Record Q2 2014 Glacier Production, Industry Leading Low Cost Structure & Strong Cash Margin Reinforces Visibility to Execution of our Three Year Growth Plan Investor Presentation TSX / NYSE: AAV October 2014
ADVANTAGE: AT A GLANCE Intermediate Canadian Montney Producer Listed on TSX and NYSE AAV TSX 52week trading range (Cdn) 3.84 7.85 Shares Outstanding (basic) 169.4 million Record Glacier Q2 2014 production 136 mmcfe/d (22,685 boe/d)…
ADVANTAGE Q2 2014 HIGHLIGHTS 26% Glacier production growth to Record 136.1 mmcfe/d (22,685 boe/d) 81% Increase in Cash Flow to 0.25/share (0.52/share for 6 months 2014) 88% Operating netback as % of Sales (strong netback margin)…
INDUSTRY LEADING PURE PLAY MONTNEY PRODUCER FOCUSED ON GLACIER AREA Proven Montney only producer Fully funded 3 year development plan 190% Cash Flow Per Share growth by 2017 100% Production/share growth by 2017 100% owned…
GLACIER DELINEATION DRILLING PROVIDED VISIBILITY TO MULTILAYER UPSIDE Swan & Tupper at 4 to 7 wells/section density today. Potential for 20 wells/section at Glacier EnCana began horizontal drilling in 2005; however,…
GLACIER DELINEATION DRILLING LED TO PENTASTACK DEVELOPMENT PLAN Five Development Intervals Containing 1,400 Future Locations Development based on four wells per section per layer Proven commercial well rates across Glacier in…
MIDDLE MONTNEY LIQUIDS RESULTED IN ACQUISITION OF NEW MONTNEY LANDS Phase VI drilling results confirm increasing liquids in east Glacier and extended liquids potential to 132907612W6 C3+ =57 bbl/MMcf new lands acquired September…
GOING FORWARD: FINANCIAL STRENGTH TO SUPPORT MONTNEY GROWTH PLAN Strengthened Balance Sheet Q2 2014 Total Debt / Cash flow 1.0x 94 million gross proceeds from Longview share sale 17.5 million from sale of Questfire…
INDUSTRY LEADING COST STRUCTURE CONTRIBUTES TO STRONG MARGIN (UPDATED TO Q2 2014) Advantages full cycle margin is among the top Montney producers today. 2015 liquids production will further increase the realized price and…
THREE YEAR FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 100% PRODUCTION PER SHARE AND 190% CASH FLOW PER SHARE GROWTH Development Plan (3) Phase VII Phase VIII Phase IX Q214 to Q215 to Q216 to Q115 Q116 Q117 Current Estimates…
THREE YEAR DEVELOPMENT PLAN: STRONG GROWTH LEADS TO FREE CASH FLOW Free cash flow is achieved in early 2017 based on Plan. Maintaining production at 245 mmcfe/d with a gas price of Cdn 3.65/GJ generates 160 million of free cash flow…
TRACK RECORD OF IMPROVING OPERATING PERFORMANCE Production Growth to 135 mmcfe/d & 73% Reduction in cost per frac despite increasing Operating Cost Reduction to 0.30/mcfe 475,000/frac stage average number of frac stages from 6 to…
IMPROVING UPPER & LOWER MONTNEY WELL PERFORMANCE WITH SLICKWATER Recent Upper and Lower Montney wells completed with slickwater fracs are outperforming Phase VII Budget type curve which is based on an IP30 6.9 mmcf/d. Graph…
IMPROVING UPPER & LOWER MONTNEY RESULTS DRIVES ATTRACTIVE WELL PAYOUTS Average Type Curve Increased Each Year Top Tier Wells Trending toward Payout…
SOLID UPPER & LOWER MONTNEY WELL RESULTS ACROSS GLACIER Upper Montney - Strong well results throughout block show Lower Montney Recent wells with revised completions have markedly tremendous upside potential in future development…
IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER Production Rate vs Time New Phase VI 122 well started production at restricted rate of 9.5 mmcf/d. Still flowing over 6 mmcf/d after 150 days to manage handling…
MIDDLE MONTNEY: RESULTS CONFIRM LIQUID TREND AND IMPROVED WELL RATES C3+ Middle Montney wells to date Liquids illustrate higher liquid content from Yield bbl/mmcf west to east across Glacier 26 57 31 63 30 bbl/mmcf 10…
NETBACK AND RECYCLE RATIO CONTRIBUTES TO STRONG DRILL ECONOMICS Dry Gas Liquids Rich Gas Glacier Operating Netback (1): (/mcfe) (/mcfe) Revenue (2) 3.83 5.44 Operating Royalties 0.19 Netback is 87% 0.27 of revenue Operating…
PROVEN COMMERCIALITY: GLACIER MONTNEY WELL ECONOMICS(1) Dry Gas Liquids Rich Gas Upper and Lower Montney (2) Middle Montney Intervals (3) 10.9 million Rate of Return (%) 10.5 million 8.8 million 7.9 million 6.7…
GLACIER GAS PLANT (100% OWNED): SIGNIFICANT EXPANSION POTENTIAL Glacier Gas Plant Positioned for Production Rampup 400 mmcf/d pipeline capacity to TCPL meter station in place 400 mmcf/d pipeline capacity to TCPL…
ADVANTAGE SUMMARY: GROWING OUR MONTNEY AT GLACIER Focused on our world class 16 Tcf TPIIP Glacier Montney property and development of its 4.2 Tcfe contingent resources and 1.7 Tcfe 2P reserves(1) Additional 43.25 net sections of new…
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GLACIER LOCATED IN THE HEART OF THE MONTNEY RESOURCE PLAY Montney Siltstone Comparison: 700 times more permeability 4x more formation thickness Very low clay content Liquids & Improved well efficiencies strong economics 23
2012 CORE AND COMPLETION STUDIES: INCREASED RESOURCE AND IMPROVED WELL RESULTS Core study determined original density porosity logs have to be re calibrated IP30s on open hole Recalibration aligned log to actual wells improved…
UPPER AND LOWER MONTNEY AVERAGE WELL TYPE CURVE IMPROVEMENT (DATA UPDATED TO AUGUST, 2014) Advantage has significantly improved well performance since 2008. Utilization of more frac stages and slickwater fracs have recently created…
SUMMARY OF WELL TESTS REFERENCED IN PRESENTATION SLIDES Normalized Estimated Final Gas Test Rate Test Period Final Flow Pressure Final Gas Test Rate (1) C3+ liquid yield Horizontal Well Formation (mmcf/d) (hrs) (kpa) (mmcf/d)…
GLACIER DRILLING ECONOMICS AND 2P RECOVERIES PER INTERVAL ( millions unless otherwise indicated) Glacier Drilling Economics PVs 10% Discount(1) Dry Gas(3) Liquids Rich Gas(4) AECO C natural gas price (/mcf)(2) 3.00 4.00 5.00 3.00…
GLACIER MARCH 31, 2013 CONTINGENT AND PROSPECTIVE RESOURCE ASSESSMENT Advantage engaged our independent qualified reserves evaluator Sproule Associates Ltd. (Sproule) to update the resource analysis and provide a 2C evaluation (Sproule…
GLACIER CONTINGENT AND PROSPECTIVE RESOURCE ASSESSMENT UPIIP (AAV Working Interest, Sales) (3) Low Estimate Best Estimate High Estimate Natural Gas Prospective Resources (Tcf) 0.342 0.556 0.776 Unrecoverable UPIIP (Tcf) 1.561…
GLACIER CONTINGENT AND PROSPECTIVE RESOURCE ASSESSMENT 2C (Best Estimate) Contingent Resources Gross 2C Recoverable Net Present Values Before Income Taxes ( millions) Gross Number of Hz Resources per Location Interval Well Locations…
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