Oil-Weighted Stability February 2020 Corporate Presentation
About PRAIRIE PROVIDENT • Oil and liquids-focused Alberta E&P with three core areas (Michichi/Wayne, Princess & Evi) which offer significant torque to oil prices • Production weighted 68% to oil & liquids with low base decline • >80% working interests and >80% operatorship allows control over pace of development • Committed to executing a conservative capital program balanced with cash flow to maintain our balance sheet and financial flexibility • Supportive lenders and solid hedging program support capital expenditures and allow conservative management of production, reserves and cash flow • Year-end 2019 estimated reserves-based NAV of $0.16/share on PDP, $0.87/share on 1P and $1.92/share on 2P (1) ; current share price of $0.04 = 25% of PDP NAV (1) Based on year-end 2019 independent reserves evaluation of NPV10 after accounting for estimated long-term debt, less cash collateralized letters of credit, divided by basic shares outstanding. See Reserves Data 2 Disclosure Advisories on slide 23
PPR’S FOCUSED STRATEGY • Development of conventional oil and liquids plays across core Michichi/Wayne, Princess and Evi areas that offer compelling economics • Maintain capital spending levels to approximate adjusted funds flow (1) ; remain flexible to quickly respond to increases or decreases in commodity prices • Pursue accretive business combinations to add scale, improve efficiencies and increase cash flow to drive growth; management has track record of successful acquisitions completed to date • Remain committed to protecting and strengthening the balance sheet through capital expenditure discipline and a robust hedging program (1) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 20 & 21 3
PPR STRATEGIC HIGHLIGHTS • Increased size, scale and self-funded growth potential PPR Snapshot (1) affords opportunity to command increased market 6,071 boe/d awareness Average 2019 production (2)(3) (68% liquids) • 2019 capital expenditures (excl. ARO) were $11.9MM, Base production decline (4) ~19% ~16% below budget (2) 2P reserves (5) 34,467 Mboe • Synergies & operational efficiencies captured with 2P FD&A costs (2)(5) $12.48/boe declining operating costs 2P recycle ratio (2)(5) • 1.5x Improved capital investment efficiency with low annual production decline rate Net debt (2) $111 million • Replaced 163% of 2019 production with reserves Enterprise value (6) $118 million additions and positive technical revisions on a 2P basis (5) Outstanding shares 171 million 1) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 20 & 21 2) As at December 31, 2019 (based on unaudited financial information) 3) 2019 average production of 6,071 boe/d includes 61% in light/medium oil, 4% in heavy oil, 32% in conventional natural gas and 3% in natural gas liquids 4) Excluding two higher decline Princess wells drilled in 2019; 21% including the impact of the Princess wells 5) Based on year-end 2019 independent reserves evaluation, results of which were announced February 3, 2020. See Reserves Data Disclosure Advisories on slide 23 6) Enterprise value is calculated above by adding net debt and equity value, based on a share price of $0.04/share 4
PPR 2019 HIGHLIGHTS • Competed 4 development wells, two each at Princess and Evi with a 100% success rate • Advanced Evi waterflood resulting in incremental reserves assigned to future waterflood expansions • Executed a modest 2019 capital program yet still replaced reserves year-over-year (3) • Recorded significant reserves additions and positive technical revisions at Michichi due to opex reductions (2)(3) • Achieved robust recycle ratios of 1.5x, 14.4x and 3.0x based on FD&A costs of $12.48/boe, $1.29/boe and $6.16/boe for 2P, 1P and PDP, respectively (1)(2)(3) • Reduced overall net debt by $6.4 million on a year-over-year basis (1)(2) • Re-confirmed our senior revolver borrowing base, providing financial stability and flexibility to execute our capital program 1) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 20 & 21 2) As at December 31, 2019 (based on unaudited financial information) 3) Based on year-end 2019 independent reserves evaluation, results of which were announced February 3, 2020. See Reserves Data Disclosure Advisories on slide 23 5
