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Enercom Conference – Tamarack Valley Energy Ltd.

Tamarack Valley Energy Ltd. · Aug 16, 2016 · 29 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. Enercom Conference – Tamarack Valley Energy Ltd. – slide 1
    Creating a Sustainable Business August 2016 TVE : TSX www.tamarackvalley.ca 1
  2. Enercom Conference – Tamarack Valley Energy Ltd. – slide 2
    How to Win in a Downturn Position for High cost, low recovery Commodity commodity Reality sets in Execute M&A and recovery Poorest economics Position balance sheet build inventory Accelerate growth Q4/14 Q1/15 Pumping costs Q2/16…
  3. Enercom Conference – Tamarack Valley Energy Ltd. – slide 3
    Tamaracks 2016/17 Strategy Current 2016/17 strategy consistent with 2015 execution Manage to cycles Maintain strong balance sheet: keep debt to cash…
  4. Enercom Conference – Tamarack Valley Energy Ltd. – slide 4
    Acquisition Criteria New Asset Targets Must: 1. cycle ROR on drilling upside must compete for capex with current inventory (< 1.5 year payout) 2. Asset must have potential to double production 3. Does not materially change oil…
  5. Enercom Conference – Tamarack Valley Energy Ltd. – slide 5
    2015 Acquisition & Performance Look-back Completed 3 tuck-in acquisitions for 54.0 mm Added 1,450 boe/d at 37,000/boepd (45% light oil & NGLs) 4.4x cash flow at strip pricing Added 5.75 mmboe at 9.37/boe proved and 6.44 mmboe…
  6. Enercom Conference – Tamarack Valley Energy Ltd. – slide 6
    Attributes of 2016 Acquisitions (85 mm for 3 assets) Purchased at favorable metrics 44,750/boepd (75% light oil & NGLs) 4.8x cash flow at strip pricing Proved reserves at 10.36/boe Cash flow per share 5% accretive in 2016 and 14%…
  7. Enercom Conference – Tamarack Valley Energy Ltd. – slide 7
    Tamarack Wells in the Top 10th Percentile Top 10th Percentile Top 25th Percentile Note: The above IRR calculations assume CIBCs base commodity price forecast of US45.00/Bbl WTI & C2.78/Mcf AECO in 2016, and US65.00Bbl WTI &…
  8. Enercom Conference – Tamarack Valley Energy Ltd. – slide 8
    The Evolution of a Core Area Alder Flats TVE 9-24 Compressor Keyera Minnehik Buck Lake Entry in 2013 42 net sections TVE Wilson Creek (10 sec with Cardium pay) Battery 16 locations December 2015 200 sections TVE Sun Creek GP…
  9. Enercom Conference – Tamarack Valley Energy Ltd. – slide 9
    Control What We Can Control - Costs Operating & Transportation Costs Top 10 Corporate Operating Cost 16 Accounts Q4/15 14.84 Corporate Corporate Budget Trucking - Clean 14 Wilson Creek 12.00 Oil Gas Processing 12.88* Electrical…
  10. Enercom Conference – Tamarack Valley Energy Ltd. – slide 10
    Barons / Wilson Creek Cardium / Redwater Viking Comparison Parameters Cardium Sst Barons Sst Viking Sst WC CARDIUM TYPE LOG Age U. Cretaceous U. Cretaceous L. Cretaceous Depth (m TVD) 1,600 1,200 750 Gross Thickness (m) 17 18 5…
  11. Enercom Conference – Tamarack Valley Energy Ltd. – slide 11
    Penny Barons A Pool Development Plan Pool Status: Primarily drilled 1999-2005 Under waterflood OOIP 71 MMstb Current recovery factor 10% (7.1 mmbbls) Ultimate PDP reserves 16% (11.3 mmbbls) Development Potential: 17 1.5-mile…
  12. Enercom Conference – Tamarack Valley Energy Ltd. – slide 12
    Penny - Production Optimization Opportunities 1. Water flood optimization Redirect injected water to high GOR patterns Convert additional producers to injectors Results in lower decline and higher recovery factors 2. Re-activate…
  13. Enercom Conference – Tamarack Valley Energy Ltd. – slide 13
    Tamarack Drilling Economics Wilson Creek 1.5 Mile Wilson Creek 2.0 Mile Alder Flats 1.5 Mile ROR % Payout (years) ROR % Payout (years) ROR % Payout (years) 700 4 1200 4 80 4 ROR ROR ROR 600 3.5 3.5 70 3.5 Payout 1000 Payout Payout 3…
  14. Enercom Conference – Tamarack Valley Energy Ltd. – slide 14
