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2016 Budget Targets – Advantage Oil & Gas Ltd.

Advantage Oil & Gas Ltd. · Dec 30, 2015 · 31 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. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 1
    2016 Budget Targets 39% Production Growth, 0.75/mcf Total Cash Costs and 1.6x Debt to Cash Flow AECO Cdn 2.50/mcf Investor Presentation TSX / NYSE: AAV December 2015
  2. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 2
    ADVANTAGE AT A GLANCE TSX, NYSE: AAV TSX 52-week trading range 4.94-8.36 Shares Outstanding (basic) 170.7 million 2016 Annual Production Target 39% Annual Production Growth 200 mmcfe/d (33,300 boe/d) Market Capitalization December 11,…
  3. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 3
    POSITIONED FOR PROFITABLE & SUSTAINABLE GROWTH World Class Glacier Montney Asset 1000 future drill Strong Balance Sheet locations Industry Leading Low Cost 1.6x Year-end D/CF Producer 2016 Budget 0.75/mcfe(2) total cash costs 2.50…
  4. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 4
    2016 BUDGET STRONG GROWTH AND FINANCIAL FLEXIBILITY INPUTS OUTPUTS 120 Million Capital 160 Million Cash Flow(1) (40 million surplus) 52% Hedged Cdn 3.62/mcf 39% Production Growth 13 Wells to Drill 200 mmcfe/d Annual 0.75/mcfe Total…
  5. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 5
    2016 D/CF VS DEBT-ADJUSTED PROD/FD SHARE GROWTH %(1) STRIP PRICING AAV 44% PPS 1.3x D/CF AAV Source: (1) RBC December 21, 2015 Junior/Intermediate E&P: Weekly Review & Industry Tables Future Strip Pricing 5
  6. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 6
    WORLD CLASS MONTNEY ASSET WITH INDUSTRY LEADING LOW COSTS & CAPITAL EFFICIENCIES Montney Thin Section Photo Glacier 6 300 meters thick Glacier Montney Natural gas Siltstone and liquids Core resource Strong economics at…
  7. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 7
    GLACIER DEVELOPMENT WITH ADDITIONAL MONTNEY LANDS PROVIDES FUTURE UPSIDE Current development at Glacier including dry and liquids rich gas drilling Progress (Future) Glacier future drilling inventory 1,000 100% owned locations…
  8. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 8
    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…
  9. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 9
    ROBUST UPPER & LOWER MONTNEY DRY GAS WELL ECONOMICS ROR% CURRENT COMMODITY PRICES Upper & Lower Montney Middle Montney 50 bbls/mmcf C3+, 45% C5+ 77% Advantage achieved 20% cost reduction to average 5.5 million DC & E 47%…
  10. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 10
    INDUSTRY LEADING LOW COST STRUCTURE ENHANCES ECONOMIC RETURN AAV - Industry leading low cost structure 10
  11. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 11
    AND GENERATES STRONG RECYCLE RATIOS Illustrative Q3 2015 AECO Cdn Glacier Operating Netback (/mcfe) 2.50/mcf Revenue (Realized Price) 3.28(1) 2.40(3) Royalties (0.12) (0.12) Operating Costs (including liquids transportation…
  12. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 12
    2013 UPPER & LOWER MONTNEY WELLS OUTPERFORM LONG TERM PRODUCTION EXPECTATIONS. 2014 WELLS JUST STARTED 8 New Wells on-stream December 2015 to sustain production at 180 mmcfe/d. Wells are normally restricted to 10 mmcf/d for frac sand…
  13. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 13
    IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER 10 New MM wells could exceed type curve Production Test Rate Initial On-production Rate 12-2 well (2013) cumulative production 2 Bcfe after 400 days (restricted)…
  14. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 14
    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 10 MM wells drilled in 2014 program…
  15. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 15
    LOW RISK DEVELOPMENT WITH A WELL DEFINED GROWTH PLAN 15
  16. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 16
    LARGE INVENTORY OF STANDING WELLS & PRODUCTION CAPABILITY Only 8 Wells Required to 15 Wells Completed & Sustain Production from 130 to Standing (current) 180 mmcfe/d since July 2015 120+ MMCF/D IP30 from the 15 wells + older wells…
  17. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 17
    EXPANDED GLACIER GAS PLANT PROVIDES ADDITIONAL CAPACITY FOR FUTURE GROWTH & OPERATIONAL FLEXIBILITY Plant Process Capacity 250 mmcf/d after installation of final inlet compressor unit December 2015 (provides 70 mmcfe/d of additional…
  18. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 18
    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…
  19. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 19
    PLAN TARGETS 22% PRODUCTION GROWTH (CAGR) THROUGH 2017 Annual Average Production Plan Summary 2015 thru 2017 (1) (mmcfe/d) 235 245 mmcfe/d (40,830 boe/d) in 2017 200 142 485 million Capital Expenditures, down from original…
  20. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 20
    GROWING CASH FLOW FUNDS CAPITAL REQUIREMENTS 250 Cash flow significantly exceeds maintenance 245 mmcfe/d 3.00/mcf capital each year. Maintenance capital levels can generates 85 million free be achieved at 1.50/mcfe cash flow netback…
  21. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 21
    2015 THROUGH 2017 GROWTH PLAN PRICE SENSITIVITY Cash Flow per Share Downside gas price Total Debt to Trailing mitigation while retaining Sensitivity torque to upside Cash Flow Sensitivity 2.3 1.20 1.10 AECO 1.04 2.50/mcf 1.6…
  22. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 22
    Clear Vision for Growth Financial Strength Proven Expertise
  23. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 23
    APPENDIX 23
  24. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 24
    FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 22% ANNUAL AVERAGE PRODUCTION GROWTH FOR 2015 TO 2017 Annual Average Production (mmcfe/d) 235 200 142 142 8% 2015 Actual + Estimate 2016 Budget 2017 Estimate Annual Average…
  25. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 25
    (1) EXCEPTIONAL UPPER & LOWER MONTNEY WELL ECONOMICS Upper & Lower Montney Dry Gas (2) Budget Type Curve. Some recent Upper & Lower Montney wells are outperforming type curve (3) (1) Management estimates. NPV 10%…
  26. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 26
    STRONG EAST GLACIER MIDDLE MONTNEY WELL (1) ECONOMICS Middle Montney at 50 bbls/mmcf C3+ (2) Budget type curve. Some recent MM wells are exceeding type curve. (3) (1) Management estimates. NPV 10% pre-tax (2) Based on 5.9…
  27. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 27
    UPPER AND LOWER MONTNEY WELLS - IMPROVING PERFORMANCE SINCE 2008 Budget Type Curve (IP30 7.2 mmcf/d & 7.2 Bcf) Data: updated to December 2015 27
  28. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 28
    GLACIER DRILLING ECONOMICS AND 2P RECOVERIES PER INTERVAL NO COST REDUCTIONS ASSUMED ( millions unless otherwise indicated) Glacier - 2P Recoveries per Interval(1) of Gross HZ Wells 2P Recovery [bcf/well] Interval Developed…
  29. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 29
    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 Up…
  30. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 30
    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…
  31. 2016 Budget Targets – Advantage Oil & Gas Ltd. – slide 31
    ADVANTAGE CONTACT INFORMATION Investor Relations 1.866.393.0393 iradvantageog.com www.advantageog.com Listed on NYSE and TSX: AAV Advantage Oil & Gas Ltd. Suite 300, 440 2nd Avenue SW Calgary, Alberta T2P 5E9 Main:…

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