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February 2017 Corporate Presentation – Birchcliff Energy Ltd.

Birchcliff Energy Ltd. · Feb 1, 2017 · 65 slides

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Slides

  1. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 1
    CORPORATE PRESENTATION February 2017
  2. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 2
    PEOPLE, FOCUS & EXECUTION 3
  3. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 3
    Corporate Snapshot & Select Guidance Q4 2016 average production 60,750 boe/d % oil and NGL 21% Current production as at February 8, 2017 62,000 boe/d Estimated 2017 annual average production 70,000 74,000 boe/d % oil and NGL 23%…
  4. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 4
    INVESTMENT HIGHLIGHTS Record quarterly average production of 60,750 boe/d, an 11% increase from 54,538 boe/d in the Q3 2016 and a 50% increase from 40,445 boe/d in Q4 2015 Q4 2016 cash flow was 71.8 million or 0.27 per basic common…
  5. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 5
    INVESTMENT HIGHLIGHTS Focused assets in the Peace River Arch Area of Alberta (the Montney/Doig Resource Play and the Charlie Lake Light Oil Resource Play) Essentially 100% working interest; 99% of production is operated Large,…
  6. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 6
    2021 FIVE YEAR PLAN(1) 140,000 125,000 Approximate Annual Average 120,000 110,000 105,000 Production (boe/d) 100,000 91,000 80,000 72,000(2) 60,000 40,000 20,000 0 2017E 2018E 2019E 2020E 2021E Approximate…
  7. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 7
    HEDGING SUMMARY 2017 Natural Gas Hedging Summary 2017 Crude Oil Hedging Summary MMcf/d(1) CDN/Mcf(1) bbl/d CDN/bbl Q1 2017 157.0 3.44 Q1 2017 1,500 69.90 Q2 2017 157.0 3.44 Q2 2017 1,500 69.90 Q3 2017 157.0 3.44 Q3 2017 1,500…
  8. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 8
    BIRCHCLIFFS HISTORY A Track Record of Execution
  9. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 9
    KEYS TO SUCCESS Executives with proven track record, continuity since inception and significant ownership Management Highly experienced Management Team with excellent technical knowledge and a long history with the company 295 (289.7…
  10. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 10
    PRODUCTION HISTORY 80,000 70,000 74,000 70,000 Average Production (boe/d) 60,000 Compound annual growth of 30% per year since 2005 49,236 50,000 38,950 40,000 33,734 30,000 25,829 22,802 20,000 18,136 13,079…
  11. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 11
    CORPORATE RESERVES 1,000,000 PDP TP 880 MMboe 900,000 2P 800,000 On a per share basis PDP, 1P and 2P 700,000 reserves have increased at a compound annual growth rate of 14%, 22% and 23% Reserves (Mboe)(1) 600,000 per year…
  12. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 12
    CORPORATE NPV10 (BT) 7,000 PDP TP 5.8 Billion 6,000 2P PDP and 2P NPV10 (BT) increased by 5,000 66% and 50% year over year, respectively 4.1 Billion NPV10 (million) 4,000 3,000 1.9 Billion 2,000 1,000 0…
  13. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 13
    PROVEN TRACK RECORD AS A LOW COST PRODUCER 5 Year Profitability Breakdown: 2012 2013 2014 2015 2016 Average Average AECO (CAD/GJ) 2.27 2.99 4.27 2.55 2.05 2.83 Average WTI (USD/bbl) 94.21 97.97 92.99 48.80 43.32 75.46 P&NG Revenue…
  14. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 14
    PROVEN TRACK RECORD AS A LOW COST FINDER 16 PDP F&D 1P F&D 2P F&D 1.2x 1.8x 1.8x Cash flow 12 1.9x netback recycle F&D Cost (/boe) 1.2x 1.2x 1.3x ratios 8 2.0x 2.0x 2.3x 1.4x 2.6x 1.3x 4 3.7x 1.7x 1.8x 4.7x 7.3x…
  15. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 15
    2016 ACCOMPLISHMENTS Completed the acquisition of significant petroleum and natural gas properties and related assets located in the Gordondale area of Alberta for a purchase price of 613.5 million, after final adjustments In…
  16. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 16
    LOOKING FORWARD 2017 Plans & Beyond
  17. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 17
    2017 CAPITAL PROGRAM 2017 CAPITAL BUDGET: 355.0 MILLION Net Capital Gross Wells Net Wells (millions) Drilling & Development Pouce Coupe - Montney D1 HZ Gas Wells 22.0 22.0 86.1 Pouce Coupe - Basal Doig/Upper Montney HZ Gas Wells 7.0…
