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MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc

Perpetual Energy Inc · Mar 1, 2015 · 49 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. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 1
    Corporate Presentation March 2015
  2. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 2
    Perpetual Energy Inc. DIVERSIFIED RESOURCE STYLE GROWTH ORIENTED ENTREPRENEURIAL EXPLORER, PRODUCER & MARKETER Common shares o/s 150 million Management ownership 25% Share price(1) 1.12 Trading volume(2) 68,000 shares/day…
  3. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 3
    Operating profile Conventional Shallow Gas Mannville Heavy Oil Eastern Alberta Bitumen Warwick Gas Storage Viking/Colorado Shallow Shale Gas Edson Wilrich Deep Basin Multi-Zone Liquids-Rich Gas Tight Oil and Gas…
  4. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 4
    Diversified portfolio built to prosper SHALLOW GAS LIQUIDS-RICH HEAVY OIL BITUMEN OTHER GAS Eastern Edson Wilrich Mannville Panny Warwick Gas Alberta Greater Edson Mannville Bluesky Storage Conventional Multi-zone EOR Liege…
  5. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 5
    Portfolio management strategy 2015 CASH FLOW GENERATORS Maximize cash flow Conventional shallow gas Warwick Gas Storage Eastern Alberta heavy oil MEDIUM AND LONG TERM PROVEN VALUE STRATEGIES DIVERSIFYING GROWTH STRATEGIES…
  6. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 6
    2015 Top Five Strategic Priorities 1. Grow Greater Edson Liquids-Rich Gas Production, Cash Flow, Inventory, Reserves and Value 2. Optimize Value of Mannville Heavy Oil 3. Maximize Value of Shallow Gas 4. Refine Elements of…
  7. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 7
    1. Key Priority Grow Greater Edson liquids-rich gas production, cash flow, inventory, reserves and value 8
  8. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 8
    Edson Wilrich liquidsrich gas To Rosevear Plant (15% WI) Sales Pipeline to Alliance Pipeline To Edson Deep Cut Plant 16-10 Compressor 1-34 Gas Plant Capacity 30 MMcf/d Capacity 60 MMcf/d 10-3 Gas Plant Capacity 30 MMcf/d…
  9. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 9
    West Edson Transaction Summary Swap of West Edson property for 6.75 million Tourmaline Shares Market Value of 256.5 million 24 MMboe of reserves 7.2 MMboe (29%) proved and probable developed producing 16.8 MMboe undeveloped reserves…
  10. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 10
    East Edson JV transaction details Granted two royalties that work in combination to create a fixed, first-out wedge production GORR Flat 5.6 MMcf/d plus associated liquids of 100 bbl/d until 2022 Declining at 10% per year from…
  11. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 11
    East Edson JV execution D ec 3 1, Late time data on all wells is impacted by plant capacity as we drill to fill new plant under construction and preferentially test new wells 17 new JV wells drilled 13 on production to…
  12. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 12
    Greater Edson liquids-rich gas play performance 40% net production growth in 2014 14,000 14,000 Driven by West Edson facility expansion from 15 to 30 MMcf/d net 12,000 12,000 Ramp up to fill existing East Edson facilities with JV…
  13. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 13
    2. Key Priority Optimize value of Mannville heavy oil 14
  14. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 14
    Eastern Alberta Conventional heavy oil R10 R9 R8W4 L K G 8 Producing Mannville pools* L K A F G AU JKF G Mannville L G K G L L L F K L F K F C U G K F 6 Lloyd, 1 Sparky, 1 Basal Quartz K F K K AU G G C C…
  15. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 15
    Mannville heavy oil value potential Projected Economics Per Well Assumptions Lloyd Sparky (McDaniel Year End 2013) Capital (D,C & T) 1.2 MM 1.2 MM 68.90/bbl Wellhead heavy price 2014 Pricing WTI US95/bbl, WCS US23.5/bbl, offset…
  16. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 16
    Waterflood and enhanced oil recovery Mannville I2I Working Interest 66.7% Waterflood Pool OOIP: 35 MMbbl Sparky Mid Type Log Cum Prodn + McDaniel P+P: 1.5 MMbbl 100/09-32-050-08W4/00 (4.2% recovery) technical recovery 19 Horizontals…
