C O R P O R AT E P R E S E N TAT I O N SEPTEMBER 2017 BOLD IDEAS FOR ENERGY 1
Financial Profile Financial Profile Common Shares o/s (1) 59 million Management ownership 46% Share price (1) 1.30 Market capitalization 77 million Net bank debt (2) 11 million TOU share-based loan (3) 19 million Term Loan (4)…
Operating Profile Conventional shallow gas Mannville heavy oil Eastern Alberta Bitumen Viking/Colorado shallow shale gas Edson Wilrich Deep Basin Multi-zone liquids-rich gas Tight oil & gas exploration Asset Summary…
High Graded Asset Base 100% 100% Building a foundation 90% of resource-style plays 90% Robust multi-zone inventory 80% for profitable exploration 80% and development Proved and Probable Reserves (% of Total) 70% High working…
Diversified Portfolio for Value Creation Edson Wilrich Mannville & Panny Greater Edson secondary conventional shallow gas zones Mannville Viking/Colorado Columbia/Brazeau shallow shale gas Tight conventional Deep Basin & Wilrich…
2017 Strategic Priorities Grow Value of Greater Edson Liquids-Rich Gas Optimize Value of Eastern Alberta Assets Advance High Impact Opportunities Optimize Balance Sheet For Growth Positioned to pursue profitable growth…
2017 Capital Spending 2017 2017 2017 H1 H2 Forecast Total ( millions) ( millions) ( millions) ( millions) 35 - 40 21 Up to 10 gross West Central 6 gross (6.0 net) drill (9.4 net) wells 56 - 61 Liquids-Rich Gas (complete 1 Q4…
Line of Sight Growth Plan 16,000 Forecast Production Average Daily Production (Boe/d) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Q4 2016 Q1 2017 Q2 2017 Q3 2017E Q4 2017E Q1 2018E Q2 2018E Q3 2018E Q4 2018E…
STRATEGIC PRIORITY 1 GROW VALUE OF GREATER EDSON LIQUIDS-RICH GAS
Edson Wilrich LiquidsRich Gas PERPETUAL H2 2017 Extended Reach Horizontals underway Pre 2017 2017 Drilled to Date 2017 Drills Remaining 2018 Drills (10 wells) Inventory of 145 (134.7 net) Wilrich locations 76 (73.7 net)…
East Edson Type Curves Projected Economics per SW Drilling Location Capital (D,C & T) 4.3 MM NPV 10 % 4.2 MM ROR 60% F&D 6.39 / boe McDaniel SW Type Curve Capital Efficiency 7,200 boe/d McDaniel NW Type Curve McDaniel NE…
East Edson Wilrich Capital Efficiency 10.0 Capital Costs 6,000 Capital Efficiency 20,000 Average Total Drilling/Completion/E&T Cost (Millions) Average Well Capital Cost Per Horizontal Length 9.0 18,000 Capital…
Greater Edson Liquids-Rich Gas Play Performance 14,000 25,000 2015: Growth driven by East Edson JV Royalty sale Ramp up to fill existing East Edson facilities 12,000 Constructed new 30 MMcf/d West Wolf Lake plant on stream July…
Greater Edson Production Growth Greater Edson Daily Production 90,000 East Edson JV East Edson New spending ramp up Plant start-up West Edson Decision to defer 80,000 Swap for TOU capital spending One rig drilling program Shares…
STRATEGIC PRIORITY 2 OPTIMIZE VALUE OF EASTERN ALBERTA ASSETS
Eastern Alberta - Mannville 9 Producing Mannville pools* 6 Lloyd, 2 Sparky, 1 Basal Quartz 150 MMbbl Original Oil in Place 7.5 MMbbl 5% recovery factor 4.5 MMbbl produced to date (3%) Current production 1,000 boe/d Low exposure…
Waterflood and Enhanced Oil Recovery Scope Select Pools OOIP Cumulative P+P Implied Internal Potential Remaining Currently Under production Reserves Recovery Remaining with Improved Waterflood to YE 2016 booked at Factor Recoverable…
STRATEGIC PRIORITY 3 ADVANCE HIGH IMPACT OPPORTUNITIES
Viking/Colorado Shallow Shale Gas 885 Bcf Resource In Place OGIP estimated average 5.9 Bcf/section Viking 342 Bcf potential recoverable resource Assumes HZ development at 2 wells/section Probable opportunity to double to 4…
