Faro Energy Remanso Norte 25052018

Faro ENERGY INC.
Faro Energy INC.

LATIN AMERICA EXPLORATION AND PRODUCTION COMPANY
COLOMBIA FOCUSSED E&P

OIL OPPORTUNITY
MIDDLE MAGDALENA VALEY BASIN
REMANSO BLOCK
REMANSO NORTE FIELD
Source: ANH
Private & Confidential – NOT FOR DISTRIBUTION

Faro Energy INC. All Rights Reserved. May 2018
Faro ENERGY INC. Why Colombia?
Investor friendly, economically stable, and growth - oriented

• Highly favorable fiscal regime.
• Investor-friendly reforms to Colombia's hydrocarbon sector have attracted record levels of foreign
investment and increased participation of major producers.
• Agencia Nacional de Hidrocaburos (ANH) promotes hydrocarbon potential and its fiscal terms have resulted
in an influx of foreign investment capital.
ANH Terms
• 6-year exploration term + 25 years to develop
commercial discoveries.
• Production subject to attractive sliding scale
royalty fixed at 8% for the first 5,000 bbl/d.
• Corporate income tax rate of 33%.
• Most attractive for developers of smaller oil fields:
~90% of Colombia's fields contain less than 60
mmbbl.
Source: ANH

Faro ENERGY INC. Company Overview
• Junior pure play focused on exploration and development of oil and natural gas
assets in Colombia.
• Spearheaded by a team of renowned professionals, with extensive connections

and dealings with the global energy community.
• A property focused on proven basin; The Middle Magdalena Basin:

✓ Remaso Block: 10.6 MMbbl of 2P (Gross) Reserves and 14.7 MMbbl
Prospective Resources (Best Estimate) (evaluated by Petrotech
Engineering Inc.).
➢ Remanso Norte Field: 4.7 MMbbl of 2P (Gross) Reserves (evaluated
by Petrotech Engineering Inc.) and 32.0 MMbbl of Recoverable
Reserves (Management Estimation).
Short Term Focus
• Raise us$ 60.0 million in equity to drill development wells in Remanso Norte Field.
• Acquired additional development asset in de region.

Faro ENERGY INC. CORPORATE SNAPSHOTS
REMANSO NORTE FIELD
Year 1 Year 2 Year 3 Year 4 Year 5

Operating results (2018 – 19) (2019 – 20) (2020 – 21) (2021 – 22) (2022 – 23)
Production FY Average (bopd) 965 3.998 7.979 11.703 13.295
Capital Expenditures (MMus$) 27.6 51.6 51.6 51.6 3.6
Cash Flow from Operations (MMus$) 10.0 37.0 62.9 79.4 92.4
Exploration Drilling (# prospects) 1 1 1 1 -
Appraisal Drilling (# Pilots Wells) 1 1 1 1 -
Development Drilling (# Horz Wells) 10 22 22 22 -
Total (# Horz Wells Clusters) 12 24 24 24 -
Reserves (2023 year end)
Accum. Produ. (2023 year end) 13.9 MMbbl
Remaining Reserves 18,1 MMbbl
(Managment Estimation)
2P Reserves Life Index (RLI) 7 years (2030)

Faro ENERGY INC. Crude Oil Operating Netback Summary
• Heavy oil production with competitive and sustainable netbacks under US$40/bbl.
• Downside protection on netbacks as royalties and ICE BRENT discount adjust to lower
commodity prices.
• Completely unhedged portfolio with ability to capture turnaround in commodity prices.
Operating Netbacks (us$/bbl)

ICE BRENT(us$/bbl) 40.00 50.00 55.00 60.00
DISCOUNT Quality & Transport (us$/bbl) 12.00 12.00 12.00 12.00
Sales Price @ Wellhead (us$/bbl) 28.00 38.00 43.00 48.00
Royalties ANH (us$/bbl) 1.80 2.40 2.70 3.00
Override Royalty PRIVATE 8 % (us$/bbl) 1.50 2.00 2.25 2.50
Opex (us$/bbl) 9.00 9.00 9.00 9.00
Cycle Steam Stimulation (us$/bbl) 3.00 3.00 4.00 3.00
Fixed Costs (G&A /Finances & Other Cost) (us$/bbl) 4.65 4.29 4.12 3.92
Income taxes @ 38% (us$/bbl) 2,90 5.80 7.24 8.70
Net Back AT (us$/bbl) 6.15 12.51 15.69 18.88
Faro ENERGY INC. PROPERTIES OVERVIEWS
REMANSO NORTE FIELD
MIDDLE MAGDALENA BASIN

