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July 2018 Corporate Presentation – Kelt Exploration Ltd.

Kelt Exploration Ltd. · Jul 12, 2018 · 58 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. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 1
    Corporate Presentation July 2018 KeltExploration.com David J. Wilson President & Chief Executive Officer Sadiq H. Lalani Vice President & Chief Financial Officer www.KeltExploration.com 0
  2. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 2
    Why Invest in Kelt CREATING VALUE DURING DOWNTURNS The Kelt management team has a track record of creating shareholder value during downturns, previously during the 2008-2009 period with Celtic Exploration Ltd., eventually sold in…
  3. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 3
    Common Share Information Stock Exchange listing TSX Trading symbol KEL Market capitalization 1.6 billion 52-week trading range 5.69 9.30 Common shares issued ( June/2018 ) 183.5 million Stock options ( 8.3 MM ) & RSUs ( 0.7 MM )…
  4. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 4
    Convertible Debentures TSX trading symbol KEL.DB Principal amount outstanding 90.0 million Coupon / Maturity date 5.0% / May 31, 2021 52-week trading range 133.51 176.00 D&Os purchased 14.7 million (16%) of the total Debenture…
  5. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 5
    Insider Commitment Insider Purchases Offering / Market Purchases Date Shares (MM) Amount (MM) Price/share 13.9 MM Equity Private Placement Feb-2013 3.7 8.7 2.32 94.4 MM Equity Private Placement Apr-2013 5.7 31.5 5.55 92.0 MM Equity…
  6. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 6
    Capital Expenditures 2018 2018/17 ( millions ) 2016 2017 Forecast Change Drilling & Completions 47.4 154.7 170.0 + 10% Equipment, Facilities, & 28.5 78.0 95.0 + 22% Pipeline Infrastructure Land, Seismic & Asset Acquisitions 28.3…
  7. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 7
    Drilling Program 2017 Gross 2017 Net 2018 Gross 2018 Net Drills Wells Wells Wells Wells Alberta 16 15.0 13 11.6 British Columbia 13 13.0 18 18.0 Non-operated Properties 11 3.2 6 0.4 Total 40 31.2 37 30.0 2017 Gross 2017 Net 2018…
  8. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 8
    Reserves LIQUIDS WEIGHTING CONTINUES TO GROW: 2017 proved plus probable reserve additions, before dispositions, were weighted 63% to oil/ngls and 37% to gas compared to 40% and 60% respectively in 2016. The 2018 drilling program will…
  9. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 9
    Finding, Development & Acquisition Costs Proved + As at December 31, 2017 Proved Probable 2017 capital expenditures + change in FDC ( M ) 315,436 343,953 Reserve additions, net ( MBOE ) 32,837 49,592 FD&A cost ( /BOE ) 9.61 6.94…
  10. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 10
    Production Outlook 2018 2018/17 2016 2017 Forecast Change Oil ( bbls/d ) 5,070 6,634 10,000 10,600 51% 60% Ngls ( bbls/d ) [1] 2,709 2,608 3,300 3,600 27% 38% Gas ( mcf/d ) 79,009 77,330 90,000 96,000 16% 24% Combined ( BOE/d )…
  11. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 11
    2018 Product Mix Production 2018 Forecast Income Split ( MM ) Split Oil & Ngls 47% 212.0 91% Gas 53% 19.8 9% Operating income 100% 231.8 100% G&A and interest expense ( 16.8 ) Funds from operations 215.0 10
  12. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 12
    Commodity Prices ( CA, unless otherwise specified ) 2016 2017 2018 (E) YOY Change WTI Crude Oil ( USD/bbl ) [1] US 43.32 US 50.95 US 65.00 + 28% WTI Crude Oil ( CAD/bbl ) [2] 52.79 61.85 78.11 + 26% NYMEX Natural Gas ( USD/mmBtu ) US…
  13. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 13
    Gas Market Risk Management GAS MARKET DIVERSIFICATION: The Company has taken a diversified approach to selling its natural gas in order to reduce exposure to single market risk. Kelt has entered into several contracts that result in…
  14. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 14
    Annual Production Growth ( since inception ) PRODUCTION ( BOE / d ) 35,000 CAGR since 2013 = 49% 30,000 28,500 - 29,500 25,000 22,130 20,947 15,000 20,000 18,577 16,000 15,000 12,888 12,756 13,168 11,879 10,000 8,419…