  17. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 17
    Preliminary waterflood response Mannville I2I North End Wells Group Plot: GOR dropping; Indications of oil increasing Gas Mcf/d Mannville B: Fluid rates increasing; Oil production increasing Water bbl/d Oil bbl/d Positive…
  18. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 18
    Waterflood and enhanced oil recovery scope Select Pools OOIP Cumulativ P+P Implied Expected Potential with e Reserves Recovery Primary Secondary production booked at Factor Recovery Recovery and EOR to YE 2014 YE 2014 (5-8% (10-15%)…
  19. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 19
    Mannville heavy oil play performance 60 180 Cumulative Capital (MM) 50 130 Transitioned from Capital (MM) 40 30 80 growth to value in 20 2014 10 30 Drilling capital reduced 0 -20 Rationalized smaller 2009 2010…
  20. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 20
    3. Key Priority Maximize value of shallow gas 21
  21. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 21
    Conventional shallow gas Legacy asset base characteristics East Central and Northeast Alberta Cretaceous and Devonian sweet shallow gas < 800m Current production: 60 - 65 MMcf/d Belly River Base declines < 15% Multiple stacked…
  22. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 22
    Viking/Colorado shallow shale gas 130 TCF Resource In Place Belly River Play Fairway OGIP estimated average 16 Bcf/section Cardium/ Colorado Wells Perpetual Lands 300m gas saturated shale section Historical Viking Reserves 6…
  23. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 23
    4. Key Priority Refine Elements of Production Growth Strategy For 2017 to 2020 24
  24. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 24
    Future production growth potential SWAP for TOU SHARES shifts baseline for production growth Inventory captured and risk assessment on track for future production growth 25 Growth trajectory depends on commodity prices, capital…
  25. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 25
    Bitumen 527net sections (329,000 net acres) of oil sand leases Variousformation targets and ultimate recovery methods 7potential project areas with varying potential Over 3 billion bbls OBIP independently recognized at Liege…
  26. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 26
    Bitumen Panny Bluesky Low rate cold flow without 8 m Bitumen solvent or thermal assistance 10 m Bitumen Average pay thickness 11 m Low viscosity bitumen 15,000 cp at 25oC 50,000 cp at 11oC reservoir temp Highly mobile at 70oC…
  27. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 27
    LEAD process technology pilot Low pressure electro-thermally assisted drive First stage of pilot planned for 2015 Cyclic Heat Stimulation 3-5 million capital net of 30% IETP funding Evaluating heater technology and validating…
  28. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 28
    5. Key priority Reduce Debt and Improve Debt/Cash Flow Ratio 29
  29. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 29
    Debt reduction Transactions Closed in 2014 West Central AB undeveloped land 3 million Gas over bitumen monetization 23.2 million Mannville non-core 21.6 million East Edson JV net proceeds 120 million Producing royalty sale 50…
  30. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 30
    Balance sheet Net Bank Debt: 20 million(1) Borrowing base on credit facility - 105 million Next semi-annual redetermination April 2015 3 million of restricted cash remaining in escrow for East Edson JV Senior Unsecured Notes: 275…
  31. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 31
    2014 Capital spending 2014 Exploration and Development Capital = 116 million 68 million of further capital spending funded by JV Partner escrow Q1 - Q3 2014 Q4 2014 Total Wells Capital Wells Capital Wells Capital West Central 13…
  32. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 32
    2015 Capital spending 2015 Q1 capital spending of 45 million Q1 2015 Wells Capital West Central 7 gross (1) 42 MM Liquids-Rich Gas (5 net) Waterflood Mannville Heavy Oil 1 MM facilities Recompletions/ Eastern Shallow Gas…
