34 slides from Paramount Resources Ltd. Class A's investor presentation, March 2018
Slide 1: Corporate Presentation
Corporate Presentation March 2018
Slide 2: Advisories
Advisories • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount", "PRL" or the "Company") and its future plans and operations, this presentation contains certain forward-looking information and statements. • The projections, estimates and forecasts contained in s
Slide 3: Corporate Overview
Corporate Overview • Founded in 1976; IPO in 1978; TSX: POU • Market Cap: ~$2.4 Bln (133.6 MM shares @$18.00/sh) • Net Debt at Dec 31, 2017 ~$636 MM (1) • Total land position ~3.1 million net acres including: • ~378,000 net Montney acres • ~230,000 net Duvernay acres • 376 MMBoe Proved Reserves; 593
Slide 4: Highlights
Highlights Transaction Highlights • April 2016 sold Musreau Plant ~$565 MM • August 2016 sold Musreau Asset ~$2.1 Bln • December 2016 sold royalty on Cavalier Oil Sands Asset ~$100 MM • December 2016 dividend declared: ~3.8 MM Seven Generations shares ~$120 MM • May 2017 closed the sale of Valhalla
Slide 5: Higher Sales & Stronger Balance Sheet
Higher Sales & Stronger Balance Sheet • Organically grew legacy Paramount production from ~11,000 Boe/d following the Musreau sale to ~37,000 Boe/d in October 2017 through the Karr development program • Returned to pre-disposition production levels in 14 months • Total sales volumes > 98,000 Boe/d i
Slide 6: Strategic Transactions
Strategic Transactions • ~$487 MM acquisition; funded with cash on hand • High quality Wapiti Montney acreage, liquids-rich Montney and Duvernay at Kaybob and lower decline, long-life assets in Central Alberta (including 176,000 net acres of fee simple lands) • Added ~39,000 Boe/d of production (26%
Slide 7: Diversified Montney and Duvernay Assets
Diversified Montney and Duvernay Assets Location Breakeven Breakeven 2021 Wellhead Production Stage of Asset Description Inventory WTI Oil NYMEX Gas Potential (Gross) Development (1) (2) (2) P+P | Total (1) US$/Bbl () US$/MMbtu () Liquids Bbl/d | Total Boe/d(3) 2018 – 2021 Focus Assets Karr Montney
Slide 8: Focus Assets – BTax Return and NPV10
Focus Assets – BTax Return and NPV10 (1) (1) Based on US$50/Bbl WTI & US$3.00/MMbtu NYMEX, US$1.00/MMbtu AECO Basis & FX US$/C$ 0.80. Refer to the heading “Reserves and Other Information” in the Advisories Appendix. 8
Slide 9: Grande Prairie Snapshot
Grande Prairie Snapshot Operational Highlights 2018 Program: • D/C/T 10 wells at Karr • Drill 23 wells; complete 6 wells at Wapiti • Q4 2017 Sales: 31,791 Boe/d (51% liquids) Asset Summary • Three Montney assets in Alberta Deep Basin trend - Wapiti, Karr, and Resthaven/Jayar • Over-pressured liquids
Slide 10: Karr Montney Asset Detail
Karr Montney Asset Detail (1) Operational Highlights • Rig released all 27 (2017) wells within 10% of budget • Increased average frac stages completed per day from ~5 on earlier pads to >10 on most recent pad (high is 17 frac stages in 24 hours) • Average peak 30-day wellhead rate of 1,970 Boe/d (~5
Slide 11: Karr Montney P+P Type-Well
Karr Montney P+P Type-Well (1) Karr West Unit Lateral Length = 3,000m Wellhead IP30 Boe/d 2,112 Proppant Loading = 1,565 lb/ft (2.3 t/m) Stages = 75 Wellhead IP30 Condensate % 67 Total Sales Gas Bcf 4.8 Total Sales Condensate MBbl 569 Total Sales Volume MBoe 1,428 DCET (multi-well pad) MM$ 12.8 Btax
