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August 2015 Investor Presentation – Long Run Exploration Ltd.

Long Run Exploration Ltd. · Aug 20, 2015 · 38 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 – Long Run Exploration Ltd. – slide 1
  2. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 2
    LONG RUN PROFILE British Columbia Listing TSX:LRE NORTHERN GAS Shares Outstanding 193.5 million Alberta Market Capitalization 125 million Liquidity 1,000,000 PEACE (shares/day; 30 day avg) RIVER AREA Q2 2015 Production…
  3. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 3
    CORPORATE STRATEGY Provide longterm value to shareholders Improve capital structure through strategic and financial means Focus on disciplined capital management, portfolio rationalization and cost saving measures Actively…
  4. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 4
    2014 YEAR END RESERVES HIGHLIGHTS December 31, 2014 Reserves Volumes Long Run P+P Reserves: 170,625 MBoe PDP Probable 32% 39% Long Run P+P Reserves NPV (BT10%): PDNP & 1.64 billion PUD 28% Increased proved plus…
  5. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 5
    PRODUCTION PROFILE Completed Deep Completed Crocotta Basin property 40,000 acquisition Energy Inc. acquisition (August 2014) (May 2014) 35,000 30,000 Production (Boe/d) 25,000 20,000 15,000 10,000 5,000 0…
  6. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 6
    CAPITAL STRUCTURE Share Capital: Debt Structure 193.5 million common shares outstanding (at June 30, 2015) Credit Facilities(1): Long Runs credit facilities total 695 million Credit Credit facilities consist of a 410 million…
  7. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 7
    2015 CAPITAL BUDGET Capital budget of 100 million 60 45 million planned for the second half of the year 45 Based on average commodity price assumptions of WTI US52.50/Bbl, AECO Million 2.60/GJ and FX CDN/USD 0.80 for…
  8. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 8
    RISK MANAGEMENT 2015 Oil Hedges 2015 Natural Gas Hedges 100% 100 100% 3.60 80% 80% 75 3.40 CDN/GJ 60% 60% US/Bbl 50 40% 40% 3.20 25 20% 20% 0% 0 0% 3.00 Q1 Q2 Q3* Q4* Q1 Q2 Q3 Q4 % of Production Hedged Average…
  9. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 9
    SECOND QUARTER 2015 HIGHLIGHTS 45.9 million (0.24/share) in funds flow from operations 34,457 Boe/d average production (41% oil and NGLs) 8.8 million in capital expenditures Total capital expenditures of 54.1 million over the…
  10. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 10
    200 MILLION PRIVATE PLACEMENT Announced August 4, 2015 LRE has entered into an agreement for a private placement to Maple Marathon Investments Limited Maple Marathon is indirectly owned by MIE Holdings Corporation, an independent…
  11. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 11
    PEACE RIVER MONTNEY Normandville / Girouxville Q2 2015 production of 8,800 Boe/d (55% oil and NGLs) Montney oil horizontal multifrac play 950m vertical depth Normandville Medium gravity oil (28o API) Normandville Oil Battery…
  12. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 12
    PEACE RIVER MONTNEY Enhanced Oil Recovery (EOR) ALBERTA ALBERTA Good waterflood candidate for oil displacement and pressure maintenance: Large oil in place reservoir Normandville Good rock permeability of 5 15 md and porosity of…
  13. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 13
    PEACE RIVER MONTNEY Historical Development Peace River Montney Development 12,000 180 5 Montney horizontal wells were drilled in Q1 2015 10,000 150 8,000 120 Production (Boe/d) Number of Hz Wells 6,000 90 4,000…
  14. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 14
    PEACE RIVER MONTNEY Montney Type Curve 250 Expected Total Well Capital 1.9 MM 200 Type Curve Total Prod Liquids Production (Sales) (Boe/d) (Bbl/d) Production (Boe/d) 150 IP 30 210 120 Prod (3m Avg) 174 99 100 Prod (12m…
  15. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 15
    DEEP BASIN Edson Q2 2015 production of 7,400 Boe/d (3,050 Bbl/d of oil + NGLs; 26.1 MMcf/d of natural gas) 1309 LRE Compressor Station Cardium horizontal light oil development 15MMcf/d (100%) Pine Creek 1,800m 1,900m vertical…
  16. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 16
    DEEP BASIN EDSON Historical Development 9,000 Edson Development 180 8,000 160 Deep Basin Edson area was acquired through two transactions in May and August of 2014 7,000 140 Historical area production averaged: 6,000 120…
  17. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 17
    DEEP BASIN EDSON Cardium Type Curve 600 Expected Total Well Capital 3.0 MM 500 Type Curve Total Prod Liquids Production (Sales) (Boe/d) (Bbl/d) Production (Boe/d) 400 IP 30 394 252 300 Prod (3m Avg) 314 174 Prod (12m…
  18. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 18
    DEEP BASIN Kakwa / Elmworth Q2 2015 production 5,700 Boe/d (1,100 Boe/d oil + NGLs; 27.7 MMcf/d of natural gas) Cardium horizontal liquidsrich natural gas 1,000m 1,600m vertical depth NGL content (4050 Bbl/Mmcf) Firm gas…
  19. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 19
    DEEP BASIN KAKWA/ELMWORTH Historical Development Kakwa/Elmworth Development 6,000 80 70 Deep Basin Kakwa/Elmworth area was 5,000 acquired in May 2014 60 Historical area production averaged: 4,000 2012: 5,450 Boe/d (68 wells)…
