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Corporate Presentation – Penn West Petroleum Ltd.

Penn West Petroleum Ltd. · Jul 31, 2014 · 40 slides

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Slides

  1. Corporate Presentation – Penn West Petroleum Ltd. – slide 1
    Corporate Presentation July 2014
  2. Corporate Presentation – Penn West Petroleum Ltd. – slide 2
    Corporate Summary Listing TSX: PWT NYSE: PWE Market Capitalization(1) 5.0 billion Big Hill Shares Outstanding(2) 492.6 million Liquidity(3) TSX: 2.0 million NYSE: 1.7 million 2014 Production Forecast(4) 101 - 106 mboe/d (66%…
  3. Corporate Presentation – Penn West Petroleum Ltd. – slide 3
    Penn West Value Proposition Maximize return to shareholders through efficient development and production of established light oil resources Focused Portfolio Target Best-in-Basin Operator Status Reliable Production Performance…
  4. Corporate Presentation – Penn West Petroleum Ltd. – slide 4
    Q1/14 Financial Highlights Funds flow for Q1 was 279MM (0.57/share) Q1 netback improved 38% to 36.67/boe from Q4/13 Long-term debt at quarter-end was reduced by 180MM(1) compared to Q4/13 Operating expenses decreased 28MM (14%)…
  5. Corporate Presentation – Penn West Petroleum Ltd. – slide 5
    Q1/14 Operational Highlights All planned capital activities were completed during the quarter with development capital at 205MM compared to plan of 230MM 47 net wells drilled exceeded plan to drill 34 wells 49 net wells on-stream…
  6. Corporate Presentation – Penn West Petroleum Ltd. – slide 6
    Q1/14 Financial & Operating Highlights Q1/14 Production Profile 320 Funds Flow Bridge 116,000 300 28 279 280 (9) 112,000 106 (2) (4) Funds Flow (MM) Production (boe/d) 260 Growth 240 108,000 220 216 200…
  7. Corporate Presentation – Penn West Petroleum Ltd. – slide 7
    Q4/13 Q1/14 Net Debt Bridge 3,000 75 13 2,860 205 2,750 55 2,713 402 (3) (279) (213) 360 Net Debt (MM) 2,500 Decrease in Net Debt 2,250 401 Increase in Net Debt 221 Net Working Capital Bank Debt Senior…
  8. Corporate Presentation – Penn West Petroleum Ltd. – slide 8
    Quarterly Cash Costs 33.48/boe 33.11/boe 34.57/boe 34.48/boe 36.01/boe 600 500 Quarterly Cash Cost (MM) 400 G&A (net) Environmental 300 Major R&M Workovers Royalties 200 Transportation 100 Operating (excluding…
  9. Corporate Presentation – Penn West Petroleum Ltd. – slide 9
    Play Performance Metrics Current Performance vs 2014 Budget and Long-Term Plan Targets Gross Well Count Over 95% of development capital is allocated in 500 these three core areas through the long-term plan 400 Slave Point Program…
  10. Corporate Presentation – Penn West Petroleum Ltd. – slide 10
    2014 Capital Budget Focused on Core Oil Resources & Balanced Across Quarters 2014 Capital Allocation(1) (MM) Corp / Other Focus of 2014 capital budget is on maximizing 47 Infrastructure / profitability and capital efficiency Major…
  11. Corporate Presentation – Penn West Petroleum Ltd. – slide 11
    Debt Capital Structure Senior Debt to EBITDA of 2.1 times at March 31, 2014(1) Credit Syndicate Private Notes 1.7B capacity CAD2.1B private notes(2) 0.5B expires June 30, 2016 4.3 years average remaining 1.2B expires May 6, 2019…
  12. Corporate Presentation – Penn West Petroleum Ltd. – slide 12
    Focus the Portfolio: A&D Strategy Timing Target Proceeds Initial non-core asset disposition Phase 1 - Debt repayment Completed 486MM - Focusing asset base Major portfolio repositioning and focus Completed 213MM - Debt…
  13. Corporate Presentation – Penn West Petroleum Ltd. – slide 13
    Focus the Portfolio: A&D Strategy Early Success Asset Divestitures Improve Penn Wests Portfolio s Phase 1: Closed December 20th, 2013 Proceeds of 486MM from non-core asset sales producing 10,800 boe/d (46% heavy oil, 35% natural gas,…
