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 January 2015
ADVANTAGE: AT A GLANCE Canadian Pure Play Montney Producer Listed on TSX and NYSE AAV TSX 52week trading range 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 3 Year Development Plan 100% Production Increase 245 mmcfe/d in 2017 (40,800 boe/d) 27…
Advantage Financial & Operational Strengths 0.85/mcfe (1) Total Cash Costs Industry Leading 51%3.90 (2) 2015 Natural gas hedge position (% forecast production & price) 3.94/mcf (2) Average Price of natural gas hedges to Q1 2017…
STRONG NETBACKS PROVIDE SUSTAINABILITY Actual YTD Q3 2014(1) Illustrative Glacier Operating Netback (/mcfe) 2.50/mcfe Revenue 4.39(2) 2.50 Royalties (0.22) (0.13) Operating Costs (0.31) (0.31) Q3 14 Operating netback is 88%…
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 Program %…
THREE YEAR GLACIER GROWTH PLAN Three Year Plan Summary (1) 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 Forward Cash…
THREE YEAR PLAN PRICE SENSITIVITY REDUCED BY HEDGING & LOW COST STRUCTURE Downside gas price mitigation while retaining torque to upside 8
GROWTH LEADS TO SIGNIFICANT FREE CASH FLOW IN EARLY 2017 BASED ON PLAN 350 245 mmcfe/d 3.65/GJ generates 160 million free annual cash flow 300 250 200 Million Capital Capital Capital required required required…
INDUSTRY COST STRUCTURE & MARGIN COMPARISON Advantages full cycle margin is among the top Montney producers today. 10
WORLD CLASS MONTNEY ASSET Glacier 300 meters Natural gas and liquids resource 16 Tcf TPIIP 11
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 12
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 Expansion to 250 MMcf/d Dry and Liquid Gas Processing…
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 DRILLING 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…
OPERATIONAL EXCELLENCE 17
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 No Wells Drilled 30 bbl/mmcf 10…
IMPROVING LIQUIDS RICH MIDDLE MONTNEY WELL PERFORMANCE AT GLACIER New Phase VI 122 well started Middle Montney wells have sequentially production at restricted rate of 9.5 demonstrated improved productivity as mmcf/d. Currently…
STRONG EAST GLACIER MIDDLE MONTNEY WELL (1) 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) Middle Montney AECO C natural gas price Upper Montney Layer 1(6) Lower Montney Layer…
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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