Annual & Special Meeting June 13, 2017 - panorient.ca · Annual & Special Meeting June 13, 2017 . ... Indonesia East Jabung Prospective Resources as at June 30, ... – P1 168km2

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© 2017 Pan Orient Energy Corp.

Annual & Special Meeting June 13, 2017

Page 02


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 reader’s 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


Corporate Summary

Financial

Common Shares Outstanding (TSX:POE) @ Jun13-2017 54.9 million

Insider Holdings 7.3%

Total Long-term Debt nil

Enterprise Value @$1.50/Share $82.3 million

Q1/17 Funds Flow used in operations (including share of Thailand) $0.2 million

March 31, 2017 Working Capital & Non-current Deposits $47.3 million

March 31, 2017 Working Capital & Non-current Deposits per POE share $0.86

Reserves1 & Values PV10 and Prospective Resources2 (Excluding Sawn Lake SAGD)

Thailand L53 Proved + Probable (“2P”) December 31, 2016 0.6 million barrels

NPV10 @ After Tax $13.2 million ($0.24/share)

Indonesia East Jabung Unrisked Mean Prospective Resources 122.9 million barrels

1. Thailand oil reserves of Pan Orient Energy (Siam) Ltd. (“POS”) at December 31, 2016 evaluated by Sproule International Limited.

Value shown here reflects POE’s 50.01% ownership in POS. See NI51-101 Filing on SEDAR April 28, 2017.

2. Indonesia East Jabung Prospective Resources as at June 30, 2015 evaluated by Gaffney, Cline & Associates (Consultants) Pte.

Ltd. See Page 6 of Pan Orient’s December 31, 2015 MD&A.

Page 04


Asset Summary

1. All Asian assets are profitable in a sub $50USD Brent environment

2. High impact exploration at East Jabung PSC onshore Sumatra, Indonesia (49% non op):

– The best fiscal terms in Indonesia with a 65%/35% after tax & cost recovery split in favor

of the GOI for oil (60%/40% for natural gas) after POE recovers its costs

– Carried up to a well cost cap of the first $10MMusd on the first high impact exploration

well (AYU-1X)

– There is a second carried well (first $5MMusd) if successful in the first well

– Onshore with low drilling & development costs and robust domestic gas prices/market

– Very experience operator in the region with nearby existing infrastructure (Talisman –

“Repsol”)

3. Approx. 275 BOPD of low cost oil production onshore Thailand Concession L53 the cash flow

from which will be used to fund one exploration well between Q3/17 & Q4/17

4. A completed SAGD bitumen pilot in Peace River Alberta, Canada that performed at Tier 1

metrics for production rate and ISOR :

– Andora Energy – operator & 71.8% owned by POE

– Currently pursing long lead time approvals towards future development

Page 05


Focus 2017

Maintain Strong Balance

Sheet

Add Material Value

Through the Drill Bit

Build Sawn Lake Value

•CDN $47.3 million estimated current working

capital & non-current deposits (end 2017 Q1)

• Thailand production revenue covers Corp G&A

and a modest annual Thai exploration program

• East Jabung PSC - AYU-1X exploration well cost

will be carried by partner up to a gross cap of

$10MMusd

• L53 Thailand exploration well Q3/17 – Q4/17

• Long lead time application for 3,200 BOPD

expansion submitted April 2016 – approval

anticipated in 2017

Page 06


East Jabung PSC Indonesia

East Jabung PSC

Batu Gajah PSC (expired)

Repsol (Talisman) assets

Oil Pipeline

Gas Pipeline

AYU-1X WELL

• Repsol (Talisman) 51% Operator & POE 49%

• Rig mobilization has commenced and the start

of AYU-1X drilling is anticipated on or about

July 5 2017

• The structural complex being targeted by the

AYU-1X well was estimated by Gaffney Cline in

2015 to hold an unrisked Pmean prospective

resource of 122.9MMboe (recoverable) net to

POE’s 49% interest within the BatuRaja, Gumai

and ABF formations

• Additional prospective resource upside exists

within the Lower Talang Akar sandstones &

Basement formations

• Condensate rich gas with possible oil legs are

deemed likely at all potential reservoir levels

• East Jabung PSC possess the best fiscal

terms of any conventional PSC onshore

Indonesia with net contractor take of 35% after

cost recovery for oil and 40% after cost

recovery for gas.

