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July 2017 Corporate Presentation – Kelt Exploration Ltd.

Kelt Exploration Ltd. · Jul 13, 2017 · 52 slides

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Slides

  1. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 1
    Corporate Presentation JULY 2017 David J. Wilson, President & Chief Executive Officer Sadiq H. Lalani, Vice President & Chief Financial Officer www.KeltExploration.com
  2. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 2
    Why Invest in Kelt 1 CREATING VALUE DURING DOWNTURNS The Kelt management team has a track record of creating shareholder value during downturns, previously during the 2008- 2009 period with Celtic Exploration Ltd., sold in February…
  3. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 3
    Common Share Information 2 Stock Exchange listing TSX Trading symbol KEL Market capitalization 1.1 billion 52-week trading range 4.22 7.70 Common shares issued ( Jun/30/2017 ) 176.0 million Stock options ( 8.3 MM ) & RSUs ( 0.8…
  4. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 4
    Convertible Debentures 3 TSX trading symbol KEL.DB Principal amount outstanding 90.0 million Coupon / Maturity date 5.0% / May 31, 2021 52-week trading range 112.00 155.35 D&Os purchased 15.0 million (17%) of the total Debenture…
  5. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 5
    Capital Expenditures 4 2017 2017/16 ( millions ) 2015 2016 Forecast Change Drilling & Completions 100.9 47.4 129.0 + 172% Facilities, Equipment & 56.0 28.5 35.0 + 23% Pipeline Infrastructure Land, Seismic & Asset 26.1 28.3 9.0…
  6. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 6
    2017 Drilling Program 5 Gross Net Average 2017 Drills Wells Wells WI % Notes: [1] Alberta drilling prospects include : Alberta [1] 11 9.1 83% Grande Prairie (Pouce Coupe/Progress/LaGlace/Pipestone) - Montney British Columbia [2]…
  7. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 7
    Production Outlook 6 2017 2017/16 2015 2016 Forecast Change Oil ( bbls/d ) 5,091 5,070 7,400 46% Ngls ( bbls/d ) 1,607 2,709 2,550 - 6% Gas ( mcf/d ) 71,272 79,009 81,300 3% Combined ( BOE/d ) 18,577 20,947 23,500 12% Per MM…
  8. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 8
    Annual Production Growth ( since inception ) 7 PRODUCTION ( BOE / d ) : Year-over-year Exit growth rate 30,000 CAGR since + 28% 2013 = 56% 26,000 25,000 23,500 20,947 20,370 20,000 18,577 14,700 13,550 15,000 13,168 12,756…
  9. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 9
    Annual Production per Share Growth ( since inception ) 8 PRODUCTION PER MILLION SHARES ( BOE / d ) : 200 Year-over-year Exit growth rate CAGR since + 28% 2013 = 26% 148 150 134 120 121 116 105 84 100 77 77 76 73 69…
  10. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 10
    Commodity Prices 9 2017/16 ( CA , unless otherwise specified ) 2015 2016 2017 (E) Change WTI Crude Oil ( USD/bbl ) US 48.80 US 43.32 US 51.00 + 18% CLS Crude Oil ( CAD/bbl ) 57.45 52.79 64.17 + 22% NYMEX Natural Gas ( USD/MMBtu )…
  11. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 11
    Netbacks 10 2017/16 ( / BOE ) 2015 2016 2017 (E) Change Revenue 26.45 24.08 32.77 + 36% Realized hedging gain ( loss ) ( 0.12 ) 0.02 ( 0.01 ) - Royalties ( % of revenue ) ( 10.6% ) ( 8.6% ) ( 12.0% ) + 40% Transportation expense (…
  12. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 12
    Financial Outlook 11 2017 2017/16 2015 2016 Forecast Change Revenue ( MM ) 179.3 184.6 281.1 + 52% Adj. funds from operations ( MM ) [1] 56.5 58.4 130.0 + 123% Per share diluted ( /share ) 0.36 0.34 0.73 + 115% Capital expenditures,…
