1 / 26

Investor Presentation – July 2011

Investor Presentation – July 2011. Safe Harbor Statement.

oshin
Télécharger la présentation

Investor Presentation – July 2011

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Investor Presentation – July 2011

  2. Safe Harbor Statement MATTERS DISCUSSED IN THIS PRESENTATION CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. WHEN USED IN THIS DOCUMENT, THE WORDS "ANTICIPATE," "BELIEVE," "ESTIMATE," "MAY," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS, UNCERTAINTIES, ASSUMPTIONS, AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED, EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO, RISKS AND UNCERTAINTIES ASSOCIATED WITH THE IMPACT OF ECONOMIC, COMPETITIVE AND OTHER FACTORS AFFECTING THE COMPANY AND ITS OPERATIONS, MARKETS, PRODUCTS AND CUSTOMERS, AND OTHER FACTORS DETAILED IN PERIODIC REPORTS FILED BY THE COMPANY WITH THE SEC. Page 2

  3. Oil Industry Overview • Company Overview • Oil Price Trends • Overview of Oil and Gas Projects • Oil and Gas AQUISITION Model • Enhanced Recovery Techniques • Saltwater Disposal Wells • Saltwater Disposal Business Model Page 3

  4. Oil Industry Overview • A combination of increased global demand for oil, as well as the threat of potential supply disruptions has FORCED the U.S. to turn its attention to domestic sources of oil. • According to the Association for the Study of Peak Oil and Gas, last year, the U.S. was the largest contributor to the increase in global oil supplies, and is on track to increase domestic production by 25% by the second half of the decade. • In 2010, domestic production of crude oil and related liquids rose 3% to an average of 7.5 million barrels/day. • The rise enabled a 2% drop in U.S. oil imports to 9.5 million barrels/day (1). • Increasing domestic production has been made possible by small and mid-sized companies, such as XTOG, that have applied a variety of new technologies to onshore oil reserves. • New technologies, such as hydraulic fracturing and horizontal drilling, have enabled the U.S. to open up new resources often overlooked. • The number of onshore oil-directed rigs recently reached 818 its highest level since 1987(2). U.S. Oil Supply in December 2010 (million barrels per day) Source: U.S. Energy Information Administration OTCQB:XTOG Page 4 Page 4

  5. Company Overview • Xtreme Oil & Gas, Inc. (XTOG) is a Dallas-based independent energy company engaged in the acquisition, development and production of oil and gas properties in the U.S. XTOG’s interests are located in Texas, Oklahoma and Kansas. XTOG also has an industry parallel saltwater disposal business. • XTOG has been successful and believes that it can acquire additional distressed properties and reserves, including properties with older-functioning wells, abandoned wells and properties that were previously in production or adjacent to producing properties that are now operating with little to no production and can be redeveloped for profitable operation using enhanced recovery techniques. • As of May 31, 2011 estimated total reserves in all of the Company’s (6) properties – 225 Million Barrels of ORIGINAL OIL IN PLACE(3). • Recoverable Reserves on West Thrifty and Smoky Hill IS ESTIMATED TO BE 14.7 Million Barrels of oil(3). • Out of the total 14.7 million barrels, the Company’s West Thrifty property IS TO PRODUCE 4.5 million barrels FROM RECOVERY. • XTOG is currently completing our first LICENSED COMMERCIAL saltwater disposal well THAT WILL BE GERNERATING REVUNUE 3Q 2011. • $8,000,000 HAS BEEN Invested to date ON THE PROJECTS LISTED BELOW OTCQB:XTOG Page 5 Page 5

  6. Oil Price Trends • Global demand for oil and the threat of potential supply disruptions has helped to increase the price of oil. • Price has gone up significantly and is back to pre-recession highs. West Texas Intermediate Crude Oil (WTI) Prices Xtreme has positive operating margin when prices are above ~$15 per barrel OTCQB:XTOG Page 6

  7. Overview of Oil & Gas Projects • Management has built a portfolio of oil and gas properties with a history of production and strong reserve potential. • Properties have been acquired based on industry relationships. OTCQB:XTOG Page 7

