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January 2016 Corporate Presentation – Birchcliff Energy Ltd.

Birchcliff Energy Ltd. · Jan 15, 2016 · 70 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. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 1
    CORPORATE PRESENTATION January 2016
  2. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 2
    PEOPLE, FOCUS & EXECUTION Unconventional Natural Gas Resource Player Unconventional Light Oil Resource Player 2
  3. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 3
    INVESTMENT HIGHLIGHTS Current production of approximately 42,000 boe/d as at January 20, 2016. 2015 average production was approximately 39,000 boe/d a new annual average production record. Q4 2015 average production was…
  4. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 4
    INVESTMENT HIGHLIGHTS Focused assets in the Peace River Arch Area of Alberta (the Montney/Doig Natural Gas Resource Play and the Charlie Lake Light Oil Resource Play). Essentially 100% working interest; 99% of production is operated.…
  5. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 5
    CORPORATE SNAPSHOT Production 2014 Average Production (boe/d) 33,734 (84% gas) Q3 2015 Average Production (boe/d) 38,433 (87% gas) 2014 Year End Reserves 2P Reserves 465 MMboe (18% PDP) 2P FD&A Cost (Including FDC) 10.45/boe 2P Recycle…
  6. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 6
    CREDIT FACILITY SUMMARY On May 11, 2015 credit capacity was increased to 800 million based on year end 2014 reserves which included PDP reserves of 84.7 MMboe. Birchcliff expects too see a material increase in PDP reserves volumes at…
  7. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 7
    BIRCHCLIFF HISTORY A Track Record of Execution
  8. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 8
    KEYS TO SUCCESS Executives with proven track record, continuity since inception and significant ownership. Management Highly experienced Management Team with excellent technical knowledge and a long history with the company. 186…
  9. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 9
    PRODUCTION HISTORY 50,000 45,000 40,000 Compound annual growth of 41,000 32% per year since 2005 40,500 40,000 39,000 Average Production (boe/d) 35,000 33,734 30,000 25,829 25,000 22,802 20,000 18,136 15,000 13,079…
  10. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 10
    CORPORATE RESERVES SUMMARY 500,000 450,000 400,000 PDP, 1P and 2P compound annual growth of 16%, 26% 350,000 and 27% per year since 2005 Reserves (Mboe) 300,000 250,000 PDP 200,000 TP 150,000 2P 100,000 50,000 0…
  11. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 11
    CORPORATE NPV10 (BT) 4,000 3,500 2014 year end 2P NPV10 (BT) was 3.8 billion 3,000 NPV10 (million) 2,500 PDP 2,000 TP 1,500 2P 1,000 500 0 YE 2005 YE 2006 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE…
  12. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 12
    PROVEN TRACK RECORD AS A LOW COST PRODUCER Even in 2012, the lowest natural gas price in 10 years, Birchcliff was still able to generate profit. 3 Year Profitability Breakdown: 2012 2013 2014 Average Average AECO (CAD/GJ) 2.27 2.99…
  13. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 13
    PROVEN TRACK RECORD AS A LOW COST FINDER 20 PDP FD&A 1P FD&A 2P FD&A Cash flow netback recycle FD&A Cost (/boe) 0.9x 15 1.2x ratios 1.4x 1.5x 1.6x 1.2x 1.5x 1.9x 10 1.9x 1.3x 1.2x 2.1x 2.3x 2.5x 2.2x 2.2x 2.3x 5 3.1x…
  14. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 14
    PROVEN TRACK RECORD OF PER SHARE GROWTH 40,000 240 600 4,000 Annual Production (boe/d) P+P Reserves per Share (boe/1,000 35,000 210 525 3,500 Annual Production (boe/d) Production per Share Proved (boe/d/million…
  15. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 15
    DECLINE & CAPITAL EFFICIENCY AVERAGE DECEMBER TO DECEMBER PRODUCTION; NOT IPS Dec Avg. 45,000 40,454 Additions boe/d 40,000 Dec Avg. Base 28,749 35,000 Dec Avg. boe/d Production (boe/d) Total Production 27,142 30,000 boe/d…
  16. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 16
    2014 ACCOMPLISHMENTS Drilled 57 (56.0 net) horizontal wells including 41 (41.0 net) Montney/Doig horizontal natural gas wells and 12 (12.0 net) Charlie Lake horizontal light oil wells. Four successful exploration wells drilled in…
  17. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 17
    2015 ACCOMPLISHMENTS Reduced DCCET (drill, case, complete, equip and tie-in) costs on Montney/Doig horizontal natural gas multi-well pads to an average of 4.5 million per well from an average of 5.8 million per well. A combination of…
