Presentation on theme: "A PROVEN, Innovative TECHNOLOGY FOR HYDROCARBON EXPLORATION"— Presentation transcript:
1A PROVEN, Innovative TECHNOLOGY FOR HYDROCARBON EXPLORATION CORPORATE PRESENTION(updated April 1, 2014)A PROVEN, Innovative TECHNOLOGY FOR HYDROCARBON EXPLORATION
2Disclaimer and Forward-looking Statements This presentation is not intended to be used as an Offering Document. The information contained in this document may include forward-looking statements including opinions, assumptions, estimates and expectations of future prospects for the Company and financial projections. When used in this document, the words "anticipate," "believe", "estimate," "expect," "intend," "may," "project," "plan," "will," "should" and similar expressions are intended to be among the statements that identify forward-looking statements. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable; there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, volatility of oil and natural gas prices, changes in the oil and gas industry, the Company’s ability to implement corporate strategies and obtain financing, the state of capital markets, operating and technology risks, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. Neither the TSX-Venture nor the OTC Exchanges accept responsibility for the adequacy or accuracy of any information contained in this document.22
3A Canadian Public Company NXT Energy Solutions Inc. is a service provider to the upstream Oil & Gas Industry:Engaged in exploration reconnaissance.We identify and rank high-potential prospect leads using a unique airborne survey method.Expanding worldwide client base (PEMEX, Pacific Rubiales)SFD ® Survey System
4Frontier areas and NOCS Offices/AgentsSFD ProjectsProposed SFD Projects
5Exploration activity on recent SFD® survey areas, and new opportunities CountryE&PactivitiesJoint PapersPotential ContractsUS$ Value(millions)Colombiaseismic (P)-2$ 1.5Guatemaladrilling (I)Argentinaseismic (C)Drilling (P)1 (P)$ 3.5Belizeseismic (I)1Mexicodrilling (P)multi-year$10.0 +Pakistanmultiple$ 5.0 +Peru$ 4.0 +BoliviaUSA$ 5.0So., we start with Colombia:PRE and Petrodorado plan conduct a seismic survey in the tacacho block in the area where the SFD anomaly is situated (get update from Krishna)Resumed discussions with Ecopetrol and Repsol about potential sale existing offshore data and regarding new SFD surveys offshore.P – planned I – in progress C - completed
6TSX-V: SFD, OTC BB: NSFDF CapitalizationTSX-V: SFD, OTC BB: NSFDFCapitalization - Shares Outstanding (millions)44.7 Common shares issued8.0* Convertible Preferred shares (convert at 1:1, mature Dec 31, 2015)2.8 Stock options (average exercise price $0.90)1.3 Warrants (US $1.20 exercise, expire May 4, 2014)56.8 Fully diluted # of sharesD&O Insider Ownership – 18.4% Basic, 31.4% Fully diluted52 Week High/Low: $ $2.0590 day average trading volume ~ 45,000 sharesDebt-Free Balance Sheet ~ US $7.5 million cash* Does not represent debt or debt service…converts 1:1 to common on achievement of milestonesThe current is listed on the TSX-V and…6
7SFD® Data Acquisition System The aircraft Cessna 560 Citation jet (fly at 3,000 meters, 500 km/h) The SFD Sensors 3 systems of multiple sensors Data recording equipment (2,000 cycles / second) Aircraft positioning system GPS based, tracks flight linesThe SFD sensor is a passive transducer that produces an electrical signal in response to changes in sub-surface stress.The electrical signal is fed through the signal conditioning box, which uses a proprietary method to reduce noise and amplify the signal.The analog signal is output in volts into the Data Acquisition Cards where it is converted to a digital signal for display on a computer systemThe QC system incorporates the raw digital output from QNX and the graphical display of the output from the from Windaq acquisition systemTwo systems record the data independently and simultaneously - the WINDAQ system records with 14 bit precision and the QNX system records at 16 bits precision1.- Flight following system that provides the capability for ground crew and operator to follow the flight path and ensure the aircraft is on its intended course.2.- The second tracking system is connected to the GPS system and gives a real time map based update to the operator who is monitoring the on-board QC systemDADISP is a commercial interactive graphics Worksheet—a visually oriented software package for the display, management, analysis and presentation of scientific and technical data. It can manipulate, edit, reduce, transform, display or analyze technical data. DADiSP can handle and simplify the large volumes of data outputted by the SFD system
