BONAVISTA ENERGY CORP. MAY 2017 SOUTH CENTRAL ALBERTA ASSET OFFERING

Transcription

1 BONAVISTA ENERGY CORP. MAY 217 SOUTH CENTRAL ALBERTA ASSET OFFERING

2 OPPORTUNITY OVERVIEW Bonavista Energy Corp. ( Bonavista or the Company ) has retained National Bank Financial Inc. ( NBF ) as its exclusive financial advisor to assist in an asset sale process The desired structure is a sale of all or substantially all of the interests in the Company s South Central Alberta Assets (the SCA Assets ) OFFERING HIGHLIGHTS ASSET OVERVIEW Total offering includes current production of 5,417 boe/d (14% oil & 35% NGL s) (1) ~78% operated production T4 ~66% working interest in the SCA Assets acreage T39 Production decline of ~13% provides stable and predictable cash flow 217E net operating income of $3.7 million (2) Q4 216 average operating netback of $15.34/boe YE 216 reserves of 28.4 mmboe and BT NPV1% of $29.4 million on a P+P basis (3) JOFFRE RED DEER T38 T37 16 Proved and 1 Probable booked locations P+P RLI of ~15 years LANAWAY T36 Strong liquids weighted package with multi-zone potential T35 Low decline (~12%) Cardium oil production Typical Mannville recoveries of 1 bbl/mmcf CAROLINE GARRINGTON T34 Large inventory of over 26 multi-zone drilling locations, ~1% currently booked T33 Estimated 97 Cardium, 4 Glauconite, and 82 Ellerslie unbooked locations with offsetting industry activity Multiple development opportunities in other horizons including the Elkton, Wabamun, Pekisko and Viking formations HARMATTAN OLDS T32 T31 Strategically owned and operated infrastructure provides for an attractive cost structure, with $8.8/boe (2) operating and transportation costs Extensive network of operated company pipelines, seven oil batteries, and eleven compressor stations CARSTAIRS T3 T29 Access to deep cut infrastructure providing optimal liquids recovery PRODUCTION, FINANCIALS, RESERVES, AND ACREAGE SUMMARY T28 Current Production (1) Financials (2) LOCHEND T27 Oil NGL's Gas % Oil & Liquids Total Op. & Trans. Costs Netback NOI (bbl/d) (bbl/d) (mcf/d) (%) (boe/d) ($/boe) ($/boe) ($mm) AltaGas Harmattan 9-27 Plant T ,96 16,591 49% 5,417 $8.8 $15.34 $3.7 Reserve Volume (3) Reserve Value (BT NPV 1%) (3) LLR Net Acres PDP Proved P+P PDP Proved P+P (mboe) (mboe) (mboe) ($mm) ($mm) ($mm) # # LEGEND Company Land Unit Boundary Gas Plant Company Battery CALGARY T25 T24 12,934 18,637 28,381 $126.8 $149.1 $ ,485 Company Pipeline > 6 Company Compressor 1) Current production based on average from April 1 to April 22, 217; NGL production includes C2+ 2) NOI estimated as Q4 216 annualized; operating cost and netback assumptions are based on Q4 216 Company lease operating statements 3) Based on GLJ's Reserve Report effective December 31, 216 using the January 1, 217 price forecast AltaGas 1 Lines R8 R7 R6 Company Wells R5 R4 R3 R2 R1W5 R29 R28 R27 R26W4 T23 2

