Overview

Primary Petroleum (TSXV:PIE, OTCQX:PETEF)  is a junior oil and gas company engaged in exploration and development activities in Montana and Alberta and currently holds substantial land positions in two unconventional tight oil plays in North America; the Saturn Prospect in the Williston Basin and the Pondera-Teton Prospect in the Southern Alberta Basin of Western Montana.  The Company’s mandate is to continue to acquire strategic land positions of merit in the Sedimentary Basin of the Western United States and Canada; de-risk them using modern industry science and seek out qualified industry partners to exploit and develop them. To learn more about us, please visit our website at: www.primarypetroleum.com.

The Southern Alberta Basin of Northwestern Montana – A New Multi-Formation Tight Oil Resource Play

Primary Petroleum has focused a majority of its resources in the acquisition of prospective oil and gas acreage in Montana. The Company has a significant land position in the Alberta Basin Bakken Fairway in Western Montana and in the Northwest area of the Williston Basin in Eastern Montana. Currently, Primary has completed approx. 85 of 145 sq. miles of 3D seismic and has commenced a six vertical well drilling program on its Pondera-Teton Prospect in the southern Alberta Bakken Basin in NW Montana to evaluate and test the Sunburst, Madison, Lodgepole, Bakken, Three forks and Nisku Formations.

Primary holds over 310,000 gross acres (216,425 net acres) (485 gross ; 338 net sections) in Bakken prospective areas. Primary and its U.S. Major Industry Partner currently hold 67.5% / 32.5% interest over its Southern Alberta Bakken Basin Leases in NW Montana and 100% interest in its lands located 50 mi. NW of the Elm Coulee Bakken oil field in eastern Montana.

Primary acquired over 300 miles of 2D seismic and shot a 26 square miles 3D seismic survey in 2008 on it’s Pondera Teton prospect in the Southern Alberta Bakken Basin and 52 miles of 2D seismic over it’s Saturn Prospect in Daniels County.Currently at least ten prospective drilling locations in both the Madison and Sunburst formations in our NW Pondera Teton and four prospective drilling locations in both the Mission Canyon and McGowan formation on our Saturn prospect have been identified.

Recent drilling (25 vertical and 11 horizontal wells) by multiple major US companies, which combined have acquired over 700,000 acres on the adjoining Blackfeet reservation, has resulted in the discovery of oil saturation and over pressurization in the Lodgepole [Banff], Bakken, and Three Forks Formations plus oil and normal pressurization in the Nisku Formation. Estimated published OOIP (Original Oil in Place) on a section of land ranges from 13 million to 15 million barrels. Current drilling operations in the Alberta Basin Bakken Fairway on both sides of the border have identified over 80 vertical and horizontal wells that have been permitted, spud and/or drilled as reported by the Montana State board of Oil and Gas and the DOB in Alberta.

Primary’s current land holdings and future exploration and development possibilities in Montana will provide excellent upside for the Company and its shareholders because:

• Montana is located in the Western Sedimentary Basin, which is world renowned for oil and gas discoveries.
• Its access to large blocks of contiguous and prospective land at reasonable lease rates.
• Primary land holdings in the Southern Alberta Basin Bakken Fairway in NW Montana offer multi-zone potential for oil and gas.
• At least three major oil and gas companies have acquired large blocks of land in the Southern Alberta Bakken Basin in NW Montana and are currently drilling to develop this prospect area.
• Primary’s land holding in eastern Montana have multi-zone oil potential and are adjacent to the Cabaret Coulee field which has produced approx. 450,000 barrels of oil. Wells in this field had IP rates between 500 – 700 barrels/day from the McGowan and Mission Canyon Oil Formations.

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Chief Properties

Alberta Basin Bakken Properties

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Pondera-Teton Project

Primary currently holds over 291,000 gross acres / 196,425 net acres (455 gross / 307 net sections) in its Pondera-Teton prospect located in the Southern Alberta Bakken Basin Fairway in NW Montana located in Pondera and Teton Counties. These lands adjoin the Blackfeet Indian reservation to the south and are prospective for oil in the Sunburst; Madison; Lodgepole (Banff); Bakken; Three Forks and Nisku Formations. Primary has secured a U.S. Major Industry Partner ( see News Release Oct. 19, 2011) along with completing 85 / 145 sq. miles of 3D seismic and has commenced in early November/2011 a six vertical well drilling program to evaluate and test the Sunburst; Madison; Lodgepole; Bakken; Three forks and Nisku formations.

Recent drilling (over 25 vertical and horizontal wells) by multiple U.S. based companies, which combined have acquired over 750,000 acres on the adjoining reservation, has resulted in the discovery of oil saturation and over pressurization in the Lodgepole [Banff], Bakken, and Three Forks Formations plus oil and normal pressurization in the Nisku Formation. Estimated published OOIP (Original Oil in Place) on a section of land ranges from 13 million to 15 million barrels. Current drilling operations in the Alberta Basin Bakken Fairway on both sides of the border have identified over 80 vertical and horizontal wells that have been permitted, spud and/or drilled as reported by the Montana State board of Oil and Gas and the DOB in Alberta.

