North Montney: Scale, Growth, Value High Half-cycle IRR of 75% at 2.50/GJ AECO1 Liquids-Rich Montney Quality Average 9 Bcf EUR over last 30 Hz Upper Montney wells 218,000 net acres Asset Recent well…
Building Momentum Through Pad Drilling Production Growth 25,000 Corporate production Avg. Daily Production (boe/d) Expansion of owned 20,000 infrastructure Dec 2016: 16,650 boe/d (16% liquids) Q1 2017: 16,732 boe/d (15%…
Robust Economics: Low Cost, Liquids-Rich, Hot Gas Assumptions 9.0 Bcf Wells Breakeven: D&C Cost (MM, excl. 0.4 MM tie-in) 4.6 US50/bbl WTI: 0.85/GJ AECO EUR (Bcf) 9.0 IP30 - Gas (MMcf/d, raw)2 7.0 IP30 - Total (boe/d) 1,300 Black…
Repeatable Well Deliverability at Low Cost Upper Montney Wells (by completion date) 14.0 Ongoing operational success 12.0 Avg EUR: 9.0 Bcf since Q3/13 (30 wells) Expected EUR (Bcf/well) 10.0 9 Bcf Repeatable and predictable…
Pad Operations Provide Capital Efficient Growth Upper Montney Multi-Well Pad Performance Tracking Type Curves 10,000 Pad Year Wells/ Avg Avg 9,000 Type Curves Completed Pad D&C EUR 7-H Pad Average 8,000 19-E Pad Average (MM) (Bcf)…
Infrastructure Advantage 100% owned & operated infrastructure Plant 1: North Aitken Creek Gas Plant Existing gathering trunk-lines Phase 1: 50 MMcf/d 110 MMcf/d 6 raw capacity 6 Phase 2: 60 MMcf/d Liquids recoveries capable of 40…
Low Cost Growth: Owned & Operated Gas Plant North Aitken Creek Gas Plant Production 60 100 90 Phase 1 capacity: 10,000 boe/d 50 80 Plant optimized to maximize netbacks: Liquids Yield (bbl/MMcf) Gas Production (MMcf/d) 40…
North Aitken Plant Phase 2 Commissioning June 2017 2016: Phase 1 Q1 2016 Additional liquids handling Increased gas through put capacity 2017: Phase 2 Expansion Q2 2017 9
Inventory Feeds H1/17 Production, New Wells Fill Plant Expansion Black Swan Production1 30,000 North Aitken Plant Corporate production at record rates Phase 2 on-stream 25,000 Dec-16 Jan-17 Feb-17 Mar-17 Average Daily Production…
2017 Outlook: Growth to 25,000 boe/d With Pad Drilling Corporate production 32-C Pad (6 wells) Dec 2017E: 24,000 26,000 boe/d (17% liquids) 72-C Pad (6 wells) Capital program 2017 budget: 180 MM 19 Hz wells drilled, 16 completed,…
Growth Underpinned With Firm Service Egress Commitments vs. Planned Plant Capacity BRITISH COLUMBIA 600 Egress beyond planned plant capacity ALBERTA provides opportunity to accelerate 500 North Aitken 400 Gas…
Aitken Area Capable of Delivering & Sustaining 100,000 boe/d 54-D pad 19-E pad Avg EUR = 8 Bcf 92-C pad Development plan1…
Low Cost Reserves Underpin Growth Plan 2016 PDP adds replaced 196% of annual production Net Present 2016 Company Interest Reserves Value1 Before Tax (MM) 8% Gas NGLs Total 2016 Total Reserves 0% 10% (MMcf) (mbbl) (mboe)2 PDP PDP…
Risk Management & Pricing Black Swan utilizes financial and physical contracts to manage price volatility Hedge positions can be taken to cover production up to three years out with positons layered in over time Gas volumes are…
Source Water Secured for Development Plan 10 km Beatton River water license License supports: c-7-H Fresh Water Pit 60,300 m capacity Peak drilling rate of 100+ Hz wells/year Development to achieve 100,000 boe/d in Water Pump…
Dominant Position in Over-Pressured, Liquids-Rich Fairway Caribou Over-pressured; repeatable deliverability Highly over-pressured reservoir 13-16 kPa/m Jedney Laprise Normally Liquids-rich Pressured Total liquids of 30-50 bbl/MMcf1…
Differentiation: Performance on Multiple Factors vs. Peers EUR1 Wells Drilled in Last Three Years Operating Cost (2017E) 12.0 12.00 BSE 10.0 10.00 Infrastructure 8.3 Well Black Swan performance advantage EUR (Bcf) 2017E /boe…
Strategic Focus Long-term, Scalable, Low Cost Development Pad development: one-rig Montney program Current North Aitken Gas Plant expansion to 110 MMcf/d Activity Engineering and long lead items for 198 MMcf/d Plant 2…
Appendix: Corporate & Financial Summary 20
Black Swan Energy Management and Directors Management Team David Maddison, P.Eng. President and CEO (Talisman Energy, BP Exploration) Marc Mereau, P.Eng. COO (Talisman Energy, BP Canada) Michael Wilhelm, B.Comm., CPA, CGA CFO & VP…
