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February 2016 Corporate Presentation – Birchcliff Energy Ltd.

Birchcliff Energy Ltd. · Feb 17, 2016 · 66 slides

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Slides

  1. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 1
    CORPORATE PRESENTATION February 2016
  2. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 2
    PEOPLE, FOCUS & EXECUTION Unconventional Natural Gas Resource Player Unconventional Light Oil Resource Player 2
  3. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 3
    INVESTMENT HIGHLIGHTS Production for January 2016 averaged approximately 42,000 boe/d 2015 average production was 38,950 boe/d a new annual average production record Q4 2015 average production was 40,445 boe/d 2015 cash flow of…
  4. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 4
    INVESTMENT HIGHLIGHTS Focused assets in the Peace River Arch Area of Alberta (the Montney/Doig Natural Gas Resource Play and the Charlie Lake Light Oil Resource Play) Essentially 100% working interest; 99% of production is operated…
  5. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 5
    CORPORATE SNAPSHOT Production 2015 Average Production (boe/d) 38,950 (86% gas) Q4 2015 Average Production (boe/d) 40,445 (87% gas) 2015 Year End Reserves 2P Reserves 573 MMboe (18% PDP) 2P FD&A Cost (Including FDC) 1.32/boe 2P Recycle…
  6. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 6
    BIRCHCLIFF HISTORY A Track Record of Execution
  7. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 7
    KEYS TO SUCCESS Executives with proven track record, continuity since inception and significant ownership Management Highly experienced Management Team with excellent technical knowledge and a long history with the company 188 (187.9)…
  8. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 8
    PRODUCTION HISTORY 50,000 45,000 40,000 41,000 40,000 Compound annual growth of 38,950 Average Production (boe/d) 30% per year since 2005 35,000 33,734 30,000 25,829 25,000 22,802 20,000 18,136 15,000 13,079…
  9. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 9
    CORPORATE RESERVES SUMMARY 700,000 600,000 On a per share basis PDP, 1P and 2P reserves have increased at a compound 500,000 annual growth of 16%, 26% and 27% per year since 2005, respectively Reserves (Mboe) 400,000…
  10. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 10
    CORPORATE NPV10 (BT) 4,500 4,000 Birchcliffs 2015 year end 2P 3,500 NPV10 (BT) was 3.9 billion (up from 3.8 billion in 2014) 3,000 NPV10 (million) 2,500 PDP (million) 2,000 TP (million) 2P (million) 1,500 1,000…
  11. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 11
    DELOITTE PRICE DECK YEAR OVER YEAR COMPARISON Deloitte WTI Forecast Deloitte AECO Forecast Dec 31, 2015 vs. Dec 31, 2014 Dec 31, 2015 vs. Dec 31, 2014 100 6.00 90 Five Year Average Forecast 78.64/bbl as at Dec 31, 2014 5.00 Five…
  12. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 12
    PROVEN TRACK RECORD AS A LOW COST PRODUCER Even in 2012, the lowest natural gas price in over 10 years, Birchcliff was still able to generate profit. 3 Year Profitability Breakdown: 2012 2013 2014 2015 Average Average AECO (CAD/GJ)…
  13. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 13
    PROVEN TRACK RECORD AS A LOW COST FINDER 20 PDP FD&A 1P FD&A 2P FD&A 0.9x Cash flow 16 1.2x netback recycle FD&A Cost (/boe) 1.4x ratios 12 1.5x 1.2x 1.5x 1.9x 1.6x 1.9x 1.2x 2.1x 1.3x 2.3x 8 2.5x 2.2x 2.2x 1.5x…
  14. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 14
    PROVEN TRACK RECORD OF PER SHARE GROWTH 45,000 270 600 4,000 Annual Production (boe/d) P+P Reserves per Share (boe/1,000 40,000 Production per Share 240 525 3,500 Proved Annual Production (boe/d) (boe/d/million shares)…
  15. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 15
    HISTORICAL CAPITAL EFFICIENCY AVERAGE DECEMBER TO DECEMBER PRODUCTION; NOT IPS Dec Avg. Dec Avg. 40,354 45,000 40,454 boe/d Additions boe/d 40,000 Dec Avg. Base 28,749 35,000 Dec Avg. boe/d Total Production 27,142 Production…
  16. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 16
    2015 ACCOMPLISHMENTS Achieved annual average production of 38,950 boe/d (15% Y/Y growth) Drilled 32 (31.5 net) horizontal wells including 29 (29.0 net) Montney/Doig horizontal natural gas wells, 1 (1.0 net) Charlie Lake horizontal…
