Richfield Oil & Gas Company Investor Presentation

1. OTCQX: ROIL
INVESTOR PRESENTATION
July 2013
Confidential Material

2. DISCLAIMER
FORWARD LOOKING STATEMENTS AND
OTHER MATTERS
THE FINANCIAL AND OPERATING PROJECTIONS CONTAINED HEREIN REPRESENT CERTAIN ESTIMATES OF RICHFIELD OIL
AND GAS COMPANY (“RICHFIELD” OR THE “COMPANY”) AS OF THE DATE HEREOF. RICHFIELD’S INDEPENDENT PUBLIC
ACCOUNTANTS HAVE NOT EXAMINED, REVIEWED OR COMPILED THE PROJECTIONS AND, ACCORDINGLY, DO NOT
EXPRESS AN OPINION OR OTHER FORM OF ASSURANCE WITH RESPECT THERETO. FURTHERMORE, NEITHER RICHFIELD
NOR ITS MANAGEMENT CAN GIVE ANY ASSURANCE THAT THE PROJECTIONS CONTAINED HEREIN ACCURATELY
REPRESENT RICHFIELD’S RESULTS OF OPERATIONS OR FINANCIAL CONDITION. SOME OF THESE ASSUMPTIONS
INEVITABLY WILL NOT MATERIALIZE AND UNANTICIPATED EVENTS MAY OCCUR THAT COULD AFFECT RICHFIELD’S
RESULTS. THEREFORE, RICHFIELD’S ACTUAL RESULTS ACHIEVED DURING THE PERIODS COVERED BY THE PROJECTIONS
WILL VARY AND MAY VARY MATERIALLY FROM THE PROJECTED RESULTS. THESE VARIATIONS COULD MATERIALLY
AFFECT RICHFIELD’S ABILITY TO MAKE PAYMENTS WITH RESPECT TO ANY OF ITS OUTSTANDING AND/OR FUTURE
DEBT SERVICE OBLIGATIONS.
UNLESS OTHERWISE NOTED, THE FORECASTED INDUSTRY AND MARKET DATA CONTAINED IN THE ASSUMPTIONS FOR
THE PROJECTIONS ARE BASED UPON MANAGEMENT ESTIMATES AND INDUSTRY AND MARKET PUBLICATIONS AND
SURVEYS. THE INFORMATION FROM INDUSTRY AND MARKET PUBLICATIONS HAS BEEN OBTAINED FROM SOURCES
BELIEVED TO BE RELIABLE, BUT THERE CAN BE NO ASSURANCE AS TO THE ACCURACY OR COMPLETENESS OF THE
INCLUDED INFORMATION. RICHFIELD HAS NOT INDEPENDENTLY VERIFIED ANY OF THE DATA FROM THIRD-PARTY
SOURCES, NOR HAS RICHFIELD ASCERTAINED THE UNDERLYING ECONOMIC ASSUMPTIONS RELIED UPON THEREIN.
THESE MATERIALS ARE BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND FOR USE AT THE
PRESENTATION. THIS PRESENTATION AND THESE MATERIALS MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED
ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, BY ANY MEDIUM OR
FOR ANY PURPOSE.
1

3. Company Overview

4. INVESTMENT HIGHLIGHTS
Low Risk Assets
Superior Well Economics
Liquids-Rich Asset Base with
Significant Upside Potential
Proprietary Database and Research
Technology
Best in Class Geological Team
Strong Management Team with
Proven Track Record
• Fields with long production histories and significant well control
• Documented pay in areas with low historical recovery due to antiquated methods
• Significant inventory of low-cost, high-return behind pipe and offset opportunities
• Well costs range from $0.25 - $0.50 million, with 26 MBoe EUR per zone
• Additional performance-based upside of 80 MBoe per well in the Arbuckle Formation
• Re-work and new drill type wells produce IRR’s of 329% and 126%, respectively
•
•
•
•
1,656 MBoe Proved Reserves (95% oil) - 5,447 MBoe 2P Reserves (91% oil)
$33.9 million Proved PV-10 ($158.3 million 2P PV-10)
Additional unbooked potential in horizontal Mississippian well locations
World class upside in Utah acreage in the Navajo Sandstone, Mancos Shale,
Mississippian, and other formations
• Database of over 300,000 wells – most comprehensive Kansas dataset
• Allows for rapid identification and evaluation of potential acquisitions
• Proven strategy originally developed by the Richfield management team
• Award-winning geologists with over 208 years of combined experience in analyzing
drilling and development opportunities in Kansas and Utah
• Experts in exploring for and producing from reservoirs that are not in capillary
pressure equilibrium and subject to damage from standard drilling techniques
• Expertise in overthrust geology in Rockies
• Demonstrated a unique ability to identify, evaluate and develop undercapitalized assets
• Found in excess of 1 BBoe of reservoirs in the UT / WY overthrust belt
• Pioneered the dewatering production methods now in use throughout Kansas and
Oklahoma, by many operators
3

