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January 2015 Investor Day Presentation – Pengrowth Energy Corp

Pengrowth Energy Corp · Jan 22, 2015 · 68 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 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 1
  2. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 2
    AGENDA 1 Investor Day 2015 Introduction & welcome Wassem Khalil Manager Investor Relations Corporate strategy Derek Evans President & CEO Financial strategy Chris Webster Chief Financial Officer 2015 Budget & asset overview Marlon…
  3. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 3
  4. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 4
    TSX:PGF NYSE:PGH CORPORATE PROFILE 1. Based on January 19, 2015 TSX closing price of $3.62. 2. Defined as market capitalization + long-term + short-term debt as at December 31, 2014. 3. As at December 31, 2014. 4. Calculated as…
  5. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 5
    TSX:PGF NYSE:PGH EXPERIENCED TEAM WITH TRACK RECORD OF SUCCESS ? Pengrowth management has extensive oil and gas experience spanning many commodity cycles in the Western Canadian Sedimentary Basin over several decades ? This…
  6. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 6
    TSX:PGF NYSE:PGH WHY SHOULD YOU INVEST IN PENGROWTH? Strategic plan ? Build a sustainable dividend paying entity through the development of large accumulations of oil, bitumen and natural gas with low declines and low cost…
  7. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 7
    TSX:PGF NYSE:PGH Financial ? Expanded commodity price hedging positions protecting 2015 and 2016 cash flows ? Foreign exchange hedges on term debt ?In the Money ~$55 million? at December 31, 2014 ? Covenant relief on bank facility…
  8. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 8
    TSX:PGF NYSE:PGH CONVENTIONAL OPERATIONS Conventional ? Production performance exceeded top end of guidance even with mature asset sales of 1,400 boe/d ? Proceeds from mature asset sales of $89 million, were used to partially fund…
  9. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 9
    TSX:PGF NYSE:PGH 2014, ANOTHER YEAR OF SUBSTANTIAL ACCOMPLISHMENTS Thermal ? Lindbergh Phase I construction and commissioning completed on time ? First steam in December 2014 ? Pilot production continues to outperform expectations ?…
  10. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 10
    TSX:PGF NYSE:PGH ?PRESERVING OUR FINANCIAL HEALTH AND SUSTAINABILITY WHILE WEATHERING THE STORM?
  11. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 11
    TSX:PGF NYSE:PGH REACTING TO THE CURRENT ENVIRONMENT ? A significantly reduced capital program for 2015 of $200 million, representing a 74 percent reduction from 2014 ? Deferral of Lindbergh Phase II capital spending by at least one…
  12. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 12
    TSX:PGF NYSE:PGH ?OUR STRATEGY REMAINS TO BUILD A SUSTAINABLE DIVIDEND PAYING ENTITY THROUGH THE DEVELOPMENT OF LARGE ACCUMULATIONS OF OIL, BITUMEN AND NATURAL GAS WITH LOW DECLINES AND LOW COST STRUCTURES?
  13. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 13
    TSX:PGF NYSE:PGH WE HAVE ALL THE REQUIRED ELEMENTS TO BECOME A SUSTAINABLE DIVIDEND PAYING ENTITY Investor Day 2015 Sustainable Dividend Paying Entity Assets Finance People Assets ? Conventional assets are large accumulations…
  14. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 14
    TSX:PGF NYSE:PGH SUSTAINABLE GROWTH WITH COMMODITY AND CAPITAL OPTIONALITY Barbell provides commodity and capital optionality SUSTAINABLE DIVIDEND PAYING ENTITY ? Large accumulations ? Long life assets ? Low declines ? Low cost…
  15. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 15
    TSX:PGF NYSE:PGH STRATEGY EXECUTION ? Cardium drilling results continue to outperform with lower capital costs, consistent year-over-year initial production and EUR?s ? Delivered on Lindbergh Phase I - construction, commissioning and…
  16. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 16
    TSX:PGF NYSE:PGH ? We have a history of delivering on our commitments and 2014 was another solid year of demonstrating this ? Announced extensive measures to ensure our financial health and sustainability in turbulent low commodity…
  17. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 17
  18. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 18