  18. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 18
    LOOKING FORWARD 2015 Plans & Beyond
  19. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 19
    OUR ASSETS EASILY SUPPORT A PLAN 120,000 TO 100,000 BOE/D 100,000 100,000 Production (boe/d) 80,000 Last common share equity 60,000 offering 14.2 million shares April 2012. 40,000 39,000 40,500 41,000 40,000 33,734…
  20. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 20
    2015 GOALS Deliver annual average production of 39,000 40,000 boe/d (16% 19% Y/Y average production growth). Deliver reserve growth in all categories while progressing strategic exploration projects. Maintain financial…
  21. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 21
    REVISED 2015 CAPITAL EXPENDITURE PROGRAM 2015 CAPITAL BUDGET: 249.4 MILLION Gross Wells Net Wells Net Capital (million)(1) Difference in Capital Drilling & Development New Old New Old New Old (million) Montney D1 Horizontal Gas Wells…
  22. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 22
    2016 GOALS The 2016 capital program is designed to accomplish the following: Spend less than funds flow, maintain Birchcliffs financial flexibility and protect its balance sheet Achieve approximately 3% to 5% year over year annual…
  23. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 23
    2016 CAPITAL EXPENDITURE PROGRAM DCCET Capital 8% 2016 CAPITAL BUDGET: 140.0 MILLION 4% Montney D1 HZ Gas Wells Net Capital Gross Wells Net Wells Basal Doig HZ (million) 12% Gas Wells Drilling & Development Montney D4 HZ 51% Gas…
  24. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 24
    MONTNEY/DOIG NATURAL GAS RESOURCE PLAY A Significant Position in a World Class Play
  25. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 25
    MONTNEY/DOIG - A WORLD CLASS RESOURCE PLAY Resource density. Stacked resource up to 300 meters thick. Large areal extent. Extends over 50,000 square miles. Exceptional fracability. Low clay content, Birchcliff Montney/Doig low Poissons…
  26. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 26
    2016 POUCE COUPE MONTNEY/DOIG DRILLING PROGRAM Utilizing pad drilling efficiencies; 3 pads and 14 wells. All pads already tied-in; minimal tie-in costs. Focus on high quality reservoir area; high production and high EUR. No land…
  27. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 27
    BIRCHCLIFF MONTNEY/DOIG Large contiguous land base with 876.3 net sections prospective for the Montney/Doig over our current intervals. Stacked resource in some of the thickest Montney with 3,346.3 net potential locations…
  28. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 28
    POUCE COUPE AREA Proven asset in development phase. Wells in the area show Montney C high initial deliverability, low Exploration terminal decline and stable long Horizontal term production. Recent exploration success in the…
  29. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 29
    ELMWORTH DEVELOPMENT Second Exploration Horizontal Birchcliff has drilled two successful exploration horizontal wells into the Montney D4 interval, both of which are First expected to result in follow up Exploration Horizontal…
  30. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 30
    STACKED RESOURCE PROVIDES SUBSTANTIAL FUTURE UPSIDE Birchcliff Montney/Doig Natural Gas Resource Play Full Development Plan: Hexastack Basal Doig / Upper Montney (D5) 305.1 (288.4 net) sections 2P reserves booked on 28% of land…
  31. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 31
    PCS GAS PLANT The Engine for Future Growth
  32. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 32
    Production Processed through 2012 2013 2014 Q1-Q3 2015 the PCS Gas Plant Average daily production, net to Birchcliff: Natural gas (Mcf) 59,327 91,666 132,808 159,786 Oil & NGLs (bbls) 204 527 1,065 1,258 Total boe (6:1) 10,092…
  33. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 33
    Corporate Operating Costs vs. % of Natural Gas Sales Volumes Processed at the PCS Gas Plant KEY STRATEGIC 10.00 100% Volume Through PCS Gas Plant Corporate Operating Cost (/boe) ADVANTAGES 8.00 6.00 80% 60% Generates…
  34. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 34
    MONTNEY/DOIG RESERVES Drilled 41 HZ M/D wells 450,000 159 (158.9 net) Montney/Doig Drilled 25 HZ M/D wells 400,000 horizontal natural gas wells Drilled 22 HZ drilled as of Dec 31, 2014 M/D wells 350,000 Drilled 23 HZ…
  35. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 35