Slide 12: Wapiti Montney Asset Detail
Wapiti Montney Asset Detail (1) Operational Highlights • 9-3 pad drilling begun (total 11 wells in 2018) • Additional 12 wells to be drilled from 5-3 pad • Third party gas plant and infrastructure under construction with scheduled Q2 2019 in-service • Paramount completion design on new wells Asset P
Slide 13: Wapiti Montney P+P Type-Well
Wapiti Montney P+P Type-Well (1) Wapiti Unit Wellhead IP30 Boe/d 2,159 Wellhead IP30 % 56 Condensate Total Sales Gas Bcf 4.9 Total Sales MBbl 500 Condensate Total Sales Volume MBoe 1,408 DCET (multi-well pad) MM$ 12.5 Btax NPV10 MM$ 7.9 Lateral Length = 3,000m Proppant Loading = 1,676 lb/ft (2.5 t/m
Slide 14: Kaybob Snapshot
Kaybob Snapshot (1) Operational Highlights 2018 Program: • D/C/T 21 hz Montney oil wells • Drill 15 hz Duvernay wells from three pad sites • Complete and tie in 9 hz Duvernay wells • Evaluating gas re-routing projects to reduce operating costs • Q4 2017 Sales: 41,531 Boe/d (29% liquids) Asset Summar
Slide 15: Kaybob Duvernay Asset Details
Kaybob Duvernay Asset Details (1) Operational Highlights • Kaybob Smoky 10-35 pad: 4 wells on pad spud • Kaybob South 7-22 pad: 5 wells on pad spud • Kaybob South 7-28 pad: 6 wells planned • Near-term data acquisition projects include fiber for optimizing well placement, well spacing and cluster des
Slide 16: Kaybob Duvernay P+P Type-Well
Kaybob Duvernay P+P Type-Well (1) Kaybob Smoky Unit Lateral Length = ~ 2,700m Wellhead IP30 Boe/d 1,877 Proppant Loading = 2,000 lb/ft (3.0 t/m) Wellhead IP30 Condensate % 69 Total Sales Gas Bcf 2.2 Total Sales Condensate MBbl 469 Total Sales Volume MBoe 929 DCET (multi-well pad) MM$ 11.5 Btax NPV10
Slide 17: Kaybob Montney Oil Development
Kaybob Montney Oil Development (1) Operational Highlights • 22 gross wells were drilled and completed in 2017 • 2018 activity: drill and complete up to 21 horizontal wells Asset Potential • Discovered 2011 with ~150 wells drilled to date • ~32,000 net acres • P+P inventory of 100 locations with an a
Slide 18: Kaybob Montney Oil P+P Type Well
(1) Kaybob Montney Oil P+P Type Well Kaybob Montney Unit Wellhead IP30 Boe/d 545 Wellhead IP30 Oil % 80 Total Sales Gas Bcf 0.6 Total Sales Oil/Condensate MBbl 154 Total Sales Volume MBoe 261 DCET (multi-well pad) MM$ 3.0 Btax NPV10 MM$ 2.2 Btax Return % 68 Payout Months 11 Completion Design Update
Slide 19: Central Alberta & Other Snapshot
Central Alberta & Other Snapshot (1) Operational Highlights 2018 Program: • 2 hz Duvernay wells planned at Willesden Green • 3 hz Glauconite wells planned at Leafland • New well at 02/13-5-39-5W5 had a peak rate of 532 Bbl/d (total producing days 269) • Q4 2017 Sales: 22,090 Boe/d (32% liquids) Asse
Slide 20: Willesden Green
(1) Willesden Green Operational Highlights • Drill 2 hz Duvernay wells from the 4-21-39-4W5 pad • Complete 1 hz Duvernay well Asset Potential • Duvernay Shale Play • 59,686 acres of land (100% WI) • Drilled and completed 4 Hz Duvernay wells to date • 02/13-05 Cum Production to March 6, 2018 • 219.5
Slide 21: 2018 Budget
2018 Budget • 2018 Capex ~$600 million (excluding acquisitions & divestitures) • Plan to drill ~75 development wells and complete ~51 of those wells 51 well completions represent ~12% of PRL’s P+P undeveloped locations (1) • Drilling services to be primarily provided by Paramount's wholly-owned Fo
