Petrol Oil and Gas, Inc.
October, 2005
Corporate Overview
Copyright 2005. Presentation and contents of this presentation are copyright by Petrol Oil and Gas, Inc. All rights reserved. Copying of the presentation is forbidden without the prior written consent of Petrol Oil and Gas, Inc. Information in this presentation is provided without warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose and the timeliness of the information. You assume all risk in using the information. In no event will PETROL or its representatives be liable for any direct, special, indirect or consequential damages resulting from the use of the information. This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements may include the words "may," "could," "estimate," "intend," "continue," "believe," "expect" or "anticipate" or other similar words. Forward-looking statements are not guarantees of performance. Although PETROL believes its expectations reflected in forward-looking statements are based on reasonable assumptions, no assurance can be given that these `expectations will be achieved. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, among others: the timing and extent of changes in commodity prices for crude oil, natural gas and related products, foreign currency exchange rates and interest rates; the timing and impact of natural gas demand or prices for oil and gas; the extent and effect of any hedging activities engaged in by PETROL; the extent of PETROL's success in discovering, developing, marketing and producing reserves and in acquiring oil and gas properties; the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise; the availability and cost of drilling rigs, experienced drilling crews and other equipment; the availability of pipeline transportation capacity; the extent to which PETROL can develop additional producing wells; the results of wells yet to be drilled that are necessary to test whether substantial acreage positions contain suitable drilling prospects; whether PETROL is successful in its efforts to more intensely develop its acreage and other production areas; political developments around the world; acts of war and terrorism and responses to these acts; and financial market conditions. In light of these risks, uncertainties and assumptions, the events anticipated by PETROL's forward-looking statements might not occur. PETROL undertakes no obligations to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. As noted above, statements of proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include not only proved reserves, but also other categories of reserves that the SEC's guidelines strictly prohibit PETROL from including in filings with the SEC. Investors are urged to consider closely the disclosure in PETROL's Annual Report on Form 10-KSB and Quarterly Reports on Form 10-QSB, available from PETROL at 3161 E. Warm Springs Road, Suite 300, Las Vegas, NV 89120 (Attn: Investor Relations). You can also obtain these forms from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.
Executive Summary
Nevada Corporate Hdqtrs:
OTCBB:POIG
Current Shares Outstanding – 24,619,660*
Headquarters – Las Vegas, Nevada
Website – www.petroloilandgas.com
*12/31/04
401 Pearson Ave.
Waverly, KS 66871
Phone (785) 733-2158
Fax (785) 733-2187
3161 E. Warm Springs Rd, Ste 300
Las Vegas, NV 89120
Phone (702) 454-7318
Fax (702) 434-7594
110 E. 5th St.
Piqua, KS 66761
Phone (620) 468-2885
Fax (620) 468-2925
Rte 1
Thayer, KS 66776
Phone (620) 839-5911
Fax (620) 839-5912
Corporate Information Highlights
Kansas Field Offices:
Corporate Strategy
We will continually build value in the Company
through the development and acquisition of gas
and oil assets that exhibit consistent, predictable,
and long-lived production. The current focus of
the Company is Coal Bed Methane reservoirs in
the central U.S., which produce both Coal Bed
Methane and conventional gas.
Established A Significant Acreage Position in the Cherokee Basin
(~165,000 acres since 2001)
New Publicly Traded Company (March 2004)
Acquired/Operate Oil Producing Properties
Raised $6.76 Million in a Private Offering for Drilling and
Development (Oct 2004).
Purchased a CBM Producing Gas Field , Petrol-Neodesha (Nov 2004).
Soliciting $30-65 Million Debt Financing for Coal Creek Development
Milestones and Progress
88,800
134,000
165,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2002
2003
2004
Petrol Oil and Gas
Gross Acres
Leased Mineral Acres
Petrol Net Gas Reserves*
18.1 Bcf Net
12.7 Bcf PROVED
5.4 Bcf Probable
* McCune Engineering Reserve Report
Dec 31, 2004
12.7
5.4
0
2
4
6
8
10
12
14
Bcf
Petrol NET
Gas Reserves
Proved
Probable
Petrol Net Reserves*
$39.63 Million PV 10%
$2.17 Million Future Net OIL
Cash Flow
* McCune Engineering Reserve Report
Dec 31, 2004
$39.63
$31.02
$8.61
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
PV 10%
Petrol Gas Reserves
PV 10%
Net Value
Proved
Probable
$0.044
$0.822
$0.866
$1.191
$1.805
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
$1.8
$2.0
3rd
4th
Yr End
1st
2nd
2
0
0
4
2
0
0
5
Petrol Revenues
Basin Review
Major U.S. Coal-Bed Methane Gas Basins
Northern Rocky Mountains
and Great plains
Illinois Basin
Appalachian
Basin
Gulf Coast
Colorado Plateau
Black Warrior
United States Geologic Society (USGS)
700 Tcf CBM Reserves
7% of Total US Gas Production, 2000
Western Interior
Petrol’s Leases are located in the Cherokee Basin and
Bourbon Arch along the Kansas and Missouri border.
