44% Production Growth, Top Quartile Well Results and 0.58/mcfe Total Corporate Cash Costs in Q3 2016 Underpins Glacier Plant Expansion Plans to 350 MMcf/d (58,330 Boe/d) Investor Presentation TSX / NYSE: AAV November 2016
ADVANTAGE AT A GLANCE TSX, NYSE: AAV TSX 52-week trading range 5.85 - 10.33 Shares Outstanding (basic) 184.6 million 2016 Annual Production Target 40% Annual Production Growth 200 mmcfe/d (33,300 boe/d) Market Capitalization November…
FOCUSED ON GLACIER DEVELOPMENT SINCE 2008 ADDITIONAL MONTNEY LANDS PROVIDES FUTURE UPSIDE Current development at Glacier including Progress dry and liquids rich gas drilling with a future (Future) drilling inventory 1,100 locations…
ADVANTAGES GROWTH & ACHIEVEMENTS 2016+ Record Low Cash Costs 0.58/mcfe Gen 4 Fracs (ports, 25+ frac stages) 350 mmcf/d Plant expansion plan in progress 2014 - 2015 30% Well IP30 + EUR(1) 58,330 Boe/d 0.82/mcfe Total Cash Costs…
IS BASED ON A SOLID FOUNDATION FOR PROFITABLE & SUSTAINABLE GROWTH Strong Balance Sheet 1.0x D/CF(1) 2016 Operating & Hedged to Protect Own & Operate Financial Flexibility Future Cash Flow (2) 100% Plant & Lowest Cash Cost…
DRIVING STRONG RETURNS IN THE LAST 3 YEARS THREE-YEAR TOTAL SHAREHOLDER ESTIMATED ANNUAL RETURN RETURN (Nov.7/13 to Nov.7/16) 2016 Estimate /mcfe 124% Natural gas and liquids sales price 2.75 including realized hedging gains…
CONTINUOUS IMPROVEMENT HAS CREATED INDUSTRY LEADING EFFICIENCIES 7
WITH OPERATIONAL FLEXIBILITY 125 mmcf/d Surplus Well Productivity from 9 Completed Standing Wells(1) 12 wells Uncompleted Standing Wells(2) 100 mmcf/d Plant Expansion plan to 350 mmcf/d in progress 180 mmcf/d Additional Sales Gas…
ESTIMATED SURPLUS CASH FLOW IN 2016 Surplus 161 ( million) Cash 2016 Annual Estimates 36 125 40% Production Growth Drill 13 wells 190 to 210 mmcfe/d Annual 63 million Average Production in H2 2016 (31,670 35,000 Boe/d)…
STRONG NETBACKS & RECYCLE RATIOS ARE ACHIEVABLE EVEN WITHOUT HEDGING Montney Natural Gas Producers Total Cost Structure - Q2 2016 NO HEDGING INCLUDED /Mcfe AAV - Lowest Total Corporate Cash Cost Montney Producer Illustrative…
MAINTENANCE CAPITAL AND SURPLUS CASH FLOW SENSITIVITY Surplus Cash Flow Above AECO 1.76/Mcf Surplus (NO HEDGING INCLUDED) 110 million Surplus 65 million Based on average well type curve (1) 100 million Based on top 80…
ADVANTAGE DEVELOPMENT PLAN 2015 THROUGH 2017(1) Annual Average Production 22% Capital Spending CAGR (2) (mmcfe/d) ( millions) 18% 235 40% 490 million Total (original 200 estimate 700 million) 200 165 141 125 2015 Actual…
DEVELOPMENT PLAN SENSITIVITY & HEDGING POSITIONS Total Debt to Trailing Current Hedging Program Extended (1) Cash Flow Sensitivity (reduces downside risk and maintains upside torque) 1.3 Production(2) Average AECO Period Hedged…
SIGNIFICANT DRILLING INVENTORY INCLUDES DRY AND LIQUIDS RICH NATURAL GAS LOCATIONS AT GLACIER Capable of maintaining 245 mmcfe/d (40,830 boe/d) for 50 years (1) 1,100 Future Drill Locations at Glacier supports future growth (1) 297…
OPERATIONAL EXCELLENCE 15
RECENT EIGHT WELL PAD SURPASSES MANAGEMENT EXPECTATIONS COMBINED 120 MMCF/D(1), 35 MILLION DCE&T Longer Laterals, More Frac Stages 3 LM wells average 2,583 meters (longest 2,880 meters) 5-16 28 frac stages, 60 tonnes/stage 8 Well…
IMPROVING WELL PERFORMANCE AND LOWER WELL COSTS THROUGH DRILLING & COMPLETION TECHNOLOGY Recent TOP Quartile Wells (1) Well Costs Reduced ( millions) Increasing frac count has improved long term production performance in all layers…
