Scotiabank CAPP Conference April 2016 CORPORATE PRESENTATION

Transcription

1 Scotiabank CAPP Conference April 2016 CORPORATE PRESENTATION

2 DISCLAIMER Certain information regarding RMP Energy Inc. ( RMP ) (the Company ) contained within this corporate presentation may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include internal estimates and forecasts and may also include estimates, plans, expectations, opinions, forecasts, projections, indications, targets, guidance or other similar statements that are not statements of fact. The forward-looking statements contained within this corporate presentation are based on Management s assessments of future plans that involve geological, engineering, operational and financial estimates or expectations of future production, reserves, capital expenditures, well project economics, cash flow and earnings. Although the Company believes that such estimates or expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. A number of risks and uncertainties that may or may not be within the control of the Company may cause these results to vary materially from those predicted herein and the reader and/or viewer is therefore cautioned that such information is speculative in nature. Please refer to the Risk Factors outlined in RMP s Annual Information Form for the year ended December 31, 2015, which is available on the System for Electronic Document Analysis and Retrieval ( SEDAR ). Any disclosed and/or presented net present value of future net revenue or cash flows attributable to the Company s reserves are stated without provision for interest costs, general and administrative costs and any income taxes, but after providing for estimated royalties, production/operating and transportation costs, future development costs, other income, and well abandonment costs. It should not be assumed that the undiscounted or discounted net present value of future net revenue or cash flows attributable to the Company s reserves, as estimated or evaluated by the Company or their independent qualified reserves evaluators, represents the fair market value of those reserves. Actual reserves may be greater than or less than the estimates provided herein. 2

3 DISCLAIMER - CONT D Any well economics provided in this presentation are based on the average historical estimates of reserves for wells drilled in the respective areas in which RMP has an interest and there is no certainty that future wells will have similar economics. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. Finding and development costs have been prepared in accordance with National Instrument The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserves additions for that year. Reserves and production data are commonly stated in barrels of oil equivalent ( BOE ) using a six to one conversion ratio when converting thousands of cubic feet of natural gas ( MCF ) to barrels of oil ( BBL ) and a one to one conversion ratio for natural gas liquids ( NGLs ). Such conversion may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. 3

4 DISCLAIMER - CONT D Any drilling locations disclosed within this presentation may relate to four categories: (i) proved undeveloped locations; (ii) probable undeveloped locations; iii) unbooked locations; and, iv) an aggregate total of (i), (ii) and (iii). Proved undeveloped locations and probable undeveloped locations are booked and derived from the RMP s most recent independent reserves evaluation as prepared by InSite Petroleum Consultants Ltd. as of December 31, 2015 and account for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked locations are internal estimates based on the Company s prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources. Unbooked locations have been identified by management as an estimation of the Company s multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which the Company will actually drill wells is ultimately dependent upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been derisked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production. 4

5 RMP ENERGY DASHBOARD CORPORATE Shares outstanding MM 151 Insider ownership % f.d. 9% Market capitalization (Apr 7/16) $MM 208 Net debt (Dec 31/15) - audited $MM 118 Pro forma net debt (Dec 31/15) - post-equity $MM 86 Bank credit facility $MM 150 OPERATIONS Production (Q4 2015) boe/d 11,257 Light Oil & NGL weighting % 46% Operated production % + 95% Operating costs (FY 2015) $/boe 4.90 Drilling activities (2016 YTD) # HZ wells 4 (4.0 net) H MARKET GUIDANCE (1) (Estimates) Production boe/d 10,500-11,000 Light Oil & NGL weighting % 43% Capital Budget - six months $MM 30 Funds from Operations - six months $MM 30 Net debt (Jun 30/16) $MM 118 Pro forma net debt (Jun 30/16) post-equity $MM 86 Note 1: RMP committed to a cash-flow funded first half 2016 capital budget. Budget assumed US$ 42/bbl WTI and C$ 2.50/GJ AECO for the first half. 5

6 boe/d (6:1) STRONG DRILLBIT PRODUCTION GROWTH 12,000 11,782 12,026 10,000 8, MMbbls Oil/NGLs 45% 13.5 MMbbls Gas 55% % BCF 6,872 Proved + Probable Reserves: Year-End 2015 Natgas Light oil NGLs 6,000 5,356 53% 53% 4,000 2, ,472 25% 43% FY2011 FY2012 FY2013 FY2014 FY2015 Horizontal Drilling Programs: 18 wells 17 wells 17 wells 24 wells 15 wells 95% operated production High working interest (+90%) 47% 45% Ownership and control of key oil and gas infrastructure 6

