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July 2017 Corporate Presentation – Obsidian Energy Ltd.

Obsidian Energy Ltd. · Jul 20, 2017 · 38 slides

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Slides

  1. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 1
    Corporate Presentation July 2017
  2. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 2
    Obsidian Corporate Profile 250 200 Value of 100 Investment 150 100 50 0 Jan '16 Mar '16 May '16 Jul '16 Sep '16 Nov '16 Jan '17 Mar '17 May '17 Obsidian (OBE) Energy Index (XEG) TSX/NYSE: OBE Share Price /share…
  3. July 2017 Corporate Presentation – Obsidian Energy 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. July 2017 Corporate Presentation – Obsidian Energy 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…
  5. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 5
    Why Invest in Obsidian Balanced Organic portfolio production growth Liquids-weighted assets with a Self-funded double digit production mix of short-cycle and mid-cycle growth with a low-decline advantage opportunities…
  6. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 6
    Balanced Portfolio Index Map Liquids-Focused Growth Company 2017 plan for self-funded double-digit production growth Manufacture cold flow Peace 90 kms 2017 hedged 50% of oil at US51 WTI 56 miles in Peace River River and…
  7. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 7
    Balanced Portfolio 2017 Corporate Themes Activity details Budget (MM) Injectors Producers Build Cardium 55 45 10 97 Waterflood platform Strat Producers 31 7 24 Manufacture cold flow 8 in Peace River Operated Non-Op…
  8. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 8
    Balanced Portfolio Low Decline Cash Flow Advantage Illustrative 35 Quarterly Net Operating Income(NOI) per 100 Invested () Year 5 NOI vs Year 1 NOI (%) Viking and Mannville wells 70% 30 generate 75% of total NOI in 60% the first…
  9. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 9
    Balanced Portfolio Resilient Assets in Volatile Commodity Prices WTI (US/bbl) and AECO (C/Mcf) Required for 10% IRR (Break-even) 3.00 Illustrative Current Prices US45/C2.75 Break-evens lower than current prices Cardium Type I…
  10. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 10
    Organic Production Growth Focus on 2017 & 2018 Sustainability 2017 2018 Double digit growth Maintain production Near term price consideration Reduce cash outlays i.e. US45 / C2.50 Minimal Non-Productive Spend i.e. Self-fund…
  11. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 11
    Organic Production Growth The Cardium is our Foundation R10W5 R5 OBE land More acreage than the 2nd and OBE producing well Injector 3rd largest land holders POR 8%, PERM 0.2mD combined Best quality reservoir Industry HZ well…
  12. July 2017 Corporate Presentation – Obsidian Energy 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 NOI Capital Spend Free Cash Flow 300 Free Cash Flow US50/C2.75 FCF 70MM of FCF in 2017…
  13. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 13
    Organic Production Growth Tremendous Potential with Consistent Injection 120% In areas where waterfloods were maintained, recovery factors 100% 35% and high watercuts show success of waterfloods N PCU 1 Bea r Lake A Lease…
  14. July 2017 Corporate Presentation – Obsidian Energy 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 one horizontal producer horizontal producers to that is…
  15. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 15
    Organic Production Growth Pembina Integrated Development Details 500 160 Pembina Inventory ( patterns) 450 450 Response in 6-9 months with an initial 140 increase followed by much lower decline 400 Type I 80% Type II 5% 120 350…
  16. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 16
    Organic Production Growth Willesden Green Integrated Development Details 300 350 Willesden Green Inventory ( patterns) 250 250 300 Type I 85% Type II 10% 250 200 Type IV 5% Integrated Waterflood approach results in lower…
  17. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 17
    Organic Production Growth Signpost Demonstration in Crimson Lake 2 Hall Plot 1.4 10,000 100,000 Crimson Section 01-042-08W5 Waterflood project 1.2 Oil (bbl/day) Cum Pressure Differential Injected Water (bbl/day) 1 GOR…
  18. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 18
    Organic Production Growth Manufacturing Cold Flow in Peace River R20W5 R15 Large contiguous position in a crude oil resource highly amenable to conventional cold-flow production Obsidian 55% ownership Nampa JV partner funds 90%…
