INTRODUCTION Started Sept 2010, fourth Storm since Nov 1998 history of per share growth in prodn & asset value Market cap 515 MM (4.25/sh), TSX-V symbol SRX 121 MM shares + 8 MM options officer + director ownership 14% (16% FD) Q4/16…
PRODUCTION 7 new hzs in 2016 maintained 13,000 boe/d Jan-Nov, Dec/16 was 14,700 boe/d after 2 more hzs turned on currently 17,000 boe/d prodn per share +38% per year over last 3 years 3
CASH COSTS PER BOE 2017 costs improve 15% (1.00 - 1.50/boe) with prodn growth & new processing agreement at Umbach 2016 costs -15% vs 2015 (-1.57/boe) transportation excluded from controllable cash costs as sales price for…
FUNDS FLOW Q4/16 funds flow per share +173% YOY funds flow per share excluding hedging increases in 2017 with prodn growth (+30%) & lower costs (-1.50/boe) 5
KEY RESERVE INFORMATION 2P Reserves 104 Mmboe at Year-end 2016 529 Bcf of sales gas, 16 Mmbbl of cond + NGL Proved Producing (PDP) 25 Mmboe (+21% per share YOY) Total Proved (1P) 77 Mmboe Proved plus Probable (2P) 104 Mmboe (RLI 21…
COST OF RESERVE ADDITIONS all-in reflects total capital investment 2016 PDP FD&A 6.89/boe Recycle 1.3 X using field netback 8.88/boe incl hedging PDP FD&A reflects actual capital and well results 1P & 2P FD&A based on estimates of…
MAJOR AREAS large shale gas resource in HRB, Umbach Montney needs higher nat gas price 108,000 net acres 12,945 Boe/d* growth from Montney development at Umbach (liquids rich nat gas) Horn River Basin 78,000 net acres 310 Boe/d*…
UMBACH AREA (NE British Columbia) 1% H2S requires sour gas plant Montney liquids rich gas (McMahon or Stoddart GPs) 154 net sections 108,000 net acres 1,200 1,300 btu/scf McMahon GP connected to 3 sales pipelines Q4/16 12,945 Boe/d…
PROCESSING ARRANGEMENT AT UMBACH Reduces corporate op cost 15% - 20% starting Jan 2017 Commitment totals 65 mmcf/d raw (less than current 90 mmcf/d raw Jan Feb/17) 45 mmcf/d for 15 years starting Jan/17 10 mmcf/d for 15 years starting…
UMBACH ACTIVITY total field compression 115 mmcf/d raw (Jan Feb/17 was 90 mmcf/d raw) increase to 150 mmcf/d raw by expanding 3rd facility for 7 MM (growth to 27,000 boe/d) Q1/17 drill 6 hzs, compl 4 hzs (leaves inventory of 8…
UMBACH HZ COSTS accounting system costs, incl pad & roads 2016 avg drill & compl 3.9 MM, -11% vs 2015 (-22% per stage) costs improving with lower service costs and operational changes (mud system, multi- well pads, water logistics)…
UMBACH HZ PERFORMANCE 13
UMBACH TYPE CURVE 14
UMBACH 2016 HZS 15
UMBACH HZ FRAC SPACING & SAND TONNAGE 16
UMBACH HZ LENGTH & NUMBER OF FRACS 17
UMBACH HZ ECONOMICS recent hzs tracking 7.0 Bcf type curve flat prices, not escalating full cycle (excl land) +1,380 K/hz facility + pipelines F&D: 4.95/boe ROR: 21% Payout: 3.2 yrs PV15: 1.2 MM 18
UMBACH LANDS DELINEATED TO DATE 33% of lands delineated 21% with 2P 7% with prod hzs Montney productive across the area 54.4 net hzs drilled to date on 154 net sections (with 400 m interwell spacing, can drill 4 hzs per…
PROCESSING & TRANSPORTATION Processing & transport supports growth thru 2018 Firm processing 75 mmcf/d raw in 2017 (68 mmcf/d sales) average 60 mmcf/d raw McMahon, 15 mmcf/d raw Stoddart ROFR to add up to 35 mmcf/d raw at McMahon Firm…
WESTERN CANADIAN NAT GAS PRICES export pipelines Chicago AECO diff to US fully widening; too much prodn contracted growth from WCSB there is pipeline capacity to Eastern Canada but, declining demand imports on Nexus or Rover pipelines…
AECO - BC STATION 2 DIFF 50% of BC prodn to AECO; exports from AECO are the issue AECO - Stn 2 diff impacted by TCPL or Alliance restrictions (more gas to Stn 2); hedging to mitigate risk 22
HEDGING (Mar 2/17) Hedging supports growth & mitigates price volatility target: 50% of current prodn hedged 1 to 12 months forward 25% of current prodn hedged 13 to 24 months forward Growth volumes are not hedged Fixed price hedges 40%…
GUIDANCE if prices not supportive of growing prodn, can reduce capex to 50 MM in 2017, maintain 16,500 boe/d H1/17 capex 45 MM Montney hz D&C 4.2 MM (+10% vs 2016) base decline 33% (Dec/16 vs Dec/15); requires 8 hzs to offset…
STORM RESULTS VS MARCELLUS/UTICA Tracking 10 public Marcellus/Utica companies AR, CHK, COG, ECR, EQT, GPOR, REXX, RICE, RRC, SWN 15.8 Bcf/d Q4/16 (+5% YOY) Q4 debt 30 billion is 4.7 X annualized funds flow 2016 capex 9.9 billion…
SUMMARY Focused on converting large, high quality Montney resource at Umbach to per share growth in prodn & funds flow low sustaining capex with 7 new hzs in 2016 to offset decline continuing to improve hz rates/reserves (length, sand,…
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…
APPENDIX
NAT GAS PRICING USING 2017 FWD STRIP 2017 FWD STRIP (Feb 23/17) Sell in Chicago (Alliance pipeline) NYMEX US2.95/mmbtu NYMEX US2.95/mmbtu NYMEX - Chicago diff - US0.08/mmbtu NYMEX - Chicago diff -US0.08/mmbtu Chicago price Cdn3.55/GJ FX…
HORN RIVER BASIN HRB (NE BC) Shale gas from Muskwa, Otter Park, Evie shales 78,000 net acres, 100% WI 119 net sections Drilled 2 hzs & 2 verticals to validate commerciality 1 producing hz, 1 standing hz
US NAT GAS PRICE bullish nat gas prices with US supply/demand deficit increasing; declining prodn & rising exports 2016 supply/demand is tighter by 2.1 Bcf/d prodn -1.6 Bcf/d YOY exports +0.5 Bcf/d YOY For 2017, EIA forecast exports…
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