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December 2017 Corporate Presentation – Seven Generations Energy Ltd

Seven Generations Energy Ltd · Dec 25, 2017 · 33 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. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 1
    CORPORATE PRESENTATION December 2017 TSX: VII.TO
  2. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 2
    7G CORPORATE PROFILE 7G Capitalization & Key Corporate Statistics Ticker symbol - TSX VII Share Price(1) 18.16 Basic Market Cap(1) 6.4 billion Net Debt(2)(4) 2.0 billion Enterprise Value(5) 8.4 billion Available Funding(3)(4) 1.4…
  3. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 3
    LEVEL 1 CORPORATE POLICY Stakeholder Differentiation We believe that companies have only the rights given to them by society. While people have a natural entitlement to basic rights, corporations are an instrument created by society to…
  4. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 4
    7G IS DESIGNED TO DELIVER Cash flow Profitable Industry-leading Financial self-sufficiency growth returns sustainability Targeting a 7% to 14% Delivering a 10% Continue to balanced budget production CAGR to 15% ROCE maintain a…
  5. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 5
    DELIVERING BEST IN CLASS CORPORATE RETURNS Historical Cash Return on Invested Capital (CROIC)(1) 16% 15% 14% 2013-2015 2015 2016 14% 12% 12% 11% 10% 10% CROIC (%) 8% 7% 7% 6% 6% 6% 5% 5% 4% 4% 2% VII VII Top…
  6. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 6
    Breakeven HHub Price (/mcfe) at 30% 0.00 2.00 3.00 4.00 5.00 6.00 1.00 Montney - Nest 2 Montney - Attachie Eagle Ford Wet Tier 1 VII Montney - Doe US Play Montney Montney - Dawson Montney - Gundy NE…
  7. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 7
    GROWING ON AN ABSOLUTE AND PER SHARE BASIS Production - MBOE/D(1) Funds Flow - MM(1)(2) 250 1,500 200 1,250 1,000 150 750 100 500 50 250 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Guidance Budget Guidance Budget…
  8. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 8
    2018 BUDGET: SETTING THE STAGE FOR FREE CASH FLOW VISIBILITY 2018 Production Guidance(1) 2018 Quarterly Wells on Production (boe/d) 200,000 210,000 55% - 60% liquids 14% - 20% annual growth 2018 Capital Program(1) (MM) 1,675…
  9. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 9
    2018 CAPITAL ALLOCATION Capital Investment by Area Activity Capital (MM) Nest Development 1,275 - 1,325 Delineation 125 - 150 Water Infrastructure 75 - 80 Gold Creek Facility 145 - 155 NGL Pipeline 25 - 30 Other 30 - 35 Total…
  10. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 10
    BUILDING OUT PROCESSING CAPACITY TO SUPPORT FUTURE GROWTH Processing Capacity & Corporate Production (mboe/d) Track record of infrastructure investments to facilitate profitable growth 510 MMcf/d of owned and operated natural gas…
  11. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 11
    LAYERS OF INVESTMENT: ALREADY PRODUCING FREE CASH FLOW Layers of Capital Investment(1)(2) Free Cash Flow above sustaining capital for past 5 years Strategic investments in growth and infrastructure to enhance value of the…
  12. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 12
    INVENTORY BY DEVELOPMENT AREA Current Development 800 Montney Sections 1,400 Nest Locations Nest 1 500 Locations(1) Nest 2 700 Locations(1) Nest 3 200 Locations(1) 900 Wapiti & Rich Gas Locations(1) Future Upside Lower…
  13. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 13
    INDIVIDUAL WELL ECONOMICS US50/BBL WTI & US3.00/MMBTU HENRY HUB Nest 1 Wapiti & Rich Nest 2 Nest 3 (2014 Prospectus) Gas Economics IRR (%) 41% 138% 110% 44% Cycle Half NPV10 (MM) 5.5 17.1 13.6 4.6 Natural gas supply cost…
  14. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 14
    RECENT NEST 1/NEST 2 BOUNDARY WELL RESULTS Condensate bbl/d Raw Gas Mcf/d 7G high intensity well design on pad located on the boundary of Nest 1 and Nest 2 Condensate rate significantly outperforms Nest 2 type curve; gas rate is…
  15. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 15
    NEST 3 TYPE CURVE VS INITIAL RESULTS Condensate bbl/d Raw Gas Mcf/d 7G high intensity well design drilled in heart of Nest 3 lands Condensate rate approaching Nest 2 type curve after 150 days; gas rate nearly double Nest 2 type…
  16. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 16
    MARKETING & RISK MANAGEMENT PHILOSOPHY Move the Gas - Value creation primarily through liquids production Sufficient Processing & Moving the gas ensures capture of higher value liquids barrels Takeaway Capacity Ensure adequate…
  17. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 17
