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November 2017 Corporate Presentation – Birchcliff Energy Ltd.

Birchcliff Energy Ltd. · Nov 8, 2017 · 54 slides

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Slides

  1. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 1
    CORPORATE PRESENTATION November 2017
  2. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 2
    PEOPLE, FOCUS & EXECUTION 3
  3. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 3
    Corporate Snapshot & Select Guidance Q3 2017 average production 65,276 boe/d Estimated 2017 annual average production 67,000 68,000 boe/d % oil and NGL 21% Estimated Q4 2017 average production 79,000 80,000 boe/d % oil and NGL 20%…
  4. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 4
    Q3 2017 HIGHLIGHTS Record quarterly average production of 65,276 boe/d, a 20% increase from 54,538 boe/d in Q3 2016 Cash flow of 64.4 million (0.24/basic common share), a 55% increase from 41.7 million (0.18/basic common share) in Q3…
  5. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 5
    INVESTMENT HIGHLIGHTS Focused assets in the Peace River Arch Area of Alberta on the Montney/Doig Resource Play Essentially 100% working interest; 99% of production is operated Large, contiguous undeveloped land base with an average…
  6. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 6
    HEDGING SUMMARY 2017 Natural Gas Hedging Summary 2017 Crude Oil Hedging Summary MMcf/d(1) CDN/Mcf(1) bbl/d CDN/bbl Q1 2017 157.0 3.44 Q1 2017 1,500 69.90 Q2 2017 157.0 3.44 Q2 2017 1,500 69.90 Q3 2017 157.0 3.44 Q3 2017 1,500…
  7. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 7
    BIRCHCLIFFS HISTORY A Track Record of Execution
  8. November 2017 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 346 (340.7…
  9. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 9
    PRODUCTION HISTORY 90,000 79,000 80,000 80,000 67,000 70,000 Compound annual growth of 30% 68,000 Average Production (boe/d) per year since 2005 60,000 49,236 50,000 38,950 40,000 33,734 30,000 25,829 22,802…
  10. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 10
    CORPORATE RESERVES 1,000,000 PDP TP 880 MMboe 900,000 2P 800,000 On a per share basis PDP, 1P and 2P 700,000 reserves have increased at a compound annual growth rate of 14%, 22% and 23% Reserves (Mboe)(1) 600,000 per year…
  11. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 11
    CORPORATE NPV10 (BT) 7,000 PDP TP 5.8 Billion 6,000 2P PDP and 2P NPV10 (BT) increased by 5,000 66% and 50% year over year, respectively 4.1 Billion NPV10 (million) 4,000 3,000 1.9 Billion 2,000 1,000 0…
  12. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 12
    PROVEN TRACK RECORD AS A LOW COST PRODUCER 5 Year Profitability Breakdown: 2012 2013 2014 2015 2016 Average Average AECO (CAD/GJ) 2.27 2.99 4.27 2.55 2.05 2.83 Average WTI (USD/bbl) 94.21 97.97 92.99 48.80 43.32 75.46 P&NG Revenue…
  13. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 13
    PROVEN TRACK RECORD AS A LOW COST FINDER 16 PDP F&D 1P F&D 2P F&D 1.2x 1.8x 1.8x Cash flow 12 1.9x netback recycle F&D Cost (/boe) 1.2x 1.2x 1.3x ratios 8 2.0x 2.0x 2.3x 1.4x 2.6x 1.3x 4 3.7x 1.7x 1.8x 4.7x 7.3x…
  14. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 14
    LOOKING FORWARD 2017 Plans & Beyond
  15. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 15
    2017 CAPITAL PROGRAM 2017 CAPITAL PROGRAM(1) Difference in Gross Wells Net Wells Capital (millions)(1) Capital (millions) (1) Drilling & Development New Old New Old New Old Pouce Coupe Montney D1 HZ Gas Wells 26 22 26.0 22.0 113.9…
  16. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 16
    2017 CAPITAL PROGRAM Given our completed and planned dispositions for 2017, our board of directors has approved an increase to our capital expenditure budget for 2017 to approximately 404 million, up from 355 million that was…
  17. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 17
    BORROWING BASE DETAILS Birchcliff has extendible revolving credit facilities in the aggregate principal amount of 950 million, which are comprised of an extendible revolving syndicated term credit facility of 900 million and an…
  18. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 18
    MONTNEY/DOIG RESOURCE PLAY A Significant Position in a World Class Play
  19. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 19
    MONTNEY/DOIG - A WORLD CLASS RESOURCE PLAY Resource density. Stacked resource up to 300 metres thick. Large areal extent. Extends over 50,000 square miles. Exceptional fracability. Low clay Birchcliff Montney/Doig content, low Poissons…
  20. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 20
