Pegasi Energy Resources Corporation
Pegasi Energy Resources — Investor Presentation (May 2013)
24 slides from Pegasi Energy Resources's investor presentation, May 17, 2013
Slide 1: Pegasi Energy Resources Corporation Investor Relations Presentation May 2013
PEGASI ENERGY RESOURCES CORPORATION Pioneering the Development of Unconventional Oil Reservoirs in East Texas with Horizontal Drilling and Multi-Stage Fracturing Investor Relations Presentation May 2013
Slide 2: Forward Looking Statements
Forward Looking Statements ‘= The SEC requires oll and gas companies, in their flings with the SEC, to disclose proved reserves which are those quantities of oil and gas, which, by analysis of geological, geophysical and engineering data, can be estimated with reasonable certainty to be economically
Slide 3: Overview (1 of 2)
Overview (1 of 2) Pegasi Energy Resources Corporation ("Pegasi’) is a US public company, regulated by the SEC and traded on the Over the Counter market (OTCBB symbol: PGS!) Pegasi is a small independent oil & gas exploration and production company active in the Rodessa oilfield of East Texas The Com
Slide 4: Overview (2 of 2)
Overview (2 of 2) + In its Cornerstone Project, Pegasi is targeting deeper oil bearing formations whose low permeability has limited their development by conventional vertical well technology + Pegasi proposes to develop these oil bearing formations by applying the horizontal drilling and multi-stag
Slide 5: Pegasi's Management Team
Pegasi’s Management Team Michael H. Neufeld — President & CEO Mr. Neufeld, 62, worked as a professional Geologist in the Gulf Coast, Louisiana and Texas for Pennzoil * ‘Company, American Resources Company, Hunt Oil Company and as Senior Exploration Geologist and Vice-President of Exploration for Cro
Slide 6: ‘hate plays Basing
‘hate plays Basing Current pays popey, ‘Upaite: May 9,201"
Slide 7: The Cornerstone Project (1 of 2)
The Cornerstone Project (1 of 2) * The Rodessa field has produced over 400 million barrels of oil and 2.3 trillion cubic feet of gas from a number of shallow oil and gas producing horizons known as the Rodessa, Pettit and Travis Peak formations. * Ownership has never been significantly consolidated
Slide 8: The Cornerstone Project (2 of 2)
The Cornerstone Project (2 of 2) * Drilling activity in the CVL and the Haynesville formations to the south of the Comerstone area has successfully employed dynamic horizontal and multistage fracking technology resulting in major increases in proven natural gas reserves. = Pegasi has access to well
Slide 9: Petroleum Geology of the Bossier/Cotton Valley Lime Formations
Petroleum Geology of the Bossier/Cotton Valley Lime Formations Source: Pegasi and the Railroad ‘Commission of Texas
Slide 10: Comparison of Petroleum Geology of Bossier/Cotton Valley Lime and Bakken Formations
Comparison of Petroleum Geology of Bossier/Cotton Valley Lime ) ’ and Bakken Formations Comparison of typical Bakken log with typical Cornerstone Log Bakken well Pegasi well Total interval of reservoir 100 feet 1,000 feet and source 9,700 feet to 9,800 feet 9,500 to 10,500 feet Total Reservoir 30 fe
Slide 11: Petroleum Geology of Bossier/Cotton Valley Lime Formation
Petroleum Geology of Bossier/Cotton Valley Lime Formation Typical Cornerstone Well Log for the Bossier/Cotton Valley Lime « We have 5 potential targets for horizontal wells: Cotton Valley Lime Bossier D Sandstone Bossier C Sandstone Bossier B Sandstone Bossier A Sandstone 10,150 feet 9,860 feet 9,80
Slide 12: Projected Morse #1-H Monthly Production
Projected Morse #1-H Monthly Production The steep hyperbolic phase of decline has ceased and production is now expected to continue to decline modestly Monthly Production (BBLS/BOE) 8,000 7,000 6,000 5,000 "Forecast Gas Production (BOE) ‘= Forecast Oil Production (BBLS). = Actual Gas Production (BOE