• Excellent pipeline infrastructure that feeds

into robust gas markets with current gas

pricing of approximately $6 to $8usd/mcf

52,000 boepd

141,000 boepd

24,000 boepd

2016 Production Rates

?

Page 07


AYU-1X Exploration well

• Torrential monsoon rains have been

encountered throughout the construction

phase of the AYU-1X exploration well access

road and well pad, with up to 6 to 10cm of rain

over a number of 24 hour periods

• As a result, measures required to mitigate the

impact of the rain have resulted in delays to

the originally planned schedule

(mm)

Page 08


AYU-1X Construction

Page 09


Geological Summary

Page 010


AYU-1X Batu Raja (BRF)

Primary Target

• The Batu Raja formation is the

primary target of the AYU-1X

exploration well

• Estimated areas of closure:

– P1 168km2

– P10 93km2

– P50 44km2

– P90 14km2

• Top BRF estimated @ 1,200m

TVD

• AYU-1X is located on the

structurally highest point of the

main BRF closure

• In the success case, condensate

rich gas is anticipated at this

location, with oil possible down

structure

P1

P10

P90

P50

Batu Raja Limestone Rock Type & Structural P1 to

P90 Overlay

Page 011


AYU-1X Well Summary

Estimates: • Dry hole Cost:

– $12.58MMusd with NPT & contingency

– $1.16MMusd net to POE

• Tested Cost:

– $14.67MMusd with NPT & contingency

– $2.19MMusd net to POE

Timing:

– Access road completed March 2017

– Rig mobilization underway

– Commencement of drilling approximately

July 5 2017

Objectives:

– Primary: Batu Raja Fm Limestones

– Secondary: Lower Talang Akar Fm

sandstones & Basement

Page 012


Gumai/ABF Sandstones

• The Gumai and ABF formation sandstones will

be penetrated by the AYU-1X well on the way

down to the BRF primary target, but at a

location below the maximum P10 closure.

• In the event of BRF success at AYU-1X, a

second well may be drilled at the ANGGUN-1X

location that would: a) potentially define the

down dip limit of hydrocarbons encountered in

the BRF, and b) test for hydrocarbons within the

Gumai & ABF sandstones within the P90

closure at the Gumai level.

• A complete lack of hydrocarbon shows at any

stratigraphic level while drilling AYU-1X (and

failure at the BRF level) would make the

decision to drill for the Gumai sands up dip of

AYU-1X at ANGGUN-1X difficult.

• All decisions regarding a second well will be

subject to: 1) AYU-1X wells results, 2) timing, 3)

cost, and 4) Government of Indonesia approval.

Intra Gumai Fm Depth Structure

Page 013


Exploration Well Locations

•Long lead time Forestry Ministry approval has been granted for

the Cantik, Anggun & Ayu locations

•Road construction timing & cost to Anggun (5.7 kms road on

high ground) would be similar to Ayu (4.1km road)

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Prospective Resource Estimates

Page 015


East Jabung Summary

• Despite delays related to rain, difficult & remote terrain the AYU-1X access road and well pad are now in a

state that rig mobilization has commenced and the start of drilling is anticipated on or about July 5. POE will

issue a press release announcing the commencement of drilling when this occurs.

• It is estimated that the well will take 33 days to reach total depth with another 16 days of testing, if justified by

technical data. POE will issue a press release announcing the completion of drilling when this occurs, a

summary of what was encountered and whether testing will occur.

• AYU-1X exploration well will be targeting the Batu Raja limestone (reef) as the primary objective with LTAF

sandstones and basement as secondary objectives. The shallow Gumai and ABF sandstones are not targets

in the AYU-1X well as they will be penetrated below maximum structural closure.

• Based on the Operator’s AFE cost estimate, POE’s net cost of the AYU-1X well is estimated @

$1.16MMusd (dry hole) and $2.19MMusd (tested).