3 OPERATING SUMMARY OPERATING HIGHLIGHTS HISTORIC FINANCIAL & OPERATING SUMMARY (2) Current production of 5,417 boe/d (1) primarily from the Cardium, the Rundle Group and the Mannville formations Production is projected to remain fairly flat with low risk optimization opportunities Q1 217 workovers and reactivations added 343 boe/d at a capital cost of ~$323k (<$1,/boe/d) Additional workovers and reactivations have been identified which could provide an additional ~682 boe/d of immediate upside Low cost structure provides strong torque to improving commodity prices 215 annual NOI of $32.6 million at a realized average oil price of $52.9/bbl Q4 216 operating netback increased 77% compared to Q1 216 while realized pricing only increased 46% over the same time period Attractive operating and transportation costs of $8.8/boe during Q4 216 Financial & Operating Summary Fiscal 215 Q1 216 Q2 216 Q3 216 Q4 216 Fiscal 216 Production Oil bbl/d 1, Liquids bbl/d 2,141 2,23 2,7 2,13 1,932 2,38 Gas mcf/d 22,322 2,332 18,221 17,59 16,644 18,57 Total boe/d 7,44 6,51 5,876 5,661 5,485 5,881 % Liquids % 47% 48% 48% 5% 49% 49% Revenue Oil $/bbl $52.9 $36.94 $5.89 $5.4 $57.37 $48.47 Liquids $/bbl $2.51 $15.61 $16.21 $16.83 $24.3 $18.13 Gas $/mcf $2.83 $2.34 $1.83 $2.57 $3.3 $2.43 Total $/boe $24.1 $17.79 $18.41 $2.9 $25.89 $2.6 Royalties $/boe ($1.37) ($.36) ($.71) ($.93) ($1.76) ($.91) % Royalty % 5.7% 2.% 3.9% 4.5% 6.8% 4.4% Transporation $/boe ($.77) ($.73) ($.8) ($.72) ($.74) ($.74) Operating Expense $/boe ($9.32) ($8.) ($8.9) ($1.73) ($8.6) ($8.9) Net Operating Income $/boe $12.63 $8.69 $8. $8.53 $15.34 $1.4 MAIN PRODUCING FORMATIONS NET OPERATING INCOME ($MM) (2) NETBACK SUMMARY ($/BOE) (2) CRETACEOUS COLORADO GROUP FIRST WHITE SPECKLED SHALE COLORADO SHALE CARDIUM SECOND WHITE SPECKLED SHALE FISH SCALE ZONE VIKING JOLI FOU BASAL COLORADO 217E (3) FY 216 FY 215 $3.7 mm $21.6 mm $32.6 mm $. $5. mm $1. mm $15. mm $2. mm $25. mm $3. mm $35. mm Netback Components ($/boe) $3. $25. $2. $15. $1. $5. $. Royalties Operating & Transportation Costs Operating Netback Fiscal 215 Q1 216 Q2 216 Q3 216 Q4 216 Fiscal 216 UPPER MANNVILLE CURRENT PRODUCTION BREAKDOWN (1) HISTORIC PRODUCTION (2) MISSISSIPPIAN MANNVILLE GROUP RUNDLE GROUP UPPER LOWER MT HEAD ELKTON SHUNDA PEKISKO CLEARWATER GLAUCONITIC OSTRACOD ELLERSLIE (BASAL QUARTZ) DETRITAL Gas: 51.% Oil: 13.8% NGL's: 35.2% Production (boe/d) 7, 6, 5, 4, 3, 2, 1, Gas NGL's Oil BANFF Fiscal 215 Q1 216 Q2 216 Q3 216 Q4 216 Fiscal 216 1) Current production based on average from April 1 to April 22, 217; NGL production includes C2+ 2) As per Company lease operating statements 3) Estimated as Q4 216 annualized 3

4 RESERVE SUMMARY RESERVE HIGHLIGHTS GLJ reserve report effective as at December 31, ,381 mboe (48% liquids) of P+P reserves; BT NPV 1 of $29.4 million PDP represents 69% of Total Proved volumes and 85% of Total Proved value TP represents 66% of P+P volumes and 71% of P+P value Significant drilling and optimization potential Over 26 drilling locations identified, of which ~1% are currently booked Future development capital of $84.6 million RESERVE VOLUMES (MBOE) & VALUE ($MM) (1) SUMMARY OF OIL & NATURAL GAS RESERVE VOLUME AND VALUE (1) Company Interest Reserves BT NPV Oil NGL's Gas Total % of P+P 1% % of P+P mbbl mbbl mmcf mboe % $mm % Proved Developed Producing 2,186 4,241 39,42 12,934 46% $ % Proved Non-Producing ,375 1,233 4% $7.8 4% Proved Undeveloped 333 1,651 14,917 4,47 16% $14.5 7% Total Proved 2,613 6,31 58,334 18,637 66% $ % Probable 1,21 3,399 3,815 9,744 34% $6.3 29% Proved + Probable 3,823 9,699 89,149 28,381 1% $29.4 1% P+P FUTURE DEVELOPMENT CAPITAL ($MM) (1) PDP PDNP $5. 9,744 34% 4,47 16% 1,233 4% 12,934 46% PUD Probable $14.5 7% $7.8 4% $6.3 29% $ % Capital Costs ($mm) $4. $3. $2. $1. P+P Reserves: 28,381 mboe P+P NPV1: $29.4 mm $ FORECAST PRODUCTION (1) 7,5 PDP PDNP PUD Probable Production (boe/d) 6, 4,5 3, 1,5 Current Production: 5,417 boe/d (2) ) Based on GLJ's Reserve Report effective December 31, 216 using the January 1, 217 price forecast 2) Current production based on average from April 1 to April 22, 217; NGL production includes C2+ 4

