Presentation on theme: "August 2014 Rational for the Acquisition of Stimsol Business from Arcan Resources Ltd and the Creation of BlendForce Energy Services Inc. Fortaleza Energy."— Presentation transcript:
August 2014 Rational for the Acquisition of Stimsol Business from Arcan Resources Ltd and the Creation of BlendForce Energy Services Inc. Fortaleza Energy Inc
Vision – Rapidly Changing Industry Improving Commodity Prices however there remains significant risks with continued success of resource play development in North America Resource Play Development – large land position – deep drilling inventory – profits driven with field execution- cost reductions. Resource Plays returns are very sensitive to costs and commodity prices Significant shift down market in Companies being financed – however investors remain selective
Vision - Investment Opportunity Stimsol Acquisition from Arcan Resources Operating Business Immediate Cash Flow Low maintenance capital No outside equity requirement Growth opportunities Very quick payback – less than two years Potential to pay dividends in the future Diversified lines of business Exploration – variety of resource plays Production – existing producing wells Complete management team in place and operating the business
History of Stimsol Stimsol created in 1983 Operating in Red Earth Creek Stimsol Acquired by Arcan in September 2011 for $24.5mm. Business consisted of: 1. Proprietary Acid Blend with $134/m3 royalty 2. 5 C&A Pumpers, 7 Pressure Tank Trucks 3. Production Services Business employing 85 people with operational bases located in Grande Prairie, Blackfalds and Red Earth Creek. Corporate Office and Lab based in Calgary. In 2012, acquired Firm Acid Supply from Canexus and Univar for 80,000 m3 per In 2011, commenced construction of Acid Blend Facility in Swan Hills for $7.3mm - commission in November disposed of $8.0mm of equipment. Terminated take or pay acid supply contracts with Univar and Canexus
The Acquisition – Stimulation Fluid Blending Facility Arcan has agreed to sell to Fortaleza the assets and business of StimSol for $2.5mm. Assets: The Swan Hills Blending Facility site operated by StimSol located within the town of Swan Hills, Alberta consisting of 48,400 sq. meter site governed by municipal and provincial surface lease. Disposal Well located within facility site LSD W5M and bottom hole located at LSD W5M and all equipment associated with asset and special assignment of disposal zone rights Warehouse & Office Building (50ft X 120ft), including office furniture, pump room and load cell station and QC lab and associated equipment. 10 – 750 bbl fiberglass acid tanks within containment 4 – 400 bbl steel storage tanks within containment 4 – 100 bbl steel storage tanks within containment All equipment associated with handling, blending and shipping of all products produced out of the Swan Hills Facility. Office, Lab and computer equipment located at 7874 – 10 th Street N.E. Calgary, Alberta and the assignment of the commercial lease agreement.
Blendforce Swan Hills Service Area – 250 KM Vision – Maximizing Value of Service Area
Carbonate Play Light Oil Resource Play being exploited with Horizontal multi stage acid fracs. 840 sections of oil charged platform reef. Estimated Unconventional OOIP of 2.5 billion bbls with per section OOIP of mmbbls – “Sleeping Giant”
Wells Drilled Since 2006
Play Types – Undrilled LSDs
Swan Hills – Carbonate Play
35% Acid Acid in the Field 1. Acid Frac – 1,000 cubic meters - 33 Truck Loads Diluted to 28% and chemical added: Friction reducers Corrosion inhibitors Solids Controls Demulsifier 2. Spearhead – 200m3 per job – any horizontal stage fracs. Diluted to 15% and chemicals added Corrosion inhibitors Solids Controls 3. Stimulation Fluid – Well Cleanouts – Scale Removal -15 m3 per job Diluted to 15% and chemicals added Every producing well with associated water requires Acid treatment Specialty Chemical Blends 4. Flow Back Fluid Disposal Disposal Well
Fortaleza Public Co TSX V Listing Oil and Gas Meets Minimum Listing Requirements for TSX-V Buick Creek Pine Creek BlendForce Acid Frac Fluid Blending & Supply Acid Stimulation & Production Enhancement Fluids Flow Back Water Disposal Petroleum Based Frac Fluid Supply Logicss
Revenue Streams and Field Margins
Expansion Opportunities Transportation From Terminal to SHAW Blending Facility - $50/m3 From Shaw Blending Facility to Field – $50-75/m3 New Location Blending Facility is new location SE Saskatchewan - Bakken Fort Nelson -NE BC Montney Supply Logistic Management for Frac Fluids Fluid & Logistics Management Water and Petroleum Based Fracs Flow Back Water Disposal $750,000 Investment Capacity to dispose of 300 m3 of fluid per day New completion flowback m3 per well.