  8. Oil and Gas AQUISITION Model • Property Criteria • 100% Working Interest with 75% Net Revenue Interest • Secondary recovery and/or surrounding production • Reserves to achieve 300 BOPD (Barrels of Oil Per Day) production for five years • Acquisition Approach • Identified through extensive contacts • Seek properties with business problems and/or inexperienced operators • Projected Economic Cost • Reserves acquisition costs = $2 - $8 per barrel • Drilling and completion = $250,000 - $2 million per well • Breakeven = Less than 12 months OTCQB:XTOG Page 8

  9. Enhanced Recovery Techniques • XTOG focuses on properties with production history and will employ two methods of mineral recovery that helps it unlock remaining oil reserves that were left in place. • Waterflooding and Chemical Treatment • Waterflooding is a method of improved recovery in which water is injected into a reservoir to remove oil that has been left behind. • Surfactants may be used to separate the oil from the porous sand and rock formations in which oil is trapped. • Polymers are used to seal off regions that produced their oil to force water pressure to other regions for additional oil recovery. • Horizontal Drilling with Proper Hydraulic Fracturing • Horizontal drilling is deviating the well bore from the vertical plane to intersect the reservoir at the entry point with a near-horizontal inclination. • Horizontal drilling exposes significantly more reservoir rock to the well bore than would be the case with a conventional vertical well. • Hydraulic Fracturing forces high pressure fluids in the wellbore causing the rock formations to fracture creating significant additional surface area from which to drain reserves(7). • Horizontal Drilling and Hydraulic Fracturing can produce 2.5x to 7x the rate and reserves of vertical wells(8). OTCQB:XTOG Page 9

  10. Saltwater Disposal Wells • In addition to its oil and gas projects, XTOG plans to drill and operate commercial Saltwater Disposal Wells (SWD) as a complimentary line of business. • Oil and Gas wells produce large quantities of saltwater that must be trucked and disposed of, typically at a cost to the producer. • Xtreme intends to strategically position its SWD wells local to producers and truckers alike and will offer disposal services to these groups lowering their costs. • Xtreme expects to have three wells (of various sizes) operating by 2014 with total capacity of 100,000 barrels per day. • Capital-Expenditure to build a 15-25,000 barrel/day well is less than $2.5 million. • A 15,000 barrel/day well will generate over $7 million in annual revenues. • Each well has a 30 year lifecycle; breakeven in less than one year. • Wells are generally not affected by movements in oil prices and are an attractive play to diversify income stream. • In addition, Xtreme anticipates a 1-2% oil cut from every barrel disposed which it can sell at full market value with no Royalty. OTCQB:XTOG Page 10

  11. Saltwater Disposal Business Model • Property Criteria • Highway access, commercial zone, 10 mile radius production • Volume requirements rising due to horizontal drilling and fracturing • Five acre surface lease within seven miles of 25,000 Bbl/day disposal need • Major road access to accept tankers every 10 minutes • Identification Approach • Current disposal customers • Drilling permits filed with commission • Economics • Drilling and Completion $1 - $3 Million per 20,000 bbl/day Well • 30 year lifecycle, breakeven = less than one year • High margins and cash flow • Projected Results • 15,000 barrels per day will generate additional $7 M per year in revenue OTCQB:XTOG Page 11

