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July 2015 Investor Presentation – Perpetual Energy Inc

Perpetual Energy Inc · Jul 28, 2015 · 49 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 – Perpetual Energy Inc – slide 1
    I N V E S T O R P R E S E N TAT I O N J U LY 2 0 1 5 KEY PRIORITY 3 BOLD IDEAS MAXIMIZE VALUE OF FOR ENERGY SHALLOW GAS 1
  2. July 2015 Investor Presentation – Perpetual Energy Inc – slide 2
    Perpetual Energy Inc. Common shares o/s 152 million Management ownership 26% Share price(1) 0.93 Trading volume(2) 79,000 shares/day Market capitalization 141 million Total net debt(3) 375 million Net bank debt(3) 65…
  3. July 2015 Investor Presentation – Perpetual Energy Inc – slide 3
    Diversified portfolio for value creation SHALLOW LIQUIDS- HEAVY OIL BITUMEN OTHER GAS RICH GAS Eastern Edson Wilrich Mannville Panny Warwick Gas Alberta Greater Edson Mannville Bluesky Storage Conventional Multi-zone EOR Liege…
  4. July 2015 Investor Presentation – Perpetual Energy Inc – slide 4
    Operating profile Conventional shallow gas Mannville heavy oil Eastern Alberta Bitumen Warwick gas storage Viking/Colorado shallow shale gas Edson Wilrich Deep Basin Multi-zone liquids-rich gas Tight oil & gas exploration…
  5. July 2015 Investor Presentation – Perpetual Energy Inc – slide 5
    Portfolio management strategy 2015 CASH FLOW GENERATORS Maximize cash flow Conventional shallow gas Warwick Gas Storage Mannville heavy oil MEDIUM AND PROVEN LONG TERM DIVERSIFYING VALUE STRATEGIES GROWTH STRATEGIES Optimize…
  6. July 2015 Investor Presentation – Perpetual Energy Inc – slide 6
    2015 Top five strategic priorities 1. Grow Greater Edson Liquids-Rich Gas Production, Cash Flow, Inventory, Reserves and Value 2. Optimize Value of Mannville Heavy Oil 3. Maximize Value of Shallow Gas 4. Refine Elements of…
  7. July 2015 Investor Presentation – Perpetual Energy Inc – slide 7
    KEY PRIORITY 1 GROW GREATER EDSON LIQUIDS-RICH GAS PRODUCTION, CASH FLOW, INVENTORY, RESERVES AND VALUE
  8. July 2015 Investor Presentation – Perpetual Energy Inc – slide 8
    Edson Wilrich liquidsrich gas Inventory of 111 gross (99 net) locations; 87 gross (79 net) booked in reserve report 9 Optimal development scenario set at 400 m interwell spacing
  9. July 2015 Investor Presentation – Perpetual Energy Inc – slide 9
    East Edson JV transaction details Granted two royalties that work in combination to create a fixed, first-out wedge production GORR Flat 5.6 MMcf/d plus associated liquids of 100 bbl/d until 2022 Declining at 10% per year from…
  10. July 2015 Investor Presentation – Perpetual Energy Inc – slide 10
    East Edson JV execution D e c 3 1, Rates curtailed pending new plant commissioning in early July 2015 Late time data on all wells impacted by capacity restrictions 17 new joint venture wells drilled 13 on production to…
  11. July 2015 Investor Presentation – Perpetual Energy Inc – slide 11
    West Edson transaction summary Swap of West Edson property for 6.75 million Tourmaline Shares Market value of 265 million 24 MMboe of reserves 7.2 MMboe (29%) proved and probable developed producing 16.8 MMboe undeveloped reserves…
  12. July 2015 Investor Presentation – Perpetual Energy Inc – slide 12
    TOU Shares Use of Proceeds Multi-faceted range of possibilities over time Stay invested in TOU shares for return on investment Analysts average 12 month TOU target price is 51/share = 345 MM (30% ROR) Collateralize TOU shares to…
  13. July 2015 Investor Presentation – Perpetual Energy Inc – slide 13
    Greater Edson liquids-rich gas play performance 40% net production growth in 2014 12,000 14,000 Driven by West Edson expansion from 15 to 30 MMcf/d net 10,000 12,000 Ramp up to fill existing East Edson facilities with JV drilling…
  14. July 2015 Investor Presentation – Perpetual Energy Inc – slide 14
    KEY PRIORITY 2 OPTIMIZE VALUE OF MANNVILLE HEAVY OIL
  15. July 2015 Investor Presentation – Perpetual Energy Inc – slide 15
    Eastern Alberta Conventional heavy oil Mannville 8 Producing Mannville pools* R10 R9 R8W4 L KA F G AU JKF L K G G G G L F K K L F C U G F K L K K C K L L F F K K AU G G 6 Lloyd, 1 Sparky, 1 Basal Quartz L K F…
  16. July 2015 Investor Presentation – Perpetual Energy Inc – slide 16
