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February 2018 Corporate Presentation – Birchcliff Energy Ltd.

Birchcliff Energy Ltd. · Feb 16, 2018 · 55 slides

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Slides

  1. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 1
    CORPORATE PRESENTATION February 14, 2018
  2. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 2
    PEOPLE, FOCUS & EXECUTION 2
  3. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 3
    Corporate Snapshot & Select Guidance Q4 2017 average production 80,103 boe/d 2017 annual average production 67,963 boe/d Estimated 2018 annual average production 76,000 78,000 boe/d % oil and NGL 20% Estimated 2018 capital…
  4. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 4
    2017 HIGHLIGHTS Annual: Record annual average production of 67,963 BOE/d and maintained balance sheet strength by exiting 2017 without increasing debt Completed a number of asset sales, including the sale of the Worsley Charlie Lake…
  5. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 5
    INVESTMENT HIGHLIGHTS Focused assets in the Peace River Arch Area of Alberta on the Montney/Doig Resource Play Essentially 100% working interest; 99% of production is operated Large, contiguous undeveloped land base with an average…
  6. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 6
    BIRCHCLIFFS HISTORY A Track Record of Execution
  7. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 7
    KEYS TO SUCCESS Executives Executiveswith withproven proventrack trackrecord, record,continuity continuitysince sinceinception inceptionand andsignificant significantownership ownership Management Highly Highly experienced…
  8. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 8
    90,000 PRODUCTION HISTORY 76,000 80,000 78,000 70,000 Compound per-share production 67,963 growth of 12% per year since 2005. Average Production (boe/d) (14% since PC Gas Plant Phase I 60,000 Completion) 49,236 50,000…
  9. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 9
    BIRCHCLIFF CORPORATE DECLINE(1) Long life, low decline asset allows for smaller capital wedge YoY needed to maintain volumes Corporate Production (boe/d) 20.3% 25.7% Base Base Decline Decline (1) 20052017 Production…
  10. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 10
    CORPORATE RESERVES 1,000,000 7,000 PDP - Reserves TP - Reserves 900,000 2P - Reserves 6,000 800,000 PDP - NPV10 TP - NPV10 On a per share basis PDP, 1P and 2P reserves have increased at a compound 5,000 700,000 2P - NPV10 annual…
  11. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 11
    PROVEN TRACK RECORD AS A LOW COST PRODUCER 5 Year Profitability Breakdown: 2013 2014 2015 2016 2017 Average Average AECO (CAD/GJ) 2.99 4.27 2.55 2.05 2.05 2.78 Average WTI (USD/bbl) 97.97 92.99 48.80 43.32 50.95 66.81 P&NG Revenue…
  12. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 12
    PROVEN TRACK RECORD AS A LOW COST FINDER 16 PDP F&D 1P F&D 2P F&D 1.2x 12 1.8x 1.8x 1.2x 1.9x Cash flow F&D Cost (/boe) 1.2x 1.3x netback recycle 8 2.0x 2.0x ratios 1.4x 1.6x 1.8x 1.3x 2.0x 4 1.7x 1.8x 4.7x 7.3x 0…
  13. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 13
    LOOKING FORWARD 2018 Plans & Beyond
  14. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 14
    2018 CAPITAL PROGRAM Our board of directors has approved a 2018 capital expenditure budget of 255 million The 2018 budget includes 149.9 MM of E&D spending and 66.9 MM of facilities and infrastructure (25.7 MM for PC Gas Plant Phase…
  15. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 15
    2018 CAPITAL PROGRAM DETAILS 2018 CAPITAL PROGRAM Gross Wells Net Wells Capital (MM) Drilling & Development Pouce Coupe - Montney D1 Horizontal Gas Wells 12 12.0 66.2 Pouce Coupe - Montney D2 Horizontal Gas Wells 1 1.0 4.9 Pouce…
  16. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 16
    2018 CAPITAL PROGRAM DETAILS 2018 budget includes 66.9 MM Land & of investment in facilities Seismic, 4.6MM Other, 16.5MM including: 2% 6% Sustaining & PC Gas Plant Phase VI Opt., 17.1,MM completion including Phase 7% V/VI…
  17. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 17
    2018 NATURAL GAS MARKETING AECO 1.50 0.02 0.26 1.22 Dawn 3.30 0.09 ACE/ ATP/ 1.22 Alliance Alliance 1.99 3.30 1.50 0.08 0.03 Note: All Birchcliff gas realizes a 1.23 0.35 9% heat premium(1) 1.99 1.12 Pricing Hub…
  18. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 18
    BORROWING BASE DETAILS Birchcliff has extendible revolving credit facilities in the aggregate principal amount of 950 million, which are comprised of an extendible revolving syndicated term credit facility of 900 million and an…
