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February 2016 Investor Update – Painted Pony Petroleum Ltd

Painted Pony Petroleum Ltd · Feb 12, 2016 · 37 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 Update – Painted Pony Petroleum Ltd – slide 1
    Investor Update February 12, 2016
  2. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 2
    Corporate Profile TSX Ticker Symbol PPY Average Daily Production (1) 105 MMcfe/day (17,500 boe/d) Daily Trading Volume 1.7 million shares per day (30 day average ) Shares 100million Net Debt (2) 64.9million Outstanding…
  3. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 3
    Asset Focus Montney Asset 100% BC Focused Montney Montney is one of the most prolific and economic natural gas and liquids plays 2.9 Tcfe (488 MMboe) Proved Plus Probable Reserves(1) Growth Forecasting exit production Q4…
  4. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 4
    The Montney Trend Location, Location, Location Thick, over- pressured, sweet spot PPYs Montney Sweet Spot is: a dolomitic siltstone with higher quality reservoir than a shale 4x thicker than the Marcellus at greater than 300m…
  5. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 5
    Canadian Natural Gas Reserves As at Dec 31, 2014 Tied for 6th 2014 Cost of Supply Largest 30% Increase in 2P Undeveloped Reserves per well Natural Gas Reserves in 5.1x Recycle Ratio FD&A (2P) 8,000 Canada 1.48 2013 FDC/Mcfe (1)…
  6. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 6
    Land Position Premium Assets in the Optimum Area Land West of Royalty Large contiguous land base with year-round access Line 217 Net sections (139,049 net acres) 2nd Largest position in northern Montney west of reduced royalty…
  7. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 7
    Reserves Growth Impressive and Consistent Assuming Enterprise Value 4.65/sh (4.00/sh equity + 0.65/sh debt) 4.65/sh 0.95 / boe 4.91 boe/sh = or 500 2P Reserves per Share 0.16 / Mcfe 4.91 5 Proved Probable 400 4…
  8. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 8
    2014 Reserves Deep, Long-Term, Underlying Value 2015 Reserve Report expected release on March 2, 2016 2.9 Tcfe Proved + Probable Reserves Dec. 31, 2014(1) 68% Increase in 2P Reserves in 2014 30% Increase in 2P Undeveloped Reserves…
  9. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 9
    Production Growth Impressive and Consistent 50,000 Annual Average Daily Production per 1 Million Weighted-Average Shares 475 500 Oil & NGLs Natural Gas 45,000 Q4 2016 Exit Production 450 Annual Average Boe per Day per 1 Million…
  10. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 10
    3-Year Development Model Improved Well Performance Drives Down Well Count 60,000 Improved well performance 350 has reduced the number of 1st AltaGas Townsend Facility wells necessary to meet (48 MMcf/d) Cumulative well count…
  11. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 11
    Well Performance Top Performing Wells Among Montney Producers Painted Pony Average Peak Month Rate Twice Average Comparable Wells PPY Wells 275 7 Average 140 Painted Pony Double the (6.2 MMcf/d) Rates of All 6 Wells in the 120…
  12. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 12
    Sales Egress Optionality Firm Transportation Supports Increasing Volumes Firm capacity on Spectras T-North pipeline of 266 MMcf/d in November 2016 Under terms of expanded firm capacity agreement, PPY volumes can be sold at either…
  13. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 13
    Royalty Advantage Best Royalty Structure in the Basin Painted Pony is 100% in B.C. and 100% west of the Deep Royalty Line Inclusive of the B.C. Deep Well Royalty Credit, B.C. has the best royalty structure in North America PPY…
  14. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 14
    Cost-Conscious Culture Driving Cash Costs Lower General & Administrative Costs per Boe 3.00 G&A Cost ( / boe) 2.73 Focus on one large 2.00 property results in 2.19 efficiencies of 1.72 1.00 operations and staff 1.14…
  15. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 15
    Risk Management Prudent Downside Protection PPY hedged Financial Hedging 75% at 3.03 Physical Contracts Volume AECO for 2016 (MMcf/d) 100% and Q1 2017 5.00 50% 0.00 % of Trailing Quarterly Production Hedged Differential off…
  16. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 16
    AltaGas Strategic Alliance Deal with People You Trust in a Win / Win Alliance Liquids-Rich Natural Gas Processing Provides for the development of essential liquids-rich gas processing facilities Existing AltaGas PNG Mainline 10…
  17. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 17
    AltaGas Construction Underway Ahead of Schedule, On Budget Planned for mid-year 2016 start-up (approximately 70% complete as at January 7, 2016) 17
  18. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 18
    Facilities Key Infrastructure New AltaGas Townsend Facility: Major new shallow-cut facility Alaska Highway 198 MMcf/d gross capacity Blair PPY has secured firm capacity for entire plant West Blair Daiber (25 mmcf/d) (50…
  19. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 19
