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PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc

Perpetual Energy Inc · Jan 22, 2014 · 45 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. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 1
    Peters & Co. Conference January 22, 2014
  2. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 2
    Perpetual Energy TSX:PMT DIVERSIFIED RESOURCE STYLE GROWTH ORIENTED Conventional ENTREPRENEURIAL Shallow Gas EXPLORER, PRODUCER & MARKETER Distributing Trust Common shares outstanding 148.5 million Management ownership 25.34%…
  3. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 3
    Operating Profile Conventional Shallow Gas Mannville Heavy Oil Eastern Alberta Bitumen Warwick Gas Storage Viking/Colorado Shallow Shale Gas Edson Wilrich Deep Basin Multi-Zone Liquids-Rich Gas Tight Oil and Gas…
  4. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 4
    Diversified Portfolio Built to Prosper SHALLOW LIQUIDS- HEAVY OIL BITUMEN OTHER GAS RICH GAS Maximize Invest For Invest For Advance and Advance and Cash Flow Growth Growth Optimize For Optimize For Value Value Eastern Alberta…
  5. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 5
    Portfolio Management Strategy PROVEN MEDIUM AND CASH FLOW DIVERSIFYING LONG TERM GENERATORS GROWTH STRATEGIES VALUE STRATEGIES Maximize Cash Flow Invest For Growth Optimize and Advance Conventional Shallow Gas Eastern Alberta…
  6. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 6
    Cash Flow Diversification Production Revenue from Oil and NGL 2013 Forecast Revenue Oil NGL Hedging Gas Gas Storage 6 Diversifying Assets Contributed Almost 50% of Revenue in 2013
  7. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 7
    Asset Base Transformation Resource-style oil & liquids growth assets 40% of production in 2013 With a spectrum of proven plays to reinvest capital, we are poised to allocate future capital spending to optimize returns and cash…
  8. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 8
    2014 Top 5 Strategic Priorities 1. Reduce Debt and Manage Downside Risk 2. Grow Edson Liquids-Rich Gas Production, Reserves, Cash Flow, Inventory and Value 3. Maximize Value of Mannville Heavy Oil 4. Maximize Cash Flow from Shallow…
  9. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 9
    Reduce Debt and Manage Downside Risk
  10. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 10
    Balance Sheet Current Net Bank Debt: 77 million Borrowing base on credit facility 110 million Next semi-annual redetermination April 2014 Senior Unsecured Notes: 150 million Coupon rate - 8.75% Maturity date - March 2018…
  11. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 11
    Debt Reduction 23 Transactions Closed in 2012 Net Proceeds: 167.2 MM Production: 2,945 Boe/d Gas: 13.2 MMcf/d Oil and NGL: 745 bbl/d P+P Reserves: 10.0 MMBoe Reduction in FDC: 24.6 MM Warwick Gas Storage: 90% Elmworth…
  12. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 12
    Diversification - Warwick Gas Storage 40 Bcf Storage Reservoir Commercial Park and Loan business Delta Pressure to 47 Bcf 30 to 50 year life 10 Bcf base reserves cushion gas in place Up to 25 Bcf potential working gas capacity 1.2…
  13. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 13
    Commodity Price Risk Management Strategy Enhance or protect funds flow and balance sheet Enhance or protect the economics of an acquisition Enhance or protect capital program economics Capitalize on perceived market anomalies 180…
  14. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 14
    Gas Price Risk Management Type of Contract Term Volumes Fixed Price Futures % of 2013 Price(1) Natural Gas (GJ/d) (/GJ) (/GJ) Production(2) AECO Fixed Feb 2014 75,000 3.849 3.90 66% Price AECO Fixed Mar 2014 62,500 3.857 3.92…
  15. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 15
