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October 2017 Investor Update – Painted Pony Energy Ltd.

Painted Pony Energy Ltd. · Oct 6, 2017 · 31 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. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 1
    Celebrating 10 Years of Growth TSX: PONY Investor October 6, 2017 Update
  2. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 2
    Corporate Profile TSX Ticker Symbol PONY Daily Trading Volume (6 month average) 0.9 million shares per day Q2 2017 Average Daily 243 MMcfe/day Shares Outstanding 161 million Production (40,574 boe/d) 2017(e) Q4…
  3. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 3
    Significant Growth Montney Pure Play Asset The Montney is the most economic natural gas liquids play in Canada 314 net sections (201,009 net acres) of Montney lands 6.9 Tcfe (1,148 MMboe) 2P Reserves(1) (2) with a year- end 2016…
  4. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 4
    PONYs High Growth History Nobody cares about the shoe you make 80 years from now Resource Increased pace of development to grow annual production volumes necessary to match resource potential and to bring value forward Economies…
  5. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 5
    2017 & 2018 Development Model Infrastructure Supports Growth 90,000 AltaGas 80,000 Townsend Facility (Phase 2) 99 MMcf/d 70,000 Begins Production Volumes (boe/d) Operations 60,000 2018 50,000 YE 2017 AltaGas Townsend…
  6. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 6
    Growth-Oriented Spending Moving Towards Cash Flow Budget Annual Average Daily Production (Forecast) Capital Development Program 400 Annual Average Daily Production (Actual) Cash Flow 600 Cash Flow per Share (Forecast) (Net of Interest…
  7. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 7
    Financial Strength Term Debt and Credit Facility Provide Ample Flexibility Improved Liquidity 400 Million Syndicated Credit Facility Syndicated Credit Secured, Reserve Based Lending Facility 11% Matures April 2019 45 mm Drawn*…
  8. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 8
    Historical Costs Drilling & Completion Efficiency on 113 Operated Wells As capital well costs fell, production type curves dramatically improved Management Type Curve Continued type curve Perf & Plug Systems 22 wells increased 50%…
  9. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 9
    Increasing Cash Flow per Mcfe Driving Costs Lower / Increasing Liquids Production G&A Costs per Mcfe Operating Costs per Mcfe* Liquids Production Operating Cost ( / Mcfe) 0.35 63% 1.00 43% 6,000 G&A Cost ( / Mcfe) Liquids…
  10. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 10
    Solid Margins Drive Earnings Cost Efficiencies Drive Higher Cash Flow/Mcfe in 2018 Cash Costs Non-Cash Costs Cash Costs Non-Cash Costs 3.50 Top Line Revenue Pre-Tax 3.50 Top Line Revenue 1.50 Pre-Tax 3.26 /Mcfe 1.50 Earnings 3.18…
  11. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 11
    Montney Sweet Spot Location, Location, Location PONYs Montney Sweet Spot is: a dolomitic siltstone with higher reservoir quality than a shale 4x thicker than the Marcellus at greater than 300 300m Beg meters (approximately 1,000…
  12. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 12
    PONY Well Performance Drilling in the Sweet Spot Cumulative production of approximately Estimated 15 bbls/MMcf of liquids flowing 2.5 Bcf in first 8 months through Townsend Facility 500 15,000 Casing Pressure (kPa) Daily…
  13. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 13
    The Sweet Spot Top Decile Well Performance PONY has best well in North Montney with 2,500,000 6-month cumulative production of 2.0 Bcf 6-Month Cumulative 36 of top 100 2,000,000 Based on North Montney Natural wells are PONY…
  14. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 14
    2017 Economics By Area Consensus Pricing Townsend Blair Daiber 16 Management Type Curves 16 Management Type Curves 16 Management Type Curves 14 14 14 Op Day Gas Rate (mmcef/d) Op Day Gas Rate (mmcf/d) 12 45 bbls/MMcf 12 15…
  15. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 15
    Development Economics Price Sensitivity (Half Cycle) Townsend P50 Blair P50 Daiber P50 175% High-rate Daiber wells 150% Liquids-enhanced, provide Blair wells provide natural gas 125% exposure to stronger pricing torque…
