1. EFI Gas-to-Market Conference
INTEK
Oil Shale Development Economics
May 16, 2007
Khosrow Biglarbigi
INTEK, INC.
EFI Gas-to-Market Conference
The Westin Edmonton
14-16 May 2007

2. Economic Discussion Part I - Project Economics
Project costs
Economic price
Cash flow
Part II – A new oil shale industry
Potential size
Economic hurdles/solutions
Benefits on U.S. economy

3. National Oil Shale Model

4. Resource Base Analyzed
Industry nominated tracts
79 Billion Barrels of resource in place
Detailed geologic & petrophysical data
Western Oil Shale

5. Technologies Considered
Surface Mining / Surface Retort
Underground Mining / Surface Retort 1 2 3 4
Modified In-Situ
True In-Situ

6. Alberta Oil Sands Production, MMBbl/Day First Generation Projects
Project Costs
Canadian Oil Sands
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
1981
1984
1994
1998
1999
2001
2003
2005
Production Cost, 2004 US $
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9 1
Alberta Oil Sands Production, MMBbl/Day
Production Costs: Oil & Gas Journal, July 14, 2003, V
Production Volumes: Canadian Association of Petroleum Producers, Historical Statistics
O & M Costs
First Generation Projects
*Inclusive of mining, retort, & upgrading *

7. However, the Capital Costs are Increasing (Source: CAPP, March 2007)*
*Presented at the 2007 EIA conference, Washington. D.C.

8. Economic Price for Oil Shale Technology
Generic Projects (Price: $/Bbl)
True
In-Situ
Surface
Mining
Underground
Modified
$35.00
$43.00
$52.00
$57.00 10 20 30 40 50 60 70
2004 Dollars
Rate of Return – 15%

9. Breakdown of Economic Price for Generic Surface Project
$43/Bbl
Transfer Payments $6
$/Bbl

10. Cashflow of a Generic Oil Shale Project
1200
-1000
-800
-600
-400
-200
200
400
600
800
1000 5 10 15 20 25 30 35 40
Before Tax
Room for Government Action
Cumulative Discounted After Tax Cashflow (MM$)
Year
After Tax

11. Impact of Incentives on Generic Cashflow
1200
-1000
-800
-600
-400
-200
200
400
600
800
1000 5 10 15 20 25 30 35 40
Before Tax
Cumulative Discounted After Tax Cashflow (MM$)
After Tax
Year
$10/Bbl Production Credit
$5/Bbl Production Credit
15% investment Credit
10% Investment Credit
Accelerated Depreciation

12. Projected Production Potential (BOE) (Shale Oil in the U.S.)
RD&D
Accelerated
Tax Incentives
Measured
Base

13. Potential Influence of Oil Shale Development
World Demand
Change In
Oil Price
Effects on
Consumer Spending
Drilling Rigs
Skilled Labor
Steel Pipes
Power
Heaters
OPEC
World Supply
Oil Shale
Investments
Oil Shale
Development
Reduces Call
on OPEC
Oil Shale Direct
and Indirect Jobs
Reduces
Imports
Shale Oil
Production
Impact on
National
Economy
Local, State,
Federal
Treasuries
Contribution to
GDP

14. Favorable Fuel Prices Will Increase Consumer Discretionary Spending, Non-Petroleum Jobs, And GDP
Oil Price
Fuel Price
Consumer
Discretionary
Spending
Industrial
Energy
Spending
Non Petroleum
Contribution
to GDP
Driven
Jobs

15. Impact of Increased Production on Future Prices
Reductions from Reference Prices $0

16. Savings to U.S. Consumers
(Cumulative)
$200 to $900 Billion

17. Contribution to GDP
Up to $1.2 Trillion
(Cumulative)

18. New Jobs
Up to 250,000

19. Savings on Foreign Imports
Up to $325 Billion

20. Direct Local, State, And Federal Revenues Will Increase by $25 to $85 Billion by 2035
(Cumulative)

21. Summary Provide Long Term Sustained Production
With Substantial Benefits to the U.S. Economy:
Contribution to GDP: up to $1.2 Trillion
New Jobs: 250,000
Reduction in Foreign Imports: $325 Billion
Consumer Savings: $900 Billion
Additional Investments: $145 Billion (Stimulated)
Public Revenues: up To $85 Billion
Concerted Efforts by Government and Industry Needed to Capitalize on this Opportunity

22. Acknowledgements Office of Naval Petroleum & Oil Shale Reserves
Office of Petroleum Reserves
U.S. Department of Energy