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February 2016 Investor Presentation – Bonavista Energy Corp

Bonavista Energy Corp · Feb 1, 2016 · 51 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. February 2016 Investor Presentation – Bonavista Energy Corp – slide 1
    INVESTOR PRESENTATION FEBRUARY 2016 1
  2. February 2016 Investor Presentation – Bonavista Energy Corp – slide 2
    CORPORATE IDENTITY 3
  3. February 2016 Investor Presentation – Bonavista Energy Corp – slide 3
    IDENTITY Value creation through our excellent people and high quality assets: Bonavista is EXPERIENCED EFFICIENT ALIGNED Management tenure is 20% reduction in Q4 2015 operating costs 10% insider ownership 11 years with Bonavista…
  4. February 2016 Investor Presentation – Bonavista Energy Corp – slide 4
    IDENTITY Focused: Deep Basin 21,459 boe/d, 27% 2015 production 87% natural gas < 5/boe operating costs Key plays: Wilrich, Bluesky, Falher, Notikewin West Central 48,297 boe/d, 61% 2015 production 64% natural gas 6/boe…
  5. February 2016 Investor Presentation – Bonavista Energy Corp – slide 5
    2016 STRATEGIES 6
  6. February 2016 Investor Presentation – Bonavista Energy Corp – slide 6
    2016 STRATEGIES Four priorities: Improve financial flexibility Balance sheet focused Maintain sustainability Living within cash flow Protect funds from operations 60% production hedged Enhance efficiencies Doing more…
  7. February 2016 Investor Presentation – Bonavista Energy Corp – slide 7
    2016 STRATEGIES Total & senior debt*: Senior Notes (CDN) 20 Unutilized Bank Capacity 325 Bank credit facility - 600 million 11 banks in credit facility Unsecured, financial covenants Matures September 10, 2019 Senior notes…
  8. February 2016 Investor Presentation – Bonavista Energy Corp – slide 8
    2016 STRATEGIES Senior debt maturities: 300 Senior notes average rate 4.1% Bank debt rate 3.3% Average term approximately 5.3 years at 3.9% 250 200 (millions) 150 100 50 0 2016 2017 2019 2020 2021 2022 2023 2025…
  9. February 2016 Investor Presentation – Bonavista Energy Corp – slide 9
    2016 STRATEGIES Total and senior debt / EBITDA: Forecast* December 31, 2016 ( millions) Revenues, net of royalties 403 Gains on financial instrument contracts 164 567 Expenses: Operating 156 Transportation 21 General and…
  10. February 2016 Investor Presentation – Bonavista Energy Corp – slide 10
    2016 STRATEGIES Guidance sustainable program: 2016 Forecast Capital expenditures ( millions): Exploration and development 190-210 Production (boe/d): 73,000 76,000 Realized commodity prices*: Natural gas (/mcf) 2.90 3.20…
  11. February 2016 Investor Presentation – Bonavista Energy Corp – slide 11
    2016 STRATEGIES Funds from operations sensitivities: 203 MM 253 MM 303 MM AECO +/- 0.25 WTI +/- 15.00 F/X +/- 0.05 2.30/gj AECO US 35.47/bbl WTI CAD/USD 0.71 12
  12. February 2016 Investor Presentation – Bonavista Energy Corp – slide 12
    2016 STRATEGIES Natural gas hedging protected from commodity price volatility: 300 4.00 3.80 Hedged Volumes (thousands gjs/d) 250 3.60 3.40 200 3.20 CDN/gj 150 3.00 2.80 100 2.60 2.40 50 55% 70% 68%…
  13. February 2016 Investor Presentation – Bonavista Energy Corp – slide 13
    2016 STRATEGIES Oil hedged at 80 for 2016: 4 100.00 90.00 Hedged Volumes (mbbls/d) 3 80.00 CDN/bbl 2 70.00 60.00 1 50.00 59% 55% 71% 71% 0 40.00 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17…
  14. February 2016 Investor Presentation – Bonavista Energy Corp – slide 14
    2016 STRATEGIES Propane hedged at 42% of WTI for 2016: 3,000 60% 2,500 50% Hedged Volumes (bbls/d) 2,000 40% % of WTI 1,500 30% 1,000 20% 500 10% 46% 18% 18% 19% 0 0% Q1-16 Q2-16 Q3-16 Q4-16…