  12. West Texas Properties • Oklahoma Properties • Kansas Property • Oklahoma Saltwater Disposal Well Page 12

  13. West Texas Properties • Xtreme operates the leases shown below in West Texas. The Company plans to conduct reworking and drilling to INCREASE existing production. • West Thrifty Unit – Brown County, Texas: • 8 Million barrels produced on primary production by Conoco and Hess (9) • 4.5 million barrels of estimated recoverable oil in Fry Sands Formation (10) • 16 Million barrels of OOIP(5) • 1,272 acres of land. • Room for 22 5 Well patterns producing ~50 barrels /day per pattern • Potential – 22 Patterns X 50 BOPD = 1,100 BOPD • 53 wells on the property, all drilled ready to produce • Xtreme operates and owns 90% of the working interest of the Unit • Infield developmental rework and drilling • Quita Field – Brown County, Texas: • 600,000 barrels of company estimated recoverable oil Ellenberger Formation • 400 acres of land • 10 wells on the property, all drilled ready to produce • Xtreme operates and owns 97% of the working interest • Production began April 2008 and has recovered several thousand barrels of oil • Ellenberger area production 245MM BO, 5.5 TCF and 415 MMBNGL(5) • Pennsylvanian/Caddo Sandstone – Brown County, Texas: • 100,000 barrels of estimated recoverable oil • Internal to West Thrifty property • Xtreme operates and owns 100% of the working interest of the Unit • Surrounding areas Produced 1.4 BPO, 1.6 TCF and 77 MMBNGL (5) • Marble Falls – Brown County, Texas • One well producing approx. 3/4 BOPD • 20-25 feet of oil producing formation • Up to 20% Porosity and 100mD permeability • Mississippian Barnett Shale – Brown County, Texas • Area produced 34.5 BCFG through 1990 • Risk for additional producible discoveries in this play is high but potential for • additional discoveries is also significant. OTCQB:XTOG Page 13

  14. Oklahoma Properties • Xtreme owns or operates two properties in Oklahoma in the Hunton and Bromide formations. The company achieved success generating each of these prospects and drilling with advanced horizontal and proper fracturing techniques locating significant reserves in both. • Lionheart Well – Logan County, Oklahoma: • In the summer of 2009, the Company began drilling on the prospect and in January 2010 began initial production on the prospect with increases to this production in late February 2010 • Initial Production - 256 BOPD and 300/500 MCFPD • 790,000 barrels of estimated recoverable oil reserves(4) • 1.1 Bcf of estimated recoverable gas reserves • 160 acres of land. • Xtreme has recently successfully completed drilling one vertical well with five horizontal extensions in the property • Xtreme is the operator of this property • Current Status – Damaged by vendor who admitted NEGLIGENCE to the State Court in Logan County. Our Lawsuit is progressing to settlement or trial in November. • Oil Creek #1-19 property – McClain County, Oklahoma: • 200,000 +barrels of estimated recoverable oil reserves(11) • 80 acres of land • One well on the property, drilled and producing • Xtreme owns 10% of the working interest of the Unit • This well has produced $2 Million in revenues in two years • Xtreme receivable - $215,000 OTCQB:XTOG Page 14

  15. Smoky Hill Project, Kansas • Xtreme is a Working Interest owner (a maximum of 50%) in the project in Kansas. The Company plans to produce this formation utilizing horizontal drilling and advanced fracturing techniques. The new planned horizontal wellbores will be strategically placed between old wells where the reserves have not been depleted(9). • Trend that has produced 23 million barrels of oil from same formations, representing only 12% of the original oil in place. • Estimated remaining 88% of the oil (217 million barrels of oil) in the larger trend is still in place • Additional 9-15% of the reserves can be produced representing 21 million barrels of proven undeveloped oil. • Initial Potential for the vertical wells were up to 5,000 BOPD. • Xtreme Projections at a minimum 300 BOPD • 8,516 acres of land. • Infield Shallow developmental 60 - 200 wells to be drilled to depths of 3,000 feet with 3,500’ lateral extension. • Xtreme is a Working Interest owner and leasehold interests (maximum of 50%) of the Project. OTCQB:XTOG Page 15

  16. Oklahoma Saltwater Disposal Well • Xtreme has recently completed drilling a commercial salt water disposal well located south of Oklahoma City and is in the process of completing the surface equipment construction to start revenue. • Saltwater Disposal Well – Seminole County, Oklahoma: • 15,000 barrels of water per day • 6,456 feet total depth in the Arbuckle Formation WITH over 1,300 feet of usable formation • $7.0 million per year projected revenue per year • Injection Permit Received(12) • Completed Drilling and Testing • Xtreme anticipates completing before the end of 3Q11 and generating revenue 4Q11 OTCQB:XTOG Page 16