Current Facts: Southern Alberta Basin & Williston Basin

Southern Alberta Bakken Basin

• Over $230 million on Land Sales in Southern Alberta from April 2010
• Average price – $2,000/ha ($820/acre) Maximum price – over $8,200/ha ($3,300/acre)
• To-date over 80 wells are in the process of been tested, completed and/or drilled.
• Currently approx 45 Industry participants in the region whereby 34 CDN and 11 U.S.
• Fairway estimated at 175 mi., north – south and 60 mi., east-west
• Implied potential resource in place – in the multiples of billions of barrels
• Approx. $500 mm spent to date on land, JV’s, exploration and drilling.

Williston Basin

• Over 3000 producing wells and has in excess of 4.3Bbo of recoverable oil
• Elm Coulee (Montana) is producing over 380,000 bbls/day in the U.S. and 70,000 bbls/day in Canada

Eastern Montana Bakken Property

Saturn Project

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The Saturn prospect runs along the western margin of the Williston basin, which is located in Daniel’s county, approximately 15 miles south of the Saskatchewan border, and 50 miles north west of the Elm Coulee Bakken Discovery. Primary holds approximately 20,000 net acres [31 sections].

Current production in the area has come from the Cabaret Coulee field, which has produced in excess of 450,000 bbls of oil to date and has reported wells with Initial Production (“IP”) rates of up to 700 bbls/day from the Mississippian McGowan and Mission Canyon Formations.

Approximately 53 miles of 2D seismic data has been acquired and several locations on ‘Mississippian structures’ have been identified.

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Four wells originally drilled in the area were logged to the base of the Nisku formation. The middle Bakken siltstone, which produces at Elm Coulee and in southeast Saskatchewan is present in these wells but was never tested.

Bakken Stratigraphic Cross-Section - click to zoom

Saturn for 2012 

• 3D Seismic Program:

Evaluate, outline, permit and shoot approx 15 sq. mi. 3D Seismic

Budget: $0.9 million (approx)

Seek JV Partner to commit to a multiple well exploration program

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Management

Michele (Mike) N. Marrandino – President, Director, Founder
Mike holds a diploma from the British Columbia Institute of Technology of Mechanical and Industrial Engineering. He has provided independent consulting in sales, marketing, corporate communications, fund raising and management for private and public companies in the mining, hi-tech and oil and gas sectors since 1986. He has held several senior management and directorship positions in both private and public companies for the past 20 years.
Mike has initiated several ventures, maturing them into successful public companies. His motivation and work ethic have proven to be one of his strongest assets while his unique management style has brought success to all endeavors he pursues.

Rod Haverslew M.Sc., P. Geol. – VP Exploration
Rod is a Professional Geologist with over 30 years of diverse oil and gas experience. He holds an M.Sc. Degree in Geology and is an active member of APEGGA, the Canadian Society of Petroleum Geologists, the American Association of Petroleum Geologists and the Geological Association of Canada.
Rod’s extensive experience includes regional studies, prospect generation, development and exploitation optimization as well as evaluating corporate and property acquisitions. Several prospects initiated by Rod have resulted in significant discoveries which have produced in excess of 25 million barrels of recoverable oil equivalent with an estimated 35 million BOE remaining.
He has held several management positions including VP Exploration and President as well as Board member of a TSE listed company for 15 years.

Jim R. Ehrets, P.Geol. – U.S. Operations Advisor, Director
Jim brings 30 years of experience as a Petroleum Geologist to Primary’s current technical team. His past experience includes the last four years as VP Exploration for Headington Oil Company, LLC (“HOC”). As a member of the senior management team for the Texas-based independent, his responsibilities included management of HOC’s horizontal Bakken drilling program in the Williston Basin which culminated in the $1.85 billion divesture to XTO Energy. Previously, Jim also served as a consultant to various CamWest Companies where he was involved in horizontal drilling programs in the Northern Rockies and also provided technical assistance for their $300 million asset divestiture to PrimeWest Energy.

Colleen Bailey – Manager of Land
Ms Bailey brings thirty years of business experience to Primary, most recently as the founder and President of Tangent Energy, an urban design firm established in 2006. Ms Bailey also founded Gable House Investments Ltd. in 1998 with the goal of investing in non-operated exploration and development opportunities in Saskatchewan and Alberta. This business model proved to be successful for Ms Bailey and her partners and the working interests were converted into shares in a publically trading enterprise and subsequently sold. Having completed her education as a Petroleum Landman just as the National Energy program was implemented in Alberta, Ms Bailey was transferred to the gulf coast of the United States to manage the land department of Caribe Petroleums Inc., providing the opportunity to round out her Canadian experience with three years of US land and contract work. Ms Bailey is an Albertan with family ties to the oil business that date back to the hay days of the industry giving her an ethical and creative approach to the current business climate along with extensive experience in land asset management and value enhancement.

