Investor Presentation Repositioned for Oil Production Growth December 7, 2011 www.andersonenergy.ca
3 Why Invest in Anderson 1. Focused Development on Cardium Light Oil Production in Central Alberta Oil provides stronger cash flows than natural gas and reduces debt leverage over time Oil & NGL production is expected to grow from…
4 Anderson Energy Snapshot Trading Equity Symbol TSX AXL-T Institutions Debentures AXL.DB 10% AXL.DB.B Trading Volumes(1) 0.9 million shares/d Insiders & (Past 12 months) Family Retail 15% Shares Outstanding(1) 172.5 million…
5 Net Asset Value Net Asset Valuation (September 30, 2011) million P&P Reserves, pre-tax NPV 10%(1) 350 Undeveloped Land (excluding Cardium)(1) 5 Cardium Prospective Land(2) 118 Hedging Gains & Stock Option Proceeds(3) 18 Net…
6 October 1, 2011 Reserves Report GLJ Petroleum Consultants October 1, 2011 Reserves Report Highlights Total Proved plus Probable P&P BOE reserves increased 13% to 35.8 MMBOE P&P oil reserves increased 62% to 6.3 MMbbls P&P oil &…
7 Attractive Valuation vs Cardium Peers Current Enterprise Value/ Q3 Average boe/d 33 Compared to Cardium Peers 193,636 76,586 77,212 52,179 35,750 41,004 26,421 28,850 31,900 24 31 32 43 28 37 33 70 70* Vero NuVista…
8 The Plan Repositioned for Light Oil Production Completed Next Steps Results Drill and complete Achieve a balanced Restructured technical approximately 30 net production portfolio team Cardium horizontal wells annually Built…
9 Evolving to an Oil Weighted Company Replacing natural gas production Potential Impact of Higher Oil & NGL declines with oil volumes improves Volumes on Cash Flow (mm) funds from operations in 2012 estimate approximately 200% oil…
10 Potential Impact of Higher Oil & NGL Volumes on Netbacks Average Funds from Revenue Operating Netback Wellhead Gas Operations (/BOE) (/BOE) Price (/Mcf) (/BOE) 2009 3.95 27.74 15.07 11.26 2010 3.96 31.31 17.44 13.22 Q1…
11 Financing Our Growth Plan 2012 Capital Program Funded with Cash Flow and Existing Credit Facility Convertible Debentures Series A: 50 million, 5 year term, 7.5% coupon, conversion price 1.55 per share, closed December 31, 2010…
12 Managing Our Risk Hedging Philosophy Hedge produced oil and natural gas volumes to protect capital program and reduce cash flow volatility Continue to evaluate the merits of further price management strategies as market…
OPERATIONS
14 Operations Overview Targeting 50% of total production being oil and NGL sometime in 2012 Q3/11 Production Average 7,351 boe/d 32% oil and natural gas liquids ALBERTA Reserves at October 1, 2011 Proved + probable 35.8 MMBOE…
15 Cardium Horizontal Wells Cardium drilling focuses on the halo or periphery of major Cardium fields The best wells are positioned in good quality rock: away from potential pressure depletion and old waterfloods Cardium…
16 Cardium Drilling & Completion Cost Reductions Willesden Green/Garrington Fields 2010 drilling & completion costs 3 MM per well (13 frac stages) First half 2011 drilling & completion costs of 3 MM per well (17 frac stages) Q3…
17 Cardium Land and Drilling Inventory Land inventory of: 124.5 gross sections 74 net sections 85% in oil fairway Industry standard is 3 wells per section or 222 net potential locations Corporate Presentation December 2011
18 Cardium Horizontal Wells Cardium Horizontal Oil Drill Ready Locations Gross Net (1) Area Locations Locations Garrington 71 51.7 Willesden Green 54 37.4 Ferrier 32 17.2 Pembina Areas 47 23.5 TOTAL DRILLABLE 204 129.8…
19 Average Individual Well Production vs Days on Production (Normalized to time zero) boe/d Days 85% Oil & NGL on average, individual wells average production normalized to time zero Corporate Presentation December 2011
20 3 Year Development Plan Drilled 40 gross (30.2 net revenue) Cardium wells during the nine months ended September 30, 2011. 2010 2011 2012 Oil 20-30 net Cardium HZ wells 15 net Cardium HZ wells 39 net Cardium HZ wells…
21 Ferrier Discovery New Cardium oil discovery at Ferrier 2 gross (1.3 net) wells drilled and on production Average for both wells: IP (30 days) 300 boe/d (73% oil & NGL) Identified 30 gross (15.9 net revenue) additional…
22 Garrington Area 34 gross (28.2 net revenue) wells drilled and on production as of October 2011 Identified 37 gross (23.5 net revenue) additional locations to be drilled Grew production from 8 BOPD to 1500 BOPD in 16 months…
23 Garrington Area First well drilled and on production May 2010 Initial well design was 800 metre horizontal with 8 stage oil frac Current well design is 1,400 metre horizontal with 19 stage water frac Tank battery and gathering…
24 Leveraging Technology Cardium Well Performance Switched from an interstage frac distance of 100 metres to 75 metres in November 2010 Made numerous changes to the frac design including moving to water based fracture stimulation…
25 Technology Improving Well Performance Corporate Presentation December 2011
26 New Cardium Initiatives Acquiring additional Cardium acreage Implementing drilling and completion initiatives to lower costs and improve well productivity and reserves Evaluating horizontal multi well laterals to further…
27 Upside Opportunity Plan Cardium enhanced oil recovery Garrington reservoir simulation underway, (EOR) implementation as early as 2012 Viking, SWS vertical well recompletions in Q4, Second White Specks (SWS), Glauc, one to…
28 Cardium Enhanced Oil Recovery Evaluating waterflood vs gas flood for implementation in Garrington as early as 2012 Could potentially double ultimate oil recovery and reserves with EOR Gas flood is an attractive option Edmonton…
29 Second White Specs Anderson controls 134 gross (70.5 net) sections of land in this emerging play Second White Specs (SWS) is the source rock for the Cardium and is situated 100 meters deeper than the Cardium Oil quality and…
30 Summary Anderson Energy has repositioned itself as an oil production growth story generating cash flow growth with Cardium horizontal oil drilling The business plan is to achieve 50% of total production from oil & NGL by…
APPENDIX
32 Q3 Showing Results Q3 2011 highlights Significant increase in funds from operations, positive earnings and improving operating netback/boe achieved by replacing natural gas and NGL decline with oil production of higher value Q3…
33 Cardium HZ Well Economics on Crown Land Garrington Ferrier 133 Mboe 184 Mboe IP First Month boe/d 145 274 % Oil & NGL first month 93 70 Total Capital (MM) per well 2.45 3.1 F&D Cost (/boe) 18.42 17.02 Operating Netback (/boe)…
34 Other Horizontal Oil Projects Planning to drill horizontal oil opportunities as early as 2012 Gross Prospective Sections SWS Oil 134 Glauc Oil 5 Belly River Oil 2 Viking Oil 2 Total 143 1. One section = 640 acres…
35 Natural Gas Vertical Well Drilling Inventory Gross Net Edmonton Sands 552 302 Central AB Liquids Rich 18 14 Subtotal Booked as Reserves 2011-09-30 570 316 Edmonton Sands (additional locations not booked in 302 147 reserves…
www.andersonenergy.ca Head Office Contact Information 700 Selkirk House Brian H. Dau 555 4th Avenue S.W. President & Chief Executive Officer Calgary, Alberta T2P 3E7 (403) 262-6307 Phone: (403) 262-6307 infoandersonenergy.ca
Loading...
