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2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp

Pengrowth Energy Corp · Jun 24, 2014 · 37 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 1
    BUILDING SUSTAINABLE CASH FLOW 2014 Annual Meeting and Lindbergh Reserves Update June 24, 2014 Metropolitan Centre TSX:PGF NYSE:PGH
  2. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 2
    WHAT A DIFFERENCE A YEAR MAKES 2014 Annual Meeting (June 24, 2014) Share Price (close June 23, 2014) 7.57 Market Capitalization 4.0 Billion Lindbergh 2P Reserves Value (MM)(1) 2,215 Total shareholder return(2) 64% 1. Based on…
  3. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 3
    CORPORATE PROFILE 1. Based on June 23, 2014 TSX closing price of 7.57. 2. Defined as market capitalization + long-term + short-term debt as at March 31, 2014 less cash on hand. 3. As at March 31, 2014. 4. Calculated as decline in…
  4. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 4
    WHY SHOULD YOU INVEST IN PENGROWTH Strategic plan We have one Become a long-term sustainable dividend paying entity by shifting to thermal oil production with lower declines, better capital efficiency and growing free cash flow Have…
  5. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 5
    2013 A YEAR OF SUBSTANTIAL ACCOMPLISHMENTS: Operational Financial Initial 12,500 bbl/d commercial development Sold 1 billion of non-core assets received regulatory approval in July 2013 with construction commencing in September 2013…
  6. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 6
    THERMAL STRATEGY MAKES MORE SENSE THAN EVER Supply cost Thermal offers the lowest supply cost as compared to global alternatives Growth Niche thermal opportunities continue to exist for a company of our size Competition U.S. is not…
  7. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 7
    STRATEGY EXPECTED TO DRIVE STRONG CASH FLOW GROWTH Liquids content expected to grow from 53% (2014) to 79% (2018) Average production (boe/d) Total liquids production Lindbergh oil Liquids Natural Gas *CAGR compound…
  8. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 8
    MAJOR FUNDS FLOW* GROWTH PER SHARE IS PROJECTED Funds Flow (/share) 2014 2015 2016 2017 2018 * See slide 38 for details of funds flow per share calculations and assumptions 8 ANNUAL MEETING TSX:PGF NYSE:PGH
  9. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 9
    2014 GUIDANCE Guidance Capital (MM) 740 - 770 Non-thermal(1) 350 Lindbergh(1) 405 Average daily production (boe/d) 71,000 73,000 EBITDA (MM)(2)(3) 575 625 Funds Flow (MM)(2)(3) 500 540 Royalties (%) 16 18 Net operating costs…
  10. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 10
    GREATER OLDS/GARRINGTON AREA Large, contiguous land base RED DEER Over 500 gross sections of Cardium rights Prospective sections 290 gross (160 net) SYLVAN LAKE 4-5 years of Tier 1 drilling locations Extensive infrastructure…
  11. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 11
    LOCHEND CARDIUM Typical 100% Well 30 day initial production (boe/d) 285 First year average production (boe/d) 132 Reserves* (Mboe) 239 Metrics Drill/complete (MM/well) 3.4 Tie in Costs (MM/well) 0.4 0.6 F&D (/boe) 15-17…
  12. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 12
    PENGROWTH IS A LEADER IN DEVELOPING THE CARDIUM FORMATION Pengrowth Cardium economics have improved: In 2013, Pengrowth achieved lower capital costs and shorter cycle times, better than expected production performance and higher than…
  13. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 13
    LINDBERGH WHERE AND WHAT IS IT Map Area Lindbergh Target formation Lloydminster Lindbergh 2P Reserves * 230 MMbbls Best Estimate 96 MMbbls Contingent Resources* 2P Reserves* NPV10 2,215 MM Lindberg h Best Estimate 374…
  14. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 14
    EXCELLENT PILOT PERFORMANCE Total cumulative production in excess of 1.26 MMbbls at May 31, 2014 Estimated combined June rate 1,785 bbl/d Bitumen Production (bbl/d) Monthly ISOR Pump efficiency issues drove a change to…
  15. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 15
    LINDBERGH PILOT RESULTS DEMONSTRATE IMPRESSIVE INSTANTANEOUS STEAM-OIL RATIO AND WELL PRODUCTIVITY 2,000 1,800 1,600 1,400 Christina C-D Average well productivity (bbl/d) Firebag 1,200 1,000 Lindbergh Surmont 800…
  16. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 16
    LINDBERGH PILOT RESULTS HAVE EXCEEDED TYPE CURVE EXPECTATIONS Pump efficiency issues drove a change to Electric Bitumen Production (bbl/d) Submersible Pump (ESP) Type Curve based on 1.2 MM EUR Month *Average…
  17. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 17
    LINDBERGH 12,500 BBL/D COMMERCIAL PROJECT 630 MM estimated project cost 85% of capital spent/committed as at June 24, 2014 Project remains on time and budget 17 ANNUAL MEETING TSX:PGF NYSE:PGH
