Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Corporate Update (November 2014)
36 slides from Athabasca Oil's corporate update, November 2014
Slide 1: Corporate Update
Corporate Update Duvernay – Light Oil November 2014 Hangingstone – Thermal Oil
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. The use of any of the words “anticipate,” “plan,” “continue,” “estim
Slide 3: Value Proposition
Value Proposition World Class Assets • 1,000+ well inventory in the Duvernay shale play at Kaybob • 80,000 bbl/d project potential at the Funding Hangingstone thermal asset Assets • Significant long-term optionality within a diverse portfolio (9 billion barrels of contingent resource(1)) Well Funded
Slide 4: How We Get There
How We Get There Guiding Principles Cash Flow Growth Balance Sheet Strength • Accelerate near-term cash flow • Capital and cost discipline • Focus on returns • Focus on core assets Delivering on Commitments Execution Excellence • Set achievable plans • Technical rigor drives investment • Deliver on
Slide 5: Financial Highlights, 2014 Budget and Outlook
Financial Highlights, 2014 Budget and Outlook Capitalization Highlights(1) Capital Expenditures / Funding in Place ($ MM) $1,200 Stock exchange listing TSX 1000 Trading symbol ATH 800 $675 >$600 52-week trading range $3.04 - $8.84 600 $/sh $450-500 Basic shares outstanding 402.0 MM400 $445 $354 ~25%
Slide 6: Focused on our Core Assets
Focused on our Core Assets Light Oil: Kaybob Fort McMurray • $291 million 2014 budget • Four rigs active; 26 additional Duvernay wells by the end of 2015(1) Hangingstone • Duvernay primary target; 200,000 acres with the potential for 1,000+ wells • Ownership and operatorship in strategic Thermal Oil
Slide 7: Duvernay Overview
Duvernay Kaybob frac operation drilling Duvernay Overview
Slide 8: The Duvernay is a World Class Resource
The Duvernay is a World Class Resource Select Select Unconventional Unconventional Plays Plays In In North America North America World • Large in place resource Class • High liquid content: 100 -1,000 bbl/MMcf free condensate Resource • Initial results compare favorably to the Eagle Ford • Proactive
Slide 9: Industry Transitioning to Development
Industry Transitioning to Development AOC Drilling (4) AOC Drilled Duvernay (9) Licensed Duvernay (328) Drilled Duvernay (209) Athabasca Apache Chevron Hitic Shell Trilogy Shell Partial Farm In Xto Conoco Encana Talisman Other Apache Partial *As of October 10, 2014 8
Slide 10: Activity on the Upswing
Activity on the Upswing Industry transitioning to development • Majors are accelerating activity from the appraisal Eagle Ford to development stage • Forecasted 70% lift in spending Y/Y; 2015e $3.6 billion vs. 2014e $2.1 billion (RBC Rundle) Montney • 6 - 8 multi-well pads (Apache, Chevron, Encana,
Slide 11: Duvernay Activity Update
Duvernay Activity Update 14-33 Currently Drilling Nabors #82 4-29 S/C/Hz. On stream: June 16, 2014 30 day IP (restricted) – 615 boe/d (0.7 MMcf/d & 710 bbl/MMcf) 8-29 Hz. CTD – 41 mboe, 72% liquids On stream: June 21, 2014 30 day IP (restricted) – 784 boe/d (0.8 MMcf/d & 763 bbl/MMcf) CTD – 56 mboe,
Slide 12: Liquids Yield is Driving Economics
Liquids Yield is Driving Economics Pressure (1,000 psi) 0 5 10 15 0 AOC Industry Depth (1,000 ft) 5 08-18 01-07 10 4-32 Pad 02-34 06-10 01-25 0.44 0.6 0.7 0.8 0.9 15 Under-Pressured Over-Pressured 0 - 50 50 - 250 250 - 550 550+ bbl/MMcf *Liquid yield is cum/cum for wells with > 3 months production.
