Read Microsoft PowerPoint - R11-37_Rock Powerpoint_March_2012_V10 text version

What's New: We're 100% Oil Focused

High Quality Heavy Oil. Plains and Southwest Saskatchewan

March 2012 Presentation

TSX:RE

Forward-Looking Statements

All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements include forecasts for production, cash flow, capital expenditures and debt levels and are based on estimates for commodity prices, reservoir performance, drilling performance and industry conditions including availability of services and weather. These statements involve known and unknown risks, uncertainties, assumptions and other factors, some of which are b hi h beyond R k E d Rock Energy's control, th t may cause actual results t diff ' t l that t l lt to differ materially from a conclusion, forecast or projection in such forward-looking statements. Rock Energy believes that the expectations reflected in those forwardlooking statements are reasonable at the time made but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in, or incorporated by reference into, this presentation should not be unduly relied upon. These statements speak only as of the date of such information, as the case may be, and may be superseded by subsequent events. Rock Energy does not intend, and does not assume any obligation, to update these forward-looking statements whether as a result of information, future events or otherwise.

Rock's Go Forward Strategy: Oil Focused

STRATEGIC REVIEW PROCESS COMPLETED

GO-FORWARD VISION

Focus heavy OIL exploration and development programs in two core areas: Plains Southwest Saskatchewan initiatives. infrastructure, while drilling 30-50

and Southwest Saskatchewan. Plains generates cash flow to support d S th tS k t h wells per year within cash flow.

Find resource type plays that are scalable and repeatable where Rock can control

Focus on shallower less expensive wells during the first few years, then move into deeper, more expensive plays as cash flow grows. Explore new technology to increase

from known pools (radial drilling, water flooding, SP flooding, etc.)

recovery factors

Rock's Corporate Goals

3-5 YEARS

Grow Rock to of oil production.

6,000-10,000 bpd with a strong foundation

2015 AND BEYOND: RE-EVALUATE NATURAL GAS ASSETS

Review gas exploration plays when additional export capacity will allow Canadian gas to attract world prices. Rock's oil-focused production and cash flow will support aggressive gas development scenarios.

Advancing Southwest Saskatchewan Heavy Oil: New Pool Discovery

February 2012: Rock discovers significant

new

oil pool at Mantario in Southwest Saskatchewan

· · · ·

14-16°API 14 16°API Exshaw source rock Consolidated sand ­ conventional production techniques Amenable to secondary and tertiary enhancement (water flood and surfactant polymer flood)

Corporate Profile Proforma

Stock exchange Current stock price trading range Capital structure Common stock

TSE ­ Symbol RE $1.75-2.00/share (basic) (fully diluted) 38.8 MM 41.3 MM $75 MM $14.5 MM $45.0 MM $103 MM 2,400 8.3 MMBOE $4.17/share 86,000

Market capitalization Cash in bank (Dec. 31, 2012) Total bank lines available Tax pools (Dec. 31, 2011) Current Production Estimate (boe/d, 73% oil and liquids) Reserves (P+P, 79% oil) Net Asset Value (Basic, P+P, Btax 10%) (GLJ Dec 31/11 Price deck) Land (net undeveloped acres)

Oil Rock's Focus and Future

· Heavy oil from Mannville Group · 500-1,000 metres deep · Pl i core area Plains

Reduce operating costs Optimize production

ALBERTA Plains core area

SASKATCHEWAN

Lloydminster Sub Basin Edmonton Lloydminster Provost Kindersley High Mantario Edam Neilburg

Wainwright Hackett

Southwest Saskatchewan core area Onward

· Southwest Saskatchewan core area

New pool discovery at Mantario Initial stages of waterflood project at Onward

Calgary

Swift Current Platform

Oil pools

Plains: Rock's Legacy Heavy Oil Core Area

Plains core area

Lloydminster Sub Basin

Biodegraded oil/Water-degraded oil Lower in-situ temperature

· · · · · ·

Oil pools

Edmonton

Lloydminster Edam City of Lloydminster Neilburg

ALBERTA

Calgary

SASKATCHEWAN

600-750 m deep Gravity: 11 14° API 11-14 Viscosity: 5,000-15,000 cp Source rock: Leduc/Duvernay Unconsolidated sand ­ Worm-holes CHOP (Cold Flow Heavy Oil Production) techniques

Plains: Rock's Legacy Heavy Oil Core Area

Plains core area

Lloydminster Sub Basin

· ·

Edmonton

Lloydminster Edam City of Lloydminster Neilburg

Today: Plains provides majority of Rock's cash flow. 2012 Plan: Focus on reducing operating costs

Install water handling and disposal facilities Optimize production through careful recompletions and implementation of high volume lift where appropriate.

