Skip to main content February 2017 Investor Day – Tourmaline Oil Corp. Investor Presentation | Shale Experts
Loading...
Pm

February 2017 Investor Day – Tourmaline Oil Corp.

Tourmaline Oil Corp. · Feb 28, 2017 · 73 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. February 2017 Investor Day – Tourmaline Oil Corp. – slide 1
    Investor Day B February 28, 2017
  2. February 2017 Investor Day – Tourmaline Oil Corp. – slide 2
    Tourmaline Oil Corp. Investor Day 6. MARKETING & TRANSPORTATION 1
  3. February 2017 Investor Day – Tourmaline Oil Corp. – slide 3
    Planning for Change Planning is bringing the future into the present so that you can do something about it now Alan Lakein 2
  4. February 2017 Investor Day – Tourmaline Oil Corp. – slide 4
    Change in N. American Natural Gas Fundamentals Its no secret that there has been a fundamental shift in N. Americas Natural Gas Market. Why Technology-horizontal drilling and multi-stage hydraulic fracturing Emergence of…
  5. February 2017 Investor Day – Tourmaline Oil Corp. – slide 5
    Emergence of Appalachia and Wet Gas Changed Natural Gas Fundamentals 4
  6. February 2017 Investor Day – Tourmaline Oil Corp. – slide 6
    Demand growth continues-BP 2035 Outlook US demand will grow by 21 bcf/d by 2035 Demand in Canada & Mexico increases by 10 bcf/d, driven mostly by power generation and industry. Natural gas becomes the leading fuel in N.A around…
  7. February 2017 Investor Day – Tourmaline Oil Corp. – slide 7
    Demand for Natural Gas Grows Strongly Source: BP 6
  8. February 2017 Investor Day – Tourmaline Oil Corp. – slide 8
    The Fuel Mix is Set to Change Significantly Source: BP 7
  9. February 2017 Investor Day – Tourmaline Oil Corp. – slide 9
    Unprecedented Call on N.A. Supply to be Led by US Big Three from 2015-2020 Source: PIRA 8
  10. February 2017 Investor Day – Tourmaline Oil Corp. – slide 10
    LNG plays an Increasingly Important Role in Demand LNG exports reach nearly 18 Bcf/d by 2035 N. Americans share of global exports peaks at almost 30% around 2030 and accounts for a quarter of global LNG trade by 2035 9
  11. February 2017 Investor Day – Tourmaline Oil Corp. – slide 11
    Regional Dispersion of US Demand Gains 2020 vs 2015 Source: PIRA 10
  12. February 2017 Investor Day – Tourmaline Oil Corp. – slide 12
    Changes in North American Gas Supply (2015-2020) Source: PIRA 11
  13. February 2017 Investor Day – Tourmaline Oil Corp. – slide 13
    Tourmaline Diversification Strategy Tourmaline was a leader in seeing the fundamental supply shift and localized supply challenges We immediately became proactive and started to diversify our exposure Our Portfolio Approach 2013…
  14. February 2017 Investor Day – Tourmaline Oil Corp. – slide 14
    April 2017-Oct 31 2017 Exposure Diversification 9% 3% 51% Aeco Spot 2% 5% 15% Aeco FP 8% California 7% 7% Nymex Basis 54% Nymex FP 51% 2% Dawn Aeco Spot 8% 5% Chicago/Ventura Aeco FP 3% Sumas 9% Station 2 15% Note:…
  15. February 2017 Investor Day – Tourmaline Oil Corp. – slide 15
    Target Exit 2018 Exposure Diversification 33% Aeco Spot 13% 2% 33% 13% Aeco FP 7% 13% California Aeco Spot 13% Nymex 6% 6% Dawn Nymex FP Aeco 7% Chicago/Ventura FP 13% 2% Sumas 13% 13% 13% Station 2 14
