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Corporate Presentation – Perpetual Energy Inc

Perpetual Energy Inc · Jan 21, 2015 · 46 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. Corporate Presentation – Perpetual Energy Inc – slide 1
    Corporate Presentation January 21, 2015
  2. Corporate Presentation – Perpetual Energy Inc – slide 2
    Perpetual Energy Inc. DIVERSIFIED RESOURCE STYLE GROWTH ORIENTED ENTREPRENEURIAL EXPLORER, PRODUCER & MARKETER Common shares o/s 150 million Management ownership 25% Share price(1) 0.96 Trading volume(2) 127,300 shares/day…
  3. Corporate Presentation – 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…
  4. Corporate Presentation – Perpetual Energy Inc – slide 4
    Diversified portfolio built to prosper SHALLOW GAS LIQUIDS-RICH HEAVY OIL BITUMEN OTHER GAS Eastern Edson Wilrich Mannville Panny Warwick Gas Alberta Greater Edson Mannville Bluesky Storage Conventional Multi-zone EOR Liege…
  5. Corporate Presentation – Perpetual Energy Inc – slide 5
    Portfolio management strategy CASH FLOW GENERATORS Maximize cash flow Conventional shallow gas Warwick Gas Storage PROVEN MEDIUM AND DIVERSIFYING LONG TERM GROWTH STRATEGIES VALUE STRATEGIES Invest for growth Optimize and…
  6. Corporate Presentation – Perpetual Energy Inc – slide 6
    2015 Top Five Strategic Priorities 1. Grow Greater Edson Liquids-Rich Gas Production, Cash Flow, Inventory, Reserves and Value 2. Optimize Value of Mannville Heavy Oil 3. Maximize Value of Shallow Gas 4. Refine Elements of…
  7. Corporate Presentation – Perpetual Energy Inc – slide 7
    1. Key Priority Grow Greater Edson liquids-rich gas production, cash flow, inventory, reserves and value 8
  8. Corporate Presentation – Perpetual Energy Inc – slide 8
    Edson Wilrich liquidsrich gas To Rosevear Plant (15% WI) Sales Pipeline to Alliance Pipeline To Edson Deep Cut Plant 16-10 Compressor 1-34 Gas Plant Capacity 30 MMcf/d Capacity 60 MMcf/d 10-3 Gas Plant Capacity 30 MMcf/d…
  9. Corporate Presentation – Perpetual Energy Inc – slide 9
    West Edson type curve West Edson Type Curve DC&T 6.4 MM IP 9.0 MMcf/d 9 bbl/MMcf C5+ Reserves 5.6 Bcfe/well NPV10 10.7 MM ROR 168% 30 (15.0 Net) P+PUDs booked 42 additional in prospect inventory *McDaniel July 2014 reserve…
  10. Corporate Presentation – Perpetual Energy Inc – slide 10
    East Edson type curves East Edson SW Type Curve* DC&T 5.1 MM IP 5.5 MMcf/d 20 bbl/MMcf NGL Reserves 3.4 Bcfe/well NPV10 5.0 MM ROR 50% 40 (40.0 Net) P+PUDs booked 20 additional in prospect inventory East Edson NE Type…
  11. Corporate Presentation – Perpetual Energy Inc – slide 11
    East Edson JV transaction details Granted two royalties that work in combination to create a fixed, first-out wedge production GORR Flat 5.6 MMcf/d plus associated liquids of 100 bbl/d until 2022 Declining at 10% per year from…
  12. Corporate Presentation – Perpetual Energy Inc – slide 12
    East Edson JV execution D ec 3 1, Late time data on all wells is impacted by plant capacity as we drill to fill new plant under construction and preferentially test new wells 15 JV wells drilled 12 on production to date…
  13. Corporate Presentation – Perpetual Energy Inc – slide 13
    Greater Edson liquids-rich gas play performance 40% net production growth in 2014 14,000 14,000 Driven by West Edson facility expansion from 15 to 30 MMcf/d net 12,000 12,000 Ramp up to fill existing East Edson facilities with JV…
  14. Corporate Presentation – Perpetual Energy Inc – slide 14
    2. Key Priority Optimize value of Mannville heavy oil 15
  15. Corporate Presentation – Perpetual Energy Inc – slide 15
    Eastern Alberta Conventional heavy oil R10 R9 R8W4 L K G 8 Producing Mannville pools* L K A F G AU JKF G Mannville L G K G L L L F K L F K F C U G K F 6 Lloyd, 1 Sparky, 1 Basal Quartz K F K K AU G G C C…