    Oil Price Risk Management Type of Term Volumes Fixed or Ceiling Price Futures % of 2013 Contract Floor Price (/GJ) Price(1) Oil & NGL (bbl/d) (/bbl) (/bbl) (/bbl) Production(2) WTI collars Calendar 2014 1,500 US 86.67 US 95.15 US…
  16. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 16
    Grow Edson Liquids-Rich Gas Production, Reserves, Cash Flow, Inventory and Value
  17. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 17
    Edson Wilrich LiquidsRich Gas Pipeline To Edson Sales Pipeline to Alliance Deep Cut Plant Constructed Q2/Q3 2013 36 bbl/MMcf NGLs 01-34 Gas Plant Capacity 30 MMcf/d 2014 Expand to 45+ MMcf/d 16-10 Compressor Capacity 30…
  18. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 18
    Wilrich Value Potential - West Edson West Edson Production 25000 Projected Economics per 2013 Drills: IP30 11-20 MMcf/d Drilling Location restricted rates Capital (D,C & T) 6.3 MM gross 00/01-29-051-18W5/0 (14-29) NPV 10 % 4.93…
  19. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 19
    Wilrich Value Potential - Edson Edson Production 9000 Projected Economics per 14-28 (2013 Drill): IP30 6 MMcf/d Drilling Location 00/05-16-052-15W5/0 (13-10) 8000 00/03-09-052-15W5/0 (13-09) Capital (D,C & T) 4.9 MM…
  20. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 20
    Edson Liquids-Rich Gas Play Performance 7,000 8,000 Cumulative Production (MBoe) 6,000 7,000 6,000 5,000 5,000 4,000 Boe/d 4,000 3,000 3,000 2,000 2,000 1,000 1,000 - - 2009 2010 2011 2012 2013E 2014E 80…
  21. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 21
    Greater Edson Q1 2014 Capital Activity WEST EDSON (50% WI) Budget Objectives Grow production to reach facility capacity (30 MMcf/d gross) Compression bypass may allow for up to 50 MMcf/d gross Prepare for additional West Edson…
  22. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 22
    Maximize Value of Mannville Heavy Oil
  23. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 23
    Eastern Alberta - Conventional Heavy Oil Mannville Discovered 12 Mannville pools 6 Lloyd, 5 Sparky, 1 Basal Quartz 200 MMbbl Original Oil in Place 10 MMbbl 5% recovery factor Current Production 2,500 3,000 bbl/d Low cost HZ…
  24. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 24
    Upper Mannville A Pool - Lloyd Channel OOIP = 30.5 MMbbls Cumulative production to date 750 Mbbl ( 2.5% recovery) Booked Reserves (year end 2012) 1.13 MMbbl (5% RF) 13 wells drilled to date including 6 wells drilled in 2013 9…
  25. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 25
    Mannville Heavy Oil Value Potential Projected Economics per Assumptions Drilling Location (from McDaniel) 92.50/bbl WTI; 26.90/bbl differential Capital (D,C & T) 1.1 MM 2013 Pricing = 65.60 Hardisty heavy price 10.56 /Boe (first…
  26. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 26
    Mannville Heavy Oil Play Performance 50 180 45 160 Cumulative Capital (MM) 40 140 35 Capital (MM) 120 30 100 25 80 20 15 60 10 40 5 20 0 0 2009 2010 2011 2012 2013E 2014E 4,000 4,500 Cumulative Production…
  27. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 27
    Upper Mannville I2I Sparky - Enhanced Recovery OOIP = 31 MMbbl (initial EOR area only); Total Pool: 53 MMbbl Cumulative to date 467 Mbbl Recovery Factor to…
  28. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 28
    Enhanced Oil Recovery Scope Pool (4) OOIP (1) Cumulative P+P Implied Expected Potential with production Reserves Recovery Primary Secondary to 12/31/12 booked at Factor Recovery Recovery and EOR 12/31/12 (5-8%) (10-15%) (MMbbl)…
  29. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 29
    Maximize Cash Flow from Shallow Gas
  30. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 30
    Conventional Shallow Gas East Central and Northeast Alberta Cretaceous and Devonian sweet shallow gas Belly River Current production: 60 - 65 MMcf/d Base declines < 15% Viking Multiple stacked zones and play types Extensive…