  15. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 15
    Annual Production per Share Growth ( since inception ) PRODUCTION PER MILLION SHARES ( BOE / d ) 200 CAGR since 2013 = 25% 155 - 165 150 121 125 120 105 82 - 88 100 73 77 76 69 53 50 73 - 78 42 45 52 36 43 11 0…
  16. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 16
    Netbacks 2018/17 ( / BOE ) 2016 2017 2018 (E) Change Revenue/Price 24.08 31.51 38.78 + 23% Realized hedging gain ( loss ) 0.02 ( 0.13 ) Royalties ( % of revenue ) ( 8.6% ) ( 9.3% ) ( 10.5% ) + 13% Transportation expense ( 2.86 ) (…
  17. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 17
    Financial Outlook 2018 2018/17 2016 2017 Forecast Change Revenue ( MM ) 184.6 257.6 410.5 + 59% Operating income ( MM ) [1] 75.7 123.4 231.8 + 88% Adj. funds from operations ( MM ) [1] 58.4 108.0 215.0 + 99% Per share diluted (…
  18. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 18
    2018 Commodity Price Sensitivities Kelt Kelt CAD/USD 2018 Oil/NGLs Price Gas Price Exchange Rate Forecast minus 10% minus 10% minus CAD 0.05 WTI Crude Oil ( USD/bbl ) 65.00 58.40 - 10% 65.00 n/c 65.00 n/c NYMEX Natural Gas (…
  19. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 19
    Core Areas Fort St. John ( BC ) : Inga/Fireweed & Oak/Flatrock Stacked Montney light oil and condensate-rich gas Doig condensate-rich gas Grande Prairie ( AB ) : Fort St. John Pouce Coupe/Progress, Valhalla/La Glace & Grande…
  20. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 20
    Kelt Land Fairway Fireweed Corporate Land Holdings Inga May/8 Net Net Flatrock 2018 Acres Sections Stoddart Oak Developed 222,271 347 Fort Undeveloped 644,512 1007 St. John Total 866,783 1,354 Pouce Coupe Progress Montney…
  21. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 21
    British Columbia Montney Lands Land (Montney Rights) Gross: 345,148 acres ( 539 sections ) Net: 340,196 acres ( 532 sections ) Fireweed Operations Kelt has been successful delineating the Stoddart Flatrock Upper and Middle Montney…
  22. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 22
    British Columbia Montney Wells PRODUCTION RESERVES Kelt British Columbia Montney Drills Typical Well EURs: Top 10 IP30 Wells ( gross sales, BOE/d ): Inga/Fireweed Upper Montney ( UM ) (1) Fireweed 00/C-31-I/94-A-12 UM 2,068 ( 68%…
  23. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 23
    B.C. - Stacked Montney Resource Potential MULTIPLE STACKED MONTNEY HORIZONS Kelt has been successful delineating the Upper and Middle Montney at Inga/Fireweed Initial results from the IBZ Montney have been encouraging and Kelt will…
  24. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 24
    Inga 6-Section / 3-Pad / 72-Well Development Plan Kelt has increased its 2018 capital expenditure budget to include 6 new drills at Inga which will ultimately be part of a 24-well pad made up of 8 Upper, 8 Middle and 8 IBZ Montney…
  25. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 25
    Inga / Fireweed Montney Lands B-90-A UM Land (Montney Rights) (sfc C-10-H) A-58-I UM 220 gross sections ( 218 net sections ) (sfc D-A79-I) C-26-A UM 00/15-25 MM (sfc A-6-A) Operations Delineation drilling to date has been…
  26. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 26
    Inga / Fireweed Upper Montney Type Curve ( BOE / d ) TOTAL RAW PRODUCTION ( Well Count [1] ) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 795 MBOE 54% Oil/Ngls 46% Gas 10 10 5 0 1 3 5…
  27. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 27
    Inga / Fireweed Middle Montney Type Curve ( BOE / d ) TOTAL RAW PRODUCTION ( Well Count [1] ) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 645 MBOE 59% Oil/Ngls 41% Gas 10 5 0 1 3 5…
  28. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 28
    Oak / Flatrock Montney Lands LAND 02/13-13 (sfc 13-12) Montney Rights: Gross: 182,087 acres ( 285 sections ) Net: 180,814 acres ( 283 sections ) OPERATIONS 00/7-3 (sfc 10-27) Oil and gas exploration activity targeting the Upper…
  29. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 29