  17. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 17
    LOOKING FORWARD 2016 Plans & Beyond
  18. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 18
    OUR ASSETS EASILY SUPPORT A PLAN 120,000 TO 100,000 BOE/D 100,000 100,000 Production (boe/d) 80,000 Last common share equity 60,000 offering 14.2 million shares April 2012. 40,000 42,000 41,000 38,950 40,000 33,734…
  19. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 19
    2016 GOALS The 2016 capital program is designed to accomplish the following: Spend less than cash flow, maintain Birchcliffs financial flexibility and protect its balance sheet Achieve approximately 3% to 5% year over year annual…
  20. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 20
    2016 CAPITAL EXPENDITURE PROGRAM DCCET Capital 8% 2016 CAPITAL BUDGET: 140.0 MILLION 4% Montney D1 HZ Gas Wells Net Capital Gross Wells Net Wells Basal Doig HZ (million) 12% Gas Wells Drilling & Development Montney D4 HZ 51% Gas…
  21. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 21
    BORROWING BASE DETAILS Birchcliff has two credit facilities with a combined borrowing base limit of 800 million, including an extendible revolving 40 million Working Capital Facility and an extendible revolving 760 million Syndicated…
  22. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 22
    BORROWING BASE DETAILS 1,200 120 Aggregate Borrowing Base 102.1 Borrowing Base / Amount Drawn (million) Amount Drawn 1,000 100 PDP Reserves 84.7 PDP Reserves (MMboe) 800 80 62.0 600 54.6 60 38.7 400 30.8 40 200…
  23. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 23
    MONTNEY/DOIG NATURAL GAS RESOURCE PLAY A Significant Position in a World Class Play
  24. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 24
    MONTNEY/DOIG - A WORLD CLASS RESOURCE PLAY Resource density. Stacked resource up to 300 meters thick. Large areal extent. Extends over 50,000 square miles. Exceptional fracability. Low clay content, Birchcliff Montney/Doig low Poissons…
  25. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 25
    2016 POUCE COUPE MONTNEY/DOIG DRILLING PROGRAM Utilizing pad drilling efficiencies; 14 wells from three pads including one two well pad and two six well pads All pads already tied-in to Birchcliffs infrastructure system minimizing…
  26. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 26
    BIRCHCLIFF MONTNEY/DOIG Large contiguous land base with 888.8 net sections prospective for the Montney/Doig over our three current development intervals Stacked resource in some of the thickest Montney with 3,367.3 net potential…
  27. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 27
    POUCE COUPE AREA Proven asset in development phase. Wells in the area show Montney C high initial deliverability, low Exploration terminal decline and stable long Horizontal term production Exploration success in the Montney D4…
  28. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 28
    ELMWORTH DEVELOPMENT Second Exploration Horizontal Birchcliff has drilled two successful exploration horizontal wells into the Montney D4 interval, both of which are expected to result in First follow up drilling and significant…
  29. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 29
    STACKED RESOURCE PROVIDES SUBSTANTIAL FUTURE UPSIDE Basal Doig / Upper Montney (D5) 309.9 (293.7 net) sections at Dec 31, 2015 with 2P reserves booked on 31% of land Montney D4 293.4 (287.0 net) sections at Dec 31, 2015 2P…
  30. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 30
    MONTNEY/DOIG RESERVES 600,000 Drilled 29 HZ M/D wells Drilled 41 HZ 500,000 188 (187.9 net) Montney/Doig M/D wells horizontal natural gas wells Drilled 25 HZ M/D wells drilled as of Dec 31, 2015 Drilled 22 HZ 400,000 M/D…
  31. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 31
    2014 MONTNEY/DOIG RESOURCE ASSESSMENT Summary of Birchcliff Reserves and Resources(1)(2)(3) Reserves and Resource Volumes (Bcfe) Resource Class Low Estimate Case Best Estimate Case High Estimate Case Cumulative Production(4) 216.3…
  32. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 32
    LOW DECLINE PRODUCTION All wells are choked initially for better operational efficiency, higher ultimate recovery and reservoir management. This leads to lower declines and subsequently less wells required to maintain production base…