Slide 13: Improving Cost Trends
Improving Cost Trends Average Well Cost Drilling 18 • Multi-well pads 16 Complete Cost • Fit for purpose rigs Drill Cost 14 • Wellbore design 12 • Bit optimization • Experience D+C Cost ($MM) 10 8 6 Completions • Multi-well pads 4 • Frac fluid and volume 2 optimization 0 • Sand type and procurement
Slide 14: Current Duvernay Well Economics are Compelling
Current Duvernay Well Economics are Compelling(1) 02/2-34-62-20W5 Initial Free Liquids Economic Sensitivity(2) 2,000 350 30 1,800 Cumulative Production (mboe) 300 01-25-62-25W5 1,600 25 102/02-34 Payout Production (boe/d) 1,400 250 NPV 10% ($MM) 20 1,200 Saxon/ Simonette 200 1,000 15 01-07-64-20W5 K
Slide 15: Defining the Duvernay Fairway
Defining the Duvernay Fairway Kaybob West Kaybob East Acreage: 52,000 ac Acreage: 113,000 ac Locations: 295 Locations: 640+ NPV/well: $10 – $17 MM NPV/well: $5 – $15 MM Saxon/Simonette Acreage: 53,000 ac Locations: 300 NPV/well: $13 – $20 MM Athabasca Farm In AOC Drilled Duvernay (9) Licensed Duvern
Slide 16: Material Near-Term Growth
Material Near-Term Growth Duvernay Projected Daily Production 70,000 7 Potential for production to exceed 60,000 6 50,000 boe/d in 5 years Production (boe/d) 50,000 5 • Inventory of > 1,000 wells Rig Count 40,000 4 • Growth weighted to high value liquids 30,000 3 • Timeline can be accelerated with m
Slide 17: AOC Controls Strategic Infrastructure
AOC Controls Strategic Infrastructure Total Battery Capacity Gas Pipeline Oil Capacity 36,000 bbl/d Up to Gas Capacity 84 MMcf/d, 180 MMcf/d Gas Capacity expandable to >130 MMcf/d Kaybob East AOC 91 km Pipeline Fort McMurray Kaybob West Saxon Keyera Simonette SemCAMS KA Placid EDMONTON • Operatorshi
Slide 18: Hangingstone Overview
Hangingstone CPF Hangingstone Overview
Slide 19: Hangingstone Development
Hangingstone Development Resource Hangingstone Regional Development Map • 225 MMbbl reserves(1) • 782 MMbbl contingent resources(2) Fort McMurray Development • Project HS1 – 12,000 bbl/d • First Steam – expected end Q1 2015 • Project HS2A CPF • 8,000 bbl/d incremental debottleneck of HS1 • Project H
Slide 20: Efficient Delivery of First Thermal Project
Efficient Delivery of First Thermal Project $565 MM Cost Performance Incurred Remaining Spend Hangingstone Project 1(1) $532 MM $33 MM Progress 0% 100% Engineering Procurement Dilbit tanks – September 2014 Construction 87% D&C Overall 94% First Steam Actual Evaporator tower – September 2014 (1) Stat
Slide 21: Drilling and Reservoir Results to Date
Drilling and Reservoir Results to Date Application of Industry Best Practices ~ 5m of separation as per design • One delineation well per SAGD pair • High resolution 3D seismic • Integrated workflow providing optimal reservoir planning and drilling execution Drilling path and separation survey Use o
Slide 22: Development Profile
Development Profile Operations Cash Flow ($MM/year) 140 14,000 Approved – In Construction 120 12,000 Daily Production (bbl/d) 100 10,000 • Hangingstone Project 1 80 8,000 12,000 bbl/d 12,000 bbl/d • First steam end Q1 2015 60 12,000 bbl/d 6,000 • Plateau production 12,000 bbl/d in 2016 40 4,000 20 2
Slide 23: Future Growth
‘Saxon Battery ATHABASCA ==] OIL CORPORATION Future Growth
Slide 24: Development and Exploration Opportunities
Development and Exploration Opportunities Grosmont • 418 MMbbl(1) (AOC interest) • Apply recovery mechanisms being tested by industry Birch Slave Point Slave Point • 2.1 Bbbl(1) • > 675,000 acre land position • Validated oil production with 2013 pilot program Birch Grosmont Montney • Two-well apprai
Slide 25: Supplemental Information