5 CARDIUM ASSET OVERVIEW CARDIUM SUMMARY CARDIUM OVERVIEW Large, contiguous land base within the highly prolific Cardium oil fairway Net Cardium acreage of 38,74 acres Over 1 horizontal drilling opportunities identified (6% booked) Max core porosity >14% (6-4) is inline with log porosity of >15% (16-2) 95% of Cardium production is operated Comprises 32% of net production (3% oil & 3% NGLs) and decline rate of ~12% 76% average working interest in the Cardium acreage Active water injection in three units Additional waterflood optimization/implementation potential Potential for waterflood optimization of the Crossfield Cardium Unit #2, WI ~95.5% Potential incremental recovery CARDIUM A T39 T38 T37 T36 T35 T34 CARDIUM A TYPE LOG UWI: 1/ W5/ UWI: 1/ W5/ Active BNP water flood T33 T32 T31 CARDIUM A 235 1/ W5/ T3 T29 CARDIUM A 1/ W5/ T28.15 UWI: 1/ W5/.1.5 Porosity 2,192. m 2,222.6 m 2,222.8 m 2,222.9 m 2,223.1 m 2,223.3 m 2,223.6 m 2,223.8 m 2,224. m 2,224.3 m 2,224.6 m 2,224.8 m 2,225.2 m 2,225.7 m 2,234. m Permeability (md) LEGEND R8 Active BNP water flood Company Cardium Rights Regional Cardium Trend Cardium Unit Boundary Company Cardium Producers Area Cardium Hz Wells R7 R6 R5 R4 R3 R2 1/ W5/ CROSSFIELD CARDIUM UNIT #2 R1W5 R29 R28 R27 R26W4 T27 T26 T25 T24 T23 5

6 GLAUCONITE ASSET OVERVIEW GLAUCONITE SUMMARY GLAUCONITE OVERVIEW Extensive land base within a newly emerging liquids rich Glauconite horizontal fairway Limited horizontal drilling to date, the area has been developed almost exclusively using vertical wells, minimizing resource risk HOADLEY GLAUC T39 T38 Significant amount of undeveloped upside potential with good well/core control 4 locations identified T37 Active development offsetting Bonavista s lands in the Caroline/Garrington area with encouraging results to date Analogous 1/ W5/2 Glauconite horizontal well placed on production in March 216 with an IP9 of over 73 boe/d and has produced approximately.7 bcf and 61 mbbl of liquids of which 35% are C5+ Bonavista Glauconite reservoir compares favorably with (1/ W5/2 vs. 1/ W5/) 1/ W5/ 1/ W5/2 IP9: ~73 boe/d Cum Gas.:.7 bcf Liquids: ~9 bbl/mmcf T36 T35 GLAUCONITE TYPE LOG & CORE ANALYSIS T34 UWI: 1/ W5/ UWI: 1/ W5/ LEGEND Company Glauconite Rights Regional Glauconite Trend REGIONAL GLAUC T33 Hoadley Glauc Trend GLAUC Company Glauconite Wells Hz Glauconite Producers Vt Glauconite Producers 1/ W5/ T32 R9 R8 R6 R5 1/ W5/2 PRODUCTION PROFILE R7 R4 R3 R2W5 Total Production (boe/d) Jan-16 Mar-16 May-16 Jun-16 Aug-16 Oct-16 Nov-16 Jan-17 Mar-17 6

7 ELLERSLIE ASSET OVERVIEW ELLERSLIE SUMMARY ELLERSLIE OVERVIEW Extensive land base within the Ellerslie/Lower Mannville fairway Thick Ellerslie sandstones are present across large areas of the land base T39 Ellerslie A is the primary target with potential in other Ellerslie sands Core data shows excellent reservoir quality that is oil saturated Majority of wells drilled to date have been vertical with limited horizontal development, minimizing resource risk 82 upside locations with good well/core control Recent activity offsetting Bonavista s land with encouraging results to date Analogous 1/ W5/ Ellerslie horizontal well came on production in June of 213 with an IP9 of over 63 boe/d and has produced approximately 99 mbbl of oil and 1.7 bcf of gas to date 1/ W5/ IP9: 63 boe/d Cum. Oil: 99 mbbl 12/ W5/ T38 T37 T36 ELLERSLIE TYPE LOG T35 UWI: 1/ W5/ UWI: 12/ W5/ 1/ W5/ T34 ELLERSLIE A ELL. A LEGEND Company Ellerslie Rights ELL. A Regional Ellerslie A Trend ELLERSLIE B Company Ellerslie Hz Wells Hz Ellerslie Producers Vt Ellerslie Producers T33 ELLERSLIE C R9 R8 R7 R6 R5 R4 R3W5 1/ W5/ PRODUCTION PROFILE ELL. C Total Production (boe/d) May-13 Nov-13 Jun-14 Dec-14 Jul-15 Jan-16 Aug-16 Mar-17 7

