corporate presentation december,...
TRANSCRIPT
Corporate Presentation
December, 2011
Disclaimer FORWARD LOOKING INFORMATION:
This presentation contains certain forward-looking statements relating, but not limited, to DEEP Earth Energy Production Corp.’s
expectations, intentions, plans and beliefs. Forward-looking information can often be identified by forward looking words such as
“anticipate”, “believe”, “expect”, “goal”, “plan”, “intent”, “estimate”, “may” and “will” or similar words suggesting future outcomes or
other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking
information may include reserve and resource estimates, estimates of future production, costs of capital projects and timing of
commencement of operations, and is based on current expectations that involve a number of business risks and uncertainties. Factors that
could cause actual results to differ materially from any forward-looking statement include, but are not limited to, failure to establish
estimated resources and reserves, the recovery of resources varying from estimates, capital and operating costs varying significantly from
estimates, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, inflation, changes in
exchange rates, fluctuations in commodity prices, delays in the development of projects and other factors. Forward-looking statements
are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results.
Shareholders and prospective investors should be aware that these statements are subject to known and unknown risks, uncertainties and
other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. Shareholders are
cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous
assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts,
projections and various future events will not occur. DEEP Earth Energy Production Corp. undertakes no obligation to update publicly or
otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect
this information, except as required by law.
This caution is provided in accordance with the requirements of Parts 4A and 4B of National Instrument 51-102 Continuous Disclosure
Obligations, respecting disclosure of forward looking information.
STATUORY RIGHTS OF INVESTORS:
Securities legislation in certain of the provinces and territories of Canada provides purchasers with the right to withdraw from an
agreement to purchase securities. The right may be exercised within two business days after receipt or deemed receipt of a prospectus,
offering memorandum or any amendment thereto. In several of the provinces, securities legislation further provides a purchaser with
remedies for rescission or, in some jurisdictions, revisions of the price or damages if the offering document, or any amendment thereto,
contains a misrepresentation or is not delivered to the purchaser, provided that such remedies for rescission, revision of the price or
damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory.
The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for the particulars
of these rights or consult with a legal advisor.
Geothermal Worldwide
Global installed
geothermal power is
10,700 MW, in 24
countries, supplying 60
million people with
renewable energy
Overall potential global
geothermal power
capacity is 190,000 MW
3 Source: Islandbanki United States Geothermal Energy Market Report
Mature technology – dates back to early 1900’s
Saskatchewan Electricity Landscape
SaskPower – provincial utility owns & operates system
3,500 MW capacity from SaskPower-owned assets
Forecasting 2.4% annual growth in load demand
New supply forecast: 1,000 MW by 2015
1,100 MW for period 2016 – 2023
1600 MW for period 2024 – 2033
Entire generation system to be rebuilt or replaced by 2033
Select highlights of SaskPower’s action plan:
Encourage small-scale renewable energy power production
Pursue new generation technologies
Evaluate supply options including renewable fuel power generation opportunities
4 Source: 2010 SaskPower Annual Report
Encourages renewable energy production by:
Streamlining power purchasing for small and medium-sized
“clean power” producers
Creating ongoing opportunity - RFP for 50 MW / year
Fixing contract price for production and guaranteeing
interconnection
$101.98/MWh for 2014, increasing at 2% per year
DEEP’s application for a 5.0 MW geothermal
project was selected in the 2011 lottery
Equivalent to ~ 5000 households
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Green Options Partners Program
Power supply option and approximate
cost per kWh:
Generation option Base load, intermittent or
peak?
