Production Growth, Record Low Cash Costs of 0.75/mcfe & Top Quartile Well Results Underpins Glacier Plant Expansion Plans to 350 MMcf/d (58,330 Boe/d) Investor Presentation TSX / NYSE: AAV May 2016
ADVANTAGE AT A GLANCE TSX, NYSE: AAV TSX 52-week trading range 5.85 - 8.36 Shares Outstanding (basic) 184.4 million 2016 Annual Production Target 39% Annual Production Growth 200 mmcfe/d (33,300 boe/d) Market Capitalization May 5, 2016…
POSITIONED FOR PROFITABLE & SUSTAINABLE GROWTH Low Risk Development Industry Leading Low Strong Balance Sheet 27 standing wells Cost Producer 2016 Budget (1) 1,000 drill locations 0.75/mcfe (2) total cash costs 26 million surplus…
WITH OPERATIONAL FLEXIBILITY 90 mmcf/d Completed Standing Well Productivity from 13 Wells(1) 50 mmcf/d Currently Available Glacier Plant Capacity 100 mmcf/d Plant Expansion in Progress to 350 mmcf/d 200 mmcf/d Additional Sales Gas…
FOCUSED ON GLACIER DEVELOPMENT ADDITIONAL MONTNEY LANDS PROVIDES FUTURE UPSIDE Current development at Glacier including dry and liquids rich gas drilling with a Progress (Future) future drilling inventory 1,000 locations 100% owned…
CONTINUOUS IMPROVEMENT HAS CREATED INDUSTRY LEADING EFFICIENCIES 6
DRIVING STRONG GROWTH & FINANCIAL FLEXIBILITY IN OUR 2016 BUDGET Surplus ( million) Cash 146 26 2016 Budget Highlights 120 123 Drill 13 wells 40% Production Growth 35 190 to 210 mmcfe/d Annual Average 65 million Production…
INDUSTRY LEADING LOW COST STRUCTURE PROVIDES STRONG NETBACKS & RECYCLE RATIO EVEN WITHOUT HEDGING NO HEDGING INCLUDED Illustrative AECO Cdn Glacier Operating Netback 2.00/mcf Revenue (Realized Price) 1.80 (1) AAVs Total Cash Costs…
ADVANTAGE DEVELOPMENT PLAN 2015 THROUGH 2017(1) Annual Average Production 22% Capital Spending CAGR (2) (mmcfe/d) ( millions) 18% 235 40% 485 million Total (original 200 estimate 700 million) 200 165 141 120 2015 Actual…
DEVELOPMENT PLAN SENSITIVITY & HEDGING POSITIONS (1) Current hedging program reduces downside risk and maintains upside torque Production Average Period Hedged (net) AECO Floor Price 2016 52% 3.62/mcf 2017 36% 3.24/mcf 2018…
MAINTENANCE CAPITAL AND CASH FLOW SENSITIVITY Staying Flat is achievable at AECO 2.00/Mcf (NO HEDGING INCLUDED) Based on average well type curve (1) 115 million 200 million Based 155 million on top 115 million quartile 90…
OPERATIONAL EXCELLENCE 12
IMPROVING WELL PERFORMANCE THROUGH DRILLING & COMPLETION TECHNOLOGY Recent TOP Quartile Wells (1) Well Costs Reduced ( millions) (Increasing frac count has improved long term production performance) UPPER MONTNEY 5.5 4.5 2014…
PENTASTACK DEVELOPMENT WITH DECADES OF DRILLING INVENTORY AT GLACIER Capable of maintaining 245 mmcfe/d (40,830 boe/d) for 50 years (1) 1,000 Future Drill Locations at Glacier support future growth (1) 297 undeveloped locations booked…
ROBUST UPPER & LOWER MONTNEY DRY GAS WELL ECONOMICS Upper & Lower Montney Middle Montney (Dry Gas) (50 bbls/mmcf C3+, 45% C5+) 83% Advantage achieved 20% DC & E well cost reduction 33% 55% 20% Type Higher IP Curve & & EUR…
