Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (November 2017)
22 slides from Tamarack Valley Energy's investor presentation, November 2017
Slide 1: Predictable & Sustainable Per Share Growth
Predictable & Sustainable Per Share Growth NOVEMBER 2017 TVE : TSX www.tamarackvalley.ca 1
Slide 2: Forward Looking Information
Forward Looking Information Certain information included in this presentation constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”,
Slide 3: Key Indicators Leading to Self Sustainability
Key Indicators Leading to Self Sustainability Decline Rate 2016: 38% 2017: 32-33% Quality & Inventory Capital Efficiency 7+ years of 1.5 yr. or 2013-2016: $22,000+ less payback 2017: ~$18,000 Sustainable Per Share Growth High CF Netback Clean Balance 2016: $17/boe Sheet H1/17: $19-20/boe 2017 exit <
Slide 4: Tamarack Valley – Key Strategic Guidelines
Tamarack Valley – Key Strategic Guidelines Key Strategy & Principles: Company Snapshot: • Growth company with a long term focus Corporate • Internal processes and skills to grow to a much Share price November 7, 2017 $3.09 larger size than current • Multi-play strategy ensures risk management Shares
Slide 5: 9 Month 2017 Success – Delivering on Promises
9 month 2017 Success – Delivering on Promises What we said we would accomplish in 2017: What we accomplished to end of Q3/17: (Jan 18/17 press release) • 19,000-20,000 boe/d; exit 21,000 boe/d later increased to 22,000 boe/d • Oct 31 - Nov 7 averaged slightly over 22,000 boe/d • $165-175 mm capex •
Slide 6: Key Financial Stats – Improving Year Over Year
Key Financial Stats – Improving Year Over Year 9 mo. 2017 2016 Actuals 2017 Forecast YOY % Increase Actuals Average pricing $43.32/bbl WTI $49.55/bbl WTI 14% - Edm Par $51.69/bbl $59.93/bbl 16% $60.66/bbl AECO (monthly index) $2.00/GJ $2.22/GJ 11% $2.30/GJ Operating income ($/boe) $16.55 $21.50 – $2
Slide 7: Sustainability and 2018 Growth Sensitivities
Sustainability and 2018 Growth Sensitivities 2017E Forecast Maintenance Scenario Growth Scenario Oil (US$WTI) H2/17 @ $48.50 @ $45.00 @ $50.00 @ $50.00 FX (Cdn$/US$) H2/17 $0.80 $0.80 $0.80 $0.80 Oil (Cdn$WTI) H2/17 $57.70 $56.25 $62.50 $62.50 AECO (Cdn$/GJ) H2/17 $2.29 $2.55 $2.55 $2.55 Funds flow
Slide 8: Current Hedges Internal Report (as at Nov 7, 2017)
Current Hedges Internal Report (as at Nov 7, 2017) Term Hedge Type Volume Pricing October 1, 2017 to December 31, 2017 WTI fixed price 2,000 bbls/d Cdn $70.83/bbl Q4 2017 average Cdn October 1, 2017 to December 31, 2017 WTI fixed price 600 bbls/d US $55.08/bbl $71.62/bbl January 1, 2018 to March 31,
Slide 9: Improving Capital Efficiency
Improving Capital Efficiency $60,000 60% 52% Capital Efficiency Closed Spur Acquisition Jan 11/17 $50,000 % Corp. Decline 50% $51,590 Capital Efficiency* ($boepd) Decline Rate (%) 37% Acquired 38% $40,000 Wilson Creek 40% Assets 34% 32-33% $30,000 30% $26,740 $20,000 $21,845 Acquired 20% $21,225 Red
Slide 10: First Half 2017 Summary
First Half 2017 Summary Q3 2017 Production BOE/D % Liquids Cardium oil 7,737 54% Viking oil 8,474 69% ALBERTA SASKATCHEWAN Penny oil 1,283 71% Other 3,047 40% Total 20,541 59% VIKING OIL Redwater H1/17 Capital Drills (net) Capex ($ millions) % CARDIUM OIL Edmonton Lloydminster Cardium oil 14.3 $55.6
Slide 11: Wilson Creek Cardium – Growth Through A Downturn
Wilson Creek Cardium – Growth Through A Downturn Closed PWT 9,000 acquisition 8,000 Closed Suncor 7,000 acquisition Production (boe/d) 6,000 5,000 4,000 3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2015 2016 2017 2014 2015 2016 9 mo. 2017 Operating netback ($/boe) $43.32 $21
