World Class Montney Resource, Industry Leading Low Cost Structure & Cash Margin and Operational Excellence Reinforces the Strength of our Three Year Growth Plan Investor Presentation TSX / NYSE: AAV December 2014
ADVANTAGE: AT A GLANCE Intermediate Canadian Montney Producer Listed on TSX and NYSE AAV TSX 52week trading range (Cdn) 3.84 7.85 Shares Outstanding (basic) 169.8 million Glacier Q3 2014 production 132.5 mmcfe/d (22,087 boe/d) Market…
FOCUSED ON MONTNEY GROWTH & VALUE CREATION World Class Montney Asset Growth Plan & Operational Financial Excellence Strength 245 mmcfe/d in 2017 190% CFPS growth (1) 100% PPS growth (1) Free Cash Flow 2017 Pure…
GROWTH LEADS TO SIGNIFICANT FREE CASH FLOW IN 2017 Free cash flow is achieved in early 2017 based on Plan 160 million of free annual cash flow is generated at 245 mmcfe/d Cdn 3.65/GJ 350 300 250 200 Million Capital…
THREE YEAR FULLY FUNDED GLACIER GROWTH PLAN Three Year Plan Summary: 245 mmcfe/d (40,830 boe/d) in 2017 735 million Capital Expenditures 33 New Montney wells per year 3.75/GJ Aeco Cdn average price 1.5x Average Total Debt to…
FINANCIAL STRENGTH SUPPORTS DEVELOPMENT PLAN Credit Facility: (1) 329 million currently available (18% drawn on our 400 million credit facility) Balance Sheet: 1.4x Total debt to annualized Q3 2014 Cash Flow Hedging…
GAS PRICE SENSITIVITY REDUCED BY HEDGING AND LOW COST STRUCTURE Downside gas price mitigation while retaining torque to upside 7
YTD 2014 STRONG NETBACKS UNDERPIN GROWTH PLAN Glacier Operating Netback (1): (/mcfe) Revenue (2) 4.39 Royalties (0.22) Operating Costs (0.31) Operating Operating Netback 3.86 netback is 88% of (Recycle Ratio at 2013 2P F&D…
INDUSTRY COST STRUCTURE & MARGIN COMPARISON Advantages full cycle margin is among the top Montney producers today. 9
WORLD CLASS MONTNEY ASSET Glacier 300 meters Natural gas and liquids resource 16 Tcf TPIIP 10
GLACIER LOCATED IN THE HEART OF THE MONTNEY RESOURCE PLAY Montney Siltstone Comparison: 700 times more permeability 4x more formation thickness Very low clay content Liquids & Improved well efficiencies strong economics 11
FOCUSED ON MONTNEY SURROUNDING GLACIER GAS PLANT Current development of 16 TCF (1) TPIIP at Glacier including liquids drilling Progress Glacier future drilling inventory 1,400 100% owned locations 9 net Montney Glacier Glacier…
GLACIER 100% OWNED GAS PLANT & PIPELINE ACCESS Glacier Gas Plant Positioned for Production Rampup 400 mmcf/d pipeline capacity to TCPL meter station in place 400 mmcf/d pipeline capacity to TCPL meter station in…
GLACIER DELINEATION DRILLING HAS CONFIRMED MULTILAYER DEVELOPMENT Swan & Tupper at 4 to 7 wells/section density today. Potential for 20 wells/section at Glacier EnCana began horizontal drilling in 2005; however, Advantage…
PENTASTACK DEVELOPMENT WITH DECADES OF DRILL INVENTORY Five Development Intervals Containing 1,400 Future Locations Development based on four wells per section per layer Proven commercial well rates across Glacier in the Upper,…
OPERATIONAL EXCELLENCE 16
TRACK RECORD OF OPERATING PERFORMANCE Production Growth to 135 mmcfe/d & 73% Reduction in cost per frac despite increasing Operating Cost Reduction to 0.30/mcfe 475,000/frac stage average number of frac stages from 7 to 16…
UPPER AND LOWER MONTNEY AVERAGE WELL TYPE CURVE IMPROVEMENT 8,000 Advantage has significantly improved well performance since 2008. Utilization 7,000 of more frac stages and slickwater fracs have recently created another step rate…
