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A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION
CORPORATE PRESENTATION (January 21, 2013) Ladies and Gent…My name…thank you for the opportunity to introduce NXT’s breakthrough oil and gas exploration technology…that has been successfully applied in a various regions of the world. Today is an opportunity for us to make our method available in the Chinese market. A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION
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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. 1 1
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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. SFD ® Survey System Who we are What do we do
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SFD ® “Stress Field Detection”
NXT’s method will identify the best oil and gas prospects 10 times faster, and at up to1/20 the cost of seismic - Exploration is capital intensive and time consuming…it may take 5 years on average to complete full cycle exploration…NXT can find them 10 x faster and 20 x cheaper…. … - Patent pending SFD® (Patent Pending)
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SFD® Survey in Colombia - 2009
Sabanero Block NXT recommendation in Dec 2009 3D Seismic over the block (grey area) completed by December Discovery July 2010 with an estimated 180 million barrels OOIP. Today the entire field is developed. NXT Energy Solutions Investor Presentation to MicroCapClub Jan _Final
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SFD® Survey, Pacific Rubiales, Tacacho block, Colombia
Flown 2000 line km From Start to finish 7 weeks SFD® grid program fully evaluated the 7,500 km2 area Pacific Rubiales relinquished non prospecting areas Petrodorado farms in $8 million commitment
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Tacacho and Terecay 2010 Results Drilling in Q1 2013
This chart shows the exploration leads and resource expectations in the Tacacho and Terecay areas vs. the top SFD anomalies Independent G&G work by PRE confirms (shows) that the areas identified by SFD as highly prospective are the same as the areas identified .. The next example shows a different way to use the SFD …when seismic is already shot… Source : PRE – Exploration Asset Portfolio Report (September 2010)
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E&P Success = LOW FINDING COSTS Cost Time Risk
SFD®: Fast Tracks the Exploration Process Cost Time E&P Success = LOW FINDING COSTS REDUCES Risk Environmental Footprint In summary we can say that SFD reduces cost…i.e. it fast track expl and mitigates risk…… Focus is the key
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SFD® System Exploration spectrum
Inferred knowledge of Trap & Reservoir detail steadily increases Basin Level Prospect Level Well Level Exploration spectrum Aeromagnetics & Gravity Hi-Res Aeromag Gravity Gradiometry 2-D Seismic 3-D Seismic Drilling Where is SFD® in my Toolbox? And what does it do? How does it work? In the exploration spectrum it is situated between gravity gradiometer and 2D recon seismic… It is not your conventional gravimeter…SFD does not respond to magnitude changes due to acceleration of mass but responds to a energy spectrum selectively, such as induced by stress… According to GR matter, energy, and momentum causes space-time to curve, which constitutes gravity…i.e. the source of gravity is the geometry of space as apposed to MASS. A as result, Stress affects gravity and vice versa..GR postulates that matter responds orientation changes along the horizontal gravitational field. These changes are induced by subsurface horizontal stress… The reason is that stress distribution in rocks and reservoirs fluid are very different…..In rocks stress propagation has direction and magnitude..in contrast stress in fluids are radially distributed and shear does ………… The resolution of an SFD ® survey significantly surpasses other remote sensing techniques at the prospect scale. - Early in the exploration cycle or also used to verify Seismic. Reconnaissance Prospect Identification Prospect Verification SFD® The resolution of an SFD ® survey significantly surpasses other remote sensing techniques
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SFD® Data Acquisition System
The aircraft Cessna 560 Citation jet (fly at 3,000 meters, 500 km/h) The SFD Sensors 2 systems of quantum devices 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
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SFD® responds to perturbations in the gravity field
SFD® responds to perturbations in the gravity field related to changes in stress direction Gravity field is distorted by stress Discontinuities affect regional/local stress distribution SH max SH min Summary slide for the technical part of the presentation.. Schematic illustration of stress field re-distribution (red & blue vectors) in the vicinity of a subsurface feature. These stress ‘distortions’ are manifested as minor rotational effects (white arrows) in the horizontal gravity field. changes in stress orientation entering reservoir
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We started our SFD services in 2006…..
