CAPP Investment Symposium 2012 Toronto Dec. 10-11, 2012
Why own COS Pure (100% light, sweet) crude oil investment in long-life resource Strong existing operating base with production upside potential High-quality, undeveloped leases for future development Well-positioned with…
Syncrude: A high quality resource Strong, stable production base Integrated oil sands mining project Proven technology Predictable reservoir recovery over 90% Lower risk compared to SAGD projects Minimal exposure to reservoir…
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 XOM/IMO…
Significant reserves and resources support growing production for decades Billions of Synthetic Crude Oil Barrels 6 5 4 3 2 1 0 Produced to date Proved plus probable Contingent Prospective reserves resources resources…
2012 Outlook vs. 2013 Budget1 2012 2013 millions unless otherwise indicated Outlook Budget Sales volume (bbl/d) 107,400 110,400 WTI average (US/bbl) 95.00 85.00 Average premium (discount) to WTI (/bbl) -1.00 -5.00 Operating…
Highly leveraged to increasing crude oil prices Illustrative cash flow from operations (/share)2 4.00 3.00 2013 estimate 2.00 1.00 0.00 65 75 85 95 105 WTI (US) All figures in Canadian dollars unless otherwise noted.…
Pure play oil sands investment Oil sands as % of total production 0% 20% 40% 60% 80% 100% COS Canadian Natural Cenovus Imperial MEG Nexen Suncor Our production is 100% light, sweet crude oil Source: FirstEnergy Capital…
Dividends continue to reflect free cash flow over time millions Cumulative annual 2,100 7,000 1,800 6,000 1,500 5,000 Free Cash Flow 1,200 4,000 Dividends 900 3,000 Cumulative 600 2,000 Dividends 300 1,000 Cumulative…
Highest yield amongst peers COS 6.93%* Canadian Natural 1.42% Cenovus 2.64% Imperial 1.13% MEG 0.00% Nexen 0.81% Suncor 1.60% S&P/TSX 2.98% S&P 500 Average 2.20% Bank of Canada 1.03% Source: Bloomberg as at Dec. 4/12…
Operating leverage Syncrude production Thousand barrels per day Average production 400 350 (290,000 bbl/d, or 83% of design capacity since 2007) 300 250 200 150 100 50 0 2007 2008 2009 2010 2011 2012F 2013F 2…
Premium product and competitive operating costs result in significant margin advantage 18.00 Syncrude margin advantage over nearest competitor Realized price advantage 16.00 vs. Competitor A Operating cost advantage 14.00 /…
Investing in our business for sustained success Total cost Major Capital Projects Total Costs 1 estimate Estimated % complete Target in- (B) % accuracy 12/04/12 service date +15% / Mildred Lake mine train replacement 1.6 35 Q4…
Mildred Lake Mine Extension (MLX) Project Proposed project expected to be highly economic Enables Syncrude to access a large bitumen source at a cost that is expected to be significantly lower than the cost of a new mine Scope…
Major projects spending profile billions Spent to 2013 2014 2015 TOTAL Dec. 31, 2012e Canadian Oil Sands 1.1 0.9 0.8 0.2 3.0 share Costs exclude regular maintenance (estimated to average about 0.4 billion COS share) and…
Strong liquidity position to support capital program and healthy dividend millions 2500 2000 1500 Capex 1000 500 Dividends 0 Cash flow from Cash uses Cash balance operations - 2013 Dec. 31/12 (forecast) forecast…
Managing a strong, efficient balance sheet Net debt1, millions 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 Target Targeting net debt level of 1 to 2 billion 1. Non-GAAP measure. 2 Expected year-end net…
Positioned for strong free cash flow1 millions, net to Canadian Oil Sands maintenance major projects cash flow from operations 2000 1600 1200 800 400 0 2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (1)…
Compelling valuation relative to new mining projects Project(s) Cost estimate/ Production Product per flowing bbl Enterprise value1 capacity (bbl/d) Syncrude 10.0 billion 128,000 Light, sweet 78,000 (COS share) synthetic Kearl Lake 2…
Return compared to energy producers 2012 total shareholder returns 10 year total shareholder returns Nexen CNRL Husky ARC Husky Encana COS Suncor Nexen ARC Suncor COS Encana Talisman Talisman CNRL PennWest PennWest…
Final thoughts Strength in Syncrude Strength in COS 40+ year reserve life, decades more Pure crude oil investment of resources Fully upgraded, light sweet oil 90%+ recovery Track record of delivering free Multi-train, predictable…
Appendix
COS: a premier pure-play oil sands investment Ticker: COS on Toronto Stock Exchange Shares outstanding: 484.6 million 52 week high / low / close1: 25.19 / 18.21 / 20.12 Market Cap: 10.0 billion1 Enterprise value: 10.3 billion2…
2013 Objectives Aim to maintain a quarterly dividend of 0.35 per share in 2013* Maintain a strong balance sheet while remaining unhedged on oil prices, thereby providing investors with the full potential of this commodity Increase…
Senior notes issued in 2012 US 700 million US 400 million at 4.5% due April 1, 2022 US 300 million at 6.0% due April 1, 2042 Ratings: Moodys - Baa2 (Stable) and S&P - BBB (Stable) Expected to result in outstanding senior notes…
Demonstrating strong return on shareholders equity Percentage Return 45% 45 40% 40 35% 35 30% 30 Return on Equity 25% 25 Average ROE of 25% 20% 20 15% 15 Average Share Price 10% 10 5% 5 0% - 2001 2002 2003 2004…
COS most levered to WTI oil prices 2012 cash flow per share sensitivity to WTI oil prices 30% 20% 10% 0% -10% -20% WTI - 10/bbl WTI + 10/bbl -30% COS MEG PXX IMO SU CNQ NXY HSE TLM CVE ECA Source: TD Securities
Bitumen production projects 2 mine train moves 2 new mine train builds 2 sustaining mine train builds
A mine train processes bitumen 1 Crusher 2 Surge bin 3 Mix box 4 Hydrotransport 2 1 3 4
Mildred Lake mine train replacements Constructing 2 new Ore Processing Plants New mine trains will have larger capacity than existing mine trains New wet crushing technology to enhance recovery and reduce maintenance No production…
Aurora North mine train relocations Much smaller scope than Mildred Lake mine train construction 2 existing mine trains will be relocated No production impact expected (3 trains at Aurora North provides flexibility during move…
Pipeline solutions for pricing disparities Brent US109/bbl Seaway Twinning 2014 KXL (Southern portion) Enbridge Line 9 Reversal Seaway Reversal 2012 WTI Enbridge Northern Gateway 2017+ US92/bbl Kinder Morgan TMX Keystone XL…
Market access Keystone XL (KXL) Routing Hardisty to Cushing to Houston/P.A. Gulf Coast Size 700-830 kbd 700-830 kbd Timing 2015 2013 Enbridge Line 9 Reversal Enbridge Northern Routing Sarnia to Gateway (NGP) Montreal Routing…
A responsible developer of the oil sands Achievements at Syncrude Reduced water intensity by 60% since the early 1980s Recycle 87% of water used Reduced energy use per barrel by 39% since 1982, thereby reducing CO2 emissions First…
Syncrude CO2 emissions vs other sources of crude oil Full-life cycle, well-to-wheels, including combustion Kg CO2e emitted for every bbl of crude oil produced (extraction, processing, distribution and combustion) SAGD 700 Syncrude…
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…
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…
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