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CIBC ENERGY CONFERENCE – Perpetual Energy Inc

Perpetual Energy Inc · Apr 1, 2014 · 56 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. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 1
    CIBC Energy Conference April 2014
  2. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 2
    Perpetual Energy TSX:PMT DIVERSIFIED RESOURCE STYLE GROWTH ORIENTED Conventional ENTREPRENEURIAL Shallow Gas EXPLORER, PRODUCER & MARKETER Distributing Trust Common shares outstanding 148.5 million Management ownership…
  3. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 3
    Operating profile Conventional Shallow Gas Mannville Heavy Oil Eastern Alberta Bitumen Warwick Gas Storage Viking/Colorado Shallow Shale Gas Edson Wilrich Deep Basin Multi-Zone Liquids-Rich Gas Tight Oil and Gas Exploration…
  4. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 4
    Diversified portfolio Built to prosper SHALLOW GAS LIQUIDS-RICH HEAVY OIL BITUMEN OTHER GAS Eastern Alberta Edson Wilrich Mannville Panny Bluesky Warwick Gas Conventional Storage (30%) Greater Edson Mannville EOR Liege Grosmont…
  5. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 5
    Portfolio management strategy PROVEN MEDIUM AND CASH FLOW DIVERSIFYING LONG TERM GENERATORS GROWTH STRATEGIES VALUE STRATEGIES Maximize cash flow Invest for growth Optimize and Advance Conventional shallow gas Eastern Alberta…
  6. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 6
    70% 62% OF RESERVE VALUE 59% OF REVENUE 52% OF RESERVES OF PRODUCTION
  7. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 7
    Commodity diversification Oil and NGL Production Revenue from Oil and NGL 120 50% 4,500 25% 45% 4,000 100 20% 40% 2014 Forecast Revenue Percentage of total production (%) 3,500 Warwick Oil and NGL Production (bbl/d)…
  8. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 8
    Asset base transformation 100% 10,000 90% 9,000 80% 8,000 Growth Asset Production (bbl/d) 70% 7,000 Resource-style growth Production (% of total) 60% assets 43% of production in 6,000 50% 2013 and growing 5,000…
  9. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 9
    2014 Top five strategic priorities 1. Reduce Debt and Manage Downside Risk 2. Grow Edson Liquids-Rich Gas Production, Reserves, Cash Flow, Inventory and Value 3. Maximize Value of Mannville Heavy Oil 4. Maximize Cash Flow from…
  10. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 10
    1. Key priority Reduce debt and manage downside risk 11
  11. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 11
    Balance sheet Net Bank Debt: 67 million (YE 2013) Borrowing base on credit facility 110 million Next semi-annual redetermination April 2014 Senior Unsecured Notes: 150 million Coupon rate - 8.75% Maturity date - March 2018…
  12. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 12
    Debt Reduction 23 Transactions Closed in 2012 Total Net Proceeds: 167.2 MM 4 Transactions Closed 2013 Net Asset Sale Proceeds: 79.0 MM Production: 16 Boe/d P+P Reserves: 13.1 MMBoe Reduction in FDC: 122.8 MM Trioil Shares…
  13. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 13
    Diversification Warwick Gas Storage 40 Bcf Storage Reservoir Delta Pressure to 47 Bcf Commercial Park and Loan business 10 Bcf base reserves cushion gas in 30 to 50 year life place Up to 25 Bcf potential working gas Grass Roots…
  14. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 14
    Commodity price risk management strategy Enhance or protect funds flow and balance sheet Enhance or protect the economics of an acquisition Enhance or protect capital program economics Capitalize on perceived market anomalies 200…
  15. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 15
    2. Key Priority Grow Edson liquids-rich gas production, reserves, cash flow, inventory and value 16
  16. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 16
    Edson Wilrich liquids-rich gas To Rosevear Plant (15% WI) PMT Sales Pipeline to Alliance Constructed in 2013 Pipeline To Edson Deep Cut Plant 01-34 Gas Plant Capacity 30 MMcf/d Expanding to 60 MMcf/d by Q3 2014 16-10…
  17. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 17
    Wilrich value potential Edson Projected Economics per Drilling Location Capital (D,C & T) 5.1 MM NPV 10 % 3.3 MM ROR 47% BT F&D 11.30 / boe Capital…
  18. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 18
    Wilrich value potential West Edson Projected Economics per Drilling Location Capital (D,C & T) 6.4 MM gross NPV 10 % 10.7 MM BT gross ROR 168% BT F&D 6.83 / boe Capital Efficiency < 8,308 boe/d Payout 0.8 Years Recycle…
  19. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 19
    Edson liquids-rich gas play performance 7,000 8,000 80 160 6,000 7,000 30% production 70 140 growth expected in Cumulative Production (MBoe) 2014 Cumulative Cash Flow (MM) 6,000 60 120 5,000 Drill to fill expanded…
