Pure-Play Pipestone
Condensate, Growth, Achievement
July 2017
TSX-V:BBI
The Opportunity
2. The Team
1. The Asset
4. The Plan
3. The Vision
Resource Exploitation
Resource Delineation
Resource Capture
BBI
o
o
o
o
o
o
121 gross (~104.9 net) sections
of contiguous Montney land at
Pipestone
Two zones delineated on
western acreage with six
Montney wells and two
additional prospective zones (1)
Corporate CGR of 144
bbls/mmcf (1)
2P reserves: 59,169 mboe (46%
NGLs, $455mm NPV10%)
3C resources: 64,675 mboe
(46% NGLs, $547mm NPV10%)
2-20 (surface 11-9) eastern
step-out
o
200 years of collective
experience
o
Alberta’s Montney Growth
Story
o
Highly invested in
Blackbird with insider
ownership of ~18% (2)
o
Goal to achieve increased
production through
expanded egress
o
Highly innovative in all
aspects of business
o
o
Highly motivated to drive
for perfection and deliver
excellence
o
Goal to become one of the
lowest cost condensate
and natural gas producers
in the Montney
o
Achieved 2017 TSX
Venture 50 Top Oil & Gas
Company Award
o
o
o
o
Develop technologies and
methods to drive
sustainable competitive
advantage
o
Increase processing and
take-away for long term
growth
Complete 102/6-26 well,
using the Stage System
Drill two further
development wells in
2017 to build production
Participate in nonoperated drilling
programs to delineate
multiple Montney
intervals across
Blackbird’s lands
Construct enhanced
infrastructure solution
Notes: (1) Based on Blackbird Q3 2017 MD&A; (2) Includes shares owned in third party portfolio that is managed by board member; (3) Production described is a goal based
on the non-binding nomination volumes, and is not a production forecast.
2
TSX-V: BBI
Blackbird’s Pipestone Asset
o One of the largest pure-play
Pipestone Montney land packages
o Corporate CGR of 144 bbls/mmcf (1)
Three Processing Options
Available North of Wapiti
Blackbird
Shell
CNOR
Sinopec
NuVista
Apache
Encana
Private company
o Four prospective intervals
o Production tied-in and cash flowing
o Close to Infrastructure and egress
CNRL
o Expandable 10 mmcf/d facility and
western pipeline gathering system
o Year-round access and close to
services
o Multiple processing options proposed
for corridor
Notes: (1) Based on Blackbird Q3 2017 MD&A.
Three Processing Options
Available South of Wapiti
3
TSX-V: BBI
The Pipestone Corridor
Encana 2-15, Upper,
Cum. TD: 2.0 Bcf,
24 Prod. Mths*
CNOR 5-26 Rig
Released Jan 24
Encana 14-1 Pad, I.P. 2,000
Boe/d, (56% Condensate)
** Oct 5, 2016
CNOR 3 Licences
Kelt Hz Lic.
BBI 5-26 Upper, 0.9 Mmcf/d, 341
Bbls/MMcf liquids (48 hr Prod.
Test)
Encana
BBI 6-26 Middle, 900 – 1,050 Boe/d
Calculated Test Rate (133
Bbls/MMcf liquids) **Mar 4, 2015
BBI
NVA
Velvet
Sinopec
CNRL
4-28
Shell
RMP
Sinopec 4-32
CNRL 13-7, 15-11 & 14-4
Montney Hz Licences
NuVista Key Wells
4 Middle Montney Hz with
Max 1,635 Boe/d
2 Upper Montney, Max 146
Bbls/MMcf of C5+
1 Lower Montney Strat Test
with CGR of 133
** Jan 2017
Kelt
BBI
3 New Encana Licences
1-19, 1-3 & 8-3, Upper
CNOR 13-22 Upper,72 hr Test
3.6 MMcf/d & 1000 Bbls
condensate/day*
BBI 2-20 Middle: 1,768 Boe/d (6.8
MMcf/d, 641 Bbls/d liquids), Last
24 hrs of Prod. Test
CNRL
Encana 12-25, Upper,
Cum 3 Bcf in 20 Prod. mths*
Encana, Upper, 02/5-26, cum
1.5 Bcf in 7.2 Prod. mths*
Kelt Lands, Jan 18,
2017
BBI 2-20-70-6W6,
Drilled & Completed
BBI Non-Operated Wells
Apache 02/1-16, Middle
CGR: 178 (60 hr Prod Test*)
Paramount
CIOC
Shell
NuVista
Notes: *Public data within Montney Resource Play as of June 19, 2017, “Prod. Mths” is actual producing hours / 720 hours per month
** Corporate Presentations; Represents analogous information. See “Analogous Information” in Advisories.
Apache 9-23 Test, (CGR 187*) 10.6
mmcf/d, 2,000 bbls/d,**Nov 3,
2016
Shell 38 Montney Hz Licenced,
31 Drilled, Range of CGR’s: 95 (12
hr Test) to 482 (62 hr Test)
Max Cal Day Gas
Rate 4.2 MMcf/d
(26 mths Production*)
4
TSX-V: BBI
The Pipestone Liquids-Rich Corridor
BBI Mapping of Upper Montney Condensate Corridor (2)
Encana’s Mapping of Liquids-Rich Corridor (1)
BBI Mapping of Middle Montney Condensate Corridor (2)
Source: (1) Encana May 17, 2016 Montney Investor Event Presentation (slide 49); (2) Internal mapping by Blackbird; Represents analogous information. See
“Analogous Information” in Advisories.