  16. February 2017 Investor Day – Tourmaline Oil Corp. – slide 16
    Diversification yields Gains Diversification strategy is paying off and yielding marketing gains: Basis Deals 2016 Averaged 0.39 Cdn/GJ above Aeco 5A index. Equating to 27.7M Export Deals Avg. Cdn/GJ above High in 2016…
  17. February 2017 Investor Day – Tourmaline Oil Corp. – slide 17
    More Gains from Strategy Gains from Financial Swaps In 2016 TOU had 18.3 M in gains from financial swaps St 2 vs Aeco 2016 average differential at St 2 to Aeco was -0.41 Cdn/GJ As wide as -0.81 Cdn/GJ in Nov, 2016 TOU 2016…
  18. February 2017 Investor Day – Tourmaline Oil Corp. – slide 18
    Transportation Strategy Source: TCPL 17
  19. February 2017 Investor Day – Tourmaline Oil Corp. – slide 19
    Transportation Strategy continued Tourmaline is well positioned to handle TCPL issues. Why Decisions to take firm transport on TCPL and Spectra needed to be made 2-3 yrs in advance. We made them. Have contracted Firm service for…
  20. February 2017 Investor Day – Tourmaline Oil Corp. – slide 20
    Tourmaline Mid-Stream Assets Feb 2017 The infrastructure skeleton in all three core operated complexes is now complete R. 15W6 R. 1W6 R. 15W5 Gundy Inga 17 Working interest gas plants, 14 of which NE Alberta BC are 100% owned and…
  21. February 2017 Investor Day – Tourmaline Oil Corp. – slide 21
    Aeco Supply/Demand Storage TCPL Mainline 2017 Maintain 2.5 bcf/d export market Work to gain incremental market in future TCPL A/BC Border expansion 2018 Additional 610 mmcf/d export out Westgate Oil Sands Natural Gas Demand…
  22. February 2017 Investor Day – Tourmaline Oil Corp. – slide 22
    Tourmaline LNG Approach and Strategy Natural Gas is cleanest, most abundant fossil fuel source and the logical bridge energy source for the next several decades. This will drive increasing LNG demand. LNG export capability is a…
  23. February 2017 Investor Day – Tourmaline Oil Corp. – slide 23
    Oil Pricing Outlook WTI Prices: where are they going Recent OPEC cuts will help markets restore to a more balanced outlook At present, we subscribe to consensus view that oil is set up to remain in a price range of 50-60 US/BBL…
  24. February 2017 Investor Day – Tourmaline Oil Corp. – slide 24
    Tourmaline Marketing Strategy Physical Oil Tourmalines Peace River High Charlie Lake oil play continues to grow We are currently building a clean oil terminal to handle oil, condensate, and NGL, Will facilitate blending of butane…
  25. February 2017 Investor Day – Tourmaline Oil Corp. – slide 25
    Tourmaline Marketing Strategy Physical NGLs Transportation: Tourmaline has firm pipeline transportation capacity for our NGL production Deep Cut NGL Extraction: Tourmaline has capacity to generate C2+ NGL Mix through Pembina…
  26. February 2017 Investor Day – Tourmaline Oil Corp. – slide 26
    Natural Gas Liquids NEBC Opportunity Northeast British Columbia Opportunities Tourmaline has an opportunity to build its own deep-cut NGL extraction facility at Gundy We believe that by extracting propane we can create…
  27. February 2017 Investor Day – Tourmaline Oil Corp. – slide 27
