ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS MAY 4, 2017
Company Overview THE BASICS Corporate Symbol: PXX, PXXS o Our focus is heavy oil and oil sands Exchanges: TSX, OMX o Exposure to long life low decline reserves Shares Outstanding (MM) (1) Basic 336 o Significant management ownership…
The Transition to Thermal o Our long term strategy has always been to transition the Company from a conventional heavy oil operator to a major thermal heavy oil producer o With the success of Phase 1 and the sanctioning of Phase 2 of…
Why the shift to Thermal o Long life, low decline assets o At 12,000 b/d our 2P reserve life at Onion Lake is 25 yrs o Top quartile economics o Cash break-even of C27/bbl o Low sustaining capital requirements and lower operating…
2016 Reserve and Contingent Resource - Summary o 6% increase in 2P reserves year over year Volume BT PV10% (MMboe) ( mm) o Reserves added at Onion Lake o 2P reserve value is equivalent to 6/sh 2P Reserves (1) 312 2,055 o 2C risked…
Three Core Properties CORE PROPERTIES o All are in heavy oil and oil sands regions o All projects have been delineated and Blackrod Athabasca (SAGD) Peace piloted River o All projects employ proven technologies: Cold Lake…
OPERATIONS REVIEW 8
Onion Lake - Primary THE BASICS o Active in the region since 2006 o Over 300 wells drilled o Expect initial production of 40 60 b/d o Expect 40,000 80,000 bbls per well o Capex of 0.45 mm per well CURRENT STATUS o Producing 2,000 b/d o…
Onion Lake - Thermal PHASE 1 (6,000 b/d) o Producing 6,100 b/d o ISOR 2.5 PHASE 2 (an additional 6,000 b/d) o Sanctioned in February 2017 Thermal o 12 to 15 month construction period; followed by 9 to Development 12 month production…
Onion Lake - Thermal THERMAL DEVELOPMENT AREA DELINEATED o 197 existing delineation wells in the thermal development area o 90% 3D seismic coverage THERMAL DEVELOPMENT PLAN IN PLACE o Phase 1 - 13 horizontal production wells o Phase 2…
Onion Lake Thermal Phase 2 Construction Schedule 2016 2017 2018 Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June CPF Module Fabrication Wellpad Module Fabrication AGP Engineering Wellpad…
Onion Lake - Thermal ECONOMICS ESTIMATED OPERATING INCOME(1)(2) (mm/yr) o Royalties of 11% (pre-payout) 200 o Operating (including energy) and 150 transportation costs of 10 15/bbl 100 o Total capital of 8 10/bbl, including…
Blackrod SAGD - Overview THE BASICS Pilot Well Pair o Located in the Athabasca oil sands 700 14 o 100% owned and operated 600 12 o Grand Rapids reservoir 500 10 CURRENT STATUS 400 8 o Successful pilot operated since 2012 bw/bo…
Blackrod Commercial Development COMMERCIAL o Received regulatory and environmental approval for 80,000 b/d commercial 1 mile development o Project to be built in phases, with the first phase planned for 20,000 b/d o Phase 1 capital…
Mooney - ASP Flood THE BASICS Phases 3 & 4 Phase 2 o Bluesky reservoir Phase 1 Phase 2 o Drilled over 90 horizontal wells o Phase 1 of the ASP flood initiated in 2011; production increased from 300 to 2,000 boe/d o Recoveries expected…
Comparative SOR Performance Last 12 Months Trailing SOR (March 2016 - February 2017) *instantaneous SOR presented for newer projects still in ramp-up phase 7.0 1st quartile 2nd quartile 3rd quartile 4th quartile 6.0 5.0 4.0 3.0…
FINANCIAL REVIEW 19
2016 Financial Highlights Operating Costs - /boe 30.00 o 21% increase in production 20.00 o Exceeded 2016 guidance 21% 38% 25.24 o Onion Lake thermal production 10.00 19.94 12.44 exceeded design capacity 0.00 2014 2015 2016 o…
2017 Outlook o Our primary focus in 2017 is thermal 2016 2017E(1) expansion at Onion Lake Average production (boe/d) 10,077 10 11,000 o Best economics of all our projects Capital expenditures (MM) 11 190 o Development to be funded…
2017 Development Plan CAPITAL SPENDING ( mm) THE PLAN 5.0 3.5 3.52.0 o 2017 capital spending will be Onion Thermal dominated by the expansion of the John Lake Onion Lake thermal project o Includes phase 2 expansion of Onion Primary…
Strong Financial Position 18 Month Requirements ( mm) o Strong balance sheet Non Discretionary Discretionary o Debt free at year-end 2016 Capital Other Expenditure Onion Lake Expansion 180 40 o Bank credit facilities of 117.5mm…
Hedging Program Volumes Hedged Using Swaps and Collars (1)(3) o We use oil hedging to mitigate price 6000 volatility to support capital program and 5000 42% hedged 45% hedged debt repayment 4000 C40.00 WCS Floor Collar o 37…
Key Takeaways o Transition to long life, low decline thermal production o Phase 2 thermal development at Onion Lake o Initiate commercial development at Blackrod o Estimated 6/share of reserve value and 3/share of risked contingent…
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