OIL FOCUSED DEVELOPMENT AND PRODUCTION. August 2013

Transcription

1 OIL FOCUSED DEVELOPMENT AND PRODUCTION August 2013

2 FORWARD LOOKING STATEMENTS This presentation is for information purposes only and is not intended to, and should not be construed to, constitute an offer to sell or the solicitation of an offer to buy securities of Marquee Energy Ltd. ( Marquee ). Certain disclosures set forth in this presentation constitute forward looking information within the meaning of applicable securities laws. Any information contained herein that is not a statement of historical facts is forward looking information. Forward looking information is often, but not always, identified by the use of words such as anticipate, "expect", believes, budget, continue, could, estimate, forecast, intends, may, plan, predicts, projects, should, will and other similar expressions. All estimates and information that describe the Companies future, goals, or objectives, including management s assessment of future plans and operations, constitute forward looking information under securities laws. In particular, this presentation contains forward looking information pertaining, directly or indirectly, to the following: future plans and operations including growth and operational strategies; reserves; future production expectations; capital expenditures and other costs including future operating costs and expenses, and the amounts, timing and sources of funding thereof including potential future operating cash flows; and operating netbacks. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Marquee believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because Marquee cannot give assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this presentation, assumptions have been made regarding and are implicit in, among other things: field production rates and decline rates; the ability of Marquee to secure adequate product transportation, and secure such transportation in a timely and cost efficient manner; the ability to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; the ability to operate its properties in a safe, efficient and effective manner; the ability to obtain financing on acceptable terms; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Forward looking information involves known and unknown risks and uncertainties which include, but are not limited to: exploration, development and production risks; assessments of acquisitions; anticipated success of resource prospects and the expected characteristics of resource prospects; the validity of analogues to other properties and projects; the effectiveness of the application of certain drilling and completion technologies; reserve measurements; availability of drilling equipment; access restrictions; permits and licenses; aboriginal claims; title defects; commodity prices; commodity markets, transportation and marketing of crude oil, liquids and natural gas; reliance on operators and key personnel; competition; lack of diversification; corporate matters; funding requirements; access to credit and capital markets; market volatility; cost inflation; foreign exchanges rates; general economic and industry conditions; health, safety and environmental risks; climate control legislation; and government regulation and taxation. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Forward looking information relates to future events and/or performance and, may prove to be incorrect. Actual results may differ materially from those anticipated in the information provided. Undue reliance should not be placed on forward looking information because the Companies can give no assurance that such expectations will prove to be correct. The forward looking information contained in this presentation is given as of the date hereof and Marquee does not undertake any obligation to update forward looking information except as required by applicable securities laws. 2

3 MARQUEE'S EDGE Demonstrated technical proficiency Significant upside through low-risk development inventory Compelling relative valuation Opportunity 3 Poised for solid growth

4 THE TEAM - TECHNICAL AND EXPERIENCED Richard Thompson President & CEO Roy Evans, CA VP Finance & CFO Steve Bradford VP Land Rob Lemermeyer VP Production Trevor Rath, P. Eng Senior VP Engineering Dave Washenfelder, P. Geol VP Exploration Sam Yip, P. Eng VP Heavy Oil Geophysicist formerly with Cequence, Cyries, Cypress, Cequel and Wascana CFO Base Oil & Gas, Partner KPMG Milestone, West, Twin Butte Canadian Coyote, Base, Petrofund Profico, Renaissance, Canadian Hunter Tamarack Valley, Apache Canada, Wascana Teague, Atco Gas, Webex, Mark 4 Successful record of using technical edge to enhance value

5 CORPORATE SNAPSHOT Share Structure Basic/Fully Diluted Insider Ownership TSX-V: MQL 54.6MM/60.4MM 7.2% (Basic) Credit Facility/Net Debt 3 $70.0MM/$45.7MM Production 4 (63% Oil & NGLs) NPV10 5 (P+P) Tax Pools Undeveloped Land 2,237 boe/d $140.5MM $118MM ~147,000 net acres Net Asset Value 1 Enterprise Value Market Capitalization 2 $117.7MM $2.16/share $76.3MM $30.6MM Notes: (1) Includes internal land value of $22.9MM,net debt & NPV10 2P (2) Based on Marquee closing share price of $0.56 August 21, 2013 (3) Net debt June 30, 2013 (4) June 2013 sales volumes (5) Sproule Reserve Report Dec 31, Significantly undervalued with large growth potential

