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TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited

Canadian Oil Sands Limited · Jan 12, 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. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 1
    TD Securities London Energy Conference January 12-13, 2014 Ryan Kubik, President & CEO Siren Fisekci, VP, Investor & Corporate Relations
  2. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 2
    Why own COS Pure (100% light, sweet) crude oil investment in long-life resource Strongg operating p g base with production p upside p p potential High-quality, undeveloped leases for future development Well-positioned with…
  3. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 3
    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 SSinopec opec Mocal Nexen…
  4. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 4
    Syncrude: A high quality resource Strong, stable production base Integrated oil sands mining project No exposure to light/heavy differentials gy Proven technology Predictable reservoir recovery over 90% Less exposure to…
  5. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 5
    Large reserve and resource base supports d d off production decades d i 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…
  6. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 6
    Pure play oil sands investment Oil sands as % of total production 0% 20% 40% 60% 80% 100% COS Canadian Natural Cenovus Imperial MEG Suncor Our production is 100% light light, sweet crude oil Source: FirstEnergy Capital…
  7. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 7
    Quality and location differentials Cdn /bbl Trailing 3-month average 130 120 110 100 90 Brent SCO 80 WTI WCS 70 Bitumen 60 50 40
  8. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 8
    Markets for COS COS Syncrude Production Kitimat Syncrude Edmonton Burnabyy Hardisty Quebec City Montreal Sarnia Chicago Patoka Cushing Current synthetic crude oil markets Houston Potential new markets
  9. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 9
    2014 Outlook 20141 Sales volume (bbl/d)2 105,700 Operating expenses (/bbl) 41.48 Cash flow from operations (millions)3,4 1,158 Cash flow from operations (/share)3 2.39 Realized selling price (/bbl) 87.78 1. 2014 Outlook…
  10. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 10
    Highly leveraged to increasing crude oil prices Illustrative cash flow from operations (/share)2 4 00 4.00 3 00 3.00 2014 estimate 2 00 2.00 1 00 1.00 0 00 0.00 WTI (US/bbl) 70 80 90 100 110 All figures in Canadian…
  11. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 11
    Operating leverage Syncrude production Thousand barrels per day 400 350 Average g pproduction of 287,000 , bbl/d / since 2007 300 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014F 2 million bbl…
  12. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 12
    Premium product and competitive operating costs result in significant margin advantage 20.00 Syncrude margin advantage over nearest competitor R li d price Realized i advantage d t vs. Competitor A 15.00 Operating cost advantage /…
  13. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 13
    Syncrude upgrader delivers significant value per bbl 120 Earnings before interest and taxes 5 100 Depreciation COS EBIT 80 36/bbl Crown royalties 60 Other 3 40 Operating expenses and 20 G&A 0 1, 2 COS1, 4 Mining & Typical…
  14. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 14
    Compelling valuation relative to new mining projects Project(s) Cost estimate/ Production Product per flowing bbl Enterprise value1 capacity (bbl/d) Syncrude 10.4 billion 128,000 Light, sweet 81,000 (COS share) synthetic k 2 Kearll…
  15. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 15
    Investing in our business for sustained success Total cost Total cost Estimated % Major Capital Projects Total Costs 1 estimate Target g in- ti t estimate complete l t (B) service date accuracy (% ) 12/09/132 +15% / Mildred…
  16. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 16
    Major projects spending profile billions Spent to 2014 2015 Dec. 31, 2013 Canadian Oil Sands share 1.3 0.8 0.2 Costs exclude regular maintenance (estimated to average about 0.4 billion COS share) and capitalized interest…
  17. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 17
    Mildred Lake Mine Train Replacement
  18. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 18
    Strong liquidity position to support capital program and healthy dividend millions 2000 1.8B 1.5B 1500 1.2B Capex 1000 0 8B 0.8B 500 Dividends 0 Cash uses - 2014 Cash flow from Cash balance Credit facility estimate…
  19. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 19
