PEOPLE, FOCUS & EXECUTION Unconventional Natural Gas Resource Player Unconventional Light Oil Resource Player 2
INVESTMENT HIGHLIGHTS 2015 average production forecast 39,000 40,000 boe/d (16% 19% Y/Y average production growth). Q4 2015 average production forecast increased to 41,000 42,000 boe/d while reducing forecast 2015 capital…
CORPORATE SNAPSHOT Production 2014 Average Production (boe/d) 33,734 (84% gas) Q2 2015 Average Production (boe/d) 38,489 (86% gas) 2014 Year End Reserves 2P Reserves 465 MMboe (18% PDP) 2P FD&A Cost (Including FDC) 10.45/boe 2P Recycle…
CREDIT FACILITY SUMMARY Effective May 11, 2015: Credit capacity has been increased to 800 million based on year end 2014 reserves which includes PDP reserves of 84.7 MMboe. In conjunction with expanded credit capacity, Birchcliff has…
BIRCHCLIFF HISTORY A Track Record of Execution
KEYS TO SUCCESS Executives with proven track record, continuity since inception and significant ownership. Management Highly experienced Management Team with excellent technical knowledge and a long history with the company. Over 180…
PRODUCTION HISTORY 50,000 45,000 41,000 - Compound annual growth of 39,000 - 42,000 32% per year since 2005 40,000 40,000 Average Production (boe/d) 35,000 33,734 30,000 25,829 25,000 22,802 20,000 18,136 15,000…
CORPORATE RESERVES SUMMARY 500,000 450,000 400,000 PDP, 1P and 2P compound annual growth of 16%, 26% 350,000 and 27% per year since 2005 Reserves (Mboe) 300,000 250,000 PDP 200,000 TP 150,000 2P 100,000 50,000 0…
CORPORATE NPV10 (BT) 4,000 3,500 2014 year end 2P NPV10 (BT) was 3.8 billion 3,000 NPV10 (million) 2,500 PDP 2,000 TP 1,500 2P 1,000 500 0 YE 2005 YE 2006 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE…
PROVEN TRACK RECORD AS A LOW COST PRODUCER Even in 2012, the lowest natural gas price in 10 years, Birchcliff was still able to generate profit. 3 Year Profitability Breakdown: 2012 2013 2014 Average Average AECO (CAD/GJ) 2.27 2.99…
PROVEN TRACK RECORD OF PER SHARE GROWTH 40,000 240 600 4,000 Annual Production (boe/d) P+P Reserves per Share (boe/1,000 35,000 210 525 3,500 Annual Production (boe/d) Production per Share Proved (boe/d/million…
DECLINE & CAPITAL EFFICIENCY AVERAGE DECEMBER TO DECEMBER PRODUCTION; NOT IPS Dec Avg. 45,000 40,454 Additions boe/d 40,000 Dec Avg. Base 28,749 35,000 Dec Avg. boe/d Production (boe/d) Total Production 27,142 30,000 boe/d…
2014 ACCOMPLISHMENTS Drilled 57 (56.0 net) horizontal wells including 41 (41.0 net) Montney/Doig horizontal natural gas wells and 12 (12.0 net) Charlie Lake horizontal light oil wells. Four successful exploration wells drilled in…
2015 ACCOMPLISHMENTS Reduced DCCET (drill, case, complete, equip and tie-in) costs on Montney/Doig horizontal natural gas multi-well pads to an average of 4.5 million per well from an average of 5.8 million per well. A combination of…
LOOKING FORWARD 2015 Plans & Beyond
LONG TERM GROWTH PROFILE 120,000 100,000* 100,000 Production (boe/d) 80,000 Last common share equity 60,000 offering 14.2 million shares April 2012. 41,000 - 39,000 - 42,000 40,000 40,000 33,734 25,829 22,802…
2015 GOALS Deliver annual average production of 39,000 40,000 boe/d (16% 19% Y/Y average production growth). Deliver reserve growth in all categories while progressing strategic exploration projects. Maintain financial…
REVISED 2015 CAPITAL EXPENDITURE PROGRAM 2015 CAPITAL BUDGET: 249.4 MILLION Gross Wells Net Wells Net Capital (million)(1) Difference in Capital Drilling & Development New Old New Old New Old (million) Montney D1 Horizontal Gas Wells…
MONTNEY/DOIG NATURAL GAS RESOURCE PLAY A Significant Position in a World Class Play
MONTNEY/DOIG - A WORLD CLASS RESOURCE PLAY Resource density. Stacked resource up to 300 meters thick. Large areal extent. Extends over 50,000 square miles. Exceptional fracability. Low clay content, Birchcliff Montney/Doig low Poissons…
