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July 2015 Investor Presentation – Advantage Oil & Gas Ltd.

Advantage Oil & Gas Ltd. · Jul 2, 2015 · 31 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. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 1
    Glacier Montney Outperformance provides Clear Vision for Growth supported by Financial Strength & Proven Expertise. Investor Presentation TSX / NYSE: AAV July 2015
  2. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 2
    ADVANTAGE: AT A GLANCE Canadian Pure Play Montney Producer Listed on TSX and NYSE AAV TSX 52-week trading range 4.51-8.11 Shares Outstanding (basic) 170.3 million Glacier Q1 2015 production 134 mmcfe/d (22,326 boe/d) Market…
  3. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 3
    FOCUSED ON MONTNEY GROWTH & VALUE CREATION World Class Glacier Montney Asset Growth Plan & Operational Financial Excellence Strength 2015-2017 Development Plan 22% Average Annual Production Growth 245 mmcfe/d in 2017…
  4. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 4
    GLACIER OUTPERFORMANCE IMPROVES CAPITAL EFFICIENCIES Growth Maintained Improved Well with Lower Capital Performance 110 Million (1) Reduction in 2015 Capital Expenditures Industry Leading Low Cost 18% (1) 2015 Annual Production…
  5. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 5
    GLACIER GAS PLANT EXPANSION & DEVELOPMENT PLAN Glacier gas plant (100% AAV) expansion to 250 mmcf/d on track for mid-year 2015 & reserves spare capacity for future growth. Production targeted to increase to 183 mmcfe/d mid-July 2015…
  6. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 6
    PLAN GROWTH MAINTAINED WITH 150 MILLION LOWER CAPITAL Plan Summary 2015 to 2017 (1) Production Profile 245 mmcfe/d 245 mmcfe/d (40,830 boe/d) in 2017 205 mmcfe/d 1 545 million Capital Expenditures 183 mmcfe/d (5% service cost…
  7. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 7
    GROWTH PLAN LEADS TO SIGNIFICANT FREE CASH FLOW IN EARLY 2017 300 Cash flow significantly exceeds 245 mmcfe/d 3.50/gj generates maintenance capital each year 130 million free annual cash flow 250 200 Capital Capital required…
  8. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 8
    2015 THROUGH 2017 GROWTH PLAN PRICE SENSITIVITY Downside gas price mitigation while retaining torque to upside 8
  9. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 9
    FOCUSED ON GLACIER DEVELOPMENT WITH ADDITIONAL MONTNEY LANDS PROVIDING FUTURE UPSIDE Current development at Glacier including dry and liquids rich gas drilling Progress Glacier future drilling inventory 1,000 100% owned locations 9…
  10. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 10
    INDUSTRY LEADING LOW COST PRODUCER A 1 Cdn realized gas price will more than cover Advantages production costs, royalties, G&A & interest of 0.89/mcfe 10
  11. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 11
    STRONG NETBACKS PROVIDE SUSTAINABILITY Q1 2015 Illustrative Glacier Operating Netback (/mcfe) 2.50/mcfe Revenue (99% gas production Q1 2015) 3.32 (1) 2.50 Royalties (0.13) (0.13) Operating Costs (0.35) (0.35) Q1 2015 Operating…
  12. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 12
    UPPER AND LOWER MONTNEY WELL PERFORMANCE Recent wells completed with slick water and more frac stages are outperforming expectations. No 2014/2015 wells have been brought on-production to date. - - - Budget Type Curve (IP30 6.9…
  13. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 13
    2013 SLICKWATER WELLS OUTPERFORM LONG TERM PRODUCTION EXPECTATIONS Recent Upper and Lower Montney wells completed with slickwater fracs are outperforming longer term production expectations. Graph illustrates production from 21…
  14. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 14
    IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER New 2013 12-2 well started Middle Montney wells have sequentially production at restricted rate of 9.5 demonstrated improved productivity as mmcf/d. Currently producing…
  15. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 15