7 BUSINESS STRATEGY FOR PROLONGED COMMODITY PRICE WEAKNESS Maintain a top-tier balance sheet with below average debt and spend within cash flow. Position RMP to thrive with improved commodity prices. Capex program focused on expanding inventory and not production growth. Counter-cyclical land and asset purchases to augment future growth. Maintain a top-quartile, low cost structure and continue to identify more operational efficiencies in the field. 7

8 FFO Netback $/boe BUSINESS STRATEGY FOR PROLONGED COMMODITY PRICE WEAKNESS Positive Cash Flow in Low Oil Price Environment RMP Funds from Operation vs WTI Oil $45.00 $40.00 Field Netbacks Opex Low Cost Structure $ $35.00 $30.00 $30.40 $ $25.00 $23.66 $ $ $15.00 Assumes: WTI US$/Bbl AECO Gas price $2.50/GJ Fx 0.70 US$/C$ 15% Royalty rate Cash costs ~ C$11/boe (Opex, Transportation, G&A, Bank Interest) $10.00 $5.00 $9.56 $7.97 $7.22 $5.81 $4.90 $- FY2011 FY2012 FY2013 FY2014 FY2015 G&A ($/boe) $3.91 $2.87 $2.57 $1.83 $1.62 Bank Interest ($/boe) $0.49 $1.16 $1.23 $0.90 $0.97 8

9 VALUE DRIVER INITIATIVES POSITIVE IMPLICATIONS FOR INVENTORY EXPANSION AND ENHANCEMENT Waskahigan Hybrid Slick-Water Completion Success Increased well EURs new completions yielding very positive results. Improved well economics. Increased organic inventory of economic drilling locations. Ante Creek Secondary Recovery Waterflood application approved by AER. Waterflood performance models indicate potential for significant additional oil recovery. Secondary recovery waterflood pilot injection planned for July Ante Creek Exploration Delineation Drilling Step-out exploration drilling in 2016 to the south of core six section production area. 36 sections at 100% W.I. at Ante Creek Counter-cyclical Land Accumulation at Gold Creek 48 sections at 99% W.I. accumulated at ~ $300 hectare. Targeting Montney formation: utilize RMP s extensive geoscience and technical acumen. 9

10 OPERATING AREAS Montney light oil and gas exploration and development Ante Creek Waskahigan/Grizzly Gold Creek Kaybob Added 51,200 acres of land in 2015 Other Assets Pine Creek - Wilrich Ricinus - Ellerslie Duvernay Big Muddy Bakken/Birdbear Montney Assets Other Assets Acreage Primary Acreage Area (net acres) Area Formation (net acres) Ante Creek 22,528 Ante Creek Duvernay 47,360 Waskahigan/Grizzly 48,320 Pine Creek Falher/Wilrich 2,525 Kaybob 16,555 Ricinus Glauconite/Ellerslie 3,240 Gold Creek 30,400 Big Muddy Bakken/Birdbear 33,339 Total: 116,843 Total: 86,464 10

11 REGIONAL MONTNEY FAIRWAY Significant land position in the Montney fairway. 187 gross (184 net) sections in fairway; ~ 99% W.I. Extensive low risk development inventory. Opportunities to increase land position. Owned and operated field infrastructure at Ante Creek and Waskahigan Ante Creek Waskahigan Wells Drilled Drilling Inventory Booked Locations 7 52 % Booked Locations 17% 26% P+P EUR avg. (mboe) D&C cost ($000s) 2,800 4,000 11

12 John Ferguson President & CEO INVESTOR RELATIONS Dean Bernhard VP Finance & CFO Corporate Corporate Website: CORPORATE INFORMATION Transfer Agent/Registrar Computershare Calgary, AB Toronto, ON Stock Exchange Listing TSX Trading Symbol: RMP Auditors KPMG LLP Calgary, AB Lending Banks Bank of Nova Scotia National Bank HEAD OFFICE RMP ENERGY INC. Suite 1200, th Avenue S.W. Calgary, Alberta, Canada T2P 2V6 (403)