Canacol Energy Ltd. · BVC:CNEC
Canacol Energy — Investor Presentation (November 2021)
32 slides from Canacol Energy's investor presentation, Nov 5, 2021
Slide 1: Corporate Presentation November 2021
Corporate Presentation November 2021
Slide 2: Why Canacol
Why Canacol Colombia’s Largest Independent Natural Gas Producer Best in Class Assets & Management Sustainability Financial Strength & Discipline • Growing reserves, production, and cash flow • Supplying growing demand for clean-burning • Strong balance sheet • Experienced, focused executive and tech
Slide 3: Canacol at a Glance
Canacol at a Glance TSX : CNE BVC : CNE.C OTCQX : CNNEF Basic Shares O/S (MM) 1 176.7 Share Price (C$) 2 $3.88 Market Cap CAD$686MM - (US$MM) 3 $555 Net Debt (US$MM) 4 $371 Enterprise Value (US$MM) $927 Quarterly Dividend (C$/sh) $0.052 Annual Yield (%) 2 5.4% Gas Reserves (bcf) 5 1P 2P Gross Reserv
Slide 4: Colombia: A Large and Growing Economy
Colombia: A Large and Growing Economy GDP, US$ bn PPP1 1,000 History Forecast 800 600 400 200 0 2000 2005 2010 2015 2020 2025 • Stable Democracy, Political and Regulatory Environment • OECD Member Country 1) Source: IMF World Economic Outlook Database, April 2021, PPP is Purchasing Power Parity. 202
Slide 5: Solving Colombia's Forecast Natural Gas Supply Shortfall
Solving Colombia’s Forecast Natural Gas Supply Shortfall Colombia’s Proved Reserves (TCF)1 Colombia Gas Supply / Demand (mmcf/d)2 6 16% 1,500 14% 12% 4 10% 1,000 8% 6% 2 500 4% 2% 0 0% - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2019 2020 2021 2022 2023 2024 2025 2026 Colombia Proved Reserves Can
Slide 6: Natural Gas Will Lead The Energy Transition In Colombia
Natural Gas Will Lead The Energy Transition In Colombia Climate Change: • Colombia plans to use more gas to meet its Paris Agreement CO2 Emission Target: 51% ↓ by 2030 Energy Demand Projections (PJ)1 2,000 • Gas produces 50% less CO2 than Coal and 30% less than Oil 1,500 34% 25% Air Pollution: 21% 1
Slide 7: Long-Term Supply Shortage = High and Stable Gas Prices
Long-Term Supply Shortage = High and Stable Gas Prices Canacol’s sales and transportation contracts give us a strong competitive advantage in meeting Colombia’s increasing gas demand. 70% Realized Gas Price History (US$/Mcf)1 Volatility of Quarterly Average Prices $6 60% $5 50% $4 40% $3 30% $2 20%
Slide 8: Track Record of Growing Gas Sales
Track Record of Growing Gas Sales 50 330(1) 2021 Guidance: 190 MMcf/d – with interruptible 00 Sales (MMscfd) demand reactivating 50 153 153 MMcf/d – without - 190 interruptible demand reactivating 00 172 50 • Contracts: 143 fixed price take-or-pay contracts 113 00 priced in US$ at the wellhead 81 20
Slide 9: Reserves Underpin Value and Future Production Growth
Reserves Underpin Value and Future Production Growth 771 bcf added through discoveries, extensions and revisions since 2013* 2P Gas Reserves (bcf) 2P After-Tax NPV10 (US$MM) 1,583 624 637 1,270 559 505 1,136 1,083 411 372 945 873 638 482 113 95 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015
Slide 10: 2021 Plan
2021 Plan CAPEX Budget 2021 Gas Sales $19 153 – 190 MMscf/d $21 $140 MM CAPEX $15 $98 - $140 million $85 Drill up to 12 wells 10 drilled, 1 remaining Seismic Acquisition Exploration Wells Admin, ESG, & Seismic & Other Acquire 665 km2 of 3D seismic Facilities & Maintenance & Execute agreements to con
Slide 11: Canacol's Financial Management
