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June 2015 Corporate Presentation – Tamarack Valley Energy Ltd.

Tamarack Valley Energy Ltd. · Jun 3, 2015 · 26 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. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 1
    TVE: TSX-V www.tamarackvalley.ca Being Sustainable in this Low Price Environment June 2015 1
  2. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 2
    What We Said in November 2014 January 2015 Stop spending until we get acceptable payouts / ROR Cut CAPEX per well costs by at least 20% though reduction of service costs and well re-designs Wait for M&A opportunities at lower prices…
  3. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 3
    Key Points in this Presentation Wilson Creek acquisition Sustainable growth at low oil prices Impressive acquisition metrics Eliminates the budgeted non-drilling capital by adding key infrastructure Adds 70 drill locations, 40 of…
  4. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 4
    What Successful Companies do in a Downturn High cost, low Price recover with commodity Reality sets in lower costs locked in Poorest economics Period to negotiate contracts Deploy capital Pumping costs Drilling day rates…
  5. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 5
    Cardium Oil TVE is Delivering the Best Economic Returns 60% 100 IRR (%) NPV 15 Break-even (C/bbl) 90 89.87 50% 49% 80 70 71.04 40% 70.5 64.88 60 62.85 62.25 36% 58.98 33% 55.71 30% 50 51.74…
  6. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 6
    Wilson Creek at end of Q1/15 Alder Flats Construct 8 P/L connecting Alder Flats with TVE Wilson TVE land Creek (5.2 mm) Existing Cardium producers Existing vertical Cardium oil wells Q4/14 Drills 2015 Drills Gas plant Battery…
  7. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 7
    Wilson Creek after Tuck-in Acquisition Alder Flats Reduce P/L length by 2/3, size by 2 (3.5 mm savings) TVE land Acquisition land Existing Cardium producers Existing vertical Cardium oil wells Q4/14 Drills 2015 Drills Gas…
  8. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 8
    Wilson Creek Dominant Infrastructure 16-2 MWB Pembina P/L Connection 9-24 Pump Station TVE land Capacity 2,000 bbls/d Existing Cardium producers 20% utilization Existing vertical Cardium oil wells Q4/14 Drills 2015 Drills…
  9. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 9
    Wilson Creek 2015 Tuck-in Acquisition Overview What We Bought Strategic Rationale Acquisition price 54 million Three separate one-off deals Production (45% liquids) 1,450 boe/d Blocky contiguous lands allow for Decline rate 20% more…
  10. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 10
    Additional Upside to 2014 Wilson Acquisition Plan Reduction in Opex Recompletion/Reactivation Results 11.40/boe to 8.00/boe 350 300 NPV10 29 million 250 70% Liquids BOEPD 200 5 Reactivation / Recompletions 150 1.7 million…
  11. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 11
    Wilson Creek - Drilling & Completion TVE Advantage Drilling Cost Per Meter Completion Cost Per Stage 700 100 600 532 31% 72 47% 000s per stage 75 per meter 500 443 400 368 376 340 53 50 42 43 300 35 1.5 mile 1.5…
  12. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 12
    Wilson Creek - Recycle Ratio 1 mile well - 70/bbl 1.5 mile well - 70/bbl Current 4.0 4.0 economics Current Operating at 70/bbl economics expense 3.5 Operating at 70/bbl 3.5 cost cut expense 3.3 0.7 cost cut 3.2 20% 3.0 3.0…
  13. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 13
    Wilson Creek Cardium Oil Drilling Inventory 160.0 PUDs booked Dec 31/14 140.0 Cardium Payout 1.5 years or less drilling inventory 120.0 100.0 80.0 60.0 40.0 20.0 0.0 60 70 80 90 Edmonton Par oil price…