    Conclusion N. Americas Natural Gas Market has fundamentally changed future demand is in the South and supply is in the North Flows are changing to reflect this shift Tourmaline is participating in this change and diversifying to…
  28. February 2017 Investor Day – Tourmaline Oil Corp. – slide 28
    Tourmaline Oil Corp. Investor Day 7. FIVE YEAR PLAN ROLLOUT 1
  29. February 2017 Investor Day – Tourmaline Oil Corp. – slide 29
    2016 Highlights 185,672 boe/d Reserves (1) 5th In 2016 12% Largest Gas Oriented 3% Midstream Company in WCSB 1.5x 16 Exit Net Debt / Q4 Annualized CF 85% 2nd Largest Canadian Natural Gas Producer Gas Oil NGL 2,666,170 PDP 1P…
  30. February 2017 Investor Day – Tourmaline Oil Corp. – slide 30
    Financial Outlook and Initiatives: Five Year Plan Components EURs, Drilling Days Royalties + + Currency Development Plans Taxes (Pools) Product Prices Five G&A + + Hedges Year Plan Interest Transportation Capital Costs…
  31. February 2017 Investor Day – Tourmaline Oil Corp. – slide 31
    5 Year Forecast: The 5 Year Plan from 2012 Vs Actuals 2012 Forecast Vs Actual Production 350,000 300,000 250,000 200,000 Boe/d 150,000 100,000 50,000 - 2012 2013 2014 2015 2016 2017 2018 Forecasted Production…
  32. February 2017 Investor Day – Tourmaline Oil Corp. – slide 32
    2017/18 Guidance Feb 2017 2017(1) 2018(1) Production Boe/d 240,000 - 260,000 290,000 - 320,000 Cash Flow - MM(i) 1,411 1,843 CFPS - Diluted(i) 5.23 6.80 E&P Capital Program - MM 1,331 1,792 Free Cash Flow - MM(ii) 81 51…
  33. February 2017 Investor Day – Tourmaline Oil Corp. – slide 33
    5 Year Forecast: The Current 5 Year Plan 450,000 400,000 350,000 Spirit River 300,000 NEBC 250,000 Boe/d Deep Basin 200,000 150,000 100,000 50,000 - 2016 2017 2018 2019 2020 2021 2022 2023…
  34. February 2017 Investor Day – Tourmaline Oil Corp. – slide 34
    Price Forecast NYMEX (USD/mmbtu) AECO (CAD/mcf) 3.90 3.80 3.70 TOU Forecast 3.60 TOU Forecast 3.50 3.40 Bank Price Deck Average 3.20 Bank Price Deck Average 3.30 3.00 3.10 External Reservoir External Reservoir 2.80 Engineer Price…
  35. February 2017 Investor Day – Tourmaline Oil Corp. – slide 35
    5 Year Forecast: Price Deck and Netback 2017E 2018E 2019E 2020E 2021E Exchange Rate [US/C] 0.77 0.77 0.77 0.77 0.77 WTI [US/bbl] 60.00 60.00 60.00 60.00 60.00 Edmonton Par [C/bbl] 71.92 71.92 71.92 71.92 71.92 Henry Hub [US/mcf] 3.25…
  36. February 2017 Investor Day – Tourmaline Oil Corp. – slide 36
    Operating Netbacks 25.00 20.00 15.00 10.00 5.00 - 2013 2014 2015 2016 2017E (5.00) Operating Netback Before Hedges Hedges Operating Netback After Hedging (1) Price Assumptions - 2017 & 2018 Gas price -…
  37. February 2017 Investor Day – Tourmaline Oil Corp. – slide 37
    5 Year Forecast: Drilling, Completion, Equip and Tie In Costs Deep Basin (D,C,E&T Costs) 10 8 6 MM 4 2 - 2014 2015 2016 2017E 2018E NEBC (D,C,E&T Costs) 7 6 5 4 MM 3 2 1 - 2014 2015 2016 2017E 2018E 6…
  38. February 2017 Investor Day – Tourmaline Oil Corp. – slide 38
    5 Year Forecast: Decline Curves 2,000 1,750 Deep Basin 1,500 EUR 5.60 Bcfe 1,250 47% EUR Increase Since 2012 IP 30 10,872 Mcfe/d Boe/d 1,000 750 IP 90 8,005 Mcfe/d 500 250 IP 365 4,207 Mcfe/d - 1 4 7 10 13 16 19 22…