Canacol’s Financial Management 2021 Waterfall (US$MM)(1): Flexibility High Sales Case (190 MMcf/d) • Un-drawn credit facilities $30 Revolver US $46MM Low Sales Case (153 MMcf/d) Bridge Loan US $50MM $210 $45 • Capex flexibility to adjust $30 Canacol’s Quarterly Dividend $140 • ~US $30MM per annum •
Slide 12: Financial Flexibility
Financial Flexibility1 Debt Profile: • Revolving Credit Facility: $46 million • Senior Notes: $320 million 3 Year Term, Undrawn Maturity: May 2025, Interest Rate: LIBOR + 4.75% on drawn amounts Interest Rate: 7.25% 1.425% on undrawn amounts Ratings: Fitch BB- & Moody’s Ba3 • Credit Suisse Term Loan:
Slide 13: Solving Cost-Prohibitive Transportation – Jobo-Medellin Pipeline
Solving Cost-Prohibitive Transportation – Jobo-Medellin Pipeline Existing Pipeline Network Fees Prevent Canacol From Supplying the Interior Market Existing network transport fees from the Caribbean to Interior: $5.3-$6.6 USD/Mcf Jobo-Medellin pipeline fees expected to be: - <50% of current Jobo-Mede
Slide 14: Diversifying and Growing Canacol's Gas Market – Jobo-Medellin Pipeline
Diversifying and Growing Canacol’s Gas Market – Jobo-Medellin Pipeline Interior Market Coastal Market - Larger market (60% of Colombia’s Natural Gas Demand) - lots - Canacol has grown to supply >50% of the coastal gas of room to grow market share market, supporting increasing demand at a time of dec
Slide 15: Strategic Gas Sales Contract Signed with EPM
Strategic Gas Sales Contract Signed with EPM – Jobo-Medellin Pipeline Signed strategic contract with the largest utility company EPM: - Take or Pay Contract - Duration: 11 years - Start Date: December 1, 2024 - End Date: November 30, 2035 - 1 year initial volume: ~21 million MMscfpd - Escalates to ~
Slide 16: Jobo–Medellin Pipeline: Project Outline
Jobo – Medellin Pipeline: Project Outline New 20” pipeline will be built between Canacol´s gas treatment plant at Jobo to the city of Medellin located 285 kilometers to the south CAPEX: ~ US$450 million Capacity: 100 mmscfd (option to expand to 200 mmscfd) Target Start-up: December 2024 June 2023 1Q
Slide 17: Positioned for Growth
Positioned for Growth Continue Utilizing Best-in-Class Technology and Large resource base Expertise to De-Risk Large Resource Potential Land (Gas) Blocks 10 Net acres 1.5 MM Prospective resources (Tcf)(1) Un-risked 5.7 Risked 1.7 Prospects & Leads 188 Track record(2) Exploration/appraisal wells 27/3
Slide 18: Industry-Leading Exploration Success Utilizing AVO
Industry-Leading Exploration Success Utilizing AVO* Uncalibrated 3D Calibrated 3D for AVO analysis Includes pay in ft. TVD Discovery Arandala-1 Prospect Cacahuate-1 30 ft. Datil-1 Breva-1 Carambolo-1 29 ft. Nuez-1 Toronja-1 Nelson-5 14 ft. 79 ft. Nelson-6 39 ft. Drilling success rate using AVO = 89%
Slide 19: 2021 Drilling: Exploration Focused
2021 Drilling: Exploration Focused 10 Wells Drilled Block Well Well Type Flauta-1 Exploration VIM 5 Oboe-2 Development Corneta-1 Exploration Milano-1 Exploration Esperanza Canahuate-4 Development Nelson-9 Development San Marcos-1 Exploration Aguas Vivas-1 Exploration VIM 21 Aguas Vivas-2 Appraisal A
Slide 20: ESG Journey
ESG Journey Enabling Colombia's Transition to a Cleaner Energy Future Our 6 year strategy has four priorities: A cleaner energy A safe and A transparent and A society guided by future committed team ethical business sustainable development • Energy, climate change & air • Health and safety • Board o
Slide 21: Supporting Colombia's Transition: Carbon Intensity