  17. Valuation • Capitalization Table • Management Team • Use of Proceeds • References Page 17

  18. Valuation November 2010, Xtreme completed a third party valuation for fund raising purposes. The results concluded the Company to have a valuation of $103 Million. (1) at the time there was app. 43,800,000 shares outstanding or $2.34 per share. OTCQB:XTOG Page 18

  19. Capitalization Table • Management is heavily invested in the success of the company. Management Team owns 54.2% of the Company. • The Company currently has 45,919,248 shares of outstanding common stock as of August 15, 2011. OTCQB:XTOG Page 19

  20. Balance Sheet Items • Accounts Payable • Total: $1,929,513 • Disputed: $ 615,000 • Due For Lionheart: $ 711,000 (Pending Lawsuit Outcome) • Salaries Payable: $ 241,500 • Current: $ 362,000 • Deposits Payable • Total: $1,373,244 • Generated from Working Interest Sales Prior to SWD Project Completion • Upon Completion of Project This Item Migrates to Net Revenue • Expected Project Completion: 60 Days post capital raise • Notes Payable • Total: $ 120,000 • Payable to Two Investors Who Are Strong Supporters of the Company OTCQB:XTOG Page 20

  21. Management Team • Willard G. McAndrew III - Chairman, Chief Executive Officer and President • 4th generation energy industry experience EXXON (NYSE: XOM) and 41 years of experience ranging from field operations to refining. • Throughout his career has owned over 100 wells in TX, OK and LA and 100 miles of gas pipeline. • Began his career in 1969, gaining experience working for Hercules Drilling Company, a subsidiary of Hercules Offshore, Inc. (NASDAQ:HERO), and later joined Exxon Corporation’s (NYSE: XOM) Refinery Distillation and Specialties division in Baton Rouge. • Former CEO and President of Millennium Fuels Corp., provider of renewable fuel source based solutions.  After filing multiple patents and creating multiple products the company was sold to a public company in the Bio-Diesel business. • Served as CEO, President and Director of Energy & Engine Technology Corp. (OTCBB: EENT), engaged in the development and marketing of power generation products for the long haul trucking industry. • Attended Louisiana State University. • Nicholas DeVito - Chief Operating Officer • Former COO of Raven Biofuels, an alternative energy development company that sought to create ethanol from waste products.   • Served as VP of Product Management and Business Development and as CEO of several subsidiaries in Tellium, Inc. a telecommunications equipment manufacturing company now a subsidiary of Zhone Technologies, Inc. (NASDAQ:ZHNE).  • Responsible for raising over $400 Million in an IPO; completing product development of optical switching line; and generating sales of $225 Million to three major communications companies. • Began his career at Bell Laboratories , a provider of solutions to deliver voice, data, and video communication services.  • Deployed three new technologies into the infrastructure, generating over $1 billion in savings. • Received a BSEE and MSEE from Columbia University and an MBA in Management from New York University. • Roger Wurtele - Chief Financial Officer • Served as CFO of Lang and Company LLC, a developer of commercial real estate projects. • Former CFO of Millennium Fuels Corp., provider of renewable fuel source based solutions. • Former VP of Finance for Phoenix Operating Company, engaged in the monitoring and remediation of oil fields. • Participated in the effort to acquire and redevelop 2,700 oil wells in five states. • Served as CFO of Energy & Engine Technology Corp. (OTCPK:EENT), engaged in the development and marketing of power generation products for the long haul trucking industry. • Serves as CFO of Alchemy Creative, Inc. (OTCPK:ALMY), engaged in the development, production, and distribution of DVDs, 3-D cartoons, online games, and derivative products. • Received a bachelor’s degree from the University of Nebraska and has been a CPA for 40 years. OTCQB:XTOG Page 21

  22. Use of Proceeds The majority of the Use of Proceeds in this capital raise are for completing drilling projects on properties we own, increasing production capacity on the SWD business, and general obligations. OTCQB:XTOG Page 22 Page 22

