2014 Apr 07

CBM Asia Development Corp
Indonesian Coalbed Methane
 1 Tcf Net Resource Audited
 2014 Goal: Production Near the
Bontang LNG Export Facility
 Board and Management Changes
 Significant Overhead Cost
Reductions
www.cbmasia.ca
TSX.V: TCF
April 2014
CBM Asia
New Management, New Direction

CBM
ASIA
DEVELOPMENTCORP

NEW PRESIDENT & CEO: Charlie Bloomquist, petroleum engineer with 40 years
operational experience in Indonesia and North America.
NEW VP OPERATIONS: Keith Potter, 12 years Indonesian CBM and natural gas
experience, 10 years Australia CBM experience
BOARD TARGET: half independent, half executive
NEW DIRECTION




DEVELOPMENT FOCUS: commercialize Kutai West PSC 3.9 Tcf (705 Bcf - net)
PHASE I: 2014 - 5 well gas-to-power project: 2.0-2.5 MMcf/d (net 360-450 Mcf/d)
PHASE II: 2015 - 25 well gas-to-pipeline: 12.5 MMcf/d (net 2.25 MMcf/d)
PHASE III: full development, gas-to-LNG at > US$8/Mcf sales price
COST REDUCTIONS





Running burn rate cut by 50%
Corporate office and administrative salaries cut by 50%
Operational office rationalization size and staff levels
New investment solely for development
Suspend exploration capex
DEVELOP 981 BCF
RECOVERABLE
RESOURCE




981 Bcf (163 MMboe) net to CBMA of Recoverable Prospective Resource (51-101)
Gas flow, water flow and permeability tests demonstrate commercial potential
High gas price markets: domestic US$7-10/Mcf, export US$10-17/Mcf
Domestic and regional gas shortages
NEW MANAGEMENT

2
CBM
ASIA
DEVELOPMENTCORP
CBM Asia Board and Senior Management Team
New Key Management Focused On Development
Board of Directors
Search
Under
Way
Executive Team
Scott H. Stevens, Chairman: SVP and Director of Advanced
Resources International an internationally recognized CBM and
shale gas consulting firm. Since 1995 Mr. Stevens has been
working with the Government of Indonesia, Chevron, and other
multinationals to high-grade CBM resources and develop
current CBM regulations in Indonesia.
Charles Bloomquist, P.Eng, President and CEO, Director:
petroleum engineer with over 30 years experience in North
America, Africa and Indonesia. Worked with Indonesia’s
National Oil Company Pertamina to manage drilling projects in
Sumatra. One of the first movers in Indonesia’s CBM Industry
since 1996.
Dr. James Friberg, Ph.D. Sedimentology, Independent Director:
former President of Black Gold Energy (Indonesia) - which was
acquired by Niko Resources for CAD300 mn in 2009 -Exploration
Manager for Unocal Indonesia (now Chevron) and Unocal’s
Chief Geologist Worldwide.
Keith Potter – General Manager, Indonesia, VP Operations:
Former President Director of PT Seamgas Indonesia identified 3
Tcf of CBM resources. Has held senior project and executive
corporate positions with oil & gas companies and EPC
contractors in Indonesia, Australia and UK. 30 years of oil & gas
experience, 12 years in CBM and 12 years in Indonesia.
Clint B. Sharples, Independent Director: a partner in First
Growth Management Inc. a small private equity company with
share holdings in many different companies. Mr. Sharples is also
a board member of several public and private companies. Mr.
Sharples serves as the Chair of the Audit and Governance
Committee for CBM Asia.
Adam Clarke, VP Corporate Development, Director: former
Managing Partner of Expedition Capital (HK) and Senior
Managing Director Bear Stearns Asia (HK). 20 years of oil & gas
investment related experience in the Asia-Pacific region
including Indonesian oil & gas and coal industries.
New Independent Director: The board has decided to increase
the number of independent directors to three from two as to
equal the number of executive directors. Search is in progress
James Hurren, CFO: over 11 years of business experience
supporting oil & gas and mining companies. Has served as CFO
and Controller for other junior publically traded companies in
the natural resource sector. Holds a degree in accounting and
an MBA.
.
3
CBM Asia’s New Direction
Development and Cash Flow Focused

Development and Cash
Flow Focus


Two properties with 981 Bcf of net engineered resources: Kutai West (3.9 Tcf
/ 705 Bcf net) and Sekayu (1.1 Tcf / 276 Bcf net)
Both properties have proved permeability and gas/water flow tests
indicating commerciality
FOCUS: bring assets to commercialization starting with the Kutai West block

KUTAI WEST: 5 well production pilot (drill 4 new wells plus 1 existing well).
Sell gas 2.0-2.5 MMcf/d to local power plant - government-mandated – at an
indicative price of US$8.00/Mcf. Certify proved reserves.

KUTAI WEST: Expand to 30-well production. Sell gas for power and to
Bontang LNG gas pipeline - 15 MMcf/d - at an estimated price of
US$8.00/Mcf. Certify reserves and turn cash flow positive.

KUTAI WEST: Obtain project financing on the back of certified reserves, offtake agreements and operational cash flow for full field development plan
with long term production levels estimated to exceed 250 MMcf/d.
SEKAYU. Establish 5-well commercial pilot using gas-to-power @
US$7.50/Mcf
Phase I - 2014
Phase II - 2015-2016
Phase III – Kutai West &
Sekayu
CBM
ASIA
DEVELOPMENTCORP

4
CBM
ASIA
DEVELOPMENTCORP
CBM Asia Development Opportunities
Net 981 BCF (163 MMboe), 51-101 Recoverable Resource Booked
KUTAI WEST PSC (18%) - 705 BCF
KUTAI WEST PSC
SEKAYU PSC (26%) - 276 BCF
Bontang LNG
Gross
5,830
CBMA (18%)
Gross
CBMA (26%)
2,056
3,916
1,062
2,303
415
Low
705
1,049
535
319
Gas Pipelines
276
83
Best
High
Sanga Sanga PSC
Low
Best
High
 51-101 engineered resource completed by NSAI in
January 2013. Post-report stimulation and
production testing conducted on KWCBM-01 well
established commercial permeability levels (5 mD),
water flow rates and early gas flow.
 51-101 engineered resource completed by NSAI in
September 2011. Post-report production testing
conducted at two wells establishing commercial
permeability levels, water flow rates and initial gas
flow.
 Kutai West PSC positioned near existing infrastructure
 Sekayu PSC positioned near existing infrastructure
 20 kV power line for gas-to power generation
SEKAYU PSC
 Pipeline to Java
 VICO’s pipeline with spare capacity
 Pipeline to Duri Steam Flood (Chevron 400 MMcf/d)
 Bontang LNG Terminal export - 1,200 MMcf/d spare
capacity
 Local industry, electricity generators and urban
areas
 94 ft thick coal seams with high gas saturation
 158 ft thick coal seams with high gas saturation
Gas Pipelines
 Adjacent to VICO’s Sanga-Sanga CBM PSC -successfully
producing CBM since March 2011 – 500 Mcf/d/well
 Close proximity to NuEnergy-Pertamina block successfully producing 200 Mcf/d/well
5
CBM
ASIA
DEVELOPMENTCORP
Kutai West Development
Path: Exploration to Cash Flow Positive to Full Development
Phase I
2014
CBM-To-Power
2.0-2.5 MMcf/d
Exploration
Complete
 2012. 4 explorations wells
drilled establishing - 3.9 Tcf
recoverable resource (705
Bcf net) based on 51-101
audit