Located along the central reaches of the Magdalena River
Valley between the Central and Eastern Cordilleras of the
Colombian Andes.
▪ Basin type: Poly-historic, Rift to Broken Foreland
▪ Area: 34,000 km2 / 7,900,000 acres
▪ Wildcat wells: 296
▪ Oil field discoveries: 41
▪ Discovered oil reserves: 1,900 MMBO
▪ Discovered gas reserves: 2.5 GCF
SCHEMATIC CROSS SECTION
Source: ANH

REMANSO NORTE FIELD

SCHEMATIC CROSS SECTION E-W’
Source: Petrotech Engineering Inc. Report.

REMANSO NORTE FIELD
MIDDLE MAGDALENA VALLEY BASIN

PETROLEUM SYSTEM CHART
The mains objectives are the reservoir of Real Group

and, the reservoirs Colorado Formation & Mugrosa
Formation.
Source: ANH

REMANSO NORTE FIELD
REMANSO BLOCK
PETROLEUM SYSTEM CHART
The mains objectives are the reservoir of Chuspas

Group.
Source: Comtrol S.A.

REMANSO NORTE FIELD
REGIONAL GEOLOGICAL MAP HIGHER PRODUCTION FIELDS OF THE BASIN
MIDDLE MAGDALENA BASIN OPERATOR CONTRACT ID # FIELD BOPD
ECOPETROL LA CIRA-INFANTAS 2204 INFANTAS 9.717

ECOPETROL LA CIRA-INFANTAS 2204 LA CIRA 22.484
MANSAROVAR NARE 2389 NARE 295

MANSAROVAR NARE 2389 UNDERRIVER 1.008
ECOPETROL PALAGUA 2230 CAIPAL 797
ECOPETROL PALAGUA 2230 PALAGUA 4.379
MANSAROVAR NARE 2389 ABARCO 4.657
MANSAROVAR NARE 2389 GIRASOL 4.070
MANSAROVAR NARE 2389 JAZMIN 4.885
MANSAROVAR NARE 2389 MORICHE 14.545
MANSAROVAR NARE 2389 UNDERRIVER 2.284
PACIFIC STRATUS DINDAL - RIO SECO 2371/2393 GUADUAS 222
HOCOL S.A. ARMERO 2396 TOTARE 86

HOCOL S.A. PULI 2367 TOQUI-TOQUI 450
INTEROIL MANA 2353 MANA 759
REMANSO BLOCK Source: ANH

Remaso Block: 10.6 MMbbl of 2P
(Gross) Reserves and 14.7 MMbbl
Prospective Resources (Best PanAtlantic Turpiales-3 horizontal well.
Estimate) (evaluated by Petrotech lower Real sand flowed at a maximum
Engineering Inc.). sustained rate of over 700 barrels of 16
Remanso Norte Field: 4.7 MMbbl of degree API oil per day with a 2% BSW
2P (Gross) Reserves (evaluated by (June 22, 2015 Press Release).
Petrotech Engineering Inc.) and 32.0
MMbbl of Recoverable Reserves BOCACHICO BLOCK
(Management Estimation). 2P RESERVES = 56.0 MMbbl
(evaluated by Ralph E. Davis
Associates Inc.).

REMANSO BLOCK INFRASTRUCTURE MAP

✓ The block is crossed by the
Magdalena Valley gas
pipeline, so the steam will
be generated using gas, we
are associating the cost of
the steam stimulation
operation of 4 us $ / bbl
produced, set value by the
operators of the neighboring
heavy crude fields.
✓ The block is placed

strategically in a prospective
geological area with plenty
of nearby infrastructure,
such as roads, pipelines,
Source: ECOPETROL
refineries and electric grid.

