Perpetual Energy Inc. Peters & Co. Conference September 2011
Market Profile Common shares outstanding 148.3 million Management ownership 21% Share price (5 day weighted average) 2.71 Market capitalization 400 million Convertible debentures 235 million Senior unsecured notes 150 million…
Entrepreneurial Approach to Value Creation New and inherent opportunities within our asset mix where exploration and emerging technologies will create value in our long term future Oil and gas resource plays, conventional heavy…
Sustainable Growth Plus Income Strategy DIVIDENDS: Target Sustainability BASE CASH FLOW GENERATORS: Target to Minimize Production Declines and Maximize Free Cash Flow DIVERSIFYING GROWTH STRATEGIES: Target Value And Cash…
Assets and Operations
Assets and Operations Base Cash Flow Conventional Shallow Gas Generators Conventional Heavy Oil Diversifying Deep Basin Oil and Liquids-Rich Gas (Multi-zone, Wilrich, Montney, Cardium) Growth Viking and Colorado Shallow Shale Gas…
Base Legacy Assets Conventional Shallow Gas East Central and Northeast Alberta Cretaceous and Devonian sweet shallow gas 75% of production base Belly River Base declines < 20% Multiple stacked zones and play types Viking 1,000+…
Diversifying Growth Strategies
Eastern Alberta - Conventional Heavy Oil R10 R9 R8 L G K F K K G L L G G F G L G G L F Geographically synergistic with shallow gas assets Mannville T52 C G T52 G G U G C F KC Q3 production forecast: 800 bbl/d U G G C…
Deep Basin Liquids-Rich Gas West Central Alberta Multi-Zone Area South Rosevear Shallow Cut Current Production Targeting Viking, Bluesky, Wilrich, ROSEVEAR Plant (15% WI) 6,000 boe/d 75 MMcf/d capacity Lower Mannville, Fernie Sand &…
West Central Alberta Resource Projects Edson Wilrich To South Rosevear Plant (15% WI) Section 36-52-15W5 HZs Pipeline To Edson Deep 2 well pad currently drilling Cut Plant 36 bbl/MMcf NGLs (50% condensate) 13-26-52-15W5…
Wilrich Value Potential Economics per Drilling Location Assumptions Pricing 4/Mcf; 75/bbl WTI = 53.20/bbl NGLs Capital (D,C & T) 4.9 MM (4/Mcf; 95/bbl WTI = 66.30/bbl NGLs) Operating Costs 6.45/BOE NPV 10 % 2.7 MM BT (3.5 MM BT)…
West Central Alberta Resource Projects Elmworth Montney 92 Gross Sections of Montney Exposure 50/50 Joint Venture with Tourmaline at Elmworth 100% WI in Karr block Reserves and Contingent Resource 32 Bcfe net P+P reserves booked…
Elmworth Montney Prospect Inventory POD 2 Initial Development POD C B A Drilled & Tested Drilled & Tested Inline Flow Test currently being conducted Initial Development Drilled & Tested 50 MMcf/d gross POD Gross Startup…
West Central Alberta Resource Projects Cardium Tight Oil NOTE: Only Cardium producing wells shown Light oil in tight sand halo 400 Boe/d Cardium production 24 net sections of CARROT CREEK undeveloped Cardium rights HZ well…
Carrot Creek Cardium Q1 2011 Activity Section 16-52-13W5 development 4 (3.5 net) Hz wells drilled; production Vero start-up late March Production 400 Boe/d Undeveloped Land Disposition 21 gross (12 net) sections of undeveloped…
Warwick Gas Storage 40 Bcf Storage Reservoir 10 Bcf cushion gas in place Test Cycle Injection: May October 5 - 8 Bcf additional operating cushion 2010 22 to 25 Bcf potential working gas capacity 1.5 cycle facility Facility…
Resource Projects - Viking / Colorado Tight Shallow Gas Vast Tight Shallow Gas Play Belly River Play Fairway Cardium/ Colorado Wells Booked Reserves (Viking Only) Perpetual Lands 6 Bcf P+P Producing Viking Proved Undeveloped 15 Bcf…