    MONTNEY/DOIG MINEROLOGY LEADS TO EXCELLENT FRACABILITY The Montney/Doig Resource Play rock type is composed of a Some other Resource Plays have a high percentage of clays high percentage of hard minerals, and a low percentage of and…
  21. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 21
    BIRCHCLIFF MONTNEY/DOIG The Gordondale Acquisition adds a fourth commercial development interval in the Montney D2 Large contiguous land base with 441 sections prospective for the Montney/Doig as at December 31, 2016 Birchcliff…
  22. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 22
    STACKED RESOURCE PROVIDES SUBSTANTIAL FUTURE UPSIDE 23
  23. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 23
    MONTNEY/DOIG MULTI LAYER OPPORTUNITY 3 2 1 4 5 6 5 6 4 3 2 1 24
  24. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 24
    PROXIMAL TO INFRASTRUCTURE WITH LONG TERM EXPOSURE TO LNG EXPORT Montney/Doig Birchcliff Pouce Coupe Production Montney/Doig & PC Gas Plant Owned Infrastructure PC Gas Plant Nova Pipeline System North American Market…
  25. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 25
    POUCE COUPE OVERVIEW Proven asset in development phase Wells show high initial deliverability, low terminal decline and stable long term production Predictable results with improving rates & liquids yields 100% owned and operated…
  26. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 26
    POUCE COUPE LOWER MONTNEY (D1) PERFORMANCE VS. TYPE CURVE 10,000 9,000 Deloitte Tier 0 Type Curve 8,000 IP (un-choked): 6.9 MMcf/d IP (choked): 4.0 MMcf/d 7,000 2P Reserves: 8.2 Bcfe(1) Gas Rate (Mcfd) 6,000 5,000…
  27. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 27
    GORDONDALE ACQUISITION HIGHLIGHTS Completed the Gordondale Acquisition on July 28, 2016 for a purchase price of 613.5 million, after final adjustments Consolidated a sizeable and contiguous land base within Birchcliffs existing…
  28. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 28
    GORDONDALE BASE PRODUCTION HISTORY Montney D2 Last well drilled in 2014 (on-stream 2015) discovery well with peak production of 35,000 boe/d AltaGas Deep Cut Plant on stream October 2012 and Montney oil Production (boe/d)…
  29. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 29
    GORDONDALE OVERVIEW Drilled 6 (6.0 net) Montney horizontal oil and natural gas wells in 2016 including three Montney D2 oil wells and three Montney D1 natural gas wells; early results from all 6 wells are meeting or exceeding…
  30. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 30
    GORDONDALE KEY INFRASTRUCTURE Key Natural Gas Processing Infrastructure Existing infrastructure has already AltaGas Gordondale CNRL Progress Sour Deep Cut Gas Plant Sour Shallow Cut Gas Plant supported peak production of…
  31. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 31
    ELMWORTH DEVELOPMENT Received regulatory approval for an acid gas injection well in August 2016 Second Exploration Preliminary planning underway for a Horizontal 100% owned and operated 40 MMcf/d natural gas processing plant;…
  32. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 32
    CONCEPTUAL MONTNEY/DOIG FIELD DEVELOPMENT MODEL STATUS OF MODEL CALLIBRATION AND DERISKING FACIES & PETROPHYSICAL GEOLOGICAL, GEOPHYSICAL, GEOMECHANCAL HYDRAULIC FRAC & MICRO SEIS. RESERVOIR MODEL OPTIMIZED DCC & PRODUCTION BASAL…
  33. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 33
    POUCE COUPE DRILLING PERFORMANCE Drill Cost Efficiency Yearly Average Drill Speed ( Spud Rig Release) 700 300 650 250 600 550 mD/Day /mD 200 500 450 150 400 35% decrease in /mD from 2007 Drilling twice as fast as…
  34. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 34
    POUCE COUPE LOWER MONTNEY (D1) CORE AREA COMPLETION EVOLUTION Completion Cost per Stage vs. Number of Stages Proppant Intensity 300 30 1.00 200 Completion Cost Per Stage (000's) Average Proppant Intensity (t/m) Average Number…
  35. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 35
    ENGINEERED COMPLETIONS FOR MONTNEY/DOIG FULL FIELD DEVELOPMENT Industry Range Birchcliff Best Practices Oil Birchcliff Best Practices Gas Liner type Openhole or Cemented Openhole or Cemented Openhole Inter-well spacing 100 400 m…
  36. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 36
    TERMINAL DECLINE CHANGES Due to strong historical performance from both Birchcliff and industry Montney/Doig wells, Deloitte has reduced their forecast TP and 2P terminal declines to 11% and 9%, respectively Deloittes Tier 0 type…
  37. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 37
    PC GAS PLANT The Engine for Future Growth
