A LOW COST NATURAL GAS CONSOLIDATOR INVESTOR UPDATE JULY 2016 TSX: PNE
CORPORATE PROFILE POSITIONED FOR PROFITABLE AND SUSTAINABLE LOW RISK NATURAL GAS GROWTH Listing TSX: PNE Market Capitalization(1) 273 MM Average Daily Volume(2) 0.7 MM 52-Week Trading Range 0.61 to 1.46 (3) Shares Issued 306.6 MM…
SUSTAINABLE SHAREHOLDER VALUE CREATION Acquisition Priorities Focused on Value Accretive acquisitions of high-quality natural gas assets offering low operating costs, low decline production, and increasing drilling inventories; nine…
A UNIQUE, COUNTER-CYCLICAL STRATEGY CAPITALIZING ON A LOW COMMODITY PRICE ENVIRONMENT PNE uniquely focused on a low-risk, natural gas asset consolidation strategy in Western Canada Weak commodity prices have reduced industry cash…
SUCCESSFUL EXECUTION OF THE STRATEGY TRACK RECORD SINCE JANUARY 2012 488,000,000 2.70 Market Cap 448,000,000 12 Share Price 11 408,000,000 10 13 2.20 368,000,000 328,000,000 14 288,000,000 1.70 9 248,000,000 4 8 7…
HISTORY OF ACCRETIVE ACQUISITIONS ACQUISITION METRICS REFLECT DISCIPLINED VALUE FOCUSED STRATEGY (1) Transaction Metrics Announcement Transaction Value Production P+P Reserves Flowing Barrel P+P Reserves P+P Reserves Transaction Date…
WHAT WE HAVE BUILT THREE MAJOR OPERATED CORE AREAS Base Production of over 23,000 boe/d Weighted 92% towards natural gas Low Decline Rate Corporate decline rate on base production of 10% High Working Interest and Operatorship…
CENTRAL ASSETS AREA OVERVIEW PINE CLIFFS NEWEST AND LARGEST CORE AREA - DEC 11 15 Gas weighted, low decline assets in the Ghost Pine and Viking areas of Central Alberta Acquisition was accretive on cash flow, production and reserves…
SOUTHERN ASSETS AREA OVERVIEW LOW DECLINE, LOW COST PRODUCTION Q1 2016 production of 9,935 boe/d (mostly natural gas), 43% of Pine Cliffs production 100% Ownership of a key international NEB regulated pipeline from Alberta to…
EDSON AREA OVERVIEW PINE CLIFFS FIRST CORE AREA, ACQUIRED IN Q1 2012 Q1 2016 production of 1,979 boe/d (77% natural gas), 8.5% of Pine Cliffs production Drilled 3 gross (1.0 net wells) in Q1 2016, all of which are performing at or…
SUSTAINABILITY OUR KEY FOCUS STRONG EMPHASIS ON GROWTH OF SUSTAINABLE NATURAL GAS ASSETS 120 EV/PDP Reserves 100 EV/PDP (/boe) 80 PNEs valuation is attractive from a PDP reserves 60 perspective 40 20 0 RRX…
HIGHLY LEVERAGED TO NAT GAS PRICING BUILT FOR SUSTAINABILITY IN A VOLATILE COMMODITY PRICE ENVIRONMENT PNE offers one of the highest exposures to movements in natural gas pricing given low operating expenses and overhead, low decline,…
LOW CORPORATE BREAK EVEN BUILT FOR SUSTAINABILITY IN A VOLATILE COMMODITY PRICE ENVIRONMENT At 1.74 per mcfe, PNE has one of the lowest all-in corporate break even points in the industry(1) Every 0.10 / mcf increase in AECO adds…
FIELD BREAK EVEN GAS PRICE The break even gas price was calculated using each producing properties specific OPEX, royalty, third party fee revenue and downstream pipeline tariff Pine Cliff Break Even Gas Price by Property 100.0%…
LOW COST OPERATOR PINE CLIFF HAS ONE OF THE LOWEST COST STRUCTURES IN THE INDUSTRY Ongoing focus on reducing operating expenses and G&A Current cost reduction initiatives include deferring non-essential maintenance and swabbing in the…