  33. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 33
    Investment Thesis
  34. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 34
    Reserve distribution Reserve growth in higher value diversifying assets 35
  35. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 35
    Sum of the parts Trading at
  36. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 36
    Key investment highlights High Quality Assets Asset base repositioning for resource-style and diversification successful Edson Wilrich liquids-rich gas inventory well-defined Mannville heavy oil delivering diversified cash flow with…
  37. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 37
    FOR ADDITIONAL INFORMATION Additional Susan L. Riddell Rose Information President & CEO Cameron R. Sebastian Vice President, Finance & CFO 3200, 605 5 Avenue SW Calgary, Alberta Canada T2P 3H5 800.811.5522 TOLL FREE 403.269.4400 PHONE…
  38. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 38
    Appendix
  39. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 39
    East Edson type curves East Edson SW Type Curve* DC&T 5.55 MM IP 5.5 MMcf/d 13.5 bbl/MMcf NGL Reserves 3.2 Bcfe sales/well NPV10 2.5 MM (5.0 MM Jan 1, 2014) ROR 28% (ROR 50% Jan 1, 2014) 63 (60.5 Net) P+PUDs booked 7…
  40. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 40
    West Edson type curve West Edson Type Curve* DC&T 6.5 MM IP 9.0 MMcf/d 5.25 bbl/MMcf C5+ Reserves 5.5 Bcfe sales/well NPV10 8.7 MM (10.7 MM Jan 1, 2014) ROR 95% (ROR 168% Jan 1, 2014) 37 (18.5 Net) P+PUDs booked 44 additional…
  41. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 41
    Diversification Warwick Gas Storage 40 Bcf Storage Reservoir Delta Pressure to 47 Bcf 10 Bcf base reserves cushion gas Commercial Park and Loan in place Up to 25 Bcf potential working business gas capacity 30 to 50 year life…
  42. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 42
    Bitumen Liege carbonates AOC Shell Excellent reservoir quality vuggy porosity in Grosmont 3 Grosmont carbonate / Leduc OV wells drilled Combined with legacy gas wells to evaluate and map resource Stacking of 3 Grosmont…
  43. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 43
    Commodity price risk management strategy Enhance or protect funds flow and balance sheet Enhance or protect the economics of an acquisition Enhance or protect capital program economics Capitalize on perceived market anomalies…
  44. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 44
    Commodity price risk management Futures % of 2015 Volumes Fixed Price Type of Contract Term Price(1) Natural Gas (GJ/d) (/GJ) (/GJ) Production(2) AECO Fixed Price Financial Apr-June 2015 92,500 2.57 2.53 74% AECO Fixed Price…
  45. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 45
    Projected 2015 funds flow 2014 Production of 20,554 boe/d 20,100 boe/d net of East Edson JV Royalty East Edson JV GORR reported as royalty expense, reducing netback 2015 Production of 23,000 boe/d (19,000 boe/d proforma West Edson…
  46. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 46
    P+P Reserve distribution Year-End 2014 PDP 2PDP PNP/PUD PbNP Total: 105.5 MMboe PDP 2PDP PbNP/PbUD PNP/PUD PDP PbNP/PbUD 2PDP Mannville Deep Basin Eastern Shallow Gas PNP/PUD Over 70% of reserves in West…
  47. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 47
    P+P Reserve distribution Year-End 2014 2PDP PDP PbNP/Pbud PDP Total: 685 Million PNP/PUD 2PDP PDP PbNP/PbUD 2PDP PNP/PUD Mannville Deep Basin Eastern Shallow Gas Close to 50% developed producing reserves by…
  48. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 48
    10.00 20.00 30.00 40.00 50.00 60.00 0.00 0% -60% -40% -20% 100% 120% 20% 40% 60% 80% DEE AAV YGR ERF PMT PMT PNE BNP QEC DEE KEL TOU RRX BIR TOU TET CR JOY FD&A and Reserve growth CJ…
  49. MARCH 2015 CORPORATE PRESENTATION – Perpetual Energy Inc – slide 49
    Future growth and value creation 2016 - 2020 Edson expansion for additional inventory development East Edson additional downspacing LIQUIDS-RICH Development of secondary targets including Belly River, Cardium, Second White GAS…

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