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FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc

Perpetual Energy Inc · Nov 16, 2011 · 51 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. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 1
    Perpetual Energy Inc.
  2. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 2
    Market Profile Common shares outstanding 146.9 million Management ownership 24.4% Share price (5 day weighted average) 1.59 Market capitalization 225 million Convertible debentures 235 million Senior unsecured notes 150 million…
  3. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 3
    Perpetual Strategy The Last 24 Months Build a diversified portfolio of material repeatable, high return assets for growth Capture material positions in chosen strategies De-risk game changers at appropriate pace to manage risk…
  4. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 4
    Historical Funds Flow Netbacks Funds flow netbacks maintained for 2 extra years after gas price collapse due to hedging program Excess funds flows from hedging directed to transition assets, modest debt reduction and dividends 90 MM…
  5. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 5
    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…
  6. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 6
    Assets and Operations
  7. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 7
    Asset Base Transition Strategy The Last 24 Months Asset Portfolio Characteristics Generate superior returns on investment Predictable and repeatable Material in size and scope and scalable Opportunity-rich with probability for…
  8. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 8
    Operating Profile Conventional Shallow Gas Gas over Bitumen Technical Solutions Mannville Heavy Oil Eastern Alberta Viking/Colorado Shallow Shale Gas Bitumen Near Cold Flow Panny Bluesky Bitumen Thermal Liege Carbonates Warwick…
  9. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 9
    Entrepreneurial Approach to Value Creation DIVERSIFYING CASH FLOW GROWTH GENERATORS OPTION VALUE STRATEGIES Sustainable Cash Invest For Growth Exposure to Emerging Flow Generators Deep Basin Liquids-rich Tight Technologies Legacy…
  10. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 10
    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+…
  11. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 11
    Diversifying Growth Strategies Chosen Key Priorities
  12. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 12
    Eastern Alberta - Conventional Heavy Oil Geographically synergistic with shallow gas assets Production established from 6 Mannville pools Mannville 5 Lloydminister; 1 Sparky 82 MMbbl Original Oil in Place 3D coverage 4.1 MMbbl 5%…
  13. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 13
    Sparky Type Curve GRAPH OF PRODUCTION RESULTS FROM LINDA 2 additional wells to be spud before year end Average initial rate over 100 bbl/d; low decline rate 13
  14. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 14
    Mannville Lloyd Development Plan Example 2011 Simulate development options 1st phase complete 2011 HZ Drills (ongoing & encouraging) 2 Channel (1st 22.5 Mbbl cum prod) Lloyd Channel 4 Lower Regional 3 Upper Regional Redo…
  15. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 15
    Deep Basin Liquids-Rich Gas West Central Alberta ROSEVEAR South Rosevear Shallow Cut Plant (15% WI) 75 MMcf/d capacity Multi-Zone Area Targeting Viking, Bluesky, Wilrich, Lower Mannville, Fernie Sand & Rock Edson Shallow Cut…
  16. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 16
    West Central Alberta Resource Projects Edson Wilrich To South Rosevear Plant (15% WI) Pipeline To Edson Deep Cut Plant 36 bbl/MMcf NGLs (50% condensate) Ansell 16-10Edson Compressor Capacity 30 MMcf/d Exploration…
  17. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 17
    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) NPV 10 % 2.7 MM BT (3.5 MM BT) Operating Costs 6.45/BOE ROR…
  18. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 18
    Other Diversifying Growth Strategies Optimize and Advance
  19. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 19
    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…
  20. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 20
    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…
  21. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 21
    West Central Alberta Resource Projects Cardium Tight Oil NOTE: Only Cardium producing wells shown Light oil in tight sand halo 200 Boe/d Cardium production 24 net sections of CARROT CREEK undeveloped Cardium rights HZ well…
  22. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 22
    Carrot Creek Cardium Section 16-52-13W5 development 4 (3.5 net) Hz wells drilled; production start-up late March Vero Production 200 Boe/d Undeveloped Land Disposition 21 gross (12 net) sections of undeveloped Cardium rights…
  23. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 23
    Warwick Gas Storage 40 Bcf Storage Reservoir 10 Bcf base reserves cushion gas in place Grass Roots Gas Storage Development 8-11 Bcf additional operating cushion of existing depleted gas pool Up to 25 Bcf potential working gas…
  24. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 24
    Resource Projects - Viking / Colorado Tight Shallow Gas Belly River Play Fairway Vast Tight Shallow Gas Play Cardium/ Colorado Wells Booked Reserves (Viking Only) Perpetual Lands Viking Proved Undeveloped 6 Bcf P+P Producing 15…
  25. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 25
    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…
  26. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 26
    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…
  27. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 27
