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Annual General Meeting of Shareholders – Delphi Energy Corp.

Delphi Energy Corp. · May 24, 2016 · 35 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. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 1
    CORPORATE PRESENTATION ANNUAL GENERAL MEETING OF SHAREHOLDERS MAY 24, 2016
  2. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 2
    A MONTNEY FOCUSED BUSINESS MODEL Delphis Bigstone Montney remains a Top Tier growth asset Maintains favorable economics in the current commodity price environment Free cash generated at payout remains significant Significant…
  3. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 3
    A DIRECTIONAL LOOK AT 2016 2016 Priorities Through This Structural Reset Maintain financial flexibility Capex in the context of cash flow Reduced debt by 30 percent with Wapiti and Hythe dispositions in 2015 Significant hedge…
  4. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 4
    CORPORATE SUMMARY DEEP BASIN NORTHWEST ALBERTA CORPORATE INFO Dawson Creek Trading Symbol TSX:DEE Hythe Basic Shares Outstanding 155.5 million Hythe and Wapiti Grande Prairie sold in 2015 Market Capitalization 179 million…
  5. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 5
    BIGSTONE A SINGULAR FOCUS Negus Gas Plant 15 mmcf/d 7-11 Montney Facility 55 mmcf/d K3 Facility Bigstone West Gas Plant 16-34-59-21W5 85 mmcf/d Disposal Facility 5-8 Montney Facility 10 mmcf/d 7-11 Tower Creek…
  6. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 6
    DOMINANT LAND POSITION Montney land position has grown to 139 gross (117.1 net) sections since 2010 Continue to pursue additional Delphi one of the largest Montney landowners on map sheet Montney acquisition/farm-in opportunities…
  7. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 7
    STRATEGIC INFRASTRUCTURE Rge25W5 Delphi owns Rge24 significant infrastructure at Rge23 Rge22 Rge19 Rge18 SemCAMS KA TCPL Bigstone 100% owned 55 mmcf/d sour dehy and Alliance compression facilities 26% ownership in 85 mmcf/d…
  8. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 8
    STRATEGIC INFRASTRUCTURE Delphi 100% owned Water Disposal Facility 3 million project Less than 1 year payout Targeted operating costs savings of: 2.0 to 2.5 million per year or 0.70 per Montney boe Targeted completion cost…
  9. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 9
    ALLIANCE FIRM TRANSPORTATION SERVICE 80.0 TCPL/Alliance Capacity (mmcf/d) 70.0 60.0 Q1 2016 Average Natural Gas Production 50.0 Staged firm service capacity on Alliance to deliver natural gas to the Chicago gas market with…
  10. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 10
    26 MONTNEY WELLS DRILLED Drilled 3 HZ wells in 2012 To KA Sour Plant Conventional gelled oil frac designs DEI 3 wells Extended reach laterals of 2,200 m to 3,000 m ATH Drilled 21 HZ wells in 2013 - 2015 5 wells Initial…
  11. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 11
    CORPORATE AND MONTNEY RESERVES Montney Development (2012 to Q1 2016) 26 wells drilled life-to-date (LTD) 29% PDP 47% PDNP Produced 6.1 million boes in 3.5 years 1% PUD Generated 120 million in field operating income PA 31%…
  12. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 12
    INDIVIDUAL MONTNEY WELL DATA Initial Production (IP) Rate Well Performance (1) Number IP30 IP30 IP30 IP90 IP180 IP270 IP365 IP 2yr HZ Length of Fracs Total Sales FCond Rate Total NGL Total Sales Total Sales Total Sales Total Sales…
  13. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 13
    INCREASING CONDENSATE YIELDS DEE 13-21 2015 Drill Geography (East to West) IP30 CGR 252 bbl/mmcf DEE Type Well Field condensate yields increase IP30 CGR 70 bbl/mmcf Montney thickens Multiple layers to drill Porosity and…
  14. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 14
    CONDENSATE YIELDS INCREASING Recent drilling results achieving 45.00 higher condensate yields 40.00 7.75/boe hedging gain Increasing the revenue (/boe) forecast in 2016 of the new wells more than 35.00 Delphi's in-the-money…
  15. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 15
    YIELD GROWTH REPLACES HEDGING GAINS IN 2017 2.10/boe 45.00 hedging gain forecast in 2017 2016 40.00 2016 13-21 IP30 35.00 12.00/boe increase Recycle Ratio = 2.3 in revenue 2017 drilling program will Revenue (/boe)…
  16. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 16
    MONTNEY ECONOMIC MODEL Delphi Energy Bigstone Montney Bigstone Montney Toe Up Two Section Horizontal Hypothetical Type Well 8,000 800 30 to 40 stage Slickwater Completion 7,000 700 Average All 30+ Stage SW Gas Average Toe Up 30+…
  17. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 17
    MONTNEY ECONOMIC MODEL Ultra Rich CGR Economic Sensitivities* Initial Sales Production (IP30) & Reserve Assumptions: IP30 Gas Rate 3.6 mmcf/d st 1 Month Field Condensate/Gas Ratio (CGR) 185 bbl/mmcf Gas Reserves 3.9 bcf Section…
