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INVESTOR UPDATE – Long Run Exploration Ltd.

Long Run Exploration Ltd. · Mar 11, 2014 · 35 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
    MARCH 2014 INVESTOR UPDATE
  2. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 2
    LONG RUN PROFILE Key Metrics Listing TSX:LRE Shares Outstanding 126 million Market Capitalization 650 million Liquidity (shares/day) 400,000 2013 Q4 Production 27,003 boe/d Oil + NGLs 14,771 bbls/d Gas 73.4 mmcf/d Average Oil…
  3. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 3
    DIVIDEND + GROWTH 2014 Targets Yield and Growth Long Run began paying a dividend in 2014 in addition to providing shareholders with moderate per share growth Focus on operational efficiency and capital discipline Maintain a…
  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, 3 percent production per share growth Approved net capital program of…
  5. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 5
    LONG RUN Strong Reserve Growth Reserve Growth (mmboe) 100 Probable 80 Proved 35.0 2013 Reserve Highlights Reserves (mmboe) 60 P+P NAV BT 8% of 8.99 97.7 per share 35 40 62.7 Increased P+P reserves 17% 20 per…
  6. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 6
    RESULTS AND TRACK RECORD 30,000 Annual Production Growth 0.080 0.075 0.073 0.070 25,000 Production per share 0.053 0.060 20,000 BOE per day 0.050 15,000 0.040 0.030 10,000 0.020 5,000 0.010 13,189 25,094…
  7. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 7
    2013 NETBACK Montney Redwater 100 100 74.91 (8.78) 80 80 (1.98) (13.35) 60 53.90 60 50.80 (5.33) (2.93) (8.90) 36.74 40 40 20 20 - - Revenue Royalties Transportation Operating Field Revenue Royalties Transportation…
  8. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 8
    RESULTS AND TRACK RECORD 300 2.50 Annual Funds Flow from Operations per Share Annual Funds Flow Growth Annual Funds Flow from Operations (mm) 2.00 250 1.83 2.00 200 1.41 1.50 150 1.00 100 0.50 50 129 230 260 0…
  9. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 9
    2014 RISK MANAGEMENT Excluding calls Oil Hedged (2014 - 62%) Gas Hedged (2014 - 64%) 10,000 100% 50,000 100% 8,000 80% 40,000 80% 6,000 60% 30,000 69% 60% (Mcf/d) (Bbl/d) 66% 64% 67% 62% 62% 59% 57% 4,000 40% 20,000…
  10. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 10
    PEER COMPARABLES Yield Sector 2014e Sustainability Ratio (Dividend + Capex) 2014e Funds Flow Netback 200% 60.00 180% 50.00 160% Dividend + Capex as a % of 140% 40.00 120% AVG 110% AVG 33.30 Funds Flow per BOE…
  11. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 11
    PEER COMPARABLES Yield Sector 2014e Dividend Payout Ratio 2014e Debt: Funds Flow 90% 4.5x 80% 4.0x 70% Dividend as a % of Funds Flow 3.5x 60% 3.0x 50% Debt :Funds Flow 2.5x 40% 2.0x AVG 1.8x AVG 35% 1.5x 30%…
  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 NET CAPITAL SPENDING Development Drill, Complete, and Equip 138 mm Peace River (Montney) 43 net wells Redwater (Viking) 40 net wells Provost (Viking) 2 net wells 85 net wells Plants / Facilities / EOR 37 mm…
  14. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 14
    KEY PROPERTIES Development Focused Northern Gas Peace River Area ALBERTA Edmonton Area Long Run Exploration 14
  15. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 15
    PEACE RIVER AREA Dominant Position in Multi-Zone Play ALBERTA 600,000 net acres T87 T85 Primary targets are Normandville T83 Triassic age resource plays targeting oil and T81 liquids-rich gas T79 T77 Current…
  16. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 16
    NORMANDVILLE / GIROUXVILLE Montney Current production of ALBERTA 10,000 boe/d (60% Oil + NGLs) T79 Normandville Resource Assessment evaluated 92 sections of land in Montney Normandville fairway Oil Battery 5,000 bopd T77 15…
  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 Estimated Single Well Netback 300 Long Run 2014 Montney Hz Oil 60 54.26 (8.60) 250 73 Wells 50 (3.08) (8.65) Total Production (Boed) 200 40 33.93 150 30 50…
  20. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 20
    NORMANDVILLE Montney Oil Play Original Gas Discovery in ALBERTA 1980 in the crestal gas cap T79 First horizontal oil well drilled in 2010 Normandville More vigorous horizontal oil T77 well drilling started in the fall of…
  21. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 21
    GIROUXVILLE Montney Oil Play Original Gas Discovery in 1981 ALBERTA in the crestal gas cap T79 First pilot horizontal oil well drilled in 2010 More vigorous drilling T77 commenced in January, 2012 Peace River Area with…
  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. Expanding waterflood pilots during 2014. With success, full implementation will occur in 2015 3. Range of recovery: Primary 10% to…
  23. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 23
    EDMONTON CORE AREA Redwater & Cherhill ALBERTA Redwater & Cherhill T62 produce a combined 7,500 boe/d (70% oil + NGLs) Redwater T60 T58 Primary targets are Viking /Mannville & Mississippian T56 oil horizons T54…
  24. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 24
    REDWATER Consolidating Light Oil & Facilities Current production 7,000 boe/d ALBERTA (90% oil + NGLs) T62 Viking oil horizontal multi-frac play Redwater 38 API oil T60 45,000 gross acres (70 sections) of Redwater North…
  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 5-7 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 Redwater North Compressor Station T59 4.5 mmcf/d Redwater North T58 Redwater Oil Battery 5,000 bbls/d 4.0 mmcf/d Eastgate Gas Plant T57 1.0 mmcf/d Bruderheim North Oil…
  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. 16 wells per section for optimal drainage 3. Implement initial water injection scheme in 2013.…
  28. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 28
    REDWATER Type Curve Economics Historical Type Curve Estimated Single Well Netback 80 100 88.07 (6.49) 70 90 (3.84) (13.70) 80 60 70 64.04 50 60 40 50 30 40 30 20 20 10 10 0 0 1 4 7 10 13 16 19 22 Revenue Royalty…
  29. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 29
    CHERHILL Emerging Play Primarily targeting Banff and Lower T60 ALBERTA Mannville formations True vertical depth of 1,000 - 1,500 T59 meters T58 Current production of approximately 1,200 boe/d T57 primarily from the Banff…
  30. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 30
    BOYER Natural Gas Torque ALBERTA Producing approximately 18 MMcf/d Shallow decline gas (8%/year) 710,000 net acres Low operating costs of 1.75/Mcf Current drilling density less than 1.5 wells per section 70 MMcf/d of…
  31. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 31
    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…
  32. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 32
    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…
  33. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 33
    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)…
  34. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 34
    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…
  35. INVESTOR UPDATE – Long Run Exploration Ltd. – slide 35
    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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