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September 2017 Corporate Presentation – Kelt Exploration Ltd.

Kelt Exploration Ltd. · Sep 14, 2017 · 58 slides

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Slides

  1. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 1
    Corporate Presentation SEPTEMBER 2017 David J. Wilson, President & Chief Executive Officer Sadiq H. Lalani, Vice President & Chief Financial Officer www.KeltExploration.com
  2. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 2
    Why Invest in Kelt 1 CREATING VALUE DURING DOWNTURNS The Kelt management team has a track record of creating shareholder value during downturns, previously during the 2008- 2009 period with Celtic Exploration Ltd., eventually sold…
  3. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 3
    Common Share Information 2 Stock Exchange listing TSX Trading symbol KEL Market capitalization 1.1 billion 52-week trading range 5.11 7.70 Common shares issued ( Sep/8/2017 ) 176.0 million Stock options ( 10.2 MM ) & RSUs ( 0.8…
  4. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 4
    Convertible Debentures 3 TSX trading symbol KEL.DB Principal amount outstanding 90.0 million Coupon / Maturity date 5.0% / May 31, 2021 52-week trading range 125.00 155.35 D&Os purchased 15.0 million (17%) of the total Debenture…
  5. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 5
    Capital Expenditures 4 2017 2017/16 ( millions ) 2015 2016 Forecast Change Drilling & Completions 100.9 47.4 129.0 + 172% Facilities, Equipment & 56.0 28.5 53.0 + 86% Pipeline Infrastructure Land, Seismic & Asset 26.1 28.3 9.0…
  6. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 6
    2017 Drilling Program 5 Gross Net Average 2017 Drills Wells Wells WI % Notes: [1] Alberta drilling prospects include : Grande Prairie Alberta [1] 11 10.0 91% (Pouce Coupe/Progress/LaGlace/Pipestone) - Montney - Doig British…
  7. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 7
    Production Outlook 6 2017 2017/16 2015 2016 Forecast Change Oil ( bbls/d ) 5,091 5,070 7,300 44% Ngls ( bbls/d ) 1,607 2,709 2,300 - 15% Gas ( mcf/d ) 71,272 79,009 77,400 - 2% Combined ( BOE/d ) 18,577 20,947 22,500 7% Per MM…
  8. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 8
    Annual Production Growth ( since inception ) 7 PRODUCTION ( BOE / d ) : Year-over-year Exit growth rate 30,000 CAGR since + 30% 2013 = 54% 26,500 25,000 22,500 20,947 20,370 20,000 18,577 14,000 12,900 15,000 13,168 12,756…
  9. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 9
    Annual Production per Share Growth ( since inception ) 8 PRODUCTION PER MILLION SHARES ( BOE / d ) : 200 Year-over-year Exit growth rate CAGR since + 30% 2013 = 25% 151 150 128 120 121 116 105 80 100 73 77 76 73 69 53…
  10. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 10
    Commodity Prices 9 ( CA , unless otherwise specified ) 2015 2016 2017 (E) YOY Change WTI Crude Oil ( USD/bbl ) [1] US 48.80 US 43.32 US 50.00 + 15% CLS Crude Oil ( CAD/bbl ) [2] 57.45 52.79 61.12 + 16% NYMEX Natural Gas (…
  11. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 11
    Gas Market Risk Management 10 GAS MARKET DIVERSIFICATION: The Company has taken a diversified approach to selling its natural gas in order to reduce exposure to single market risk. Effective November 1, 2017, Kelt has entered into…
  12. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 12
    Netbacks 11 2017/16 ( / BOE ) 2015 2016 2017 (E) Change Revenue 26.45 24.08 32.89 + 37% Realized hedging gain ( loss ) ( 0.12 ) 0.02 0.06 - Royalties ( % of revenue ) ( 10.6% ) ( 8.6% ) ( 10.2% ) + 19% Transportation expense ( 2.09 )…
  13. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 13
    2017 Product Mix 12 2017 (E) 2017 (E) Product Income Production Operating Split Split BOE/d Income (MM) Oil 7,300 33% 95.8 69% Ngls [1] 2,300 10% 10.3 7% Gas 77,400 57% 33.5 24% Combined 22,500 100% 139.6 100% G&A and interest…
  14. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 14
