Cardinal Energy Ltd. · TSX:CJ
Cardinal Energy — Investor Presentation (January 2017)
23 slides from Cardinal Energy's investor presentation, January 2017
Slide 1: Built to Last
BUILT TO LAST January 2017
Slide 2: Built to Last
Built to Last Low Debt Low Decline Strong Capital Efficiencies 2
Slide 3: Operating the Business
Operating the Business Amount of capital required to keep Committed Capital production flat year over year Cash flow from Target 30 – 35% simple Dividend Payments Operations payout ratio Balance increased Free Cash Flow decline from drilling with low decline acquisition opportunities 3
Slide 4: Cardinal Energy Profile
Cardinal Energy Profile Shares Outstanding(1) TSX: CJ Basic 74,151,719 Fully Diluted 77,752,968 Annual Dividend ($/share) $0.42 2016 average production (boe/d) 14,600 2017 forecast average production (boe/d) 17,000 % Oil and NGLs (2016 Forecast) 83% Net Bank Debt (1) $68 MM Bank line $150 MM/Borrowi
Slide 5: Convertible Debentures
Convertible Debentures TSX: CJ.DB Issue Size: $50,000,0001 Face Value: $100 Issued: October 6, 2015 Term: 5 Years Conversion Price: $10.50 Coupon Rate: 5.5% 1. Can be Redeemed in Whole or in Part after Year 3. 5
Slide 6: Dividend Commitment
Dividend Commitment Dividend Commitment $120,000,000 140% $100,000,000 120% 100% $80,000,000 80% $60,000,000 60% $40,000,000 40% $20,000,000 20% $‐ 0% Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016F Cummulative dividends Total payout ratio Dividend $0
Slide 7: Cardinal Asset Base
Cardinal Asset Base Solid Base of Oil Production from 3 Core Areas: 2017 Guidance NORTH Appr. 5,300 – 5,400 boe/d production CENTRAL Appr. 5,600 – 5,700 boe/d production SOUTH Appr. 5,900 – 6,200 boe/d production All areas have extensive development drilling, consolidation and growth potential 7
Slide 8: North
North Comprises of the Mitsue Gilwood unit and approximately 1,200 Boe/d of non operated 5,300 – 5,400 boe/d (primarily 75% working interest) production Production from the North area is expected to be approximately 5,300 – 5,400 boe/d in 2017 Light sweet 41˚ API oil Existing infrastructure
Slide 9: Mitsue Gilwood Units
Mitsue Gilwood Units Discovery in 1964 Developed with vertical drilling from 1964-1988 Pool underwent miscible flood then converted to water flood. Voidage replacement maintained at 1:1 2017 Development Plan 1. Reduce operating costs 2. 5 drills budgeted 3. Re-size infrastructure New facil
Slide 10: Central
Central Dominant land position with over 55 sections of land Oil production under waterflood with less than 10% decline 98% operated, average 95% working interest Multiyear drilling inventory in excess of 40 unbooked locations 5,600 – 5,700 By pass uphole oil drilling targets boe/d 2 dri
Slide 11: Waseca Drilling
Waseca Drilling Drill Economics* Capex $1.2 M Payout 1.3 yrs Capital Efficiency $21,000 F&D $10.00 EUR 119 mbbl IP365 57 boe/d * Based on Sproule YE 2016 prices 11
Slide 12: South
South The majority of base production is currently under waterflood with less than a 12% decline 97% operated, average 94% working interest oil production Control key infrastructure resulting in ½ cycle drilling program Excellent Glauc drilling results to date 5,900 – 6,200 with over 100 unb
Slide 13: Bantry Type Curve
Bantry Type Curve Drill Economics* Capex $1.8 M Payout 1.0 yrs Capital Efficiency $11,000 F&D $12.00 EUR 150 mbbl IP365 163 boe/d * Based on Sproule YE 2016 prices and Cardinal 2106 drill results. 13
Slide 14: Reserve Comparison
Reserve Comparison 3,300 boed 4,825 boed 4,825 boed(1) 1,525 1,525boed boed(1) Proved Developed 1,085/boed(1) Producing Proved Undeveloped Probable 1,525 boed(1) 1,525 boed(1) 1. Source: Scotiabank 14
Slide 15: Hedging
Hedging Hedging 1. Natural gas - 4,996 gj/d swapped at $2.43 for 2017 and 3,333 gj/d swapped at $2.62 for 2018. 2. 4,414 bbl/d swapped for 2017 fixing WCS differential at CAD $18.53. 15
Slide 16: 2017 Guidance
2017 Guidance Operational 2017e(1) 2016e(2) 2015 Average Oil Price $ 55 WTI $ 44 WTI $ 49 WTI Average production (boe/d) 16,800 – 17,300 14,600 11,838 Development capital ($MM)(1) $ 58 $ 35 $ 37 Wells Drilled 18 9 8 Financial Cash flow from operations ($MM) $92 $60 $95 - per share (basic) $1.18 $0.8
Slide 17: Sensitivity – Free Cash Flow
Sensitivity – Free Cash Flow 2017 (WTI) 2017 Budget $50 $55 $60 Development Capital Exependitures (MM) $58 $58 $58 $58 Dividend (MM) $31 $31 $31 $31 Free Cash Flow (MM) $27 $9 $27 $41 *Excludes hedges. 17
Slide 18: Operating Costs
Operating Costs CARDINAL ENERGY LTD. OPERATING COSTS ($/BOE) $34.00 (1) Bantry Acquisition (2) Wainwright Acquisition #1 [3] Wainwright Acquisition #2 wn = ipl mo yw $32.00 (4) Mitsue Acquisition $30.00 ful a nN Nn uw $28.00 vt ee al $76.00 ~ o : 2 g g $24.00 o as a ~ iS i Ey 5 a i a wn N Ss x q uw
Slide 19: Corporate Information
Corporate Information Corporate Headquarters Cardinal Energy Ltd. 600, 400 – 3rd Avenue S.W. Calgary, AB T2P 4H2 Bankers ATB Financial CIBC World Markets Inc. RBC Dominion Securities Inc. Scotia Capital Inc. National Bank of Canada Auditors KPMG LLP Legal Burnet Duckworth & Palmer LLP Reserves Sprou
Slide 20: Analyst Coverage
Analyst Coverage Firm Analyst Phone Email BMO Nesbitt Burns Ray Kwan 403-515-1500 Ray.kwan@bmo.com CIBC Adam Gill 403-216-3405 adam.gill@cibc.com Canaccord Genuity Corp. Sam Roach 403-691-7809 sroach@canaccordgenuity.com Clarus Securities Inc. Robert Pare 403-767-0823 rpare@clarussecurities.com Firs
Slide 21: Advisory
Advisory Forward-looking Statements This presentation contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Cardinal's plans and other aspects of Cardinal's anticipated future
Slide 22: Advisory
Advisory This presentation contains future-oriented financial information and financial outlook information (collectively, "FOFI") about our prospective results of operations, cash flows, payout ratio and components thereof, all of which are subject to the same assumptions, risk factors, limitations
Slide 23: Advisory
Advisory Advisory Regarding Oil and Gas Information The crude oil, natural gas and natural gas liquid reserves and related future net revenue of Cardinal presented herein were evaluated by Sproule Associates Limited ("Sproule") and GLJ Petroleum Consultants (“GLJ“), Cardinal's independent reserves e
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