SUSTAI NABLE DI VI DEND & GROW TH November 2018
Cardinal Profile Shares Outstanding TSX: CJ Basic (1) 116.0 MM Diluted (excluding debentures) 119.6 MM 2018 Annual Dividend ($/ share) $0.42 2018 Average Production Guidance (boe/ d) 21,000-21,500 Light oil & NGL’s ( bbls/ d) 9 ,7 7 5 ( 4 6 % ) WCS medium quality oil (bbls/ d) 8,700 (41% ) Natural gas (boe/ d) 2,775 (13% ) Annual Decline Rate + / - 10% Reserves ( Mm boe) ( 2 ) ( 3 ) Proved and Developed Producing (“PDP”) 71.0 Total Proved (“1P”) 78.8 Total Proved Plus Probable (“2P”) 104.7 RLI 2P (years) 13.7 Net Bank Debt ( 1 ) ± $ 2 0 0 MM Bank line $325 MM Tax Pools $ 1 .5 B (1) As at September 30, 2018 (2) As at December 31, 2017 (Company interest reserves) 2 (3) See Advisory
2019 Objectives Mandate: Maintain dividend Reduce operating costs Maintain base production with 2-3% growth Reduce debt 3
Op Cost Reduction Initiatives W ainw right: Oil blending facility opportunities Independent power generation House Mountain: Independent power generation Mitsue: Oil blending facility opportunities Cogen power generation Electrical charges make up $4-$5/ boe of our operating costs. 4
Decline Rates Source: Scotiabank, Statsbook, May 2018 5
Growth in 2019 Focus Areas for Growth in 2019: Bantry Midale Grande Prairie 6
Bantry Large land base focused on Mannville medium conventional oil development Current area production 4,700 boe/ d Owned and operated infrastructure Recently acquired 58 net sections via farmin with identified drilling inventory Cardinal lands Farmin lands 7
Bantry Economics Glauc Econom ics ( 1) Ellerslie Econom ics ( 1) Capex (MM$) 1.8 Capex (MM$) 1.2 IP 365 (boe/ d) 130 IP 365 (boe/ d) 135 EUR (m boe) 160 EUR (m boe) 155 Payout (years) 0.5 Payout (years) 1.2 ROR (% ) 88% ROR (% ) > 400% NPV BT10 (MM$) 3.1 NPV BT10 (MM$) 1.9 (1) Based on WCS C$60/ bbl and AECO $1.50/ mcf 8
Midale = Opportunity (1) Underdeveloped relative to Weyburn analogue Inefficient and insufficient injection Low well density Lower recovery Weyburn Midale Estimated OOIP (1) 1300 7 6 1 Current CO2 Inj. Rate ~ 110 ~ 1 7 (1) (mmcf/ d) Well Density (acres/ well) 20 3 4 Current Recovery ~ 38% ~ 2 1 % Factor (1) (1) See advisory 9
Inefficient & Insufficient Injection 1 0
Midale Development Weyburn Midale Existing Midale CO2 phases Midale 2 0 1 8 -2 0 1 9 Q1 Future Developm ent ( > 2 0 0 potential locations) CO2 enhancement initiatives CO2 Development Areas 3 conversions to CO2 injection Enhance existing phases (2018-2021) 3 new Hz CO2 injectors Expand existing and develop new phases (2019+ ) 4 new production wells Peripheral areas (unit and non unit) Test horizontal multifrac (2019) Offsetting competitor activity Expand multifrac development (2020+ ) 1 1
Grande Prairie 9 well Hz program (2017-2018) Average well performance above expectation Additional drilling 2018 EOR (water flood) to be implemented in 2019 Further development drilling in 2020 2017/2018 New Drills Dunvegan Bar sand - ~ 1350m TVD High quality light oil (~ 75% liquids) 1 2
Inventory - Potential Light Oil Midale GP – Dunvegan GP Mitsue Wainwright – Forestburg Viking House Mitsue – Gilwood infills Mtn House Mtn – Swan Hills infills Wainwright Bantry – Arcs Medium – Heavy Bantry – Glauc, Ellerslie Wainwright – Waseca, Rex Bantry Mitsue - Mannville 1 3
ARO A recent liability program proposed by the Alberta Energy Regulator would require companies to spend 4% of deemed inactive liability per year to satisfy the new requirements. Estimated Cardinal required spend for 2019: $5 million Estimated Cardinal actual spend for 2019: $5-7 million Spend more when oil prices are high, spend required amounts when oil prices are lower. * Area Based Closure (ABC) program announced by AER on July 18, 2018 1 4
Debt Reduction Current: Net Bank Debt $213 million Convertible Debentures $50 million Estim ated 2 0 1 8 Exit: Net Bank Debt $205 million Convertible Debentures $50 million 1 5
Debt Adjusted Free Cash Flow Source: Scotiabank, Statsbook, May 2018 1 6
Cash Flow Growth - Peers Source: Scotiabank, Statsbook, May 2018 1 7
Corporate Information Corporate Headquarters Cardinal Energy Ltd. 600, 400 – 3 rd Avenue S.W. Calgary, AB T2P 4H2 Bankers CIBC World Markets Inc. ATB Financial RBC Dominion Securities Inc. Scotia Capital Inc. National Bank of Canada Auditors KPMG LLP Legal Burnet Duckworth & Palmer LLP Reserves GLJ Petroleum Consultants Contacts Scott Ratushny E scottr@cardinalenergy.ca T 403.216.2706 Laurence Broos E laurenceb@cardinalenergy.ca T 403.727.2021 1 8
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