  19. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 19
    MONTNEY/DOIG RESOURCE PLAY A Significant Position in a World Class Play
  20. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 20
    MONTNEY/DOIG - A WORLD CLASS RESOURCE PLAY Resource density. Stacked resource up to 300 metres thick. Large areal extent. Extends over 50,000 square miles. Exceptional fracability. Low clay Birchcliff Montney/Doig content, low Poissons…
  21. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 21
    MONTNEY/DOIG MINEROLOGY LEADS TO EXCELLENT FRACABILITY The Montney/Doig Resource Play rock type is composed of a Some other Resource Plays have a high percentage of clays high percentage of hard minerals, and a low percentage of and…
  22. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 22
    BIRCHCLIFF MONTNEY/DOIG RESOURCE PLAY The Gordondale Acquisition added a fourth commercial development interval in the Montney D2 Large contiguous land base with 349.4 sections prospective for the Montney/Doig as at December 31,…
  23. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 23
    STACKED RESOURCE PROVIDES SUBSTANTIAL FUTURE UPSIDE 24
  24. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 24
    MONTNEY/DOIG MULTI LAYER OPPORTUNITY 3 2 1 4 5 6 5 6 4 3 2 1 25
  25. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 25
    BIRCHCLIFF MONTNEY/DOIG INVENTORY Note: Location counts based on Deloitte YE2017 Reserve Report 26
  26. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 26
    PROXIMAL TO INFRASTRUCTURE WITH LONG TERM EXPOSURE TO LNG EXPORT Montney/Doig Birchcliff Pouce Coupe Production Montney/Doig & PC Gas Plant Owned Infrastructure PC Gas Plant Nova Pipeline System North American Market…
  27. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 27
    POUCE COUPE OVERVIEW Proven asset in development phase Wells show high initial deliverability, low terminal decline and stable long term production Predictable results with improving gas rates & liquids yields 100% owned and…
  28. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 28
    2017 WELL PERFORMANCE Delloite Tier 0 Type Curve 29
  29. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 29
    CONTINUED WELL IMPROVEMENT Delloite Tier 0 Type Curve Note: Only 12 2017 wells with history beyond 5 producing months 30
  30. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 30
    CONTINUOUS COST AND DESIGN REFINEMENT Drilling costs have decreased while overall well costs have slightly Birchcliff Corporate Wellbore Evolution increased due to 7,500 increased2,f5r0a0cintensity Lateral Length (m) and Frac…
  31. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 31
    LIQUIDS SUMMARY 2017 New Wells IP60 Rates (Avg. Per Well) MAP GORDONDALE: CRUDE OIL Excellent Lower Montney oil inventory in D1 and D2 intervals Engineered completions drive recovery factor improvements EOR scheme under…
  32. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 32
    POUCE COUPE LIQUIDS TYPE CURVE 2018 TARGETED WELL 5,000 Rate of Return (%) WTI (US/bbl) 55/bbl 60/bbl 65/bbl 1.50/GJ 30% 32% 35% 4,000 AECO 2.00/GJ 46% 49% 51% Sales Gas Rate (Mscfd) 2.50/GJ 64% 68% 71% 3,000 NPV 10%…
  33. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 33
    GORDONDALE OVERVIEW Acquired in 2016, Gordondale consolidated a sizeable and contiguous land base within Birchcliffs existing core area High oil & NGLs weighting Strategic infrastructure Low base decline production High quality…
  34. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 34
    GORDONDALE KEY INFRASTRUCTURE Key Natural Gas Processing Infrastructure Existing infrastructure has already AltaGas Gordondale CNRL Progress Sour Deep Cut Gas Plant Sour Shallow Cut Gas Plant supported peak production of…
  35. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 35
    GORDONDALE BASE PRODUCTION HISTORY Current 40,000 Production Last well drilled in 2014 (on-stream Birchcliff (30,000 BOE/d) 2015) with peak production of Acquisition 35,000 boe/d (22,000 BOE/d) Scheduled 35,000 AltaGas Plant…
  36. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 36
    GORDONDALE D2 OIL TYPE CURVE D2 Oil Tier 1 Rate of Return (%) D2 Oil Tier 1 Type Curve D2 Oil Tier 2 Type Curve WTI (US/bbl) 300 55/bbl 60/bbl 65/bbl 1.50/GJ 87% 104% 121% AECO 2.00/GJ 100% 118% 137% 250 2.50/GJ 114% 133%…
  37. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 37
    ELMWORTH DEVELOPMENT Received regulatory approval for an acid gas injection well in August 2016 Second Exploration Preliminary planning underway for a Horizontal 100% owned and operated 40 MMcf/d natural gas processing plant;…