REMANSO NORTE FIELD
The analogue oil producers in the Middle Magadalena

Valey basin area of the Remanso Block area Abarco,
Girasol, Jazmin, Moriche, Nare, Palagua, Teca and
Underriver, Velasquez Fields. Most of the analogue
fields are under steam injection enhanced recovery and
fully developed and with the required investments. The
production data of these fields is as follow:
Cumulative 2017 Daily

PRODUCTION Production Average
FIELD NAME ° API OPERATOR
START DATE (2000 - June 2017) Rate
(bbl) (bopd)
ABARCO nov-06 10.071.315 3.773 11.7 Mansarovar
GIRASOL JAN-06 16.560.098 3.546 11.6 Mansarovar
JAZMIN nov-01 48.650.638 4.503 11.7 Mansarovar
MORICHE AUG-01 31.839.594 12.530 13.4 Mansarovar
NARE BEFORE 2000 4.978.971 216 12.5 Mansarovar
PALAGUA BEFORE 2000 26.907.169 5.656 11.4 Ecopetrol
TECA BEFORE 2000 18.214.118 1.504 12.6 Ecopetrol
UNDERRIVER BEFORE 2000 8.212.771 2.241 12.4 Mansarovar
VELAQUEZ BEFORE 2000 15.898.658 3.247 20.8 Mansarovar
TOTAL 181.333.332 37.216

REMANSO BLOCK
REMANSO NORTE 1 WELL TEST (COLD)

REMANSO BLOCK
REMANSO NORTE 2 & 3 WELLS TESTS (COLD)

APPENDIX
REMANSO BLOCK
SEISMIC INTERPRETATION & IDENTIFIED PLAYS

REMANSO NORTE FIELD
SURROUNDING FIELDS

REMANSO NORTE FIELD
STRUCTURE MAP OF CHUSPAS SAND

REMANSO NORTE FIELD

REMANSO NORTE FIELD

APPENDIX
REMANSO BLOCK
PETROPHYSICS AND WELLS CORRELATION

REMANSO NORTE FIELD
STRATIGRAFIC CORRELATION AT THE TOPE OF CHUSPAS GROUP

Faro ENERGY INC.
APPENDIX
Economic and Efficient
Development Technologies

Development for Remanso Norte Field

HORIZONTAL WELL PATH (CLUSTERS) CICLE STEAM STIMULATION BY HORIZONTAL WELL

Production Forecast Remanso Norte

Field

OPEX & CAPEX Remanso Norte Field

CASH FLOW Remanso Norte Field

Faro ENERGY INC.
Thank you very much for your attention….


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Faro ENERGY INC.

Faro Energy INC.

COLOMBIA FOCUSSED E&P

MIDDLE MAGDALENA VALEY BASIN

Private & Confidential – NOT FOR DISTRIBUTION

Investor friendly, economically stable, and growth - oriented

Private & Confidential – NOT FOR DISTRIBUTION

• Spearheaded by a team of renowned professionals, with extensive connections

• A property focused on proven basin; The Middle Magdalena Basin:

Short Term Focus

• Acquired additional development asset in de region.

Private & Confidential – NOT FOR DISTRIBUTION

REMANSO NORTE FIELD

Year 1 Year 2 Year 3 Year 4 Year 5

Private & Confidential – NOT FOR DISTRIBUTION

• Completely unhedged portfolio with ability to capture turnaround in commodity prices.

Operating Netbacks (us$/bbl)

REMANSO NORTE FIELD

MIDDLE MAGDALENA BASIN

SCHEMATIC CROSS SECTION

Private & Confidential – NOT FOR DISTRIBUTION

REMANSO NORTE FIELD

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

REMANSO NORTE FIELD

MIDDLE MAGDALENA VALLEY BASIN

The mains objectives are the reservoir of Real Group

Private & Confidential – NOT FOR DISTRIBUTION

REMANSO NORTE FIELD

The mains objectives are the reservoir of Chuspas

Source: Comtrol S.A.

Private & Confidential – NOT FOR DISTRIBUTION

ECOPETROL LA CIRA-INFANTAS 2204 INFANTAS 9.717

MANSAROVAR NARE 2389 NARE 295

PACIFIC STRATUS DINDAL - RIO SECO 2371/2393 GUADUAS 222

HOCOL S.A. ARMERO 2396 TOTARE 86

REMANSO BLOCK Source: ANH

Private & Confidential – NOT FOR DISTRIBUTION

REMANSO BLOCK INFRASTRUCTURE MAP

✓ The block is placed

Private & Confidential – NOT FOR DISTRIBUTION

REMANSO NORTE FIELD

The analogue oil producers in the Middle Magadalena

Cumulative 2017 Daily

Private & Confidential – NOT FOR DISTRIBUTION

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

Private & Confidential – NOT FOR DISTRIBUTION

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

Private & Confidential – NOT FOR DISTRIBUTION

Source: Petrotech Engineering Inc. Report.

Private & Confidential – NOT FOR DISTRIBUTION

Private & Confidential – NOT FOR DISTRIBUTION