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March 2016 Investor Presentation – Bonavista Energy Corp

Bonavista Energy Corp · Mar 21, 2016 · 43 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. March 2016 Investor Presentation – Bonavista Energy Corp – slide 1
    INVESTOR PRESENTATION MARCH 2016 1
  2. March 2016 Investor Presentation – Bonavista Energy Corp – slide 2
    IDENTITY Value creation through our excellent people and high quality assets: Bonavista is EXPERIENCED EFFICIENT ALIGNED Management tenure 20% reduction in 2015 operating costs 10% insider ownership is 11 years to 6.60/boe…
  3. March 2016 Investor Presentation – Bonavista Energy Corp – slide 3
    IDENTITY Focused: Deep Basin 21,459 boe/d - 2015 production 87% natural gas < 5/boe operating costs Key plays: Wilrich, Bluesky, Falher, Notikewin West Central 48,297 boe/d - 2015 production 64% natural gas 6/boe operating…
  4. March 2016 Investor Presentation – Bonavista Energy Corp – slide 4
    IDENTITY Core area concentration: 90,000 250 80,000 Operating Expense ( millions) 70,000 200 60,000 12.88 /boe 10.67 /boe Production (boe/d) 150 50,000 40,000 100 30,000 7.28 /boe 6.02 /boe 20,000 50 10,000…
  5. March 2016 Investor Presentation – Bonavista Energy Corp – slide 5
    2016 STRATEGIES FINANCIAL FLEXIBILITY 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,…
  6. March 2016 Investor Presentation – Bonavista Energy Corp – slide 6
    2016 STRATEGIES FINANCIAL FLEXIBILITY Senior debt maturities: 300 Senior notes average interest rate 4.1% Bank debt interest rate 3.3% Remaining term approximately 5.3 years at 3.9% 250 200 (millions) 150 100 50 0…
  7. March 2016 Investor Presentation – Bonavista Energy Corp – slide 7
    2016 STRATEGIES FINANCIAL FLEXIBILITY Total and senior debt / EBITDA: Estimate December 31, 2016 ( millions) Revenues, net of royalties 348* Realized gains on financial instrument contracts 188 536 Expenses: Operating 151…
  8. March 2016 Investor Presentation – Bonavista Energy Corp – slide 8
    2016 STRATEGIES - SUSTAINABILITY Guidance sustainable and flexible program: 2016 Budget Capital expenditures: Exploration and development ( millions) 145 190 Production (boe/d): Entrance 72,000 72,000 Annual 69,000 73,000 Exit…
  9. March 2016 Investor Presentation – Bonavista Energy Corp – slide 9
    2016 STRATEGIES SUSTAINABILITY Funds from operations sensitivities: 210 MM 220 MM 230 MM 240 MM 250 MM 227 MM AECO - 0.25 + 0.25 WTI (US) - 5.00 + 5.00 F/X + 0.05 - 0.05 227 MM funds from operations based on:…
  10. March 2016 Investor Presentation – Bonavista Energy Corp – slide 10
    2016 STRATEGIES - PROTECTED Natural gas hedging protected from commodity price volatility: 300 4.00 Hedged Volumes (thousands gjs/d) 250 3.50 200 3.00 CDN/gj 150 2.50 100 2.00 50 1.50 84% 84% 73%…
  11. March 2016 Investor Presentation – Bonavista Energy Corp – slide 11
    2016 STRATEGIES - PROTECTED Oil hedged at CDN 80 WTI for 2016: 4 100.00 90.00 Hedged Volumes (mbbls/d) 3 80.00 70.00 CDN/bbl 2 60.00 50.00 1 40.00 30.00 59% 75% 72% 51% 0 20.00 Q1-16 Q2-16 Q3-16…
  12. March 2016 Investor Presentation – Bonavista Energy Corp – slide 12
    2016 STRATEGIES - PROTECTED 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% 50% 20% 32% 32% 0 0% Q1-16 Q2-16…
  13. March 2016 Investor Presentation – Bonavista Energy Corp – slide 13
    2016 STRATEGIES ENHANCED EFFICIENCIES Adding production more efficiently: 20,000 2016 Production Additions 18,000 (Prorated to 145MM) 16,000 2015 Production Additions (Prorated to 145MM) 14,000 2014 Production Additions…
  14. March 2016 Investor Presentation – Bonavista Energy Corp – slide 14
