Current Snapshot Production: 20,500(1) Boepd 44% Light oil and NGLs 44% WCS oil 12% Natural gas Debt: 45 mm Convertible Debentures 5.5% interest rate 204.6 mm Bank debt + Working capital (325 mm bank line ( 4% interest rate))…
Decline Rates Cardinal 10% Source: Scotiabank, Statsbook, May 2019 3
Cardinal Goals 1. Sustainability Long term dividends with modest growth 2. Low Risk Confidence in dividend and corporate sustainability 4
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 Southern Alberta - Strat well program Saskatchewan - Midale drilling Wainwright - Viking/Rex drilling 8
Drilling Inventory Multi-year inventory Cardinal (500 identified locations/69 booked) North (136/18) Light and medium oil Light and medium oil Conventional play types Horizontal multifrac and Horizontal multifrac, multilateral and…
2019 Activity Focus MitsueNipisi Continue water flood optimization North Prepare Clearwater for 2020 development Dunvegan Cardinal 2019 Alberta development pace subject to Continue EOR planning House Mountain Continue to…
Cardinal Production Trend Daily Field Net Production (BOEPD) 2019 Recovery South AB Turnaround (Scots House Mountain Lake) and Jenner Power Turnaround (October) Outages South AB New Drills Midale Turnaround on Production…
Southern Alberta Drilling 2019 Torxen Kininvie farmin Kininvie Torxen farm-in commitment 5 wells drilled to date current combined production 700 boepd 3 Ellerslie hz multilaterals o 2 poor (35-40 boepd), 1 fair 135 boepd o Poor…
Increasing Sustainability 2. Lower our operating costs: Independent power generation Facility consolidation and third party processing Economies of scale 13
Unplugging from the Grid Cardinals goal is to UNPLUG as much power as we can from the Grid 14
Unplugging from the Grid Cardinal 2018 Power Bill Total Electricity 37.6 mm Costs: /Boe: 4.94 Average Alberta 50.19 Price (/Mwh): YTD 2019 Power Price /Boe: 5.40 Average Alberta 63.55 Price (/Mwh): 15
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 4 projects completed to date Based on…
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) * Wells currently drilling, production expected late Q3 Cardinals entire…
Reducing Risk 1. Less Debt Less Risk Dec 31, 2018 Q2 2019 Cost/Year (000s) (000s) (000s) Net debt 269,689 249,627 11, 500 Bank debt 211,443 195,468 9,000 Convertible Debentures 50,000 45,000 2,500 *0.10/share in interest…
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 Cardinal continues to exceed required…
ARO Area Based Closure Program 06-34 Facility Site 06-34 Facility Site March 2019 June 2019 Under the new area based closure program, Cardinal is able to go into shut-in or suspended facilities and remove surface and underground…
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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