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The next genera+on of airborne geophysical survey technology
NXT Energy Solutions
INVESTOR PRESENTATION
February 2017
© 2017 NXT Energy Solutions Inc.
Disclaimer and Forward-looking Statements
The information contained in this document may include forward-looking statements including opinions, assumptions, estimates and expectations of future prospects for the Company and financial projections. When used in this document, the words "anticipate," "believe", "estimate," "expect," "intend," "may," "project," "plan," "will," "should" and similar expressions are intended to be among the statements that identify forward-looking statements.
Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable; there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, volatility of oil and natural gas prices, changes in the oil and gas industry, the Company’s ability to implement corporate strategies and obtain financing, the state of capital markets, operating risks, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities.
Neither the TSX or the OTC QB Exchanges accept responsibility for the adequacy or accuracy of any information contained in this document.
2
© 2017 NXT Energy Solutions Inc. 3
Introduction to NXT: NXT Energy Solutions is a Canadian Airborne Geophysical Survey public company with a proprietary game-changing technology called SFD®.
Is NXT’s proprietary gravity-based airborne geophysical technology
Stress Field Detection (SFD®):
Confirms trap integrity (trap, reservoir and seal), thereby reducing exploration risk
Creates value independent of commodity prices
Increases conventional exploration success rates while rejecting most non-commercial targets
© 2017 NXT Energy Solutions Inc.
NON INVASIVE
MINIMAL ENVIRONMENTAL OR
COMMUNITY FOOTPRINT
A patented and proven technology with drilled commercial discoveries and client references
© 2017 NXT Energy Solutions Inc.
SFD® Survey System on Citation 560 jet aircraft
4
SFD® survey system detects minute gravity field perturbations corresponding to changes in subsurface homogeneity induced by density and stress variations
Survey Altitude and speed
3,000 meters and 500km/hr
The SFD® Sensors Three systems of multiple sensors
DAQ 2,000 samples/second/sensor
GPS Tracks flight lines
ONSHORE SHALLOW WATER DEEP WATER
© 2017 NXT Energy Solutions Inc.
SOURCE MIGRATION TRAP RESERVOIR SEAL
The Five Components of a Sedimentary Basin Analysis
SFD® verifies the presence of a trap area
SFD® identifies, locates and ranks potential reservoirs
SFD® confirms the trap integrity
SFD® identifies targets only if all 3 components are present
Where Does SFD® Demonstrate Value in the Exploration Process?
5
5
SFD® is the only tool that identifies
the simultaneous existence of a TRAP, RESERVOIR and SEAL.
Empowering the industry with a
critical information that substantially increases success rates and saves
time and costs.
© 2017 NXT Energy Solutions Inc.
Background
6
SFD®- Value Proposition Current exploration challenge: High costs – Low success rates – Smaller Discoveries
Basin/Block Analysis
Select optimal leads
TIME AND CAPITAL INTESNTIVE PROCESS
Exploratory Drilling
Serious Financial Risk Global Failure Rates:
Onshore: 82% Offshore: 93%
Average cost/dry well:
Onshore: $1M-$60M Offshore: $25M-$280M
Focused Exploration
SFD® Technology Critical Subsurface Information
Identifies Trapped fluid accumulations Confirms Trap Integrity
(Trap, Seal and Reservoir) Correlates with Seismic data attributes
Prioritized Drilling
Higher Chance of Success SFD® Proven Success rates: > 60%
Significant reduction in:
Finding costs G&G Costs &Timeline
Significantly lower finding costs with greater success rates
Primary reason for failure No Trap No Seal
Non Commercial Negative Economics Breached structures
Due to lack of trapped potential
hydrocarbon accumulation
CO
NV
ENTI
ON
AL
PRO
CES
S SF
D® S
OLU
TIO
N
© 2017 NXT Energy Solutions Inc.
Background
7
Multiple applications providing strategic benefits in the exploration cycle
Diverse SFD® Applications
Pre Seismic
• Optimize G&G work program
• Focus Seismic Programs
• Reduce seismic costs
• Analyze area prospectivity
• Survey sensitive or in-accessible areas
Post Seismic
• Focused seismic data evaluation
• Prioritize seismic prospects
• Focused geophysical studies
• New Geological play evaluation
• Near field/upside field development
Executive Decisions
• Block relinquishment
• Bidding round decisions
• Investment/farm-in decisions
• Budget allocations
• Work commitment extension decisions
• Block participation
Profitability
• Early block prospectivity
• Focused allocation of funds/Investment
• Reduce seismic and other exploration cost
• Early exploration risk assessment
• Reduce dry well costs
© 2017 NXT Energy Solutions Inc.
Background
8
A patented, proven and established technology
Technical Papers validating the Efficacy of the technology
Further to a successful technical
evaluation of the technology, PEMEX - National Oil Company of Mexico
has written a joint technical paper in 2013.
