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April 2020 Corporate Presentation – Kelt Exploration Ltd.

Kelt Exploration Ltd. · Apr 23, 2020 · 47 slides

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Slides

  1. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 1
    Corporate Presentation April 2020 ( updated April 23, 2020 ) KeltExploration.com David J. Wilson President & Chief Executive Officer Sadiq H. Lalani Vice President & Chief Financial Officer www.keltexploration.com 0
  2. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 2
    Current Economic Environment COVID-19 PANDEMIC Kelts highest priority remains the health and safety of its employees, partners and the communities where it operates. The Company has introduced measures to protect the well-being of…
  3. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 3
    Why Invest in Kelt VALUE CREATION Kelt focuses on value creation resulting in annual growth in production and funds from operations per share over the long-term. The Company emphasizes low-cost land accumulation in resource-style…
  4. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 4
    Environment, Social and Governance ( ESG ) Environment Social Governance Kelt is committed to minimalizing impacts on the Health and safety are a high Kelt is committed to strong environment. priority and Kelt maintains a HS&E…
  5. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 5
    Capital Structure Stock Exchange listing TSX Trading symbol KEL Market capitalization ( effective April 23, 2020 ) 230 million Enterprise value 670 million 52-week stock trading range 0.67 6.14 Common shares issued 187.9 million…
  6. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 6
    Insider Commitment Insider Purchases Offering / Market Purchases Date Shares (MM) Amount (MM) Price/share 13.9 MM Equity Private Placement Feb-2013 3.7 8.7 2.32 94.4 MM Equity Private Placement Apr-2013 5.7 31.5 5.55 92.0 MM Equity…
  7. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 7
    Capital Expenditures ( millions ) 2018 2019 Drilling & Completions 168.7 184.7 Equipment, Facilities, & Pipeline Infrastructure [1] 117.7 129.0 Land, Seismic & Asset Acquisitions, net of Property ( 0.9 ) 1.9 Dispositions Net…
  8. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 8
    Drilling Program 2018 2019 Drills Gross / Net Wells Gross / Net Wells Alberta 16 15.1 8 8.0 British Columbia 17 17.0 25 25.0 Total [1, 2, 3] 33 32.1 33 33.0 2018 2019 Completions Gross / Net Wells Gross / Net Wells Alberta 21 20.1…
  9. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 9
    Production Outlook 2018 2019 Oil ( bbls/d ) 8,403 9,361 NGLs ( bbls/d ) [1] 3,186 4,490 Gas ( Mcf/d ) 92,502 96,658 Combined ( BOE/d ) 27,006 29,961 Per MM Shares ( BOE/d ) 148 163 Note: [1] The NGLs production mix is…
  10. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 10
    Product Mix Operating Income 2019 Production Split Operating Income Split ( MM ) Oil & NGLs 46% 170.9 83% Gas 54% 35.6 17% Total 100% 206.5 100% 9
  11. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 11
    Commodity Prices ( CA, unless otherwise specified ) 2018 2019 WTI Crude Oil ( USD/bbl ) [1] US 64.94 US 56.98 MSW Crude Oil ( CAD/bbl ) [2] 69.29 69.19 WTI-MSW Basis Differential ( CAD/bbl ) ( 14.98 or 18% ) ( 6.42 or 8% ) NYMEX…
  12. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 12
    Gas Market Risk Management GAS MARKET DIVERSIFICATION The Company has taken a diversified approach to selling its natural gas in order to reduce exposure to single market risk. Kelt has entered into several contracts that result in…
  13. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 13
    Hedging Commodity Index Term Quantity Fixed Price WTI Apr/2020 to CA 77.55/bbl Crude Oil 4,000 bbls/d Fixed Price Jun/2020 [ equivalent to US 55.39 at the CAD/USD exchange rate of 1.400 ] WTI to MSW Apr/2020 to WTI minus CA 6.40/bbl…
  14. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 14
    Netbacks ( / BOE ) 2018 2019 Revenue/Price 37.30 34.53 Realized hedging gain ( loss ) ( 0.60 ) ( 0.08 ) Royalties ( % of revenue/price ) ( 8.3% ) ( 5.1% ) Transportation expense ( 3.92 ) ( 4.62 ) Production expense ( 9.11 ) ( 9.18…
  15. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 15
    Financial 2018 2019 Revenue ( MM ) 389.3 394.4 Operating income ( MM ) [1] 202.6 206.5 Adjusted funds from operations ( MM ) [1] 186.8 182.5 Per share diluted ( /share ) 1.01 0.99 Capital expenditures, net ( MM ) [2] 285.5 315.6…