2014 SHALLOW GAS ACQUISITION UPDATE In the first 19 months following the 2014 Acquisition: OPEX was reduced by 6,000 14% to 7.37/boe (1.22/mcfe) from 8.54/Boe (1.42/mcfe) 5,000 TCPL Only 650,000 in capital Outage was spent in low…
DEMONSTRATED PER SHARE VALUE GROWTH Production (boe/d)Mid-point of Reserves (Mboe)(2) 2016 Guidance 25,000 80 22,750 80,000 300,000 BOE/D per million shares 72% 70 70,000 39% 250,000 Daily Production per million shares…
MINIMAL CAPEX IN A LOW PRICE ENVIRONMENT 2016 capital budget of 10 million, before acquisitions (2015 - 7.3 million on 25.8 million cash flow; 2014 - 11.1 million on 39.0 million cash flow) 2016 production guidance of 22,500 to…
NATURAL GAS OUTLOOK - DEMAND U.S. Annual LNG Exports U.S. Natural Gas Demand Growth in Electric Power Sector bcf/d 8.0 Forecast bcf/d 7.0 5.0 4.0 Forecast Coal to gas LNG started 6.0 3.0 shifting shipping 5.0 2.0 continues…
NATURAL GAS OUTLOOK - SUPPLY Monthly Dry Shale Gas Production U.S. December HDDs 1931-2015 bcf/d 50 HDDs Marcellus (PA,WV,OH & NY) 45 Natural gas 40 Haynesville (LA & TX) Eagle Ford (TX) 4,500 2015/16 Short term 4,000…
WHY INVEST IN PINE CLIFF High-quality assets with one of the lowest operating costs and lowest decline rates One of the strongest exposures to natural gas price improvements Proven track record of delivering superior long-term…
APPENDIX -22-
BUILDING A FAMILIAR MODEL A CLEAR VISION FOR LONG-TERM GROWTH WITH PROVEN EXPERIENCE Pine Cliff management has a long-term view of value creation, with a counter-cyclical focus to acquire natural gas assets that are non-core to their…
RESERVE REPORT (1) Summary of Remaining Oil and Gas Reserves as of December 31, 2015 Natural Gas and Coal Bed Natural Gas Light , Medium and Heavy Oil Methane Liquids Total Oil Equivalent Gross Gross Gross Gross Reserve Category:…
SIGNIFICANT LOW RISK DEVELOPMENT SIGNIFICANT UPSIDE POTENTIAL GHOST PINE HORSESHOE CANYON COAL BED METHANE(1) Attractive and predictable low-cost production with long reserve life Over 1,000 gross upside opportunities identified…
EMERGING COLORADO SHALE PLAY SIGNIFICANT UPSIDE POTENTIAL COLORADO SHALE(1) Industry was drilling this area using horizontal drilling technology in 2014 138 Tier 1 locations with over 4m of net pay 70% recovery factor at 3…
UNDERSTANDING ARO AND LLR With increasing attention on future abandonment liabilities in the oil and gas industry, it is important for investors to know how companies intend to manage their future asset retirement obligations. Two key…
PNE LIABILITY PROFILE Over 85% of PNE Well Count Are Producing Wells Producing Well Count By Year* 120% Percent of Producing Wells 7,000 Net PNE Producing Wells Gross Net 6,000 100% Producing Wells 8,871 6,281 5,000 80%…
PNEs LLR and ARO As of June 1, 2016, PNE had an Alberta LLR Rating of 1.53 and a Saskatchewan LLR rating of 1.22 62% of licensees have a lower Alberta LLR rating than PNE As at March 31, 2016, PNE recorded an ARO of 277.0 million on…
ANALYST COVERAGE The following analysts provide research report coverage on Pine Cliff: COMPANY ANALYST AltaCorp Capital Patrick ORourke Canaccord Genuity Anthony Petrucci CIBC World Markets Dave Popowich Clarus Securities Inc.…
CORPORATE INFORMATION BOARD OF DIRECTORS HEAD OFFICE STOCK EXCHANGE LISTING Gary J. Drummond 850, 1015 4th Street SW TSX Exchange George F. Fink Calgary, Alberta T2R 1J4 Trading Symbol: PNE Philip B. Hodge Phone: (403) 269-2289 Randy M.…
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