EPAC OIL & GAS INVESTOR CONFERENCE. June 12, 2013

Transcription

1 EPAC OIL & GAS INVESTOR CONFERENCE June 12,

2 Future Oriented Information (See additional advisories at the end of this document) In the interest of providing information regarding Paramount Resources Ltd. ("Paramount" or the "Company"), including management's assessment of the Company's future plans and operations, this presentation contains certain forward-looking information and forward-looking statements. The projections, estimates and beliefs contained in such forward-looking information and statements necessarily involve a number of assumptions and are subject to known and unknown risks and uncertainties which may cause the Company's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. The material assumptions, risks and uncertainties are referred to in the advisories contained in Appendix A. Accordingly, shareholders and potential investors are cautioned that events or circumstances could cause actual results to differ materially from those predicted. Any use of information contained within this presentation is expressly forbidden. 2

3 Corporate Profile Q production: 22,591 Boe/d (~85% gas) 95.4 MM shares outstanding Market $37.50/share: $3.6 billion > 50% insider ownership 1.2 million net acres undeveloped land (December 31, 2012) Net Debt: $713 MM (March 31, 2013 pro forma equity offering) 2013 Capital Expenditure Guidance: $650 MM 2013 Production Guidance: Avg 21,000 Boe/d-25,000 Boe/d (1) 2014 projected production to attain > 50,000 Boe/d 3 (1) Production reliant on availability of downstream NGLs transportation and processing capacity

4 Core Areas Average Production (Boe/d) Q1/2013 Kaybob 14,156 Grande Prairie 4,844 Southern 2,028 Northern 1,563 Total Boe/d 22, Capital Budget: $650 MM (includes Strategic Investments) 4

5 Kaybob Cretaceous Gas Resource Significant liquids-rich gas resource exists within Deep Basin tight sand reservoirs CRETACEOUS GAS SANDS DGIIP PER SECTION 70 Bcf/Section Average DGIIP(1) Bcf per section DGIIP(1) Bcf EUR per vertical/directional well(1) ~ 5+ Bcf EUR per Hz well(1) > 10.0 Tcf DGIIP net to PRL(1) 5 1) Internal estimates: DGIIP denotes Discovered Gas Initially In Place and EUR denotes Estimated Ultimate Recovery.

6 Dunvegan Hz Wells Hz Dunvegan well at Resthaven Tested 11.3 MMcf/d(1) at 6.2 MPa IP: 8.3 MMcf/d Producing ~2 MMcf/d Cost: $8.3 MM d/c/t 6 1) Please refer to the heading "Test Results" within the "Advisories" section of this presentation for further information

7 Falher Hz Wells Hz Falher well at Musreau Tested 16.4 MMcf/d(1) at 20.8 MPa IP: 12 MMcf/d Producing ~2 MMcf/d Cost: $8.6 MM d/c/t 7 1) Please refer to the heading "Test Results" within the "Advisories" section of this presentation for further information

8 Falher Production 8

9 Economics of Kaybob 4.9 Bcf Horizontal Falher Well * Based on processing through a refrigeration facility 9

10 Falher Drilling Time Improvements 10

11 Falher Completion Cost Improvements 11 * Data points not included in trend

12 Montney Gas Resource Liquids-rich Montney gas play Paramount holds ~229 sections (~125,000 net acres) (335 incl. Karr) of Montney rights 2011 drilling included 5 Hz Montney wells: tested MMcf/d(1) +NGLs 2012 program included seven Hz Montney wells; tested 14.5 MMcf/d(1) +NGLs 8-17 tested 5.5 MMcf/d(1)+NGLs 102/9-31 tested 11.6 MMcf/d(1) +NGLs 102/13-36 tested 10.6 MMcf/d(1) +NGLs 102/16-31 tested 10.5 MMcf/d(1) +NGLs 102/15-33 tested 8.1 MMcf/d(1) +NGLs WOC Montney 2013 program: Drilled eleven of approximately 20 wells planned Offset activity indicating exciting test rates of over 10 MMcf/d + NGLs Paramount estimates 70+ Bcf/section DGIIP(2), ~15 Tcf DGIIP(2) + NGLs in total 12 1) Please refer to the heading "Test Results" within the "Advisories" section of this presentation for further information 2) Internal estimates: DGIIP denotes Discovered Gas Initially In Place

13 Montney Cross - Section 13

14 Paramount Musreau/Resthaven Montney Lands 1) For Paramount well test results please refer to the heading "Test Results" within the "Advisories" section of this presentation for further information. Test results from Competitor wells were obtained through publicly disclosed information. 14

15 3.7 Bcf Montney Type Curve 15 * Based on processing through a refrigeration facility

16 Montney Wellbore Placement Placement of the wellbore matters: 1. Penetration rates 2. Accessing the best part of the reservoir 3. Toe up/toe down can effect the long term rates/eur s(1) of the wells 16 1) EUR denotes Estimated Ultimate Recovery.