IMPROVING UPPER & LOWER MONTNEY WELL PERFORMANCE WITH SLICKWATER Recent Upper and Lower Montney wells completed with slickwater fracs are outperforming Phase VII Budget type curve which is based on an IP30 6.9 mmcf/d. Graph…
IMPROVING UPPER & LOWER MONTNEY WELL PAYOUT Top Tier Wells Trending toward Payout…
(1) EXCEPTIONAL UPPER MONTNEY WELL ECONOMICS Upper Montney Dry Gas (2) Frac optimization of 108 Upper and Lower Montney wells since 2008 at Glacier has increased the average Budget type curve to an IP of 6.9 mmcf/d.…
(1) EXCEPTIONAL LOWER MONTNEY WELL ECONOMICS Lower Montney at 11 bbls/mmcf C3+(2) Budget type curve 6.9 mmcf/d. Lower Montney wells have improved with frac design changes and are similar to Upper Montney wells AECO Gas…
EAST GLACIER CONTAINS HIGHER MIDDLE MONTNEY LIQUID CONTENT Middle Montney wells to date Glacier C5+ 57 illustrate higher liquid content from deg API west to east across Glacier 26 57 31 63 30 bbl/mmcf 10 bbl/mmcf vertical…
IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER Budget Type Curve 4mmcf/d New Phase VI 122 well started Middle Montney wells have sequentially production at restricted rate of 9.5 demonstrated improved productivity…
(1) STRONG EAST GLACIER MIDDLE MONTNEY WELL ECONOMICS Middle Montney at 50 bbls/mmcf C3+ (2) Current Budget Type Curve 4 mmcf/d IP 30 Continued frac design changes have shown improving rates in each subsequent MM…
ADVANTAGE SUMMARY: GROWING OUR MONTNEY AT GLACIER Focused on our world class 16 Tcf TPIIP Glacier Montney property and development of its 4.2 Tcfe contingent resources and 1.7 Tcfe 2P reserves(1) Additional 52.25 net sections of new…
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THREE YEAR FULLY FUNDED GLACIER GROWTH PLAN DETAILS: 100% PRODUCTION PER SHARE AND 190% CASH FLOW PER SHARE GROWTH Development Plan (3) Phase VII Phase VIII Phase IX Q214 to Q215 to Q216 to Q115 Q116 Q117 Current Estimates…
SOLID UPPER & LOWER MONTNEY WELL RESULTS ACROSS GLACIER Upper Montney - Strong well results throughout block show Lower Montney Recent wells with revised completions have markedly tremendous upside potential in future development…
2012 CORE AND COMPLETION STUDIES: INCREASED RESOURCE AND IMPROVED WELL RESULTS Core study determined original density porosity logs have to be re calibrated IP30s on open hole Recalibration aligned log to actual wells improved…
GLACIER DRILLING ECONOMICS AND 2P RECOVERIES PER INTERVAL ( millions unless otherwise indicated) Glacier Drilling Economics PVs 10% Discount(1) AECO C natural gas price Layer 1(6) Layer 5(3) Liquids Rich Gas (East Glacier)(4)…
GLACIER MARCH 31, 2013 CONTINGENT AND PROSPECTIVE RESOURCE ASSESSMENT Advantage engaged our independent qualified reserves evaluator Sproule Associates Ltd. (Sproule) to update the resource analysis and provide a 2C evaluation (Sproule…
GLACIER CONTINGENT AND PROSPECTIVE RESOURCE ASSESSMENT UPIIP (AAV Working Interest, Sales) (3) Low Estimate Best Estimate High Estimate Natural Gas Prospective Resources (Tcf) 0.342 0.556 0.776 Unrecoverable UPIIP (Tcf) 1.561…
GLACIER CONTINGENT AND PROSPECTIVE RESOURCE ASSESSMENT 2C (Best Estimate) Contingent Resources Gross 2C Recoverable Net Present Values Before Income Taxes ( millions) Gross Number of Hz Resources per Location Interval Well Locations…
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