OPERATIONS - OIL AND GAS

WORD ON OIL

Demand
The US Energy Information Administration (EIA) has daily global oil consumption at approximately 100 million barrels per day. The EIA has set its oil demand growth outlook for 2019 at one million barrels per day, or right around a 1% increase over 2018’s oil consumption which was up 1.3% over 2017. OPEC has maintained its forecast for 2020 at an increase in the demand / consumption of oil at about a 1% or roughly 1.1 million more barrels of oil per day consumed. Further, The Government of Alberta will continue the oil production restrictions on companies producing over 20,000 boe / day to ensure Alberta’s small producers receive a fair market price for their oil.

Price Volatility
The Alberta Energy Regulator price forecast for Canadian Light Sweet oil in 2020, which is a compilation of several industry forecasts, is $75.64 / bbl climbing to $94.00 over the next eight (8) years.

Supply
The Government of Alberta will continue the oil production restrictions on companies producing over 20,000 boe / day to ensure Alberta's small producers (like Altima) receive a fair market price for their oil.

The Company
The Company is engaged in the acquisition and enhancement of oil and liquids rich natural gas assets. Our Company's goal is to ramp up daily production to 2400 boe / day by the end of 2020 through strategic acquisitions and the enhancement of the Company's current oil and gas assets.
 
WORD ON NATURAL GAS

Demand
Natural gas has a healthy outlook for years to come. The United States is the world’s largest consumer and forecasters agree that the demand will continue to increase for decades. That bodes well for the price of natural gas, particularly as there are concerns about supply.

Seasonal Cycle
Natural gas prices tend to be higher in the winter and summer due to demands for heating and air conditioning. Prices are largely set by the NYMEX exchange based on perceptions of supply and demand.

Price Volatility
Severe winters on the East Coast or Southern United States can force the price of Natural Gas up substantially driven by major buyers such as utilities and major industries. The same supply concerns support prices during the summer air conditioning and gas storage injection season.

Supply
Many gas fields in North America are mature with decreasing annual production. New wells are producing less gas and production rates are declining faster than in the past. Over the next 10 - 20 years analysts predict that new higher cost sources of supply will be required.

The Company
It is Altima’s intent to position the Company in areas where large natural gas reserves with high liquid content from multiple formations remain to be discovered.