SIGNIFICANT DEBT REPAYMENT AND FOCUSED ASSET BASE STRENGTHENS THE FOUNDATION CORPORATE PRESENTATION October 26, 2017 CORPORATE PRESENTATION 1
2017 STRATEGY Strategic objectives for 2017 include: Achieved Execute on asset sales Materially reduce debt and improve balance sheet Position Company to execute on Lindbergh development CORPORATE PRESENTATION 2
APPROXIMATELY 1.0 BILLION OF PROCEEDS FROM DISPOSITIONS Year to date, 977 million in asset sales were announced or closed while only selling 27 percent of 2P reserves Post dispositions, portfolio concentrated on two growth assets…
MEANINGFUL DEBT REDUCTION ASSET SALES HAVE ALLOWED FOR SIGNIFICANT REDUCTION IN DEBT FROM YEAR END 2016 1.1 billion Term notes and covertible debentures repaid in 2017 125 million (net) Expected net Swan Hills sale proceeds for…
SYNDICATED CREDIT FACILITY PROVIDES AMPLE LIQUIDITY CURRENT COMPOSITION ( MILLION) COMPOSITION POST SWAN HILLS SALE ( MILLION) 400 330 Undrawn 225 Undrawn 240 Drawn 175 Drawn 90 Current 400 million credit facility will be…
BALANCE SHEET MANAGEMENT REMAINING TERM DEBT MATURITY SCHEDULE IS EXPECTED TO BE MANAGEABLE LONG-TERM DEBT MATURITIES (CDN MILLION EQUIVALENT) Anticipated term debt repayment of 37 million with Swan hills sale proceeds 498 million of…
COVENANT RELAXATION FINANCIAL FLEXIBILITY TO PURSUE LONG-TERM GROWTH OBJECTIVES Previous financial covenants Amended financial covenants Maximum trailing 12 month 3.5x Debt to Adjusted EBITDA Waiver of all covenants for a period…
REVISED INTEREST COVERAGE RATIO PROVIDING FLEXIBILITY AND RUNWAY TO RESTRUCTURE DEBT Trailing 12 month Adjusted EBITDA to Adjusted Interest Expense Pre Swan Post Swan Hills Closing Hills Closing Q3 2017 4.00 to 1.00 4.00 to 1.00 Q4…
FOCUSED GROWTH PORTFOLIO FOCUS ON TWO 100 PERCENT OPERATED GROWTH ASSETS CORPORATE PRESENTATION 9
2017 CAPITAL BUDGET AND CORPORATE GUIDANCE Grow thermal production 80 million Corporate Lindbergh Guidance Focus on growing optimization and additional thermal engineering 2017 Average daily production volumes 41,500 to 43,500 (boe…
PENGROWTHS RESOURCE BASE CONTINUING FOCUS ON THERMAL OIL AND MONTNEY GAS DEVELOPMENT AB SK Fort McMurray Lindbergh Thermal Oil Groundbirch Montney Edmonton Gas Saskatoon BC Calgary Large accumulations Long life assets…
LONG-TERM DEVELOPMENT TWO KEY ASSETS EXPECTED TO PROVIDE OVER 9 BILLION OF DEVELOPMENT OPPORTUNITIES Thermal Oil Montney Gas Lindbergh/Selina SAGD Groundbirch Approximately 7.5 billion of Approximately 1.5 billion of future…
LINDBERGH THERMAL OIL TOP TIER SAGD OPERATION Exceptional Operated SAGD Project Best in Class Economics Large Resource with Low Risk LEGEND Growth Lindbergh Liquids pipelines Lindbergh is one of the most economic, ultra…
LINDBERGH A DEMONSTRATED HIGH QUALITY PROJECT WITH TOP QUARTILE PERFORMANCE 1400 Firebag Christina Lake (CVE) 1200 1000 Average well productivity (bbl/d) 800 Jackfish Surmont Foster Creek Leismer Lindbergh 600…
PEANUT BUTTER VS. HOCKEY PUCKS LINDBERGH: THE PERFECT COMBINATION OF RESERVOIR FLUID AND ROCK Peanut butter vs. hockey pucks Athabasca Cold Lake/Lindbergh Lower API, more steam Higher API, less steam required required…
LINDBERGH THERMAL PROJECT STRONG PERFORMANCE FROM FIRST COMMERCIAL PHASE 18,000 14.00 Production (bbl/d) SOR 16,000 12.00 14,000 Steam-Oil Ratio (SOR) Bitumen Production (bbl/d) 10.00 12,000 10,000 8.00 8,000 6.00…
