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October 2015 Investor Presentation – Rock Energy Inc.

Rock Energy Inc. · Oct 2, 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. October 2015 Investor Presentation – Rock Energy Inc. – slide 1
    SEIZING THE CHALLENGE October, 2015
  2. October 2015 Investor Presentation – Rock Energy Inc. – slide 2
    Focus on plays Develop a and reservoirs foundation of Implement where we can assets with growth with the Develop a suite of assets apply emerging predictable drill bit and that can provide a solid technology to cash flow, through…
  3. October 2015 Investor Presentation – Rock Energy Inc. – slide 3
    Find plays Explore new Focus on OIL that are Preserve and technologies exploration scalable and build our to increase and repeatable development recovery development where Rock drilling factors and programs can control inventory…
  4. October 2015 Investor Presentation – Rock Energy Inc. – slide 4
    TSX:RE STOCK TRADING Stock exchange TSE Symbol: RE Corporate Current stock price trading range 1.50 1.60/share Profile CAPITAL STRUCTURE Common stock (basic) 47.5 M Common stock (full diluted) 51.5M Market capitalization 75 80 M…
  5. October 2015 Investor Presentation – Rock Energy Inc. – slide 5
    ROCK ENERGY VALUE PROPOSITION Why Buy Rock 5
  6. October 2015 Investor Presentation – Rock Energy Inc. – slide 6
    Why buy Rock Strong As a low-cost producer with an excellent debt- Investment Case to-cash flow ratio, a low decline rate and a production strategy that fits the times, we will survive. We have great growth prospects when the time is…
  7. October 2015 Investor Presentation – Rock Energy Inc. – slide 7
    1. How is your Balance Sheet Will you be around when prices recover Why Buy Rock 2. What are you doing to get your costs down 4 Questions to think about Can you adapt to survive at these prices 3. What kind of assets do you have…
  8. October 2015 Investor Presentation – Rock Energy Inc. – slide 8
    We entered 2015 with low debt Year end 2014 net debt was 69.0 million Rock moved proactively to guard the Balance Sheet balance sheet early in the year Proactively protecting shareholder value Reduced the 2015 capital program to 25…
  9. October 2015 Investor Presentation – Rock Energy Inc. – slide 9
    Declining Cost of Lowering Our Total Cost of Production Production 45.00 Implementing the EOR project at Cost Initiatives Interest -0.07 40.00 0.23 Mantario in 2015 has reduced our 5.67 Rock is working to reduce its 35.00 3.16…
  10. October 2015 Investor Presentation – Rock Energy Inc. – slide 10
    2015 Corporate Funds from Sustainability Operations vs. WTI Because of our low decline rate, at WTI 50.00US/bbl for 50.00 2016 the company is Assets 45.00 42.00 46.00 generating enough funds from Rocks assets have a low base…
  11. October 2015 Investor Presentation – Rock Energy Inc. – slide 11
    Netbacks by Play at Various WTI Prices 90.00 Play Type 80.00 Netbacks 70.00 All our plays generate positive 58.39 60.00 cash netbacks down to WTI 40.00 US/bbl Netback (/bbl) 50.00 47.16 40.00 35.93 30.00 24.69 20.00…
  12. October 2015 Investor Presentation – Rock Energy Inc. – slide 12
    Share Price by Torque in Action Valuation Multiples Hedges in 2015 provide down 9.00 1.80 side protection, and we still have significant torque in 2016. Torque 3:1 8.00 1.60 In 2016 if Rock holds production Our hedges protect the…
  13. October 2015 Investor Presentation – Rock Energy Inc. – slide 13
