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March 2018 Corporate Presentation – Perpetual Energy Inc

Perpetual Energy Inc · Mar 5, 2018 · 40 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. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 1
    C O R P O R AT E P R E S E N TAT I O N MARCH 2018 BOLD IDEAS FOR ENERGY 1
  2. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 2
    Financial Profile Financial Profile December 31, 2017 except as noted Common Shares o/s (1) 59.3 million Management ownership 49% Share price (1) 0.83 Market capitalization 49 million Net bank debt (2) 48 million TOU…
  3. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 3
    Operating Profile Edson Wilrich Deep Basin Multi-zone liquids-rich gas Tight oil & gas exploration Mannville heavy oil Eastern Alberta Conventional shallow gas Viking shallow shale gas Bitumen Asset Summary Production (1)…
  4. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 4
    High Graded Asset Base 100% 100% Building a foundation 90% of resource-style plays 90% Robust multi-zone inventory 80% for profitable exploration 80% and development Proved and Probable Reserves (% of Total) 70% High…
  5. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 5
    Diversified Portfolio for Value Creation Edson Wilrich Mannville & Panny Greater Edson secondary conventional shallow gas zones Mannville Viking shallow Columbia/Brazeau shale gas Tight conventional Waskahigan Duvernay…
  6. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 6
    2018 Strategic Priorities Grow Value of Greater Edson Liquids-Rich Gas Grow Value of Eastern Alberta Portfolio Advance High Impact Opportunities Optimize Balance Sheet For Growth Positioned to pursue profitable growth…
  7. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 7
    2018 Forecast Capital Spending H1 2018 H2 2018 2018 Forecast 2017 Forecast Forecast Total ( millions) West Central 65 8 3 11 14 gross 1 gross (1.0 net) drills 0 drills 1 gross (1.0 net) drills Liquids-Rich Gas (13.4 net)…
  8. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 8
    Line of Sight Growth Plan 14,000 Forecast Production 2018 Avg 11,500 boepd Average Daily Production (Boe/d) 12,000 2017 Avg 9,876 boepd 10,000 8,000 6,000 4,000 2,000 - Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1…
  9. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 9
    Market Diversification Strategy 2018 Price Exposure Net of Royalties Crude Oil NGL - Other 9% Natural gas market shift to diversify portfolio NGL - 2% Condensate AECO Locked in term spreads and swapped back to Daily Index at five…
  10. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 10
    Increasing Margins 35.00 35 30.00 30 Maintaining Margins despite 25.00 25 lower AECO 2018 forward strip 20.00 20 /Boe /Boe 15.00 15 10.00 10 5.00 5 - - 2012 2013 2014 2015 2016 2017 2018E Operating Costs…
  11. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 11
    2018 Projected Adjusted Funds Flow Sensitivities Projected 2018 Calendar 2018 NYMEX Price (US/MMbtu) Adjusted Funds Flow(1) ( CAD millions) 2.25 2.50 2.75 3.00 3.25 3.50 3.75 45.00 21 23 25 27 29 31 33 Calendar 2018 WTI 50.00…
  12. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 12
    STRATEGIC PRIORITY 1 GROW VALUE OF GREATER EDSON LIQUIDS-RICH GAS
  13. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 13
    Greater Edson Liquids-Rich Gas Wilrich Play Performance 14,000 25,000 2014: East Edson JV Royalty deal Sold 5.6 MMcf/d plus associated liquids for 120 MM investment 2015: Growth driven by JV Royalty sale commitments 12,000…
  14. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 14
    Edson Activity Added 15 MMcf/d capacity at West Wolf 10-3 plant to bring area capacity to 78 MMcf/d Winter 2017/18 ERH program - longest well to date 3,400m horizontal length Pre 2017 2017 Q1 2018 H2 2018 2018 Drill…
  15. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 15
    Edson Type Curves McDaniel YE 2017 TPP West Type Curve Economics(1) Price Deck McDaniel January 1/2018 Capital (D,C & T) 4.5 MM NPV 10 % 3.5 MM ROR 45% F&D 6.57/ boe Capital Efficiency 7,800 boe/d Payout 2.1 Years…
  16. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 16
    East Edson Wilrich Capital Efficiency Capital efficiency = Cost to drill complete, equip and tie in/first 12 months average daily production, based on actual capital and average daily production to date (with McDaniel 2017 PDP…
  17. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 17
    Top Quartile Operating Cost Structure East Edson Operating Costs 2,500 14.00 12.00 2,000 10.00 Operating Cost (/Boe) Operating Cost (M) 1,500 8.00 6.00 1,000 4.00 500 2.00 0 0.00 (1) Operating…
  18. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 18
    STRATEGIC PRIORITY 2 GROW VALUE OF EASTERN ALBERTA PORTFOLIO
  19. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 19
    Eastern Alberta Mannville 8 Producing Mannville pools 6 Lloyd, 2 Sparky Current production 1,000 boe/d New Drill Injector Conversion New Pipeline Facility Upgrade/Set up Disposal Well Access to Large Resource 2017…
  20. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 20
    Mannville Heavy Oil Drilling Inventory Well Economics Assumptions (1) Capital (D,C & T) 0.9 MM 2018 Pricing CAD47.90/bbl wellhead heavy price (McDaniel Jan 2018 WTI US58.50/bbl, WCS CAD51.90/bbl, Offset CAD-4.00/bbl forecast) NPV…
