sunshine oilsands ltd. annual general meeting june 12 ... · forecasted development metrics...

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Sunshine Oilsands Ltd.Annual General MeetingJune 12, 2009

Sunshine Oilsands Ltd.


DisclaimerDisclaimer

This presentation contains “forward-looking statements” including estimates offuture plans and operations, cash flows, the estimated amounts and timing ofcapital expenditures, the assumptions upon which estimates are based and relatedsensitivity analyses, and other expectations, beliefs, plans, objectives, assumptionsor statements about future events or performance (often, but not always, usingwords or phrases such as “expects” or “does not expect”, “is expected”,“anticipates” or “does not anticipate”, “plans”, “estimated” or “intends”, or stating thatcertain actions, events or results “may”, “could”, “would”, “might” or “will” be taken,occur or be achieved). Forward-looking statements are based on currentexpectations, estimates and projections that involve a number of risks and uncertainties, whichcould cause actual results to differ materially from those reflected in the statements. Forwardlooking statements are based on the estimates and opinions of the Corporation’s management at the time the statements are made.

The Corporation assumes no obligation to update forward-looking statements shouldcircumstances or management’s estimates or opinions change.

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AgendaAgenda

IntroductionHealth, Safety & EnvironmentAssets

Conventional Heavy Oil

Cretaceous Sandstone

Carbonate

Capital Markets UpdateSummary

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Health Safety & Environment, Regulatory & Stakehold er AffairsHealth Safety & Environment, Regulatory & Stakehold er Affairs

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Sunshine will comply with all health and safety, environmental laws and regulationsSunshine has established all relevant controls to ensure compliance and has delegated an executive sponsorThe near term focus on this dimension is compliance, with the commitment to position this company for leadership and contribution to sustainable developmentSunshine is focused on transparent and open relationships with all stakeholders with the highest level of financial transparency


Introduction: Positioned for SuccessIntroduction: Positioned for Success

Strong management team and board of directorsExtensive energy experience Proven track record of executing large capital and oilsands projects Key divisional management in place

Significant size and quality resource base100% ownership of one of the largest oilsands land holdings – 1,000,640 acres (1,563.5 sections) 8.9 Billion barrels of Petroleum Initially in Place (PIIP), 1.3 Billion (best case gross lease recoverable resources) and 2.4 Billion (high case gross lease recoverable resources)Conventional heavy oil, cretaceous SAGD sandstone and bitumen charged carbonates

Multiple areas identified for commercial developmentPotential conventional heavy oil production in MuskwaSAGD cretaceous sandstone projects identifiedProduction capacity of 184,000 bbl/d from 68 sections

Legend Lake – 50,000 bbl/d for 35 yearsWest Ells – 82,000 bbl/d for 35 yearsThickwood – 52,000 bbl/d for 35 years

Significant resource and production potential in the carbonate reservoirs

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Introduction: New DevelopmentsIntroduction: New Developments

Legend Lake: New Core AreaGLJ assigned contingent resourceSunshine technical review indicates good upsideForecasted development metrics consistent with best in class reservoirsCapital and operating cost advantage

Muskwa: Conventional Heavy OilPending final testing, rapid execution facilitated by proven technology and year round accessExcellent development metrics, profitable in low price environments

West Ells and ThickwoodApplied technology options available for additional recovery and cost savingsCommercial projects preceded by pilot phases to prove applied technology optionsOpportunities for cost efficiencies through cooperation with adjacent mineral rights owners

Harper Carbonate Pilot: Application Submitted October 2008 – currently addressing SIR’sRecalibrating Cost Base: costs are being driving down to reflect new market paradigm

Savings of 20% estimatedResearching Technical Joint Venture Opportunities

Initial assessment of new proven technologies indicate compatibility with Sunshine reservoir typesCapital and operating advantages are significant with technologies that are applicable

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AssetsAssets

West EllsElls

Harper

Muskwa

Portage/Pelican Lake

Thickwood

Legend LakeGLJ resource estimate (based on

only 392 sections and 58 core holes)