Bitumen Lands 526 net sections (336,000 net acres) of oil sand leases 7 discrete project areas Various formation targets and ultimate recovery methods 2011 Q1 Activity Tested 4 project areas - South Liege, Hoole, Panny and Clyde…
Bitumen Panny Bluesky Q1 2011 8m Bitumen Drilled 3 vertical, 1 HZ to evaluate 10m Bitumen possibility of cold flow in greater Panny area Established low rate flow without solvent or thermal assistance Average pay thickness 11 m…
Bitumen South Liege Carbonates Q1 2011 GROSMONT NET BITUMEN 3 Grosmont carbonate / Leduc wells drilled to 10 - 20 m evaluate resource 20 30 m Stacking of 3 Grosmont units; 30 m pay 30 m Leduc reef facies present and bitumen…
Diversification Strategy Summary
H1 2011 Capital Spending H1 2011 Capital : 70.9MM Heavily weighted to oil and liquids-rich gas Maintenance Drill, Complete and Tie-ins: 52.0 MM Warwick Gas Conventional Gas Capital 2.6 Activity 4.3 Storage 7.7 Recompletions /…
H2 2011 Capital Budget H2 2011 Capital Budget: 64.1MM Maintenance Heavily weighted to oil and liquids-rich gas to Warwick Gas Capital 1.0 Storage 1.2 accelerate commodity diversification Recompletion / Workovers 3.6 Conventional…
Diversification Strategy - Resource Growth Plays Growth vs Legacy Assets Legacy Shallow Gas Production GOB Deemed Production Diversifying Growth Assets % Diversifying Growth Assets (Excluding Deemed) 210,000 50% 45% 190,000…
Diversification Strategy - Oil and Liquids Production 3,000 12% 2,500 10% 2,000 8% bbl/d 1,500 6% 1,000 4% 500 2% 0 0% Q110 Q210 Q310 Q410 Q111 Q211 Q311E Q411E Eastern Oil (BBL/d) West Central Oil and Liquids…
Cash Flow Diversification - Oil and Liquids Revenue 20 40% 18 16 30% 14 12 20% MM 10 8 10% 6 4 0% 2 0 -10% Q110 Q210 Q310 Q410 Q111 Q211E Q311E Q411E Oil and Liquids Revenue %Liquids 200% increase in oil and liquids…
Historical Funds Flow Netbacks Funds flow netbacks maintained for 2 extra years after gas price collapse due to hedging program Significant measures taken to increase future netbacks Operating costs and royalties reduced…
Balance Sheet
Balance Sheet Current Net Bank Debt : 90 million Current borrowing base on credit facility - 210 million Semi-annual redetermination October 31, 2011 Senior Unsecured Notes: 150 million Coupon Rate - 8.75%; Maturity date - March…
Balance Sheet Debt Reduction through Asset Repositioning Total debt reduced 23% since Q2 2007 32
Maximizing Shareholder Value
Opportunity Inventory - Unrisked Reserve Report Current Recorded Prospect Inventory 2010 Year End P + P Reserves = 488 Bcfe Unrisked Additional Reserve Potential = 1,367 Bcfe UnConventional Tight Gas Resource UnConventional Plays…
Sum of the Parts Risked Value Asset Measure Valuation Range (MM) Base Shallow Gas Reserve Report PV10% 480 Prospect Inventory 1,485 net locations and recompletions 175 - 270 Resource Projects Reserve Report PV10% 145 Deep Basin…
Investment Thesis Asset base repositioning for oil and liquids-focused opportunities successful Edson Wilrich in full scale development phase Conventional heavy oil development and low exposure exploration promising Evolving…
3200, 605 5 Avenue SW Calgary, Alberta CANADA T2P 3H5 800.811.5522 TOLL FREE 403.269.4400 PHONE 403.269.4444 FAX infoperpetualenergyinc.com EMAIL www.perpetualenergyinc.com WEB FOR ADDITIONAL INFORMATION: Susan L. Riddell Rose…
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