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Athabasca Resources. Athabasca Resources Limited Investor Overview Overview & Strategy Santiago Investor Conference. 21 June 2014. Important Notice

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21 june 2014

Athabasca Resources

Athabasca Resources Limited

Investor Overview

Overview & Strategy

Santiago Investor Conference

21 June 2014


21 june 2014

Important Notice

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN OR CANADA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

  • This document is personal to the recipient and has been issued by Athabasca Resources Limited (the Company). It has been prepared solely for use at presentations to institutional investors in connection with the proposed private placement by the Company of its ordinary shares (Placing). For the purposes of this notice, the presentation that follows (the Presentation) shall mean and include the slides that follow, the oral presentation of the slides by the Company, the question-and-answer session that follows that oral presentation, hard copies of this document and any materials distributed at, or in connection with, that presentation.

    This Presentation is not a prospectus for the purposes of the Prospectus Rules of the Financial Services Authority and has not been approved by the Financial Services Authority. This Presentation is for information purposes only and does not constitute or form part of, and should not be construed as constituting or forming part of any offer, invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company or securities in any other entity, nor shall any part of this Presentation nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company or of any other entity.

    The information and opinions expressed in this Presentation are provided as of the date of this Presentation. The information contained herein is for discussion purposes only and does not purport to contain all information that may be required to evaluate the Company and/or its financial position. Some of the information in this Presentation is still in draft form has not been independently verified. [In particular, it should be noted that (i) resources data and (ii) certain financial information and certain prospective information) contained herein have not been finalised or audited]. No reliance may be placed for any purpose whatsoever on the information contained in this Presentation or on its completeness, accuracy or fairness. No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, officers, advisers, agents or employees or any other person as to the accuracy or completeness of the information or opinions contained in this Presentation and, to the extent permitted by law, no liability whatsoever (in negligence or otherwise) is accepted by the Company or its members, directors, officers, advisers, agents or employees nor any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts contained in this Presentation and nothing in this Presentation is or should be relied on as a promise or representation as to the future. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. The Company is not under any obligation to update or keep current the information in this Presentation.

    This Presentation and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose and are intended for distribution in the United Kingdom only to: (i) persons who have professional experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) persons falling within Article 49(2)(a) to (d) of the Order or to those persons to whom it can otherwise lawfully be distributed (all such persons together being referred to as “relevant persons”). This Presentation must not be acted upon by persons who are not relevant persons. Any investment or investment activity to which this Presentation relates is available only to relevant persons and will be engaged in only with relevant persons. Any recipient of this Presentation who is not a relevant person should return it to Company immediately, not attend the physical presentation and take no other action.

    The distribution of this Presentation in certain jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This Presentation does not constitute an offer to sell or a solicitation of an offer to purchase any securities in any jurisdiction in which such offer or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction. The securities proposed to be offered by the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the Securities Act) or under any securities laws of any state of the United States and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

    Certain statements in this Presentation are forward-looking statements. The forward-looking statements include statements typically containing words such as “intends”, “expects”, “anticipates”, “targets”, “plans”, “projects”, “estimates” and words of similar import. Statements relating to "reserves" and "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and can be profitably produced in the future. These forward-looking statements speak only as at the date of this Presentation and you should not place undue reliance on them. These statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause actual results, performances and achievements to differ. The forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and environments in which the Company will operate in the future and such assumptions may or may not prove to be correct. No statement in this Presentation is intended to be nor may it be construed as a profit forecast. The Company does not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Forward-looking information is based on management's current expectations and is subject to a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking information. The material risk factors affecting the Company and its business are similar to those of other companies engaged in the business of exploring for and producing oil and gas, both domestically and in foreign countries and include, but are not limited to: risks in identifying and acquiring oil and gas interests on acceptable terms; the ability of the Company to obtain financing on acceptable terms; geological risks; drilling risks; oil and gas industry operational risks in development, exploration and production (including encountering unexpected formations or pressures, premature declines of reservoirs, potential environmental damage, blow-outs, fires and spills); delays or changes in plans with respect to exploration or development projects or capital expenditures; the ability to attract and retain key personnel and to acquire equipment and services in a timely and cost efficient manner; the risk of commodity price and foreign exchange rate fluctuations; competition risks; general economic risks, risks associated with the timely receipt of any required regulatory approvals and changes to the regulatory impacting levels of royalties and taxes and the risks associated with international activity (including the uncertainty associated with negotiating with foreign governments, adverse determinations or rulings by governmental authorities, changes in energy policies or the personnel administering them, nationalization, arbitrating and enforcing claims against entities that may claim sovereignty and other risks arising out of foreign governmental sovereignty). References to boes may be misleading, particularly if used in isolation. In addition, design capacity is not necessarily indicative of the stabilized production levels that may ultimately be achieved. Moreover, reported average or instantaneous production levels may not be reflective of sustainable production rates and future production rates may differ materially from the production rates reflected in this Presentation due to, among other factors, difficulties or interruptions encountered during the production of bitumen or other hydrocarbons.