• The structural complex being targeted by the AYU-1X well was estimated by Gaffney Cline in 2015 to hold

an unrisked Pmean potential of 122.9MMboe (recoverable) net to POE’s interest within the Batu Raja,

Gumai and ABF formations. The Lower Talang Akar sandstone & Basement formations were not part of

this evaluation however potential was recognized in these zones subsequent to the GCA report and 2D

seismic reprocessing that was conducted by the Operator. Condensate rich gas with a possible oil leg is

deemed likely at all potential reservoir levels.

• East Jabung PSC possess the best fiscal terms of any conventional PSC in Indonesia with net contractor

take of 35% after cost recovery for oil and 40% after cost recovery for gas. The region within which the PSC

is located has excellent pipeline infrastructure that feeds into high gas demand markets with gas pricing of

between $6 to $8usd/mcf.

• There is a 2 firm exploration well commitment for the East Jabung PSC, AYU-1X will fulfill the first one of the

two. The options regarding a second well are many but will be based primarily on 1) AYU-1X results, 2)

timing, 3) cost, and 4) Government of Indonesia approvals.

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THAILAND

Page 017


L53/48 Concession

• Low cost onshore operation: trucking $1.75usd/bbl + $12.50usd/bbl Opex + 5% GOT royalty

• Reserves YE 2016 (net POE) - 2P: 0.57MMbbls 1P: 0.273MMbbls, 2PNPV(10): $10.99MMcdn

• Material exploration upside remains that can be evaluated inexpensively ($1.4MMusd/well dry hole)

• 2017 cash flow will be used to fund an ongoing work-over program and the drilling of the L53AC-C exploration

well sometime between late Q3 2017 & early Q4 2017

•Increased activity levels anticipated with any exploration success or increased oil prices

Operating

cost $usd/bbl

Cum Sales just

under 1.6MMbbls

Page 018


L53 Prospects

Prospect Most likely closure (km2)

West_A1-A4 2.01

East_A5 0.78

East_A6 1.20

East_A6A 0.50

East_A7 4.20

South B 3.17

ANorth_CC 0.31

ANorth_DD 0.86

ANorth_EE 0.63

ANorth_FF 0.62

Prospects

Fields

Source Kitchen

Dry Holes

L53D PA

L53A PA

L53G PA

West A

A North

East A5-A7

South B 5 km.

L53B PA

• L53AC-C (South B) exploration drilling is planned

for late Q3/17 to early Q4/17

•Currently seeking government approval for the

ANorth_DD & West_A locations for drilling in 2018

•Exploration Reserve Areas A&B will expire in

January 2021 after which only the production areas

(A,B,D &G) will be retained

•L53 has no Agricultural Land Reform Office

(“ALRO”) designated areas which were the subject

of a recent supreme court of Thailand ruling that

these lands may only be used for agricultural

purposes

Reserve Area A

Reserve Area B

Page 019


L53AC-C Exploration Well

A A’ A

A’ Free Oil & Oil Staining

in Samples observed in

the L53-C well drilled in

2008

L53AC-C

• L53AC-C drilling planned for late Q3/17 to

early Q4/17

•Testing a 3.17 km2 structural closure

•Approximately $1.4MMusd dry hole cost

2 km

Page 020


Capital - Drilling Schedule

2017/18

Notes:

1. AYU-1X exploration well location construction is near completion and rig mobilization has commenced. Drilling is anticipated to start

in early July 2017 & take approximately 33 days to completion. Based on the well AFE provided by the operator, it is estimated POE’s

net cost above the farm-in carry will be $1.2MMusd. This amount includes a large contingency amount that may or may not be

utilized.

2. The East Jabung JV plans regarding a second well in East Jabung PSC will be based entirely upon the results of the AYU-1X

exploration well, JV and Government of Indonesia approval. In the event that AYU-1X is successful, the farminee will pay the first

$5MMusd towards the drilling of the second well with POE paying 49% of any amounts above the first $5MMusd. If a well were to be

drilled at Anggun-1X it is anticipated that the cost would be similar to AYU-1X; however, with success at AYU-1X there are a number

of follow-up well options.

3. Thailand L53 L53AC-C exploration well is planned for late Q3 2017 to early Q4 2017. Funding will come from L53 cash flow.

4. In the event the L53AC-C well is successful, the drill pad will have three additional slots from which at least one appraisal well would

likely be drilled prior to year end.