Prod est. 2.0-2.5 MMcf/d
 2013-2014. stimulation,
dewatering and production
test established
permeability, water flow
and initial gas flow

Gas sales to power
company

Gas sales-to-pipeline
feeding Bontang LNG

Gas price est. US$8/Mcf

Gas price est. US$8/Mcf

Strong support from
Government of Indonesia
for pre-POD CBM
production

Domestic and international
market shortage

Cash flow positive
4 wells will be drilled
around existing test well (5
wells total)
Phase III
2017+
CBM-To-LNG
>250 MMcf/d
Phase II
2015-2016
CBM-to-Pipeline
15 MMcf/d

25 development wells


Prod est. 12.5 MMcf/d
bringing total production
to 15 MMcf/d
>250 MMcf/d production
level supported by Approx.
3.7 Tcf resource

Spare capacity at Bontang
LNG est. at 1,215 MMcf/d.
Second largest LNG facility
in the world at 22.5 MMtpa

Project financing likely on
phase I and II production
history and resulting
resource upgrade
6
CBM
ASIA
DEVELOPMENTCORP
Kutai Basin
Kutai West Adjacent to BP’s Producting Sanga-Sanga CBM PSC
BONTANG
LNG
CBM
ASIA
DEVELOPMENTCORP
 Bontang LNG: Spare capacity estimated at 1,215
MMcf/d. Second largest LNG facility in the world at
22.5 Mmtpa.
 Sanga-Sanga PSC: VICO (BP, ENI) Producing
approximately 2.5 MMcf/d of CBM for local power
generation and LNG export from Bontang.
Operated by VICO Indonesia (BP, ENI, and partners).
 Kutai West PSC: Gross: 869 km2 area with 3.9 Tcf
prospective recoverable resources. CBM Asia holds
18% working interest (705 Bcf net). Four CBM test
wells drilled and cored. One well is being
dewatered and flowing initial gas.
7
CBM ASIA
Kutai Basin: Sanga-Sanga CBM PSC
VICO is Producing CBM Gas for Power Generation and LNG Export
DEVELOPMENTCORP

VICO (BP, ENI and partners) operates the Sanga-Sanga block adjacent to CBM Asia’s Kutai West PSC.

VICO began delivering CBM gas to Bontang in March-April 2011 and plans increase to two drilling rigs to drill 20 new CBM wells/year
by 2015. The company’s new automated Italian-built rig has “the most advanced technology in the world to explore Coal Bed
Methane” according to VICO.

“VICO CBM has successfully managed to dewater ten wells with good surface facility reliability. Since the first CBM well was put on
production in October 2010.”

April 30, 2013: “VICO initiated CBM sales for power generation “VICO is now supplying CBM gas to PLN. The electricity from CBM
gas powers more than 1,000 homes in East Kalimantan. This is the first CBM to Electricity Project in Indonesia.”

Gas production from VICO’s other 4-well CBM pilot is being exported to Japan from Bontang as LNG.
VICO Initiating CBM-to-Power at Sanga-Sanga on April 30, 2013
VICO and PLN visit CBM-to-Power Station at Sanga-Sanga
VICO
May
2013
VICO May 2013
8
Kutai West Development Phase I & II
30 Production Well Development Outline
CBM
ASIA
DEVELOPMENTCORP
A. 5 Well Production Pilot - 2014
 400-500 Mcf/d/well = 2.0-2.5 MMcf/d
 US$1.5 mn/well x 4 = US$6.0mn
B. Sales to 10MW Power Plant - 2014
 US$8.00/Mcf est.
 Gas to produce electricity
 Sponsored under government early gas
scheme (pre-POD)
C
A
B
D
E
C. 25 Production Wells – 2015/2016
 500/Mcf/d/well = 12.5 MMcf/d
 US$1.5 mn/well x 25 = US$36.4mn
 POD required
D. 20 km Pipeline -2015/2016




