Presentation on theme: "April 2010 Flare Gas Monetization Greg Loewen, President & CEO."— Presentation transcript:
April 2010 Flare Gas Monetization Greg Loewen, President & CEO
BURNING GAS is BURNING CASH! 2 The Problem The problem is many companies are burning their valuable resources.
$$$$$ RGT TURNING GAS into CASH! New Saskatchewan Flaring Guidelines Requires flare gas conservation by Jan 2011. 3 The Problem Why will operators change? We want to help companies that burn the gas they produce from oil wells turn their resources into revenue.
The Solution - Rich Gas Transportation (RGT) Transport the gas from the source to a plant, pipeline, or end user. Scaleable, portable and uses conventional oilfield equipment. Oil Well Solution Gas Gas Plant 3 RD party Transport Unloading Facility 4 Loading Facility Install our proprietary skid mounted Loading Facility. Load the container. Use 3 rd party transport to take it to the Gas Plant. Unload the container and then return it to the wellsite to be filled again. Currently gas is being flared.
Flare Gas Market N. America Canada Sask 320 mmcf/day $470 MM/yr 130 mmcf/day $180 MM/yr 50 mmcf/day $75 MM/yr Worldwide flare gas 15,000 mmcf/day OUR GOAL 5% of Canada Market in 3 Yrs $6 MM/Yr 5 2.4 million tonnes of Carbon Credit potential per year from flared gas in Canada
6 Producer pipelines The Competition Cost Revenue Rich Gas Transportation provides the best combination of cost and revenue generation. + _ Better flare stacks Status quo RGT Remove liquids & burn methane Power Generation Capstone Tech AGRI Some of the competition falls off the table right away because of regulatory changes. In most cases, the gas is being flared because pipelines are not economic. Power only works if the gas can be used as fuel and the electrical demand is in the same location as the gas.
Our Process Local engineering expertise. Compression partner with market presence and equipment to handle flare gas. 7 RGT 3 x Volume 4 x Heat Content W. Claire proprietary RGT process uses the unique characteristics of flare gas to make the transport economical.
The Approach to Market Initially, sell direct to Saskatchewan producers flaring gas from oil wells. W. Claire has signed a Letter of Intent with PetroBakken Energy Inc. to implement a field demo of our process on one of their well sites. Compared to Alberta, there are more opportunities in Saskatchewan because of the significant flare volumes, limited infrastructure, high activity levels, and proposed new flaring regulations. Once established, we will channel sell through compression and/or equipment suppliers. Direct to Large Producers 8
Business Model 9 WCE Breakeven Point Currently producer is making no revenue from flaring the gas. Capturing the gas can generate significant revenues. Up to 60% of the revenue is from the liquids in the gas. *150 mcf/d Well, 70 bbls/mmcf Liquids, after royalties and processing fees
Business Model Gas Plant Monthly Fee + $/Volume shipped MARGIN = 48% 10 Producer $1.00 Revenue $0.75 to $0.90 W. Claire will charge the producer a flat monthly fee and a fee based on the volume shipped. For every dollar of revenue the producer receives (after royalties and plant processing fees), $0.75 to $0.90 goes to W. Claire for these fees.
Business Model 11 Typical System (thousands) Well Revenue*/year$340 W. Claire Fees$306 W. Claire Exp$148 W. Claire Profit$158 Capital$425 Payout<3 years Economics for a typical system installed at a wellsite. Added benefit not included in the revenue is increased oil production as a result of installing compression on the wellsite and reducing the wellbore pressure. *150 mcf/d Well, $4 Gas Prices, 70 bbls/mmcf Liquids, after royalties and processing fees
The Forecast Year 1Year 2Year 3Year 4Year 5 Number of Wells1530405060 Yearly Well Revenue*$5.1$10.2$13.6$17.0$20.4 Yearly W. Claire Share$4.6$9.2$12.3$15.4$18.4 Yearly W. Claire Expenses$2.9$4.8$6.1$7.5$8.8 Yearly W. Claire Profit$1.7$4.4$6.1$7.9$9.6 *150 mcf/d Well, $4 Gas Prices, 70 bbls/mmcf Liquids, after royalties and processing fees Millions except wells 12 Will ramp up quickly after field demo. 2000+ Bakken wells in SE Sask and many more thousands to drill. Estimate 100+ sites could use system now and 50+ more new sites per year. Expansion will come through lease financing and equity offerings.
13 First 15 150 mcf/d projects 500 mcf/d project Milestones 5 mmcf/d project 2011 Private offering $1.0 million Growth offering $3 million Growth offering $15 million 2010 Present F & F offering $0.5 million Demo design Field demo Growth thru Lease Financing 2012 Previous offering used for demo design. Current offering used to construct a field demonstration of process to be on stream by June 2010. Sign LOI with PetroBakken
14 Management Greg Loewen, President & CEO 29 years in industry. Company start-up experience. Contract Robin Westin, V.P. Finance & CFO Transportation company experience. Worked for several start-ups. Don Fraser, CNG Consultant 17 years compressed gas bulk transport experience. The People Board of Directors John Mroch, Executive Chairman 35 years in industry. Several prior company start-ups. Ray Gertz 26 years of running his own company. Director of two other public companies. Greg Loewen Jay Zammit Corporate Secretary. Partner at Burstall Winger. Will add to our board right away and to technical staff as operations ramp up.
The Deal Current offering is for $1 Million. Money in: Founders$340 thousand Family and friends 780 thousand Other assets 220 thousand Coming Govt. grants 700 thousand T otal $2.0 million Government R&D funding conditionally approved - IRAP and SR&ED. Breakdown of spending: Intellectual property protection $150 thousand Field demo in SE Sask 650 thousand Marketing, G&A 200 thousand Total $1.0 million 15
Design the Product Calculate a Forecast We Have The Team To Sum Up Offering - $1 Million We need your help to take our company to the next step. 16 $6 MM 3 YEAR FORECAST RGT Identify the Problem Provide a Solution The Market
17 W. Claire Energy Corporation 401, 100 – 4 th Avenue SW Calgary, AB Canada T2P 3N2 Phone: 403-452-7787 Mr. Greg Loewen, President & CEO firstname.lastname@example.org www.wclaire.com Contact GAS to CASH!