  18. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 18
    2017 CAPITAL PROGRAM The 2017 Capital Program reflects Birchcliffs long-term plan of the continued exploration and development of Birchcliffs low-cost natural gas, crude oil and liquids-rich assets on the Montney/Doig Resource Play…
  19. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 19
    BORROWING BASE DETAILS Birchcliff has extendible revolving credit facilities in the aggregate principal amount of 950 million with maturity dates of May 11, 2018, which are comprised of an extendible revolving syndicated term credit…
  20. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 20
    MONTNEY/DOIG RESOURCE PLAY A Significant Position in a World Class Play
  21. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 21
    MONTNEY/DOIG - A WORLD CLASS RESOURCE PLAY Resource density. Stacked resource up to 300 metres thick. Large areal extent. Extends over 50,000 square miles. Exceptional fracability. Low clay Birchcliff Montney/Doig content, low Poissons…
  22. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 22
    MONTNEY/DOIG MINEROLOGY LEADS TO EXCELLENT FRACABILITY The Montney/Doig Resource Play rock type is composed of a Some other Resource Plays have a high percentage of clays high percentage of hard minerals, and a low percentage of and…
  23. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 23
    BIRCHCLIFF MONTNEY/DOIG The Gordondale Acquisition adds a fourth commercial development interval in the Montney D2 Large contiguous land base with 441 sections prospective for the Montney/Doig Birchcliff has contiguous land block…
  24. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 24
    STACKED RESOURCE PROVIDES SUBSTANTIAL FUTURE UPSIDE 25
  25. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 25
    MONTNEY/DOIG MULTI LAYER OPPORTUNITY 3 2 1 4 5 6 5 6 4 3 2 1 26
  26. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 26
    PROXIMAL TO INFRASTRUCTURE WITH LONG TERM EXPOSURE TO LNG EXPORT Montney/Doig Birchcliff Pouce Coupe Production Montney/Doig & PC Gas Plant Owned Infrastructure PC Gas Plant Nova Pipeline System North American Market…
  27. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 27
    POUCE COUPE OVERVIEW Proven asset in development phase Wells show high initial deliverability, low terminal decline and stable long 2017 February 8th Montney D1 Test Results term production Predictable results with improving rates…
  28. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 28
    2017 FEBRUARY 8TH POUCE COUPE TEST RESULTS The table below sets forth the recent test results from Birchcliffs two Montney horizontal natural gas wells drilled in the Pouce Coupe area as a part of our budget expansion in Q4 2016…
  29. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 29
    POUCE COUPE LOWER MONTNEY (D1) PERFORMANCE VS. TYPE CURVE 7,000 6,000 Deloitte Tier 0 Type Curve IP (un-choked): 6.9 MMcf/d 5,000 IP (choked): 4.0 MMcf/d 2P Reserves: 8.2 Bcfe(1) Gas Rate (Mcf/d) 4,000 3,000…
  30. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 30
    GORDONDALE ACQUISITION HIGHLIGHTS Completed the Gordondale Acquisition on July 28, 2016 for a purchase price of 613.5 million, after final adjustments Consolidated a sizeable and contiguous land base within Birchcliffs existing…
  31. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 31
    GORDONDALE BASE PRODUCTION HISTORY Montney D2 40,000 discovery well 2015 2014 Last well drilled in 2014 (on-stream 2015) 2013 2012 with peak production of 35,000 boe/d 35,000 2011 2010 2009 2008 and Earlier 30,000 AltaGas Deep…
  32. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 32
    GORDONDALE OVERVIEW Drilled 6 (6.0 net) Montney horizontal oil and natural gas wells in 2016 including three Montney D2 oil wells 2017 February 8th Montney D1 Test Results and three Montney D1 natural gas wells Early results from…
  33. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 33
    2017 FEBRUARY 8TH GORDONDALE TEST RESULTS The table below sets forth the recent test results from Birchcliffs first six Montney horizontal wells drilled on the Gordondale Assets in Q4 2016 Preliminary results are meeting or exceeding…
  34. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 34
