1

Creating a New Growth Company Focused on Conventional Oil & Gas Production and

Development in the Black Sea Region

Confidential

April 2016

Disclaimer  

This   Presenta,on   contains   certain   statements   that  may   be   deemed   "forward-­‐looking   statements".   All   statements   in   this   presenta,on,   other   than  statements   of   historical   fact,   that   address   events   or   developments   that   the   Company   expects   to   occur,   are   forward   looking   statements.   Such  statements  are  not  guarantees  of  future  performance  and  actual  results  may  differ  materially  from  those  in  forward  looking  statements.  Factors  that  could  cause  the  actual  results  to  differ  materially  from  those  in  forward-­‐looking  statements  include,  but  are  not  limited  to,  market  prices,  explora,on  and  drilling  success,  con,nued  availability  of  capital  and  financing  and  general  economic,  market  or  business  condi,ons.  Investors  are  cau,oned  that  any  such  statements  are  not  guarantees  of  future  performance  and  actual  results  or  developments  may  differ  materially  from  those  projected  in  the  forward-­‐looking   statements.   The  Company  undertakes  no  obliga,on   to  update   these   forward-­‐looking   statements   in   the  event   that  management's  beliefs,  es,mates  or  opinions,  or  other  factors,  should  change.  No  assurances  can  be  given  that  any  of  the  events  an,cipated  by  the  forward  looking  es,mates  will  -­‐transpire  or  occur,  or  if  any  of  them  do  so,  what  benefits,  including  the  amounts  of  proceeds,  that  the  Company  will  derive  there  from.      The  Presenta,on  does  not  cons,tute  or  form  part  of  any  offer  to  sell  or  issue  or  invita,on  to  purchase  or  subscribe  for,  or  any  solicita,on  of  any  offer  to  purchase  or  subscribe  for,  any  securi,es  of  the  Company,  nor  shall  it  or  any  part  of  it  nor  the  fact  of  its  distribu,on  form  the  basis  of,  or  be  relied  on  in  connec,on  with,  any  contract  or  investment  decision  in  rela,on  thereto.  The  informa,on  and  opinions  contained  in  the  Presenta,on  are  provided  as  at  the  date  of  the  Presenta,on  and  are  subject  to  change.  To  the  extent  available,  the  industry,  market  and  compe,,ve  posi,on  data  contained  in  the   Presenta,on   comes   from   official   or   third   party   sources.   Third   party   industry   publica,ons,   studies   and   surveys   generally   state   that   the   data  contained  therein  have  been  obtained  from  sources  believed  to  be  reliable,  but  that  there  is  no  guarantee  of  the  accuracy  or  completeness  of  such  data.  While   the   Company   reasonably   believes   that   each   of   these   publica,ons,   studies   and   surveys   has   been  prepared   by   a   reputable   source,   the  Company   has   not   independently   verified   the   data   contained   therein.   In   addi,on,   certain   of   the   industry,   market   and   compe,,ve   posi,on   data  contained   in   the   Presenta,on   comes   from   the   Company’s   own   internal   research   and   es,mates   based   on   the   knowledge   and   experience   of   the  Company’s  management  in  the  markets  in  which  the  Company  operates.  Their  underlying  methodology  and  assump,ons  have  not  been  verified  by  any   independent   source   for  accuracy  or   completeness  and  are   subject   to   change.  Accordingly,  undue   reliance   should  not  be  placed  on  any  of   the  industry,  market  or  compe,,ve  posi,on  data  contained  in  the  Presenta,on.  The  informa,on  contained  in  the  Presenta,on  does  not  purport  to  be  comprehensive.  No  reliance  may  or  should  be  placed  by  any  for  any  purposes  whatsoever  on  the  informa,on  contained  in  this  document  or  any  other  material  discussed  at  the  Presenta,on,  or  on  its  completeness,  accuracy  or  fairness.  Neither  the  Company  nor  any  of  its  respec,ve  directors,  officers,  employees,  advisers  or  agents  accepts  any  responsibility  or  liability  whatsoever  for/or  makes  any  representa,on  or  warranty,  express  or  implied,  as  to  the   truthfulness,   accuracy   or   completeness   of   the   informa,on   in   the   Presenta,on   (or   whether   any   informa,on   has   been   omiOed   from   the  Presenta,on)   or   any   other   informa,on   rela,ng   to   the   Company,   its   subsidiaries   or   associated   companies,   whether  wriOen,   oral   or   in   a   visual   or  electronic  form,  and  howsoever  transmiOed  or  made  available  or  for  any  loss  howsoever  arising  from  any  use  of  the  Presenta,on  or  its  contents  or  otherwise   arising   in   connec,on   therewith.   Recipients   of   the   Presenta,on   should   conduct   their   own   inves,ga,on,   evalua,on   and   analysis   of   the  business,  data  and  property  described  therein.  

