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May 2016 Corporate Presentation – Pengrowth Energy Corp

Pengrowth Energy Corp · May 30, 2016 · 48 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. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 1
  2. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 2
    CORPORATE PRESENTATION 2 CORPORATE PROFILE Corporate Summary Q1 2016 Avg. Daily Production 62,056 boe/d Production Mix1 ~61% liquids/39% gas Corporate Decline2 ~12% Undeveloped Land (net) 503,000 acres Reserves (2P YE 2015)3 569.1…
  3. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 3
    CORPORATE PRESENTATION 3 TAKE ACTIONS TO ENSURE THAT WE SURVIVE TO THRIVE SHORT-TERM STRATEGY 1 Focus on the things we can control 2 Harvest hedge book 3 Asset dispositions 4 Cost reductions 5 Prudent capital spending
  4. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 4
    CORPORATE PRESENTATION 4 ACTIONS TAKEN IN 2016 TO PRESERVE FINANCIAL HEALTH AND REDUCE DEBT RESPONDING TO THE LOW PRICE ENVIRONMENT ? Suspension of the dividend (As at January 20, 2016) ? Reduced 2016 capital program of $60 to $70…
  5. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 5
    CORPORATE PRESENTATION 5 Generated strong funds flow from operations ? Consistent quarterly funds flow despite weaker commodity prices ? Funds flow declined only seven percent from Q4, 2015 despite 16 percent reduction in commodity…
  6. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 6
    CORPORATE PRESENTATION 6 AVAILABLE OPTIONS TO HANDLE MATURING DEBT DEBT STRATEGY 1 Repay with cash on hand 2 Asset dispositions 3 Sell mid-stream rights 4 Sell GORRS
  7. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 7
    CORPORATE PRESENTATION 7 LONG-TERM DEBT STRUCTURE IS PRIMARILY MADE UP OF PRIVATE TERM NOTES BALANCE SHEET MANAGEMENT Convertible Debentures 8% Long-term Notes 90% Credit Facilities 2% Approximately 86 percent of total debt is…
  8. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 8
    CORPORATE PRESENTATION 8 ? Total debt reduced by $173 million during the first quarter ? Total debt reduced by $280 million in 2015 ? $9.7 million of principal value of convertible debentures retired at significant discount to face…
  9. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 9
    CORPORATE PRESENTATION 9 ? No maturities in 2016 ? Excess cash flow will be used to: - Pay down any existing balance on credit facilities - Make early offers to retire term notes and convertible debentures ? $1.0 B fully committed,…
  10. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 10
    CORPORATE PRESENTATION 10 PROVIDING FUNDS FLOW PROTECTION IN LOW COMMODITY PRICE ENVIRONMENT RISK MANAGEMENT PROGRAM Volume Percentage Hedged2 Average Price Volume Percentage Hedged2 Average Price Mark to Market3 (bbl/d)…
  11. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 11
    CORPORATE PRESENTATION 11 DESPITE SIGNIFICANT DECLINES IN COMMODITY PRICES HEDGES HELP ENSURE STABLE FUNDS FLOW Funds flow from operations ($ million) % change in prices -70% -60% -50% -40% -30% -20% -10% 0% $0 $20 $40…
  12. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 12
    CORPORATE PRESENTATION 12 ? Prudently managing costs and expenditures ? Reduced debt by $280 million (2015) and $173 million (Q1 2016) ? Expect to generate excess funds flow in 2016 to be used to partially retire maturing debt in…
  13. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 13
    CORPORATE PRESENTATION 13 OPERATIONS OVERVIEW
  14. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 14
    CORPORATE PRESENTATION 14 THRIVE TO GROW LONG-TERM STRATEGY 1 Focus on long-life, low cost and competitively advantaged assets 2 Continue with disciplined capital investment strategy 3 Significant long-term development and…
  15. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 15
    CORPORATE PRESENTATION 15 PORTFOLIO WITH INCREASING FOCUS ON OIL AND LIQUIDS DEVELOPMENT PENGROWTH?S RESOURCE BASE British Columbia Alberta Saskatchewan
  16. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 16
    CORPORATE PRESENTATION 16 PRESERVING FINANCIAL HEALTH IN A LOW PRICE ENVIRONMENT 2016 CORPORATE GUIDANCE Metric Guidance* Capital Budget ($million) 60 to 70 Average daily production (boe/d) 56,000 to 58,000 Royalties (%) 7 to 8 Net…
  17. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 17
