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 480 MM (4.00/sh)…
PRODUCTION Q2/16 f/c 12,500 boe/d; prodn shut-in due to low nat gas price 60% of NGLs higher priced condensate & plant pentanes 3
FUNDS FLOW funds flow per share flat since 2014; prodn per share growth offset by decline in revenue Q1/16 vs 2014 prodn per share +78% revenue per Boe -65% 4
CASH COSTS PER BOE focused on reducing cash costs in all price environments Q1/16 cash costs decreased 16% from 2015 5
RESERVES 2015 PDP +44% per share from 2014 2015 2P +7% per share from 2014 6
COST OF RESERVE ADDITIONS all-in reflects entire capital investment program significant improvement in 2015 2015 3 Year PDP 6.53/boe 14.18/boe 1P 3.38 9.70 2P 0.50 7.82 7
MAJOR AREAS large shale gas resource in HRB, Umbach Montney needs higher nat gas price 109,000 net acres 13,400 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 requires processing at sour Montney liquids rich gas gas plant (McMahon or Stoddart) 155 net sections shallow depth, low 109,000 net acres drill & complete cost 1,200 1,300 btu/scf…
UMBACH ACTIVITY two step-outs Q1 op cost 6.72/boe in 2016 (85% proc fees); reduce fees or build sour gas plant delayed 3rd facility (35 mmcf/d raw) field compression 80 to Q1/17 due to mmcf/d raw (Q1/16 low nat gas price…
UMBACH HORIZONTAL WELL PERFORMANCE 11
UMBACH 2014 - 2015 HORIZONTAL WELLS 12
UMBACH HORIZONTAL WELL LENGTHS 13
UMBACH HZ COSTS accounting system costs, not field estimates recent hzs 4,260 M drill & compl 2015 drill & compl cost -17% per frac vs 2014 DRILLING hzs fracs length cost COMPLETION hzs fracs length cost 2014 16 20 1,205 m 2,080 M…
COMPARING COMPLETIONS FOR NE BC HZS bigger fracs not increasing Storms sand & still experimenting with frac 12 month cum gas; rock water per metre size & spacing; minimizing quality important higher than average water to reduce cost…
UMBACH LANDS DELINEATED TO DATE Montney productive throughout the area; encouraging results on adjacent lands SRX mgmt estimates 33% of lands delineated to date 2P reserves on only 20% of lands 17
GUIDANCE 2016 pricing doesnt support growth; maintain prodn 2017 forward strip supports growth; adding hedges guidance contingent on nat gas price capital efficiency 8,600 per Boe/d with 8,300 Boe/d in Dec/15 from wells starting prodn…
AECO Canadian markets oversupplied; AECO price declining relative to other markets (Chicago) Q1/16 prodn record high exports declining 20% of NGTL receipts from NE BC (and growing) 19
BC STATION 2 AECO - BC Stn 2 diff back to historical with increased flow to Alliance & TCPL with BC prodn growing, wider diff is future risk for Storm as incremental growth goes to BC Stn 2 TCPL North Montney & Towerbirch expansions…
CHICAGO VS AECO Chicago price increasing vs AECO since 2012 Storm capacity on Alliance to Chicago is 43 mmcf/d in 2016 (70% of forecast prodn) 21
HEDGING (June 8, 2016) Hedge up to 50% of current prodn as insurance to support growth; growth volumes are not hedged target 50% of current prodn hedged 1 to 12 months forward target 25% of current prodn hedged 13 to 24 months forward…
PROCESSING & TRANSPORTATION Firm processing 65 mmcf/d sales (70 mmcf/d raw) 15 mmcf/d Stoddart, 55 mmcf/d McMahon flexibility on terms with 21 mmcf/d raw at 5 10 year terms (30%), remainder at 1 3 year terms (70%) Firm transport 63…
SUMMARY In general, operations going well with improving hz results, growth in 2016 reduced by low nat gas price Montney at Umbach is high quality asset improving hz rates; increased internal type curve to 7.0 Bcf raw 2016 continue…
STORM RESOURCES LTD. CONTACT INFO For further information please contact: Brian Lavergne, President and Chief Executive Officer Donald McLean, Chief Financial Officer Carol Knudsen, Manager Corporate Affairs Address: 200, 640 5th…
APPENDIX
GUIDANCE forecast 2016 avg prodn 2016 2015 2014 +30% per share vs 2015 Guidance Actual Actual Annual Average Boe/d 12,500 13,500 9,956 6,980 Q4 Production Boe/d 13,000 14,000 10,730 10,173 AECO 1.60/GJ 2.55/GJ 4.27/GJ BC STN 2 1.25/GJ…
NAT GAS PRICING USING 2016 FWD STRIP 2016 FWD STRIP (Apr 28/16) Sell in Chicago NYMEX US2.47/mmbtu NYMEX US2.47/mmbtu NYMEX - Chicago diff -US0.02/mmbtu NYMEX - Chicago diff -US0.02/mmbtu Chicago price Cdn2.90/GJ FX 1.25 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
CANADIAN NATURAL GAS PRICE Oversupply in Western Canada wont get fixed quickly Demand flat to decreasing Marcellus nat gas into Ontario displacing exports to eastern Canada (TCPL Niagara/Chippawa pipeline reversal 0.4 Bcf/d Nov/16,…
US NATURAL GAS PRICE US storage overhang vs 5 yr avg (warm winter) could get fixed quickly as a result of growing demand Mexico Exports +1.1 Bcf/d year to date (EIA) LNG +0.5 Bcf/d Sabine T1 May/16 0.7 Bcf/d (T2 Oct/16 0.7 Bcf/d)…
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