•  Horizon was formed by an experienced oil and gas team to pursue oil & gas appraisal and development assets

•  Our focus is to establish a near term operated production platform as a foundation for corporate growth

•  We have entered into an Arrangement Agreement to acquire through a Plan of Arrangement all of the outstanding shares of Iskander Energy. Iskander holds operated interests in Bulgaria and the Republic of Georgia.

•  Defined undeveloped gas resources Best Estimate (P50) Contingent Resources of 38 bcf natural gas with high case (P10) potential of 81 bcf in Bulgaria

•  Financing requirement of $2 million, to complete the Iskander acquisition, and advance the Cameroon farm-in

•  Opportunity to establish Horizon as an operator in the Black Sea region with development opportunities to develop gas into a high priced, growing gas market, and to appraise and develop light oil opportunities as oil prices recover to achieve enhanced investment returns

Introduc1on  

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Confiden,al  

New,  Combined  Board  &  Management  

YOGESHWAR  SHARMA,  Non-­‐Execu*ve  Director  •  Co-­‐founder,  Director,  and  former  CEO  of  Hardy  Oil  &  Gas  (LSE),  

with  assets  offshore  India,  and  Nigeria.  Previously  Manager  Reservoir  Engineering  at  Elf  Interna,onal  

•  BSc  in  Mechanical  Engineering  from  the  University  of    Alberta;  and  registered  Professional  Engineer  in  Alberta  

       

4  

Dr.  CHARLE  GAMBA,  Non-­‐Execu*ve  Director  •  Co-­‐Founder,  Director  &  CEO  of  TSX  listed  Canacol  Energy,  

producing  12,000  bopd  in  partnership  with  ExxonMobil,  Shell  and  others  in  Colombia  

•  PhD  in  Geology  from  McMaster  University,  and  MSc  from  University  of  OOawa    

MICHAEL  HIBBERD,  Non-­‐Execu*ve  Chairman,  and  Director  •  Former  investment  banker  with  Sco,aMcLeod  •  Chairman  of  Canacol  Energy  and  Vice-­‐Chairman  of  Sunshine  

Oilsands,  Chairman  of  Greenfields  Petroleum  

Dr.  DAVID  A.  WINTER,  Director,  President  &  CEO  •  Founder  and  Director  of  privately-­‐held  Miramar  

Hydrocarbons,  focused  on  Argen,na  •  Co-­‐Founder  &  Director  of  TSX  listed  Canacol  Energy,  

producing  in  Colombia,  with  a  market  cap  of  C$4000  million.  Previously  Co-­‐Founder,  Director  &  CEO  of  TSXV-­‐listed  Excelsior  Energy,  which  was  acquired  by  Athabasca  Oil  Sands  for  C$144  million  

•  BSc  &  MSc  in  Geology  from  University  of  London,  PhD  in  Geology  from  Edinburgh  University    

ROGER  MCMECHAN,  Chief  Opera*ng  Officer  •  30  years  of  experience  in  Georgia,  Ukraine,  Bulgaria,  

Poland,  Hungary,  Romania,  Tunisia,  and  Algeria  •  Worked  with  Petro  Canada,  Burlington  Resources,  Winstar  

Resources,  and  Iskander  Energy  •  BSc  in  Mechanical  Engineering  from  University  of  Waterloo  

DARREN  MOULDS,  Chief  Financial  Officer  •  16  years  of  accoun,ng  ,  finance,  and  tax  experience  •  A  Cer,fied  Public  Accountant  whom  previously  worked  

with    PricewaterhouseCoopers  •  Former  Financial  Controller  with  Dana  Gas  (Egypt),  former  

CFO  with  TSXV-­‐listed  Africa  Oil  Corp,  with  ac,vi,es  in  Kenya,  Ethiopia,  and  Somalia,  and  CFO  for  the  Forbes  Group,  with  responsibility  over  Vast  Explora,on,  Sagres  Energy,  Longford  Oil  &  Gas,  and  others  

MICHAEL  FLORENCE,  Non-­‐Execu*ve  Director  •  Chartered  Accountant  whom  was  President  of  Sherfam  Inc.,  

the  parent  company  of  Apotex,  the  largest  generic  drug  company  in  Canada  

 

LUIS  VAZQUEZ  –  Non-­‐Execu*ve  Director  •  Founder  and  Chairman,  Groupo  Diavaz,  since  1982,  a  leading  

oilfield  services  conglomerate  as  well  as  an  oil  and  gas  explora,on  and  produc,on  company  in  Mexico.      