  16. Corporate Presentation – Perpetual Energy Inc – slide 16
    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…
  17. Corporate Presentation – Perpetual Energy Inc – slide 17
    Waterflood and enhanced oil recovery Mannville I2I Working Interest 66.7% Waterflood Pool OOIP: 35 MMbbl Sparky Mid Type Log Cum Prodn + McDaniel P+P: 1.5 MMbbl 100/09-32-050-08W4/00 (4.2% recovery) technical recovery 19 Horizontals…
  18. Corporate Presentation – Perpetual Energy Inc – slide 18
    Preliminary waterflood response Mannville I2I: GOR dropping; Indications of oil increasing Start of offset injection Mannville B: Fluid rates increasing; Oil cut increasing Start of offset injection Mannville B pool…
  19. Corporate Presentation – Perpetual Energy Inc – slide 19
    Waterflood and enhanced oil recovery scope Select Pools OOIP Cumulative P+P Implied Expected Potential with production Reserves Recovery Primary Secondary to YE 2013 booked at Factor Recovery Recovery and EOR YE 2013 (5-8% (10-15%)…
  20. Corporate Presentation – Perpetual Energy Inc – slide 20
    Mannville heavy oil play performance 60 180 Cumulative Capital 50 130 Transitioned from Capital (MM) 40 growth to value in (MM) 2014 30 80 20 10 30 Drilling capital reduced 0 -20 Rationalized smaller 2009…
  21. Corporate Presentation – Perpetual Energy Inc – slide 21
    3. Key Priority Maximize value of shallow gas 22
  22. Corporate Presentation – Perpetual Energy Inc – slide 22
    Conventional shallow gas Legacy asset base characteristics East Central and Northeast Alberta Cretaceous and Devonian sweet shallow gas < 800m Current production: 60 - 65 MMcf/d Belly River Base declines < 15% Multiple stacked…
  23. Corporate Presentation – Perpetual Energy Inc – slide 23
    Viking/Colorado shallow shale gas 130 TCF Resource In Place Belly River Play Fairway OGIP estimated average 16 Bcf/section Cardium/ Colorado Wells Perpetual Lands 300m gas saturated shale section Viking Proved Undeveloped 6…
  24. Corporate Presentation – Perpetual Energy Inc – slide 24
    4. Key Priority Refine Elements of Production Growth Strategy For 2017 to 2020 25
  25. Corporate Presentation – Perpetual Energy Inc – slide 25
    Future production growth potential Inventory captured and risk assessment on track for future production growth 26 Growth trajectory depends on commodity prices, capital and play performance
  26. Corporate Presentation – Perpetual Energy Inc – slide 26
    Bitumen 527net sections (329,000 net acres) of oil sand leases Variousformation targets and ultimate recovery methods 7potential project areas with varying potential Over 3 billion bbls OBIP independently recognized at Liege…
  27. Corporate Presentation – Perpetual Energy Inc – slide 27
    Bitumen Panny Bluesky Low rate cold flow without 8 m Bitumen solvent or thermal assistance 10 m Bitumen Average pay thickness 11 m Low viscosity bitumen 15,000 cp at 25oC 50,000 cp at 11oC reservoir temp Highly mobile at 70oC…
  28. Corporate Presentation – Perpetual Energy Inc – slide 28
    LEAD process technology pilot Low pressure electro-thermally assisted drive First stage of pilot planned for 2015 Cyclic Heat Stimulation 5 million capital net of 30% IETP funding Evaluating heater technology and validating reservoir…
  29. Corporate Presentation – Perpetual Energy Inc – slide 29
    5. Key priority Reduce Debt and Improve Debt/Cash Flow Ratio 30
  30. Corporate Presentation – Perpetual Energy Inc – slide 30
    Debt reduction 100 Million Target Set in November 2013 Transactions Closed in 2014 West Central AB undeveloped land 3 million Gas over bitumen monetization 23.2 million Mannville non-core 21.6 million East Edson JV net proceeds 120…