  15. February 2016 Investor Presentation – Bonavista Energy Corp – slide 15
    2016 STRATEGIES Adding production more efficiently: 25,000 2016 Production Additions 23,000 (Prorated to 200MM) 21,000 2015 Production Additions (Prorated to 200MM) 19,000 2014 Production Additions Production (boe/d)…
  16. February 2016 Investor Presentation – Bonavista Energy Corp – slide 16
    2016 STRATEGIES Pace of improvement cost of adding production: 10% Production Addition Costs* (% change) 0% -10% 33% -20% -30% -40% 63% -50% -60% 2012: -70% Bonavista 32,500/boed Peer Group Average…
  17. February 2016 Investor Presentation – Bonavista Energy Corp – slide 17
    2016 STRATEGIES Competitive cost structure F&D costs: 24.00 Finding and Development Costs (/boe)* 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 2012 2013 2014 2015 Bonavista Peer Group Average ** *…
  18. February 2016 Investor Presentation – Bonavista Energy Corp – slide 18
    2016 STRATEGIES Sustainability with continued cost improvements: 20.00 Improved cash costs 100% sustain profitability 18.00 despite a 27% decrease 90% 16.00 in revenues per boe* 80% 14.00 70% 12.00 10 - 12 60% (/boe)…
  19. February 2016 Investor Presentation – Bonavista Energy Corp – slide 19
    2016 STRATEGIES Pace of improvement operating costs: 10% 5% Operating Costs * (% change) 0% 1% -5% -10% 28% -15% -20% 2012: -25% Bonavista 9.07/boe Peer Group Average 12.22/boe -30% 2012 2013 2014…
  20. February 2016 Investor Presentation – Bonavista Energy Corp – slide 20
    2016 STRATEGIES Maintaining sustainability: 300% 250% 200% Total Payout Ratio* 150% 100% 50% 0% 2012 2013 2014 2015E Bonavista Peer Group Min/Max ** * E&D capital expenditures + dividends / funds from…
  21. February 2016 Investor Presentation – Bonavista Energy Corp – slide 21
    ASSET QUALITY 22
  22. February 2016 Investor Presentation – Bonavista Energy Corp – slide 22
    ASSET QUALITY Many years of high quality development: Locations (gross) in our key play inventory*: 1,435 West Central: Hoadley Glauconite 288 Strachan Glauconite 82 Montney Notikewin/Falher 149 302 locations 21% SPIRIT RIVER…
  23. February 2016 Investor Presentation – Bonavista Energy Corp – slide 23
    24 23 All together better.
  24. February 2016 Investor Presentation – Bonavista Energy Corp – slide 24
    DEEP BASIN WILRICH Rapid early stage growth: 14,000 53% two year CAGR* 12,000 Current Production of 11,310 boe/d 10,000 Production (boe/d) 8,000 6,000 4,000 2,000 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014…
  25. February 2016 Investor Presentation – Bonavista Energy Corp – slide 25
    DEEP BASIN ANSELL WILRICH Controlling our infrastructure: 60 mmcf/d compression and processing facility commissioned in Q3 2015 Expandable to 120 mmcf/d Connected to both TCPL and Alliance pipelines Anticipated 30% reduction…
  26. February 2016 Investor Presentation – Bonavista Energy Corp – slide 26
    DEEP BASIN ANSELL WILRICH Improving efficiencies through capital cost reductions: 6,000 down 30% Completion Cost to Drill and Complete (000s) 5,000 4,000 14,800/boed * 16,300/boed * 16,700/boed *…
  27. February 2016 Investor Presentation – Bonavista Energy Corp – slide 27
    DEEP BASIN ANSELL WILRICH Improving efficiencies through capital cost reductions: 8.0 5,600 7.0 4,900 6.0 4,200 /HZ meter 5.0 3,500 millions 4.0 2,800 3.0 2,100 2.0 1,400 1.0 700 0.0 0 2014 2015 2016F Cost per…
  28. February 2016 Investor Presentation – Bonavista Energy Corp – slide 28
    DEEP BASIN ANSELL WILRICH Improving capital efficiencies*: 80% Extended reach drilling 70% enhancing profitability 60% Internal Rate of Return ** 50% 40% 30% 20% 2016 1.5 mile 10% 2015 Improved Cost (1-mile) 2014…