•  Chairman  of  the  Mexico  Chapter  of  the  World  Energy  Council,  and  Chairman,  Mexican  Natural  Gas  Associa,on.      

•   BSc  in  chemical  engineering  from  the  Ryerson  Polytechnical  Ins,tute  in  Toronto.  

 

•  Iskander  Energy  is  a  private  company  with  assets  in  Bulgaria  and  Georgia  •  Acquisi,on  by  Plan  of  Arrangement  whereby  Horizon  will  acquire  all  of  the  issued  and  outstanding  shares  of  Iskander  by  issuing  55,373,072  shares.  

•  Value:  C$  2,768,654,  versus  over  C$60  million  invested  to  date  •  Board  to  comprise  3  members  from  Horizon  and  3  members  from  Iskander.    

•  Augmented  Board  with  depth  of  experience  and  diverse  skill  sets  •  Adds  key  COO  posi,on  to  company  

•  Upon  closing  HPL  shares  will  be  consolidated  on  a  6  for  1  basis.  •  Change  name  of  resul,ng  issuer  to  “Scion  Energy  Corp.”  •  Expected  Closing:  On  or  around  June  14,  2016  

Iskander  Opportunity  

Bulgaria  Gas  Development  Opportunity  

Confiden,al   6  

•  Iskander: 50% working interest •  Opportunity to increase to 100%

•  1,900 km2 area located in north central Bulgaria.

•  236 2D seismic lines (totaling 2,857 KM) and 66 wells gas and oil fields immediately to northwest of block

•  Multiple wells drilled in the 1970’s and 1980’s tested over 1 MMcf/d with only minor field development

•  Independent engineering report (RPS Nov 2012): •  Assigned 3C Gas in Place 283Bcf

•  Assigned 2C Contingent Resources of 38 bcf, 3C Contingent Resources 81 bcf

•  Opportunity to develop complex reservoirs with advanced drilling and completion technologies for tight, naturally fractured reservoirs

•  Pipelines run east-west through the block, all of which have capacity for local production to offset Russian imports

•  Licenses currently in a “standstill” with agreement of the Bulgarian Gov’t. until at least Summer, 2016 as a result of the government imposed ban on fracture stimulation

•  Longer term large shale gas potential attracted significant interest in unconventional gas shales

Georgia:  Development  &  Acquisi1on  Opportuni1es  

Satskhenisi Permit: •  Working Interest: 90% and Operator •  Current production 20 bopd, light oil (400 API), reservoir

pressure is still close to virgin pressure •  Oil transported via truck to nearby sales point and sold at

Brent price less $12 discount for transportation and marketing

•  Field has produced ~300,000 bbls to date, low recovery factor

•  Multiple stacked, naturally fractured sand/shale reservoirs •  Opportunity to redevelop with horizontal/highly slanted

wells to drain naturally fractured reservoirs Forward Strategy •  Evaluate workover opportunity in unproduced naturally

fractured reservoirs •  Evaluate the redevelopment with horizontal/highly slanted

wells in the stacked naturally fractured reservoirs •  Opportunity to expand redevelopment strategy into

neighbouring fields operated by Iskander’s country partner

•  Evaluate opportunity to acquire other blocks in the region (next slide)

Satskhenisi  

Georgia:  Acquisi1on  Opportunity  

•  Current owner is a major steel and power company currently undergoing a re-structuring. New corporate strategy requires exit from oil & gas business generally and in Georgia particularly

•  Permit XIB: one of the best PSC’s in Georgia contains 5 producing oil fields and multiple stacked reservoir opportunities.

