Oil-Weighted Growth Engine January 2018 Corporate Presentation
About PRAIRIE PROVIDENT • Oil and liquids focused E&P company operating primarily in Alberta • Low-decline production generates attractive operating netbacks* in current environment ~70% liquids (62% light oil) and ~20% base decline - > 5 years of low cost drilling locations* drives long-term growth engine - Balance sheet well supported by reserves, cash flow and active hedging program • Debt to EBITDAX* currently 1.7x; target of 1x on a rolling 12 month basis - • High working interests and operatorship allows control over pace of development Competition for capital allocation drives enhanced capital efficiencies and IRRs - 2 * Note: See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 24
STRATEGY • Focus on development of conventional western Canadian oil and liquids plays that offer compelling economics in a low price environment Maintain high working interests and operatorship • Maintain and grow production through waterflood and light oil focused development • • Deliver accretive growth through exploitation plus opportunistic acquisitions Competition for capital across areas improves IRRs • • Maintain strong balance sheet through capital discipline and robust hedging program 3
Company OVERVIEW As at January 22, 2018 Market and Financial Summary Shares Outstanding 115.9 MM Management & Board Equity Ownership 3% Market Capitalization $57 MM Total Debt Net of Cash $52 MM Credit Capacity (1) $70 MM 2018 Forecast Adjusted EBITDAX(*) $27 - 30 MM Operational Summary (1) Current Production ~5,000 boe/d 2017 Oil & liquids weighting ~70% Base decline rate ~20% Reserves (YE2017) P+P Reserves (*) 20,677 Mboe Reserve Life Index (P+P) (*) 11.3 years P+P Reserves NPV10 (*) $298 MM PDP Reserves (*) 9,386 Mboe PDP Reserves NPV10 (*) $150 MM (*) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 24 and Reserves Data Disclosure 4 Advisories on slide 25 (1) Applying a USD/CAD exchange rate of $0.80 per US$1.00
FOCUSED ASSET BASE KEY FOCUS AREAS Evi EVI ~2,200 boe/d 773,238 Slave Point light oil – low risk Granite Wash light oil play PPR Total Net Acres 121 sections Emerging waterflood; initial reserves booked 20.7 MMboe Wheatland Proved + Probable Lower cretaceous oil/gas 116 sections; year round access Reserves (1) Hz development WHEATLAND $298.5 MM Princess ~1,600 boe/d Other Proved + Probable Multi-zone potential ~600 boe/d Lithic Glauc & Detrital NPV10 Value (1) PRINCESS 75 sections ~600 boe/d Hz and Vt development ALBERTA (1) See Reserves Data Disclosure Advisories on slide 25 5
MANAGEMENT TEAM AND BOARD Management Board of Directors Tim S. Granger , President & CEO Patrick R. McDonald , Chairman CEO at Molopo Energy Limited, President and CEO at Compton Petroleum Corporation, COO at Paramount Energy, Managing Director at TAQA North, COO at PrimeWest Energy Derek Petrie Mimi M. Lai, VP Finance and CFO Vice President, Finance & Controller, Manager, Financial Reporting at Harvest Ajay Sabherwal Operations Corp, Sr. Manager at Financial Accounting Advisory Services Ernst & Young LLP Robert Guy, VP Operations Rob Wonnacott Vice President, Production Operations at Spyglass Resources Corp., Manager, Operations at Ketch Resources Trust, Various Management Positions at Acclaim Energy Trust Terence (Tad) Flynn Tony van Winkoop, VP Exploration President and CEO at Arsenal Energy Inc., General Manager of Development at PrimeWest Energy, Co-founder of Venator Petroleum Tim Granger (President & CEO) Gjoa Taylor, VP Land Vice President, Land at Arsenal Energy Inc. Various land positions of increasing responsibility with Imperial Oil, Crestar Energy, and Manager, Negotiations. At PrimeWest Energy 6
POSITIONED FOR GROWTH • Built an oil-weighted and low-risk asset base in Alberta focused in Wheatland / Princess and Evi, which offers: • 5 years of drilling inventory on internally identified development drilling opportunities (assuming a notional 30 MM$/yr. capital budget) • 2017 activity was reduced to defer capital spending in low a commodity price environment and to refocus on higher net back liquids weighted opportunities • Refocused drilling to the Wayne area to target better economics through higher liquids rate • Attractive Waterflood, Granite Wash and future Slave Point development opportunities at Evi • Increased Princess footprint • Multiple M&A targets in close proximity to focus areas 7 7