  33. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 33
    MONTNEY/DOIG REPRESENTS 84% OF PRODUCTION AND 90% OF 2P RESERVES Production (boe/d) 2P Reserves (MMboe) 50,000 700 Corporate Production Corporate Reserves Montney/Doig Production 600 Montney/Doig Reserves 40,000 500 30,000 400…
  34. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 34
    NEW LOWER MONTNEY (D1) TYPE CURVE 34
  35. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 35
    LOWER MONTNEY (D1) CORE AREA COMPLETION EVOLUTION Completion Cost per Stage vs. Number of Stages Lateral Length 18 300 2,500 Number of Stages Completion Cost per Stage (000's) Lateral Length Completion Cost per Stage 15 250 2,000…
  36. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 36
    NEW COMPLETION TECHNIQUES IMPROVING D1 WELL RESULTS 36
  37. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 37
    DRILLING & 2015 Montney/Doig Wells COMPLETION 2014 Montney/Doig Wells INITIATIVES Achieved steady reduction in both drilling time & costs. Continue to monitor and refine current drilling & completion practices to improve…
  38. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 38
    ONE OF THE LARGEST MONTNEY LAND HOLDERS 1,400 1,200 Birchcliff has one of the largest land positons in the entire Montney/Doig Montney Acres (000's) 1,000 Natural Gas Resource Play 800 600 400 200 0 CNQ…
  39. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 39
    PCS GAS PLANT The Engine for Future Growth
  40. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 40
    Production Processed through 2012 2013 2014 2015 the PCS Gas Plant Average daily production, net to Birchcliff: Natural gas (Mcf) 59,327 91,666 132,808 163,641 Oil & NGLs (bbls) 204 527 1,065 1,287 Total boe (6:1) 10,092 15,805…
  41. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 41
    Corporate Operating Costs vs. % of Natural Gas Sales Volumes Processed at the PCS Gas Plant KEY STRATEGIC 10.00 100% Corporate Operating Cost (/boe) Volume Through PCS Gas Plant ADVANTAGES 8.00 6.00 80% 60%…
  42. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 42
    TCPL SERVICE OVERVIEW TCPL service secured to execute Birchcliffs long term plan Sufficient renewable service that can be cancelled with one year notice; gives ultimate flexibility to future pace of development Secondary service can…
  43. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 43
    PCS GAS PLANT HIGHLIGHTS 100% owned & operated Current processing capacity of 180 MMcf/d Preparation for construction of Phase 19% V expansion underway; will add 80 MMcf/d bringing total processing capacity to 260 MMcf/d in 2017…
  44. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 44
    PCS GAS PLANT Scenario Analysis
  45. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 45
    IMPROVED PCS GAS PLANT ECONOMICS As of December 31, 2015, DCCET costs on our Montney/Doig horizontal natural gas wells have decreased to 4.4 million largely due to significant cost savings and new technology on drilling and…
  46. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 46
    ILLUSTRATIVE 80 MMcf/d PCS GAS PLANT BUILD & FILL SCENARIO The chart to the right depicts the Montney/Doig Wells to keep 80 MMcf/d Gas estimated Montney/Doig wells Plant Full for 30+ Years(1) required to keep 80 MMcf/d plant 30…
  47. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 47
    The table below presents on an annual basis the internally estimated (1) facilities and DCCET capital requirements, (2) operating cash flow and (3) free cash flow (FCF) from an 80 MMcf/d PCS Gas Plant under various AECO natural gas…
  48. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 48
    PROXIMAL TO INFRASTRUCTURE WITH LONG TERM EXPOSURE TO LNG EXPORT Montney/Doig Birchcliff Pouce Coupe Production Montney/Doig & PCS Gas Plant Owned Infrastructure PCS Gas Plant Nova Pipeline System North American Market…
  49. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 49
    ENOUGH RESOURCE TO FILL A ONE Bcf/d LNG TRAIN FOR OVER 30 YEARS = 1 Bcf/d LNG Train X 365 Days X 30 Years 11.0 Tcf BIR Remaining BIR Contingent Reserves Resource + / = 1 Bcf/d LNG 3.1 Tcf 7.9 Tcf 30 Years Train Birchcliff…
  50. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 50
    CHARLIE LAKE LIGHT OIL RESOURCE PLAY Dependable Light Oil Production
