Annual & Special Meeting June 13, 2017

Page 01

Annual & Special Meeting June 13, 2017 © 2017 Pan Orient Energy Corp.

Cautionary Statement Page 02

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.

© 2017 Pan Orient Energy Corp.

Corporate Summary Page 03

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 NPV10 @ After Tax Indonesia East Jabung Unrisked Mean Prospective Resources

0.6 million barrels $13.2 million ($0.24/share) 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.


Asset Summary Page 04

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


Focus 2017 Page 05

•CDN $47.3 million estimated current working capital & non-current deposits (end 2017 Q1)

Maintain Strong Balance Sheet

Add Material Value Through the Drill Bit

Build Sawn Lake Value


• 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

East Jabung PSC Indonesia Page 06

•

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

Batu Gajah PSC (expired)

•

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.

•

East Jabung PSC

Repsol (Talisman) assets Oil Pipeline Gas Pipeline

AYU-1X WELL 52,000 boepd

?

141,000 boepd 24,000 boepd

Excellent pipeline infrastructure that feeds into robust gas markets with current gas pricing of approximately $6 to $8usd/mcf 2016 Production Rates


AYU-1X Exploration well Page 07

(mm)

• 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


AYU-1X Construction Page 08


Geological Summary Page 09


AYU-1X Batu Raja (BRF) Primary Target Page 010

P1

P50

•

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

P10

P90

Batu Raja Limestone Rock Type & Structural P1 to P90 Overlay


AYU-1X Well Summary Page 011

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

Gumai/ABF Sandstones Page 012

Intra Gumai Fm Depth Structure


•

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.

Exploration Well Locations Page 013

•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)


Prospective Resource Estimates Page 014


East Jabung Summary Page 015

•

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.


THAILAND Page 016


L53/48 Concession Page 017

Operating cost $usd/bbl

Cum Sales just under 1.6MMbbls

• 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 © 2017 Pan Orient Energy Corp.

L53 Prospects Page 018

Prospect

Most likely closure

West_A1-A4 East_A5 East_A6 East_A6A East_A7 South B ANorth_CC ANorth_DD ANorth_EE ANorth_FF

2.01 0.78 1.20 0.50 4.20 3.17 0.31 0.86 0.63 0.62

• 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

Reserve Area B

West A

East A5-A7 L53D PA


L53B PA Prospects

L53A PA

•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

A North

Reserve Area A

(km2)

Fields Source Kitchen Dry Holes

L53G PA

South B 5 km.

L53AC-C Exploration Well Page 019

A

L53AC-C

A’

Free Oil & Oil Staining in Samples observed in the L53-C well drilled in 2008

A

A’ 2 km

• 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


Capital - Drilling Schedule 2017/18 Page 020

Well/Area

Q3/2017

Q4/2017

Q1/18

Q2/18

Q3/2018

Capital

AYU-1X Exploration Well East Jabung Indonesia

$1.2MMusd1

ANGGUN-1X Exploration well East Jabung Indonesia

See note 2 below

L53AC-C Exploration Well L53 Thailand

$0.9MMusd3

L53AC-C Appraisal L53 Thailand

$0.7MMusd4

Range of timing of commencement of drilling – Firm Wells Range of timing of commencement of drilling – Contingent Wells

Firm 2017: $2.1MMusd

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. © 2017 Pan Orient Energy Corp.

CANADA Page 021


Sawn Lake, Alberta, Canada Page 022

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

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

•

R24 T98

Sawn Lake Husky Koch

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.


R1 W5

Shell Penn West Baytex

T79

Red Earth

5th Meridian

Contingent Bitumen Resources at June 30, 2016 evaluated by Sproule Unconventional Limited. See NI51-101 Filing on SEDAR on April 28, 2017.

Andora’s Oil Sands Leases Page 023

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 • 50% of 12 sections • Designated Operator • 128 MMbbls risked “Best Estimate” contingent resources net to Andora • SAGD Demonstration Project facility & wellpair at 7-30-91-12W5 Sawn Lake South • 100% of 16 sections • 67 MMbbls risked “Best Estimate” contingent resources net to Andora Andora holds varying interests in 88 sections of oil sands leases. Pan Orient Energy Corp owns 71.8% of Andora


Demonstration Project Page 024

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. © 2017 Pan Orient Energy Corp.

Sawn Lake Quality Page 025

Tier 1 Projects

Sawn Lake


Andora Summary Page 026

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.


Contacts Page 027

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 © 2017 Pan Orient Energy Corp.

Annual & Special Meeting June 13, 2017

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