A SUSTAINABLE CASH FLOW BUSINESS INVESTOR UPDATE SEPTEMBER 2018 TSX: PNE
CORPORATE PROFILE A UNIQUE SUSTAINABLE CASH FLOW MODEL Listing TSX: PNE 2018 Production Guidance 20,000 20,500 Boe/d - % natural gas 95% Market Capitalization(1) 115 MM 2018 Capital Guidance 10.4 MM Average Daily Volume(2) 0.6 MM…
FOCUS ON PER SHARE VALUE Predictable Cash Flow Model Low decline, low cost and low capital efficiencies form the foundation for a sustainable cash flow model, EXPERIENCED MANAGEMENT even at lower commodity prices TEAM Significant…
A UNIQUE, COUNTER-CYCLICAL STRATEGY BUILDING A CASH FLOW MODEL IN A VOLATILE COMMODITY PRICE ENVIRONMENT PNE has been uniquely focused on a low-risk, low decline, natural gas asset consolidation strategy in Western Canada with nine…
WHAT WE HAVE BUILT THREE MAJOR OPERATED CORE AREAS 2018 Production Guidance of 20,000 20,500 Boe/d Weighted 95% towards natural gas One of the Lowest Decline Rates in the Sector Corporate decline rate of 10% on base production…
DIVERSIFIED NATURAL GAS PRICE EXPOSURE Flexible Exposure to Multiple Pricing Points Balance of 2018 Price Exposure Commenced deliveries to Dawn market in November 2017 Forecast Liquids Commenced deliveries downstream of Empress…
NATURAL GAS REVIEW HEDGING UPDATE Physical Price Hedging GJ/d /GJ - 2018 Contractual Terms Delivery Delivery April May June July August September October Point Quantity April 1 Oct 31, 2018 DAWN 4,000 3.13 3.13 3.13 3.13 3.13 3.13…
LOW CORPORATE BREAK EVEN KEY TO PNE CASH FLOW At 1.27/Mcf AECO, PNE has one of the lowest corporate break even gas prices in the industry At 2.00/Mcf AECO, PNE would expect to generate 26 million in annual adjusted funds flow Break…
FREE CASH FLOW IS THE FOCUS OF THE PNE MODEL SUSTAINABLE CASH FLOW = SUSTAINABLE BUSINESS Annual free cash flow Free cash flow yield(2) (MM) Free Cash Flow Yield(1) 50 50% PNE Stock Price 40 40% 0.40 30 30% 0.50 20 20%…
2018 CAPITAL PROGRAM GUIDANCE CONSERVATIVE CAPITAL SPENDING TO MITIGATE PRODUCTION DECLINE 2018 Capital Budget Allocation (MM) 2018 capital budget of 10.4MM includes 1.3MM of abandonment spending Abandonments Six gross (1.2 net)…
NATURAL GAS OUTLOOK NORTH AMERICAN SUPPLY Canadian Natural Gas Storage (Bcf) U.S. Natural Gas Rig Count Operating natural gas 2018 950 drilling rigs in Canadian 850 the U.S. are Gas still at historic storage as 750 lows, despite of…
NATURAL GAS OUTLOOK NORTH AMERICAN DEMAND Alberta Natural Gas Demand U.S. Annual LNG Export Capacity (Year End) Bcf/D 7.0 Forecast Forecast Committed TA Conversions 10 Corpus Christi T1&2 LNG export 6.0 Alberta natural gas AER…
NATURAL GAS OUTLOOK GLOBAL SUPPLY AND DEMAND Global Changing Dynamics of Supply and Demand for Natural Gas Bcf/D Global LNG Supply Bcf/D Global LNG Demand Future growth Forecast Demand for Forecast in global LNG LNG supply is…
DEMONSTRATED PER SHARE VALUE GROWTH Production (Boe/d) Reserves (MBoe)(1) 25,000 BOE/D per million shares 80 22,495 21,408 63% 70 80,000 72% 300,000 Daily Production per million shares 20,000 70,000 Production per basic…
WHY INVEST IN PINE CLIFF Long life predictable natural gas assets with low operating/corporate costs and an industry leading decline rate creates one of the lowest cash flow break even points Demonstrated ability to generate positive…
