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49 North Resource Conference – Perpetual Energy Inc

Perpetual Energy Inc · Nov 17, 2014 · 48 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 49 North Resource Conference – Perpetual Energy Inc – slide 1
    49 North Resource Conference November 17, 2014
  2. 49 North Resource Conference – Perpetual Energy Inc – slide 2
    Perpetual Energy Inc. DIVERSIFIED RESOURCE STYLE GROWTH ORIENTED ENTREPRENEURIAL EXPLORER, PRODUCER & MARKETER Common shares o/s 150 million Management ownership 25% Share price(1) 1.50 Trading volume(2) 207,000 shares/day…
  3. 49 North Resource Conference – Perpetual Energy Inc – slide 3
    Operating profile Conventional Shallow Gas Mannville Heavy Oil Eastern Alberta Bitumen Warwick Gas Storage Viking/Colorado Shallow Shale Gas Edson Wilrich Deep Basin Multi-Zone Liquids-Rich Gas Tight Oil and Gas…
  4. 49 North Resource Conference – Perpetual Energy Inc – slide 4
    Diversified portfolio built to prosper SHALLOW GAS LIQUIDS-RICH HEAVY OIL BITUMEN OTHER GAS Eastern Edson Wilrich Mannville Panny Warwick Gas Alberta Greater Edson Mannville Bluesky Storage Conventional Multi-zone EOR Liege GOB…
  5. 49 North Resource Conference – Perpetual Energy Inc – slide 5
    Portfolio management strategy CASH FLOW GENERATORS Maximize cash flow Conventional shallow gas Warwick Gas Storage PROVEN MEDIUM AND DIVERSIFYING LONG TERM GROWTH STRATEGIES VALUE STRATEGIES Invest for growth Optimize and…
  6. 49 North Resource Conference – Perpetual Energy Inc – slide 6
    2015 Top Five Strategic Priorities 1. Grow Greater Edson Liquids-Rich Gas Production, Cash Flow, Inventory, Reserves and Value 2. Optimize Value of Mannville Heavy Oil 3. Maximize Value of Shallow Gas 4. Refine Elements of…
  7. 49 North Resource Conference – Perpetual Energy Inc – slide 7
    1. Key Priority Grow Greater Edson liquids-rich gas production, cash flow, inventory, reserves and value
  8. 49 North Resource Conference – Perpetual Energy Inc – slide 8
    Edson Wilrich liquidsrich gas To Rosevear Plant (15% WI) Sales Pipeline to Alliance Pipeline To Edson Deep Cut Plant 16-10 Compressor 1-34 Gas Plant Capacity 30 MMcf/d Capacity 60 MMcf/d 1 2 10-3 Gas Plant Capacity 30…
  9. 49 North Resource Conference – Perpetual Energy Inc – slide 9
    Edson Wilrich type curves West Edson Type Curve East Edson and West Edson Production DC&T 6.4 MM 20 IP 9.0 MMcf/d East Edson SW Wells (2 Wells) 9 bbl/MMcf C5+ 18 East Edson NE Wells (12 Wells) Reserves 5.6 Bcfe/well West Edson…
  10. 49 North Resource Conference – Perpetual Energy Inc – slide 10
    East Edson JV transaction details Granted two royalties that work in combination to create a fixed, first-out wedge production GORR Flat 5.6 MMcf/d plus associated liquids of 100-150 bbl/d until 2022 Declining at 10% per year…
  11. 49 North Resource Conference – Perpetual Energy Inc – slide 11
    East Edson JV transaction rationale Facilitates significant production and cash flow growth East Edson property becomes self-funding with kick start of capital to grow production All production reported net to Perpetual GORR reported…
  12. 49 North Resource Conference – Perpetual Energy Inc – slide 12
    East Edson JV execution D ec 3 1, 9 JV wells drilled 4 on production to date; 6 more to drill in Q4 Results promising thus far
  13. 49 North Resource Conference – Perpetual Energy Inc – slide 13
    Greater Edson liquids-rich gas play performance 40% net production growth in 2014 14,000 14,000 Driven by West Edson facility expansion from 15 to 30 MMcf/d net 12,000 12,000 Ramp up to fill existing East Edson facilities with JV…
  14. 49 North Resource Conference – Perpetual Energy Inc – slide 14
    2. Key Priority Optimize value of Mannville heavy oil
  15. 49 North Resource Conference – Perpetual Energy Inc – slide 15
    Eastern Alberta Conventional heavy oil 8 Producing Mannville pools* R10 R9 R8W4 L K A F G AU JKF L K G G Mannville G G L F K K F K L K K C K L L L L F F K K F C F C U G K AU L G G 6 Lloyd, 1 Sparky, 1…
  16. 49 North Resource Conference – Perpetual Energy Inc – slide 16
    Mannville heavy oil value potential Projected Economics Per Well Assumptions Lloyd Sparky (McDaniel Year End 2013) Capital (D,C & T) 1.2 MM 1.2 MM 68.90/bbl Wellhead heavy price 2014 Pricing WTI US95/bbl, WCS US23.5/bbl, offset…
