SUSTAINABLE CONVENTIONAL RESOURCE COMPANY TSX: SGY AUGUST, 2016
REASONS TO OWN SURGE 100% operated, high quality, low decline asset base High quality light/medium crude oil asset base; low decline < 23% NAV of 4.79 per share using Sproule and Associates pricing(1) Alberta modern royalty…
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 < 23% (RLI 17 years) Q2 2016 net debt:…
PROACTIVE MANAGEMENT Positioned to accelerate and grow as crude oil prices continue to rally Created over 763MM 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…
CASH FLOW SENSITIVITIES Surge is well positioned to accelerate out of the downturn Production growth = compounding cash flow growth at higher oil prices: 2017 Growth Sensitivity Oil USD WTI 48* 55 60 CAD 0.77 0.80 0.83…
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 1.5 Billion bbls net OOIP with up to 190 Million net barrels remaining 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 provides top tier performance and higher recovery factors U. Shaunavon Valhalla Doig Sparky Depth 1450m Depth 2000m Depth 725m Net Pay 4 - 10m…
TOP TIER CAPITAL EFFICIENCIES AND REPLACEMENT METRICS Large inventory with excellent economics on August 2016 strip pricing 2016 Budget Areas/Formations Rates of Core Capital Drill/ Complete/ Payout(1) NPV10 / Mboe/well Locations…
UPPER SHAUNAVON Large contiguous undeveloped land position in the greater Upper Shaunavon trend R21W3 R19W3 Upper Shnvn Well Count Depth OOIP Cum Oil Peak Rate Current Rate T10 Instow Area/Pool Vt Hz (m) (MMbbl) (MMbbl) (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 Q2 16 U. Shvn Hz Waterflood…
UPPER SHAUNAVON PERFORMANCE Surge horizontal results in the Upper Shaunavon outperforming area average FOOTNOTES INCLUDED IN THE BACK AS ENDNOTES 15
UPPER SHAUNAVON WATERFLOOD RESPONSE Production flattening above type curve at over 100 bopd after 10 months FOOTNOTES INCLUDED IN THE BACK AS ENDNOTES 16
NORTHWEST ALBERTA Large OOIP 585MMbbls net 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…
NORTHWEST ALBERTA - VALHALLA Firm service agreements for Alliance and TCPL pipelines mitigate production restrictions Valhalla Doig 140 MMbbls of net combined OOIP on Surges Sexsmith Valhalla and Wembley Lands (40 API light oil) Doe…
VALHALLA DOIG PERFORMANCE 2015/2016 drilling in Valhalla yielded 4 of the top oil wells in Canada North Valhalla Doig Recent drilling results outperforming type curve and exceeding expectations Optimization of drilling and…
SOUTHEAST ALBERTA - SPARKY Provost / Eyehill / Wainwright areas Oil saturated Cretaceous sands Wainwright Alberta Sask 470 MMbbls of net OOIP (23-31 API oil) Current recovery factor of 14% Betty Lake Eyehill Sparky waterflood…
SPARKY EYEHILL ACTIVITY 90MMbbl net OOIP estimated in the Sparky at Eyehill R3W4 R2W4 Eyehill - Sparky Type Log 06-14-037-03W4 Sparky Sands 06-14-37-3W4 Type Log T37 Recently drilled and completed 5 consecutive Sparky…
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 78.33 78.33 80.00 3,500 70.99 Ceiling 70.99 70.00 C WTI - Average hedge Floor / Ceiling Price 66.57 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…
ANALYST COVERAGE Financial Institution Analyst Email Address Acumen Capital Partners Trevor Reynolds treynoldsacumencapital.com BMO Capital Markets Ray Kwan ray.kwanbmo.com Canaccord Genuity Anthony Petrucci apetruccicanaccordgenuity.com…
CORPORATE PARTNERS Advisors National Bank of Canada Bank of Nova Scotia Canadian Imperial Bank of Commerce Toronto-Dominion Bank Bank of Montreal Bankers Syndicate: ATB Financial HSBC Bank Canada Wells Fargo Goldman Sachs BDC…
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