2Important NoticeNOT 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 JURISDICTIONThis 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). 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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). 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3Athabasca Oil Sands - Overview Athabasca ResourcesAthabasca Oil Sands - OverviewThe 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.Source: DeGolyer & MacNaughton 2012
4Canadian Oil Sands – The 3rd Largest Oil Reserve In The World Athabasca ResourcesCanadian Oil Sands – The 3rd Largest Oil Reserve In The WorldCanadian Oil Sands makes Canada no. 3 among 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: Canadian Association of Petroleum producers; MIT Technology Review, January 2012;
5Athabasca – A Part Of The Chard Field Athabasca ResourcesAthabasca – A Part Of The Chard FieldMiddle ChannelGeology:McMurray Sand Formation: Upper, Middle & Lower channelsUpper channel thickness: between – 7 mMiddle channel thickness: between – 30 mLower channel thickness: between 10 – 50 mFormation Depth: between 200 – 360 mHeavy Oil :Gravity estimated: APIPorosity: 27 – 35 %Oil Saturation: Approx. 70 – 75 %Permeability: 2 – 6 DarcyChannel identification on the map:Green: indicates layers above 10 mRed: indicates layers above 8 mLayers above 5 meters: indicated with a 5 m lineSection with above 8 meters: 7 sections on the western side of the leases holds the majority of the oilLower ChannelSource: DeGolyer & MacNaughton 2012
6Facts - The Chard Field Has Oil Resources in Place Athabasca ResourcesFacts - The Chard Field Has Oil Resources in Place50% 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: MM Bbl at 48% recoveryMid level: MM Bbl at 40% recoveryLow level: MM Bbl at 31% recoveryA 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 resourcesto verify the quality of the oilto prepare for pilot programme.Source: DeGolyer & MacNaughton 2012;
7Athabasca Resources’ Chard Field Athabasca Is Located Close To Other Oil Sands Exploration Companies In AthabascaAthabasca Resources’ Chard FieldATHABASCARESOURCESMeg 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 sectionsSource: The Terracon Group
8Surrounding Area Is Covered By Active Oil Sands Companies Athabasca ResourcesSurrounding Area Is Covered By Active Oil Sands CompaniesMEG Energy – Christina Lake (just south of Chard)Currently producing bpd from 8 API bitumen. Expanding to bpd by Upgrading facility nearby and pipeline to Edmonton.EnCana – Christina Lake 8 API bitumen. Estimated start of production Capacity bpdConoco Phillips - Surmount Phase I (north of Chard) Production start bpd.ConocoPhillips - Surmount Phase II7-9 API. Engineering underway. Estimated start of production Capacity bpd.Jacos - Hanging stone (north west of Chard) Demo project. Production start Capacity bpd initially increasing to bopdPetrobank - May River Phase I. (south of Chard)Demonstration plant. Using toe-to-heel air injection (THAI) technology. Production has started. Initial capacity of bpd after start-up phase. Ultimate production up to bpd.Devon - Jackfish IOperating. Capacity bpd. Jackfish II. (South of Chard). Under construction. Estimated start of production Capacity bpd. Plan upgrade to bopdStatoil. Kai Kos Dehseh – LeismerEstimated start of production in 2Q Initial production rising to bopd at year-end. Production estimated at bopd by 2016 and to top bpd on projects currently applied for. Can reach bopd according to partner PTTEP after 2018.Source: Public presentations and announcements from the respective companies listed above and
9Chard Oil Sands Is An ”In Situ” Project Athabasca ResourcesChard Oil Sands Is An ”In Situ” ProjectAbout 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 TECHNOLOGYSource: ; MIT Technology Review, January 2012;
10Athabasca ResourcesNew Technologies Provides Access To Thinner Layers & Incentives Are In Place To Promote Further InnovationMajor In Situ TechnologiesCSS - Cyclic Steam StimulationSeveral 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 DrainageSAGD 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 ProcessSimilar 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 ProcessThe 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 InjectionHas the potential to recover percent of bitumen-in-place versus % 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 SAGDEnhances the recovery by up to 20% and is currently being tested in by Sinopec in China in thin layers >5 meters.Innovative Energy Technologies ProgramAlberta’s Innovative Energy Technologies Program (IETP) offers royalty adjustments of up to $10 million per pilot project that demonstrates the use of new orinnovative technologies to increase environmentally sound recovery of existing reserves and encourages responsible development of new oil.Year~1985~1995~2005~2009IETPSource: McDaniel & Associates Consultants Ltd. (McDaniel THAI® Transition Report); Sinopec China,
11OIL RECOVERY SERVICES LTD (ORS) Athabasca ResourcesThe ORS solution offers an end to end service platform Oil Production Tar Sands and Heavy OilWater Separation and remediationSand Separation and in situ backfillingWaste Oil RecoveryEnvironmental remediationWHAT 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.
12OIL RECOVERY SERVICES LTD (ORS) Athabasca ResourcesSurfactant InjectionReduce the product viscosity.Break down wax and asphaltene deposits.Suspend colloids and insoluble waste in emulsion.CirculationTar Sands are treated with high pressure injection systems to apply surfactant in situ using engineering solution similar to SAGD.No water or steam is used.Removal through dialysisHeavy Solids.Oxidised Metal.Water Coalescence.Small Particle Removal.Oil and/or Bitumen delivered to marketHOW DOES OUR TECHNOLOGY WORK?OUR BESPOKE ORGANIC SURFACTANTS ARE BOTH SAFE AND FAST ACTING.UP TO 400 TIMES MORE EFFICIENT THAN STEAM.
131-3 Year Growth Strategy – Upgrade, Acquire, Produce Athabasca Resources1-3 Year Growth Strategy – Upgrade, Acquire, ProduceWorking AssumptionsUpgradingUpgrade 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.AcquireEvaluate neighboring and/ or strategic acreage for possible purchase or farm-in to grow portfolio of resources and reserves.Establish pilot productionPursue 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 facilityEstablish production wells targeting initial best case production figures.Continue exploration on the licenses.Continue the organic and acquisitive growth.Source: Company Analysis
14Management Team & Board Athabasca ResourcesManagement Team & BoardJulian Hamilton Barns, aged 54, Founder DirectorJulian 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, DirectorAtul Gupta served as CEO of Burren Energy Plc until 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, DirectorRichard Bonnycastle has been the Chairman and the President of Cavendish Investments Limited since 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.
15Joint Operating Committee Will Control The Work Program Athabasca ResourcesJoint Operating Committee Will Control The Work ProgramNordic Petroleum ASAthabasca Resources Ltd100%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
16Use Of Funds Athabasca Resources Use of funds Paid-in Capital* £5,000,000Acquire 50% of the Leases & Pay initial work program £1,950,000AIM listing and advisory fees £ 600,000Working capital for 18 months £ 500,000Working Capital / Acquisition and Due Diligence £ 1,950,000Assumption: 1 USD = 1 CAD = 0.64 GBP*): Based on an equity raise of £4 million