Corporate Profile

Overview and Update

Chinook Energy Inc.(CKE) is a TSX listed oil and gas exploration and production company with current operations focused in North Africa and Western Canada. The company has offices in Calgary and Tunis.

Our people are experienced, qualified and motivated to deliver value in direct alignment with our shareholders.

We will deliver value to our shareholders through our ability to develop and deliver cost effective solutions in our core project areas where our focused expertise will allow us to develop a sustainable competitive advantage and support repeatable profitable growth.

We are committed to the safe and environmentally responsible development of our assets. Safety of the public, our personnel and our contractors is the primary consideration in all operations.

We are committed to fair and open business practices in contracting, commercial negotiations with partners, contractors, local interests and host governments.

We are committed to sharing the benefits of resource development in the local communities that are impacted by our operations to the degree possible, and will strive to minimise the scope and impact of our developments.

We recognise these commitments as core to our business and in the best interests of our shareholders.

The Company began in June 2003 with a mandate to identify and secure a balanced portfolio of exploration and exploitation opportunities in proven international hydrocarbon provinces that are characterized by competitive fiscal terms, low political risk and an abundance of opportunities. Technology applications developed in the relatively mature basins in North America, a lower cost structure with greater focus, and historically high commodity prices supporting a lower economic limit, all contribute to framing the opportunity we are trying to exploit in both domestic and international operations.

Our business plan is to create sustainable and profitable growth in reserves, production and cash flow in the oil and natural gas industry in the Western Canadian Sedimentary Basin ("WCSB") and internationally.  Since the completion of the Iteration Acquisition on June 29, 2010, we have had an opportunity to gain a more complete understanding of the production profile and the opportunities in the former Iteration asset base and have sold down non-core assets while developing a focused plan to grow the portion of the asset base where we believe we can deliver sustainable profitable growth.  We intend to transition from a natural gas weighted conventional producer towards a stronger oil and liquids production base through the expansion of an international light oil platform and an increased focus on select oil opportunities in the WCSB business.

Subject to a recovery in Canadian natural gas prices, we have the opportunity to increase the contribution to production from the exploitation of resource play concepts, particularly in the Montney.  We intend to continue to dispose of non-core properties through sales or swaps and focus the reinvestment of Canadian cash flow on our conventional multi-zone core areas at Grande Prairie, Peace River and Gilby.  These core areas currently represent 68% of our Canadian production and are areas where we have a competitive cost structure, facility infrastructure and a strong prospect inventory.

Internationally, we will focus on the development inventory from the BBT Concession, exploration drilling on the Sud Remada Permit and Borj el Khadra Permit. Over the next several years, we anticipate redeploying excess cash flow from the BBT Concession to accelerate onshore drilling, develop offshore fields and explore other fairways in Tunisia.  We are prepared to expand our international platform to include another oil weighted country exposure through a combination of either a production purchase or field development opportunity.

We will continue to pursue internal and external generation of exploration plays that have low to medium risk and multi-zone potential.  We intend to maintain a balance between exploration, exploitation and development drilling in our core areas over the course of the next several years.

 

Corporate Capabilities

Experience

The Company is led by a team of professionals who have demonstrated a successful track record of corporate and project initiation, growth and value crystallization in Western Canada over the last 25 years. Specifically, the group has been materially involved in the founding, building and sale of companies with combined production of over 70,000 Boed through Pinnacle Resources, Storm Energy Ltd., Storm Energy Inc., and Renaissance Energy Inc. over the period 1986 – 2004. This domestic experience has been augmented with partners possessing strong “hands on” production, project management and business development skills that have been focused on international oil operations in North Africa, and the North Sea. Recognizing what we don’t know well is equally important. The Company will align itself with local or joint venture partners who will be the catalysts to a successful operation or are capable of effectively providing strategic technical skills we lack on a specific project.

Biographies of the key management and directors are available at the Key Personnel location on the website.

Technology

Challenging opportunities require innovative strategies that often include the application of fit for purpose technologies or development strategies. New oilfield technologies are usually available globally very quickly but the expertise associated with the successful application of new technologies in tough applications is not as wide spread. The industry in North America has been more aggressive than most other parts of the world at applying new technologies to help economically exploit increasingly more marginal accumulations by reducing costs, increasing rates and improving ultimate recoveries. CKE has experience in successfully applying modern geophysical, drilling, and completion technologies in tight gas, sour gas, heavy oil and conventional applications. As important as our experience, is our understanding and commitment to using fit for purpose technology applications to provide the innovation required to commercialize an opportunity.

Capital

Canadian private and public equity markets have always had a very strong resource bias and have shown mixed support of international resource plays. CKE management has had a successful track record of dealing with a large number of capital providers, both equity and debt, in the Canadian or US energy marketplace over the last 20 years. We would intend to access capital in this market as required to grow the Company.

Bank Facilities

A syndicate of Canadian banks (National Bank of Canada, Alberta Treasury Branches and HSBC Bank Canada) has committed to fund a $115MM facility to finance our Canadian business and our future operations.

An international bank has signed a US$70MM international amortizing reserve-based credit facility for a term of fine years, with initial availability of US$46.5MM to finance our Tunisian business and our future operations.

Expanding Offshore Expertise

Chinook is actively exploring offshore in the Tunisian portion of the Mediterranean Sea and has experience as an exploration and production operator in the UK sector of the North Sea. We are quickly gaining experience operating in some of the most challenging operating conditions and stringent regulatory environments in the world.  We are also investing in purpose built technologies that will make us a profitable developer of marginal fields which will allow us to access both brownfield and new exploratory opportunities.

The expertise we will develop in exploiting conventional reservoirs in Western Canada will be useful in developing our international projects, particularly our large light oil discovery in Tunisia.

Shareholders can access a powerpoint presentation that outlines the prospects for Chinook Energy Inc. on our website at www.chinookenergyinc.com.