BIRCHCLIFF MONTNEY/DOIG Large contiguous land base with 876.3 net sections prospective for the Montney/Doig over our current intervals. Stacked resource in some of the thickest Montney with 3,346.3 net potential locations…
POUCE COUPE AREA Proven asset in development phase. Wells in the area show Montney C high initial deliverability, low Exploration terminal decline and stable long Horizontal term production. Recent exploration success in the…
ELMWORTH DEVELOPMENT Second Exploration Birchcliff has drilled two Horizontal successful exploration horizontal wells into the Montney D4 interval, both of which are expected to result in follow up First Exploration drilling and…
STACKED RESOURCE PROVIDES SUBSTANTIAL FUTURE UPSIDE Birchcliff Montney/Doig Natural Gas Resource Play Full Development Plan: Hexastack Basal Doig / Upper Montney (D5) 305.1 (288.4 net) sections 2P reserves booked on 28% of land…
PCS GAS PLANT The Engine for Future Growth
Production Processed through 2012 2013 2014 H1 2015 the PCS Gas Plant Average daily production, net to Birchcliff: Natural gas (Mcf) 59,327 91,666 132,808 157,462 Oil & NGLs (bbls) 204 527 1,065 1,249 Total boe (6:1) 10,092 15,805…
Corporate Operating Costs vs. % of Natural Gas Sales Volumes Processed at the PCS Gas Plant KEY STRATEGIC 10.00 100% Volume Through PCS Gas Plant Corporate Operating Cost (/boe) ADVANTAGES 8.00 6.00 80% 60% Generates…
MONTNEY/DOIG RESERVES Drilled 41 HZ M/D wells 450,000 159 (158.9 net) Montney/Doig Drilled 25 HZ M/D wells 400,000 horizontal natural gas wells Drilled 22 HZ drilled as of Dec 31, 2014 M/D wells 350,000 Drilled 23 HZ…
2014 MONTNEY/DOIG RESOURCE ASSESSMENT Summary of Birchcliff Reserves and Resources(1)(2)(3) Reserves and Resource Volumes (Bcfe) Resource Class Low Estimate Case Best Estimate Case High Estimate Case Cumulative Production(4) 216.3…
LOW DECLINE PRODUCTION All wells are choked initially for better operational efficiency, higher ultimate recovery and reservoir management. This leads to lower declines and subsequently less wells required to maintain production…
MONTNEY/DOIG REPRESENTS 81% OF PRODUCTION AND 89% OF 2P RESERVES Production (boe/d) 2P Reserves (MMboe) 40,000 500 Corporate Production Corporate Reserves Montney/Doig Production Montney/Doig Reserves 400 30,000 300 20,000 200…
PCS GAS PLANT HIGHLIGHTS 100% owned & operated. Current processing capacity of 180 MMcf/d. Preparation for construction of 22% Phase V expansion underway; will add 80 MMcf/d bringing total processing capacity to 260 MMcf/d in…
DRILLING & 2015 Montney/Doig Wells COMPLETION 2014 Montney/Doig Wells INITIATIVES Achieved steady reduction in both drilling time & costs. Continue to monitor and refine current drilling & completion practices to improve…
NEW COMPLETION TECHNIQUES IMPROVING WELL RESULTS 2014 Well Results vs. Deloitte Type Curves Year End 2014 Deloitte Tier 1 Type Curve IP: 5.2 MMcf/d 2P EUR: 6.0 Bcfe 36
ONE OF THE LARGEST MONTNEY LAND HOLDERS 1,400 1,200 Birchcliff has one of the largest land positons in the entire Montney/Doig Montney Acres (000's) 1,000 Natural Gas Resource Play 800 600 400 200 0 CNQ…
PCS GAS PLANT Scenario Analysis
IMPROVED PCS GAS PLANT ECONOMICS As of July 15, 2015, DCCET costs on our Montney/Doig horizontal natural gas wells have decreased to 4.5 million from 5.8 million largely due to significant cost savings on drilling and completion…
ILLUSTRATIVE 60 MMcf/d PCS GAS PLANT BUILD & FILL SCENARIO The chart to the right depicts the Montney/Doig Wells to keep 60 MMcf/d Gas estimated Montney/Doig wells Plant Full for 30+ Years(1) required to keep 60 MMcf/d plant 25 80…