8 PROCESS OVERVIEW National Bank Financial Inc. ( NBF ) has been engaged by Bonavista Energy Corp. ( Bonavista or the Company ) to conduct an asset sale process for the Company The desired structure is a sale of all or substantially all of the interests in the Company s South Central Alberta Assets (the SCA Assets ) Interested parties are not to contact the Company directly. All communications, inquiries and requests for information relating to Bonavista should be made directly to a National Bank Financial Inc. representative listed below CONFIDENTIALITY AGREEMENT ( CA ) Return signed CA to Travis Inlow: Travis Inlow, Investment Banking National Bank Financial Inc. Phone: travis.inlow@nbc.ca A Confidentiality Agreement ( CA ) will be made available on NBF s website at PROCESS TIMELINE Data Room will open the week of May 1 Management presentations will begin the week of May 8 Bid instructions will be provided to parties that sign a CA TECHNICAL PRESENTATIONS/VIRTUAL DATA ROOM ACCESS Upon receipt of a CA, NBF will provide access to all available confidential information and the opportunity to schedule a technical presentation with Bonavista TECHNICAL QUESTIONS/DATA REQUESTS All questions and data requests should be forwarded to Travis Inlow PROPOSAL INSTRUCTIONS AND DUE DATE Proposal instructions and a firm date for receipt of non-binding proposals will be forwarded in due course to interested parties who have executed a CA National Bank Financial Inc. 18, th Avenue S.W. Calgary, AB F: (43) INVESTMENT BANKING CONTACTS Cristina Lopez Managing Director, Investment Banking Ph: (43) E: cristina.lopez@nbc.ca Blair C. Ward Managing Director, Investment Banking Ph: (43) E: blair.ward@nbc.ca Rahim Daredia, P. Eng Director, Engineering Ph: (43) E: rahim.daredia@nbc.ca Ian Berman, P. Geo Director, Geology Ph: (43) E: ian.berman@nbc.ca Arun Chandrasekaran Head of Energy Investment Banking Ph: (43) E: arun.chandrasekaran@nbc.ca Travis Inlow Vice President, Investment Banking Ph: (43) E: travis.inlow@nbc.ca Ryan Hoogendam Associate, Investment Banking Ph: (43) E: ryan.hoogendam@nbc.ca Will MacRae Analyst, Investment Banking Ph: (43) E: will.macrae@nbc.ca 8

9 DISCLAIMER National Bank Financial Inc. ( NBF ) has been retained by Bonavista Energy Corp. ( Bonavista ) to act as its financial advisor in respect to a potential transaction (the Transaction ). This document is delivered on behalf of Bonavista by NBF. All information contained in or enclosed with this document (unless otherwise stated herein) or otherwise received as part of any due diligence process has been provided by Bonavista and has not been independently verified. No representation or warranty, express or implied, is given by Bonavista, NBF, their respective directors, employees, partners or advisors or any other person as to the accuracy or completeness of such information and no responsibility or liability is accepted for any errors, omissions or misstatements, negligent or otherwise, in such information. Accordingly, none of Bonavista, NBF or their affiliates, directors, employees or advisors shall be liable for any direct, indirect, or consequential loss or damage suffered by any person as a result of relying on any statement or omission in this document or any other information or communication received as a part of the due diligence process. This document does not contain all of the information available with respect to Bonavista s SCA Assets or otherwise necessary to evaluate the Transaction. Its sole purpose is to assist the recipient in deciding whether to proceed with a further analysis of Bonavista s SCA Assets and it is assumed, and expected, that each recipient will conduct its own investigation and analysis of Bonavista s operations, financial condition and prospects. The information contained herein is for informational purposes only, and this document is not to be construed under any circumstances to be an offering or solicitation for the sale of securities; a recommendation to purchase, sell, or hold any securities; an offering memorandum as contemplated by applicable securities laws; or an obligation by Bonavista to enter into any proposed transaction. Bonavista may modify the offering procedure at any time, to accept any proposal prior to the closing date for proposals, to alter the dates of the offering procedure, or to withdraw from the process altogether without ascribing any reason thereto and without any liability to any interested party. 9