Post on 21-Jul-2020
Page 01
© 2020 Pan Orient Energy Corp.
February 2020 Update
Page 02
© 2020 Pan Orient Energy Corp.
Cautionary Statement
This presentation contains forward looking statements which involve subjective judgment and analysis and
are subject to significant uncertainties, risks and contingencies including those risk factors associated with
the oil and gas industry, many of which are outside the control of and may be unknown to Pan Orient. No
representation, warranty or assurance, express or implied, is given or made in relation to any forward looking
statement. In particular, no representation, warranty or assumption, express or implied, is given in relation to
any underlying assumption or that any forward looking statement will be achieved. Actual and future events
may vary materially from the forward looking statements and the assumptions on which the forward looking
statements were based.
Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking
statements, and should rely on their own independent enquiries, investigations and advice regarding
information contained in this presentation. Any reliance by a reader on the information contained in this
presentation is wholly at the readers own risk.
Readers are cautioned that well test results are not necessarily indicative of long-term performance or of
ultimate recovery.
Pan Orient and its related bodies corporate and affiliates and their respective directors, partners, employees,
agents and advisors disclaim any liability for any direct, indirect or consequential loss or damages suffered
by a person or persons as a result of relying on any statement in, or omission from, this presentation.
Subject to any continuing obligations under applicable law or any relevant listing rules of the TSX-V, Pan
Orient disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking
statements in this presentation to reflect any change in expectations in relation to any forward looking
statements or any such change in events, conditions or circumstances on which any such statements were
based.
Page 03
© 2020 Pan Orient Energy Corp.
Corporate Summary
Financial
Basic Common Shares Outstanding (TSX:POE) Dec31-2019 54.5 million
Insider Holdings 7.5%
Total Long-term Debt nil
Market Capitalization @$1.07/Share (Dec31-2019) $58.3 million
Total Corporate Adjusted Funds Flow from Operations 2019 Q3 (9 months) $13.7 million
Working Capital & Non-current Deposits – Pan Orient Sept30-2019 $32.5 million
Working Capital & Non-current Deposits – Thailand Joint Venture Sept30-2019 $ 9.4 million
Working Capital & Non-current Deposits (Pan Orient & Thailand JV) $41.9 million ($0.77/POE Share)
Reserves1 & Contingent Resources2
Thailand Proved + Probable Reserves (“2P”)1 (50% of POS) 1.834 million
NPV10 (after income tax) $ 43.7 million
per Pan Orient share $0.80
Sawn Lake Alberta - Risked Best Estimate Contingent Bitumen Resources 2
(71.8% of Andora) 139 million bbls recoverable
Notes:
1. Thailand oil reserves at December 31, 2019 evaluated by Sproule International Limited for Pan Orient Energy (Siam) Ltd. (POS),
value shown here reflects POE’s 50% ownership in POS.
2. Sawn Lake Contingent Bitumen Resources at September 30, 2019 evaluated by Sproule Associates Limited, volume shown here
reflects POE’s 71.8% ownership in Andora Energy Corporation (Andora)
Page 04
© 2020 Pan Orient Energy Corp.
Normal Course Issuer Bid
(Share Buy Back)
• The Company received approval from TSX Venture Exchange for renewal of its Normal Course
Issuer Bid (“NCIB”) for the period of May 16, 2019 to May 16, 2020.
• Under the terms of the NCIB, Pan Orient is authorized to purchase, for cancellation, up to
4,504,064 of its common shares (10% of the public float), subject to a maximum of 1,098,008
common shares (2% of the 54,900,407 issued and outstanding common shares) during any 30
day period.
• Between May 16 and December 20, 2019 the Company purchased 654,400 shares at an average
price of $1.22 per POE share. There have been no purchases since December 20, 2019.
• Purchases by the company under the NCIB are not allowed while the company is in blackout
pending news such as pending reserve reports, financials and drilling results as has been the
case since December 20, 2019, to the present.
• The Company will continue to purchase shares under the NCIB while not in blackout and anytime
the Company believes its share price is undervalued by the market.
Page 05
© 2020 Pan Orient Energy Corp.
