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2017 Budget and Production Growth – Advantage Oil & Gas Ltd.

Advantage Oil & Gas Ltd. · Feb 9, 2017 · 34 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 1
    2017 Budget Includes Production Growth of 16% to 236 mmcfe/d (39,330 boe/d) & Upsized Glacier Gas Plant Expansion to 400 mmcfe/d (66,670 boe/d). Development through 2019 increases Production to 316 mmcfe/d (52,670 boe/d) Investor…
  2. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 2
    ADVANTAGE AT A GLANCE TSX, NYSE: AAV TSX 52-week trading range 6.41 - 10.33 Shares Outstanding (basic) 184.7 million Annual Production - 2017 Budget 16% Production Growth 236 mmcfe/d (39,330 boe/d) Market Capitalization January 30,…
  3. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 3
    OUR STRATEGY LONG TERM 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 Infrastructure…
  4. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 4
    LAST 3 YEARS - A SOLID TRACK RECORD OF VALUE GENERATION THREE-YEAR TOTAL SHAREHOLDER ESTIMATED ANNUAL RETURN RETURN (Dec. 31/13 to Dec. 31/16) 2016 Estimate /mcfe 98% Natural gas and liquids sales price 2.84 (1) including…
  5. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 5
    2017 BUDGET FUNDED THROUGH CASH FLOW INCLUDING UPSIZED GLACIER GAS PLANT EXPANSION TO 400 MMCF/D ( million) 2017 Highlights (1) 205 210 16% Annual Production Growth Drill 21 wells 37 23% Cash Flow Per Share Growth(2) 236…
  6. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 6
    PRODUCTIVITY & INFRASTRUCTURE SUPPORTING 2017 THROUGH 2019 GROWTH 90 mmcf/d Surplus Well Productivity 19 wells Uncompleted Standing Wells(1) 150 mmcf/d Plant Expansion to 400 mmcf/d in progress 180 mmcf/d Additional Sales Gas Pipeline…
  7. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 7
    ADVANTAGES 2017 THROUGH 2019 GROWTH 2017 thru 2019 Highlights 56% Production Growth (2017 to 2019) 625 Million Capital Investment Post 2019 735 Million Cash Flow Average AECO Cdn 2.95/mcf (2.80/GJ) 400 mmcfe/d 0.2x Total YE 2019…
  8. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 8
    ADVANTAGE GROWTH PLAN 2017 THROUGH 2019(1) Annual Average Production 16% Capital Spending Cumulative 625 million CAGR (2) (mmcfe/d) ( millions) 2017-2019 16% 316 15% 205 210 210 16% 272 236 203 128 2016E 2017 Budget…
  9. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 9
    CASH SURPLUS REDUCES TOTAL DEBT TO CASH FLOW Cumulative Cash Surplus(1) Year-end Total Debt to Cash Flow (1) 2.95/MCF (2.80/GJ) Ratio 80 110 million surplus 2017-2019 1.0 39 0.7 25 0.5 5 0.2 2016E 2017E 2018E 2019E…
  10. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 10
    DEVELOPMENT PLAN NATURAL GAS PRICE SENSITIVITY CFPS & D/CF (1) Includes Advantages current hedge positions as of November 28, 2016 10
  11. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 11
    MAINTENANCE CAPITAL AND SURPLUS CASH FLOW SENSITIVITY ILLUSTRATIVE AT 325 MMCFE/D 3 Year Cumulative 3 Year Cumulative (NO HEDGING INCLUDED) Surplus Surplus 525 million 690 million 360 Million 305 Million Surplus Cash Flow…
  12. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 12
    ATTRACTIVE NETBACKS & RECYCLE RATIOS ARE ACHIEVABLE WITHOUT HEDGING Montney Natural Gas Producers Total Cost Structure Q3 2016 NO HEDGING INCLUDED /Mcfe 5.00 Illustrative Illustrative AECO Cdn AECO Cdn 4.50 AAV - 0.58/mcfe Lowest…
  13. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 13
    HIGH QUALITY MONTNEY ASSETS, OPERATIONAL EXCELLENCE 13
  14. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 14
    GLACIER DRIVES GROWTH THROUGH NEXT DECADE, 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…
  15. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 15
    ONLY 7% OF GLACIERS FUTURE WELL INVENTORY REQUIRED FOR 2017 THRU 2019 DEVELOPMENT Only 83 of our 1,100 Future Drill Locations at Glacier is required to achieve growth to 316 mmcfe/d average 2019 Only 297 undeveloped locations booked…
  16. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 16
    (1) LM WELLS FROM RECENT 120 MMCF/D EIGHT WELL PAD OUTPERFORMING PRODUCTION TYPE CURVE 35,000 2.0 3 longer lateral LM wells (still production 30,000 restricted) are significantly outperforming average well type curve 1.5 25,000…
  17. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 17
    UPPER & LOWER MONTNEY WELL PRODUCTION CONTINUES TO IMPROVE 16mmcf/d New wells are normally restricted to 10 mmcf/d for frac sand flowback control during initial 6 months Production Average (23 wells) Budget Type Curve (IP30 7.5…
  18. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 18
    MOST RECENT LOWER MONTNEY WELLS WITH UP TO 30 FRAC STAGES (OPEN-HOLE PACKERS AND CEMENTED PORTS) Additional Lower Montney wells with longer laterals, reduced frac spacing and cemented ports are continuing to be brought on…
  19. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 19
    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…
  20. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 20
    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 well…
  21. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 21
    ROBUST GLACIER MONTNEY WELL ECONOMICS Upper & Lower Montney Middle Montney (Dry Gas) (50 bbls/mmcf(1) C3+, 45% C5+) Advantage achieved 20% DC & E well cost reduction with ROR = 83% ROR = 82% 35% increase in frac count ROR = 62%…
  22. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 22
    GROWTH BEYOND 400 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 400…
  23. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 23
    Clear Vision for Growth Financial Strength Proven Expertise
  24. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 24
    APPENDIX 24
  25. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 25
    GLACIER GROWTH PLAN DETAILS 16% ANNUAL AVERAGE PRODUCTION GROWTH 2017 TO 2019 Annual Average Production (mmcfe/d) 316 272 236 203 2016E 2017 Budget 2018E 2019E Annual Average Production Growth 16% average growth per year…
  26. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 26
    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…
  27. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 27
    CONTINUOUS IMPROVEMENT HAS CREATED INDUSTRY LEADING EFFICIENCIES 27
  28. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 28
    UPPER AND LOWER MONTNEY WELLS - IMPROVING PERFORMANCE SINCE 2008 Newer wells restricted for frac sand flow back Budget Type Curve (IP30 7.5 mmcf/d & 7.5 Bcf) Data: updated to November 2016 28
  29. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 29
    EXCEPTIONAL UPPER & LOWER MONTNEY WELL (1) 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%…
  30. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 30
    EXCEPTIONAL 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) Capital…
  31. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 31
    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…
  32. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 32
    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…
  33. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 33
    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…
  34. 2017 Budget and Production Growth – Advantage Oil & Gas Ltd. – slide 34
    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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