  23. References (1) U.S. Energy Information Administration Baker Hughes, February 2011 Geneva Rothweil, November 2010 Gregg McDonald, Senior Geologist, April 2011 Bend Arch-Fort Worth Basin Province /Assessing Undiscovered Resources of the Barnett-Paleozoic Total Petroleum System, Bend Arch-Fort Worth Basin Province, Texas Allard, J., 2000, Barnett Shale play hot in North Texas: Landman, p. 26-28, Accessed June 2002 at URL http://www.landmand.org. Ball M. M., and W. J. Perry, 1996, Bend Arch-Fort Worth Basin Province (045), in D. L. Gautier, G. L. Dolton, K. I. Takahashi, and K. L. Varnes, eds., 1995 National assessment of United States oil and gas resources –Results, methodology, and supporting data: U.S. Geological Survey Digital Data Series DDS-30, Release 2, [CD-ROM]. Bowker, K., 2002, Recent developments of the Barnett Shale play, Fort Worth Basin, in Law, B.E. and Wilson, M., eds., Innovative Gas Exploration Concepts Symposium: Rocky Mountain Association of Geologists and Petroleum Technology Transfer Council, October, 2002, Denver, CO, 16 p. Comer, J. B, 1991, Stratigraphic analysis of the Upper Devonian Woodford Formation, Permian Basin, West Texas and Southeastern New Mexico: Texas Bureau of Economic Geology Report of Investigations 201,63 p. Devon Energy Corporation, 2002, Mid-year company operations update and Barnett Shale school, June 20, 2002: Accessed August 2002 at URL www.dvn.com. Flippin, J. W., 1982, The stratigraphy, structure, and economic aspects of the Paleozoic strata in Erath County, North-Central Texas, in C. A. Martin, ed., Petroleum geology of the Fort Worth Basin and Bend Arch area: Dallas Geological Society, p. 129-155. Gautier, D. L., G. L. Dolton, K. I. Takahashi, and K. L. Varnes, K. L., eds., 1996, 1995 National assessment of United States oil and gas resources - Results, methodology, and supporting data: U.S. Geological Survey Digital Data Series DDS-30, Release 2, one CD-ROM. Grayson, R. C. and G. K. Merrill, eds., 1991, Carboniferous geology and tectonic history of the Southern Fort Worth (Foreland) Basin and Concho Platform, Texas: AAPG, 1991 Annual Convention, Dallas Geological Society Guidebook, Field Trip No. 13, 67 p. Grayson, R. C., Jr., G. K. Merrill, L. L. Lambert, and M. J. Pranter, 1991, Carboniferous geology and tectonic history of the southern Fort Worth (foreland) Basin and Concho Platform, in R. C. Grayson and G. K. Merrill, eds., Carboniferous geology and tectonic history of the Southern Fort Worth (foreland) Basin and Concho Platform, Texas: AAPG, 1991 Annual Convention, Dallas Geological Society Guidebook, Field Trip No. 13, p. 3-67. Hall, J., 2002, Barnett Shale geology, in Devon Energy Corporation, Mid-year operations update and Barnett Shale school, June 20, 2002: Accessed August 2002 at URL www.dvn.com. Henk, F., J. Breyer, and D. M. Jarvie, 2000, Lithofacies, petrology, and geochemistry of the Barnett Shale in conventional core and Barnett Shale outcrop geochemistry [abs], in L. Brogden, ed., Barnett Shale Symposium, Fort Worth Texas, Oil Information Library of Fort Worth, Texas, p. 7. Jarvie, D. M., B. L. Claxton, F. Henk, and J. T. Breyer, 2001, Oil and shale gas from the Barnett Shale, Fort Worth Basin, Texas [abs.]; AAPG Annual Meeting, Program and Abstracts, p. Al00. Jarvie, D. M., and B. L. Claxton, 2002, Barnett Shale oil and gas as an analog for other black shales [abs.]: AAPG Midcontinent Meeting, New Mexico. OTCQB:XTOG Page 23 Page 23