    MARKET ACCESS Gas GasMarket MarketDiversification(1) Diversification Forecast Revenue by Product(2) 33% 58% 9% Source: ARC Financial Enhancing realizations through a portfolio approach to natural gas marketing…
  18. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 18
    IMPROVING 3RD PARTY FACILITY RELIABILITY Action Plan Phase 1 - Joint 7G, 3rd party operator and independent engineering firm to conduct data gathering process. Phase 2 - Task force to review Phase 1 findings and propose…
  19. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 19
    WATER MANAGEMENT STRATEGY TO REDUCE OPERATING COSTS Operating Costs (1-10%) Re-use of injected frac water: (10-15%) Successful test in re-using lower (15-20%) salinity water in Q3 Testing re-using higher salinity (20-30%) water…
  20. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 20
    THE 7G VALUE PROPOSITION Among North Americas lowest supply cost liquids-rich natural gas producers Asset Quality Canadas largest condensate producer 800 net sections of Montney rights with decades of drilling opportunities…
  21. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 21
    Appendix 21
  22. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 22
    CURRENT HEDGE POSITION Hedge Position November 30, 2017 2017 2018 2019 2020 Q4 2017 ROY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Liquids Hedging WTI…
  23. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 23
    2018 BUDGET DETAIL 2018 Budget Assumptions 2018 well activity: 85 to 95 wells drilled 90 to 100 wells completed 80 to 90 wells on production Nest well cost of 11.5 MM Drill: 3.5 MM Complete: 7.0 MM Tie-in 1.0 MM Costs…
  24. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 24
    RESERVES AND RESOURCES Year End 2P Reserves (MMBoe)(1) 1P & 2P Finding Costs (/Boe) 1,800 18.00 Natural Gas 16.05 3 Yr Avg. 1,600 16.00 15.39 1,535 14.43 14.26 Dec. 31, 2016 Liquids 1,400 14.00 11.17 10.97 11.50 11.68 1,200 12.00…
  25. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 25
    UPSIDE POTENTIAL UPPER MONTNEY EXTENSION AND SECONDARY TARGETS 7G ACREAGE HELD BY ZONE (September 30, 2017) Gross Zone Gross Acres Net Acres Net Sections Average WI Sections Cardium 158,400 119,567 247.5 187 75% 1WS 164,000…
  26. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 26
    SELECTED FINANCIAL AND OPERATIONAL INFORMATION VII - Recent Quarterly Results OPERATING Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 YE 2016 YE 2015 Average daily production Condensate & oil (mbbls/d) 57.8 54.2 46.8 43.2…
  27. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 27
    WELL RESULTS WITHIN THE NEST Nest 2 Gas C5+ Total C5 +Yield Wells Mcf/d bbls/d boe/d bbl/MMcf () IP30 4,557 925 1,685 203 218 IP90 4,477 814 1,561 182 199 IP180 4,022 662 1,332 165 172 IP270 3,650 549 1,157 150 152 IP365 3,335 475…
  28. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 28
    INVENTORY OF NEST 1 & NEST 2 MONTNEY WELLS In Progress Well Wells down due to Nest 1 Drilling Phase Completion Phase Tie-in Phase Producing Wells Inventory Concurrent Ops January 1, 2017 0 0 0 0 15 0 April 1, 2017 0 1 0 1 18 0…
  29. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 29
    INFRASTRUCTURE SUMMARY Infrastructure Footprint Natural Gas Processing: 760 MMcf/d capacity 510 MMcf/d owned & operated Access to 3rd party capacity of up to 250 MMcf/d Building an additional 250 MMcf/d at Gold Creek…
  30. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 30
    SUPER PADS: LIFT, EFFICIENCY, REDUNDANCY Super Pad Schematic Innovative field-distributed pads Efficient gathering of single-phase GAS & C5+ (2-phase) products in segregated systems Benefits: High pressure gas for artificial lift…
  31. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 31
    RESPONSIBLE DEVELOPMENT HIGHLIGHTS Safety Environment Community Safety first Low GHGs GP Hospital 0.56 TRIF in 2016 0.0126 carbon intensity(1) 1.7 million raised Second year in a row of 7Gs annual golf reduced incident Among…
  32. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 32
    SWEET SPOT OF THE MONTNEY Over Pressured High Productivity Brittle Rock High Recovery Factor Thickness Large Resources in Place Lower Temperature High Liquids Content Sources: Canadian Discovery Ltd. & Graham Davies Geological…
  33. December 2017 Corporate Presentation – Seven Generations Energy Ltd – slide 33
    DEFINITIONS AND ABBREVIATIONS AECO physical storage and trading hub for natural gas on the TransCanada Alberta transmission Mbbls thousand of barrels system Mboe thousands of barrels of oil equivalent avg average Mcf thousand cubic…

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