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INVESTOR UPDATE – Long Run Exploration Ltd.

Long Run Exploration Ltd. · Feb 1, 2014 · 34 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. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 1
    FEBRUARY INVESTOR UPDATE
  2. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 2
    LONG RUN PROFILE Key Metrics 2013 Q3 Production Listing TSX:LRE Shares Outstanding 126 million 48% 52% Market Capitalization 700 million Natural Oil + Gas NGLs Liquidity (shares/day) 400,000 2013 Q3 Production 25,293 boe/d Oil +…
  3. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 3
    DIVIDEND + GROWTH 2014 Targets Yield and Growth Long Run intends to begin paying a dividend in February 2014 in addition to providing shareholders with moderate per share growth Focus on operational efficiency and capital…
  4. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 4
    DIVIDEND + GROWTH 2014 Targets Yield and Growth Expected annual funds flow of 260 million provides approximately 10 percent per share funds flow growth, 4 percent production per share growth Approved capital program of…
  5. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 5
    RESERVES Strong Year-Over-Year Growth Reserve Growth (mmboe) 100 Probable 80 Proved Reserves (mmboe) 29.5 60 Natural Gas Oil + NGLs 40 83.1 47 mmboe 36 mmboe 53.6 20 0 2009 2010 2011 2012 2012 Y/E Reserve…
  6. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 6
    RESULTS AND TRACK RECORD Annual Production Growth 30,000 0.080 0.075 0.073 0.070 Production per share 25,000 0.060 BOE per day 20,000 0.053 0.050 15,000 0.040 0.033 0.030 10,000 0.025 0.022 0.020 5,000 0.010…
  7. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 7
    Q3 2013 NETBACK Montney Redwater 100 100 85.68 -9.85 -2.21 -14.01 80 80 -4.55 59.61 60 55.26 -3.08 60 -8.92 38.71 40 40 20 20 0 0 Revenue Royalties Transportation Op Costs Operating Revenue Royalties Transportation Op…
  8. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 8
    RESULTS AND TRACK RECORD Annual Funds Flow Growth Annual Funds Flow from Operations (mm) Annual Funds Flow from Operations per Share 300 2.50 2.00 250 1.83 2.00 200 1.41 1.50 1.17 150 1.00 100 0.54 0.31 0.50 50 7…
  9. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 9
    RISK MANAGEMENT Downside Protection Oil Hedged as Percentage of Current Production (1) Gas Hedged as Percentage of Current Production (1) 10,000 100% 50,000 100% % Gas Hedged of Forecast Gas Production % Oil Hedged of Current Oil…
  10. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 10
    PEER COMPARABLES Yield Sector 2014e Funds Flow Netback 2014e Debt: Funds Flow 50.00 4.5x 4.0x 40.00 3.5x AVG 30.61 3.0x Debt :Funds Flow per BOE 30.00 2.5x 2.0x AVG 1.8x 20.00 1.5x 1.0x 10.00 0.5x…
  11. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 11
    PEER COMPARABLES Yield Sector 2014e Dividend Payout Ratio 2014e Sustainability Ratio (Dividend + Capex) 100% 200% 90% 180% 80% 160% 70% 140% Dividend as a % of Funds Flow AVG 120% 60% 120% 50% 100% 40% AVG 36%…
  12. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 12
    BUSINESS SUSTAINABILITY Adding Production & Reserves Development of light oil play areas through horizontal technology Ongoing development work targeting oil at Peace River in the Montney and at Redwater in the Viking Multi-year…
  13. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 13
    2014 FORECAST CAPITAL SPENDING Development Drill, Complete, and Equip 138 mm Peace River (Montney) 44 net wells Redwater (Viking) 30 net wells Provost (Viking) 6 net wells 80 net wells Plants / Facilities / EOR 37 mm…
  14. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 14
    KEY PROPERTIES Development Focused Northern Gas Peace River Edmonton Area Long Run Exploration 14
  15. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 15
    PEACE RIVER AREA Dominant Position in Multi-Zone Play 600,000 net acres T87 Primary targets are T85 Triassic age resource Normandville plays targeting oil and T83 liquids-rich gas T81 T79 Current development T77…
  16. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 16
    NORMANDVILLE / GIROUXVILLE Montney T80 Current production of T79 10,200 boe/d (60% Oil + NGLs) Normandville T78 Resource Assessment Normandville Oil Battery 5,000 bbls/d evaluated 92 sections of 15 mmcf/d T77 Peace River…
  17. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 17
    MONTNEY WELL Typical Design True vertical depth 1,000 m Horizontal lateral length 1,200 m Average drilling time 8 days Drill cost 900K Frac size per stage 3-5 tonnes Completion costs 900K Equip & tie in 250K Long Run…
  18. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 18
