Celebrating 10 Years of Growth TSX: PONY Investor January 15, 2018 Update
WHY we do what we do We believe: world demand for clean and reliable source of energy is rapidly growing technological advancements makes our energy cost competitive on a world scale in developing our world-class resource using the…
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…
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…
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…
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…
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…
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…
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)…
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…
2018 Production Revenue Managing Volatility 52% of PONYs total forecast 2018 production volumes are protected through a combination of physical NYMEX and financial contracts 8% Unhedged at a volume-weighted Condensate…
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…
Diversified Market Exposure 2018 / 2019 Sales Contracts Support Strong Netbacks All currency CAD Index pricing as of Dec 13, 2017 Painted Pony actively markets the majority of natural gas volumes into a diversity of sales points…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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 24
Appendices and Advisories
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…
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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