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PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd.

Twin Butte Energy Ltd. · Sep 10, 2013 · 35 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 LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 1
    Printer-friendly version Q3 2013 Sustainable Income with Moderate Growth TSX: TBE www.twinbutteenergy.com
  2. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 2
    Corporate Snapshot Current Basic shares 251.6 MM FD 258.1 MM Insiders own - Basic / FD 3.3 /4.3% Average daily trading volume (2) 1,800,000 Share price 1.85 Market cap 465 MM Enterprise value (1) 659 MM Current production…
  3. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 3
    Twin Butte Attributes Oil leveraged with oil and NGLs comprising 88% of production 16,500 boe/d (85% heavy oil, 3% light oil & NGLs and 12% natural gas) Manageable base decline of 29 percent Capital efficiency of under 20,000…
  4. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 4
    Corporate Strategy Provide shareholders with long term total returns comprised of both income and moderate growth Focus on dividend sustainability Capital allocation will be based on cash flow less dividend payout (100% payout) Cash…
  5. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 5
    Heavy Oil Differential WCS USD Heavy Crude Oil Monthly Basis - (5) (10) (15) USSD per Bbl Avg 18.15 (20) (25) (30) (35) (40) Apr-10 Apr-11 Apr-12 Oct-09 Jul-10 Apr-13 Oct-10 Jul-11…
  6. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 6
    Hedging Summary Oil Hedging Program 100% 90% 80% 99.40 oduction 70% 97.07 60% Perccentage of Pro 50% 40% 97.04 96.90 98.44 75.33 30% 97.72 20% 74.94 73.33 10% 75.07 74.80 73.10 76.72 0% Q3 2013 Q4 2013 Q1 2014…
  7. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 7
    Financial Targets 2012 YTD June 2013 Forecast 2013 Production boe/d 14 681 14,681 17 050 17,050 16 100-16 16,100 16,300 300 % liquids production 84 87 88 Production/MM shares 71.4 68 64.7 Capital C it l expenditures dit ((nett…
  8. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 8
    Financial Sensitivity 2013 Cash Flow Sensitivity and Assumptions Input Base Sensitivity CF Impact (000) Before hedging Oil price C WTI 97 00 97.00 +/- 1.00 1 00 4 000 4,000 WCS differential to WTI 24.00 +/- 1.00 3,800 Gas…
  9. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 9
    Lloydminster Heavy Oil Fairway Current heavy oil production of 14,025 b/d 700+ net heavy oil drilling location inventory Mid term potential for recovery enhancement through EOR Focused and concentrated asset base with year…
  10. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 10
    Heavy Oil Resource Play - multi zone potential Area Productive Zones Celtic / Mervin - Colony, Colony Waseca Freemont - Colony, Waseca, Sparky Frog Lake - McLaren,Sparky, GP, Rex (HZ) Furness - Colony, Sparky, GP Lashburn -…
  11. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 11
    Heavy Oil Play Types Play Types Net Wells Alberta/Saskatchewan High Viscosity Areas: Frog Lake; Meridian; Swimming; Lashburn 310 Saskatchewan Low Viscosity Areas: Celtic; Primate; Edam 330 Alberta/Saskatchewan Horizontals…
  12. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 12
    Dividend Model Three Key Attributes Decline x production rate = production additions required Netback x Production = Cash Flow Dividend Maintenance Capital = CAPEX C it l Effi Capital Efficiency i required i d = CAPEX / P…
  13. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 13
    Industry Shift To Horizontal Drilling Heavy Oil Drilling Going Horizontal 80% 70% Wells 60% orizontal W 50% 40% 30% % Ho 20% 10% 0% 2008 2009 2010 2011 2012 2013 Year 13 TSX: TBE
  14. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 14
    2011 Heavy Oil Area - Vertical Drilling 100 90 80 70 60 IP3 (boe/d) 50 40 30 20 10 79 bbl/d 43 bbl/d 32 bbl/d 24 bbl/d 19 bbl/d 13 bbl/d 9 bbl/d 6 bbl/d 4 bbl/d 1 bbl/d 10% 20% 30% 40% 50% 60%…
  15. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 15
    2011 Heavy Oil Area - Horizontal Drilling 100 90 80 70 60 IP3 (bbl/d) 50 40 30 20 10 198 bbl/d 89 bbl/d 66 bbl/d 53 bbl/d 45 bbl/d 37 bbl/d 29 bbl/d 21 bbl/d 13 bbl/d 4 bbl/d 10% 20% 30% 40% 50%…
  16. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 16
    Stable Predictable Historic Wells Wildmere North Horizontal Type Curve 830 m average leg length of typecurve Type Curve (51 wells 73 mbbl EUR) Type Curve (51 wells, 73 mbbl EUR) 100 102/081104705W4/0 (66 mbbl CTD)…
  17. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 17
    Wildmere Horizontal Program Asset acquired in October 2013 producing 420 boe/d and currently 1,500 boe/d TBE tested horizontal concept in Janaury 2013 with 2 wells and followed up with 17 wells in Q2 & Q3 2013 To date IP 3…