  18. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 18
    PRODUCTION AND OPERATING MARGIN GROWTH Montney Production (boe/d) Field Condensate Production (boe/d) 8,000 1,600 7,000 1,400 6,000 10-15% Growth in Consistent condensate 1,200 2016 vs 2015 yields over time have 5,000 1,000…
  19. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 19
    DELPHI WELL COST IMPROVEMENTS D&C Costs ( 000) DEE Well Costs Cost per Frac Stage (000) 12,000 Avg. Drill Costs Avg. Comp. Costs Avg. Comp. /Stage 700 10,000 600 500 8,000 Well costs down 400 6,000 36 percent Montney Capital…
  20. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 20
    DRILLING PLANS MOVING WEST Competitor well producing 95 bbl/mmcf condensate 4 Competitor wells drilled and Moving West completed Montney pay thickness increasing 6 laterals per section spacing Two layers to drill Natural gas…
  21. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 21
    BIGSTONE CRETACEOUS: OPTIONALITY Area and Play Attributes Bigstone Gething Land Delphi operated / high working interest 12-16-60-23W5 Hz Gething Drilled 2012 Multiple zones are prospective, with Gething most 789 m Hz length 10…
  22. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 22
    COMMODITY PRICES: MANAGING VOLATILITY CDN/US FX Volatility creates hedging opportunities May 24, 2016 23
  23. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 23
    CONSISTENT AND PROVEN RISK MANAGEMENT PROGRAM Hedging Contribution to Cash Flow Event driven hedging strategy with a long term 40 (/boe) view of a relatively balanced supply/demand market with events: 30 Mitigates commodity price…
  24. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 24
    HEDGES PROTECTING CASH FLOW Natural Gas (Cdn) Apr Dec 2016 2017 Volume (mmcf/d) 2.4 2.4 % Hedged (1) 7% 7% Hedge Price (Cdn /mcf) (2) 3.89 3.96 Strip Price (Cdn /mcf) 1.91 2.71 Natural Gas (US) Apr Dec 2016 2017 2018 2019 Volume…
  25. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 25
    2016 GUIDANCE 2016 Guidance Average Annual Production (boe/d) 8,300 8,800 Exit Production Rate (boe/d) 8,500 9,500 NYMEX Natural Gas Price (US per mmbtu) 2.00 WTI Oil Price (US per bbl) 38.00 Natural Gas Liquids Price (Cdn…
  26. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 26
    SENSITIVITIES TO 2016 FORECAST 2016 CAPEX / CF MATRIX Number of 2016 Exit Rate US WTI / US2.00 NYMEX Gross Wells Production Growth 30.00 40.00 50.00 60.00 4 0% 122% 106% 96% 87% 5 15% 140% 122% 110% 100% 6 25% 152% 131% 118% 107%…
  27. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 27
    2017 AND BEYOND Levers Still to be Pulled in an Oil Lower for Much Longer Scenario: Operating efficiency gains lifting unhedged netbacks through 2016 and 2017 Capital efficiency gains New well innovations are continuing Significant…
  28. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 28
    SUMMARY Bigstone Montney is a Top Tier growth asset Large Montney land base of 139 sections Favorable economics and attractive capital efficiencies Remains economic in the trough of the commodity price cycle Continuing to…
  29. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 29
    APPENDIX May 24, 2016 30
  30. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 30
    EVOLUTION OF THE WORLD-CLASS MONTNEY PLAY Elmworth Large data set 488 Montney wells on production Wapiti Delphi Kakwa Bigstone Source of Data: geoSCOUT May 24, 2016 31
  31. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 31
    EVOLUTION: PACE OF DRILLING ACCELERATING Producing Wells by Rig Release Date Drilling remains active with 106 Montney Total Wells: 488 wells rig released YTD 2015 200 Only 10 wells reporting Montney 150 production as of the date of…
  32. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 32
    EVOLUTION: WELL LENGTH INCREASING 180 Number of Wells 3,000 Average Horizontal Length (m) 160 Delphi Ave 2,500 140 120 2,000 100 1,500 80 60 1,000 40 500 20 0 0 0-1,000 1,001-1,500 1,501-2,000 2,001-2,500 2,501-3,000…
  33. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 33
    EVOLUTION: FRAC STAGES INCREASING Number of Wells Average Number of Frac Stages/Well 160 30 Delphi Ave 140 25 120 20 100 80 15 60 Evolution of frac design/recipe 10 40 has also had a significant 20 5 positive impact to…
  34. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 34
    EVOLUTION: WELL PRODUCTIVITY INCREASING IP90 (mcf/d) IP180 (mcf/d) 4,500 15 18 441 wells 4,500 17 362 wells 4,000 19 60 36 4,000 14 46 3,500 59 3,500 18 30 48 33 38 3,000 3,000 25 2,500 66 2,500 36 18 55 2,000 2,000 15 1,500…
  35. Annual General Meeting of Shareholders – Delphi Energy Corp. – slide 35
    300, 500 4th Avenue SW Calgary, Alberta T2P 2V6 P (403) 265-6171 F (403) 265-6207 infodelphienergy.ca www.delphienergy.ca May 24, 2016 36

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