  13. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 13
    2017 Commodity Price Sensitivities 12 Adjusted FFO per Net NBD/ WTI AECO Funds from Share Bank FFO Crude Oil Nat Gas Operations Diluted Debt Ratio (USD/bbl) (CAD/GJ) (MM) () (MM) (times) 2017 Forecast 51.00 2.70 130.0 0.73 78.0…
  14. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 14
    2017 Product Mix 13 2017 (E) 2017 (E) Product Income Production Operating Split Split BOE/d Income (MM) Oil 7,400 31% 98.1 68% Ngls [1] 2,550 11% 12.0 8% Gas 81,300 58% 34.9 24% Combined 23,500 100% 145.0 100% G&A and interest…
  15. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 15
    Reserves 14 DEC/31 DEC/31 NPV 10% BT 2015 2016 Percent DEC/31/2016 ( MMBOE ) ( MMBOE ) Change ( MM ) Proved Developed 33.8 34.5 + 2% 422.8 Producing Total Proved 83.8 108.2 + 29% 940.2 Proved plus Probable 150.5 194.1 + 29%…
  16. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 16
    Finding, Development & Acquisition Costs 15 Proved As at December 31, 2016 Developed Proved Proved + Producing Probable 2016 capital expenditures + change 98,268 155,509 177,684 in FDC expenditures ( M ) Reserve additions, net (…
  17. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 17
    Core Areas 16 Fort St. John ( BC ) : Montney condensate-rich gas Doig condensate-rich gas Baldonnel light oil Fort St. John Grande Prairie ( AB ) : Grande Prairie Montney light oil Grande Cache Montney gas Doig gas Charlie…
  18. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 18
    Kelt Land Fairway 17 Fireweed Corporate Land Holdings Inga Flatrock Mar/31 Net Net 2017 Acres Sections Stoddart Oak Developed 210,638 329 Fort St. John Undeveloped 636,637 995 Progress Total 847,275 1,324 Pouce Coupe…
  19. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 19
    British Columbia Montney Lands 18 LAND (Montney Rights) Gross: 269,398 acres ( 421 sections ) Net: 264,941 acres ( 414 sections ) Fireweed OPERATIONS Kelt has successfully delineated the Upper Montney at Inga/Fireweed and…
  20. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 20
    British Columbia Montney Wells 19 PRODUCTION RESERVES Kelt Montney Drills: slick-water completions Typical well EURs: Top IP30 Wells ( gross sales, BOE/d ): Inga/Fireweed Upper/Middle Montney: (1) Fireweed c-31-I/94-A-12 UM [a] 2,068…
  21. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 21
    B.C. - Stacked Montney Resource Potential 20 MULTIPLE STACKED MONTNEY HORIZONS Kelt has successfully delineated the Upper Montney at Inga/Fireweed and currently estimates an un-risked drilling inventory of 660 locations Initial…
  22. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 22
    Inga / Fireweed Montney Lands 21 LAND MONTNEY RIGHTS 188 gross sections ( 186 net sections ) c-26-A (sfc a-6-A) OPERATIONS MONTNEY Delineation drilling to date has been c-85-I (sfc a-65-I) focused in the Upper Montney and…
  23. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 23
    Inga / Fireweed Montney Type Curve 22 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 725 MBOE 100 47% Oil/Ngls 53% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17 19 21…
  24. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 24
    Inga / Fireweed Montney Type Curve 23 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 725 MBOE 100 47% Oil/Ngls 53% Gas 10 10 5 0 1 3 5 7 9 11…
  25. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 25
    Inga / Fireweed Montney Gas Well Economics 24 [ Economics are for a well East of the B.C. royalty line ] Sproule Futures Strip Dec/31/2016 Feb/16/2017 Capital expenditures drill, complete & tie-in ( MM ) 6.1 6.1 1,030 1,030…
  26. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 26
