Celebrating 10 Years of Growth TSX: PONY Investor November 9, 2017 Update
Corporate Profile TSX Ticker Shares Symbol PONY Outstanding 161 million Daily Trading Volume (6 month average) 1.1 million shares per day Term Debt(1) 186 million Q3 2017 Average Daily 254.1 MMcfe/day Bank Debt(2) (includes…
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…
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…
2017 & 2018 Development Model Infrastructure Supports Growth 90,000 AltaGas 80,000 Townsend Facility (Phase 2) 70,000 99 MMcf/d Production Volumes (boe/d) Begins Operations 60,000 2018 50,000 YE 2017 AltaGas Townsend…
Growth-Oriented Spending Moving Towards Cash Flow Budget Annual Average Daily Production (Forecast) Capital Development Program Annual Average Daily Production (Actual) Cash Flow Cash Flow per Share (Forecast) (Net of Interest…
Financial Strength Term Debt and Credit Facility Provide Flexibility Ample Liquidity 450 Million Syndicated Credit Facility Syndicated Credit Secured, Reserve Based Lending Facility Matures April 2019 Incremental 50 million…
Historical Costs Drilling & Completion Efficiency As capital well costs fell, production type curves dramatically improved Management Sequential 6-well Type Curve Program on 17-G Pad for Perf & Plug Systems 22 wells increased 50%…
Increasing Cash Flow per Mcfe Driving Costs Lower / Increasing Liquids Production G&A Costs per Mcfe Operating Costs per Mcfe* Liquids Production bls/d) Operating Cost ( / Mcfe) 43% G&A Cost ( / Mcfe) 0.35 1.00 6,000 63%…
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 1.50 3.50 Top Line Revenue Top Line Revenue Pre-Tax Pre-Tax 1.50 3.04 /Mcfe Earnings 3.03…
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…
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…
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 Cumulative Natural Gas (Mcf) North…
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…
Development Economics Price Sensitivity (Half Cycle) Townsend P50 Blair P50 Daiber P50 High-rate 200% Daiber wells 180% Liquids-enhanced, provide Blair wells provide natural gas 160% exposure to stronger pricing torque Rate of…
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 changein FDC) perMcfe 2.26 2016 PDP Recycle Ratio…
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…
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) reserves of 6.4 Tcf 8.0 (3.2 Tcf Proved + 3.2…
Market Diversification Natural Gas Catalysts 2017 YTD Alberta Demand increased 0.4 Bcf/d 14-year contract to initially deliver 10 Station 2 MMcf/d to Methanexs methanol plant in Medicine Hat, Alberta AECO T-South increasing to…
2018 Production Revenue Managing Volatility PONY is Unhedged NOT tied to Condensate Station 2 & NGLs Pricing 11% AECO 8% Station 2 Fixed Price 7% Contracts 52% SUMAS 5% Currently 93% of 2018 Estimated Production Revenue…
Hedging Profile Prudent Risk Management 48% of PONYs forecast 2018 production volumes 500 are protected through a combination of physical and financial contracts at volume-weighted average price of 3.44/Mcfe 400 Forecasted…
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 86 million(e) 16 wells(e) 12…
Pony Points Checking Off All of the Boxes Financing In-Place + Liquidity Top Well Performance Low Well Costs Firm Transportation Massive Reserves Base 22
Appendices and Advisories
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…
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 -…
Cash Flow Growth Strong Per Share Metrics 0.55 Significant Year-over-Year 1.22 2018f Growth in Cash Flow per Share 0.50 0.45 0.79 2017f 0.40 Realized Cash Flow per Share Forecast 0.35 0.56 0.30 2016 0.25 0.20…
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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