2013 UPPER & LOWER MONTNEY WELLS OUTPERFORM LONG TERM PRODUCTION EXPECTATIONS. 2014 WELLS JUST STARTED New wells are normally restricted to 10 mmcf/d for frac sand flowback control during initial 6 months Ten wells from our 2014…
IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER 10 New MM wells could exceed type curve Production Test Rate On-production Rate New 8-35 well (2014) cumulative production 1.4 Bcf in 8 months (restricted) 12-2…
GROWTH BEYOND 350 MMCF/D CAN BE ACCOMMODATED ON EXISTING PLANT SITE R14 R13 R12 R11 R10 R9 R8 R7W6 100% Owned Glacier Gas Plant Positioned for T78 T78 Advantage Gas Plant Production Ramp-up T77 T77 Alliance Sales Gas Line…
Clear Vision for Growth Financial Strength Proven Expertise
APPENDIX 20
FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 22% ANNUAL AVERAGE PRODUCTION GROWTH FOR 2015 TO 2017 Annual Average Production Development Plan (1) (2) (mmcfe/d) 2014 2015 2016 2017 235 Pro Forma Actual Actual Budget Estimate 200…
UPPER AND LOWER MONTNEY WELLS - IMPROVING PERFORMANCE SINCE 2008 Budget Type Curve (IP30 7.2 mmcf/d & 7.2 Bcf) Data: updated to March 2016 22
(1) EXCEPTIONAL UPPER & LOWER MONTNEY WELL ECONOMICS Upper & Lower Montney Dry Gas (2) Budget Type Curve. Some recent Upper & Lower Montney wells are outperforming type curve (3) (1) Management estimates. NPV 10%…
STRONG EAST GLACIER MIDDLE MONTNEY WELL (1) ECONOMICS Middle Montney at 50 bbls/mmcf C3+ (2) Budget type curve. Some recent MM wells are exceeding type curve. (3) (1) Management estimates. NPV 10% pre-tax (2) Capital of 5.8…
2014 MIDDLE MONTNEY PROGRAM FOCUSED ON HIGHER LIQUID CONTENT IN EAST GLACIER Glacier C5+ 57 Middle Montney wells to date illustrate higher liquid content(1) from west to east deg API 10 MM wells drilled in 2014 program at Glacier…
GLACIER MONTNEY ASSIGNED 2P EUR PER WELL & INTERVAL 2P Recoveries per Interval(1) of Gross HZ Wells 2P Recovery [bcf/well] Interval Developed Undeveloped TOTAL Developed Undeveloped TOTAL YE YE YE YE YE YE YE YE YE YE YE YE YE YE…
GLACIER LOCATED IN THE HEART OF THE MONTNEY RESOURCE PLAY Montney Siltstone Comparison: 700 times more permeability 4x more formation thickness Very low clay content Liquids & Improved well efficiencies strong economics Up…
2012 CORE AND COMPLETION STUDIES: INCREASED RESOURCE AND IMPROVED WELL RESULTS Core study determined original density porosity logs have to be re- calibrated IP30s on open hole Re-calibration aligned log to actual wells improved by…
INVESTMENT ANALYSIS OF 2013 DRILLING PROGRAM (25 Wells, No Hedging Gains Included) Capital Investment DC & E 25 Wells in 2013(1) (150) million Allocation of Plant, GGS, P/L cost to 25 wells (2) (13) million Total Capital investment…
ADVANTAGE COMPARED TO NORTH AMERICAN GAS WEIGHTED PRODUCERS 16E/15E Production Growth (%) 2016E Total Cash Costs (Cdn /boe) 12.78 12.43 38% 17% 4.48 13% AAV Canadian E&P US E&P AAV Canadian E&P US E&P (Gas Weighted) (Gas…
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