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October 2015 Investor Presentation – Advantage Oil & Gas Ltd.

Advantage Oil & Gas Ltd. · Oct 6, 2015 · 28 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 – Advantage Oil & Gas Ltd. – slide 1
    Low Risk Glacier Montney Development, Strong Balance Sheet & Hedging Program Supports Profitable & Sustainable Growth Investor Presentation TSX / NYSE: AAV October 2015
  2. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 2
    ADVANTAGE AT A GLANCE TSX, NYSE: AAV TSX 52-week trading range 4.51-8.34 Shares Outstanding (basic) 170.7 million Current production 180 mmcfe/d (30,000 boe/d) Q3 Production estimate (1) 147 mmcfe/d (24,500 boe/d) Market Capitalization…
  3. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 3
    POSITIONED FOR PROFITABLE & SUSTAINABLE GAS GROWTH World Class Glacier Montney Asset 1000 future drill Strong Balance Sheet locations Industry Leading Low 1.6x D/CF Average Cost Producer 2015 thru 2017 0.89/mcfe total cash costs…
  4. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 4
    WORLD CLASS MONTNEY ASSET WITH INDUSTRY LEADING LOW COSTS & CAPITAL EFFICIENCIES Montney Thin Section Photo Glacier 4 300 meters thick Glacier Montney Natural gas Siltstone and liquids Core resource Strong economics at…
  5. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 5
    GLACIER DEVELOPMENT WITH ADDITIONAL MONTNEY LANDS PROVIDES FUTURE UPSIDE Current development at Glacier including dry and liquids rich gas drilling Progress Glacier future drilling inventory 1,000 100% owned locations Glacier Gas 9…
  6. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 6
    PENTASTACK DEVELOPMENT WITH DECADES OF DRILLING INVENTORY AT GLACIER Capable of maintaining 245 mmcfe/d (40,830 boe/d) for 50 years(1) 1,000 Future Drill Locations at Glacier support future growth(1) 292 undeveloped locations booked…
  7. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 7
    GLACIER WELL ECONOMICS(1) STRONG RETURNS CURRENT COMMODITY PRICES Upper Montney % Lower Montney % Advantage achieved 16% cost reduction to average 4.6 million DC & E on its last 11 UM wells Higher IP Higher IP % & EUR & EUR Case…
  8. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 8
    INDUSTRY LEADING LOW COST STRUCTURE ENHANCES ECONOMIC RETURN AAV - Industry leading low cost structure Gas Weighted Q2/15 Cash Flow per BOE vs. Cash Costs per BOE 30.00 Median of 14.25 25.00 Lower Costs & Source:…
  9. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 9
    AND GENERATES STRONG RECYCLE RATIOS Q2 2015 Illustrative Glacier Operating Netback (/mcfe) 2.50/mcfe Revenue (Realized Price) 3.29 (1) 2.50 Royalties (0.11) (0.13) Operating Costs (0.37) (0.35) Operating Netback 2.81 2.02…
  10. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 10
    2013 SLICKWATER WELLS OUTPERFORM LONG TERM PRODUCTION EXPECTATIONS. 2014 WELLS JUST STARTED 3 Wells initially brought on-stream in July 2015 to increase production from 130 to 180 mmcfe/d (one 2013 LM & two 2014 UM). Wells are…
  11. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 11
    IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER 10 New MM wells Based on 2014 production test rates could exceed historical type curve 12-2 well (2013) cumulative production 2 Bcfe after 400 days (restricted)…
  12. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 12
    2014 MIDDLE MONTNEY PROGRAM FOCUSED ON HIGHER LIQUID CONTENT IN EAST GLACIER Middle Montney wells to date Glacier C5+ 57 illustrate higher liquid content(1) from west to east across Glacier deg API 22 MM wells (hz & vert) drilled…
  13. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 13
    LOW RISK DEVELOPMENT WITH A WELL DEFINED GROWTH PLAN 13
  14. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 14
    LARGE INVENTORY OF STANDING WELLS & PRODUCTION CAPABILITY Only 3 Wells Utilized to Initially Increase Production from 130 33 Wells Drilled in 2014 to 180 mmcfe/d in July 2015 program 19 Wells Completed & Standing (current) 2-18…
