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Fortaleza Energy Inc

Fortaleza Energy Inc. August 2014 Rational for the Acquisition of Stimsol Business from Arcan Resources Ltd and the Creation of BlendForce Energy Services Inc. Vision – Rapidly Changing Industry.

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Fortaleza Energy Inc

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  1. Fortaleza Energy Inc August 2014 Rational for the Acquisition of Stimsol Business from Arcan Resources Ltd and the Creation of BlendForce Energy Services Inc.

  2. Vision – Rapidly Changing Industry • Improving Commodity Prices however there remains significant risks with continued success of resource play development in North America • Resource Play Development – large land position – deep drilling inventory – profits driven with field execution- cost reductions. • Resource Plays returns are very sensitive to costs and commodity prices • Significant shift down market in Companies being financed – however investors remain selective

  3. Vision - Investment Opportunity Stimsol Acquisition from Arcan Resources • Operating Business • Immediate Cash Flow • Low maintenance capital • No outside equity requirement • Growth opportunities • Very quick payback – less than two years • Potential to pay dividends in the future • Diversified lines of business • Exploration – variety of resource plays • Production – existing producing wells • Complete management team in place and operating the business

  4. History of Stimsol • Stimsol created in 1983 Operating in Red Earth Creek • StimsolAcquired by Arcan in September 2011 for $24.5mm. • Business consisted of: • Proprietary Acid Blend with $134/m3 royalty • 5 C&A Pumpers, 7 Pressure Tank Trucks • Production Services Business employing 85 people with operational bases located in Grande Prairie, Blackfalds and Red Earth Creek. Corporate Office and Lab based in Calgary. • In 2012 , acquired Firm Acid Supply from Canexusand Univar for 80,000 m3 per • In 2011, commenced construction of Acid Blend Facility in Swan Hills for $7.3mm - commission in November 2012. • 2013 disposed of $8.0mm of equipment. • Terminated take or pay acid supply contracts with Univar and Canexus

  5. The Acquisition – Stimulation Fluid Blending Facility • Arcanhas agreed to sell to Fortaleza the assets and business of StimSol for $2.5mm. • Assets: • The Swan Hills Blending Facilitysite operated by StimSol located within the town of Swan Hills, Alberta consisting of 48,400 sq. meter site governed by municipal and provincial surface lease. • Disposal Well located within facility site LSD 2-14-66-10 W5M and bottom hole located at LSD 8-14-66-10 W5M and all equipment associated with asset and special assignment of disposal zone rights • Warehouse & Office Building (50ft X 120ft), including office furniture, pump room and load cell station and QC lab and associated equipment. • 10 – 750 bbl fiberglass acid tanks within containment • 4 – 400 bbl steel storage tanks within containment • 4 – 100 bbl steel storage tanks within containment • All equipment associated with handling, blending and shipping of all products produced out of the Swan Hills Facility. • Office, Laband computer equipment located at 7874 – 10th Street N.E. Calgary, Alberta and the assignment of the commercial lease agreement.

  6. Vision – Maximizing Value of Service Area Blendforce Swan Hills Service Area – 250 KM

  7. Carbonate Play • Light Oil Resource Play being exploited with Horizontal multi stage acid fracs. • 840 sections of oil charged platform reef. • Estimated Unconventional OOIP of 2.5 billion bbls with per section OOIP of 1.6 -6.2mmbbls – “Sleeping Giant”

  8. Wells Drilled Since 2006

  9. Play Types – Undrilled LSDs

  10. Swan Hills – Carbonate Play

  11. 35% Acid Acid in the Field • Acid Frac – 1,000 cubic meters - 33 Truck Loads Diluted to 28% and chemical added: • Friction reducers • Corrosion inhibitors • Solids Controls • Demulsifier • Spearhead– 200m3 per job – any horizontal stage fracs. Diluted to 15% and chemicals added • Corrosion inhibitors • Solids Controls • Stimulation Fluid – Well Cleanouts – Scale Removal -15 m3 per job Diluted to 15% and chemicals added • Every producing well with associated water requires Acid treatment • Specialty Chemical Blends • Flow Back Fluid Disposal • Disposal Well

  12. Revenue Streams and Field Margins

  13. Identified Work

  14. Expansion Opportunities • Transportation • From Terminal to SHAW Blending Facility - $50/m3 • From Shaw Blending Facility to Field – $50-75/m3 • New Location • Blending Facility is new location • SE Saskatchewan - Bakken • Fort Nelson -NE BC Montney • Supply Logistic Management for Frac Fluids • Fluid & Logistics Management • Water and Petroleum Based Fracs • Flow Back Water Disposal • $750,000 Investment • Capacity to dispose of 300 m3 of fluid per day • New completion flowback 1500 - 2500 m3 per well.

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