~63 Gross (~57.8
net) sections in
Encana’s Super
Condensate
Corridor (2)
5
TSX-V: BBI
Blackbird’s Pipestone Resource
2,250 M
(7,382
Feet)
Doig
Upper
Montney
70 M
(230 Feet)
Middle
Montney
50 M
(165 Feet)
Lower
Montney
Belloy
79 M
(260 Feet)
1.6KM
(1 Mile)
Gamma Ray (Green) Bulk Density (Red)
6
TSX-V: BBI
The Pipestone Liquids-Rich Corridor
Four distinct intervals
A
10-4-7-8W6
ECA 4-9
2
0
0
m
Doig/Upper
Montney
13-22-70-8W6
CNOR 13-22
A
02/10-8-70-7W6
BBI 2-20
BBI 02/2-20
A’
8-25-70-7W6
BBI 6-26
BBI 5-26
6-21-70-6W6
A’
BBI 2-20 East
Upper
Montney
6
5
6
Middle
Montney
F
t
Lower
Montney
Gamma Ray (Green), Bulk Density (Gray)
Note: Sourced from Accumap.
Potential Turbidites
in Lower Montney
7
TSX-V: BBI
Blackbird’s Pipestone Resource
Blackbird’s Lands with Proved
Reserves Booked
Blackbird’s Lands with Proved +
Probable Reserves Booked
Blackbird’s Lands with
Contingent Resources
8 sections booked
12 sections booked
~21.5 sections booked
(7.9% of land booked)
(11.9% of land booked)
21.2% of land booked
1P Reserves: 30,525 mboe
2P Reserves: 59,169 mboe
1P NPV10: $204 million
2P NPV10: $455 million
2C Resources: 53,818 mboe
2C NPV10: $437 million
3C Resources: 64,675 mboe
3C NPV10: $547 million
Reserves and Resources Booked in Only Two of Four Highly
Prospective Intervals
TSX-V: BBI
8
Note: (1) From Blackbird’s March 1, 2017 reserve report prepared by Blackbird’s independent reserves evaluator, McDaniel and Associates Consultants Ltd.
Blackbird Expected Type Curves (1)
RawRaw
GasGas
Type
TypeCurve
Curve
300
Condensate Rate (Bbls/d)
3,000
Gas Rate (Mcf/d)
2,500
2,000
1,500
1,000
500
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Production Month
Raw Expected
Ultimate
Recovery
Raw Expected
Ultimate
Recovery
Wellhead
Condensate
Type
Curve
Wellhead
Condensate
Curve
250
200
150
100
50
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Production Month
Encana’s Pipestone Type-Curve (2) (3)
1,000
600
400
Blackbird EUR: 884 mboe
Expected Btax IRR: ~60%
200
0
Expected 2P NPV10%: $7.1 million
Type Well Metrics – Encana
Net (2) (3)
Atax IRR (%)
120
1
14
27
40
53
66
79
92
105
118
131
144
157
170
183
196
209
222
235
248
261
274
EUR (Mboe)
800
Production Month
9
Note: (1) All Blackbird type curve, EUR, IRR reserves and NPV10% data from Blackbird’s March 1, 2017 reserve report prepared by Blackbird’s independent reserves evaluator McDaniel and
Associates Consultants Ltd., see Advisories. (2) From slide 21 of Encana April 2017 Montney update. (3) Represents analogous information. See “Analogous Information” in Advisories.
TSX-V: BBI
IP 30, IP60, IP90
IP30 RESULTS (1)
Well
5-26-70-7W6
2-20-70-7W6
102/2-20-70-7W6(4)
6-26-70-7W6
Montney
Interval
Upper
Middle
Upper
Middle
Raw
Gas(2)
(mmcf/d)
1.37
2.15
Sales
Gas(3)
(mmcf/d)
1.31
1.85
Condensate(3)
(bbls/d)
293
274
NGLs(3)
(bbls/d)
19
21
Total
Liquids(3)
(bbls/d)
312
295
Total
Sales(3)
(boe/d)
530
604
CGR
C5+/Raw
(bbls/mmcf)
214
127
0.58
0.49
69
6
75
157
119
0.74
0.65
181
13
194
302
245
Notes:(1) First 720 hours of production excluding third party gas processing plant shut-downs of approximately 33 days and other periods where the wells were shut-in. (2) Based on field-
estimated production data. (3) Based on actual sales data. (4) Based on camera run performed, management estimates that this well was producing through a limited number of stages
due to mechanical issues experienced in the wellbore during completion operations. Management is unable to determine the number of producing stages. Management believes that
these results may not be indicative of the well’s production potential.
IP60 RESULTS (1)
Well
5-26-70-7W6
2-20-70-7W6
6-26-70-7W6
Montney
Interval
Upper
Middle
Middle
Raw
Gas(2)
(mmcf/d)
1.17
2.59
Sales
Gas(3)
(mmcf/d)
1.09
2.31
Condensate(3)
(bbls/d)
224
254
NGLs(3)
(bbls/d)
19
28
Total
Liquids(3)
(bbls/d)
243
282
Total
Sales(3)
(boe/d)
425
667
CGR
C5+/Raw
(bbls/mmcf)
191
98
0.58
0.50
130
10
140
223
224
Notes:(1) First 1,440 hours of production excluding third party gas processing plant shut-downs of approximately 33 days and other periods where the wells were shut-in. (2) Based on
field-estimated production data. (3) Based on actual sales data.