    Mannville heavy oil value potential Projected Economics Per Well Assumptions Lloyd Sparky (McDaniel Year End 2013) Capital (D,C & T) 1.2 MM 1.2 MM 68.90/bbl Wellhead heavy price 2014 Pricing WTI US95/bbl, WCS US23.5/bbl, offset…
  17. July 2015 Investor Presentation – Perpetual Energy Inc – slide 17
    Waterflood and enhanced oil recovery Mannville I2I Waterflood Pool Working Interest 66.7% OOIP: 35 MMbbl Sparky Mid Type Log 100/09-32-050-08W4/00 Cum Prodn + McDaniel P+P: 1.5 MMbbl (4.2% recovery) technical recovery 19…
  18. July 2015 Investor Presentation – Perpetual Energy Inc – slide 18
    Preliminary waterflood response Mannville I2I North End Wells Group Plot: GOR dropping; Indications of oil increasing Gas Mcf/d Mannville B: Fluid rates increasing; Oil production increasing Water bbl/d Oil bbl/d Positive…
  19. July 2015 Investor Presentation – Perpetual Energy Inc – slide 19
    Waterflood and enhanced oil recovery scope Select Pools OOIP Cumulative P+P Implied Expected Potential with production Reserves Recovery Primary Secondary Recovery to YE 2014 booked at Factor Recovery and EOR YE 2014 (5-8% (10-15%)…
  20. July 2015 Investor Presentation – Perpetual Energy Inc – slide 20
    KEY PRIORITY 3 MAXIMIZE VALUE OF SHALLOW GAS
  21. July 2015 Investor Presentation – Perpetual Energy Inc – slide 21
    Conventional shallow gas Legacy asset base characteristics Northeast and East Central Alberta Cretaceous and Devonian sweet shallow gas < 800m Current production 60 MMcf/d Belly River Base declines < 15% Multiple stacked zones and…
  22. July 2015 Investor Presentation – Perpetual Energy Inc – slide 22
    Viking/Colorado shallow shale gas 130 TCF Resource In Place Belly River Play Fairway OGIP estimated average 16 Bcf/section Cardium/ Colorado Wells Perpetual Lands 300m gas saturated shale section Historical Viking Reserves 6…
  23. July 2015 Investor Presentation – Perpetual Energy Inc – slide 23
    KEY PRIORITY 4 REFINE ELEMENTS OF PRODUCTION GROWTH STRATEGY FOR 2017 TO 2020
  24. July 2015 Investor Presentation – Perpetual Energy Inc – slide 24
    Waskahigan Duvernay volatile oil play Richer/Volatile Oils 16-36 Leaner/Gas Condensates AOC Farm-in: Deep Valley Drilled & completed 16-36-63-25W5 Gas Plant PMT retains 35% in 6 sections & Simonette 100% in 3.75…
  25. July 2015 Investor Presentation – Perpetual Energy Inc – slide 25
    Bitumen 527net sections (329,000 net acres) of oil sand leases Variousformation targets and ultimate recovery methods 7potential project areas with varying potential Over 3 billion bbls OBIP independently recognized at Liege…
  26. July 2015 Investor Presentation – Perpetual Energy Inc – slide 26
    Bitumen Panny Bluesky Low rate cold flow without solvent 8 m Bitumen or thermal assistance 10 m Bitumen Average pay thickness 11 m Low viscosity bitumen 15,000 cp at 25oC 50,000 cp at 11oC reservoir temp Highly mobile at 70oC…
  27. July 2015 Investor Presentation – Perpetual Energy Inc – slide 27
    Future production growth potential Inventory captured and risk assessment on track for future production growth 28 Growth trajectory depends on commodity prices, capital and play performance
  28. July 2015 Investor Presentation – Perpetual Energy Inc – slide 28
    KEY PRIORITY 5 REDUCE DEBT AND IMPROVE DEBT/CASH FLOW RATIO
  29. July 2015 Investor Presentation – Perpetual Energy Inc – slide 29
    Debt reduction 2014 Transactions West Central AB undeveloped land 3 million Gas over bitumen monetization 23.2 million Mannville non-core 21.6 million East Edson JV net proceeds 120 million Producing royalty sale 50 million…
  30. July 2015 Investor Presentation – Perpetual Energy Inc – slide 30
    Balance sheet Net Bank Debt: 65 million(2) Borrowing base on credit facility - 100 million Includes lending value for TOU shares Next semi-annual redetermination October 2015 Senior Unsecured Notes: 275 million 7 year Notes issued…
  31. July 2015 Investor Presentation – Perpetual Energy Inc – slide 31
    2015 Capital spending Q1 2015 Q2-Q4 Total Wells Capital Capital West Central 7 gross (1) 43 MM 20 MM 63 MM Liquids-Rich Gas (5 net) Waterflood Mannville Heavy Oil 1 MM 2 MM 3 MM facilities Recompletions/ Eastern Shallow…
  32. July 2015 Investor Presentation – Perpetual Energy Inc – slide 32
    INVESTMENT THESIS
  33. July 2015 Investor Presentation – Perpetual Energy Inc – slide 33
    Sum of the parts Trading at
  34. July 2015 Investor Presentation – Perpetual Energy Inc – slide 34
