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 est 13,000 boe/d 5 hzs turned on to date in 2016 to maintain 13,000 Boe/d prodn per share +48% annually since Q2/13 (3 years) 3
FUNDS FLOW growth in prodn per share has been offset by 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…
COST OF RESERVE ADDITIONS all-in reflects entire capital investment program significant improvement 2015 3 Year PDP 6.53/boe 14.18/boe 1P 3.38 9.70 2P 0.50 7.82 6
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 sour gas plant Montney liquids rich gas (McMahon or Stoddart GPs) 155 net sections access to 3 sales 109,000 net acres gas pipelines from 1,200 1,300 btu/scf McMahon GP Q2/16…
UMBACH ACTIVITY two step-outs in 2016 current field compression 80 mmcf/d raw (Q2/16 throughput 67 mmcf/d) 3rd facility adds 35 mmcf/d raw in Jan/17 (expandable to 70 mmcf/d for 7 MM) 2015 hzs 2016 hzs 9
PROCESSING ARRANGEMENT AT UMBACH Reviewed other alternatives; provides highest ROR uses less than 20% of Storms future drilling inventory assuming 4 hzs per section on 80% of lands Total commitment 65 mmcf/d raw starting Jan 2017 45…
UMBACH HORIZONTAL WELL PERFORMANCE 11
UMBACH 2014 - 2016 HORIZONTAL WELLS 12
UMBACH HORIZONTAL WELL LENGTHS 13
UMBACH HORIZONTAL COMPLETIONS 14
UMBACH HZ COSTS accounting system costs 2016 drill & compl 4.0 MM drill cost incl pad construction, roads 2016 drill & compl cost per frac -40% vs 2014 reductions from pad drilling, improved completion logistics, lower service costs…
UMBACH HZ ECONOMICS recent hzs tracking 7.0 Bcf type curve reasonable ROR at low pricing for comparison, 2015 all- full cycle in PDP FD&A 6.53/boe +1,380 K/hz facility + pipelines F&D: 4.70/boe ROR: 26% Payout: 2.6 yrs…
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 (updated Sep 7/16) updated Sep 7/16 to accelerate 2017 growth; supported by fwd strip pricing guidance contingent on nat gas price updated guidance reflects cost reductions realized in 2016 (was using 2015 actual costs)…
PROCESSING & TRANSPORTATION Firm processing 72 mmcf/d sales (80 mmcf/d raw) 15 mmcf/d raw Stoddart, 65 mmcf/d raw McMahon 85% of forecast 2017 nat gas sales Firm transport increases to 96 mmcf/d in 2018 diversifying nat gas sales to…
AECO WCSB nat gas prodn +20% since 2013 flat Cdn demand (mainline east) 20% of NGTL receipts from NE BC (growing) AECO diff to other markets increasing to incentivize exports Storm has 55 mmcf/d on Alliance to Chicago in 2017 (70% of…
BC STATION 2 AECO-BC Stn 2 diff back to historical with increased flow to Alliance & TCPL growing BC prodn is a future risk for BC Stn 2 price TCPL expansions at Towerbirch (2018) & North Montney (2019) move nat gas out of BC, more to…
HEDGING (Sep 7/16) 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 may…
SUMMARY Operations going well, hz rates improving, 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 deferred to 2017 2016…
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…
forecast 2016 avg prodn +30% per share vs 2015 GUIDANCE 2017 2016 2015 Guidance Guidance Actual Annual Average Boe/d 16,500 18,000 12,500 13,500 9,956 Q4 Production Boe/d 18,000 20,000 13,000 14,000 10,730 AECO 2.65/GJ 1.95/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
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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