Diversified oil value growth Corporate Presentation January 2020
Highlights Gear Energy (GXE.TO) is a 90% liquids weighted junior oil growth company with: An Attractive Valuation Third quarter 2019 annualized funds from operations (FFO) of 0.29/share (60% of current share price) One of the most…
GXE: 2.6X Performance vs. Peers GXE: 1.1X GXE: 25.07 3
More Highlights Deep Inventory of Economic Oil Drilling Locations Over 600 management estimated drilling locations (as at Dec 31, 2018). 108 and 187 booked as TP and P+P locations, respectively Diversified and Resilient Asset Base…
Core Areas Lloydminster Lloydminster Heavy Oil 60% of corporate production low cost horizontal cold-flow heavy oil Central Alberta 25% of corporate production Central Alberta Horizontal light oil in the Light/Medium Oil Belly…
Financial Strength Outstanding Balance Sheet Forecast Reduced Q3 2019 net debt by 24% from the end of 2018 while maintaining stable production Exited Q3 2019 with net debt of 69.8MM and a quarterly annualized net debt to FFO ratio…
Low Costs Structural Cost Reductions Current total costs as a percentage of revenue are estimated to be approximately 25% lower than in 2015 Accomplished by drilling low cost horizontal wells primarily on Crown lands, and by…
2020 Plan Strategically designed to maximize shareholder value Balance the following core goals Maintain stable production and reserves values Maintain and enhance balance sheet strength Continue to repurchase shares under the NCIB…
Pricing Sensitivity Funds from Operations (FFO) The 2020 budget is estimated to deliver the following results if WTI oil prices average the following flat prices for the year (including the impacts of current risk management contracts)…
Production Summary Stability Forecasting stable annual production for 2020 averaging approximately 7,000 boe/d Forecasting 7% production growth and light oil, medium oil and NGL weighting increases from 32% to 37% (Q4 20…
Growth History Growing Value Again Gear has recalibrated to the current pricing environment and has all the ingredients for future value growth: Deep inventory, strong balance sheet, low costs and a proven history of successful…
Drilling Inventory Competitive Economics Future growth balanced across the three core areas targeting strong returns on capital and price and egress stability Lloydminster MLU Lloydminster SLL Core Areas SE Saskatchewan Central Alberta…
Lloydminster Lindbergh Future growth planned through drilling of multi-lateral unlined (MLU) horizontal wells Paradise and single-leg lined (SLL) horizontal heavy oil wells into multiple stacked formations. 17 wells planned for 2020 in…
SE Saskatchewan GXE Drills to date Torquay two-mile Area Licenses Recent Peer drills Capital 3,500k IP365 170 bbl/d EUR 150 mbbls Future growth planned through drilling horizontal light oil wells in the Torquay 2019 drilling…
Central Alberta Central Well Capital 2,300k IP365 175 boe/d EUR 185 mboe Wilson Creek Killam Future growth planned through drilling light oil wells in Wilson Creek Basal Belly River, Lower Basal Belly River and Ferrier Cardium.…
Oil Marketing Diversification Oil production sourced from three core areas with distinct pricing benchmarks and egress provides opportunity to balance future investments targeting maximum corporate revenue Current Strip…
Hedging Bought Put Sold Swap Product Term (inclusive) Contract Volume bbl/d Currency Sold Call /bbl Sold Put /bbl /bbl /bbl WTI Jan 19 Dec 19 3-way collar 600 USD/CAD U66.00 C62.00 C52.00 WTI Jan 19 Dec 19 3-way collar 600 USD/CAD…
Gear Team Management Role Prior Experience Ingram Gillmore President & CEO, Director VP Engineering ARC Resources, Talisman Yvan Chretien VP Land VP Land ARC Resources, CNRL Bryan Dozzi VP Engineering VP Business Development Rock Energy…
Research Coverage Firm Analyst AltaCorp Capital Inc. Patrick ORourke Beacon Securities Limited Kirk Wilson Cormark Securities Inc. Garett Ursu Stifel FirstEnergy Bob Fitzmartyn Haywood Securities Inc. Christopher Jones National Bank…
APPENDIX: Economic Assumptions Economics using flat WTI oil prices at US50, 60 and 70 per barrel, fx of 0.75 /, WCS differential of 35%, MSW differential of 18.5% and LSB differential of 14%, all in relation to WTI. Price discounts to…
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