    Inga / Fireweed Baldonnel Lands 25 LAND Birch Baldonnel Rights: Gross: 169 sections Baldonnel C Oil Pool (CTD 5.0 MM barrels of oil) Net: 158 sections OPERATIONS Fireweed Oil exploration activity with plans to drill and…
  27. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 27
    Alberta Montney Lands 26 LAND Montney Rights: Gross: 177,380 acres ( 277 sections ) Net: 152,445 acres ( 238 sections ) Pouce Coupe OPERATIONS Kelt has successfully delineated the lower- Progress middle and the Upper-Middle…
  28. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 28
    Alberta Montney Wells 27 PRODUCTION RESERVES Kelt Alberta Montney Drills Typical well EURs: Top 10 Wells IP30 (gross sales, BOE/d): (1) Pouce Coupe/Progress Montney Oil: (1) Pouce Coupe 03/07-18-078-11W6 LMM 2,045 ( 66% oil/ngls )…
  29. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 29
    Pouce Coupe / Progress 28 14-14 MM 875 BOE/d IP30 (KEL 50%) 15-13 MM 920 BOE/d IP30 Pouce (KEL 50%) Coupe Progress UMM Pad: Progress 02/06-18 Gas Plant 04/07-18 14-8 (20% WI) LMM Pad: 02/08-18 LMM 03/07-18 13-8 05/07-18…
  30. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 30
    Pouce Coupe / Progress Montney Oil Type Curve 29 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 550 MBOE 58% Oil/Ngls 42% Gas 10 15 10 5 0 1 3 5 7 9…
  31. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 31
    Pouce Coupe / Progress Montney Oil Type Curve 30 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 550 MBOE 58% Oil/Ngls 42% Gas 10 15 10 5…
  32. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 32
    Pouce Coupe / Progress Montney Oil Well Economics 31 Sproule Futures Strip Dec/31/2016 Feb/16/2017 Capital expenditures drill, complete & tie-in ( MM ) 5.3 5.3 990 990 Production IP30 sales ( BOE / d ) ( 58% oil/ngls ) ( 58% oil/ngls…
  33. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 33
    Valhalla / La Glace and Pipestone / Wembley 32 Targeting the Montney formation. Kelt Ownership in pipeline La Glace Facility Encana infrastructure, oil battery, gas (100% WI) Sexsmith Gas Plant compression and minor interests…
  34. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 34
    La Glace Montney Oil Type Curve 33 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 575 MBOE 100 71% Oil/Ngls 29% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17 19 21…
  35. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 35
    La Glace Montney Oil Type Curve 34 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 575 MBOE 100 71% Oil/Ngls 29% Gas 10 10 5 0 1 3 5 7 9 11 13…
  36. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 36
    Valhalla / La Glace Montney Oil Well Economics 35 Sproule Futures Strip Dec/31/2016 Feb/16/2017 Capital expenditures drill, complete & tie-in ( MM ) 4.6 4.6 1,090 1,090 Production IP30 sales ( BOE / d ) ( 78% oil/ngls ) ( 78%…
  37. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 37
    Net Asset Value 36 Dec/31 Dec/31 % ( millions ) 2015 2016 change P&NG reserves, NPV10% BT 1,185.2 1,730.7 + 46% Decommissioning obligations, NPV10% BT [1] ( 13.0 ) ( 9.5 ) - 27% Undeveloped land 168.7 212.5 + 26% Net bank debt ( 211.5 )…
  38. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 38
    Future Considerations 37 KELT: the Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. the Company has amassed vast Montney acreage in new…
  39. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 39
    Management 38 David J. Wilson, President & CEO Sadiq H. Lalani, Vice President & CFO Douglas J. Errico, Vice President, Land Patrick Miles, Vice President, Exploration Douglas O. MacArthur, Vice President, Operations Alan G. Franks,…