US$12.5 mn
Built by third party on BOO basis
Capacity 15 MMcf/d
Toll rate est. US$0.50/Mcf
E. Sales at Compression Station - 2016
 US$8.00/Mcf net back est.
 Supply to Bontang LNG
 Spare capacity 1,200 MMcf/d
Development Costs Est (US$)
Per Well
30 Wells
Drilling Facility
Completion
Water Management
Flow lines/Compression
Total
787,833
241,667
197,000
229,600
1,456,100
23,635,000
7,250,000
5,910,000
5,083,333
41,878,000
9
CBM
ASIA
DEVELOPMENTCORP
Kutai West Development Phase I & II
30 Well Development Schedule
A. 5 Well Production
Pilot - 2014
A
B. Sales to 10 MW
Power Plant - 2014
C. 25 Production Wells 2015/2016
D. 20 km Pipeline 2015/2016
B
E. Sales at Compression
Station - 2016
C
D
E
10
CBM
ASIA
DEVELOPMENTCORP
Kutai West Development Phase I & II
CBMA Estimates: Monthly Capex, Production and Operational Cash
Flow CAPITAL EXPENDITURE (US$ 000’s)
DAILY PRODUCTION (MMcf/d)
5 well
development
15 MMcf/d
additional wells
to maintain
production level
25 well
development
2.7 MMcf/d
OPERATIONAL CASH FLOW (US$ 000’s)
Drop as carry
obligation
repaid
Drop as carry
obligation repaid
Drop as cost
recovery pool falls
reducing tax shield
ACCUMULATED PRODUCTION (MMcf)
25.6 Bcf produced
3,890 Bcf remaining
5.3 Bcf produced
699 Bcf remaining
11
CBM
ASIA
DEVELOPMENTCORP
Kutai West Development Phase I & II
CBM Asia Estimates: Capex and Cash Flow Estimates
KUTAI WEST DEVELOPMENT: PHASE I & II BUDGET FORECAST
USD
CAPEX - GROSS (100%)
- Phase I - 5 Well Production Pilot
- Phase 2 - 25 Well Development
- 20 km Pipeline
- Admin & Exploration
Sub Total
OPERATIONAL CASH FLOW - GROSS (100%)
- Revenue
- Operating Costs
- FTP
- Governnment Take
- Income Tax
Total
Net Cash Flow - Gross (100%)
CAPEX - NET TO CBMA
- Phase I - 5 Well Production Pilot
- Phase 2 - 25 Well Development
- 20 km Pipeline
- Admin & Exploration
Sub Total
OPERATIONAL CASH FLOW - NET TO CBMA
- Revenue
- Operating Costs
- FTP
- Governnment Take
- Income Tax
Total
Net Cash Flow - Net to CBMA
2014
-6,310,000
0
-850,000
-7,160,000
2015
2016
2014-2016
0
0
-34,032,333
-1,536,000
Built by Third Party (BOO)
0
-750,000
-34,032,333
-2,286,000
-6,310,000
-35,568,333
-1,600,000
-43,478,333
185,658
-159,874
0
-37,132
-65,352
-76,699
5,362,449
-1,005,593
0
-1,072,490
-1,887,582
1,396,784
28,109,212
-2,100,632
-2,810,921
-505,966
-890,500
21,801,193
33,657,319
-3,266,098
-2,810,921
-1,615,587
-2,843,434
23,121,279
-7,236,699
-32,635,549
19,515,193
-20,357,054
-1,893,000
0
0
0
-7,630,020
-276,480
Built by Third Party (BOO)
0
-135,000
-7,630,020
-411,480
-1,893,000
-7,906,500
-255,000
-2,148,000
-390,000
-10,189,500
55,697
-47,962
0
-11,139
-19,605
-23,010
1,608,735
-301,678
0
-321,747
-566,275
419,035
8,432,764
-630,189
-843,276
-151,790
-267,150
6,540,358
10,097,196
-979,830
-843,276
-484,676
-853,030
6,936,384
-2,171,010
-7,210,985
6,128,878
-3,253,116
NOTES
 US$43.4 mn gross capex estimate
excluding 20 km pipeline
 Majority of development capex spend
(78%) in 2015 after 5-well production
pilot becomes operational
 20 km pipeline to be built by third party
on a BOO basis. No capex outlay.
 CBMA net contribution to development
capex is US$10.1 mn, majority in 2015
 Operational cash flow begins in 2014
with gas-to-power, increases during 2015
on full flow of 5 well production pilot
and ramps up in 2016 on start up of
Phase II’s 25 production wells
 Project turns operational cash flow
positive in 2016. 3.89 Tcf of recoverable
resources remaining to be developed
12
CBM
ASIA
DEVELOPMENTCORP
South Sumatra Basin: Sekayu PSC
2 Wells Flow Gas - Dewatering Test Show Excellent Results
SEKAYU PSC
Gross Area: 580 km2
WI: 26%
1.1 Tcf (276 Bcf net)
CBM-SE-02
Gas rate 10-30
Mcfd increasing
as well dewaters
2014 Sekayu PSC Development Plan
4
3
2
 SE-02: Continue dewatering, increase gas rate. Multi-well pilot
planned to accelerate dewatering and gas sales
 SE-04 : Workover existing well, test shallower coal seams
 SE-09 : Drill new shallow slim-hole 400-m TD corehole
1
Lemigas CBM Pilot
Santos and NuEnergy CBM Programs


Santos: “Encouraging results…4 pilot wells
due onstream before year-end 2013.”
NuEnergy: 200 Mcf/d rate from one well
13
CBM
ASIA
DEVELOPMENTCORP
CBM Asia Budgeting
Cost Reductions: Administration, Operational Office and Assets
VANCOUVER OFFICE





Reduce admin, IR, legal, BoD from US$2.0-3.2 m to US$1.0-1.4 m per year
Overhead costs and staff cut in half
Office size reduced
CEO and VP Development salaries cut by 50%, CFO’s reduced
Investor relations costs significantly reduced
JAKARTA OFFICE




Reduced from US$1.8 mn to US$840 K per year
Office size cut from 560 m2 to 150m2
Staff level rationalized from 22 to 4
Focus on development of Kutai West and Sekayu
ASSETS



Focus on near term development opportunities - Kutai West
Limit Sekayu PSC capex until development plan
Postpone exploration capex (Hulu PSC, Besar PSC and KKI PSC)
14
CBM
ASIA
DEVELOPMENTCORP
CBM Asia Budgeting
Use Of Proceeds and Source of Funds
2014-2016: CBMA BUDGET PROJECTION
USD
2014
2015
2016
NOTES
2014-2016
SOURCE OF FUNDS
Kutai West Operational Cash Flow
Debt With Share Offer (2014)
Future Financing
Total
Canadian Dollars
-23,010
10,000,000
9,976,990
10,974,689
419,035
12,500,000
12,919,035
14,210,939
6,540,358
-10,000,000
7,500,000
4,040,358
4,444,394
6,936,384
0
20,000,000
26,936,384
29,630,022
USE OF FUNDS
Kutai West Development
- Phase I - 5 Well Production Pilot
- Phase 2 - 25 Well Development
- Admin & Exploration
Sub Total
1,893,000
0
255,000
2,148,000
0
7,630,020
0
7,630,020
0
276,480
135,000
411,480
1,893,000
7,906,500
390,000
10,189,500
Sekayu Exploration/Planning
JKT Office & Exploration Support
Total Operations
600,000
1,568,797
4,316,797
900,000
944,348
9,474,368
900,000
1,032,903
2,344,383
2,400,000
3,546,048
16,135,548
Corporate, Legal, Admin & BOD
Financing (Interest & Finders Fees)
KII Payment
Total Corporate
1,621,064
1,650,000
1,400,000
4,671,064
1,358,256
1,800,000
0
3,158,256
1,058,334
900,000
0
1,958,334
4,037,654
4,350,000
1,400,000
9,787,654
Total
Canadian Dollars
8,987,861
9,886,647
12,632,624
13,895,887
4,302,717
4,732,989
25,923,202
28,515,522
Corporate
2014 - Phase I: CAD11 mn Loan with Bonus Shares




Phase I Kutai West: 5 well production pilot
First gas and revenue
Upgrade resource to proved, probable and contingent
Optimize technique for phase II
 Sekayu PSC Exploration Planning
 Further production testing for development plan
 Vancouver and Jakarta Expense & Rationalization
 Smaller offices, staff & executive pay reduction

Financing: Debt interest payment & finders fees

Kutai II: Arbitration award payment
2015 - Phase II: CAD14 mn Financing

New funding round based on success of the Kutai West 5
well production, resource upgrade, offtake agreement
and 2016 cash flow projection

Potential project financing supported by offtake
agreements and conversion of resources to proved
reserves, with substantial increase in asset value
15
CBM Asia Budgeting
Financing: Loan With Bonus Share Offer - CAD11,000,000
Unit

VALUE PER UNIT: CAD20,000

NUMBER OF UNITS: 550

TOTAL VALUE: CAD11,000,000

DETAIL: One Unit consists of one Note in the principal
amount of CAD20,000 and 80,000 Bonus Shares
Note: continued

