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Presentation on theme: "A PROVEN, Innovative TECHNOLOGY FOR HYDROCARBON EXPLORATION"— Presentation transcript:


2 Disclaimer 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. 2 2

3 A 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

4 Frontier areas and NOCS
Offices/Agents SFD Projects Proposed SFD Projects

5 Exploration activity on recent SFD® survey areas, and new opportunities
Country E&P activities Joint Papers Potential Contracts US$ Value (millions) Colombia seismic (P) - 2 $ 1.5 Guatemala drilling (I) Argentina seismic (C) Drilling (P) 1 (P) $ 3.5 Belize seismic (I) 1 Mexico drilling (P) multi-year $10.0 + Pakistan multiple $ 5.0 + Peru $ 4.0 + Bolivia USA $ 5.0 So., 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

Capitalization TSX-V: SFD, OTC BB: NSFDF Capitalization - Shares Outstanding (millions) 44.7 Common shares issued 8.0* 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 shares D&O Insider Ownership – 18.4% Basic, 31.4% Fully diluted 52 Week High/Low: $ $2.05 90 day average trading volume ~ 45,000 shares Debt-Free Balance Sheet ~ US $7.5 million cash * Does not represent debt or debt service…converts 1:1 to common on achievement of milestones The current is listed on the TSX-V and… 6

7 SFD® 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 lines The 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 system The QC system incorporates the raw digital output from QNX and the graphical display of the output from the from Windaq acquisition system Two systems record the data independently and simultaneously - the WINDAQ system records with 14 bit precision and the QNX system records at 16 bits precision 1.- 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 system DADISP 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

8 SFD® System Rapid 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 risk SFD® (Patent Pending)

9 Exploration Criteria and Large Reserves
5 exploration criteria that must be met for discoveries Source Migration Trap Reservoir Seal SFD only responds if all three are present Major exploration areas with large reserve potentials Deep water Salt bound reservoirs Resource plays Frontier areas Sub-Basalt When it comes to the 5 major areas promising the best remaining reserves… the industry is facing new challenges geology more complex, harder to reach and more difficult to image, much more expensive and time consuming… basalt can absorb and scatter seismic energy Key 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

10 E&P Success = LOW FINDING COSTS Cost Time Risk
SFD® Fast Tracks Exploration Cost Time E&P Success = LOW FINDING COSTS REDUCES Risk Selling FOCUS!!!!! E&P companies will continue doing seismic exploration but…. Environmental Footprint Focus is the key

11 SFD® System Exploration spectrum
Inferred knowledge of Trap & Reservoir detail steadily increases Basin Level Prospect Level Well Level Cost (Line-km) $30 $110 $300 $1,500 $30,000 $90,000 $ million Exploration spectrum Aeromagnetics & Gravity Where is SFD® in my Toolbox? And what does it do? How does it work? Hi-Res Aeromag Gravity Gradiometry 2-D Seismic 3-D Seismic Drilling Reconnaissance Prospect Identification Prospect Verification SFD®

12 Prospect Identification
Area = 10,000 Km2 2D-Seismic As 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 seismic SFD ® grid (5x5) km SFD® - More focused information, quicker and with no environmental footprint

13 Prospect Verification
4/1/2017 Prospect Verification Offshore Coverage Exiting prospects identified by seismic SFD® evaluates reservoir potential of prospects Data integrated to choose best prospect and to minimize drilling risk Seismic Prospects SFD lines Best Prospect SFD® quickly and cost effectively evaluates seismically identified prospects for reservoir potential – reducing drilling risk

14 SFD® responds to perturbations in the gravity field due to changes in poroelastic properties (stress and fluid) Gravity field is distorted by discontinuities Rubiales Field Stress reflects discontinuities and poroelastic changes SH max The SFD process starts in the subsurface.. Three Principal Stresses…interaction at depth…Shear.. Give rise to Discontinuities Discontinuities 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 gravity SH min changes in stress magnitude and orientation entering reservoir

15 SFD® signal over Ladyfern Field, Canada
The only tool that identifies trapped fluid at Stage 1 of exploration - Disruptive Technology with Global Impact SFD® signal over Ladyfern Field, Canada 1.62 Trillion cu. ft. Rec. Ladyfern Field Signal Response SFD® Anomaly SFD® signal over Rubiales Field, Colombia 500 million bbls Rec. SFD® Anomaly Rubiales Field Signal Response SFD 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 technology The 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.

16 Estimated 1.26 Billion BBL OOIP
Example of NXT Survey Results Llanos Basin, Colombia ( ): SFD® Recommendations vs. Discovery NXT conducted 10 surveys for 5 clients totalling more than 7,000 line kilometers Wells drilled on SFD recommended leads Wells drilled in areas rejected by SFD 11 12 Looking 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 Discoveries 7 Commercial discoveries Estimated 1.26 Billion BBL OOIP Prediction Success Rate 64% 100%

17 SFD® - 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 prospects Total project with SFD® recommendations was delivered in only 4 months Project results High correlation between SFD and seismic anomalies 47 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. 

18 Programa operativo 1 2 This 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…

19 Cuenca 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) SE NW ONE of the New frontiers…SALT!!!! Existing G&G data compared with SFD NW SE

20 Expanding Potential Revenue Streams
1. Service Fees 2. Data Sales In Colombia alone, over 40,000 km of proprietary data have been acquired. Additional data added with each new survey. 3. Royalties Existing GORR contracts in Canada (Pengrowth ~ BC Horn River Basin; Alberta ~ Swan Hills). 4. Vertical Expansion Goal = Equity ownership in prospects Additional long-term survey opportunities. We enjoy Excellent gross margin… Data sales gives us even higher margins!

21 Growth Strategy – Organic growth
Where: Focus on areas where SFD has a Competitive advantage - Latin America (core area for NXT) Asia Arctic and Atlantic Coast Mediterranean and Africa Who: 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 growing Asia – first survey complete, agents in place, new contracts expected Alaska and Atlantic coast – political will for energy self sufficiency but environmental concerns Mediterranean – agents in place Who: 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 Regions Arctic , Alaska Resource Plays (world wide) Canada, USA, South America, China, Australia Offshore (world wide) Deep Waters, Salt associated Traps Conventional Frontier Exploration (world-wide) How: Remain focused on what has been working very well for us and actively pursue improvement Access: 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 focused Leverage - Access Awareness Acceptance Application

22 Board, Management and Advisors
4/1/2017 Management Non-Executive Directors Geosciences Advisory Board George Liszicasz Chairman & CEO Greg Leavens, C.A. Chief Financial Officer Andy Steedman, M.B.A V-P Operations Charles Selby Caledonian Royalty Corporation Mickey Abougoush Teknica Overseas Ltd. Tom Valentine Norton Rose Fullbright LLP Krishna Vathyam Petrodorado Energy John Agee Business Advisor Dr. George Iusco Repsol Dr. Cleveland Jones State Univ. of Rio De Janeiro Dr. Arief Budiman Univ. of Calgary, Canada Extensive public company experience Solid global experience Outstanding scientific credibility We have seasoned professionals in both Management and the Board……

23 SFD ® Highlights Value Added Service - Increase Client Exploration Success Identify potential hydrocarbon traps Rapid and cost effective project execution Highly complementary to other G&G tools An Expanding, Profitable Business Have surveyed in numerous countries in multiple geological settings Strong repeat business opportunities Non dilutive growth formula Vast Market Opportunity SFD market is global – onshore and offshore Unique Proprietary Service Patent Pending No direct competitors Quantum technologies are the Future If 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.



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