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May 2017 Investor Presentation – Northern Blizzard Resources Inc

Northern Blizzard Resources Inc · May 31, 2017 · 32 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. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 1
    May 2017 Free Cash Flow Generation
  2. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 2
    Corporate Profile Common Shares TSX Ticker Symbol NBZ Outstanding Shares(1) 101 million Market Capitalization(2) 339 million Net Debt(3) AB SK Cash on Balance Sheet 21 million Credit Facility 285 million (0% drawn) Senior Unsecured…
  3. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 3
    Sustainable Yield Investment Free cash flow(1,2) generation Low corporate decline Low sustaining capital Sustainable dividend Low total payout ratio(2) Within funds from operations(2) to US40/bbl WTI Enhanced Oil Recovery (EOR)…
  4. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 4
    Low Base Decline Rate = Low Sustaining Capital Corporate Base Decline Rates(1) 40% 41% 40% 39% 39% NBZs low 12% decline rate means sustaining 36% 37% 37% 36% 35% capital required to replace production declines 33% 34% 34% 34% 32%…
  5. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 5
    Industry Leading Free Cash Flow Generation 17% Free Cash Flow Yield (2017E)(1,2) Forward Strip(3) 16% 13% 12% Annual FCF/share FCF yield = 9% 8% 8% 8% share price 8% 8% 7% 7% 6% 6% 6% 6% 5% 5% 5% 5% 5% 4% 4% 4% 4% 4% 3% 3% 4%…
  6. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 6
    Dividend Protected by Low Total Payout Ratio 8% 7.1% Dividend Yield (1) 6.6% 6.3% 6% 5.4% 5.4% 4.9% Energy Non-Energy Bonds 4.1% 4.1% 4.0% 4.0% 3.9% 3.7% 3.5% 3.4% 3.4% 4% 2.9% 2.7% 2.3% 1.9% 1.5% 1.4% 1.2% 2% 0%…
  7. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 7
    Balance Sheet Protected by Excess Cash Flow Bank Credit Facility(1) FFO(3) 2017 Sensitivity(4) 140 21 million cash on balance sheet 140 132 121 285 million credit facility (0% drawn) 120 110 111 Compliant with all covenants:…
  8. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 8
    Concentrated EOR Asset Base Large, low decline oil resource AB SK 1.9 billion bbl DOIIP(1) only 12% recovered Best-in-class decline rate of 10-12% 70% production under waterflood or polymer flood 80% of production Low viscosity…
  9. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 9
    Cactus Lake EOR Cash Flow Engine Highlights Est. 2017 production 9,000 boe/d DOIIP(1) 402 mmbbl 2P Reserves(1) 63 million boe Recovered to date(1) 13% Est. ultimate recovery(2) 36% Wells drilled since 2010(3) 427 Drilling…
  10. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 10
    Cactus Lake Decline Reversal Production by Vintage Pre 2011 2011 2012 2013 2014 2015 2016 9,000 Successful EOR at 8,000 Cactus Lake has Base Declines by Production Vintage caused declines in old 2011 2012 2013 2014 2015 2016…
  11. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 11
    Cactus Lake Consistent Performance Production Growing While Operating Costs Fall Production (boe/d) Operating Costs (/boe) DOIIP & Reserves Increasing(1) 10,000 20 500 100 9,000 18 DOIIP 2P Reserves 8,000 16 Operating Costs…
  12. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 12
    Cactus Lake Repeatable, Low Risk Infill Drilling 40 Acre Waterflood 10 Acre Waterflood 1:1 Prod/Inj Ratio 3:1 Prod/Inj Ratio 1:1 Prod/Inj Ratio Wells Drilled versus Inventory (Gross) 350 300 331 low risk locations(1) 50%…
  13. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 13
    Cactus Lake Increasing Recovery Rates Cactus Lake EOR Recovery Forecast 10,000 10 Acre Oil Rate (Bbl/d) Polymerflood 1,000 40 Acre 40 Acre 10 Acre Primary Waterflood Waterflood 100 9% RF 18% RF 28% RF 36% RF Adding polymer…
  14. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 14
    Cactus Lake Robust Economics Polymer 10-Acre Infill - Results vs. Type Curve 40 2017 Operating Netback 90 Type Curve (gross) 2014-2017 (142 wells) 2011-2013 (244 wells) 35 80 70 WCS Diff (/bbl) 30 Production (Bbl/d) 60 25…
  15. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 15
    Cactus Lake Strong Free Cash Flow at US50/bbl WTI Free Cash Flow(1) Profile (Flat US50WTI / Flat Production Scenario(2)) Cumulative FCF (less capex) Annual FCF (less capex) WTI 110.00 500 Strong cumulative FCF with flat 450 394MM…
  16. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 16
    Winter Low Risk Conventional Drilling Highlights Est. 2017 production 2,700 boe/d DOIIP(1) (gross) 599 million bbl 2P Reserves(1) 19 million boe Recovered to date(1) 8% Est. ultimate recovery(2) 12% Hz wells drilled since 2010(3)…
