Ante5 Oil & Gas  OGIS Conference September 2011
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Ante5 Oil & Gas OGIS Conference September 2011

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    Ante5 Oil & Gas  OGIS Conference September 2011 Ante5 Oil & Gas OGIS Conference September 2011 Presentation Transcript

    • OGIS Conference San Francisco September 2011OTCBB/OTCQB: ANFC
    • Forward Looking StatementsStatements made by representatives of Ante5, Inc. (“Ante5” or the “Company”) during the course of thispresentation that are not historical facts are “forward‐looking statements” within the meaning of federalsecurities laws. These statements are based on certain assumptions and expectations made by the Companywhich reflect management’s experience, estimates and perception of historical trends, current conditions,anticipated future developments and other factors believed to be appropriate. No assurances can be given thatsuch assumptions and expectations will occur as anticipated and actual results may differ materially from thoseimplied or anticipated in the forward looking statements. Such statements are subject to a number of risks anduncertainties, many of which are beyond the control of the Company, and which include risks relating to theglobal financial crisis, our ability to obtain additional capital needed to implement our business plan, declines inprices and demand for gas, oil and natural gas liquids, our minimal operating history, loss of key personnel, lackof business diversification, reliance on strategic, third‐party relationships, ability to obtain rights to explore anddevelop oil and gas reserves, financial performance and results, our indebtedness under our senior securedpromissory notes, our ability to replace reserves and efficiently develop our current reserves, our ability to makeacquisitions on economically acceptable terms, and other important factors. Ante5 undertakes no obligation topublicly update any forward‐ looking statements, whether as a result of new information or future events. 2
    • Company Snapshot Ante5, Inc. (“Ante5”, “Ante5 Oil & Gas” or “the Company”) is a high-growth, Non-Operator Exploration and Production (E&P) company focused on the acquisition, exploration, development and production of crude oil and natural gas properties. Ante5 focuses primarily on the Bakken and Three Forks trend in North Dakota and Montana (Williston Basin), one of the most exciting and productive oil and gas plays in the U.S. As of August 15th, Ante5 controlled the rights to mineral leases covering over 10,000 net acres for prospective drilling in the Williston Basin and held working interests in 26 gross wells representing 0.71 net wells that are preparing to drill, drilling, awaiting completion, completing or producing. Market Capitalization ~$50 million Total Debt No debt. $10 million un-drawn revolving facility available Company Management Bradley Berman, CEO James Moe, CFO Joshua Wert, COO 3
    • The Bakken • Subsurface rock formation located within the Williston Basin, covering parts of North Dakota, Montana and Saskatchewan. • 2008 U.S. Geological Survey assessment estimated that there are 3.0 to 4.3 billion barrels of undiscovered, recoverable oil in the Bakken Formation.Image Source: http://esask.uregina.ca/entry/williston_basin.html 4
    • North Dakota Oil Industry Well Count Oil Produced 6,000 5,900 160 155 5,102 140 5,000 4,407 120 113 4,061 Oil Production in the Bakken is 4,000 expected to exceed 250 million 3,646 100 barrels in the next 4-7 years 80 3,000 80 63 60 2,000 45 40 1,000 20 - - Producing Well Count at Year End Total Barrels of Oil Produced (Millions) Source: NDIC Department of Minerals 5 Yellow: Ante5 Estimates
    • North Dakota Oil IndustryPermits Spuds Rigs 1,950 2012,000 2,000 200 1,8501,800 1,675 1,800 180 Exceeded industry prediction of 200 on 1631,600 1,600 1,544 160 August 31, 20111,400 1,400 1401,200 1,200 1201,000 946 1,000 100 92 800 800 720 80 75 623 622 600 494 600 60 53 407 400 400 40 200 200 20 - - -Total Well Permits granted by NDIC Total Wells Spud by Operators Peak Rig Count Source: NDIC Department of Minerals 6 Yellow: Ante5 Estimates