L53AC-C Exploration Well

L53 Thailand

Capital Q3/2017 Q1/18 Q3/2018 Q4/2017 Well/Area

ANGGUN-1X Exploration well

East Jabung Indonesia

L53AC-C Appraisal

L53 Thailand

Q2/18

AYU-1X Exploration Well

East Jabung Indonesia

Range of timing of commencement of drilling – Firm Wells

Range of timing of commencement of drilling – Contingent Wells

$1.2MMusd1

See note 2 below

$0.9MMusd3

$0.7MMusd4

Firm 2017: $2.1MMusd

Page 021


CANADA

Page 022


Sawn Lake, Alberta, Canada

• Andora Energy Corporation is focused on developing the bitumen resources at Sawn Lake using SAGD development

• Interests in 88 sections of oil sand leases

• Pan Orient Energy Corp. owns 71.8% of Andora

• 141.4 million barrels of risked “Best Estimate” contingent bitumen resources attributed to Pan Orient’s 71.8% ownership of Andora (Andora has 196.9 million barrels)

• Demonstration project produced bitumen September 2014 to February 2016.

Sawn Lake

(Company Gross)

(15% development risk)

High

Estimate

Best

Estimate

Low

Estimate

Millions of barrels of

Bitumen - SAGD 166.1 141.4 128

NPV (10%) After Tax

CDN$ millions 290 228 190

Sawn Lake Risked Contingent Bitumen Resources at June 30, 2016 (net to Pan Orient’s 71.8%)

Contingent Bitumen Resources at June 30, 2016 evaluated by Sproule Unconventional Limited. See NI51-101

Filing on SEDAR on April 28, 2017.

Red

Earth

T79

R1

W5

R24 T98

Husky

Baytex

5th

Meridia

n

Shell

Penn

West

Sawn Lake

Koch

Page 023


Andora’s Oil Sands Leases

Sawn Lake North

• 10% of 51 sections (non-operated)

• 100% of 9 sections

• 2 MMbbls risked “Best Estimate”

contingent resources net to Andora

Sawn Lake Central


• Designated Operator



• SAGD Demonstration Project facility

& wellpair at 7-30-91-12W5

Sawn Lake South




Andora holds varying interests in 88 sections of oil sands

leases. Pan Orient Energy Corp owns 71.8% of Andora

Page 024


Demonstration Project

Results

• Steady state bitumen production in January and February 2016 averaged of 615 barrels

BOPD (307 BOPD net to Andora) 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.

• Provided information on productive capability and instantaneous steam-oil ratio of the

reservoir, and critical information for well & facility design for future development.

• Results of higher peak production rate, higher average recovery factors and lower SOR

used to update reservoir model and contingent resources report resulting in an 8%

increase across the range of contingent resource estimates.

Potential Expansion

• Application for potential expansion at the demonstration project site to 3,200 BOPD

submitted April 2016 and waiting for approval. Anticipated that any expansion would

include the test installation of Andora’s proprietary Produced Water Boiler.

• Expansion is dependent on regulatory approval, completion of detailed engineering and

a higher commodity price environment to support project economics and financing. 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 025


Sawn Lake Quality

Sawn Lake

Tier 1 Projects

Page 026


Andora Summary

Andora Value Components

1. Sawn Lake Interests & Operations - “Tier 1” SAGD asset with significant potential

value at WTI US$55 – US$60 oil prices

• 231 million barrels of Bluesky Risked “Best Estimate” Contingent Resources

• 50% ownership of $34 million SAGD facilities & SAGD wellpair

• Control of Sawn Lake development as Operator per the JOA

2. SAGD experience for drilling, installation of facilities & operations

3. Andora proprietary technology for “Produced Water Boiler”

4. Corporate entity with $1.7 million working capital & non-current deposits and $54

million of tax pools/losses

Andora Energy

Taking steps which allow for potential future development at Sawn Lake Andora

Work with partners for commercial development at Sawn Lake using a small scale

development approach.

Page 027


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

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Annual & Special Meeting June 13, 2017 - panorient.ca · Annual & Special Meeting June 13, 2017 . ... Indonesia East Jabung Prospective Resources as at June 30, ... – P1 168km2