APPENDIX -17-
BUILDING A FAMILIAR MODEL A CLEAR VISION FOR LONG-TERM GROWTH WITH PROVEN EXPERIENCE Pine Cliff management has a long-term view of value creation, with a counter-cyclical focus to acquire natural gas assets that are non-core to their…
AN ACTIVE SIX YEARS OF ACQUISITIONS TRANSACTION RECORD SINCE JANUARY 2012 448,000,000 2.70 Market Cap 11 408,000,000 Share Price 10 368,000,000 12 9 2.20 328,000,000 13 14 288,000,000 1.70 248,000,000 8 4 7 15 208,000,000…
RECOMPLETION PROGRAMS UPDATE ACHIEVED CAPITAL EFFICIENCIES OF 1,320/BOE/D Voluntary shut-in due Recompletion Uplift to low AECO pricing 2000.0 Net Raw PNE Production 1800.0 1600.0 1400.0 1200.0 Boe/d 1000.0 800.0…
HISTORY OF ACCRETIVE ACQUISITIONS ACQUISITION METRICS REFLECT DISCIPLINED VALUE FOCUSED STRATEGY (1) Transaction Metrics Announcement Transaction Value Production P+P Reserves Flowing Barrel P+P Reserves P+P Reserves Transaction Date…
RESERVE REPORT (1) Summary of Remaining Oil and Gas Reserves as of December 31, 2017 Light and Natural Gas and Natural Gas Total Oil Medium Oil CBM Liquids Equivalent NPV 10% Gross Gross Gross Gross Reserve Category: (Mbbl)…
FUTURE DRILLING OPPORTUNITIES EXTENSIVE INVENTORY OF LOCATIONS TO SUPPLY LONG TERM MODEL Gross Undrilled Locations(1) 600 500 Approximately 29% of PNEs undrilled Gross Locations 400 locations below 3.00/Mcf are economic…
CENTRAL ASSETS AREA OVERVIEW PINE CLIFFS LARGEST CORE AREA Gas weighted, low decline assets in the Ghost Pine and Viking areas of Central Alberta Q2 - 2018 production of 9,053 Boe/d (93% natural gas), 46% of Pine Cliffs production…
SOUTHERN ASSETS AREA OVERVIEW LOW DECLINE, LOW COST PRODUCTION Q2 - 2018 production of 8,444 Boe/d (mostly natural gas), 43% of Pine Cliffs production 100% ownership of three NEB regulated pipelines delivering gas to Montana and…
EDSON AREA OVERVIEW HIGH IMPACT INVENTORY Q2 - 2018 production of 2,060 Boe/d (72% natural gas), 10% of Pine Cliffs production Drilled five gross (0.6 net) wells in 2018 Over 30 net, high quality locations targeting the Wilrich,…
HIGH QUALITY EDSON AREA LOCATIONS MULTI ZONE, LIQUIDS RICH LOCATIONS (1) Attractive and predictable high liquids yield production 93 gross (33.3 net) multi-zone undrilled locations of which 25 gross (6.8 net) are booked locations…
EAST SHALE BASIN DUVERNAY EMERGING LIGHT OIL RESOURCE PLAY Light Oil resource play still in the early stages of development with 20 wells drilled in 2016, 60 wells drilled in 2017, and over 50 wells drilled in the first half of…
ACTIVELY MANAGING ASSET RETIREMENT OBLIGATIONS (ARO) ARO is PNEs future abandonment and reclamation liabilities for our working interest ownership share of wells, facilities, and pipelines Costs are based on audited company…
ANALYST COVERAGE The following analysts provide research report coverage on Pine Cliff: COMPANY ANALYST AltaCorp Capital Patrick ORourke Canaccord Genuity Anthony Petrucci CIBC World Markets Dave Popowich Cormark Securities Inc.…
CORPORATE INFORMATION BOARD OF DIRECTORS HEAD OFFICE STOCK EXCHANGE LISTING Gary J. Drummond 850, 1015 4th Street SW TSX Exchange George F. Fink (Chairman) Calgary, Alberta T2R 1J4 Trading Symbol: PNE Philip B. Hodge Phone: (403)…
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