IP90 RESULTS (1)
Well
5-26-70-7W6
2-20-70-7W6
Montney
Interval
Upper
Middle
Raw
Gas(2)
(mmcf/d)
1.17
2.72
Sales
Gas(3)
(mmcf/d)
1.08
2.45
Condensate(3)
(bbls/d)
200
245
NGLs(3)
(bbls/d)
20
31
Total
Liquids(3)
(bbls/d)
220
276
Total
Sales(3)
(boe/d)
400
684
CGR
C5+/Raw
(bbls/mmcf)
171
90
Notes:(1) First 2,160 hours of production excluding third party gas processing plant shut-downs of approximately 33 days and other periods where the wells were shut-in. (2) Based on
field-estimated production data. (3) Based on actual sales data.
10
TSX-V: BBI
2-20 (Surface 11-9) Eastern Step-Out Test
Contingent
Resources (1)
Reserves (1)
Well
2-20-70-6W6(1) (4)
Montney
Interval
Middle
Average
Flowing
Casing
Pressure
(kPa)(2)
3,051
Raw Gas
(mmcf/d)(3)
0.22
Oil
(bbls/d)(3)
379
Total Combined
Production
(boe/d)(3)
416
Notes:(1) Based on camera run performed, management estimates that this well was producing through a limited number of stages due to mechanical issues
experienced in the wellbore during completion operations. Management is unable to determine the number of producing stages. Management believes that these
results may not be indicative of the well’s production potential. The 2-20 (surface 11-9) well flowed on clean-up for a total of 111 hours. (2) The 2-20 (surface 11-9) well
produced through a 14.3 millimeter choke at the beginning of the final 48 hour test period and a 25.4 millimeter choke at the end of the final 48 hour test period. At the
end of the 48 hour test period, the flowing casing pressure was 2,205 kPa. (3) The 2-20 (surface 11-9) well average rates over the final 48 hours of the test. (4) The 2-20
(surface 11-9) well produced an average of approximately 1,290 bbls of water per day over the final 48 hours of the 111 hour production test.
11
Note: (1) From Blackbird’s March 1, 2017 reserve report prepared by Blackbird’s independent reserves evaluator, McDaniel and Associates Consultants Ltd.
TSX-V: BBI
Development and Delineation Program
Northern MultiInterval
Delineation
Block
(Tie-In ~2019)
To be Drilled during 2017
2-28-70-7W6 (100% WI)
Drilled/awaiting completion 102/6-26
(100% WI)
To be Drilled during 2017
1-20-70-7W6 (100% WI)
Non-Operated Well
#4
(9-20)
(20% WI)
Non-Operated Well #1
(14-30)
(17.9% WI)
Western
Development
Block
(Tied-In)
Eastern MultiInterval Delineation
Block
(Tie-In ~Q1 2018)
Non-Operated Well #3
(3-17)
(20% WI)
Non-Operated Well #2
(13-04)
(37.5% WI)
Completed Well
U. Montney
Location
M. Montney
12
TSX-V: BBI
Current and Planned Well Summary
Well
6-26-70-7W6
5-26-70-7W6
2-20-70-7W6
Operated
or NonOperated
Operated
Operated
Operated
Working
Interest
(%)
100
100
100
Montney
Interval
Middle
Upper
Middle
Measured
Depth
(meters)
4,734
4,621
4,660
Lateral
Length
(meters)
2,052
1,951
2,008
102/2-20-70-7W6
Operated
100
Upper
4,598
2,049
15-21-70-7W6
Operated
100
Upper
2-20-70-6W6
Operated
100
Middle
14-30-70-7W6
NonOperated
17.9
Upper
13-04-70-6W6
NonOperated
37.5
Middle
3-17-70-5W6
NonOperated
20
Middle
02/6-26-70-7W6
2-28-70-7W6
1-20-70-7W6
Operated
Operated
Operated
100
100
100
Upper
Upper
Upper
Status
Producing
Producing
Producing
Recompleted
and Producing
To be
Recompleted in
August 2017
To be
4,885
2,256
Recompleted,
Timing TBD
Drilled &
Completed, to be
5,350
2,861
Tested NearTerm
Drilled &
Completed, to be
5,615
3,056
Tested NearTerm
Drilled, to be
5,320
2,876
Completed NearTerm
Drilled/awaiting completion (14-14 Pad)
To be Licensed (11-15 Pad)
Licensed (10-8 Pad)
4,120
1,500
13
TSX-V: BBI
Driving Innovation with Stage Completions
Blackbird owns a 10% indirect interest in Stage
Completions Inc. (“Stage”)
Stage Completions Inc. is a downhole
technology company focused on providing
innovative completion solutions
Stage’s Bowhead II Technology is designed to achieve
the following benefits:
Pinpoint
Fracturing
Pinpoint
fracturing
Higher Rates and
Tonnages
SC Bowhead II: Collet-activated fracturing
sleeve system designed for cased hole and open
hole applications – Enhanced Gen 4. XS System
•
•
•
Benefits to BBI Through Investment
System at cost plus an admin fee
Preferential access
Participant in disruptive and leading edge
technology
Reduced Risk
•
Longer Laterals
Longer Laterals
andand
Increased
Increased
Stages
Stages
Asset in the
Wellbore
Asset in the
Wellbore
Reduced Cost
(Drilling and
Completions)
Blackbird will use Generation 4 XS
System on 102/6-26 wellReduced Cost
14 14 TSX-V:
TSX-V:BBI
BBI
Completion Optimization
20 Days
20 Days
Completion
Program #1
Completion
Program #2
(5-26 and 6-26)
Plug & perf cluster
Slickwater
~2,700 tonnes of proppant
1.4 tonnes / meter of proppant
40 meter cluster spacing
(2-20)
Sliding Sleeve
CO2 (largest in N.A.)
