A SUSTAINABLE CASH FLOW BUSINESS INVESTOR UPDATE MAY 2019 TSX: PNE
CORPORATE PROFILE A UNIQUE SUSTAINABLE CASH FLOW MODEL 2019 Production Guidance(8) 19,250 19,750 Boe/d Listing TSX: PNE - % natural gas 93% Market Capitalization(1)(3) 69.1 MM 2019 Capital Guidance 11.1 MM Average Daily Volume(2) 0.2…
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, even at lower commodity prices EXPERIENCED MANAGEMENT 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, primarily natural gas asset consolidation strategy in Western Canada with…
WHAT WE HAVE BUILT THREE MAJOR OPERATED CORE AREAS 2019 Production Guidance of 19,250 19,750 Boe/d(1) Weighted 93% towards natural gas One of the Lowest Decline Rates in the Sector Corporate decline rate of less than 10% on base…
APRIL 17TH ACQUISITION ANNOUNCEMENT(1) ACCRETIVE ACQUISITION REPLACES 2019 PRODUCTION DECLINE Purchase Price 8.6 million(2) Production (April 2019) 1,575 boe/d (75% natural gas) Estimated 2020 Adjusted Funds Flow from Operations(3)…
LIGHT OIL POTENTIAL PEKISKO AND BASAL QUARTZ LOCATIONS PROVIDE ATTRACTIVE OIL DRILLING POTENTIAL PNE currently owns approximately 229,000 gross (182,000 net) acres of land in Central Alberta that include Pekisko and Basal Quartz…
FUTURE DRILLING OPPORTUNITIES EXTENSIVE INVENTORY OF LOCATIONS TO SUPPLY LONG TERM MODEL Summary of Undrilled Locations Total Locations (1) Booked Locations (1) Gross Net Gross Net Tier Recompletions (Viking, Mannville, Belly River,…
2019 CAPITAL PROGRAM GUIDANCE CAPITAL SPENDING WITHIN CASH FLOW 2019 capital budget of 11.1MM includes: 2019 Capital Budget Allocation (MM) Four gross (0.4 net) wells in the liquids rich Edson area for 1.9 MM One gross (1.0 net)…
DIVERSIFIED NATURAL GAS PRICE EXPOSURE* Flexible Exposure to Multiple Pricing Points 2019 Price Exposure Commenced deliveries to Dawn market in November 2017 Dawn Commenced deliveries downstream of Empress 10% delivery point in…
LOW CORPORATE BREAK EVEN KEY TO PNE CASH FLOW* BUILT FOR SUSTAINABILITY IN A VOLATILE COMMODITY PRICE ENVIRONMENT AECO Price (/Mcf) 1.35 1.50 2.00 2.50 Realized Gas Price (/Mcf) 1.93 2.07 2.36 2.70 Oil and Gas Sales (/Mcfe)(1) 2.30…
NATURAL GAS OUTLOOK NORTH AMERICAN SUPPLY Canadian Natural Gas Storage U.S. & Canada Natural Gas Rig Count Operating 2019 Bcf 1000 natural gas Canadian 950 900 drilling rigs in Gas CANADA the U.S. and 850 800 storage as Canada are…
NATURAL GAS OUTLOOK NORTH AMERICAN DEMAND Alberta Natural Gas Demand U.S. Annual LNG Export Capacity (Year End) Bcf/d Bcf/d 12 9.0 Committed 8.0 Freeport T3 LNG export TA Conversions 10 Alberta capacity 7.0 AER Power Corpus…
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 Demand for in global LNG LNG supply is continues to forecast to…
WHY INVEST IN PINE CLIFF Long life predictable natural gas assets with low operating costs and an industry leading decline rate creates one of the lowest cash flow break even points Demonstrated ability to generate positive cash flow…
APPENDIX -18-
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 SEVEN 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 7 208,000,000…
HISTORY OF ACCRETIVE ACQUISITIONS ACQUISITION METRICS REFLECT DISCIPLINED VALUE FOCUSED STRATEGY Transaction Metrics PNE Price at Announcement Announcement Transaction Value Production P+P Reserves Flowing Barrel P+P Reserves P+P…
CENTRAL ASSETS AREA OVERVIEW PINE CLIFFS LARGEST CORE AREA Gas weighted, low decline assets in the Ghost Pine and Viking areas of Central Alberta Extensive land position of 1.3 MM gross (0.95 MM net) acres Q1 - 2019 production of…
SOUTHERN ASSETS AREA OVERVIEW LOW DECLINE, LOW COST PRODUCTION Q1 - 2019 production of 7,872 Boe/d (mostly natural gas), 42% of Pine Cliffs production 100% ownership of three NEB regulated pipelines delivering gas to Montana and…
EDSON AREA OVERVIEW HIGH IMPACT INVENTORY Q1 - 2019 production of 1,889 Boe/d (73% natural gas), 10% of Pine Cliffs production Approximately 60 gross (15.1 net), high quality locations targeting the Wilrich, Bluesky, Ellerslie,…
HIGH QUALITY EDSON AREA LOCATIONS MULTI ZONE, LIQUIDS RICH LOCATIONS (1) Attractive and predictable high liquids yield production 60 gross (15.1 net) multi-zone undrilled locations of which 25 gross (6.7 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 22 wells drilled in 2016, 50 wells drilled in 2017, and 121 wells drilled in 2018 East Shale Basin…
RECOMPLETION PROGRAMS UPDATE Recompletion Uplift 1,600 Cumulative Production 720,000 Boe (4.2 Bcfe) 1,400 Net Raw PNE Production* 1,200 1,000 boe/day 800 600 400 200 0 Ghost Pine Reactivations Ghost Pine…
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…
RESERVE REPORT (1) Summary of Remaining Oil and Gas Reserves as of December 31, 2018 Light and Medium and Natural Gas and Natural Gas Total Oil Heavy Oil CBM Liquids Equivalent NPV 10% Gross Gross Gross Gross Reserve Category:…
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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