5. HIGHLY EXPERIENCED MANAGEMENT TEAM
Alan D. Gaines: Chairman of the
Board of Directors
Douglas C. Hewitt: President and
CEO
Glenn G. MacNeil: CFO and Director
Mike A. Cederstrom: General
Counsel and Corporate Secretary
George T. Ulrich: Controller
David K. Detton: Land and Legal
• 30 years experience as an energy investment and merchant banker, and has participated in
the raising of debt and equity financing in excess of $100 billion
• Chairman, and Founder of Dune Energy, Inc. since its formation in May 2001 through April
2011 and CEO form inception though May 2007
• 27 years in managing all aspects of oil company development, including geological
analysis, design and implementation of advanced engineering, field management and
finance
• Founder & CEO of publicly traded HEGCO Canada, an oil & gas exploration company
(1995-2000), Iron Thunder Drilling (1998), Nemaha Services (1991), Hewitt Energy
Group, Inc. (1988), and New Century Petroleum (1986)
• Over 30 years in public accounting and CFO positions for the oil and gas and financial
services industries, internationally
• Served as an officer and director for numerous private and public companies
• Lead roles in acquisitions, divestitures, turnaround situations and start-up businesses
• Practiced law since 1980, over 17 years experience advising oil and gas companies in all
areas including leasing, environmental and regulatory compliance and securities matters
• Practiced law with Dexter & Dexter Attorneys at Law from 2004 to 2008
• Served as the General Counsel and CFO of HEGCO Canada, Inc. from 1997 to 2002
• 28 years experience in public and private companies in senior accounting roles, including
15 years with Iomega Corporation
• Significant experience in SEC reporting and filings for public companies
• Licensed Utah attorney since 1976, former partner in two of the 100 largest U.S. law firms
• Managed land teams for over $1 B in acquisitions of oil & gas companies
• Managed company’s recent acquisitions of over 12,000 acres of mineral rights and 10,000
acre feet of water rights
4

6. BEST IN CLASS TECHNICAL TEAM
Monty Hoffman: Production
Geologist
Raina Powell: Production Geologist
Bill Alexander: Petroleum Engineer
Paul Lamerson: Consulting
Geologist
Jeremiah J. Burton: Geologist
• From 2007 to 2009, served as SVP of Exploration for Hunter Energy, LLC
• From 1990 to present, has served as President of Safford Exploration - resulted in the
discovery of the 1 MMBO Thief Creek Field in the Wyoming Thrust Belt for Anshutz Corp.
• From 1976 - 1990 worked for Chevron, supervised the development of Whitney Canyon Carter Creek fields, and served as District Geologist of the Mid-Continent District
• From 1976 - 1990 worked for Chevron in various roles, including the geologic
negotiations with partners in Painter and East Painter fields
• Since 1990, has served as a Staff Geologist for Safford Exploration, Inc.
• Experience in several Wyoming basins, in the Williston Basin, and in Texas and Kansas
• From 2003 to 2005, served as Senior Staff Geologist for Nautilus Resources; supervised
the Gebo Field, which doubled from 500 BOPD to 1000 BOPD
• Over 60 years of oil and gas experience
• From 1960 to 1974, served as a drilling and completions engineer and field engineer with
Shell Oil Company
• Also served in various engineering roles with Kirby Exploration, Alexander Drilling,
Natomas North America, and Pennaco Resources Company
• Over 50 years of oil and gas experience
• Currently with Safford Exploration, where he served with the team responsible for the
discovery of the 1 MMBO Thief Creek Field in the Wyoming Thrust Belt
• From 1956 to 1989, served as a geologist for Chevron where he was part of the team who
discovered Ryckman Creek (1976), Painter Reservoir (1977), East Painter Reservoir
(1978), Whitney Canyon-Carter Creek (1977), and Glasscock Hollow (1980) fields
• 15 Years of Oil and Gas Experience in the Mid-Continent and the Rockies, including work
for Flying J Oil & Gas, and permitting work for Anadarko in Alaska.
• 10 years with Richfield and its Predecessors, including the initial identification, and
evaluation of Richfield’s current Mid-Continent Properties.
• Helped Develop Richfield’s Proprietary exploration database
5