    LUSELAND ONWARD ONWARD HZ VIKING PROJECT Rocks Focus and PRAIRIEDALE KERROBERT Future PLENTY DODSLAND NORTH Our Southwest-Saskatchewan oil assets COLEVILLE SMILEY DODSLAND ONGOING EXPLORATION ACTIVITIES…
  14. October 2015 Investor Presentation – Rock Energy Inc. – slide 14
    MANTARIO/LAPORTE The EOR project is working, and it provides the foundation of production and cash flow for the Company. 14
  15. October 2015 Investor Presentation – Rock Energy Inc. – slide 15
    VERTICAL WELL* DCET 575-625k NPV 1.6-1.5MM Pay Out 10-14 months Mantario IRR 200-120% *Assumes GLJ Oct 2015 Price Foundation of production and Forecast (WTI=50.00US/bbl in cash flow. 2016) and EOR royalty of 1%. Rock has a number of…
  16. October 2015 Investor Presentation – Rock Energy Inc. – slide 16
    Free cash flow WTI50.00US/bbl = 23.00CDN/bbl Mantario/Laporte Netback Average Production 10-20 potential infill locations. B of 2,300-2,500 bopd 6-8 potential step-out locations. Annual Cash flow of 20 Million/yr Maintenance…
  17. October 2015 Investor Presentation – Rock Energy Inc. – slide 17
    Gas/Oil Ratio (GOR) How do we The GOR at Mantario/Laporte has increased from 25 m3/m3 to a peak of 75m3/m3, but has stabilized at 70 m3/m3. know it is As the pressure in the pool increases (from the polymer working injection) the GOR…
  18. October 2015 Investor Presentation – Rock Energy Inc. – slide 18
    Before polymer Conversion of 12 Production increase without Projected production injection producers to injectors replacing 12 injector wells plateau with infills 4,000 3,200-3,500 bbl/d 2,200 bbl/d 2,300-2,500 bbl/d 2,650 bbl/d…
  19. October 2015 Investor Presentation – Rock Energy Inc. – slide 19
    ONWARD SASKATCHEWAN VIKING & MANNVILLE PLAYS Growth opportunities through continued development of this light oil, high netback, stacked horizons play
  20. October 2015 Investor Presentation – Rock Energy Inc. – slide 20
    Viking Resource Play Mannville Lloyd Oil Current light oil production Current Mannville oil Onward over 1,000 bopd production approximately Saskatchewan Light oil, high netback 400-450 bopd Area is highly prospective for new pools in…
  21. October 2015 Investor Presentation – Rock Energy Inc. – slide 21
    Onward Viking Play Large drilling inventory GAS/OIL CONTACT New gas/oil contact has been confirmed with vertical wells and 3D seismic. Play has been established over 40 sections of land generating over 600 unbooked drilling locations…
  22. October 2015 Investor Presentation – Rock Energy Inc. – slide 22
    Onward Viking Well Performance Onward Viking 18+ Stage Wells drilled after June 2014 Well Production 70 ONWARD VIKING TYPE WELL* Performance 60 Last 41 Wells Drilled IP30 50-60 boepd More fracs per well and better EUR 35 mboe (P+P)…
  23. October 2015 Investor Presentation – Rock Energy Inc. – slide 23
    Better production rates Results with new completion techniques are yielding initial production rates 35% better than before Onward Viking We brought our per-well costs down We have validated the play Drill and Case 260K Complete…
  24. October 2015 Investor Presentation – Rock Energy Inc. – slide 24
    NEW 30-SECTION 3D SEISMIC PROGRAM Onward Mannville 3D seismic program to further develop pools and confirm exploration leads EXISTING 3D SEISMIC PROGRAM Rock Land Existing 3D Rock Producing Lloydminster wells New 30 Section…
  25. October 2015 Investor Presentation – Rock Energy Inc. – slide 25
    Onward ONWARD MANNVILLE Mannville WELL CHARACTERISTICS VERTICAL HORIZONTAL Typical Well Characteristics Cost (DCET) 650K 775K Reserves (2P) 70 MBOE 100 MBOE Initial Production Rate 50 BOEPD 80 BOEPD IRR 23% 70% NPV (Btax 10%) 240K…