    • Favorable Developments in North Dakota Technological Breakthrough & Ongoing Evolution New technology application (horizontal drilling + multi-stage frac’ing) has created an on-shore resource play that is expected to increase U.S. domestic oil output by 25% within the decade. Operators continue to evolve completion techniques that are increasing the efficiency and productivity of North Dakota wells. Pace of Bakken Development Record rig activity and advancements in drilling technology is driving the pace of development in the Bakken. Government and industry officials believe North Dakota’s record crude production will double within a decade. 11 Billion Barrels? In 2008, the U-S Geological Survey estimated that there were 3.0 to 4.3 billion barrels of undiscovered, recoverable oil in the Bakken formation. Because new evidence suggests that actual recoverable barrels is much higher, the government agency will begin to update its assessment in Fall 2011. With the Three Forks / Sanish formation delineating rapidly, some government and industry officials are starting to see indications that the region may reasonably yield between 7 and 11 billions barrels of undiscovered, recoverable oil. 7
    • Non-Operator Business Model Acquire Acreage Participate in Wells Sell OilLow Overhead Non-Operating expenses are limited to direct drilling and certain operating costs, while most traditional E&P corporate overhead expenditures (e.g., seismic, legal and accounting, R&D, geological and geophysical, etc.) are minimized or eliminated entirely.Diversified Non-Operators leverage their operating partner’s technical capabilities and scale while, by holding only a minority interest in many different wells, diversifying risk across geography and operators throughout the region.Scalable Non-Operators focus almost exclusively on acreage acquisition. With no exploration or production staff, and no requirement to gain a majority interest in spacing units, the Non- Operator efficiently deploys capital by cherry picking parcels as it builds a diversified acreage portfolio. Management creates substantial market value by becoming experts at acreage acquisition without the need to add significant general & administration expenses. 8
    • Well Operations Spacing Unit (1280 Net Acres) 64 64 Oil & Gas Well (Operators) • Majority interest owners (i.e., operators) may permit a well on a standard spacing unit. Wells are usually permitted on a 2-section spacing unit. Each section is about 640 acres. As such, a spacing unit is usually 1,280 acres. Minority Interest (Non-Operators) • Example: 2 Parcels, 64 net acres each. Totals 128 net acres, or 10% of the 1280 spacing unit. • Minority interest owners have the right to elect to be pooled into a pro-rata share of costs and revenue in those spacing units in which they own mineral rights. Well Drilling Process & Timing* Day 30 Day 60 Day 90 Day 120 Day 0 Day 180 Well Well Producing Non-Operator Non-Operator Elects to Well Spud Well Drilled Permitted Receives “AFE” Participate in Well* Timeline can be shorter or longer depending primarily on factors affecting successful drilling and completion of a well that are both within and beyond the operator’s control. 9
    • Ante5 Strategy Non-Operator Maximize Bakken / Three Forks Exposure as a Non-Operator • ~10,000 net acres (and growing) in the play. Acreage is primarily in Williams, Mountrail & Dunn Counties in North Dakota. • Substantial permitting activity on Ante5 acreage. • Forecasted to be participating in 40 gross (1.0 net) wells by year-end 2011. Acreage Acquisition Opportunistically Acquire Acreage • Continue to cultivate strategic alliances with two men local to North Dakota. One is a 25-year landman, the other a 25-year geologist. Together, they own about 18% of Ante5 and they have represented & warrantied title of all leases assigned to Ante5 by them. • Developing additional acreage acquisition channels (e.g., direct to mineral owners, contract landmen, etc.). Financial Flexibility Maintain Financial Flexibility and Strong Balance Sheet • Raised more than $16 million since December 2010. • No debt, $10 million un-drawn revolving facility available. • Goal: National Exchange listing by Q4 2011 - Q1 2012. 10
