Teine Energy Growth oriented private company focused on acquiring and developing large, low cost, high quality oil assets Current asset suite 29,000 boe/d Viking light oil 22,000 boe/d Bakken low decline waterfloods 7,000 boe/d…
Saskatchewan Based Concentrated world class asset suite with years of self-funded growth Alberta Saskatchewan Bakken Heavy Oil Teine Land 7,000 boe/d 18 miles MONTNEY CARDIUM VIKING HEAVY BAKKEN VIEWFIELD BAKKEN…
2016: Transformational Year for Teine Positioned for sustainable growth and free cash flow generation moving forward Penn West asset acquisition solidified Teine as a sustainable Corporate growth oil company Objectives Increased…
Delivering Strong Per Share Growth Measure growth on a debt-adjusted-per-share basis and deliver consistent execution of growth strategy Avg. Production (boe/d) 2P Reserves (mmboe)(2) 30,000 150 30% debt- 15% debt- 27,219 adjusted…
Infrastructure and Egress Advantage Positioned for low cost growth, attractive F&D costs, and carbon capture legislation Teine seeks to own, control and operate strategic infrastructure to reduce down time, increasing Enbridge Main…
Corporate Capital Efficiency Reduced DCET costs, minimal future infrastructure spend, and strong well performance = consistent improvement in capital efficiency Corporate Capital Efficiency(1) (C / exit boe/d) 15,000 31,000 /…
Self Funding Growth & Positive Returns Despite Low Prices Full cycle positive returns and positive ROCE through oil price cycle trough 2016A Return per BOE (C/boe)(1) 47.82 19.30 5.84 10% return 17.76 Royalties G&A…
Teine Reserves: High Sustainability and Low Cost Focused on sustainability and efficiency metrics Focus on 2P reserve development that is achievable and funded by PDP FD&A is more representative of replacement cost (depletion) cash flow…
Sustainability Across the Cost Structure Take steps to sustainably control costs capture margin as WTI recovers Drilling Costs 30% of well cost Drilling days have decreased from 3 days to Drilling rig day rate remains 30% less than…
Key Cost Drivers Continuous improvement on controllable costs strive to generate more profit per barrel Operational Metrics(1) 2013A 2014A 2015A 2016A Heavy Oil Impact 3.96 G&A 2.61 3.32 71% 1.14 (2) 3.93 Light Oil…
Financial Discipline is Part of Our Strategy In a world of high oil price volatility, we are focused on protecting the balance sheet and maintaining flexibility RISK CAPITAL LIQUIDITY LEVERAGE MANAGEMENT EFFICIENCY 2017E growth…
Canadian Oil Market Pricing Ample egress and natural hedge from the Canadian dollar Pricing per barrel Commentary 120 C WTI Cdn Light Sweet (40 API) WCS Heavy (20.5 API) US WTI 3-year average Cdn Light Sweet 100 Differential of…
2017 Capital Program Focus remains on Viking light oil development, while testing attractive heavy oil and EOR opportunities 2017 Capital Allocation 300 Viking horizontal development wells with flexibility to increase or decrease…
15 Viking Light Oil
Viking Features Leading Single Well Economics Leading North American low cost oil play shallow depth, low water production, low gas ratio Oil Play Benchmarking Before Tax IRRs(1) 150% Viking Play Teines Average inventory Permian…
Teines Dominant Viking Position Dominant land position 1 million gross acres Largest Viking light oil producer at 22,000 boe/d Play expertise Teine has drilled 1,000 Hz wells to date Control some of the highest OOIP lands within…
Teine Historical Viking Outperformance Premium land base + well-honed completion and production techniques = strong well results Using 2014-2016 Viking Horizontal Wells (2014-2016 Rig Release Dates) rig release dates 100 provides…
Teine Viking Well Economics Consistent execution 2016 drill program was broadly distributed across entire land base showcasing Teines depth of high quality differentiated Viking inventory 120 Standard Length Wells (0.5 mi) Teine…