INTEREST: Simple interest rate of 18% per annum, calculated
annually and payable semi-annually

TERM: 2 years and matures on the 2nd anniversary of the
Closing Date of the Unit


SECURITY: Secured on a pro-rata undivided basis, by a
pledge over shares of 0865665 BC Ltd, a wholly owned
subsidiary of CBM Asia, which holds a 26% net interest in the
Sekayu PSC. Each Unit will have a right to 0.15% interest in
0865665 BC Ltd.
SEKAYU PSC: 51-101 engineered recoverable resource of
1,062 BCF or 177 MMboe (276 Bcf net or 46 MMboe net to
CBM Asia). One Unit (0.15%) = 414 MMcf or 69,000 boe
security resource.
EARLY REPAYMENT: A) Right to repay Note, in whole or in
part after the 1st anniversary without notice, bonus or
penalty. B) Right to repay Note before 1st anniversary to
Trustee equal to:
1) Principal amount
2) 1st year full interest minus any paid interest
3) Immediate discharge of Security
4) Repayment to holder 1st day following 1st anniversary
Note

CBM
ASIA
DEVELOPMENTCORP

TRUSTEE: Third party trustee appointed by issuer
Bonus Shares

Issued to holder on closing of Unit

One Bonus Share equal to one common share

4 Bonus Shares per CAD1.00 of loan principal (80,000 Bonus
Shares per unit)

4 month and 1 day lock up
16
CBM
ASIA
DEVELOPMENTCORP
CBM Asia
Share Structure, Share Holders and Financial Position
Share Structure
Common Shares Outstanding (mn)
Current
Capital Raise
Debt with Bonus Shares
And Finder Warrants
Projection
182.7
44.0
226.7
(19.4% of projected outstanding)
Warrants (mn)
16.7
16.5
33.2
(finders warrants estimate)
Options (mn)
11.3
0
11.3
Fully Diluted (mn)
210.7
60.5
271.2
nil
CAD12.0 mn (2 year debt)
CAD12.0 mn
Debt (CAD)
5.2%
SIGNIFICANT SHAREHOLDERS
32.2%
Indus Capital Partners LLC
Management /Closely Held
54.0%
15.5%
5.2%
8.7%
Management / Closely Held
Institutions
Professional
Retail
17
CBM
ASIA
DEVELOPMENTCORP
CBM Asia
Corporate Information and Corporate Governance
Listings:
Canada: TSX Venture Exchange – symbol TCF
Germany: Frankfurt Stock Exchange – symbol IY2
USA: OTC – CBMDF
Reporting Jurisdictions: British Columbia, Alberta, Ontario
CUSIP Number: 1248XC101
Head Office:
CBM Asia Development Corp.
404 - 815 Hornby Street
Vancouver, British Columbia
Canada V6Z 2E6
Jakarta Office:
Talavera Office Park 3rd Floor
Jl T.B. Simatumpang, Kav. 22-26
Jakarta Selatan 12430
Indonesia
Legal Counsel: Canada
Gregory T. Chu, A Law Corporation
650- 1188 West Georgia St.
Vancouver, British Columbia
Canada, V6E 4A2
Transfer Agent and Registrar:
Computershare Trust Company of Canada
3rd Floor, 510 Burrard Street
Vancouver, British Columbia
Canada, V6C 3B9
Auditors:
BDO Canada LLP
600 Cathedral Place
925 West Georgia Street
Vancouver, British Columbia
Canada, V6C 3L2
Corporate Governance Policies
1.
2.
3.
4.
5.
6.
7.
Code of Business Conduct and Ethics
Disclosure
Insider Trading
Board Charter
Audit Committee Charter
Compensation Committee Charter
Governance and Nominating Committee Charter
Anti Corruption Policies
1.
2.
Anti Corruption
Whistleblower
Contact
Mr. Charlie Bloomquist, President & C.E.O.
email: [email protected]
Phone: +1 303 263 3445 (US)
Mr. Adam Clarke, VP Development
Email: [email protected]
Phone: (852) 9106 4969 (Hong Kong)
18
CBM
ASIA
DEVELOPMENTCORP
CBM Asia Development Corp.
Appendix
19
CBM
ASIA
DEVELOPMENTCORP
Indonesian CBM
Natural Gas: Strong Price Structure & Underutilized Infrastructure
Bontang LNG
SINGAPORE MARKET
Domestic :USD11-15/Mcf
Regional LNG Hub
DURI STEAM FLOOD MARKET
USD11/Mcf Linked to Oil
Grissik-Duri Pipeline
Length: 563 km
Capacity: 420 MMcf/d
Spare Capacity: 900 MMcf/d
DURI
NORTH ASIA LNG
EXPORT MARKET
>USD15/Mcf Linked to
oil price
SINGAPORE
Grissik-Singapore
Pipeline
Length: 477 km
Capacity: 350 MMcf/d
KUALA
KAPUAS I
HULU
BESAR
KUTAI WEST
Grissik
SEKAYU
South Sumatra –
West Java I & II Pipeline
Length: 1,000 km
Capacity: 970 MMcf/d
Compression: 2.3 Bcf/d
West Java
LNG Import
500 MMcf/d
JAKARTA
Proposed South Kalimantan
Bontang Pipeline
Deliver Barito CBM to
Bontang LNG
Proposed Kalimantan –
Java Pipeline
Length: 1,219 km
Capacity: 1,000 MMcf/d
Semarang
Planned Central
Java LNG Import
400 MMcf/d
TANGGUH LNG
IMPORTS
JAVA MARKET
Pop: 103 mn
GRP/capita: USD2,200
Gas Price: USD6-12/Mcf
Source: Indonesian Government reports, Company reports, Migas, JKT Post, PGN
20
Why Indonesian CBM?
Sekayu & Kutai West Results Superior to USA Analog
Depth
(Feet)
CBM
ASIA
DEVELOPMENTCORP
Mud Gas Units Unknown
0
100 200 300 400
South Sumatra geology compares favorably with the Powder
River Basin (Wyoming, USA), which most experts consider
best commercial analog for Indonesia.
Fm 1
0
500
1,000
Fm 2
The Powder River Basin is the world’s second largest CBM field,
producing 1.5 Bcf/d and expected to recover 30 Tcf.
1,500
JAF01525.CDR
Fm 3
2,000
2,500
Reservoir
Well test results indicate that Sekayu CBM reservoir
conditions are significantly better than in the Powder
River Basin analog.
Wyoming USA
Indonesia
Indonesia
Powder River
South Sumatra
East Kalimantan
Big George Coal