    By attending the physical presentation or by accepting the Presentation you will be taken to have represented, warranted and undertaken that: (i) you are a relevant person (as defined above); (ii) you have read, acknowledge and agree to comply with the contents of this notice; and (iii) you will not at any time have any discussion, correspondence or contact concerning the information in this Presentation with any of the directors or employees of the Company, its subsidiaries nor with any of their suppliers, customers, sub-contractors or any governmental or regulatory body, or otherwise distribute this Presentation, without the prior written consent of the Company.


Athabasca oil sands overview

Athabasca Resources

  • The Chard Field:

  • The Chard Leases contain 31 contiguous sections (gross 19,840 acres/ 81 km2)

  • 240 million barrels of oil in place within the McMurray formation.

  • Infrastructure in place: Public highway and railroad crossing the field. Chard is close to existing 3rd party facilities for crude-synthetic oil conversion for transportation in pipelines.

  • Active area with producing units in the area (20 miles) such as Statoil, EnCana, ConocoPhillips, Nexen/ PetroCanada, PetroBank, Devon, Meg Energy and Cenovus Energy.

  • Athabasca farm-in 50% of four licenses currently owned by Nordic Petroleum ASA.

Athabasca Oil Sands - Overview

Source: DeGolyer & MacNaughton 2012


Canadian oil sands the 3rd largest oil reserve in the world

Athabasca Resources

Canadian Oil Sands – The 3rd Largest Oil Reserve In The World

  • Canadian Oil Sands makes Canada no. 3among reserve holders of hydrocarbons in the world.

  • 175 billion barrels ultimately recoverable reserves.

  • Current oil sands production has risen to more than 1.5 million barrels per day.

  • By 2024 oil sands production is projected to 3.7 million barrels per day, and in situ is expected to deliver nearly two-thirds of that increase.

  • Strategic proximity to the US, the world’s largest oil market.

  • Stable political environment.

  • Oil Sands is the fastest growing source of oil in Canada:

Source: www.eia.gov/emeu/cabs/Canada; Canadian Association of Petroleum producers; MIT Technology Review, January 2012;

www.oilsands.infomine.com/commodities; www.en.wikipedia.org/wiki/Athabasca_oil_sands


Athabasca a part of the chard field

Athabasca Resources

Athabasca – A Part Of The Chard Field

Middle Channel

  • Geology:

  • McMurray Sand Formation: Upper, Middle & Lower channels

  • Upper channel thickness: between 5 – 7 m

  • Middle channel thickness: between 3 – 30 m

  • Lower channel thickness:between 10 – 50 m

  • Formation Depth: between 200 – 360 m

  • Heavy Oil :

  • Gravity estimated: API 9 - 12

  • Porosity: 27 – 35 %

  • Oil Saturation: Approx. 70 – 75 %

  • Permeability: 2 – 6 Darcy

  • Channel identification on the map:

  • Green: indicates layers above 10 m

  • Red: indicates layers above 8 m

  • Layers above 5 meters: indicated with a 5 m line

  • Section with above 8 meters:7 sections on the western side of the leases holds the majority of the oil

Lower Channel

Source: DeGolyer & MacNaughton 2012


Facts the chard field has oil resources in place

Athabasca Resources

Facts - The Chard Field Has Oil Resources in Place

  • 50% ownership with a 2.5% overriding royalty.

  • 31 sections (81 km2). Third party evaluated bitumen in place of 240 million barrels.

  • Resources confirmed by commissioned geological studies by geologist DeGolyer & MacNaughton in 2012 based on logs originally drilled for gas extraction and water.

  • DeGolyer & MacNaughton estimate 240 MM Bbl Original Oil In Place (OOIP), whereof:

    • 127 MM Bbl of oil with thickness above 8 meters.

