the Williston Basin, and in Texas and Kansas • From 2003 to 2005, served as Senior Staff Geologist for Nautilus Resources; supervised the Gebo Field, which doubled from 500 BOPD to 1000 BOPD • 15 Years of Oil and Gas Experience in the Mid-Continent and the Rockies, including work for Flying J Oil & Gas, and permitting work for Anadarko in Alaska. • 10 years with Richfield and its Predecessors, including the initial identification, and evaluation of Richfield’s current Mid-Continent Properties. • Helped Develop Richfield’s Proprietary exploration database Bill Alexander: Petroleum Engineer • Over 60 years of oil and gas experience • From 1960 to 1974, served as a drilling and completions engineer and field engineer with Shell Oil Company • Also served in various engineering roles with Kirby Exploration, Alexander Drilling, Natomas North America, and Pennaco Resources Company
- 7. 6 North American exploration and production company based in Salt Lake City, Utah Publicly-traded on the OTCQX U.S. Premier Market; Ticker Symbol: ROIL Incorporated April 2011, simultaneous with the merger with Hewitt Petroleum, Inc. Unique balance of low-risk assets with immediate cash flow impact and long-term upside: Kansas - Low-risk, low-cost, high return assets Wyoming – Low-risk, moderate cost, high return assets Independence Project, Mancos Shale - Moderate risk, high upside Central Utah Overthrust –High Risk, high upside Near-term strategy focuses on increasing cash flow through exploitation of Kansas and Wyoming assets 2013 – 2014 capital program includes 80 re-work and new drill operations 5 additional horizontal Mississippian well locations Pursue cash-flow accretive bolt-on acquisitions in core operating region Central Utah Overthrust acreage provides significant upside potential through Mancos Shale exposure Approximately 11,464 acres with unbooked resource potential in the Navajo Sandstone, Mancos Shale, and deep Mississippian formations (127 potential drilling locations) - 89.5% WI in the HUOP Freedom Trend Prospect and 59.6% WI in the Liberty Prospect 20,000 acres prospective for the Mancos Shale (31 potential drilling locations) o Partnered with experienced, NYSE-listed, independent operator with extensive experience in unconventional resource plays – 4% WI in the Independence Prospect COMPANY SUMMARY
- 8. 7 2012 RESERVES SUMMARY – DEVELOPED PROPERTIES ONLY Source: Pinnacle Energy Services, LLC Reserves and Engineering Evaluation dated January 18, 2013 Note: Excludes Utah and Wyoming resource potential. 1. Represents 5 horizontal Mississippian well locations; additional reserves and present value represent increase well performance from the PD and PUD drilling locations. Significant Performance-Based Upside Reserve Drilling Net Net Reserves Data Class Locations PV-10 ($MM) Oil (MBbl) Gas (MMcf) MBoe % Oil PD 32 $15.6 546 118 566 96.5% PUD 43 18.3 1,022 409 1,090 93.7% Total Proved 75 $33.9 1,568 527 1,656 94.7% PROB1 5 $124.4 3,407 2,304 3,791 89.9% Total 2P 80 $158.3 4,975 2,831 5,447 91.3%
- 10. 9 Proprietary database that includes well data from several public and private sources Data on 300,000+ wells drilled in the mid-continent since the 1920s Invested over $3 million in unique strategic advantage which allows Richfield to: Allocate capital to best drilling targets Identify and evaluate acquisition targets EXPLORE AND RESEARCH SYSTEM (“EARS”) Production history charts Well data Well logs & cross-sections Most Comprehensive Source of Kansas Production, Completion, and Geological Data
- 11. 10 Unproduced Oil and Gas Zones Arbuckle Overview Main target is the Arbuckle formation, a water-drive reservoir system that has yielded 2.4 billion barrels since the late-1920s Typically outfit new or recompleted Arbuckle wells with high volume submersible pumps Typical well will produce 10-40 BOPD and with proper well density, these oil rates can increase Untapped Potential Formation has been produced almost exclusively from its topmost layer Productive lower Arbuckle intervals exist in every major CKU field. These zones were only sporadically produced—mainly due to a lack of information sharing among an unsophisticated, under-capitalized producer base Behind Pipe Reserves Recent cased hole logs on Richfield’s wells identify significant new reserves in two of Central Kansas’ largest fields CENTRAL KANSAS UPLIFT OVERVIEW 2009 Halliburton TMD Log, Gorham Field 2009 Halliburton TMD Log, Trapp Field
- 12. Utah and Wyoming Asset Overview
- 13. 12 Central Utah Overthrust— a string of pearls • 40% of world oil reserves are arrayed along thrust belts. • The North American Thrust Belt runs from Alaska (Prudhoe Bay) to Mexico (Cantrell Field). Four billion barrels of oil-equivalent (BOE) found in Canadian Overthrust. National and state parks, great depths and extreme volcanism have limited activity in Montana and northwestern Wyoming Two billion BOE found in northeast Utah and southwest Wyoming in 1970’s and 80’s • Two large reported discoveries on both the Paxton and the Gunnison Thrust confirm productivity of Central Utah Overthrust. Covenant Field, discovered in 2003/4, has estimated 150 million Bbls with 13 million BO produced to date. Providence Field, discovered in 2008, multi pay system. Production testing is underway. National and state parks Extreme volcanism North American Overthrust (Rocky Mountains):