The table below presents on an annual basis the internally estimated (1) facilities and DCCET capital requirements, (2) operating cash flow and (3) free cash flow (FCF) from a 60 MMcf/d PCS Gas Plant under various AECO natural gas…
PROXIMAL TO INFRASTRUCTURE WITH LONG TERM EXPOSURE TO LNG EXPORT Montney/Doig Birchcliff Pouce Coupe Production Montney/Doig & PCS Gas Plant Owned Infrastructure PCS Gas Plant Nova Pipeline System North American Market…
ENOUGH RESOURCE TO FILL A ONE Bcf/d LNG TRAIN FOR OVER 20 YEARS = 1 Bcf/d LNG Train X 365 Days X 20 Years 7.3 Tcf BIR Remaining BIR Contingent Reserves Resource + / = 1 Bcf/d LNG 2.5 Tcf 7.9 Tcf 28 Years Train Birchcliff…
CHARLIE LAKE LIGHT OIL RESOURCE PLAY Dependable Light Oil Production
WORSLEY CHARLIE LAKE LIGHT OIL Essentially 100% W.I. with operatorship and control of wells, pipelines and facilities. Own over 190 net sections with 200+ horizontal locations currently identified. Mature, predictable, long life…
WORSLEY CHARLIE LAKE LIGHT OIL ACCOMPLISHMENTS SINCE SEPTEMBER 2007 ACQUISITION 2P reserves have increased over 160% to 40.2 MMboe from 15.1 MMboe. Production increased over 45% to 4,991 boe/d in 2014 from 3,400 boe/d. 2014 year end…
WORSLEY AREA RESERVES 45,000 40,000 35,000 30,000 Reserves (Mboe) 25,000 PDP 20,000 TP 15,000 2P 10,000 5,000 0 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 PDP 6,018 6,395 6,008 6,757 7,102…
WORSLEY AREA NPV10 (BT) VS. DELOITTE OIL PRICE FORECAST 1,200 120 1,000 100 5 Year WTI Average /bbl 800 80 NPV (million) 600 60 400 40 200 20 0 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 0…
PROGRESS Birchcliff Non-Confidential Land CHARLIE LAKE Birchcliff Recent Exploration Horizontal Wells Charlie Lake Producing Wells LIGHT OIL Successfully drilled first Charlie Lake light oil exploration horizontal at Progress…
10 YEAR HIGHLIGHTS Celebrating 10 Years of Success
Birchcliffs average daily production was 33,734 boe/d in 33,734 boe/d 2014 compared to 2,793 boe/d in 2005, a compounded annual growth rate of 32% per year during those 10 years. 2,793 boe/d 1 2 3 4 5 6 7 8 9 10 11 12 2004 2005…
Production Growth boe/d/million wtd. avg. shares 40,000 300 30,000 225 Birchcliff has increased production at a compound annual growth rate of boe/day 20,000 150 32% over the past 10 years. 10,000 75 0 0 2005 2006…
Cash Flow from Operations 300 3.00 250 2.50 200 2.00 On average, cashflow and cash flow millions /share 150 1.50 per common share have increased 100 1.00 by 35% and 29%, respectively, over 50 0.50 the past five years. -…
Reserves Growth 500 3,500 400 2,800 Birchcliff has added significant low cost reserves boe/1,000 shares over the last 10 years of operations. On a per 300 2,100 common share basis, PDP, 1P and MMboe 200 1,400 2P…
APPENDIX
PEER COMPARISONS 2014 PDP FD&A Summary (/boe) Top 15 50.00 5.0 PDP FD&A Recycle on 2014 CF/BOE (Right Axis) 40.00 4.0 30.00 3.0 20.00 2.0 10.00 1.0 0.00 0.0 CQE PPY BIR PEY RMP SGY WCP CPG TOU…
PEER COMPARISONS Historical FD&A Costs 2P (/boe) 20.00 2014 3-Year Average 16.00 12.00 8.00 4.00 0.00 TOU ARX VII KEL PEY NVA CR BIR SRX AAV PPY Source: Cormark…
EXECUTIVE OFFICERS Mr. Tonken is a Director and the President and CEO of Birchcliff. He has more than 34 years of A. Jeffery experience in the oil and gas industry and is one of the Corporations founders. Prior to creating Birchcliff,…
EXECUTIVE OFFICERS Mr. Carlsen was appointed Vice-President, Engineering on July 22, 2013. He previously served as Christopher A. Asset Team Lead and Senior Exploitation Engineer with Birchcliff. Mr. Carlsen is a Professional Engineer…
BOARD OF DIRECTORS Mr. Shaw is a Director of Birchcliff and has more than 27 years of experience in the oil and gas industry Larry A. Shaw and is one of the Corporations founders. Prior to joining Birchcliff, Mr. Shaw served as Chairman…
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