Glori Energy Inc · OTC:GLRI
Glori Energy — Robert W. Baird & Co. Industrials Conference 2014
44 slides from Glori Energy's conference presentation, Nov 12, 2014
Slide 1: Investor Presentation – Robert W. Baird Industrials Conference
Investor Presentation Stuart Page, CEO Robert W. Baird & Co. Industrials Conference Chicago, IL November 2014 More Oil From Yesterday’s Wells
Slide 2: Forward Looking Statements
Forward Looking Statements 1 Any statements contained herein which are not statements of historical fact may be deemed to be forward - looking statements, including, without limitation, statements identified by or containing words like “believes,” “expects,” “anticipates,” “intends,” “estimates,” “p
Slide 3: Company Overview: Synergistic Dual Business Model
Company Overview: Synergistic Dual Business Model 2 Glori Energy is an oil production and biotechnology company that deploys its proven breakthrough AERO TM technology to recover more oil from conventional oil fields at a lower cost. Oil & Gas Segment : Acquires and operates mature conventional oilf
Slide 4: Summary Highlights
Proven & Proprietary Technology Compelling Return and Unit Economics Attractive Acquisition Opportunities More Oil From Yesterday’s Wells Summary Highlights 3 Experienced Management, Board, Advisors & Investors Depressed Oil Price Provides Significant Opportunities
Slide 5: Glori Energy Can Be Successful in a Lower Oil Price Market
AERO is Effective in Low Price Commodity Environment 4 Acquiring mature producing oil properties: • Lower prices induce oil and gas companies to sell mature “non - core” properties to raise capital, which increases our acquisition opportunities • L ower price deck potentially reduces acquisition cos
Slide 6: Activated Environment for Recovery of Oil (AERO) Technology
ACTIVATED ENVIRONMENT FOR RECOVERY OF OIL (AERO) TECHNOLOGY 5
Slide 7: Technology Overview
6 Technology Overview Glori’s AERO System is the result of decades of lab research and field deployments by Glori and its research collaborators, primarily Statoil S.A. of Norway All key Intellectual Property is owned or controlled by Glori and is protected through 2032 The AERO System is a highly e
Slide 8: How it Works
7 How it Works Micro Injection well with AERO Production well Bacteria Grows on Residual Oil • Nutrients enable resident bacteria to grow on the residual oil, developing a biomass on the oil/water interface Trapped oil is freed • Growth of microbiology on the residual oil disrupts the balance of for
Slide 9: Implementation of AERO Technology
Implementation of AERO TM Technology 8 Post - AERO™ Technology Injection well with AERO™ technology New water pathways Newly dislodged oil New water flow Sand grains Microbial nutrients Source : Company data. Pre - AERO™ Technology Sand grains Trapped oil Water pathway Injection well Production Outp
Slide 10: Model Return Potential
Model Return Potential 9 A Pre - AERO Production B Projected Production without AERO C Incremental Production due to AERO Today Time Economic Limit Barrels of Oil per Day Log Scale A B C AERO Start Projected Original Oi l Projected Additional Oil Post - AERO Start Comparative Production: Production
Slide 11: Sample AERO Technology Implementation Data
10 -- 50 100 150 200 250 -240 -210 -180 -150 -120 -90 -60 -30 0 30 60 90 120 150 180 210 Production (boe/d) Days Relative to AERO Start Oil Production without AERO Oil Production with Aero Daily Production Uplift of ~90% AERO Start AERO Stop Peak Production Rate Source: Company data. Sample AERO Tec
Slide 12: Biology Impact is Dynamic
Biology Impact is Dynamic 11 Microbial Enhanced Oil Recovery Response from single well - pair flood pilot 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Month Production (Bopd) Bopd Blue = Start MEOR Red = Stop MEOR o Production m^3
Slide 13: AERO Profit Margin Beats Traditional Methods
AERO Profit Margin Beats Traditional Methods 12 (1) Source : Company data. At $80 oil prices and $6 cost per bbl , AERO profit margin is $74 Low CAPEX (typical pilot expenditure $100k) + Low OPEX (ultra low concentration nutrients) = Low Risk Biology is Low Cost (1) Estimated Average Production Cost
