INTRODUCTION Started Sept 2010, fourth Storm since Nov 1998 history of per share growth in prodn & asset value 119.6 MM shares + 7.6 MM options, TSX-V symbol SRX officer + director ownership 13% (16% FD) Market cap 420 MM (3.50/sh)…
CORPORATE PRODUCTION outages & prodn shut-in due to poor nat gas price: Q2/15 2,250 Boe/d Q3/15 2,900 Boe/d Q4/15 2,700 Boe/d 3
FINANCIAL RESULTS 2015 prodn per share +33% vs 2014 2015 cash costs -11% vs 2014 +43% prodn growth in 2015 not enough to offset revenue decline 4
RESERVES SUMMARY reserve improvements coming with more prodn history from Umbach hzs PDP +54% from 2014 (+44% per share) 2P +7% per share from 2014 1P +15% per share PDP PV10 unchanged; from 2014 volume growth offset price…
COST FOR RESERVE ADDITIONS All-in FD&A (reflects entire capital investment program) 2015 3 YR 2015 PDP recycle 1.3 X PDP 6.53/boe 14.18/boe 1P 3.38 9.70 2P 0.50 7.82 F&D also strong (2015 PDP F&D 8.50/boe) PDP FD&A is…
MAJOR AREAS large shale gas resource in HRB, Umbach Montney needs higher nat gas price 109,000 net acres 10,700 Boe/d* growth driven by developing Montney at Umbach (liquids rich nat gas) Horn River Basin 78,000 net acres 0 Boe/d…
UMBACH AREA (North East British Columbia) 1% H2S in gas, processed Montney liquids rich gas at McMahon or Stoddart sour gas plants 155 net sections 109,000 net acres Storm lands benefit 1,200 1,300 btu/scf from shallow depth with…
UMBACH LANDS most lands in higher productivity sweet spot - reservoir quality is important in Montney 155 net sections (168 gross) 109,000 net acres Storms cost to date for land is 2,570/ha or 1,025/acre 33 MM acquire land +…
UMBACH ACTIVITY Inventory of 11 hzs two step-outs 46 hzs drilled in 2016 35 hzs producing Field compression 80 mmcf/d raw 72 mmcf/d Jan-Feb/16 15,000 boe/d max Field compression to 115 mmcf/d with 3rd facility Q4/16 Op cost…
UMBACH HORIZONTAL WELL PERFORMANCE 11
UMBACH 2014 - 2015 HORIZONTAL WELLS 12
UMBACH HORIZONTALS OPERATED DAY RATES 13
UMBACH HORIZONTAL WELL LENGTHS 14
UMBACH HZ COSTS adding fracs to increase rate/reserves for less cost per frac (reduces F&D) 2015 per frac cost -15% from 2014 drill compl fracs length 2014 2,080 K 2,500 K 19 1,205 m 2015 2,025 K 2,480 K 22 1,295 m 2016 2,020…
UMBACH SOUTH HZ ECONOMICS full cycle economics: infrastructure +1,110 K per hz (32 MM for 70 mmcf/d facility for 37 hzs) F&D: 5.25/boe ROR: 15% Payout: 4.2 yrs PV15: 0.1 MM 2015 all-in PDP FD&A 6.53/boe PDP F&D 8.50/boe 16
UMBACH LANDS DELINEATED TO DATE Delineated 1/3 of lands to date 50.6 net sections 202 net hz drills, 42.4 net hzs drilled 160 net hzs to drill encouraging results on adjacent lands 17
UMBACH 2015 YEAR END RESERVES 2P reserves on 20% of lands upper Montney only 2P on 31.2 net sections (total 155 net) 90.4 net 2P hz drill locations (82% 1P) 2P FDC 543 MM (undiscounted) reserves increasing with prodn history…
GUIDANCE need 7 net hzs to offset decline in 2016 based on 6.3 Bcf and 4.5 MM drill & compl for Umbach hzs guidance contingent on nat gas price, can reduce 2016 capex to 45 MM and maintain 13,500 boe/d 19
NATURAL GAS PRICE DIFFERENTIAL IN BC AECO BC Stn 2 diff wider since 2014 1) increasing BC prodn 2) takeaway from BC onto TCPL & Alliance capped 3) more gas left in BC on Spectra system going to BC Stn 2 20
HEDGING, PROCESSING, & TRANSPORTATION Hedge up to 50% current prodn to support growth 2016: 17 mmcf/d AECO 3.72/mcf (2.98/GJ) 20% of forecast 2016 prodn is hedged 500 bpd WTI 77Cdn/bbl 11,000 GJ/d AECO BC Stn 2 diff -0.34/GJ 33,000…
ADDITIONAL INFORMATION Prodn shut-in Q3Q4/15 due to low BC Stn 2 nat gas price Diversified nat gas sales with Alliance capacity (started Dec/15) plus hedging and marketing arrangements using forecast 2016 prodn: 22% Chicago, 65% AECO…
SUMMARY Montney at Umbach is high quality resource competitive advantage from shallower depth & liquids rich Converting Montney resource into prodn and cash flow hz rates improving and costs decreasing executing on plan to expand…
GUIDANCE 2015 prodn +33% per 2016 2015 2014 share year over year Guidance Actual Actual Annual Average Boe/d 14,000 15,000 9,956 6,980 Q4 Production Boe/d 15,500 16,500 10,730 10,173 AECO 2.00/GJ 2.55/GJ 4.27/GJ BC STN 2 1.45/GJ…
UMBACH MONTNEY GEOLOGY B sand upper Montney 39 metres A sand hzs target A and B sand of upper Montney mid Montney 34 metres thickness upper + mid Montney 200 metres DPIIP 58 - 79 Bcf/section upper + mid porosity 73 metres…
UMBACH HZ ADDITIONAL INFO
COMPARING COMPLETIONS FOR NE BC HZS completed length Storm hz's shorter but, frac intensity 3,000 (sand tonnage and water volume per 12 month cum gas, mmcf 2,500 Storm 62-A pad (5 hz's) 2,000 1,435 m length metre) are higher than…
NAT GAS PRICING 2016 fwd strip (Feb 12/16) Sell in Chicago (price is net transport) NYMEX US2.24/mmbtu NYMEX US2.24/mmbtu NYMEX - Chicago diff -US0.04/mmbtu NYMEX - Chicago diff -US0.04/mmbtu Chicago price Cdn2.90/GJ FX 1.39 Alliance…
HORN RIVER BASIN HRB (NE BC) Shale gas from Muskwa, Otter Park, Evie shales 81,000 net acres, 100% WI 123 net sections Drilled 2 hzs & 2 verticals to validate commerciality 1 producing hz, 1 standing hz
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