  17. 49 North Resource Conference – Perpetual Energy Inc – slide 17
    Waterflood and enhanced oil recovery Mannville I2I Working Interest 66.7% Waterflood Pilot Pool OOIP: 53 MMbbl Sparky Mid Type Log Cum Prodn + McDaniel P+P: 1.7 MMbbl 100/09-32-050-08W4/00 (3.2% recovery) 17 Horizontals to date (100…
  18. 49 North Resource Conference – Perpetual Energy Inc – slide 18
    Waterflood and enhanced oil recovery scope Select Pools OOIP Cumulative P+P Implied Expected Potential with production Reserves Recovery Primary Secondary to YE 2013 booked at Factor Recovery Recovery and EOR YE 2013 (5-8% (10-15%)…
  19. 49 North Resource Conference – Perpetual Energy Inc – slide 19
    Mannville heavy oil play performance 60 200 50 150 Transitioning from Cumulative Capital Capital (MM) 40 growth to value in 2014 (MM) 30 100 20 10 50 Drilling capital reduced 0 - Rationalized smaller 2009…
  20. 49 North Resource Conference – Perpetual Energy Inc – slide 20
    3. Key Priority Maximize value of shallow gas
  21. 49 North Resource Conference – Perpetual Energy Inc – slide 21
    Conventional shallow gas East Central and Northeast Alberta Cretaceous and Devonian sweet shallow gas Current production: 60 - 65 MMcf/d Belly River Base declines < 15% Multiple stacked zones and play types Viking Extensive…
  22. 49 North Resource Conference – Perpetual Energy Inc – slide 22
    4. Key Priority Refine Elements of Production Growth Strategy For 2017 to 2020
  23. 49 North Resource Conference – Perpetual Energy Inc – slide 23
    Viking/Colorado shallow shale gas 130 TCF Resource In Place Belly River Play Fairway OGIP estimated average 16 Bcf/section Cardium/ Colorado Wells Perpetual Lands 300m gas saturated shale section Viking Proved Undeveloped 6…
  24. 49 North Resource Conference – Perpetual Energy Inc – slide 24
    Bitumen 527net sections (329,000 net acres) of oil sand leases Variousformation targets and ultimate recovery methods 7potential project areas with varying potential Over 3 billion bbls OBIP independently recognized at Liege…
  25. 49 North Resource Conference – Perpetual Energy Inc – slide 25
    Bitumen Panny Bluesky Low rate cold flow without 8 m Bitumen solvent or thermal assistance 10 m Bitumen Average pay thickness 11 m Low viscosity bitumen 15,000 cp at 25oC 50,000 cp at 11oC reservoir temp Highly mobile at 70oC…
  26. 49 North Resource Conference – Perpetual Energy Inc – slide 26
    LEAD process technology pilot Low pressure electro-thermally assisted drive First stage of pilot planned for 2015 Cyclic Heat Stimulation 5 million capital net of 30% IETP funding Evaluating heater technology and validating reservoir…
  27. 49 North Resource Conference – Perpetual Energy Inc – slide 27
    Future production growth potential Inventory captured and risk assessment on track for future production growth Growth trajectory depends on commodity prices, capital and play performance
  28. 49 North Resource Conference – Perpetual Energy Inc – slide 28
    5. Key priority Reduce Debt and Improve Debt/Cash Flow Ratio
  29. 49 North Resource Conference – Perpetual Energy Inc – slide 29
    Debt reduction 100 Million Target Set in November 2013 Closed 2014 West Central AB undeveloped land 3 million Gas over bitumen monetization 23.2 million Mannville non-core 21.6 million East Edson JV net proceeds 120 million…
  30. 49 North Resource Conference – Perpetual Energy Inc – slide 30
    Balance sheet Net Bank Debt: 6 million Borrowing base on credit facility - 105 million Next semi-annual redetermination April 2015 25 million of restricted cash in escrow Senior Unsecured Notes: 275 million 7 year Notes issued March…
  31. 49 North Resource Conference – Perpetual Energy Inc – slide 31
    2014 Capital spending Total Capital: 193 million 69 million of capital spending funded by JV Partner escrow and not reported by Perpetual Q1-Q3 2014 Q4 2014 Total Wells Capital Wells Capital Wells Capital West Central 13 gross 4…
  32. 49 North Resource Conference – Perpetual Energy Inc – slide 32
    Projected 2014 Funds Flow Production of 20,100 20,500 boe/d 19,600 20,000 boe/d net of East Edson JV Royalty East Edson JV GORR reported as royalty expense, reducing netback 2014 Funds Flow Q4 AECO Gas Price (/GJ) 3.00 3.50…