  14. Corporate Presentation – Penn West Petroleum Ltd. – slide 14
    Focus the Portfolio: A&D Strategy Divested Acreage Improves Focus on Core Light Oil Positions Phase 1: (Dec 20, 2013) Big Completed Hill Switchgrass 486MM; 10,800 boe/d Phase 2: (Mar 14, 2014) First Transaction Completed 175MM;…
  15. Corporate Presentation – Penn West Petroleum Ltd. – slide 15
    Assets Overview
  16. Corporate Presentation – Penn West Petroleum Ltd. – slide 16
    Cardium Development Profile Gaining Momentum in Canadas Largest Light Oil Resource Operated Development Net Production Adds & Capital(1) Gross Well Count(1) Cumulative Development Production 800 45 350 40 300 35 600…
  17. Corporate Presentation – Penn West Petroleum Ltd. – slide 17
    Cardium Trend Long-Term Development Plan T50 Cardium Capital Program(1) 800 Willesden Green Pembina 600 MM/year J Lease 400 Pembina 200 0 2014 2015 2016 2017 2018 Cardium Production(1) 60,000 Lodgepole 50,000…
  18. Corporate Presentation – Penn West Petroleum Ltd. – slide 18
    Cardium Key Attributes(1)(2)(3) Strategic Value & Potential(1)(2)(3) 600,000 net acres Working Interest (%) 65 650 MMboe contingent resources Booked Reserves (MMboe 2P YE 2013) 161 Dominant infrastructure position EUR Factor(1)…
  19. Corporate Presentation – Penn West Petroleum Ltd. – slide 19
    Cardium Crimson Lake & Unit 6 Long-Term Development Plan Crimson Lake Type Curve(1)(3) Penn West land PW drilled 500 WGU 9 Penn West current program PW 2013 well Penn West plan type curve 400 PW 2014 well T44 PW long-term…
  20. Corporate Presentation – Penn West Petroleum Ltd. – slide 20
    Cardium Lodgepole & PCU 9 Long-Term Development Plan Lodgepole Type Curve(1)(3) 300 T48 Penn West current program PCU 9 Penn West plan type curve 200 boe/d 100 0 0 12 24 PCU 9 Injection pilot Months Lodgepole Per…
  21. Corporate Presentation – Penn West Petroleum Ltd. – slide 21
    Cardium J Lease & Easyford Long-Term Development Plan J Lease Type Curve(1)(3) 300 T50 250 Penn West plan type curve Easyford 200 boe/d 150 100 50 0 0 12 24 Months T49 J Lease Per Well D&C 4 Cost…
  22. Corporate Presentation – Penn West Petroleum Ltd. – slide 22
    Viking Development Profile WCSB Leading Economic Returns Prioritized Operated Development Net Production Adds & Capital(1) Gross Well Count(1) Cumulative Development Production 160 10 120 140 9 8 100 120 Well…
  23. Corporate Presentation – Penn West Petroleum Ltd. – slide 23
    Viking Oil Long-Term Development Plan Viking Oil Hz Production Comparison in Greater Dodsland(1)(3) 70 R23 R20W3 60 Penn West average Penn West current program 50 Penn West plan type curve bbls/d 40 30 20 10 0 0 12…
  24. Corporate Presentation – Penn West Petroleum Ltd. – slide 24
    Viking Oil Key Attributes(1)(2)(3) 2014 Play Focus & Status(1)(2)(3) Working Interest (%) 92 Industry leader for production results Achieved competitive costs in early Q4 2013 Booked Reserves (MMboe 2P YE 2013) 31 Implement Avon…
  25. Corporate Presentation – Penn West Petroleum Ltd. – slide 25
    Viking Oil Penn West Outperforming Peers 80 70 Average IP30 rate (bbls/d) 60 Penn West 50 40 30 20 2 3 4 5 6 7 8 9 10 11 Average 6 month Total Oil (Mbbl) Source: TD Securities West Central Saskatchewan…
  26. Corporate Presentation – Penn West Petroleum Ltd. – slide 26
    Slave Point Development Profile Extensive Light Oil Upside Potential Operated Development Net Production Adds & Capital(1) Gross Well Count(1) 450 16 80 Cumulative Development Production 400 14 70 350 12 60 Well…
  27. Corporate Presentation – Penn West Petroleum Ltd. – slide 27
    Slave Point Long-Term Development Plan Slave Point Capital Program(1) 450 400 Red Earth 350 Sawn Sawn R10W5 R7 300 Otter MM/year 250 200 Penn West land 150 100 PW 3D seismic 50 PW 2013 well 0 PW 2014 well 2014 2015…