Cost per kilowatt hour
(kWh)
Biomass Base load $0.06 to $0.11
Coal Base load
$0.07 to $0.10
$0.08 to $0.13 with
Carbon Capture
Cogeneration Base load $0.07 to $0.12
Hydroelectric Base load and peak $0.07 to $0.10
Imports Base load and peak Variable
Natural gas Base load and peak $0.08 to $0.13
Nuclear Base load $0.08 to $0.10
Solar Intermittent $0.43 to $1.80
Wind Intermittent
Large $0.06 to $0.10
Small $0.12 to $0.22
Micro $0.27 to $0.57
Source: SaskPower Website
GEOTHERMAL Base load $0.06 to $0.08
Source: Islandbanki United States Geothermal Energy Market Report
Rafferty Project – 5,920 acres
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Geothermal Power
• Heat is recovered from water recycling through the
system and converted to electricity
• Continuous heat supply means that with proper
engineering geothermal systems can run indefinitely
• The ultimate renewable resource! 8
Geothermal Power
Binary turbine technology
Geothermal Power
10
5 Megawatts = ~5000 households
Courtesy of TAS
0
1,000
2,000
3,000
4,000
5,000
Solar PV SolarConcentrating
Coal Geothermal Wind
0%
20%
40%
60%
80%
100%
Wind -Onshore
Solar -PV
Hydro -Small Scale
Geothermal -Dual Flash
Biomass -Combustion
11 Sources: (1) Net Capacity Factor (%) averages for selected renewables, Glitnir Research
Baseload power generation
Base-Load
Geothermal v s. Other Renewables
Source: Islandbanki United States Geothermal Energy Market Report
Small foot print
Land Use In acres/ 1 billion kWh
Power Availability (%)
Panax Geothermal website
Hot Sedimentary Aquifer (HSA):
• Heat stored in water (brine) in
existing reservoirs with natural
permeability and porosity
Volcanic Geothermal:
• Geothermal resource in
fractures in non-permeable
volcanic rock
Geothermal Reservoirs
COMPLICATED SIMPLE VS
Target aquifers are the Winnipeg
and Deadwood Formations,
directly above the Precambrian
basement
Reservoir thickness of 150
metres
Depth of 3000 metres
~120 degrees Celsius
Flow rates estimated at
80kg/sec
Offsets 30,000 metric tonnes of
CO2 annually
Petroleum
Technology
Research
Centre
Project Details
13
A vast sedimentary reservoir
that is continuous and
repeatable over 1000s of square kilometres
Enormous data set derived
from oil and gas exploration since the 1950s
The resource is proven with
measured data
Predictable geology
14
Williston Basin – Predictable Geology
• Bottom hole temperature
• Temperature gradient
• Production/DST
• Water chemistry
Real data points
Robust model
Basin is ‘structurally
benign’
Multiple data points
increases confidence and reduces project
risk
35,770 wells in SE Saskatchewan !
Williston Basin: an extensive dataset
Rafferty Project – 5,920 acres
Excellent well control – low risk, predictable geology
16
Geothermal Power “Farming”
17
Large-scale 50 MW project Multiple 5 MW projects
Capital intensive
Long lead times
Less upfront capital
Shorter time to commissioning
“Grid friendly”
Small projects in an area with the potential for 100s of MW of
repeatable baseload electrical production
Situated in a region that develops its local resources
extensive agriculture, and oil and gas development
Environmentally friendly – silent, small surface footprint
Like another common quonset structure on the prairie horizon
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Welcoming Location
Saskatchewan Geothermal
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• Excellent regulatory framework
• Drill permitting and surface rights agreements - easy and quick
Land Acquisition
20
Lease of Space agreement
from the Saskatchewan
Ministry of Energy and
Resources on an initial project area ~9 sections
of land, (5,920 acres)
Partnered with Petrobakken
for exclusive rights to their non-oil bearing aquifers in
SE Saskatchewan
• May reduce drilling cost
• Access to world class drilling experience
Development Budget
21
Phase 1: Exploration - $3,900,000
• Development Plan
• Land Position
• Permitting
• Exploration Test
• DEEP #1 well
• Reservoir engineering and possible reservoir
enhancement
Development Budget
22
Phase 2: Production Drilling - $12,200,000
• DEEP #2, 3 and 4 (production)
• Two injection wells
• Pipeline infrastructure
Phase 3: Plant Design - $200,000
• Design
• Permitting
Phase 4: Engineer, Procure & Construct – $12,500,000
Phase 5: Commercialization - $50,000
Total $28,500,000
Directors & Management • Kirsten Marcia, P.Geo.: President, CEO & Director
Former VP of Exploration for Wescan Goldfields Inc., 13 years of mining exploration
experience for TSX-listed resources companies (primarily diamonds, gold, coal,
uranium)
• Steve Halabura, P.Geo., F.E.C. (Hon.): Director & Non-Executive Board Chair
President and CEO, Concept Forge Inc., Partner HCF Mercantile Inc.