  38. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 38
    Production Processed 9 Months through the PC Gas 2012 2013 2014 2015 2016 2017 Plant Average daily production, net to Birchcliff: Natural gas (Mcf) 59,327 91,666 132,808 163,641 168,444 173,351 Oil & NGLs (bbls) 204 527 1,065 1,287…
  39. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 39
    Corporate Operating Costs vs. % of Natural Gas Sales Volumes Processed at the PC Gas Plant KEY STRATEGIC 10.00 100% Corporate Operating Cost (/boe) Volume Through PC Gas Plant ADVANTAGES 8.00 6.00 80% 60% 100% owned…
  40. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 40
    PC GAS PLANT HIGHLIGHTS Current processing capacity of 260 MMcf/d Phase V expansion was completed ahead of its initially scheduled October 1, 2017 completion date, adding 80 MMcf/d bringing total processing 42% 58% capacity to 260…
  41. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 41
    BUILDING ON OUR PAST Over 10 Years of Success
  42. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 42
    Forecasted record annual Birchcliffs average daily production was 49,236 boe/d in average production of 67,000-68,000 boe/d in 2016 compared to 2,793 boe/d in 2005, a compounded 2017 annual growth rate of 30% per year over that…
  43. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 43
    Production Growth 60,000 300 boe/d/million wtd. avg. shares 50,000 250 Birchcliff has increased production at a 40,000 200 compound annual growth rate of boe/d 30,000 150 20,000 100 30% since 2005. 10,000 50 0 0…
  44. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 44
    Reserves Growth 1000 4,000 800 3,200 Birchcliff has added significant low cost reserves boe/1,000shares 600 2,400 since commencing operations in 2005. On a per MMboe 400 1,600 common share basis, PDP, 1P and 200 800 2P…
  45. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 45
    APPENDIX
  46. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 46
    2016 MONTNEY/DOIG RESOURCE ASSESSMENT Reserves and Resource Volumes (Bcfe)(1)(2) Resource Class Raw/Sales Low Estimate Case Best Estimate Case High Estimate Case Cumulative Production(3) Sales 696.7 696.7 696.7 Remaining…
  47. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 47
    2016 YEAR END MONTNEY/DOIG 900,000 RESERVES Drilled 20 HZ M/D wells and acquired 87 (82.5 net) HZ M/D wells 295 (289.7 net) Montney/Doig horizontal 800,000 Drilled 29 HZ wells drilled as of Dec 31, 2016 including M/D wells 87…
  48. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 48
    SERIES A PERPETUAL PREFERRED SHARES Preferred Share Details Series A Number of Shares 2 million Issue Date August 8, 2012 TSX Trading Symbol BIR.PR.A Issue / Par Price 25.00 per share Quarterly Dividend 0.523375 per share Current…
  49. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 49
    SERIES C PREFERRED SHARES Preferred Share Details Series C Number of Shares 2 million Issue Date June 14, 2013 TSX Trading Symbol BIR.PR.C Issue / Par Price 25.00 per share Quarterly Dividend 0.4375 per share Yield at Issue 7.0%…
  50. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 50
    EXECUTIVE OFFICERS Mr. Tonken is the President, Chief Executive Officer and Chairman of the Board of Birchcliff. He has more than 36 years of A. Jeffery experience in the oil and natural gas industry and is one of the Corporations…
  51. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 51
    EXECUTIVE OFFICERS Mr. Carlsen is the Vice-President, Engineering of Birchcliff and is a Professional Engineer. He previously served as Asset Christopher A. Team Lead and Senior Exploitation Engineer with Birchcliff. Mr. Carlsen is a…
  52. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 52
    BOARD OF DIRECTORS A. Jeffery Tonken See Mr. Tonkens biography under Executive Officers. President, CEO and Chairman of the Board Mr. Shaw is a director of Birchcliff and has more than 29 years of experience in the oil and…
  53. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 53
    BOARD OF DIRECTORS Mr. Dawson is a director of Birchcliff. Prior to joining Birchcliff, Mr. Dawson was the Vice-President General Counsel and Corporate Secretary of AltaGas. Mr. Dawson joined AltaGas as Associate General Counsel in…
  54. November 2017 Corporate Presentation – Birchcliff Energy Ltd. – slide 54
    THANK YOU TEAM BIRCHCLIFF Jeffrey Akeroyd, Bradley Alexander, Karen Allen, Laura Armstrong, Camille Ashton, Rainer Augsten, Gates Aurigemma, Bryce Baloun, Alan Basnett, Angela Belbeck, Charmaine Belley, Tyrus Bender, Tim Berg, Perry…

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