    Financial Outlook 13 2017 2017/16 2015 2016 Forecast Change Revenue ( MM ) 179.3 184.6 270.1 + 46% Adj. funds from operations ( MM ) [1] 56.5 58.4 124.0 + 112% Per share diluted ( /share ) 0.36 0.34 0.70 + 106% Capital expenditures,…
  15. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 15
    2017 Commodity Price Sensitivities 14 Adjusted FFO per Net NBD/ WTI AECO Funds from Share Bank FFO Crude Oil Nat Gas Operations Diluted Debt Ratio (USD/bbl) (CAD/bbl) (CAD/GJ) (MM) () (MM) (times) 2017 Forecast 50.00 65.00 2.50…
  16. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 16
    Reserves 15 NPV 10% BT DEC/31/2015 DEC/31/2016 Percent DEC/31/2016 ( MMBOE ) ( MMBOE ) Change ( MM ) Proved Developed 33.8 34.5 + 2% 423 Producing Total Proved 83.8 108.2 + 29% 940 Proved plus Probable 150.5 194.1 + 29% 1,731 (…
  17. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 17
    Finding, Development & Acquisition Costs 16 Proved As at December 31, 2016 Developed Proved Proved + Producing Probable 2016 capital expenditures + change 98,268 155,509 177,684 in FDC expenditures ( M ) Reserve additions, net (…
  18. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 18
    Core Areas 17 Fort St. John ( BC ) : Stacked Montney light oil and condensate-rich gas Fort St. John Doig condensate-rich gas Grande Prairie Grande Prairie ( AB ) : Stacked Montney light oil Grande Cache Montney/Doig gas…
  19. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 19
    Kelt Land Fairway 18 Fireweed Corporate Land Holdings Inga Aug/31 Net Net Flatrock 2017 Acres Sections Stoddart Oak Developed 212,533 332 Fort St. John Undeveloped 648,546 1,013 Total 861,079 1,345 Progress Pouce Coupe…
  20. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 20
    British Columbia Montney Lands 19 LAND (Montney Rights) Gross: 274,009 acres ( 428 sections ) Net: 269,552 acres ( 421 sections ) Fireweed OPERATIONS Kelt has successfully delineated the Upper Montney at Inga/Fireweed and…
  21. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 21
    British Columbia Montney Wells 20 PRODUCTION RESERVES Kelt British Columbia Montney Drills Typical well EURs: Top 10 IP30 Wells ( gross sales, BOE/d ): Inga/Fireweed (1) Fireweed 00/C-31-I/94-A-12 UM [a] 2,068 ( 32% gas ) Upper/Middle…
  22. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 22
    B.C. - Stacked Montney Resource Potential 21 MULTIPLE STACKED MONTNEY HORIZONS Kelt has successfully delineated the Upper Montney at Inga/Fireweed and currently estimates an un-risked drilling inventory of 660 locations Initial…
  23. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 23
    Inga / Fireweed Montney Lands 22 LAND MONTNEY RIGHTS 188 gross sections ( 186 net sections ) C-26-A (sfc A-6-A) OPERATIONS MONTNEY Delineation drilling to date has been C-85-I (sfc A-65-I) focused in the Upper Montney and…
  24. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 24
    Inga / Fireweed Montney Type Curve 23 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 725 MBOE 35% Oil 100 12% Ngls 53% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17…
  25. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 25
    Inga / Fireweed Montney Type Curve 24 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 725 MBOE 35% Oil 100 12% Ngls 53% Gas 10 10 5 0 1 3 5 7 9…
  26. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 26
    Inga / Fireweed Montney Gas Well Economics 25 Sproule - Dec/31/2016 Kelt - Sep/2017 Capital drill/complete/equip ( MM) 6.1 6.1 Production IP30 sales ( BOE/d ) 1,030 ( 70% oil/ngls ) 1,030 ( 70% oil/ngls ) EUR 2P reserves ( MBOE )…
  27. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 27
    Oak / Flatrock Montney Lands 26 5-1 OPERATIONS (sfc 13-12) Oil and gas exploration activity with plans to drill and complete two wells in 7-3 2017. (sfc 10-27) Initial well at 6-2 was successful and is currently producing at…
  28. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 28
    Alberta Montney Lands 27 LAND Montney Rights: Gross: 187,520 acres ( 293 sections ) Net: 162,585 acres ( 254 sections ) Pouce OPERATIONS Coupe Kelt has successfully delineated the Lower- Progress Middle and the Upper-Middle…
  29. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 29