8.9 Billion PIIP2.4 Billion recoverable (high case)1.3 Billion recoverable (best case)

1,000,640 Acres (1,563.5 sections)7 Primary areas100% ownership and operatorship

Vast inventory of land provides the Company with optionality

Provides currencyGenerates reverse inquiries

Ability to maintain operational momentum in any capital market environmentArea participants include Shell, Husky, CNRL, Total, Athabasca, Suncor, Chevron & Imperial Oil

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Assets: Resource PotentialAssets: Resource Potential

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Time

Pro

duct

ion

Technology: HorizontalAPI: 14 to 16Steam: NoDiluents: NoPricing: LLB - 5%Depth: 450mOther:

� Water flooding at later stages to sustain recovery

� 4 to 10% recovery on primary

� Up to 30% recovery on enhanced

� Short time line to cash flow

� Controllable capital and lifting costs

Conventional Heavy Oil

CretaceousSandstone

Carbonate

Technology: SAGD API: 8 to10Steam: YesDiluents: YesPricing: LLB - 2% (Blended)

- 25% (Hot)Depth: 200m to 430mOther:

� 40 to 70% Recovery

� Reliable and predictable

� Reservoir conformance maturing and predisposed to optimization

Technology: CSS or SAGDAPI: 9 to 12Steam: YesDiluents: YesPricing: LLB - 2% (Blended)

- 25% (Hot)Depth: 550mOther:

� Potential +30% recovery

� Knowledge base and emerging technologies growing

� Harper pilot key activity to initiate and prove mobility

Tec

hnol

ogy

Evo

lutio

n

Assets: Project PortfolioAssets: Project Portfolio

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• Existing primary production projects in Wabiskaw formation

Muskwa

Shell Canada:

Woodenhouse

CNRL: South

Wabasca

CNRL:

Wabasca CNRL: Pelican

Lake

Encana: Pelican Lake

IIICNRL: Brintnell

CNRL: North

Wabasca

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Primary Cold Flow ProjectsPrimary Cold Flow Projects


Conventional Heavy Oil: Muskwa Conventional Heavy Oil: Muskwa -- Net Pay MappingNet Pay Mapping

Porosity 28% Oil Saturation 67% OOIP > 4 m (over386 Mbbl)> 160 drilling spacing unitsRecent penetrations validating contours

2009 Wells Licensed for

Wabiskaw Oil

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Primary Development Component

Project Phase

Estimated Period

Expected Heavy Oil Production(bbl/d)

Cumulative Capital Cost

Phase 1 2010 1,800 $29,000,000Phase 2 2011 3,100 $46,600,000Phase 3 2012 3,800 $64,800,000Phase 4 2013 - 2018 4,000 $130,800,000Phase 5 2019 - 2022 2,000 $134,800,000

Total Capital for Primary & Enhanced $448,700,000

Time

Enhanced Development Component

Project Phase

Estimated Period

Expected Heavy Oil Production(bbl/d)

Cumulative Capital Cost

Phase 1 2017 3,350 $110,900,000Phase 2 2018 4,160 $110,900,000Phase 3 2019 4,860 $220,900,000Phase 4 2020 – 2030 5,600 $312,900,000Phase 5 2031 - 2034 1,900 $313,900,000

Conventional Heavy Oil: Muskwa Conventional Heavy Oil: Muskwa -- DevelopmentDevelopment

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Cretaceous Sandstone: ProjectsCretaceous Sandstone: Projects

Three principal core areas in the SAGD project portfolioAll adjudicated by GLJ and assigned significant resourceSunshine in depth technical analysis indicates very significant opportunity beyond GLJ’s assessmentDetailed development plan constructed

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Projects CompanyNet Pay

(m)Porosity Bitumen Saturation

Reservoir Depth(m)

