Arkanova Energy Company · OTC:AKVA
Arkanova Energy — Investor Presentation (2007)
38 slides from Arkanova Energy's investor presentation, 2007
Slide 1: Agenda
AGENDA PROJECT BACKGROUND PHASE 1 PHASE 2 PHASE 3 PHASE 4 LEASEHOLD VERIFICATION SUPPORT SEISMIC ACQUISITION DRILLING GUSTAVSON ASSOCIATES
Slide 2: North American Shale Plays
16 0 °W North American Shale Plays 1 40 °W 12 0 °W 10 0 °W 8 0° W 60 °W 4 0 °W 7 0 °N 20 °W 20°W B e a uf o rt S e a GRE E NLAN D B af f i n B ay V ic U . S. A . to r ia I sl Ba Da A l a s ka an f f in vi d I s la sS nd t ra it 160°W Yu k o n N o rth W e s t T e rr i to r ie s L ab r ad or S e a N u
Slide 3: Fayetteville Shale Facts
Fayetteville Shale Facts Cumulative Production 05 and 06 = 20 BCFG Current Production Rates = 130 MMCF/D Industry Expected to Drill 600 Wells in 2007 Estimated 58-65 Bcf/Section Fayetteville Shale Play The Fayetteville Shale is contemporaneous with the Barnett Shale in the Fort Worth Basin of Texas,
Slide 4: Estimated Ultimate Recovery
EUR ESTIMATED ULTIMATE RECOVERY VERTICAL WELLS 20 – 388 MMCF AVERAGE 109 MMCF HORIZONTAL WELLS 239 MMCF - 4.5 BCF AVERAGE 1.1 BCF Calculated from production, 2004- 2007 GUSTAVSON ASSOCIATES
Slide 5: Mississippian Age Shale Gas Plays
MISSISSIPPIAN AGE SHALE GAS PLAYS GUSTAVSON ASSOCIATES
Slide 6: Fayetteville Play Leasing Activity
a Arkanova ENERGY CORPORATION Fayetteville Play Leasing Activity + ‘ Lovett 1-7 Discovery Well a SF . ‘Thompson 1-32 Discovery Well Byers 1-3H Discovery Well NS i aN. 25 \ 4 Serge, & +> 2 ~~ ar * Arrington Helena Port Well ~ = Texas Gas Proposed Pipeline Drilled and Permitted Wel Since May, 2006) Mi
Slide 7: Acreage Position
ACREAGE POSITION GUSTAVSON ASSOCIATES
Slide 8: Phase 2: Play Potential
PHASE 2 PLAY POTENTIAL PROPERTY IN ACTIVE PLAY FRONTIER FAYETTEVILLE SHALE WELLS 1. EURS 1.3 – 1.7 BCFG 2. AVERAGE INITIAL PRODUCTION 2.5 MMCFPD 3. $1.4 – $1.8 MILLION FOR HORIZONTAL COMPLETION 4. PROXIMITY TO PIPELINES GUSTAVSON ASSOCIATES
Slide 9: Risks in the Eastern Extension of the Fayetteville Shale Play
RISKS IN THE EASTERN EXTENSION OF THE FAYETTEVILLE SHALE PLAY 1. WAS THE FAYETTEVILLE SHALE DEPOSITED? 2. HAS THE FAYETTEVILLE BEEN ERODED? 3. IS STRUCTURAL COMPLEXITY AN ISSUE? 4. INFLUENCE of REELFOOT RIFT? GUSTAVSON ASSOCIATES
Slide 10: Paleogeography of the U.S.A., Late Mississippian Time
Paleogeography of the U.S.A., Late Mississippian Time Shallow-marine shelf depositional setting in Arkansas- Mississippi area post Fayetteville Shale deposition GUSTAVSON ASSOCIATES
Slide 11: AOI shown on tectonic map of Arkansas and Mississippi
AOI shown on tectonic map of Arkansas and Mississippi Note: AOI is near potentially deformed Paleozoic rocks. Deformation front of Fold and Thrust belt is closer to AOI based on gravity and magnetic GUSTAVSON ASSOCIATES data. AOI is southeast of Reelfoot Rift.