8SFD® SystemRapid identification of high-potential oil and gas prospects at low cost, both onshore / offshore, in any terrain.So, today we will introduce you to NTX Energy’s Stress Field Detection technology (or SFD). SFD represents a new class of exploration tools…it exploits the subtle variation in the gravitational field to identify trapped fluid accumulations. (oil/gas/water)Continue….. Identifies onshore/offshore…….Verification / evaluation of seismic prospects for reservoir potential - thereby reducing drilling riskSFD® (Patent Pending)
9Exploration Criteria and Large Reserves 5 exploration criteria that must be met for discoveriesSourceMigrationTrapReservoirSealSFD only responds if all three are presentMajor exploration areas with large reserve potentialsDeep waterSalt bound reservoirsResource playsFrontier areasSub-BasaltWhen it comes to the 5 major areas promising the best remaining reserves… the industry is facing new challengesgeology more complex, harder to reach and more difficult to image, much more expensive and time consuming…basalt can absorb and scatter seismic energyKey challenges:High velocities of basalt rock reduce the transmission of energy below.Severe absorption of higher frequencies reduces sub-basalt resolution.Hundreds of high-to-low velocity contrasts produce unprecedented levels of noise in the form of surface-related and internal multiple reflections.Undulating basalt interfaces and chaotic flow patterns scatter the seismic energy in all directions.SFD can assist clients in all areas with no environmental impact
10E&P Success = LOW FINDING COSTS Cost Time Risk SFD® Fast Tracks ExplorationCostTimeE&P Success=LOW FINDING COSTSREDUCESRiskSelling FOCUS!!!!!E&P companies will continue doing seismic exploration but….EnvironmentalFootprintFocus is the key
11SFD® System Exploration spectrum Inferred knowledge of Trap & Reservoir detail steadily increasesBasin LevelProspect LevelWell LevelCost(Line-km)$30$110$300$1,500$30,000$90,000$ millionExploration spectrumAeromagnetics& GravityWhere is SFD® in my Toolbox? And what does it do? How does it work?Hi-ResAeromagGravity Gradiometry2-DSeismic3-DSeismicDrillingReconnaissanceProspect IdentificationProspect VerificationSFD®
12Prospect Identification Area = 10,000 Km22D-SeismicAs we discussed, there a number of applications of SFD…You are at the stage 1 of the expl. cycle, have no information…what do you do if you have $5mm budget to evaluate a 2000sq area…you can conduct an 2000 mile SFD survey….2x2, very quickly…Or you can spend your $5mm on 100 miles 2D seismicSFD ® grid (5x5) kmSFD® - More focused information, quicker and with no environmental footprint
13Prospect Verification 4/1/2017Prospect VerificationOffshore CoverageExiting prospects identified by seismicSFD® evaluates reservoir potential of prospectsData integrated to choose best prospect and to minimize drilling riskSeismic ProspectsSFD linesBest ProspectSFD® quickly and cost effectively evaluates seismically identified prospects for reservoir potential – reducing drilling risk
14SFD® responds to perturbations in the gravity field due to changes in poroelastic properties (stress and fluid)Gravity field is distorted by discontinuitiesRubiales FieldStress reflects discontinuities and poroelastic changesSH maxThe SFD process starts in the subsurface..Three Principal Stresses…interaction at depth…Shear..Give rise to DiscontinuitiesDiscontinuities produce gravity anomalies as long as they are large enough they can be detected.. It is well understood that discontinuities distort regional stress fields..You can also see that Gravity controls vertical stress magnitude and direction… However, gravity in the horizontal direction is more balanced; the mass distribution is more even. So, the effect of Crustal forces, such tectonics, can affect and redistribute horizontal gravity magnitude and direction, which becomes detectable…... Horizontal stresses control horizontal gravitySH minchanges in stress magnitude and orientation entering reservoir