    Alberta Montney Lands LAND Montney Rights: Gross: 173,280 acres ( 271 sections ) Net: 148,915 acres ( 233 sections ) Pouce OPERATIONS Coupe Kelt has commenced development of the Lower-Middle Progress and the Upper-Middle Montney…
  30. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 30
    Alberta Montney Wells PRODUCTION RESERVES Kelt Alberta Montney OIL Drills Typical Well EURs: Top 10 IP30 Wells ( gross sales, BOE/d ): (1) Pouce Coupe Montney OIL: (1) Pouce Coupe 03/07-18-078-11W6 LMM 2,045 ( 66% oil/ngls ) 2P EUR =…
  31. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 31
    Pouce Coupe / Progress Abbreviations: 15-13 MM UM = Upper Montney 920 BOE/d IP30 (KEL 50%) MM = Middle Montney UMM = Upper-Middle Montney (may also be referred to as Montney H 14-14 MM or Montney D2) 875 BOE/d IP30 Pouce (KEL…
  32. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 32
    Pouce Coupe / Progress Montney Oil Type Curve ( BOE / d ) TOTAL RAW PRODUCTION ( Well Count [1] ) 5,000 Average Well 2P EUR Type Curve [2] Well Count 1,000 2P EUR [2] 600 MBOE 100 45% Oil/Ngls 55% Gas 10 15 10 5 0 1…
  33. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 33
    Valhalla / La Glace and Pipestone / Wembley Drilling has been focused on the Middle Montney. Upper Montney also productive - tested in the 15-33 Kelt 14-29 well. La Glace Facility Encana Ownership in pipeline infrastructure, minor…
  34. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 34
    La Glace Montney Oil Type Curve ( BOE / d ) TOTAL RAW PRODUCTION ( Well Count [1] ) 5,000 Average Well Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 590 MBOE 61% Oil/Ngls 39% Gas 10 10 5 0 1 3 5 7 9 11 13…
  35. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 35
    2017 Montney Development Wells Paybacks Drill & Actual Cumulative to Dec 31, 2017 [3] Remaining to Payback [4] Last Months Initial Production Payback Production Complete Operating Well Test Start Operating Operating Production Period…
  36. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 36
    Spirit River Charlie Lake Land 13-34 Gross: 30,560 acres ( 48 sections ) CL Pad: 14-22 (60%) 15-22 (60%) Net: 23,151 acres ( 36 sections ) 13-33 16-22 (60%) Charlie Lake: 20.25 net sections 16-11 H2O Disposal Charlie Lake:…
  37. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 37
    Net Asset Value Dec/31 Dec/31 % ( millions ) 2016 2017 change P&NG reserves, NPV10% BT 1,730.7 2,111.5 + 22% Decommissioning obligations, NPV10% BT [1] ( 9.5 ) ( 12.8 ) + 35% Undeveloped land 212.5 239.1 + 13% Net bank debt ( 138.0…
  38. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 38
    Future Considerations Kelt: The Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. The Company has amassed vast Montney acreage in new plays…
  39. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 39
    Management David J. Wilson, President & CEO Sadiq H. Lalani, Vice President & CFO Douglas J. Errico, Vice President, Land Patrick Miles, Vice President, Exploration Douglas O. MacArthur, Vice President, Operations Alan G. Franks, Vice…
  40. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 40
    Board of Directors Robert J. Dales Lead Director, Compensation (Chair), Audit, Reserves Geri L. Greenall Reserves (Chair), Audit, Nominating William C. Guinan Chairman of the Board, HSE Michael R. Shea Nominating (Chair),…
  41. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 41
    Appendix Abbreviations 2018 Forecasted Commodity Prices Quarterly Forecast of 2018 WTI & NYMEX Prices Quarterly Production Growth Quarterly Cash Costs Map of North American Natural Gas Hubs Gas Marketing & Transportation Contracts…
  42. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 42
    2018 Forecasted Commodity Prices ( CA, unless otherwise specified ) Jan-Mar Apr-Dec (E) 2018 (E) WTI Crude Oil ( USD/bbl ) [1] US 62.91 US 65.69 US 65.00 CLS Crude Oil ( CAD/bbl ) [2] 74.77 79.20 78.11 NYMEX Natural Gas ( USD/MMBtu )…
  43. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 43
    Kelts 2018 Oil Price Forecast ( CA/bbl ) ( US/bbl ) 80.00 80.00 KELT Realized ( 2018 Average = CA71.74 ) 75.00 74.33 75.00 WTI ( 2018 Average = US65.00 ) 72.08 71.58 70.00 70.00 68.16 66.74 65.34 65.00 65.13 65.00 65.00…
  44. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 44