Slide 14: Technology & Statoil Collaboration Recognized by the Industry
Technology & Statoil Collaboration 13 Recognized by the Industry Glori Energy Ownership of Jointly Developed IP Statoil ASA ( OB: STL) International public energy company with ~$71 billion market capitalization In the Norne field, more than 30 million barrels of oil attributed to application of the
Slide 15: Better Enhanced Oil Recovery
Better Enhanced Oil Recovery 14 As much as 2/3 of discovered oil remains in the reservoir after using today’s conventional oil and gas development technologies due to the physics of fluid flow, leaving 2.4 trillion barrels of unrecovered reserves (1) The AERO System can potentially recover an additi
Slide 16: Oil & Gas Segment
ENERGY olori OIL & GAS SEGMENT
Slide 17: Coke and Quitman Fields
Coke and Quitman Fields Glori has acquired, and will continue to acquire, mature oil fields in the United States • Developing these properties is the primary business driver but will also help accelerate the industry adoption of the AERO technology Glori’s first significant oil property was the Coke
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 19: Financial Strategy
Financial Strategy 18 Deploy capital to acquire mostly producing oil assets to be enhanced by implementing Glori’s AERO technology Leverage acquisitions with debt secured by proved reserves and supported by historical cash flow Benefit from expanding production base, low cost of AERO and growth in r
Slide 20: Q3 2014 Income Statement Summary
3 Q14 Income Statement Summary 19 * Please see Adjusted EBITDA reconciliation at the end of this presentation. % Change (unaudited, in 000s) 30-Sep-13 30-Sep-14 Total revenues 775 5,458 604% Operating Expenses 1,054 3,745 255% Science and technology 386 449 16% SG&A 934 1,572 68% Total operating exp
Slide 21: Summary Balance Sheet
Summary Balance Sheet 20 (in millions) September 30, 2014 Cash 32.7$ Debt 20.4 Net debt (12.3) Stockholders' equity 52.8 Total assets 78.9$ Debt/Cap 28%
Slide 22: Illustrative Potential Build-up From Acquisitions
Illustrative Potential Build - up From Acquisitions (1) 21 Acquisition Build - up Terms / Assumptions _____________________ (1) Illustrates potential financial outcome assuming three acquisitions per year of 500 Bls per day spaced 4 months apart. ($ in millions) $27 $74 $124 $171 $215 $17 $47 $81 $1
Slide 23: Investment Highlights
Investment Highlights 22 Compelling Return and Unit Economics ▪ Demonstrated >60% daily production growth after 6 months of AERO TM implementation ▪ Enhanced Oil Recovery (EOR) technology with estimated recovery of an additional 9 - 12% of the Original Oil in Place (OOIP) ▪ Potential for increase in
Slide 24: Appendices
APPENDICES Board of Directors & Management Intellectual P roperty & Awards Field Performance 23
Slide 25: Management & Board of Directors
APPENDIX Management & Board of Directors
Slide 26: Experienced Management Team
Experienced Management Team 25 STUART PAGE CEO MBA Harvard Business School BA, MA, Oxford University VICTOR PEREZ CFO MBA University of Texas at Arlington BA Economics, Virginia Tech TOM HOLLAND SVP Acquisitions & Production BBA Petroleum Land Management, University of Oklahoma MICHAEL PAVIA CTO PhD
Slide 27: Accomplished Board of Directors
Accomplished Board of Directors 26 Mark P uckett Former President, Chevron Energy Technology Thomas Hicks Chairman and CEO Ganesh Kishore Former Chief Biotechnology Officer (DuPont) Former Chief Biotechnologist (Monsanto) John Clarke Former EVP and CFO (Dynegy) Former Chairman and CEO (NATCO) Mark C
Slide 28: Intellectual Property & Awards
APPENDIX Intellectual Property & Awards
Slide 29: Strong Intellectual Property Protection
Key AERO Patent – Systems and Methods of Microbial Enhanced Oil Recovery Received notice of allowance July 23, 2014 Owned by Glori. License to Statoil Inventors: Glori & Statoil personnel Microbial Enhanced Oil Recovery Delivery Systems and Methods (Capillary Delivery ), US Patent 8,783,345 issued J
Slide 30: AERO Has Received Multiple Awards For Innovation