    Bitumen Liege Carbonates R 22 R 21 R 20 R19 W4 3 Grosmont carbonate / Leduc wells drilled in GROSMONT NET BITUMEN Q1 2011 to evaluate resource 10 - 20 m Stacking of 3 Grosmont units; 30 m pay T95 20 30 m Leduc reef facies present…
  28. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 28
    Q3 2011 Highlights
  29. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 29
    Q3 2011 Operational Highlights - Production Actual and deemed production averaged 165.3 MMcfe/d, down 6% from Q3 2010 Gas over Bitumen Shut-in of 8 MMcf/d at Liege Dispositions of non-core assets including 5.2 MMcfe/d Production…
  30. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 30
    Q3 2011 Operational Highlights - Costs Cost reduction initiatives enhancing competitiveness, profitability and efficiency Q3 operating costs down 10% year over year to 22.5 MM (1.79 per Mcfe) Year to date operating costs flat on a…
  31. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 31
    Q3 2011 Capital Spending Highlights E&D capital expenditure program of 38.4 MM delivers positive results 21.5 MM spent in West Central Alberta Liquids-Rich Gas Edson 3 (3.0 net) horizontal wells and 1 (1.0 net) vertical well…
  32. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 32
    Q4 2011 Capital Plan Warwick Gas Q4 2011 Capital Budget: 31.2 MM Maintenance Capital, Storage, 0.8 Heavily weighted to oil and liquids-rich gas to accelerate 0.1 commodity diversification Recompletion / Conventional Gas Focus on…
  33. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 33
    Q3 Financial Highlights Realized gas price of 3.75/Mcf versus 6.02/Mcf in Q3 2010 Realized hedging gains in 2010 of 29.4 MM versus 2.2 MM in Q3 2011 Realized oil and NGL price of 70.15/bbl versus 56.13 for Q3 2010 Funds flow of…
  34. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 34
    Diversification Strategy Summary
  35. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 35
    Diversification Strategy - Resource Growth Plays Growth vs Legacy Assets Legacy Shallow Gas Production GOB Deemed Production Diversifying Growth Assets 2011 YTD Dispositions % Diversifying Growth Assets (Excluding Deemed) 210,000…
  36. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 36
    Diversification Strategy - Oil and Liquids Production 3,000 14% 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 Q311 Q411E Eastern Oil (BBL/d) West Central Oil and…
  37. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 37
    Cash Flow Diversification - Oil and Liquids Revenue 20 30% 15 20% MM 10 10% 5 0% 0 -10% Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411E Oil and Liquids Revenue %Liquids 200% increase in oil and liquids revenue in two…
  38. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 38
    Commodity Diversification 2012 Funds Flow (86% gas, 14% Oil; 18 Bcf Cycle) AECO(/GJ) 3.50 4.00 4.50 5.00 5.50 Key Assumptions: 75 48 73 97 121 145 Production: Maintain 140 MMcfe/d flat 85 55 79 103 127 151 WTI 20% base decline…
  39. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 39
    Balance Sheet
  40. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 40
    Balance Sheet Current Net Bank Debt : 120 million Current borrowing base on credit facility - 210 million Semi-annual redetermination November 30, 2011 Senior Unsecured Notes: 150 million Coupon Rate - 8.75%; Maturity date - March…
  41. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 41
    Balance Sheet Debt Reduction while Asset Repositioning Birchwavy Acquisition - 130 MM Viking/ Colorado Shale Profound Acquisition - 81 MM Cardium Office Building Sale - 36 MM Thousands Edson Acquisition - 71 MM Elmworth…
  42. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 42
    2011 Q4 Funds Flow and Balance Sheet Sensitivities 2011 Q4 funds flow outlook Average AECO Gas Price (/GJ) 3.00 4.00 5.00 Natural gas production (MMcf/d) 123 123 123 Oil and NGL production (bbl/d) 2,850 2,850 2,850 Realized gas price…
  43. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 43
    Maximizing Shareholder Value
  44. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 44
    TOP 4 Strategic Priorities The Next 12 Months 1. Restore Healthy Balance Sheet Dividend suspension Net Dispositions of 75 to 150 million Repay PMT.DB.C in June in cash Option to repay in shares at Companys discretion Capital…
  45. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 45
    Dividend Suspension Dividend suspended effective October 2011 Preferential capital investment in higher netback assets will strengthen balance sheet by increasing funds flow in combination with ongoing debt reduction initiatives…
  46. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 46
    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…
  47. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 47
    Sum of the Parts At 4 gas prices 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…
  48. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 48
    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 very promising Evolving…
  49. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 49
    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…
  50. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 50
    Appendix Q3 Financial Results ( millions except per Three Months Ended Nine Months Ended Share amounts) September 30 September 30 2011 2010 % 2011 2010 % Change Change Revenue 60.6 90.6 (33) 189.2 305.9 (38) Funds Flow 19.3 46.1 (58)…
  51. FIRSTENERGY SOCIETE GENERALE ANNUAL ENERGYGROWTH CONFERENCE – Perpetual Energy Inc – slide 51
    Appendix Q3 Operating Results Three Months Ended Nine Months Ended September 30 September 30 2011 2010 % 2011 2010 % Change Change Total Production (Bcfe) 12.4 13.9 (10) 38.8 42.4 (8) Daily Production 135.5 151.0 (10) 142.1 155.2…

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