•  Total area: 601km2

•  Samgori-Patardzeuli is Georgia’s largest field, cumulative production > 170 million bbls since 1974 and continues to produce 400 API crude

•  Current production: 310 bopd from Block Xib. Significant potential to increase production through workovers, recompletions and development drilling

•  Multiple untapped structures have been identified on 388 km2 3D seismic survey

•  Huge upside potential for gas production and sale within Georgia with gas price of ~$8 per mmbtu. Gas infrastructure transects the Permit area. Multiple gas tests throughout the permit with initial well rates as high as 10 mmscf/d

•  Attractive PSA terms with large cost recovery pools (~$100M)

•  Motivated seller looking to exit oil and gas business entirely and refocus on core businesses: steel, power and mining

•  Asset has under-performed due to inexperienced operator

•  Large exploration upside in 3 PSC’s

Remaining Minimum Work Program obligation (to be completed by Nov 2017):

•  Drill 3500m well

•  Deepen JSD 1 Well to test gas potential in Lower Eocene

•  Acquire 30km of 2D seismic

•  Workover in Rustavi Field to re-activate gas/condensate production

•  We have signed a Letter of Intent with a large independent oil and gas company to acquire a 50% working interest (37.5% after Government back-in), in an oil appraisal and development project in Cameroon:

•  P50 discovered resources of ca.35 MMbbls with low risk potential to add an additional 90 MMbbls. Further large upside potential in prospect inventory of over 500 MMbbls oil/condensate and 1.35 TCF gas

•  Robust economic returns in low oil price environment generates a 60% IRR, net before tax US$330 million EMV10 (using GLJ January Brent oil price forecast).

•  Breakeven oil price (NPV10 = 0) less than US$28/bbl Brent for 68 mmbbl case and < US$36/bbl for the 35 mmbbl case

•  Financing requirements for US$45 – 50 million to fund appraisal well and preliminary development work program.

•  Commenced discussions with potential financing partners

Take advantage of low oil prices to acquire low risk, light oil appraisal and development asset on favourable terms. Drill and develop while service costs are depressed. Enhanced returns from increasing production revenues with increasing oil price over the next five years.

Cameroon  Opportunity  

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Forward  Strategy  

10

Bulgaria •  Renegotiate work program with conventional gas appraisal and development with focus

on shallower Cretaceous aged naturally fractured reservoirs •  Evaluate opportunity to employ horizontal wells with open hole completions to

effectively develop the naturally fractured reservoirs •  Design 3D seismic and initial well programs •  Drill appraisal wells, design and implement development plan Georgia •  Evaluate redevelopment of Satskhenisi Field and possibility to expand into neighbouring

fields operated by partner •  Continue negotiations initiated by Iskander to acquire a further producing PSC. Initial

discussions have indicated price range of US$10 – 15 million Cameroon •  Complete documentation to acquire a 50% interest in an offshore block with an existing

oil discovery Business Development •  Horizon and Iskander have identified a number of attractive oil and gas appraisal and

development opportunities in the Black Sea region for potential acquisition/farmin

Corporate  Informa1on  

Confiden,al   11  

Contact  Details:    

Dr.  David  A.  Winter,  President  &  CEO  david.winter@horizon-­‐petroleum.com  

+1  (403)  619-­‐2957  

David  Robinson,  Vice  President  Business  Development  david.robinson@horizon-­‐petroleum.com  

+1  (403)  399-­‐9047    

Office:  Suite  490,  700  4th  Ave.  S.W.  

Calgary,  AB,  T2P  3J4  

CANADA  

 Corporate  Website  www.horizon-­‐petroleum.com  

 

   

 

Addi1onal  Informa1on  

Bulgaria:  ATrac1ve  Concession  Fiscal  terms  

§  Flat corporate income tax at 10%; §  Flat dividend tax at 5%; §  Favorable concession-type agreement with government for exploration and production rights §  Government royalty based on R-factor, starting as low as 2.5%: §  2% overriding royalty to third party consultant

R-Factor based Royalty = TCI/TCC

TCI- cumulative income, related to the object of concession for all periods under review, reduced by the paid concession payments; TCC- cumulative costs of prospecting, exploration, evaluation, development, operation, for all periods under review;

The calculated R-factor is in the following limits:

R-FACTOR

7,5%-12,5%

2.50-3.00 12,5%- 22,50%

Above 3.00 25,0%-30%

% royalty

Under 1.50 2,50%

1.50-1.75 5,00%

1.75- 2.00

Georgia:  Satskhenisi  PSC  Fiscal  terms  

•  Favorable existing PSA terms. Government take includes payment of tax and royalty

•  Current capital cost pool = ~$11M

•  PSA granted in 2000 for 25 years with additional 5 year extension

•  Operations currently conducted jointly with our partner but Iskander controls capital programs

•  Most operations contracted to partner Norio Service Company but under our supervision

Georgia:  Further  Opportunity  PSC  Fiscal  terms