15SFD® signal over Ladyfern Field, Canada The only tool that identifies trapped fluid at Stage 1 of exploration - Disruptive Technology with Global ImpactSFD® signal over Ladyfern Field, Canada1.62 Trillion cu. ft. Rec.Ladyfern Field Signal ResponseSFD® AnomalySFD® signal over Rubiales Field, Colombia500 million bbls Rec.SFD® AnomalyRubiales Field Signal ResponseSFD is indeed a disruptive technology!!! WHY??It is the ONLY tool that at stage 1 in the exploration cycle that is capable of indicating the presence of trapped fluid..i.e. potential reservoirs (oil/H2O/Gas). The reservoir extent is shown by the yellow bar.This single feature makes SFD a GLOBAL IMPACT technologyThe first examples here is the Ladyfern gas field…SFD has identified LADYFERN 2 years before the discovery!! It is today the largest conventional gas field found in the last 15 years in Canada. The field contains 1.6 tril cu.ft of recoverable gas.The second example is the famous Rubiales oil Field in Colombia – again, the yellow bar indicates the extend of the reservoir…The a stratigraphically trapped heavy oil field has 1.5 B bbls of OOIP with 500 million recoverable. The field is being developed by Pacific Rubiales, the fastest growing Canadian oil company in SA. NXT has conducted 6 SFD surveys for PRE since 2009 in two countries.
16Estimated 1.26 Billion BBL OOIP Example of NXT Survey ResultsLlanos Basin, Colombia ( ):SFD® Recommendations vs. DiscoveryNXT conducted 10 surveys for 5 clientstotalling more than 7,000 line kilometersWells drilled on SFD recommended leadsWells drilled in areasrejected by SFD1112Looking back..one of the questions, very frequently asked, is what happened to these recommendations?… But we also recommend against drilling…You can see case examples of these discoveries on our websites…..We need to update our North American findings…. And of course we have numerous seismic confirmations as well… Why is it then that SFD is slow to adoption? Well, one is the Exploration cycle which can be quite long, often 3+ years from concept to actual drilling. (we did make some sign progress over the years …and today we are planning the NEW lines for PEMEX)The other is the conservativeness of the Industry…change and adaptation comes slowly… and third is the technology itself… Quantum mechanics based device which has only NOW arrived in oil and gas exploration….(SFD is now being accepted as PROVEN!!!)4 Field Discoveries7CommercialdiscoveriesEstimated 1.26 Billion BBL OOIPPredictionSuccess Rate64%100%
17SFD® - Growing Industry Acceptance Highlights of the US $5.8 million PEMEX 2012 SFD survey project:Initial survey covered vast area (over 100,000 sq. km)Covered varying geological areas and the Gulf of Mexico (e.g. deep waters, salt traps)Survey was designed both as a “blind-test” to assess SFD® correlation with existing geophysical data and producing fields and to identify new exploration prospectsTotal project with SFD® recommendations was delivered in only 4 monthsProject resultsHigh correlation between SFD and seismic anomalies47 of 64 known field identified, representing 98% of total reserves flown, missed fields less than 2km in lateral extent.PEMEX is assessing the potential for additional new SFD® surveys.PEMEX and NXT co-authored a technical paper, which includes SFD® / seismic correlations, July 24, 2013.
18Programa operativo12This year we completed a project shown here for Therefore the industry is focusing on alternate options…There are three major frontiers left… We discussed Colombia results… now we would like to discuss our current activities…and put it into prestive… There are 3 major area of exploration are remaining…
19Cuenca Salina del Istmo Golfo Profundo Anomalía PMX-2.17, Segundo orden, Clasificación (1+B) Buen potencial de trampa, Potencial moderado de yacimiento, confiabilidad (1)Anomalía PMX-2.16, Segundo orden, Clasificación (1+B+) Buen potencial de trampa, Buen potencial de yacimiento, confiabilidad (1)SENWONE of the New frontiers…SALT!!!! Existing G&G data compared with SFDNWSE
20Expanding Potential Revenue Streams 1. Service Fees2. Data SalesIn Colombia alone, over 40,000 km of proprietary data have been acquired.Additional data added with each new survey.3. RoyaltiesExisting GORR contracts in Canada (Pengrowth ~ BC Horn River Basin; Alberta ~ Swan Hills).4. Vertical ExpansionGoal = Equity ownership in prospects Additional long-term survey opportunities.We enjoy Excellent gross margin…Data sales gives us even higher margins!
