Record Low Reserve Addition Costs of PDP 0.84/Mcfe in 2016 Tops Off A Stellar Year of Operating & Financial Results. Development Plan Growth to 316 mmcfe/d (52,670 boe/d) Underway Investor Presentation TSX / NYSE: AAV March 2017
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 March 2, 2017…
OUR STRATEGY LONG TERM PROFITABLE & SUSTAINABLE GROWTH (2) 2016 PDP F+D 0.84/mcfe (2) 1P F+D 0.25/mcfe Strong Balance (2) 3 Year 2P F+D 0.46/mcfe Sheet 2016 Q4 Total corporate cash (3) 1.0x D/CF 2016 costs 0.83/mcfe Operating…
LAST 3 YEARS - A SOLID TRACK RECORD OF VALUE GENERATION THREE-YEAR TOTAL SHAREHOLDER 2016 RETURN ON CAPITAL RETURN (Dec. 31/13 to Dec. 31/16) /mcfe 98% Natural gas and liquids sales price 2.89 including realized hedging gains…
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…
PRODUCTIVITY & INFRASTRUCTURE SUPPORTING 2017 THROUGH 2019 GROWTH 70 mmcf/d Surplus Well Productivity IP30 Average(1) 5 wells Completed Waiting on Testing 15 wells Uncompleted Standing Wells(2) 150 mmcf/d Plant Expansion to 400…
ADVANTAGES 2017 THROUGH 2019 GROWTH 2017 thru 2019 Highlights Post 2019 56% Production Growth (2017 thru 2019) 400 mmcfe/d 625 Million Capital Investment (66,670 boe/d) 735 Million Cash Flow Average AECO Cdn 2.95/mcf (2.80/GJ) 0.2x…
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 2016 2017 Budget 2018E…
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 2016 2017 Budget 2018E…
HEDGING, TRANSPORTATION AND MARKETS Current Hedges TCPL Transportation Service 100% firm service secured thru 2019. Advantages surplus plant & well Production(1) Average AECO capacity provides flexibility to capture high pipeline flow…
DEVELOPMENT PLAN NATURAL GAS PRICE SENSITIVITY CFPS & D/CF Cash Flow per Share Total Debt to Trailing Cash Sensitivity (1) Flow Sensitivity (1) 1.86 1.4 1.3 AECO 1.49 1.58 1.2 2.00/mcf 1.0 0.9 1.32 AECO 2.50/mcf 0.8 1.20 1.30…
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 Above…
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 - 0.85/mcfe Lowest…
HIGH QUALITY MONTNEY ASSETS, OPERATIONAL EXCELLENCE 14
GLACIER DRIVES GROWTH THROUGH NEXT DECADE, ADDITIONAL MONTNEY LANDS PROVIDES FUTURE UPSIDE Current development at Glacier including dry Progress and liquids rich gas drilling with a future drilling (Future) inventory 1,100 locations…
INDUSTRY ACTIVITY ENCROACHING PROGRESS, WEMBLEY AND VALHALLA LAND BLOCKS Pipestone/Wembley Multi-Layer Development New Locations Upper Montney Middle Montney Lower Montney Progress Valhalla Recent Wells Pipestone New Wells…
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 307 undeveloped locations booked…
(1) LM WELLS FROM RECENT 120 MMCF/D EIGHT WELL PAD OUTPERFORMING PRODUCTION TYPE CURVE 3 longer lateral LM wells (still production restricted) are significantly outperforming average well type curve LM Well 1 LM Well 2 LM…
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 (24 wells) Budget Type Curve (IP30 7.5…
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…
GLACIER MIDDLE MONTNEY WELLS EXCEEDING AVERAGE BUDGET TYPE CURVE Wells are exceeding current type curves Ongoing delineation identifies sweet spots within different Middle Montney layers. Frac designs are tailored to further optimize…
ROBUST GLACIER MONTNEY WELL ECONOMICS Upper & Lower Montney Middle Montney (Dry Gas) (50 bbls/mmcf(1) C3+, 45% C5+) ROR = 108% Advantage achieved 20% ROR = 106% DC & E well cost reduction with 35% increase in frac count ROR =…
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…
Clear Vision for Growth Financial Strength Proven Expertise
APPENDIX 25
GLACIER GROWTH PLAN DETAILS 16% ANNUAL AVERAGE PRODUCTION GROWTH 2017 THRU 2019 Annual Average Production (mmcfe/d) 316 272 236 203 2016 2017 Budget 2018E 2019E Annual Average Production Growth 16% average growth per year…
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 NOTE: 2017 cost estimate includes an…
CONTINUOUS IMPROVEMENT HAS CREATED INDUSTRY LEADING EFFICIENCIES 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 February 2017 29
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 2015-16 1 Well Slickwater, OH Packers 20 total…
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%…
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…
GLACIER MONTNEY ASSIGNED 2P EUR PER WELL & INTERVAL Glacier - 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…
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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