  18. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 18
    WHY WE EXPECT THE COMMERCIAL PROJECT TO PERFORM AS WELL AS THE PILOT Porosity Permeability cross plot Core, log, seismic and model data show reservoir is homogenous 10000 Consistent reservoir characteristics evident in 150…
  19. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 19
    LINDBERGH PRODUCTION RAMP-UP PLAN FOCUSED ON ACHIEVING TARGET OF 50,000 BBLS/DAY 100 MM EIA application submitted in December 2013 for the Production (bbl/d) 17,500 bbl/d expansion - approval expected in Q1 2016 360 MM…
  20. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 20
    LINDBERGH RESERVE UPDATE INDICATES SIGNIFICANT RESERVE AND VALUE GROWTH December May % Reserves 31, 2013(1) 31, 2014(2) Change Total 1P Reserves (MMbbl) 82 101 23 Total 2P Reserves (MMbbl) 143 230 61 Best Estimate Contingent…
  21. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 21
    LINDBERGH PROJECT 2P RESERVE VALUE HAS MORE THAN DOUBLED ON A PER SHARE BASIS SINCE DECEMBER 31, 2013 61% increase in Lindbergh 2P reserves 18% increase in total Pengrowth 2P reserves NPV10 increase of greater than 2 per share based…
  22. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 22
    FINANCIAL STRATEGY 22 ANNUAL MEETING TSX:PGF NYSE:PGH
  23. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 23
    2014 FINANCIAL STRATEGY TO SUPPORT GROWTH Pengrowth entered 2014 with approximately 450 million of cash on hand We aim to maintain a balance between cash inflows and cash outflows, which protects the dividend and ensures financial…
  24. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 24
    MAINTAINING A BALANCED CASH IN/OUT PROFILE IN 2014 1.0 B of Cash inflows 1.0B of Cash outflows Cash on hand 450 755 Capex Anticipated funds 520 flow from operations 250 Dividends Anticipated DRIP proceeds 50 24 ANNUAL…
  25. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 25
    PENGROWTHS CREDIT CAPACITY IS MORE THAN SUFFICIENT TO MEET OUR NEEDS March 31, 2014 Forecast year Forecast year (MM) end 2014 end 2015 Outstanding (MM) (MM) Senior fixed term notes 1,468 1,393 1,350 Term Credit facilities/Bank…
  26. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 26
    DEBT/EBITDA EXPECTED TO DECLINE FROM 2.8X IN 2014 TO 1.5X IN 2018 Pengrowth has a history of financial discipline Strategy reduces Debt/EBITDA in the 2015 to 2018 period Total Debt/EBITDA * Total debt includes notes, convertible…
  27. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 27
    TOTAL PAYOUT RATIOS* EXPECTED TO DECLINE FROM 2014 ONWARDS 210% 190% 170% Payout Ratio 150% 130% 110% 90% 70% 50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 *Total payout defined as capex +…
  28. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 28
    SUMMARY 28 ANNUAL MEETING TSX:PGF NYSE:PGH
  29. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 29
    WE ARE FIRING ON ALL CYLINDERS We did what we said we would do in 2013 Monthly 0.04/share dividend will continue to be protected Lindbergh pilot performance has exceeded expectations for an extended period of time Pilot has produced…
  30. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 30
    During the Southern Alberta Floods of 2013 Pengrowth lent a helping hand 30 TSX:PGF NYSE:PGH
  31. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 31
    PENGROWTH EMPLOYEES MADE A HUGE DIFFERENCE TO FLOOD CLEAN UP EFFORTS 31 ANNUAL MEETING TSX:PGF NYSE:PGH
  32. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 32
    PENGROWTH PROVIDED FLOOD ASSISTANCE IN HIGH RIVER Total volunteers 346 180 volunteers from Pengrowth Total volunteer hours 2,768 Total homes assisted with volunteers 88 These are very impressive numbers which made a substantial…
  33. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 33
    PEOPLE OUR GREATEST ASSET 33 ANNUAL MEETING TSX:PGF NYSE:PGH
  34. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 34
    Pengrowth Energy Corporation Investor Relations 2100, 222 3rd Avenue SW Toll-free: 1.855.336.8814 Calgary, Alberta, Canada T2P 0B4 Email: investorrelationspengrowth.com Telephone: 403.233.0224 Website: www.pengrowth.com Toll Free:…
  35. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 35
    APPENDIX 37 ANNUAL MEETING TSX:PGF NYSE:PGH
  36. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 36
    STRATEGY DELIVERS STRONG CASH FLOW GROWTH 2014 2015 2016 2017 2018 Production boe/d 72,100 78,200 78,400 84,700 95,500 Liquids content % 53% 62% 67% 74% 79% EBITDA MM 602 783 882 1,084 1,382 Per share 1.15 1.47 1.63 1.98 2.50…
  37. 2014 Annual Meeting and Lindbergh Reserves Update – Pengrowth Energy Corp – slide 37
    2013 FINDING, DEVELOPMENT AND ACQUISITION (DISPOSITION) COSTS 2013 Three-year Weighted Average Proved Proved Proved Proved plus plus Probable Probable Excluding Future Development costs Finding and Development (/boe) 8.30 10.61…

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