Investor Presentation September 2019 6-35 pad completion, Gold Creek, June 2019 Full cycle, fully engaged
ADVISORIES THESE MATERIALS CONTAIN CONFIDENTIAL INFORMATION AND ARE BEING FURNISHED ON A CONFIDENTIAL BASIS SOLELY FOR INFORMATION PURPOSES TO ASSIST RECIPIENTS IN MAKING THEIR OWN EVALUATION OF VELVET ENERGY LTD. (VELVET OR THE…
VELVET ENERGY LTD. KEY MESSAGES Dominant land owner in the Montney oil window in Alberta / NEBC Converted raw land into 21,500 boe/d of light oil production in just over two years Replicating our full cycle approach at Gold Creek /…
VELVET ENERGY LTD. OVERVIEW Largest Holder of Montney Light Oil Acreage in FLATROCK Alberta 53,000 acres 29,500 boe/d (47% liquids) POUCE Repeatable organic growth model COUPE Egress from Canada a differentiator 62,000 acres…
THE VELVET MONTNEY OIL OPPORTUNITY POUCE COUPE GOLD CREEK KARR / SIMONETTE FLATROCK Gold Creek D23 Gold Creek LSW Karr/Simonette Pouce Coupe Flatrock TOTAL OOIP (BnBBLS) 5.9 2.6 2.5 1.9 2.5 15.4 Inventory Locations () 634…
DIFFERENTIATED AS AN ORGANIC GROWTH COMPANY Velvets commercial approach secures large contiguous land blocks, advances an integrated geological model, including 3D seismic and geoscience to high grade prospects Velvet Energy Ltd.…
ORGANIC GROWTH YIELDS COMPETITIVE FULL CYCLE RATES OF RETURN 12.8% average CROCI since inception Consistently generate top decile CROCI, even in years where we capitalize resource plays as we shift from exploration to development…
DIFFERENTIATED BY PROACTIVELY ASSURING ACCESS TO MARKET FOR OUR PRODUCTS Basis positions on 100,000 mmbtu/d via NYMEX-AECO Synthetic Pipe to the Gulf financial hedges through 2023 Represents current wedge of net PDP gas sales…
CONFLUENCE OF FACTORS DRIVE M&A STRATEGY Confluence of factors create value enhancing M&A scenario Dislocation in private / public multiples 12.0x EV / Forward DACF(x) Historic low energy weight in market indices 11.0x…
HISTORY OF VELVET 2011 Closed C336 million equity line with Warburg Pincus, 1901 Partners, Trilantic Capital; 70 million equity draw Production (boe/d) Acquired Vero Energy Deep Basin assets for 209 million; 2012 110 million…
STRONG GOVERNANCE: MANAGEMENT & DIRECTORS MANAGEMENT Ken Woolner, P.Eng, President & CEO Chris Theal, CFA, CIM, Chief Financial Officer Jeremy Kwasnecha, P.Eng, VP, Midstream & Marketing Peter Henry, CA, VP, Finance Scott James,…
VELVET TECHNICAL DIFFERENTIATION Geomodeller (1) Petrophysicist (1) RISK MANAGEMENT Microseismic/geomechanics expert (1) Geologist (6) Geophysicist (3) Reservoir Engineer (2) 12 All geotechnical work is carried out…
VELVETS MONTNEY PORTFOLIO Organic Growth at Velvet = taking high quality prospects from identification to exploitation Montney dual zone play development at Gold Creek Velvet Exploration & Development Portfolio Pouce Coupe under…
VELVETS OIL WINDOW ACREAGE & MONTNEY INVENTORY FLATROCK 53,000 ac Velvet has acquired 352,000 acres of Montney land within the light oil window in Alberta and BC at various stages of maturity; each position is offset by active…
COMPLETIONS EVOLUTION VELVET 2016 Velvet 2017 / 2018 VELVET 2019 & Forward 2600 6000 ft Laterals 8000 10,000 ft Laterals 7000 ft Laterals 500-1100 lb / ft Proppant 1600 1850 lb / ft Proppant 1600 1800 lb / ft Proppant 30-60…
MONTNEY PRODUCTION GROWTH Montney production has grown to 21,500 BOE/d in 2 years through the drill bit Velvet Montney Historical Production By Vintage 22,000 2019 Current: 21,500 BOE/d 20,000 18,000 16,000 Calendar Day…
GOLD CREEK ACTIVITY UPDATE 2019 Activity To-date 7 Wells on Production Mid - Montney D2A wells Phase 4 6700 laterals 3 Wells Drilled Mid - Montney D2A wells 6700 laterals 4-1 Pad Frac in Sept, on prod Q4/2019 Proposed 4Q2019…
GOLD CREEK OIL PRODUCTION PHASE 4 WELLS 900 Phase 4 - Producing Day Oil Rates 800 Sales Oil Production (bbl/d) 700 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 Producing Months TYPE CURVE Average (7 Wells)…
NEW 2019 GOLD CREEK WELLS OIL PRODUCTION TO-DATE New 06-35 and 04-01 Pad Wells 800 700 600 Oil Production (bbl/d) 500 400 300 200 100 0 0 10 20 30 40 50 60 70 80 Days on Production TYPE AVERAGE 19
TYPE CURVE ECONOMICS 900 800 700 Production (boe/d) 600 500 400 300 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Month Total Sales Type Oil EUR, IRR and Payout1,2 IRR vs. Price…
HARVESTING LIQUIDS RICH ELLERSLIE INVENTORY IN EDSON Edson capex directed at harvesting inventory into equity-owned plants MCLEOD Prioritize Extended Reach Horizontal Ellerslie wells Maintain optionality on development PINE…
FINANCIAL & OPERATING RESULTS Production 8-year production CAGR of 26%, notably crude 35,000 50% oil growth has outpaced at 41% 45% 30,000 40% 25,000 1P/2P reserve growth of 55% driven by 35% 30% Montney resource development at…
FINANCIAL HIGHLIGHTS Velvet Capital Structure 704 mm in PSS equity from four shareholders, Bank Draw, including CPPIB 180 * US175mm 2nd lien notes due 2023 held by two world class institutional debt investors Underutilized…
VELVET ENERGY LTD. SUMMARY People Strong Balance Sheet and Supportive Sponsors Seasoned executive team that has built and sold successful Solid foundation of PE support + addition of CPPIB E&P companies Strategic relationships with…
FORWARD LOOKING INFORMATION AND FUTURE ORIENTED FINANCIAL INFORMATION Certain statements contained in these materials including, expectations, beliefs, plans, goals, strategies, objectives, assumptions, information and statements about…
OIL AND GAS INFORMATION We have included estimated reserves, estimated ultimate recovery and recovery rates in this presentation that have been evaluated by Velvet's independent reserves evaluator and/or internally estimated by Velvet.…
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