corporate presentation ( january 21, 2013 ) a proven, disruptive technology for hydrocarbon...

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CORPORATE PRESENTATION (January 21, 2013) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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Page 1: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

CORPORATE PRESENTATION

(January 21, 2013)

A P R O V E N , D I S R U P T I V E T E C H N O L O G Y F O RH Y D R O C A R B O N E X P L O R A T I O N

Page 2: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

Disclaimer and Forward-looking Statements

This presentation is not intended to be used as an Offering Document.

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 and technology 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-Venture nor the OTC Exchanges accept responsibility for the adequacy

or accuracy of any information contained in this document.

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Page 3: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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NXT Energy Solutions Inc. is a service provider to the upstream Oil & Gas Industry:

SFD ® Survey System

Engaged in exploration reconnaissance.

We identify and rank high-potential prospect leads using a unique airborne survey method.

www.nxtenergy.comA Canadian Public Company

Page 4: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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NXT’s method will identify the best oil and gas prospects

10 times faster, and at up to1/20 the cost of seismic

SFD ® “Stress Field Detection”

SFD® (Patent Pending)

Page 5: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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SFD® Survey in Colombia - 2009

• NXT recommendation in Dec 2009

• 3D Seismic over the block (grey area) completed by December

• Discovery July 2010 with an estimated 180 million barrels OOIP.

• Today the entire field is developed.

Sabanero Block

Page 6: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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• Pacific Rubiales relinquished non- prospecting areas

• Petrodorado farms in $8 million commitment

SFD® grid program fully evaluated the 7,500 km2 area

SFD® Survey, Pacific Rubiales, Tacacho block, Colombia

• Flown 2000 line km

• From Start to finish 7 weeks

Page 7: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

Tacacho and Terecay 2010 Results

Drilling in Q1 2013

This chart shows the exploration leads and resource expectations in the Tacacho and Terecay areas vs. the top SFD anomalies

Source : PRE – Exploration Asset Portfolio Report (September 2010)

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Page 8: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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Focus is the key

Cost

Time

Risk

E&P Success =

LOW FINDING COSTS

REDUCES

SFD®: Fast Tracks the Exploration Process

EnvironmentalFootprint

Page 9: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

SFD® System

Exploration spectrum

Aeromagnetics& Gravity

Hi-Res Aeromag

2-D Seismic

3-D Seismic

Drilling

SFD®

Inferred knowledge of Trap & Reservoir detail steadily increases

Gravity Gradiometry

Reconnaissance

Prospect LevelBasin Level Well Level

Prospect Identification Prospect Verification

The resolution of an SFD ® survey significantly surpasses other remote sensing techniques

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Page 10: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

The aircraft

Cessna 560 Citation jet

(fly at 3,000 meters, 500 km/h)

The SFD Sensors

2 systems of quantum devices

Data recording equipment

(2,000 cycles / second)

Aircraft positioning system

GPS based, tracks flight lines

SFD® Data Acquisition System

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Page 11: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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SH min

SH max

Gravity field is distorted by stress

Discontinuities affect regional/local stress distribution

changes in stress orientationentering reservoir

SFD® responds to perturbations in the gravity field related to changes in stress direction

Page 12: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

Offices/Agents2012 Ongoing Projects

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Page 13: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

NXT Surveys - Llanos Basin, Colombia (2009-2012):

NXT conducted 10 surveys for 5 clients

totalling more than 7,000 line kilometers

Wells drilled on SFD recommended Leads

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CommercialWells7 0

PredictionSuccess Rate64% 100%

Estimated 1.26 Billion BBL OOIP

Correlations between discoveries and SFD Recommendations

4 Field Discoveries

Wells drilled in areas rejected by SFD

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Page 14: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

QUIFA BLOCK SFD BLIND TESTTested by Drilling

RUBIALES OIL FIELDRUBIALES OIL FIELD

‘Blind Test’ Results

SFD ® identifies 4 leads

All verified by seismic

A – 100 million bbl

F - 100 million bbl

B - drills 100 ft wet sand

X - un-drilled

X

AF

B

X

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Page 15: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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2012 – A Record Year - $11million

Selected list of recent contracts and near-term pipeline objectives.

Near-termObjectives

Status Location US$ Value

Complete Colombia, Guatemala $ 3.5 million

Complete Argentina $ 1.65 million

Complete Mexico $ 5.8 million

Complete Q4-12 Belize $0.5 million

Underway Q1-13 South Asia $ 2.66 million

Pipeline Central & Latin America $ 5 million

Pipeline Paraguay & Bolivia $ 5 - $ 8 million

Pipeline Colombia $ 1 - $ 5 million

Page 16: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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Source: Spears Oilfield Market Report, 2010; Barclay’s Original E&P Spending Survey, 2010; NXT Market Analysis