Supporting Colombia’s Transition Canacol Beats its Peer Group in GHG Intensity Per Unit of Production1 Canacol is a leader in GHG emissions intensity in oil and gas 80 Canacol industry standards 70 USA Gas 60 Carbon Intensity (kg CO2e / BOE) LatAm Oil Canada Gas Direct and Indirect GHG emissions per
Slide 22: Supporting Colombia's Transition
Supporting Colombia’s Transition A Clean Energy Future Energy Intensity (kwh/BOE) Direct Emissions Intensity (kg CO2 eq / BOE) Water Consumption Intensity Scope 1 & 2 (l/kboe) 31.1% 19.3% 28.6% 13.3% Energy Matrix GHG Footprint Measurement Hazardous Waste Intensity 2020 (kg/kboe) 2017 2018 2019 2020
Slide 23: We are the future, we are energy
We are the future, we are energy A transparent & Ethical Business A culture guided by sustainable development 5 Board Committees Includes new ESG Committee • Communities: 57 projects benefiting > 60,000 px • Bringing gas to communities cooking with wood and coal: • No cases of corruption >5,000 bene
Slide 24: Colombia's Largest Independent Natural Gas Producer
Colombia’s Largest Independent Natural Gas Producer Focused Leader Well Positioned Conventional natural Largest supplier to the Caribbean Coast Only active onshore gas operator gas pure play focused in and largest independent producer country with the most competitive cost Colombia wide structure Si
Slide 25: Appendix: Upcoming/Ongoing Drilling Activity
Appendix Upcoming/Ongoing/ Drilling Activity
Slide 26: Siku-1 Exploration Well, VIM5 Contract
Oboe-1 SIKU-1 X Y Siku-1 Exploration Well, VIM5 Contract Mid Miocene Unc Blue-SS3 depth structure 50’ Contours Siku prospect SIKU-1 Y X OBOE-1 1 KM OBOE-2 PENETRATION POINT SURFACE LOCATION AVO event Well objective: OBOE-1 (Siku-1 Analogue) Investigate potential of the Siku prospect north of the Obo
Slide 27: Appendix: Financial Performance and Valuation
Appendix Financial Performance and Valuation 2020 Investor Presentation |
Slide 28: High Margins + Growth = Funds Flow And Share Price Growth
Appendix: High Margins + Growth = Funds Flow And Share Price Growth Adjusted Funds from operation (per f.d. share)1 Relative share price performance $0.30 2 $0.20 $0.10 1 $0.00 -$0.10 0 Q1/15 Q1/16 Q1/17 Q1/18 Q1/19 Q1/20 Q1/21 ene-15 ene-16 ene-17 ene-18 ene-19 ene-20 ene-21 FFOPS 12-month average
Slide 29: Valuation Not Reflecting Business Strengths Or Growth Potential
Valuation Not Reflecting Business Strengths Or Growth Potential 100% 2022E EBITDA Margin CNE, 74% 75% 50% 25% 0% 20x 2022E P/E 10x CNE, 6.2x 0x (1) Source: FACTSET consensus data, as of November 4, 2021. Tickers of comparable oil and gas companies shown but not identified are PXT, GTE, GPRK, FEC, VI
Slide 30: Advisories
Advisories This presentation is provided for informational purposes only as of November 2021, is not complete and may not contain certain material information about Canacol Energy Ltd. (“Canacol" or the "Company"), including important disclosures and risk factors associated with an investment in Can
Slide 31: Advisories
Advisories Oil and Gas Information Barrels of oil equivalent (“boe”) Boe may be misleading, particularly if used in isolation. A boe conversion ratio of cubic feet of natural gas to barrels of oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip a
Slide 32: www.canacolenergy.com
Carolina Orozco Mauricio Hernandez Tascon Vice President, Investor Relations Investor Relations Manager +44 755.537.3873 +57 1.621.1747 corozco@canacolenergy.com mhernandezt@canacolenergy.com www.canacolenergy.com 2021 Investor Presentation |
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