  17. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 17
    Winter Repeatable Horizontal Infill Drilling Consistent performance Wells Drilled versus Inventory 198(1) horizontal wells drilled on 25 meter spacing since 500 Unbooked Booked Actual 2010 400 Large, repeatable inventory 300…
  18. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 18
    Winter Strong Economics; Long Lateral Upside Winter HZ Infill Wells - Type Curves 2017 Operating Netback 100 90 90 80 Long (750m) Horizontals 70 WCS Diff (/bbl) 80 Short (400m) Horizontals 60 Royalties (/boe) Production…
  19. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 19
    Plover Lake SAGD Large oil in place Huge upside potential Technology-driven recovery Significant advantages from existing Long life assets infrastructure AB SK T36 DOIIP(1) 143 mmbbl Plover Lake SAGD T35 R28 R27 R26…
  20. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 20
    Plover Lake SAGD Value to be Unlocked Plover Lake SAGD Total Rates 3,000 9,000 Under-injection of steam led to well bore 2,500 damage and suboptimal production Steam, Total Fluid, bbl/d 2,000 6,000 Oil Rate, bbl/d 1,500…
  21. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 21
    Compelling Relative Valuation EV/DACF (2017E)(1,2) Forward Strip(3) 25.9x 26.0x 24.0x 22.0x 20.0x 18.0x 16.0x 14.0x 11.5x 12.0x 10.5x10.8x 10.0x 9.2x 8.3x 8.4x 8.6x 7.7x 7.9x 8.0x 8.1x 8.0x 7.1x 7.1x 7.1x 7.4x 7.4x 7.5x…
  22. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 22
    Reasons for Discount What Were Doing About It Commodity price collapse & magnified Protected downside through hedging & 1. impact on heavy oil margins. strengthened margins through cost control. Previous PE partners replaced with…
  23. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 23
    Why to Own Northern Blizzard 1. 7.1% dividend yield protected by best-in-class 77% total payout. 2. Capex & dividend within cash flow to US40/bbl WTI. 3. Best-in-class 10-12% base decline rate. 4. Best-in-class 17% free cash flow…
  24. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 24
    Appendix Corporate Presentation May 2017 23
  25. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 25
    2017 Guidance & Sensitivities Current 2017 Forward Guidance(1) WTI Sensitivity Strip WTI Sensitivity WTI (US/bbl) 55.00 40.00 45.00 50.00 50.25 55.00 60.00 65.00 WCS Differential (US/bbl) (15.00) (13.47) (13.47) (13.47) (13.47)…
  26. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 26
    Corporate Decline Rate YOY Profile Base Declines by Production Vintage(1) Production by Vintage 2011 2012 2013 2014 2015 2016 2017 Pre 2011 2011 2012 2013 2014 2015 2016 On stream pre-2011 15% 14% 18% 20% 18% 5% 5% 20,000 On stream…
  27. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 27
    Corporate Capital Efficiency YOY Profile 2016 2017E 1,000 Well Costs - DCET (000) Capital Expenditures(1) (000) 800 Corporate 51,445 59,590 26% Savings Polymer powder capitalized (9,531) (11,562) 600 24% Capex, excl polymer…
  28. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 28
    Corporate Free Cash Flow YOY Profile Free Cash Flow(1) Profile (Flat US50WTI / Flat Production Scenario(2)) Cumulative FCF (less capex & excl. hedging) Annual FCF WTI price 100.00 97.96 400 95.12 Strong cumulative FCF with flat…
  29. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 29
    Free Cash Flow Yield vs. Peers SUSTAINABILITY ANALYSIS (1,2,3) - FORWARD STRIP COMMODITY PRICES(4) Production Declines Capital Efficiency Free Cash Flow (5) Analysis (MM) Free Cash Flow Yield Cost to Management of decline rates…
  30. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 30
    Hedging Summary Hedging program supports predictable cash flows 2017 10,000 bbl/d (58%) at US49.54/bbl WTI and 8,000 bbl/d (47%) at US13.52/bbl WCS differential 2018 6,000 bbl/d (35%) at US46.18/bbl WTI Hedging Profile 100%…
  31. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 31
    Shareholder Breakdown Public Float Common Shares (28%) Outstanding, Basic(1) 101.0 million shares Waterous Public Float 28.1 million shares / 28% Energy Fund Management & Directors(2) 5.2 million shares / 5% (67%) Mgmt (5%) Waterous…
  32. May 2017 Investor Presentation – Northern Blizzard Resources Inc – slide 32
    1900, 421 7 Avenue SW, Calgary, AB T2P 4K9 (403) 930-3000 www.northernblizzard.com Corporate Presentation May 2017 34

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