Canadian Spirit Resources Inc. · TSXV:SPI
Canadian Spirit Resources — Investor Presentation (December 2007)
25 slides from Canadian Spirit Resources's investor presentation, December 2007
Slide 1: Moving Forward
Moving Forward December 2007 Trading Symbol: SPI – TSX Venture Exchange Website: www.csri.ca
Slide 2: Disclosure Statement
DISCLOSURE STATEMENT The corporate information contained in this presentation contains forward-looking forecast information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonably accurate by Canadian Spirit Resources Inc. (“CSRI”) at the
Slide 3: Farrell Creek, British Columbia
FARRELL CREEK, BRITISH COLUMBIA Flaring b-092 Well Drilling b-003 Well
Slide 4: Beautiful British Columbia
“BEAUTIFUL BRITISH COLUMBIA” Production Drilling Testing b-002 Well b-003 Well Fracing b-002 Well
Slide 5: CSRI Location
CSRI LOCATION British Columbia, Canada Fort St. John CSRi Land Sedimentary Basins Duke Energy Pipeline Spectra
Slide 6: Why Unconventional Gas in Northeast British Columbia?
WHY UNCONVENTIONAL GAS IN NORTHEAST BRITISH COLUMBIA? Large resource Æ 35 bcf per section in shallow formations 28 bcf per section - Gething Formation 7 bcf per section - Moosebar/Gates Formations (Compared to 2–4 bcf per section Horseshoe Canyon and 6-9 bcf per section Mannville in Alberta)
Slide 7: The B.C. Advantage
THE B.C. ADVANTAGE B.C. Crown Royalty (new Net Profit Program) Designed specifically for unconventional gas plays 2% royalty on gross revenue until capital pool payout – compared to approximately 20% gross royalty in Alberta Allowable capital pool includes the capture of previous 3 years of
Slide 8: Why CSRI?
WHY CSRI? Economies of scale Up to 400 potential Gething well locations with 30 that are immediately drillable Large 1.8 tcf natural gas resource play Significant leverage to natural gas prices “Rock Package” approach to coals, shales and tight sands Reduced risk – engineering solutions/
Slide 9: Farrell Creek Geology
FARRELL CREEK GEOLOGY * * Primary Target Average depth to top of Cadomin is 900m
Slide 10: Farrell Creek: Generic Well Production Profile
FARRELL CREEK: GENERIC WELL PRODUCTION PROFILE ____ Shale Gas Profile + Total G ____ Coal (CBM) Profile A = S CBM ___ Total Farrell Creek Gas R A T Pilot Results To Date E Shale TIME
Slide 11: Undervalued Resource
UNDERVALUED RESOURCE $ Million 1.00 140 280 420 560 12+ 0.75 105 210 315 420 9 Value of Potential $/Share Reserves ($/mcf) 0.50 70 140 210 280 5 0.25 35 70 105 140 1 10 20 30 40 Recovery Factor ( % ) Note: Assumes 1.4 tcf of Gething Gas-in-Place (Sproule)
Slide 12: Farrell Creek - Overview
FARRELL CREEK - OVERVIEW Acquired approximately 60 sections (40,000 acres) of shallow rights 70% of land also has deep rights Spectra main sales line runs through the west block of CSRI lands Eight test holes drilled to-date Five test holes have been fracture stimulated Independent estim
Slide 13: Farrell Creek Lands
FARRELL CREEK LANDS CSRI EnCana Talisman GeoMet/CEP
Slide 14: Farrell Creek Pilot Project
2 FARRELL CREEK PILOT PROJ ECT GSRI _Experimental Scheme Area
Slide 15: Current Status
CURRENT STATUS c-083 Shut-in b-092 Shut-in * b-003 Flowing * b-002 Shut-in * Anticipated Range d-093 Recently fracture stimulated //////////////////// and currently testing * mcf/d 0 200 400 * Ready to be tied-in Stabilized flow Initial flow