Relatively New CBM Basin –
Production of Cherokee Group
Coals became active in the early
’90s.
4 major transition pipelines
serve this basin
Current Counties with Petrol leases
(16 counties )
-Current production
Outlined below are the conclusions and analysis provided by Petrol
geologist Bill Stoeckinger:
The Western Interior Coal Province is divided into the
Forest City and Cherokee basins in Kansas.
The Cherokee basin has had proven CBM production since
1998.
The Forest City basin is an emerging area and gas reserve
potential has not been quantified.
Coal thickness in the Cherokee Rock Group ranges from 8
to 26 feet.
Using an average thickness of 10 feet and a measured gas
content of 150 scf/ton, the in-place gas reserve potential is
1.73 Bcf per section.
Cawley, Gillespie & Associates has reviewed the analysis
and believes the assumptions are reasonable.
Other coal and shale potential is available throughout
Coffey County.
E&P Project Overview
Petrol-Neodesha -- Wilson, Neosho Co. KS
Coal Creek Project - Hatch Field, Coffey Co. KS
Pomona Gas Project – Pomona Field, Franklin Co. KS
Missouri Gas Project – Belton Field, Cass Co. MO
Oil Field Projects -- South Eastern KS
Current Projects
Neosho
County
Wilson
County
Current Position
10,000 Gross Acres
100% WI
79.5% NRI
Resources/Reserve Est.
Proven Reserves 9.9 Bcf - (PV10 $23.8)*
Probable Reserves 4.3 Bcf - (PV10 $6.5 M)*
Field Production Ave. 2,900 Mcfd
Gas Gathering (56 miles)/Compression
Sales into Southern Star Pipeline
Operations
76 Producing Wells
8 SWD Wells
50-100 New Well Locations
*McCune Engineering, Dec 2004
Petrol-Neodesha Project
Petrol-Neodesha
Recent $800,000 Development Program
Drilled 5 New Wells in May 2005
Enhanced the Capacity of the Gas Gathering System
Installed New Gas Processing and Compression
Facilities
Net Increased Gas Sales by about 600 Mcfd
(35%)
Petrol-Neodesha Net Future Cash Flow (PV10%) *
$30.26 Million PV10%
$23.72 Million Proven
$6.54 Million Probable
* McCune Engineering Reserve Report Dec 31, 2004
$30.26
$23.72
$6.54
$0
$5
$10
$15
$20
$25
$30
$35
$40
PV 10%
Petrol Gas Reserves
Future Net Cash Flow (PV10%)
Net Value
Proved
Probable
Current Position
92,000 Net Acres
100% WI
84.375% NRI
Resources/Reserve Estimates
Proved 1.9 Bcf
Probable 1.2 Bcf
3 Major Interstate Pipelines
Operations
18 CBM Wells
Drill Cuttings & Whole Core
High De-Watering Rates
Initial Sustained Gas Rates
Coal Creek Project
* McCune Engineering Reserve Report Dec 31, 2004
R13E
R14E
R15E
R16E
R17E
T19S
T20S
T21S
T22S
T23S
R13E
R14E
R15E
R16E
R17E
T19S
T20S
T21S
T22S
T23S
Lebo
Waverly
Burlington
Gridley
Aliceville
Halls
Summit
Enbridge
Southwest
Northeast
NorthWest
So. Star
CMS Energy
Coal Creek Project Current Reserves
$6.51
$1.72
0
1
2
3
4
5
6
7
Proven
Probable
Possible
Coal Creek
Current PV 10%
Osage
County
Anderson
County
Franklin
County
Current Position
36,000 Gross Acres
100% WI
84.375% NRI
Resources/Reserve Estimates
Possible CBM Reserves
Proven Conv. Gas Reserves
2 Major Interstate Pipelines
Operations
13 Conv. Wells
1 Salt Water Disposal Well
Dewatering CBM Testing
Based on 150 scf/ton with 10 ft net CBM pay or 1.73 Bcf/Section