2019 RESERVES HIGHLIGHTS 2P Reserves per Value Volumes (Btax) Basic Share (1)(3)(4) As at December 31, 2019 Conventional Conventional Natural Gas (2) +28% Light & Natural Gas Barrels of Oil Natural Gas (other than Equivalent (4) Medium Oil Heavy Oil Liquids NPV10 ‘16 - ‘19 Solution Gas) (Solution Gas) 0.21 Reserves Category (1)(4)(5) (Mbbl) (Mbbl) (MMcf) (MMcf) (Mbbl) (Mboe) ($MM) 0.18 Proved developed producing 6,065 403 9,063 10,381 329 10,038 135.4 0.15 Proved developed non-producing 137 - - 253 4 183 3.2 0.12 0.09 Proved undeveloped 7,910 459 - 16,905 316 11,502 118.8 0.06 Total proved 14,112 862 9,063 27,540 648 21,723 257.4 0.03 0 Probable 8,004 748 2,448 19,214 383 12,744 180.3 2016 2017 2018 2019 Total proved plus probable 22,115 1,610 11,511 46,754 1,031 34,467 437.7 STEADILY INCREASING RESERVES PER SHARE Through strategic M&A and Based on Sproule’s forecast prices and costs, applicable for the effective date of the independent reserves (1) successful drilling programs within evaluation report. Forecast commodity prices can be found at www.Sproule.com (2) Including both non-associated gas and associated gas but excluding solution gas (gas dissolved in crude oil) challenging environments (3) Per share numbers based on basic shares outstanding at December 31 for the applicable year (4) See Reserves Data Disclosure Advisories on slide 23 (5) Columns may not add due to rounding 6
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 William Roach Operations Corp., Sr. Manager at Ernst & Young LLP Brad Likuski, VP Operations Ajay Sabherwal Manager of Exploitation, Vice President Production at Spyglass Resources Corp., Vice President Engineering at AvenEx Energy Corp. Rob Wonnacott Tony van Winkoop, VP Exploration President and CEO at Arsenal Energy Inc., General Manager of Development at PrimeWest Energy, Co-founder of Venator Petroleum Terence (Tad) Flynn Gjoa Taylor, VP Land Vice President, Land at Arsenal Energy Inc., various land positions of increasing Tim Granger (President & CEO) responsibility with Imperial Oil, Crestar Energy, and Manager, Negotiations at PrimeWest Energy 7
CURRENT ASSET OVERVIEW KEY FOCUS AREAS EVI Michichi/Wayne 34.5 MMboe Lower cretaceous oil/gas Proved + Probable Reserves (1) Year round access Hz development 635,000 Princess PPR Total Net Acres Multi-zone potential Lithic Glauc & Detrital MICHICHI/ Hz and Vt development WAYNE $437.7 MM Evi Proved + Probable NPV10 Value (1) Slave Point light oil – low risk PRINCESS Granite Wash light oil play Emerging waterflood; proven and probable reserves booked ALBERTA (1) See Reserves Data Disclosure Advisories on slide 23 8
PRINCESS (3) Current production (1) : 1,350 boe/d of medium crude oil • Revenue/boe (2) $41.68 • Opex/boe (2) $9.63 • Royalty/boe (2) $7.67 • Operating Netback (2)(3) $24.38/boe Activity: • Drilled and tied in 2 wells in 2019 adding 1.3MMboe of 2P reserves. Since inception PPR has drilled 7 Glauconite wells adding an average of 405 Mboe/well of 2P reserves. • Shot 3D seismic to identify the Glauconite channel and Detrital structures on new lands. • Drilled a stratigraphic test at 12-24 to confirm Glauconite channel Emerging Ellerslie potential on PPR’s acreage: (3) • Competitors on offsetting land have drilled wells with IP30 rates ~200 to 300 bbls/d (3) (1) February 2020 production (2) Based on unaudited Q3 2019 operating results 9 (3) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 20 & 21
EVI Current Production (1) : 1,720 boe/d of light oil Otter WF • Revenue/boe (2) $61.61 • Opex/boe (2) $21.01 • Royalty/boe (2) $6.70 • Operating Netback (2)(3) $33.90/boe Future Outlook: • Further advance waterflood development Evi WF Expansion • Continue the transition of our depletion plan from infill Current WF drilling to waterflood. Evi BTY WF (1) February 2020 production (2) Based on unaudited Q3 2019 operating results 10 (3) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 20 & 21
EVI At Evi, PPR has transitioned its depletion plan from infill Production Plot of CURRENT WF drilling to waterflood. That transition has resulted in changes to reserves and future capital. • Incremental 1.5 MMboe and 1.2 MMboe of 2P and 1P undeveloped reserves (98% liquids), respectively, have been assigned to future waterflood expansions. Minor decline over 4 years • Removal of infill locations in the waterflood areas, has resulted in 1.2 MMboe and 0.9 MMboe of negative technical revisions on a 2P and 1P basis. • The transition from infill drilling to waterflood reduced 1P future capital by $5.3 million; improving the development economics. 11
Recommend
More recommend
