Victory Oilfield Tech, Inc. · OTC:VYEY
Victory Oilfield Tech — Victory Energy — Investor Presentation (May 2012)
26 slides from Victory Oilfield Tech's investor presentation, May 24, 2012
Slide 1: Victory Energy Corporation - May 3, 2012
Victory Energy Corporation www.vyey.com 1 May 3, 2012
Slide 2: Forward-looking statements
Victory Energy Corporation www.vyey.com This presentation contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933 and Sectio n 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this present
Slide 3: Victory Energy Corporation overview
Victory Energy Corporation www.vyey.com Victory Energy Corporation (OTCQB: VYEY ) is engaged in the exploration, acquisition, development, and production of domestic oil and gas properties. Victory leverages both internal capabilities and strategic industry relationships to acquire working interes
Slide 4: FY 2011 accomplishments and FY 2012 plans
Victory Energy Corporation www.vyey.com FY 2011 FY 2012 ORGANIZATIONAL Moving to high growth phase in oil and gas First O&G executives brought on board Begin transition out of all non oil and gas service providers Begin transition of California offices to Texas FINANCE AND GOVERNANCE Becam
Slide 5: Capitalization and proved developed reserves
Victory Energy Corporation www.vyey.com 5 12/31/2011 3/22/2012 Outstanding Common Shares 7,646,146 26,973,707 Market Cap $12,616,141 $35,065,819 Cash & Cash Equivalents $475,623 $1,549,000 Senior Convertible Debt $748,763 $0 12/31/11 Proved Developed Reserves Natural Gas 686,020 mcf Crude Oil 6,750
Slide 6: Management team
Kenneth Hill (CEO) • Served as Victory’s COO from Nov. 2010 – Jan. 2012 • 20 years of professional experience, seven in E&P • Previously held titles of Interim CEO, VP of Operations and VP Investor Relations with another publicly traded E&P company • Member of the first 20 employees at Dell Inc. Mar
Slide 7: Strategy: increase reserves, improve returns, manage balance sheet
Victory Energy Corporation www.vyey.com • Deploy a higher percentage of capital towards E&P development • Target longer - life, quality prospects with improved PUD opportunity • Expand strategic relationships and geographical reach • Leverage internal geological capabilities Increase Reserves • Redu
Slide 8: Run the business and add to the business
Victory Energy Corporation www.vyey.com • Manage and grow current prospects that hold 1% to 10 % WI. • Company currently holds acreage that provides opportunity to drill 31 additional wells. • Bootleg Canyon offers additional development drilling with typical per well reserves exceeding 250,000 BOE.
Slide 9: 2011 drilling activity and 2012 capital plans
Victory Energy Corporation www.vyey.com During 2011 the Company participated in the drilling of nine (9) gross exploration wells and directly acquired an interest in three (3) gross producing oil wells. We also acquired a 2% working interest in an Oklahoma water flood project. Total capital expe
Slide 10: Strategy element - optimize development of existing assets
Victory Energy Corporation www.vyey.com 10 STRATEGY ELEMENT 1 – OPTIMIZE DEVELOPMENT OF EXISTING ASSETS
Slide 11: Uno Mas, Bootleg Canyon and Adams-Baggett
Victory Energy Corporation www.vyey.com THE UNO MAS RE - ENTRY WELL Completed and put into initial production on December 23, 2011. Oil and Gas is flowing to sales. Located in Lea County, New Mexico. WI of 10%. Still in WIP stage during Q1 2012. THE BOOTLEG CANYON (ELLENBERGER) FIELD First well (Uni
Slide 12: Jones County, Atwood and Clearwater Wolfberry
Victory Energy Corporation www.vyey.com 12 THE JONES COUNTY OIL PLAY Producing oil since early 2011. Two wells are on production. This is a m ulti well, multi year drilling program. The operator plans to drill eight wells in CY 2012 with each well targeting between 20,000 and 45,000 barrels of recov
Slide 13: Nueces County project cost and economic assumptions
Victory Energy Corporation www.vyey.com 13 Cost Assumptions Land (has been purchased) $280,000 Vertical well cost (est.) Gross $1.5M Net to 5% WI $77,000 Victory Working Interest 5% Net Revenue Interest 3.75% Severance Tax 4.3% Description Located in south central Nueces county, TX.
