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November 2017 Corporate Presentation – Kelt Exploration Ltd.

Kelt Exploration Ltd. · Nov 9, 2017 · 57 slides

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Slides

  1. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 1
    Corporate Presentation NOVEMBER 2017 David J. Wilson, President & Chief Executive Officer Sadiq H. Lalani, Vice President & Chief Financial Officer www.KeltExploration.com
  2. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 2
    Why Invest in Kelt 1 CREATING VALUE DURING DOWNTURNS The Kelt management team has a track record of creating shareholder value during downturns, previously during the 2008- 2009 period with Celtic Exploration Ltd., eventually sold…
  3. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 3
    Common Share Information 2 Stock Exchange listing TSX Trading symbol KEL Market capitalization 1.2 billion 52-week trading range 5.43 7.70 Common shares issued ( Nov/7/2017 ) 178.7 million Stock options ( 9.9 MM ) & RSUs ( 0.8…
  4. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 4
    Convertible Debentures 3 TSX trading symbol KEL.DB Principal amount outstanding 90.0 million Coupon / Maturity date 5.0% / May 31, 2021 52-week trading range 133.51 155.35 D&Os purchased 15.0 million (17%) of the total Debenture…
  5. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 5
    Capital Expenditures 4 2017 2018 2018/17 ( millions ) 2016 Forecast Budget Change Drilling & Completions 47.4 144.0 135.0 - 6% Facilities, Equipment & 28.5 67.0 65.0 - 3% Pipeline Infrastructure Land, Seismic & Asset 28.3 15.0…
  6. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 6
    Drilling Program 5 2016/17 Gross 2016/17 Net 2018 Gross 2018 Net Drills Wells Wells Wells Wells Alberta 21 19.5 9 8.0 British Columbia 17 17.0 11 10.5 Non-operated Properties 14 4.0 1 1.0 Total 52 40.5 21 19.5 2016/17 Gross 2016/17…
  7. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 7
    Production Outlook 6 2017 2018 2018/17 2016 Forecast Budget Change Oil ( bbls/d ) 5,070 6,830 10,600 11,000 55% 61% Ngls ( bbls/d ) 2,709 2,370 2,800 2,900 18% 22% Gas ( mcf/d ) 79,009 75,600 90,600 93,600 20% 24% Combined (…
  8. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 8
    Annual Production Growth ( since inception ) 7 PRODUCTION ( BOE / d ) : CAGR since 35,000 2013 = 49% 28,500 30,000 29,500 25,000 21,800 20,947 15,100 15,600 20,000 18,577 15,000 12,600 12,756 13,168 11,879 10,000 8,419…
  9. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 9
    Annual Production per Share Growth ( since inception ) 8 PRODUCTION PER MILLION SHARES ( BOE / d ) : 200 CAGR since 2013 = 25% 159 - 165 150 120 121 124 84 - 87 105 100 71 77 76 69 53 50 75 - 78 42 45 52 43 36 11…
  10. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 10
    Commodity Prices 9 ( CA, unless otherwise specified ) 2016 2017 (E) 2018 (E) YOY Change WTI Crude Oil ( USD/bbl ) [1] US 43.32 US 50.00 US 52.00 + 4% CLS Crude Oil ( CAD/bbl ) [2] 52.79 60.81 61.52 + 1% NYMEX Natural Gas ( USD/MMBtu )…
  11. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 11
    Gas Market Risk Management 10 GAS MARKET DIVERSIFICATION: The Company has taken a diversified approach to selling its natural gas in order to reduce exposure to single market risk. Kelt has entered into several contracts that result…
  12. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 12
    Netbacks 11 2018/17 ( / BOE ) 2016 2017 (E) 2018 (E) Change Revenue 24.08 31.51 34.64 + 10% Realized hedging gain ( loss ) 0.02 ( 0.05 ) Royalties ( % of revenue ) ( 8.6% ) ( 9.6% ) ( 10.4% ) + 8% Transportation expense ( 2.86 ) (…
  13. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 13
    Finding, Development & Acquisition Costs 12 Proved As at December 31, 2016 Developed Proved Proved + Producing Probable 2016 capital expenditures + change 98,268 155,509 177,684 in FDC expenditures ( M ) Reserve additions, net (…
  14. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 14
