BUILDING ON A PROVEN TRACK RECORD CORPORATE PRESENTATION January 2017 CORPORATE PRESENTATION 1
CORPORATE PROFILE Corporate Summary Q3 2016 Avg. Daily Production 55,137 boe/d Production Mix1 61% liquids/39% gas Intermediate Corporate Decline2 12% Canadian oil and natural gas Undeveloped Land (net)1 430,000 acres producer…
PENGROWTHS RESOURCE BASE INCREASING FOCUS ON OIL AND LIQUIDS DEVELOPMENT Large accumulations Long life assets Low declines Low cost structure Low sustaining capital Conventional Assets Thermal Assets Growth engines for Swan…
2017 CAPITAL BUDGET ENHANCING FINANCIAL STRENGTH IN A RECOVERING COMMODITY PRICE ENVIRONMENT 2017 Full Year Guidance 2017 CAPITAL ALLOCATION ( MILLION) Average daily production (boe/d) 50,000 to 52,000 Total capital expenditures (…
2017 CAPITAL BUDGET PRIORITIES 2017 CAPITAL BUDGET OF 125 MILLION Optimization of Progress with Continue to focus on Lindbergh Phase One engineering and design safety, asset integrity and production work on Lindbergh Phase…
SHORT-TERM STRATEGY PRIORITIES: FOCUS ON THE THINGS WE CAN CONTROL 1 Prudent capital spending 2 Cost reductions 3 Reduce indebtedness 4 Continue with asset dispositions CORPORATE PRESENTATION 6
DEALING WITH THE CURRENT ECONOMIC ENVIRONMENT FOCUSING ON WHAT WE CAN CONTROL Asset Optimization Reducing Costs Generating strong production Year to date significant savings in despite conservative capital cost structures: program…
FINANCIAL AND OPERATING HIGHLIGHTS THIRD QUARTER RESULTS SHOW CONTINUED PERFORMANCE IN DELIVERING RESULTS ( millions except per share and per boe amounts) Three Months Ended Nine Months Ended September 30 September 30 Realized a…
BALANCE SHEET MANAGEMENT LONG-TERM DEBT STRUCTURE IS PRIMARILY MADE UP OF PRIVATE TERM NOTES DEBT COMPOSITION (AS AT SEPTEMBER 30, 2016) COVENANT COMPLIANCE (AS AT SEPTEMBER 30, 2016) Convertible Debentures September (Cdn…
ASSET DISPOSITION STRATEGY OBJECTIVE: DE-LEVER THE BALANCE SHEET Consistent with our strategy De-levers the balance Lindbergh GORR Criteria sheet (credit positive) Swan Hills for dispositions Targets Olds/Garrington Economic…
PROPERTY DISPOSITION ACTIVITY ACTIONS TAKEN OVER THE PREVIOUS 2 YEARS 120 Challenges to Success 4.50 1. Declining commodity price environment 2. Acquirers did not have cash 3. Not debt/credit accretive 4. Proposals did not reflect…
PROPERTY DISPOSITION ACTIVITY ACTIONS TAKEN OVER THE PREVIOUS 2 YEARS 4.50 60 3.75 50 3.00 AECo Gas Prices (C/GJ) 40 WTI Oil Price (US/bbl) 2.25 30 1.50 20 Lindbergh GORR Sales 10 Process 0.75 0 0.00…
LINDBERGH GROSS OVERRIDING ROYALTY EXCELLENT TRANSACTION WITH SUPERIOR TRANSACTION METRICS On January 6, 2017 Penrgowth completed the sale of a 4.0% GORR on all Lindbergh and Muriel Lake lands together with certain proprietary seismic…
LONG-TERM DEVELOPMENT TWO KEY ASSETS EXPECTED TO PROVIDE OVER 11 BILLION OF DEVELOPMENT OPPORTUNITIES Thermal Oil Montney Gas Lindbergh SAGD Groundbirch/Bernadet Approximately 6.8 billion of Approximately 4.7 billion of future…
LINDBERGH CHARACTERISTICS TOP TIER SAGD OPERATION Exceptional Operational SAGD Project Best in Class Economics Large Resource with Low Risk Growth Lindbergh is one of the most economic, ultra long-life SAGD projects with…
LINDBERGH THERMAL OIL APPROXIMATELY 6.8 BILLION OF LONG-TERM REINVESTMENT OPPORTUNITIES 319 MMbbls 15,190 bbl/d 2P reserves1 Q3/16 production Large high quality resource Approximately 6.8 billion of future capital…
LINDBERGH A DEMONSTRATED HIGH QUALITY PROJECT WITH TOP QUARTILE PERFORMANCE 1400 Firebag Christina Lake (CVE) 1200 1000 Average well productivity (bbl/d) 800 Lindbergh Surmont Jackfish Foster Creek Leismer 600…
PEANUT BUTTER VS. HOCKEY PUCKS LINDBERGH: THE PERFECT COMBINATION OF RESERVOIR FLUID AND ROCK Athabasca Cold Lake/Lindbergh VS. CORPORATE PRESENTATION 20
