MicroCapClub Invitational: NXT Energy (SFD.V)


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Welcome to the first ever MicroCapClub Invitational where our membership is showcasing several companies we are discussing in our members forum. Oil and gas companies spend tens of billions of dollars every year on exploration trying to discover the next big oil field. With the evolution of 2d, 3d, and now 4d seismic, technology is playing a greater and greater role in reducing the time and money spent discovering oil reservoirs. NXT Energy’s (SFD.V) Stress Field Protection technology is just starting to get adopted by large oil/gas companies such as PEMEX, Pacific Rubiales (PRE.TO), and others. The technology can identify the best oil and gas prospects 10 times faster, and at up to 1/20th the cost of seismic. NXT’s survey technology has already been associated with the finding over 1 billion barrels of OOIP in Colombia in the few short years since the technology has been commercialized. We expect adoption of this technology to increase throughout 2013 and beyond. Listen to CEO George Liszicasc as he tells the story.

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MicroCapClub Invitational: NXT Energy (SFD.V)

  2. 2. Disclaimer and Forward-looking Statements g 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," 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 Forward looking statements are subject to a wide range of risks and uncertainties and although the uncertainties, 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 including to prices 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 authorities. Neither the TSX-Venture nor the OTC Exchanges accept responsibility for the adequacy or accuracy of any information contained in this document. y y 1
  3. 3. A Canadian Public CompanyA Canadian Public Company www.nxtenergy.com n tenerg com NXT Energy Solutions Inc.  Energy Solutions Inc.  is a service provider to the upstream Oil & Gas Industry:   Engaged in exploration reconnaissance. g g p We identify and rank high‐potential prospect leads  us g a u que a bo e su ey e od using a unique airborne survey method. SFD ® Survey System y y 2
  4. 4. SFD ® “Stress Field Detection Stress Detection” NXT’s method will identify the best oil and g p p y gas prospects 10 times faster, and at up to1/20 the cost of seismic SFD® (Patent Pending) 3
  5. 5. 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  y y 180 million barrels OOIP. • Today the entire field is developed Today the entire field is developed.  4
  6. 6. SFD® Survey, Pacific Rubiales, Tacacho block, Colombia Tacacho block, Colombia • Flown 2000 line km SFD® grid program fully evaluated  the 7,500 km2 area • From Start to finish 7 weeks • Pacific Rubiales  relinquished non‐ prospecting areas • Petrodorado farms in Petrodorado farms in  $8 million commitment 5
  7. 7. Tacacho and Terecay 2010 Results Drilling in Q1 2013 Drilling in Q1 2013 This chart shows the exploration leads and resource expectations in the Tacacho and Terecay areas vs. the top SFD anomaliesSource : PRE – Exploration Asset Portfolio Report (September 2010) 6
  8. 8. SFD®: Fast Tracks the Exploration Process p Cost Time E&P SuccessREDUCES C S = Risk LOW FINDING Environmental COSTS Footprint Focus is the key 7
  9. 9. SFDSFD® System Inferred knowledge of Trap & Reservoir detail steadily increases Basin Level Prospect Level Well Level Exploration spectrum Aeromagnetics Hi-Res Gravity 2D 2-D 3D 3-D Drilling & Gravity Aeromag Gradiometry Seismic Seismic Reconnaissance SFD® Prospect Identification Prospect Verification The resolution of an SFD ® survey significantly surpasses other remote sensing techniques 8
  10. 10. 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 , g 9
  11. 11. SFD® responds to perturbations in the gravity field  related to changes in stress direction g Gravity field is distorted by stress Discontinuities affect  regional/local stress distribution  SH max SH min changes in stress  orientation entering reservoir t i i 10
  12. 12. 2012 Ongoing Projects Offices/Agents 11
  13. 13. Estimated 1.26 Billion 1 26 BilliBBL OOIP 12 12
  14. 14. QUIFA BLOCK SFD BLIND TEST Tested by Drilling A ‘Blind Test’ Results FSFD ® identifies 4 leadsAll verified by seismic BA – 100 million bblF - 100 million bbl X XB - drills 100 ft wet sandX - un-drilled RUBIALES OIL FIELD 13