~2,223 tonnes of proppant
1.1 tonnes/ meter proppant
28.5 meter spacing
Stage Completions Sliding Sleeve
Sub 5 Day Programs
BBI 2017 Version 4.0
53 Stage Slickwater
~2.0 tonnes / meter proppant
>4,000 tonnes
Higher Tonnage + Reduced Pump Time = Increased EUR and NPV
15
TSX-V: BBI
D&C Costs
D&C Cost
(2014-2015)
D&C Cost
(Late 2016)
D&C Cost
(Late 2016)
5-26, 6-26 and 2-20
~$10 million
02/2-20
~$5.5 million
3-28
~ $5.2 million
16
TSX-V: BBI
Vision 2021: Alberta’s Montney Growth Story
o
Blackbird’s goal is to become a large-scale, low cost producer by 2021 through
access to low-cost capital, innovation and operational achievement
o
Blackbird has entered into a non-binding nomination agreement with a premier midstream company to
increase its processing throughput as follows (non-binding nomination volumes in blue):
New Processing mmcf/d
Total Implied boe/d
~32,100 Boe/d
120
100
~25,400 Boe/d
Mmcf/d
80
~18,800 Boe/d
~15,400 Boe/d
60
~12,100 Boe/d
40
20
35,000
30,000
25,000
20,000
Boe/d
Exisiting Processing mmcf/d
15,000
10,000
~2,100 Boe/d
0
5,000
0
Present to April 1, April 1, 2019 to January 1, 2020 to July 1, 2020 to January 1, 2021 to July 1, 2021 to
2019
December 31,
June 30, 2020
December 31,
June 30, 2021
April 30, 2029
2019
2020
Finite Total Processing Volume Available in Corridor
Multiple Short-Term and Long-Term Processing Options Available for Production Growth
Notes: (1) Aggregate Boe based on estimated 50% liquids, 50% gas composition; chart above assumes that Blackbird can secure processing with its current
provider to 2029 (red in chart) in addition to new non-binding nomination. Implied BOE/D is not a production forecast.
17
TSX-V: BBI
Value Delineation Curve / Acceleration
Number of Analysts Covering Company
Value
D&C
Initial
Production
Ramp Up
$10mm  $5.5mm
Innovation: Stage
↑NPV
$260 mm
BBI: 0 – 104.9 net sections
↑EUR
20 – 260 wells in corridor
BBI
Pilot Plant
10 mmcf/d
Non-Binding
CGR’s > 300 Bbls/MMcf (1)
GHA
$84.8 mm Raised
Reserve Build
$2 mm
3 years
High Risk
Notes: (1) Based on regional test data.
2 years
Time
<1 year
The Next Steps
High Impact
Development and
Delineation
Program
Increased
Processing / Takeaway
Production
Growth Through
Expanded Egress
Continued Land
Aggregation
Near - Term
Lower Risk
18
TSX-V: BBI
Corporate Social Responsibility
• Corporate Social Responsibility is critical to gain social
license to operate in any community
•
Tree Planting Program: focused on reclaiming boreal forest and
replacing trees we take down;
•
Planted 51,579 trees to date!
•
Another 50,000 committed in April, 2017 (101,579 trees total!)
•
Thank you Cormark, Pareto, TD, BMO, Scotia, Laurentian, & Jett Capital
•
Goal: 200,000 trees
•
Movement to reduce flare volumes
•
Reduction in water usage through technology
•
Boring vs. cutlines
•
Mitigation of traffic impact
•
Extensive community consultation
•
Noise mitigation
• Our plan gives us a significant competitive advantage as we
develop our resource – this is also the right way to do
business
19
TSX-V: BBI
Corporate Snapshot
Common Share Trading Symbol
TSX-V: BBI
Warrant Trading Symbol
TSX-V: BBI.WT
Share Price (06/30/2017)
$0.36
Shares Basic
~745 mm
Fully Diluted
~963 mm
Insider Holdings (1)
~18%
Market Capitalization
~$268 mm
Cash (2)
~$79.5 mm
52 Week Range
$0.13 - $0.72
Gross Acreage
121 sections
(77,440 acres)
Net Acreage
104.9 sections
(67,136 acres)
Notes: (1) Includes shares owned in third party portfolio that is managed by board member. (2) At April 30, 2017, unaudited.