    2018 Product Mix 13 Production 2018 (E) Operating Income Split Income ( MM ) Split Oil 37% 146.4 76% Ngls [1] 10% 13.2 7% Gas 53% 32.4 17% Operating income 100% 192.0 100% G&A and interest expense ( 17.0 ) Funds from operations…
  15. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 15
    Financial Outlook 14 2017 2018 2018/17 2016 Forecast Budget Change Revenue ( MM ) 184.6 250.7 366.6 + 46% Adj. funds from operations ( MM ) [1] 58.4 110.0 175.0 + 59% Per share diluted ( /share ) 0.34 0.62 0.97 + 56% Capital…
  16. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 16
    2018 Commodity Price Sensitivities 15 Adjusted FFO per Net NBD/ Realized Realized Funds from Share Bank FFO Oil & NGLs Gas Operations Diluted Debt Ratio ( CAD/bbl ) ( CAD/Mcf ) ( MM ) () ( MM ) ( times ) 51.16 3.32 2018 Forecast…
  17. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 17
    Core Areas 16 Fort St. John ( BC ) : Stacked Montney light oil and condensate-rich gas Fort St. John Doig condensate-rich gas Grande Prairie Grande Prairie ( AB ) : Stacked Montney light oil Grande Cache Montney/Doig gas…
  18. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 18
    Kelt Land Fairway 17 Fireweed Corporate Land Holdings Inga Oct/31 Net Net Flatrock 2017 Acres Sections Stoddart Oak Developed 214,613 335 Fort St. John Undeveloped 644,369 1,007 Total 858,981 1,342 Progress Pouce Coupe…
  19. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 19
    British Columbia Montney Lands 18 LAND (Montney Rights) Gross: 283,909 acres ( 443 sections ) Net: 279,452 acres ( 437 sections ) Fireweed OPERATIONS Kelt has successfully delineated the Upper Montney at Inga/Fireweed Stoddart…
  20. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 20
    British Columbia Montney Wells 19 PRODUCTION RESERVES Kelt British Columbia Montney Drills Typical well EURs: Top 10 IP30 Wells ( gross sales, BOE/d ): Inga/Fireweed (1) Fireweed 00/C-31-I/94-A-12 UM [a] 2,068 ( 32% gas ) Upper/Middle…
  21. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 21
    B.C. - Stacked Montney Resource Potential 20 MULTIPLE STACKED MONTNEY HORIZONS Kelt has successfully delineated the Upper Montney at Inga/Fireweed and currently estimates an un-risked drilling inventory of 660 locations Initial…
  22. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 22
    Inga / Fireweed Montney Lands 21 LAND MONTNEY RIGHTS B-90-A UM (sfc C-10-H) 188 gross sections ( 186 net sections ) A-58-I UM (sfc D-A79-I) C-26-A UM (sfc A-6-A) OPERATIONS MONTNEY 00/15-25 MM C-85-I UM (sfc A-65-I)…
  23. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 23
    Inga / Fireweed Montney Type Curve 22 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 725 MBOE 35% Oil 100 12% Ngls 53% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17…
  24. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 24
    Inga / Fireweed Montney Type Curve 23 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 725 MBOE 35% Oil 100 12% Ngls 53% Gas 10 10 5 0 1 3 5 7 9…
  25. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 25
    Inga / Fireweed Montney Gas Well Economics 24 Sproule - Dec/31/2016 Kelt - Sep/2017 Capital drill/complete/equip ( MM) 6.1 6.1 Production IP30 sales ( BOE/d ) 1,030 ( 70% oil/ngls ) 1,030 ( 70% oil/ngls ) EUR 2P reserves ( MBOE )…
  26. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 26
    Oak / Flatrock Montney Lands 25 02/5-1 OPERATIONS (sfc 13-12) Oil and gas exploration activity with plans to drill and complete two wells in 00/7-3 2018. (sfc 10-27) Initial well at 02/6-2 was successful and is currently…
  27. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 27
    Alberta Montney Lands 26 LAND Montney Rights: Gross: 187,760 acres ( 293 sections ) Net: 162,825 acres ( 254 sections ) Pouce OPERATIONS Coupe Kelt has successfully delineated the Lower- Progress Middle and the Upper-Middle…
  28. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 28