    2016 STRATEGIES ENHANCED EFFICIENCIES Pace of improvement cost of adding production: 10% Production Addition Costs* (% change) 0% -10% 24% -20% -30% -40% 52% -50% 2012: -60% Bonavista 32,500/boed Peer…
  15. March 2016 Investor Presentation – Bonavista Energy Corp – slide 15
    2016 STRATEGIES ENHANCED EFFICIENCIES 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…
  16. March 2016 Investor Presentation – Bonavista Energy Corp – slide 16
    2016 STRATEGIES ENHANCED EFFICIENCIES Pace of improvement operating costs: 10% 5% Operating Costs * (% change) 0% 1% -5% -10% 27% -15% -20% 2012: -25% Bonavista 9.07/boe Peer Group Average 12.22/boe -30%…
  17. March 2016 Investor Presentation – Bonavista Energy Corp – slide 17
    2016 STRATEGIES Sustainability with continued cost improvements: Improved cash costs sustain profitability despite a 39% decrease in revenues per boe* 20.00 60% 18.00 50% 16.00 14.00 10 - 12 40% 12.00 (/boe) 10.00…
  18. March 2016 Investor Presentation – Bonavista Energy Corp – slide 18
    2016 STRATEGIES Maintaining sustainability: 200% 180% 160% 140% Total Payout Ratio* 120% 100% 80% 60% 40% 20% 0% 2012 2013 2014 2015 2016E Bonavista Peer Group Average ** * E&D capital expenditures +…
  19. March 2016 Investor Presentation – Bonavista Energy Corp – slide 19
    2015 RESERVES F&D costs of 7.26/boe: Natural Before- Natural 10%NPV Total 2.4 billion Oil Gas Total Tax Gas Liquids 10%NPV Proved (Mbbls) (MMcf) (Mbbls) (Mboe) (M) Probable Developed 35% Producing Category 40%…
  20. March 2016 Investor Presentation – Bonavista Energy Corp – slide 20
    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…
  21. March 2016 Investor Presentation – Bonavista Energy Corp – slide 21
    DEEP BASIN WILRICH Rapid early stage growth: 14,000 4 recent wells will add 12,000 3,500 boe/d of capability by mid-March 10,000 Current Production of 11,150 boe/d Production (boe/d) 8,000 6,000 4,000 2,000…
  22. March 2016 Investor Presentation – Bonavista Energy Corp – slide 22
    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…
  23. March 2016 Investor Presentation – Bonavista Energy Corp – slide 23
    DEEP BASIN ANSELL WILRICH Improving efficiencies through capital cost reductions: 6,000 down 47% Completion 5,000 Cost to Drill and Complete (000s) 4,000 15,000/boed * 15,000/boed * 14,800/boed *…
  24. March 2016 Investor Presentation – Bonavista Energy Corp – slide 24
    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 2016E Cost per…
  25. March 2016 Investor Presentation – Bonavista Energy Corp – slide 25
    DEEP BASIN ANSELL WILRICH Improving capital efficiencies*: 70% Extended reach drilling 60% enhancing profitability Internal Rate of Return ** 50% 40% 30% 20% 10% 2016 1.5-mile lateral length 2015 1-mile lateral…
  26. March 2016 Investor Presentation – Bonavista Energy Corp – slide 26
    WEST CENTRAL GLAUCONITE Reliable production growth: 30,000 Consistent and 25,000 predictable development Current Production of 23,400 boe/d 20,000 Production (boe/d) 15,000 10,000 5,000 0 * Q4 Q1 Q2 Q3 Q4…
  27. March 2016 Investor Presentation – Bonavista Energy Corp – slide 27
    WEST CENTRAL - GLAUCONITE Maintaining production through 2016: Annual production Capital expenditures percent of NOI* 25,000 24,000 23,000 2016E Production (boe/d) 22,000 21,000 20,000 2015 19,000 18,000 2015…
  28. March 2016 Investor Presentation – Bonavista Energy Corp – slide 28
    WEST CENTRAL HOADLEY GLAUCONITE Improving cost structure: 3,500 down 23% Completion Cost to Drill and Complete (000s) 3,000 2,500 2,000 12,400/boed * 12,400/boed * 16,100/boed * 9,000/boed * 11,500/boed…
  29. March 2016 Investor Presentation – Bonavista Energy Corp – slide 29
    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…
  30. March 2016 Investor Presentation – Bonavista Energy Corp – slide 30