Slide 14: Adams-Baggett recompletion opportunity
Victory Energy Corporation www.vyey.com Nine producing gas wells are currently held by Victory Seven wells at 100% WI and two at 50% WI With emergence of the proven Wolfcamp “Tippitt” shale resource play, these wells are now being evaluated for vertical frack recompletion We anticipate recom
Slide 15: Victory Energy Corporation www.vyey.com 15
Victory Energy Corporation www.vyey.com 15
Slide 16: Strategy element - acquire 25% to 100% working interest on oil prospects
Victory Energy Corporation www.vyey.com 16 STRATEGY ELEMENT 2 – ACQUIRE 25% TO 100% WORKING INTEREST ON HIGH - POTENTIAL OIL PROSPECTS
Slide 17: The Lightnin' oil and gas shale play
Victory Energy Corporation www.vyey.com 17 THE LIGHTNIN’ OIL AND GAS SHALE PLAY This 320 - acre unconventional oil and gas focused resource shale play is located in Glasscock County, Texas. The Company acquired a 75% working interest (56.25% NRI) for $480,000. This prospect is covered by 2D seismic
Slide 18: Lightnin' cost and economic assumptions
Victory Energy Corporation www.vyey.com 18 Cost Assumptions Land (has been purchased) $480,000 Vertical well cost (est.) $2.5M Planned Working Interest to VYEY 25% Net Revenue Interest 18.75% VYEY currently controls 75% Description Located in Glasscock county, TX. Resource drilling pla
Slide 19: Internally generated prospects
Victory Energy Corporation www.vyey.com Utilizing internal geologic and development resources, Victory can now generate its own oil and gas prospects Initial focus has been on low risk re - entry and near development quality oil focused targets These prospects offer the company a 100% WI and a
Slide 20: Strategy element - acquire resource play acreage ahead of the cost curve
Victory Energy Corporation www.vyey.com 20 STRATEGY ELEMENT 3 – ACQUIRE RESOURCE PLAY DEVELOPMENT ACREAGE AHEAD OF THE COST CURVE
Slide 21: As the number of wells drilled increased
Victory Energy Corporation www.vyey.com 21 As the Number of Wells Drilled Increased 1. The learning curve has been established by others 2. Completion techniques for optimal EUR have been established and can be replicated 3. Lower cost acreage positions remain 4. Geoscience and other technical data
Slide 22: Wolfcamp shale cost and economic assumptions
Victory Energy Corporation www.vyey.com 22 Cost Assumptions Land costs ( per acre) $1,000 - $2,500 Seismic processing Net well costs $5,797,000 Vertical well (est.) $1,897,000 Horizontal leg (est.) $3,900,000 Drill wells to PUD to property Working Interest available 100% Net Revenue
Slide 23: Company structure
Victory Energy Corporation www.vyey.com 23 COMPANY STRUCTURE
Slide 24: Aurora partnership
Victory Energy Corporation www.vyey.com The Aurora partnership provides an ongoing capital structure for a 5 year relationship that is fiscally designed to accelerate Victory Energy into a “phase 3” type of capital opportunity and a move from the OTC to a superior capital market. Victory Energy
Slide 25: Investment summary
Victory Energy Corporation www.vyey.com Access exploration project deal flow is very strong Management team has technical and financial expertise, as well as significant industry experience Lower G&A – will move back - office functions to Texas resulting in higher EBITDA; can dedicate more cas
Slide 26: Contact Information
Victory Energy Corporation www.vyey.com Contact Information 26 Kenny Hill (CEO) Khill@vyey.com Ph. 512 - 347 - 7300 Cell 512 - 423 - 2547 Fax 866 - 234 - 9806 Mark W Biggers (CFO) Mbiggers@vyey.com Ph. 512 - 347 - 7300 Cell 210 - 630 - 1296 Fax 866 - 234 - 9806 Texas Office 3355 Bee Caves Road Suite