Facies

Legend Sunshine 12-16 32% 78% 430 Deltaic Sands

West Ells Sunshine 15-22 33% 78% 255 Deltaic Sands

Thickwood Sunshine 12-20 33% 73% 200 Deltaic Sands

Great Divide Connacher 15-21 32% 85% 400 Channel Sands

Christina Lake EnCana 25 35% 81% 400 Channel Sands

Hangingstone Jacos 15-24 33% 80% 350 Channel Sands

Mackay River Petro-Canada 15-35 34% 74% 137 Channel Sands

Joslyn Total 15-25 33% 80% 110 Channel Sands

Ells River Chevron 15-30 33% 78% 220 Deltaic Sands

Dover 1 AOSC 15-24 34% 78% 250 Deltaic Sands

Cretaceous Sandstone: Reservoir CharacteristicsCretaceous Sandstone: Reservoir Characteristics

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Carbonate: ProjectsCarbonate: Projects

Ells

Harper

Muskwa

Portage

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Massive underlying resource Regional geological model broadly understoodPrincipal risk is efficient extraction technologyRepresents Sunshine’s future development option


Carbonate: Development MetricsCarbonate: Development Metrics

Potential to sustain over 400,000 bbl/d production from the carbonate regions for over 25 yearsGLJ adjudicated technology

Conventional SAGD wells

Pilot plant in each operational area to prove reservoir conformance

CAPEX efficiency of $35,000 per bbl/dIncludes road, Co-Gen, Pipeline and additional well costs (challenging drilling environment, deeper structures)

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Carbonate: Development Areas PotentialCarbonate: Development Areas Potential

Sunshine conservative management estimate indicates over 400,000 bbl/d potential from carbonatesBased on conservative management exploration planIndications are that the area potential is considerably larger2009 in-situ Harper pilot to establish thermal mobility response which has significant implications for resource recognition and value

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Capital Markets Update: ValuationsCapital Markets Update: Valuations

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Time

Public Oilsands Company Valuations

1 Jr. Oil Sands index is a simple average of Excelsior Energy, North Peace Energy, Oilsands Quest, Southern Pacific, Alberta Oilsands and Patch International2 Sr. Oil Sands index is a simple average of Canadian Oil Sands Trust, UTS Energy, OPTI Canada, Connacher and Suncor

3 Jr. Heavy Oil Index is a simple average of Bronco Energy and Black Pearl

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1

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Capital Markets Update: Recent PerformanceCapital Markets Update: Recent Performance

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Time

Public Oilsands Company Valuations

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1

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Capital Markets Update: Recent Oil & Gas FinancingsCapital Markets Update: Recent Oil & Gas Financings

Flow of capital shut off in Q4 2008Markets opening up but deals are opportunistic

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Issuer Announcement Date Issue Amount (C$ 000's)Peyto Energy Trust Jun 5, 2009 85,050Painted Pony Petroleum Ltd. Jun 4, 2009 19,950TransAtlantic Petroleum Corp. Jun 4, 2009 150,150Galleon Energy Inc. Jun 1, 2009 36,000Sabretooth Energy Ltd. May 27, 2009 40,076Connacher Oil and Gas Ltd. May 27, 2009 150,075Seaview Energy Inc. May 22, 2009 15,001Petro Andina Resources Inc. May 20, 2009 23,560NAL Oil & Gas Trust May 19, 2009 86,423Zargon Oil & Gas Ltd. May 14, 2009 35,475Harvest Energy Trust May 12, 2009 126,509Savanna Energy Services Corp. May 11, 2009 110,250Crew Energy Inc. May 7, 2009 43,400Bonterra Oil & Gas Ltd. May 7, 2009 14,997Breaker Energy May 7, 2009 26,979Anderson Energy Ltd. May 7, 2009 60,040Angle Energy Inc. May 7, 2009 20,000Coastal Energy Company May 6, 2009 16,000Vero Energy Inc. Apr 30, 2009 15,000Cathedral Energy Services Income Trust Apr 28, 2009 15,005Petrominerales Ltd. Apr 27, 2009 101,475Bronco Energy Ltd. Apr 21, 2009 23,905Bankers Petroleum Ltd. Apr 16, 2009 40,002Daylight Resources Trust Apr 15, 2009 172,410Iteration Energy Ltd. Apr 14, 2009 57,555Pearl Exploration and Production Ltd. Apr 7, 2009 46,054Celtic Exploration Ltd. Apr 2, 2009 36,438Baytex Energy Ltd. Mar 23, 2009 115,058Midnight Oil Exploration Ltd. Mar 20, 2009 9,450Crescent Point Energy Trust Mar 4, 2009 230,031TriStar Oil & Gas Ltd. Mar 4, 2009 287,500Orleans Energy Inc. Feb 12, 2009 14,001Storm Exploration Inc. Feb 12, 2009 19,610TransGlobe Energy Corporation Feb 4, 2009 20,003Breaker Energy Jan 29, 2009 16,109Penn West Energy Trust Jan 29, 2009 250,007Progress Energy Resources Corp. Jan 28, 2009 140,508ARC Energy Trust Jan 21, 2009 253,006