- 14. 13 Liberty #1 Discovery Well – Drilled in 2010 Logs and testing demonstrated over 1,200 gross feet of interconnected fractures in Jurassic Twin Creek Limestone and 427 feet of oil saturated deeper Navajo Sandstone Freedom Trend Prospect Gravity maps show prominent structural anomalies 2D seismic shows three, overlapping structural closures in the Twin Creek-Navajo Independence Project – Drilling operations are anticipated to begin Q3 2013, in the organically rich, Tununk member of the Lower Mancos Shale Hogback Ridge (UT- WY Overthrust) – New acreage has been acquired, offsetting a past producing well. Geological research and lease acquisition is ongoing UTAH AND WYOMING ASSET OVERVIEW Nephi Freedom Trend Prospect Richfield Leases Discovery Industry Targets Industry Well Permit Liberty Field (Gas/Oil Condensate Discovery) Independence Play (Oil Discovery) Covenant Field (oil) Providence Field (oil) Wolverine Painted Rock (Flowed Gas & Condensate) Liberty Prospect (UT) 1,025 - 9 74.7% Liberty Prospect (UT) 160 1 - 64.3% HUOP Freedom Trend Prospect (UT) 12,464 - 140 89.5% Independence Prospect (UT) 20,000 1 31 4.0% Hogback Ridge (UT) 1,511 - 9 100.0% Graham Reservoir (WY) 640 1 1 100.0% SrpingValley (WY) 160 - 1 100.0% Total 35,960 3 191
- 15. 14 Central Utah Overthrust—Source and Migration Pathway Mississippian Source Basin Several Billion barrels of Oil Generated It is estimated that approximately one trillion barrels of oil, or more, were generated from Mississippian aged (359-318 million year old) source rocks, mostly likely the Chainman Shale, in western Utah and Nevada. However, only 65 billion barrels have been found in Utah’s Tar sands. • Oil found in the Covenant Field has a different source. • The HPI Liberty #1 discovered pristine Mississippian Oil from this large source basin, for the first time. • This identifies a migration pathway from Western Utah, into the Central Utah Overthrust. • There are many more undrilled structural closures in the central Utah over-thrust, the largest of which is Richfield’s HUOP Freedom Trend Prospect. • That prospect covers 11 contiguous miles on the northern end of the Gunnison Thrust.Providence Field Liberty Field Covenant Field Freedom Trend Prospect Modified from Willis 1999 Modified from Schelling 2007 Tar sands Tar sands Tar sands Tar sands Only 65 Billion barrels of oil are accounted for in Utah’s Tar Sands Mississippian Oil Migration Pathway and trapped oil
- 16. 15 HUOP FREEDOM TREND PROSPECT Gravity maps show prominent structural anomalies—similar to those in the Covenant and Providence fields but substantially larger. Multi-spectral satellite photography reveals Freedom Trend acreage to be among the most hydrocarbon-saturated on the Overthrust. North 9,000 feet 12,000 feet 6,000 feet 2D seismic shows three, overlapping structural closures in the Twin Creek- Navajo. One engineering study found potential gross reservoir volume in excess of several billion barrels.
- 17. 16 Providence Field Cross Section Source: Wolverine Gas & Oil Corp. Categorized as several times larger than Covenant Field Covenant Field Cross Section Source: Wolverine Gas & Oil Corp. 150 million Barrels of Oil Fountain Green Prospect. Initial test well, to 13,000 feet in Jurassic will target three repeated sections of Twin Creek- Navajo with the untested sourcing Mississippian super giant. Richfield’s Freedom Trend Cross Section Source: Hewitt Petroleum/Richfield Oil & Gas. Categorized Seismically as several times larger than Providence Discovery Wolverine Gas and Oil Company’s Covenant Field and subsequent Oxy/Wolverine Providence field discoveries in 2003/4 and 2008, show important similarities with Fountain Green. • Richfield's position covers the largest identified undrilled structure in the Central Utah Overthrust. • We anticipate a discovery in three stacked Navajo formations, 1,000+ feet thick each, filled to spill point. • The Freedom Trend prospect is in the Mississippian oil migration path. HUOP Freedom Trend Prospect
- 18. 17 Mancos Shale and Others Compared Eagle Ford Shale Texas 200 feet Thick 11,500 feet deep 4.5% Total Organic Carbon .650 Pressure Gradient Requires Hydraulic Fracturing Oil & Gas Prone Tuscaloosa Marine Shale Louisiana, Mississippi 200 feet thick 10,000 – 15,000 feet deep 1% - 4% Total Organic Carbon .7 Pressure Gradient Bakken Shale North Dakota, Montana, Canada 150 feet thick 10,500 feet deep 11% Total Organic Carbon .500 Pressure Gradient 85 feet of interbedded siltstone and sandstone Requires Hydraulic Fracturing Oil Prone Independence Project Mancos Shale (Tununk) Utah 600-3,000’ feet thick 11,550 Feet Deep 7% Total Organic Carbon .660 Pressure Gradient 180 feet of interbedded siltstone and sandstone Extensive Natural Fractures Oil & Gas Prone Utica Shale Ohio, Pennsylvania, West Virginia 140 feet thick 7,500 – 9,500 feet deep 7% Total Organic Carbon .46 Pressure Gradient A good shale play is defined by having total organic carbon (“TOC’s) greater than 2%, high thermal maturity and a brittle nature that can be fractured. Natural Fractures eliminate the need for Hydraulic Fracturing, saving money reducing possible environmental/political issues. The Tununk member of the Mancos shale is thick, has high TOC’s, interbedded sandstones, natural fractures, and a high pressure gradient, which should yield a higher than average recovery factor.
- 19. OTCQX: ROIL 15 W. South Temple, Suite 1050 Salt Lake City, Utah 84101 Phone: (801) 519-8500 www.richfieldoilandgas.com Contact Information