Thailand Reserves & Production
YE2018 2P: +150%
YE2019 2P: +34%
POS 100% (POE 50%
ownership in POS)
Page 06
© 2020 Pan Orient Energy Corp.
Thailand Oil Sales
POS 100% (POE 50%
ownership in POS)
Page 07
© 2020 Pan Orient Energy Corp.
Thailand Crude Oil Sales
Agreement
• All previous L53 crude oil sales agreements used High Sulphur Fuel Oil (“HSFO”) as the basis for pricing despite the
fact L53 crude oil is low Sulphur (~0.3%). This was simply because HSFO was the most traded (~80% of sales) bunker
fuel in Singapore
• Historically, L53 oil sales have averaged an approximately 10% discount to Brent crude oil. The basis of contract pricing
has been a price for various per barrel yields the majority of which was tied to high Sulphur fuel oil (“HSFO” 3.5%
Sulphur bunker fuel) in Singapore. This was despite the fact that L53 crude oil is low Sulphur in composition at an
average less than 0.3% and was simply a result of the fact that over 85% of all fuel oil traded in Singapore was HSFO,
by far the highest volume, highest demand market
• The IMO2020 regulations that were implemented globally on January 1, 2020 specified that all bunker fuels after this
date must be 0.5% Sulphur or less. The impact of IMO2020 was seen in the Singapore market starting in October 2020
and has continued through to the present. During this time, L53 realized crude oil sales saw an average discount to
Brent of 23.4% from October 2019 to January 2020.
• In accordance with the L53 crude oil sales agreement, discussions between Pan Orient Energy (Siam) Ltd. (“POS”) and
the buyer have resulted in an agreed repricing effective February 1, 2020 that would see, on a comparable basis, the
average 23.4% discount to Brent experienced through the October 2019 to January 2020 period, reduced to a 2.75%
discount to Brent.
• For comparison purposes, the discount to Brent estimated for the POS December 31, 2019 reserves report was 10%.
Page 08
© 2020 Pan Orient Energy Corp.
DD Reserves
SH1
AA
DD
D
D-
3
D
D-
2
D
D-
1
EE1
EE2
20%
2P RF
22%
2P RF
20%
2P RF
BB/CC
20%
2P RF
2P Area OOIP RF EUR RR. 2019
Sq.km. M BBL % M BBL M BBL
AA 0.44 3,009 20 602 498
BB 0.75 4,022 20 805 694
CC 0.50 3,923 22 863 697
CC N 0.08 574 22 126 63
DD+EE 0.47 4,430 20 886 667
Total 3,282 2,619
Currently Producing No Reserves
assigned YE 2019
• There remains material future potential
upside in the DD field from recovery
factors alone, 2P ~20% versus 3P 30%
• There are a number of zones that are
clearly oil bearing on open hole logs that
are yet to be tested, AA2 being the most
significant, plans are to test this zone in
2020
POS 100% (POE 50% ownership in POS)
Page 09
© 2020 Pan Orient Energy Corp.
Concession L53/48
Thailand Oil sales prices (% of Brent)
• Pan Orient owns a 50% interest in Pan Orient
Energy (Siam) Ltd. with one local Thai partner
holding the remaining interest.
• Per barrel costs ($CAD) during the third quarter of
2019 were:
• Transportation expenses of $2.46
• Operating expenses of $4.70
• General and administrative expenses of $1.85
• A 5% to 6.25% royalty to the Government of
Thailand
• December 31, 2019 Reserves (net to POE) - 2P:
1.834MMbbls (+34%) 1P: 0.618 MMbbls (+37%),
2PNPV(10) after tax: Cdn$43.7 million (+10%)
• 2019 Thailand oil sales averaged 89% of Brent price
• Effective February 1, 2020 a revised oil pricing
agreement will come into effect
POS 100% (POE 50%
ownership in POS)
Page 010
© 2020 Pan Orient Energy Corp.
Thailand Production Forecast
DD-6ST2
DD-9
DD-7
POS 100% (POE 50%
ownership in POS)
Page 011
© 2020 Pan Orient Energy Corp.
L53 Prospects
Prospects
Prospects (drilled)
Oil window
5 km.
