A SUSTAINABLE CASH FLOW BUSINESS INVESTOR UPDATE NOVEMBER 2018 TSX: PNE
CORPORATE PROFILE A UNIQUE SUSTAINABLE CASH FLOW MODEL Listing TSX: PNE 2018 Production Guidance 19,500 20,000 Boe/d - % natural gas 94% Market Capitalization(1) 93.7 MM 2018 Capital Guidance 13.4 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 19,500 20,000 Boe/d Weighted 94% 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 Balance of 2018 Market Diversification Flexible Exposure to Multiple Pricing Points Began AECO Liquids Commenced deliveries to Dawn market in Forecast diversification Dawn 6% November 2017 in…
LOW CORPORATE BREAK EVEN KEY TO PNE CASH FLOW Break Even Analysis(1)(4) AECO (CDN)(2) /Mcf 1.17 1.50 2.00 2.50 Realized Gas Price /Mcf 1.74 2.03 2.48 2.93 Realized Price(3)(4) /Mcfe 2.20 2.48 2.90 3.32 Revenue MM 95 107 125 143…
EXCESS CASH FLOW IS THE FOCUS OF THE PNE MODEL SUSTAINABLE CASH FLOW = SUSTAINABLE BUSINESS Annual free cash flow Free cash flow yield(2) (MM) Excess Cash Flow Yield(1) 60 70% 60% PNE Stock Price 50 50% 0.30 40 40% 0.50 30…
2018 CAPITAL PROGRAM GUIDANCE CONSERVATIVE CAPITAL SPENDING TO MITIGATE PRODUCTION DECLINE 2018 13.4 MM Capital Budget Allocation (MM) In November 2018 PNE revised its capital budget of 10.4 MM to 13.4 MM mainly to drill an oil…
NATURAL GAS OUTLOOK NORTH AMERICAN SUPPLY Canadian Natural Gas Storage U.S. Natural Gas Rig Count Operating Bcf natural gas 2018 drilling rigs in Canadian 950 the U.S. are Gas 850 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) Forecast Bcf/d Bcf/d Forecast Committed 9.0 LNG export 10 Alberta 8.0 TA Conversions Corpus Christi T1&2 capacity 9…
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 60…
WHY INVEST IN PINE CLIFF Long life predictable natural gas assets with low operating costs and an above average industry decline rate creates one of the lowest excess cash flow break even points Demonstrated ability to generate…
APPENDIX -16-
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)…
CENTRAL ASSETS AREA OVERVIEW PINE CLIFFS LARGEST CORE AREA Gas weighted, low decline assets in the Ghost Pine and Viking areas of Central Alberta Q3 - 2018 production of 9,230 Boe/d (93% natural gas), 47% of Pine Cliffs production…
SOUTHERN ASSETS AREA OVERVIEW LOW DECLINE, LOW COST PRODUCTION Q3 - 2018 production of 8,531 Boe/d (mostly natural gas), 44% of Pine Cliffs production 100% ownership of three NEB regulated pipelines delivering gas to Montana and…
EDSON AREA OVERVIEW HIGH IMPACT INVENTORY Q3 - 2018 production of 1,842 Boe/d (75% natural gas), 9% of Pine Cliffs production Drilled six gross (0.7 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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