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June 2017 Corporate Presentation – Penn West Petroleum Ltd.

Penn West Petroleum Ltd. · Jun 30, 2017 · 38 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. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 1
    Corporate Presentation June 2017
  2. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 2
    Penn West Corporate Profile TSX: PWT NYSE: PWE Share Price /share 1.79 *June 8, 2017 PWT Daily Volume (shares) MM 2.0 % of Shares Outstanding 0.4% PWE Daily Volume (shares) MM 1.6 % of Shares Outstanding 0.3% Market…
  3. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 3
    What a Difference 4 Years Have Made Penn West circa 2013 Obsidian Energy 30/5.5 3/1.7 operating areas/ operating areas/ million net acres million net acres 135,000 31,000 boe/d boe/d 24 2.5 floors floors 15 5…
  4. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 4
    What Obsidian Energy Means to Us The name honours that our foundation is a natural resource that is honed to support the good of mankind. To us, the name, Obsidian Energy, reflects that we will build a bright future shaped by discipline…
  5. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 5
    Why Invest in Penn West Organic Production Balanced Portfolio Growth Liquids-weighted assets with a mix of short-cycle and mid- Self-funded double digit cycle opportunities production growth with a low-decline advantage…
  6. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 6
    Balanced Portfolio Liquids-Focused Growth Company 2017 plan for self-funded double-digit production growth Index Map 2017 hedged 50% of oil at US51 WTI and 30% of gas at C2.90 AECO Peace 90 kms Manufacture Cold Flow River 56…
  7. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 7
    Balanced Portfolio 2017 Corporate Themes Activity Details Budget (MM) Injectors Producers Cardium WaterfloodBuild Cardium Cardium Waterflood 55 45 10 Platform 97 Waterflood Platform Platform Strat Producers Manufacture…
  8. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 8
    Balanced Portfolio Low Decline Cash Flow Advantage Illustrative 35 Quarterly NOI per 100 Invested () Year 5 NOI vs Year 1 NOI (%) 70% 30 60% 50% 25 40% 30% 20% 20 10% 0% Viking Mannville W. Green Peace River…
  9. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 9
    Balanced Portfolio Resilient Assets in Volatile Commodity Prices 3.00 WTI (US/bbl) and AECO (C/Mcf) Required for 10% IRR (Break-even) Illustrative Current Prices US48/C2.75 Break-evens Cardium Type I break-even WTI price…
  10. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 10
    Organic Production Growth Focus on 2017 and 2018 Sustainability 2017 2018 Near Term Price Double Digit Growth Maintain Production Consideration i.e. US45 / C2.50 Reduce Cash Outlays Minimal Non-Productive Spend i.e. Self-fund 180…
  11. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 11
    Organic Production Growth The Cardium is Our Foundation R10W5 R5 PENN WEST LAND More acreage than the 2nd and PENN WEST PRODUCING WELL INJECTOR 3rd largest land holders combined POR 8%, PERM 0.2mD BEST QUALITY RESERVIOR INDUSTRY…
  12. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 12
    Organic Production Growth Cardium is a Free Cash Flow Machine Cardium 5 Year Plan (MM) High-netback light-oil production creates an engine of Free Cash Flow NOI Capital Spend Free Cash Flow 300 70MM of FCF in 2017 increasing to…
  13. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 13
    Organic Production Growth Tremendous Potential with Consistent Injection 120% In areas where waterfloods were maintained, recovery factors 35% and high watercuts show success of 100% waterfloods NPCU 1 Bear Lake A Lease…
  14. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 14
    Organic Production Growth Four Cardium Development Types TYPE I TYPE II Hz Producers, Vert Injectors Hz Injector Conversions A pattern is made up of Convert existing horizontal one horizontal producer producers to injection that…
  15. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 15
    Organic Production Growth Pembina Integrated Development Details 160 Development focused on Type Response in 6-9 months with an initial increase followed by I patterns made up of Hz 140 producers and 3 Vt injectors much lower…
  16. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 16
    Organic Production Growth Willesden Green Integrated Development Details 350 Development focused on Type I patterns made up of Hz 300 producers and 3 Vt injectors 250 Integrated waterflood approach Majority of Willesden Green…
  17. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 17
    Organic Production Growth Signpost Demonstration in Crimson Lake Crimson Section 01-042-08W5 Waterflood Project 10,000 2 Hall Plot 100,000 1.4 Oil (bbl/day) 1.2 Injected Water (bbl/day) Cum Pressure Differential 1 GOR…
  18. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 18
    Organic Production Growth Manufacturing Cold Flow in Peace River R20W5 R15 Large contiguous position in a crude oil resource PennWest 55% Ownership highly amenable to conventional cold-flow production Nampa JV partner funds 90% of…
  19. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 19
