2015 Capital Budget & Long-Term Plan Update Conference Call November 17, 2014
Significant Progress in First Year of Plan Measure Outlook Details 2014 average production expected above mid-point of Average Production ON TARGET guidance range of 101,000 106,000 boe/d Opex run rate down 200MM on an annualized…
Delivering On Targets Results starting to be reflected in reporting; Change taking hold Production on Track to Meet 2014 Guidance Net Debt Expected to Decrease by 1B Drill Times Decreased Significantly 110 25 22 109 3,500…
Value Proposition Key pillars of the Long-Term Plan remain unchanged Continue to improve leverage through non-core dispositions Debt View current debt levels as manageable within a sustained annual Reduction average C75/bbl Light…
Updated Long-Term Plan Overview Strong execution to date on the original Long-Term Plan Updated Long-Term Plan generally offers more value on key metrics, although leverage in 2015 expected to be higher as non-productive…
Profitable Growth: Key Metrics of the Plan Strategy remains unchanged; Production and Funds Flow CAGRs have improved over the last year on same price deck Average Annual Production Funds Flow 150 2,500 8% CAGR 20% CAGR 130…
2015 Budget: Next Step in Delivery 2015 continues to focus on oil development, particularly in the three core plays 2015 plan implies 3 - 8% annual average Total Capital 840MM production growth over 2014, adjusting for major…
Long-Term Plan Production Profile Penn West expects meaningful seasonality to its production profile as a result of breakup on longer cycle-time projects at Cardium and Slave Point Throughout the Plan, growth expected to be most…
Debt Reduction: Leverage Perspective Committed to reaching target of 1.0 - 1.5x Net Debt / Funds Flow Additional non-productive divestitures viewed as the most appropriate method to reach target in the near term Current and original…
Funds Flow, Sustainability and Leverage Updated Long-Term Plan (LTP) shows Funds Flow meaningful improvement of Sustainability Ratios 2016 forward 2,500 Funds Flow 100% or below post 2015 2,000 Funds Flow Original LTP Approach…
Profitable Growth: High-Grading the Portfolio 2015E Production 2019E Production By Play 40% from By Play 65% from Delivering on the Plan Core Areas Core Areas Spending 90% of capital on Cardium 3 core plays, including 55%…
Profitable Growth: Value to Shareholders Dividend impact is meaningful for potential shareholder returns Funds Flow Per Share Penn West views paying a 6 Funds Flow Per Share sustainable dividend as a Funds Flow Per Share 5…
Execution and Cost Control Operating expense reduction and production reliability drive value from the base 95% Production reliability is a low cost 94% Targeting reliability opportunity to add barrels Production Reliability…
Appendix
Commodity Price Assumptions 2015 2016 2017 2018 2019 Oil Prices WTI Oil Price US/bbl 87.50 87.50 87.50 89.25 89.25 Ed Par Oil Price C/bbl 86.45 88.20 88.20 91.84 91.84 WTI To Ed Par Differential US/bbl (4.37) (3.50) (3.50) (1.79)…
Endnotes Slide 5 Pro Forma A&D Net Debt is assuming 315mm net proceeds from disposition announced Oct 23, 2014. Drill times are current view of drill times relative to historical Penn West performance. Q4 14E Net Dispositions assumes…
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