Upon completion of a successful
project for PPL – Pakistan Petroleum Limited, the National Oil Company of Pakistan, a joint technical paper was
written in 2012.
Established Value in the Exploration Cycle
SFD® Technology is established as a
key focusing tool in hydrocarbon exploration and has been included for Exploration Work Credits in the
following jurisdictions:
PAKISTAN BOLIVIA
COLOMBIA ARGENTINA
Successful projects completed for the following clients
(Case studies available on request)
Client references and recommendations letters are available on request
© 2017 NXT Energy Solutions Inc.
Reliability of SFD® Recommendations
WILDCAT - DST
No. of SFD® recommendations drilled successfully (Commercial discoveries made) 14
19 SFD® Recommendations drilled to date
73% SFD® SUCCESS RATE
Where SFD® and seismic prospects correlated Average OOIP/drill : >150 MMBBL
Average OGIP/drill : > 100 BCF
WILDCAT – P&A
No. of SFD® recommendations drilled unsuccessfully (NO commercial discoveries made)
5
9
Onshore
18%
Offshore 9%
INDUSTRY SUCCESS RATES
Based on the applications of all current technologies and G&G processes
14 prospects that were qualified by seismic but surveyed and NOT RECOMMENDED by SFD® drilled
Dry wells
79%
Non Commercial Discoveries Average OOIP/drill : < 5 MMBBL Average OGIP/drill : < 1 BCF
21%
Unparalleled Risk Mitigating tool for Oil and Gas Explorers and Project Investors alike
© 2017 NXT Energy Solutions Inc.
NXT Revenue Streams
10
SFD® Survey Fee for Service
SFD® Retail rates are currently at $1500 per line kilometer.
An average survey for a 5000 sq. kilometer block would cost a client
$3.5 million. SFD® Data Sales NXT owns over 100,000 line km of proprietary SFD® Data that is being prepared for sale to potential clients.
Strategic Royalty Agreements
Existing GORR contracts in Canada (Pengrowth – BC Horn
River Basin, Alberta – Swan Hills)
Vertical Business Model
Equity ownership in strategic global assets by investing
proprietary data and through third party financing
© 2017 NXT Energy Solutions Inc.
Offices/Agents Potential Project Opportunities Completed Projects
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NXT’s Global Presence
© 2017 NXT Energy Solutions Inc.
Over $100 Million Worth of Potential Contracts in the Pipeline
NXT’s Pipeline of Contract Opportunities
CONTRACTS
# Potential No. of Contracts Revenue received
PHASE 3: Contract Negotiations
PHASE 2: Technical Discussions
PHASE 1: Qualified Leads
Earn
ing
Pote
ntia
l (U
S $M
M)
0
5
10
15+
Latin
Am
eric
an
Cou
ntrie
s
5+
Arg
entin
a
2
Boliv
ia
3
3
Sri L
anka
1
2
Signed Contracts Potential contracts Additional Contract ops
Qat
ar
1
Sene
gal
3
Nig
er
1
Paki
stan
Nam
ibia
5+
1 1 Li
beria
Seyc
helle
s 1
Indo
nesia
Kuw
ait
2
2+
Mal
aysi
a
2+
Gha
na
Mex
ico
2 UA
E
Russ
ia
1
12
© 2017 NXT Energy Solutions Inc.
Background
13
NXT Growth Prospects
Robust Sales funnel with over $100 million in
estimated revenue potential.
GROWTH POTENTIAL Currently in discussions with Mexico, Ghana,
Malaysia, Senegal for major
basin study projects.
UPCOMING MAJOR PROJECTS Vertical projects
under discussions with several entities
that include proprietary data sales
DIVERSIFIED REVENUE SFD® identified
leads in Argentina and Pakistan
currently being prepared for drilling
further validating SFD® strategic
value.
RELIABILITY & VALIDATION Pending major
project award in 2017 from Sri
Lanka estimated at US$29 million.
Refer to latest press release on NXT
website.
LARGE REVENUE PROJECTS
© 2017 NXT Energy Solutions Inc.
Background
14
2017 Critical year for key milestones Direct results of major strategy shift and marketing drive undertaken in 2016
Pending official announcement of 3 major SFD®
recommended successes
Currently engaged in final stages of discussions for major
basin level survey projects globally
Launching a wholly owned subsidiary in Canada to
monetize SFD® identified prospects
In discussions with three Super Majors currently to test,
validate and use the technology shortly
Several projects under negotiations where NXT gets a bonus royalty position SFD®
prospects
In final stages of a US$28 million survey contract award. (NXT’s largest year to date
contract)
Strategically focused towards global growth
© 2017 NXT Energy Solutions Inc.
