perdure petroleum · perdure petroleum was formed to acquire chaparral energy’s eor assets...

Perdure PetroleumMidland CO2 Conference December 2018

Perdure Corporate - Overview

Shidler Area

Panhandle Area

EOR with CO2

45Q – High Level Comments

Agenda

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Perdure Overview

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Perdure Petroleum was formed to acquire Chaparral Energy’s EOR assets November 17, 2017 Business Model Acquire properties where production can be maintained with

development activities funded with cash flow Long term distribution model vs typical PE

Equity Partners Long view on investments

Unique 45Q opportunities

Perdure Petroleum - Overview

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Shidler Area Assets

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Current Development Area

Current Net Production - ~3,000 Bbls/d

North Burbank is the Prized asset OOIP 820 Million

CO2 supply from Coffeyville gasifier/fertilizer (max rate ~50 MMCF/D) ~65 Mile CO2 pipeline 45Q opportunity for large CO2 source

With current CO2 supply, NBU has 20 plus years of development

South Burbank has CO2 flooding potential but NBU first

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Shidler Area

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North Burbank

2018 CO2 Patterns Added

Panhandle Area Assets

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Panhandle Area CO2 Supply

Perdure Active CO2 Flood

Perdure CO2 Pipelines

Perdure CO2 Sources

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Panhandle Area

Solid asset base with CO2 upside - ~2,500 Bbls/d Net Production

CO2 supply is currently limited - ~13,000 Mcf/d

Investigating natural CO2 source options

45Q opportunity to reconfigure small CO2 source

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EOR with CO2 has unique challenges

Investors OK with moderate IRR’s (15% - 30% unlevered) Willing to weather downturn in oil prices

— This is almost inevitable with the long term nature of CO2 flooding Have staying power with capital

— Grass root development projects early years have negative cash flow

CO2 Reliable supply Price

— Variable with oil (We are living in a very volatile oil price environment – To state the obvious)— CO2 Price Floors are a BIG issue

Need the right technical staff Expensive to learn from mistakes It has to be watched almost everyday

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EOR and Anthropogenic CO2 Sources

Need confidence in CO2 source for 10+ Years Supports very large oil field investment

Can have CO2 price advantage Upfront investment but CO2 cost long term can be lower than West TX purchases

There are not many large anthropogenic CO2 sources

But it can and is working economically

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45Q – High Level Comments

Will regulators and regulations be reasonable What sources will qualify MRV – Reasonable / Economic

Post economic oil production monitoring

45Q alone will most likely not support an EOR project without the other standard economic support Good reservoir Reasonably priced CO2 supply

Questions

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