Total 2,923,059

Oil & Gas Financings (Since January 1, 2009)


Capital Markets Update: Recent Oilsands FinancingsCapital Markets Update: Recent Oilsands Financings

No significant new capital issues between September 2008 and April 2009Markets for oilsands beginning to thaw

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Issuer Announcement Date Issue Amount (C$ 000's)North Peace Energy Jun 9, 2009 10,000Connacher May 19, 2009 172,586Oilsands Quest Apr 29, 2009 29,814Petrobank Energy Dec 18, 2008 9,431Oil Sands Quest Sep 23, 2008 17,640Oil Sands Quest Sep 22, 2008 22,080OSUM Oil Sands Corp. Aug 27, 2008 275,000Excelsior Energy Aug 6, 2008 11,287North Peace Energy Jul 24, 2008 26,000Alberta Oil Sands Inc. Jul 10, 2008 15,477Bronco Energy May 6, 2008 63,056Oilsands Quest May 1, 2008 54,500

Total 706,871

Oilsands Financings (Since January 1, 2008)


Current EnvironmentCurrent EnvironmentLarge amounts of cash not yet deployedVolatility has dropped significantlyOil prices at an attractive level and rising trendFear of missing the upswing in energy sector

Capital Markets Update: Environment & ImpactCapital Markets Update: Environment & Impact

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Impact of DownturnImpact of Downturn

North American E&P companies on average reduced capital budgets by 33%1 to 3 Million bbl/d of oilsands projects deferredCosts have retreatedMaterials and manpower in better supply


Capital Markets Update: Financial StrategyCapital Markets Update: Financial Strategy

Execute multi-pronged financing strategyDevelop financing structures that leverage our assetsMitigate riskManage dilutionAccess the most advantageous markets for capitalRealize maximum value for shareholders

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SummarySummary

AssetsOne of the largest 100% working interest land holdings in the Athabasca Region (1,000,640 acres)Portfolio consists of multiple asset groupings

Conventional Heavy Oil - short line of sight to cash flowCretaceous Sandstone - high value, large production profile SAGD assetsCarbonates - substantial long term value assets

Thermal recovery only, no mining of resourcesNo tailing ponds or mining pits

PeopleProven track record of execution within all Sunshine product types with other successful companies (Rally Energy, Deer Creek, Connacher and Flint)Divisional leaders in place

Capital StructureBroad shareholder baseNo controlling shareholder (all shareholders <10%)Efficient and transparent structure with managed dilution

ResourcesTremendous upside potentialGLJ evaluations predicated on only 58 core holes resulting in 8.9 Billion bbls (PIIP)

Production GrowthCurrently forecasting 184,000 bbl/d production identified on only 68 sectionsOver 400,000 bbl/d production potential from carbonate reservoirsSignificant future production potential on remaining land base (~1,500 sections)

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Contact InformationContact Information

Sunshine Oilsands Ltd. Suite 1400, 700-4th Avenue, SWCalgary, Alberta, CanadaT2P 3J4

Main Telephone: +1 (403) 984-1450Facsimile: +1 (403) 455-7674

David Sealock Vice President, Corporate [email protected]

Email: www.sunshineoilsands.com

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sunshine oilsands ltd. annual general meeting june 12 ... · forecasted development metrics...

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