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January 2018 Corporate Presentation – Blackpearl Resources, Inc.

Blackpearl Resources, Inc. · Jan 19, 2018 · 26 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 – Blackpearl Resources, Inc. – slide 1
    Corporate Presentation January 2018
  2. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 2
    Why Canadian Heavy Oil o Canada is second only to Saudi Arabia in proven oil reserves o Canada has some of the best fiscal terms (royalty + tax) in the non-OPEC world o 90% of the non-OPEC production growth in the past 5 years came from…
  3. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 3
    Why BlackPearl o Management owns 10% of PXX and are focused on shareholder value o Onion Lake thermal has 20,000 bopd of production potential with enough reserves/resource to last 20+ years o Full cycle Onion Lake thermal economics are…
  4. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 4
    BLACKPEARL HEAVY OIL GROWTH POTENTIAL o In the next ten years our existing projects have the potential to get us to over 40,000 bbl/d o Development of future phases at Blackrod could take us over 100,000 bbl/d BlackPearl Heavy Oil…
  5. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 5
    Company Overview The Basics Corporate Symbol: PXX, PXXS o Our focus is long life, low decline heavy oil Exchanges: TSX, OMX projects o Fiscally disciplined with a strong balance sheet Shares Outstanding (MM) (1) Basic 336 o Independent…
  6. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 6
    Company Risks Cost Risk o Project capital has been dropping over the last few years in the oil sands. We have built two Athabasca Blackrod phases at Onion Lake on budget. Peace River (SAGD) Resource Risk Cold o Blackrod has a…
  7. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 7
    Operations Review
  8. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 8
    Onion Lake Thermal Phase 1 (6,000 b/d) o Producing 6,150 b/d o ISOR 2.5 o We have been operating at, or over, design capacity for 2 years without any sustaining capital Thermal Phase 2 (an additional 6,000 b/d) Development Area o…
  9. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 9
    Design Capacity 0 1000 2000 3000 4000 5000 6000 7000 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Onion Lake Thermal Apr-16 Initial steam injection May-16 Jun-16 Jul-16 Aug-16…
  10. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 10
    Onion Lake Thermal Thermal Development Area Delineated o 197 existing delineation wells in the thermal development area o 90% 3D seismic coverage Thermal Development Plan in Place o Phase 1 13 horizontal production wells o Phase 2 14…
  11. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 11
    Onion Lake Attractive Thermal Economics o Operating (including energy) and transportation costs of 10 15/bbl o Low sustaining capital provides strong Free Funds Flow (FFF) o Break-even wellhead price of C27/bbl (includes initial +…
  12. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 12
    Blackrod SAGD The Basics o Located in the Athabasca oil sands o 100% owned and operated o Grand Rapids reservoir Current Status o Successful pilot operated since 2012 o Pilot well averaged 525 b/d over last 32 months o Pilot well has…
  13. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 13
    Blackrod Development Commercial o Received regulatory and environmental approval for 80,000 b/d development 1 mile o Project to be built in phases, with the first phase planned for 20,000 b/d o Phase 1 capital cost estimate of…
  14. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 14
    Financial Review
  15. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 15
    Oil Prices WTI Oil Price (US/bbl) o Rebound in WTI oil prices over the last 70.00 4 months 60.00 o Supply/demand rebalancing in the 50.00 market 40.00 30.00 o Heavy oil differentials have widened 20.00 during the same period 10.00…
  16. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 16
    Improved Operating Efficiencies Operating Costs - /boe o The transition to thermal production has 30.00 resulted in significant improvements in operating efficiencies 20.00 25.24 10.00 15.43 o Unit operating costs decreased 39%…
  17. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 17
    2018 Guidance 2018 Estimates Funds Flow Sensitivities (MM) 2017e(1) 2018e(2) 90 Production (boe/d) 80 Average 10,100 11-12,000 70 Exit 10,500 14,000 60 50 Capital expenditures (MM) 195-200 60-65 40 30 20 Adjusted funds flow (MM)…
  18. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 18
    Strong Financial Position Debt Structure o Issued second lien notes to Prudential o Bank credit facilities Capital Group in June 2017 o 120MM (undrawn as of Sept 30) o Completed funding for the Onion Lake Phase 2 thermal expansion o…
  19. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 19
    Hedging Program o We use oil hedging to mitigate downside risk to support our capital program and debt repayment o Oil price is hedged out for the forward 18 months with 50% of forecast production hedged out 12 months; 20% hedged out…
  20. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 20
    Key Takeaways o Finishing construction of phase 2 thermal development at Onion Lake o 20,000 bbl/d potential at Onion Lake (for 20+ years) o 80,000 bbl/d potential at Blackrod (for 20+ years) o Develop later or accelerate with a partner…
  21. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 21
    Appendix
  22. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 22
    Successful Transition to Thermal o Our long term strategy has always been to transition the Company from a conventional heavy oil producer to a thermal heavy oil producer o Currently thermal production accounts for 60% of corporate…
  23. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 23
    Onion Lake Primary The Basics o Active in the region since 2006 o Over 300 wells drilled o Expect initial production of 40 60 b/d o Expect 40,000 80,000 bbl per well o Capex of 0.45MM per well Current Status o Producing 2,000 b/d o 2P…
  24. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 24
    Mooney ASP Flood The Basics Phases 3 & 4 Phase 2 o Bluesky reservoir Phase 1 Phase 2 o Drilled over 90 horizontal wells o Phase 1 of the ASP flood initiated in 2011; production increased from 300 to 2,000 boe/d o Recoveries expected…
  25. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 25
    2018 Guidance 2018 Capital Spending Blackrod 3% Onion Lake o Our 2018 focus will be on completing the Thermal(ph 2) Other 8% phase 2 expansion at Onion Lake as well as 20% sustaining capital (one additional well pad) o We…
  26. January 2018 Corporate Presentation – Blackpearl Resources, Inc. – slide 26
    Onion Lake Oil Pricing o The following provides indicative pricing of a barrel of Onion Lake crude oil Per bbl WTI Price (US) 60.00 (light oil reference price) Heavy Oil differential (US) 15.00 (assuming a 25% discount) Western…

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