Sekayu PSC
indicates better result
Kutai West PSC
Property
Parameter
Source
Parameter
Source
Depth (ft)
1,200
BBC
2,000
Well Logs
Coal Thickness (ft)
120
BBC
147
Well Logs
100
Well logs
Coal Rank (Ro)
0.3%
USGS
0.3%-0.4%
Lab Test
0.4-0.47%
Joint Study
50
USGS
>100
Corelab
150-280
Geogas
Higher Gas Content = more potential gas in place
Gas Saturation
60%
USGS
95%
Weatherford
79-100%
Geogas
Higher Saturation = faster potential gas production
Permeability (mD)
500
USGS
500
Medco
5-15
Schlumberger
Current Gas Price (USD/Mcf)
3.00
NYMEX
5.50-9.40
Public
7.50 - 12.00
Public
Gas Content (ft3/ton d.a.f)
Parameter
Source
1,000-2,500 Schlumberger
Comment
Deeper = more pressure, higher potential gas content
Thicker = more potential gas in place
Higher Rank = higher potential gas content
Comparable
Better Economics
Source: BBC = Bill Barrett Resources 2011. USGS = US Geological Survey, 2004
21
CBM
ASIA
DEVELOPMENTCORP
Indonesian CBM
Low Geological Risk: Abundant Conventional and Coal Control Data
Depth
(Feet)
Mud Gas Units Unknown
0
100 200 300 400
0
Fm 1
Sekayu PSC: 8 conventional wells inside and 6 outside
the PSC area, substantial seismic coverage.
Thick Coal Seams with Gas Kicks
500
CBM SE-02
CBM SE-04
Fm 2
CBM SE-03
1,000
CBM SE-01
1,500
2,500
Hulu PSC: 2D seismic showing coal seams and two
conventional petroleum wells north of the block.
JAF01525.CDR
Fm 3
2,000
KUTAI WEST
NSAI PROJECT RISK ANALYSIS
Discovery Risk Factors
Coal Quantity
Gas Content
Coal Permeability
Probability of Discovery
Kutai West PSC & Kutai II PSC:
extensive seismic coverage and
good conventional well control.
100%
100%
80%
80%
Development Risk Factors
Gas Producibility
Economic Recovery
Probability of Development
70%
90%
63%
Probability of Commerciality
50%
22
CBM
ASIA
DEVELOPMENTCORP
Indonesian CBM
Low Capital At Risk: USD7.5-10.0 mn per PSC to Plan of Development
LOW CAPEX EXPLORATION PHASE
HIGH CAPEX
100%
Acquisition
USD2.5-3.0 mn
DERISK RATE
80%
60%
Study
USD300-500K
Signature Bonus
USD1.0mn
Performance Bond
USD1.0-1.5mn
Exploration Phase
Four slim wells & one 5-Well
Production Pilot. USD6.0-8.5 mn
DIVESTITURE
ASSET SALE
Determine:
coal depth, coal thickness, permeability, gas
content, gas saturation, well spacing, well type,
production flow rate and reserve audit.
Development Phase
production ramp up
cost reduction
asset sale/jv potential
NSAI RISK ASSESSMENT
50% chance of commercialization
at Kutai West PSC at core drilling
stage
40%
Value Creation Trend
rapid increase
Capex Trend Assumption: 1.0
Tcf field costs USD1.0 bn to
develop and USD10 mn spent
to derisk to 70-80% confidence
level
Capex Trend
Low capex pre
development
20%
0%
Long Term
Gas Sales
Develop
Build Out
Gas
Contract
Develop
Plan
Pilot
Gas Sales
Production
Test
Core
Drilling
G&G
Study
Evaluation
Study
EXPLORATION AND DEVELOPMENT CYCLE
23
CBM
ASIA
DEVELOPMENTCORP
Indonesian CBM PSC Terms
Fiscal Flow = 40-45% After Tax; Best Terms In Country
Revenue Flow
Indonesia
GROSS PRODUCTION
Contractor
FTP – 5-10%
(19.6 -21.8%,100% )
(-) FTP (5-10%)
FTP 5-10%*
(78.2-80.4%)
(-) Cost Recovery (90-100%)
Revenue
minus FTP
(royalty)
minus Cost
Recovery
(formula to recover
capex and opex)
Profit Petroleum Split
Contractor Share
(71.4 - 80.4%) (gas)
Indonesia Share
(19.6 - 28.6%) (gas)
* Royalty split with
government in
Sekayu PSC.
= Profit Split
(government and
contractor)
(-) DMO (25% max)
Domestic Market
Obligation
(+) DMO Fee
(no price
adjustment)
Taxable Income
- Income Tax
(-) Income Tax (40-44%)
INDONESIA TAKE
CONTRACTOR TAKE
= Contractor Take
24
CBM
ASIA
DEVELOPMENTCORP
Why Indonesian CBM?
Natural Gas: Conventional Production Declining – 2 Bcf/d Drop by 2020
North & Central Sumatra
2P Reserves
2P Recoverable: 16.0 Tcf
2P Remaining: 687 Bcf
Technical: 3.1 Tcf
Kutai /Makassar 2P Reserves
2P Recoverable: 39.5 Tcf
2P Remaining: 11.3 Tcf
Technical: 2.8 Tcf
Natuna 2P Reserves
2P Recoverable: 4.8 Tcf
2P Remaining: 2.8 Tcf
Technical: 45.8 Tcf
South Sumatra 2P Reserves
2P Recoverable: 13.8 Tcf
2P Remaining: 6.63Tcf
Technical: 3.4 Tcf
Sumatra, Java and
Kalimantan 2P Reserves
2P Recoverable: 87.5 Tcf
2P Remaining: 26.9 Tcf
Technical: 59.5 Tcf
800
West Java
East Java 2P Reserves
2P Recoverable: 6.2 Tcf
2P Remaining: 4.0Tcf
Technical: 2.0 Tcf
JAKARTA
700
600
500
Source: CBM Asia and
public sources
400
300
200
100
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Production: MMcf/d
West Java 2P Reserves
2P Recoverable: 6.3Tcf
2P Remaining: 1.6 Tcf
Technical: 1.4 Tcf
25
CBM
ASIA
DEVELOPMENTCORP
Indonesian Natural Gas
Strong Domestic and Export Demand Trends
9.0

2010, 2011 & 2012 Indonesian gas production fell - likely decline in 2013.

Review of over 374 gas fields forecast sharp decline in production in Java,
Sumatra and Kalimantan through to 2020.

28 deep water wells drilled in Eastern Indonesia since 2011 – one success.

Gas consumption has risen sharply in the past 10 years but fell in 2010, 2011 &
2012 due to a decline in supply. With higher supply consumption would rise.