Viking Extended Reach Horizontal Increasing efficiency throughout the entire play with the potential to significantly improve economics One Sproule Two Sproule Tier 50 Tier 9 Well(1) 6 Wells(1) Teine Average DCET Cost 975k…
Viking Horizontal Well Cost Trends Doing more for less despite overall sand tonnage and stage counts increasing to improve IPs, overall costs are down due to cheaper sand, service cost reductions and design improvements Standard…
Saskatchewan Viking OOIP Shallow deposit with significant oil in place per section 50 55 mbbl of recoverable oil per well, development requires 30 wells per section to attain full primary recovery. Infill wells will benefit from…
Teine Viking 20-acre Pilot Program Results to date have been successful and significantly de-risks the concept throughout much of the play 200 LEGEND 2015/2016 Dodsland Pilot Program Red Line Sproule Tier 5 180 Green Line avg.…
Viking Light Oil Inventory 5,000 repeatable, low risk locations representing 80% of the land base being de-risked Mile Inventory Illustrative Optimized 1 Mile Inventory 8000 8000 Sproule Tier 5 at 1/2 Mile Sproule Tier 8 at 1 Mile…
25 Bakken Heavy Oil
Bakken Heavy Oil Low viscosity oil is ideal candidate for water and polymer flooding, driving low declines and free cash flow Over 1 billion BBL OOIP with less than 12% recovery 98% under water flood amenable to waterflooding due…
Bakken Polymer Flood Coleville polymer flood exhibits excellent prodn efficiencies and low F&D costs while mitigating corporate decline 2011 pilot demonstrated consistent increased production Plan to initiate Phase 1/2/3 in H1…
28 Summary
Resource World class, low cost oil resource driving long term, low risk growth 6 Billion bbls Estimated Oil in Place within Teine Lands Remaining Recoverable Oil Remaining Recoverable Oil = 675 mmbbl 2016E YE 2P Reserves…
Teine Competitive Advantage World class oil deposit with significant OOIP and scalability Predictable and significant growth with low-risk capital programs Low Cost Built to withstand ongoing oil market volatility Solid track…
Corporate Information Board of Directors Bankers Avik Dey Chair Dennis Chorney Vice-Chair National Bank of Canada, Syndicate head Jim Howe Nicholas Zelenczuk Wilmington Trust, Bond Administrator David Chambers Jason Denney…
Management Team Jason Denney, P.Eng President & CEO 20+ years, previously COO of Teine (management roles with Encana, operational roles with Murphy Oil) Ken Hillier, CA SVP & CFO 30+ years (CFO Angle Energy, CFO C&C Energia, CFO…
35 Appendix
Teine Viking Well Economics Type Curve IRR Sensitivities - Standard Length Wells (1)(2) (1)(2) Assumptions WTI (US/bbl) 60.71 40.00 45.00 50.00 55.00 60.00 65.00 Apr 19 Strip Fixed Operating Cost (/month) 2,000 DCET Cost (C000s) 600 625…
Debt & Hedging Summary Senior Bank Facility Facility Covenants HY Note C475 MM secured banking Covenant 1: < 3.0x senior US350 MM unsecured note facility debt / 4 quarter trailing Principal and interest 185 MM drawn at Mar EBITDA…
Cash Returns Teines high quality production and low cost structure delivers one of the most profitable bbls in Canada 2016 Operating Netback less G&A per boe(1) Teine 29 26 22 21 21 20 18 15 14 12 12 10 10 10 10…
Penn West Asset Acquisition Overview Transaction Overview & Rationale Asset Map Acquisition of Penn West southwest Saskatchewan oil acreage, primarily focused on the core Viking light oil Teine Pre Acquisition Land Base acreage PWT…
Viking Light Oil Waterflood Potential Economic success will be area specific and is dependent on adequate porosity and permeability. However, Teine lands within the identified area exhibit some of the highest porosity and permeability…
Corporate History June 2010 November 2011 November 2011 December 2012 January 2013 May 2013 September 2014 June 2016 US300 MM C155 MM equity Second Lien Term Closed US350 Closed 975 MM Acquisition of Company Founded C204 MM…
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