20
TSX-V: BBI
Advisories
Forward‐Looking Statements or Information and Additional Advisories
Certain statements included in this presentation constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the
purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making
investment decisions. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting
future outcomes or statements regarding an outlook. Forward-looking statements or information concerning Blackbird Energy Inc. (“Blackbird” or the “Company”) in this presentation may include, but are not limited to,
statements or information with respect to: guidance, forecasts and related assumptions; capital spending and availability of cash; the number of prospective or potential Montney zones on Blackbird’s lands and the economics
thereof; Blackbird’s ability to innovate; the ability of Blackbird to become a large-scale, low-cost producer by 2021; the ability of Blackbird to grow its production base; the construction of an enhanced infrastructure solution; the
ability to create shareholder value; the ability to extend Blackbird’s current gas handling agreement to 2029; business strategy and objectives; drilling, development and exploration activities and plans and the timing, associated
costs and results thereof, including Blackbird’s plans to drill development wells and delineation wells in 2017 and the expected results thereof; the attributes and potential of the Montney; prospective intervals and proposed
processing options, commodity pricing; costs associated with operating in the oil and natural gas business; future production levels of Blackbird's wells, including the composition thereof; the cost reduction, and drilling and
completion optimization derived from use of the Stage Completions Inc. technology and the other benefits of the Stage Completions Inc. investment including priority access to the technology and growth potential of the minority
interest investment; the expected increased processing capacity as a result of the execution of the binding nomination agreement with a premier mid-stream company; the execution of binding gas handling and take-away
agreements for material volumes; and the ability of Blackbird's corporate social responsibility initiatives to provide a significant competitive advantage. In addition, references to reserves and resources are deemed to be forwardlooking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated. Forward-looking statements or
information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Blackbird believes that the expectations reflected in such
forward-looking statements or information are reasonable; however, undue reliance should not be placed on forward-looking statements because Blackbird can give no assurance that such expectations will prove to be correct. In
addition to other factors and assumptions which may be identified in this presentation, assumptions have been made regarding, among other things: the impact of increasing competition; the timely receipt of any required
regulatory approvals; the ability of Blackbird to retain and obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of Blackbird to operate in a safe, efficient and effective manner; the ability
of Blackbird to obtain financing on acceptable terms; the timing and costs of operating Blackbird's business; the ability of Blackbird to secure adequate product transportation; future oil and natural gas prices; currency, exchange
and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability of Blackbird to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is
not exhaustive of all factors and assumptions which have been used.
Forward‐looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those
anticipated by Blackbird and described in the forward‐looking statements or information. These risks and uncertainties may cause actual results to differ materially from the forward‐looking statements or information. The
material risk factors affecting Blackbird and its business are contained in Blackbird's Annual Information Form which is available at SEDAR at www.sedar.com. The forward‐looking statements or information contained in this
presentation are made as of the date hereof and Blackbird undertakes no obligation to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise
unless required by applicable securities laws. The forward‐looking statements or information contained in this presentation are expressly qualified by this cautionary statement.
Additional Advisories
This presentation contains statistical data, market research and industry forecasts that were obtained from government or other industry publications and reports or based on estimates derived from such publications and reports
and management’s knowledge of, and experience in, the markets in which Blackbird operates. Government and industry publications and reports generally indicate that they have obtained their information from sources
believed to be reliable, but do not guarantee the accuracy and completeness of their information. Often, such information is provided subject to specific terms and conditions limiting the liability of the provider, disclaiming any
responsibility for such information, and/or limiting a third party’s ability to rely on such information. None of the authors of such publications and reports has provided any form of consultation, advice or counsel regarding any
aspect of, or is in any way whatsoever associated with, Blackbird. Further, certain of these organizations are advisors to participants in the Canadian oil and gas industry, and they may present information in a manner that is more
favourable to that industry than would be presented by an independent source. Actual outcomes may vary materially from those forecast in such reports or publications, and the prospect for material variation can be expected to
increase as the length of the forecast period increases. While management believes this data to be reliable, market and industry data is subject to variations and cannot be verified due to limits on the availability and reliability of
data inputs, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any market or other survey. None of Blackbird nor its affiliates has independently verified any of the data from
third party sources referred to in this presentation or ascertained the underlying assumptions relied upon by such sources.
The outlook and guidance in this presentation has been provided to assist investors in analyzing Blackbird's anticipated development strategies and prospects and it may not be appropriate for other purposes and actual results
could differ from the guidance provided herein.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the information contained in this presentation.
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Advisories
Independent Reserves Evaluation
Estimates of the Company's reserves and contingent resources and the net present value of future net revenue attributable to the Company's reserves and contingent resources as at March 1, 2017, are based upon the reports that
were prepared by McDaniel & Associates Consultants Ltd. (“McDaniel”), dated March 24, 2017. The estimates of reserves and contingent resources provided in this document are estimates only and there is no guarantee that the
estimated reserves or contingent resources will be recovered. Actual reserves and contingent resources may be greater than or less than the estimates provided in this in this document, and the differences may be material. The
estimates of reserves or contingent resources and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of
aggregation. Estimates of net present value of future net revenue attributable to the Company's reserves and contingent resources do not represent the fair market value of the Company's reserves and contingent resources and
there is uncertainty that the net present value of future net revenue will be realized. There is no assurance that the forecast price and cost assumptions applied by McDaniel in evaluating Blackbird's reserves, contingent resources
and prospective resources will be attained and variances could be material. There is uncertainty that it will be commercially viable to produce any portion of the contingent resources that are described herein.
Note Regarding Oil and Gas Metrics
Blackbird has adopted the standard of 6 Mcf:1 bbl when converting natural gas to boes. Condensate and other natural gas liquids (“NGLs”) are converted to boes at a ratio of 1 bbl:1 bbl. Boes may be misleading, particularly if used
in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based roughly on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the Company's sales point.
Given the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1 bbl, utilizing a conversion ratio at 6 Mcf: 1 bbl may be misleading as an indication of
value.
