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TRANSCRIPT
Prepared for August 2014
OTCQB: COIL
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Forward Looking Statements
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This presenta-on contains forward-‐looking statements, including without limita-on those statements regarding Citadel’s ability to
exploit mining concessions. The statements and discussions contained in this presenta-on that are not historical facts cons-tute
forward-‐looking statements, which can be iden-fied by the use of forward-‐looking words such as "believes," "expects," "may,"
"intends," "an-cipates," "plans," "es-mates" and analogous or similar expressions intended to iden-fy forward-‐looking statements.
Citadel wishes to cau-on the reader of this presenta-on that these forward-‐looking statements and es-mates as to future
performance, es-mates as to future valua-ons and other statements contained herein regarding maCers that are not historical
facts, are only predic-ons, and that actual events or results may differ materially. Citadel cannot assure or guarantee you that any
future results described in this presenta-on will be achieved, and actual results could vary materially from those reflected in such
forward-‐looking statements. We assume no obliga-on to update any forward-‐looking statements in order to reflect any event or
circumstance that may arise aGer the date of this presenta-on, other than as may be required by applicable law or regula-on.
Reserve and Resource Disclosure: Securi-es and Exchange Commission (“SEC”) rules prohibit a publicly-‐repor-ng oil and gas
company from including oil and gas resource es-mates in its filings with the SEC, except proved, probable and possible reserves that
meet the SEC’s defini-on of such terms. Es-mates of non-‐proved and non-‐probable reserves included herein are not based on SEC
defini-ons and guidelines and may not meet specific defini-ons of reserves or resource categories within the meaning of the SPE/
SPEE/WPC Petroleum Resource Management System.
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ExecuEve Summary
Simple Capital Structure § (OTCQB: COIL) 30.9MM shares issued (35.4 MM including vested op-ons and warrants) § Insider Ownership ~16MM Shares
Founder & CEO: Armen Nahabedian – 4th GeneraEon Oilman § Extensive database & knowledge provide first-‐mover advantage § Experienced operator with boots on the ground advantage § United States Marine 1999 – 2003; Infantry veteran of Iraq war
CFO: Phil McPherson – 11 Years as a Small Cap E&P Analyst § Noted expert on California E&P companies § Wall Street Journal “Best on the Street”; Mul-ple “5-‐Star” awards
Two Major Prospects Under Development § Project Indian: Un-‐risked poten-al 100MM Bbls in place § Yowlumne: Strategically located adjacent to hundred-‐million barrel fields
COIL: An ExploraEon & ProducEon Company Focused on California
The Next Great California Independent
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Project Indian: Drilling January 25, 2014
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Project Indian: California Heavy Oil Background
§ Heavy oil characterized as less than 18 degrees API, immobile without s-mula-on § Thermal recovery (steam injec-on) is the primary s-mula-on technique
o Steam created using natural gas increases recovery by 15-‐50% of (OOIP)
§ Invented in California in 1960 and in con-nuous use since § 60% of California’s daily oil produc-on (~300,000 barrels per day) is via Thermal Recovery
The Majority of California Oil ProducEon is Heavy
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Project Indian: Overview
§ Analogous to North San Ardo oilfield o Discovered by Chevron in 1950 o Re-‐discovered by CEO in 2005 with Salinas Energy
§ Shallow heavy oil ~11-‐17 degree API § 100% working interest – 80% NRI § More than 100 MMBbls in place; Expect 20% -‐ 40% recovery
688 acres under lease from OXY in San Benito County
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Project Indian: Structure Contour Map
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Project Indian: Cross SecEon
N S
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Project Indian: Electric Log Of Indian #1-‐15 Well
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PG&E Gas Transmission Line
PG&E Power
Project Indian
Indian Oil Field: Ideal Thermal Recovery Opportunity
Phase I: CAPEX $500k § 1-‐well pilot cyclic steam project § 469-‐foot well logged 100-‐foot oil column § Perforated 14 feet 382-‐396’ § Well currently producing 5-‐7 bbls/pd § 11.6 gravity oil / lower viscosity
Phase II: CAPEX $4MM § Begin Environmental Impact Report (EIR) § Expanded 4-‐well pilot steam project
o Includes produc-on and steam facili-es
§ Proximity to PG&E improves economics o Electric power for pumps o Natural gas for steam
§ Mul-ple points of sale within 100 miles
Low natural gas prices + high oil prices = abracEve thermal economics
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Project Indian: Phase II Development Timeline
Long Lead Items Next 12 months
Item Expected Time in Months Cost
Begin Environmental Impact Report 9-‐12 ~$250k
Order Steam Generator 9-‐12 ~$1.5MM
Construct Natural Gas Pipeline 6 ~$250k
Heated Produc-on Tanks 3-‐6 ~$500k
Reverse Osmosis Water System 3-‐6 ~$250k
Heated injec-on/flow lines 3 ~$250k
Drill 4 Addi-onal Ver-cal wells 2 days each ~$1MM
Total Cost of Phase II ~ $4MM
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Yowlumne
~3,000 gross acres leased by Citadel Explora-on.
Yowlumne Area
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Yowlumne: Overview
2-‐26 AREA OF FOCUS ~3000 Acres gross
LANDSLIDE Family discovered 1985 ~20MM BOE recovered
from 15 wells
YOWLUMNE Discovered 1974 ~100MM BOE Recovered
Currently Vintage (OXY)
Recent AcEvity, Prolific ProducEon & Family Historic Success
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Vintage (OXY) OXY
CENTURY
374M-‐18 2.2 miles from 2-‐26
BRY CVX
2 miles
28-‐12.2 8 miles from 2-‐26 Spud Aug 2013
318X-‐127 Spud 11/26
120 Acres 100% NWI
COIL 2-‐26 12,500’ completed well Ready for sEmulaEon
& tesEng
New ExploraEon Near Yowlumne
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Yowlumne: Mud Log
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Yowlumne: Summary
§ Well 2-‐26 (100% WI) work-‐over and/or s-mula-on candidate in 4Q14
o Es-mated CAPEX $250k
§ 2 explora-on prospects – 12,000-‐14,000 G o Citadel 80% WI and operator
o CAPEX 2014/2015: $10MM (gross)
o Seismically defined
o Major operators ac-ve in the area
o 50MM Bbls un-‐risked reserve poten-al
§ Permits expected 4Q14
§ Drilling expected 1Q15
Key Takeaways
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Investment Summary
Four GeneraEons of California Oil ExperEse § 100 iden-fied prospects generated with 2D, 3D and well control data
California Renaissance Opportunity § Premium pricing vs. WTI § Increasing investment from large independents § Limited small-‐cap opportunity
Two iniEal projects § Project Indian: 100MM Bbls gross in place § Yowlumne: 2,700 gross acres leased (80% working interest) § Other California opportuni-es under lease or evalua-on
Clean, simple structure § Two Employees: Experienced CEO & CFO § Chairman: Dan Szymanski, geophysicist & 15-‐year OXY explora-on manager
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WHAT’S OLD IS NEW Headquarters: 417 31st St. Unit A Newport Beach, CA 92663 949-‐612-‐8040 Phil McPherson, CFO [email protected]
Geologic Office: 408 Bryant Circle Ojai, CA 93023 805-‐910-‐5369 Armen Nahabedian, CEO [email protected]
www.citadelexploraEon.com
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