  14. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 14
    Tamarack Profile TVE : TSX-V Corporate Operational 2013 2014 2015e Shares outstanding* (mm) 97.32 Production (boe/d) 3,276 5,717 8,000 - 8,200 Fully diluted* (mm) 102.99 Exit Q4 avg. prodn (boe/d) 4,718 7,681 10,000 Share price May…
  15. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 15
    2015 Realistic Budgets on Realistic Prices AECO - Gas /GJ Edmonton Par - Oil /bbl 5.50 90 5.00 80 4.50 Budget price 2.60/GJ AECO 70 4.00 60 3.50 3.00 50 Budget price 63.00/bbl Edm Par 2.50 40 Assumptions: 2.00 WTI/Edm Par…
  16. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 16
    Current Oil Hedges as at May 29, 2015 Term Hedge type Counterparty Volume Cdn Pricing April 1, 2015 to June 30, 2015 WTI fixed price Macquarie Bank 1,000 bbls/d Cdn 96.31/bbl July 1, 2015 to August 31, 2015 WTI fixed price Macquarie…
  17. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 17
    Revised 2015 Budget Financial Stats per BOE 2014 Actuals 2015 Budget Revised 2015 Budget Average pricing Edm Par 94.09/bbl 51.60/bbl 63.00/bbl AECO (monthly index) 4.40/GJ 2.65/GJ 2.60/GJ /boe Revenue 60.38 33.92 40.45 Royalties…
  18. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 18
    Capital Expenditures 2014 2015 Budget Revised 2015 (millions) Budget Land and seismic 7.0 0.7 4.0 Drill and completion 119.7 37.2 62.0 Equip and facilities 26.7 8.6 19.0 Capitalized G&A and office 0.5 0.5 1.0 Wilson Creek…
  19. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 19
    Key 6 Month Objectives and Look-back What we did in Objectives for What we said we would do Q1 2015 / Q2 2015 Q3 2015 / Q4 2015 Deliver 8,000 boe/d in Q1/15. Q1/15 averaged 8,092 boe/d. Cautiously proceed with drilling program to…
  20. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 20
    Why Buy/Continue to Own Tamarack Resilient assets in low commodity price environment Preserves a solid balance sheet As commodity prices improve, TVE high quality inventory will be economic earlier than most inventory TVE has a plan…
  21. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 21
    TVE Contact Information Tamarack Valley Energy 3100, 250 6th Avenue SW Calgary AB T2P 3Y7 Tel: 403.263.4440 www.tamarackvalley.ca infotamarackvalley.ca 21
  22. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 22
    Circa 2010 Strategy and Culture Holds Up in Tough Times Key Points Out of Strategy Applicable Today Full cycle ROR decision making Still want 1 to 1.5 year paybacks or will divert capital Manage the balance sheet Ensure survival…
  23. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 23
    Break-even Economics What oil price do each companys core plays need to achieve a 15% return Oil plays by break-even price mid-cycle, 15% hurdle rate (C/bbl Edm Par) TVE 39 Note: Break-evens for heavy oil plays are to the Edm…
  24. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 24
    Internal Rates of Returns Which companies and oil plays offer the best returns Oil plays by IRR TVE 49% Source: geoSCOUT; company reports; CIBC World Markets Inc. 24
  25. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 25
    Wilson Creek - Payout 1 mile well - 70/bbl 1.5 mile well - 70/bbl 1.6 1.6 20% capital cost cut Operating 20% capital expense cost cut 1.4 1.4 1.3 0.3 cost cut Current 1.2 economics 1.2 Operating at 70/bbl 1.1 0.3 expense cost…
  26. June 2015 Corporate Presentation – Tamarack Valley Energy Ltd. – slide 26
    Key 6 Month Objectives and Look-back What we did in Objectives for What we said we would do Q4 2014 / Q1 2015 Q1 2015 / Q2 2015 Exit Q4/14 at 9,500 boe/d; average Exit Q4/14 at 9,700 boe/d for last 2 weeks Deliver 8,000 boe/d in…

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