Slide 13: Morse #1-H Results to Date
Morse #1-H Results to Date * Beta well: Morse #1-H was the first horizontal well to target the Bossier Oil Sands in the Rodessa Field and confirmed several important assumptions for the future development strategy = The lateral wellbore was drilled and completed without any problems + Proved Lowest
Slide 14: Morse #1-H Production Compares Favorably to the Bakken
Despite the limitations of the test well’s design, the Morse #1-H’s ) \ Production Compares favorably to that of the Bakken Bakken and Morse #1-H Initial Production Comparison Bossier Bakken Shale Sandstone Morse # 1-H Slick Water Treatment Hybrid Treatment —X-Link Gel wi X-Link Gel Category Pert &
Slide 15: Fully-Fracked Future Wells Likely to Match / Exceed Bakken
Fully-Fracked Future Wells Likely to Match / Exceed Bakken Bakken Horizontal Fracked Well 25-stage fractures in the Bossier sandstone have the ~~ Bac cme potential to out- ants ‘produce wells in the Bakken 60p00 2 soom Average 49300 3 15,600 2 4opo0 é 3 Average 29,100 g 2000 20900 10900 Ww Slick Wat
Slide 16: Horizontal Well Economics Assumptions for 4,000 ft model
Horizontal Well Economics Assumptions for 4,000 ft model development well Lateral Length Fracture Stimulation Stages. Well Driling & Completion Cost Base Case Average Dally First Month Production: Production Dectine 1% year: Production Decline 2" year: Production Dectine 3" year: Production Decline
Slide 17: Horizontal Well Economics
Horizontal Well Economics The projected IRR of the 25-stage model development well is. \ robust across a range of oil prices 180% 4,000 ft lateral with 25 Stages 160% Superior: 133% Morse Productivity 140% = 120% Base Case: Morse Productivity Rate per Frack Inferior: 66% Morse Productivity ‘$90 $100
Slide 18: Horizontal Well Economics
Horizontal Well Economics Similarly the projected NPV of the 4,000 ft, 25 stage model \ development well are significantly better than for the shorter well co $50.0 $450 $400 $35.0 $30.0 $250 $200 $150 $100 $50 $00 4,000 ft lateral with 25 Stages dill $110 $120 ‘Bil Price (SIBBL) inferior (66% Morse
Slide 19: Our Investment Proposition
Our Investment Proposition * Proven management team that has drilled over 300 wells in Texas and Louisiana * Proven Technology - Horizontal drilling is now more widely used than vertical drilling in the US. The experiences in the Bakken field demonstrates the impact it can have on production rates w
Slide 20: Other Activities and Outlook for 2013 Date
\ Other Activities and Outlook for 2013 Date * Rodessa (Norbord-Travis Peak): We recently successfully completed the Haggard A vertical well in the Travis Peak formation. The Haggard A is Pegasi's third well to successfully produce from this zone and confirms the opportunity for further development
Slide 21: Appendix
Appendix
Slide 22: Estimated Reserves and Contingent Resources
Estimated Reserves and Contingent Resources ESTIMATED RESERVES AS AT 31 DEC 2012 PEGASI ENERGY: CASS AND MARION COUNTIES, TEXAS. CATEGORY PERCENTAGE on GAS ——_GASTOOIL CONV, % 80 MMCF___ 6,000 cuFT- 1.80) ‘TOTAL PROVED, PROBABLE AND POSSIBLE RESERVES AS OF 31 DEC 2012 BOE (1 ESTIMATED CONTINGENT RES
Slide 23: Stock Price History
Stock Price History PGSI:OB Closing Price na Jan 08: Drilled Harris # 2 Mar 12: aul Completed Haggard A 2s waa Completed wonesen ae Tan compiled 4 Haggard B | v -_ Vv $0.50 Pipelines Feb 08: Drilled Childers # 2 soo PS PS, FSF pF oS e PF ESOP HK rw, PP? e ARLE LLL SE Ss ss SSS ii Sas é 23
Slide 24: Gross, Net Operated and Net Leased Acreage
Gross, Net Operated and Net Leased Acreage Lease Position as of April 30" 2013 ° Net Acres Leased Net Acres Leased Net Acres Operated Net Acres Unleased Gross Acres byPegasi by Drilling Partners by Pegasi Leased by Others Source: Pegasi 24
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