17 Montney Drilling Time Improvements Pad drilling/pad layout Bits/muds/motors Well design: monobores/orientation/reservoir placement Toe up/toe down: effects on production Natural gas fueled rigs 17

18 Montney Completion Cost Improvements Cemented liners/openhole packers (ECP s) Plug and perf/sliding sleeves Frac sizing/spacing/ clusters Frac fluid/fluid handling Pumping techniques Frac fluid recycling Proppants Flow back/production practices 18 * Data points not included in trend

19 Kaybob Plant Capacity Current Capacity Gross Raw Capacity MMcf/d Net POU Raw Capacity MMcf/d Est. Net POU Sales Capacity (1) Boe/d Musreau Refridge Plant ,500 Resthaven Plant ,000 Smoky Plant ,500 Kakwa Plant Pembina Musreau Processing Capacity ,800 Subtotal ,500 Future Capacity Musreau Phase II Deep-Cut (Q4 2013) ,000 Musreau Stabilizer Expansion 12,000 Smoky/Resthaven Deep-Cut (Q3 2014) ,500 Subtotal ,500 Projected Total ,000 Behind pipe well inventory at April 30, 2013; 45 (35.5 net) wells 19 1) Please refer to the heading Estimated Net Sales Capacity within the Advisories section for further information

20 Process Flow Chart: Musreau Deep Cut Facility 20 Note: Illustrative example *Based on indicative prices and differentials which are subject to change

21 Illustrative Deep-Cut Mix of Cretaceous and Montney Wells Example Montney Wells Only Example Price 200 MMcf/d x 15% Shrinkage=170 MMcf/d (28,333 Boe/d) Sales Gas 100 Bbl/MMcf: 20,000 Bbl/d NGLs 200 MMcf/d x 23% Shrinkage=154 MMcf/d (25,667 Boe/d) Sales Gas 150 Bbl/MMcf: ~30,000 Bbl/d NGLs Deep-Cut Rich Gas $3.00/Mcf 170 MMcf/d $510, MMcf/d $462,000 Condensate $100.00/Bbl 8,000 Bbl/d $800,000 12,400 Bbl/d $1,240,000 Butane $65.00/Bbl 2,000 Bbl/d $130,000 2,500 Bbl/d $162,500 Propane $35.00/Bbl 4,000 Bbl/d $140,000 5,000 Bbl/d $175,000 Ethane $12.00/Bbl 6,000 Bbl/d $72,000 10,480 Bbl/d $125,760 Total: 48,333 Boe/d $1,652,000/day 56,047 Boe/d $2,165,260/day Royalty 5% ($82,600/day) 5% ($108,260/day) Operating Cost ($0.50/mcf) ($85,000/day) ($0.50/mcf) ($77,000/day) Total: 17.6 MMBoe/year $1,484,400/day $542 MM/year $30.78/Boe 20.5 MMBoe/year $1,980,000/day $723 MM/year $35.25/Boe 21

22 Paramount Deep-Cut Montney - Illustrative Project Economics Paramount s shallow rights will add substantially to the RLI Paramount has de-risked a substantial amount of its land base and thus could have the potential to do this many times Simple Payout after start up is years Resource Needed: 200 MMcf/d x 365 ~ 73 Bcf/year x 10 year RLI = 730 Bcf 70 ~ 50% recovery = ~ 20 Sections Cost 40 (5 MMcf/d wells) x $10 MM/well = $400 MM Gas Plant = Annual Deep-Cut Cash Flow Annual Capital = 20 (3.5 Bcf) wells x $10 MM/well Free Cash Flow Total: $200 MM $600 MM $542 MM/year - $723 MM/year $200 MM/year $342 MM - $523 MM/year 22

23 Located 50 km SW of Grande Prairie Karr-Gold Creek Multi-zone potential, including Halfway, Montney sour and Nikanassin, Gething, Bluesky, Falher sweet commingled gas Current lands ~95,000 net acres (~148 sections) Average 83% working interest Expanded plant and gathering systems to 40 MMcf/d First horizontal Middle Montney well on production: optimizing well performance 23

24 Valhalla Montney/Doig/Boundar y Lake Play 16 wells tied in at restricted rates (facility constraints) Gathering system expansion and additional compression completed 2012 Continued acquisition of strategic producing assets and land Focus on high-liquid yield prospects at East Valhalla 24 *Please refer to the heading "Test Results" within the "Advisories" section of this presentation for further information

25 Birch Completed Hz Montney well with promising results; significant liquids ratio on test Production processed through pilot facility limited to 3 MMcf/d Drilled, completed and tied in two additional horizontal Montney wells Facility modifications completed early December (1)Please refer to the heading "Test Results" within the "Advisories" section of this presentation for further information