  24. References Kerans, C., 1988, Karst-controlled reservoir heterogeneity in Ellenburger Group carbonates of West Texas: AAPG Bulletin, v. 7, p. 1160-1183. K!ett, T. R., J. W. Schmoker, and T. S. Ahlbrandt, 2000, Assessment hierarchy and initial province ranking, Chapter AR, in U.S. Geological Survey World Energy Assessment Team, U.S. Geological Survey World Petroleum Assessment 2000 - Description and results, USGS Digital Data Series DDS-60, Version 1.0, CD-ROM, Disk one, 31 p. Kuuskraa, V. A., G. Koperna, J. W. Schmoker, and J. C. Quinn, 1998, Barnett Shale rising star in Fort Worth Basin: Oil and Gas Journal, v. 96, no. 21, p. 71-76. Lancaster, D. E., S. McKettta, and P. H. Lowry, 1993, Research findings help characterize Fort Worth Basin's Barnett Shale: Oil and Gas Journal, v. 91, p. 59-64. Magoon, L. B., and W. G. Dow, 1994, The petroleum system, in L. B. Magoon, and W. G. Dow, eds., The Petroleum system - From source to trap: AAPG Memoir 60, p. 3-24. Magoon, L. B., and J. W. Schmoker, 2000, The total petroleum system - The natural fluid network that constrains the assessment unit, Chapter PS, in U.S. Geological Survey World Energy Assessment Team, U.S. Geological Survey World Petroleum Assessment 2000 - Description and results, USGS Digital Data Series DDS-60, Version 1.0, CD-ROM, Disk one, 31 p. Mapel, W. J., R. B. Johnson, G. O. Bachman, and K. L. Varnes, 1979, Southern Mid-Continent and southern Rocky Mountains Region, in L. C. Craig, and W. C. Connor, eds., Paleotectonic investigations of the Mississippian System in the United States: Part 1 - Introduction and regional analyses of the Mississippian System: U.S. Geological Survey Professional Paper 1010, p. 161-187. Reeves, S., 2002, Gas shales - Production and potential: Conference on gas shales - Production and potential, Strategic Research Institute, June 2002, Denver, CO, 40 p. Schenk, C. J., and R. M. Pollastro, 2001, Natural gas production in the United States: National Assessment of Oil and Gas Series, U.S. Geological Survey Fact Sheet FS-113-01, 2 p. Schmoker, J. W., 1996, Method for assessing continuous-type (unconventional) hydrocarbon accumulations, in D. L. Gautier, G. L. Dolton, K. I. Takahashi, and K. L. Vames, eds., 1996, 1995 National assessment of United States oil and gas resources - Results, methodology, and supporting data: U.S. Geological Survey Digital Data Series DDS-30, Release 2, [CD-ROM]. Schmoker, J. W., C. J. Quinn, R. A. Crovelli, V.F. Nuccio, and T. C. Hester, 1996, Production characteristics and resource assessment of the Barnett Shale continuous (unconventional) gas accumulation, Fort Worth Basin, Texas: U.S. Geological Survey Open-File Report 96-254, 20 p. Shirley, K., 2002, Barnett Shale living up to potential: AAPG Explorer, v. 23, no. 7, p. 18-27. Sloss, L. L., 1976, Areas and volumes of cratonic sediments, western North America and eastern Europe: Geology, v. 4, p. 272-276. Swindell, G. S, 2002, Newark East Barnett Shale gas field, cumulative production graph: Accessed December 2002 at URL http://gswindell.com/newark.hml. Walper, J. L., 1982, Plate tectonic evolution of the Fort Worth Basin, in Martin, C.A., ed., Petroleum geology of the Fort Worth basin and Bend arch area: Dallas Geological Society, p. 237-251. OTCQB:XTOG Page 24 Page 24

  25. References • Reinke Engineering Evaluation, May 2011 • Chesapeake Energy, April 2011 • Horizontal Drilling, Lynn Helms • Railroad Commission of Texas • Dauben International Engineering, January 1998 • Larry Seng Geological Report • Oklahoma Corporation Commission OTCQB:XTOG Page 25 Page 25

  26. Transaction Summary Xtreme Oil & Gas, Inc. 5700 West Plano Parkway Suite 3600 Plano, TX | 75093 | United StatesPhone: 214-432-8002    Fax: 214-432-8005 For any additional questions of comments please contact Willard G. McAndrew III at will@xtoginc.com www.xtoginc.com

More Related