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GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited

Canadian Oil Sands Limited · Jun 24, 2014 · 33 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. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 1
    GHS 100 Energy Conference - Chicago June 24, 2014 Rob Dawson Chief Financial Officer
  2. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 2
    Syncrude: A High Quality Resource Established production base Long-life reserves Fully upgraded light, sweet crude oil Proven operator and proven technology Predictable reservoir recovery over 90%
  3. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 3
    Large Syncrude Reserve and Resource Base Supports Decades of Production 1 Billions of Synthetic Crude Oil Barrels 2 Proved plus Probable - Producing 2.3 RLI= 23 years 4 Mildred Lake Aurora North 3 RLI= 22 years 4…
  4. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 4
    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, sweet crude oil Source: FirstEnergy Capital Nov.…
  5. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 5
    Highly Leveraged to Increasing Crude Oil Prices1 Illustrative cash flow from operations (/share)2 4.00 3.00 2014 estimate 2.00 1.00 0.00 WTI (US/bbl) 70 80 90 100 110 All figures in Canadian dollars unless otherwise noted.…
  6. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 6
    Syncrude Upgrader Delivers Significant Value per bbl 120 Operating expenses, G&A, Royalties 3 and other 100 Depreciation 5 80 Earnings before interest and taxes 60 40 COS EBIT 20 35/bbl 0 1 1, 2 COS 1, 4 Mining Peer…
  7. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 7
    COS Demonstrates Compelling Valuation Relative to New Mining Projects Per flowing bbl of capacity 140,000 120,000 COS enterprise value reflects 100,000 mine infrastructure PLUS: 80,000 Upgrader producing light, sweet crude oil…
  8. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 8
    Dividends Reflect Free Cash Flow Over Time (1,2) millions Annual Total Dividends Cumulative Dividends/FCF 2,400 8,000 2,100 7,000 1,800 6,000 Dividends 1,500 5,000 1,200 4,000 Cumulative Dividends 900 3,000 600 2,000…
  9. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 9
    2014 Outlook 20141 Sales volume (bbl/d)2 100,700 Realized selling price (/bbl) 96.00 Operating expenses (/bbl) 46.08 Cash flow from operations (millions)3 1,194 Cash flow from operations (/share)3 2.46 1. 2014 Outlook as…
  10. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 10
    Managing a Strong, Efficient Balance Sheet Net debt1, millions 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Targeting net debt level of 1 to 2 billion 1. Non-GAAP measure
  11. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 11
    Operating Leverage Syncrude production Thousand barrels per day 400 350 Average production of 287,000 bbl/d since 2007 300 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012 2013 2014F Every 2 million bbl change in…
  12. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 12
    Froth Production Issues with crushers and conveyors contributed to approximately 3 MBbl production restriction in 2013 Actions taken include: Aurora Mine Relocation in 2013 Comprehensive rebuild of trains 2 and 3 Mildred Lake…
  13. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 13
    Froth Treatment and Distillation High solids in the bitumen feed causing furnace tube leaks downstream in distillation units contributed to approximately 2 - 4 MBbl production restriction. Actions taken include: Improved product…
  14. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 14
    Hydro Processing Fouled hydrogen plant exchanger Reliability issues in hydro processing have led to as much as 5 MBbls/yr of lost production Actions taken include: Program to replace the waste heat recovery exchangers in all…
  15. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 15
    Utilities Gas Turbine Generator Additional steam and power utilities planned in 2017
  16. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 16
    Major Projects Capital Expenditure Profile millions, net to Canadian Oil Sands 1000 Centrifuge Tailings Management 900 Mildred Lake Mine Train Replacement Aurora North Tailings Management 800 Aurora North Mine Relocation 700…
  17. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 17
    Mildred Lake Mine Train Replacements (MLMR) Currently 85% complete Expected in-service date of Q4 2014 Cost estimates revised downward to 3.9 billion from 4.2 billion (gross to Syncrude) Tightened range around cost estimate to +5% /…
  18. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 18
    Centrifuge Tailings Management Project Currently 75% complete Expected in-service date of first half of 2015 Cost estimate remains at 1.9 billion (gross to Syncrude) Range around the cost estimate remains at +15% / -15% (1) Total…
  19. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 19
    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
  20. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 20
    Markets for COS Syncrude Production Kitimat Syncrude Edmonton Burnaby Hardisty Quebec City Montreal Sarnia Chicago Patoka Cushing Current synthetic crude oil markets Houston Potential new markets
  21. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 21
    World Energy Demand by Fuel Type Global energy needs expected to increase by 30% Oil use is expected to increase 13% to 101 million barrels per day Source: International Energy Agency, World Energy Outlook 2013
  22. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 22
    Production Declines Dramatically Without Further Investment Source: International Energy Agency, World Energy Outlook 2013; Production declines from all currently producing fields in the absence of further investment.
  23. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 23
    COS Investment Catalysts 1. Production growth through improved reliability These four catalysts represent potential to improve total shareholder 2. Completion of remaining major projects return Mildred Lake Mine Replacement (MLMR)…
  24. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 24
    Appendix Follow us: Twitter cdnoilsands www.cdnoilsands.com/blog
  25. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 25
    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)…
  26. GHS 100 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: 24.68/ 18.85 / 24.27 Market cap: 11.8 billion1 Enterprise value: 13.1 billion2…
  27. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 27
    COS has Significantly Outperformed the Market Over the Long-term 10 Year Cumulative Return as of December 31, 2013 700% 600% 500% Average compound annual return 400% 300% Canadian Oil Sands 14% 200% S&P/TSX Oil & Gas 10% 100%…
  28. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 28
    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 Price…
  29. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 29
    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…
  30. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 30
    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…
  31. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 31
    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…
  32. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 32
    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…
  33. GHS 100 ENERGY CONFERENCE – Canadian Oil Sands Limited – slide 33
    2014 Crown Royalty Calculation Based on 2014 Outlook provided Apr. 30/14 SCO % Mining Bitumen Revenue1 3,528 2,534 Operating expenses (1,693) 80% (1,354) Non-production costs (176) 80% (141) Capital expenditures (842) 85% (716)…

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