Bitumen Panny Bluesky Low rate cold flow possible without solvent or thermal assistance Average pay thickness 11 m Low viscosity bitumen 15,000 cp at 25oC 50,000 cp at 11oC reservoir temp Highly mobile at 70oC Panny Bluesky…
STRATEGIC PRIORITY 4 OPTIMIZE BALANCE SHEET FOR GROWTH
Balance Sheet Net bank debt: 11 million(1) Credit facility borrowing limit set at 40 million; Term extended until May 2019 Next borrowing limit redetermination scheduled prior to November 30, 2017 Term Loan: 35 million 45 million…
Debt Repayment Profile Forecast Debt Repayment Profile 12/31/2017 50% 45% 45% 42% 40% 35% 30% 25% 20% 13% 15% 10% 5% 0% < 1 Year 1 Year < 3 Years 3 Years TOU Loan Bank Debt Senior Notes Term Loan 2017…
Natural Gas Market Diversification Strategy 2018 Natural Gas Markets (MMBtu) Malin 7,000 Established pricing across diversified portfolio of end-use markets Chicago 8,000 Locked in term spreads and swapped back to Daily Index at…
INVESTMENT THESIS TORQUE TO GAS PRICE RECOVERY POTENTIAL FOR MULTIPLE EXPANSION RELATIVE TO PEER GROUP COMPELLING DISCOUNT TO NET ASSET VALUE
Torque to Gas Price Recovery 0.50/GJ in 2018 gas price 10 to 13 million increase in adjusted funds flow (incremental 0.17 to 0.22 per share) 25% increase in 2018 funds flow (1) 10% reduction in year end 2018 debt Combines to…
Share Price Performance Last 11 Months of Trading (Post Shallow Gas Disposition) 130.00 120.00 110.00 100.00 90.00 80.00 70.00 60.00 50.00 10/3/2016 11/3/2016 12/3/2016 1/3/2017 2/3/2017 3/3/2017 4/3/2017 5/3/2017 6/3/2017…
Sum of the Parts (1) Year-end 2016 reserves based on McDaniel reserves and pricing, adjusted for 1.67 MM TOU shares 28/share and Q1 equity issuance (2) Undeveloped land replaced with risk-discounted prospect inventory; Includes…
Key Investment Highlights High Quality Assets Asset base repositioning for resource-style and diversification successful Edson Wilrich liquids-rich gas inventory well-defined providing high capital efficiency growth Mannville heavy…
ADDITIONAL INFORMATION Sue Riddell Rose President & CEO Mark Schweitzer VP Finance and CFO Lorenzo Chiarastella Investor Relations infoperpetualenergy.com EMAIL 800.811.5522 TOLL FREE 403.269.4400 PHONE 403.269.4444 FAX 3200,…
APPENDIX
Transformational Transactions Warwick Gas Storage Sale: (May 2016) Sold remaining 30% partnership interest (23 million) Senior Notes Swap: (May 2016) Positive Impact: Retired Senior Notes via swap for 4.4 MM TOU shares (214 million)…
Shallow Gas Disposition October 1, 2016 Nominal proceeds + 2 year call option Deferred Purchase Price through 2 year call on AECO gas price 2.81/GJ for 33,611 GJ/d Metrics Impact Production: (35.5 MMcfe/d) Funds Flow: 5 - 10…
Mannville Heavy Oil Drilling Inventory Well Economics Assumptions Capital (D,C & T) 0.8 MM 2017 Pricing CA49.70/bbl wellhead heavy price (McDaniel Jan 2017 WTI US55.00/bbl, WCS CA53.70/bbl, Offset CA-4.00/bbl forecast) NPV 10 %…
Waterflood Response - Mannville I2I Working Interest 66.7% OOIP: 38 MMbbl gross Cum Prodn + McDaniel P+P: 0.9 MMbbl net (4% recovery factor) Mannville I2I Internal forecast: 1.1 MMbbl net (5% recovery factor) Waterflood Pool 20…
Conventional Shallow Gas Belly River Conventional shallow gas asset base characteristics Primarily Mannville Area remaining post shallow gas disposition Viking Cretaceous sweet shallow…
Bitumen R9 R5 R1W5 R21 R17 R13W4 T98 Perpetual OS Leases Overriding Royalty Lands Perpetual Panny Pilot T95 Experimental Primary Projects Thermal Projects 301 net sections (192,416 net acres) of oil sand leases…
LEAD Process Technology Pilot Low Pressure Electro-Thermally Assisted Drive First stage of pilot single well Cyclic Heat Stimulation currently operating Electrical resistive heating and production in a single horizontal well to…
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