Victory Oilfield Tech, Inc. · OTC:VYEY
Victory Oilfield Tech — Victory Energy — Investor Presentation (September 2014)
33 slides from Victory Oilfield Tech's investor presentation, Sep 3, 2014
Slide 1: A Public Pure Play Permian Basin Company
o VICTORY ENERGY CORPORATION w = A Public Pure Play Permian Basin Company September 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 + High growth oll and gas E&P company focused on creating shareholder value through the acquisition and of assets in the World Class Permian Basin + The company currently holds interests in high profile plays such as the Spraberry, Wolfcamp, Wolfberry, Mississippian, Cline and Fussel
Slide 4: Investor Highlights
Investor Highlights Public-Pure-Play-Permian Focused company Early stage rapid-growth company Oil and liquid rich gas focus, growing reserves and cash flow Experienced management team and operators Asset value upside — PUD, Probable and over 50 additional exploration and development well locations i
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. * * Locate multi-well drilling opportunities that provide three or more years of drilling inventory. * Focus acquisitions on lower
Slide 6: 2014 Strategic Financial Deliverables
2014 Strategic Financial Deliverables Deploy $15 million of new capital towards E&P development and acquisitions INCREASE Create more than $30 million in proved reserves Target longer-life, quality prospects with improved PUD opportunity RESERVES expand strategic relationships, geographical reach an
Slide 7: Established Capital Sources for Sustained Growth
Established Capital Sources for Sustained Growth iron Financial relationship established in October 2011 ‘+ Members include sophisticated investors & boutique private equity AURORA ENERGY PARTNERS (50/50 owned by Victory and Navtus) * $10 M private placement now underway (Navitus Partners) Issue of
Slide 8: Why Focus on the Permian Basin?
Why Focus on the Permian Basin? E] Hh twice Ae Jem mexico | gdoeient The play is the largest oil field in the U.S. (Baker-Hughes, rig count & Pioneer recoverable resources). *? Predictable vertical well economics deliver break-even points at less than $55 per bbl (Midland Basin). ? Standard & Poor's
Slide 9: Diversified Permian Basin Portfolio
Diversified Permian Basin Portfolio teey entra Data Ca Bone Sine & Wat N-Daonare Cor Roe pring MEWERICO 7 TEAS S Damar Coe Wale Fairway Preiect (Proved Producing) Gaseeoec& rowand Courter { aoteon 2ov ges ox / 75H Bootleg Canyon Proved Producing) {FSiob asia + Elnbuvger and come! ‘Adams Baggett (Pro
Slide 10: Permian Oil Focus is Driving 2014 Results
Permian Oil Focus is Driving 2014 Results 1,200,000, 1,000,000 300,000 «00,000 dono S088) 326,584 2an,c00 Fr [ae o & = all -2012,-« 2018014 angi? 400,000 < 325,750 300,000 1 iN BIT woe \ i é Q, Q3 100% 18% 50% 28% 0% 41% al a
Slide 11: 2014 Reserve Acceleration Underway
2014 Reserve Acceleration Underway Month Acceleration in 2014 sae. 830,160 3,937,270 — 9,930,370_ $3,500 ee 535,20 ‘386 soma 128 $7000 L asaa 22100 e000 yes “ ‘$6,000 “ 200 $000 P = 3296 Increase in proved re $000 “$696 reromein2P PUD roxerves) 937,270) $3,000 = 296% reserve replacement y ee : $1,00
Slide 12: Reserve Breakdown August 2014
Reserve Breakdown August 2014 POP 2722 667.28 140.10 $6.470890 $3,440,490 $2,185,490 PONP 15 21.18 15,03 $1,242,690 $722,810 $365,030 pub 12.16 11.44 1467 $1,287,100 $714,300 $396,590 Probable 28.42 44.23 35.78 $3,016 50 $1,385,710 $830,160 Total Reserves 739 754.13 205.59 $22,017,180 $6,313,310 $3,
Slide 13: Fairway is in the Heart of the Tier 1 Zone
Fairway is in the Heart of the “Tier 1” Zone * Tier 1 is highest prospectivity acreage, as by several By © Pioneer wotcamp 8 wale geologic properties, including: Wolfcamp 8 depth contour Original oil in place (OO1P) ~Kerogen content “Thermal maturity Porosity Brittle mineral fraction (fracability, l
Slide 14: Fairway 4,050 Acre Economic Plan & Assessment
Fairway 4,050 Acre Economic Plan & Assessment irom The company plans to grow reserves through drilling, improve the property's current cash-flow and drive up property valuation via a three year or shorter development plan + Total three year acquisition and drilling Capex of $11.2 million $5 million
Slide 15: Fairway Geology Offers Stacked Pay Upside
Fairway Geology Offers Stacked Pay Upside + Both the Fusselman and Wolfberry formations are productive in the acreage Phase 1 ~Fusselman 3000 $700" 00-500 6 000-8,00' 7000 8300" 000-3500" esrtrk fr ide waeane Lower Welcome. ‘tla Benet ("Sy Saha Phase 2 Woltberry Potential for future Cline developmen
Slide 16: 2014 Acquisition and Development Plan