Oil and Gas Definitions
Terms that are used in this news release that are not otherwise defined herein are provided below:
Low estimate contingent resources, referred to herein as 1C, is a classification of estimated resources described in the Canadian Oil and Gas Evaluation Handbook, which is considered to be the best estimate of the quantity that
will actually be recovered. It is equally likely that the actual quantities recovered will be greater or less than the best estimate. Resources in the best estimate case have a 90% probability that the actual quantities recovered will
equal or exceed the estimate.
Best estimate contingent resources, referred to herein as 2C, is a classification of estimated resources described in the Canadian Oil and Gas Evaluation Handbook, which is considered to be the best estimate of the quantity that
will actually be recovered. It is equally likely that the actual quantities recovered will be greater or less than the best estimate. Resources in the best estimate case have a 50% probability that the actual quantities recovered will
equal or exceed the estimate.
High estimate contingent resources, referred to herein as 3C, is a classification of estimated resources described in the Canadian Oil and Gas Evaluation Handbook, which is considered to be the best estimate of the quantity that
will actually be recovered. It is equally likely that the actual quantities recovered will be greater or less than the best estimate. Resources in the best estimate case have a 10% probability that the actual quantities recovered will
equal or exceed the estimate.
Contingent resources are the quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not
currently considered to be commercially recoverable due to one or more contingencies. Contingencies are conditions that must be satisfied for a portion of contingent resources to be classified as reserves that are: (a) specific to
the project being evaluated; and (b) expected to be resolved within a reasonable timeframe. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. It is
also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. There is no certainty that it will be commercially viable to produce any
portion of the contingent resources or that Blackbird will produce any portion of the volumes currently classified as contingent resources. The estimates of contingent resources involve implied assessment, based on certain
estimates and assumptions, that the resources described exists in the quantities predicted or estimated, as at a given date, and that the resources can be profitably produced in the future. The risked net present value of the future
net revenue from the contingent resources does not represent the fair market value of the contingent resources. Actual contingent resources (and any volumes that may be reclassified as reserves) and future production therefrom
may be greater than or less than the estimates provided herein.
Developed producing reserves are those gross reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut in, they must have
previously been on production, and the date of resumption of production must be known with reasonable certainty.
Developed non-producing reserves are those reserves that either have not been on production, or have previously been on production, but are shut in, and the date of resumption of production is unknown.
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Advisories
Developed reserves are those gross reserves that are expected to be recovered from existing wells and installed facilities or, if facilities have not been installed, that would involve a low
expenditure (for example, when compared to the cost of drilling a well) to put the reserves on production. The developed category may be subdivided into producing and non-producing.
Gross means (i) in relation to the Company's interest in production or reserves, its "company gross reserves", which are the Company's working interest (operating or non-operating) share before deduction of royalties and without
including any royalty interests of the Company; and (ii) in relation to wells, the total number of wells in which the Company has an interest.
Net means, in relation to the Company's interest in wells or lands, the number of wells obtained by aggregating the Company's working interest in each of its gross wells.
Probable reserves are those additional gross reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the
estimated proved plus probable reserves.
Proved reserves are those gross reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. In this
presentation, proved plus probable reserves are also referred to as 2P reserves.
Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on: (i) analysis of drilling, geological, geophysical and
engineering data; (ii) the use of established technology; and (iii) specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to the degree of certainty associated with the
estimates.
Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (for example, when compared to the cost of drilling a well) is required to render them capable of
production. They must fully meet the requirements of the reserves classification (proved, probable) to which they are assigned.
Analogous Information
Certain information in this document may constitute "analogous information" as defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), including, but not limited to, information
relating to areas, wells and/or operations that are in geographical proximity to or on-trend with prospective lands held by Blackbird and production information related to wells that are believed to be on trend with Blackbird's
properties. Such information has been obtained from government sources, regulatory agencies or other industry participants, each of which is independent of Blackbird. Management of Blackbird believes the information may be
relevant to help define the reservoir characteristics in which Blackbird may hold an interest and such information has been presented to help demonstrate the basis for Blackbird's business plans and strategies.
However, to Blackbird’s knowledge, such analogous information has not been prepared in accordance with NI 51-101 and the Canadian Oil and Gas Evaluation Handbook and Blackbird is unable to confirm that the analogous
information was prepared by a qualified reserves evaluator or auditor. Blackbird has no way of verifying the accuracy of such information. There is no certainty that the results of the analogous information or inferred thereby will
be achieved by Blackbird and such information should not be construed as an estimate of future production levels. Such information is also not an estimate of the reserves or resources attributable to lands held or to be held by
Blackbird and there is no certainty that the reservoir data and economics information for the lands held or to be held by Blackbird will be similar to the information presented herein. The reader is cautioned that the data relied
upon by Blackbird may be in error and/or may not be analogous to such lands to be held by Blackbird.
Initial Production Rates
Any references in this document to test rates, flow rates, initial and/or final raw test or production rates, early production, test volumes and/or "flush" production rates are useful in confirming the presence of hydrocarbons,
however, such rates are not necessarily indicative of long-term performance or of ultimate recovery. Such rates may also include recovered "load" fluids used in well completion stimulation. Readers are cautioned not to place
reliance on such rates in calculating the aggregate production for Blackbird. In addition, the Montney is an unconventional resource play which may be subject to high initial decline rates. Such rates may be estimated based on
other third party estimates or limited data available at this time and are not determinative of the rates at which such wells will continue production and decline thereafter.
