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January 2018 Corporate Presentation – Kelt Exploration Ltd.

Kelt Exploration Ltd. · Jan 16, 2018 · 54 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. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 1
    Corporate Presentation JANUARY 2018 David J. Wilson, President & Chief Executive Officer Sadiq H. Lalani, Vice President & Chief Financial Officer www.KeltExploration.com
  2. January 2018 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. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 3
    Common Share Information 2 Stock Exchange listing TSX Trading symbol KEL Market capitalization 1.3 billion 52-week trading range 5.56 7.70 Common shares issued ( Dec/31/2017 ) 178.9 million Stock options ( 9.9 MM ) & RSUs ( 0.8…
  4. January 2018 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. January 2018 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. January 2018 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 [1] 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…
  7. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 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. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 18
    Kelt Land Fairway 17 Fireweed Corporate Land Holdings Inga Dec/31 Net Net Flatrock 2017 Acres Sections Stoddart Oak Developed 210,783 329 Fort St. John Undeveloped 637,853 997 Total 848,636 1,326 Progress Pouce Coupe…
  19. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 19
    British Columbia Montney Lands 18 LAND (Montney Rights) Gross: 295,043 acres ( 461 sections ) Net: 290,091 acres ( 453 sections ) Fireweed OPERATIONS Kelt has successfully delineated the Upper Montney at Inga/Fireweed Stoddart…
  20. January 2018 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 2,068 ( 32% gas ) Upper/Middle…
  21. January 2018 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. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 22
    Inga / Fireweed Montney Lands 21 B-90-A UM LAND MONTNEY RIGHTS (sfc C-10-H) A-58-I UM C-26-A UM 207 gross sections ( 204 net sections ) (sfc D-A79-I) (sfc A-6-A) C-85-I UM OPERATIONS (sfc A-65-I) B-65-I UM (sfc A-34-I)…
  23. January 2018 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 15 10 5 0 1 3 5 7 9 11 13 15…
  24. January 2018 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 15 10 5 0 1 3 5…
  25. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 25
    Oak / Flatrock Montney Lands 24 OPERATIONS 02/5-1 (sfc 13-12) Oil and gas exploration activity with plans to drill and complete two wells in 2018. 00/7-3 (sfc 10-27) First well at 02/6-2 was successful and initially produced…
  26. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 26
    Alberta Montney Lands 25 LAND Montney Rights: Gross: 172,640 acres ( 270 sections ) Net: 148,274 acres ( 232 sections ) Pouce OPERATIONS Coupe Kelt has successfully delineated the Lower- Progress Middle and the Upper-Middle…
  27. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 27
    Alberta Montney Wells 26 PRODUCTION RESERVES Kelt Alberta Montney OIL Drills Typical well EURs: Top 10 IP30 Wells (gross sales, BOE/d): (1) Pouce Coupe Montney OIL: (1) Pouce Coupe 03/07-18-078-11W6 LMM 2,045 ( 66% oil/ngls ) Sproule…
  28. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 28
    Pouce Coupe / Progress 27 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…
  29. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 29
    Pouce Coupe / Progress Montney Oil Type Curve 28 ( 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…
  30. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 30
    Pouce Coupe / Progress Montney Oil Type Curve 29 ( 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…
  31. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 31
    Valhalla / La Glace and Pipestone / Wembley 30 Drilling has been focused on the Middle Montney. Upper Montney Kelt 14-29 La Glace also productive - tested in the 15-33 Encana Facility (100% WI) 1-5 Sexsmith well Gas Plant…
  32. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 32
    La Glace Montney Oil Type Curve 31 ( 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…
  33. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 33
    La Glace Montney Oil Type Curve 32 ( 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…
  34. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 34
    2017 Montney Development Wells Paybacks 33 Actual Cumulative to Nov 30, 2017 [3] Remaining to Payback [4] Last Drill & Months Complete Production Operating Production Cost Initial Start Operating Operating Production Income Payback…
  35. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 35
    2017 Montney Delineation / Step-out Wells Paybacks 34 Actual Cumulative to Nov 30, 2017 [3] Remaining to Payback [4] Last Drill & Months Complete Production Operating Production Cost Initial Start Operating Operating Production…
  36. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 36
    Net Asset Value 35 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 )…
  37. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 37
    Future Considerations 36 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…
  38. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 38
    Management 37 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,…
  39. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 39
    Board of Directors 38 Robert J. Dales Compensation (Chair), Nominating, Audit, Reserves Geri L. Greenall Audit, Nominating William C. Guinan Chairman of the Board, HSE Eldon A. McIntyre Reserves (Chair), Nominating, Audit,…
  40. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 40
    APPENDIX 39 INSIDER COMMITMENT MONTHLY FORECAST OF 2018 WTI & AECO PRICES QUARTERLY PRODUCTION GROWTH QUARTERLY CASH COSTS MAP OF NORTH AMERICAN NATURAL GAS HUBS GAS MARKETING & TRANSPORTATION CONTRACTS NON-MONTNEY PROPERTIES:…
  41. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 41
    INSIDER COMMITTMENT 40 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…
  42. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 42
    Kelts 2018 Oil Price Forecast 41 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…
  43. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 43
    Kelts 2018 Gas Price Forecast 42 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…
  44. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 44
    Quarterly Production Growth 43 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]
  45. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 45
    Quarterly Cash Costs 44 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…
  46. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 46
    North American Natural Gas Hubs 45 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…
  47. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 47
    B.C. Gas Marketing / Transportation Contracts 46 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…
  48. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 48
    Alberta Gas Marketing / Transportation Contracts 47 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…
  49. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 49
    Spirit River 48 LAND Gross: 42,880 acres ( 67 sections ) 13-34 CL Pad: 14-22 (60%) Net: 35,352 acres ( 55 sections ) 15-22 (60%) 13-33 16-22 (60%) Charlie Lake: 28 net sections 16-10 H2O Doe Creek: 17 net sections Disposal…
  50. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 50
    Grande Cache 49 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…
  51. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 51
    2017 B.C. Inga DOIG Development Wells Paybacks 50 Kelt drilled two Doig wells in 2017 where 2P Type Curves target an IP30 of 1,800 BOE/d ( 39% gas / 61% oil/ngls ) and EURs of 894 MBOE ( 59% gas / 41% oil/ngls ). Kelt has 33 future…
  52. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 52
    Reserves 51 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 (…
  53. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 53
    Sproule P+P Reserves FDC 52 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…
  54. January 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 54
    Corporate Presentation Suite 300, 311 6th Avenue SW Calgary, Alberta, Canada T2P 3H2 www.KeltExploration.com

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