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INVESTOR UPDATE – Long Run Exploration Ltd.

Long Run Exploration Ltd. · Aug 1, 2014 · 38 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 1
    INVESTOR UPDATE AUGUST 2014
  2. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 2
    LONG RUN PROFILE Listing TSX:LRE Shares Outstanding 193.4 million Market Capitalization 1.0 billion Liquidity 800,000 (shares/day; YTD) Q2 2014 Production* 27,602 Boe/d Oil + NGLs 14,514 Bbl/d Natural Gas 78,524…
  3. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 3
    CORPORATE STRATEGY Provide long-term value to shareholders with sustainable yield plus growth model where capital expenditures and dividends are funded through funds flow from operations Provide growth through controlled…
  4. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 4
    STRATEGY - OPERATIONS Focus on strong capital efficiencies within portfolio of properties Improve recycle ratio through capital and operational cost control Build and expand infrastructure to maximize operating efficiencies and…
  5. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 5
    STRATEGY - FINANCE Ensure corporate sustainability by funding dividends and capital spending through funds flow from operations Execute financial strategy without the aid of a dividend reinvestment program (DRIP) Target net debt…
  6. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 6
    RESULTS AND TRACK RECORD Strong Reserve Growth 120 Reserve Growth 1 0.89 0.9 Continuous strong reserve 100 0.75 0.8 growth 0.7 80 Increased proved plus 0.6 0.52 probable reserves (P+P) 17% Boe/share MMBoe 60 0.5…
  7. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 7
    RESULTS AND TRACK RECORD Production & Funds Flow Growth Production Growth Funds Flow Growth 30,000 Implemented 0.08 80,000 0.60 New Management Dividend 0.074 0.56 New Management Implemented Team 0.069 Dividend 0.07 70,000 Team…
  8. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 8
    WHY A DIVIDEND Assets Long Runs proven and predictable assets support a sustainable total payout ratio People Highly experienced technical teams who are able to embrace new technologies, maximize resource recovery and take…
  9. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 9
    PEER COMPARABLES 2014e Yield 2014e Total Payout Ratio(1) 2014e Debt/Funds Flow 2014e EV/DACF Source: National Bank; based on strip pricing at 07/26/2014 (1) Total Payout is net of DRIP 9
  10. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 10
    RECENT ACTIVITIES 2014 Successful dividend implementation in January 2014 and 5% dividend increase in June 2014 Completed Deep Basin Cardium Acquisition on May 30, 2014 Sizeable entry point into an additional core area in the Deep…
  11. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 11
    ASSET BASE Peace River Area Montney tight oil 13,000 Boe/d Northern Gas (55%+ Oil & NGLs) (Bluesky) ALBERTA Edmonton Area Peace River Area Basal Viking tight oil (Montney) 7,800 Boe/d (75% Oil & NGLs) Deep Basin (Cardium)…
  12. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 12
    ASSET BASE LOOKING FORWARD 2014 Upcoming Activity Peace River Area 43 net Montney wells planned for EOR activity initiated in 2013 with expansion planned for Q4 2014 Deep Basin Area Cardium property acquisitions on May 30, 2014…
  13. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 13
    PEACE RIVER Normandville & Girouxville - Montney Plays ALBERTA Montney tight oil development Normandville T79 950m vertical well depth Substantial production growth in Normandville and Girouxville T77 Sept 2011 - 4,500 Boe/d…
  14. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 14
    DEEP BASIN - PINE CREEK Cardium Play ALBERTA Cardium tight oil development 1,800m - 1,900m vertical well depth T56 High-quality, liquids-rich natural Pine Creek gas and light oil production (41o API) Bluesky liquids-rich natural…
  15. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 15
    DEEP BASIN - WAPITI Cardium Play ALBERTA Cardium tight liquids-rich T70 T69 natural gas formation Elmworth Moderate depths T68 (1,000m - 1,600m vertical T67 well depth) Wapiti Current production 4,100 Boe/d T66 (30%…
  16. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 16
    EDMONTON AREA Redwater Viking Play ALBERTA T59 Basal Viking tight oil development Redwater T58 700m vertical well depth Current production 5,400 Boe/d T57 (85% liquids) Light oil (38o API) Strong netbacks, moderate declines…
  17. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 17
    BOYER Natural Gas ALBERTA T110 Bluesky natural gas Current production - 17.5 MMcf/d T108 Shallow decline gas (8%/year) 690,000 net acres T106 Current drilling density less than 1.5 Boyer wells per section T104 70 MMcf/d of…
  18. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 18
    CORE AREA OVERVIEW Peace River Redwater Long Run Deep Basin Deep Basin Northern Gas (Normandville (Redwater & Total - Pine Creek - Wapiti (Boyer) & Girouxville) Bruderheim) (incl. minors) Current production 10,200 7,800 4,100…
  19. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 19
    CORE AREA WELL ECONOMICS Deep Basin - Deep Basin - Peace River Redwater Pine Creek Wapiti Montney Viking Cardium Cardium 250 350 410 72 IP 30 (Boe/d) (65% liquids) (56% liquids) (20% liquids) (91% liquids) 140 184 265 36 IP…