    Alberta Montney Wells 28 PRODUCTION RESERVES Kelt Alberta Montney Drills Typical well EURs: Top 10 IP30 Wells (gross sales, BOE/d): (1) Pouce Coupe/Progress Montney Oil: (1) Pouce Coupe 03/16-25-077-13W6 MM 2,317 ( 94% gas ) Sproule 2P…
  30. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 30
    Pouce Coupe / Progress 29 15-13 MM 14-14 MM 920 BOE/d IP30 875 BOE/d IP30 (KEL 50%) (KEL 50%) Pouce Coupe Progress UMM Pad: Progress 02/06-18 Gas Plant 04/07-18 14-8 (20% WI) LMM Pad: 02/08-18 LMM 03/07-18 13-8 05/07-18…
  31. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 31
    Pouce Coupe / Progress Montney Oil Type Curve 30 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 550 MBOE 57% Oil 1% Ngls 42% Gas 10 15 10 5 0 1 3 5 7…
  32. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 32
    Pouce Coupe / Progress Montney Oil Type Curve 31 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 550 MBOE 57% Oil 1% Ngls 42% Gas 10 15 10…
  33. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 33
    Pouce Coupe Montney Oil Well Economics 32 Sproule - Dec/31/2016 Kelt - Sep/2017 Capital drill/complete/equip ( MM) 5.3 5.3 Production IP30 sales ( BOE/d ) 990 ( 58% oil/ngls ) 990 ( 58% oil/ngls ) EUR 2P reserves ( MBOE ) 550 550…
  34. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 34
    Valhalla / La Glace and Pipestone / Wembley 33 Drilling has been focused on the Kelt Middle Montney. Upper Montney La Glace Facility also productive - tested in the 15- (100% WI) Encana 02/13-33 Sexsmith 33 well Gas Plant 790…
  35. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 35
    La Glace Montney Oil Type Curve 34 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 575 MBOE 100 67% Oil 4% Ngls 29% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17 19…
  36. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 36
    La Glace Montney Oil Type Curve 35 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 575 MBOE 100 67% Oil 4% Ngls 29% Gas 10 10 5 0 1 3 5 7 9 11…
  37. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 37
    La Glace Montney Oil Well Economics 36 Sproule - Dec/31/2016 Kelt - Sep/2017 Capital drill/complete/equip ( MM) 4.6 4.6 Production IP30 sales ( BOE/d ) 1,090 ( 78% oil/ngls ) 1,090 ( 78% oil/ngls ) EUR 2P reserves ( MBOE ) 575 575…
  38. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 38
    2017 Montney Development Wells Paybacks 37 Actual Cumulative to May 31, 2017 [3] Remaining to Payback [4] Last Drill & Months Complete Production Operating Production Cost Initial Start Operating Operating Production Income Payback…
  39. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 39
    2017 Montney Delineation / Step-out Wells Paybacks 38 Actual Cumulative to May 31, 2017 [3] Remaining to Payback [4] Last Drill & Months Complete Production Operating Production Cost Initial Start Operating Operating Production…
  40. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 40
    Net Asset Value 39 Dec/31 Dec/31 % ( millions ) 2015 2016 change P&NG reserves, NPV10% BT 1,185.2 1,730.7 + 46% Decommissioning obligations, NPV10% BT [1] ( 13.0 ) ( 9.5 ) - 27% Undeveloped land 168.7 212.5 + 26% Net bank debt ( 211.5 )…
  41. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 41
    Future Considerations 40 KELT: The Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. The Company has amassed vast Montney acreage in new…
  42. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 42
    Management 41 David J. Wilson, President & CEO Sadiq H. Lalani, Vice President & CFO Douglas J. Errico, Vice President, Land Patrick Miles, Vice President, Exploration Douglas O. MacArthur, Vice President, Operations Alan G. Franks,…
  43. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 43
    Board of Directors 42 Robert J. Dales Compensation (Chair), Nominating, Audit, Reserves William C. Guinan Chairman of the Board, HSE Eldon A. McIntyre Reserves (Chair), Nominating, Audit, Compensation Neil G. Sinclair Audit (Chair),…
  44. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 44