    Kelts 2018 Gas Price Forecast ( CA/Mcf ) ( US/MMBtu ) 4.00 4.00 KELT Realized ( 2018 Average = CA2.89 ) NYMEX ( 2018 Average = US2.90 ) 3.50 3.52 3.50 3.47 3.25 3.20 3.13 3.00 2.97 2.90 3.00 3.00 2.91 2.87 2.92 2.83 2.79…
  45. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 45
    Quarterly Production Growth ( BOE / d ) PRODUCTION 32,000 Oil Ngls 28,000 Gas 24,000 20,000 16,000 12,000 8,000 4,000 0 2014 Q3 Q4 2015 Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2017 Q1 Q2 Q3 Q4 2018 Q1 Q2 [E] 45
  46. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 46
    Quarterly Cash Costs ( / BOE ) CONTROLLING COSTS 22.00 G&A 20.00 Interest Production & Transportation 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2014 Q3 Q4 2015 Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2017 Q1 Q2…
  47. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 47
    North American Natural Gas Hubs Kelt 2018 Gas Netback Forecast Station 2 Hub Price Netback Gas Hub % US/MMBtu US/Mcf AECO Sumas Empress Emerson Dawn 26% 2.75 1.94 Kingsgate Waddington Chicago 22% 2.70 1.72 Stanfield Boston…
  48. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 48
    Kelt Gas Firm Transportation Contracts Transportation Supply Term Volume (MMcf/d) Upstream Hub Nov/1/17 Oct/31/18 10.3 [2] Alliance Receipt Point Nov/1/17 Oct/31/20 [1] 2.0 [2] Alliance Receipt Point Apr/1/18 Oct/31/20 [1] 2.1 [2]…
  49. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 49
    Kelt Gas Marketing Sales Contracts Volume Physical Sales Market Term (MMcf/d) Delivery Hub Market Price Nov/1/17 Oct/31/27 [1] 23.7 DAWN DAWN USD Daily Index Nov/1/17 Oct/31/20 15.0 NIT MALIN USD NGI FOM Index less US0.70/MMBtu…
  50. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 50
    Reserves NPV 10% BT Dec/31/2016 Dec/31/2017 Percent Dec/31/2017 ( MMBOE ) ( MMBOE ) Change ( MM ) Proved Developed 34.5 37.9 + 10% 423 Producing Total Proved 108.2 133.0 + 23% 1,093 Proved plus Probable 194.1 235.6 + 21% 2,112…
  51. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 51
    Sproule P+P Reserves FDC December 31, 2017 FDC ( MM ) Net HZ Wells Alberta Montney wells 176 37 B.C. Montney wells 638 103 TOTAL Montney wells 814 140 Other formation wells 342 74 Other expenditures 7 - TOTAL 1,163 214 Notes:…
  52. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 52
    Grande Cache LAND Modern 13-4 Gross: 130,270 acres ( 204 sections ) Narraway 135 MMcf/d Gas Plant IP30: 9 MMcf/d Falher/Wilrich TOU 4-29 IP30: 20 MMcf/d Net: 93,384 acres ( 146 sections ) OPERATIONS (7% WI) Falher/Wilrich…
  53. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 53
    2017 B.C. Inga DOIG Development Wells Paybacks Kelt drilled two Doig wells in 2017 where 2P Type Curves target an IP30 of 2,000 BOE/d (26% gas / 74% oil/ngls) and EURs of 1,080 MBOE (49% gas / 51% oil/ngls). Kelt has 31 (28.4 net)…
  54. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 54
    Inga / Fireweed Upper Montney Type Curve ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 795 MBOE 54% Oil/Ngls 46% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17 19…
  55. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 55
    Inga / Fireweed Middle Montney Type Curve ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 645 MBOE 59% Oil/Ngls 41% Gas 10 5 0 1 3 5 7 9 11 13 15 17 19…
  56. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 56
    Pouce Coupe / Progress Montney Oil Type Curve ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 2P EUR Type Curve* Well Count 1,000 2P EUR* 600 MBOE 100 45% Oil/Ngls 55% Gas * Sproule has a 795 MBOE and a 514 MBOE type…
  57. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 57
    La Glace Montney Oil Type Curve ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Type Curve Well Count 1,000 Sproule 2P EUR 100 590 MBOE 61% Oil/Ngls 39% Gas 10 10 5 0 1 3 5 7 9 11 13 15 17 19 21 23 25…
  58. July 2018 Corporate Presentation – Kelt Exploration Ltd. – slide 58
    Corporate Presentation KeltExploration.com Kelt Exploration Ltd. Suite 300, East Tower 311 Sixth Avenue SW Calgary, Alberta Canada T2P 3H2 Phone: 403-294-0154 Fax: 403-291-0155 Website: www.KeltExploration.com 65

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