    MONTNEY Resource Assessment Identifies Significant Resource In-Place For the purpose of the Resource Assessment, 48% of LREs Montney acreage was evaluated by independent third-party engineers Unevaluated Evaluated 301.2…
  19. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 19
    MONTNEY Horizontal Type Curve Economics Historical Type Curve Netback 300 100 250 80 200 60 55.26 -4.55 -3.08 Boe/d -8.92 150 38.71 40 100 20 50 0 0 1 3 5 7 9 11 13 15 17 19 21 23 Revenue Royalties…
  20. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 20
    NORMANDVILLE Substantial Throughput Capacity T80 Original Gas Discovery in T79 1980 in the crestal gas cap First pilot horizontal oil well drilled in 2010 T78 Normandville More vigorous horizontal oil well drilling started in…
  21. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 21
    GIROUXVILLE Substantial Throughput Capacity T80 Original Gas Discovery in 1981 T79 in the crestal gas cap First pilot horizontal oil well T78 drilled in 2010 More vigorous drilling T77 Peace River Area commenced in January,…
  22. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 22
    MONTNEY UPSIDE 1. Have drilled 3 sections at 8 wells per section spacing with no interference 2. If water injection pilots are successful, we will commence full EOR schemes in 2014 3. Range of recovery: Primary 10% to 15%…
  23. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 23
    EDMONTON CORE AREA Redwater & Cherhill Redwater & Cherhill T63 produce a combined 8,500 T61 boe/d (70% oil + NGLs) Redwater T59 Primary targets are Viking T57 /Mannville & Mississippian oil horizons T55 Cherhill / St.…
  24. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 24
    REDWATER Consolidating Light Oil & Facilities Current production 7,000 boe/d (90% oil + NGLs) T62 Viking oil horizontal multi-frac / multilateral play T60 Redwater 38 API oil 45,000 gross acres (70 sections) T58 of…
  25. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 25
    REDWATER WELL Typical Design True vertical depth 700m Horizontal lateral length 800m Average drilling time 4 days Drill cost 400K Frac size per stage 7 tonnes Completion costs 600K Equip & tie in 200K 25 Stage Frac (35m…
  26. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 26
    REDWATER FACILITIES Typical Design Redwater North Compressor Station 2-2.5 mmcf/d T58 Redwater North Redwater Oil Battery 3,000 bbls/d 2.0 mmcf/d Eastgate Gas Plant T57 3.2 mmcf/d Bruderheim North Oil Battery T56 2,000…
  27. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 27
    REDWATER VIKING UPSIDE 1. Improved operating efficiencies, as Long Run now owns gas gathering and processing infrastructure 2. Have drilled 6 sections at 16 wells per section with no interference. We will continue to infill to…
  28. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 28
    REDWATER Type Curve Economics Historical Type Curve Netback 80 100 85.68 -9.85 70 80 -2.21 -14.01 60 50 59.61 60 boe/d 40 40 30 20 20 10 0 0 1 3 5 7 9 11 13 15 17 19 21 23 Revenue Royalties…
  29. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 29
    CHERHILL Emerging play Primarily targeting Banff and T60 Lower Mannville formations True vertical depth of 1,000 T59 Cherhill - 1,500 meters T58 Current production of 1,200 boe/d from the Banff T57 Lower Mannville…
  30. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 30
    FREE FUNDS FLOW BY PLAY Fully Funded Dividend & Capital 140 2014 Capex vs Funds Flow 120 1 2014e Free 11 100 Funds Flow of 60 million Millions 80 34 60 121 109 6 93 40 25 53 46 20 21 0 Peace River Peace…
  31. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 31
    BUSINESS PLAN Focus on operational efficiency and capital discipline Maintain a reasonable balance sheet Provide growth through development of tight oil and natural gas, strategic acquisitions, enhanced oil recovery and…
  32. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 32
    CORPORATE INFORMATION TSX:LRE Contacts Bill Andrew Chair & CEO Corporate Office Long Run Exploration Ltd. (403) 261-6012 Livingston Place, West Tower Suite 400, 250 2nd Street SW Dale Miller President Calgary, AB T2P 0C1 (403)…
  33. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 33
    2014 SENSITIVITIES BASE SENSITIVITY +/- IMPACT (MM) WTI 95.00 +/- 1.00 = 2.1 AECO (GJ) 3.25 +/- 0.10 = 1.8 Edmonton par 91.75 +/- 1.00 = 4.6 FX 0.97 +/- 0.01 = 3.9 Interest % 5.00% +/- 0.25% = 1.0 Long Run Exploration…
  34. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 34
    ADVISORY Forward Looking Statements The following definitions from NI-51-101 and COGE Handbook are used in this presentation: Production means the cumulative quantity of petroleum that has been recovered at a given date. Discovered Oil…

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