SUSTAINABLE CONVENTIONAL RESOURCE COMPANY TSX: SGY SEPTEMBER, 2017
REASONS TO OWN SURGE 100% operated, high quality, low decline asset base Experienced management team with proven track records High quality light/medium crude oil asset base; low decline < 25% High netbacks; top tier capital…
OUTSTANDING RESULTS Continuing to execute a strong and sustainable business plan Over the previous four quarters Surge management has delivered: Three upward revisions to production guidance; 22% growth in production/share from…
FUNDAMENTALS OF SUSTAINABILITY - SHAREHOLDER RETURNS(1) The foundations for sustainability and the assets to deliver low to mid-teens annual returns Cashflow Capital Netback Efficiencies Decline CAD 23.25/…
REVISED GUIDANCE APRIL 2017 Generating excess free cashflow at US55 WTI 2017 Guidance at US55 WTI(1) OPERATIONAL 2017 Average Production (boe/d) 14,450 (81 percent liquids) 2017 Exit Production (boe/d) 15,150 (82 percent liquids)…
CASH FLOW SENSITIVITIES Production growth = compounding cash flow growth at higher oil prices 2H 2017 Annualized Cashflow Sensitivity to Changes in US WTI(1) 60.0 50.0 40.0 Millions 30.0 20.0 10.0 0.0…
ELITE ASSETS FOCUSED IN THREE CORE AREAS Large OOIP pools in established conventional reservoir trends Surge 2017(e) Avg Production: Total: 14,450 boe/d (81% Oil & NGLs) (57% on AB Crown) Western Alberta Production: Total: 6,100…
TARGETING CONVENTIONAL RESERVOIRS Surge focuses on reservoirs in the conventional end of the permeability spectrum Ultimate Oil Capital expenditures decrease, Recovery while recovery factors and ROR rates of return…
FULL CYCLE ECONOMIC DRILLING INVENTORY 8 years of drilling locations with an average 53% risked IRR 45 WTI & 3 Henry Hub IRR*: 94% IRR*: 89% IRR*: 78% IRR*: 53% Strong balance sheet: 2017 Debt/CF = 1.25x Ample liquidity: 60%…
LARGE OOIP, LOW RECOVERY FACTORS 1.6 Billion bbls net OOIP with up to 230 Million net barrels remaining recoverable Drilling Locations Internally Estimated Ultimate OOIP (MMbbls) Gross/Net(2) Avg. CTD Oil Total Booked Independent…
THREE CORE CONVENTIONAL RESERVOIRS Applying proven technology to conventional reservoirs provides top tier performance and higher recovery factors U. Shaunavon Valhalla Doig Sparky Depth 1450m Depth 2000m Depth 725m Net Pay 4-10m…
CORE AREA ECONOMICS Top tier capital efficiencies and replacement metrics 2017 Budget Areas/Formations Capital Internal EUR Core Drill/ Complete/ Payout(1) NPV10 / Locations Efficiency Rates of 365 day IP Mboe/well Area Equip/…
SOUTHEAST ALBERTA Provost / Eyehill / Wainwright areas Oil saturated, stacked Cretaceous sands Wainwright AB SK 500 MMbbls of net OOIP (23-31 API oil) Betty 400MMbbls of net OOIP in the Sparky Lake Current recovery factor of 13%…
SPARKY UNDER-DEVELOPED COMPARED TO SIMILAR RESOURCE TRENDS Surge leading the pack with horizontal multi-stage fracs on the next big play Oil Play Comparison Alberta Sask Cum oil Recovery of Hz Avg. oil OOIP Play Prod Factor wells…
SPARKY EYEHILL ACTIVITY 100MMbbl net OOIP estimated in the Sparky at Eyehill…
EYEHILL SPARKY WATERFLOOD PERFORMANCE Waterflood pressure support flattening production profiles, and increasing EURs Eyehill SPKY - SGY Results vs Type Curve 160 100/12-10-037-03W4/00 Rate 140 102/13-10-037-03W4/00 Rate Injection…