  29. February 2016 Investor Presentation – Bonavista Energy Corp – slide 29
    30 All together better.
  30. February 2016 Investor Presentation – Bonavista Energy Corp – slide 30
    WEST CENTRAL GLAUCONITE Reliable production growth: 30,000 26% two year CAGR* 25,000 Current Production of 24,275 boe/d 20,000 Production (boe/d) 15,000 10,000 5,000 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4…
  31. February 2016 Investor Presentation – Bonavista Energy Corp – slide 31
    WEST CENTRAL HOADLEY GLAUCONITE Improving cost structure: 3,500 Completion down 11% 3,000 Cost to Drill and Complete (000s) 2,500 2,000 10,500/boed * 12,400/boed * 12,400/boed * 16,100/boed *…
  32. February 2016 Investor Presentation – Bonavista Energy Corp – slide 32
    WEST CENTRAL HOADLEY GLAUCONITE Slickwater proving to outperform: 4,000 200% Slickwater rate as percentage of foam rate (%) 3,500 175% 3,000 150% Raw gas production (Mcf/d) 2,500 125% 2,000 100% 1,500 75% 1,000…
  33. February 2016 Investor Presentation – Bonavista Energy Corp – slide 33
    WEST CENTRAL HOADLEY GLAUCONITE Extended reach performance: 6,000 300% Cumulative Percentage Extended Reach vs 1-Mile 5,000 250% Raw Gas Production (Mcf/d) 4,000 200% 3,000 150% 2,000 100% 1,000 50% 0 0% 1 51 101…
  34. February 2016 Investor Presentation – Bonavista Energy Corp – slide 34
    WEST CENTRAL HOADLEY GLAUCONITE Sensitivity: 70% Enhancing economics with drilling and completions technology 60% 50% Internal Rate of Return* 40% 30% 20% 2-mile Type Curve (Slickwater) Enhanced Type Curve…
  35. February 2016 Investor Presentation – Bonavista Energy Corp – slide 35
    36 38 All together better.
  36. February 2016 Investor Presentation – Bonavista Energy Corp – slide 36
    WEST CENTRAL MORNINGSIDE FALHER Prolific production performance: 4,500 129% two year CAGR* 4,000 3,500 Current Production of 3,000 boe/d 3,000 Production (boe/d) 2,500 2,000 1,500 1,000 500 0 Q3 Q4 Q1 Q2 Q3…
  37. February 2016 Investor Presentation – Bonavista Energy Corp – slide 37
    WEST CENTRAL MORNINGSIDE FALHER Sensitivity: 80% 70% 60% All key plays compete Internal Rate of Return* 50% equally for capital in current price environment 40% 30% Ansell Wilrich (1.5 mile) 20% Hoadley Glauconite…
  38. February 2016 Investor Presentation – Bonavista Energy Corp – slide 38
    CAPITAL ALLOCATION E&D Spending to maintain production: Wells Expenditures % of Value Gross Net ( millions) Expenditures West Central: Glauconite 27 23.8 76 42 Falher/Notikewin 9 8.5 24 13 Deep Basin: Wilrich 13 13.0 70 39…
  39. February 2016 Investor Presentation – Bonavista Energy Corp – slide 39
    WHY INVEST IN BONAVISTA 1. SUSTAINABILITY Maintaining production throughout 2016 with a total payout ratio < 100% 2. FOCUS Improving cost structure through a concentrated asset base 3. EFFICIENCY Top decile capital and…
  40. February 2016 Investor Presentation – Bonavista Energy Corp – slide 40
    APPENDIX 41
  41. February 2016 Investor Presentation – Bonavista Energy Corp – slide 41
