A SUSTAINABLE CASH FLOW BUSINESS CORPORATE UPDATE SEPTEMBER 2020 TSX: PNE
FIVE REASONS TO BUY PINE CLIFF ENERGY 1 Natural gas prices in early stages of a strong natural gas bull market One of the industrys highest adjusted funds flow 2 sensitivities to natural gas prices PNEs long-life, low-risk…
ANALYST COVERAGE Company Analyst Haywood Securities Inc. Darrell Bishop Desjardins Capital Markets Chris MacCulloch Stifel FirstEnergy Cody Kwong Canaccord Genuity Anthony Petrucci Cormark Securities Inc. Amir Arif Peters…
CORPORATE PROFILE A UNIQUE SUSTAINABLE CASH FLOW MODEL 2020 Production Guidance 18,500 19,000 Boe/d Listing TSX: PNE - % natural gas 91% Market Capitalization(1)(3) 67.1 MM 2020 Capital Guidance 10.2 MM Average Daily Volume(2) 0.36…
EXPERIENCED BOARD AND MANAGEMENT BOARD OF DIRECTORS George F. Fink (Chairman of the Board) Mr. Fink is the Chairman of the Board of Pine Cliff Energy Ltd. (Pine Cliff , PNE, or the Company) and is also the Chief Executive Officer and…
EXPERIENCED BOARD AND MANAGEMENT CONT. Jacqueline R. Ricci Ms. Ricci joined the Board of Directors of Pine Cliff in May, 2020. Ms. Ricci has been a Vice President and Director at J. Zechner Associates, Toronto, Ontario, since 1997,…
UNPRECEDENTED NATURAL GAS FUNDAMENTALS Lower Industry Capex + Lower Rig Counts + Lower Production + Strong Demand = Higher Prices Lowest North American Rig Count in 80 From February 2020 to July 2020, North Americas average rig…
NATURAL GAS OUTLOOK NORTH AMERICAN SUPPLY Western Canada Natural Gas Supply U.S. Active Rig Count - Weekly 2020 Active drilling Western rigs in the US Canadian and Canada gas supply is are at historic on trend for a lows. Natural second…
NATURAL GAS OUTLOOK NORTH AMERICAN DEMAND US Total Natural Gas Demand U.S. Annual LNG Export Capacity (Year End) Bcf/d Committed 12 US LNG Freeport T3 Despite export 10 Corpus Christi T1-3 COVID-19, capacity Sabine Pass T5 US…
NATURAL GAS OUTLOOK GLOBAL SUPPLY AND DEMAND Global Natural Gas Demand Global LNG Demand Tcf Bcf/d Natural gas Demand for consumption LNG continues to continues to increase in climb, practically specifically every region in Asia, with…
WHAT WE HAVE BUILT THREE MAJOR OPERATED CORE AREAS 2020 Production Guidance of 18,500 19,000 Boe/d Weighted 91% towards natural gas High Working Interest and Operatorship Production and infrastructure is 85% operated 80%…
A COUNTER-CYCLICAL STRATEGY BUILDING A CASH FLOW MODEL IN A VOLATILE COMMODITY PRICE ENVIRONMENT PNE has been uniquely focused on a low-risk, low decline, primarily natural gas asset consolidation strategy in Western Canada with nine…
ONE OF THE LOWEST BASE PRODUCTION DECLINES Base Decline PNEs asset base has one of the lowest base declines of any Western Canada producer This results in a longer reserve life index and provides PNE the ability to maintain production…
FLEXIBLE NATURAL GAS PRICE EXPOSURE UNIQUE INFRASTRUCTURE OPTIONALITY Sales volumes can be physically diverted to Saskatchewan and the United States by utilizing three PNE owned CER regulated pipelines Preserves capability of PNE to…
2021 CASH FLOW TORQUE TO NATURAL GAS PRICING 2021E Cash Flow Torque to AECO(1) (2) (1) Haywood Capital Markets (Aug 2020) based on strip prices (US45/bbl WTI, C2.68/GJ AECO) (2) Haywood Capital Markets PNE cash flow based on a…
VERY HIGH CASH FLOW SENSITIVITY COMPARED TO PEERS 2021E Cash Flow Torque to AECO (US0.25/Mcf) PNE LXE CR AAV NVA PEY SDE TOU POU ARX OVV OBE HWX ERF VII TVE FRU HSE VET CNQ BTE WCP TOG CPG -120% -20% 80% 180%…
Consensus EV/Forward 12 months DACF 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x 4.0x Jan-13 22.0x Apr-13 Source: Canaccord Genuity Group Inc. Jul-13 Oct-13 Jan-14 Apr-14 Current Jul-14 Oct-14…
A STRONG BALANCE SHEET AND SHAREHOLDER BASE % of PNE Shareholder and Relationship Shares Held Date and Source Outstanding Robert Disbrow (Reporting Insider 46,455,500 14.2% Aug 7, 2020 - SEDI and Long Term Debt Holder) Alberta…