Slide 12: General Stratigraphy
GENERAL STRATIGRAPHY PRODUCING AND Shales and COMPLETED FORMATIONS Sandstones Bold Gas Symbols ADDITIONAL TARGET INTERVALS Limestones and Cherts GUSTAVSON ASSOCIATES
Slide 13: Fayetteville Shale Productive Interval
FAYETTEVILLE SHALE PRODUCTIVE INTERVAL COVE CREEK FIELD 3,000 Fayetteville 4,000 Fields PERFS FAYETTEVILLE SHALE Cove Ck Cove Creek Bosnick #1 Field Harrison #2-11 Faulkner County From SEECO Bosnick #1 Lee GUSTAVSON ASSOCIATES County
Slide 14: Well #1 Horizontal Frac Site
WELL #1 HORIZONTAL FRAC ea SITE Frac Detail Tee * GUSTAVSON ASSOCIATES LLC
Slide 15: Risks in the Eastern Extension of the Fayetteville Shale Play
RISKS IN THE EASTERN EXTENSION OF THE FAYETTEVILLE SHALE PLAY 1. FAYETTEVILLE SHALE WAS BELIEVED DEPOSITED ACROSS ENTIRE REGION 2. SUBSURFACE AND OUTCROP OCCURENCES INDICATE FAYETTEVILLE SHALE PRESENT IN THE GREATER AREA 3. STRUCTURAL COMPLEXITY EXPECTED TO BE COMPARABLE TO EXISTING FIELDS 4. REELFO
Slide 16: Conclusions
CONCLUSIONS 1. THE PROPERTY IS AN EXPLORATION PLAY OF UNPROVEN POTENTIAL 2. PRODUCING INTERVAL IS PROBABLY PRESENT 3. STRUCTURAL RISK APPEARS SIMILAR TO EXISTING FIELDS 4. STRUCTURAL RISK HIGHER SOUTH OF TOWNSHIP 6 SOUTH 5. EXPLORATION ACTIVITY IS APPROACHING THE PROPERTY 6. INDUSTRY INTEREST VERY H
Slide 17: Recommendation
RECOMMENDATION THE PROPERTY IS AN EXPLORATION PLAY OF UNPROVEN POTENTIAL IF EXPLORATION RISK IS ACCEPTABLE EXERCISE OPTION ON PROPERTIES GUSTAVSON ASSOCIATES
Slide 18: Phase 3
PHASE 3 1. Review available 2D seismic 2. License representative seismic data 3. Obtain regional gravity and aeromagnetic surveys 4. Identify structural framework of Area of Interest (AOI) GUSTAVSON ASSOCIATES
Slide 19: Review Available 2D Seismic
Review Available 2D Seismic 1. Identified 14 2D seismic lines (295 line miles) in vicinity of AOI 2. QC’d 6 seismic lines (200 line miles) 3. Selected part of 3 lines (43 miles) to license for interpretation GUSTAVSON ASSOCIATES
Slide 20: License Seismic Data
License Seismic Data 1. Selected part of 3 lines (43 miles) to license for interpretation 2. Received licensed data June 6, 2006 3. Loaded one line to interpretation workstation 4. Delivered field data to be reprocessed 5. Reprocessed data expected late June 2006 GUSTAVSON ASSOCIATES
Slide 21: Gravity & Aeromagnetic Surveys
Gravity & Aeromagnetic Surveys 1. Gravity data – U.S.G.S. PP-1474 2. Aeromagnetic survey – N.U.R.E. GUSTAVSON ASSOCIATES
Slide 22: Structural Framework of AOI
Structural Framework of AOI Gravity shows: 1. Reelfoot Rift 2. Areas of thicker sedimentary section 3. Fold – Thrust Belt GUSTAVSON ASSOCIATES
Slide 23: Structural Framework of AOI
Structural Framework of AOI Available seismic suggests: 1. Thickness of sedimentary section 2. Depth to Cretaceous - Paleozoic unconformity 3. Low amplitude folds in Paleozoic section GUSTAVSON ASSOCIATES
