Canaccord Genuity Global Energy Conference October 12 13, 2011
Penn West Exploration Corporate Profile Listing NYSE: PWE TSX: PWT Market Capitalization(1) 7.1 Billion Shares Outstanding (Q2 2011) 468 million Liquidity (shares/day) 3.0 million Production (H1 2011) 161,000 boe/d Liquids 102,000…
Canadian Oil & Gas Evolving Landscape Light Oil Significantly Expanded Activity Light Oil Natural Gas Oil Sands Oil Sands 1940 1980 1980 2000 2000 2010 Steady Growth Natural Gas Reduced Selective Development 5
Strategic Direction Adding Value Field Netback Comparison Oil Gas 60 Netback (/boe) 12 Converted 6:1 Price assumption: US85/bbl WTI, CDN4/mcf AECO, US/C FX par. Note: Definitions of non-IFRS terms can be found on page 27 of…
North American Peers Production 100,000 500,000 boe/d Liquids Exposure Gas Oil & NGL 100% Oil & NGL Production (%) 80% 60% 40% 20% 0% Source: Company reports 7
Global Economy & Oil Price Funds Flow Stability WTI US 2012 Hedging 120 Position 105 100 85 80 65 60 40 20 0 2009 2010 2011 2012 2013 Note: WTI pricing is a combination of both historical and future strip…
Strategic Direction Adding Value Light Oil Growth 2011e 66% Liquids 57% 51% Light Oil Dec 2011e Liquids 39% Light Oil Jan 2010 9
Assessment Appraisal Development Building the Business 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Acquisition / Assessment Tight Oil Appraisal Tight Oil Development Resource Appraisal 10
Capital Strategy Capital WTI Price Financial Capital Protect Balance Sheet 65 Anticipate Maintaining Dividend No Production Growth for Short Term Maintain Balance Sheet Production Growth 85 Portfolio Proceeds Redeployed Focused…
Strategic Direction 2011 2012e Capital Deployment 2010 2011 2012e Tight Oil Development Drilling Four Trends 25% 35% 85% Large Inventory Resource Appraisal Drilling Joint Venture & Partnership Enhanced Oil Recovery 75% 65%…
Tight Oil Development Penn West Light Oil Leverage Penn West land position Carbonates Cardium Penn West has the most leverage to large Viking scale oil development using horizontal multistage technology in North…
Cardium Tight Oil Development Focused Drilling Program Cardium Trend 665,000 net acres 7,500 - 8,500 boe/d incr. production (2011e) 40o API crude quality 2011 capital estimate: 350 - 450MM 2011 well count: 90 - 110 2012…
Cardium Tight Oil Development Focused Drilling Program R10W5 120 miles T50 115 miles Alder Flats T45 West Pembina Willesden Green T40 Red Deer Penn West land PW Forecast 2012 well PW 2011 well PW 2010 well…
Carbonates Tight Oil Development Focused Drilling Program Carbonates Trend 250,000 net acres Carbonates 4,500 5,500 boe/d incr. production (2011e) 40o API crude quality 2011 capital estimate: 220 - 250MM 2011 well count: 38 - 44…
Carbonates Tight Oil Development Drilling Program R20 R1W5 250 miles T95 Sawn Lake Slave Point Penn West land PW Forecast 2012 well Red PW 2011 well Otter Earth PW 2010 well Industry well 225 miles Peace River Slave…
Tight Oil Development Summary Light oil Drilling inventory for next 5 10 years Low upfront royalties All trends deliver high IRRs Infrastructure control 19
Enhanced Oil Recovery Resource Appraisal Significant Oil Opportunity for Existing Waterfloods Low Cost Adds Carbonates Tight Oil and Lowering of Corporate Swan Polymer/Chemical Decline Rates Hills CO2 Pembina Cardium…
Cordova Gas Project Resource Appraisal Cordova Major natural gas Cordova Shale Gas project aligned with ShaleVenture Joint Gas Asian market Joint Venture through JV with Mitsubishi Corp British Columbia Prince Rupert…
Peace River Oil Partnership Resource Appraisal Low Cost Appraisal of Cordova Large Oil Resource Shale Gas for Production Joint Venture Growth in 5 year+ Timeframe Peace River British Oil Partnership Columbia Prince Rupert…
Resource Appraisal Summary Size of the prizes Appraisal phase supported by key relationships Major mid-long term growth potential Market value unrecognized 24
Current Drilling Inventory Drilling Inventory 10,000+ well inventory 8,000 Potential Drilling Locations Carbonates 6,000 Cardium 4,000 Viking 2,000 Spearfish Viking Other Cordova 0 Oil Gas PROP Note: For…
Penn West Balance Point Proving Oil Potential / Prudent Financial Management Oil Development Dividend Financial Management 26
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