  33. 49 North Resource Conference – Perpetual Energy Inc – slide 33
    2015 Capital spending 2015 Q1 capital spending of 64 million Q1 2015 Wells Capital West Central 7 gross (1) 48 MM Liquids-Rich Gas (5.5 net) 5 gross Mannville Heavy Oil 8 MM (4.7 net) Recompletions/ Eastern Shallow Gas…
  34. 49 North Resource Conference – Perpetual Energy Inc – slide 34
    Projected borrowing base and credit Q2 Proforma Q1 ( Millions) Q2 2014 July Q3 2014 Q4E 2014 2015(4) 2014 Transactions (5) East Edson Partner Escrow Funds - - (70) (16) (1) - Projected Bank Borrowing Base 130 120 100 105 105 130 -…
  35. 49 North Resource Conference – Perpetual Energy Inc – slide 35
    Investment Thesis
  36. 49 North Resource Conference – Perpetual Energy Inc – slide 36
    Strong annual growth forecast 2014 Key diversifying plays production growth of 22% Growth focused at Edson Funds flow and funds flow per share growth of 50% Disposition program of close to 100 million Generated 70 million in…
  37. 49 North Resource Conference – Perpetual Energy Inc – slide 37
    Key investment highlights Asset base repositioning for resource-style and diversification successful Mannville heavy oil delivering strong cash flow with material secondary recovery growth potential Edson Wilrich liquids-rich gas…
  38. 49 North Resource Conference – Perpetual Energy Inc – slide 38
    Sum of the parts NAV Per Share (1) WGS LP valued at prorata 2013 buyback acquisition 28 million (2) McDaniel April 2014 Assumptions Trading at
  39. 49 North Resource Conference – Perpetual Energy Inc – slide 39
    FOR ADDITIONAL INFORMATION Additional Susan L. Riddell Rose Information President & CEO Cameron R. Sebastian Vice President, Finance & CFO 3200, 605 5 Avenue SW Calgary, Alberta Canada T2P 3H5 800.811.5522 TOLL FREE 403.269.4400 PHONE…
  40. 49 North Resource Conference – Perpetual Energy Inc – slide 40
    Appendix
  41. 49 North Resource Conference – Perpetual Energy Inc – slide 41
    Wilrich value potential West Edson West Edson Production Projected Economics per 25,000 Drilling Location 00/01-29-051-18W5/0 (14-29) Capital (D,C & T) 6.4 MM gross 00/08-17-051-18W5/2 (04-20) 00/15-34-051-18W5/0 (01-34) NPV 10 %…
  42. 49 North Resource Conference – Perpetual Energy Inc – slide 42
    East Edson JV type curve economics Projected Economics per South West Projected Economics per North East Drilling Location Drilling Location Capital (D,C & T) 5.1 MM Capital (D,C & T) 5.0 MM NPV 10 % 5.3 MM NPV 10 % 3.4 MM ROR 50 % BT…
  43. 49 North Resource Conference – Perpetual Energy Inc – slide 43
    Commodity price risk management strategy Enhance or protect funds flow and balance sheet Enhance or protect the economics of an acquisition Enhance or protect capital program economics Capitalize on perceived market anomalies…
  44. 49 North Resource Conference – Perpetual Energy Inc – slide 44
    Projected balance sheet reconciliation Q2 2014 Capitalization July-August 2014 Transactions H2 2014 Operations (projected) 2015 Operations (projected) Sources Sources Sources East Edson JV GORR sale/farmout 120 Funds Flow…
  45. 49 North Resource Conference – Perpetual Energy Inc – slide 45
    Diversification Warwick Gas Storage 40 Bcf Storage Reservoir Delta Pressure to 47 Bcf 10 Bcf base reserves cushion gas Commercial Park and Loan in place Up to 25 Bcf potential working business gas capacity 30 to 50 year life…
  46. 49 North Resource Conference – Perpetual Energy Inc – slide 46
    Reserve distribution 120,000 80% 70% 100,000 60% 80,000 50% % Diversifying Assets Proved and Probable Mboe 60,000 40% 30% 40,000 20% 20,000 10% - 0% 2009 2010 2011 2012 2013 2014Q2 2014E Shallow…
  47. 49 North Resource Conference – Perpetual Energy Inc – slide 47
    Future growth and value creation 2016 - 2020 Edson expansion for additional inventory development West and/or East Edson additional downspacing LIQUIDS-RICH Development of secondary targets including Belly River, Cardium, Second…
  48. 49 North Resource Conference – Perpetual Energy Inc – slide 48
    Bitumen Liege carbonates AOC Shell Excellent reservoir quality vuggy porosity in Grosmont 3 Grosmont carbonate / Leduc OV wells drilled Combined with legacy gas wells to evaluate and map resource Stacking of 3 Grosmont…

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