    EAST GLACIER CONTAINS HIGHER MIDDLE MONTNEY LIQUID CONTENT Middle Montney wells to date Glacier C5+ 57 illustrate higher liquid content(1) deg API from west to east across Glacier 26 57 31 63 No 30 Wells Drilled bbl/mmcf 10…
  16. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 16
    (1) EXCEPTIONAL UPPER MONTNEY WELL ECONOMICS Upper Montney Dry Gas (2) Recent average Upper Montney well performance exceeding 7 mmcf/d IP30 (3) (1) Management estimates. NPV 10% pre-tax (2) (3) Based on 5.5 million…
  17. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 17
    (1) EXCEPTIONAL LOWER MONTNEY WELL ECONOMICS Lower Montney at 11 bbls/mmcf C3+(2) Recent Lower Montney wells are at or above 7 mmcf/d IP 30 AECO Gas Price /mcf (3) (1) Management estimates. NPV 10% pre-tax (2) Based on 5.8…
  18. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 18
    STRONG EAST GLACIER MIDDLE MONTNEY WELL (1) ECONOMICS Middle Montney at 50 bbls/mmcf C3+ (2) Recent wells are exceeding Budget Type Curve of 4 mmcf/d IP 30 (3) (1) Management estimates. NPV 10% pre-tax (2) Based on 6.4…
  19. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 19
    PENTASTACK DEVELOPMENT WITH DECADES OF DRILLING INVENTORY AT GLACIER Five Development Intervals Containing 1,000 Future Locations after 2017 292 undeveloped locations booked in Dec 31, 2014 Reserve Report 65% of unbooked future…
  20. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 20
    GLACIER 100% OWNED GAS PLANT & PIPELINE ACCESS R14 R13 R12 R11 R10 R9 R8 R7W6 T78 T78 Glacier Gas Plant Positioned for Production Ramp-up T77 T77 Advantage Gas Plant 250 MMcf/d Capacity Alliance Sales Gas Line July 2015…
  21. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 21
    Pilings for expansion Doubles process Refrigeration Equipment Installation train Length to 1,000 feet (3 Blocks) AAV Glacier Gas Plant Expansion Activity Spring 2015 Total of 150 persons employed for project Connecting the New…
  22. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 22
    Clear Vision for Growth Financial Strength Proven Expertise
  23. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 23
    APPENDIX 23
  24. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 24
    FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 22% ANNUAL AVERAGE PRODUCTION GROWTH FOR 2015 TO 2017 Development Plan (1) Production Profile 2014 2015 2016 2017 245 mmcfe/d Completed Current Estimate Estimate Production Calendar average…
  25. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 25
    2015 GUIDANCE 2015 Guidance(1) Average Production (mmcfe/d) 150-160 % Annual Production growth 18% Exit Production (mmcfe/d) 180-190 Royalty Rate (%) 4.5% to 5.5% Operating costs (/mcfe) 0.32 to 0.37 Capital Expenditures (…
  26. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 26
    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 26
  27. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 27
    TRACK RECORD OF OPERATING PERFORMANCE 0.50 472,400/frac stage 77% Reduction in cost per frac in Upper Montney Production Growth to 135 mmcfe/d & Average number of frac stages from 7 to 17 Completion Costs/Frac (MM/frac)…
  28. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 28
    HIGHLY EFFICIENT 2014 MONTNEY RESERVES ADDITIONS 321% Reserves Replacement (1) 803% Growth 2P Reserves 33% Increase in PDP (2) reserves to 279 Bcfe 11% Increase in Proven reserves to 1.2 Tcfe 6% Increase in Proven plus Probable…
  29. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 29
    HIGHLY EFFICIENT GLACIER RESERVE ADDITIONS & RECYCLE RATIO Mcfe 2.50 (1.03) 2P F&D Cost 2.00 (0.89) Total Cash Cost 2014 2P F&D Cost (/Mcfe) 1.03 3yr Avg F&D (1) 1.50 2.9x 3yr Avg Recycle Ratio (2) (1.92) 1.00…
  30. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 30
    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 Re-calibration aligned log to actual wells improved by…
  31. July 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 31
    GLACIER DRILLING ECONOMICS AND 2P RECOVERIES PER INTERVAL ( millions unless otherwise indicated) Glacier Drilling Economics PVs 10% Discount(1) Middle Montney AECO C natural gas price Upper Montney Layer 1(6) Lower Montney Layer…

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