Historical Financial Summary 2017 2016 2016 2015 2015 2014 2014 Q11 Full Year Q4 Q3 Q2 Q1 Full Year Q4 Q3 Q2 Q1 Full Year Q4 Q3 Q2 Q1 Production Oil (bbl/d) 16 - - - 65 79 54 64 82 116 17 69 - - - Gas (mcf/d) 85,832 67,151 74,626…
Appendix: Half-cycle Input Assumptions 23
Type Curve Assumptions 1. Economics assume Black Swan owned infrastructure; Fx C/US of 1.30, 1.25 & 1.20 at US40/bbl, US50/bbl & US60/bbl respectively; Station 2 differential = 0.32/mcf 2. Economics Include equip & tie-in costs of 0.4…
Appendix: Drilling, Completions & Well Results 25
Drilling Improvements Early in Development Total Time vs. Depth 0 200 Preset surface, skid rig Black Swan has established a highly effective 400 drilling program as a result of continuous Move pad rig, install BOP 2015/16 Pad…
Completions Optimization of Design Completion Design Evolution Completed Well Length 2600 Early move to short stages, optimizing well length and sand loading in development 2400 2012/13 Perf-plug, long stage length, 8 stages x3…
Upper Montney Multi-Well Pad Production Summary Black Swan utilizes downhole chokes on all Hz wells for operational purposes Data presented is based on actual daily production which has been normalized to adjust for downtime Internal…
Appendix: Egress & Hedging 29
Over 3 Bcf/d New Egress Planned Within Three Years 2017 2018 2019 Receipt Point Delivery Point Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Enbridge High Pine Ft. Nelson T-North NGTL or Station 2 240 240 240 240 240 240 240 240 240 240…
Leveraging Infrastructure to Access Diverse Markets Western Canada Pipeline Capacity & (Flows) Infrastructure connects Black Swan to BRITISH COLUMBIA diverse existing and new markets ALBERTA NEBC Montney is the most active natural…
Marketing and Risk Management Third party natural gas processing 25 MMcf/d firm: McMahon Q4 2015 to Q4 2020 Natural gas egress From McMahon 9.1 MMcf/d contract on Alliance Q4 2015 to Q4 2017 4 MMcf/d on T-North Q4 2016 to Q4 2018…
Appendix: Resources & Reserves 33
Substantial Resource to Unlock Jedney Capable of sustaining 2 Bcf/d for 10 years Gas-in-place supports long-term growth Average 250 Bcf/DSU OGIP 78 Tcf of gas-in-place 1 Over 2,800 Hz well inventory and 16 Tcfe of 2 recoverable…
Reserve Booking Methodology Upper Montney Reserve Booking Map Proved plus probable reserves 2016 YE 2P reserves were 478 MMboe, of which 75% are in the upper Montney where development is focused 2P reserves for drilled wells and…
Black Swan Liquids Yields Black Swan Corporate Liquid Yield 100 Average 2016 corporate recoveries: 90 Black Swans plant provides superior 80 liquids yield vs. McMahon with additional 31 bbl/MMcf (73% C5+) Liquids Yield…
Base Decline & Impact of New Production Black Swan Wells by Vintage 160 2017 Completions 140 Base decline on 2016 Completions existing wells: 25-30% 2015 Completions 120 2014 Completions Gas Production (MMcf/d) 2012 & 2013…
Appendix: Montney Fairway 38
NEBC Growth in 2017 Driven by Junior/Intermediate Producers Industry investment accelerating North Montney production of 1.37 Bcf/d at March 2017 North Montney Production1 1,600 1,400 ARC Average Calendar Day Gas…
Montney: Proven Top-Tier North American Play Alberta Black Swan Beg A-020-H/094-G-01 BC Montney over 250 m thick Upper Montney 1850 65 metres Four landing zones are proven Hz targets either on or immediately 1900…
Appendix: Benchmarking 41
PIR (Atax, 10%) 0.0x 0.2x 0.4x 0.6x 0.8x 1.0x 1.2x 1.4x 1.6x 1.8x YO - Inga/Fireweed Montney CR - Greater Portage Montney VII - Route - Upper/Middle Montney TOU - Deep Basin Montney Canbriam - South Fault Block…
Before Tax IRR (%) 0% 10% 20% 30% 40% 50% 60% 70% Black Swan Montney (9 Bcf) Bakken Tier 1 Midland Lower Spraberry Eagle Ford Wet Gas TFS Tier 1 Eagle Ford Condensate Tier 1 Marcellus Dry Tier 1 Eagle Ford Oil Tier 1…
Cost Structure Supports Top Tier Ranking vs. Marcellus/Utica Producers BTAX IRR Ranking (US50/bbl WTI & US3/mcf HHUB) US Investor Presentations are stating forward looking economics March 2017 IR Presentations US3 HHUB that show…
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