LINDBERGH THERMAL PROJECT STRONG PERFORMANCE FROM FIRST PHASE AND PILOT CONTINUES Maintenance outage Commercial project Three well pads on production for 21 Instantaneous Steam-Oil Ratio (ISOR) Commenced months Bitumen…
LINDBERGH PHASE ONE OPTIMIZATION GROWTH TO 18,000 BBL/D BY YEAR END 2017 Approximately 60 million allocated in 2017 capital budget towards the optimization of Phase One production Expect to increase production from Lindbergh Phase One…
COLD LAKE/LINDBERGH REGIONAL ADVANTAGES COLD LAKE REGION = SUPERIOR ECONOMICS Projects in the Cold Lake region such as Lindbergh benefit from a number of significant regional economic advantage based on their bitumen quality and…
LINDBERGH COMPETES WITH LOW COST PRODUCTION GLOBAL RESOURCES PRODUCTION 2014 COST CURVE Average break even Oil Extra heavy oil Sands Ultra Deepwater Onshore rest of world Deepwater Onshore 72 Cost (US per barrel)…
LINDBERGH PHASE TWO CAPITAL COST ESTIMATES LINDBERGH PHASE 2 CAPITAL COSTS ARE DOWN 27 PERCENT 900 27 percent reduction 800 ( million) 700 600 500 May-15 Oct-15 Nov-15 Feb-16 Jun-16 Phase 2 Capital Costs Steam…
LINDBERGH RESERVES UPDATE UNLOCKING SIGNIFICANT VALUE Update as at September 30, 2016 with 31-Dec-2015 30-Sept-2016 Change Proved reserves increasing to 147.9 Reserves MMbbls MMbbls % MMbbls and Proved Plus Probable Proved (1P) 103.4…
MONTNEY GAS SIGNIFICANT DEVELOPMENT INVENTORY 8.0 Tcf 1,980 boe/d Petroleum Q3/16 production initially-in-place (PIIP)1 Large high quality resource Approximately 4.7 billion of future capital reinvestment potential…
PENGROWTH MONTNEY OVERVIEW MULTIPLE PLAYS WITH LONG-TERM GROWTH POTENTIAL Bernadet (Liquids-rich) Groundbirch (Dry gas) 36.2 sections (100 percent 21 gross sections (90 percent working interest) working interest) Pengrowths best…
MONTNEY PLAY ECONOMICS PROVIDE STRONG RETURNS THAT COMPETE WITH OIL PLAYS Bernadet1 Groundbirch1 Per Well Unrisked Per Well Unrisked Metrics Case 1 Case 2 Case 3 Metrics Case 1 Case 2 Case 3 DCET ( million/well) 5.5 5.5 5.5 DCET (…
OLDS/GARRINGTON MULTI-ZONE LIQUIDS DEVELOPMENT OPPORTUNITIES 62.9 MMboe 15,795 boe/d 2P reserves 1 Q3/16 production Large, contiguous land base with access to multi-tier development opportunities Over 500 net (unrisked)…
OLDS/GARRINGTION DEVELOPMENT DOMINANT POSITION WITH OPPORTUNITIES FOR GROWTH Light oil (35o to 50o oil) Control of key Technology continues and liquids-rich natural INFRASTRUCTURE processing ( 112 to unlock large new gas with…
OLDS/GARRINGTION LIGHT OIL AND LIQUIDS-RICH GAS IN STACKED RESERVOIRS Horizontal potential in all layers Technology continues to unlock new resource plays Stacked reservoirs (Cardium, Viking, Mannville, Elkton, Pekisko and Wabamun)…
SUMMARY EXECUTING ON WHAT IS IN OUR CONTROL Company delivering strong, consistent operating results Reduced cost structures across the organization Focused on preserving and improving financial strength Reduced total debt by 203…
APPENDIX CORPORATE PRESENTATION 37
TOTAL DEBT CONTINUITY TOTAL DEBT BEFORE WORKING CAPITAL CONTINUITY Continuing with our strategy of reducing debt in 2016 (Cdn millions) Total debt at December 31, 2015 1,856.5 Increase (decrease) due to: Foreign exchange impact…
PEER BENCHMARKING Q3 2016 OPERATING COSTS ( PER BBL) Source: TD Securities Even with a 4.0% GORR burden increasing operating costs slightly, Lindbergh still generates one of the highest operating netbacks amongst its peers (1)…
LINDBERGH COMMERCIAL PROJECT TRADING LOWER IP RATES FOR GREATER RECOVERABLE RESERVES Relative Permeability - Low permeability = lower IP rates Greater net pay = larger recoverable reserves Increase in net pay by 1 m adds 100…
MONTNEY DEVELOPMENT POTENTIAL MULTI-ZONE DEVELOPMENT OPPORTUNITIES BERNADET GROUNDBIRCH U3 U1 Upper U1 Lower M1 U2 U3 L1 Upper L1 Lower Four prospective and proven sub-zones thought to exist within the Montney 2014…
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