26 PARAMOUNT INVESTMENTS 26

27 CAVALIER ENERGY INC. 28

28 Cavalier Energy Inc. Created in December 2011 Experienced team led by CEO Dr. Will Roach (ex UTS) Paramount has contributed its oilsands assets and seed capital to Cavalier Energy Funding at the Cavalier level will be via a combination of equity and debt Assets retained as 100% WI within Cavalier Energy Regulatory application for the development of the first 10,000 Bbl/d SAGD project at Hoole filed November

29 Cavalier Assets Approximately 320 sections gross (316 net) Prospective primarily for conventional oilsands, bitumen in carbonates, and cold-flow heavy oil Hoole Project: 100% WI 1) Resource estimates are Best Estimate based on McDaniel independent engineering reports dated as of October 31, 2011 for Saleski, Granor and Orchid; April 30, 2010 for Eagles Nest; and December 31, 2012 for Hoole. Please refer to the Advisories for a description of the resource definitions. 30

30 Hoole Grand Rapids - 1st Project Grand Rapids Reservoir Φ = 30 %, k = 1 to 4 D d = 250m, h ~ 20m, p = 1,500 kpa Viscosity = 200,000 to 2,000,000 cp McDaniel Best Estimate: DEBIP=1.6 Billion Bbl(1) 75 wells drilled to date; 39 cored 1AA/ W4/00 93 Million Bbl Probable Undeveloped Reserves and 719 Million Bbl Best Estimate Recoverable Contingent Resource(1) Paramount Paramount 2004/02/28 Kwabiskaw Probable Reserves NPV 10%: $379 Million(1) Contingent Resource NPV 10%: $946 $2,982 Million(1) Best Estimate NPV BT 10%: $1.9 Billion(1) 250 Kjoli_fou 275 Kgrand_rp 0 1) Independent evaluation by McDaniel & Associates Consultants Ltd. effective December 31, Please refer to the Advisories for a description of the resource definitions. 31

31 Liard Basin Drilled and completed b-40-i Clean-up test: ~5-14 MMcf/d(1) Tie in planned for late 2013 to evaluate well performance Drilling of d-57-d/94-o-12 to be completed in fall 2013 Recently announced Liard Basin industry test results(2): Bcf / section OGIP ~20% expected recovery ~ Bcf sales gas/section Paramount holds ~180 net sections with production potential from the Besa River shale gas formation (1)Please refer to the heading "Test Results" within the "Advisories" section of this presentation for further information (2)As recently publicly disclosed by a large U.S. public E&P company with significant landholdings in the Liard Basin. The resource evaluation disclosed by such E&P company was not noted as having been independently prepared or prepared by a qualified reserves evaluator or auditor (as such terms are defined in NI ) or in accordance with the COGE Handbook. This information is relevant to Paramount s landholdings in the Liard Basin as the information is in respect of landholdings in the Liard Basin that are close to Paramount s lands in such basin and are, accordingly, likely to have similar geology. 32

32 Liard Basin Cross Section Besa River Shale Gas 33 33

33 Quarterly Operating Results Natural gas and NGLs sales volumes increased 20% in Q despite the impact of property dispositions and 2,000 Boe/d of thirdparty disruptions. Operating expenses decreased due to the sale of higher cost Northern and US properties. Growing production and cost controls are mitigating the impact of lower commodity pricing Paramount has doubled production while maintaining staffing levels and costs 34

34 Reserves Reserve Category Natural Gas BCF Light & Medium Crude Oil MBbl NGL MBbl Boe (6:1) MBoe Proved Producing ,416 4,198 29,501 Proved Non-Producing ,695 10,090 Proved Undeveloped ,769 11,266 Total Proved ,540 15,662 50,857 Reserve Category Natural Gas BCF Light & Medium Crude Oil MBbl NGL MBbl Boe (6:1) MBoe Total Bitumen Reserves MBoe Probable Producing ,373 9,786 9,786 Probable Non-Producing ,784 4,579 4,579 Probable Undeveloped ,942 21, ,710 Total Probable ,099 35, ,076 Total Proved plus Probable ,128 30,761 86, ,933 (1) As at December 31, 2012 as independently evaluated by McDaniel 35

35 Exposure to significant reserve opportunities Kaybob Deep Basin: Cretaceous, Montney Karr: Montney, Nikanassin Valhalla: Montney, Doig Birch: Montney Significant asset value Trilogy MGM MEG Energy Cavalier Energy Horn River/Liard Shale Gas Summary Paramount continues to provide long-term value creation for shareholders 36

36 4700 Bankers Hall West 888 Third Street S.W. Calgary, Alberta Canada T2P 5C5 Telephone: (403) Facsimile: (403)