Wavefront president's club presentation (oct 2011)Presentation Transcript
Increasing the Size of the PrizeRevitalizing Waterfloods and Adding Reserve Barrels to Mature Operations October 2011 WEE TSX.V onthewavefront.com
DisclaimerThis presentation may contain forward-looking statements within the meaning of applicable securities laws.Forward-looking statements may include estimates, plans, anticipations, expectations, opinions, forecasts,projections, guidance or other similar statements that are not statements of fact. Although Wavefront believesthat the expectations reflected in such forward-looking statements are reasonable, it can give no assurancethat such expectations will prove to be correct. These statements are subject to certain risks and uncertaintiesand may be based on assumptions and data provided by arms-length parties, which is believed to be reliable,but is in no way assured; which could cause actual results to differ materially from those anticipated or impliedin the forward-looking statements. These risks include, but are not limited to: the risks associated with theresults of Wavefront’s technology when applied to a particular oil well or field potentially not being equal orsimilar to those when applied to a different oil well or field, the oil and gas industry (e.g. operational risks indevelopment, exploration and production which may impact production volumes; delays or changes in planswith respect to exploration or development projects or capital expenditures; the uncertainty of reserveestimates; the uncertainty of estimates and projections relating to production, costs and expenses), commodityprice and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans withrespect to exploration or development projects or capital expenditures. Wavefront’s forward-looking statementsare expressly qualified in their entirety by this cautionary statement. The forward-looking statements containedin this corporate presentation are made as of the date hereof and Wavefront undertakes no obligations toupdate publicly or revise any forward-looking statements or information, whether as a result of new information,future events or otherwise, unless so required by applicable securities laws.This presentation does not constitute an offer to sell to, or a solicitation of an offer to buy, from anyone in anyjurisdiction.
Wavefront Is…The leader in the development and deployment of field-proven injection processes Wavefront’s technology platform enables: Global oil producers to potentially add reserve barrels Efficient remediation of contaminated sites Enhanced mineral leaching processes and geothermal well optimization
Elephant Fields Are in the Past
Can You Imagine…..
The Easy Oil Tank is Getting Empty
What About Technology?
Revisiting Legacy Fields
The Squeeze is on
How the Squeeze WorksAll methods of getting more oil out of oldfields (EOR) involves the injection of afluid - water, chemicals, microbialnutrients, CO2, natural gas, or steam.
The Problem: Fluid Distribution• Injected fluids (water, chemical, polymers, CO2, etc) tend to find the path stranded oil of least resistance through porous media which results in low recovery swept oil factors.
The Solution: Pulsed Injection Injection Optimization for Enhanced Fluid Distribution Conventional Injection Powerwave Injection Oil Oil Water Water 139 s 139 s •• •• •• •• •• •• •• •• •• •• Powerwave increases oil recovery by two main mechanisms:1. Overcoming path of least resistance: increased finger density2. Lower residual oil saturation caused by fluid momentum breaking up residual oil globules and allowing them to be produced.