Indonesia’s consumption rates are far below regional peers.
Indonesia Natural Gas (BCF/d)
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
Pop
mn
GDP /
Capita
USD
Australia
Bangladesh
China
India
Indonesia
Japan
Korea, South
Malaysia
New Zealand
Pakistan
Philippines
Singapore
Taiwan
Thailand
Vietnam
23
150
1,344
1,241
242
128
50
29
4
177
95
4
24
70
88
60,642
735
5,445
1,489
3,495
45,903
22,424
9,656
33,450
1,194
2,370
46,241
17,316
4,972
1,411
Africa
Asia
Eurasia
Europe
C&S America
Middle East
North America
World
1,039
3,872
287
577
480
220
461
6,938
Production
Consumption
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
0.0
Net Export
Source: EIA and World Bank
70.0
Asia-Pacific Natural Gas (BCF/d)
60.0
50.0
40.0
30.0
20.0
10.0
Production
Consumption
Source: EIA, BP and World Bank
Net Import
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
0.0
NATURAL GAS
2011
-------- Consumption -------------- Production --------- Surplus/(Deficit) -Mcf /
Bcf /
10 Year
Mcf /
BCF /
10 Year
Mcf /
BCF /
Capita / Y
Day
Growth Capita / Y
Day
Growth Capita / Y
Day
43.0
4.7
3.4
1.8
5.5
31.1
32.6
37.5
34.3
7.8
1.1
70.5
24.2
23.7
3.1
2.7
1.9
12.7
6.2
3.6
10.9
4.4
3.0
0.4
3.8
0.3
0.8
1.6
4.5
0.7
10%
81%
336%
144%
67%
28%
97%
10%
-29%
71%
45%
650%
99%
78%
241%
70.2
4.7
2.7
1.4
11.1
0.9
0.2
75.5
34.9
7.8
1.1
0.0
0.4
18.8
3.1
4.4
1.9
9.9
4.6
7.4
0.3
0.0
6.0
0.4
3.8
0.3
0.0
0.0
3.6
0.7
29%
81%
215%
82%
31%
-47%
na
28%
-28%
71%
45%
na
-69%
85%
241%
27.2
0.0
-0.7
-0.5
5.6
-30.2
-32.3
38.1
0.6
0.0
0.0
-70.5
-23.8
-4.9
0.0
1.7
0.0
-2.7
-1.6
3.7
-10.6
-4.4
3.0
0.0
0.0
0.0
-0.8
-1.5
-0.9
0.0
2.4
5.5
89.5
32.8
10.8
47.6
64.8
16.4
6.9
58.5
70.5
51.8
14.2
28.7
81.8
312.4
7%
84%
27%
4%
48%
37%
8%
25%
6.9
4.3
104.3
17.1
11.8
78.0
65.0
16.8
19.5
45.8
82.2
27.0
15.5
47.1
82.1
319.2
52%
62%
20%
-13%
54%
98%
11%
29%
4.4
-1.2
14.9
-15.7
0.9
30.4
0.3
0.4
12.6
-12.7
11.7
-24.8
1.2
18.4
0.3
6.8
Source: EIA and World Bank
26
CBM
ASIA
DEVELOPMENTCORP
Indonesian Natural Gas
Market Prices
Continued economic growth:
Legacy Contract Prices Adjusted
Sets New Floor at USD5.50-6.00/MMbtu
1) support higher prices
2) increase demand
----- Price USD/MMbtu -----Seller
COP/Pertimina
COP
Santos
COP
Pertimina
Hess
Medco
PHE
Medco
Buyer
PGN
Petronas
PGN
PGN
PGN
PLN
PLN
PLN
MEB
Orginal
5.06
3.10
2.40
1.85
2.20
2.38
2.42
3.00
3.41
New
10.13
6.00
5.00
5.60
5.50
5.10
4.45
6.00
6.04
%
100%
94%
108%
203%
150%
114%
84%
100%
77%
Date
Jun-12
Mar-12
Mar-12
May-12
May-12
Sep-12
Sep-12
Sep-12
Dec-12
Production decline has resulted in:
1) a reset in legacy contract prices
2) new contract prices trending higher
LNG imports will set gas price trend in:

High oil prices:

Source: Jakarta Post, Migas, Company Reports
New Domestic Gas Contract Prices
USD/MMbtu (59 samples)
allow gas to act at low costs diesel alternative in the industrial and
power sectors
CBM Pilot Gas Price:

Source: Jakarta Post, Migas, Company Reports
Java and North Sumatra at USD11.00/Mcf




Minimum of USD7.50/MMbtu – no documentation from the
government to confirm however consistently found in contracts
Dart Energy South Sumatra: USD7.50/MMbtu
Dart Energy Sangata West: USD7.90/MMbtu
Vico Sanga Sanga: PLN @ USD7.50/MMbtu
NuEnergy: PT Dharma Pratrama Sejati – 1-5 MMcf/d @
USD10.00/MMbtu
CBM Contract Price:

Likely priced at market rates - USD6.00-11.00/MMbtu with escalation
clauses (3% per annum)
27
CBM
ASIA
DEVELOPMENTCORP
Why Indonesian CBM?
Inexpensive: Shallow Wells and Available Control Data
Low Drilling Costs: current drilling costs run at approximately USD1.0 mn per well based on the use of 500-750 HP rigs. Drilling
costs are expected to fall sharply as lower horsepower dedicated CBM rigs and slim hole mining rigs are deployed. These drilling
costs compare favorably to onshore conventional drilling costs in Indonesia of USD10-30 mn per well. Shale exploration is not
expected to start for several years and faces a critical shortage of fracking equipment.
Coal Mining
Conventional
Conventional
Coal Mining
Depth
(Feet)
Mud Gas Units Unknown
0
100 200 300 400
Fm 1
0
500
CBM: Optimum
depth Range 2001,000 meters
Fm 2
1,000
1,500
2,500
JAF01525.CDR
2,000
Fm 3
Conventional well
penetrates coal seam
providing well log data
indicating coal thickness
and gas kicks
28
CBM
ASIA
DEVELOPMENTCORP
Why Indonesian CBM?
Value Potential: 1.0 Tcf NPV10 Model = USD400-700 mn
1.0 Tcf Recoverable CBM Project Value Sensitivity (NPV10)
Model Assumptions
1,000
Indonesia CBM PSC terms dictate contractor after-tax take is
approximately 45%. Based on these terms and the following
recovery, capex and operating assumptions:
900
1. Estimate ultimate recovery (EUR) /well: 1.0 Bcf
2. Drilling, completion & gathering costs/well: USD763 K
3. Operating & G&A costs: USD1.96/Mcf
600
1.0 Tcf of recoverable resources result in an in-the-ground predevelopment value estimate range USD400-700 mn based on
likely realized gas price range of USD6.00-8.00/Mcf (with 3%
annual escalation rate).
300
To achieve an 80% confidence level in the NPV(10) value
requires approximately USD7.5-10.0 million of capex:
 USD2.5-3.0 mn - signature bonus, study and performance
bond
USD/Mcf
USDmn
1.20
1.00
800
700
0.80
500
0.60
400
0.40
200
0.20
100
0
0.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Gas Price (USD/Mcf)
Note: This model has been prepared solely for illustrative purposes. It does not represent actual values
associated with CBM Asia’s current asset portfolio.
 USD6.0-8.5 mn – four slim core wells and one 5 well
production pilot tests to prove gas content, permeability, coal
thickness and gas saturation, well spacing, well type and
production flow rate.
29
CBM
ASIA
DEVELOPMENTCORP
Indonesian CBM
Value Potential: Australia Transaction Comparison
Australia’s coalbed methane industry has consolidated in recent years. These transactions
provide an indication of potential CBM asset values in Indonesia.
Gas Price (USD/Mcf)
Domestic
Export
Queensland’s lower tax regime and lower drilling costs are mostly offset by Indonesia’s higher
gas prices and established/operating infrastructure – pipeline/LNG facilities.
Fiscal Regime
Royalty
MRRT/Profit Petroleum
Income Tax
Total Tax
* Grant Samuel
Based on 33 reported transactions, the 2P average transaction value is USD1.03/Mcf, with a
3P average transaction value of USD0.45/Mcf.
4.00
3.50
USD/Mcf
2.50
2.00
Indonesia
3.50-4.00*
na
5.00-9.50
8.00-12.00
Royalty/Tax
PSC
10%
5-10%
22.5%
19.6%
30.0%
44.0%
45.5%^
55.0%
^ Queensland Resource Council
2P avg = USD1.03/Mcf
3P avg = USD0.45/Mcf
2P Transaction Price
3P Transaction Price
Linear (2P Transaction Price)
Linear (3P Transaction Price)
3.00
Queensland
1.50
1.00
0.50
0.00
1
1
2
3
4
5
6
7
8
9
10
11
2
3
4
5
6
7
8
Jul-03 - Oil Company of Australia Limited
Jul-05 - Fairveiw CSG
Sep-05 - Sydney Gas Joint Venture
Sep-05 - Moura CSG Field
Sep-05 - ATP638P, PL198
Feb-06 - Argyle and Lauren CSG Project
May-06 - CH4 Gs Limited
Jun-06 - Maranbah Gas Project
Jul-06 - Arrow Energy NL
Dec-06 - Queensland Gas Company Limited
Feb-08 - Walloons CSG interest
9
10
11
12
13
14
15
16
17
18
19
20
21
22
12
13
14
15
16
17
18
19
May-08 - Santos CSG interests
Jun-08 - Arrow Australian CSG Assets
Aug 08 - Sunshine Gas Limited
Sep-08 - Origin Energy CSG Assets
Oct-08 - Queensland Gas Company Limited
Dec-08 - Gloucester Project
Dec-08 - Sydney Gas Limited
Feb-09 - Pure Energy Resources Limited
Apr-09 - Tipton West Joint Venture
Apr-09 - ATP788P
Jul-09 - Narrabri Gas Project
20
21
22
23
24
25
26
27
28
29
30
31
32
33
23
24
25
26
27
28
29
30
31
32
33
Jul-09 - Eastern Gas Star Limited
Dec-09 - ATP650
Mar-10 - Dawson SeamGas CSG Fields
Mar-10 - Arrow Energy Limited
Sep-10 - Glandstone LNG
Sep-10 - Apollo Gas Limited
Dec-10 - Gladstone LNG
Apr-11 - Australia Pacific LNG
Apr-11 - ATP688P & ATP769P
Jul-11 - East Star Gas Limited
Source: Grant Samuel
Jul-11 - Narrabri Gas Project
30
Indonesian CBM
CBM Development Likely to Mirror Australia & USA
USA
CBM Gas In
Place
Reservoir
Quality
>500 Tcf
China
>500 Tcf
Major Oil
Company
CBM Activity
>500 Tcf
Indonesia
453 Tcf
Excellent:
Challenging:
Excellent:
Excellent:
Mostly High Gas
Saturation &
Permeability
Low Gas
Saturation &/or
Permeability
Mostly High Gas
Saturation &
Permeability
Mostly High Gas
Saturation &
Permeability
Fully Mature
Struggling
Development: AUD30bn of
mergers/acquisitions
Exploration: Land grab and
de-risking now underway
Production: 5 Bcf/d
Production: only 300 MMcf/d
after 20 years
Production: >600 MMcf/d after 8
years - likely to outstrip USA by
2020
Multi-billion dollar consolidation
likely to occur as in Australia
Development
Stage
Australia
CBM
ASIA
DEVELOPMENTCORP
BHP, BP,
ConocoPhillips,
Chevron all tested CBM
but then left due to poor
geology.
31
CBM
ASIA
DEVELOPMENTCORP
STATEMENTS CONCERNING RESOURCE ESTIMATES
1.
Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future
development projects. Prospective resources have both an associated chance of discovery and a chance of development. The chance of commerciality is the product of these two risk
components. There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is
developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources. Prospective gas
resources are undiscovered resources that represent exploration opportunities and quantify the development potential in the event a petroleum discovery is made and should not be
construed as reserves or contingent resources.
2.
Unrisked prospective resources for CBM prospects are estimated ranges of recoverable gas volumes assuming their discovery and development and are based on estimated ranges of inplace volumes. Geologic risking of prospective resources addresses the probability of success for the discovery of a significant quantity of potentially moveable petroleum; this risk
analysis is conducted independent of estimations of petroleum volumes. For CBM prospects, principal geologic risk elements include coal quantity, gas content, and coal permeability.
Development risking of prospective resources for CBM accumulations should include consideration of whether the entire area addressed by the assessment can and will be developed;
this component is generally unique to CBM prospects because of the thickness and areal extent and wide variability in rock, gas content, and production characteristics across that areal
extent. For CBM prospects, principal development risk elements are reservoir quality across the evaluated acreage, development and application of technology needed to commercially
produce the acreage, the ability to depressurize the reservoir over a reasonable period of time, project commercial conditions (financial, marketing, legal, social, and governmental
factors), and a reasonable expectation of a commitment to develop the acreage.
3.
The resource figures for the Sekayu and Kutai West PSCs contained in this Presentation have been derived from the Sekayu Report and Kutai West Report, respectively, prepared by NSAI
and represent unrisked prospective gas resources. Theses resources were estimated using probabilistic methods and are dependent on a CBM discovery being made. If a discovery is
made and development undertaken, the probability that the recoverable volumes will equal or exceed the unrisked estimated amounts is 90% for the low estimate, 50% for the best
estimate, and 10% for the high estimate. The resources figures referred to in this Presentation represent best estimates. Readers are referred to the Sekayu Report and the Kutai West
Report directly for details of the low and high estimates for prospective resources associated with the Sekayu PSC and Kutai West PSC, respectively, the assumptions and qualifications
made and relied upon by NSAI in preparing such reports and certain risks and uncertainties associated with the recovery of unrisked prospective resources and other significant factors
relevant to the resource estimates. Copies of the Sekayu Report and the Kutai West Report are available for review under CBM Asia’s profile on SEDAR at www.sedar.com and on the
Company’s website at www.cbmasia.ca.
4.
The resource figures contained in the Sekayu Report were estimated on the Sekayu PSC as a whole. The net resource figures attributable to CBM Asia’s interest in the Sekayu PSC