  16. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 16
    Focused on per Share Growth PRODUCTION PER MILLION SHARES ( BOE / d ) ADJUSTED FUNDS FROM OPERATIONS PER SHARE ( diluted ) 250 1.25 CAGR CAGR Since Since 2013 2013 = 21% 200 = 21% 1.00 1.01 0.99 163 0.93 148 150 0.75 120 121 125…
  17. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 17
    Reserves December 31 December 31 NPV 10% BT NPV 10% BT Percent 2018 2019 Dec/31/2019 Dec/31/2019 Change ( MBOE ) ( MBOE ) ( MM ) ( / BOE ) Proved Developed 40,702 48,854 + 20% 514 10.53 Producing Total Proved 158,443 224,582 +…
  18. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 18
    P+P Reserves Future Development Capital December 31, 2018 December 31, 2019 FDC Net HZ FDC Net HZ ( MM ) Wells ( MM ) Wells Alberta Montney wells 332 59 582 101 B.C. Montney wells 744 140 1,463 270 TOTAL Montney wells 1,076 199…
  19. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 19
    Finding, Development & Acquisition Costs As at December 31, 2019 Proved Proved + Probable 2019 capital expenditures + change in FDC ( M ) 822,972 1,295,973 Reserve additions, net ( MBOE ) 77,053 169,217 FD&A cost ( /BOE ) 10.68…
  20. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 20
    Operating Divisions Inga/Fireweed Montney light oil/condensate-rich gas Doig condensate-rich gas Oak/Flatrock Montney light oil/condensate-rich gas Inga/ Fireweed Oak/ Flatrock Pouce Coupe/Progress Pouce Coupe/Progress…
  21. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 21
    Kelt Land Fairway R13 R11 R9 R7 R5 R3 R1W6 R24W5 94-A-13 94-A-14 94-A-15 94-A-16 Fireweed Corporate Land Holdings T90 94-A-12 94-A-11 94-A-10 94-A-9 T88 Inga T88 [ as at January 2020 ] Flatrock T86 T86 Developed + Gross Net…
  22. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 22
    Kelt Montney Framework 21
  23. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 23
    Reserves by Operating Divisions Inga/ Pouce Coupe/ Wembley/ Other Total As at December 31, 2019 Fireweed Progress Pipestone Properties Company Division Division Division [2] PDP Reserves ( MBOE ) 24,107 12,354 7,622 4,771 48,854 %…
  24. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 24
    British Columbia Montney Lands MONTNEY LAND HOLDINGS Extrapolation of previous BC Crown Land Sale Prices to Gross: 368,618 acres ( 576 sections ) Kelts Inga / Fireweed Montney Lands (139,963 acres) Net: 363,852 acres ( 569 sections )…
  25. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 25
    British Columbia Montney Wells PRODUCTION RESERVES Kelt British Columbia Montney Drills Typical Well EURs Top 10 IP30 Wells ( gross sales, BOE/d ): Inga / Fireweed Upper Montney ( UM ) (1) Inga (B5-9) 05/16-33-087-23W6 UM 2,148 ( 80%…
  26. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 26
    Inga / Fireweed Division Delineation Drilling 94-A-13 94-A-14 F A-65-I MM G B-90-A UM H E F G MONTNEY LAND HOLDINGS 02/A-65-I UM (sfc C-10-H) 03/A-65-I UM Gross: 141,543 acres ( 221 sections ) 94-A-13 94-A-14 B-65-I UM…
  27. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 27
    Inga / Fireweed - Montney CGR (Condensate to Gas Ratio) 94-A-13 94-A-14 94-A-13 94-A-14 F G H E F G H F G H E F G H 94-A-13 94-A-14 94-A-13 94-A-14 C B A D C B A C B A D C B A 02/14-24 02/15-33 IP30 1,609 BOE IP30…
  28. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 28
    Inga / Fireweed Division Development Drilling 94-A-13 94-A-14 THE MONTNEY CUBE F G H E F G MULTIPLE STACKED MONTNEY HORIZONS 94-A-13 94-A-14 C B A D C B Fireweed 5-well Montney pad Fireweed 5-well 4 UM & 1 MM 94-A-12…
  29. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 29
    Inga 6-Section / 3-Pad / 72-Well Montney Development Plan Kelts 2019 / 2020 capital expenditures included 24 drills at Inga on the Companys first 24-well multi-layer Montney cube pad that included eight Upper, seven IBZ, eight Middle…
  30. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 30
    Inga 24-well Montney Cube Pad Initial Results Aggregate combined sales volumes from the first six wells (5-9 Group 1) for initial production of 30 days (720 operating hours) was 6,569 BOE per day (77% oil and NGLs). Aggregate combined…
  31. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 31
    Inga Gas Processing & Liquids Handling KELT FACILITY ( Inga 2-10 Facility ): The Company constructed a 100 MMcf/d compression, dehydration, liquids handling and frac water facility located at Inga which is currently in operation. The…
  32. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 32
