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March 2014 Investor Presentation – Advantage Oil & Gas Ltd.

Advantage Oil & Gas Ltd. · Mar 14, 2014 · 39 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 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 1
    Strong 2013 Reserve Replacement Efficiencies & Production Performance at Glacier Reinforces our Three Year Development Plan Designed To Deliver 100% Production per share growth & 190% Cash flow per share growth Investor…
  2. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 2
    Advantage at a glance Pure Play Montney Producer Focused on Per Share Growth Listed on TSX & NYSE AAV TSX 52 week trading range ( Cdn) 3.06 - 4.93 Shares Outstanding (basic) 168.4 million Enterprise Value(1) C1.0 billion Current…
  3. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 3
    Recent Achievements Strong Glacier 2013 Reserve Replacement Efficiencies (1) Replaced 840% of Glacier 2013 production 2P F&D cost : 2013 1.33/mcfe (7.99/boe) & 3 year 1.06/mcfe (6.36/boe) 2P Recycle ratio: 2013 2.1x & 3 year 2.7x 2P…
  4. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 4
    What Differentiates Advantage From Other Gas Producers Industry leading low cost Montney producer with strong cash margins & well economics Over six years of proven Montney operational experience in growing production/reserves &…
  5. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 5
    Advantage Pure Play Montney Producer Glacier 100% owned 77 net Glacier Gas sections Plant Valhalla Recently acquired 43.25 net sections of Montney Acreage Located in the heart of the Montney siltstone fairway (290 meter…
  6. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 6
    Industry Leading Cost Structure Creates Strong Margins Advantages full cycle margin between realized price & cash costs is among the top Montney producers. Liquids production will further increase the realized price &…
  7. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 7
    Glacier 2013 Reserves 840% Production Replacement, 2.1x Recycle Ratio 580% 2P Reserves At Year-end 2013: growth since 2008 3 Year F&D 1.06/mcfe & Replaced 840% of 2013 Glacier production at a 3 Year Recycle Ratio 1.33/mcfe 2P F&D…
  8. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 8
    Proven Operating Cost & Production Performance at Glacier 135 mmcfe/d Phase VI production target achieved one month ahead of schedule Advantage grew Glacier production from 0 to 100 mmcfe/d during the first 3 years of…
  9. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 9
    Glacier Five Interval Development (Pentastack) Provides Significant Drilling Inventory Over 1,305 Locations Remain Undrilled Beyond 2017 - Post Development Plan 1,400 remaining drilling locations Five 50 meter intervals are…
  10. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 10
    Three Year Growth Plan Reinforced by Solid Financial Strategy Advantage has mitigated financial risk in our development plan: Strengthened balance sheet - reduced bank debt 58% to 64 million (1) Sale of Longview shares Termination of…
  11. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 11
    Three Year Glacier Development Plan Designed to Deliver 100% Production per Share & 190% Cash Flow per Share Growth Development Plan (3) Phase VI Phase VII Phase VIII Phase IX Q213 to Q214 to Q215 to Q216 to Q114 Q115 Q116 Q117…
  12. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 12
    Three Year Development Plan Strong Cash Flow Growth Total Debt/ Cash Flow averages 1.5 times and cash flow grows significantly based on an average natural gas price of Cdn 3.75/GJ. The post Q2 2017 period illustrates the amount of…
  13. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 13
    Glacier Well Netback & Recycle Ratio Supports Strong Drill Economics Liquids Rich Gas Netbacks & Recycle Ratios Dry Gas (/mcfe) (/mcfe) 2P F&D Average Undeveloped Location (1) 1.10__ . 1.57__ . Glacier Operating Netback (2):…
  14. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 14
    Glacier Montney Well Economics (1) Strong well economics driven Dry Gas by industry leading cost Liquids Rich Gas Upper and Lower Montney (2) structure & well performance Middle Montney Intervals (3) 12.7 million Phase VII…
  15. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 15
    Exceptional Upper Montney Well Performance Across Glacier 21 mmcf/d 11 mmcf/d record well 10 mmcf/d 11 mmcf/d 13 mmcf/d 11 mmcf/d 15 mmcf/d 10 mmcf/d 10 mmcf/d No Wells Drilled 13 mmcf/d 14 mmcf/d 17 mmcf/d 11 mmcf/d 11…
  16. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 16
    Recent Results Confirm Solid Lower Montney Results Across Glacier 7 mmcf/d 5 mmcf/d 43.7 mmcf/d mmcf/d 7 6.8 mmcf/d mmcf/d Previous LM well 16 mmcf/d Previous LM well 3 3.6 mmcf/d mmcf/d Phase VI wells proving up…
  17. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 17
    Recent Glacier Upper & Lower Montney Slickwater Wells Recent Upper & Lower Montney wells completed with slickwater fracs are High rate wells are outperforming Phase VII Budget type typically rate restricted to avoid curve which is…
  18. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 18
    Middle Montney - Record 13 MMcf/d Well With Free Condensate Trend shows increasing liquid yield west to east Liquids are pervasive through entire Glacier land block 8 mmcf/d 26 bbl/mmcf 8 bbl/mmcf 8 mmcf/d 40 bbl/mmcf 57…
  19. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 19
