I N V E S TO R P R E S E N TAT I O N SEPTEMBER 2015 BOLD IDEAS FOR ENERGY 1
Perpetual Energy Inc. Common shares o/s 153 million Management ownership 26% Share price(1) 0.70 Trading volume(2) 67,000 shares/day Market capitalization 107 million Total net debt(3) 375 million Net bank debt(3) 65…
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…
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…
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…
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…
KEY PRIORITY 1 GROW GREATER EDSON LIQUIDS-RICH GAS PRODUCTION, CASH FLOW, INVENTORY, RESERVES AND VALUE
Edson Wilrich liquidsrich gas To Rosevear Plant (15% WI) Pipeline To Edson Deep Cut Plant 16-10 Compressor Capacity 30 MMcf/d West Wolf Lake 10-3 Gas Plant Capacity 45 MMcf/d (July 14, 2015 start-up) Pre-2014…
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…
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…
East Edson JV execution East Edson JV-July 2014 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%…
Greater Edson production growth Greater Edson Daily Production 80,000 70,000 Daily Production (Mcfe/d) 60,000 50,000 40,000 30,000 20,000 10,000 - 2014-01 2014-07 2015-01 2015-07 Edson West Edson Sold production…
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…
KEY PRIORITY 2 OPTIMIZE VALUE OF MANNVILLE HEAVY OIL
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…
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…
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…
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…
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%)…
KEY PRIORITY 3 MAXIMIZE VALUE OF SHALLOW GAS
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…
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…
KEY PRIORITY 4 REFINE ELEMENTS OF PRODUCTION GROWTH STRATEGY FOR 2017 TO 2020
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…
Bitumen 434net sections (278,000 net acres) of oil sand leases Variousformation targets and ultimate recovery methods 6potential project areas with varying potential Over 3 billion bbls OBIP independently recognized at Liege…
Bitumen Panny Bluesky Low rate cold flow without solvent 8m Bitumen or thermal assistance 10m Bitumen Average pay thickness 11 m 12m Bitumen 14m Bitumen Low viscosity bitumen 16m Bitumen 15,000 cp at 25oC 50,000 cp at 11oC…
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
KEY PRIORITY 5 REDUCE DEBT AND IMPROVE DEBT/CASH FLOW RATIO
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…
Balance sheet Net Bank Debt: 66 million(1) Borrowing base on credit facility - 96.5 million 25 million reserve-based loan including 40 million grind for senior notes 70.5 million margin loan for TOU shares (reduced from 75 million…
2015 Capital spending H1 2015 H2 Total Wells Capital Capital West Central 7 gross (1) 55 MM 11-21 MM 66-77 MM Liquids-Rich Gas (5 net) Waterflood Mannville Heavy Oil 1 MM 1 MM 2 MM facilities Recompletions/ Eastern…
INVESTMENT THESIS
Sum of the parts Trading at
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…
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…
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…
APPENDIX
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…
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,…
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…
LEAD process technology pilot Low pressure electro-thermally assisted drive First stage of pilot underway in 2015 Cyclic Heat Stimulation 5 million capital net of 30% IETP funding Validating reservoir flow model and evaluating heater…
Bitumen Liege carbonates AOC Shell Excellent reservoir quality vuggy 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…
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…
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…
Reserve distribution Reserve growth in higher value diversifying assets 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…
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…
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