    GORDONDALE KEY INFRASTRUCTURE Key Natural Gas Processing Infrastructure Existing infrastructure has already AltaGas Gordondale CNRL Progress Sour Deep Cut Gas Plant Sour Shallow Cut Gas Plant supported peak production of…
  35. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 35
    ELMWORTH DEVELOPMENT Received regulatory approval for an acid gas injection well in August 2016 Preliminary planning underway for a Second Exploration 100% owned and operated 40 Horizontal MMcf/d natural gas processing plant;…
  36. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 36
    CONCEPTUAL MONTNEY/DOIG FIELD DEVELOPMENT MODEL STATUS OF MODEL CALLIBRATION AND DERISKING FACIES & PETROPHYSICAL GEOLOGICAL, GEOPHYSICAL, GEOMECHANCAL HYDRAULIC FRAC & MICRO SEIS. RESERVOIR MODEL OPTIMIZED DCC & PRODUCTION BASAL…
  37. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 37
    POUCE COUPE DRILLING PERFORMANCE Drill Cost Efficiency Yearly Average Drill Speed ( Spud Rig Release) 700 300 650 250 600 550 mD/Day /mD 200 500 450 150 400 35% decrease in /mD from 2007 Drilling twice as fast as…
  38. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 38
    POUCE COUPE LOWER MONTNEY (D1) CORE AREA COMPLETION EVOLUTION Completion Cost per Stage vs. Number of Stages Proppant Intensity 300 30 1.00 200 Completion Cost Per Stage (000's) Average Proppant Intensity (t/m) Average Number…
  39. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 39
    ENGINEERED COMPLETIONS FOR MONTNEY/DOIG FULL FIELD DEVELOPMENT Industry Range Birchcliff Best Practices Oil Birchcliff Best Practices Gas Liner type Openhole or Cemented Openhole Openhole Inter-well spacing 100 400 m (300 1,200 ft)…
  40. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 40
    TERMINAL DECLINE CHANGES Due to strong historical performance from both Birchcliff and industry Montney/Doig wells, Deloitte has reduced their forecast TP and 2P terminal declines to 11% and 9%, respectively Deloittes Tier 0 type…
  41. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 41
    MONTNEY NORMALIZED VINTAGE PLOT Historical Pouce Coupe Montney D1 Performance(1) 8,000 7,000 2016 Engineered completions and improved drill placement have led 6,000 to substantial year over year 2015 increases in well results…
  42. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 42
    PC GAS PLANT The Engine for Future Growth
  43. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 43
    Production Processed 2012 2013 2014 2015 2016 through the PC Gas Plant Average daily production, net to Birchcliff: Natural gas (Mcf) 59,327 91,666 132,808 163,641 168,444 Oil & NGLs (bbls) 204 527 1,065 1,287 960 Total boe (6:1)…
  44. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 44
    Corporate Operating Costs vs. % of Natural Gas Sales Volumes Processed at the PC Gas Plant KEY STRATEGIC 10.00 100% Corporate Operating Cost (/boe) Volume Through PC Gas Plant ADVANTAGES 8.00 6.00 80% 60% 100% owned…
  45. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 45
    PC GAS PLANT HIGHLIGHTS Current processing capacity of 180 MMcf/d Expect Phase V expansion will be completed in October 2017, adding 80 MMcf/d bringing total processing 32% capacity to 260 MMcf/d Expect Phase VI expansion will be…
  46. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 46
    POUCE COUPE SERVICE OVERVIEW Virtually all of our natural gas production is transported on TransCanadas NGTL System in Alberta pursuant to both firm and interruptible service agreements Birchcliff recently entered into sales…
  47. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 47
    CHARLIE LAKE LIGHT OIL RESOURCE PLAY Dependable Light Oil Production
  48. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 48
    WORSLEY CHARLIE LAKE LIGHT OIL One 2016 well Essentially 100% W.I. with operatorship continued 18 sections of land and extends and control of wells, pipelines and pool to N.E. off an facilities existing pad at minimal tie-in cost…
  49. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 49
    WORSLEY CHARLIE LAKE LIGHT OIL ACCOMPLISHMENTS SINCE SEPTEMBER 2007 ACQUISITION 2P reserves have increased over 150% to 38.9 MMboe from 15.1 MMboe 2016 year end 2P NPV10 (BT) was 537 million versus purchase price of 270 million…
