Canadian Spirit Resources Inc. · TSXV:SPI

Canadian Spirit Resources — Investor Presentation (June 2007)

23 slides from Canadian Spirit Resources's investor presentation, June 2007

  1. Slide 1: Unconventional Natural Gas

    Unconventional Natural Gas A Compelling Case. A Focused Vision. June 2007 Trading Symbol: SPI – TSX Venture Exchange Website: www.csri.ca

  2. 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

  3. Slide 3: Farrell Creek Area

    Farrell Creek Area

  4. Slide 4: Corporate Information

    CORPORATE INFORMATION  Listed – SPI (TSX Venture Exchange)  Working capital surplus - $1.5mm (March 31). No debt.  28,833,082 shares outstanding  2,471,000 options outstanding – average strike price = $2.40  3,200,00 warrants outstanding – strike price = $2.50 (expiring August 11, 2007)  Manag

  5. Slide 5: Overview

    OVERVIEW  Acquired 40,000 acres of Shallow Rights  75% of land also has deep rights  Eight test holes drilled to date  Four test holes have been fracture stimulated  Independent estimate of 1.8 tcf of discovered resource for the shallow Gething, Gates and Moosebar Formations  Deeper formations

  6. Slide 6: Current Status

    CURRENT STATUS  Have recently established mechanical reliability on pumping units  Implemented field changes to reduce costs  Flowing wells while reducing reservoir pressure and determine a production response on three of four test holes  Trailer mounted compressor to be utilized to complete thi

  7. Slide 7: Current Status

    CURRENT STATUS c-083 – Shut-in – deliverability test complete b-092 – Flowing – currently the best producing well to date b-003 – Flowing from upper zone – bridge plug wedged between zones b-002 – Flowing with only 22 meters perforated - lowest capital cost well to date d-093 – Drilled and cased - p

  8. Slide 8: Results

    RESULTS Well Deliverability 1600 —- b-002 Daily Gas —@ c-083 Daily Gas -& b-092 Daily Gas — Expon. (b-002 Daily Gas) — Expon. (c-083 Daily Gas) —— Expon. (b-092 Daily Gas) 1400 1200 1000 800 600 Wellhead Pressure (Kpa) 400 200 4 ~7.0 E’m* 100 Kpa 0.0 10 l 20 I50 40 50 60 70 80 90 10.0 50 mcfid 100 m

  9. Slide 9: Valuation

    VALUATION $Million 1.00 140 280 420 560 12+ 0.75 105 210 315 420 9 $/mcf $/share 0.50 70 140 210 280 5 0.25 35 70 105 140 1 10 20 30 40 Recovery Factor ( % ) Assumes 1.4 tcf of Gas-in-Place (Sproule) and 45 million fully diluted shares

  10. Slide 10: Preliminary Economic Data

    PRELIMINARY ECONOMIC DATA  Capital  Target: Less than $1 million to drill, case and fracture stimulate  Production  Target: 200-300 mcf/d from vertical wells  B.C. Crown Royalty (new Net Profits Interest)  Designed for unconventional gas  2% royalty on gross revenue until capital pool payout

  11. Slide 11: Proposed Base Program

    PROPOSED BASE PROGRAM Deliverability Testing  Timing (March 30 to June 30, 2007)  Continue to flare three test holes to establish consistent run time (upward production trend)  Currently b-092 is the best well (100 to 150 mcf/d)  Install trailer mounted compressor  Shut in c-083 and continue to

  12. Slide 12: Proposed Base Program

    PROPOSED BASE PROGRAM Tie-in Evaluation  Timing (June 2007)  Determine in parallel  Tie-in options  Industry Partner – Short term solution  Will take raw gas for compressor fuel  Initiate discussions  Spectra Energy (formerly Duke Energy) – Long term solution  Must meet sales gas specificati

  13. Slide 13: Proposed Base Program

    PROPOSED BASE PROGRAM Apply best completion techniques  Timing (July to August 2007)  Fracture stimulate d-093  Flow back and drawdown pressure with trailer mounted compressor  Continue to monitor b-092 and b-002  Move trailer mounted compressor as required  Issues:  How much will the rate in

  14. Slide 14: Proposed Base Program

    PROPOSED BASE PROGRAM Prepare for tie-in and add production  Timing (August to October 2007)  Finalize pipeline access  Start construction  Convert test holes to production wells  Drill three vertical wells  Spacing  Consider drilling one directional well  Continue to evaluate results to fin

  15. Slide 15: Proposed Base Program

    PROPOSED BASE PROGRAM Tie-in for cash flow  Timing (October to mid December 2007)  Tie-in the following producing wells  b-092  d-093  Possibility to tie-in up to five additional wells Goal:  Target total production of 1 million cubic feet per day and increasing

  16. Slide 16: Additional Potential

    ADDITIONAL POTENTIAL Shallow Rights – (Surface to base of Cadomin)  Substantial availability of B.C. Crown lands  Land swap/Farm-in potential  GeoMet “Strategic Process”  Infrastructure co-operation  Formations  Moosebar and Bluesky

  17. Slide 17: Additional Potential

    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.  Triumph Pacific Oil & Gas Corp.  Others  Formations  Nordegg/Fernie, Halfway, Doig/Montney, Debolt

  18. Slide 18: 2007 Funding Plan

    2007 FUNDING PLAN  Confirm productivity and economics  $3 million private placement  June 2007  Capital program June – August 2007  Production and reserves  $15 – $30 million  September 2007  Capital program September 2007 – September 2008

  19. Slide 19: Conclusions

    CONCLUSIONS Farrell Creek Project  Large discovered resource – 1.8 tcf on existing lands  Expect production in early 2008  Large number of potential locations  Prospective deep rights/multi-zone potential  Year round road and pipeline accessibility  Long Reserve Life Index (low decline)

  20. Slide 20: Farrell Creek Location

    FARRELL CREEK LOCATION Fort St. J ohn CSRi Land Sedimentary Basins Duke Energy Pipeline

  21. Slide 21: Farrell Creek Lands

    FARRELL CREEK LANDS CSRI T85 EnCana Talisman T84 GeoMet/ CEP/ Triumph T83 T82 T81 93-O-16 R26 R25 R24 R23

  22. Slide 22: Farrell Creek Pilot Project

    2 FARRELL CREEK PILOT PROJECT @SRI eee eee eee eee eee eee Proposed CSRI Pipeline \ i x Energy I ot Tap’ Yoon ten Duke Enetgy Main Pipaine ™: 7° 74 Experimental Scheme Area

  23. Slide 23: 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: SPI www.csri.ca

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