    TSX:PGF NYSE:PGH ? Completed Phase I of Lindbergh by deploying proceeds from 2013 property sales ? Continued to build portfolio of hedge positions providing cash flow protection in 2015 and 2016 ? Maintained ample capacity on $1…
  19. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 19
    TSX:PGF NYSE:PGH 2015 WILL FOCUS ON A BALANCED SPENDING PROFILE Investor Day 2015 ? Development efforts will focus on optimizing vs. growth ? 2015 financial profile that balances cash outflows with cash inflows ? Reduce 2015 capital…
  20. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 20
    TSX:PGF NYSE:PGH OPPORTUNITIES TO FURTHER REDUCE DEBT ? Take opportunities to repay bank revolver debt ? Asset sales and continue to rotate asset base ? Mid-stream and 3rd party infrastructure partners ? Excess cash flow directed to…
  21. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 21
    TSX:PGF NYSE:PGH 2015 GUIDANCE STRIKING A BALANCE Capital ($ Millions) 190 to 210 Conventional 95 Lindbergh 75 Average daily production (boe/d) 73,000 to 75,000 Royalties (%) 12 to 15 Net operating costs ($/boe) 15.50 to 16.50…
  22. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 22
    TSX:PGF NYSE:PGH PENGROWTH?S CREDIT CAPACITY IS MORE THAN SUFFICIENT TO MEET OUR NEEDS Outstanding Forecast year end 2014 ($ Millions) Senior fixed term notes 1,534 Term Credit facilities/Bank debt 191 Convertible debentures 137…
  23. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 23
    TSX:PGF NYSE:PGH 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 $80 WTI $70 WTI $60 WTI $50 WTI Corporate presentation TOTAL DEBT1/EBITDA EXPECTED TO DECLINE EVEN IN LOWER…
  24. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 24
    TSX:PGF NYSE:PGH Calendar Year Hedge positions as at January 15, 2015 Oil Volume (bbl/d) Price per bbl ($Cdn) Current oil production hedged* Hedging Limits (% of production) 2015 26,000 $93.96 75% Up to 65% 2016 20,000 $89.95 58%…
  25. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 25
    TSX:PGF NYSE:PGH Oil Volume (bbl/d) Price per bbl ($Cdn) Mark to Market Value ($ Millions)* 2015 26,000 $93.96 $264 2016 20,000 $89.95 $120 Total $384 Natural Gas Volume (MMcf/d) Price per Mcf ($Cdn) Mark to Market Value ($…
  26. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 26
    TSX:PGF NYSE:PGH OIL HEDGE POSITION PROTECTS CASH FLOW 10 12 14 16 18 20 22 24 26 28 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Swap Put Hedged Volume (Mbbl/d) 75% of 2015 expected oil production hedged at an average price of $93.96/bbl*…
  27. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 27
    TSX:PGF NYSE:PGH NATURAL GAS HEDGE POSITION PROTECTS CASH FLOW 0 10 20 30 40 50 60 70 80 90 100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Swap Put Hedged Volume (MMcfl/d) 2015 2016 2017 2018 49% of 2015 expected gas…
  28. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 28
    TSX:PGF NYSE:PGH DEBT OUTLOOK ? Approximately $1.87 billion of long-term debt as at December 31, 2014 ? $100 million of 6.75% convertible debentures matured on December 31, 2014 ? Approximately $170 million of long-term notes…
  29. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 29
    TSX:PGF NYSE:PGH 0 50 100 150 200 250 300 350 400 450 2015 2017 2018 2019 2020 Principal amount Amount hedged 70% 17% 63% 47% 43% % of principal hedged $Cdn Millions HEDGING FOREIGN EXCHANGE EXPOSURE ON TERM NOTES TO…
  30. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 30
    TSX:PGF NYSE:PGH Category ($Millions) Canadian Oil and Gas Property Expense 685 Canadian Development Expense 770 Undepreciated Capital Cost 1,030 Canadian Exploration Expense 170 Other 1,325 Total 3,980 Estimated Tax Pools as at…
  31. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 31
  32. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 32
    TSX:PGF NYSE:PGH 2014, ANOTHER SUCCESSFUL YEAR OF DELIVERING ON WHAT WE PROMISED ? Drilling details - 74 gross (44.3 net) wells ? weighted to Cardium ? Continued to rationalize portfolio, selling minor non-core assets with…
  33. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 33
    TSX:PGF NYSE:PGH WHAT TO EXPECT IN 2015 ? Production growth of approximately 1.5 percent at mid-point of guidance 73,000 to 75,000 boe/d ? Low decline rate allows for sustained production with a significantly reduced capital budget ?…