UPPER SHAUNAVON Large contiguous land position in the 2.0Bbbl Upper Shaunavon trend R21W3 R19W3 Instow T10 T8 Reference: Table above sourced from Discovery Digest Volume 4, 2016 Total Shaunavon production (Upper & Lower) is…
UPPER SHAUNAVON ACTIVITY 275MMbbl (265MMbbl net) OOIP on Surge lands in the Upper Shaunavon R20W3 R19W3 Shaunavon Type Log 15-25-005-20W3 T7 Upper Shaunavon A Sand Upper Shaunavon B Sand Upper Shaunavon C Sand T6 Lower…
UPPER SHAUNAVON WATERFLOOD RESPONSE Average production 90 bopd per well after 22 months U. Shaunavon Primary Type Curve vs Waterflood Production 80 Waterflood Producers Cum (9 Wells) Waterflood: 5 horizontal wells converted to…
NORTHWEST ALBERTA Large OOIP 615MMbbls net in concentrated high quality light oil reservoirs Large OOIP of 760 (635 net) MMbbls of high quality light oil (32-40 API) Valhalla Large development inventory of OOIP: 300 mmbbl Nipisi…
NORTHWEST ALBERTA - VALHALLA Control of large OOIP stacked pay reservoirs, with working interest ownership in key facilities, and firm service agreements in place Stacked Reservoirs Sexsmith Depth Net OOIP Current 04-08-075-7W6…
POSITIONED FOR LONG TERM SUSTAINABILITY Low base decline
HIGH QUALITY CRUDE OIL ASSET BASE Focused, high quality, crude oil asset and opportunity base; 3 core areas are 100% operated, with working interests of 90% Large OOIP crude oil reservoirs with low recovery factors; 17 year…
2016 YEAR END RESERVES 1.3 Billion of Total Proved plus Probable Reserves Value (NPVBT10) 2016 Year End Reserves(1) Surge replaced more than Oil& NGLs Gas Total NPVBT10 Reserve Category (Mbbl) (MMcf) (Mboe) (MM) (2) 130% of 2016…
NET ASSET VALUE - 5.47 PER SHARE Strong NAV supporting per share value SURGE 2016 NAV 2P Reserves Value (MM)* 1,301 Undeveloped Land 96 and Seismic (MM)** 2016 Year End Net Debt (MM) (162) Basic Shares Outstanding (MM) 225.8…
OIL HEDGING Significant percentage of 2017 production protected with a floor of over C65 WTI 5,500 80.00 5,000 4,500 70.00 Weighed Average Floor Price per bbl (C WTI) 4,000 60.00 3,500 bbl/d of C WTI Hedged 3,000…
RISK MANAGEMENT / HEDGING STRATEGY 2017 ONWARDS The Company has an orderly, on-going, risk management / hedging program designed to lock in future cash flows to protect the Companys capital program and fund dividends. Below is a list of…
RISK MANAGEMENT / HEDGING STRATEGY 2017 ONWARDS The Company has an orderly, on-going, risk management / hedging program designed to lock in future cash flows to protect the Companys capital program and fund dividends. Below is a list of…
ANALYST COVERAGE Financial Institution Analyst Email Address Acumen Capital Partners Trevor Reynolds treynoldsacumencapital.com BMO Capital Markets Ray Kwan ray.kwanbmo.com Canaccord Genuity Anthony Petrucci apetruccicanaccordgenuity.com…
CORPORATE PARTNERS Advisors National Bank of Canada Bank of Nova Scotia Canadian Imperial Bank of Commerce Toronto-Dominion Bank Bank of Montreal Bankers Syndicate: ATB Financial HSBC Bank Canada Wells Fargo Goldman Sachs BDC…
ENDNOTES Slide 2 & 10: (1) Based on Sproule's December 31, 2016 Price Forecast (2) This presentation discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Proved…
NON-GAAP MEASURES NON-GAAP MEASURES This presentation includes non-GAAP measures as further described herein. These non-GAAP measures do not have a standardized meaning prescribed by International Financial Reporting Standards (IFRS…
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