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August 2017 Corporate Presentation – Obsidian Energy Ltd.

Obsidian Energy Ltd. · Aug 8, 2017 · 36 slides

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Slides

  1. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 1
    Corporate Presentation August 2017
  2. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 2
    Obsidian Corporate Profile TSX/NYSE: OBE 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 Jul '17 Obsidian (OBE) Energy Index (XEG) Corporate…
  3. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 3
    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…
  4. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 4
    Why Invest in Obsidian Balanced Organic portfolio production growth Liquids-weighted assets with a Self-funded double-digit percent mix of short-cycle and mid-cycle production growth with a low-decline opportunities…
  5. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 5
    Balanced Portfolio Index Map Liquids-Focused Growth Company 2017 plan for self-funded double-digit percent production growth Manufacture cold flow Peace 90 kms 2017 hedged 50% of oil at US52 WTI 56 miles in Peace River…
  6. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 6
    Balanced Portfolio 2017 Corporate Themes Activity details Budget (MM) Injectors Producers Build Cardium 33 26 7 80 Waterflood platform Strat Producers 26 5 21 Manufacture cold flow 5 in Peace River Leverage…
  7. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 7
    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…
  8. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 8
    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…
  9. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 9
    Organic Production Growth Focus on 2017 & 2018 Sustainability 2017 2018 Double digit percent growth Maintain production Near term price consideration Reduce cash outlays i.e. US45 / C2.50 Minimal Non-Productive Spend i.e.…
  10. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 10
    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…
  11. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 11
    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…
  12. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 12
    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…
  13. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 13
    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…
  14. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 14
    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…
  15. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 15
    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…
  16. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 16
    Organic Production Growth Signpost Demonstration in Crimson Lake (2 Hz injectors + 2 Hz producers) 10,000 100,000 Crimson Section 01-042-08W5 Waterflood project 1.4 2 Hall Plot Oil Prod rate, bbl/d 1.2 Water Inj rate, bbl/d…
  17. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 17
    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%…
  18. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 18
    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…
  19. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 19
    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…
  20. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 20
    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 21
  21. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 21
    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…
  22. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 22
    Organic Production Growth Pursue New Ventures F OR M A T ION BELLY RIVER R8W5 R5 OBE land Drilling 3 operated wells in Willesden Green COLORADO SHALE OBE operated Cardium unit in H2/17 Cardium trend CARDIUM OBE 2017 upper…
  23. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 23
    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…
  24. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 24
    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…
  25. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 25
    Solid Balance Sheet Major 2016 Restructuring Now Complete Long Term Debt Reduction since YE 2015 (MM) 1,940 (1,392) (79) 469 (70) (7) 392 YE 2015 Dispositions FX & Other YE 2016 A&D Closed FCF & Other Q2 2017 Discounted…
  26. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 26
    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…
  27. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 27
    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 H1 2017 Cash Margins (/boe) 2.97 in Key Development Areas…
  28. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 28
    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…
  29. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 29
    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…
  30. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 30
    Appendix One Waterflood Examples ObsidianEnergy.com TSX/NYSE: OBE
  31. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 31
    Crimson Cardium Waterflood Update R9 R8W5 R7 OBE land 3 areas of waterflood Well performance Central Section 32,33,34- 042 08W5 T43 Section 15 15-042-08W5 Section 1 01-042-08W5 Central WF 2 successful WF patterns in…
  32. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 32
    Crimsom Central Waterflood Response 1 Hz Injector + 1 Hz Producer 1,000 10,000 Oil Prod rate, bbl/d Water Inj rate, bbl/d Gas Oil Ratio scf/bbl 3 GOR flattens Rate (bbl/day) GOR (scf/bbl) 100 1,000 4 Hz Producer…
  33. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 33
    Crimson Section 15 Waterflood Response 2 Hz Injectors + 3 Hz Producers 10,000 100,000 Oil Prod rate, bbl/d Converted 2 Hz to injection June 2014 Water Inj rate, bbl/d 2 Hz producers from 2012-2013 Gas Oil Ratio scf/bbl 1 Hz…
  34. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 34
    Crimson Section 1 Waterflood Response Signpost Demonstration in Crimson Lake (2 Hz injectors + 2 Hz producers) 10,000 100,000 Oil Prod rate, bbl/d Water Inj rate, bbl/d Gas Oil Ratio scf/bbl 1,000 10,000 3 Rate…
  35. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 35
    PCU9 Section 36 Injector Reactivations 6 Injector Reactions 1,000 10,000 1 injector reactivation GOR stabilizes and begins to fall Rate (bbl/day) GOR (scf/bbl) 100 1,000 5 additional vertical reactivations Oil Prod…
  36. August 2017 Corporate Presentation – Obsidian Energy Ltd. – slide 36
    Appendix 2 Supplementary information 37

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