7. COMPANY SUMMARY
 North American exploration and production company based in Salt Lake City, Utah
 Publicly-traded on the OTCQX U.S. Premier Market; Ticker Symbol: ROIL
 Incorporated April 2011, simultaneous with the merger with Hewitt Petroleum, Inc.
 Unique balance of low-risk assets with immediate cash flow impact and long-term upside:




Kansas - Low-risk, low-cost, high return assets
Wyoming – Low-risk, moderate cost, high return assets
Independence Project, Mancos Shale - Moderate risk, high upside
Central Utah Overthrust –High Risk, high upside
 Near-term strategy focuses on increasing cash flow through exploitation of Kansas and Wyoming assets
 2013 – 2014 capital program includes 92 re-work and new drill operations
 Pursue cash-flow accretive bolt-on acquisitions in core operating region
 Central Utah Overthrust acreage provides significant upside potential through Mancos Shale exposure
 Approximately 11,464 acres with unbooked resource potential in the Navajo Sandstone, Mancos Shale, and deep
Mississippian formations (127 potential drilling locations) - 89.5% WI in the HUOP Freedom Trend Prospect and
59.6% WI in the Liberty Prospect
 20,000 acres prospective for the Mancos Shale (31 potential drilling locations)
o Partnered with experienced, NYSE-listed, independent operator with extensive experience in unconventional
resource plays – 4% WI in the Independence Prospect
6

8. 2012 RESERVES SUMMARY – DEVELOPED PROPERTIES ONLY
Reserve
Class
PD
PUD
Total Proved
PROB1
Total 2P
Drilling
Locations
Net
PV-10 ($MM)
Oil (MBbl)
43
75
18.3
$33.9
1,022
1,568
409
527
1,090
1,656
94.7%
5
$124.4
3,407
2,304
3,791
89.9%
32
80
$15.6
$158.3
546
4,975
Net Reserves Data
Gas (MMcf)
MBoe
118
2,831
566
5,447
% Oil
96.5%
93.7%
91.3%
Significant Performance-Based Upside
Source: Pinnacle Energy Services, LLC Reserves and Engineering Evaluation dated January 18, 2013
Note: Excludes Utah and Wyoming resource potential.
1. Represents 5 horizontal Mississippian well locations; additional reserves and present value represent increase well performance from the PD and PUD drilling locations.
7

9. Kansas Asset Overview

10. EXPLORE AND RESEARCH SYSTEM (“EARS”)
 Proprietary database that includes well data from several public and private sources
 Data on 300,000+ wells drilled in the mid-continent since the 1920s
Production history charts
 Invested over $3 million in unique strategic advantage which allows Richfield to:
 Allocate capital to best drilling targets
 Identify and evaluate acquisition targets
Well data
Well logs & cross-sections
Most Comprehensive Source of Kansas Production, Completion, and Geological Data
9

11. CENTRAL KANSAS UPLIFT OVERVIEW
Unproduced Oil and Gas Zones
Arbuckle Overview
 Main target is the Arbuckle formation, a water-drive
reservoir system that has yielded 2.4 billion barrels
since the late-1920s
 Typically outfit new or recompleted Arbuckle wells
with high volume submersible pumps
 Typical well will produce 10-40 BOPD and with
proper well density, these oil rates can increase
2009 Halliburton TMD Log, Gorham Field
 Untapped Potential
 Formation has been produced almost exclusively
from its topmost layer
 Productive lower Arbuckle intervals exist in every
major CKU field. These zones were only
sporadically produced—mainly due to a lack of
information sharing among an unsophisticated,
under-capitalized producer base
 Behind Pipe Reserves
 Recent cased hole logs on Richfield’s wells identify
2009 Halliburton TMD Log, Trapp Field
significant new reserves in two of Central Kansas’
largest fields
10