  28. Corporate Presentation – Penn West Petroleum Ltd. – slide 28
    Slave Point Key Attributes(1)(2)(3) 2014 Play Focus and Status(1)(2)(3) Low-Risk development drilling Working Interest (%) 95 - Otter 7 wells Booked Reserves (MMboe 2P YE 2013) 40 - Sawn 9 wells EUR Factor(1) (%) 14 26 - Red Earth…
  29. Corporate Presentation – Penn West Petroleum Ltd. – slide 29
    Slave Point Sawn Long-Term Development Plan R13W5 Sawn Type Curve(1) 3D seismic 400 Sawn type curve 3 kms 300 Penn West plan type curve 2 miles boe/d 200 100 0 0 6 12 18 24 30 Months Sawn Lake Per Well D&C…
  30. Corporate Presentation – Penn West Petroleum Ltd. – slide 30
    Slave Point Otter Long-Term Development Plan 250 Otter Type Curve(1) R10W5 200 150 boe/d 100 50 0 0 12 24 T88 Months Otter Wells Exceeding Budgeted Volumes(2)(3) 300 Water Flood 250 Cumulative mboe…
  31. Corporate Presentation – Penn West Petroleum Ltd. – slide 31
    Slave Point Red Earth Long-Term Development Plan R8W5 Red Earth Type Curve(1)(2) 3 kms 300 2 miles 200 boe/d 100 0 0 12 24 Months Red Earth is an under-developed reef facies analogous to Sawn Evaluating…
  32. Corporate Presentation – Penn West Petroleum Ltd. – slide 32
    Supplemental Information
  33. Corporate Presentation – Penn West Petroleum Ltd. – slide 33
    Price Realizations By Product Oil NGLs Natural Gas Q1 2014 Q4 2013 Q1 2014 Q4 2013 Q1 2014 Q4 2013 /bbl /bbl /bbl /bbl /mcf /mcf WTI or Henry Hub Benchmark US 98.62 97.50 98.62 97.50 4.69 3.85 Benchmark Differential US (8.25)…
  34. Corporate Presentation – Penn West Petroleum Ltd. – slide 34
    Hedging Position Current Balanced Financial Management Oil: H1/2014 - 20,000 bbls/d Swaps - US93.74/bbl H1/2014 - 10,000 bbls/d Collars - (US93.20/bbl x US101.00/bbl) Gas: 2014 - 90,000 mcf/d Swaps - 3.90/mcf 2014 - 50,000 mcf/d…
  35. Corporate Presentation – Penn West Petroleum Ltd. – slide 35
    2014 Budget Funds Flow Sensitivities Change Budget Change WTI Oil (US/bbl) - 10.00 + 10.00 92.50 Funds Flow Impact (CMM) - 123 + 135 Light Differential (US/bbl) - 10.00 + 10.00 - 5.55 Funds Flow Impact (CMM) - 195 + 193 AECO…
  36. Corporate Presentation – Penn West Petroleum Ltd. – slide 36
    2013 Reserves Highlights Proved(1): 415 MMboe High Quality Reserves Proved + Probable (2P)(1): 625 MMboe 72% Proved Developed Liquids account for approximately 70% of 2P reserves Producing Proved Reserves 415 MMboe Excluding impact…
  37. Corporate Presentation – Penn West Petroleum Ltd. – slide 37
    Light Oil Plan Resource Conversion Key Plays Light Oil Cardium 1,400 900 Prospective 800 Resources 1,200 Prospective Resources 700 Remaining Remaining 1,000 Resource 600 Resource (post long-term (post long-term Contingent 800…
  38. Corporate Presentation – Penn West Petroleum Ltd. – slide 38
    Definitions and Industry Terms All references to dollar amounts in this presentation are to Canadian dollars unless otherwise specified. A&D means oil and natural gas property acquisitions and divestitures. API means, in relation to…
  39. Corporate Presentation – Penn West Petroleum Ltd. – slide 39
    Non-GAAP Measures Advisory In this presentation, we refer to certain financial measures that are not determined in accordance with International Financial Reporting Standards (Canadian GAAP). These measures as presented do not have any…
  40. Corporate Presentation – Penn West Petroleum Ltd. – slide 40
    Stock Exchange Investor Relations Toronto: PWT Clayton Paradis Manager, Investor Relations New York: PWE Telephone: (403) 539-6343 Email: clayton.paradispennwest.com Independent Reserves Evaluator Sproule Associates Limited Toll Free:…

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