Brian J. Spilchen, CMA – CFO
Mr. Spilchen holds a Certified Management Accountant designation, as well as a BA degree (Economics) from the University of Alberta. Mr. Spilchen was formerly VP Finance & CFO, Director and Co-Founder of Nexstar Energy Ltd., a publically traded (TSX-V) oil and gas company based in Calgary, Alberta. Nexstar was sold in February 2010 and was one of the first companies involved in the successful drilling of horizontal Cardium light oil wells in the Pembina area of Alberta. Mr. Spilchen has several years experience working in banking and finance, combined with providing financial consulting services to junior oil and gas companies.

William (Bill) Paddock – Drilling and Completions Consultant
Bill is a senior level management engineering consultant through applied knowledge and hands on experience of drilling, completions and production practices, with special emphasis on advanced levels of drilling technology, including horizontal, high angle and horizontal re-entries with single or multi-leg potential. His 30+ years of experience in the industry came from working with companies like; Noble Energy Inc., as their Project Manager for drilling and completion operations; Continental Resources Inc., Drilling Engineer on extended Bakken horizontal wells (21,000ft) and Bakken tri-lateral wells; Anschutz Exploration Corporation; EnCana Oil and Gas, USA and BP Amoco Production Company all as a Engineering Consultant in charge of all field operations and Camwest Exploration, LLC, as a drilling and well-site consultant

Robert Bailey, P.Eng – Operations Consultant
Robert bring’s 30 years of Operations experience with a strong focus on senior management/reservoir engineering which is value based. Robert brings extensive operations experience in oil production; drilling; completions; facilities and work overs. Previous to joining Primary Petroleum, robert was VP Engineering, COO and Director for Excelsior Energy Ltd. Robert also worked for Encana as an Advisor for divestitures and Corporate Development and previously to that with Ryder Scott Company Petroleum Consultant as a consulting Reservoir Engineer.

Betty Anne Loy – Corporate Secretary
Betty Anne is a corporate administrator who resides in Vancouver, Canada. She has been Primary Petroleum Corp.’s Corporate Secretary since its inception. Ms. Loy has more than twelve years experience in corporate administration of Canadian and US public companies including responsibility for statutory compliance and regulatory filings and manages all aspects of corporate and shareholder communications. Ms. Loy assists us in corporate relations and statutory filings.

William D.B. (“Bill”) Koenig – CFA, CMA, Independent Director
Mr. Koenig is Portfolio Manager with Pathway Asset Management, Mineral Fields Group and Energy Fields Group. With a strong background in oil and gas analysis, his primary responsibility has been to provide guidance on resource company investments. With over 20 years of industry experience, he is well known for his work in the early identification of companies in the energy sector with growth and investment potential. Mr. Koenig provides the Company with oil & gas financial expertise and an extensive industry network.

Alan Blair, Partner, Gowling Lafleur Henderson LLP – Independent Director
Alan has been practicing law for 26 years – specifically in Corporate Regulatory Compliance and acts for Corporations in areas of environmental and occupational health and safety regulations Alan is a partner at Gowlings LLP.

His other business experience includes:

• serving as a Director for various public companies since 1991
• the past president of MDX Medical (TSX Exchange) – a medical devices development company.
• past director of junior mining exploration company
• presently the co-owner of a private company currently developing a 350 acre urban site in Eastern Canada; and
• A frequent speaker at various International Conferences on Corporate Compliance and Due Diligence.

Advisors:

Don R. Lee, Attorney, Advisor – Land Leasing & Title Opinions, Montana

• Graduate of University of Montana School of Law in 1973
• Practicing Oil and Gas Law since 1976
• Vast experience in all aspects of oil and gas law, inlusive of extensive hearing work before the Montana Board of Oil and Gas Conservation.
• Considered amongst his peers as an expert in title opinions, farmout, pooling and communitization agreements, purchase and sale of producing properties, negotiations of gas purchase contracts on both well head and delivered basis.
• Has represented a variety of clients from the largest gas producer in the State of Montana, Fidelity Exploration & Production Company, to large independants such as Noble energy Inc., and many smaller companies. Mr. lee also peformed a multitde of legal services for Encana Energy Resources Inc.(one of the largest natural gas producers in Canada and one of the top (5) gas producers in the USA.
• Mr. Lee is rated “AV” by Martindale-Hubbell, which is based upon recommendations by other attorneys and is essentially the “exclusive” rating directory for attorneys nationwide. The “AV” rating indicates that a lawyer has reached the height of professional excellence, practiced law for many years and has been recognized for the highest levels od skill and integrity.

P. Ted Doughty – Ph.D., P.Geol.
Mr. Doughty is the founder of PRISEM Geoscience Consulting LLC, which provides comprehensive geological consulting services to the petroleum industry.

Mr. Doughty received his B.A. degree in geology from Washington University in St. Louis in 1986, his M.Sc. degree from the University of Montana in 1990, and his Ph.D. from Queens University in 1995. He has worked for Amoco Production Company in Denver as an exploration geologist and as a research geologist for Exxon Production Research Company. After teaching geology at Eastern Washington University for eight years, he formed PRISEM Geoscience in 2005. Since then he has consulted with various companies on conventional and unconventional exploration in the Rockies and throughout the United States and Canada