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August 2019 Investor Update – Painted Pony Energy Ltd.

Painted Pony Energy Ltd. · Aug 16, 2019 · 33 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 1
    Investor Update August 16, 2019
  2. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 2
    Why we do what we do Our Mission is to establish Painted Pony as a low-cost supplier of clean natural gas to Canada and the world. We believe: world demand for clean and reliable energy is Oil Oil rapidly growing Percentage…
  3. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 3
    Clean-Burning Natural Gas Lowest GHG Emissions PONY uses natural gas to fuel some completion operations which Series reduces 1 costs capital 250 per well and lowers Compared to clean 229 PONYs GHG emissions burning natural…
  4. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 4
    Global LNG Market Demand Growth Mtpa (Million Tonnes per Annum) is a typical measurement unit in Global LNG LNG markets .for production demand forecasted to 500 increase Approximate conversion: 1 mtpa = 0.132 Bcf/d 34% 57 1…
  5. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 5
    Proposed West Coast LNG & LPG Projects Game Changer T-North Enbridge Mainline LNG Projects Capacity British Columbia LNG Canada Shell, Petronas, Mitsubishi, 1.9 3.8 Bcf/d Petro-China, KOGAS (Under AltaGas Ridley Island…
  6. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 6
    LNG Canada Construction Underway Kitimat, BC Site August 2018 April 2019 LNG Canadas export facility at Kitimat has been under December 2018 construction since April 2019 October 2018 5
  7. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 7
    Alberta Natural Gas Market Continued Demand Growth Significant demand growth is taking place in Alberta Alberta is expected to increase (Bcf/d) 8.0 8.0 natural gas consumption by over Steady phase-out of coal in 45% between…
  8. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 8
    Corporate Profile TSX: PONY 1H 2019 Average Daily Production 310 MMcfe/d (51,669 boe/d) 2019 Capital Budget 80 - 95 million 2P Reserves 6.9 Tcfe (1.15 billion boe) 2P Reserve Life Index* 60 Years Enterprise Value 430…
  9. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 9
    World Class Resource Montney Pure Play Natural Gas Pipeline Coastal GasLink Pipeline Asset The Montney is the most economic natural gas and natural gas liquids play in Canada British Alberta Columbia 305 net sections (195,187…
  10. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 10
    2019 Capital Program Disciplined Capital Investment Current PONY budget maintains net capital spending within adjusted funds flow from operations 1H 2019 capital spending of 52 million 1H 2019 adjusted funds flow from operations…
  11. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 11
    Historical Costs Drilling & Completions Efficiency Continued type curve As capital well costs fell, production type curves improvement with dramatically improved average Total 2P(1) well booking of 9.2 Bcfe/well Management Perf &…
  12. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 12
    Montney Pure Play Location, Location, Location PONYs Montney Sweet Spot is: 4x thicker than the Marcellus at 38 sections greater than 300 meters (approx. 36 1,000 ft.) thick sections Beg a continuous sweet natural gas- Dry…
  13. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 13
    The Sweet Spot North Montney 6-Month Cumulative Production Volumes British Columbia 2,250,000 PONY has the best well in North Montney with North 6-month average daily Montney PONY 2,000,000 production rate of more than 11…
  14. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 14
    2018 Reserves Significant Resource, Significant Value 6.9 Tcfe of 1.0 Tcfe of PDP reserves Total 2P (3) Proven 19% annual growth of PDP reserves at a cost of Reserves Developed 0.55/Mcfe Producing (14% of Reserves) 31% annual…
  15. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 15
    2018 Reserves Consistently Profitable Recycle Ratios 2018 Corporate Netback* 1.71/Mcfe = 2018 PDP = 3.1x PDP Finding, Development Recycle Ratio & Acquisition Cost 0.55/Mcfe 4.0x Industry leading 3.7x PDP recycle ratio…
  16. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 16
    2018 Natural Gas Reserves Fourth-Largest 2P Natural Gas Reserves 12 11.7 4th largest natural gas reserves of any publicly- Proved plus Probable Reserves (Tcf) 10 9.6 traded company in Canada 8 7.3 6.4 6 5.1 4.6 4.1…
  17. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 17
