MACQUARIE EQUITY CONFERENCE PRESENTATION – MAY 2011
Statements made by representatives of American Standard Energy, Corp. (“ASEN” or the “Company”) during the course of this presentation that are not historical facts are “forward ‐ looking statements” within the meaning of federal securities laws. These statements are based on certain assumptions and expectations made by the Company which reflect management’s experience, estimates and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate . No assurances can be given that such assumptions and expectations will occur as anticipated and actual results may differ materially from those implied or anticipated in the forward looking statements . Such statements are subject to a number of risks and uncertainties, many of which are beyond the control of the Company, and which include risks relating to the global financial crisis, our ability to obtain additional capital needed to implement our business plan, declines in prices and demand for gas, oil and natural gas liquids, our minimal operating history, loss of key personnel, lack of business diversification, reliance on strategic, third‐ party relationships, ability to obtain rights to explore and develop oil and gas reserves, financial performance and results, our indebtedness under our senior secured promissory notes, our ability to replace reserves and efficiently develop our current reserves, our ability to make acquisitions on economically acceptable terms, and other important factors. ASEN undertakes no obligation to publicly update any forward ‐ looking statements, whether as a result of new information or future events.
Ticker: ASEN (OTC BB)
• | American Standard Energy Corp. (“ASEN”) was formed for the purpose of leveraging a strategic relationship with a large private oil and gas company to accumulate and develop select oil and gas properties within highly desirable areas of the United States. |
• | To date, the Company has utilized a “non‐operated plus” business model to accumulate more than 39,400 acres in the Bakken formation in North Dakota, the Wolfberry formation in West Texas and the Eagle Ford shale in South Texas. |
• | ASEN’s strategy is to build a position of scale in each of its core operating areas. With a unique ability to acquire, at will, acreage and production at attractive relative values, the Company is well positioned to deliver superior returns through the conversion of resources to cash flow. |
Ticker: ASEN (OTC BB)
• | Williston Basin – Bakken / Three Forks Formation (Non‐Op, Minority WI Model) |
• | 31,700 net acres under lease, actively acquiring more acreage |
• | Participated in 51 gross wells in 2010, expect to participate in approximately 150 gross (6‐8 net) wells in 2011 |
• | $7.5 million to drill and complete a 1,280 acre Bakken well |
• | Permian Basin – Wolfberry Formation (100% WI Positions) |
• | 6,500 net acres under lease, actively acquiring more acreage |
• | Completed 2 net wells in 2010, expect to define an aggressive Permian drilling program |
• | $1.75 million to drill and complete a Wolfberry well |
• | South Texas – Eagle Ford Shale Formation (Mixed WI Strategy) |
• | 1,200 net acres under lease, actively acquiring more acreage |
• | Participated in 2 gross (0.2 net) wells in 2010, expect to participate in approximately 12 gross (1.2 net) wells in 2011 |
• | $7.5 million to drill and complete a Eagle Ford well |
• | Position operated by Cheyenne Petroleum, currently running two rigs in the basin |
Ticker: ASEN (OTC BB)
• | The 31,700 net acres in the Williston Basin are located primarily in Mountrail, Dunn, Billings, Burke, McKenzie and Williams Counties |
• | American Standard has partnered with the following operators across its Williston Basin acreage position |
10.8%
Ticker: ASEN (OTC BB)
| | BAKKEN / THREE FORKS OVERVIEW | 8 |
• Opportunity: | Diversification across operators, new technology application, horizontal |
| | drilling, multistage fracing | | |
• Strategy: | Targeting an additional 25,000+ net acres in the Bakken in highly | |
| | desirable counties for near term acquisition. | |
• Leasehold: | Mountrail, McKenzie, Williams, Dunn, Divide, Stark, Burke, Billings and |
| | Golden Valley County, North Dakota | | |
• Acreage: | 31,700 net acres | | |
| | 4 Net Bakken Wells Available for Drilling: | 320 acre spacing = 96 net wells | |
| | 4 Net Three Forks Wells Available for Drilling: | 320 acre spacing = 96 net wells | |
| | Total Williston Basin Drilling Exposure: | 192 net wells | |
• Status | Participated in 51 gross wells in 2010. Currently producing 100‐125 | |
| | BOEPD from ~.4 net wells, with .3 net wells in completion. Expect to | |
| | participate in 150 gross (7‐8 net) wells in 2011 | |
Ticker: ASEN (OTC BB)
| ACCELERATED BAKKEN GROWTH PLAN | 9 |
• Recent Activity: | April 12, 2011, acquired 2,780 net acres in Mountrail County at an | |
| | average price of $669/acre. | |
• April 26, 2011, acquired 11,775 net acres over seven counties, including | |
| Mountrail, Stark and Williams Counties, including two 100% WI positions. | |
Increasing ASEN’s Bakken Presence:
• | ASEN believes the successful acquisition of this acreage at attractive pricing will continue to enhance shareholder value. |
• | This acreage can be acquired at an average price of $1,000 ‐$1,500 per acre. |
Ticker: ASEN (OTC BB)
• | Record drilling activity has significantly intensified the pace of development in the Williston Basin |
North Dakota Average Monthly Rig Count
Jan Ma Jun Jul No M
y- - 10 Aug- v ay-
- 10 Feb- 10 Mar- 10 Apr- 10 10 - 10 10 Sep- 10 Oct - 10 - 10 Dec- 10 Jan- 11 Feb- 11 Mar- 11 Apr- 11 11
(1) This forecast emphasizes the impact of acquiring 100,000 net
acres in the Bakken in 2011.