  39. February 2017 Investor Day – Tourmaline Oil Corp. – slide 39
    5 Year Forecast: Historical Capital Efficiencies Historical Capital Efficiency 50,000 Cinch 45,000 40,000 70% improvement in cash capital efficiencies from 2011 to 2016 35,000 Shell and Huron Capital efficiency (/boepd)…
  40. February 2017 Investor Day – Tourmaline Oil Corp. – slide 40
    5 Year Forecast: Forecast Capital Efficiencies 12,000 10,000 8,000 6,000 4,000 2,000 - 2017E 2018E 2019E 2020E 2021E CE excl. Major Facilities CE incl. Major Facilities 13
  41. February 2017 Investor Day – Tourmaline Oil Corp. – slide 41
    Maintenance Capital = 1B Production at 320,000 boe/d 400,000 Maintenance Capex to hold production at 320,000 boe/d from 2019 - 2021 350,000 300,000 250,000 200,000 150,000 100,000 50,000 - Base 2017 2018 2019 2020…
  42. February 2017 Investor Day – Tourmaline Oil Corp. – slide 42
    2017 Financial Sensitivities Sensitivities Impact on Cash Flow 40 35 30 25 millions 20 15 10 5 0 2017 WTI Pricing 2017 AECO pricing 2017 Exchange rate 2017 Interest rate 2017 Gas 2017 Oil production…
  43. February 2017 Investor Day – Tourmaline Oil Corp. – slide 43
    5 Year Forecast: Operating Costs Q3 YTD Consolidated Operating Expenses - 174MM (3.46/boe) Road & Lease Maintenance 2.48 MM Lease Rentals Fuel / Power 1% 6.38 MM 2.27 MM 4% 1% Workover and Turnaround Expenses 8.43 MM 5%…
  44. February 2017 Investor Day – Tourmaline Oil Corp. – slide 44
    Tax Pools Classification % Total (MM) PV10(MM) CEE 100% 323 79 CDE 30% 1,952 392 COGPE 10% 2,066 277 UCC Oil & Gas 25% 1,863 340 Non-Capital Losses 100% 684 167 Other - 66 13 Total Tax Pools 6,954 1,268 Tourmaline Tax…
  45. February 2017 Investor Day – Tourmaline Oil Corp. – slide 45
    Tourmaline Oil Corp. Investor Day 8. INITIATIVES IN FINANCE & U.S. PLAY TYPE COMPARATIVES 1
  46. February 2017 Investor Day – Tourmaline Oil Corp. – slide 46
    Trends in 2016 Canadian E&P Supply/Demand fundamentals for natural gas recently improving Growth rates for E&P companies were low Continual improvement in capital efficiencies Recycle and payout metrics became worse Maintaining…
  47. February 2017 Investor Day – Tourmaline Oil Corp. – slide 47
    Macro Trends Wells Drilled (WCSB) 2014 2015 2016 Gas 4,075 1,850 1,300 Oil 6,430 3,180 2,150 3
  48. February 2017 Investor Day – Tourmaline Oil Corp. – slide 48
    Canadian/US Investment Landscape: Canadian Gas Vs. American Gas Well Costs Well Costs Vs. EUR by Play Type Drilling 3 Montney Wells 25 Completed Well Cost CDN EUR (Bcfe) 22.5 Bcfe 20 19.2 Bcfe 17.7 Bcfe 13.7 15 MM 12.0 MM…
  49. February 2017 Investor Day – Tourmaline Oil Corp. – slide 49
    Tourmaline vs US Gas Weighted Peers Cash Costs Per BOE Aug 2016 Operating Transportation G&A Interest 12.00 10.80 10.00 1.62 1.82 8.00 Costs Per BOE 6.00 5.05 0.45 5.39 0.36 4.00 1.60 2.00 2.64 1.98 -…
  50. February 2017 Investor Day – Tourmaline Oil Corp. – slide 50
    TOU Positioning and Peer Group Analysis: Canadian and US Peers: Cost Structure 5.00 Unhedged revenue, net of royalties 9M/16 (US/Mcfe) Cash costs 9M/16 (US/Mcfe) 4.00 Canadian Gas Peers Marcellus Peers 3.00 2.00 1.00 0.00…
  51. February 2017 Investor Day – Tourmaline Oil Corp. – slide 51