  34. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 34
    TSX:PGF NYSE:PGH 2015 OPERATING COSTS BY CATEGORY ($/BOE) $16.71/BOE ORIGINAL ESTIMATE Highlighted categories can be impacted by the cost management program We will target a reduction of $7.80 X 10% = $0.78/boe ($20 MM) TARGET <…
  35. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 35
  36. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 36
    TSX:PGF NYSE:PGH Oil sand deposits Peace River Area Athabasca Area Calgary Lloydminster Edmonton Albera Saskatchewan Lindbergh LINDBERGH ? WHERE AND WHAT IS IT? Map Area Lindbergh Target formation Lloydminster 2P Reserves *…
  37. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 37
    TSX:PGF NYSE:PGH LINDBERGH COMMERCIAL FACILITIES Lindbergh oil tanks Flare stack
  38. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 38
    TSX:PGF NYSE:PGH LINDBERGH COMMERCIAL FACILITIES Lindbergh water tanks Evaporator towers
  39. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 39
    TSX:PGF NYSE:PGH LINDBERGH COMMERCIAL FACILITIES Incoming pipelines Glycol delivery
  40. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 40
    TSX:PGF NYSE:PGH LINDBERGH COMMERCIAL OPERATIONS UPDATE Incoming pipelines Glycol delivery ? First two well pads steaming ? Pad D05 with eight wells pairs ? Pad D03 with seven well pairs ? Pad D02, with five well pairs expected to…
  41. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 41
    TSX:PGF NYSE:PGH SUPERIOR PILOT PERFORMANCE HAS INCREASED OPTIONALITY FOR LINDBERGH DEVELOPMENT ? Strong pilot performance allows us to utilize anticipated efficiencies to gain additional value on commercial facilities 200 700…
  42. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 42
    TSX:PGF NYSE:PGH LINDBERGH PILOT RESULTS POINT TO HIGHER RECOVERY RATES VERSUS TYPE CURVE EXPECTATIONS 0 200 400 600 800 1,000 1,200 1,400 0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90 96 102 108 114 120 Type Curve Lindbergh…
  43. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 43
    TSX:PGF NYSE:PGH LINDBERGH ECONOMICS REMAIN ROBUST EVEN IN LOW PRICE ENVIRONMENT $0 $10 $20 $30 $40 $50 $60 $70 $90 $80 $70 $60 $50 $40 $30 Netback* ($Cdn/bbl) WTI ($US/bbl) *Assumptions: Based on 12,500 bbl/d project, 26%…
  44. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 44
    TSX:PGF NYSE:PGH 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Phase I Optimized Phase II Optimized NEW LINDBERGH PRODUCTION PROFILE WITH ONE YEAR DELAY Production (bbl/d) 2013 2014 2015 2016 2017…
  45. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 45
    TSX:PGF NYSE:PGH ACCESSING LLOYDMINSTER THIN PAY ? Total best estimate BIIP* on Pengrowth lands of 1,452 MMbbl down to the 0m pay contour* ? Total proved plus probable exploitable BIIP is 533 MMbbl* ? The company considers the…
  46. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 46
  47. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 47
    TSX:PGF NYSE:PGH PLAY ECONOMICS 0 5 10 15 20 25 30 35 40 45 50 Cardium ROR % Cardium Oil $80 $70 $60 GLJ Jan 1/15 Price deck 0 5 10 15 20 25 30 35 40 45 50 Bernadet Groundbirch ROR % Montney Gas $3.50 $3.00…
  48. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 48
    TSX:PGF NYSE:PGH CONVENTIONAL DRILLING INVENTORY 18% 58% 9% 15% Cardium Oil Montney Gas & Liquids Gas &Liquids- Other Oil- Other Gross Locations* Net Locations* Cardium Oil >200 >140 Montney Gas & Liquids >450 >450 Other…
  49. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 49
    TSX:PGF NYSE:PGH CONVENTIONAL PRODUCT MIX 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2015 2016 2017 2018 2019 Percentage of DCET CAPEX Year Anticipated Evolution of DCET CAPEX Program Composition Montney Gas & Lquids…
  50. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 50
    TSX:PGF NYSE:PGH ? Large, contiguous land base* ? Over 800 gross (450 net) sections of Cardium-access rights ? Prospective Cardium-access sections ~280 gross (150 net) ? 4-5 years of Tier 1 drilling locations ? DCET capital budget…
  51. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 51
    TSX:PGF NYSE:PGH COMBINED CARDIUM CAPITAL EFFICIENCIES 24 25 26 27 28 29 30 31 2011 2012 2013 2014 2015E $000/boe/d 12 Month Capital Efficiency
  52. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 52