    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…
  31. March 2016 Investor Presentation – Bonavista Energy Corp – slide 31
    WEST CENTRAL HOADLEY GLAUCONITE Sensitivity: 60% Improved economics with enhanced drilling and completions technology 50% Internal Rate of Return* 40% 30% 20% 10% 2-mile** Type Curve (Slickwater) 1-mile** Enhanced…
  32. March 2016 Investor Presentation – Bonavista Energy Corp – slide 32
    WEST CENTRAL MORNINGSIDE FALHER Prolific production performance: 4,500 4,000 Early stages of successful 3,500 development Current Production of 3,575 boe/d 3,000 Production (boe/d) 2,500 2,000 1,500 1,000…
  33. March 2016 Investor Presentation – Bonavista Energy Corp – slide 33
    WEST CENTRAL - FALHER Growing production in 2016: Annual production Capital expenditures percent of NOI* 4,500 Exit Entry 4,000 3,500 2016E Production (boe/d) 3,000 2,500 2,000 1,500 1,000 2015 500 0…
  34. March 2016 Investor Presentation – Bonavista Energy Corp – slide 34
    WEST CENTRAL MORNINGSIDE FALHER Sensitivity: 70% 60% 50% All key plays compete Internal Rate of Return* equally for capital in 40% current price environment 30% 20% Ansell Wilrich (1.5 mile lateral length) 10%…
  35. March 2016 Investor Presentation – Bonavista Energy Corp – slide 35
    CAPITAL ALLOCATION Base E&D spending of 145MM: Wells Expenditures % of Value Gross Net ( millions) Expenditures West Central: Glauconite 16 14.1 48 39 Falher/Notikewin 8 7.5 20 16 Deep Basin: Wilrich 10 10.0 53 43 Bluesky 1…
  36. March 2016 Investor Presentation – Bonavista Energy Corp – slide 36
    2016 COMMODITY COMPOSITION By volume: By revenue: 8% 3% 5% Ethane 7% 12% 4% Propane 5% Butane 6% 16% Pentane 64% Oil 70% Natural Gas 47 Based on February 16, 2016 strip pricing
  37. March 2016 Investor Presentation – Bonavista Energy Corp – slide 37
    KEY PLAYS AMONG THE BEST Source: CIBC Resource Play Watch January 2016 48
  38. March 2016 Investor Presentation – Bonavista Energy Corp – slide 38
    DEEP BASIN WILRICH Ansell Wilrich type curve: 900 Type 1.5-mile Curve Type Curve 800 Capex 4.2 4.6 ( millions) 700 IP12 (boe/d) 380 475 600 Production (boe/d) /boed 11,050 9,700 500 EUR (mboe) 733 956 400 IRR (%) 13 19…
  39. March 2016 Investor Presentation – Bonavista Energy Corp – slide 39
    WEST CENTRAL HOADLEY GLAUCONITE Type curve: 700 Type Curve 600 Capex ( millions) 2.4 500 IP12 (boe/d) 270 Production (boe/d) /boed 9,000 400 EUR (mboe) 496 300 IRR (%) 11 200 F&D (/boe) 4.84 100 Recycle Ratio 2.1…
  40. March 2016 Investor Presentation – Bonavista Energy Corp – slide 40
    WEST CENTRAL STRACHAN GLAUCONITE Type curve: 1,000 2-mile Type Curve 900 Capex ( millions) 6.0 800 IP12 (boe/d) 560 700 Production (boe/d) 600 /boed 10,700 500 EUR (mboe) 920 400 IRR (%) 7 300 F&D (/boe) 6.49 200…
  41. March 2016 Investor Presentation – Bonavista Energy Corp – slide 41
    WEST CENTRAL - MORNINGSIDE FALHER Type curve: 1,000 Type Curve 900 Capex ( millions) 2.2 800 IP12 (boe/d) 300 700 Production (boe/d) 600 /boed 7,400 500 EUR (mboe) 477 400 IRR (%) 20 300 F&D (/boe) 4.61 200 Recycle…
  42. March 2016 Investor Presentation – Bonavista Energy Corp – slide 42
    DEEP BASIN BLUESKY Type curve: 700 Type Curve 600 Capex ( millions) 3.7 IP12 (boe/d) 345 500 Production (boe/d) /boed 10,580 400 EUR (mboe) 509 300 IRR (%) 10 200 F&D (/boe) 7.18 Recycle Ratio 1.7 100 0 12 24…
  43. March 2016 Investor Presentation – Bonavista Energy Corp – slide 43
    ESTIMATED TAX POOLS as at December 31, 2015 Category millions Canadian Oil & Gas Property Expense 724 Canadian Development Expense 716 Canadian Exploration Expense 314 Undepreciated Capital Cost 437 Non-capital Losses 406…

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