Canadian Oil Sands Valuable. For the Long Term. Investor Presentation January 2016
Reasons to Reject Suncors Hostile Bid Significantly Undervalued: - Fails to recognize a new era of lower cost production - Assumes the collapse of oil prices will last forever; but no one not even Suncor believes that - Asks COS…
COS Valuable Syncrude Asset 1. Pure-play exposure to a scarce, irreplaceable oil sands mining asset in a low-risk, geopolitically stable country 2. Fully upgraded production of light sweet crude oil 3. Cost structure expected to…
COS Remains Focused on What Matters 1. Reducing operating, capital and administrative costs and protecting the balance sheet 2. Capitalizing on Imperial Oil and Exxon Mobils expertise in executing Syncrudes production improvement…
Syncrudes New Era of Lower Costs Operating Expenses (C/bbl) Capital Expenditures (C millions) 1 Syncrude reduced operating and capital costs by more than 1.3 billion (gross to Syncrude) from the original 2015 budget Cost…
Cost Structure Has Improved Dramatically Total Cash Costs1 (US/bbl) COS total cash costs have decreased to approximately US39 per barrel Fully-upgraded synthetic crude oil (SCO) attracts a 40 to 55% higher sales price than…
Oil Sands Project Break-Even USWTI Price1,2 Average oil sands break- even US WTI price Source: TD Securities, COS estimates Cost reduction efforts combined with Syncrudes valuable upgrader position COS favorably amongst oil…
Strong Financial Position COS is one of only 7 Canadian exploration and production (E&P) companies with an investment grade credit rating (out of 122 publicly listed Canadian E&P companies with a market capitalization over 10…
Ample Available Liquidity Change in Available Liquidity COS 2016 Budget forecasts 633 million of Sensitivity 2 cash flow from operations and 338 million (millions) of free cash flow1 800 950 1,100 1,250 1,400 (Assuming US50 WTI, 105…
A Modest Improvement in Oil Prices Significantly Increases COS 2016 Free Cash Flow per Share1 2.02 1.79 1.54 1.28 1.00 0.70 0.20 0.29 0.28 Current Implied US45 US50 US55 US60 US65 US70 US75 COS Current WTI WTI WTI WTI WTI WTI…
COS Provides Dramatically More Exposure to Oil Price Increases COS Share Price and Suncor Offer Price Sensitivity to WTI (Last 5 Years) 33.73 31.59 30.05 COS Share Price 28.31 0.25 of Suncors Share Price 17.38 19.75 19.23…
Strong Dividend Paying History Cumulative Capital Returned to Shareholders Since 2001 18 16.85 16 14 12 per share 10 8 6 4 1 2.28 2 0 COS Dividends Suncor Dividends + Share Buybacks Source: Canadian Oil Sands,…
COS is Strongly Positioned to Withstand Low Oil Prices and Emerge With Even Greater Value 1. A strong balance sheet with significant financial flexibility - over 1 billion of its 1.5 billion credit facility still available, and no…
Additional Information
Why Sell at the Bottom 60 180 COS correlation to US WTI is 98%1 50 150 40 120 COS Share Price C US WTI 30 90 20 60 10 30 0 0 Dec-2005 Dec-2007 Dec-2009 Dec-2011 Dec-2013 Dec-2015 2 COS Share Price C…
Syncrudes Strategic Lease Position High quality leases border every oil sands mining project This strategic location creates multiple opportunities to share value with other projects in the region Source: RBC Capital…
Syncrudes Undeveloped Leases Have Significant Value Lease 29 is contiguous with Syncrudes Lease 29 Suncors North Steepbank mine Continue mining Minimal capital The sale of Lease 29 to Suncor Higher quality and larger ore body…
Decades of Visible, Non-Declining Production Anticipated production improvements are a free option for COS shareholders Syncrude owners have endorsed the plan underway for improving reliability and increasing production 18
Production Improvement Plan is Underway Lost Barrels1 Initiative / Project Completed 2009-14 2015 The Rebuild, redesign and expand mine trains 11 - disciplined, methodical Bitumen Production reliability plan, endorsed by Retrofit,…
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