A N E M E R G I N G G E O P H Y S I C A L S E R V I C E C O M PA N YA N E M E R G I N G G E O P H Y S I C A L S E R V I C E C O M PA N Y

Technical Presentation, September, 2011p

11

Disclaimer & Trademark Notice:

The SFD survey system represents an early stage reconnaissance technology, which is ti ll d i fi t d l t h t d difi ti P ticontinually undergoing refinement, re-development, enhancement and modification. Prospective

clients users and investors are cautioned as to the various risks associated with employing earlyclients, users and investors are cautioned as to the various risks associated with employing early stage technologies which include but are not limited to financial and business risks performancestage technologies, which include but are not limited to financial and business risks, performance and operational risks customer risks and othersand operational risks, customer risks and others.

The SFD sensor is a quantum particle device. Quantum particle devices obey stochastic physical laws and consequently may not consistently provide repeatable measurements in time or space.

All i t t ti f SFD d t h th id d b NXT it d i b dAll interpretations of SFD data, whether provided by NXT or its advisors or users are based on inferences from quantum geophysical data Such interpretations while believed reasonable andinferences from quantum geophysical data. Such interpretations, while believed reasonable and prudent at the time may be expected to change significantly as additional data and or informationprudent at the time, may be expected to change significantly as additional data and or information become available.become available.

SFD® is a registered trademark of NXT Energy Solutions Inc.

22

A CanadianA Canadian PublicPublic CompanyCompanyA Canadian A Canadian Public Public CompanyCompany

www.nxtenergy.com

NXTNXTNXT NXT Energy Solutions Inc. Energy Solutions Inc. gygyi i id t th t Oil & G I d tis a service provider to the upstream Oil & Gas Industry:  

Engaged in exploration reconnaissance.g g p

We identify and rank high‐potential prospect leadsWe identify and rank high potential prospect leads using a unique airborne survey methodusing a unique airborne survey method.

SFDSFD®®SFDSFD®® Survey SystemSurvey Systemy yy y

33

SFDSFD®® St Fi ld D t tSFDSFD®® : Stress Field Detector

®®SFDSFD®® : Survey position within the prospecting spectrum

Exploration Prospect Resolution ContinuumLow Highp p g

Aeromagnetics 2-D 3-D Inter-well Gravityg& Gravity Seismic Seismic Seismic

yGradiometryy

Hi Res SFD®

yHi-Res

AeromagSFD®

Aeromag

Basin Level Prospect Level Well Levelp

Inferred knowledge of Trap & Reservoir detail steadily increases

44

STRESS in materialsSTRESS in materials

• Active stress – produces energies (ex: piezoelectricity Kaiser Effect)Active stress produces energies (ex: piezoelectricity, Kaiser Effect)

St ti t ff t ti• Static stress – affects energy propagation (photoelasticity & seismic AVO)

More colors meanLight propagation More colors mean higher internal

g p p gin the absence

f tg

shear stresses of stress

55

SFDSFD®® Wh d SSFDSFD® ® Why detect Stress . . . . .SFDSFD Why detect Stress . . . . .

In this example the porous sandstone and the shale carry the same densityIn this example, the porous sandstone and the shale carry the same density.Equal density implies equal gravitational accelerationEqual density implies equal gravitational acceleration.Therefore mass‐based gravimeters yield the same measurement value over bothTherefore, mass‐based gravimeters yield the same measurement value over both.

The elastic (shear) differences create stress anomalies oblivious to conventional gravimetry, but detectible by the SFD sensor ‐ due to field rotational effects. 

66

SS ®®SFDSFD®® responds to perturbations in the gravity field p p g yrelated to changes in stress directionrelated to changes in stress direction

Gravity field is distorted by stressy y

Discontinuities affect regional/local stress distribution  

SHSH max

SH minSH min

changes in stress orientationchanges in stress  orientationentering reservoir

77

SFDSFD®® Stress AnomaliesSFDSFD® ® Stress Anomalies . . . . .

CarbonateCarbonateReefReef

Consider the simple caseConsider the simple case of a carbonate reef buriedof a carbonate reef buried within a shale basinwithin a shale basin.

Stress VectorStress Vector

Shale BasinFluid-Filled Porosity

88

SFDSFD®®SFDSFD® ® Stress AnomaliesSFDSFD Stress Anomalies . . . . .

“ f i ” lStress “Refraction” Anomalyl h falong the Reef Front

Stress “Dissipation” Anomaly within/around the Porosity

B I f SFD® i l d t id tifBy Inference – SFD® signals are used to identify areas with reservoir and trap potential

99

SFDSFD®®SFDSFD® ® Example SignalSFDSFD Example Signal . . . . .