  26. October 2015 Investor Presentation – Rock Energy Inc. – slide 26
    Current Status 2015 Plans Onward Current production 450- Interpret 30 section 3D Mannville 500 bopd seismic program Program New Lloyd pool discovered Develop exploration with 11-16 (West Onward) prospects New Bakken pool Review…
  27. October 2015 Investor Presentation – Rock Energy Inc. – slide 27
    LOOKING FOWARD 2015 CAPEX program and go-forward strategy
  28. October 2015 Investor Presentation – Rock Energy Inc. – slide 28
    Rock is focused on the higher rate of return projects first Prudent 1. Mantario/Laporte EOR project and vertical wells Stewardship of Capital 2. Onward Viking Wells Protected with Hedges Focused on value creation over the long term…
  29. October 2015 Investor Presentation – Rock Energy Inc. – slide 29
    Ready to grow Drilling Locations rapidly 700 Drilling As oil prices Inventory improve, Rock has a 600 Prepared to capitalize quickly on significant amount improved oil prices of drilling inventory 500 to provide growth…
  30. October 2015 Investor Presentation – Rock Energy Inc. – slide 30
    Total Net Capital Expenditures for 2015 2015 Capital 4mm Budget Exploration Expanded on May 12, 2015 to accomplish our strategic 6mm objectives. Protected with hedges Mantario Drilling 40mm 16mm 2015 Capex Onward Viking…
  31. October 2015 Investor Presentation – Rock Energy Inc. – slide 31
    2015 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Forecast Production Avg. (boepd) 4,988 4,747 5,328 5,155 3,974 4,300 4,500 Results and % oil Realized Price (/boe) 95 82.45 95 75.76 97 60.09 97 37.65 95 50.38 97 42.50…
  32. October 2015 Investor Presentation – Rock Energy Inc. – slide 32
    Our Balance Sheet is Our Assets Have a Low Intact Decline Rate of 15-20% Spending less than Stable foundation of cash flow in 2H/2015 cash flow Forecasting D/CF at Can generate enough year-end of 1.7 times cash flow at WTI 50.00…
  33. October 2015 Investor Presentation – Rock Energy Inc. – slide 33
    SUPPLEMENTARY INFORMATION 33
  34. October 2015 Investor Presentation – Rock Energy Inc. – slide 34
    Management Team Directors Strong Allen J. Bey Stuart G. Clark Management President and CEO Chairman of the Board Team/Board Jeffrey G. Campbell Richard J. S. Wigington Senior Vice President and COO Robert A. Maitland Todd Hirtle…
  35. October 2015 Investor Presentation – Rock Energy Inc. – slide 35
    TRADING TSX Stock Symbol RE Market Profile USA - OTC RENFF SHARES OUTSTANDING Basic 47.5 MM Fully diluted 51.5 MM MANAGEMENT & DIRECTORS Basic 7.1% Fully diluted 11.5% RECENT TRADING RANGE 1.50 1.60 MARKET CAPITALIZATION 75…
  36. October 2015 Investor Presentation – Rock Energy Inc. – slide 36
    Drilling Results WELLS DRILLED 2013 2014 2015 YTD Heavy Oil 31 (30.0 net) 30 (30.0 net) 3 (3.0 net) Light Oil 10 (10.0 net) 39 (39.0 net) 16 (16.0 net) Natural Gas - - - D&A 4 (4.0 net) 6 (6.0 net) - Service Wells 1 (1.0 net) - -…
  37. October 2015 Investor Presentation – Rock Energy Inc. – slide 37
    Hedging Stream Volume (bpd) Price (CDN/bbl) Term Summary WCS 1,000 60.40 July Dec 2015 Fair Market Value at July 31, 2015 MSW 1,000 71.18 July Dec 2015 was 6.3 MM MSW 500 69.50 Jan Dec 2016 37
  38. October 2015 Investor Presentation – Rock Energy Inc. – slide 38
    Analyst INVESTOR RESEARCH FIRM RATING ANALYST Coverage FirstEnergy Out Perform B. Fitzmartyn Alta Corp Out Perform T. Matthews Paradigm Capital Buy K. Lin GMP Capital Buy G. Daunheimer Acumen Buy T. Reynolds Dundee Buy C. Ellison…

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