SUSTAINABLE CONVENTIONAL RESOURCE COMPANY TSX: SGY JUNE, 2016
REASONS TO OWN SURGE 100% operated, high quality, low decline asset base High quality light/medium crude oil asset base; low decline < 20% NAV of 4.79 per share (proforma Sunset sale) using Sproule and Associates pricing(1)…
SURGE ENERGY Well positioned for growth and sustainable dividends Total Proved plus Probable Reserves of 80.7 mmboe(1) 2016(e) Exit Production Rate 13,000 boepd (76% oil) Low Decline of < 20% (RLI 17 years) Q1 2016 Net Debt: 134…
PROACTIVE MANAGEMENT Positioned to accelerate and grow as crude oil prices continue to rally Created over 759MM in liquidity since oil prices began to fall in 2014 512MM in accretive asset/facility sales 117MM in dividend reductions…
2016 CAPITAL PROGRAM Protecting NAV and balance sheet through conservative capital spending OPERATIONAL 2016(e) Exit Production (boe/d) 13,000 (76% Oil/NGLs) Capital Spending for 2016 55 million DCET 32.4 million Waterflood 1.5…
55MM CAPEX 2016(E) EXIT PRODUCTION OF 13,000 BOE/D Maintaining production with full cycle production efficiencies of 18,500 IP365 Capital Allocation Capital / Well Total Capital IP365 PE of Drills Production Adds Area (MM / DCET)…
CASH FLOW SENSITIVITIES Surge remains well positioned and poised to accelerate out of the downturn Production growth = compounding cash flow growth at higher prices: 2017 Growth Sensitivity Oil USD WTI 48* 55 60 CAD 0.77 0.80…
ELITE ASSETS FOCUSED IN THREE CORE AREAS Large OOIP pools in established conventional reservoirs Surge 2016(e) Exit Production: Total: 13,000 boe/d (79% Oil & NGLs) (57% on AB Crown) Western Alberta Production: Total: 6,300…
CORE AREA DETAILS 1.47 Billion bbls net OOIP with an additional 187 Million net barrels of oil recoverable Drilling Locations Internally Estimated Ultimate OOIP (MMbbls) Gross/Net(2) Avg. CTD Oil Total Booked Independent Recovery…
TARGETING CONVENTIONAL RESERVOIRS Large OOIP, high quality reservoirs tend to get larger over time Conventional reservoirs tend to outperform over time: Year over year recovery factor reserve additions Long life, low decline…
CONVENTIONAL VS. UNCONVENTIONAL RESERVOIRS Surge targets reservoirs on the conventional end of the permeability spectrum Ultimate Oil Capital expenditures decrease, Recovery while recovery factors and ROR rates of return…
THREE CORE CONVENTIONAL RESERVOIRS Applying proven technology to conventional reservoirs helps provide top tier performance and higher recovery factors U. Shaunavon Valhalla Doig Sparky Depth 1450m Depth 2000m Depth 725m Net Pay 4…
TOP TIER CAPITAL EFFICIENCIES AND REPLACEMENT METRICS Large inventory with excellent economics using May 2016 strip pricing Areas/Formations Capital Rates of Drill/ Complete/ Mboe/well Locations Core Area Gross / Net Efficiency…
QUALITY WATERFLOOD PROJECTS Waterflood - increasing reserves & flattening declines Current Properties Under Commercial Waterflood Area Formation Start Date 2015 Decline Current RF Booked RF Expected RF Silver Lloyd/ Cummings 1996 10%…
SOUTHWEST SASKATCHEWAN - SHAUNAVON 450MM barrels of net OOIP in the Upper and Lower Shaunavon combined 450 MMbbls of net OOIP in the Lower and Upper Shaunavon formations (medium gravity oil) Current combined recovery factor 1.2%…
UPPER SHAUNAVON Large contiguous undeveloped land position in the greater Upper Shaunavon trend R21W3 R19W3 Area/Pool Well Count Depth OOIP Cum Oil Peak Rate Current Rate T10 Instow Vt Hz (m) (MMbbl) (MMbbl) (bbl/d) (bbl/d)…
UPPER SHAUNAVON ACTIVITY 250MMbbl OOIP on Surge lands in the Upper Shaunavon R21W3 R20W3 R19W3 Upper Shaunavon A Sand T7 Upper Shaunavon B Sand Upper Shaunavon C Sand Lower Shaunavon T6 SGY Q3 Waterflood Pilot…
UPPER SHAUNAVON PERFORMANCE Surge horizontal results in the Upper Shaunavon outperforming area average Upper Shaunavon Monthly Production vs Area Average 400 350 300 Rate (bopd), Cum Oil (mbbl) 250 200 150…
UPPER SHAUNAVON Early Waterflood Response FOOTNOTES INCLUDED IN THE BACK AS ENDNOTES 19
NORTHWEST ALBERTA Large OOIP 695MMbbls in concentrated high quality light oil assets Large OOIP of 695 (585 net) MMbbls of high quality light oil (32-40 API) Valhalla OOIP: 228 mmbbl Large development inventory of (195 mmbbl…
NORTHWEST ALBERTA - VALHALLA Firm service agreements for Alliance and TCPL pipelines mitigates production restrictions Valhalla Doig 140 MMbbls of net combined OOIP on Surges Sexsmith Valhalla and Wembley Lands (40 API light oil)…
VALHALLA DOIG PERFORMANCE 2015 drilling in Valhalla yielded 3 of the top oil wells in Canada North Valhalla Doig Recent drilling results outperforming type curve and exceeding expectations Optimization of drilling and completion…
SOUTHEAST ALBERTA - SPARKY Provost / Eyehill / Wainwright areas Oil saturated Cretaceous sands Wainwright 430 MMbbls of net OOIP (23-31 API oil) Current recovery factor of 15% Eyehill Sparky waterflood implemented in Q4 2014…
POSITIONED FOR LONG TERM SUSTAINABILITY Low base…
HIGH QUALITY CRUDE OIL ASSET BASE Focused, high quality, crude oil asset and opportunity base; 3 core areas are 100% operated, with working interests of 90% Large OOIP crude oil reservoirs with low recovery factors; 17 year…
RISK MANAGEMENT / HEDGING STRATEGY The Company has an orderly, on-going, risk management / hedging program designed to lock in future cash flows to protect the Companys capex program and fund dividends. Below is a list of Surges current…
OIL HEDGING PHILOSOPHY Reflects management best efforts, not hedge policy 4,000 77.38 77.38 80.00 3,500 70.99 Ceiling 70.99 70.00 66.57 C WTI - Average hedge Floor / Ceiling Price 3,000 Targeted Hedging Level 2,500…
2015 YEAR END RESERVES 1.1 Billion of Total Proved plus Probable Reserves Value (NPVBT10) 2015 Year End Reserves Proforma Sunset Asset Sale Oil& NGLs Gas Total Reserve Category NPVBT10 (MM) (1) (Mbbl) (MMcf) (Mboe) Proved…
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