PTTEP
L53/48
West A-A4
West A7
South B1-B4A
Prospect Most likely
closure
(km2)
WEST_A1-A4 2.01
WEST_A7 4.20
2020 Firm 2020 Contingent
Prospect Most Likely
closure (km2)
AA (AA2 Well) 0.77
AA North (AA1
Well)
0.40
BB (BB1 Well) 0.35
BB West 0.38
TOTAL 1.90
DD Area
3D Coverage
• In January 2021 all exploration lands (indicated
by the red outline on the map) outside of an
existing discovery Production License will
expire. For this reason the 2020 capital/work
program is focused on exploration drilling – at
the end of 2020 everything worth drilling will
have been drilled.
Page 012
© 2020 Pan Orient Energy Corp.
Prospect Closure (km2)
2P EUR
YE 2019
MMbbls
AA (AA2 Well) 0.77 NA
AA North (AA1 Well) 0.40 NA
BB (BB1 Well) 0.35 NA
BB West 0.38 NA
TOTAL 1.90 NA
AA South (DD5ST1) 0.17 0.178
DD 2P 0.64 3.282
BB
1 KM
• The size of any oil discovery is not only a function of
the areal extent but as importantly, the number of sands
(AA South: 1 sand – DD: 4 sands) that are oil bearing
• BB1 well is currently sitting cased at 150m TVD with
the rig moved to AA2 while the wellpad is reinforced
•Currently drilling ahead on AA2 well, then AA1 back to
BB1 afterward
AA Pad
BB Pad
DD Area Prospects
DD Pad
2020 Firm Exploration Well
AA
North
AA
BB
West
AA South
Field
DD
Field
Prospects Unsuccessful
Prospects Oil Fields
2020 Contingent Exploration
Well
Page 013
© 2020 Pan Orient Energy Corp.
AA2 Sandstone @ DD Field
DD-6ST2
DD-7
AA2 Sandstone Depth Structure
AA2 Sandstone Penetrations interpreted oil bearing
Planned in
2020
AA2 Sandstone in just drilled DD6ST2
• The AA2 sand has now been penetrated by 3 wells
in the DD field area – DD4, DD3 & DD6ST2
• The DD7 well planned later in 2020 will be
specifically targeting this zone in addition to others
• No test have been conducted on the AA2 sand yet
and no reserves were attributed to it at YE 2019
Page 014
© 2020 Pan Orient Energy Corp.
A
A’
ML
0.46 km2
ML
0.6 km2
ML
0.29 km2
ML
0.66 km2
West A1-A4 Prospects
A A’
L53-D Field West A1-A3
A6 Sandstone
Structure
WEST_A
Total
2.01 km2
Page 015
© 2020 Pan Orient Energy Corp.
2020 Thailand
Capital Program
Drilling and Workover Expenditures 100%
• The 2020 Thailand capital program will be
funded entirely through Thailand cash flow
• Any significant exploration success may
result in increased drilling
Page 016
© 2020 Pan Orient Energy Corp.
Sawn Lake, Alberta, Canada
Page 017
© 2020 Pan Orient Energy Corp.
Andora’s Sawn Lake SAGD Project
• Pan Orient Energy Corp. owns 71.8% of Andora
• Andora is focused on developing the bitumen resources at Sawn Lake using SAGD development.
• Currently interests in approximately 78 sections of Alberta oil sand leases.
• 139 million barrels of risked “Best Estimate” contingent bitumen resources attributed to Pan Orient’s 71.8% ownership of Andora (Andora has 194 million barrels). Andora operates all lands assigned contingent resources at Sept30-2019.
• Demonstration project produced bitumen September 2014 to February 2016 and indicated that Sawn Lake is a top quartile SAGD asset.
• Intended development with Andora’s patented “Produced Water Boiler” (PWB) which enables use of “battery scale SAGD” to significantly reduce financial, reservoir and operating risk.
Sawn Lake
(Company Gross)
(15% development risk)
High
Estimate
Best
Estimate
Low
Estimate
Millions of barrels of
Bitumen - SAGD 164 139 126
Sawn Lake Risked Contingent Bitumen Resources September 30, 2019 (net Pan Orient’s 71.8%) Evaluated by Sproule Associates Limited. Refer Press Release December 2, 2019.