  50. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 50
    45,000 WORSLEY AREA RESERVES PDP 38.9 MMboe 40,000 TP PDP reserves increased 15% as 2P success with the waterfood scheme 35,000 advanced proved reserves to PDP 30,000 Reserves(1) (Mboe) 25,000 20.4 MMboe 20,000…
  51. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 51
    WORSLEY AREA NPV10 (BT) 1,200 2016 PDP NPV10 (BT) of 172 million, 1,000 a increase of 29% from year end 2015 800 NPV10(1) (million) 600 537 Million 400 341 Million 172 Million 200 0 2007 2008 2009 2010 2011…
  52. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 52
    BUILDING ON OUR PAST Over 10 Years of Success
  53. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 53
    Record annual average Birchcliffs average daily production was 49,236 boe/d in production of 49,236 2016 compared to 2,793 boe/d in 2005, a compounded boe/d in 2016 annual growth rate of 30% per year over that span. 2,793 boe/d 1…
  54. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 54
    Production Growth 60,000 300 boe/d/million wtd. avg. shares 50,000 250 Birchcliff has increased production at a 40,000 200 compound annual growth rate of boe/d 30,000 150 20,000 100 30% since 2005. 10,000 50 0 0…
  55. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 55
    Reserves Growth 1000 4,000 800 3,200 Birchcliff has added significant low cost reserves boe/1,000shares 600 2,400 since commencing operations in 2005. On a per MMboe 400 1,600 common share basis, PDP, 1P and 200 800 2P…
  56. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 56
    APPENDIX
  57. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 57
    2015 MONTNEY/DOIG RESOURCE ASSESSMENT Reserves and Resource Volumes (Bcfe)(1)(2) Resource Class Raw/Sales Low Estimate Case Best Estimate Case High Estimate Case Cumulative Production(3) Sales 286.2 286.2 286.2 Remaining…
  58. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 58
    2016 YEAR END MONTNEY/DOIG 900,000 RESERVES Drilled 20 HZ M/D wells and acquired 87 (82.5 net) HZ M/D wells 295 (289.7 net) Montney/Doig horizontal 800,000 Drilled 29 HZ wells drilled as of Dec 31, 2016 including M/D wells 87…
  59. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 59
    SERIES A PERPETUAL PREFERRED SHARES Preferred Share Details Series A Number of Shares 2 million Issue Date August 8, 2012 TSX Trading Symbol BIR.PR.A Issue / Par Price 25.00 per share Quarterly Dividend 0.5000 per share Yield at…
  60. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 60
    SERIES C PREFERRED SHARES Preferred Share Details Series C Number of Shares 2 million Issue Date June 14, 2013 TSX Trading Symbol BIR.PR.C Issue / Par Price 25.00 per share Quarterly Dividend 0.4375 per share Yield at Issue 7.0%…
  61. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 61
    EXECUTIVE OFFICERS A. Jeffery Mr. Tonken is a Director and the President and CEO of Birchcliff. He has more than 35 years of experience in the oil and gas industry and is one of the Corporations founders. Prior to creating Birchcliff,…
  62. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 62
    EXECUTIVE OFFICERS Christopher A. Mr. Carlsen was appointed Vice-President, Engineering on July 22, 2013. He previously served as Asset Team Lead and Senior Exploitation Engineer with Birchcliff. Mr. Carlsen is a Professional Engineer…
  63. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 63
    BOARD OF DIRECTORS Mr. Shaw is a Director of Birchcliff and has more than 28 years of experience in the oil and gas industry and is one of the Larry A. Shaw Corporations founders. Prior to joining Birchcliff, Mr. Shaw served as Chairman…
  64. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 64
    PRESENTATION OF OIL AND GAS RESERVES AND RESOURCES: Deloitte prepared the 2016 Consolidated Reserves Report, the 2016 Deloitte Reserves Report and the 2015 Deloitte Reserves Report. McDaniel prepared the 2016 McDaniel Reserves Report. In…
  65. February 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 65
    THANK YOU TEAM BIRCHCLIFF Jeffrey Akeroyd, Karen Allen, Camille Ashton, Rainer Augsten, Gates Aurigemma, Al Basnett, Angela Belbeck, Charmaine Belley, Tyrus Bender, Tim Berg, Perry Billard, Deborah Borthwick, Myles Bosman, Jeff…

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