  19. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 19
    Organic Production Growth Peace River Economics, excluding benefit of JV carry 250 Peace River economics Inputs Drill + complete Total DCET Cost (MM) 1.6 2.8 200 Production Liquids (bbl) BOE (boe) EUR 310,000 400,000 IP (30…
  20. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 20
    Organic Production Growth Leverage Infrastructure with Viking Prospects R10 R5 R1W4 Large contiguous land position criss- crossed and de-risked by peer activity Misty GP Compeer GP Light-oil, high netback shorter cycle wells…
  21. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 21
    Organic Production Growth Top Drilling Results from 2016 Viking Campaign OBE 2016 Drilling Program Peer 1 Peer 2 60% performance increase from OBE legacy Viking wells ObsidianEnergy.com TSX/NYSE: OBE 22
  22. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 22
    Organic Production Growth High Rate Alberta Viking Economics 200 Alberta Viking economics 180 Inputs Drill + complete Total DCET Cost (MM) 1.1 1.5 160 Production Liquids (bbl) BOE (boe) EUR 38,000 75,000 IP (30 day) 110 175…
  23. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 23
    Organic Production Growth Pursue New Ventures F OR M A T ION BELLY RIVER R8W5 R5 OBE land On track to drill 3 operated wells in COLORADO SHALE OBE operated Cardium unit Willesden Green in Q3/17 Cardium trend CARDIUM OBE…
  24. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 24
    Organic Production Growth Mannville Fahler B Type Curve and Offsetting Wells Type Curve (Mcf/d) 16-25-43-8 offset 16-36-44-7 offset 4-13-45-7 offset 8,000 Inputs Drill + complete Total DCET Cost (MM) 3.0 4.0 7,000 Production…
  25. July 2017 Corporate Presentation – Obsidian Energy 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 9% self-funded…
  26. July 2017 Corporate Presentation – Obsidian Energy 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. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 27
    Leading Costs 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 Oil volumes hedged (bbl/d) Gas volumes…
  28. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 28
    Leading Costs and Cash Generation Improved Margins with a Focused Portfolio 19-21 5.38 17.88 15.92 6.39 29% opex savings vs 2015 Cash Margins (C/boe) Strong Q1 2017 Cash Margins (/boe) 2.97 in Key Development Areas…
  29. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 29
    Leading Costs and Cash Generation Margins Are An Excellent Engine for Cash Oil & Gas Hedging OPEX Royalties Transportation Netback Incl. Hedging Implied FX Rate (CAD/USD) 1.325 All numbers are C/boe 24.25 23.00 13.50 21.25…
  30. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 30
    Obsidian 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. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 31
    Appendix One Five Year Plan ObsidianEnergy.com TSX/NYSE: OBE
  32. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 32
    Tenets of our Five Year Plan Organic Competitive growth profile through the drill-bit production Cardium is the foundation with modest growth and high FCF growth Shorter-cycle projects to toggle growth as needed Self funded…
  33. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 33
    Power of the Portfolio = 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% OBE normalized free cash…
  34. July 2017 Corporate Presentation – Obsidian Energy 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 of declines Oil price Results…
  35. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 35
    Manufacture Cold Flow in Peace River Gas price Attractive economics remain after JV carry finishes in 2017 5 year plan of 12% production growth CAGR with 80% sustainability ratio Oil price Asset level free cash flow (MM)…
  36. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 36
    Leverage Viking Infrastructure Gas price Modest Viking development in current 5 year plan as more capital is allocated to New Ventures Short-cycle nature allows for higher or lower pace of development Oil price pending New…
  37. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 37
    Pursue New Ventures Gas price 40 locations in near-term inventory for 5 year plan To pursue oil-weighted Jurassic plays in 2018 Oil price Ability to toggle capital up or down depending on well results Asset level free cash…
  38. July 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 38
    Appendix 2 Supplementary information 39

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