  38. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 38
    CONCEPTUAL MONTNEY/DOIG FIELD DEVELOPMENT MODEL STATUS OF MODEL CALLIBRATION AND DERISKING FACIES & PETROPHYSICAL G EOLOG I C A L, GEOPHYSI CAL, G E O M E C H A N C A L HYDRAULIC FRA C & M I C R O SEIS. RESERVOIR M O D E L OPT I MI…
  39. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 39
    POUCE COUPE DRILLING PERFORMANCE Drill Cost Efficiency Average Drilling Speed (Spud to Rig Release) 800 300 750 Cost per Drilled Length (/m MD) 2017 - 1,993k/well (4,832m MD, 32 Stages Planned) 250 2017 - 3.7 Days/1000m 700…
  40. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 40
    POUCE COUPE LOWER MONTNEY (D1) CORE AREA COMPLETION EVOLUTION Completion Cost per Stage vs. Number of Stages Proppant Intensity 400 40 1.00 200 Completion Cost Per Stage (000's) 350 35 0.90 180 Average Proppant Intensity…
  41. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 41
    ENGINEERED COMPLETIONS FOR MONTNEY/DOIG FULL FIELD DEVELOPMENT Industry Range Birchcliff Best Practices Oil Birchcliff Best Practices Gas Liner type Openhole or Cemented Openhole or Cemented Openhole Inter-well spacing 100 400 m…
  42. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 42
    TERMINAL DECLINE CHANGES Continued support for low terminal decline rates from Birchcliffs existing wells and offsetting industry wells with significant production history. Deloittes Tier 0 type curve has remained at 8.2 Bcfe sales…
  43. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 43
    PC GAS PLANT The Engine for Future Growth
  44. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 44
    Production Processed through the PC Gas 2012 2013 2014 2015 2016 2017 Plant Average daily production, net to Birchcliff: Natural gas (Mcf) 59,327 91,666 132,808 163,641 168,444 193,417 Oil & NGLs (bbls) 204 527 1,065 1,287 960 1,316…
  45. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 45
    Corporate Operating Costs vs. % of Natural Gas Sales KEY STRATEGIC 10.00 Volumes Processed at the PC Gas Plant 100% Corporate Operating Cost (/boe) Volume Through PC Gas Plant ADVANTAGES 8.00 80% 6.00 60% 100% owned…
  46. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 46
    PC GAS PLANT HIGHLIGHTS Current processing capacity of 260 MMcf/d Phase V expansion was completed ahead of its initially scheduled October 1, 2017 completion date, adding 80 MMcf/d bringing total processing capacity to 260 MMcf/d…
  47. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 47
    BUILDING ON OUR PAST Over 10 Years of Success
  48. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 48
    Forecasted record annual Birchcliffs average daily production was 67,963 boe/d in average production of 76,000-78,000 boe/d in 2017 compared to 2,793 boe/d in 2005, a compounded 2018 annual growth rate of 30% per year over that…
  49. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 49
    Production Growth 80,000 300 70,000 boe/d/million wtd. avg. shares 250 60,000 Birchcliff has increased production at a compound annual growth rate of 200 50,000 boe/d 40,000 30,000 150 30% since 2005. 100 20,000…
  50. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 50
    Reserves Growth 1200 4,000 1000 3,200 Birchcliff has added significant low cost 800 reserves since commencing operations in boe/1,000shares 2,400 MMboe 600 2005. On a per common share 400 1,600 basis, PDP, 1P and 2P…
  51. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 51
    APPENDIX
  52. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 52
    2017 YEAR END MONTNEY/DOIG 1,000, RESERVES Drilled 53 HZ M/D wells Drilled 20 HZ M/D wells and acquired 87 HZ M/D wells 900,000 348 (342.8 net) Montney/Doig horizontal Drilled 29 HZ M/D wells 800,000 wells drilled as of Dec…
  53. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 53
    MONTNEY/DOIG WELL LOCATIONS 54
  54. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 54
    SERIES A PERPETUAL PREFERRED SHARES Preferred Share Details Series A Number of Shares 2 million Issue Date August 8, 2012 TSX Trading Symbol BIR.PR.A Issue / Par Price 25.00 per share Quarterly Dividend 0.523375 per share Current…
  55. February 2018 Corporate Presentation – Birchcliff Energy Ltd. – slide 55
    SERIES C PREFERRED SHARES Preferred Share Details Series C Number of Shares 2 million Issue Date June 14, 2013 TSX Trading Symbol BIR.PR.C Issue / Par Price 25.00 per share Quarterly Dividend 0.4375 per share Yield at Issue 7.0%…

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