    Oak / Flatrock Division 00/1-9 UM 00/4-10 UM MONTNEY LAND HOLDINGS (sfc 5-33) 00/14-24 UM 00/16-6 UM 00/13-5 MM 02/13-13 UM (sfc 13-12) 00/12-2 MM Gross: 206,260 acres ( 322 sections ) (sfc 5-31) (sfc 10-27) T87 Net: 204,988 acres…
  33. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 33
    Alberta Montney Lands MONTNEY LAND HOLDINGS T80 Gross: 193,600 acres ( 303 sections ) Net: 167,674 acres ( 262 sections ) OPERATIONS Pouce Coupe Kelt commenced development of the Montney oil play at T78 Pouce Coupe with its first…
  34. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 34
    Alberta Montney Wells PRODUCTION RESERVES Kelt Alberta Montney OIL Drills Typical Well EURs Top 10 IP30 Wells ( gross sales, BOE/d ): Wembley Montney GAS Sproule 2P (1) Pouce Coupe 03/07-18-078-11W6 LMM (D1) 2,045 ( 66% oil/ngls ) EUR =…
  35. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 35
    Wembley / Pipestone / La Glace Division Upper Middle Montney MONTNEY LAND HOLDINGS Gross: 110,880 acres ( 173 sections ) Sexsmith 00/1-35 UMM Gas Plant T75 Net: 107,155 acres ( 167 sections ) (sfc 12-19) (0.3% WI) 00/13-6 UMM…
  36. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 36
    Wembley / Pipestone / La Glace Division Middle Montney Kelt 14-29 MONTNEY LAND HOLDINGS La Glace Facility (100% WI) 1-5 MM Gross: 110,880 acres ( 173 sections ) 02/13-33 MM 15-33 UM Sexsmith T75 Net: 107,155 acres ( 167 sections )…
  37. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 37
    Net Asset Value Dec/31 Dec/31 NET ASSET VALUE PER SHARE ( diluted ) ( millions ) Change 22.50 2018 2019 CAGR Since 20.00 2013 = 22% P&NG reserves, NPV10% BT 3,119.6 3,988.5 + 28% 18.78 Undeveloped land 279.7 350.6 + 25% 17.50 Net…
  38. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 38
    Future Considerations The Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. The Company has amassed vast Montney acreage in new plays to…
  39. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 39
    Appendix Convertible Debentures Environment, Social and Governance ( ESG ) Corporate Governance - Board of Directors Management Abbreviations Disclaimers 38
  40. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 40
    Convertible Debentures TSX trading symbol KEL.DB Principal amount issued 90.00 million Principal amount outstanding 89.91 million Coupon / Maturity date 5.0% / May 31, 2021 52-week trading range 75.00 127.00 D&Os purchased 14.7…
  41. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 41
    Environment, Social & Governance ( ESG ) Health & Safety Safety is paramount in Kelts corporate culture. The Company is committed to safe and environmentally responsible operations for the benefit of its employees, contractors and the…
  42. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 42
    Environment, Social & Governance ( ESG ) Environment and Air Quality Kelt is committed to ensuring that its operational activities comply with all environmental regulatory standards and requirements. By conducting due diligence, Kelt…
  43. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 43
    Environment, Social & Governance ( ESG ) Kelt supports innovative strategies, clean technology (including alternative energy and renewable energy), green products and utilizing lower emitting solutions to meet industry targets. GHG…
  44. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 44
    Environment, Social & Governance ( ESG ) Corporate Governance The following documents relating to the Companys corporate governance matters are available on the internet at www.keltexploration.com: Advance Notice Policy Disclosure,…
  45. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 45
    Corporate Governance - Board of Directors Robert J. Dales [ 2, 3, 4, 7 ] Geri L. Greenall [ 2, 3, 6 ] President, Valhalla Ventures Inc. Chief Financial Officer, Return Energy Inc. Common shares 1,794,255 Common shares 38,500…
  46. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 46
    Management David J. Wilson Sadiq H. Lalani Douglas J. Errico President & Chief Executive Officer Vice President & Chief Financial Officer Vice President, Land Common shares 18,940,775 Common shares 1,665,233 Common shares 463,842…
  47. April 2020 Corporate Presentation – Kelt Exploration Ltd. – slide 47
    Corporate Presentation KeltExploration.com Kelt Exploration Ltd. Suite 300, East Tower 311 Sixth Avenue SW Calgary, Alberta Canada T2P 3H2 Phone: 403-294-0154 Fax: 403-291-0155 Website: www.KeltExploration.com 54

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