Red
Earth
T79
R1
W5
R24 T98
Husky
Baytex
5th
Me
rid
ian
Shell
Penn
West
Sawn Lake
Koch
Peace River Oil Sands Area
Page 018
© 2020 Pan Orient Energy Corp.
Andora’s Oil Sands Leases
Sawn Lake Central
• 50% of 11 sections (Andora is Operator)
• 127 MMbbls risked “Best Estimate” contingent
resources net to Andora
• SAGD Demonstration Project facility & wellpair
at 7-30-91-12W5
Sawn Lake South
• 100% of 16 sections (Andora is Operator)
• 67 MMbbls risked “Best Estimate” contingent
resources net to Andora
Sawn Lake North
• 100% of 9 sections (Andora is Operator)
• 10% of estimated 42 sections (non-operated)
(August 2019 is the end of the lease term for 31
sections and it is uncertain what lands the
operator is able to continue indefinitely – no
impact on contingent resources assigned)
• No risked “Best Estimate” contingent resources
assigned at September 30, 2019
Andora holds varying interests in 88 sections Dec31-2017
With 194 MMbbls contingent bitumen resources assigned. Pan
Orient has a 71.8% ownership in Andora.
Page 019
© 2020 Pan Orient Energy Corp.
Progress at Sawn Lake
Demonstration Project 2014 - 2016
• Bitumen production in January and February 2016 averaged 615 barrels BOPD with an average
instantaneous steam-oil ratio (“ISOR”) of 2.1 from the one SAGD wellpair.
• Established viability of the SAGD process in the Bluesky formation at Sawn Lake.
Potential Expansion to 3200 BOPD at Sawn Lake Central (Andora operator with 50% WI),
• Andora finalized detailed engineering for its patented PWB in 2017.
• Regulatory approval received Dec5-2017 for potential commercial expansion to 3200 BOPD (in
which Andora has a 50% working interest and is the operator) using Andora’s PWB.
• First stage is reactivation of existing SAGD facility and wellpair, expansion to install the first PWB
and drill an additional wellpair at an estimated cost of $11 million net to Andora. Andora’s share of
production estimated at 620 BOPD.
• A further expansion is for drilling of an additional three wellpairs plus facilities work at an estimated
cost of $16 million to increase Andora’s share of production to 1547 BOPD.
• Bitumen production would commence approximately 24 months after an investment decision by
Andora and its partners.
• It is recognized that stable crude oil prices, and specifically Western Canada Select benchmark
prices, will have a significant impact on project economics and financing, and on decisions
regarding the timing and extent of future development .
Note: Production results to date are not necessarily indicative of long-term performance or of ultimate recovery and the
Sawn Lake demonstration project has not yet proven that it is commercially viable.
Page 020
© 2020 Pan Orient Energy Corp.
Sawn Lake Quality
Sawn Lake
Tier 1 Projects
Page 021
© 2020 Pan Orient Energy Corp.
Andora Summary
Andora Value Components
1. Sawn Lake Interests & Operations - “Tier 1” SAGD asset with significant potential
• 194 million barrels of Bluesky Risked “Best Estimate” Contingent Resources
• Control of Sawn Lake development as Operator per the JOA
• Existing Sawn Lake 7-30-91-12W5 SAGD $34 million facility & wellpair ready for
expansion to 3200 BOPD with AER approval in place (Andora 50% working interest &
operator). Intended development is in stages with first stage of development, net to
Andora, of $11 million in capital expenditures with bitumen production of 620 BOPD.
2. Andora proprietary technology for “Produced Water Boiler” to for intended use at Sawn
Lake and utilized at other projects
3. SAGD experience for drilling, installation of facilities & operations
Page 022
© 2020 Pan Orient Energy Corp.
Contacts
Pan Orient Energy Corp
Suite 1505, 505 3rd St SW
Calgary, Canada
Telephone: +1 403 294-1770
Fax: +1 403 294-1780
www.panorient.ca