  16. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 16
    Reserve Additions At Excellent FD&A Costs Industry Leading Finding, Development & Acquisition Costs 3.00 Industry 2.77 2.76 leading 1P + 2P FD&A 2.50 costs FD&A Costs (incl change in FDC) per Mcfe 2.26 2016 PDP Recycle…
  17. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 17
    Pro Forma Reserves PONY Reserves (Pro Forma) Dec 31, 2016 2016 Proved F&D costs of 0.56/Mcfe generated a Proven Recycle Ratio of 2.6x PDP 6.9 Tcfe 2P Reserves 0.6 Tcfe or 9% 1.125 Bboe PUD + Probable PDNP Reserves Includes…
  18. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 18
    Canadian Natural Gas 2P Reserves As at Dec 31, 2016 Proved Natural Gas Reserves Probable Natural Gas Reserves 10.0 PONYs 2P Natural Gas Canadian Natural Gas 2P Reserves (Tcf) 8.0 reserves of 6.4 Tcf (3.2 Tcf Proved + 3.2…
  19. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 19
    Market Diversification Natural Gas Catalysts 2017 YTD Alberta Demand increased 0.4 Bcf/d Station 2 AECO T-South Alliance Sumas Mainline GTN Northwest US Exports to Northern Border Mexico & LNG Dawn Malin Exports…
  20. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 20
    2018 Production Revenue Managing Volatility PONY is Contracts Under NOT tied to Negotiation Condensate Station 2 8% & NGLs Pricing 17% AECO Fixed Price 8% Contracts 34% Station 2 Currently 92% of 2018 8% Estimated…
  21. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 21
    Increasing Market Diversification Access to Markets 100% Call Option 90% PONY is increasingly Percentage of Estimated Production 80% Fixed Price Physical Contracts diversifying sales away from 70% Station 2 by financially…
  22. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 22
    Fixed Price Hedges Prudent Risk Management Financial hedges, working together with index physical contracts, protect 550 cash flow and AECO Fixed Price Hedges (/Mcf) mitigate pricing Station 2 Fixed Price Hedges (/Mcf) Expected…
  23. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 23
    Sensitivities Natural Gas & Liquids Pricing 2017 2018 AECO CAD 0.10/Mcf 1.0 million 8.0 million WTI US 1.00/bbl 0.5 million 1.6 million Cash Flow* 117 million 230 million Capital / Development 314 million 262 million *Net…
  24. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 24
    Forecasted Capital Expenditures 2017 2017 Capital Spending Forecast Period Capital Drilling Completions Q1 96 million 18 wells 12 completions Q2 58 million 11 wells 10 completions Q3 84 million(e) 16 wells(e) 12…
  25. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 25
    Relative Valuation 2018 Metrics 12.0x 11.8x 9.9x 10.0x 9.2x 8.4x 2018 EV/DACF 8.0x 7.4x 7.1x 6.7x 5.8x 6.1x 6.0x 5.2x 5.3x 4.9x 4.6x 3.8x 4.0x 2.0x 0.0x BNP PONY BIR SRX VII CR TOU PEY NVA AAV ARX KEL TET…
  26. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 26
    Pony Points Checking Off All of the Boxes Financing In-Place + Liquidity Top Well Performance Low Well Costs Firm Transportation Massive Reserves Base 25
  27. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 27
    Appendices and Advisories
  28. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 28
    Gas Processing Complex Processing Flexibility Jedney (13 MMcf/d) Total Processing Capacity October 2017 577 MMcf/d Owned 153 MMcf/d West Blair Third-party 424 MMcf/d (25 MMcf/d) AltaGas Blair Beg Liquids Processing - 372 MMcf/d…
  29. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 29
    Production Growth Consistent Per Share Growth 6,589 8,693 13,192 15,604 23,204 43,500 - 46,000 68,500 - 72,000 Annual Average boe/d boe/d boe/d boe/d boe/d boe/d boe/d (boe/d ) 450 3.00 250% Organic Production Growth, 2012 -…
  30. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 30
    Cash Flow Growth Strong Per Share Metrics 0.55 Significant Year-over-Year 1.35 2018f Growth in Cash Flow per Share 0.50 0.45 0.80 2017f 0.40 Realized Cash Flow per Share Forecast 0.35 0.56 0.30 2016 0.25 0.20…
  31. October 2017 Investor Update – Painted Pony Energy Ltd. – slide 31
    Corporate Overview Auditor KPMG LLP Evaluation Engineers GLJ Petroleum Consultants Ltd. Banks The Toronto-Dominion Bank The Bank of Nova Scotia Alberta Treasury Branches Canadian Imperial Bank of Commerce HSBC Bank Canada Wells…

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