    Organic Production Growth Peace River Economics, excluding benefit of JV carry 250 Inputs Drill + Complete Total DCET Cost (MM) 1.6 2.8 200 Production Liquids (bbl) BOE (boe) EUR 310,000 400,000 IP(30 day) 205 215 IP(365 day)…
  20. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 20
    Organic Production Growth Leverage Infrastructure with Viking Prospects Large contiguous land position R10 R5 R1W4 criss-crossed and de-risked by peer activity Misty GP Compeer GP T35 Light-oil, high netback shorter cycle…
  21. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 21
    Organic Production Growth Top Drilling Results from 2016 Viking Campaign 200 PWT 2016 1 mile 11 wells 180 PWT 2016 PWT pre-2014 1 mile EQ 11 wells Drilling Program Peer 1 1 mile EQ 61 wells Peer 2 1 mile EQ 17 wells 160 140…
  22. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 22
    Organic Production Growth High Rate Alberta Viking Economics 200 Alberta Viking Economics Inputs Drill + Complete Total DCET 180 Cost (MM) 1.1 1.5 Production Liquids (bbl) BOE (boe) EUR 38,000 75,000 160 IP(30 day) 110 175…
  23. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 23
    Organic Production Growth Pursue New Ventures On track to drill 3 operated wells F OR M A T ION R8W5 R5 BELLY RIVER PENN WEST LAND PENN WEST OPERATED CARDIUM UNIT COLORADO SHALE CARDIUM CARDIUM TREND in Willesden Green in…
  24. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 24
    Organic Production Growth Mannville Fahler B Type Curve and Offsetting Wells 8,000 Type Curve (Mcf/d) 16-25-43-8 offset 16-36-44-7 offset 4-13-45-7 offset Inputs Drill + Complete Total DCET Cost (MM) 3.0 4.0 7,000 Production…
  25. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 25
    Organic Production Growth Waterfloods Maintain Low Decline While Growing 30% Average current peer decline rate 28% 28% Higher growth scenario not expected to materially increase decline rate 26% 5YP US60/C3.25 24% 5YP…
  26. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 26
    Solid Balance Sheet Major 2016 Restructuring Now Complete Long Term Debt Reduction since YE 2015 (MM) 1,940 (1,392) (79) 469 (70) (15) 384 YE 2015 Dispositions FX & Other YE 2016 A&D Closed FCF & Other Q1 2017 Discounted…
  27. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 27
    Leading Cost Structure and Cash Generation Strong Hedge Position Corporate forecasting and hedging program extends six quarters Allows for planning and line of sight past each Spring breakup cycle Increases confidence for…
  28. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 28
    Leading Cost Structure and Cash Generation Improved Margins with a Focused Portfolio 19-21 5.38 17.88 15.92 6.39 Cash Margins (C/boe) 29% opex Strong Q1 2017 Cash Margins (/boe) savings in Key Development Areas vs…
  29. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 29
    Leading Cost Structure and Cash Generation Margins Are An Excellent Engine for Cash Implied FX Rate Oil & Gas Hedging OPEX Royalties Transportation Netback Incl. Hedging (CAD/USD) 1.325 All numbers are C/boe 24.25 23.00 13.50…
  30. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 30
    Penn West Management David French Andrew Sweerts President and VP, Production & Chief Executive Officer Technical Services David Hendry Mark Hodgson Chief Financial Officer VP, Business Development & Commercial Tony…
  31. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 31
    Appendix: Five Year Plan
  32. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 32
    The Tenets of our Five Year Plan Competitive growth profile through the drill-bit Organic Production Cardium is the foundation with modest growth and high FCF Growth Shorter-cycle projects to toggle growth as needed Self Funded…
  33. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 33
    Power of the Portfolio Drives Balanced Growth Gas Price 2017-2021 US50/C2.75 US55/C3.00 US60/C3.25 FFO CAGR (%) 3% 12% 17% Oil Price Production CAGR (%) 3% 9% 13% Re-Investment Rate (%) 100% 100% 100% PWT Normalized Free Cash…
  34. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 34
    Cardium Optionality In All Environments Gas Price Free Cash Flow to fund shorter-cycle projects in Peace River, Viking, and New Ventures Integrated waterflood to allow for modest growth and reduction Oil Price of declines Results in…
  35. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 35
    Manufacture Cold Flow in Peace River Gas Price Attractive economics remain after JV carry finishes in 2017 Oil Price 5 year plan of 12% production growth CAGR with 80% sustainability ratio Asset Level Free Cash Flow (MM)…
  36. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 36
    Leverage Viking Infrastructure Gas Price Modest Viking development in current 5 year plan as more capital is allocated to New Ventures Oil Price Short-cycle nature allows for higher or lower pace of development pending New Ventures…
  37. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 37
    Pursue New Ventures Gas Price 40 locations in near-term inventory for 5 year plan Oil Price To pursue oil-weighted Jurassic plays in 2018 Ability to toggle capital up or down depending on well results Asset Level Free Cash…
  38. June 2017 Corporate Presentation – Penn West Petroleum Ltd. – slide 38
    Appendix

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