12. Utah and Wyoming Asset Overview

13. Central Utah Overthrust— a String of Pearls
40% of world oil reserves are arrayed along thrust belts.
North American Overthrust (Rocky Mountains):
•
•
 Four billion barrels of oil-equivalent (BOE) found in
Canadian Overthrust.
 National and state parks, great depths and extreme
volcanism have limited activity in Montana and
northwestern Wyoming
National and state parks
Extreme volcanism
Hogback Ridge
The North American Thrust Belt runs from Alaska (Prudhoe
Bay) to Mexico (Cantrell Field).
•
 Two billion BOE found in northeast Utah and
southwest Wyoming in 1970’s and 80’s
Two large reported discoveries on both the Paxton and the
Gunnison Thrust confirm productivity of Central Utah
Overthrust.
 Covenant Field, discovered in 2003/4, has estimated
150 million Bbls with 13 million BO produced to date.
Modified from Moulton and Pinnell, 2006
 Providence Field, discovered in 2008, multi pay
system, has estimated reserves several times larger
than the Covenant Field
12

14. UTAH AND WYOMING ASSET OVERVIEW
Hogback Ridge
Prospect
(Acreage Offsetting
Past Production)
WYOMING
Liberty Prospect (UT)
Richfield Properties
Liberty Prospect (UT)
HUOP Fredom Trend Prospect (UT)
1,025
Acres
160
11,464
Independence Prospect (UT)
20,000
Spring Valley Prospect (WY)
Spring Valley
Prospect
160
Pine Springs &Edwin Prospects (UT)
Hogback Ridge Prospect (UT)
(Active Oil Seep)
Graham Reservoir Field (WY)
Anschutz Ranch
Fields
Total
(208 MMBOE Produced)
American Quasar
Pineview Field
Graham
Reservoir Field
(32 MMBOE Produced)
(Existing Production)
Liberty Prospect
(1,200+ feet of highly
fractured pay)
Pine Springs and
Edwin Prospects
(Gas Shows in Pine
Springs)
Freedom Trend
Prospect
Independence
Prospect
(Navajo SS and Tununk
Sh. “Billion Barrel
Potential” Floyd Moulton)
(Tununk Shale with
Flowing Tests)
Wolverine
Providence Field
(450+ MMBOE Reserves)
Wolverine
Covenant Field
(150 MMBO Reserves)
Modified from Willis 1999
Existing
Wells
2,269
1,511
640
37,229
 Liberty #1 Discovery Well – Drilled in 2010
-
-
-
-
-
1
1
1
3
Drilling
Locations
-
9
Workin
g Interst
140
31
28
9
1
1
219
74.7%
64.3%
89.5%
3.0%
100.0%
100.0%
80.0%
100.0%
 Logs and testing demonstrated over 1,200 gross feet of interconnected
fractures in Jurassic Twin Creek Limestone and 427 feet of oil saturated
deeper Navajo Sandstone
 Freedom Trend Prospect
 Gravity maps show prominent super-structural anomalies
 105 miles of 2-D seismic shows three, overlapping structural closures in the
Twin Creek-Navajo
 Extensive Geochemcial Anomalies due to hydrocarbons, cover the same
structures identified by gravity and seismic.
 Independence Project – Drilling operations are anticipated to begin Q4 2013, or
Q1 2014, in the organically rich, Tununk member of the Lower Mancos Shale
 Hogback Ridge (UT- WY Overthrust) – New acreage has been acquired,
offsetting a past producing well. Geological research and lease acquisition is
ongoing
13