• Al Zack: CFO & Director
Principal and COO of HCF Mercantile, former President and CEO PrimeWest Mortgage
• Alison Thompson: Director
VP of Corporate Relations for Alterra Power, Chair of the Canadian Geothermal Energy
Assn., and ExCo Member of the International Energy Agency's Geothermal
Implementing Agreement
• Rob Theoret, B.Comm., CIM: Director
Principal and President/CEO of HCF Mercantile Inc., Director and CFO of Admiralty Oils
Ltd.
• Jeffrey Green: Director
Managing Partner, Jovian Asset Management Inc.
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Directors & Management • Borealis GeoPower: Project Management
Jay Dick: 30 years of geothermal project management, consulting and operations around the world, with an extensive background in both geothermal resource exploration, drilling and production, as well as power plant development
Tim Thompson: 11 years of corporate strategy consulting with Booz & Co. and CRA International; 8 years in the Pipeline business, covering Facilities Planning, Regulatory, Budgets, and Major projects for TransCanada and Union Gas
Craig Dunn: a pioneer leader in geothermal energy exploration and development initiatives in Canada with over 9 years experience in geological consultations
Dr. Daniel Yang (nee Pribnow): A globally acclaimed leader in the geothermal energy engineering field, owning more than 20 years of experience leading large-scale international exploration and development programs in the oil & gas industry and geothermal sectors
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• Ron Waldman: Business Advisor
Chairman (former President and CEO) of Great Western Brewing Company, former Manager of Corporate Finance at KPMG, former President of Beverage Central Inc., a family-owned Coca Cola franchise
• Jamie McIntyre: Government and Environmental Technical Advisor
20 years in the mining and nuclear energy business and former Cameco VP
• Tim Galbreath: Land Advisor
26 years in Petroleum Land Management, currently Land Manager to Equal Energy
• Legal Counsel: William A. Nickel - McDougal Gauley LLP
Dan Anderson – MacPherson Leslie & Tyerman LLP
Capital Structure
CURRENT CAPITAL STRUCTURE:
Shares 11,045,000
Options (10%) Issued: 885,000
Open: (219,500)
Founders Warrants 900,000
Fully diluted 13,959,500
Net working capital (Q4) ~$300,000
Debt nil
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Private placement of Flow-through shares and Non Flow-Through units
• Issue: Up to a maximum aggregate of CND$5,000,000 comprised of:
(i) Up to a maximum of CND$750,000 in flow-through shares
(ii) Up to a maximum of CND$4,250,000 in non-flow-through units
• Issue Price: CND$0.25 per flow-through share
CND$0.25 per non-flow-through unit
Units are comprised of one (1) non-flow-through common share and one (1) warrant to purchase one-
half of one non-flow-through common, exercisable at
$0.35
Current Financing
Summary:
Timing is everything!
The geothermal resource has been identified and confirmed at the
same time the technology is available
A baseload power solution for the Province
Competitively priced against traditional energy like coal and natural
gas
Opportunity to invest in a project that has the long term ability to
become a commercial utility
Predictable and well known geology – huge laterally extensive sedimentary aquifer - 100s of megawatts potentially available
Mature and reliable technology – not a science project
A strong business model of small, repeatable power plants
Silent and minimal environmental footprint with 30,000 tonnes of CO2
offset annually
27
300-110 21st Street East
Saskatoon, SK S7K 0B6
P: (306) 651-5194
www.deepcorp.ca