    • 70 MM Bbl with thickness 10 meters and more.

  • Current SAGD recovery rate in the industry is currently up to 60%.

  • DeGeolyer & MacNaughton has estimated a recovery level of 31% - 48% for Chard.

  • DeGolyer & MacNaughton has therefore estimated the following contingent resources:

    • High level: 60 MM Bbl at 48% recovery

    • Mid level: 28 MM Bbl at 40% recovery

    • Low level: 21 MM Bbl at 31% recovery

  • A staged development of the land will be based on proven extraction technologies such as CSS, SAGD, THAI or Electrodes or a combination thereof.

    • The immediate work program is expected to include 8 core wells.

    • The work program that will take place on 7 of the 31 sections has the following objectives:

      • to learn more about the contingent resources

      • to verify the quality of the oil

      • to prepare for pilot programme.

Source: DeGolyer & MacNaughton 2012; www.oilsands.infomine.com/commodities


Athabasca is located close to other oil sands exploration companies in athabasca

Athabasca Resources

Athabasca Is Located Close To Other Oil Sands Exploration Companies In Athabasca

Athabasca Resources’ Chard Field

Meg Energy’s Christina Lake field is approx 15 km south of Chard and is currently producing in the same formation as Chard Meg Energy has 2P reserves of 1.7bn barrels in 80 sections

ATHABASCA

RESOURCES

Source: The Terracon Group


Surrounding area is covered by active oil sands companies

Athabasca Resources

Surrounding Area Is Covered By Active Oil Sands Companies

  • MEG Energy – Christina Lake (just south of Chard)

  • Currently producing 26 400 bpd from 8 API bitumen. Expanding to 210.000 bpd by 2020. Upgrading facility nearby and pipeline to Edmonton.

  • EnCana – Christina Lake8 API bitumen. Estimated start of production 2013. Capacity 120.000 bpd

  • Conoco Phillips - Surmount Phase I (north of Chard)

  • Production start 2008. 27.000 bpd.

  • ConocoPhillips - Surmount Phase II

  • 7-9 API. Engineering underway. Estimated start of production 2013. Capacity 83.000 bpd.

  • Jacos- Hanging stone (north west of Chard)

  • Demo project. Production start 1999. Capacity 10.000 bpd initially increasing to 100.000 bopd

  • Petrobank - May River Phase I. (south of Chard)

  • Demonstration plant. Using toe-to-heel air injection (THAI) technology. Production has started. Initial capacity of 10.000 bpd after start-up phase. Ultimate production up to 100.000 bpd.

  • Devon - Jackfish I

  • Operating. Capacity 35.000 bpd. Jackfish II. (South of Chard). Under construction. Estimated start of production 2011. Capacity 35.000 bpd. Plan upgrade to 100.000 bopd

  • Statoil. Kai Kos Dehseh – Leismer

  • Estimated start of production in 2Q 2011. Initial production 10 000 rising to 20 000 bopd at year-end. Production estimated at 80 000 bopd by 2016 and to top 200.000 bpd on projects currently applied for. Can reach 300 000 bopd according to partner PTTEP after 2018.

Source: Public presentations and announcements from the respective companies listed above and

www.albertacanada.com/documents/AOSID_QuarterlyUpdate_Winter2011.pdf


Chard oil sands is an in situ project

Athabasca Resources

Chard Oil Sands Is An ”In Situ” Project

  • About 80% of the oil sands in Alberta are buried too deep below the surface for open pit mining. This oil must be recovered by in situ techniques.

  • Production from in situ is already being preferred to open pit mining and will in the future be replacing mining as the main source of bitumen production from the oil sands.

  • Chard is an in situ project ("in situ" is Latin for "in place“) that may be recoverable using one or more of the following technologies: CSS, SAGD, THAI or Electrodes.

  • Using drilling technology, heat is introduced (using steam, electrodes or other methods) into the oil sand deposit to lower the viscosity of the bitumen.

  • The hot bitumen migrates towards producing wells, bringing it to the surface while the sand is left in place.

  • SAGD can produce a smooth, even production that can be as high as 70% to 80% of oil in place in suitable reservoirs.