6 SIGNIFICANT MILESTONES Drilled eleven horizontal wells at Michichi to date. The last four of these wells have been drilled since October Three of these wells have production history and are above our type curve. Production from Michichi has increased from 100 boed at the start of 2012 to almost 1100 boed currently. Gas plant and gathering system acquired in October 2012 upgraded and put on stream Feb Marquee now operates more than 75% of our Michichi production. This contributes to improved volumes and Opex and tiein times for new wells. Increased proved plus probable reserves at Michichi by 330% to 3,301 MBOE and by over 18% to 1,965 MBOE at Lloydminster through drilling in Drilled a total of 10 successful wells at Lloydminster since acquiring the property in March Production from the property currently averages 530 bopd. Now shipping 33% of our oil from Lloydminster by rail to improve netbacks 6

7 barrels of oil equivalent barrels of oil & liquids prod per day per million shares Production Growth August 2013: Current production 2,250 boe/d, weighted 63% to oil and liquids 2,500 2,000 Oil Gas ,500 Liquids/day/million shares , More than doubled liquids production per share

8 OIL FOCUSED ASSET BASE Drilling results and growth in technical knowledge have established the play at Michichi, allowing the company to achieve unprecedented results MQL gas plant LLOYDMINSTER CARROT CREEK PEMBINA MICHICHI 8 COUTTS Marquee land Banff & Detrital production Michichi light oil is the focus of our oil weighted acreage

9 MICHICHI ADVANTAGE 9 Large OOIP ERCB and internal estimates of more than 5 million barrels of oil in place per section Dominant Land Base 118 net sections / 75,000 net acres Extensive Inventory 110+ horizontal oil locations identified on MQL lands through integration of geology and seismic Banff or Detrital zones can be equally prospective as stand alone prospects or as a combined zone target Operational Strength 8mmcf/d gas plant (100% ownership) Multi well pad drilling to reduce capital costs Continuous optimization of drilling & completion techniques to reduce costs, increase both productivity and reserve capture 2013 Capital Program Seven wells budgeted for 2013, first well drilled in Q1 Followup 6 well program commenced July 4, 2013 Land base offers high netback, multi-year drilling inventory

10 MICHICHI CROSS SECTION 8m Detrital Pay 17m Banff Pay 1m Detrital Pay 17m Banff Pay 9m Detrital Pay 3m Banff Pay Ellerslie Detrital Middle Banff Lower Banff Gas Bearing Oil Resource Play Non-reservoir 10 Middle Banff/Detrital zones offer large regional light oil opportunity

11 MICHICHI Geological Model W Detrital Target oil bearing zone Dual Banff/Detrital Target oil bearing zone Banff Target oil bearing zone E Bantry Ellerslie Detrital Middle Banff Limestone MIDDLE BANFF DETRITAL Lower Banff API ( ) Pay (m) Perm (md) Porosity (%) DPIIP (sec) RF (%) Depth (m) Reservoir Limestone (Packstone & Grainstone) Sandstone, Siltstone, Chert Pebble Conglomerate 11 Model indicates significant oil in place in Banff and Detrital zones

12 DRILLING SUCCESS AT MICHICHI 11 horizontal wells drilled to date with 100% success rate, optimization of 11th well underway Production currently 1100 boe/d (>65% Oil & NGLs) with >$52/boe netback on new production MQL Gas Plant The last three wells tied-in have achieved an avg. IP30 of 185 boe/d (75% liquids) The top producer to date is 13-29, which averaged 280 boe/d over the first 80 days of production 3 most recent MQL wells Previously drilled MQL wells Q Drills 12 Marquee has achieved top tier performance in the area 12

13 MICHICHI ECONOMICS Banff/Detrital Hz IP 90 Rate 123 boe/d (1) First Year Average Rate Estimated Median Reserves 112 boe/d mboe Dual Zone Banff/Detrital Total Cost $2.5MM (2) Finding Cost $13.34/boe (3) Cost on Production (First year) $22,320 boe/d Payout Period (months) 17.0 ROR 73% Recycle Ratio 3.9X (BTax) $2.5MM Last 3 wells *Sproule Pricing effective April 30, 2013 Type curve is based on seven of Marquee s horizontal wells which best represent future drilling targets (1) 70% oil &NGL (2) Well cost includes drill, case, completion (multi stage frac) & tie-in (3) Using $52/boed first year netback 13 Top tier rate of return economics based on Marquee well results