    • Strategic Acreage Position TBD: Need New Map on Web SiteAnte5 Acreage is located primarily in Williams,Mountrail & Dunn Counties. Zoom in on Ante5’s Williams & Mountrail Acreage* * This map does not include all of Ante5’s leaseholds in Williams & Mountrail. A PDF version of our full leasehold map is available at www.ante5oil.com/Leaseholds 11
    • Diversified Operating Partners 12
    • Ante5 Well Activity – 9/22/2011 Producing Wells “Drilling” Wells Initial Production Includes wells that are Preparing to Drill, Drilling, Awaiting Completion, Completing IP BOPDWell Name Operator County (ND) WI (BOPD) Average Days Well Name Operator County (ND) WIChristensen 159-102-8-5-1H Newfield Williams 29.99% 562 367 31 Weyrauch 15-11H Hess Williams 8.28%A.Tufto 18-19 #1-H Brigham Williams 7.15% 2,541 809 32 Kannegeiter 160-90-17-P-1H OXY Burke 1.04%Love 11-2 #1H Samson Williams 6.25% TBD TBD TBD EOG Burke 1.04% Vanville 22-2623HBurke 24-08H EOG Mountrail 1.56% 673 290 27 Vanville 21-2635H EOG Burke 1.04%White 157-100-17B-20-1H Petro-Hunt Williams 1.56% TBD TBD TBD Opedahl 21x-11 XTO Williams 0.98%Revolver 1-35H Slawson Mountrail 1.56% 1,770 856 27 Probe 1-19-30HMB Slawson Mountrail 0.77%Marshall 1-13H Continental Dunn 1.17% 844 586 35 Lindy 156-100-10-3-1H Newfield Williams 0.67%Olson 15-36H Hess Williams 1.04% 1135 516 28Clearwater 1-24-25H 1 Hunt Mountrail 1.04% TBD TBD TBD Pankowski 4-6H North Plains Williams 0.66%Talkington 21-30TFH Whiting Stark 0.80% TBD TBD TBD Marcy 1-24H Continental Williams 0.31%En-Charles Wood-157-94-1720H-1 Hess Mountrail 0.65% TBD TBD TBD Helstad 158-99-34D-27-1H Petro-Hunt Williams 0.14%EN-Will Trust B-157-94-2635H-1 Hess Mountrail 0.48% 402 504 20 14.93%EN-Will Trust B-157-94-2635H-2 Hess Mountrail 0.48% 412 410 33EN-Will Trust B-157-94-2635H-3 Hess Mountrail 0.48% 372 377 30Hodenfield 15-23H Hess Williams 0.47% 2,042 594 33 Hess Williams 0.39%Go-Soine A-156-97-3229H-1 TBD TBD TBD Total: 28 Gross (0.71 Net) WellsTempe #1-29H Continental Divide 0.39% TBD TBD TBDScanlan 3-5H North Plains Williams 0.16% 819 828 23TBD indicates that well is on Confidential Status 55.62% 13
    • Well EconomicsKey Assumptions IRR EUR: 500m BOE 100% 90%Gross EUR per Well: 500,000 BOE 80% 70% 60%Average Well Cost: $8.5 million 50% 40%Net Revenue Interest: 80.0% 30% 20%Price of Oil / Gas: $90.00 / $5.00 10% 50 60 70 80 90 100 110 120 130 Price ($) / BarrelConclusions IRR EUR: 600m BOE 110% 100%Present Value* - Cash Flow: $15.0 million 90% 80% 70%Return of Capital: ~24 Months 60% 50% $6.5 millionNet Present Value* - Asset: $6.5 million 40% 30% 20% Well Cost $7.0 million 10% $8.5 million 50 60 70 80 90 100 110 120 130 Price ($) / Barrel*10% Interest Rate $10.0 million 14
    • Acreage Economics Value of a Single Acre under Multiple Well Assumptions $30,483Key Assumptions $25,403NPV of 1 Bakken Well: $6.5 million $20,322 $15,242Average Acres / Well: 1,280 $10,161 $5,081NPV of 1 Acre (1 Well): $4,688 $5,081 $1,494 Ante5 Average 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 Acquisition Cost / Acre Average Number of Wells per Spacing Unit 15
    • TBD Ante5 Economics Key Assumption $5,081: Value of an Acre in a Drilling Unit with a Single Well (“1 Well Economics”) Acreage Valuation (millions) Total Acreage 1 Well 2 Wells 3 Wells 4 Wells 5 Wells 6 WellsCurrent 10,276 $52 $104 $156 $208 $260 $313Forecast 1 15,000 $76 $152 $229 $305 $381 $457Forecast 2 20,000 $102 $203 $305 $406 $508 $610Forecast 3 30,000 $152 $305 $457 $610 $762 $915Other Key Assumptions: NPV of 1 well = $6.5 million, inclusive of well initial drilling and continued operating costs. The model excludes overhead and land acquisition costs. 16
    • 2011 Highlights - ProductionOil Production Oil & Gas RevenueBarrels of Oil (BOE) Produced US$ 108% 2,606 159% 250,590 1,254 96,940 0 0 2010 Q4 2011 Q1 2011 Q2 2010 Q4 2011 Q1 2011 Q2 17
    • 2011 Highlights - Wells Producing Wells “Drilling” Wells* Gross Wells Net Wells 0.70 24 0.63 21 0.25 13 Forecast FYE 2011 • 40 Gross Wells 14 0.57 • 1 Net Well 0.45 11 2 7 0.01 0.06 2010 Q4 2011 Q1 2011 Q2 2010 Q4 2011 Q1 2011 Q2 * “Drilling” wells are Preparing to Drill, Drilling, Awaiting Completion, Completing 18
    • 2011 Highlights - Acreage Net Mineral Acres Under Lease 9,640 5,687 3,712 2010 Q4 2011 Q1 2011 Q2 19
    • For More Informationwww.ante5oil.com Bradley Berman Chief Executive Officer bberman@ante5oil.com 952-426-1851 Stay Up to Date on Ante5 Oil & Gas 20