    Debt: Current Debt Capacity Amount Facility Type (millions) Syndicated unsecured revolving credit facility Maturity of June 2020 1,800 Operating revolving credit facility Maturity of June 2020 50 Syndicated unsecured term loan…
  52. February 2017 Investor Day – Tourmaline Oil Corp. – slide 52
    Debt: Syndicated Term Loan Recently expanded and extended Syndicated Term Loan 650MM Stamping Fee: 200 bps Maturity: February 3, 2022 Tourmaline has been locking in a fixed rate of between 3.40% 3.50% on term loan Comparable…
  53. February 2017 Investor Day – Tourmaline Oil Corp. – slide 53
    Debt: Permanent Debt Range Tourmaline Forecasted Debt Level 2,000 1,500 Permanent Debt Range 1,000 500 - 2017E 2018E 2019E 2020E 2021E (500) Net Debt Per 5 Year Plan Net Debt (Permanent - Upper Limit) Net Debt…
  54. February 2017 Investor Day – Tourmaline Oil Corp. – slide 54
    Debt: Debt Maturity Profile of Total Debt Capacity TOURMALINE MATURITY PROFILE ARC MATURITY PROFILE 1,200 2,000 1,000 800 600 1,800 400 200 - 1,600 1,400 Total debt capaicity (millions) SEVEN GENERATIONS MATURITY…
  55. February 2017 Investor Day – Tourmaline Oil Corp. – slide 55
    Debt: Tourmaline Leading the Pack Calculation: Q316 Interest Expense Annualized / Q316 Debt Outstanding Canadian Peers Canadian Peers: ARC, Advantage, Baytex, Birchcliff, CNRL, Crew, EnCana, Enerplus, Painted Pony, Peyto, Seven…
  56. February 2017 Investor Day – Tourmaline Oil Corp. – slide 56
    Debt: Current Debt Capacity Drawn Vs. Debt Capacity Tourmaline Debt Profile (MM) Drawn Debt Capacity 2% 64% of Facility Drawn 26% 1,600 2,500 72% - 500 1,000 1,500 2,000 2,500 MM Revolver Term Operator Effective Interest…
  57. February 2017 Investor Day – Tourmaline Oil Corp. – slide 57
    Debt: Interest Rate Trends 6 5 4 3 % 2 1 0 1/1/2005 1/1/2006 1/1/2007 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 CDOR 1M LIBOR 1M CAD 5 Year Swap USD 5 Year…
  58. February 2017 Investor Day – Tourmaline Oil Corp. – slide 58
    Debt: Interest Rate Exposure Interest Rate Swaps Interest Rate Exposure* Hedged 100% 65% 65% 69% 83% 89% 97% 600 90% Millions 80% 500 70% 400 60% 50% 300 40% 200 30% 35% 35% 31% 20% 100 17% 10% 11% - 0% 3%…
  59. February 2017 Investor Day – Tourmaline Oil Corp. – slide 59
    Tourmaline Mid-Stream Assets Feb 2017 The infrastructure skeleton in all three core operated complexes is now complete R. 1W6 R. 15W6 R. 15W5 Gundy Inga 17 Working interest gas plants, 14 of which are 100% owned and operated…
  60. February 2017 Investor Day – Tourmaline Oil Corp. – slide 60
    TOU Strategy Convert our low cost and low risk inventory into sustainable cash flow, production and reserve growth Maintenance Capital of 1B for Low cost operator generates strong 320,000 boe/d, (base decline cash flow per BOE,…
  61. February 2017 Investor Day – Tourmaline Oil Corp. – slide 61
    TOU Strategy The Results Production per Share (Base Value = 100) 250 248.5 Peer Peer2 Peer4 Peer5 Peer6 Peer7 200 Peer10 Peer11 Peer12 TOU 150 100 50 2012 2013 2014 2015 2016E 2017E 2018E Source: Company reports and…
  62. February 2017 Investor Day – Tourmaline Oil Corp. – slide 62