  15. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 15
    EXPANDED GLACIER GAS PLANT PROVIDES SPARE CAPACITY FOR FUTURE GROWTH & OPERATIONAL FLEXIBILITY Commissioning of Inlet & New Compressors Began July 17, 2015, tested up to 200 mmcfe/d Commissioning of two 125 mmcf/d Liquid Extraction…
  16. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 16
    GROWTH BEYOND 2017 CAN BE ACCOMMODATED ON EXISTING PLANT SITE R14 R13 R12 R11 R10 R9 R8 R7W6 100% Owned Glacier Gas Plant Positioned for T78 T78 Advantage Gas Plant Production Ramp-up T77 T77 Alliance Sales Gas Line TCPL…
  17. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 17
    PLAN TARGETS 22% PRODUCTION GROWTH (CAGR) THROUGH 2017 Plan Summary 2015 thru 2017 (1) 245 mmcfe/d (40,830 boe/d) in 2017 545 million Capital Expenditures (5% service cost reduction included in 2015 only) 70 New Montney wells (10…
  18. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 18
    GROWTH PLAN LEADS TO SIGNIFICANT FREE CASH FLOW IN EARLY 2017 245 mmcfe/d 3.50/gj Cash flow significantly exceeds maintenance generates 130 million free capital each year. Maintenance capital levels can annual cash flow be achieved at…
  19. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 19
    2015 THROUGH 2017 GROWTH PLAN PRICE SENSITIVITY Downside gas price mitigation while retaining torque to upside 2015 Estimate updated on August 6, 2015 19
  20. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 20
    Clear Vision for Growth Financial Strength Proven Expertise
  21. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 21
    FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 22% ANNUAL AVERAGE PRODUCTION GROWTH FOR 2015 TO 2017 (2) (CAGR) (2) CAGR compound annual growth rate over period 22
  22. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 22
    EXCEPTIONAL UPPER MONTNEY WELL ECONOMICS NO COST (1) REDUCTIONS ASSUMED Upper Montney Dry Gas (2) Recent average Upper Montney well performance exceeding 7 mmcf/d IP30 (3) (1) Management estimates. NPV 10% pre-tax (2)…
  23. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 23
    EXCEPTIONAL LOWER MONTNEY WELL ECONOMICS NO COST (1) REDUCTIONS ASSUMED Lower Montney at 11 bbls/mmcf C3+(2) Recent Lower Montney wells are at or above 7 mmcf/d IP 30 AECO Gas Price /mcf (3) (1) Management estimates. NPV 10%…
  24. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 24
    STRONG EAST GLACIER MIDDLE MONTNEY WELL (1) ECONOMICS NO COST REDUCTIONS ASSUMED Middle Montney at 50 bbls/mmcf C3+ (2) Recent wells are exceeding Budget Type Curve of 4 mmcf/d IP 30 (3) (1) Management estimates. NPV 10%…
  25. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 25
    HIGHLY EFFICIENT GLACIER RESERVE ADDITIONS & RECYCLE RATIO Mcfe 2.50 (1.03) 2P F&D Cost 2.00 (0.89) Total Cash Cost 2014 2P F&D Cost (/Mcfe) 1.03 3yr Avg F&D (1) 1.50 2.9x 3yr Avg Recycle Ratio (2) (1.92) 1.00…
  26. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 26
    GLACIER DRILLING ECONOMICS AND 2P RECOVERIES PER INTERVAL NO COST REDUCTIONS ASSUMED ( millions unless otherwise indicated) Glacier Drilling Economics PVs 10% Discount(1) Middle Montney AECO C natural gas price Upper Montney Layer…
  27. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 27
    GLACIER LOCATED IN THE HEART OF THE MONTNEY RESOURCE PLAY Montney Siltstone Comparison: 700 times more permeability 4x more formation thickness Very low clay content Liquids & Improved well efficiencies strong economics 28
  28. October 2015 Investor Presentation – Advantage Oil & Gas Ltd. – slide 28
    2012 CORE AND COMPLETION STUDIES: INCREASED RESOURCE AND IMPROVED WELL RESULTS Core study determined original density porosity logs have to be re- calibrated IP30s on open hole Re-calibration aligned log to actual wells improved by…

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