  21. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 21
    Mannville Heavy Oil Pools Waterflood Response 800 Upper Mannville I2I Pool 600 Waterflood McDaniel Wedge Volumes F&D Recycle Ratio Oil rate, bbl/d YE 2017 from Capital Spent To-Date 400 To-date To-date Capital Current…
  22. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 22
    Waterflood and Enhanced Oil Recovery Scope Select Pools OOIP (2) Cumulative TPP Reserves Implied Currently Under production booked at YE Recovery Waterflood to YE 2017 2017 (2) Factor (MMbbl) (MMbbl) (MMbbl) (%) Sparky I2I (1) 25…
  23. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 23
    STRATEGIC PRIORITY 3 ADVANCE HIGH IMPACT OPPORTUNITIES
  24. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 24
    Bitumen Panny Bluesky Low rate cold flow possible without solvent or thermal assistance Average pay thickness 11 m Low viscosity bitumen 15,000 cp at 25oC 50,000 cp at 11oC reservoir temp Highly mobile at 70oC Panny Bluesky…
  25. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 25
    LEAD Process Technology Pilot Low Pressure Electro-Thermally Assisted Drive First stage of pilot single well Cyclic Heat Stimulation completed in Q2 2017 Electrical resistive heating and production in a single horizontal well to…
  26. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 26
    Viking Shallow Shale Gas Viking Tight Gas Resource Play 80 sections of P&NG rights on trend Type curves developed from tight Viking Perpetual Viking Tight Viking production from vertical wells in conjunction Horizontal Test Well…
  27. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 27
    STRATEGIC PRIORITY 4 OPTIMIZE BALANCE SHEET FOR GROWTH
  28. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 28
    Balance Sheet (1) Net bank debt: 48 million Comprised of 32 million revolving bank debt and 16 million working capital deficiency Credit facility borrowing limit expanded by 62.5% to 65 million; Term extended until May 2019 Next…
  29. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 29
    Debt Repayment & Liquidity Profile Forecast Debt Repayment Profile 12/31/2017 60% 80 49% 70 50% 62.9 MM 60 36% 40% 50 46.2 MM 30% 40 30 20% 15% 20 MM 18.5 10% 10 0% 0 < 1 Year 1 Year < 3 Years 3 Years TOU Loan…
  30. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 30
    INVESTMENT THESIS POTENTIAL FOR MULTIPLE EXPANSION RELATIVE TO PEER GROUP COMPELLING DISCOUNT TO NET ASSET VALUE TORQUE TO GAS PRICE RECOVERY
  31. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 31
    Sum of the Parts Year End 2017 Unbooked Inventory Unbooked Inventory (1) Net asset value per share based on 59.3 million shares outstanding. Reserve valuation based on NPV10% McDaniel reserves and pricing; Independent third party…
  32. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 32
    Key Investment Highlights High Quality Assets Asset base repositioning for resource-style and diversification successful Edson Wilrich liquids-rich gas inventory well-defined providing high capital efficiency growth Mannville heavy…
  33. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 33
    ADDITIONAL INFORMATION Sue Riddell Rose President & CEO Mark Schweitzer VP Finance and CFO infoperpetualenergy.com EMAIL 800.811.5522 TOLL FREE 403.269.4400 PHONE 403.269.4444 FAX 3200, 605 5 Avenue SW Calgary, Alberta Canada…
  34. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 34
    Non GAAP Measure Advisories NON-GAAP MEASURES: The terms adjusted funds flow, adjusted funds flow per share, adjusted funds flow netbacks, cash costs, gas over bitumen revenue, net of payments, net working capital deficiency (surplus),…
  35. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 35
    Oil and Gas Advisories NON-GAAP MEASURES continued: Debt adjusted funds flow is adjusted funds flow less cash interest expense and is used by management to analyze leverage. OIL AND GAS ADVISORIES: The presentation refers to F&D…
  36. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 36
    APPENDIX
  37. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 37
    Transformational Transactions Warwick Gas Storage Sale: (May 2016) Sold remaining 30% partnership interest (23 million) Senior Notes Swap: (May 2016) Positive Impact: Retired Senior Notes via swap for 4.4 MM TOU shares (214 million)…
  38. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 38
    Shallow Gas Disposition October 1, 2016 Nominal proceeds + 2 year call option Deferred Purchase Price through 2 year call on AECO gas price 2.81/GJ for 33,611 GJ/d Metrics Impact Production: (35.5 MMcfe/d) Adjusted Funds Flow: 5…
  39. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 39
    Conventional Shallow Gas Belly River Conventional shallow gas asset base characteristics Primarily Mannville Area remaining post shallow gas disposition Viking Cretaceous sweet shallow…
  40. March 2018 Corporate Presentation – Perpetual Energy Inc – slide 40
    Bitumen R9 R5 R1W5 R21 R17 R13W4 T98 Perpetual OS Leases Overriding Royalty Lands Perpetual Panny Pilot T95 Experimental Primary Projects Thermal Projects 301 net sections (192,416 net acres) of oil sand leases…

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