Current Snapshot Production: 20,500(1) Boepd 41% Light oil 42% WCS oil 5% NGLs 12% Natural gas Debt: 45 mm Convertible Debentures 5.5% interest rate 212.8 mm Bank debt + Working capital (325 mm bank line ( 4% interest rate))…
Cardinal Goals 1. Sustainability Long term dividends with modest growth 2. Low Risk Sleep at night investment 3
Look Back at 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Adjusted Funds 25,551 27,085 27,072 5,513 Flow (000s) Production (Boed) 21,243 20,882 20,949 20,365 Net debt (000s) 263,341 263,133 250,728 269,689 Netback (/boe) 20.20 28.07 27.74…
Production Curtailments Good or Bad Cardinal Specific: Best in Class Decline Rate Minimal drilling to maintain curtailment volume Add in Normalized pricing Lots of free cash flow What do we do with it Increase Reduce Risk…
Go Forward Increase Reduce Risk Sustainability 1. Firm up our ability to replace 1. Pay down our debt production 2. Reduce our ARO exposure 2. Lower our operating costs 3. Reduce our reliance on third 3. Increase our netbacks…
Increasing Sustainability 1. Production Replacement: Inventory Bantry farmin/drilling program Strat well program Midale drilling Viking/Rex drilling 8
Drilling Inventory Map Title Datum: NAD27 Projection: Stereographic DLS Version AB: ATS 2.6, BC: PRB 2.0, SK: STS 2.5, MB: MLI07 Multi-year inventory Cardinal (500 identified locations/69 booked) North (136/18) Light and medium…
2019 Activity Focus Map Title Datum: NAD27 Projection: Stereographic DLS Version AB: ATS 2.6, BC: PRB 2.0, SK: STS 2.5, MB: MLI07 Mitsue-Nipisi Continue water flood optimization North Prepare Clearwater for 2020 development…
Cardinal Production Trend Daily Field Net Production (BOEPD) 2019 Recovery House Mountain NO NEW WELLS House Mountain Flooding (June) Turnaround (October) ONSTREAM Q1 2019 Midale Turnaround (September) Self-Curtail…
Southern Alberta Drilling 2019 Multi-Leg Horizontal Ellerslie and Glauconitic Horizontal Multi-frac Very successful 2018 drilling program 6 wells 2/3 Glauc channel wells above type Prospective curve Ellerslie 3/3 Ellerslie hz…
Increasing Sustainability 2. Lower our operating costs: Independent power generation Facility consolidation and third party processing Economies of scale 14
Unplugging from the Grid Cardinals goal is to UNPLUG as much power as we can from the Grid 15
Unplugging from the Grid Cardinal 2018 Power Bill Total Electricity 37.6 mm Costs: /Boe: 4.94 Average Alberta 50.19 Price (/Mwh): Q1 2019 Power Price /Boe: 5.75 Average Alberta 70.73 Price (/Mwh): 16
Unplugging from the Grid Objective: To reduce large pad level power bills by unplugging from the grid using solution gas as fuel source for power. Project Economics: Pad Site Power Generation Based on our budgeted power price…
Economies of Scale Forestburg Viking Forestburg Viking Current: 60 Bopd 40/boe Drill 2 140 Bopd 8/boe wells Total 200 Bopd 17.60/boe (average) Cardinals entire production base can benefit from economies of scale 18
Reducing Risk 1. Less Debt Less Risk Q1 2019 Cost/Year (000s) (000s) Net debt 257,880 11, 800 Bank debt 206,151 9,300 Convertible Debentures 45,000 2,500 *0.10/share in interest payments Our target is 1X debt to cash…
Reducing Risk 2. ARO Expenditures New area based closure program 5 million required spend Regulatory changes over the last 4 years focus industry on cleaning up 100+ years of development 20
Reducing Risk 3. Reducing third party risk Power Pipeline Pipeline apportionment Maximize crude pricing Gas take away Hedging Short Term: 0-6 months Three Prong Strategy: Medium Term: 6-12 months Longer Term: 12-18 months…
Our Strategy Reduce operating costs/increase netbacks Reduce debt to 1X ARO impact spend Increase Free Cash Flow 22
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