CORPORATE PRESENTATION. June 2016

Transcription

1 CORPORATE PRESENTATION June 2016

2 Forward Looking Information This document contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words expect, anticipate, continue, estimate, may, will, should, believe, intends, forecast, plans, guidance and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this document contains forward looking statements and information relating to the Company s risk management program, oil, NGLs and natural gas production, capital programs, oil, NGLs, and natural gas commodity prices, and debt levels. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services. Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forwardlooking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company s expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forwardlooking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Page 2

3 Corporate Information Current Production 1,100 boepd Production tested and not tied-in 2,200 boepd (includes 13-19, 8-18, & 8-22) Cash and working capital as of March 31, 2016 $53 million (includes $12 million new gas plant equipment for sale) Dawson and Area Montney land - Gross (Net) sections 178 (160) Estimated average OGIP per section in gas window 40 bcf Liquids-rich development locations delineated - Gross (Net) 160 (128) Total potential locations 500+ Average drill and complete cost < $4 million Average EUR per liquids-rich gas well 900 mboe Capacity of operated facilities (connected to Alliance) 25 mmcf/d Shares outstanding (diluted) (189.3) Management & directors shareholdings (diluted) 7.8% (16.2%) Page 3

4 Upper and Lower Montney 3 Distinct Areas: Develop/Delineate/Explore Doe Development Drilled 3 Lower Montney Turbidite wells to date (B4-19, C4-19, 13-19) Recently announced tested at 1,290 boepd Development inventory of 160 gross (128 net) wells Two Rivers Explore Mica Delineation Drilled 3 Lower Montney Turbidite wells to date: 13-7 Light oil (IP boepd; 60% oil) 8-18 Liquids-rich gas (Test rate of 375 boepd) 8-22 Light oil (Test rate of 712 boepd 50% oil) Doe MICA Delineate Two Rivers Exploration Vertical test drilled (results not disclosed) One additional vertical test scheduled for 2016 Develop b4-19 c Legend Leucrotta Land Page 4

5 Lower Montney Turbidite Play NW Alberta NEBC Pervasive deposit spans townships of land Developed more extensively in Alberta side Two Rivers BC AB. Recent drilling in BC proves high productivity of liquids-rich gas 13-7 LXE oil discovery & 8-22 oil delineation Tower Doe Mica Lower Montney Fairway Legend Leucrotta Land Parkland Sunrise b c4-19 Dawson Lower Montney Producers P. Coupe Gordondale Lower Montney Fairway Page 5

6 Lower Montney Results vs. Expectation Montney Hz Well Performance Indicator Type Well Drill & Case ($K) 2,000 Complete ($K) 2,100 Tie-in ($K) 400 Total ($K) 4,500 Liquids Gas Total Year 1 Avg. Q (boe/d) Recoverable Reserves (mboe) GLJ Pricing (1) NPV10 ($K) (2) PV10 ($K) (3) IRR (%) Payout (yrs) F&D ($/boe) Cap. Eff. Q-12mo. ($/boe/d) 5,120 9, ,806 Notes: (1) Economics based on a Jan 2016 start date using GLJ current price forecast ($US 44.00/bbl WTI; $2.62/GJ AECO; FX 1.38 for 2016). (2) NPV Net Present Value is defined as the present value of future cash flows minus the initial capital. (3) PV Present Value is defined as the present value of future cash flows. Page 6

7 Lower Montney Sensitivity * * Based on drill, complete and equip costs (DC&E) of $4.5 million per well vs pad drilling estimated at $3.7 million DC&E per well Page 7

8 Lower Montney Turbidite Comparison British Columbia Alberta Leucrotta Doe Greater Town Greater Septimus Economic - Assumptions Lower Montney Greater Swan Greater Pouce Coupe Greater Kakwa TD Focus Area 1 TD Focus Area 2 Turbidite Play TD Focus Area 3 TD Focus Area 4 TD Focus Area 5 Well Cost ($mm) IP30 (boe/d) ,000 1, ,067 NGL Yield (bbl/mmcf) % Liquids 11% 13% 21% 3% 11% 38% EUR (mboe) 699 1, , IRR - BTAX* 13% 84% 123% 63% 41% 27% NPV - BTAX ($mm)* * assumes flat realized pricing of Cdn $50 for oil and Cdn $3.00 for natural gas Source: TD Securities Show Me the Montney report, October 6, 2015 Page 8

9 Doe Lower Montney vs Other Montney TD Montney Focus Areas High IRR & EUR TD Focus Area Area # 1 (Greater Town) Area # 2 (Greater Septimus) Area # 3 (Greater Swan) Area # 4 (Greater Pouce Coupe) Area # 5 (Greater Kakwa) Area # 6 (Doe Lower Montney) 6 Source: TD Securities Show Me the Montney report, October 6, 2015 Page 9

10 Infrastructure and Take-Away INFRASTRUCTURE 25 mmcf/d sweet gas plant 63 mmcf/d Alliance meter station Spectra/Westcoast Gathering Line Licensed salt water disposal well Licensed acid gas inj. well Leucrotta Gathering Lines TAKE-AWAY 5 year firm transportation on Alliance (15 mmcf/d escalating to 33 mmcf/d) Alliance Pipeline Up to 60 mmcf/d AECO based gas purchase arrangement Aux Sable contract for NGL s Potential future Pembina pipeline connection Legend Leucrotta Land Westcoast Transmission Spectra McMahon Plant Leucrotta Plant Spectra Doe Plant AltaGas Pouce Coupe Plant NGTL Gas Plant Spectra Pouce Coupe Plant Page 10

11 Why Leucrotta? Low capital costs combined with high IPs and high EURs make the Lower Montney Turbidite play one of the highest ROR projects in North America High GOR light oil and liquids-rich gas places Leucrotta s lands in the sweet spot of the play Over 500 possible Montney locations High production rates per well will allow rapid growth Extensive land base (160 net sections) with potentially over 1.5 billion barrels of OOIP and 3.5 tcf of OGIP (plus NGLs) Fully funded to carry out delineation and development programs Page 11

12 Management & Directors Directors Management Robert J. Zakresky, CA John A. Brussa, B.A., LL.B. Donald Cowie Daryl H. Gilbert, P. Eng. Kelvin B. Johnston, P. Geol. Brian Krausert, B.Sc. Robert J. Zakresky, CA - President and CEO Terry L. Trudeau, P. Eng. - VP Operations and COO Nolan Chicoine, MPAcc, CA - VP Finance & CFO R.D. (Rick) Sereda, M.Sc., P. Geol. - Sr. VP Exploration Helmut R. Eckert, P. Land - VP Land Peter Cochrane, P. Eng. - VP Engineering Tom J. Medvedic, CA Page 12