Slide 16: Farrell Creek Project Economic Assumptions
FARRELL CREEK PROJECT ECONOMIC ASSUMPTIONS $1.1 million per well for drilling, completion and tie-in costs $6.0 million for gathering and processing facilities 100 - 250 mcf/d estimated stabilized flow per well (Implies a future recovery of 0.6 to 1.6 bcf per well) Operating costs of $4,500
Slide 17: Farrell Creek Project Economics - Sensitivities
FARRELL CREEK PROJECT ECONOMICS - SENSITIVITIES Rate Of Return 100 mcf/d 150 mcf/d 200mcf/d 250mcf/d $6.50 Flat 1% 11% 20% 28% $7.50 Flat 5% 16% 25% 35% $8.50 Flat 8% 20% 31% 42% $9.50 Flat 11% 24% 37% 50% Plant gate pricing - CDN$
Slide 18: 2007-2008 Funding Plan
2007-2008 FUNDING PLAN First stage Æ Initial tie-in for cash flow and reduced flaring $5.0 million funding requirement–December 2007 Capital program December 2007–May 2008 Includes installation of gas processing facility Drilling and completion of additional pilot wells subject to funding
Slide 19: Capital Program – Prior to Break-up (December 2007 - March 2008)
CAPITAL PROGRAM – PRIOR TO BREAK-UP (DECEMBER 2007 - MARCH 2008) TESTING AND BUILDING PIT FOR PRODUCED WATER INSTALL INITIAL GAS PROCESSING FACILITY TIE-IN EXISTING WELLS DRILLING & COM PLETION OF ADDITIONAL PILOT WELLS * Dec-07 Jan-08 Feb-08 Mar-08 * SUBJECT TO FUNDING
Slide 20: Capital Program – Subsequent to Break-up (June - December 2008)
CAPITAL PROGRAM – SUBSEQUENT TO BREAK-UP (JUNE - DECEMBER 2008) RE-COMPLETION OF PILOT WELLS FOR OPTIMIZATION DRILLING & COMPLETION OF ADDITIONAL PILOT WELLS EXPAND GAS PROCESSING FACILITY CAPACITY DRILLING, COMPLETION & TIE-IN OF 25 - 30 WELL PROGRAM Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08
Slide 21: Additional Potential: Shallow Rights
ADDITIONAL POTENTIAL Shallow Rights – (Surface to base of Cadomin) Substantial availability of B.C. Crown lands Land swap/Farm-in potential Formations Moosebar/Gates - 400 bcf discovered resource Bluesky Cadomin
Slide 22: Additional Potential: Deep Rights
ADDITIONAL POTENTIAL Deep Rights – (Below base of Cadomin to basement) Land swap/Farm-out potential Activity in Farrell Creek Area NorthPoint Energy Ltd. Talisman Energy Inc. Canada Energy Partners/GeoMet Others Formations Nordegg/Fernie, Halfway, Doig/Montney, Debolt
Slide 23: Conclusions: Farrell Creek Project
CONCLUSIONS Farrell Creek Project Large discovered resource – 1.8 tcf on existing lands Expect production in early 2008 with reserves to follow Large number of potential well locations Prospective deep rights/multi-zone potential Year round road and pipeline accessibility Long Reserve Li
Slide 24: Corporate Information
CORPORATE INFORMATION TSX Venture Exchange - SPI Working capital surplus - $1.8 million as of September 30, 2007 No debt 32,333,082 shares outstanding 2,385,000 options outstanding – average strike price = $2.40 3,200,000 warrants outstanding – strike price = $2.50 (expiring December 14,
Slide 25: Canadian Spirit Resources Inc. contact details
Canadian Spirit Resources Inc. Suite 1950, Ford Tower 633 - 6th Avenue S.W. Calgary, Alberta T2P 2Y5 Telephone: (403) 539-5005 E-mail: info@csri.ca TSX Venture Exchange - SPI www.csri.ca
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