SUSTAINABLE CONVENTIONAL RESOURCE COMPANY TSX: SGY DECEMBER, 2016
REASONS TO OWN SURGE 100% operated, high quality, low decline asset base High quality light/medium crude oil asset base; low decline < 24% 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) 2017(e) Exit Production Rate 14,450 boepd (80% oil) Low Decline of 24% (RLI 16 years) Estimated Year End 2017…
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…
MANAGING THE DOWNTURN 8.50 NETBACK INCREASE Disciplined and aggressive cost reduction initiatives Cost Saving Initiatives 20.00 OPEX 17.78 18.00 16.00 (6.51) Savings have a 14.00 direct and lasting effect on cashflow 12.00…
2017 GUIDANCE(1) Generating excess free cashflow at US55 WTI 2017 Guidance at US55 WTI(1) OPERATIONAL 2017 Average Production (boe/d) 14,000 (80 percent liquids) 2017 Exit Production (boe/d) 14,450 (80 percent liquids) Total…
CASH FLOW SENSITIVITIES Production growth = compounding cash flow growth at higher oil prices 2017 Cashflow Sensitivity to Changes in US WTI(1) 180.0 0.70 160.0 0.60 140.0 Cashflow per Share (Basic) 120.0 0.50…
ELITE ASSETS FOCUSED IN THREE CORE AREAS Large OOIP pools in established conventional reservoirs Surge 2017(e) Avg Production: Total: 14,000 boe/d (80% Oil & NGLs) (57% on AB Crown) Western Alberta Production: Total: 6,100…
LARGE OOIP, LOW RECOVERY FACTORS 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…
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 December 6th 2016 strip pricing 2017 Budget Areas/Formations Capital Rates of EUR Core Drill/ Complete/ Payout(1) NPV10 / Locations…
UPPER SHAUNAVON Large contiguous undeveloped land position in the greater Upper Shaunavon trend R21W3 R19W3 Instow Upper Shnvn Well Count Depth OOIP Cum Oil Peak Rate Current Rate T10 Area/Pool Vt Hz (m) (MMbbl) (MMbbl) (bbl/d)…
UPPER SHAUNAVON ACTIVITY 250MMbbl OOIP on Surge lands in the Upper Shaunavon R20W3 R19W3 Upper Shaunavon A Sand T7 Upper Shaunavon B Sand Upper Shaunavon C Sand Lower Shaunavon T6 SGY Q3 16 U. Shvn Hz…
UPPER SHAUNAVON PERFORMANCE Surge exceeding expectations in the Upper Shaunavon Upper Shaunavon - SGY Results vs Type Curve 250.0 SGY Wells Normalized Rate (26 wells) 14 recent Q3/Q4 wells meeting SGY Wells Normalized Cum (26…
UPPER SHAUNAVON WATERFLOOD RESPONSE Production flattening above type curve at 90 bopd after 12 months Upper Shaunavon SGY Type Curve vs 193/13-31-5-19W3 60 bopd increase to date due to waterflood response 300 60.0 13-31 EUR 295…
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 Drilling results outperforming type curve and Q4 2016 Drill (200m Infill) exceeding expectations Optimization of…
SOUTHEAST ALBERTA Provost / Eyehill / Wainwright areas Oil saturated Cretaceous sands Wainwright Alberta Sask 480 MMbbls of net OOIP (23-31 API oil) Current recovery factor of 14% (value is skewed to Betty Lake the high side due…
SPARKY UNDER-DEVELOPED COMPARED TO SIMILAR RESOURCE TRENDS Surge leading the pack with horizontal multi-stage fracs on the next big play Oil Play Comparison Alberta Sask Cum oil Recovery of Hz Avg. oil OOIP Play Prod Factor wells…
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 10 Sparky horizontals…
SPARKY PERFORMANCE Emerging Sparky play exceeding expectations Eyehill SPKY - SGY Results vs Type Curve 140 SGY Wells Normalized Rate (12 Wells) Q4 2016 Program (4 wells) SGY Wells Avg. Cum Production Rate (bopd), Cumulative Oil…
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; 16 year…
RISK MANAGEMENT / HEDGING STRATEGY 2017 ONWARDS The Company has an orderly, on-going, risk management / hedging program designed to lock in future cash flows to protect the Companys capital program and fund dividends. Below is a list of…
OIL HEDGING Significant percentage of 2017 production protected with a floor of C61 WTI or higher 5,500 80.00 5,000 4,500 70.00 Weighed Average Floor Price per bbl (C WTI) 4,000 60.00 3,500 bbl/d of C WTI Hedged…
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…
ENDNOTES Slide 2: (1) Based on Sproule's December 31, 2015 Price Forecast (2) Based on Sproules royalty sensitivity report prepared for Surge Energy Inc. June 2016. The royalty sensitivity report was generated using Surges December 31,…
NON-GAAP MEASURES NON-GAAP MEASURES This presentation includes non-GAAP measures as further described herein. These non-GAAP measures do not have a standardized meaning prescribed by International Financial Reporting Standards (IFRS…
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