Victory Oilfield Tech, Inc. · OTC:VYEY
Victory Oilfield Tech — Victory Energy — GHS 100 Energy Conference, Chicago 2014
27 slides from Victory Oilfield Tech's conference presentation, Jun 26, 2014
Slide 1: Investor Presentation
EXHIBIT 99.1 (OTCQX: VYEY) Investor Presentation GHS 100 Energy Conference, Chicago - June 2014
Slide 2: Forward-Looking and Cautionary Statements
Forward-Looking and Cautionary Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or devel
Slide 3: Company Profile
Company Profile STOCK TICKER (OTCQX) 1 VYEY Victory Energy Corporation Share Price $0.35 •High growth oil and gas E&P focused on Market Cap $9.6 M creating shareholder value through the Shares Authorized 47.5 M acquisition and development of assets in Shares Outstanding 27.5 M the World Class Permia
Slide 4: Investor Highlights
Investor Highlights • Permian Basin (Texas), Resource Focus • Early stage rapid-growth company • Oil and liquid rich gas focus, growing reserves and cash flow • Experienced management team and world-class operators • Asset value upside (PUD) in the portfolio • $35M in Capex access through Texas Capi
Slide 5: Business Model
Business Model • Low-risk vertical well development on existing and acquired properties. • Focus on well-known basins with break-even points below $55 per barrel of oil. 1 • Locate multi-well drilling opportunities that provide three or more years of drilling inventory. • Focus acquisitions on lower
Slide 6: Established Capital Sources for Sustained Growth
Established Capital Sources for Sustained Growth • Financial relationship established in October 2011 • Members include sophisticated investors & boutique private equity AURORA • $10 M private placement now underway (Navitus Partners) ENERGY • Issue of VYEY warrants with each investment provides add
Slide 7: 2014 Strategic Financial Deliverables
2014 Strategic Financial Deliverables • Deploy $30 M of capital towards E&P development and acquisitions • Create more than $60 M in proved reserves INCREASE • Target longer-life, quality prospects with improved PUD opportunity RESERVES • Expand strategic relationships, geographical reach and qualit
Slide 8: 2013 Success Validates Capex Model
2013 Success Validates Capex Model $2,278,032 First Permian Acquisition in March 2012. Spud January 2013. $1,212,899 $589,395 $25,000 2011-2013 2012 vs 2013 Growth Rates CAGR Annual }Net Proved Reserves 42% 81% }Proved Reserves (PV-10) 50% 39% }Mineral & Drilling Investment 87% 88% (1) Proved reserv
Slide 9: 2013 Permian Oil Focus is Accelerating Results
2013 Permian Oil Focus is Accelerating Results 2011-2013 2012 vs 2013 Growth Rates CAGR Annual }Oil as a percentage of production N/A 130% }Revenue from hydrocarbon sales 55% 125% 9
Slide 10: Why Focus on the Permian Basin?