    Tamarack Drilling Economics Penny Barons Redwater Viking Mannville Gas ROR % Payout (years) ROR % Payout (years) ROR % Payout (years) 300 4 160 4 400 4 ROR ROR ROR 3.5 140 3.5 350 3.5 250 Payout Payout Payout 3 120 3 300 3 200…
  15. Enercom Conference – Tamarack Valley Energy Ltd. – slide 15
    TVE Quick Payback Drilling Inventory…
  16. Enercom Conference – Tamarack Valley Energy Ltd. – slide 16
    Tamarack Profile TVE : TSX Operational 2013 2014 2015 2016 budget Production (boe/d) 3,276 5,717 8,448 9,700 10,000 Exit Q4 avg. production (boe/d) 4,718 7,681 9,968 10,800 11,000 % Liquids 60 62 60 53 57 Cash flow (mm) 38.2 66.2…
  17. Enercom Conference – Tamarack Valley Energy Ltd. – slide 17
    2017 Free Cash Flow Sensitivity 30 11,000 boe/d spend 65 mm 12,000 boe/d spend 80 mm 25 Assumes: - 2.65/GJ AECO - 0.76 Cdn dollar Free Cash Flow ( millions) - 4.50/bbl WTI / Edm par differential 20 Debt to cash…
  18. Enercom Conference – Tamarack Valley Energy Ltd. – slide 18
    2017 Growth Potential Maintaining Balance Sheet 13,000 Spend to maintain debt to CF ratio of 1.0x 12,500 Cash flow per share growth +15% Assumes: on 95-100 million CAPEX - 2.65/GJ AECO - 0.76 Cdn dollar Production (boe/d)…
  19. Enercom Conference – Tamarack Valley Energy Ltd. – slide 19
    Current Hedges as at August 10, 2016 Term Hedge Type Volume Cdn Pricing January 1, 2016 to March 31, 2016 WTI fixed price 2,000 bbls/d Cdn 76.58/bbl April 1, 2016 to June 30, 2016 WTI fixed price 2,400 bbls/d Cdn 76.21/bbl 2016…
  20. Enercom Conference – Tamarack Valley Energy Ltd. – slide 20
    2015 - 2016 Budget Financial Stats per BOE Est. H2/16 2015 Actuals 2016 Budget Pro-forma Average pricing 48.80/bbl WTI 33.00-40.00/bbl WTI 47.00/bbl WTI Edm Par 56.91/bbl 41.00-51.45/bbl 57.00/bbl AECO (monthly index) 2.69/GJ…
  21. Enercom Conference – Tamarack Valley Energy Ltd. – slide 21
    Building Per Share Growth While De-levering Achieving Production Per Share Growth Well Inventory…
  22. Enercom Conference – Tamarack Valley Energy Ltd. – slide 22
    Key 6 Month Objectives and Look-back What we did in Objectives for What we said we would do Q1 2016 / Q2 2016 Q3 2016 / Q4 2016 Assuming 57 million capex case: spend approx. H2/16 prodn average 9,800 10,500 on capital of Executed…
  23. Enercom Conference – Tamarack Valley Energy Ltd. – slide 23
    Why Buy/Continue to Own Tamarack Cost Focus: Low cost producer and trending lower G&A, lifting cost and capital costs have all been reduced Prudent Capital Allocation: Well results in top 10th percentile Adding top quality…
  24. Enercom Conference – Tamarack Valley Energy Ltd. – slide 24
    APPENDIX 25
  25. Enercom Conference – Tamarack Valley Energy Ltd. – slide 25
    The Tamarack Team Management Board of Directors Brian Schmidt, President & CEO Floyd Price, Chairman Current: CAPP Chair, IOGC Advisor, Director Aspenleaf Energy Current Directorships: Cimarex Energy, Source Energy Former: Spearpoint…
  26. Enercom Conference – Tamarack Valley Energy Ltd. – slide 26
    Tamarack Perspective and Culture 1. Build a sustainable, predictable and reliable growth company Full cycle rate of return driven Development inventory with payout 1 to 1.5 years maximum (top quartile in the industry) Clear line of…
  27. Enercom Conference – Tamarack Valley Energy Ltd. – slide 27
    Top 2015 Alberta Wells Source: NBF, geoSCOUT, Company Reports 28
  28. Enercom Conference – Tamarack Valley Energy Ltd. – slide 28
    Wilson Creek Technology Driving Costs Down & Production Up O/H Ball Drop 1-mile Industry IP 30 Rates Capital 4.2 million Stages 8-10 800 2009-2013 *ROR n/a Oil frac 5-10 tons 700 710** NPV (2.2) 600 500 578 578 BOEPD O/H…
  29. Enercom Conference – Tamarack Valley Energy Ltd. – slide 29
    Control What We Can Control - Costs Capital Costs Savings in 2016 Budget CAPEX: 4,500 Equip+Tie-in Completions Drilling Shift to sleeve from ball drop 4,000 Eliminate nitrogen Reduce flaring and conserve 3,500 3,373 Shorten…

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