WHY INVEST IN PINE CLIFF Long life predictable natural gas assets with an industry leading decline rate creates stable, predictable cash flow One of the strongest per share sensitivities among Western Canadian energy companies to…
APPENDIX 21
FOCUS ON PER SHARE VALUE Predictable Cash Flow Model Low decline and low capital efficiencies form the foundation for a sustainable cash flow model EXPERIENCED MANAGEMENT Significant Insider Ownership TEAM Interests aligned with…
AN ACTIVE EIGHT YEARS OF ACQUISITIONS TRANSACTION RECORD SINCE JANUARY 2012 500,000,000 Market Cap 11 450,000,000 Share Price 10 2.50 9 12 400,000,000 13 14 2.00 350,000,000 300,000,000 8 4 7 15 1.50 250,000,000 6 5 3…
NATURAL GAS REVIEW HEDGING UPDATE PHYSICAL PRICE HEDGING Summer Contracts GJ/d /GJ 2020/2021 Contractual Terms Delivery Delivery April May June July August September October Point Quantity Aug 1 Oct 31, 2020 AECO 37,500 -------…
CENTRAL ASSETS AREA OVERVIEW PINE CLIFFS LARGEST CORE AREA Gas weighted, low decline assets in the Ghost Pine and Viking areas of Central Alberta Extensive land position of 1.3 MM gross (0.95 MM net) acres Q2 - 2020 production of…
TWINING PEKISKO OIL Oil and gas are trapped in the reservoir close to the subcrop edge (pinch-out). The Pekisko oil pool in Twining, is estimated to have over one billion barrels of original oil in place and is the single largest…
TWINING PEKISKO OIL PNE DRILLING UPDATE Drilled three horizontal wells (One in 2018 and two in 2019). The first well (13-33) has generated 2.9 million of adjusted funds flow to June 30, 2020 The second well (4-21) has generated 0.9…
TWINING PEKISKO ECONOMICS Pekisko (3 Hz): Rate-time (BBL/D) Twining Pekisko Economics Type Well Assumptions: 250 * M 2,800 DCE&T Capital IP 365 = 188 BOED Calendar Day Oil Rate (BBL/D) 200 * 2.50/GJ AECO (less 0.16/GJ…
EDSON AREA OVERVIEW HIGH IMPACT INVENTORY Q2 - 2020 production of 1,572 Boe/d (73% natural gas), 8% of Pine Cliffs production PNE currently estimates high quality locations targeting the Bluesky, Ellerslie, Rock Creek, Wilrich,…
HIGH QUALITY EDSON AREA LOCATIONS MULTI ZONE, LIQUIDS RICH LOCATIONS Attractive and predictable high liquids yield production 57 gross (14.1 net) multi-zoned undrilled locations including 31 gross (7.3 net) unbooked locations and…
SOUTHERN ASSETS AREA OVERVIEW LOW DECLINE, LOW COST PRODUCTION Q2 - 2020 production of 7,546 Boe/d (mostly natural gas), 40% of Pine Cliffs production 100% ownership of three CER regulated pipelines delivering gas to Montana and…
ACTIVELY MANAGING ENVIRONMENTAL FOOTPRINT As at June 30, 2020, PNE recorded an asset retirement obligation (ARO) of 233.8 MM (inflated at 2.00% and discounted at 2.30%) on its balance sheet (249.9 MM undiscounted) June 30, 2020…
METHANE EMISSIONS REDUCTION PROGRAM Pine Cliff Energy Ltd. is proud to have been an early action leader in reducing methane emissions from our operations. Starting in March 2018, we worked with a third party to inventory all of our…
RESERVE REPORT(1) Summary of Remaining Working Interest Reserves, as of December 31, 2019 Natural Gas and Light, Medium Natural Gas Coal Bed Oil Equivalent and Heavy Oil Liquids Methane Reserve Category MBbl MBbl MMcf MBoe…
FUTURE DRILLING OPPORTUNITIES EXTENSIVE INVENTORY OF OIL AND GAS LOCATIONS TO SUPPLY LONG TERM MODEL Summary of Undrilled Locations Unbooked Locations Booked Locations(1) Total Locations Gross Net Gross Net Gross Net Camrose…
CORPORATE INFORMATION BOARD OF DIRECTORS HEAD OFFICE WEBSITE George F. Fink (Chairman) 850, 1015 4th Street SW www.pinecliffenergy.com Philip B. Hodge Calgary, Alberta T2R 1J4 Randy M. Jarock Phone: (403) 269-2289 INVESTOR CONTACT…
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