    Development Horizons Significant Unrealized Upside Across 7 Layers of Montney Resource Doig formation Townsend Blair Beg 1 2 3 4 5 6 Upper Montney Middle Montney 330 m 290 m Lower Montney 6 5 4 Belloy formation 3…
  18. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 18
    Canbriam Transaction Closed June 2019 The corporate sale of Canbriam Energy, which directly offsets PONY acreage, for approximately 1 billion provides a recent value comparable for Montney assets in north eastern British Columbia…
  19. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 19
    Canbriam Deal Research Commentary Sell-Side PONY Analysis We estimate that the deal value mapped to 1.0 billion based on Suncors Q2/19 disclosures, with metrics generally favourable when compared to public companies. We dont expect…
  20. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 20
    Canbriam Energy Transaction Approximately 1.0 billion Transaction Canbriam PONY Land Acres Valuation Equity Valuation 171,436 acres = 5,833/acre 195,187 1,097 mm 771 mm 4.79/sh Production Q1 2019 Q1 2019 Value/boe/d Equity…
  21. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 21
    Land Valuation Land Sales Suggest PONY Undervalued Recent land sales have shown significant value in north east BC acreage PONY land blocks totaling 195,187 net acres (305 net sections) of Montney rights in north east BC Bernadet…
  22. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 22
    Market Diversification & Growing US Exports Higher Prices for Natural Gas; PONY H1 2019 Realized Price 37% Higher than AECO 5A St 2 Market PONY Sales / Pricing Exposure 29 MMcf/d 2019 average (spot) AECO AECO Market Station 132…
  23. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 23
    2019 Second Half Market Diversification Managing Volatility Expected Second Half 2019 Production Revenue by Source 45% of PONYs second half 2019 production revenue is protected through a AECO / STN 2 combination of physical…
  24. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 24
    Sales Diversification PONYs Net Exposure of Physical and Financial Contracts PONY regularly adds new contracts as part of ongoing risk management through sales hub diversification 100% 7% 7% 4% 10% 90% 21% Natural Gas Volume Net…
  25. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 25
    Transportation Enbridge T-North Tolls Firm Transportation & Toll Advantage to West Coast Single toll structure 0.24/Mcf Pony can deliver at either Station 2 or Sunset Creek for single toll TransCanada AECO Tolls 0.27/Mcf receipt…
  26. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 26
    Cost Structure Challenging Commodity Price Environment 2019 Top Line Revenue (forecasted, includes Q1/Q2 actuals) 3.10 /Mcfe Hedging Gain 0.12 0.64 0.76 Forecasted Adjusted Funds Flow/Mcfe Royalties (0.05) Carbon Tax…
  27. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 27
    Single Well Economics by Area 2019 Management Type Curves 1,800 m DCE&T lateral total 4.8 million Longer lateral 12,000 provides 50% 2,700 m DCE&T lateral total 5.9 million increase in daily production after 6 months at Blair…
  28. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 28
    Blair Long Lateral Wells Using longer laterals PONY Encouraging Performance has the opportunity to improve capital efficiency by approximately Both wells completed with 30 2,000/boe/d stages using 0.85 Normalized Natural Gas Rate…
  29. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 29
    Single Well Economics by Area 2019 Management Type Curves Well Capital Costs Single Well Economics IRR NPV10 Pay Out 1,800 meter lateral Daiber 1,800 m lateral (dry) 52% 5.1 mm 1.9 years Drilling 2.1 million Completion 2.1…
  30. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 30
    Pony Points Checking Off All of the Boxes Well situated to supply Canadian west coast LNG projects Diversified Market Access and Sales Points Massive reserves base Top well performance Industry leading PDP recycle ratio at…
  31. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 31
    Appendices & Advisories
  32. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 32
    Financial Strength Term Debt and Credit Facility Provide Flexibility 375 Million Syndicated Credit Facility Secured, Reserve Based Lending Matures May 2021 Syndicated 135 million drawn as at June 30, 2019 Credit Facility 135 240…
  33. August 2019 Investor Update – Painted Pony Energy Ltd. – slide 33
    Corporate Overview Auditor KPMG LLP Evaluation Engineers GLJ Petroleum Consultants Ltd. Banks The Toronto-Dominion Bank Canadian Imperial Bank of Commerce The Bank of Nova Scotia Alberta Treasury Branches Royal Bank of Canada…

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