15. Central Utah Overthrust—Source and Migration Pathway
Modified from Willis 1999
It is estimated that approximately one trillion barrels of oil, or
more, were generated from Mississippian aged (359-318 million
year old) source rocks, mostly likely the Chainman Shale, in
western Utah and Nevada. However, only 65 billion barrels have
been found in Utah’s Tar sands.
• Oil found in the Covenant Field has a different source.
Mississippian
Source Basin
Several Trillion
barrels of Oil
Generated
• The HPI Liberty #1 discovered pristine Mississippian Oil from
this large source basin, for the first time.
Tar sands
Liberty Field
Freedom Trend
Prospect
• This identifies a migration pathway from Western Utah, into the
Central Utah Overthrust.
Tar sands
Only 65 Billion
barrels of oil
Tar sands are accounted
for in Utah’s
Providence Field Tar Sands
Covenant Field
Tar sands
• There are many more undrilled structural closures in the
central Utah over-thrust, the largest of which is Richfield’s
HUOP Freedom Trend Prospect.
• That prospect covers 11 contiguous miles on the northern end
of the Gunnison Thrust.
Mississippian Oil Migration Pathway and trapped oil
Modified from Schelling 2007
14

16. HUOP FREEDOM TREND PROSPECT
6,000 feet
9,000 feet
12,000 feet
Gravity maps show prominent
structural anomalies—similar to
those in the Covenant and
Providence fields but
substantially larger.
Multi-spectral satellite
photography reveals Freedom
Trend acreage to be among the
most hydrocarbon-saturated on
the Overthrust.
2D seismic shows three, overlapping
structural closures in the Twin CreekNavajo. One engineering study found
potential gross reservoir volume in
excess of several billion barrels.
North
15

17. HUOP Freedom Trend Prospect
• Richfield's position covers the largest
identified undrilled structure in the Central
Utah Overthrust.
• We anticipate a discovery in three
stacked Navajo formations, 1,000+ feet
thick each, filled to spill point.
• The Freedom Trend prospect is in the
Mississippian oil migration path. 13,000 feet in
Fountain Green Prospect. Initial test well, to
Covenant Field
Cross Section
Source: Wolverine Gas & Oil Corp.
150 million Barrels of Oil
Jurassic will target three repeated sections of Twin CreekNavajo with the untested sourcing Mississippian super giant.
Providence Field
Cross Section
Source: Wolverine Gas & Oil Corp.
Categorized as several times larger
than Covenant Field
Richfield’s Freedom Trend Cross Section
Source: Hewitt Petroleum/Richfield Oil & Gas.
Categorized Seismically as several times larger than Providence Discovery
Wolverine Gas and Oil Company’s Covenant Field and
subsequent Oxy/Wolverine Providence field discoveries in
2003/4 and 2008, show important similarities with Fountain
Green.
16

18. Mancos Shale and Others Compared
Bakken Shale
North Dakota, Montana, Canada
Independence Project
Mancos Shale (Tununk) Utah
150 feet thick
10,500 feet deep
11% Total Organic Carbon
.500 Pressure Gradient
85 feet of interbedded siltstone
and sandstone
Requires Hydraulic Fracturing
Oil Prone
600-3,000’ feet thick
11,550 Feet Deep
7% Total Organic Carbon
.660 Pressure Gradient
180 feet of interbedded
siltstone and sandstone
Extensive Natural Fractures
Oil & Gas Prone
Eagle Ford Shale
Texas
200 feet Thick
11,500 feet deep
4.5% Total Organic Carbon
.650 Pressure Gradient
Requires Hydraulic Fracturing
Oil & Gas Prone
Utica Shale
Ohio, Pennsylvania, West Virginia
A good shale play is defined by having total organic carbon (“TOC’s)
greater than 2%, high thermal maturity and a brittle nature that can
be fractured. Natural Fractures eliminate the need for Hydraulic
Fracturing, saving money reducing possible environmental/political
issues.
The Tununk member of the Mancos shale is thick, has high TOC’s,
interbedded sandstones, natural fractures, and a high pressure
gradient, which should yield a higher than average recovery factor.
140 feet thick
7,500 – 9,500 feet deep
7% Total Organic Carbon
.46 Pressure Gradient
Tuscaloosa Marine Shale
Louisiana, Mississippi
200 feet thick
10,000 – 15,000 feet deep
1% - 4% Total Organic Carbon
.7 Pressure Gradient
17

19. Contact Information
OTCQX: ROIL
15 W. South Temple, Suite 1050
Salt Lake City, Utah 84101
Phone: (801) 519-8500
www.richfieldoilandgas.com