    2014 MONTNEY/DOIG RESOURCE ASSESSMENT Summary of Birchcliff Reserves and Resources(1)(2)(3) Reserves and Resource Volumes (Bcfe) Resource Class Low Estimate Case Best Estimate Case High Estimate Case Cumulative Production(4) 216.3…
  36. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 36
    LOW DECLINE PRODUCTION All wells are choked initially for better operational efficiency, higher ultimate recovery and reservoir management. This leads to lower declines and subsequently less wells required to maintain production…
  37. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 37
    MONTNEY/DOIG REPRESENTS 81% OF PRODUCTION AND 89% OF 2P RESERVES Production (boe/d) 2P Reserves (MMboe) 40,000 500 Corporate Production Corporate Reserves Montney/Doig Production Montney/Doig Reserves 400 30,000 300 20,000 200…
  38. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 38
    PCS GAS PLANT HIGHLIGHTS 100% owned & operated. Current processing capacity of 180 MMcf/d. Preparation for construction of Phase 22% V expansion underway; will add 80 MMcf/d bringing total processing capacity to 260 MMcf/d in…
  39. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 39
    DRILLING & 2015 Montney/Doig Wells COMPLETION 2014 Montney/Doig Wells INITIATIVES Achieved steady reduction in both drilling time & costs. Continue to monitor and refine current drilling & completion practices to improve…
  40. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 40
    NEW COMPLETION TECHNIQUES IMPROVING WELL RESULTS 2014 Well Results vs. Deloitte Type Curves Year End 2014 Deloitte Tier 1 Type Curve IP: 5.2 MMcf/d 2P EUR: 6.0 Bcfe 40
  41. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 41
    ONE OF THE LARGEST MONTNEY LAND HOLDERS 1,400 1,200 Birchcliff has one of the largest land positons in the entire Montney/Doig Montney Acres (000's) 1,000 Natural Gas Resource Play 800 600 400 200 0 CNQ…
  42. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 42
    PCS GAS PLANT Scenario Analysis
  43. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 43
    IMPROVED PCS GAS PLANT ECONOMICS As of July 15, 2015, DCCET costs on our Montney/Doig horizontal natural gas wells have decreased to 4.5 million from 5.8 million largely due to significant cost savings on drilling and completion…
  44. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 44
    ILLUSTRATIVE 60 MMcf/d PCS GAS PLANT BUILD & FILL SCENARIO The chart to the right depicts the Montney/Doig Wells to keep 60 MMcf/d Gas estimated Montney/Doig wells Plant Full for 30+ Years(1) required to keep 60 MMcf/d plant 25 80…
  45. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 45
    The table below presents on an annual basis the internally estimated (1) facilities and DCCET capital requirements, (2) operating cash flow and (3) free cash flow (FCF) from a 60 MMcf/d PCS Gas Plant under various AECO natural gas…
  46. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 46
    PROXIMAL TO INFRASTRUCTURE WITH LONG TERM EXPOSURE TO LNG EXPORT Montney/Doig Birchcliff Pouce Coupe Production Montney/Doig & PCS Gas Plant Owned Infrastructure PCS Gas Plant Nova Pipeline System North American Market…
  47. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 47
    ENOUGH RESOURCE TO FILL A ONE Bcf/d LNG TRAIN FOR OVER 20 YEARS = 1 Bcf/d LNG Train X 365 Days X 20 Years 7.3 Tcf BIR Remaining BIR Contingent Reserves Resource + / = 1 Bcf/d LNG 2.5 Tcf 7.9 Tcf 28 Years Train Birchcliff…
  48. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 48
    CHARLIE LAKE LIGHT OIL RESOURCE PLAY Dependable Light Oil Production
  49. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 49
    WORSLEY CHARLIE LAKE LIGHT OIL One 2016 well continues 18 Essentially 100% W.I. with sections of land operatorship and control of wells, and will extend pool to N.E. off an pipelines and facilities. existing pad at minimal tie-in…
  50. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 50
    WORSLEY CHARLIE LAKE LIGHT OIL ACCOMPLISHMENTS SINCE SEPTEMBER 2007 ACQUISITION 2P reserves have increased over 160% to 40.2 MMboe from 15.1 MMboe. Production increased over 45% to 4,991 boe/d in 2014 from 3,400 boe/d. 2014 year end…
  51. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 51
    WORSLEY AREA RESERVES 45,000 40,000 35,000 30,000 Reserves (Mboe) 25,000 PDP 20,000 TP 15,000 2P 10,000 5,000 0 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 PDP 6,018 6,395 6,008 6,757 7,102…
  52. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 52
    WORSLEY AREA NPV10 (BT) VS. DELOITTE OIL PRICE FORECAST 1,200 120 1,000 100 5 Year WTI Average /bbl 800 80 NPV (million) 600 60 400 40 200 20 0 YE 2007 YE 2008 YE 2009 YE 2010 YE 2011 YE 2012 YE 2013 YE 2014 0…