2017 RESERVES HIGHLIGHTS Reserves per BOE/Share (1)(2)(3) Volumes Value (Btax) Reserve Category (1)(4) Oil (mbbl) Gas (mmcf) NGL (mbbl) Total (mboe) NPV 10 ($m) 13% YoY 0.190 Increase 0.180 Proved developed producing 6,305 11,302 280 8,469 150,439 0.170 Proved developed non- 328 2,147 24 710 7,290 producing 0.160 0.150 Proved undeveloped 4,074 5,839 125 5,172 50,097 10% YoY 0.140 Total proved 10,707 19,288 429 14,351 207,826 Increase 0.130 Probable 4,639 9,073 176 6,327 90,640 0.120 0.110 Total proved plus probable 15,346 28,361 605 20,678 298,466 0.100 1P 2P 2016 2017 ABILITY TO INCREASE RESERVES PER SHARE IN A CHALLENGING ENVIRONMENT (1) Sproule Report, effective December 31, 2017; company interest gross reserves (2) Sproule Report, effective December 31, 2016; company interest gross reserves (3) Per share numbers based on basic shares outstanding at December 31 8 (4) Columns may not add due to rounding
ATTRACTIVE ECONOMICS & INVENTORY • 2018 estimated capital program of ~$26 million* (flexibility to increase, depending on commodity prices and results) • Cash flow, hedges and access to capital support growth plans Princess Princess Wheatland Evi Granite EVI Average Type Well Economics *(1) Detrital Glauconite Wayne Wash drill Waterflood Drill, Complete, Equip & Tie-in ($MM) $0.7 $1.6 $1.5 $1.1 $1.0 Production, IP30 (boe/d) 65 boe/d 180 boe/d 350 boe/d 66 boe/d n/a Production, IP365 (boe/d) 45 boe/d 130 boe/d 180 boe/d 55 boe/d 60 boe/d EUR (mboe) 55 mboe 150 mboe 260 mboe 133 mboe 150 mboe Rate of return (%) 73% 60% 40% 106% 40% Payout (years) 1.2 yrs 1.4 yrs 1.9 yrs 1.7 yrs 2.5 yrs Finding and development cost ($/boe) $13.55/boe $10.69/boe $5.77/boe $8.41/boe $7.49/boe Operating netback ($/boe) $35.00/boe $29.00/boe $15.00/boe $43.00/boe $40.00/boe Recycle ratio 2.6 2.7 2.6 5.1 5.3 * Note: See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 24 9 (1) Based on Jan 15, 2018 strip pricing – average 2018 WTI – US$63.00/bbl, AECO - C$1.43/mcf, WCS - C$51.50/bbl, Edmonton Light to WTI differential - C$6.00/bbl and USD/
CORE AREA DEVELOPMENT • Drilling program allocated across core areas at Wheatland, Princess and Evi • 2018 estimated capital program of approximately $26 million* Core Area Capex Wheatland / Wayne $9 MM Princess $10 MM Evi Drilling $3 MM Evi Waterflood $4 MM Total $26 MM • Business development opportunities can supplement accretive organic growth • Strong balance sheet and access to capital supports M&A * $26 million 2018 capital program does not include ARO or capitalized G&A 10
R20W4 R21 WHEATLAND WAYNE AREA T28 • Current production of 850 boe/d • 2017 netbacks of approximately $15/boe 2017 activity: • Drilled one well adding 350 boe/d • Added an additional 3.5 sections of land in the Wayne area • Commitment with PSK has been extended to March 31, 2019 T27 • possible additional extension to September 30, 2019 2018 budget: • 3 Ellerslie horizontals in Q1 PPR Land • Additional 3 Ellerslie horizontals in Q3 PPR Wells 2017 Drill 2018 Drills R21 (1) Based on Jan 15, 2018 strip pricing – average 2018 WTI – US$63.00/bbl, AECO - C$1.43/mcf, 11 * Note: See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 24 WCS - C$51.50/bbl, Edmonton Light to WTI differential - C$6.00/bbl and USD/
WAYNE AREA ECONOMICS Average Type Well Economics* Ellerslie Type Well 350 • Capital: $1.5 million/well ROR: 40% (1) 300 • IP30: 350 boe/day Payout: 1.9 years 250 Recycle Ratio: 2.6 Production (boe/d) • EUR: 260 Mboe 200 • Operating Netback: $15.00/boe 150 • NPV10: $740,000 /location 100 50 0 0 5 10 15 20 25 30 35 Producing Months ~700 boe/d * Note: See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 24 12 (1) Based on Jan 15, 2018 strip pricing – average 2018 WTI – US$63.00/bbl, AECO - C$1.43/mcf, WCS - C$51.50/bbl, Edmonton Light to WTI differential - C$6.00/bbl and USD/
PRINCESS Robust Economics & Low-Risk Growth Driver • Current production of 600 boe/d of medium gravity oil • 100% owned oil battery • 2017 netbacks of approximately $27/boe 2017 activity: • Tied in three wells adding 240 boe/d • Acquired 11.5 sections prospective for Glauconite and Basal Mannville • Acquired roughly 30 sections of additional 3D seismic 2018 budget: PPR lands • 3 Glauconite horizontals in Q1 Newly Acquired Lands • Additional 3 Glauconite horizontals in Q3 Well Locations • Current inventory of 15 locations prospective for Glauconite, Basal Mannville and Detrital oil (1) Based on Jan 15, 2018 strip pricing – average 2018 WTI – US$63.00/bbl, AECO - C$1.43/mcf, 13 WCS - C$51.50/bbl, Edmonton Light to WTI differential - C$6.00/bbl and USD/CAD FX - $0.81
Recommend
More recommend