Pomona Gas Project
Missouri Project
Current Position
15,000 Gross Acres
100% WI
84.375% NRI
Resources/Reserve Estimates
Possible CBM/Shale Reserves
Very Shallow CBM/Shale Gas Reserves
Gassy Coals/Shales Drill Cuttings
1 Major Interstate Pipeline
Operations
5 Exploratory Wells
Extremely Low Well Costs
Cass County
Bates County
* McCune Engineering Reserve Report Dec 31, 2004
Development Strategy
Corporate Development Strategy
Petrol-Neodesha
Infill Drilling Program
3 New Wells Last Week
5 New Drill Intents for This Fall
Optimize Gas Gathering System
Acquire Additional Nearby Mineral Leases
Coal Creek Project
Acquire $50Million Debt Financing
Initiate an Accelerated Drilling Program to Prove the Reserves
Develop the Entire Project Area (82,000 acres)
Trade on AMEX or NASDAQ
R13E
R14E
R15E
R16E
R17E
T19S
T20S
T21S
T22S
T23S
R13E
R14E
R15E
R16E
R17E
T19S
T20S
T21S
T22S
T23S
Lebo
Waverly
Burlington
Gridley
Aliceville
Halls
Summit
Enbridge
Southwest
Northeast
NorthWest
So. Star
CMS Energy
Coal Creek Project Development
PHASE I
PHASE II
Wells
Wells
180
360
FINANCING
FINANCING
32,700,000
$
31,335,000
$
Actual
Actual
Dev. Costs
Dev. Costs
33,282,297
$
56,438,790
$
Drill/Completion
22,743,990
$
45,487,980
$
Drill/Completion
Gas Gathering
712,800
$
1,425,600
$
Gas Gathering
Contingeny
1,137,201
$
2,274,399
$
Contingeny
Pipeline/Compressor Site
8,688,306
$
7,250,811
$
Pipeline/Compressor Site
Summary
Coal Creek Project Development Summary
$38.49
$8.23
$30.26
0
5
10
15
20
25
30
35
40
45
Total
Coal
Creek
P-N
BEFORE Coal Creek Dev.
Asset Impact: Developing Coal Creek Project Phase I
$200.02
$169.76
$30.26
0
50
100
150
200
250
Total
Coal Creek
P-N
AFTER Coal Creek Dev.
Asset Impact: Developing Coal Creek Project Phase I
Corporate Summary
Acquired ~ 165,000 acres since 2001
Last 4 Qtrs were Revenue Producing
Cash Flow Positive from Operations.
Coal Creek Development Can Significantly Enhance
Future Cash Flow
Market & Financial Information
OTC BB: POIG
25.2 MM Shares Issued & Outstanding
$50.4 MM Equity Market Cap at recent closing price of
$2.00 per share
Convertible Debt P-N about $6.5 Million
Participate in Broker Presentations for Institutional &
Retail Investor Support
Petrol Senior Management Team
Paul Branagan, President /CEO
President & CEO since Company Inception in 2001
30 yrs in Major R&D Projects involving Complex Gas Reservoirs
President of B&A Inc. Oil and Gas Consulting firm to clients such as
Conoco, Mobil and CNPC in China.
Gary Bridwell, Drilling/Production Field Manager
20yrs Field Production Supervision
Former Meritage CBM Explor/Development
Former Field Supervisor Stroud Oil
Owner/Operator Black Rain Energies
W.T. (Bill) Stoeckinger, Geologist
40 yrs E&P Geologist
Worldwide CBM Expertise
25 yrs Int’l E&P Chevron-Texaco
Lawrence Finn, CFO
32 yrs oil and gas financial experience, CDX, Wiser, May Petroleum
19 yrs as Financial officer, VP and Sr. Analyst
CPA with experience in un-conventional oil and gas projects
Petrol Historical Stock Trades
$1.25
$1.50
$1.75
$2.00
$2.25
$2.50
$2.75
$3.00
$3.25
$3.50
$3.75
$4.00
0.0E+00
2.0E+05
4.0E+05
6.0E+05
8.0E+05
1.0E+06
1.2E+06
Appendix
