INTRODUCTION Started Sept 2010, fourth Storm since Nov 1998 history of per share growth in prodn & asset value 120 MM shares + 7 MM options, TSX-V symbol SRX officer + director ownership 13% (16% FD) Market cap 480 MM (4.00/sh) Q2/16…
PRODUCTION Q3/16 f/c 12,500 to 13,500 boe/d 60% of NGLs higher priced condensate & plant pentanes 3
FUNDS FLOW growth in prodn per share has been offset by a decline in revenue Q2/16 vs 2014 avg prodn per share +70% revenue per Boe -68% 4
CASH COSTS PER BOE focused on reducing cash costs in all price environments H1/16 cash costs decreased 16% from 2015 transportation is excluded from controllable cash costs as sales price for volumes shipped on the Alliance…
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 12,850 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 H1/16 op cost in 2016 6.73/boe (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 (Q2/16 throughput 67…
UMBACH HORIZONTAL WELL PERFORMANCE 11
UMBACH HORIZONTAL DAILY RATES 12
UMBACH 2014 - 2015 HORIZONTAL WELLS 13
UMBACH HORIZONTAL WELL LENGTHS 14
UMBACH HZ COSTS accounting system costs, not field estimates recent hzs 4,260 M drill & compl recent drill & compl cost per frac -28% vs 2014 DRILLING hzs fracs length cost COMPLETION hzs fracs length cost 2014 16 20 1,205 m 2,080…
UMBACH HZ ECONOMICS recent hzs tracking 7.0 Bcf type curve for comparison, 2015 all- full cycle +1,280 K/hz for in PDP FD&A 6.53/boe facility + gathering pipelines F&D: 4.90/boe ROR: 20% Payout: 3.2 yrs 16
UMBACH LANDS DELINEATED TO DATE Montney productive across the area; encouraging results on adjacent lands SRX mgmt estimates 33% of lands delineated to date 2P reserves on 20% of lands producing wells on 6% of lands 17
GUIDANCE 2017 forward strip supports growth; adding hedges guidance contingent on nat gas price 18
PROCESSING & TRANSPORTATION Firm processing 65 mmcf/d sales (70 mmcf/d raw) 15 mmcf/d raw Stoddart, 55 mmcf/d raw McMahon flexibility on terms with 21 mmcf/d raw at 5 10 year terms (30%), remainder at 1 3 year terms (70%) Firm…
AECO WCSB prodn growing AECO price diff to other markets is widening to incentivize export growth (flat to declining Cdn demand) 20% of NGTL receipts from NE BC (and growing) 20
CHICAGO VS AECO Chicago - AECO diff has increased since 2012 Storm capacity on Alliance to Chicago is 46 mmcf/d in 2016 (70% of forecast prodn) 21
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…
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…
SUMMARY In general, operations going well with hz rates improving and costs decreasing Montney at Umbach is higher quality, liquids rich asset Capital investment contingent on commodity pricing, nat gas price low in 2016 and growth…
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 1.95/GJ 2.55/GJ 4.27/GJ BC STN 2 1.65/GJ…
NAT GAS PRICING USING 2017 FWD STRIP 2017 FWD STRIP (Aug 5/16) Sell in Chicago NYMEX US3.15/mmbtu NYMEX US3.15/mmbtu NYMEX - Chicago diff - US0.01/mmbtu NYMEX - Chicago diff -US0.01/mmbtu Chicago price Cdn3.93/GJ FX 1.32 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 is getting fixed quickly as a result of growing demand Sabine LNG T1 Feb/16 0.7 Bcf/d Electric Power +2.2 Bcf/d May/16 vs May/15 (EIA) T2 Oct/16 0.7 Bcf/d Industrial +0.5 Bcf/d 4…
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