Hangingstone Hangingstone CPF Project 1 Supplemental Information
Slide 26: Long-term Debt and Credit Facility Overview
Long-term Debt and Credit Facility Overview As at Sept. 30, 2014 Undrawn Credit Facilities ($ MM, Cdn) Interest Rate Pre-payment Terms Cdn $125 MM senior secured revolving credit facility due 2017 $125 ~ 5% Pre-payable without penalty 2015 – 102% US $50 MM senior secured term loan LIBOR + 7.25% 2016
Slide 27: Duvernay 4-32 Pad Initial Production
Duvernay 4-32 Pad Initial Production 77 day 8-29-64-20W5 69 day 4-29-64-20W5 soak period (on-strike orientation) soak period (north-south orientation) 2,000 4,000 2,000 4,000 TEST POST SOAK T POST SOAK E S 1,800 3,600 1,800 T 3,600 1,600 3,200 1,600 3,200 1,400 2,800 1,400 2,800 Rate (mcf/d, bbl/d)
Slide 28: Duvernay 1-7 and 1-25 Initial Production
Duvernay 1-7 and 1-25 Initial Production 1-7-64-20W5 1-25-62-25W5 2,000 4,000 4,000 8,000 1,800 3,600 7,200 3,500 1,600 3,200 6,400 3,000 1,400 2,800 5,600 Rate (mcf/d, bbl/d) Rate (mcf/d, bbl/d) 2,500 Pressure (psi) Pressure (psi) 1,200 2,400 4,800 1,000 2,000 2,000 4,000 800 1,600 3,200 1,500 600
Slide 29: Completions are Key to Commercial Success
Completions are Key to Commercial Success Casing Bowl: 279 mm x 245 mm x 34.5 MPa 20,000 80 Production Normalized to Proppant Placed 18,000 72 16,000 64 Cumulative BOE per 100 Tons 102/02-34-62-20W5 Casing size – 9 5/8” 14,000 56 12,000 48 Well Count 10,000 40 Intermediate Casing 8,000 100/08-18-64-
Slide 30: Montney Appraisal, Leading to Development
Montney Appraisal, Leading to Development Placid Montney Development Plan AOC Kaybob Region Montney Rights Simonette Placid Bigstone AOC Placid Type Curve 1,800 Initial condensate yield 100 bbl/MMcf Approximately one township of Montney 1,600 Stabilized condensate yield 40 bbl/MMcf potential offsett
Slide 31: Application of Proven Best Practices
Application of Proven Best Practices Delineation & seismic data Reservoir management Workflow integration Thermal Oil Development Lifecycle Experienced operations teams Lifecycle planning Construction execution best practices Flexible designs Use of experienced contractors 30
Slide 32: Dover West Sands, Poised for Development
Dover West Sands, Poised for Development Development • 87 MMbbl probable reserves • 2,766 MMbbl contingent resource(1) Dover West • Processing facilities planned to be a Road duplication of Hangingstone design Infrastructure Dover West CPF Fort McMurray • 64 km Dover West main road complete Grand Ra
Slide 33: Dover West Carbonate: The Next Big Resource Play
Dover West Carbonate: The Next Big Resource Play Opportunity Dover West TAGD Facility • 16,800 MMbbl of bitumen in place(1) in the Leduc carbonate reef (> 100 meter net pay) Dover West Road • 3,001 MMbbl contingent resource(2) based on SAGD Fort • Asset planned to be developed with TAGD technology M
Slide 34: Management Team
Management Team Thomas Buchanan, FCA Board of Directors President & Chief Executive Officer • Over 30 years experience in the oil and natural gas sector, and Thomas Buchanan, FCA currently Chairman of Spyglass Resources Corp. Chairman, President & Chief Executive Officer • Formerly CEO of Spyglass R
Slide 35: Management Team
Management Team Robert Bowie, MBA Anne Schenkenberger, B.Sc., LLB Vice-President, Corporate Development Vice-President, Legal & Corporate Secretary • Joined Athabasca Oil Corporation in 2010 and is Vice- • Joined Athabasca Oil Corporation in 2008 and is Vice- President, Corporate Development Preside
Slide 36: Corporate Office
Corporate Office 2000, 250 – 6 Ave SW, Calgary, Alberta, T2P 3H7 Telephone: 403-237-8227 Fax: 403-264-4640 www.atha.com