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THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited

Canadian Oil Sands Limited · May 14, 2014 · 34 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. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 1
    Barclays Americas Select Franchise Conference 2014 London May 14, 2014 Ryan Kubik President & Chief Executive Officer Canadian Oil Sands Limited Rob Dawson Chief Financial Officer Canadian Oil Sands Limited
  2. THE BARCLAYS AMERICAS SELECT FRANCHISE 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. THE BARCLAYS AMERICAS SELECT FRANCHISE 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 Probable - Undeveloped…
  4. THE BARCLAYS AMERICAS SELECT FRANCHISE 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. THE BARCLAYS AMERICAS SELECT FRANCHISE 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. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 6
    Premium Product and Competitive Operating Costs Result in Significant Margin Advantage 22.00 22.00 20.00 Syncrude margin advantage over nearest competitor 20.00 Realized price advantage vs. Competitor A 18.00 18.00 Operating cost…
  7. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 7
    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…
  8. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 8
    Compelling Valuation Relative to New Mining Projects Project(s) Cost estimate/ Production Product per flowing bbl Enterprise value1 capacity (bbl/d) Syncrude 12.5 billion 128,000 Light, sweet 98,000 (COS share) synthetic Kearl Lake 2…
  9. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 9
    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…
  10. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 10
    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…
  11. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 11
    Managing a Strong, Efficient Balance Sheet Net debt1, millions 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(F) Targeting net debt level of 1 to 2 billion 1. Non-GAAP measure
  12. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 12
    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…
  13. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 13
    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…
  14. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 14
    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…
  15. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 15
    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…
  16. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 16
    Utilities Gas Turbine Generator Additional steam and power utilities planned in 2017
  17. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 17
    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…
  18. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 18
    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% /…
  19. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 19
    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…
  20. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 20
    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
  21. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 21
    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
  22. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 22
    100 105 75 80 85 90 95 110 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 1) Source: Bloomberg, April 23, 2014 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 WTI Forward Prices1 Aug-16 Oct-16 Dec-16…
  23. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 23
    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.
  24. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 24
    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)…
  25. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 25
    Appendix Follow us: Twitter cdnoilsands www.cdnoilsands.com/blog
  26. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 26
    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)…
  27. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 27
    COS: a Premier Pure-play Oil Sands Investment Ticker: COS on Toronto Stock Exchange Shares outstanding: 484.6 million 52 week high / low / close1: 24.46 / 18.85 / 22.95 Market cap: 11.1 billion1 Enterprise value: 12.5 billion2…
  28. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 28
    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%…
  29. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 29
    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…
  30. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 30
    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…
  31. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 31
    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…
  32. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 32
    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…
  33. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 33
    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…
  34. THE BARCLAYS AMERICAS SELECT FRANCHISE CONFERENCE – Canadian Oil Sands Limited – slide 34
    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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