Information Regarding Disclosure on Reserves
The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves or resources will be recovered. Volumes of reserves have been presented based on a company interest basis which
includes Blackbird's royalty interests without deducting royalties payable by the Company. The estimates of reserves for individual properties may not reflect the same confidence level as estimates of reserves for all properties,
due to the effects of aggregation. Where discussed herein "NPV 10%" represents the net present value (net of capex) of net income discounted at 10%, with net income reflecting the indicated oil, liquids and natural gas prices and
IP rate, less internal estimates of operating costs and royalties. It should not be assumed that the future net revenues estimated by Blackbird's independent reserve evaluators represent the fair market value of the reserves, nor
should it be assumed that Blackbird's internally estimated value of its undeveloped land holdings or any estimates referred to herein from third parties represent the fair market value of the lands.
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Appendix: The Team
Leadership
Garth Braun
Chairman, CEO & President
Finance
Operations
Geology
Jeff Swainson, CA
Don Noakes, P.Eng
Craig Wiebe, P.Geo
CFO
VP Operations
VP Exploration
Joshua Mann
Paul Goodman
Ralph Allen, P.Geo
VP Business Development
Manager, Completions & Production
VP Geosciences
Travis Belak, CA
David Mills, P.Eng
Senior Financial Accountant
Manager, Facilities Engineering
Land
Jeanette Vanderveen
Brad Peterson
Josh Wylie
Operational Accountant
Marketing
VP Land
Laura Shandro
Robert Szumilas
Production Accountant
Supervisor, Drilling & Completions
John Boone
Landman
Lisa Bzdurreck
Senior Land Analyst
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Appendix: Management
Name & Title
Experience
Garth Braun
Chairman, CEO and President
Garth Braun is a seasoned oil and gas executive with over 13 years of oil and gas experience combined with 30 years of diversified business experience in finance and
real estate. Over the past several years, Mr. Braun has led Blackbird Energy Inc. through the successful acquisitions of two E&P companies, the divestiture of non-core
Montney assets, the accumulation of its Montney land at Elmworth and the drilling of Blackbird's Elmworth Montney wells. Mr. Braun was instrumental in raising
approximately $165 million of capital for Blackbird Energy Inc. Mr. Braun was previously the Chairman and Chief Executive Officer of an international oil and gas
company, an investment banker and a principal of a private real estate development company that completed over $1 billion in real estate development. Mr. Braun is
also a founder and director of Stage Completions Inc., an innovative downhole completions company.
Don Noakes, P.Eng.
Vice President Operations
Don has over 30 years of experience in drilling, completions and exploitation focused on unconventional resource plays. Don was previously responsible for multi-rig
drilling and completion programs targeting unconventional reservoirs in the Alberta Montney. Don has been part of teams at Murphy Oil, Mosaic Energy, APL Oil and
Gas, Bow Valley Energy and Culane Energy.
Craig Wiebe, P.Geol.
Vice President Exploration
Craig has over 20 years of experience in both exploration and development, the majority targeting unconventional resources plays. Craig was previously involved with
establishing a dominant position in a multi-TCF gas play for a major oil and gas E&P company. Craig has been part of teams at Encana, Amber, Grad and Walker,
Standard Energy, Capio Exploration and Saguaro Resources.
Jeff Swainson
Chief Financial Officer &
Corporate Secretary
Joshua Mann
Vice President Business
Development
Ralph Allen, P.Geo.
Vice President Geoscience
Jeff is a Chartered Accountant with broad finance and accounting experience in oil and gas exploration and production. Prior to Blackbird Jeff held positions of
increasing responsibility with BDO Canada, Chevron Canada Resources, and Sonde Resources Corp.
Joshua is a capital markets and corporate finance professional with experience in the oil and gas, services, technology and agricultural industries. Joshua was
previously an investment banker at Stifel Nicolaus Weisel where he was part of a team that assisted corporate issuers in raising over $3 billion in capital and assisted
numerous issuers on M&A engagements.
Ralph is a Professional Geologist with over 35 years of experience in the Western Canadian Sedimentary Basin. Ralph was previously an educator on shale for
companies such as Chevron, Shell, Marathon and Statoil globally and has worked for numerous E&P companies in Calgary.
Paul Goodman
Manager, Completions
Paul has over 28 years of experience in stimulation and completions focused on unconventional resource plays. Paul was previously responsible for multi-pad
completions programs and the business line aspect of fracturing operations targeting unconventional reservoirs in the Alberta Montney. Paul has been part of teams
at Encana, Sanjel and Halliburton.
David Mills
Manager, Facilities
Engineering
David is a Professional Engineer with over thirty years of varied oil and gas experience. Prior to joining Blackbird, David was responsible for the design, construction
and start-up of Mosaic Energy’s Kakwa / Jayar 50 mmscfd sour and liquid stabilization gas plant, gathering system, and wellhead facilities. Prior to Mosaic Energy,
David was responsible for the design, construction, start-up and expansion of Crew Energy’s Septimus 60 mmscfd sweet gas plant, gas gathering system and wellhead
facilities. Prior to these companies, David held senior positions with Canetic Resources, ConocoPhillips, Imperial Oil and Qatar Liquefied Gas Company.