  20. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 20
    CORPORATE GUIDANCE Guidance(1) 2014 Post Acquisitions(2) 2015 Post Acquisitions Production average 32,100 43,200 (Boe/d) Average production per share 0.073 0.081 (Boe) % oil and NGLs 50% 49% Funds flow from operations 320…
  21. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 21
    TYPE CURVES 250 80 Long Run Montney Hz Oil Long Run Viking Hz Oil 70 200 60 Total Production (Boe/d) Total Production (Bbl/d) 50 150 40 100 30 20 50 10 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22…
  22. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 22
    ENHANCED OIL RECOVERY (EOR) Waterflood Cost effective reserve Current Waterflood Pilots additions Increases recovery of Area Formation Pilot Start Date Comments Injectors Lowers finding & development costs Proceeding with…
  23. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 23
    LONG RUN KEY VALUE DRIVERS Diversified asset base within the Western Canadian Sedimentary Basin; balanced between oil and natural gas production Asset base well positioned to support sustainable dividend model without dividend…
  24. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 24
    APPENDIX 24
  25. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 25
    2014 FORECAST NET CAPITAL SPENDING 2014 Post Acquisitions* Capital Expenditures (MM) Well capital 170 Plants, Facilities, EOR 50 Recompletions, G&G, Land, Abandonment 30 Capital Expenditures by Area Capital Expenditures 250 Net…
  26. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 26
    NETBACKS BY PLAY 2014 January to June Average Peace River Deep Basin - Deep Basin - Redwater Northern Montney Pine Creek Wapiti Viking Gas Average Production 10,730 930* 4,350* 6,350 2,890 17,337 26,613 (Boe/d) % Liquids 61 28*…
  27. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 27
    RISK MANAGEMENT Costless Collars Volume Pricing July 1, 2014 December 31, 2014 2,000 Bbl/day WTI US 88.00 - 92.50/Bbl Financial hedges mitigate July 1, 2014 December 31, 2014 2,000 Bbl/day WTI US 88.00 - 92.60/Bbl risk associated…
  28. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 28
    LONG RUN A&D TRANSACTIONS ACQUISITIONS DIVESTITURES Total Total Cost Production Production Date Area Date Area Proceeds (MM) (Boe/d) (Boe/d) (MM) West Central February 2013 Peace Area 7.5 100 December 2012 175.9 1,900…
  29. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 29
    PEACE RIVER MONTNEY Normandville/Girouxville ALBERTA Current development focus areas Normandville T79 are Normandville and Girouxville Montney oil Normandville Oil Battery Initiated water injection pilot in Q2 T77 5,000…
  30. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 30
    PEACE RIVER MONTNEY Have drilled 3 sections at 8 wells per section Historical Type Curve spacing with no interference 250 200 Expanding water flood pilots in 2014. With success, full implementation will begin in 2015 & Total…
  31. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 31
    DEEP BASIN PINE CREEK ALBERTA T56 Low risk oil development Pine Creek upside at Pine Creek 01-13 LRE Gas Plant T55 13-19 LRE Multiwell 30mmcf/d (97%) Oil Battery (100%) Exploration upside at North Pine Creek and Edson in…
  32. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 32
    DEEP BASIN - PINE CREEK CARDIUM Horizontal Type Curve Economics Historical Type Curve 500 80,500 net acres 400 50 booked locations Total Production (Boe/d) 300 Average 81% working interest 200 100 0 1 2 3 4 5 6…
  33. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 33
    DEEP BASIN - WAPITI CARDIUM Horizontal Type Curve Economics Historical Type Curve 500 Liquids-rich gas (40 bbl/mmcf) 400 Strong capital efficiencies Total Production (Boe/d) 75,000 net acres 300 200 96 booked…
  34. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 34
    REDWATER VIKING 07-21 Redwater North Oil Battery Viking oil horizontal multi-frac play T59 5,000 bbls/d 4.0 mmcf/d Control of infrastructure to 05-17 Redwater North Redwater T58 maximize operating efficiencies and Compressor…
  35. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 35
    REDWATER VIKING Historical Type Curve Development drilling at 16 wells per section 80 for optimal drainage 70 60 Implemented initial water injection scheme in Total Production (bbl/d) 50 December 2013, expanding in 2014 40…
  36. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 36
    CHERHILL Emerging Play ALBERTA T60 Primarily targeting Banff and Lower Mannville formations T59 True vertical depth of 1,000 - 1,500 meters T58 Current production of approximately 1,400 Boe/d (40% liquids) primarily from…
  37. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 37
    RESERVES SUMMARY Consensus Pricing WORKING INTEREST RESERVES (12/31/2013) Oil Gas NGL Total NPV00 NPV10 NPV15 FDC MBbls MMcf MBbls MBoe M M M M LRE PDP 12,997 130,593 2,310 37,073 923,929 691,192 620,982 - TP 24,676 207,633 3,411…
  38. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 38
    CORPORATE INFORMATION TSX:LRE Contacts Bill Andrew Chair & CEO (403) 261-6012 Dale Miller President (403) 261-6012 Corine Bushfield Vice President, Finance & CFO (403) 261-6012 Jason Fleury Vice President, Business Development…

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