    Managing a strong, efficient balance sheet Net debt1, millions 2000 Short-term Debt 1500 Cash 1000 Target Long-term Debt 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2015 Targeting net debt level of 1 to 2 billion 1.…
  20. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 20
    Positioned for strong free cash flow1 millions, net to Canadian Oil Sands 2500 major projects capex maintenance capex 2000 cash flow from operations 1500 1000 500 0 2 3 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016…
  21. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 21
    Dividends continue to reflect free cash flow2 over time ti millions Annual Total Dividends Cumulative Dividends/FCF 2,100 7,000 1 800 1,800 6 000 6,000 1,500 5,000 Dividends 1,200 4,000 900 3,000 Cumulative Dividends…
  22. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 22
    Highest yield amongst peers COS 7 01%* 7.01% Canadian Natural 2.30% Cenovus 3.20% Imperial 1.12% MEG 0.00% S Suncor 2 17% 2.17% S&P/TSX 2.93% S&P 500 Average 1.91% Source: Bloomberg as at Jan. 2/14 *Based on price…
  23. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 23
    COS investment highlights Expect free cash flow to expand after 2014 SCO receives attractive margins, g reflecting gqquality yppremium to heavy ypproducts Major projects nearing completion Two completed in 2013 ahead of…
  24. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 24
    COS has significantly outperformed the market over the long long-term term 10 Year Cumulative Return as of September 30, 2013 800% 700% 600% Average compound 500% annual return 400% Canadian Oil Sands 16% 300% 200%…
  25. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 25
    Appendix
  26. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 26
    COS: a premier pure-play oil sands investment Ticker: COS on Toronto Stock Exchange Shares outstanding: 484.6 million 52 week high / low / close1: 21.93 / 18.62 / 19.98 Market cap: 9.7 billion1 Enterprise value: 10.4 billion2…
  27. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 27
    Demonstrating strong return on shareholders equity shareholders Canadian Ca ad a Oil O Sands' Sa ds ROE O 45% 45.00 40% 40.00 35% 35.00 30% 30.00 Return on Equity e Return 25% 25.00 Percentage Average ROE of 24%…
  28. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 28
    Bitumen production projects 2 mine train moves 2 new mine train builds 2 sustaining mine train builds
  29. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 29
    Mildred Lake Mine Extension (MLX) Project Expected p to be a highly g y 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…
  30. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 30
    A mine train processes oil sands ore 1 Crusher 2 Surge bin 3 Mix box 4 Hydrotransport 2 1 3 4
  31. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 31
    Access to Markets Pipeline Expansions in Development Source: CAPP
  32. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 32
    U.S. Oil Demand and Sources of Supply Source: IEA Annual Energy Outlook 2012
  33. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 33
    Syncrude is a leader in sustainable oil sands development Recognition Leading Research and Development Syncrude operates the industrys only dedicated R&D centre Syncrude spends 60 million on R&D each year; one of Top 50 spenders in…
  34. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 34
    A responsible developer of the oil sands Achievements at Syncrude Reduced water intensity by 60% since the early 1980s Recycle 85% of water used Responsible for 70% of all reclaimed land in oil sands mining industry Returned 3,400…
  35. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 35
    Oil sands industry GHG emissions are 3.5% off those th off the th UU.S. S coall iindustry d t Source: U.S. DOE/EIA, Environment Canada 2009, CAPP
  36. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 36
    Wells-to-wheels 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:…
  37. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 37
    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…
  38. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 38
    Syncrude Crown royalty terms* terms All figures gross to Syncrude Greater of 25% net bitumen revenue less capital and operating costs costs, or 1% of gross bitumen revenue* Previouslyy based on Synthetic y Crude Oil ((upgraded pg…
  39. TD SECURITIES LONDON ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 39
    2014 Crown Royalty Calculation Based on 2014 Outlook provided Dec. 9/13 SCO % Mining Bitumen Revenue1 3,386 2,469 Operating expenses (1,600) 80% (1,280) Non-production Non production costs (181) 80% (145) Capital expenditures…

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