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Celebrating 10 Years of Growth – Painted Pony Energy Ltd.

Painted Pony Energy Ltd. · Dec 18, 2017 · 27 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. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 1
    Celebrating 10 Years of Growth TSX: PONY Investor December 18, 2017 Update
  2. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 2
    Corporate Profile Market Capitalization 400 million Shares Outstanding 161 million Daily Trading 1.1 million Term Debt(1) 186 million Volume (6 month average) shares per day Q3 2017 254 Bank Debt(2) 150 million Average Daily…
  3. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 3
    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…
  4. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 4
    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…
  5. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 5
    Production Volumes (mboe/d) 0 10 30 40 60 70 20 50 80 Jan-15 Feb-15 Mar-15 Impressive Apr-15 (base) 2015 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 the drill-bit…
  6. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 6
    Sustainable Capital Spending Cash Flow Budget Annual Average Daily Production (Forecast) Consensus Cash Flow - Net of Interest Expense, G&A, and Capital Lease Expense (Consensus pricing based on WTI US56/bbl, AECO CAD2.50/Mcf, F/X…
  7. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 7
    Cash Flow Sensitivities 2018 Cash Flow (MM) YE Debt/Q4 Annualized Cash Flow 207 214 220 3.00 1.6x 1.5x 1.5x 191 197 204 2.50 AECO 1.9x 1.8x 1.7x (CAD/Mcf) 175 181 187 2.00 2.2x 2.1x 2.0x 158 164 171 1.50 2.8x 2.6x…
  8. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 8
    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…
  9. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 9
    Solid Margins Drive Earnings Cost Efficiencies Drive Higher Cash Flow/Mcfe in 2018 Cash Costs Non-Cash Costs Cash Costs Non-Cash Costs 4.00 4.00 Top Line Revenue Pre-Tax Top Line Revenue 3.50 3.36 /Mcfe Earnings 3.50 Hedging…
  10. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 10
    Sustainable Capital Spending Cash Flow Budget 2018 Capital Budget Capital 185 million Production 366 378 MMcfe/d (61,000 63,000 boe/d) Annual Average Production Growth 45% Capital Efficiency 1,500/Mcfe/d (9,000/boe/d)…
  11. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 11
    Forecasted Capital Expenditures 2018 2018 Capital Spending Forecast Period Capital Drilling Completions Q1 94 million(e) 16 wells(e) 17 completions(e) Q2 37 million(e) 3 wells(e) 6 completions(e) Q3 35 million(e) 6 wells(e) 6…
  12. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 12
    2018 Production Revenue Managing Volatility 52% of PONYs total forecast 2018 production volumes are protected through a combination of physical and financial contracts at a volume-weighted average Unhedged Condensate price of…
  13. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 13
    Hedging Profile Prudent Risk Management Percentage of Product on Fixed Price Contract (Financial and Physical) 100% Percentage Forecast Production Hedged 69.04 75% 2.81 69.04 69.04 bbl 69.04 2.71 Mcf bbl 69.04 bbl bbl Mcf bbl…
  14. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 14
    Diversified Market Exposure 2018 / 2019 Sales Contracts Support Strong Netbacks Painted Pony actively markets the vast majority of natural gas volumes away from Station 2 index prices and into more profitable sales points Note Any…
  15. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 15
    Sales Egress Optionality Firm Transportation Supports Increasing Production Volumes Firm Transportation on Enbridges T- North, T-South, TransCanadas Groundbirch Lateral and Mainline allow PONY to diversify market access which…
  16. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 16
    Market Diversification Natural Gas Catalysts 2017 YTD Alberta Demand increased 0.4 Bcf/d AECO 175 MMcf/d Station 2018 Average 2 SUMAS 30 MMcf/d AECO 2018 Average Med Hat Sumas 14-year contract to initially deliver…
  17. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 17
    The Sweet Spot Top Decile Well Performance 2,500,000 PONY has best well in 46 of top 100 North Montney with 6- wells are month cumulative PONY wells production over 2.0 Bcf 2,000,000 Cumulative Natural Gas (Mcf) Based on…
  18. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 18
    Historical Costs Drilling & Completion Efficiency As capital well costs fell, production type curves dramatically improved Continued Sequential 6-well Management type curve Program on 17-G Pad for Perf & Plug Systems Type Curve…
  19. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 19
    Economics By Area 2017 / 2018 Type Curves on Consensus Pricing Capital Costs Management Type Curves Drilling 1.9 million Daiber (dry) Completions 2.1 million Blair (lean) Townsend (liquids-rich) Equip / Tie-in 0.55 million TOTAL…
  20. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 20
    Development Economics Price Sensitivity (Half Cycle) Townsend (liquids-rich) Blair (lean) Daiber (dry) 180% 160% High-rate Daiber Liquids-enhanced, wells provide Blair wells provide 140% natural gas exposure to pricing torque…
  21. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 21
    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 change in FDC) per Mcfe 2.26 2016 PDP Recycle…
  22. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 22
    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…
  23. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 23
    Canadian Natural Gas 2P Reserves As at Dec 31, 2016 Proved Natural Gas Reserves Probable Natural Gas Reserves 10.0 PONYs 2P Natural Gas reserves of 6.4 Tcf Canadian Natural Gas 2P Reserves (Tcf) 8.0 (3.2 Tcf Proved + 3.2…
  24. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 24
    Pony Points Checking Off All of the Boxes Financing In-Place + Liquidity Top Well Performance Low Well Costs Firm Transportation Massive Reserves Base Attractive Relative Valuation 23
  25. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 25
    Appendices and Advisories
  26. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 26
    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…
  27. Celebrating 10 Years of Growth – Painted Pony Energy Ltd. – slide 27
    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 Royal Bank of Canada…

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