  31. Corporate Presentation – Perpetual Energy Inc – slide 31
    Balance sheet Net Bank Debt: 20 million Borrowing base on credit facility - 105 million Next semi-annual redetermination April 2015 3 million of restricted cash remaining in escrow for East Edson JV Senior Unsecured Notes: 275…
  32. Corporate Presentation – Perpetual Energy Inc – slide 32
    2014 Capital spending Total Capital: 184 million 69 million of capital spending funded by JV Partner escrow and not reported by Perpetual Q1 - Q3 2014 Q4 2014 Total Wells Capital Wells Capital Wells Capital West Central 13 gross…
  33. Corporate Presentation – Perpetual Energy Inc – slide 33
    2015 Capital spending 2015 Q1 capital spending of 45 million Q1 2015 Wells Capital West Central 7 gross (1) 42 MM Liquids-Rich Gas (5 net) Waterflood Mannville Heavy Oil 1 MM facilities Recompletions/ Eastern Shallow Gas…
  34. Corporate Presentation – Perpetual Energy Inc – slide 34
    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…
  35. Corporate Presentation – Perpetual Energy Inc – slide 35
    Projected 2015 funds flow 2014 Production of 20,575 boe/d 20,000 boe/d net of East Edson JV Royalty East Edson JV GORR reported as royalty expense, reducing netback 2015 Production of 23,350 boe/d 2015 Cash Flow ( MM) AECO…
  36. Corporate Presentation – Perpetual Energy Inc – slide 36
    Commodity price risk management Futures % of 2015 Volumes Fixed Price Type of Contract Term Price(1) Natural Gas (GJ/d) (/GJ) (/GJ) Production(2) AECO Fixed Price Financial Feb 2015 72,065 2.62 2.58 52% AECO Fixed Price Physical…
  37. Corporate Presentation – Perpetual Energy Inc – slide 37
    Investment Thesis
  38. Corporate Presentation – Perpetual Energy Inc – slide 38
    Strong annual growth forecast 2014 Key diversifying plays production growth of 22% Growth focused at Edson Funds flow and funds flow per share growth of 40% Disposition program of close to 100 million Generated 70 million in…
  39. Corporate Presentation – Perpetual Energy Inc – slide 39
    Sum of the parts NAV Per Share (1) WGS LP valued at prorata 2013 buyback acquisition 28 million (2) McDaniel April 2014 Assumptions Trading at
  40. Corporate Presentation – Perpetual Energy Inc – slide 40
    Key investment highlights High Quality Assets Asset base repositioning for resource-style and diversification successful Edson Wilrich liquids-rich gas inventory proven and highly economic Mannville heavy oil delivering diversified…
  41. Corporate Presentation – Perpetual Energy Inc – slide 41
    FOR ADDITIONAL INFORMATION Additional Susan L. Riddell Rose Information 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…
  42. Corporate Presentation – Perpetual Energy Inc – slide 42
    Appendix
  43. Corporate Presentation – Perpetual Energy Inc – slide 43
    Diversification Warwick Gas Storage 40 Bcf Storage Reservoir Delta Pressure to 47 Bcf 10 Bcf base reserves cushion gas Commercial Park and Loan in place Up to 25 Bcf potential working business gas capacity 30 to 50 year life…
  44. Corporate Presentation – Perpetual Energy Inc – slide 44
    Reserve distribution 120,000 80% 70% 100,000 60% 80,000 50% % Diversifying Assets Proved and Probable Mboe 60,000 40% 30% 40,000 20% 20,000 10% - 0% 2009 2010 2011 2012 2013 2014Q2 2014E Shallow…
  45. Corporate Presentation – Perpetual Energy Inc – slide 45
    Future growth and value creation 2016 - 2020 Edson expansion for additional inventory development West and/or East Edson additional downspacing LIQUIDS-RICH Development of secondary targets including Belly River, Cardium, Second…
  46. Corporate Presentation – Perpetual Energy Inc – slide 46
    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…

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