  51. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 51
    WORSLEY CHARLIE LAKE LIGHT OIL One 2016 well continues 18 Essentially 100% W.I. with sections of land operatorship and control of wells, and will extend pool to N.E. off an pipelines and facilities existing pad at minimal tie-in…
  52. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 52
    WORSLEY CHARLIE LAKE LIGHT OIL ACCOMPLISHMENTS SINCE SEPTEMBER 2007 ACQUISITION 2P reserves have increased over 170% to 41.1 MMboe from 15.1 MMboe Production increased over 25% to 4,236 boe/d in 2015 from 3,400 boe/d 2015 year end…
  53. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 53
    WORSLEY AREA RESERVES 45,000 40,000 35,000 30,000 Reserves (Mboe) 25,000 PDP (Mboe) 20,000 TP (Mboe) 2P (Mboe) 15,000 10,000 5,000 0 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 YE 2015…
  54. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 54
    WORSLEY AREA NPV10 (BT) VS. DELOITTE OIL PRICE FORECAST 1,000 120 900 100 800 5 Year WTI Average /bbl 700 80 600 NPV10 (million) 500 60 400 40 300 200 20 100 0 0 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE…
  55. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 55
    PROGRESS Birchcliff Non-Confidential Land CHARLIE LAKE Birchcliff Exploration Horizontal Wells Charlie Lake Producing Wells LIGHT OIL First successful Charlie Lake light oil exploration horizontal well drilled in Q4 2014 and…
  56. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 56
    BIRCHCLIFFS HISTORY Over 10 Years of Success
  57. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 57
    Record annual average Birchcliffs average daily production was 38,950 boe/d in production of 38,950 2015 compared to 2,793 boe/d in 2005, a compounded boe/d in 2015 annual growth rate of 30% per year over that span. 2,793 boe/d 1…
  58. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 58
    Production Growth 45,000 300 boe/d/million wtd. avg. shares 40,000 250 35,000 Birchcliff has increased production at a 30,000 200 compound annual growth rate of boe/d 25,000 150 20,000 15,000 100 30% since 2005.…
  59. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 59
    Cash Flow from Operations 350 2.50 300 2.00 250 On average, cashflow and cash flow per common share have increased millions 1.50 /share 200 150 1.00 by 10% and 6%, respectively, over 100 0.50 the past five years.…
  60. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 60
    Reserves Growth 700 4,000 600 3,500 Birchcliff has added significant low cost reserves 3,000 500 since commencing operations in 2005. On a per boe/1,000 Shares 2,500 common share basis, PDP, 1P and MMboe 400 2,000 300…
  61. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 61
    APPENDIX
  62. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 62
    SERIES A PERPETUAL PREFERRED SHARES Preferred Share Details Series A Number of Shares 2 million Issue Date August 8, 2012 TSX Trading Symbol BIR.PR.A Issue / Par Price 25.00 per share Quarterly Dividend 0.5000 per share Yield at…
  63. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 63
    SERIES C PREFERRED SHARES Preferred Share Details Series C Number of Shares 2 million Issue Date June 14, 2013 TSX Trading Symbol BIR.PR.C Issue / Par Price 25.00 per share Quarterly Dividend 0.4375 per share Yield at Issue 7.0%…
  64. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 64
    EXECUTIVE OFFICERS Mr. Tonken is a Director and the President and CEO of Birchcliff. He has more than 35 years of A. Jeffery experience in the oil and gas industry and is one of the Corporations founders. Prior to creating Birchcliff,…
  65. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 65
    EXECUTIVE OFFICERS Mr. Carlsen was appointed Vice-President, Engineering on July 22, 2013. He previously served as Christopher A. Asset Team Lead and Senior Exploitation Engineer with Birchcliff. Mr. Carlsen is a Professional Engineer…
  66. February 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 66
    BOARD OF DIRECTORS Mr. Shaw is a Director of Birchcliff and has more than 28 years of experience in the oil and gas industry Larry A. Shaw and is one of the Corporations founders. Prior to joining Birchcliff, Mr. Shaw served as Chairman…

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