    APPENDIX 43 INSIDER COMMITMENT MONTHLY FORECAST OF 2017 WTI & AECO PRICES QUARTERLY PRODUCTION GROWTH QUARTERLY CASH COSTS MAP OF NORTH AMERICAN NATURAL GAS HUBS GAS MARKETING & TRANSPORTATION CONTRACTS HEDGING NON-MONTNEY…
  45. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 45
    INSIDER COMMITTMENT 44 Kelt Insiders ( Directors & Officers ) have actively participated in the Companys financings since inception as shown below: Insider Purchases Offering Shares (MM) Amount (MM) Price/share 13.9 MM Equity Private…
  46. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 46
    Kelts 2017 Forecast - WTI & AECO Prices 45 WTI US/bbl AECO CA/GJ (2017 Average = US50.00) (2017 Average = 2.50) 60.00 5.50 53.47 52.50 52.00 52.00 51.06 51.50 50.00 49.33 50.00 4.00 48.48 48.10 46.63 45.18 3.05 2.84 2.87…
  47. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 47
    Quarterly Production Growth ( since inception ) 46 PRODUCTION ( BOE / d ) 32,000 Oil Ngls 28,000 Gas 24,000 20,000 16,000 12,000 8,000 4,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 [E] [E] 2013…
  48. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 48
    Quarterly Cash Costs 47 CONTROLLING COSTS ( / BOE ) 22.00 G&A 20.00 Interest Production and 18.00 Transportation 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 [E]…
  49. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 49
    North American Natural Gas Hubs 48 Station 2 AECO Sumas Empress Emerson Kingsgate Waddington Stanfield Boston Dawn Opal TGP Marcellus Malin Ventura Chicago Socal San Juan Permian Henry Hub Natural Gas Price Hub
  50. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 50
    B.C. Gas Marketing / Transportation Contracts 49 Supply Term Volume Upstream Market Term Volume Market Price (Transportation) (MMBtu/d) Hub (Sales) (MMBtu/d) Sep/1/2017 Alliance Sep/1/2017 CHICAGO City Gate USD 15,800 [1] 15,800…
  51. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 51
    Alberta Gas Marketing / Transportation Contracts 50 Supply Term Volume Upstream Market Term Volume Market Price (Transportation) (MMBtu/d) Hub (Sales) (MMBtu/d) Nov/1/2017 NGTL FT-D Nov/1/2017 24,640 [2] 23,695 DAWN USD Daily…
  52. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 52
    Hedging 51 ( CA unless otherwise specified ) Period Quantity Fixed Price Feb/1/17 to 500 OPIS Conway Propane 50% WTI USD Dec/31/17 bbls / day SOCAL NYMEX Henry Hub Apr/1/17 to 10,000 SOCAL + Gas Basis Oct/31/17 MMBtu / day US0.055
  53. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 53
    Spirit River 52 LAND Gross: 43,840 acres ( 68 sections ) 13-34 CL Pad: 14-22 (60%) Net: 36,232 acres ( 56 sections ) 15-22 (60%) 13-33 16-22 (60%) Charlie Lake: 28 net sections 16-10 H2O Doe Creek: 21 net sections Disposal…
  54. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 54
    Grande Cache 53 LAND Narraway Modern 13-4 IP30: 9 MMcf/d Gross: 141,120 acres ( 220 sections ) 135 MMcf/d Falher/Wilrich TOU 4-29 Net: 99,716 acres ( 155 sections ) Gas Plant IP30: 20 MMcf/d (7% WI) Falher/Wilrich OPERATIONS…
  55. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 55
    Inga / Stoddart Baldonnel 54 LAND Birch Baldonnel Rights: Gross: 169 sections Baldonnel C Oil Pool (CTD 5.0 MM barrels of oil) Net: 158 sections OPERATIONS Fireweed Oil exploration activity with plans to drill and complete…
  56. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 56
    Sproule P+P Reserves 3 Year Cash Flow Forecast 55 PRODUCTION ( BOE / d ) ( MM ) 2017 2018 2019 60,000 Production ( BOE / d ) 22,600 32,200 42,000 + 30% 50,000 Oil/Ngls / Gas 41% / 59% 44% / 56% 40% / 60% 42,000 Annual Growth 8%…
  57. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 57
    Sproule P+P Reserves FDC 56 FDC Net HZ FDC / well December 31, 2016 ( MM ) Wells ( MM ) Alberta Montney wells 163.5 31.8 5.1 B.C. Montney wells 312.5 51.0 6.1 TOTAL Montney wells 476.0 82.8 5.7 Other formation wells 339.4 74.7…
  58. September 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 58
    Corporate Presentation SEPTEMBER 2017 Suite 300, 311 6th Avenue SW Calgary, Alberta, Canada T2P 3H2 www.KeltExploration.com

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