Howard Weil 41st Annual Energy Conference New Orleans March 18-19, 2013
Why own COS Pure (100% light, sweet) crude oil investment in long-life resource Strong existing operating base with production upside potential High-quality, undeveloped leases for future development Well-positioned with…
Syncrude: A high quality resource Strong, stable production base Integrated oil sands mining project Proven technology Predictable reservoir recovery over 90% Lower risk compared to SAGD projects Minimal exposure to reservoir…
Syncrude supported by Management Services Agreement with ExxonMobil and Imperial Oil JV ownership structure Canadian Oil Sands (COS) Imperial Oil 36.74% 25% Suncor 12% 5% 7.23% Murphy Oil Sinopec Mocal Nexen (CNOOC)…
Large reserve and resource base supports decades of production Billions of Synthetic Crude Oil Barrels 6 5 4 3 2 1 0 Produced to date Proved plus probable Contingent resources Prospective resources reserves All amounts…
2013 Outlook 2013 millions unless otherwise indicated Outlook1 Sales volume (bbl/d) 110,700 WTI average (US/bbl) 85.00 Average premium (discount) to WTI (/bbl) (5.00) Operating expenses 1,482 (/bbl)4 36.67 Sales2 3,233 Cash…
Highly leveraged to increasing crude oil prices Illustrative cash flow from operations (/share)2 4.00 3.00 2013 estimate 2.00 1.00 0.00 WTI (US/bbl) 65 75 85 95 105 All figures in Canadian dollars unless otherwise noted.…
Pure play oil sands investment Oil sands as % of total production 0% 20% 40% 60% 80% 100% COS Canadian Natural Cenovus Imperial MEG Nexen Suncor Our production is 100% light, sweet crude oil Source: FirstEnergy Capital…
Dividends continue to reflect free cash flow over time Free cash flow vs. Dividends (millions) Annual Cumulative 2,100 7,000 1,800 6,000 1,500 5,000 Free Cash Flow 1,200 4,000 Dividends 900 3,000 Cumulative 600 2,000…
Highest yield amongst peers COS 6.76%* Canadian Natural 1.34% Cenovus 3.04% Imperial 1.12% MEG 0.00% Suncor 1.70% S&P/TSX 2.96% S&P 500 Average 2.15% Bank of Canada 1.03% Source: Bloomberg as at Mar. 4/13 *Based…
Operating leverage Syncrude production Thousand barrels per day 400 350 Average production (290,000 bbl/d, or 83% of design capacity since 2007) 300 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013F 2 million…
Premium product and competitive operating costs result in significant margin advantage 20.00 Syncrude margin advantage over nearest competitor Realized price advantage vs. Competitor A 18.00 Operating cost advantage 16.00 /…
Investing in our business for sustained success Total cost Estimated % Major Capital Projects Total Costs 1 estimate Estimated % Target in- complete (B) accuracy service date 12/31/122 +15% / Mildred Lake mine train replacement…
Mildred Lake Mine Extension (MLX) Project Expected to be a highly economic means to access a large bitumen source Limited scope should result in a significantly lower cost than a new mine Leverages current operating and…
Major projects spending profile billions Spent to 2013 2014 2015 TOTAL Dec. 31, 2012 Canadian Oil Sands share 1.0 0.9 0.9 0.2 3.0 Costs exclude regular maintenance (estimated to average about 0.4 billion COS share) and…
Strong liquidity position to support capital program and healthy dividend millions 2500 Debt Repayment 2000 1500 Capex 1000 500 Dividends 0 Cash uses Cash flow from Cash balance operations - 2013 Dec. 31/12 forecast…
Managing a strong, efficient balance sheet Net debt1, millions 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 Target Targeting net debt level of 1 to 2 billion 1. Non-GAAP measure.
Positioned for strong free cash flow1 millions, net to Canadian Oil Sands maintenance capital major projects capital cash flow from operations 2000 1600 1200 800 400 0 2 2007 2008 2009 2010 2011 2012 2013 2014 2015…
Compelling valuation relative to new mining projects Project(s) Cost estimate/ Production Product per flowing bbl Enterprise value1 capacity (bbl/d) Syncrude 10.5 billion 128,000 Light, sweet 82,000 (COS share) synthetic Kearl Lake 2…
Final thoughts Strength in Syncrude Strength in COS 40+ year reserve life, decades more of Pure crude oil investment resources Fully upgraded, light sweet oil 90%+ recovery Track record of delivering free cash Multi-train,…
Appendix
COS: a premier pure-play oil sands investment Ticker: COS on Toronto Stock Exchange Shares outstanding: 484.6 million 52 week high / low / close1: 23.46 / 18.21 / 20.17 Market cap: 10.0 billion1 Enterprise value: 10.3 billion2…
2013 Objectives Aim to maintain a quarterly dividend of 0.35 per share* Maintain a strong balance sheet while remaining unhedged on oil prices, thereby providing investors with the full potential of this commodity Increase…
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…
Bitumen production projects 2 mine train moves 2 new mine train builds 2 sustaining mine train builds
A mine train processes bitumen 1 Crusher 2 Surge bin 3 Mix box 4 Hydrotransport 2 1 3 4
Mildred Lake mine train replacements Constructing 2 new Ore Processing Plants New mine trains will have larger capacity than existing mine trains New wet crushing technology expected to enhance recovery and reduce maintenance No…
Aurora North mine train relocations Much smaller scope than Mildred Lake mine train construction 2 existing mine trains will be relocated No production impact expected (3 trains at Aurora North provides flexibility during move…
Pipeline solutions for pricing disparities Brent US112/bbl Seaway Twinning 2014 KXL (Southern portion) Enbridge Line 9 Reversal Seaway Reversal 2012 WTI US94/bbl Enbridge Northern Gateway 2017+ Kinder Morgan TMX SCO…
Market access Keystone XL (KXL) Routing Hardisty to Cushing to Gulf Houston/P.A. Coast Size 700-830 kbd 700-830 kbd Timing 2015 2013 Enbridge Line 9 Reversal Routing Sarnia to Enbridge Northern Gateway Montreal (NGP) Size…
A responsible developer of the oil sands Achievements at Syncrude Reduced water intensity by 60% since the early 1980s Recycle 85% of water used First operating mine to receive conditional approval for a tailings management plan…
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…
Environmental regulations GHG Provincial regulations require 12% reduction in emission intensity over 2003 - 2005 average for large emitters If not met, the emitter may: Pay 15/tonne levy into Climate Change and Emissions Management…
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…
2013 Crown Royalty Calculation Based on 2013 Outlook provided Jan. 31/13 SCO % Mining Bitumen Revenue1 3,233 2,369 Operating expenses (1,482) 75% (1,112) Non-production costs (156) 70% (109) Capital expenditures (1,229) 91%…
Loading...