Joshua Wylie
Vice President, Land
Joshua is a Petroleum Landman with over seven years of experience working with junior exploration and production companies. Joshua has been instrumental in
assembling Blackbird’s core Elmworth land position and was a key team member in the acquisition of a processing agreement for Blackbird’s Elmworth Montney gas
and a firm gas take away agreement in the Alliance pipeline to Chicago. Joshua is a member of the Canadian Association of Petroleum Landmen.
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Appendix: Reserves
Natural
Gas
Natural Gas
Liquids (1)
Total Oil
Equivalent
NPV 10%
NPV 10%
Mmcf
Mbbls
MBOE
$000s
$/BOE
Proved Developed Producing
5,215
848
1,717
33,002
19.22
Proved Non Producing
2,012
278
613
10,718
17.48
Proved Undeveloped (2) (3)
92,539
12,773
28,196
160,375
5.69
99,766
13,898
30,526
204,095
6.69
1,785
294
592
10,598
17.93
Probable Non Producing
594
89
188
2,973
15.82
Probable Undeveloped (3)
89,834
12,892
27,864
237,353
8.52
Total Probable
92,213
13,274
28,643
250,924
8.76
Total Proved Plus Probable (4) (5) (6) (7)
191,979
27,172
59,169
455,018
7.69
1C
135,188
18,659
41,190
277,344
6.73
2C
175,079
24,638
53,818
436,509
8.11
3C
212,160
29,315
64,675
547,410
8.46
Reserves Category
Total Proved
Probable Developed Producing
Contingent Resources Development
Pending (Risked) (4) (6) (7) (8) (9) (10) (11) (12)
(1) Includes field condensate. (2) The Reserve Report contemplates 46 undeveloped 1P drilling locations. (3) The Reserve Report contemplates 70 undeveloped 2P drilling locations.
(4) Drilling and completions cost per location contemplated in the Evaluations is $6 million. (5) Total undiscounted 2P capital expenditures contemplated in the reserve report amount to $515 million.
(6) The Evaluations contemplate an expected ultimate recovery of 801,000 boe per undeveloped location (46% NGLs). (7) Blackbird has a 100% working interest in the lands associated with the reserves and contingent resources.
(8) Blackbird expects to recover natural gas and NGLs. (9) “See Forward-Looking Statements or Information and Additional Advisories” on Slide 2” for a discussion regarding the risks and the level and uncertainty associated with contingent
resources. (10) All of the contingent resources discussed above are located at the Company’s Pipestone / Elmworth Montney project where ongoing development drilling is already occurring. (11) Project maturity subclass development
pending is defined as contingent resources where resolution of the final conditions for development is being actively pursued (high chance of development). (12) Contingent resources for Pipestone have been estimated based on the
continued drilling in Blackbird’s active core asset and the associated pre-development study using established recovery technologies. The estimated cost to bring these contingent resources on commercial production is $562MM and the
expected timeline is between 1 and 6 years. The specific contingencies for these resources are corporate commitment, development timing and uncertainty on additional required gas processing and takeaway capacity.
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Appendix: Building Shareholder Value
Blackbird Energy Inc. awarded 2017 TSX Venture
50 Top Oil & Gas Company
Blackbird Energy Inc. vs. S&P/TSX Capped Energy Index
$600
$500
$495
$400
$300
$200
$205
$100
$-
$48
$100
July 31, 2012
July 31, 2013
$233
$129
$103
$100
$129
July 31, 2014
S&P/TSX Capped Energy Index
$79
$76
July 31, 2015
$76
July 31, 2016
March 14, 2017
Blackbird Energy Inc.
Brendan Wood International:
Ranked #2 in peer group for Price Appreciation Potential
Ranked #3 in peer group for Confidence in Short Term Growth
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Appendix: Montney / Permian Disconnect
Up to Six Stacked Intervals
Up to Eight Stacked Intervals
Top – Tier Montney
Top – Tier Permian
IRR (ATAX)
38% – >130%
32% – 42%
Payout (Months)
8 – 23
20 – 36
EUR
1,100 mboe – >2,000 mboe
760 mboe – 1,052 mboe
Liquids %
32% – >50%
59% – 71%
NPV10% (ATAX)
CAD$4.6 mm – CAD$13.5 mm
(US$3.6 mm – US$10.3 mm)
US$2.7mm –US$4.8 mm
Acreage
Valuation
CAD$2,500 / Acre – CAD$18,750 / Acre
(US$1,900 / Acre – US$14,250/ Acre)
BBI Current
Acreage Valuation
US$27,500 / Acre – >US$50,000 / Acre
~CAD$3,900 / Acre
(~US$2,900 / Acre)
Note: Permian Economic data (mid-case scenario) from Scotiabank 2016 Playbook, Montney Economic data from Scotiabank 2016 playbook Kawka, Bilbo
regions combined with ECA Pipestone data. Acreage valuations includes data from Paramount / VII transaction, data from Scotiabank, recent transactions
from SM Energy. BBI Current Valuation: EV/Acreage 1.32 FX conversion
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Blackbird Energy Inc.
Blackbird Energy Inc.
400, 444 5th Avenue SW
Calgary, Alberta T2P 2T8
Garth Braun – Chairman, CEO & President
Tel: 403.699.9929 ext. 101
Cell: 403.500.5550
Email: [email protected]
Jeff Swainson – CFO
Tel: 403.699.9929 ext. 111
Cell: 403.796.3640
Email: [email protected]
Joshua Mann – VP Business Development
Tel: 403.699.9929 ext. 103
Cell: 403.390.2144
Email: [email protected]
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