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May 2015 Annual General Meeting – Rock Energy Inc.

Rock Energy Inc. · May 13, 2015 · 39 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. May 2015 Annual General Meeting – Rock Energy Inc. – slide 1
    SEIZING THE CHALLENGE Annual General Meeting, May 13, 2015
  2. May 2015 Annual General Meeting – Rock Energy Inc. – slide 2
    This document contains the terms operating netback and total net capital expenditures which do not have any standardized meaning prescribed by GAAP and may not be comparable with the calculation of similar measures for other entities…
  3. May 2015 Annual General Meeting – Rock Energy Inc. – slide 3
    Funds from operations This document contains the term funds from operations which does not have any standardized meaning prescribed by GAAP and should not be considered an alternative to, or more meaningful than, cash flow from…
  4. May 2015 Annual General Meeting – Rock Energy Inc. – slide 4
    Focus on plays Develop a and reservoirs Implement foundation of where we can growth with the assets with Develop a suite of assets drill bit and apply emerging predictable that can provide a solid through technology to cash flow,…
  5. May 2015 Annual General Meeting – Rock Energy Inc. – slide 5
    Find plays Explore new Focus on OIL that are Preserve and technologies exploration scalable and build our to increase and repeatable development recovery development where Rock drilling factors and programs can control inventory…
  6. May 2015 Annual General Meeting – Rock Energy Inc. – slide 6
    TSX:RE STOCK TRADING Stock exchange TSE Symbol: RE Corporate Current stock price trading range 3.00-3.50/share Profile CAPITAL STRUCTURE Common stock (basic) 47.2 M Common stock (full diluted) 51.5M Market capitalization 160-170 M…
  7. May 2015 Annual General Meeting – Rock Energy Inc. – slide 7
    NET ASSET VALUE (Proved plus Probable) Reserve Value* (M) 216.8 Net Asset Value Undeveloped Land (M) 21.0 and Reserves Net Debt (M) 69.0 Net Assets (M) 168.8 December 31, 2014 Basic Shares (M) 40.4 NAV/Basic Share 4.17 RESERVES…
  8. May 2015 Annual General Meeting – Rock Energy Inc. – slide 8
    ROCK ENERGY VALUE PROPOSITION Why buy Rock 9
  9. May 2015 Annual General Meeting – Rock Energy Inc. – slide 9
    1. How is your Balance Sheet Will you be around when prices recover Why Buy Rock 2. What are you doing to get your costs down 4 Questions to think about Can you adapt to survive at these prices 3. What kind of assets do you have…
  10. May 2015 Annual General Meeting – Rock Energy Inc. – slide 10
    We enter 2015 with low debt Year end 2014 net debt is 69.0 million Balance Sheet Rock moved proactively to guard the Proactively protecting balance sheet early in the year shareholder value Reduced the 2015 capital program to 25…
  11. May 2015 Annual General Meeting – Rock Energy Inc. – slide 11
    Declining Cost of Lowering Our Total Cost of Production Production 45.00 Interest Implementing the EOR project at Cost Initiatives 40.00 -0.07 5.67 0.23 Mantario in 2015 will reduce our 3.16 0.46 Rock is working to reduce its…
  12. May 2015 Annual General Meeting – Rock Energy Inc. – slide 12
    Corporate Funds from Sustainability Operations vs. WTI At WTI 55.00US/bbl the company is generating 80.00 enough funds from Assets 70.00 68.54 operations to hold Rocks assets have a low base production flat at 5,000 decline rate…
  13. May 2015 Annual General Meeting – Rock Energy Inc. – slide 13