    TOU Strategy Keeping a Constraint On Debt 2017E D/CF 6.0x 5.0x USA Peers = Avg. 2.5x 4.0x Canadian Peers = Avg. 1.5x = Avg. 2.5x 3.0x Tourmaline= 1.1x 2.0x 1.1x 1.0x 0.0x Source: BMO Global Oil & Gas Comparables…
  63. February 2017 Investor Day – Tourmaline Oil Corp. – slide 63
    Tourmaline Oil Corp. Investor Day 9. WRAP UP 1
  64. February 2017 Investor Day – Tourmaline Oil Corp. – slide 64
    Tourmaline Strengths 2014 (Board Strategy Session 1) Feb 2017 Premier production growth intermediate EP in the WCSB Premium reserve and value growth intermediate Cdn EP Best defined future drilling inventory, less than 10% of…
  65. February 2017 Investor Day – Tourmaline Oil Corp. – slide 65
    Tourmaline Strengths 2017 Feb 2017 Premier production growth intermediate EP in the WCSB Premium reserve and value growth intermediate Cdn EP Best defined future drilling inventory, less than 10% of which is developed Focussed…
  66. February 2017 Investor Day – Tourmaline Oil Corp. – slide 66
    Simple Scientific Fundamentals The Research S Curve Normal Statistical Distribution TECH SERVICE APPLIED New technology development will continue to improve all aspects of business/life. Appreciating risk and likelihood can…
  67. February 2017 Investor Day – Tourmaline Oil Corp. – slide 67
    Tourmaline Technology Curve/Future Concepts, Requirements & Opportunities Cost saving via novel frac water sourcing/recycling Alternative hz frac programs/processes Concurrent pairs, delayed flow-backs etc. Novel drilling…
  68. February 2017 Investor Day – Tourmaline Oil Corp. – slide 68
    Tourmaline Environmental Performance Tourmaline strives to continually improve all aspects of environmental performance including the impact of its operations on air, land and water. Tourmaline ranks as a top decile performer under…
  69. February 2017 Investor Day – Tourmaline Oil Corp. – slide 69
    Global Energy Needs . Science Matters . Source: EIA International Energy Outlook 2009 7
  70. February 2017 Investor Day – Tourmaline Oil Corp. – slide 70
    2H 2016 Highlights/2017 Outlook Feb 2017 Tourmaline now a senior with 2017 production reaching the 250,000 boepd milestone. (30%+ annual growth) The Company reserves are now 1.75 billion boe (Jan 1, 2017). (60%+ annual growth)…
  71. February 2017 Investor Day – Tourmaline Oil Corp. – slide 71
    Schedule A DRILLING LOCATIONS Estimated Drilling Inventory This news release discloses drilling locations in four categories: (i) proved undeveloped locations; (ii) probable undeveloped locations; (iii) unbooked locations; and (iv) an…
  72. February 2017 Investor Day – Tourmaline Oil Corp. – slide 72
    Schedule A continued Deep Basin Vertical well count : Approximately 2,746 gross prospective sections at approximately 1.5 wells per section minus 10% for areas that are inaccessible or limited by spacing requirements minus approximately…
  73. February 2017 Investor Day – Tourmaline Oil Corp. – slide 73
    Schedule B Prospective locations are unbooked locations that are not included in inventory. Unbooked locations are internal estimates based on the Company's prospective acreage and an assumption as to the number of wells that can be…

From the store

Browse maps, data & reports in the Shale Experts store