ALBERTA

Calgary

SASKATCHEWAN

Oil pools

Southwest Saskatchewan Heavy Oil

Southwest Saskatchewan core area

SASKATCHEWAN

Edmonton City of Lloydminster

· · · · · · · ·

Provost Onward Kindersley High Mantario

ALBERTA

Swift Current Platform

Oil pools

Non-biodegraded/ water-degraded oil Higher in-situ temperature 800-1,000 metres deep Gravity: 14-16 API Viscosity: 400-800 cp Source rock: Exshaw Consolidated sand allows for conventional production techniques Amenable to secondary and tertiary production enhancement (waterflood and surfactant polymer flood)

Southwest Saskatchewan: A New Core Area

· · Emerging core area with numerous exploration prospects Rock currently drilling two pools and implementing the first stages of waterflood Numerous exploration prospects Rock pursuing the acquisition of undeveloped pools with similar reservoir characteristics

Southwest Saskatchewan core area

SASKATCHEWAN

Edmonton City of Lloydminster

Provost Onward Kindersley High Mantario

· ·

ALBERTA

Swift Current Platform

Oil pools

Mantario ­ Exploration and Development Upside

Current production: 75 boepd from first well, 2 more wells drilled and awaiting completion 2012 Plans

· Shoot 3D seismic · Drill 14 producers · Begin design for water and surfactant polymer flood

Rock land Rock producer 2012 planned drilling locations D&A

Onward ­ Waterflood Underway

Current production 300+ boepd 2012 Plans · D ill 4 producers Drill d · Drill 3 injectors · Pipeline connect north pool and producing wells · Expand battery · Pursue additional exploration opportunities

Source well

Source well

Rock land Rock producers YTD 2012 2012 drilling location Injector well Pipeline

Shale-filled channel

2012 Capital Budget $10MM

Onward waterflood

$14MM

Mantario first stage development d l

$3MM

Lloydminster reduced opex

$3MM

Other (land, seismic)

Total 2012 Capex: $30MM

21 wells planned

$70.00

$80.00

$90.00

$100.00

$60 00 $60.00

$10.00

$20.00

$30.00

$40.00

$50.00

$-

Cdn$/bbl

Jan-09 Feb-09 Mar-09 Apr-09 May-09 June-09 July-09 Aug-09 Sept-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 June-10 July-10 Aug-10 Sept-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 June-11 July-11 Aug-11 Sept-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12

Western Canada Select Price

600 bpd hedged until December 31, 2012 at average WCS price of >Cdn$85/bbl

Premium Markets for Our Oil

Rock transports up to 1,000 bpd via rail

· Directly leased 30 rail cars in 2012 · Allows access to a variety of markets · Deliver crude oil directly to the U.S. Gulf Coast

Provides up to $6/bbl price improvement

Results and Guidance

Production avg. (boepd) % oil Funds from operations ($ MM) Funds/share Capital spending ($ MM) Year-end debt ($ MM) Working capital ($ MM) WTI (US$/bbl) WCS(CDN$/bbl) AECO (CDN$/mcf) F/X

2010 3,615 60 25.9 0.84 0 84 42.3 32.4 79.51 63.46 4.01 0.97

2011 3,132 73 20.5 0.56 0 56 49.5 31.0 95.10 78.92 3.60 1.01

2012 Forecast 2,500-2,600 79 23 0.60 0 60 30 7.3 95.00 81.00 2.50 1.00

Rock Energy Essentials

We are an oil company with a solid growth platform.

· Current production is 75% oil, primarily from Plains core area · Exciting inventory of heavy oil drilling locations at:

Southwest Saskatchewan o Mantario o Onward Plains o Lloydminster o Edam · Over 86,000 net acres of undeveloped land · Strong balance sheet with over $10 MM in cash and undrawn bank lines of $45 MM

Supplemental Information

TSX:RE

Strong Management Team

Management Team

Allen J. Bey John H. Van de Pol Jeffrey G. Campbell Bryan Dozzi Terry Manery Chief Executive Officer and Director President and Chief Financial Officer Senior Vice President and COO VP Business Development VP and Controller

Directors

Stuart G. Clark ­ Chairman of the Board Malcolm T.D. Adams James K. Wilson William H. (Bill) Slavin Ken H. F. Severs Allen J. Bey

Market Profile

TSX stock symbol Shares outstanding Basic Fully diluted Ownership Management ARC Recent trading range Market capitalization

RE

38.8 million 41.3 million Basic 6.8% 18.6% $1.70-2.00 $75 million Fully Diluted 12.5% 17.5%

Drilling Results

2008 Heavy oil Natural gas D&A Total Casing Success Rate (net)

18 (18.0 net) 14 (5 3 net) (5.3 1 (1.0 net) 33 (24.3 net) 96%

2009

20 (20.0 net) 4 (2 1 net) (2.1 Nil 24 (22.1 net) 100%

2010

31 (31.0 net) 7 (4 3 net) (4.3 1 (1.0 net) 39 (36.3 net) 97%

2011

21 (21.0 net) 3 (2 5 net) (2.5 3 (3.0 net) 27 (26.5 net) 87%

Heavy Oil Hedging Program

Quantity (bbls/d)

650 600 550

Price WCS (CDN$)

$84.25 $86.10 $86 10 $85.18

Term

Jan 2012 June 2012 July J l 2012 S t 2012 Sept Oct 2012 ­ Dec 2012

Information

Microsoft PowerPoint - R11-37_Rock Powerpoint_March_2012_V10

23 pages

Report File (DMCA)

Our content is added by our users. We aim to remove reported files within 1 working day. Please use this link to notify us:

Report this file as copyright or inappropriate

616383