Ticker: ASEN (OTC BB)
Ticker: ASEN (OTC BB)
| BAKKEN / THREE FORKS WELL ECONOMICS | 13 |
| | | Bakken Economics (500 MBOE EUR) | |
| 50 | % | | |
| | | $ | 7.5 million | |
| 45 | % | $ | 8.0 million | |
| | | $ | 8.5 million | |
Ticker: ASEN (OTC BB)
PERMIAN BASIN OPPORTUNITY• | ASEN continues to evaluate the most efficient transition of Permian acreage into the Company. |
• | Targeting ~50,000 net acres for transfer into ASEC in 2011. |
• | Increasing industry activity in the play further de‐risks ASEN’s acreage and acreage under evaluation. |
• | Focus on self‐directed drilling program in the Permian, with a focus on owning and controlling 100% WI assets in the Wolfberry, Wolfcamp and other highly desirable formations. ASEC behave more like a true operator in these plays. |
• | ASEN’s drilling and operating partners include many of the best operators in the basin. |
• | Opportunities to joint venture and partnership may also be considered for joint development. |
Ticker: ASEN (OTC BB)
WOLFBERRY WELL ECONOMICS
| Well Economics | | | | | | | | Wolfberry Economics (140 MBOE EUR) | | | | |
| | | | 65 | % | | | | | | | | | | | | |
• Gross EUR / Well | 140 Mboe | | 60 | % | | $ | 1.4 million | | | | | | | | | |
| | | | | | | $ | 1.5 million | | | | | | | | | |
| | | | 55 | % | | $ | 1.6 million | | | | | | | | | |
| | | | 50 | % | | | | | | | | | | | | |
• Well Cost | $ | 1.5 Million | | 45 | % | | | | | | | | | | | | |
| | IRR | | 40 | % | | | | | | | | | | | | |
| | BT | | | | | | | | | | | | | | | |
• Net Revenue Interest | 75.0 | % | 35 | % | | | | | | | | | | | | |
| | | | 30 | % | | | | | | | | | | | | |
• PV‐10 Value per Well | $ | 2 | ‐2.5+ Million | 25 | % | | | | | | | | | | | | |
| | | | 20 | % | | | | | | | | | | | | |
| | | | 15 | % | | | | | | | | | | | | |
• Well economics assume $90.00 oil / $5.00 natgas | | | | 60 | 65 | 70 | 75 | 80 | 85 | 90 | 95 100 | 105 | 110 | 115 | 120 |
| | | | | | | | | | | | $ | /bbl | | | | |
Ticker: ASEN (OTC BB)
EAGLE FORD SHALE OVERVIEW
| • | Opportunity: | New technology application, horizontal drilling, multistage fracing |
| • | Strategy: | Acquire 100% HBP acreage through at a discount to fair market |
| | | value. Targeting 25,000+ net acres in South Texas with Eagle Ford shale |
| | | potential for acquisition in 2011. |
| • | Leasehold: | Frio and LaSalle County, Texas |
| • | Acreage: | 1,200 net acres targeting the Eagle Ford shale formation |
| • | Status | Completed 2 gross (0.2 net) wells in 2010 |
| | | 10% WI in Eagle Ford position operated by Cheyenne Petroleum |
| | | Expect to participate in 11 gross (1.1 net) wells in 2011 with 2 active rigs |
| | | Expect to participate in 14 gross (1.4 net) wells in 2012 |
Ticker: ASEN (OTC BB)
EAGLE FORD SHALE MAP
ASEN holds a 10% WI in a 12,000 acre position
operated by Cheyenne Petroleum in the Eagle Ford
Shale Oil and Gas Resource Play in South Texas
Ticker: ASEN (OTC BB)
INVESTMENT HIGHLIGHTS
• | Non‐operated model with drilling influence through proven operators |
• | Participate in ~150 gross (6‐8 net) Bakken / Three Forks wells in 2011 |
• | Participate in 15+ gross (15 net) Wolfberry wells in 2011 |
• | Participate in 12 gross (1.2 net) Eagle Ford wells in 2011 |
• | Potential for at least 6 wells in each Bakken / Three Forks drilling unit |
• | Large acreage position in core areas of the Bakken and Permian with significant upside potential |
Ticker: ASEN (OTC BB)