    Alberta Montney Wells 27 PRODUCTION RESERVES Kelt Alberta Montney Drills Typical well EURs: Top 10 IP30 Wells (gross sales, BOE/d): (1) Pouce Coupe/Progress Montney Oil: (1) Pouce Coupe 03/16-25-077-13W6 MM 2,317 ( 94% gas ) Sproule 2P…
  29. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 29
    Pouce Coupe / Progress 28 15-13 MM 14-14 MM 920 BOE/d IP30 875 BOE/d IP30 (KEL 50%) (KEL 50%) Pouce Coupe UMM Pad: Progress UMM Pad: 00/3-9 Progress 02/6-18 00/8-9 Gas Plant 04/7-18 00/9-9 (20% WI) LMM Pad: 02/8-18 03/7-18…
  30. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 30
    Pouce Coupe / Progress Montney Oil Type Curve 29 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 550 MBOE 57% Oil 1% Ngls 42% Gas 10 15 10 5 0 1 3 5 7…
  31. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 31
    Pouce Coupe / Progress Montney Oil Type Curve 30 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 550 MBOE 57% Oil 1% Ngls 42% Gas 10 15 10…
  32. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 32
    Pouce Coupe Montney Oil Well Economics 31 Sproule - Dec/31/2016 Kelt - Sep/2017 Capital drill/complete/equip ( MM) 5.3 5.3 Production IP30 sales ( BOE/d ) 990 ( 58% oil/ngls ) 990 ( 58% oil/ngls ) EUR 2P reserves ( MBOE ) 550 550…
  33. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 33
    Valhalla / La Glace and Pipestone / Wembley 32 Drilling has been focused on the Kelt Middle Montney. Upper Montney La Glace Facility also productive - tested in the 15-33 (100% WI) Encana 02/13-33 Sexsmith well Gas Plant 790…
  34. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 34
    La Glace Montney Oil Type Curve 33 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 575 MBOE 100 67% Oil 4% Ngls 29% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17 19…
  35. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 35
    La Glace Montney Oil Type Curve 34 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 575 MBOE 100 67% Oil 4% Ngls 29% Gas 10 10 5 0 1 3 5 7 9 11…
  36. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 36
    La Glace Montney Oil Well Economics 35 Sproule - Dec/31/2016 Kelt - Sep/2017 Capital drill/complete/equip ( MM) 4.6 4.6 Production IP30 sales ( BOE/d ) 1,090 ( 78% oil/ngls ) 1,090 ( 78% oil/ngls ) EUR 2P reserves ( MBOE ) 575 575…
  37. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 37
    2017 Montney Development Wells Paybacks 36 Actual Cumulative to Sept 30, 2017 [3] Remaining to Payback [4] Last Drill & Months Complete Production Operating Production Cost Initial Start Operating Operating Production Income…
  38. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 38
    2017 Montney Delineation / Step-out Wells Paybacks 37 Actual Cumulative to Sept 30, 2017 [3] Remaining to Payback [4] Last Drill & Months Complete Production Operating Production Cost Initial Start Operating Operating Production…
  39. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 39
    Net Asset Value 38 Dec/31 Dec/31 % ( millions ) 2015 2016 change P&NG reserves, NPV10% BT 1,185.2 1,730.7 + 46% Decommissioning obligations, NPV10% BT [1] ( 13.0 ) ( 9.5 ) - 27% Undeveloped land 168.7 212.5 + 26% Net bank debt ( 211.5 )…
  40. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 40
    Future Considerations 39 KELT: The Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. The Company has amassed vast Montney acreage in new…
  41. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 41
    Management 40 David J. Wilson, President & CEO Sadiq H. Lalani, Vice President & CFO Douglas J. Errico, Vice President, Land Patrick Miles, Vice President, Exploration Douglas O. MacArthur, Vice President, Operations Alan G. Franks,…
  42. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 42
    Board of Directors 41 Robert J. Dales Compensation (Chair), Nominating, Audit, Reserves William C. Guinan Chairman of the Board, HSE Eldon A. McIntyre Reserves (Chair), Nominating, Audit, Compensation Neil G. Sinclair Audit (Chair),…
  43. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 43