COLD LAKE/LINDBERGH REGIONAL ADVANTAGES COLD LAKE REGION = SUPERIOR LOWER BLENDING REQUIREMENTS = HIGHER ECONOMICS REALIZED PRICE Projects in the Cold Lake region such as Lindbergh Cold Lakes higher bitumen quality also results in lower…
PENGROWTHS THERMAL PROJECTS STRONG PIPELINE OF THERMAL PROJECTS TO SUPPORT GROWTH Project (Phase) Status Muriel Lake Selina Q2, 2017 average production of Lindbergh Phase One 13, 657 bbl per day (100 % working interest) 2017…
LINDBERGH POTENTIAL GROWTH PROFILE Current Operations (Phase 1 incl. throughput initiative & Pilot) Full Field Lindbergh (Current Operations + Phase 2 expansion) Fully Developed (Full field Lindbergh + Muriel Lake…
LINDBERGH COMPETES WITH LOW COST PRODUCTION 2016 GLOBAL LIQUIDS COST CURVE Shallow water Ultra-deepwater non-OPEC Europe 120 Lindbergh NPV10 breakeven price L48 Niobrara is approximately US 46/bbl L48 other tight oil Canadian oil…
LINDBERGH PHASE TWO CAPITAL COST ESTIMATES LINDBERGH PHASE 2 ESTIMATED CAPITAL COSTS ARE DOWN 30 PERCENT Phase Two capital cost Phase two approval in hand Pre-engineering and design work Phase 2 Capital Costs expected to be 70…
PENGROWTH MONTNEY OVERVIEW MULTI-ZONE PLAY WITH LONG-TERM GROWTH POTENTIAL 19 sections (100 percent Deep inventory of operated, 28 million cubic feet per day working interest) low risk drilling opportunities operated facility…
MONTNEY DEVELOPMENT POTENTIAL MULTI-ZONE DEVELOPMENT OPPORTUNITIES GROUNDBIRCH Multi-zone development potential Productivity and EUR are expected to be greatly enhanced by recent fracing U1 Upper advances U1 Lower 2014 wells…
MONTNEY PLAY ECONOMICS PROVIDE STRONG RETURNS THAT COMPETE WITH OIL PLAYS PER WELL METRICS DCET ( million/well) 8.6 EUR (Bcf) 10.5 Estimate of Discovered PIIP 3.7 Tcf Liquids Yield (bbl/MMcf) Gross/Net Unrisked Inventory 399/360…
SUMMARY EXECUTING ON WHAT IS IN OUR CONTROL Significant debt reduction provides increased visibility to long-term growth and value creation potential Reduced cost structures reflect Companys drive to become low cost producer…
APPENDIX CORPORATE PRESENTATION 26
LINDBERGH PHASE ONE OPTIMIZATION Approximately 70 million allocated in 2017 capital budget towards the optimization of Phase One production The optimization program includes the first new drilling since commercial production…
OIL SANDS INDUSTRY CAPITAL SPENDING MATERIAL DECLINE IN CAPITAL SPENDING IN RECENT YEARS Oil Sands Conventional O&G 100.0 Decline in crude oil prices resulted in significant decline in oil sands capital 80.0 spending since 2014…
RISK MANAGEMENT Hedge positions as at October 26, 2017 Q4 2017 2018 WTI Crude Oil Fixed Hedges US/bbl bbl/d US/bbl bbl/d Ceiling 53.48 2,000 Floor 48.00 2,000 Swaps 49.37 11,500 49.97 8,000 AECO Natural Gas Fixed Hedges…
TAX POOLS NO CASH INCOME TAX EXPECTED TO BE PAYABLE UNTIL AT LEAST 2022 Tax Pools as at October 26, 2017 Category (million) Canadian Oil and Gas Property - Expense Canadian Development Expense 108 Undepreciated Capital Cost…
ADVISORIES Caution Regarding Engineering Terms: When used herein, the term boe means barrels of oil equivalent on the basis of one boe being equal to one barrel of oil or NGLs or 6,000 cubic feet of natural gas (6 Mcf: 1 bbl). Barrels of…
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