Why Focus on the Permian Basin? • The play is the largest oil field in the U.S. (Baker- Hughes rig count & vertical • Predictable recoverable well resources). economics deliver break-even points at less than $55 per bbl (Midland Basin). 1 Standard & Poor’s 2013 Report • Increased use of enhanced-rec
Slide 11: Predictable Economics Deliver Predictable Outcomes
Predictable Economics Deliver Predictable Outcomes Our current focus is on vertical wells with $49 - $55 WTI Oil Price Break Even Estimated Internal Rates of Return By Play * S&P’s Estimated Break-Even WTI Oil Price By US$/Barrel Play * Returns are based on Standard & Poor’s West Texas Intermediate
Slide 12: As Learning Curve Improves, Horizontal Activity Increases
As Learning Curve Improves, Horizontal Activity Increases Source: Baker Hughes Rig Count November 2013 12
Slide 13: Horizontal Decision Metrics (Best Cost Curve Drives Choice)
Horizontal Decision Metrics (Best Cost Curve Drives Choice) Low • Deploy capital in the sweet spot • Completion techniques for optimal EUR and lower drilling costs provide more predictable returns • Lower cost acreage positions remain available • Geoscience and other technical data provide solid gui
Slide 14: Opportunity for Secondary Development
Opportunity for Secondary Development The Permian is also attractive because it has multiple pay zones - some of which are extremely amenable to horizontal drilling (Develop vertical now, horizontal later) Clear •Most Permian companies have been exploiting Fork “Wolfcamp” or “Clear Fork” plays using
Slide 15: Acquisition and Development Plan
Acquisition and Development Plan 1. Drill and complete available development well locations on current high-value properties 2. Acquire producing property(s) in the Midland and Central basins with • Over 12 months of production history • $125,000 to $200,000 of monthly cash-flow • Additional upside
Slide 16: Lightnin' Property
Lightnin’ Property Adding Value Through Disciplined Development Disposition Details • Acquired March 2012 (640 gross acres) for $480,256 • First well spud January 2013 • Cumulative Capex of $2,075,074 • Gross cumulative cash flows of $461,918 • Sold June 2014 for $4,021,400 63% internal rate of retu
Slide 17: Disciplined Deployment of Capital
Disciplined Deployment of Capital Lightnin' Sale Fairway Purchase Delta Multiple Permian Basin County Glasscock (Tier 1) Glasscock (Tier 1) N/A N/A Purchase (Sale) Price $ 4,080,000 $ 5,985,059 $ 1,905,059 1.5 Developed Acres 320 1,280 960 4.0 Undeveloped Acres 320 3,280 2,960 10.3 BOE/PD 32 (1) 64.
Slide 18: Pending Fairway Acquisition (Proved and Producing)
Pending Fairway Acquisition (Proved and Producing) • Target Energy is selling a 10% WI (7.5% NRI) of its proven and producing Permian Basin asset • The proven property is located within the “Core” Wolfberry and Fusselman acreage window of Glasscock County Texas and has significant development upside
Slide 19: Fairway Economic Plan & Assessment
Fairway Economic Plan & Assessment • The company plans to acquire Fairway and improve the property’s current cash-flow and market valuation via a three year or shorter development plan • Utilizing an independent third-party reserve report and a development model established by the current operator,
Slide 20: Fairway is in the Heart of the "Tier 1" Zone
Fairway is in the Heart of the “Tier 1” Zone Source: Pioneer 2013, 3Q Report 20
Slide 21: Fairway Impact on the Company
Fairway Impact on the Company 21 Production and economics based on May 2014 third-party reserve report
Slide 22: Bootleg Canyon (Proved and Producing)
Bootleg Canyon (Proved and Producing) Description Vertical Well Economic Summary • Acquired April 2011 (over 5,000 acres) • Well cost to the 100% $1.55M • Located in Pecos County, TX • Working Interest 5% • Conventional drilling play (vertical) • Three wells completed with seven remaining • Net Reve
Slide 23: Adams Baggett Gas Field (Proved and Producing)
Adams Baggett Gas Field (Proved and Producing) Description Per Well Economics • Acquired 2008 (180 acres) • Well cost to the 100% $600K • Located in Crockett County, TX • Working Interest in 7 wells 100% • High Btu natural gas production o Net Revenue Interest 75% • Nine vertical gas wells completed
Slide 24: Experienced E&P Management
Experienced E&P Management • Served as Victory’s COO from Jan. 2011 - Jan. 2012. • Over 35 years of oil and gas industry law centered on the upstream, • 21 years of professional experience, seven in E&P. midstream and downstream activities of major and independent oil companies. • Previously held ti
Slide 25: Investment Summary
Investment Summary • Proven management team with over 150 years of combined oil and gas experience • Predictable IRRs offered by the largest resource play in the U.S. (Permian Basin) • Access to proved producing properties and development project deal flow • Strong balance sheet - excellent capital
Slide 26: Contacts
Contacts Victory Energy Corporation Kenneth Hill, CEO Email: Kenny@vyey.com Phone: (512) 347-7300 www.vyey.com Investor Relations Derek Gradwell Senior Vice President, Natural Resources - MZ North America Main: 212-301-7130 Direct: 512-270-6990 Email: dgradwell@mzgroup.us www.mzgroup.us 26
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