2014 Acquisition and Development Plan 1. Drill and complete undeveloped leasehold on current high-value properties 2. Sell properties with limited development upside and re-deploy capital to properties with higher production and more than three years of development (i.e. Lightnin’ to Fairway) 3. Acq
Slide 17: Experienced E&P Management
Experienced E&P Management Kenneth Hill (CEO) + Served as Victory’s COO from Jan, 2011 —Jan, 2012, + 21 years of professional experience, seven in ERP. + Previously held titles of Interim CEO, VP of Operations and VP Investor Relations with another publicly traded E&P company, + Member of the frst 2
Slide 18: Investment Summary
Investment Summary Proven management team with over 175 years of combined oil and gas experience Predictable IRRs offered by the largest resource play in the U.S. (Permian Basin) Significant access to proved producing properties and development project deal flow Strong balance sheet — excellent capi
Slide 19: 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
Slide 20: Appendix and Support Material
o VICTORY ENERGY CORPORATION (OTCQX: VYEY) Appendix and Support Material
Slide 21: Review of Significant Properties
Review of Significant Properties
Slide 22: Fairway (Proved and Producing)
Fairway (Proved and Producing) Description Acquired June 2014 (over 4,560 acres) Located in Glasscock and Howard County, TX + Conventional drilling play (vertical) + Six producing oil wells as of May 1, 2014 + Five new wells drilled and in various stages of completion as of August 1, 2014 + Three we
Slide 23: Fairway is in the Heart of the Tier 1 Zone
Fairway is in the Heart of the “Tier 1” Zone * Tier 1 is highest prospectivity acreage, as by several geologic properties, including: Original oil in place (O01P) ~Kerogen content “Thermal maturity Porosity Brittle mineral fraction (fracability, low lay content) * Geologic maps based on: ~>70,000 lo
Slide 24: Bootleg Canyon (Proved and Producing)
Bootleg Canyon (Proved and Producing) Description Vertical Well Economic Summary + Acquired April 2011 {over 5,000 acres) + Well castto the 100% $1.55m + Located in Pecos County, TX + Working loterest a + Conventional drilling play (vertical) SHG Svenveiiilerell sR + Three wells completed with seven
Slide 25: 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% $600K S$), Lotatedan Crockett County, 1%: + Working Interest in 7 wells 100% + High Btu natural gas production +) Net Revenue Interest 75% + Nine vertical gas wells compl
Slide 26: Chapman Ranch (Proved and Producing)
Chapman Ranch (Proved and Producing) Description Per Well Economics + Acquired in April 2012 (320 acres) + Woll cost to the 100% $12M + Located in Nueces County, TX + Working Interest 5% + Conventional driling play (vertical 6 Play d * Net Revenue Interest 3.75% + One well completed and on productio
Slide 27: Permian Basin Data
Permian Basin Data
Slide 28: Largest U.S. Oil Fields
Largest U.S. Oil Fields Estimated Recoverable Resource (BBOE)' ° 2s so 18 Spraberry/Wolfcamp, Eagle Ford Shale Prudhoe Bay, AK Bakken Shale Delaware Basin East Texas Basin Midway-Sunset, CA Wilmington, CA Kuparuk River, AK Kern River, CA ‘Thunder Horse, GOM, Yates, West TX Belridge South, CA Wasson,
Slide 29: Predictable Economics Deliver Predictable Outcomes
Predictable Economics Deliver Predictable Outcomes Our current focus is on yertical wells with $49 - $55 WTI Oil Price Break Even Estimated Internal Rates of Return S&P’s Estimated Break Ev,
Slide 30: Permian Dominance in Rig Count
Permian Dominance in Rig Count U.S. Well Count Lia \ | Q2 2014 BAGoHES a Bw - ta sae ‘a one - a] SiS ee Nets = tate, oes yt , fo ae Source: Baker Hughes Incorporated
Slide 31: Vertical Activity Growing, Horizontal Activity Less Than Half
Vertical Activity Growing, Horizontal Activity Less Than Half Counties: Andrews, Borden, Crockett, Dawson, Ector, Gaines, Glasscock, Howard, Irion, Martin, ‘Midland, Mitchell, Reagan, Schleicher, Scurry, Sterling, Tom Green and Upton 350 58% Vertical Rigs \ 96% Vertical Rigs 300 250 = 42% Horizontal
Slide 32: VYEY Horizontal Decision Metrics
VYEY Horizontal Decision Metrics (gest cost curve Drives choice) ae PHASE | Exploratory (Defining Reservoir Parameters) PHASE Il Research & Development (Reasonable Certainty, Reliable Technology) PHASE III Exploitation & Optimization (Consistency, Repestabilty, Economically Preducible) Deploy capita
Slide 33: Depth in Feet
Depth in Feet _— 2400 - 2900 - a100 - cscocune +0900 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) ‘Most Permian companies have been exploiting “Wolfcamp” or "Clear Fork” plays u
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