INTRODUCTION Started Sept 2010, fourth Storm since Nov 1998 history of discipline with capex & focus on per share growth Market cap 335 MM (2.75/share), TSX symbol SRX 121 MM shares + 8 MM options listed on TSX eff Sep 27/17 officer…
PRODUCTION GROWTH Q2/18 estimate 19,500 20,500 boe/d liquids increased to 19% of total prodn in Q1/18 from 17% in Q1/17 3
improving with cost reductions, liquids growth, FINANCIAL RESULTS diversified nat gas sales 2018 est +22% per share YOY 2017 -9% YOY 2017 +83% per share YOY (op cost -11%) f/c 2018 +25% growing prodn in a prodn per share…
recycle & FD&A are RESERVES fundamental to growth 2017 PDP is 26% of 2P (vs 24% in 2016) 2017 PDP 5.76/boe (-16% YOY) all-in reflects total capital investment 2017 PDP +32% per share YOY (1P +26%, 2P +23%) longer hzs…
UMBACH (NE British Columbia) 1% H2S requires processing Montney liquids rich gas at sour gas plant 111,000 net acres (157 sections) McMahon GP has access raw gas 1,200 1,300 btu/scf to 3 sales pipelines Q1/18 19,670 Boe/d 38…
UMBACH LAND POSITION Montney productive across area very large land position, learning from offsetting hz results Storm hzs IP365 for comparison 201416: 3.4 mmcf/d + 45 bpd est 2017: 44.5 mmcf/d + 85 bpd 65 net hzs drilled to date,…
UMBACH ACTIVITY Field compression totals 115 mmcf/d raw 2 MM increases to 150 mmcf/d Current inventory 9 drilled hzs (2 completed) drilling longer hzs at Nig & S Umbach where condensate rates are higher recent hzs 2000 m vs…
UMBACH TYPE CURVE 9
2017 - 18 HZ PERFORMANCE 10
UMBACH CONDENSATE RATES very large land position, still learning/improving 11
UMBACH CONDENSATE-GAS RATIOS 12
UMBACH HZ COSTS D&C cost per meter decreasing with longer hzs, reduces FD&A 2017 D&C per meter -16% vs 2016 actual accounting system costs, incl everything (lease & road construction, water handling) royalty credits not…
UMBACH HZ ECONOMICS Stn 2 1.50 - 1.75/GJ for growth (full-cycle ROR 15% - 20%) use Stn 2 price for flat pricing full-cycle economics as incremental growth in nat gas is sold at Stn 2 full-cycle ROR 15% incl G&A + interest…
PROCESSING & TRANSPORTATION overcommitting Firm processing totals 80 mmcf/d raw reduces flexibility Q1/18 throughput 102 mmcf/d raw for future growth McMahon GP 65 mmcf/d raw & Stoddart GP 15 mmcf/d raw McMahon processing deal…
STORM NAT GAS PRICE nat gas sales are diversified, reflected in realized price objective is to diversify nat gas sales; not for/against any single market 77% in Q1/18 sold in US US sales benefit at Chicago & Sumas from FX 16
HEDGING (to May 15/18) Hedging to support growth growth is not hedged target: 50% of current prodn hedged 1 to 12 months forward 25% of current prodn hedged 13 to 24 months forward Fixed price hedges hedged 47% f/c 2018 prodn…
GUIDANCE capex is flexible, can quickly adjust up or down corporate decline 32% (wells producing Dec/16 to Dec/17) capex to maintain 20,500 boe/d: 2018 55 - 65 MM 2019 35 - 45 MM Umbach hz est D&C 5.0 MM (vs 2017 actual 4.4…
WESTERN CANADIAN GAS PRICES primary cause of low W Cdn prices is too much prodn growth Storms incremental growth is sold at Stn 2 (higher price required for growth) Stn 2 AECO diff narrowed since Dec/17 with TCPL Towerbirch…
US NAT GAS SUPPLY/DEMAND Bullish US nat gas price with net supply flat/declining exports growing with LNG export capacity to 9 bcf/d in H2/19 US prodn is rising but, so is demand US storage -903 bcf YOY (Apr 27/18) 20
RISING NAT GAS DEMAND bullish nat gas longer-term with continuously rising demand, not cheap or easy to grow prodn US and world nat gas demand has been increasing for the last 25+ years renewables need nat gas (wind & solar are…
SUMMARY Growing prodn & funds flow on per share basis low and improving cost structure Hedging 12 24 months forward to reduce price volatility 47% of forecast 2018 prodn Near term, maintain 20,000 boe/d until Stn 2 improves…
STORM RESOURCES LTD. CONTACT INFO For further information please contact: Brian Lavergne, President and Chief Executive Officer Michael Hearn, Chief Financial Officer Carol Knudsen, Manager Corporate Affairs Address: 200, 640 5th…
APPENDIX
UMBACH 2017 HZ PERFORMANCE
2018 f/c prodn +25% YOY & funds flow +22% YOY FINANCIAL GUIDANCE 2018 Forecast (prices actual to date & 2017 2016 2015 approx fwd strip May 10/18) Average Boe/d 20,000 21,000 16,017 13,219 9,956 per MM shares 168 132 109 83 Q4…
PLANTGATE NAT GAS PRICE AT 2018 FWD STRIP 2018 FWD STRIP (Mar 2/18) Sell in Chicago (Alliance pipeline) NYMEX US2.81/mmbtu Chicago price US2.51/mmbtu NYMEX - Chicago diff - US0.30/mmbtu Chicago price Cdn3.06/GJ Alliance fuel -Cdn0.16/GJ…
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