    New Completion Techniques Middle Montney 3x Production Improvement at Glacier (graphs updated to February 28, 2014) Production Rate vs Time Glacier Middle Montney wells completed Q1 2013 show up to 3x improvement & significantly New…
  20. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 20
    New Montney Lands Prospective for Natural Gas Liquids (1) Phase VI drilling results confirm increasing liquids in east Glacier & extends liquids potential to new lands Technical work to date indicates thick Montney formation & multiple…
  21. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 21
    New Montney Lands Type Logs Show Thick Formation & Multiple Layer Potential Glacier Type Log Valhalla Type Log Wembley Type Log Valhalla Upper Upper (Upper Missing) Glacier Liquids Rich Layers Wembley Glacier Liquids…
  22. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 22
    Approved Glacier Phase VII Budget & Guidance Approved Phase VII Budget & Guidance (1) 12 Months ending March 31, 2015 Average Production (mmcfe/d) 134 to 139 Royalty Rate (%) 5% to 6% Operating Costs (/mcfe) 0.25 to 0.30 Capital…
  23. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 23
    Glacier Phase VII Middle Montney Liquids Extraction Plans Decision to install shallow cut liquids extraction Glacier process at existing 100% owned Glacier gas plant 1 Glacier Alliance Pipeline Initial Phase VII program targets 25…
  24. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 24
    Advantage Summary Growing Our Montney at Glacier Focused on our world class 16 Tcf TPIIP Glacier Montney property and development of its 4.2 Tcfe contingent resources & 1.7 Tcfe 2P reserves(1) Additional 43.25 net sections of new…
  25. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 25
    Appendix Page 25
  26. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 26
    Montney Siltstone Supports High Reserve Recoveries Shale Silt Sand 84 gross (77 net) sections - Historic type curve based on 86 wells with an average of 11.5 fracs per well The Montney formation is a siltstone and sand…
  27. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 27
    2012 Core & Completion Studies Increased Resource & Improved Well Results Core study determined original density porosity logs have to be re-calibrated Re-calibration aligned log to actual IP30s on open hole core porosities evident…
  28. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 28
    New Completion Techniques Upper Montney 2x - 3x Production Improvement at Glacier (graphs updated to February 28, 2014) Production Rate vs Time Recent Glacier Upper Montney wells show up to New 5-20 Phase VI well 2x-3x improvement &…
  29. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 29
    New Completion Techniques Lower Montney 3x Production Improvement at Glacier (graphs updated to February 28, 2014) Production Rate vs Time Recent Glacier Lower New 10-31 & 15-31 Phase VI wells above Montney wells show up to Sproule…
  30. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 30
    Summary of Well Tests Referenced in Presentation Slides Final Gas Final Flow Normalized Estimated Test Rate Test Period Pressure Final Gas Test Rate (1) C3+ liquid yield Well Formation (mmcf/d) (hrs) (kpa) (mmcf/d) (bbls/mmcf) (2)…
  31. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 31
    Glacier Drilling Economics & 2P Recoveries per Interval ( millions unless otherwise indicated) Glacier Drilling Economics PVs 10% Discount(1) Dry Gas(3) Liquids Rich Gas(4) AECO C natural gas price (/mcf)(2) 3.00 4.00 5.00 3.00 4.00…
  32. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 32
    Advantage Glacier Reserve Summary Advantage engaged our independent qualified reserves evaluator Sproule Associates Ltd. (Sproule) to update the reserves analysis for the Company (the Sproule Report) as at December 31, 2013 in accordance…
  33. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 33
    Advantage Glacier Reserve Summary (1)(2) Glacier Present Value of Future Net Revenue using Sproule price and cost forecasts (000) Before Income Taxes Discounted at 0% 10% 15% Proved Developed Producing 802,614 466,482 394,415…
  34. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 34
    Advantage Glacier Reserves Summary Page 34
  35. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 35
    Advantage Glacier Reserve Summary Page 35
  36. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 36
    Glacier Reserve Summary Sproule Price Forecasts The present value of future net revenue at December 31, 2013 was based upon crude oil and natural gas pricing assumptions prepared by Sproule effective December 31, 2013. These forecasts…
  37. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 37
    Appendix Glacier March 31, 2013 Contingent & Prospective Resource Assessment Advantage engaged our independent qualified reserves evaluator Sproule Associates Ltd. (Sproule) to update the resource analysis and provide a 2C evaluation…
  38. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 38
    Appendix Glacier Contingent & Prospective Resource Assessment Low Best High UPIIP (AAV Working Interest, Sales) (3) Estimate Estimate Estimate Natural Gas Prospective Resources (Tcf) 0.342 0.556 0.776 Unrecoverable UPIIP (Tcf)…
  39. March 2014 Investor Presentation – Advantage Oil & Gas Ltd. – slide 39
    Appendix Glacier Contingent & Prospective Resource Assessment 2C (Best Estimate) Contingent Resources Net Present Values Before Income Taxes Gross 2C Recoverable ( millions) Gross Number of Hz Resources per Location Interval Well…

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