  20. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 20
    DEEP BASIN KAKWA/ELMWORTH Cardium Type Curve Expected Total 600 Well Capital 3.5 MM 500 Type Curve Total Prod Liquids Production (Sales) (Boe/d) (Bbl/d) Production (Boe/d) 400 IP 30 392 61 300 Prod (3m Avg) 349 54 200…
  21. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 21
    REDWATER VIKING 0721 Redwater North Q2 2015 production 3,300 Boe/d Oil Battery 5,000 bbls/d (85% oil and NGLs) 4.0 mmcf/d T58 Viking horizontal oil development Redwater 0517 Redwater North 700m vertical depth Compressor Station…
  22. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 22
    REDWATER VIKING Historical Development Redwater Viking Development 7,000 350 Currently planning 12 horizontal Viking wells in 2H 6,000 300 2015 Redwater drilling program for 5,000 250 2015 began in early August 2015…
  23. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 23
    REDWATER VIKING Viking Type Curve 70 Expected Total Well Capital 1.0 MM 60 Type Curve Total Prod Liquids 50 Production (Sales) (Boe/d) (Bbl/d) Oil Production (Bbl/d) 40 IP 30 73 65 Prod (3m Avg) 60 53 30 Prod (12m Avg)…
  24. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 24
    REDWATER VIKING Project Comparison Area Comparison of Viking Horizontal Wells 80 (Top Competitors) Long Runs Redwater Viking 70 property performs competitively with top tier 60 Viking plays in both Alberta and Calendar…
  25. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 25
    BOYER Overview Q2 2015 production of 16.0 MMcf/d (2,700 Boe/d) (100% natural gas) Bluesky natural gas 200m 500m vertical depth Shallow decline (8%/year) Current drilling density less than 1.5 wells per section under vertical…
  26. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 26
    BOYER Boyer Area Development 4,000 1000 900 No new wells have been drilled 3,500 in the Boyer area since 2008 800 3,000 700 2,500 Production (Boe/d) 600 Number of Wells 2,000 500 400 1,500 300 1,000 200…
  27. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 27
    SUPPLEMENTAL 27
  28. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 28
    2014 YEAR END RESERVES December 31, 2014 Gross Reserves(1) Natural Oil NGLs Gas Total (MBbl) (MBbl) (MMcf) (MBoe) Proved Proved producing 15,164 7,799 194,693 55,412 Proved non-producing 304 818 19,975 4,451 Proved…
  29. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 29
    2014 YEAR END RESERVES Reserves Pricing(1) 2014 2013 WTI Oil AECO Gas WTI Oil AECO Gas (US/Bbl) (CDN/Mcf) (US/Bbl) (CDN/Mcf) 2014 - - 95.72 4.01 2015 64.17 3.38 93.62 4.17 2016 76.67 3.83 92.25 4.35 2017 83.33 4.06 96.01 4.81…
  30. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 30
    CORE AREA WELL PARAMETERS Property Overview Deep Basin Deep Basin Peace River Redwater Edson Cardium Kakwa Cardium Montney Viking Expected onstream 3.0 3.5 1.9 1.0 cost (MM) Expected 12month capital efficiency 15,150 13,950…
  31. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 31
    REALIZED PRICING Historical Realized Prices 2013 2014 Q1 2015 Q2 2015 Oil (/Bbl) Unhedged 80.83 85.44 42.17 58.33 Hedged 78.13 84.89 65.34 78.03 NGLs (/Bbl) Unhedged 72.45 51.24 22.50 24.48 Hedged 72.45 51.24 22.50 24.48…
  32. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 32
    NETBACKS BY AREA 1H 2015 Deep Basin Redwater Peace River Deep Basin Kakwa/ Viking Montney Edson Elmworth Boyer LRE Total 1H 2015 Netback (/Boe) /Mcf Revenue (unhedged) 51.17 31.87 20.17 18.87 15.96 2.66 27.57 Royalties (3.91)…
  33. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 33
    TAX POOLS Tax Pools Annual Deduction Millions Undepreciated Capital Cost (UCC) Up to approximately 25% 330 Canadian Oil & Gas Property Expense (COGPE) Up to 10% 420 Canadian Development Expense (CDE) Up to 30% 830 Canadian…
  34. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 34
    BANK SYNDICATE Bank of Nova Scotia National Bank of Canada The TorontoDominion Bank HSBC Bank Canada Wells Fargo Bank, N.A., Canadian Branch Canadian Imperial Bank of Commerce Alberta Treasury Branches Union Bank, Canada…
  35. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 35
    ROYALTY COSTS Royalty rates are set by a single sliding rate formula which incorporates both the well production rate and market prices The maximum royalty rate for oil is 40% The maximum royalty rate for natural gas is 36%…
  36. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 36
    ROYALTY COSTS Oil Royalty Rates Comparison Natural Gas Royalty Rates (Price and Well Production) (6/GJ Well Production) Natural Gas Royalty Rates (Based on 600 Mcf/d) For natural gas, the Company is eligible to receive…
  37. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 37
    CORPORATE INFORMATION TSX:LRE Contacts Bill Andrew Chair & CEO (403) 2616012 Dale Miller President & COO (403) 2616012 Corine Bushfield Senior Vice President & CFO (403) 2616012 Dale Orton Senior Vice President, Development (403)…
  38. August 2015 Investor Presentation – Long Run Exploration Ltd. – slide 38
    ADVISORIES BOE: Boe means barrel of oil equivalent on the basis of 6 mcf of natural gas to 1 bbl of oil. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency…

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