    CORPORATE PRESENTATION 17 OVER $11 BILLION OF DEVELOPMENT OPPORTUNITIES LONG-TERM DEVELOPMENT CONVENTIONAL ASSETS Swan Hills Cardium Montney Large accumulations Long life assets Low declines Low cost structure Low sustaining…
  18. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 18
    CORPORATE PRESENTATION 18 OVER $11 BILLION OF DEVELOPMENT OPPORTUNITIES LONG-TERM DEVELOPMENT Lindbergh $6.6 billion Groundbirch/Bernadet $4.7 billion GROWTH VEHICLES Thermal oil Montney gas
  19. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 19
    CORPORATE PRESENTATION 19 263 MMbbls 2P reserves1 $6.7 BILLION OF LONG-TERM REINVESTMENT OPPORTUNITIES LINDBERGH THERMAL OIL 15,256 bbl/d Current production2 ? Large high quality resource ? $6.7 billion of future capital…
  20. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 20
    CORPORATE PRESENTATION 20 LINDBERGH COMPETES WITH LOWEST COST PRODUCTION ON WORLD COST CURVE GLOBAL RESOURCE COSTS 0 20 40 60 80 100 120 0 20 40 60 80 100 Onshore Middle East Oil Sands North American Shale Ultra…
  21. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 21
    CORPORATE PRESENTATION 21 TOP TIER SAGD OPERATION LINDBERGH CHARACTERISTICS ? 9o ? 11o API oil, 50,000 to 350,000 cP ? Clean continuous sands with no significant shales - Reservoir characterized as nearshore marine sand ?…
  22. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 22
    CORPORATE PRESENTATION 22 FIRST COMMERCIAL PHASE CONTINUES TO RAMP UP LINDBERGH COMMERCIAL PROJECT Project area ? Commercial project ? Three well pads on production for ~ 12 months ? Pad D05 with eight wells pairs ? Pad D03 with…
  23. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 23
    CORPORATE PRESENTATION 23 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Production (bbl/d)…
  24. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 24
    CORPORATE PRESENTATION 24 PILOT WELL PAIR RESULTS POINT TO HIGHER RECOVERY RATES VERSUS TYPE CURVE LINDBERGH PILOT PERFORMANCE 0 200 400 600 800 1,000 1,200 1,400 0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90 96 102 108 114…
  25. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 25
    CORPORATE PRESENTATION 25 Length Pay Thickness Pilot Wells Phase 1 Wells TRADING LOWER IP RATES FOR GREATER RECOVERABLE RESERVES LINDBERGH COMMERCIAL PROJECT Greater net pay = larger recoverable reserves Increase in net pay by 1…
  26. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 26
    CORPORATE PRESENTATION 26 RESULTS DEMONSTRATE TOP QUARTILE RESULTS IN PRODUCTIVITY AND SORS LINDBERGH COMMERCIAL RESULTS 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00…
  27. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 27
    CORPORATE PRESENTATION 27 PROVIDING STRONG NETBACKS TO SUPPORT CASH FLOWS LINDBERGH OPERATING NETBACKS Three Months Ended (Cdn $ unless noted otherwise) March 31, 2016 December 31, 2015 September 30, 2015 WTI (US$/bbl) 33.52 42.17…
  28. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 28
    CORPORATE PRESENTATION 28 8.0 Tcf Petroleum initially-in-place (PIIP)1 SIGNIFICANT DEVELOPMENT INVENTORY MONTNEY GAS 2,320 boe/d Current production2 1. Internal Company estimate 2. Groundbirch production average Q1, 2016 3.…
  29. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 29
    CORPORATE PRESENTATION 29 SIGNIFICANT DEVELOPMENT INVENTORY PENGROWTH MONTNEY OVERVIEW ? Montney land holdings in excess of 50 net sections ? Groundbirch (dry gas) ? Bernadet (liquids-rich) ? Pengrowth?s best estimate for total…
  30. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 30
    CORPORATE PRESENTATION 30 MULTIPLE PLAYS WITHY LONG-TERM GROWTH POTENTIAL PENGROWTH MONTNEY OVERVIEW ? 32.6 sections (100 percent working interest) ? Expected to provide a scalable, low risk stacked zone liquids-rich play on…
  31. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 31
    CORPORATE PRESENTATION 31 PROVIDE STRONG RETURNS THAT COMPETE WITH OIL PLAYS MONTNEY PLAY ECONOMICS Per Well Unrisked Metrics Case 1 Case 2 Case 3 DCET ($ million/well) 5.5 5.5 5.5 EUR (Bcf) 7.0 7.0 7.0 Liquids Yield (bbl/MMcf)2 45…
  32. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 32
    CORPORATE PRESENTATION 32 WELLS DRILLED IN 2014 OUTPERFORMING FIRST GENERATION WELLS GROUNDBIRCH MONTNEY WELL PERFORMANCE 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1000.0 0 6 12 18 24 30 36 P50 Type Curve…
