INTRODUCTION Started Sept 2010, fourth Storm since Nov 1998 history of discipline with capex & focus on per share growth Market cap 480 MM (4/share), TSX-V symbol SRX 121 MM shares + 8 MM options officer + director ownership 14% (16%…
PRODUCTION H2/17 forecast 19,000 to 21,000 boe/d April May/17 18,300 boe/d Q2/17 est 14,000 boe/d, impacted by McMahon GP turnaround June 5 to July 10 (longer vs forecast June 5 - 26) prodn per share +248% last 4 years 3
CASH COSTS PER BOE Q1/17 prodn cost 5.84/boe declined 14% from 2016 (prodn growth & new processing arrangement at Umbach) transportation excluded from controllable cash costs as sales price for volumes shipped on the Alliance…
COST OF RESERVE ADDITIONS all-in reflects total capital investment PDP FD&A reflects actual capital and 2016 PDP FD&A well results 6.89/boe with 35% of capex for 1P & 2P FD&A infrastructure is based on expansion estimates of…
MAJOR AREAS large shale gas resource in HRB, Umbach Montney needs higher nat gas price 109,000 net acres 16,600 Boe/d* growth from Montney development at Umbach (liquids rich nat gas) Horn River Basin 78,000 net acres 300 Boe/d*…
UMBACH AREA (NE British Columbia) 1% H2S requires sour gas plant Montney liquids rich gas (McMahon or Stoddart GPs) 155 net sections 109,000 net acres access 3 sales pipelines from McMahon GP raw gas 1,200 1,300 btu/scf (to Chicago,…
UMBACH LAND POSITION Montney productive across area Storms lands still at an early stage 2P on 21% of lands prod hzs on 7% of lands 155 net sections 55.4 net hzs drilled planning 4 hzs/section 400 m interwell spacing 9
UMBACH ACTIVITY total field compression 115 mmcf/d raw (Q1/17 88 mmcf/d raw) increase to 150 mmcf/d raw for 7 MM (supports growth to 27,000 boe/d) inventory of 10 drilled hzs end Q1 with 2 completed hzs 2016 hzs 2017…
UMBACH HZ COSTS accounting system costs incl pad, roads 2017 drill & compl -19% per frac vs 2016 costs declining with lower service costs and operational changes (mud system, multi- well pads, water logistics) DRILLING hzs fracs…
UMBACH HZ PERFORMANCE 12
UMBACH TYPE CURVE 13
UMBACH HZ FIELD CONDENSATE RATES 14
UMBACH HZ ECONOMICS BC Stn 2 using 7.0 Bcf 2.10/GJ type curve based on 2016 hzs flat prices incl G&A + interest (1.78/boe 2016), full-cycle ROR = 19% 15
UMBACH ADDITIONAL INFORMATION Processing deal at McMahon GP reduced op cost eff Jan/17 Q1/17 corporate op cost 5.84/boe, -14% vs 2016 avg committed 70% current prodn (55 mmcf/d raw for 15 years & 10 mmcf/d raw for 5 years) with ROFR…
PROCESSING & TRANSPORTATION To preserve operational & budget flexibility, target 80% of prodn covered by firm processing & transport Firm processing 75 mmcf/d raw in 2017 (68 mmcf/d sales) average 60 mmcf/d raw McMahon, 15 mmcf/d raw…
HEDGING (July 6/17) Hedging to support growth growth is not hedged target: 50% of current prodn hedged 1 to 12 months forward 25% of current prodn hedged 13 to 24 months forward Fixed price hedges 43% forecast 2017 prodn Q2Q4/17: 29.9…
GUIDANCE uses 6.3 Bcf type curve for hz drills at Umbach Umbach hz D&C 4.3 MM (+13% vs 2016) can reduce capex to 57 MM and maintain 16,500 boe/d Dec/15 - Dec/16 McMahon GP turnaround declinethan longer 33%forecast (35 days vs…
WESTERN CANADIAN NAT GAS PRICES AECO weakening vs US markets as Eastern Canada demand declining & export pipelines to US are currently full (need more pipeline takeaway) Rover pipeline Q1/18 may displace some WCSB exports to Ontario…
AECO - BC STATION 2 PRICE DIFFERENTIAL majority of BC prodn growth goes onto TCPL to AECO (does not impact Stn 2) upcoming TCPL expansions: Towerbirch +0.9 Bcf/d Apr/18 N Montney +1.5 Bcf/d Apr/19 [reduces AECO Stn 2 diff] AECO Stn 2…
US NATURAL GAS SUPPLY/DEMAND Bullish nat gas price with US demand supply since Jan/15, US supply (prodn + net imports) declined 5.2 Bcf/d exports increasing with 9 Bcf/d LNG facilities operating or under construction and new pipelines…
SUMMARY Results improving (Q1/17 funds flow +125%/share YOY) Montney at Umbach is liquids rich, higher quality resource liquids +5/boe Q1/17 revenue, 2016 PDP FD&A 6.89/boe Prodn growth strong relative to capital investment 2016 +3,200…
STORM RESOURCES LTD. CONTACT INFO For further information please contact: Brian Lavergne, President and Chief Executive Officer Michael Hearn, Chief Financial Officer Carol Knudsen, Manager Corporate Affairs Address: 200, 640 5th…
APPENDIX
NAT GAS PRICING USING 2018 FWD STRIP 2018 FWD STRIP (July 6/17) Sell in Chicago (Alliance pipeline) NYMEX US2.92/mmbtu NYMEX US2.92/mmbtu NYMEX - Chicago diff - US0.16/mmbtu NYMEX - Chicago diff -US0.16/mmbtu Chicago price Cdn3.38/GJ FX…
HORN RIVER BASIN HRB (NE BC) Shale gas from Muskwa, Otter Park, Evie shales 78,000 net acres, 100% WI 119 net sections Drilled 2 hzs & 2 verticals to validate commerciality 1 producing hz, 1 standing hz
STORM RESULTS VS MARCELLUS/UTICA 9 public Marcellus/Utica producers AR, COG, ECR, EQT, GPOR, REXX, RICE, RRC, SWN Q1/17 12.9 Bcfe/d (+15% YOY) debt 21 B (2.6 X annual CF) 2016: capex 178% of funds flow, issued 7 B equity, prodn…
MARCELLUS/UTICA PRODUCERS CAPEX VS FUNDS FLOW with capex funds flow, Marcellus/Utica growth needs higher nat gas price or outside capital (equity, hedging)
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