Slide 24: Play Qualities
PLAY QUALITIES 1. Contemporaneous with Barnett Shale, Caney Shale, and Floyd Shale Intervals 2. Actively Explored 3. Analogous Stratigraphy 4. Analogous Production 5. Infrastructure GUSTAVSON ASSOCIATES
Slide 25: Activity in the Eastern Fayetteville Play
ACTIVITY IN THE EASTERN FAYETTEVILLE PLAY GUSTAVSON ASSOCIATES
Slide 26: Gravity Structural Features
Gravity Structural Features Reelfoot Rift Areas of thicker sediments Fold-Thrust Belt GUSTAVSON ASSOCIATES
Slide 27: Aeromagnetic Structural Features
Aeromagnetic Structural Features Area of N.U.R.E. aeromagnetic survey Aeromagnetic data corresponds with gravity data GUSTAVSON ASSOCIATES
Slide 28: Seismic Data Reviewed
Seismic Data Reviewed Location of seismic data reviewed on gravity map with drilled and permitted wells GUSTAVSON ASSOCIATES
Slide 29: Seismic Data Detail
Seismic Data Detail Blue seismic data reviewed (200 miles) Green seismic data licensed (43 miles) GUSTAVSON ASSOCIATES
Slide 30: Phase 4
PHASE 4 1. LICENSE ADDITIONAL 2D SEISMIC 2. REPROCESS ADDITIONAL SEISMIC 3. INTERPRET GEOPHYSICAL DATA 4. UPDATE LAND MAPS 5. RECOMMEND WELL SITES GUSTAVSON ASSOCIATES
Slide 31: Seismic Data and Acreage
Seismic Data and Acreage GUSTAVSON ASSOCIATES
Slide 32: Sketch of Seismic Line SEI-12X
Sketch of Seismic Line SEI-12X 14 Miles Quaternary Cretaceous Sediments -0.500 0.500- 2800 Feet 2900 Feet -1.000 1.000- 4200 Feet 5000 Feet Unconformity TWT in Seconds TWT in Seconds -1.500 1.500- Zone of Low Amplitude Folds (Paleozoics) -2.000 2.000- 2.500- -2.500 Flat lying Quaternary and Cretaceo
Slide 33: Top of Pre-Cretaceous Unconformity
2500 Top of Pre-Cretaceous Unconformity 2250 2000 1750 1500 1250 1000 750 500 250 0 -250 -500 0 -750 50 -1000 -1 -1250 -1500 -1750 00 - 20 -2000 -2250 -2500 -2750 0 50 -3000 -2 00 -3250 -20 -3500 -3750 -4000 00 - 30 -4250 -4500 00 -30 - 35 00 0 - 4 00 0 -400 -4500 0 94,817 FEET PETRA 5/9/2007 3:32:5
Slide 34: Proposed Seismic Survey
Proposed Seismic Survey a2 + t jah | | halal LINZ | INS E Arkanova ENERGY CORPORATION a Hcceer t : + : 4s 12 a + +—4 + . | | |} : sews 4 isle. t } 1 } Legend ——— Proposed Seismic Survey =] Arkanova Acreage G GUSTAVSON ASSOCIATES
Slide 35: Drilling
DRILLING WELLS #1 AND #2 $1,600,000 Drilling, Evaluation and Logging of multiple horizons that have potential and other horizons that are thought to have potential in the region. GUSTAVSON ASSOCIATES
Slide 36: Budget
BUDGET Commissions $ 600,000 Legal Fees and Closing Costs 25,000 Repay Bridge Loan, w/ interest 615,000 Acreage Payments 3,400,000 Drilling 2 Exploratory Wells* 1,600,000 Seismic Program 200,000 Employee & Consultant Comp. 500,000 Professional Fees 150,000 General & Administrative 250,000 General Wo
Slide 37: GUSTAVSON ASSOCIATES
— ——._N Arkanova ENERGY CORPORATION G GUSTAVSON ASSOCIATES
Slide 38: GUSTAVSON ASSOCIATES
—_ ——._N CORPORATION G GUSTAVSON ASSOCIATES