    Netbacks by Play at Various WTI Prices 90.00 Play Type 80.00 Netbacks 70.00 All our plays generate positive 58.39 60.00 cash netbacks down to WTI 45.00 US/bbl Netback (/bbl) 50.00 47.16 40.00 35.93 30.00 24.69 20.00…
  14. May 2015 Annual General Meeting – Rock Energy Inc. – slide 14
    Share Price by Torque in Action Valuation Multiples If oil prices increase by 18% from 8.00 1.60 55.00 US/bbl to 65.00 US/bbl, our funds from operations per Torque 7.00 1.40 share increases by 0.23/share Share price and price per…
  15. May 2015 Annual General Meeting – Rock Energy Inc. – slide 15
    LUSELAND ONWARD ONWARD HZ VIKING PROJECT Rocks Focus and PRAIRIEDALE KERROBERT PLENTY Future DODSLAND NORTH Our Southwest-Saskatchewan oil assets COLEVILLE SMILEY DODSLAND ONGOING EXPLORATION ACTIVITIES…
  16. May 2015 Annual General Meeting – Rock Energy Inc. – slide 16
    MANTARIO/LAPORTE Foundation of production and cash flow 17
  17. May 2015 Annual General Meeting – Rock Energy Inc. – slide 17
    VERTICAL TYPE WELL* DCET 700k NPV 1,470k Pay Out 9 months Mantario IRR 200% *Assumes GLJ Jan 2015 Price Foundation of production and Forecast and EOR royalty of 1%. cash flow PROCEEDING WITH EOR PROJECT TO MAXIMIZE RESERVES…
  18. May 2015 Annual General Meeting – Rock Energy Inc. – slide 18
    2015 Drilling 6 million Mantario/Laporte 3 Horizontal producers 2015 Plans 10 water injector Exploration and development conversions B upside 2015 Facilities 12 million Pipeline gathering system Polymer injection system Rock…
  19. May 2015 Annual General Meeting – Rock Energy Inc. – slide 19
    Mantario/Laporte Mantario/Laporte Production Forecast Polymer Flood 3,500 (EOR) 3,000 Lower decline rate Polymer injection began on March 11, 2015, with significantly reduced 2,500 royalties Polymer injection Production Rate…
  20. May 2015 Annual General Meeting – Rock Energy Inc. – slide 20
    ONWARD SASKATCHEWAN VIKING & MANNVILLE PLAYS Growth opportunities through continued development of this light oil, high netback, stacked horizons play
  21. May 2015 Annual General Meeting – Rock Energy Inc. – slide 21
    Viking Resource Play Mannville Lloyd Oil Current light oil production Current Mannville oil Onward approximately 1,000 bopd production approximately Saskatchewan Light oil, high netback 400-450 bopd Area is highly prospective for new…
  22. May 2015 Annual General Meeting – Rock Energy Inc. – slide 22
    OLD GAS/OIL Onward Viking CONTACT Play Large drilling inventory NEW GAS/OIL CONTACT 52 HZ DRILLED TO DATE 14 HZ TO BE DRILLED Q3/Q4 2015 Rock Land Rock Drilled Viking Horizontals to Date (52) Completed Viking Oil Wells Hz…
  23. May 2015 Annual General Meeting – Rock Energy Inc. – slide 23
    Onward Well Performance 15 Stage Fracs vs. 18+ Stage Fracs Onward Viking 70 Well Production ONWARD VIKING TYPE WELL* IP30 50-60 boepd Performance 60 EUR 35 mboe (P+P) DCET 875k More fracs per well is making a NPV 475k big difference…
  24. May 2015 Annual General Meeting – Rock Energy Inc. – slide 24
    Better production rates Results with new completion techniques are yielding initial production rates 35% better than before Onward Viking Abundance of development opportunities We have validated the play Expanded gas/oil contact 40…
  25. May 2015 Annual General Meeting – Rock Energy Inc. – slide 25
    NEW 30-SECTION 3D SEISMIC PROGRAM Onward Mannville 3D seismic program to further develop pools and confirm exploration leads EXISTING 3D SEISMIC PROGRAM Rock Land Existing 3D Rock Producing Lloydminster wells New 30 Section…
  26. May 2015 Annual General Meeting – Rock Energy Inc. – slide 26
