I nvestor Update December 2012
Cautionary Statements Certain statements contained in this presentation include statements which contain words such as “anticipate”, “could”, “should”, “expect”, “seek”, “may”, “intend”, “likely”, “will”, “believe” and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward-looking information in this presentation includes, but is not limited to: the timing of the Skope process under CCAA; management's current expectations regarding the ability of Pine Cliff to realize on the debt; expected cash provided by operations; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters. All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas trusts to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control. The foregoing factors are not exhaustive. Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits will be derived therefrom. Except as required by law, Pine Cliff disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Statements regarding the past performance of Bonterra Energy Corp. and Comaplex Minerals Corp. are illustrative only and are not indicative of Pine Cliff’s future results. The forward-looking information contained herein is expressly qualified by this cautionary statement. This presentation contains the term barrels of oil equivalent (BOE) which has been calculated on the basis of six thousand cubic feet of gas to one barrel of oil. This conversion ratio is based on energy equivalence primarily at the burner tip and does not represent a value equivalency at the wellhead. The term BOE may be misleading, particularly if used in isolation. -1-
Current Snapshot Corporate Profile Listing TSX Venture: PNE Shares Issued 153.3 million Market Capitalization $111.9 million (as at December 3, 2012; close of $0.73) Insider Ownership Directors and Officers own ~25% Credit Facility $15 million Net Debt < $1 million Value of Liquid Securities (Long-term Asset) ~ $9 million -2-
Experienced Leadership Team Key Personnel Board of Directors Philip B. Hodge , President and CEO George F. Fink, Executive Chairman of the Board Formerly VP Business Development, Penn West Exploration Chairman and CEO, Bonterra Energy; Director, Raging River Exploration Robb D. Thompson , CFO and Secretary Gary J. Drummond CFO and Secretary, Bonterra Energy; formerly CFO, Director, Bonterra Corp . and Universal Energy Group Ltd.; Trustee, Heating Oil Sonde Resources Corp. Partners Income Fund Philip B. Hodge Kristi L. Barr , Controller President and CEO of Pine Cliff; Director, Westport Innovations Inc. Formerly Corporate Controller, Orion Oil & Gas Corp. Chris S. Lee , Senior Geologist Randy M. Jarock Formerly Senior Geologist, Bonavista Energy Corp. Director, Bonterra Energy Corp.; formerly COO, Pine Cliff, President, Bonterra Energy Joe R. Swift , Land Manager Carl. R. Jonsson Formerly Senior Landman, Nuvista Energy Ltd. Principal of Tupper, Jonsson & Yeadon LLP; Director, Bonterra Energy and several other companies F. William Woodward Director, Bonterra Energy -3-
BNE/CMF Superior Historical Growth Success Combined Share Price Cumulative Dist./Div. $90.00 Bonterra IPO $80.00 Closed: July 28, 1998 $70.00 $69.56 Shares issued: 15,755,953 $60.00 Price: $0.20 per share $50.00 Proceeds: $3,151,190 $42.80 $40.00 $30.00 $26.76 $20.00 $10.00 $0.00 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Dec-12 * Based on December 3, 2012 closing price of $42.80 BNE: Superior long-term returns to shareholders Value of a $20,000 investment 09/28/98 would equate to $2,650,000 in dividends and a share value of $4,281,000 at 12/03/12 $10.00 $10.32 Comaplex IPO Share Price Closed: June 8, 1994 Shares issued: 3,500,000 Price: $1.20 per share that was reduced to $0.30 per share due to two stock splits on a 1 for 1 basis shortly after the IPO Proceeds: $3,830,000 $0.00 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 CMF: Superior long-term returns to shareholders Value of a $20,000 investment 06/08/94 would equate to value of $688,000 at 07/09/10 (date of sale) -4-
Building a Familiar Model Assembling a Portfolio of High Return Assets for Long-term Value: Acquire material asset positions to create core area(s) of production along with sustainable cash flow, significant reserves or drilling inventories Maintain a strong balance sheet for more potential counter cyclical acquisitions Accelerate near term oil and liquids drilling and optimization opportunities Strong focus on minimizing overhead and operational expenses Innovatively pursue opportunities that provide above average industry returns for short-term investors and high rates of returns for long-term investors -5-
Revitalized Strategic Focus Closed private placement for net proceeds of ~$5.4 million $120,000,000 $1.00 Market Cap Share Price Purchased the debt and security of Phil Hodge appointed President and CEO; Skope Energy Partners and $0.90 George Fink appointed Executive announces private placement Chairman of the Board $0.80 Closed the acquisition of Geomark Exploration Ltd. $0.70 $80,000,000 Completed a rights offering and private placement for gross $0.60 proceeds of ~$2.9 million Acquired the Carrot Creek assets for $23.5 million $0.50 $0.40 $40,000,000 $0.30 $0.20 $0.10 $8,000,000 - $- $- Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 -6-
Carrot Creek Assets Acquisition Key Highlights Closing Date March 1, 2012 Total Cost $23.5 million Production Approximately 950 BOE per day Production Profile 77% natural gas, 4% oil and 19% liquids 1P Reserves (1) 2,045 MBOE 2P Reserves (1) 3,105 MBOE 1P Net Present Value (10%) $27.0 million 2P Net Present Value (10%) $39.6 million Valuation Metrics $/BOE per day (2) $21,368 $/BOE 1P Reserves $11.49 $/BOE 2P Reserves $7.57 Purchase Price/1P NPV (10%) 87% Purchase Price/2P NPV (10%) 59% (1) An independent reserve evaluation was prepared by McDaniel and Associates Consultants Ltd. effective January 1, 2012 in respect of the Carrot Creek Assets -7- (2) Purchase price does not include land value of approximately $3.2 million; 4,025 hectares at $800 per hectare
Carrot Creek Assets Acquisition First Core Area Multi-Zone Area Targeting Viking, Gething/Ellerslie, Wilrich, Notikewin, Ostracod, Lower Mannville, Fernie Sand & Rock Creek Average Working Interest 31%; Production is 90% operated Land Acquired 49 gross sections; 4,035 net hectares (9,970 acres) High Quality Liquids Production NGLs pricing was 72 percent of oil pricing (Edmonton Par) in Q3 2012 -8-
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