Slide 22: Midstream & Marketing Strategy
Midstream & Marketing Strategy Midstream Portfolio Positioned for Growth Karr 06-18 • Takeaway capacity secured to manage Montney and Duvernay growth plan through 2021 • Owned and operated infrastructure coupled with 3rd party midstream provides balanced opex structure • Opportunities to increase 3r
Slide 23: Revenue/Boe and AECO
Revenue/Boe and AECO Revenue WTI NYMEX AECO BASIS PROPANE BUTANE ETHANE FX C$/Boe US$/Bbl US$/mmbtu C$/GJ US$/mmbtu US$/Bbl US$/Bbl US$/Bbl 2018 Budget 50.00 3.00 2.37 (1.00) 0.8000 17.50 28.25 11.07 29.21 January 3 2018 Strip 60.37 2.81 1.42 (1.73) 0.8026 25.55 36.53 6.56 30.66 Oil/ Oil/ Condensate
Slide 24: Strategic and Long-Term Investments
Strategic and Long-Term Investments (1) Please refer to the heading “Reserves and Other Information” in the Advisories Appendix. (2) Publicly disclosed by competitor. 24
Slide 25: The New Paramount
The New Paramount ~100,000 Boe/d intermediate E&P company with an extensive portfolio of liquids- rich unconventional plays and the financial strength to exploit those opportunities Significantly Expanded Reserves: 149 MMBoe PDP, 376 MMBoe Proved, 593 MMBoe P+P (1) Scale with Financial Flexibili
Slide 26: Appendix: Additional Information
Appendix: Additional Information
Slide 27: Performance
Performance (1) As evaluated by McDaniel & Associates Consultants Ltd. as of December 31, 2017. 27
Slide 28: Paramount Completion Evolution
Paramount Completion Evolution • Technology and Fluid: Open Hole Packers and Energized Oil • Lateral Length and Stage Spacing: Up to 1,600m and 100m (~16 stages) • Proppant Loading and Proppant Type: Up to 0.6 t/m (400 lbs/ft) and uniform sand size Gen 1 • Cluster Spacing and Pump Rate: Single point
Slide 29: Focus Assets – Btax Breakeven @ 10%
Focus Assets – Btax Breakeven @ 10% (1) (1) Breakeven analysis discounted at 10 percent before tax, based on internal type well assumptions using constant costs, FX rate of $0.80 $US/$C and AECO basis of US$1.00/MMbtu. Breakeven oil prices based on a constant NYMEX gas price of US$3.00/MMbtu. Breake
Slide 30: Advisories Appendix
Lo hs tne diaea: Advisories Appendix Paramournt
Slide 31: Advisories
Advisories Forward-Looking Information Certain statements in this presentation constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "will", "expect", "plan", "
Slide 32: Advisories (con't)
Advisories (con't) the timing and costs of future abandonment and reclamation obligations and potential liabilities for environmental damage and contamination; uncertainties regarding aboriginal claims and in maintaining relationships with local populations and other stakeholders; the outcome of exi
Slide 33: Advisories (con't)
Advisories (con't) Paramount has provided information with respect to certain of its plays and emerging opportunities which is "analogous information" as defined in NI 51-101. This analogous information includes Paramount's internally generated production type curves for certain of its wells and int
Slide 34: Paramount Resources Ltd.
Bal Paramount Resources Ltd. 2800 - 421 7 Avenue S.W. Calgary, Alberta Canada, T2P 4K9 Telephone: 403.290.3600 Facsimile: 403.262.7994 www.paramountres.com Paramournt resources Itd.