  53. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 53
    PROGRESS Birchcliff Non-Confidential Land CHARLIE LAKE Birchcliff Exploration Horizontal Wells Charlie Lake Producing Wells LIGHT OIL First successful Charlie Lake light oil exploration horizontal well drilled in Q4 2014 and…
  54. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 54
    10 YEAR HIGHLIGHTS Celebrating 10 Years of Success
  55. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 55
    Birchcliffs average daily production was 33,734 boe/d in 33,734 boe/d 2014 compared to 2,793 boe/d in 2005, a compounded annual growth rate of 32% per year during those 10 years. 2,793 boe/d 1 2 3 4 5 6 7 8 9 10 11 12 2004 2005…
  56. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 56
    Production Growth boe/d/million wtd. avg. shares 40,000 300 30,000 225 Birchcliff has increased production at a compound annual growth rate of boe/day 20,000 150 32% over the past 10 years. 10,000 75 0 0 2005 2006…
  57. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 57
    Cash Flow from Operations 300 3.00 250 2.50 200 2.00 On average, cashflow and cash flow millions /share 150 1.50 per common share have increased 100 1.00 by 35% and 29%, respectively, over 50 0.50 the past five years. -…
  58. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 58
    Reserves Growth 500 3,500 400 2,800 Birchcliff has added significant low cost reserves boe/1,000 shares over the last 10 years of operations. On a per 300 2,100 common share basis, PDP, 1P and MMboe 200 1,400 2P…
  59. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 59
    APPENDIX
  60. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 60
    PEER COMPARISONS 2014 PDP FD&A Summary (/boe) Top 15 50.00 5.0 PDP FD&A Recycle on 2014 CF/BOE (Right Axis) 40.00 4.0 30.00 3.0 20.00 2.0 10.00 1.0 0.00 0.0 CQE PPY BIR PEY RMP SGY WCP CPG TOU…
  61. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 61
    PEER COMPARISONS Historical FD&A Costs 2P (/boe) 20.00 2014 3-Year Average 16.00 12.00 8.00 4.00 0.00 TOU ARX VII KEL PEY NVA CR BIR SRX AAV PPY Source: Cormark…
  62. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 62
    EXECUTIVE OFFICERS Mr. Tonken is a Director and the President and CEO of Birchcliff. He has more than 34 years of A. Jeffery experience in the oil and gas industry and is one of the Corporations founders. Prior to creating Birchcliff,…
  63. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 63
    EXECUTIVE OFFICERS Mr. Carlsen was appointed Vice-President, Engineering on July 22, 2013. He previously served as Christopher A. Asset Team Lead and Senior Exploitation Engineer with Birchcliff. Mr. Carlsen is a Professional Engineer…
  64. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 64
    BOARD OF DIRECTORS Mr. Shaw is a Director of Birchcliff and has more than 27 years of experience in the oil and gas industry Larry A. Shaw and is one of the Corporations founders. Prior to joining Birchcliff, Mr. Shaw served as Chairman…
  65. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 65
    DISCLOSURE OF OIL AND GAS RESERVES AND RESOURCES: RESERVE CATEGORIES Reserves are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date,…
  66. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 66
    RESOURCES AND PRODUCTION (CONTINUED) Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.…
  67. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 67
    ADVISORIES AND FORWARD LOOKING INFORMATION: NON-GAAP MEASURES This Presentation uses cash flow, cash flow from operations, cash flow per common share, netback, operating netback, estimated operating netback, cash flow netback, operating…
  68. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 68
    RESERVE LIFE INDEX AND RECYCLE RATIOS Reserve life index is calculated by dividing reserves estimated by Deloitte at December 31, 2014 by the average production in the applicable period (i.e. annualized fourth quarter average production…
  69. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 69
    With respect to statements regarding the Corporations capital budget, the key assumption is that Birchcliff realizes the average annual production target of 38,000 to 40,000 boe/d and the commodity prices upon which the Corporations…
  70. January 2016 Corporate Presentation – Birchcliff Energy Ltd. – slide 70
    THANK YOU TEAM BIRCHCLIFF Jeffrey Akeroyd, Karen Allen, Camille Ashton, Rainer Augsten, Gates Aurigemma, Al Basnett, Angela Belbeck, Charmaine Belley, Tyrus Bender, Tim Berg, Perry Billard, Myles Bosman, Jeff Boswell, Robyn…

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