14 Cretaceous LLOYDMINSTER Current production >530 bopd 7 net undeveloped sections (98% avg WI) 10+ low risk locations identified before downspacing Recent field netbacks in Q2 of $38/bbl Operating costs close to $20/bbl Currently shipping more than a third of production by rail expected $6/bbl increase in netbacks Low capital cost/low risk drilling opportunities $0.55MM per well Prospective oil targets 525m 710m 14 Lloydminster offers stable cash flow MQL Land MQL Oil Producing Wells MQL Near term opportunities

15 bbl/d LLOYDMINSTER ECONOMICS Median Top MQL Wells First Month Average Rate bbl/d First Year Average Rate bbl/d Estimated Median Reserves mbbl Total Cost (1) MM $0.55 $0.55 Finding Cost $11.00/bbl $5.50/bbl Cost on Production (First year) $18,350 $13,750 Payout Period (months) 14 9 ROR 85% 241% Recycle Ratio 2.7X 5.5X (BTax) MM $0.6 $ Lloydminster Wells Months Top Performing MQL Wells Median (1) Includes drill, complete, equip and tie-in Pricing based on $60/bbl heavy oil wellhead price for 2013 & 2014 *Median well model is based on all 25 MQL producing wells. Top performing MQL wells are based on 10 MQL wells drilled into minimally exploited and/or new pools. 15 New Lloydminster pools offer opportunity to outperform

16 4% 1% (1%) (7%) (21%) (25%) (42%) (48%) 19% 45% 42% 38% 59% 58% 57% 56% 56% 54% 54% 85% 83% 81% 81% 80% 77% 73% 113% 106% 103% 103% 96% 158% 142% WCSB PLAY TYPE COMPARISON ROR 160% Play Type Economics Comparison: ROR per Well 130% Oil Plays Natural Gas Plays 100% 70% Median: 57% 40% 10% -20% -50% Notes: (1) Michichi Horizontal and Lloydminster Vertical as per Marquee estimates. All other estimates as per Peters & Co. Limited research.

17 WCSB PLAY TYPE COMPARISON Number of Years Play Type Economics Comparison: Half Cycle Payouts Oil Plays Natural Gas Plays Median: Notes: (1) Michichi Horizontal and Lloydminster Vertical as per Marquee estimates. All other estimates as per Peters & Co. Limited research.

18 2013 GUIDANCE AND UPSIDE 2013 Average Production Guidance 2,400 boe/d 2013 Exit Production Guidance 2,700 boe/d 2013 Exit Debt to Cash Flow 1 2.4X 2013 Capital Budget 7 Michichi horizontal wells 3 vertical drills at Lloydminster $26MM Notes: (1) Prior to dispositions 18 Active 2013 drilling program designed to grow production

19 WHY MARQUEE? Combination of Value, Success and Growth Trading at a 70% discount to 2P net asset value per share Less half of 1P NAV 100% success rate on drilling to date / established light oil play at Michichi Dual zone opportunities a catalyst to improve productivity of new drills Concentrated asset base with extensive inventory of repeatable, low risk light oil drills Initiatives in place to improve drilling costs and opex Strengthening balance sheet Non core dispositions, G&A reductions, strong hedging program 19 Solid platform for per-share growth

20 ANALYST COVERAGE ACUMEN CAPITAL TREVOR REYNOLDS P: DESJARDINS SECURITIES INC. TIM MURRAY P: DUNDEE SECURITIES CHAD ELLISON P: GMP SECURITIES AARON SWANSON P: MACQUARIE EQUITY RESEARCH RAY KWAN P: NATIONAL BANK FINANCIAL DAN PAYNE P: OCTAGON CAPITAL NAV MALIK P: Independent analysis provides research and perspective

21 CONTACT US Richard Thompson President, CEO & Director Direct: (403) Roy Evans CFO, Vice President Finance Direct: (403) , th Ave SW Calgary, AB T2P 2V6 P: (403) F: (403)