    Capital Expenditures 2015 and 2016 2015 Estimate Alaskan Hi-way 107 million Capital investment (est) Blair Blair/Townsend 15.0 Total net drills West Interconnect Blair Pipeline 9.0 Total net completions Cypress Daiber…
  20. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 20
    Development Economics Price Sensitivity High-Rate and 200% Liquids-Enhanced, Blair-Daiber Wells Deliver Significant Torque to Stronger Gas Prices Blair-Daiber 150% (15.5 Bcfe Paired Parallel Type Well) IRR 100% Townsend…
  21. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 21
    Technology Parallel-Pair Completion using Open Hole Drop Ball Production Increase at 26-L (1) No Cost 5-K (1) Increase West Blair Blair 41-F (1) 300-350 m Inter-well 90-100 m Average 11-F (1) Spacing Fracture Stage Spacing…
  22. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 22
    2016 Development Plan & Economics BlairDaiber - High-Rate, Liquids-Enhanced Development Program Economics 5.4 million Drill, Complete, Equip & Tie-in 9.1 MMcfe/d IP30 Production Rate 15.5 Bcfe 2P Reserves per well 15 bbls/MMcf…
  23. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 23
    Dramatic Increase in Capital Efficiencies BlairDaiber - High-Rate, Liquids-Enhanced 10 15.5 Bcfe 4,000 6,000 EUR and Cumulative Volume (Mmcfe) Only 35% Cumulative Net Operating Income (M) Decline Cumulative Net Operating…
  24. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 24
    2016 Development Plan & Economics Townsend Liquids-Rich Sweet Spot Development Program Economics 5.4 million Drill, Complete, Equip & Tie-in 7.4 MMcfe/d IP30 Production Rate 9.5 Bcfe 2P Reserves per well 60 bbls/MMcf Liquids…
  25. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 25
    Improving Capital Efficiencies Townsend Liquids-Rich Sweet Spot 10 4,000 6,000 9.5 Bcfe Type Well Ball Drop (8 wells) Cumulative Volume (Mmcf) Perf & Plug (2 wells) Cumulative Net Operating Income (M) Through Cumulative Net…
  26. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 26
    Development Model Capital Program Reduction 600 million (32%) capital program reduction from 1.9 Free Funds Flow billion to 1.3 billion Yield of 37% 700 with unchanged (202 Million) Capital Program (March 2015) production profile…
  27. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 27
    Prudent Leverage Balance Sheet Strength Maintained Townsend Facility Begins 3.25 Natural Gas NYMEX Operations 150 MMcf/d (WTI and FX at January 19, 2016 Strip) Annualized Funds Flow 6.0 Townsend Facility Net Debt :…
  28. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 28
    Sustainability Case Because You Asked What If 300 0.6 Billion Capital 50,000 Spending Reduced 47,000 47,000 by 0.7 Billion (46%) from 1.3 Billion Growth Capital Plan 41,000 on Strip Pricing 40,000 249 117 Annual Average…
  29. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 29
    Proposed West Coast LNG A Long Call Option for PPY Gas Selected Canadian LNG Projects Export Capacity Proposed TransCanada Shell LNG Canada Petronas FID 2016 est 3.2 Bcf/d (BC / NEB approvals Jan 2016) In-service 2019 PPY Has…
  30. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 30
    The Best Pony in the Race Positioned for Townsend plant 70% complete; ahead of schedule and on budget Significant Growth 198 MMcf/d of incremental net processing capacity in 6-8 months Production growth to 40,000 boe/d by end of…
  31. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 31
    Appendices & Disclosures 31
  32. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 32
    Proposed West Coast LNG Projects Proposed LNG Projects Capacity Proposed Exxon Imperial 4.0 Bcf/d TransCanada WCC LNG Petronas Shell Petrochina, Mitsubishi, KOGAS 3.2 Bcf/d LNG Canada Nexen / CNOOC Inpex, JGC 3.1 Bcf/d Aurora…
  33. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 33
    Historical Station 2 Pricing Recent Differential Anomalous 2016 YTD 5.00 Station 2 : AECO 4.51 differential 0.37 has narrowed 0.15 by 57% over 4.00 4.14 2H 2015 3.00 Price ( / Mcf) 2.76 2.67 2.91 2.70 2.67 2.56 0.55…
  34. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 34
    5-Year Development Model Improved Well Performance Drives Down Well Count Q4 2019 Exit 110,000 Boe/d 2nd AltaGas The number of 120,000 wells necessary to Townsend Facility 700 (48 MMcf/d) achieve annual 2nd AltaGas production…
  35. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 35
    Equity Research Analyst Coverage Institution Analyst AltaCorp Capital Patrick ORourke Canaccord Genuity Corp. Anthony Petrucci CIBC World Markets Adam Gill Cormark Securities Inc. Garett Ursu Credit Suisse Securities David…
  36. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 36
    Corporate Overview Auditor KPMG LLP Evaluation Engineers GLJ Petroleum Consultants Ltd. Banks The Toronto-Dominion Bank The Bank of Nova Scotia Alberta Treasury Branches Canadian Imperial Bank of Commerce HSBC Bank Canada Wells…
  37. February 2016 Investor Update – Painted Pony Petroleum Ltd – slide 37
    Endnotes R: Reserves per share are calculated by dividing P+P reserves by shares outstanding at the end of the year. As at December 31, 2014, Painted Ponys P+P reserves were 488.4 MMboe and there were 99.5 million shares outstanding.…

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