Canaccord Genuity Global Resources Conference 2014 New York October 15-16, 2014 Rob Dawson Chief Financial Officer Siren Fisekci Vice President, Investor & Corporate Relations
Syncrude: A High Quality Resource Established production base Fully upgraded light, sweet crude oil Proven operator and proven technology Predictable reservoir recovery over 90% 4.5 billion barrels 2P reserves and 5.1…
COS Strategy 1. Optimize the value of our Syncrude asset Strong stewardship and oversight of our investment in Syncrude COS chairs key Syncrude committees 2. Provide long-term pure oil exposure No crude oil price hedging Internal…
COS Investment Catalysts 1. Completion of remaining major projects 2. Production growth through improved reliability 3. Improved market access, narrowing of SCO-WTI- Brent differentials 4. Market view of long-term oil prices
Mildred Lake Mine Train Replacements On track to be in-service Q4 2014 Estimated cost 3.9 billion (gross to Syncrude) Increases unit capacity by 20% New wet crushing technology designed to improve recoveries and reduce maintenance
Centrifuge Tailings Management Project On track to be in-service first half of 2015 Cost estimate 1.9 billion (gross to Syncrude) New technology to help meet government regulations for faster reclamation
Potential for Strong Free Cash Flow millions, net to Canadian Oil Sands 2000 Major Projects 1800 Regular Maintenance 1600 Cash flow from operations 1400 1200 1000 800 600 400 200 0 2011 2012 2013 2014E 2015F Capital…
Dividends Reflect Free Cash Flow Over Time (1,2) millions Annual Total Dividends Cumulative Dividends/FCF 2,500 7,500 2,000 6,000 Dividends 1,500 4,500 Cumulative 1,000 3,000 Dividends 500 1,500 Cumulative FCF - -…
Managing a Strong, Efficient Balance Sheet Net debt1, millions 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Targeting net debt level of 1 to 2 billion 1. Non-GAAP measure
Focused on operational performance Steps to unlock production constraints: Replacing/rebuilding mine train equipment targeted completion Q4 2014 Retrofitting and reconfiguring centrifuges to improve bitumen feed to upgrader…
High Value Syncrude Barrel 2 3 2 29 28 16 Syncrude barrel has larger cuts 37 37 48 of the premium priced 25 26 33 fractions 8 6 1 WTI Bakken Syncrude SCO LPG Naptha Distillate VGO Resid Value (as % of crude price) 65%…
Markets for COS Syncrude Production Kitimat Syncrude Edmonton Burnaby Hardisty Quebec City Montreal Sarnia Chicago Patoka Cushing Current synthetic crude oil markets Houston Potential new markets
Highly Leveraged to Crude Oil Prices1 Illustrative cash flow from operations (/share)2 4.00 2014 estimate 3.00 2.00 1.00 0.00 75 85 95 105 115 WTI (US/bbl) All figures in Canadian dollars unless otherwise noted. 1. Every…
World Energy Demand by Fuel Type Global energy needs expected to increase by 30% Oil use is expected to increase 13% to 101 million barrels per day Source: International Energy Agency, World Energy Outlook 2013
COS Investment Catalysts 1. Completion of remaining major projects 2. Production growth through improved reliability 3. Improved market access, narrowing of SCO-WTI-Brent differentials 4. Market view of long-term oil prices Plus,…
COS Demonstrates Compelling Valuation Relative to New Mining Projects Per flowing bbl of capacity 140,000 COS enterprise value 120,000 reflects mine infrastructure PLUS: 100,000 Upgrader producing light, 80,000 sweet crude oil…
COS has Significantly Outperformed the Market Over the Long-term 10 Year Cumulative Return as of December 31, 2013 700% 600% 500% Average compound 400% annual return Canadian Oil Sands 14% 300% S&P/TSX Oil & Gas 10% 200% 100%…
Demonstrating Strong Return on Shareholders Equity Canadian Oil Sands' ROE 45% 45.00 40% 40.00 35% 35.00 Percentage Return 30% 30.00 Return on Equity 25% 25.00 Average ROE of 24% 20% 20.00 15% 15.00 Average Share Price…
Mildred Lake Extension (MLX)
Syncrude: A Leader in Responsible Oil Sands Development Reflects industry best practices Aboriginal relations Mining Association Toward Sustainable Mining Recognized with Gold Level accreditation by the Canadian Council of Aboriginal…
Wells-to-Wheels CO2 Emissions Average oil sands is only 9% more GHG intensive than average U.S. barrel Source: IHS CERA Special Report Oil Sands Dialogue: Oil Sands, Greenhouse Gases, and US Oil Supply: Getting the Numbers…
International Comparison of Leading Oil and Gas Producing Regions1 An independent study compared Alberta, Canada with other world-class oil producing regions around the world in terms of their environmental policies, laws and regulatory…
Stringency How Comprehensive are the Environmental Laws Stringency Factors: Requirements, time and costs for project approvals Number of regulators reviewing applications Opportunities for public to review and comment…
Transparency How Easily Can the Public Get Information Transparency Factors: Public access to project and/or facility information Monitoring reports and closure plans Stakeholder engagement processes and requirements Government…
Compliance Which Country Has Rules to Ensure Compliance Compliance Factors: Mechanisms to monitor compliance Consequences for non-compliance or non-performance Enforcement of regulations, penalties, default rates, approval…
Syncrude Crown Royalty Terms* All figures gross to Syncrude Greater of 25% net bitumen revenue less capital and operating costs, or 1% of gross bitumen revenue* Previously based on Synthetic Crude Oil (upgraded from bitumen) revenues…
2014 Crown Royalty Calculation Based on 2014 Outlook provided July 31/14 SCO % Mining Bitumen Revenue1 3,649 2,616 Operating expenses (1,680) 85% (1,428) Development expense (166) 85% (141) Capital expenditures (867) 85% (737) Net…
Canadian & US Crude Oil Pipeline Proposals Source: CAPP
Canadian Pipeline Capacity vs 2014 Supply Forecast Enbridge Mainline PADD IV Trans Mountain Express Source: CAPP
Syncrude a Cost Competitive Source of Supply Avg. Avg. Avg.
World Oil Production Declines Dramatically Without Further Investment NOTE: EHOB = extra-heavy oil and bitumen Source: International Energy Agency, World Energy Outlook 2013; Production declines from all currently producing…
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