    APPENDIX 42 INSIDER COMMITMENT MONTHLY FORECAST OF 2017 WTI & AECO PRICES QUARTERLY PRODUCTION GROWTH QUARTERLY CASH COSTS MAP OF NORTH AMERICAN NATURAL GAS HUBS GAS MARKETING & TRANSPORTATION CONTRACTS HEDGING NON-MONTNEY…
  44. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 44
    INSIDER COMMITTMENT 43 Insider Purchases Offering Shares (MM) Amount (MM) Price/share 13.9 MM Equity Private Placement 3.7 8.7 2.32 94.4 MM Equity Private Placement 5.7 31.5 5.55 92.0 MM Equity Private Placement 0.5 4.0 8.00 19.6…
  45. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 45
    Kelts 2018 Oil Price Forecast 44 KELT Realized CA/bbl WTI US/bbl (2018 Average = CA57.40) (2018 Average = US52.00) 65.00 65.00 60.00 60.20 60.00 57.82 58.22 56.80 56.80 57.01 56.49 55.00 55.00 53.22 53.25 52.50 51.71 51.93…
  46. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 46
    Kelts 2018 Gas Price Forecast 45 KELT Realized CA/Mcf AECO CA/MMBtu (2018 Average = CA3.32) (2018 Average = CA2.27) 4.50 4.50 4.38 3.69 3.50 3.52 3.47 3.50 3.21 2.96 2.79 2.70 2.68 2.63 2.50 2.52 2.50 2.33 2.12 1.83 1.79…
  47. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 47
    Quarterly Production Growth 46 PRODUCTION ( BOE / d ) 32,000 Oil Ngls 28,000 Gas 24,000 20,000 16,000 12,000 8,000 4,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 [E] Q1 18 2014 2015 2016 2017 [E]
  48. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 48
    Quarterly Cash Costs 47 CONTROLLING COSTS ( / BOE ) 22.00 G&A 20.00 Interest Production and 18.00 Transportation 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 18…
  49. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 49
    North American Natural Gas Hubs 48 Station 2 AECO Sumas Empress Emerson Kingsgate Waddington Kelt 2018 Budget Forecast: Stanfield Dawn Boston (C/MMBtu) Hub Price Netback Opal Malin Marcellus Ventura Dawn 3.84 2.42…
  50. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 50
    B.C. Gas Marketing / Transportation Contracts 49 Supply Term Volume Upstream Market Term Volume Market Price (Transportation) (MMBtu/d) Hub (Sales) (MMBtu/d) Nov/1/2017 Alliance Nov/1/2017 CHICAGO City Gate USD 10,330 [1] 10,330…
  51. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 51
    Alberta Gas Marketing / Transportation Contracts 50 Supply Term Volume Upstream Market Term Volume Market Price (Transportation) (MMBtu/d) Hub (Sales) (MMBtu/d) Nov/1/2017 NGTL FT-D Nov/1/2017 24,640 [2] 23,695 DAWN USD Daily…
  52. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 52
    Hedging 51 ( CA unless otherwise specified ) Period Quantity Fixed Price Feb/1/17 to 500 OPIS Conway Propane 50% WTI USD Dec/31/17 bbls / day
  53. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 53
    Spirit River 52 LAND Gross: 43,840 acres ( 68 sections ) 13-34 CL Pad: 14-22 (60%) Net: 36,232 acres ( 56 sections ) 15-22 (60%) 13-33 16-22 (60%) Charlie Lake: 28 net sections 16-10 H2O Doe Creek: 21 net sections Disposal…
  54. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 54
    Grande Cache 53 LAND Narraway Modern 13-4 IP30: 9 MMcf/d Gross: 141,120 acres ( 220 sections ) 135 MMcf/d Falher/Wilrich TOU 4-29 Net: 99,716 acres ( 155 sections ) Gas Plant IP30: 20 MMcf/d (7% WI) Falher/Wilrich OPERATIONS…
  55. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 55
    Reserves 54 NPV 10% BT DEC/31/2015 DEC/31/2016 Percent DEC/31/2016 ( MMBOE ) ( MMBOE ) Change ( MM ) Proved Developed 33.8 34.5 + 2% 423 Producing Total Proved 83.8 108.2 + 29% 940 Proved plus Probable 150.5 194.1 + 29% 1,731 (…
  56. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 56
    Sproule P+P Reserves FDC 55 FDC Net HZ FDC / well December 31, 2016 ( MM ) Wells ( MM ) Alberta Montney wells 163.5 31.8 5.1 B.C. Montney wells 312.5 51.0 6.1 TOTAL Montney wells 476.0 82.8 5.7 Other formation wells 339.4 74.7…
  57. November 2017 Corporate Presentation – Kelt Exploration Ltd. – slide 57
    Corporate Presentation NOVEMBER 2017 Suite 300, 311 6th Avenue SW Calgary, Alberta, Canada T2P 3H2 www.KeltExploration.com

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