  40. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 40
    Board of Directors 39 Robert J. Dales Compensation (Chair), Nominating, Audit, Reserves William C. Guinan Chairman of the Board, HSE Eldon A. McIntyre Reserves (Chair), Nominating, Audit, Compensation Neil G. Sinclair Audit (Chair),…
  41. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 41
    APPENDIX 40 INSIDER COMMITTMENT QUARTERLY PRODUCTION GROWTH QUARTERLY CASH COSTS MONTHLY FORECAST OF 2017 WTI & AECO PRICES MAP OF NORTH AMERICAN NATURAL GAS HUBS GAS MARKETING & TRANSPORTATION CONTRACTS HEDGING SPROULE P+P…
  42. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 42
    INSIDER COMMITTMENT 41 Kelt Insiders ( Directors & Officers ) have actively participated in the Companys financings since inception as shown below: Insider Purchases Offering Shares (MM) Amount (MM) Price/share 13.9 MM Equity Private…
  43. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 43
    Quarterly Production Growth ( since inception ) 42 PRODUCTION ( BOE / d ) 32,000 Oil Ngls 28,000 Gas 24,000 20,000 16,000 12,000 8,000 4,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 [E] [E] [E] 2013…
  44. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 44
    Quarterly Cash Costs 43 CONTROLLING COSTS ( / BOE ) 22.00 G&A 20.00 Interest Production and 18.00 Transportation 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 [E] [E]…
  45. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 45
    Kelts 2017 Forecast - WTI & AECO Prices 44 WTI US/bbl AECO CA/GJ 60.00 5.00 53.46 54.00 52.61 53.00 52.00 51.00 50.00 49.68 49.25 49.50 50.00 4.00 48.70 49.00 3.08 40.00 2.96 3.00 2.91 2.76 2.74 2.80 2.63 2.61 2.56…
  46. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 46
    North American Natural Gas Hubs 45 Station 2 AECO Sumas Empress Emerson Kingsgate Waddington Stanfield Boston Dawn Opal TGP Marcellus Malin Ventura Chicago Socal San Juan Permian Henry Hub Natural Gas Price Hub
  47. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 47
    B.C. Gas Marketing / Transportation Contracts 46 Volume Upstream Volume Supply Term Market Term Market Price (MMBtu/d) Hub (MMBtu/d) Nov/1/2016 Nov/1/2016 SUMAS USD Monthly Index 4,700 Station 2 4,700 Oct/31/2020 Oct/31/2020…
  48. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 48
    Alberta Gas Marketing / Transportation Contracts 47 Volume Upstream Volume Supply Term Market Term Market Price (MMBtu/d) Hub (MMBtu/d) Apr/1/2017 Alliance Apr/1/2017 CHICAGO City-Gate USD 4,300 4,300 Oct/31/2017 [2] Receipt…
  49. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 49
    Hedging 48 ( CA unless otherwise specified ) Period Quantity Fixed Price Jan/1/17 to US 1 MM USD Currency Swap [1] CAD 1.330 Dec/31/17 / month Feb/1/17 to 500 OPIS Conway Propane 50% WTI USD Dec/31/17 bbls / day SOCAL NYMEX Henry…
  50. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 50
    Sproule P+P Reserves 3 Year Cash Flow Forecast 49 PRODUCTION ( BOE / d ) ( MM ) 2017 2018 2019 60,000 Production ( BOE / d ) 22,600 32,200 42,000 + 30% 50,000 Oil/Ngls / Gas 41% / 59% 44% / 56% 40% / 60% 42,000 Annual Growth 8%…
  51. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 51
    Sproule P+P Reserves FDC 50 FDC Net HZ FDC / well December 31, 2016 ( MM ) Wells ( MM ) Alberta Montney wells 163.5 31.8 5.1 B.C. Montney wells 312.5 51.0 6.1 TOTAL Montney wells 476.0 82.8 5.7 Other formation wells 339.4 74.7…
  52. July 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 52
    Corporate Presentation JULY 2017 Suite 300, 311 6th Avenue SW Calgary, Alberta, Canada T2P 3H2 www.KeltExploration.com

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