Current Capital Structure
TSX : SFD
52 Week High: $1.85
52 Week Low: $1.19
Average Daily Volume: 6,860 Shares
Capitalization Share Outstanding (in Millions)
Cash and Short-term Investments
Approximate cash on hand $3.3 Million
Debt-Free Balance Sheet
Strong Financial Position
53.9 Common shares issued
3.2 Stock options (average exercise price $1.28)
57.1 Fully diluted number of shares
33% of Fully Diluted Shares Owned by Directors/ Management
OTC QB: NSFDF
52 Week High: US $1.31
52 Week Low: US $0.90
Average Daily Volume: 7,229 Shares
Listed on TSX since 22 March 2016 (Previously TSX Venture)
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2015 Revenue $17.4 Million
Pre Tax Income $5.7 Million
Net Income $10.5 Million
© 2017 NXT Energy Solutions Inc.
NXT Management and Advisors Management Non-Executive Directors Advisory Board
GEORGE LISZICASZ Chairman and CEO
BEV STEWART, CPA, FCCA Chief Financial Officer
CHARLES SELBY Caledonian Royalty Corp.
MICKEY ABOUGOUSH Formerly Teknica Overseas Ltd.
TOM VALENTINE Norton Rose & Fullbright LLP
JOHN TILSON Business Advisor
BRUCE WILCOX Manhattan Institute, Board of Trustees
DR. GEORGE IUSCO Formerly Head of Acquisition and Exploration, Repsol
HON. GEORGE ALLEN Former Governor of Commonwealth of Virginia and U.S. Senator
DR. CLEVELAND JONES State University of Rio De Janeiro
DR. ARIEF BUDIMAN University of Calgary, Canada
Extensive Industry Experience Solid Global Experience
Outstanding Scientific Credibility
RASHID TIPPU (MSc Geophysics) Dir. of Geoscience, Asia, MEA
ENRIQUE HUNG (MSc Geophysics) Dir. of Geoscience, LATAM
SAJID SAYEED Dir. Global Business Development
MR. THOMAS BRECKLES CEO & Managing Director, BCP Capital Advisors
TODD CHUCKRY Dir. Of Operations
DR. XIANG GUI (PhD Elec. Eng.) Dir. of Research & Development
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© 2017 NXT Energy Solutions Inc.
The next genera+on of airborne geophysical survey technology
NXT Energy Solutions
Thank You
© 2017 NXT Energy Solutions Inc.
Background
18
Drilled SFD® Recommendation list
COUNTRY PLAY TYPE(S) BASIN AVERAGE DEPTH TO BASEMENTColombia Str-Extensional, Asymmetric Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Colombia Str-Extensional, Asymmetric Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Colombia Str-Extensional, Asymmetric Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Colombia Str-Fault Bounded + Strat - Facies Change Llanos Barinas 2600m Colombia Str-Fault Bounded Llanos Barinas 2600m Colombia Str-Extensional, Asymmetric Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Colombia Str-Fault Bounded + Strat - Facies Change Llanos Barinas 2600m Colombia Str-Extensional, Asymmetric Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Colombia Str-Extensional, Asymmetric Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Colombia Str-Extensional, Asymmetric Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Colombia Str-Extensional Fault + Anticline + Strat - Clastic Dep Lens Llanos Barinas 2600m Mexico Str-Anticline + Reverse Fault, Strat-Facies Change Catemaco Fold Belt 10,000m Mexico Str-Anticline, Strat-Facies Change Comalcalco 9000m
Argentina Strat - Facies Change, Fractured Reservoir San Jorge 10000m Colombia N/A Llanos Barinas 2600m Colombia N/A Llanos Barinas 2600m Colombia N/A Llanos Barinas 2600m Colombia N/A Llanos Barinas 2600m Colombia N/A Llanos Barinas 2600m
© 2017 NXT Energy Solutions Inc.
Introduction to SFD® Response method
19
12
Example : Density/Stress Anomaly with Trapped Fluid
SFD® Signal
Time
Volta
ge
Anomalous Area (18% porosity)
1.8 Tcf
2
SFD® Signal
Time
Volta
ge
Example : Density/Stress Anomaly with no Trapped Fluid 1
Change in mode/frequency in relation to change in geology
Ladyfern, British Columbia, Canada
© 2017 NXT Energy Solutions Inc.
Volti
os (V
)
Segundos (S)
Major Geological Change
Major Geological Change
I n f l e x i o n Point
Kunah Discovery – Gulf of Mexico
Anomalía SFD 2.15
Original Map from 2012 Report PEMEX Joint Paper
Examples of SFD® Signal Correlation
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© 2017 NXT Energy Solutions Inc.
Examples of SFD® Signal Responses
464 MMBBL 2.8 Tcf.
Reserves
Rubiales Field, Colombia Gilby Field, Canada Giraldas, Mexico
4,500 MMBBL Reserves 325 MMBBL
1.83 Tcf
Reserves
SFD® Anomaly SFD® Anomaly
The Only Tool that Identifies Trapped Fluid presence at Stage 1 of Exploration
SFD® Anomaly
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