$12 BillionGlobal Geophysics

Market

2010 E&P Market:

$447 Billion1% = $120 million

Vast Market Opportunity

2012 $11.4 Million 0.09%

2013 $20 Million 0.17%

2014 $40 Million 0.33%

NXT Revenue Targets

Best Previous Year - $5.3 Million

Page 17: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

1. Service Fees

2. Data SalesIn Colombia alone, over 40,000 km of proprietary data have been acquired.Additional data added with each new survey

3. RoyaltyExisting GORR contracts in Canada (Pengrowth ~ BC Horn River Basin; Alberta ~ Swan Hills)

4. Vertical ExpansionEquity ownership, long term contracts

Current and Future Revenue Streams

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Page 18: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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SFD® Services

Concession Level

- Reconnaissance Grid designed to identify and rank

individual reservoir prospects and/or optimize seismic programs (PRE)

- Prospect VerificationHigh-Grading seismically derived prospects based on reservoir quality onshore/offshore (PRE, BP)

Basin Level Grid designed to identify Trap Potential (PEMEX)

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Page 19: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

2D Seismic SFD0

500

1000

1500

2000

2500

Survey Method

Line

Kilo

met

ers

SFD delivers Focus quickly and cost effectivelySignificantly reduces reconnaissance seismic

Data Coverage for $3.5 Million

SFD ® (5x5)Seismic

5,000 sq. km.

115 km Seismic vs. 2,500 line km SFD®

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Page 20: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

SFD® Product

A recommended target map of anomalies identified by SFD® interpretation, rated on both reservoir and trap characteristics.

From this SFD® Based Prospectivity map, seismic can be tailored to maximize results and minimize cost.

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Page 21: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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SFD® complements other tools, especially seismic

identifies and ranks potential trapped-reservoirs

identifies other major geological anomalies (ex: faults)

identifies natural fractures in resource plays

cannot differentiate reservoir fluid types (water or oil/gas)

cannot determine exact drill location

cannot define depth of reservoir

cannot distinguish the number of stacked reservoirs without

lateral offset

SFD® Capabilities and Limitations

Page 22: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

Time (seconds)

May 25, 2009 SFD® signal over heavy oil Rubiales field

Signal relaxationReservoir indicator

Vo

ltag

e (

v)N

Tim

e (seconds)

A

B

A B

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Page 23: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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Chuchupa Gas FieldChuchupa

3600

3700SFD Colombia Offshore Example : Chuchupa is a 5.5 TCF Gas Field

Page 24: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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SFD Case Example 8

Canadian PlainsNatural Fractures in Shale

Horn River, British Columbia

Page 25: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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SFD Case Example 8

Canadian PlainsNatural Fractures in Shale

Horn River, British Columbia

Directional drilling

Flight direction

Page 26: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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JQI has “developed a novel design for a highly compact, ultra-sensitive quantumdevice to measure subtle changes in gravity using atomic interferometry.”

It may “be used to search for natural resources beneath the Earth’s surface.”

Quantum detectors are now being proposed by prestigious researchers.

August 2010

NXT is ahead of the curve with the

SFD® sensor.

Further Technical Validation

Source: http://www.jqi.umd.edu/news/242‐a‐new‐design‐for‐a‐gravimeter.html

Page 27: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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Capitalization

TSX-V: SFD, OTCBB: NSFDF

Capitalization - Shares Outstanding (millions)39.5 Common shares issued

10.0* Convertible Preferred shares (convert at 1:1, mature Dec 31, 2015)

3.1 Stock options (average exercise price $0.85)

4.5 Warrants (US $1.20 exercise, expire from March 8 to May 4, 2014)

57.1 Fully diluted # of shares

D&O Insider Ownership – 15.9% Basic, 32% Fully diluted

52 Week High/Low: $0.59 - $1.17

Debt-Free Balance Sheet ~ $5.0 million cash

• Does not represent debt or debt service…converts 1:1 to common on achievement of milestones

(2 million of the total are currently convertible)

Page 28: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

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Management Non-Executive Directors

Geosciences Advisory Board

George LiszicaszChairman & CEO

Greg Leavens, C.A.

Chief Financial Officer

Andy Steedman, M.B.A

V-P Operations

Grafton Withers, M.B.A

V-P Marketing & Sales

Charles SelbyCaledonian Royalty Corporation

Mickey Abougoush Teknica Overseas Ltd.

Tom ValentineNorton Rose LLP

John AgeeBusiness Advisor

Dr. George IuscoRepsol

Dr. Cleveland JonesState Univ. of Rio De Janeiro

Dr. Arief BudimanUniv. of Calgary, Canada

Extensive public company experience

Solid global management experience

Outstanding scientific credibility

Board, Management and Advisors

Page 29: CORPORATE PRESENTATION ( January 21, 2013 ) A PROVEN, DISRUPTIVE TECHNOLOGY FOR HYDROCARBON EXPLORATION

Highlights

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• Disruptive Technology for Oil & Gas Exploration

• Profitable and Commercially Proven

• Contract and Pipeline Activity is Robust

• Vast Market Opportunity

THANK YOU !