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 570 MM (4.75/sh)…
PRODUCTION 5 hzs turned on in 2016 to maintain 13,000 Boe/d prodn per share +48% annually since Q2/13 (3 years) 3
FUNDS FLOW funds flow per share flat since Q2/15; prodn per share growth has been offset by decline in commodity prices 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 in 2015 2015 3 Year PDP 6.53/boe 14.18/boe 1P 3.38 9.70 2P 0.50 7.82 2015 1P & 2P reflects FDC changes 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 (Q3/16 throughput 69 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 drilling locations at 4 hz/section on 80% of lands Total commitment 65 mmcf/d raw starting Jan 2017 45 mmcf/d for 15 years…
UMBACH HORIZONTAL WELL PERFORMANCE 11
UMBACH 2014 - 2016 HORIZONTAL WELLS 12
UMBACH HORIZONTAL WELL LENGTH 13
UMBACH HORIZONTAL FRAC SPACING 14
UMBACH HZ COSTS accounting system costs 2016 avg drill & compl 4.1 MM, most recent hzs 3.8 MM drill cost incl pad & roads reductions from pad drilling, mud system, improved logistics, lower service costs DRILLING hzs fracs length cost…
UMBACH HZ ECONOMICS recent hzs tracking 7.0 Bcf type curve reasonable ROR at low pricing flat prices, not escalating for comparison, 2015 all- full cycle (excl land) in PDP FD&A 6.53/boe +1,380 K/hz facility + pipelines…
UMBACH LANDS DELINEATED TO DATE Montney productive across the area; encouraging results on adjacent lands 33% of lands delineated 20% with 2P 6% with producing hzs 17
GUIDANCE (updated Sep 7/16) updated to accelerate 2017 growth (improving nat gas price) guidance contingent on nat gas price recent drill & complete cost 10% below budget (2017 uses 4.1 MM/hz) 18
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 looking to add more capacity to…
AECO CHICAGO DIFF Cdn demand flat (lower TCPL toll may increase) weaker near term AECO price with continuing prodn growth (wider diff increases exports to other markets) 20% of NGTL receipts from NE BC (growing) Storm has 55 mmcf/d on…
BC NAT GAS FLOWS TCPL expansions at Towerbirch (2018) & North Montney () move nat gas out of BC, more to AECO 21
AECO - BC STATION 2 DIFF AECO - Stn 2 diff back to historical levels (wider in 2015 with less volume to Alliance & TCPL) growing BC prodn increases Stn 2 price risk 22
HEDGING (Oct 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…
Discovered Petroleum Initially in Place (DPIIP) is defined in the COGEH handbook as the quantity of hydrocarbons that is estimated to be in place within a known accumulation. Discovered Petroleum Initially in Place is divided into…
APPENDIX
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 & T2 2016 1.4 Bcf/d Electric +2.1 Bcf/d YTD Jul/16 v Jul/15 (EIA) T3 Q2/17 +0.7 Bcf/d Industrial +0.4 Bcf/d YTD…
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