E-T ENERGY LTD. UNLOCKING OVER 100 BILLION BARRELS OF STRANDED RESOURCE. ET Energy Management Presentation May 2013. Outline. Introduce E-T Energy What is ET-DSP™? Strong Economics and Environmental Performance Step 3 Field Test Program Next Steps: Demonstrate Commerciality.
UNLOCKING OVER 100 BILLION BARRELS OF STRANDED RESOURCE
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This presentation is not, and is not intended to be, an offer to sell or the solicitation of an offer to buy any security of E-T Energy and shall not constitute an offer, solicitation or sale of any securities of E-T Energy in any jurisdiction. This presentation is an overview of E-T and should not be relied on for the purposes of making an investment decision. Investors must make their investment decisions based solely on the disclosure contained in materials which may be provided in connection with an offering of securities
This presentation contains, without limitation, forward-looking information relating to the current state and future development of E-T Energy's oil sands resources, business prospects and strategies, technology, business, financial condition and operations. Forward-looking information typically contains statements using words such as "anticipate", "believe", "project", "forecasted", "expect", "plan", "intend", "estimate", "goal" or similar words suggesting future outcomes and statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future.
Readers are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, risks and uncertainties and other factors that contribute to the possibility that the possible outcome, expectations, forecasts, projections and other forms of forward looking information will not be achieved. These factors include management's ability to anticipate and manage uncertainty and risk. The Company faces a large number of risks, including: reliance on a new and unproven process; electricity supply and pricing; dependence on contractual arrangements with third parties; reliance on key personnel and competition for qualified personnel; early stage of development of the Company; insufficient funding or proceeds of financing; oil prices and heavy oil differentials; marketability of bitumen and the lack of infrastructure ; royalty regime and changes to it; taxation; environmental laws and regulations and their application; general government regulation and regulatory approvals; reliance on intellectual property rights and a proprietary process; legal risks and challenges; resource estimates and quantities; abandonment and reclamation costs; competition; foreign exchange rate fluctuations; title risks and aboriginal claims; insurance; seasonality; operational difficulties; and all of the typical risks faced by resource developers. The Company is also exposed to additional risks and uncertainties that it does not presently know, or currently considers immaterial, which may also impair E-T Energy's business and/or operations. If one or more of the events associated with these various risks actually occur, the Company's business may be harmed and E-T Energy's financial and operating results may suffer significantly.
Forward-looking statements are based on a number of assumptions that may prove to be incorrect including, but not limited to: general economic, market and business conditions; commodity prices and differentials; resource estimates; the accuracy of cost estimates, the relationships with key project contractors, suppliers and customers, production rates and economic returns; the availability of sufficient capital on satisfactory terms; the successful and timely approval and implementation of capital projects; currency exchange rates; government enacted environmental initiatives; the impact of changes in applicable laws and regulations; and the successful commercialization of ET-DSP™.
The actual results, performance or achievements of E-T Energy, and ET-DSP™, could differ materially from those expressed in or implied by forward looking statements; accordingly, no assurance can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefit E-T Energy will derive from them. Except as required by law, E-T Energy undertakes no obligation to publicly update or otherwise revise any information, including any forward looking information for future events, changes or other such factors that affect this information.
All references to funds in this presentation refer to Canadian dollars.
Large asset base
McDaniel’s best estimate contingent resource of 284 million barrels with $1.4 billion NPV10
E-T DSP™ technology unlocks 175 billion barrels of stranded resources in the Athabasca oil sands alone that are to deep for mining and to shallow for SAGD
Lower capital intensity, operating costs and energy costs than mining or SAGD
To date over $60 million has been raised and invested in the ET-DSP™ technology
TOTAL E&P participation
TOTAL provided financial and technical support for the Step 3 field test with the option to participate in future testing and to acquire a technology licence
ET-DSP™ protected by Canadian and US patents
Power Delivery System distributes electrical current and non-potable water to the electrode wells.
Electric current energizes the electrodes, while injected water cools the electrodes.
Electric current rapidly cycles between electrodes, heating the formation water and bitumen.
Injected water maintains electrical conductivity and formation pressure.
Heated bitumen and water are pumped from the formation by progressive cavity pumps.
Bitumen is cleaned to sales spec and sold into markets.
Produced water is recycled and re-injected to minimize the need for external water.
Oil sands formations are highly permeable and contain a significant amount of in situ formation water
Electrical current is conducted through the formation water that envelops the non-conductive sand particles
Water is strongly resistant to electricity and the electrical energy is converted to heat, i.e. the water gets hotter the more current that flows
The water is heated to +/- 130 deg. C, but the formation pressure prevents it from flashing into steam
Heat is transferred from the water to the oil and sand particles by conduction
The large surface area between the water film and the sand particles facilitates the rapid transfer of heat.
173 billion bbls in place
Operating Cost Comparison – 2011$ ($/bbl)
Total Cost Comparison – Project Life – 2011$ ($/bbl)
Source: Macquarie Research, Management Estimates
Net Present Value per Barrel ($/bbl)
Internal Rate of Return (%)
Model scenarios include flat pricing with unescalated costs
Source: Macquarie Research, Management Estimates
Electrodes Turned Off
Mar. 31, 2013