  20. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 20
    3. Key Priority Maximize value of Mannville heavy oil 21
  21. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 21
    Eastern Alberta Conventional heavy oil Discovered 13 Mannville pools Mannville 7 Lloyd, 5 Sparky, 1 Basal Quartz 200 MMbbl Original Oil in Place 10 MMbbl 5% recovery factor Current Production 2,800 bbl/d Low cost HZ development…
  22. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 22
    Upper Mannville A pool Lloyd Channel OOIP = 30.5 MMbbls Cumulative production to date 800 Mbbl ( 2.6% RF) Booked Reserves (year end 2013) 1.4 MMbbl (7% RF) 18 wells drilled to date 6 additional multi-laterals in inventory…
  23. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 23
    Mannville heavy oil value potential Projected Economics Per Well Assumptions Lloyd Sparky (McDaniel Year End 2013) Capital (D,C & T) 1.2 MM 1.2 MM 68.90/bbl Wellhead heavy price 2014 Pricing WTI US95/bbl, WCS US23.5/bbl, offset…
  24. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 24
    Mannville heavy oil play performance 60 180 50 Cumulative Capital 130 Capital (MM) 40 (MM) 30 80 20 30 10 0 -20 2009 2010 2011 2012 2013 2014E 4,000 4,000 3,500 3,500 Cumulative Production…
  25. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 25
    Waterflood and enhanced oil recovery Mannville I2I Working Interest 66.7% Waterflood Pilot Pool OOIP: 53 MMbbl Cum Prodn + McDaniel P+P: 1.7 MMbbl Sparky Mid Type Log (3.1% recovery) 100/09-32-050-08W4/00 17 Horizontals to date…
  26. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 26
    4. Key Priority Maximize cash flow from shallow gas 27
  27. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 27
    Conventional shallow gas East Central and Northeast Alberta Cretaceous and Devonian sweet shallow gas Belly River Current production: 60 - 65 MMcf/d Base declines < 15% Viking Multiple stacked zones and play types Extensive…
  28. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 28
    5. Key Priority Advance and broaden portfolio of high impact opportunities with risk-managed investment Viking/Colorado Shallow Shale Gas Bitumen Exploration 29
  29. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 29
    Viking/Colorado shallow shale gas Viking Belly River Play Fairway Booked Reserves Cardium/ Colorado Wells 12 Bcf PNP booked in recompletions Perpetual Lands Historical 2P reserves of 100+ Bcf removed Viking Proved Undeveloped from…
  30. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 30
    Colorado group technical advancement Colorado group free gas in place Total Resource in Place 130 Tcf OGIP estimated to average 16 Bcf/section Proven recovery from Cardium equivalent zone through horizontal development Potential…
  31. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 31
    Bitumen 527 net sections (329,000 net acres) of oil sand leases Various formation targets and ultimate recovery methods 7 potential project areas with varying potential 3 Billion bbls OBIP independently recognized at Liege…
  32. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 32
    Bitumen Panny Bluesky 8m Bitumen Low rate cold flow without 10m Bitumen solvent or thermal assistance Average pay thickness 11 m Low viscosity bitumen 15,000 cp 25oC 50,000 cp at 11oC reservoir temp Highly mobile at 70oC…
  33. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 33
    LEAD process technology pilot Low pressure electro-thermally assisted drive Pilot Plan 18.2 MM capital and operating costs over pilot life (3 years) IETP funding (30%) 5.5 million Production Injection Facilities Producing…
  34. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 34
    Bitumen Liege carbonates AOC Shell Excellent reservoir quality vuggy porosity in Grosmont 3 Grosmont carbonate / Leduc OV wells drilled Combined with legacy gas wells to evaluate and map resource Stacking of 3 Grosmont…
  35. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 35
    2014 Capital spending
  36. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 36
    2014 Capital spending plan Total Capital: 70 - 80MM Q1 2014 Q2-Q4 2014 Total Wells Capital Wells Capital Wells Capital West Central Deep 3 gross Up to 7 Up to 10 18 MM 21-26 MM 39-44 MM Basin (2.0 net) (3.5 net) (5.5 net)…
  37. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 37
    Investment thesis
  38. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 38
    Strong annual growth 2013 (versus 2012) Oil and NGL production growth of 12% Mannville oil production growth of 24% Deep basin production growth of 14% Funds flow and funds flow per share growth of 19% Debt reduction from year…
  39. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 39
    Sum of the parts NAV Per Share 1,250.00 8.50 Unrisked NAV 7.19/Share Undeveloped Land 1,000.00 6.80 Bitumen Mannville PI Risked NAV 4.91/Share 750.00 5.10 Viking/Colorado PI Conventional Shallow Gas PI Reserve Based NAV…