  15. 15. 2012 – A Record Year - $11million Selected list of recent contracts and near-term pipeline objectives. Status Location US$ Value Complete Colombia, Colombia Guatemala $ 3 5 million 3.5 Complete Argentina $ 1.65 million Complete Mexico $ 5.8 millionNear-term Complete Q4-12 Belize $0.5 millionObjectives Underway Q1-13 South Asia $ 2.66 million Central & Latin Pipeline $ 5 million America A i Pipeline Paraguay & Bolivia $ 5 - $ 8 million Pipeline Colombia $ 1 - $ 5 million 14
  16. 16. Vast Market Opportunity pp y2010 E&P M k t Market:$447 Billion $12 Billion Global Geophysics Market 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 15
  17. 17. Current and Future Revenue Streams1. Service Fees2. Data Sales In Colombia alone, over 40,000 km of proprietary data have been acquired. Additional data added with each new survey3. Royalty Existing GORR contracts in Canada (Pengrowth ~ BC Horn River Basin; Alberta ~ Swan Hills)4. Vertical Expansion Equity ownership, long term contracts 16
  18. 18. SFD® ServicesConcession Level- Reconnaissance Grid designed to identify and rank individual reservoir prospects and/or optimize seismic programs (PRE)- Prospect Verification High-Grading i i ll derived Hi h G di seismically d i d prospects based on reservoir quality onshore/offshore (PRE, BP)Basin Level Grid designed to identify Trap Potential (PEMEX) 17 17
  19. 19. 115 km Seismic vs. 2,500 line km SFD® Data Coverage for $3 5 Million $3.5 2500 2000 ometers 1500Line Kilo 1000 500 0 2D Seismic SFD 5,000 sq. km. Survey Method SFD ® (5x5) Seismic SFD delivers Focus quickly and cost effectively q y y Significantly reduces reconnaissance seismic 18
  20. 20. SFD® SFD ProductA recommended targetmap of anomaliesidentified bid tifi d by SFD®interpretation, rated onboth reservoir and trapcharacteristics.characteristicsFrom this SFD® BasedProspectivity map map,seismic can be tailoredto maximize results andminimize cost. cost 19
  21. 21. SFD® Capabilities and LimitationsSFD® complements other tools, especially seismicidentifies and ranks potential trapped-reservoirsidentifies other major geological anomalies (ex: faults)identifies natural fractures in resource playscannot differentiate reservoir fluid types (water or oil/gas)cannot determine exact drill locationcannot define depth of reservoir f fcannot distinguish the number of stacked reservoirs withoutlateral offset 20
  22. 22. A NMay 25, 2009SFD® signal overheavy oil Rubiales field B Volta (v) age Signal relaxation A Reservoir indicator B Time (seconds) 21
  23. 23. SFD Colombia Offshore Example : Chuchupa is a 5.5 TCF Gas Field Chuchupa p Chuchupa Gas Field 22
  24. 24. SFD Case Example 8 Canadian Plains Natural Fractures in ShaleHorn River, British Columbia 23
  25. 25. SFD Case Example 8 Canadian Plains Natural Fractures in ShaleHorn River, British Columbia Flight direction Directional drilling 24
  26. 26. Further Technical ValidationNXT is ahead of the curve with the ® sensorSFD sensor. JQI has “developed a novel design for a highly compact, ultra-sensitive quantum device to measure subtle changes in gravityQuantum detectors are nowQ d using atomic interferometry.”being proposed by prestigious It may “be used to search for naturalresearchers. resources beneath the Earth’s surface.” August 2010 Source: http://www.jqi.umd.edu/news/242‐a‐new‐design‐for‐a‐gravimeter.html 25
  27. 27. Capitalization pTSX-V: SFD,TSX V: SFD OTCBB: NSFDFCapitalization - 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 sharesD&O Insider Ownership – 15.9% Basic, 32% Fully diluted52 Week High/Low: $0.59 - $1.17Debt-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) 26
  28. 28. Board, Management and Advisors g Management Non Executive Non-Executive Geosciences Directors Advisory Board George Liszicasz Charles Selby Dr. George Iusco Chairman & CEO Caledonian Royalty Corporation Repsol Greg Leavens, C.A. Chief Financial Officer Mickey Abougoush Dr. Cleveland Jones Teknica Overseas Ltd. State Univ. of Rio De Janeiro UnivAndy Steedman, M.B.A V-P Operations Tom Valentine Norton Rose LLP Dr. Arief Budiman Univ. Univ of Calgary, Canada CalgaryGrafton Withers, M.B.A John Agee V-P Marketing & Sales Business Advisor Extensive public Solid global Outstanding company experience management experience scientific credibility 27
  29. 29. Highlights g g• Disruptive Technology for Oil & Gas Exploration p gy p• Profitable and Commercially Proven• Contract and Pipeline Activity is Robust• Vast Market Opportunity THANK YOU ! 28