  31. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 31
    Advance and Broaden Portfolio of High Impact Opportunities with Risk- Managed Investment Viking/Colorado Shallow Shale Gas Bitumen Exploration
  32. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 32
    Viking / Colorado Shallow Shale Gas Total Resource in Place 130 Tcf Belly River Play Fairway Cardium/ Colorado Wells Viking Perpetual Lands Viking Proved Undeveloped Year End 2012 Booked Reserves Viking Probable Undeveloped 61 Bcf…
  33. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 33
    Colorado Group Technical Advancement Colorado Group Free Gas in Place OGIP estimated to average 16 Bcf/section Proven recovery from Cardium equivalent zone through horizontal development Potential in up to 6 zones within 290m shale…
  34. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 34
    Bitumen 527 net sections (329,000 net acres) of oil sand leases Various formation targets and ultimate recovery methods 7 potential project areas with varying potential 3 Billion bbls OBIP independently recognized at Liege…
  35. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 35
    Bitumen Panny Bluesky 8m Bitumen Low rate cold flow without solvent 10m Bitumen or thermal assistance Average pay thickness 11 m Low viscosity bitumen 15,000 cp 25oC 50,000 cp at 11oC reservoir condition Highly mobile at 70oC…
  36. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 36
    LEAD Process Technology Pilot Low pressure Electro-thermally Assisted Drive Pilot Plan 18.2 MM capital and operating costs over pilot life (3 years) IETP funding (30%) 5.5 million Production Injection Facilities Producing Power…
  37. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 37
    Bitumen Liege Carbonates AOC Shell Excellent reservoir quality vuggy porosity in Grosmont 3 Grosmont carbonate / Leduc OV wells drilled Combined with legacy gas wells to evaluate and map resource Husky Stacking of 3…
  38. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 38
    2014 Capital Spending
  39. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 39
    2013 Full Year Capital Spending Summary Total Capital: 90 - 95 million Q1-Q3 2013 Q4 2013 Total 2013 Wells Capital Wells Capital Wells Capital Mannville 32 gross 4 gross 36 38 MM 5 MM 43 MM Heavy Oil (30.7 net) (4.0 net) (34.7…
  40. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 40
    2014 First Quarter Capital Spending Plan Total Capital: Up to 32 million Q1 2014 Wells Capital Up to 10 gross Mannville Heavy Oil Up to 13 MM (10.0 net) Up to 3 gross West Central Deep Basin Up To 14 MM (2.0 net)…
  41. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 41
    Investment Thesis
  42. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 42
    Strong Annual Growth Forecast 2013 Oil and NGL production growth of 15% Resource-style deep basin production growth of 20% Funds flow and funds flow per share growth of 20% Expected funds flow 55 to 60 million Debt reduction from…
  43. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 43
    Sum of the Parts 1,250.00 Unrisked NAV 6.89 /Share(2) 8.00 Warwick Gas Storage 1,000.00 Viking/Colorado Shallow Shale Gas 6.00 Conventional Shallow Gas 750.00 Risked NAV Wilrich 4.14 /Share(2) Bitumen 4.00 Mannville Heavy…
  44. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 44
    PMT Investment Thesis Asset base repositioning for resource-style oil and NGL diversification successful Mannville heavy oil delivering results with material secondary recovery growth potential Edson Wilrich liquids-rich gas…
  45. PETERS & CO ENERGY CONFERENCE – Perpetual Energy Inc – slide 45
    FOR ADDITIONAL INFORMATION: Susan L. Riddell Rose President & CEO Cameron R. Sebastian Vice President, Finance & CFO 3200, 605 5 Avenue SW Calgary, Alberta CANADA T2P 3H5 800.811.5522 TOLL FREE 403.269.4400 PHONE…

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