Our head office is in Calgary+ reps Where did we work? Every major oil co tested SFD.. Offices/Agents 2012 Ongoing Projects
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7 Correlations between discoveries and SFD Recommendations
NXT Surveys - Llanos Basin, Colombia ( ): 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 8 4 Field Discoveries To date, 11 SFD Lead Areas have been drilled, 7 of which were successful, resulting in the discovery of 4 oil pools with an estimated 1.26 Billion BBL OOIP. In addition, 8 wells were drilled along SFD survey lines that were not recommended by SFD, none of which have resulted in a discovery. Commercial Wells 7 Estimated 1.26 Billion BBL OOIP Prediction Success Rate 64% 100%
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QUIFA BLOCK SFD BLIND TEST Tested by Drilling
‘Blind Test’ Results SFD ® identifies 4 leads All verified by seismic A – 100 million bbl F million bbl B - drills 100 ft wet sand X - un-drilled F B X X RUBIALES OIL FIELD RUBIALES OIL FIELD
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Central & Latin America
2012 – A Record Year - $11million Selected list of recent contracts and near-term pipeline objectives. Status Location US$ Value Complete Colombia, Guatemala $ 3.5 million Argentina $ 1.65 million Mexico $ 5.8 million Complete Q4-12 Belize $0.5 million Underway Q1-13 South Asia $ 2.66 million Pipeline Central & Latin America $ 5 million Paraguay & Bolivia $ 5 - $ 8 million Colombia $ 1 - $ 5 million Near-term Objectives 14 14
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Vast Market Opportunity
$12 Billion Global Geophysics Market 2010 E&P Market: $447 Billion 1% = $120 million NXT Revenue Targets 2012 $11.4 Million 0.09% 2013 $20 Million 0.17% 2014 $40 Million 0.33% Best Previous Year - $5.3 Million Source: Spears Oilfield Market Report, 2010; Barclay’s Original E&P Spending Survey, 2010; NXT Market Analysis
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Current and Future 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. Royalty Existing GORR contracts in Canada (Pengrowth ~ BC Horn River Basin; Alberta ~ Swan Hills) 4. Vertical Expansion Equity ownership, long term contracts
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SFD® Services Concession Level Basin Level - Reconnaissance
Grid designed to identify and rank individual reservoir prospects and/or optimize seismic programs (PRE) - Prospect Verification High-Grading seismically derived prospects based on reservoir quality onshore/offshore (PRE, BP) Basin Level Grid designed to identify Trap Potential (PEMEX) 1. basin level reservoir targets. SFD Prospect Confirmation A tight grid over a high cost drilling prospect location verifying optimum potential before spending $10s, even $100s, of millions. 17
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115 km Seismic vs. 2,500 line km SFD®
4/2/2017 Data Coverage for $3.5 Million SFD ® (5x5) Seismic SFD tool can be used stage I: Seismic confirmation 5,000 sq. km. SFD delivers Focus quickly and cost effectively Significantly reduces reconnaissance seismic
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SFD® Product A recommended target map of anomalies identified by SFD® interpretation, rated on both reservoir and trap characteristics. From this SFD® Based Prospectivity map, seismic can be tailored to maximize results and minimize cost.
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SFD® Capabilities and Limitations
SFD® complements other tools, especially seismic identifies and ranks potential trapped-reservoirs identifies other major geological anomalies (ex: faults) identifies natural fractures in resource plays cannot differentiate reservoir fluid types (water or oil/gas) cannot determine exact drill location cannot define depth of reservoir cannot distinguish the number of stacked reservoirs without lateral offset
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Signal relaxation Reservoir indicator
May 25, SFD® signal over heavy oil Rubiales field Time (seconds) B Voltage (v) Signal relaxation Reservoir indicator A B Time (seconds)
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SFD Colombia Offshore Example : Chuchupa is a 5.5 TCF Gas Field
Chuchupa Gas Field Chuchupa 3700 3600
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Natural Fractures in Shale Horn River, British Columbia
SFD Case Example 8 Canadian Plains Natural Fractures in Shale Horn River, British Columbia
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Natural Fractures in Shale Horn River, British Columbia
SFD Case Example 8 Canadian Plains Natural Fractures in Shale Horn River, British Columbia Flight direction Directional drilling Flight line direction Map and location of the line
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Further Technical Validation
4/2/2017 NXT is ahead of the curve with the SFD® sensor. JQI has “developed a novel design for a highly compact, ultra-sensitive quantum device to measure subtle changes in gravity using atomic interferometry.” Quantum detectors are now being proposed by prestigious researchers. It may “be used to search for natural resources beneath the Earth’s surface.” August 2010 Source:
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Capitalization TSX-V: SFD, OTCBB: NSFDF
Capitalization - Shares Outstanding (millions) 39.5 Common shares issued 10.0* Convertible Preferred shares (convert at 1:1, mature Dec 31, 2015) 3.1 Stock options (average exercise price $0.85) 4.5 Warrants (US $1.20 exercise, expire from March 8 to May 4, 2014) 57.1 Fully diluted # of shares D&O Insider Ownership – 15.9% Basic, 32% Fully diluted 52 Week High/Low: $ $1.17 Debt-Free Balance Sheet ~ $5.0 million cash Does not represent debt or debt service…converts 1:1 to common on achievement of milestones (2 million of the total are currently convertible) The current average exercise price for the 3,215,600 stock options o/s is $1.02. The D&O Insider %s are also now 15.9% Basic, 32.0% Fully Diluted. 26
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Board, Management and Advisors
4/2/2017 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 Grafton Withers, M.B.A V-P Marketing & Sales Charles Selby Caledonian Royalty Corporation Mickey Abougoush Teknica Overseas Ltd. Tom Valentine Norton Rose LLP 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 management experience Outstanding scientific credibility
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Highlights Disruptive Technology for Oil & Gas Exploration
Profitable and Commercially Proven Contract and Pipeline Activity is Robust Vast Market Opportunity THANK YOU !
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