  18. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 18
    Stable / Predictable Historic Wells John Lake Horizontal Type Curve Type Curve (82 wells, 151 mbbl EUR) 100 100/031905603W4/2 (99 mbbl CTD) 103/161305604W4/0 (60 mbbl CTD) 103/060805703W4/0 TBE (27 mbbl CTD) Oil Production…
  19. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 19
    Frog Lake Horizontal Program R4 R3W4 O H F L H O 22 23 24 19 20 P 21 22 23 24 Drilled horizontal GP well in 15 14 13 G H 18 O E H H G O 17 H O O H H H O H O H PC O O O O K G H O O O P…
  20. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 20
    Horizontals May Lead to Reserve/Asset Value Upside OOIP Gross Net Cumulative Oil Prod = 69mmbl = 3.3% RTD (mmbbl) (mmbbl) 2P Heavyy YE = 35.4mmbbl = 1.7% to recover AB Frog Lake 1161 732 Total EUR as Booked 5% RF AB Others 144 134…
  21. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 21
    Undeveloped Land and Gas Inventory Provides Long Term Optionality 100,000+ net undeveloped acres (excluding heavy oil lands) 150 net gas drilling locations Bruce Viking / Colorado shale resource play (25 bcf/section) Horizontal…
  22. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 22
    Twin Butte - Sustainable Income Plus Growth Market cap of 465 million, 88+% oil leveraged, 16,500 boe/d production, 700 net heavy oil locations . Total returns to shareholders via sustainable income and moderate growth ( 10.4%…
  23. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 23
    Analyst Coverage Company Analyst Target Action Acumen Trevor Reynolds 2.50 Buy AltaCorp Don Rawson 2.00 Sector Perform BMO Capital Gordon Tait 2.30 Market Perform Canaccord Steve Toth 2.50 Buy CIBC Capital Arthur Grayfer 2.25…
  24. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 24
    Appendix 24 TSX: TBE
  25. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 25
    Team and Board That Can Execute Jim Saunders President, CEO & Director Alan Steele Vice President, Finance & CFO Bruce Hall Chief Operating Officer (COO) Bob Bowman Vice President, Operations Neil Cathcart Vice President , Busines…
  26. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 26
    Active Hedging Strategy Period Daily Type Average % of forecast production Volume Price (swap) GAS Gj/d /Gj Calendar 2013 7,800 Fixed AECO 4.50 65% for 2013 OIL b/d /b 2013 Q3 11,000 WCS 75.33 80% of heavy bbls 2013 Q3 1,000…
  27. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 27
    Lloydminster Heavy Oil Land Acquisitions Heavy Oil Land Acquisitions Company/ Date p y/ Buffalo Oct09 Frog lake assets Frog lake assets Nov 10 Nov10 Emerge Jan12 Swimming assets Apr12 Avalon Aug12 Wildmere assets…
  28. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 28
    Heavy Oil Top Decile Well Economics Average vertical well cost - 550,000 - 615,000, Average initial production of 40 - 80 boe/d - (13,750 - 7,700/boed) Average reserves per well of 40 - 80 mboes - (13.75 - 7.68/boe) Estimated per…
  29. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 29
    Net Asset Value as of December 31, 2012 PV10 PV15 Scotai Capital Data Reserve Value Dec 31, 2012 MM Proved 469.4 Data from TD Securities418.7 Proved + Probable 856.6 736.8 Land Value MM (independent report) 84.0 84.0 Net Debt…
  30. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 30
    Reserves Summary Twin Butte Energy Ltd. 2012 Yearend Company Working Interest Reserves Summary Scotai Capital Data As of December 31, 2012 Data from TD Securities Lt Oil Hvy Oil Gas NGL's % of PV 10 % of FDC RLI mbbls mbbls mmcf…
  31. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 31
    Alberta/Saskatchewan - High Viscosity C Cost: t 550,000 550 000 40 35 Wellhead Price 65/bbl 30 25 Initial Rate: 40 bopd bbl/d 20 Reserves: 40 Mstb b 15 10 Rate of Return: 115% 5 Payout: 1.1 years 0 Year 1…
  32. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 32
    Saskatchewan Low Viscosity C Cost: t 615,000 615 000 80 70 Wellhead Price 65/bbl 60 50 Initial Rate: 80 bopd bbl/d 40 Reserves: ese es 80 Mstb stb b 30 20 Rate of Return: 390% 10 P Payout: t 0 6 years 0.6…
  33. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 33
    Alberta/Saskatchewan Horizontal Cost: 900,000 60 Wellhead Price 65/bbl 50 Initial Rate: 80 bopd 40 bl/d Reserves: 80 Mstb 30 bb 20 Rate of Return: 174% 10 Payout: 0 0.8 8 years 0 Year 1 Year 2 Year 3 Year 4 Year…
  34. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 34
    Primate announcements and share price 34 TSX: TBE
  35. PETERS & CO LIMITED 2013 ENERGY CONFERENCE – Twin Butte Energy Ltd. – slide 35
    A Long Term Sustainable Model Jim Saunders -President & CEO jsaunderstwinbutteenergy.com Alan Steele CFO asteeletwinbutteenergy.com TSX TBE TSX: www twinbutteenergy com www.twinbutteenergy.com 410, 396 11th Avenue SW…

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