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August 2015 Investor Presentation – Advantage Oil & Gas Ltd.

Advantage Oil & Gas Ltd. · Aug 17, 2015 · 30 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. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 1
    Advantage Production Reaches 183 mmcfe/d Target During Commissioning of Expanded Glacier Plant in July 2015. Excess Standing Well Productivity & Spare Plant Capacity Sets the Foundation for Low Risk Development Investor Presentation…
  2. August 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 4.51-8.34 Shares Outstanding (basic) 170.7 million Current production 180 mmcfe/d (30,000 boe/d) Market Capitalization…
  3. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 3
    CORPORATE STRENGTHS SUPPORT SUSTAINABLE GROWTH World Class Glacier Montney Asset Strong Balance Sheet 1000 future drill 1.6x D/CF Average locations Industry Leading Low 2015 thru 2017 Cost Producer 3.00 Cdn/mcf (0.89/mcfe total…
  4. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 4
    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 net…
  5. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 5
    GLACIER GAS PLANT EXPANSION UPDATE Commissioning of Inlet & New Compressors Began July 17, 2015, tested up to 200 mmcfe/d 180 mmcfe/d since July 20th limited by TCPL transportation restrictions Only 3 wells (versus 6 expected)…
  6. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 6
    CURRENT DRILLED WELL INVENTORY & STANDING PRODUCTIVITY Only 3 Wells Utilized to Initially Increase Production from 130 33 Wells Drilled in 2014 to 180 mmcfe/d program 20 Wells Completed & Standing 2-18 LM MMCF/D IP30 from 20…
  7. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 7
    GLACIER WELL ECONOMICS(1) Sensitivity of Reduced Well Costs and Higher IP/EURs at Current Commodity Prices Upper Montney % Lower Montney Advantage achieved 16% % average cost reduction on its last 11 UM wells Higher IP Higher IP %…
  8. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 8
    INDUSTRY LEADING LOW COSTS AUGMENTS ECONOMIC RETURNS A 1 Cdn realized gas price will more than cover Advantages production costs, royalties, G&A & interest of 0.89/mcfe 8
  9. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 9
    AND PROVIDES STRONG CASH MARGINS Q2 2015 Illustrative Glacier Operating Netback (/mcfe) 2.50/mcfe Revenue (99% gas production Q2 2015) 3.29 (1) 2.50 Royalties (0.11) (0.13) Operating Costs (0.37) (0.35) Q2 2015 Operating…
  10. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 10
    2015 PRODUCTION PROFILE & ESTIMATED TCPL RESTRICTION & OUTAGE IMPACTS Advantage capable of 183 mmcfe/d should excess TCPL transportation capacity becomes available TCPL Restrictions & outages impact AAV annual production by 5%…
  11. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 11
    TCPL SCHEDULED MAINTENANCE/OUTAGE CHANGES 2015(1) January 2015 - TCPL NW Alberta minimal scheduled restrictions/outages (8.2 Bcf/d normal capacity) TCPL H2 2015 Restrictions & Outages: Peak restriction up to 1.2 Bcf/d impact…
  12. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 12
    AAV PLAN DELIVERS AVERAGE 22% PRODUCTION GROWTH THROUGH 2017 Plan Summary 2015 to 2017 (1) 245 mmcfe/d (40,830 boe/d) in 2017 545 million Capital Expenditures (5% service cost reduction included in 2015 only) 70 New Montney wells (10…
  13. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 13
    GROWTH PLAN LEADS TO SIGNIFICANT FREE CASH FLOW IN EARLY 2017 Cash flow significantly exceeds 245 mmcfe/d 3.50/gj generates maintenance capital each year 130 million free annual cash flow Illustrative (1) Assumed natural gas…
  14. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 14
    2015 THROUGH 2017 GROWTH PLAN PRICE SENSITIVITY Downside gas price mitigation while retaining torque to upside 2015 Estimate updated on August 6, 2015 14
  15. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 15
    UPPER AND LOWER MONTNEY WELL PERFORMANCE Recent wells completed with slick water and more frac stages are outperforming expectations. - - - Budget Type Curve (IP30 6.9 mmcf/d & 6.9 Bcf) Data: updated to July 2015 15
  16. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 16
    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…
  17. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 17
    IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER 10 New MM wells Based on 2014 production test rates could exceed historical type curve 12-2 well (2013) cumulative production 2 Bcfe after 400 days (restricted)…
  18. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 18
    2014 MIDDLE MONTNEY PROGRAM FOCUSED ON HIGHER LIQUID CONTENT IN EAST GLACIER Middle Montney wells to date Glacier C5+ 57 MM wells (hz & vert) drilled illustrate higher liquid content(1) from west to east across Glacier deg API 22…
  19. August 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. August 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 Potential Area…
  21. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 21
    FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 22% ANNUAL AVERAGE PRODUCTION GROWTH FOR 2015 TO 2017 (2) (CAGR) (2) CAGR compound annual growth rate over period 23
  22. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 22
    EXCEPTIONAL UPPER MONTNEY WELL ECONOMICS NO COST (1) REDUCTIONS ASSUMED 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)…
  23. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 23
    EXCEPTIONAL LOWER MONTNEY WELL ECONOMICS NO COST (1) REDUCTIONS ASSUMED 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%…
  24. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 24
    STRONG EAST GLACIER MIDDLE MONTNEY WELL (1) ECONOMICS NO COST REDUCTIONS ASSUMED 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%…
  25. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 25
    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 27
  26. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 26
    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)…
  27. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 27
    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…
  28. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 28
    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…
  29. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 29
    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…
  30. August 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 30
    GLACIER DRILLING ECONOMICS AND 2P RECOVERIES PER INTERVAL NO COST REDUCTIONS ASSUMED ( millions unless otherwise indicated) Glacier Drilling Economics PVs 10% Discount(1) Middle Montney AECO C natural gas price Upper Montney Layer…

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