    PMT / TOU Share Value Relationship PMT share value highly leveraged to TOU share price 6.75 MM TOU shares 260 million 50% of current PMT enterprise value; 150% of PMT market cap Mathematically, 1 in TOU share price = 0.045 in value…
  35. July 2015 Investor Presentation – Perpetual Energy Inc – slide 35
    Key investment highlights High Quality Assets Asset base repositioning for resource-style and diversification successful Edson Wilrich liquids-rich gas inventory well-defined Mannville heavy oil delivering diversified cash flow with…
  36. July 2015 Investor Presentation – Perpetual Energy Inc – slide 36
    ADDITIONAL INFORMATION Sue Riddell Rose President & CEO Cam Sebastian Vice President, Finance & CFO infoperpetualenergy.com EMAIL 800.811.5522 TOLL FREE 403.269.4400 PHONE 403.269.4444 FAX 3200, 605 5 Avenue SW Calgary, Alberta…
  37. July 2015 Investor Presentation – Perpetual Energy Inc – slide 37
    APPENDIX
  38. July 2015 Investor Presentation – Perpetual Energy Inc – slide 38
    East Edson type curves East Edson SW Type Curve* DC&T 5.55 MM IP 5.5 MMcf/d 13.5 bbl/MMcf NGL Reserves 3.2 Bcfe sales/well NPV10 2.5 MM (5.0 MM Jan 1, 2014) ROR 28% (ROR 50% Jan 1, 2014) 63 (60.5 Net) P+PUDs booked 7…
  39. July 2015 Investor Presentation – Perpetual Energy Inc – slide 39
    Future growth and value creation 2016 - 2020 East Edson expansion Wilrich development LIQUIDS-RICH Define scope of secondary targets including Belly River, Cardium, Second White GAS Specks, Viking, Notikewin, Fahler, Rock Creek,…
  40. July 2015 Investor Presentation – Perpetual Energy Inc – slide 40
    Diversification Warwick Gas Storage 40 Bcf Storage Reservoir Delta Pressure to 47 Bcf 10 Bcf base reserves cushion gas Commercial Park and Loan in place Up to 25 Bcf potential working business gas capacity 30 to 50 year life…
  41. July 2015 Investor Presentation – Perpetual Energy Inc – slide 41
    LEAD process technology pilot Low pressure electro-thermally assisted drive First stage of pilot planned for 2015 Cyclic Heat Stimulation 5 million capital net of 30% IETP funding Validating reservoir flow model and evaluating heater…
  42. July 2015 Investor Presentation – Perpetual Energy Inc – slide 42
    Bitumen Liege carbonates AOC Excellent reservoir quality vuggy Shell porosity in Grosmont 3 Grosmont carbonate / Leduc OV wells drilled Combined with legacy gas wells to evaluate and map resource Stacking of 3 Grosmont units…
  43. July 2015 Investor Presentation – Perpetual Energy Inc – slide 43
    2015 Projected funds flow 2015 Production 20,000 boe/d 100 MMcf/d gas 2,450 bbl/d oil and NGL 2015 Cash Flow(1) AECO (Cdn/GJ) ( MM) 2.50 3.00 3.50 4.00 55.00 (1.0) 3.2 7.4 11.6 WTI (US/Bbl) 60.00 0.6 4.8 9.0 13.2 65.00…
  44. July 2015 Investor Presentation – Perpetual Energy Inc – slide 44
    Commodity price risk management strategy Enhance or protect funds flow and balance sheet Enhance or protect the economics of an acquisition Enhance or protect capital program economics Capitalize on perceived market anomalies…
  45. July 2015 Investor Presentation – Perpetual Energy Inc – slide 45
    Commodity price risk management Futures % of 2015 Volumes Fixed Price Type of Contract Term Price(1) Natural Gas (GJ/d) (/GJ) (/GJ) Production(2) AECO Fixed Price Financial Jul 2015 2,500 2.54 2.45 2% AECO Fixed Price Physical Jul…
  46. July 2015 Investor Presentation – Perpetual Energy Inc – slide 46
    Reserve distribution Reserve growth in higher value diversifying assets 47
  47. July 2015 Investor Presentation – Perpetual Energy Inc – slide 47
    P+P Reserve distribution Year-End 2014 PDP 2PDP PNP/PUD PbNP Total: 105.5 MMboe PDP 2PDP PbNP/PbUD PNP/PUD PDP PbNP/PbUD 2PDP Mannville Deep Basin Eastern Shallow Gas PNP/PUD Over 70% of reserves in West…
  48. July 2015 Investor Presentation – Perpetual Energy Inc – slide 48
    P+P Reserve distribution Year-End 2014 2PDP PDP PbNP/Pbud PDP Total: 685 Million PNP/PUD 2PDP PDP PbNP/PbUD 2PDP PNP/PUD Mannville Deep Basin Eastern Shallow Gas Close to 50% developed producing reserves by…
  49. July 2015 Investor Presentation – Perpetual Energy Inc – slide 49
    FD&A and Reserve growth 2P FD&A (/Boe) 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 SRX WCP RMP RRX FRU CQE JOY LTS PGH RTK PEY BXE LEG GXE TOG PPY ERF TOU…

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