SFD detectsSFD detects an excellent signal relaxation anomalyLadyfern Reef Gas Field (825 Bcf),N th t B iti h C l bi C d

SFD detects SFD detects an excellent signal relaxation anomaly corresponding to the Ladyfern reef. This anomaly is Northeastern British Columbia, Canada p g y ycorrectly positioned correctly positioned within 0.25 km 0.25 km of the northern reef edge and 1.0 km 1.0 km of the southern edge.

Map Signal Coverage (22 km)Map Signal Coverage (22 km)

Signal Relaxation AnomalySignal Relaxation Anomaly

5 kmActual Extent of Reef

5 km

1010

SFDSFD®® Operating PremiseSFDSFD®® Operating Premise

Gravity GravityGravityexists as an equidimensional

Gravity in the Earth’s Crust q

field within an isotropic & is locally distortedhomogeneous body

y

byby byby

V i ti i M D it V i ti i R k StVariations in Mass Density Variations in Rock Stress (rock type & distribution) (fluid traps & distribution)

”Magnitude” effects Field “Shape” effectsg Field Shape effects

Traditional andTraditional andGradiometry

Rotational Gravimetric Gradiometry

SurveysSurvey - SFD®

Surveys

11

SFDSFD®® G it & StSFDSFD® ® Gravity & Stress . . . . .y

G it d St i t l t d 2nd dGravity and Stress are inter-related 2nd order [ T ]tensors through Einstein’s field equation:

[ ]

T00 T01 T02 T03G T00 T01 T02 T03

[ ] 8 GE [ T ]πT10 Sh1 Sxy Sxz[ ] 4 E [ T ]

c= T10 Sh1 Sxy Sxz[ ]

cT20 Syx Sh2 Syzwhere:  T20 Syx Sh2 Syz

[ E ] is the Spa e Time Gra itational TensorShear

T30 Szx Szy Sv[ E ] is the Space‐Time Gravitational Tensor stressT30 Szx Szy Sv[ T ] is the Stress‐Energy Tensor

Stress Tensor[ T ] is the Stress Energy Tensor

Stress Tensor

1212

Further Technical ValidationFurther Technical Validation

NXT i h d f th ith thNXT is ahead of the curve with the

SFD® sensorSFD® sensor.JQI has “developed a novel design for a

SFD sensor. p g

highly compact, ultra-sensitive quantumdevice to measure subtle changes in gravity

fQuantum detectors are now using atomic interferometry.”Quantum detectors are now being proposed by prestigious

It may “be used to search for natural being proposed by prestigious researchers t ay be used to sea c o atu a

resources beneath the Earth’s researchers.surface.”

August 2010August 2010

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

13

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

13

Th SFDSFD ®® l iThe SFDSFD ®® ExplorationThe SFDSFD Exploration . . . . .

1414

O t t tOur customers want to . . . . .

Ki kKi k S N B i E l iS N B i E l i•• KickKick‐‐Start New Basin EvaluationStart New Basin Evaluation

•• Conduct Rapid ProspectConduct Rapid Prospect‐‐Scale ReconnaissanceScale ReconnaissanceConduct Rapid ProspectConduct Rapid Prospect‐‐Scale ReconnaissanceScale Reconnaissance

•• Minimize Environmental and Community ImpactsMinimize Environmental and Community Impacts

•• Explore Areas with High Security RisksExplore Areas with High Security Risks•• Explore Areas with High Security RisksExplore Areas with High Security Risks

•• HighHigh‐‐Grade Unexplored AcreageGrade Unexplored Acreagegg p gp g

•• Evaluate Bid Round BlocksEvaluate Bid Round Blocks•• Evaluate Bid Round BlocksEvaluate Bid Round Blocks

Shorten the Exploration CycleShorten the Exploration Cycle::Shorten the Exploration CycleShorten the Exploration Cycle::

Reduce DiscoveryReduce Discovery TimeTime ‐ and ‐ Manage DiscoveryManage Discovery CostsCostsReduce Discovery Reduce Discovery TimeTime and  Manage Discovery Manage Discovery CostsCosts

1515

Prospect-Scale ReconnaissanceProspect Scale Reconnaissance

®®®h d thshowed themshowed them

WHERE TOWHERE TOWHERE TO SHOOTSHOOTSHOOT

Se ismic showed themSeismic showed them h t d i l lwhere to d r i l l .