UPPER & LOWER MONTNEY WELL PRODUCTION CONTINUES TO IMPROVE New wells are normally restricted to 10 mmcf/d for frac sand flowback control during initial 6 months Wells tested, not on-production. 14 Upper & Lower Montney Wells…
RECENT LOWER MONTNEY WELLS WITH UP TO 25 FRAC STAGES (OPEN-HOLE PACKERS AND CEMENTED PORTS) 2 of 4 new wells Additional Lower Montney wells 20 mmcf/d initial production including longer laterals, reduced frac spacing and cemented…
LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE IMPROVEMENTS SINCE 2011 2015/16 Middle Montney wells with frac design changes including 20 frac stages and cemented ports to be evaluated 19 total Middle Montney wells on-production across…
TOP QUARTILE GLACIER MIDDLE MONTNEY WELLS Wells are exceeding current type curves Ongoing delineation identifies sweet spots within different Middle Montney layers. Frac designs are tailored to further optimize results. 12-2…
ROBUST GLACIER MONTNEY WELL ECONOMICS Middle Montney Upper & Lower Montney (50 bbls/mmcf C3+, 45% C5+) (Dry Gas) 102% Advantage achieved 20% DC & E well cost reduction with 95% 35% increase in frac count 63% 57% Type Higher…
GROWTH BEYOND 350 MMCF/D CAN BE ACCOMMODATED ON EXISTING PLANT SITE 100% Owned Glacier Gas Plant Positioned for Production Ramp-up Advantage Gas Plant Room for Additional Expansion To be expanded from Alliance Sales Gas Beyond 350…
Clear Vision for Growth Financial Strength Proven Expertise
APPENDIX 25
FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 22% ANNUAL AVERAGE PRODUCTION GROWTH FOR 2015 TO 2017 Annual Average Production (mmcfe/d) 235 200 141 2015 Actual 2016 Budget 2017 Estimate Annual Average Production Growth(3) 40%…
UPPER AND LOWER MONTNEY WELLS - IMPROVING PERFORMANCE SINCE 2008 Budget Type Curve (IP30 7.2 mmcf/d & 7.2 Bcf) Data: updated to June 2016 27
(1) EXCEPTIONAL UPPER & LOWER MONTNEY WELL ECONOMICS Upper & Lower Montney Dry Gas (2) Budget Type Curve. Some recent Upper & Lower Montney wells are outperforming type curve (3) (1) Management estimates. NPV 10%…
STRONG EAST GLACIER MIDDLE MONTNEY WELL (1) ECONOMICS Middle Montney at 50 bbls/mmcf C3+ (2) Budget type curve. Some recent MM wells are exceeding type curve. (3) (1) Management estimates. NPV 10% pre-tax (2) Capitalof 4.8…
2014 MIDDLE MONTNEY PROGRAM FOCUSED ON HIGHER LIQUID CONTENT IN EAST GLACIER Glacier C5+ 57 Middle Montney wells to MM wells drilled in 2014 date illustrate higher liquid content(1) from west to east deg API 10 program at Glacier…
GLACIER MONTNEY ASSIGNED 2P EUR PER WELL & INTERVAL 2P Recoveries per Interval(1) of Gross HZ Wells 2P Recovery [bcf/well] Interval Developed Undeveloped TOTAL Developed Undeveloped TOTAL YE YE YE YE YE YE YE YE YE YE YE YE YE YE…
GLACIER LOCATED IN THE HEART OF THE MONTNEY RESOURCE PLAY Montney Siltstone Comparison: 700 times more permeability 4x more formation thickness Very low clay content Liquids & Improved well efficiencies strong economics Up…
2012 CORE AND COMPLETION STUDIES: INCREASED RESOURCE AND IMPROVED WELL RESULTS Core study determined original density porosity logs have to be re- calibrated IP30s on open hole Re-calibration aligned log to actual wells improved by…
ADVANTAGE CONTACT INFORMATION Investor Relations 1.866.393.0393 iradvantageog.com www.advantageog.com Listed on NYSE and TSX: AAV Advantage Oil & Gas Ltd. Suite 300, 440 2nd Avenue SW Calgary, Alberta T2P 5E9 Main:…
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