Slide 12: 2-Mile Cardium Wells – Improving Capital Efficiencies
2-Mile Cardium Wells – Improving Capital Efficiencies Production Rate Over Time 800 Production Rate Cumulative 800 700 700 600 600 OIL PRODUCTION (BBLS/D) 500 500 OIL PRODUCTION (BBLS/D) 400 400 300 300 200 200 100 100 0 0 0 2 4 6 8 10 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
Slide 13: Veteran / Milton Viking Oil
Veteran / Milton Viking Oil 8,000 7,000 Closed Spur 6,000 Production (boe/d) 5,000 4,000 Redwater Viking 3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017 2015 2016 9 mo. 2017 • 8+ years drilling inventory of 1.5 years Operating netback ($/boe) $25.48 $21.56 $25.29 payback or bette
Slide 14: TVE Veteran – Pressure Support Makes Viking Better
TVE Veteran – Pressure Support Makes Viking Better UPPER VIKING UPPER SST-THICKER, TIGHT PERMEABILITY HAMILTON LAKE HIGHER PERMEABILITY ZONE WATER FLOODED IN 80’S Q1/17 drills Q3/17 drills By drilling into the Viking and fracking Q1 infrastructure into the Hamilton Lake, wells benefit Q3 infrastruct
Slide 15: How Does TVE’s Veteran Compare to Industry Viking
How Does TVE’s Veteran Compare to Industry Viking TVE Wells vs. Sproule Consort Type Curves TVE Wells vs. Industry Viking Wells 100 45 45 2017 TVE Wells 2017 TVE Wells Tier 3 140 Peer 1 90 40 40 Tier 4 Peer 2 80 Tier 5 120 Peer 3 Tier 6 35 35 Peer 4 70 Tier 7 Peer 5 30 100 30 Well Count Oil Rate (bb
Slide 16: Veteran Production Performance
Veteran Production Performance 6,000 Proposed 2018 Expanded Battery Capacity 10,000-12,500 BOE/d 5,500 Current Battery Capacity 5,000-5,500 BOE/d 5,000 4,500 4,000 3,500 BOE/d 3,000 2,500 Base Production 2017 Drills - Oil 2,000 2017 Drills - Gas 1,500 1,000 500 0 16
Slide 17: Quick Payback Drilling Inventory
Quick Payback Drilling Inventory (<1.5 years) November 2017 1,400 Current drilling inventory for Redwater Ellerslie payouts of 3.0 years or less with 1,224 1,200 Viking COS of 70% of greater approx. 1,126 locations at $70, Hatton 1,091 1,215 locations at $90 Penny 1,000 995 Quick Payback Drilling In
Slide 18: Summary
Summary Lever Off Strengths - Historical Operational Execution: • Delivered better than guided results on three major asset acquisitions over the past 3 years (Wilson Creek Cardium and Redwater Viking, Penny) • Delivering better than guided results on Spur Viking acquisition • Strategic infrastructu
Slide 19: Appendix
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Slide 20: Key 6 Month Objectives and Look-back
Key 6 Month Objectives and Look-back What we did in Objectives for What we said we would do H1 2017… H2 2017 … Averaged 18,572 boe/d (with 1,070 boe/d Average 18,500 – 19,000 boe/d H1/17 on $75 million Achieve production guidance by averaging curtailed due to third party downtime) on $83 capex resul
Slide 21: Veteran Viking 2017 Drilling Program Performance
Veteran Viking 2017 Drilling Program Performance 300 Increased Pumping Equipment IP90 of 87 bbls/d H2/2017 Wells 58% increase to average Veteran Field Average average for H2/17 250 production for wells that Q1 Type Curve drills had pump upgrades Q2 Type Curve To Be Optimized 200 Oil Production (bbls
Slide 22: Other Core Areas
Other Core Areas Wilson Creek Mannville Liquids Rich Gas Hatton Heavy Oil 800 1,000 700 Production (boe/d) 800 600 Production (boe/d) 500 600 400 400 300 200 200 100 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2014 2015 2016 2017 2016 9 mo. 2017 2014 2015 201
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