1616

NXT’s Global ReachNXT s Global Reach

Syrian Petroleum Company

Pakistan Petroleum LimitedEncal Energy Pakistan Petroleum Limited

Renaissance Energy

Nexstar Energy

Montana Exploration

CamWest Exploration

Infinity Oil and Gas

Rosetta Energy Pacific Rubiales

Virtus Energy Ecopetrolgy

Hocol

BP Colombia

Petro DoradoSFD survey locationsPCR (Argentina) offices

17

yPCR (Argentina)

17

®®(Stress Field Detector)(Stress Field Detector)

• Proprietaryp y

• Citation 560 jet aircraft• Citation 560 jet aircraft

• Survey altitude: 3000mSurvey altitude: 3000m

E i t ll F i dl• Environmentally Friendly

• Identifies areas of reservoir• Identifies areas of reservoir t ti l b th h dpotential both onshore and

offshoreoffshore

1818

Comparison of Geophysical MethodsComparison of Geophysical Methods

Data Coverage for $2 Million (SFD or Seismic)Data Coverage for $2 Million (SFD or Seismic)

2500

2000

1500ters

1500

ome

1000e K

ilo

1000

Line

500

010 000 k2D Seismic SFD

SFD10,000 sq. km.

Survey Method SFDSeismicSeismic

SFD delivers Focus quickly and cost effectivelySFD delivers Focus quickly and cost effectively

1919

SFDSFD®®SFDSFD® ® Survey System LimitationsSFDSFD Survey System Limitations

SFD is not a direct hydrocarbon indicatoryCannot determine exact drill locationCannot determine exact drill locationor differentiate reservoir fluid typesypor define exact depth of reservoiror define exact depth of reservoiror distinguish the number of stacked reservoirs,or distinguish the number of stacked reservoirs, unless they have unequal lateral extensionsunless they have unequal lateral extensions

2020

TestimonialsTestimonials

“[SFD]…is a technique that measures the energy associated with tectonic stress in substructures and therefore is helping assess those areas that are very remote, very complicated to acquire seismic. I i h h i i h h i i k l d [ h ] h l i l d i iIntegrating these techniques with the existing knowledge, [such as] the geological surveys and seismic i f ti h l t d t d th t t l tt f th d d fi d i iti thinformation, helps us to understand the structural pattern of the area and define and prioritize the areas where we are going to follow up with some more detailed seismic We used [SFD] and the results werewhere we are going to follow up with some more detailed seismic. We used [SFD] and the results were very encouraging we plan to continue using this modern technique in some of those remotevery encouraging… we plan to continue using this modern technique in some of those remote areas where seismic is very complicated and expensive to shoot. This doesn't mean we are notareas where seismic is very complicated and expensive to shoot. This doesn t mean we are not going to shoot seismic, but it helps to plan the seismic coverage in big areas where you need to g g p p g g yprioritize the seismic coverage”

Jose Francisco ArataJose Francisco ArataP id t P ifi R bi l EPresident, Pacific Rubiales Energy

t f t ti t R d J i ti i C l bi f S t 13 2010except from presentation at Raymond James investing in Colombia conference, Sept 13, 2010

“The SFD® survey system allowed us to do a timely evaluation of our TEA block in the PutumayoThe SFD® survey system allowed us to do a timely evaluation of our TEA block in the Putumayo basin We are making extensive use of the SFD® data concurrently with the rest of the informationbasin. We are making extensive use of the SFD data concurrently with the rest of the information to select the best areas for future exploration.”to select the best areas for future exploration.

Dr. Jairo LugoSr. Vice President, Exploration, Pacific Rubiales Energy p gy

2121

SFD®: Fast Tracks the Exploration ProcessSFD : Fast Tracks the Exploration Process

C tCostCostE&P SuccessE&P Success

TimeTime =REDUCES LOW FINDING

REDUCESLOW FINDINGLOW FINDING

Ri k COSTSRisk COSTSRisk

Focus is the keyFocus is the key2222

Key Contact Information:

George Liszicasz, Chairman and CEOgeorge@nxtenergy.com

Andy Steedman, V.P. Operationsasteedman@nxtenergy.com

NXT Energy Solutions Inc.Azer Mustaqeem, M.Sc., P.Geoph.,

gy

Telephone (403) 264 7020Geoscientist Telephone (403) 264-7020 Fax (403) 264-6442amustaqeem@nxtenergy.com Fax (403) 264-6442

Website: www.nxtenergy.com

2323

Th SFDSFD ®® C St diThe SFDSFD ®® Case StudiesThe SFDSFD Case Studies

Click Here for SFD Case StudiesClick Here for SFD Case Studies

2424