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Peters and Co Energy Conference – Tamarack Valley Energy Ltd.

Tamarack Valley Energy Ltd. · Sep 17, 2015 · 24 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. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 1
    Peters & Co. 19th Annual Energy Conference SEPTEMBER 2015 TVE: TSX-V www.tamarackvalley.ca 1
  2. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 2
    Current Volatile Environment Commodity price uncertainty Crude oil prices lowest in 5+ years Record NGL inventories causing lowest prices in 5+ years AB royalty uncertainty Alberta royalty review process underway TCPL…
  3. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 3
    Tamarack - Creating a Sustainable Business Reduce Operating and G&A Costs Maintain Liquidity Manage Capital on Bank Lines Allocation Create Self Sustainability and Build Value Add Low Cost, High Manage Risk Impact…
  4. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 4
    How TVE is Managing in this Volatile Environment Creating Self Sustainability: Managing capital allocation First to cut capital in January 2015 Basing capital allocation solely on ROR and…
  5. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 5
    Canadian Crude Oil Plays Half-Cycle Payout Period 5.0 4.5 4.0 3.5 Median of 3.0 years 3.0 Years 2.5 2.0 1.5 1.0 0.5 0.0 Viking Hz. TVE Wilson Montney Cardium Lloydminster Cardium Hz. Dodsland Creek Tower Pembina…
  6. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 6
    Why Do Cardium Well Results Vary So Much IP30 IP30 IP30 450-650 boe/d 400-500 boe/d 150-300 boe/d conglomerate high perm, 9% porosity Total gross pay: 15 20 meters Net pay: 9 10 meters 0.5 md or less ... All wells that…
  7. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 7
    Capital Allocation Criteria Operating Current expense economics 400% 4.0 cost cut at 70/bbl 1 mile well 1.5 mile 20% 350% 3.5 TVE to deploy capital 3.3 capital 0.7 3.2 TVE cost cut 300% H2/15 3.0 TVE hedges Q1/16 0.5 250%…
  8. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 8
    Control What We Can Control - Costs Operating Costs Capital Costs 16 5,000 14.84 Corporate Equip+Tie-in Completions Drilling 4,500 14 Wilson Creek 12.59 4,000 12 3,714 11.27* 10.96* 3,500 454 36% 3,373 22% Operating Costs…
  9. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 9
    The Evolution of a Core Area Alder Flats TVE land 2014 Acquisition land Entry in 2013 2015 Acquisition land Existing Cardium producers 42 net sections Existing vertical Cardium oil wells Q4/14 Drills (10 sec with Cardium pay)…
  10. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 10
    TVE Drilling Inventory 300 Other Cardium Total Inventory 80/bbl, 25% ROR 250 303 Locations 84 Payout 1.5 Years or Less Drilling Inventory 200 28 150 26 19 171 187 100 19 133 112 50 92 - 50 60 70 80 90…
  11. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 11
    Protecting Future ROR through Hedging Oil Volumes 5,500 Actual/Outlook 5,000 Current Hedges 4,500 Hedge Policy Target Base prod'n 4,000 3,500 Production bbls/d 3,000 Oil prodn at June/15 2,500 2,000 Hedged to 70-75%…
  12. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 12
    Achieving Production Per Share Growth, While De-Levering 12,000 25.0 Oil & liquids Completed Completed Wilson Completed Natural gas Sure Energy 60 mm Creek equityacquisition & Production per share Debt per boe/d prodn acquisition…
  13. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 13
    Debt to CF Sensitivity at 9,000 boe/d & 55% Liquids 2.2 2.0 1.7 Debt to CF (trailing year) 1.5 1.2 1.0 0.7 2015 year end 2016 year end 0.5 0.2 0.0 50 60 70 80 90 WTI Prices (US/bbl) ... Even at 50 WTI…
  14. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 14
    Free Cash Flow Sensitivity At 8,000 boe/d 60 At 8,500 boe/d At 9,000 boe/d 50 Free Cash Flow ( millions) 40 30 Assumes: 20 - 2.72/GJ AECO - 0.76 Cdn dollar - 5.00/bbl WTI / Edm par differential 10 0 50 60 70…
  15. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 15
    Tamarack Profile TVE : TSX-V Corporate Operational 2013 2014 2015e Shares outstanding* (mm) 99.93 Production (boe/d) 3,276 5,717 8,000 - 8,200 Fully diluted* (mm) 104.53 Exit Q4 avg. prodn (boe/d) 4,718 7,681 9,200 9,500 Share…
  16. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 16
    Key 6 Month Objectives and Look-back What we did in Objectives for What we said we would do Q1 2015 / Q2 2015 Q3 2015 / Q4 2015 Deliver 8,000 boe/d in Q1/15. Q1/15 averaged 8,092 boe/d. Cautiously proceed with drilling program to…
  17. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 17
    Why Buy/Continue to Own Tamarack Resilient assets in low commodity price environment Preserves a solid balance sheet As commodity prices improve, TVE high quality inventory will be economic earlier than most inventory TVE has a plan…
  18. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 18
    APPENDIX 18
  19. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 19
    Current Oil Hedges as at September 15, 2015 Term Hedge type Counterparty Volume Cdn Pricing July 1, 2015 to August 31, 2015 WTI fixed price Macquarie Bank 2,000 bbls/d Cdn 79.68/bbl H2 2015 September 1 to September 30, 2015 WTI fixed…
  20. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 20
    Cardium Oil TVE is Delivering the Best Economic Returns 60% 100 IRR (%) NPV 15 Break-even (C/bbl) 90 89.87 50% 49% 80 70 71.04 40% 70.5 64.88 60 62.85 62.25 36% 58.98 33% 55.71 30% 50…
  21. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 21
    What Successful Companies Do in a Downturn High cost, low Price recover with commodity Reality sets in lower costs locked in Poorest economics Period to negotiate contracts Deploy capital Pumping costs Drilling day rates…
  22. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 22
    Wilson Creek 2015 Tuck-in Acquisition Overview What We Bought Strategic Rationale Acquisition price 54 million Three separate one-off deals Production (45% liquids) 1,450 boe/d Blocky contiguous lands allow for Decline rate 20% more…
  23. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 23
    Wilson Creek Cardium Oil Drilling Inventory 160 Alder Flats 140 Wilson Creek PUDs booked Dec 31/14 120 100 80 60 40 20 0 50 60 70 80 90 ... Lightly booked high quality drilling inventory; exiting 2015 with 39%…
  24. Peters and Co Energy Conference – Tamarack Valley Energy Ltd. – slide 24
    Revised 2015 Budget Financial Stats per BOE 2014 Actuals 2015 Budget 6 month 2015 Results Average pricing 49.15/bbl WTI Edm Par 94.09/bbl 56.75/bbl 60.59/bbl AECO (monthly index) 4.40/GJ 2.70/GJ 2.80/GJ /boe Revenue 60.38 36.13…

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