A Powerwave Pulsing Device
Pulsed InjectionPowerwave is not a frac based process
The Size of the PrizeThe prize is enhancing recovery rates is enormous.A 1% improvement in recovery on BP’s originalhydrocarbons equates to 2 billion barrels ofadditional reserves. Worldwide, a 5% increase inrecovery – a conservative increase thought to beachievable – would yield an additional 300-600billion barrels. Source BP
Powerwave Recovery Expectations Timeframe Result4 to 12 months Increased individual oil well production from 25% to 200%> 12 months Increased pattern oil production > 25%Long Term Reduced decline rate and increased recovery factor of 2% to 5% of OOIPBased on historical data provided by clients that may not be indicative of future results
Powerwave Fee vs. Production Requirements Analysis based on a Powerwave rental Required charge of $3,000/month for a 5-spot Oil Net Back Incremental production pattern having one injector ($) Production per 5-spot and 4 producers. Incremental production measured in barrels oil per day 25 5.92 30 4.93 35 4.23 Producers 40 3.70 45 3.29 Injector 50 2.96 Producers 55 2.69 60 2.47 65 2.28
Revenue Model Powerwave LicensesNumber of Gross GrossPowerwave Monthly Yearly Licenses Revenue Revenue Oil Sector ($) ($) • ~ 200,000 injector wells in 50 $ 150,000 $ 1,800,000 North America 100 $ 300,000 $ 3,600,000 • ~500,000 producing wells in 150 $ 450,000 $ 5,400,000 USA (well intervention) 200 $ 600,000 $ 7,200,000 • US DOE estimates 1,124 250 $ 750,000 $ 9,000,000 billion bbls of undeveloped 500 $ 1,500,000 $ 18,000,000 domestic resources remain 750 $ 2,250,000 $ 27,000,000 in the ground 1,000 $ 3,000,000 $ 36,000,000 2,500 $ 7,500,000 $ 90,000,000 • US DOE estimates 430 5,000 $ 15,000,000 $ 180,000,000 billion bbls of stranded oil is 10,000 $ 30,000,000 $ 360,000,000 technically recoverable 20,000 $ 60,000,000 $ 720,000,000**Assumes monthly license fee of $3,000 per Powerwave license
Powerwave Financial Benefit Base Post PW Net Net Pay ROI Decline PW Increase Back Monthly Back Months Oil Oil Cash Field Installed Rate Rate Flow Increase (bopd) (bopd) (%) ($) ($) (months) (%) TriAxon 6 131.0 203.0 55.0 60 110,000 2 >100 Harmattan Penn West 16 92.1 142.3 54.5 33 36,000 11 >100 Coleville Wainwright 39 31.2 116.0 271.8 40 101,000 5 >100 Project 1 Chauvin 9 142.4 228.9 60.7 45 89,000 5 >100 Taber 24 67.7 114.7 69.4 50 50,000 5 >100Based on historical data provided by clients that may not be indicative of future results
Wainwright Project 1 Well 8 Inj. 1 Reservoir Well 1 Proper7es: Well 2 Inj. 2h ~ 5 m (16 ft)k = 150-500 mD h = 3.5 – 5 m Powerwave 1 Well 3 Powerwave Pilot Area k = 150 – 500 mD Inj. 3 Well 7φ = 29-33%Oil = 17-20 °API Well 4 Well 6 φ = Inj.9 – 33% 24 Inj. 7 Inj. 6 Well 5 Oil = 17 – 20 °API S/I Pattern 1 Inj. 8 Well 12 Inj. 5 Powerwave 2 Pattern 2 Well 11 S/I Inj. 9 Pattern 3 S/I Well 10 Well 9 Inj. 10 Well 17 Powerwave 3 Well 13Legend 27 Nov 07 Powerwave injector Inj. 13 Well 14 26 Nov 07 Influencing injector Well 16 Inj. 11 Well 15 Pattern Producer Offset Producer Inj. 12
Key Ingredients for Achieving Growth Leverage positive Powerwave results to expand technology use Continue to build intellectual property base with complimentary fluid flow technologies and strategies for enhanced oil recovery Increase revenue across product lines Focus on controlling operating costs and maximizing financial efficiencies Maintain Wavefront’s strong balance sheet
Wavefront Investment Highlights Compelling high gross margin economics Positive, groundbreaking results in multiple sectors Strong intellectual property base Growing commercial pipeline Committed management and execution team Healthy balance sheet
Wavefront Officers and DirectorsName Position and Experience ChairmanSteve Percy Former Chair of BP America President & CEO, DirectorBrett Davidson Founder of WavefrontD. Bradley Paterson CFO, Director Director, Chair of Governance CommitteeDennis Minano Former VP and Chief Env. Officer General Motors Director, Chair of Audit CommitteeJeff Saponja President, TriAxon Oil Corp, Calgary Director, Chair of Compensation CommitteeJohn Zahary President & CEO Harvest Operations Corp., Calgary
Corporate ProfileTSX-V Trading Symbol WEEBasic Shares Outstanding 82,839,674 90,649,329Fully Diluted Shares Outstanding Options of 2,590,670 Warrants of 5,219,085 expiring April 26, 2012Insider Ownership (Basic) ~ 4.5%Institutional Ownership (Basic) ~ 15%Fiscal Year End August 31st52-Week Share Price Trading Range $1.69/$0.50Net Debt as at October11, 2011 nilCash on hand as at May 31, 2011 ~ $25 MM