AERO Has Received Multiple Awards F or Innovation 29
Slide 31: Industry commentary on microbial EOR
“ Spectacular results have been recorded by Statoil at its Norne Field in the Norwegian North Sea. Following 25 years of research and development (R&D) and deployment, the recovery factor at Norne is approaching 55%. More than 30 MMbbl of additional produced oil has been attributed to the applied mi
Slide 32: Field Performance
APPENDIX Field Performance 31
Slide 33: Glori In The Field In Brazil
Glori In The Field In Brazil 32
Slide 34: AERO Implementation Data – Project A
AERO Implementation Data 33 -20% 30% 80% 130% 180% 230% 280% 330% 380% -1000 -800 -600 -400 -200 0 200 400 600 800 1000 Percent Uplift Days Relative to AERO Start Linear Regression Applied to Data Before AERO and During AERO Implementation Project A Linear (Pre-AERO) Linear (AERO Active) Percent upl
Slide 35: AERO Implementation Data – Project B
AERO Implementation Data 34 -20% -10% 0% 10% 20% 30% 40% 50% 60% -160 -110 -60 -10 40 90 140 190 Percent Uplift Days Relative to AERO Start Linear Regression Applied to Data During AERO Implementation Project B Data Full Field: AERO Applied to Only =20% of Field Linear (AERO Active) Percent uplift,
Slide 36: AERO Implementation Data – Project C
AERO Implementation Data 35 -20% 0% 20% 40% 60% 80% 100% 120% -250 -200 -150 -100 -50 0 50 100 150 200 250 Percent Uplift Days Relative to AERO Start Linear Regression Applied to Data Before AERO and During AERO Implementation Project C Linear (Pre-AERO) Linear (AERO Active) Percent uplift measured
Slide 37: AERO Implementation Data – Project D
AERO Implementation Data 36 -20% 0% 20% 40% 60% 80% 100% 120% -250 -150 -50 50 150 250 350 450 550 650 750 Percent Uplift Days Relative to AERO Start Linear Regression Applied to Data Before AERO and During AERO Implementation Project D Linear (AERO Active) Linear (Series1) Percent uplift measured a
Slide 38: AERO Implementation Data – Project E
AERO Implementation Data 37 0% 50% 100% 150% 200% 250% 300% 350% 400% -1000 -800 -600 -400 -200 0 200 400 600 Percent Uplift Days Relative to AERO Start Linear Regression Applied to Data Before AERO and During AERO Implementation Project E Linear (Pre-AERO) Linear (AERO Active) Percent uplift measur
Slide 39: AERO Implementation Data – Project F
AERO Implementation Data 38 -20% 0% 20% 40% 60% 80% 100% 120% -400 -200 0 200 400 600 800 Percent Uplift Days Relative to AERO Start Linear Regression Applied to Data Before AERO and During AERO Implementation Project F Data Full Field: AERO Applied to Only =10% of Field Linear (Pre-AERO) Linear (AE
Slide 40: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA 39 (in 000s) 2013 2014 Net loss (825)$ (356)$ Taxes on income - 51 Gain on change in fair value of warrants (1,183) - Gain on commodity derivatives - (2,027) Interest expense 232 705 Depreciation, depletion and amortization 167 1,325 Adjusted EBITDA (1,609)$ (302)$
Slide 41: Non-GAAP Financial Information
Non - GAAP Financial Information We use both GAAP and certain non - GAAP financial measures to assess performance . Generally, a non - GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not norm
Slide 42: Glossary of Terms
Glossary of Terms 41 Enhanced Oil Recovery (EOR) ~ A stage of hydrocarbon production that involves use of sophisticated techniques to recover more oil than would be possible by utilizing only primary production or waterflooding . EOR encompasses a range of techniques used to restore formation pressu
Slide 43: E&P Innovation Trends: The Path to Mass Adoption
E&P Innovation Trends: The Path to Mass Adoption 1972 : First CO 2 EOR project initiated in West Texas 2001: DNR pursues CO 2 EOR growth strategy via acquisition of oil fields 1989: Oryx Energy significantly expands horizontal drilling activities in South Texas region 1920: Horizontal drilling first
Slide 44: Investor Relations Contacts
Investor Relations Counsel: Lisa Elliott/ Anne Pearson Dennard - Lascar Associates 713 - 529 - 6600 Thank you. Victor M. Perez Chief Financial Officer 713 - 237 - 8880 vperez@glorienergy.com 43
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