Victory Oilfield Tech, Inc. · OTC:VYEY
Victory Oilfield Tech — Victory Energy — Investor Presentation (June 2014)
24 slides from Victory Oilfield Tech's investor presentation, Jun 13, 2014
Slide 1: Victory Energy Corporation Investor Presentation June 2014
) VICTORY ENERGY CORPORATION Investor Presentation 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 21 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 develo
Slide 3: Company Profile
Company Profile STOCK TICKER (OTCQX) ! Share Price $0.35 . Markettap Sam Victory Energy Corporation Garonne au + High growth oil and gas E&P focused on creating shareholder value through the shares )aid Sy insiiers uEanu acquisition and development of assets Float? 21.0M in the World Class Permian B
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. + Locate multi-well drilling opportunities that provide three or more years of drilling inventory, + Focus acquisitions on lower r
Slide 6: Established Capital Sources for Sustained Growth
Established Capital Sources for Sustained Growth AURORA ENERGY PARTNERS (50/50 owed by Vietory and Navitus) BANKING AND OTHER RELATIONSHIPS Financial relationship established in October 2011 Members include sophisticated investors & boutique private equity $10 M private placement now underway (Navit
Slide 7: 2014 Strategic Financial Deliverables
2014 Strategic Financial Deliverables © Deploy $30 M of capital towards E&P development and acquisitions INCREASE + Create re ah som in proved atic , + Target longer-life, quality prospects with improved PUD opportunity RESERVES ‘ ‘ + Expand strategic relationships and geographical reach * Focus on
Slide 8: 2013 Success Validates Capex Model
2013 Success Validates Capex Model Mineral & Drilling Investments Proved Reserves (PV-10)' ‘Szssoa000 $2,278,032 $3,000,000 $2,422,100 $2,500,000 $2,000,000 Fit Pomen Acision tntarch 201, Sp amar 201. nee aes Sesto $1,212,899 pi $1,500,000 $1,000,000 _—. $081,080 $1,083,520, $589,295 = $1,000,000 $s
Slide 9: 2013 Permian Oil Focus is Accelerating Results
2013 Permian Oil Focus is Accelerating Results % Revenue from Oil Oil & Gas Revenue 45.0% 41.4% $800,000 $735,413 40.0% $700.00 aad $600,000 30.0% $500}000 $491,558 25.0% 20.0% 18.0% $400,000 $305,180 $326,384 15.0% ii 10.0% 6.5% $200,000 il lj 5.0% $100,000 5m 0.0% | | : 2010 = 2011S 2012, 2013 201
Slide 10: Why Focus on the Permian Basin?
Why Focus on the Permian Basin? we z "| + The play is the largest oil field in the U.S. (Baker-Hughes rig count & recoverable resources). * Predictable vertical well economics deliver break-even points at less than $55 per bbl. (Midland Basin). TEXAS * Increased use of enhanced-recovery practices ha
Slide 11: As Learning Curve Improves, Horizontal Activity Increases
As Learning Curve Improves, Horizontal Activity Increases Counties: Andrews, Borden, Crockett, Dawson, Ector, Gaines, Glasscock, Howard, Irion, Martin, Midland, Mitchell, Reagan, Schleicher, Scurry, Sterling, Tom Green ond Upton 350 96% Vertical Rigs 68% Vertical Rigs “7 \ 250 200 . Vertical Rigs 15
Slide 12: Horizontal Decision Metrics (Best Cost Curve Drives Choice)
Horizontal Decision Metrics (Best Cost Curve Drives Choice) PHASE IIL xplokation & Optimization onsistency, Repeatabilty Economically Producibla) tow PHASE I Exploratory Defining Reservoir Parameter PHASE I Research & Development Reliable Technology) Deploy capital in the sweet spot Finding and Deve
Slide 13: Opportunity for Secondary Development
Opportunity for Secondary Developme 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) Depth in Feet 1400 - 7960 ~ 70000 ronan | r1400- ans ‘Clear Fork Upper Sprabery Te LowerSpraberr
Slide 14: Acquisition and Development Plan
Acquisition and Development Plan 1, Drill and complete available development well locations on current high-value properties 2. Acquire producing properties in the Midland and Central basins with * Over 12 months of Sc: production history + $125,000 to $200,000 of monthly cash-flow * Additional upsi
Slide 15: Lightnin' Property
Lightnin’ Property Adding Value Through Disciplined Development Acquisition & Disposition Details Acquired March 2012 (640 gross acres) for $480,256 Cumulative Capex of $2,075,074 Gross cumulative cash flows of $461,918 Sold June 2014 for $4,021,400 63% internal rate of return (IRR) 15
Slide 16: 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 17: Fairway Economic Plan & Assessment
Fairway Economic Plan & Assessment The company currently 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 op
Slide 18: Fairway is in the Heart of the "Tier 1" Zone
Fairway is in the Heart of the “Tier 1” Zone ‘© Pioneer Wolfeamp 8 well Wolfcamp 8 depth contour Source: Pioneer 2013, 30. Report Tier 1 fs highest prospectivity acreage, as determined by several geologic properties, including: Original oil in place (OO1P) Kerogen content Thermal maturity Porosity B
Slide 19: Fairway Impact on the Company
Fairway Impact on the Company Fairway Impact on Operations Break Even Based on Projected , Esta -_ su20 Oil/Gas Mix vs 70% 150 om $00 : * s @a2013 @12014 Q22014 32014 42014 [aa nism) (qcmme joraum) GAGE % Oil vs. % Gas Fairway Impact on Quarterly Revenue 100% suaisess 1% $065,529 ai $536,981, 25% Ph
Slide 20: Bootleg Canyon (Proved and Producing)
Bootleg Cany n (Proved and Producing) Description * Acquired April 2011 (over 5,000 acres) * Located in Pecos County, TX * Conventional drilling play (vertical) * Three wells completed with seven remaining 2 oil wells with EUR of 187,240 BO 1 gas well flowing to sales with daily flow at 475 mef 188,
Slide 21: Adams Baggett Gas Field (Proved and Producing)
Adams Baggett Gas Field (Proved and Producing) Description * Acquired 2008 (180 acres) * Located in Crockett County, TX + High Btu natural gas production * Nine vertical gas wells completed and on production with zero remaining locations available * Formation focus ~ Canyon Sandstone (4,300-4,900')
Slide 22: Experienced E&P Management
Experienced E&P Management Kenneth Hill (CEO) + Served s Victory’sCOO from an. 2011 Jan 2012 + 21 years profesionalexperence seven a EAP. + Previously hed ties of interim CEO, VP of Operations and VP Investor Relations with another publicly traded ERP company. + Member ofthe fist 20 employees at Del
Slide 23: 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 24: 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 2