contained in this Presentation were calculated by management based on CBM Asia’s 26% participating interest in the Sekayu PSC.
5.
All references to resource or GIP (gas in place) estimates derived from the Society of Petroleum Engineers Paper 88630 (“SPE 88630”) contained in this Presentation were not prepared in
accordance with the requirements of NI 51-101 and the COGE Handbook. CBM Asia does not treat these estimates as “resources” as defined in NI 51-101 as such estimates have not, to
CBM Asia’s knowledge, had sufficient work completed by a “qualified reserves evaluator” to allow for such classification under NI 51-101 and therefore should not be relied upon as a
guarantee of resources or reserves. These estimates have been presented to provide an indication of the CBM resource potential in Indonesia and as a guide to future acquisition,
exploration and development activities. Actual resources or reserves, if any, may differ significantly. Scott H. Stevens, Chairman of CBM Asia, is the co-author of SPE 88630 which was
written prior to Mr. Stevens joining CBM Asia.
6.
Any references in this Presentation to CBM Asia’s resource “target” (or derivatives of such term) represent the Company’s target goal and do not constitute an actual estimate of
resources for CBM Asia’s current acreage. CBM Asia also cautions that such target was not prepared by a “qualified reserves evaluator” within the meaning of NI 51-101 and there are no
assurances that the Company will be successful in achieving such target, in whole or in part.
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CBM
ASIA
DEVELOPMENTCORP
TERMS OF USE AND DISCLAIMER
1. This document does not comprise an admission document, listing particulars or a prospectus relating to CBM Asia Development Corp (“CBM Asia”) or any entity
controlled by, controlling or in common control with CBM Asia (collectively the “Company”), nor does it constitute or form part of an offer or invitation to purchase,
sell or subscribe for, any securities of the Company and should not be relied on in connection with a decision to purchase or subscribe for any such securities. This
document and any accompanying verbal presentation (collectively the “Presentation”) do not constitute a recommendation regarding any decision to invest in or
sell or purchase securities in the Company.
2. The Presentation is being supplied to you solely for your information to provide you with background on the Company. The Presentation provides information in
summary form and is not intended to be complete. It does not purport to be, and should not be relied upon as, advice. It does not take account of your investment
objectives, financial situation or needs and no determination of suitability has been made in relation to your receipt of it (save under paragraphs 5 and 6 below).
You should take your own independent financial and other advice. No reliance may be placed for any purpose whatsoever on the information contained in the
Presentation or the completeness or accuracy of such information. The information contained in the Presentation has been prepared by the Company.
3. No representation, warranty or guarantee, express or implied, is given by or on behalf of the Company or their respective shareholders, directors, officers or
employees or any other person as to the fairness, accuracy, correctness or completeness of information or opinions contained in this Presentation (including as to
the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, results or statements in relation to future matters contained in the
Presentation), and no liability is accepted for any such information or opinions (including in the case of negligence, but excluding any liability for fraud).
4. The Presentation contains forward-looking statements, which relate, inter alia, to the Company’s proposed strategy, plans and objectives. Such forward-looking
statements are based on a number of estimates and assumptions that are subject to significant exploration, business, economic, regulatory and competitive
uncertainties and involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual
performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forwardlooking statements and neither the Company accept any obligation to disseminate any updates or revisions to such forward-looking statements, save as required by
law. See “Forward Looking Statements” below.
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FORWARD LOOKING STATEMENTS
CBM
ASIA
DEVELOPMENTCORP
Except for statements of historical fact, certain information contained in the Presentation including management’s assessment of future plans and operations constitute
"forward-looking statements" within the meaning of applicable securities and other laws. Often, but not always, forward-looking statements can be identified by the
use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “aims”, “anticipates”, “will”, “projects”, “target” or
“believes” or variations (including negative variations) of such words and phrases, or statements that certain actions, events, results or conditions “may”, “could”,
“would”, “might” or “will” be taken, occur or be achieved. By their very nature, forward-looking statements are subject to numerous risks and uncertainties, some of
which are beyond our control. Forward looking statements are based on the opinions and estimates of management at the date the statements are made, as well as a
number of assumptions made by, and information currently available to, CBM Asia concerning, among other things, anticipated geological formations, gas content,
saturation and permeability, well and financial performance, business prospects, strategies, regulatory developments and approvals, future commodity prices, the
existence of future resources or reserves, if any, and productions level of CBM Asia’s assets, the ability to obtain financing on acceptable terms, the ability to negotiate,
enter into and comply with future contracts and agreements including, but not limited to, individual farm-in, operating and related agreements for specific PSCs or joint
studies contemplated under CBM Asia’s joint venture agreement with ExxonMobil, the ability to acquire production and reserves through acquisition, development and
exploration activities, and that there will be no significant events occurring outside of CBM Asia’s normal course of business. Although CBM Asia considers these
assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
In addition, many of these assumptions are based on factors and events that are not within the control of CBM Asia and there is no assurance they will prove to be
correct. Factors that could cause actual results to vary materially from results anticipated by such forward looking statements include, but are not limited to, the effect
of and changes in general economic and market conditions, risks associated with coalbed methane exploration, development, production, marketing and
transportation, loss of markets, industry conditions and competition, volatility of commodity prices, currency fluctuations, imprecision of resource and/or reserve
estimates, environmental risks, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes,
competition from other industry participants, the ability to access qualified personnel, field services and equipment including drilling rigs, failure of plant, equipment or
processes to operate as anticipated, acquisitions not being completed or integrated successfully, decisions by regulators and the ability to access sufficient capital from
internal and external sources, as well as those risk factors discussed or referred to in CBM Asia’s public filings with the securities regulatory authorities in those
provinces of Canada in which CBM Asia is a reporting issuer and available on SEDAR at www.sedar.com. Although CBM Asia has attempted to identify important factors
that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions,
events or results not to be as anticipated, estimated or intended.
Readers are cautioned not to place undue reliance on the forward-looking statements contained in the Presentation as the assumptions used in the preparation of such
information, although considered reasonable at the time of preparation, may prove to be imprecise and actual results, performance or achievements could materially
differ from those expressed or implied in such forward-looking statements and accordingly, no assurance can be given that any of the plans, intentions, events or
expectations anticipated by forward-looking statements will transpire or occur, or if any of them do so, what benefit, if any, CBM Asia will derive therefrom. Actual
results will differ and the difference may be material and adverse.
CBM Asia undertake any obligation to update forward looking statements if circumstances or management’s estimates or opinions should change except as required by
applicable securities laws.
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