  40. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 40
    PMT investment thesis Asset base repositioning for resource-style oil and NGL diversification successful Mannville heavy oil delivering results with material secondary recovery growth potential Edson Wilrich liquids-rich gas…
  41. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 41
    FOR ADDITIONAL INFORMATION Susan L. Riddell Rose President & CEO Cameron R. Sebastian Vice President, Finance & CFO 3200, 605 5 Avenue SW Calgary, Alberta Canada T2P 3H5 800.811.5522 TOLL FREE 403.269.4400 PHONE 403.269.4444 FAX…
  42. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 42
    Appendix 2013 Annual Results
  43. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 43
    2013 Top 5 strategic priorities 1. Maximize value of Mannville heavy oil 2. Position for growth of Edson liquids-rich gas 3. Manage downside risk 4. Advance and broaden portfolio of high impact opportunities with risk managed…
  44. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 44
    2013 Top strategic priorities 1. Maximize Value of Mannville Heavy Oil 13 Mannville oil pools discovered by year end 2013 (7 Lloyd; 5 Sparky; 1 Basal Quartz) Drilled 37 horizontal wells (35.7 net) for 49 million Increased heavy oil…
  45. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 45
    2013 Top strategic priorities 2. Position for Growth of Edson Liquids-Rich Gas Drilled 5 (2.5 net) horizontal wells Increased gas and NGL production 12% to 4,894 boe/d (29.4 MMcfe/d) Reserve additions of 13.64 MMboe offsetting…
  46. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 46
    2013 Top strategic priorities 3. Advance and Broaden Portfolio of High Impact Opportunities with Risk-Managed Investment Elmworth Sold for 77.5 MM to Crystallize Value Drilled and completed vertical well to continue majority of South…
  47. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 47
    2013 Top strategic priorities 4. Manage Downside Risk and Reduce Debt Decrease Costs Operating costs down 5% from 2012 (2013 - 75.4 MM) Interest expense decreased 11% from 2012 (2013 - 28.9 MM) G&A down 10% from 2012 (2013 - 24.5…
  48. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 48
    2013 Top strategic priorities 5. Prepare to Maximize Value from Shallow Gas in Gas Price Recovery Operating Costs Shallow gas op costs reduced 7.4MM (12.9%) from 2012 Suspended shutin wells and pipelines and removed unused onsite…
  49. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 49
    Full year capital spending Total Capital: 96.7 Total 2013 Wells Capital Mannville Heavy Oil 37 (35.7 net) 49 MM (1) West Central Deep Basin 6 (3.0 net) 35 MM Land, Seismic, ARO & Other 12 MM Total 96 MM 1)…
  50. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 50
    Production highlights Oil & NGL production 412 bbl/d to 3,860 bbl/d, a 12% from 2012 levels Mannville heavy oil grew 24% Change in processing at Edson reduced NGL Natural gas production 11% to 88.9 MMcf/d due to shallow gas declines…
  51. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 51
    Funds flow Change Year Ended December 31 from 2012 Oil & Gas Price 32.0 MM % ( Millions) 2013 2012 Change Oil & NGL Production 9.7 MM Revenue 210.9 206.5 2 Hedging Gains 24.3 MM GOB Royalty 8.9 6.9 29 Gas Production 10.2 MM…
  52. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 52
    Balance sheet reconciliation Year Ended December 31 ( Millions) 2013 2012 % Change Exploration & Development 96.7 79.7 21 Acquisitions, net of Dispositions (51.6) (164.5) (67) Total Capital Expenditures 45.1 (84.8) (153)…
  53. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 53
    Reserve distribution PNP/PUD 2PNP/2PUD 2PDP Total Reserves = 62.4 MMbbl Mannville Heavy Oil PDP Deep Basin PDP Eastern Shallow Gas 2PNP/2PUD 2PDP PNP/PUD 2PDP PDP - Proved Developed Producing PDP 2PNP/2PUD…
  54. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 54
    Reserve value distribution PNP/PUD Total NPV 10 = 622 million 2PNP/2PUD Mannville Heavy Oil 2PDP Deep Basin PDP PDP Eastern Shallow Gas 2PDP 2PNP/2PUD PNP/PUD 2PNP/2PUD PDP PDP - Proved Developed Producing…
  55. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 55
    Gas price risk management Type of Contract Term Volumes Fixed Price Futures Price(1) % of 2013 (/GJ) Natural Gas (GJ/d) (/GJ) Production(2) AECO Fixed Price Apr Jun 2014 20,825 4.01 4.45 18% Financial AECO Fixed Price Apr Oct…
  56. CIBC ENERGY CONFERENCE – Perpetual Energy Inc – slide 56
    Oil price risk management Type of Term Volumes Fixed or Floor Ceiling Price Futures % of 2013 Contract Price (/GJ) Price(1) Oil & NGL (bbl/d) (/bbl) (/bbl) (/bbl) Production(2) WTI collars Mar Dec 2014 1,500 US 86.67 US 95.15 US…

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