CSS TECHNOLOGY

Source: www.eia.gov/emeu/cabs/Canada ; www.oilsands.infomine.com/commodities/nd; MIT Technology Review, January 2012; http://en.wikipedia.org/wiki/Steam-assisted_gravity_drainage


21 june 2014

Athabasca Resources

New Technologies Provides Access To Thinner Layers & Incentives Are In Place To Promote Further Innovation

  • Major In Situ Technologies

  • CSS - Cyclic Steam Stimulation

    • Several technologies rely on steam to heat and soften the bitumen underground allowing it to flow to production wells. CSS and is considered economic only in very high-grade, relatively homogeneous oil sands reservoirs. Recovery factor is estimated to be approximately 20%- 25%.

  • SAGD - Steam Assisted Gravity Drainage

  • SAGD are considered economic only in very high-grade, relatively homogeneous oil sands reservoirs. Thermally, SAGD is twice as efficient as the older cyclic steam stimulation (CSS) process, and it results in far fewer wells being damaged by high pressure. Recovery factor is estimated to recover up to 60% and is cheaper to operate than CSS. Most major Canadian oil companies operating in the Athabasca region are using or plan to use SAGD.

  • VAPEX - Vapor Extraction Process

  • Similar to SAGD but instead of steam, hydrocarbon solvents are injected into the upper well to dilute the bitumen and allow it to flow into the lower well.

  • ET-DSP Electro Thermal Dynamic Stripping Process

  • The recovery factor was over 75%, energy used per barrel was 23% less than anticipated and peak production rates were better than expected.

  • THAI - Toe to Heel Air Injection

  • Has the potential to recover 70-80 percent of bitumen-in-place versus 20-60 % from current in-situ CSS and SAGD technologies.

  • Thinner reservoirs (less than 10 meters) can be a target for THAI® as only one horizontal well is required compared to two horizontal wells with SAGD and is less sensitive to the presence of top or bottom water.

  • Steam Flooding – In Combination with SAGD

  • Enhances the recovery by up to 20% and is currently being tested in by Sinopec in China in thin layers >5 meters.

  • Innovative Energy Technologies Program

  • Alberta’s Innovative Energy Technologies Program (IETP) offers royalty adjustments of up to $10 million per pilot project that demonstrates the use of new or

  • innovative technologies to increase environmentally sound recovery of existing reserves and encourages responsible development of new oil.

  • Year

    ~1985

    ~1995

    ~2005

    ~2009

    IETP

    Source: www.energy.alberta.ca/OilSands/pdfs/FactSheet_OilSands.pdf, http://en.wikipedia.org/wiki/Steam-assisted_gravity_drainage; McDaniel & Associates Consultants Ltd. (McDaniel THAI® Transition Report); www.e-tengergy.com: Sinopec China

    ,


    Oil recovery services ltd ors

    Athabasca Resources

    OIL RECOVERY SERVICES LTD (ORS)

    WHAT DOES ORS DO?

    • Proven technology platform: ORS offers a complete and unique solution to recover bitumen and oil in situ from heavy oil and tar sands using environmentally friendly organic enzymes.

    • Cost effective solution: The ORS technology has applications in Enhanced Oil Recovery and Waste Water Remediation.

    • Environmentally friendly/low risk operation: Environmentally friendly technology that will revolutionise production of oil from tar sands in Athabasca and elsewhere.


    Oil recovery services ltd ors1

    Athabasca Resources

    OIL RECOVERY SERVICES LTD (ORS)

    HOW DOES OUR TECHNOLOGY WORK?

    OUR BESPOKE ORGANIC SURFACTANTS ARE BOTH SAFE AND FAST ACTING.

    UP TO 400 TIMES MORE EFFICIENT THAN STEAM.


    21 june 2014

    Athabasca Resources

    1-3 Year Growth Strategy – Upgrade, Acquire, Produce

    Working Assumptions

    • Upgrading

      • Upgrade existing contingent resources through a Work Program that will include laboratory testing, commission 3rd party reserve report and begin field development program for pilot production.

    • Acquire

      • Evaluate neighboring and/ or strategic acreage for possible purchase or farm-in to grow portfolio of resources and reserves.

    • Establish pilot production

      • Pursue tests and establish a small production development for up to 1,000 Bbls/day to prove economic recoverable reserves.

      • Continue to upgrade the licences by further core drilling program.

      • Convert contingent resources to reserves.

    • Establish production facility

      • Establish production wells targeting initial best case production figures.

      • Continue exploration on the licenses.

      • Continue the organic and acquisitive growth.