  33. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 33
    CORPORATE PRESENTATION 33 62.9 MMboe 2P reserves 1 MULTI-ZONE LIQUIDS DEVELOPMENT OPPORTUNITIES OLDS/GARRINGTON 16,870 boe/d Current production2 ? Large, contiguous land base with access to multi-tier development opportunities ?…
  34. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 34
    CORPORATE PRESENTATION 34 DOMINANT POSITION WITH OPPORTUNITIES FOR GROWTH OLDS/GARRINGTION ? Pengrowth has been one of the most active players in the area ? Focus has been on Cardium development - Over 480 gross sections of…
  35. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 35
    CORPORATE PRESENTATION 35 DOMINANT POSITION WITH OPPORTUNITIES FOR GROWTH OLDS/GARRINGTION DEVELOPMENT ? Light oil (35o to 50o oil) and liquids-rich natural gas with stacked (deep basin type) horizons ? Large land foot print ?…
  36. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 36
    CORPORATE PRESENTATION 36 ? Technology continues to unlock new resource plays ? Stacked reservoirs (Cardium, Viking, Mannville, Elkton, Pekisko and Wabamun) ? Multiple zones with horizontal well potential ? Exploiting huge oil and…
  37. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 37
    CORPORATE PRESENTATION 37 CARDIUM FOCUS PROVIDES QUICK PAYOUT AND STRONG NETBACKS CARDIUM ECONOMICS $40 WTI & $2.00 AECO $50 WTI & $2.50 AECO $60 WTI & $3.00 AECO GLJ Jan 1, 2016 Garrington Cardium NPV 10% ($ million) -751 -3…
  38. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 38
    CORPORATE PRESENTATION 38 KEY TAKEAWAYS FOR 2016 AND BEYOND CONVENTIONAL OPERATIONS ? Safe and efficient operations with a plan for delivery of budgeted results ? 2016 capital spending focused on safety, integrity and asset…
  39. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 39
    CORPORATE PRESENTATION 39 SUMMARY
  40. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 40
    CORPORATE PRESENTATION 40 EXECUTING ON WHAT IS IN OUR CONTROL SURVIVE TO THRIVE We have a plan to survive and thrive ? Focusing on preserving and improving financial strength ? Targeting debt reduction through free cash flow and…
  41. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 41
    CORPORATE PRESENTATION 41 APPENDIX
  42. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 42
    CORPORATE PRESENTATION 42 FIRST QUARTER RESULTS SHOW CONTINUED PERFORMANCE IN DELIVERING RESULTS FINANCIAL AND OPERATING HIGHLIGHTS Three Months Ended March 31 ($ millions except per share and per boe amounts) 2016 2015 Production…
  43. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 43
    CORPORATE PRESENTATION 43 TOTAL DEBT BEFORE WORKING CAPITAL CONTINUITY TOTAL DEBT CONTINUITY (Cdn $ millions) Total debt at December 31, 2015 1,856.5 Increase (decrease) due to: Foreign exchange impact of the strengthening Canadian…
  44. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 44
    CORPORATE PRESENTATION 44 BUILDING THE FOUNDATION FOR LONG-TERM GROWTH 2015 RESERVES SUMMARY 24% 1% 19% 56% Proved Developed Producing Proved Developed Non-producing Proved Undeveloped Total Probable 569 Million boe of 2P…
  45. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 45
    CORPORATE PRESENTATION 45 CONTINUED RESERVES GROWTH DESPITE SIGNIFICANT ASSET DISPOSITIONS AND REDUCED CAPITAL SPENDING 2015 RESERVES CONTINUITY* Proved (Mboe) Proved plus probable (Mboe) December 31, 2014 310,051 557,350…
  46. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 46
    CORPORATE PRESENTATION 46 BUILDING THE FOUNDATION FOR LONG-TERM GROWTH LARGE RESOURCE BASED ASSETS ? Extensions and improved recovery reserve gains of approximately 88 million boe in 2015 ? Positive technical revisions of…
  47. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 47
    CORPORATE PRESENTATION 47 FINDING, DEVELOPMENT AND ACQUISITION COSTS IMPROVING 2015 RESERVE REPLACEMENT COSTS 2015 2014 Three-year Weighted Average Proved Proved plus Probable Proved Proved plus Probable Proved Proved plus…
  48. May 2016 Corporate Presentation – Pengrowth Energy Corp – slide 48
    CORPORATE PRESENTATION 48 NO CASH INCOME TAX EXPECTED TO BE PAYABLE UNTIL AT LEAST 2021 TAX POOLS Category ($million) Canadian Oil and Gas Property Expense 445 Canadian Development Expense 564 Undepreciated Capital Cost 848…

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