    2015 RESERVES SUMMARY F&D costs of 7.26/boe Natural Gas Total Natural Gas Oil Liquids Reserves(2) Reserves:(1)(4) (mmcf) (mbbls) (mbbls) (mboe) Proved: Proved producing 614,884 14,377 45,215 162,072 Proved non-producing 19,293 623…
  42. February 2016 Investor Presentation – Bonavista Energy Corp – slide 42
    ENVIRONMENT Developing our resources sustainably: We are continually identifying creative ways to develop our assets sustainably: In the last 5 years we have reclaimed more than 1,700 acres of disturbed land and have planted over…
  43. February 2016 Investor Presentation – Bonavista Energy Corp – slide 43
    2016 COMMODITY COMPOSITION By volume: By value: 0% 8% 3% 5% Ethane 7% 12% 4% Propane 5% Butane 6% Pentane 16% 64% Oil 70% Natural Gas 44 Based on January 22, 2016 strip pricing
  44. February 2016 Investor Presentation – Bonavista Energy Corp – slide 44
    KEY PLAYS AMONG THE BEST Source: CIBC Resource Play Watch January 2016 45
  45. February 2016 Investor Presentation – Bonavista Energy Corp – slide 45
    DEEP BASIN WILRICH Ansell Wilrich type curve: 900 Type 1.5 mile Curve Type Curve 800 Capex 4.5 5.4 ( millions) 700 IP12 (boe/d) 380 485 600 Production (boe/d) /boed 11,820 11,100 500 EUR (mboe) 733 1,016 400 IRR (%) 25 33…
  46. February 2016 Investor Presentation – Bonavista Energy Corp – slide 46
    WEST CENTRAL HOADLEY GLAUCONITE Type curve: 700 Type Curve 600 Capex ( millions) 2.7 500 IP12 (boe/d) 270 Production (boe/d) /boed 10,075 400 EUR (mboe) 496 300 IRR (%) 22 200 F&D (/boe) 5.45 100 Recycle Ratio 2.7…
  47. February 2016 Investor Presentation – Bonavista Energy Corp – slide 47
    WEST CENTRAL STRACHAN GLAUCONITE Type curve: 1,000 2 mile Type Curve 900 Capex ( millions) 6.4 800 IP12 (boe/d) 560 700 Production (boe/d) 600 /boed 11,340 500 EUR (mboe) 920 400 IRR (%) 23 300 F&D (/boe) 7.30 200…
  48. February 2016 Investor Presentation – Bonavista Energy Corp – slide 48
    WEST CENTRAL - MORNINGSIDE FALHER Type curve: 1,000 Type Curve 900 Capex ( millions) 2.4 800 IP12 (boe/d) 290 700 Production (boe/d) 600 /boed 8,130 500 EUR (mboe) 470 400 IRR (%) 34 300 F&D (/boe) 5.10 200 Recycle…
  49. February 2016 Investor Presentation – Bonavista Energy Corp – slide 49
    DEEP BASIN BLUESKY Type curve: 700 Type Curve 600 Capex ( millions) 4.3 IP12 (boe/d) 380 500 Production (boe/d) /boed 11,200 400 EUR (mboe) 545 300 IRR (%) 20 200 F&D (/boe) 7.80 Recycle Ratio 2.0 100 0 12 24…
  50. February 2016 Investor Presentation – Bonavista Energy Corp – slide 50
    ESTIMATED TAX POOLS as at September 30, 2015 Category millions Canadian Oil & Gas Property Expense 728 Canadian Development Expense 833 Canadian Exploration Expense 316 Undepreciated Capital Cost 426 Non-capital Losses 335…
  51. February 2016 Investor Presentation – Bonavista Energy Corp – slide 51
    1500, 525 8th Ave. SW Calgary, Alberta T2P 1G1 Tel: (403) 213-4300 Fax: (403) 262-5184 investor.relationsbonavistaenergy.com 52

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