    Source: Company Analysis


    21 june 2014

    Athabasca Resources

    Management Team & Board

    Julian Hamilton Barns, aged 54, Founder Director

    Julian Hamilton Barns qualified as a Solicitor in England and Wales in 1984 and in Hong Kong in 1992 having graduated in Business Law in London.  He has specialized in corporate law since qualification and has acted for many international clients in the corporate finance and mergers and acquisitions sectors with particular focus on the oil and gas and natural resources industries. He has extensive Northern American clients and business connections.

    Conditional upon completion of the Private Placing, the following individuals have agreed to join the Board:

    Atul Gupta, aged 50, Director

    Atul Gupta served as CEO of Burren Energy Plc until 2008. He has worked in the international upstream oil and gas industry for over 25 years. He serves on a number of boards. He holds a Bachelors degree in chemical engineering from Cambridge University and a Masters degree in petroleum engineering from Heriot-Watt University in Edinburgh Scotland.

    Richard Bonnycastle, aged 78, Director

    Richard Bonnycastle has been the Chairman and the President of Cavendish Investments Limited since 1968. He also serves as the Chairman of the Harvest Fund Inc. He currently holds substantial investments in numerous private and public companies and sits on the board of many of these companies. He has wide ranging experience as a corporate financier and adviser in the oil and gas industry with particular focus in Canada.

    Other Directors with suitable skills and experience  will be appointed during the IPO Process.


    21 june 2014

    Athabasca Resources

    Joint Operating Committee Will Control The Work Program

    Athabasca Resources Ltd

    Nordic Petroleum AS

    100%

    Joint Operating Agreement/Committee

    (JOA)

    Nordic Americas Inc *

    Norwegian Oil Sands Corp**

    50%

    50%

    Chard

    =

    4 Licences

    *): Nordic Americas Inc is a licensed operator and Nordic America and Athabsaca Resources Limited will each be presented at the JOA Committee

    **): Norwegian Oil Sands Corp acquired the three licences from Keppoc Energy Ltd and Pan Pacific Land Corporation on the in October 2007


    21 june 2014

    Athabasca Resources

    Use Of Funds

    • Use of funds

    • Paid-in Capital*£5,000,000

    • Acquire 50% of the Leases & Pay initial work program£1,950,000

    • AIM listing and advisory fees £ 600,000

    • Working capital for 18 months£ 500,000

    • Working Capital / Acquisition and Due Diligence£ 1,950,000

    Assumption: 1 USD = 1 CAD = 0.64 GBP

    *): Based on an equity raise of £4 million


    21 june 2014

    Athabasca Resources

    Company Details & Corporate Advisors

    Legal Counsel

    McGuire Woods London LLP

    11 Pilgrim Street

    London EC4V 6RN

    Auditors

    MSCM LLP

    An independent Firm associated w/

    Moore Stephens International Limited

    701 Evans Avenue, 8th Floor

    Toronto ON M9C 1A3, Canada

    Kingston Smith

    Devonshire House60 Goswell Road

    London, EC1M 7AD

    England

    Nomad & Broker

    ZAI Corporate Finance Limited

    1 Hobhouse Court

    Suffolk Street

    St James’s

    London, SW1Y 4HH

    Bank

    Barclays Bank Plc

    City of Cardiff Branch

    Registrars

    TBA

    Independent Reserve Engineers

    DeGolyer & MacNaughton Canada Limited

    1430-311 Sixth Avenue,

    Calgary, AB T2P 3H2

    Canada

    Financial PR

    TBA

    Registered Office

    Athabasca Resources Limited

    Tudor Court

    Vaendre Close

    Castleton CardiffCF3 2UZ

    Reg. Number: 08

    Description: ISIN: SEDOL:

    Web:

    London Office

    Athabasca Resources Limited

    117 Waterloo Road

    SE1 8 UL

    Phone +44 7768 461528

    Phone : +44-20-7921 0070

    Fax: +44-20-7902 1133


    Appendix

    Athabasca Resources

    Appendix


    Athabasca s location among current oil sands projects

    Athabasca Resources

    Athabasca’s Location Among Current Oil Sands Projects

    Athabasca’s Oil Sands

    Assets


    21 june 2014

    Athabasca Resources


    21 june 2014

    Athabasca Resources

    Geological Overview: Middle & Lower Channel

    Source: DeGolyer & MacNaughton 2012


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