    Onward ONWARD MANNVILLE WELL Mannville CHARACTERISTICS VERTICAL HORIZONTAL Typical Well Characteristics Cost (DCET) 650K 800K Reserves (2P) 67 MBOE 97 MBOE Initial Production Rate 50 BOEPD 100 BOEPD IRR 57% 139% NPV (Btax 10%) 760K…
  27. May 2015 Annual General Meeting – Rock Energy Inc. – slide 27
    Current Status 2015 Plans Onward Current production 400- Interpret 30 section 3D Mannville 450 bopd seismic program Program New Lloyd pool discovered Develop exploration with 11-16 (West Onward) prospects New Bakken pool Review…
  28. May 2015 Annual General Meeting – Rock Energy Inc. – slide 28
    LOOKING FOWARD 2015 CAPEX program and go-forward strategy
  29. May 2015 Annual General Meeting – Rock Energy Inc. – slide 29
    Economic Drilling Inventory at WTI Prices Drilling 900 Inventory 800 22 22 Economic drilling locations 700 (20% ROR) 600 22 Locations Count (10% ROR) Assumes Viking is developed at 21 wells/ section 500 Onward Hz…
  30. May 2015 Annual General Meeting – Rock Energy Inc. – slide 30
    Rock is focused on the higher rate of return projects first Prudent 1. Mantario/Laporte vertical wells Stewardship of Capital 2. Onward Viking Wells Protected with Hedges 3. Onward Horizontal Mannville wells MANTARIO/LAPORTE ONWARD…
  31. May 2015 Annual General Meeting – Rock Energy Inc. – slide 31
    Total Net Capital Expenditures for 2015 2015 Capital 4mm Exploration Budget Expanded on May 12, 2015 Protected with hedges 6mm 40mm 2015 Capex Mantario Drilling 18mm Onward Viking 20 Net Wells Planned 12mm Mantario…
  32. May 2015 Annual General Meeting – Rock Energy Inc. – slide 32
    2015 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Forecast Production Avg. (boepd) 4,899 4,988 4,747 5,328 5,155 4,700-5,000 Results and % oil Realized Price (/boe) 94 73.58 95 82.45 95 75.76 97 60.09 97 37.65 97 48.50…
  33. May 2015 Annual General Meeting – Rock Energy Inc. – slide 33
    Our Assets have a low Our Team has decline rate, Our Balance been through and provide a Sheet is intact. this before. solid foundation of cash flow. We have the Our Stock Assets that We are price has big working hard will give…
  34. May 2015 Annual General Meeting – Rock Energy Inc. – slide 34
    SUPPLEMENTARY INFORMATION 35
  35. May 2015 Annual General Meeting – Rock Energy Inc. – slide 35
    Management Team Directors Strong Allen J. Bey Stuart G. Clark Management President and CEO Chairman of the Board Team/Board Jeffery G. Campbell Richard J. S. Wigington Senior Vice President and COO Robert A. Maitland Todd Hirtle…
  36. May 2015 Annual General Meeting – Rock Energy Inc. – slide 36
    TRADING TSX Stock Symbol RE Market Profile USA - OTC RENFF SHARES OUTSTANDING Basic 47.2 MM Fully diluted 51.5 MM MANAGEMENT & DIRECTORS Basic 7.6% Fully diluted 12.3% RECENT TRADING RANGE 3.00 - 3.50 MARKET CAPITALIZATION…
  37. May 2015 Annual General Meeting – Rock Energy Inc. – slide 37
    Drilling Results WELLS DRILLED 2013 2014 2015 Heavy Oil 31 (30.0 net) 30 (30.0 net) 3 (3.0 net) Light Oil 10 (10.0 net) 39 (39.0 net) 3 (3.0 net) Natural Gas - D&A 4 (4.0 net) 6 (6.0 net) - Service Wells 1 (1.0 net) Nil - TOTAL 46…
  38. May 2015 Annual General Meeting – Rock Energy Inc. – slide 38
    Hedging Summary Stream Volume (bpd) Price (CDN/bbl) Term WCS 1,000 60.40 July Dec 2015 MSW 1,000 71.18 July Dec 2015 MSW 500 69.50 Jan Dec 2016 39
  39. May 2015 Annual General Meeting – Rock Energy Inc. – slide 39
    Analyst INVESTOR RESEARCH FIRM RATING ANALYST Coverage FirstEnergy Out Perform B. Fitzmartyn Alta Corp Out Perform T. Matthews Paradigm Capital Buy K. Lin GMP Capital Buy G. Daunheimer Acumen Buy T. Reynolds Dundee Buy C. Ellison…

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