    TSX:PGF NYSE:PGH MULTI-ZONE POTENTIAL OFFERS ADDITIONAL DEVELOPMENT OPPORTUNITIES ? Incremental stacked reservoirs (Viking, Ellerslie, Glauc, Elkton and Wabamun) ? Focus has been on Cardium development over past two years ?…
  53. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 53
    TSX:PGF NYSE:PGH OLDS AREA 52 Investor Day 2015 ? Pengrowth has expanded infrastructure to connect our Cardium, Garrington and Westward Ho development with our major sour facility at Olds ? ~$4 million in increased 3rd party…
  54. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 54
  55. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 55
    TSX:PGF NYSE:PGH MONTNEY OVERVIEW ? Montney land holdings increased to 14,475 Ha (>50 sections) in 2014 through addition of 8,350 Ha in liquids-rich corridor at Bernadet ? The Pengrowth best estimate for discovered petroleum…
  56. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 56
    TSX:PGF NYSE:PGH MONTNEY OVERVIEW SE NW 2015 PROPOSED BUDGET 2174m TVD 2409m TVD 1880m TVD 2226m TVD ? Montney prospect inventory currently assessed at over 450 risked locations with potential to more than double over time ? 4…
  57. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 57
    TSX:PGF NYSE:PGH BERNADET? RECENT DEVELOPMENTS ? Pengrowth successfully acquired 8,350 Ha at November 5th Crown land sale offsetting company?s existing position in area ? The sale consisted of two blocks, Pengrowth acquired the…
  58. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 58
    TSX:PGF NYSE:PGH BERNADET OVERVIEW ? Bernadet is expected to provide a scalable, low risk stacked zone liquids-rich play on contiguous lands ? Pengrowth?s best estimate of discovered PIIP in place is approximately 4.6 TCF gas (raw)…
  59. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 59
    TSX:PGF NYSE:PGH BERNADET OVERVIEW* Per Well Unrisked Metrics DCET ($ millions/well) 7.4 EUR (Bcf) 5.0 Liquids Yield (bbls/MMcf) 45 ROR 40% PIR 1.3 NPV10 per well ($ millions) $9.5 ROR- Rate of return PIR ? Profit to investment…
  60. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 60
    TSX:PGF NYSE:PGH BERNADET- DEVELOPMENT POTENTIAL U3 M1 L1 ? Upper L1 ?Lower ? Four prospective and proven sub-zones thought to exist within the Montney in the greater Bernadet area Pengrowth Montney Lands
  61. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 61
    TSX:PGF NYSE:PGH BERNADET PLANNING & INFRASTRUCTURE Options: ? Build plant infrastructure ? Use existing third party gas gathering system ? Utilize other third party facilities currently being built 190 MMcf/d
  62. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 62
    TSX:PGF NYSE:PGH GROUNDBIRCH OVERVIEW ? Groundbirch land position ? 21 gross sections ? 90 percent working interest (average) ? 28 MMcf/d operated facility on-stream in December 2010 ? Plan is to drill to fill until longer term…
  63. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 63
    TSX:PGF NYSE:PGH GROUNDBIRCH* Per Well Unrisked Metrics DCET ($ millions/well) 7.4 EUR (Bcf) 6.0 Liquids Yield (bbls/MMcf) 0 ROR 30% PIR 0.6 NPV10 per well ($ millions) 4.4 Estimate of Discovered PIIP Gas (TCF) 3.7 Inventory…
  64. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 64
    TSX:PGF NYSE:PGH GROUNDBIRCH WELL PERFORMANCE AND TYPE CURVE 0 1 2 3 4 5 6 0 6 12 18 24 30 36 42 48 Rate (MMcf/d) Period (months) Groundbirch Production - Peak Normalized P50 Type Curve 100/13-28-080-21W6/0…
  65. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 65
    TSX:PGF NYSE:PGH GROUNDBIRCH- DEVELOPMENT POTENTIAL U3 U2 U1 ? Upper U1 ?Lower Pengrowth Montney Lands ? Four prospective and proven sub-zones exist within the Montney at Groundbirch ? 2014 program targeted the U1- Upper and U2
  66. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 66
  67. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 67
    TSX:PGF NYSE:PGH ? 2014 was an excellent year ? Continued superior execution in costs and production rates on our conventional assets ? On time delivery of construction, commissioning and first steam of Lindbergh Phase I ? Significant…
  68. January 2015 Investor Day Presentation – Pengrowth Energy Corp – slide 68
    Pengrowth Energy Corporation 2100, 222 ? 3rd Avenue SW Calgary, Alberta, Canada T2P 0B4 Telephone: 403.233.0224 Toll Free: 1.800.223.4122 Facsimile: 403.265.6251 Investor Relations Toll-free: 1.855.336.8814 Email:…

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