21Growth Strategy – Organic growth Where:Focus on areas where SFD has a Competitive advantage- Latin America (core area for NXT)AsiaArctic and Atlantic CoastMediterranean and AfricaWho:Large Land Owners / International Leverage- National Oil Companies (i.e. PEMEX, Ecopetrol)Medium sized International (i.e. Pacific Rubiales)Organic growth– no capital is required..Where: Latin America – core market, multiple surveys completed, agents in place, revenues growingAsia – first survey complete, agents in place, new contracts expectedAlaska and Atlantic coast – political will for energy self sufficiency but environmental concernsMediterranean – agents in placeWho: NOC’s because they control a majority of the land and can be leveraged into other markets through their international operations. They have greatest need (ie PEMEX has declining reserves and political pressure)Northern RegionsArctic , AlaskaResource Plays (world wide)Canada, USA, South America, China, AustraliaOffshore (world wide)Deep Waters, Salt associated TrapsConventional Frontier Exploration (world-wide)How: Remain focused on what has been working very well for us and actively pursue improvementAccess: Implemented successfully an in country, success based agent model in all key markets. These agents are well established, respected and have access to internal champions. We provide direct sales and technical support.Awareness: Through technical seminars and presentations, conferences and publishing (results, case studies, underlying science, patent protection). Customers have started to come to us (ie. Argentina)Acceptance: measured by Repeat business, willingness to publish joint papers, provide customer testimonials and customer acting on recommendations (seismic design, drilling prospects, acquiring or relinquishing lands)Application: Developed key applications – conventional plays (structural and strat traps), salt traps, shale.Leverage: Each of these components can be used to leverage from customer to customer and market to market. This will ensure our continued growth.How:Remain focusedLeverage- AccessAwarenessAcceptanceApplication
22Board, Management and Advisors 4/1/2017ManagementNon-Executive DirectorsGeosciencesAdvisory BoardGeorge Liszicasz Chairman & CEOGreg Leavens, C.A. Chief Financial OfficerAndy Steedman, M.B.A V-P OperationsCharles Selby Caledonian Royalty CorporationMickey Abougoush Teknica Overseas Ltd. Tom Valentine Norton Rose Fullbright LLPKrishna Vathyam Petrodorado EnergyJohn Agee Business AdvisorDr. George Iusco RepsolDr. Cleveland Jones State Univ. of Rio De JaneiroDr. Arief Budiman Univ. of Calgary, CanadaExtensive public company experienceSolid global experienceOutstanding scientific credibilityWe have seasoned professionals in both Management and the Board……
23SFD ® HighlightsValue Added Service - Increase Client Exploration SuccessIdentify potential hydrocarbon trapsRapid and cost effective project executionHighly complementary to other G&G toolsAn Expanding, Profitable BusinessHave surveyed in numerous countries in multiple geological settingsStrong repeat business opportunitiesNon dilutive growth formulaVast Market OpportunitySFD market is global – onshore and offshoreUnique Proprietary ServicePatent PendingNo direct competitorsQuantum technologies are the FutureIf people look at google market cap of $26 mil. They are ALL unprofitable. That will change when you report your year end numbers on April (audited by KPMG)… A large contract with PEMEX could generate 1/2 that market cap in cash.2600+ cos on venture exchange only 75 have 25% net margins. If you do $20m your net margins will be X% (40? 50%?). None are forecasting the rev growth you have in your targets. You could easily break that. We can't control the stock price. All we can do is execute and that's what you plan to do. Obviously, if NXT gets a $15mm contract with PEMEX a buyback will be in order and that would could eliminate half your float at these levels with your profits if you hit your $20m rev target.