Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Q2 2019 Earnings Presentation
25 slides from Athabasca Oil's earnings presentation, August 2019
Slide 1: Athabasca Oil Corporation August 2019 Corporate Update
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING AUGUST 2019 CORPORATE UPDATE
Slide 2: Athabasca – Premier Resource Exposure
ATHABASCA – PREMIER RESOURCE EXPOSURE LIGHT OIL ~40,000 boe/d THERMAL OIL MONTNEY 87% liquids ~$600MM EV ~$425MM Liquidity HANGINGSTONE 90 year 2P RLI 450 MMboe Proved 1,280 MMboe 2P LIGHT OIL CORNER DUVERNAY LEISMER Footnotes and additional information included in the back as endnotes 1 ATHABASCA O
Slide 3: Athabasca – The Transformation
ATHABASCA – THE TRANSFORMATION ~$400MM Light Oil $265MM Contingent surpasses infrastructure 10,000 boe/d Bitumen sale Low risk Royalty Resource development appraisal Positive 2015 2016 2017 2018 2019 Funding FCF outlook not secured Strong ~$560MM $486MM Light Balance sheet Corporate Oil JV with Leis
Slide 4: H1 2019 Highlights: Continued Strong Financial Performance
H1 2019 HIGHLIGHTS CONTINUED STRONG FINANCIAL PERFORMANCE 36,568 boe/d $89MM Funds Flow 86% liquids $30MM Free Cash Flow ~$425MM liquidity Strong Netbacks $59MM Capex (net) $28.70/boe Light Oil 2019e ~2x D/CF @ $60 WTI 52% Thermal / 48% Light Oil $22.42/bbl Thermal Oil Footnotes and additional infor
Slide 5: Canadian Oil Outlook
CANADIAN OIL OUTLOOK CANADIAN LANDSCAPE WCSB CRUDE INVENTORIES & RAIL 80 o Failed regulatory system – broken market in Q4/18 70 mmbbl o Government mandated curtailments worked 60 o Crude by rail remains a necessary bridge to pipelines 50 2014-18 Alberta Crude Inventory Range 80 2019 Alberta Crude In
Slide 6: Athabasca – A Resilient Business
ATHABASCA – A RESILIENT BUSINESS PEER LEADING LIGHT OIL NETBACKS (Q1/19) COMPLEMENTARY ASSETS Q2/19 $27.50 Q1/19 $29.75 o Diversified operating income (35% LO & 65% TO) o Top decile Light Oil netbacks ($27.50/boe Q2/19) o Competitive Leismer operating breakeven ($43/bbl WTI) o Minimal gas exposure (
Slide 7: Athabasca – Drive to Free Cash Flow
ATHABASCA – DRIVE TO FREE CASH FLOW 60 PRODUCTION SUSTAINABLE PRODUCTION Thermal Oil Light Oil 50 Potential Growth o Thermal Oil underpins low corporate decline (~10%) 40 mboe/d o Flexible operated liquids rich Montney 30 o Funded development through Duvernay JV 20 10 0 COMPELLING FREE CASH FLOW OPP
Slide 8: 2019 Outlook
2019 OUTLOOK CORPORATE 2019 FUNDS FLOW OUTLOOK o Capital: $135MM WTI (US$) o Maintain production: 37,500 – 40,000 boe/d (88% liquids) $55 $60 $65 $70 -$15.00 $150 $165 $185 $205 WCS Diff (US$) LIGHT OIL o Capital: $35MM net -$17.50 $140 $155 $175 $195 o Production: 10,000 – 11,000 boe/d (55% liquids
Slide 9: Light Oil: Montney & Duvernay
LIGHT OIL MONTNEY & DUVERNAY
Slide 10: Placid Montney
PLACID MONTNEY PLACID ACTIVITY 16-30 Pad HIGHLIGHTS – OPERATED 70%WI 7 DUCS 2-5 Pad to o 80,000 gross prospective acres spud H2/19 • 200 well development inventory1 • $23/boe 2019 operating netback (US$60 WTI) • 200 – 300 bbl/mmcf initial free liquids Wells ATH Montney Licensed Montney ACTIVITY OVER
Slide 11: Placid Montney – Strong Economics
PLACID MONTNEY – STRONG ECONOMICS PRODUCTION PLOT INTERNAL TYPE WELL PARAMETERS Rate Sales Gas C5+ liquids boe/d mmcf/d bbl/d % IP30 1,000 2.6 501 57% IP90 875 2.4 421 55% IP365 600 1.8 262 49% mboe bcf mbbl % EUR 675 2.2 246 45% ~25 bbl/mmcf plant recovered NGLs included in IPs & EURs CUMULATIVE CO
Slide 12: Kaybob Duvernay
KAYBOB DUVERNAY DUVERNAY HIGHLIGHTS JOINT VENTURE HIGHLIGHTS (30% WI) o Significant resource exposure (~210,000 acres) o Cash/carry structure minimizes financial exposure o Strong condensate yields (200 – 1,000 bbl/mmcf) o $1B gross 4 yr program; $75MM net to retain 30%WI o Royalty advantage (5% vs.
Slide 13: Duvernay – Competitive Shale Play
DUVERNAY – COMPETITIVE SHALE PLAY UNIQUE EXPOSURE TO THE OIL WINDOW KAYBOB WEST & EAST OIL 16-25 (14-20-65-19W5) NORTHERN STEP-OUT KAYBOB WEST & EAST (24 WELLS) o Significant running room o ~170,000 acres; ~800 well inventory1 o Transitioning to development in select areas o Achieved $8 – 9MM well c
Slide 14: Thermal Oil: Leismer & Hangingstone
THERMAL OIL LEISMER & HANGINGSTONE
Slide 15: Thermal Oil – Asset Overview
THERMAL OIL – ASSET OVERVIEW LEISMER – TOP TIER OIL SANDS PROJECT REGIONAL MAP o ~20,000 bbl/d; ~3.5x SOR o 40,000 bbl/d AER approval Hangingstone o 675 mmbbl 2P reserves; 90 year 2P RLI o US$43 WTI operating breakeven HANGINGSTONE – LOW SUSTAINING CAPITAL o 9,000 – 10,000 bbl/d; ~4.5x SOR o 177 mmb
Slide 16: Thermal Oil – Leismer Activity
THERMAL OIL – LEISMER ACTIVITY HIGHLIGHTS o L7 sustaining pad • 1,250m laterals (50% longer) and flow control equipped • First steam in June with production expected in Q4/19 • >4,000 bbl/d peak pad production • Steam debottleneck • Optimize field steam distribution and minimize downtime • Expanding
Slide 17: Corporate Responsibility
CORPORATE RESPONSIBILITY SAFETY ENVIRONMENT Exemplary performance is key to Committed to innovation and business results and stakeholder needs sustainable development • Total Recordable Injury Frequency (TRIF): • Environmental monitoring and compliance • 2018 0.36 vs. 0.8 industry average • Approved
Slide 18: Supplemental Information
SUPPLEMENTAL INFORMATION
Slide 19: Corporate Snapshot & Hedging
CORPORATE SNAPSHOT & HEDGING CAPITALIZATION OVERVIEW (ATH-TSX) Basic Shares Outstanding 523 MM Market Capitalization ($0.70/sh) $366 MM Q2/19 Net Debt $240 MM Total Enterprise Value $607 MM Term Debt (9.875% due Feb 2022) US$450 MM Undrawn Reserve Based Facility $120 MM Funding Capacity / Liquidity
Slide 20: Thermal Oil – Infrastructure
THERMAL OIL – INFRASTRUCTURE Illustrative map not to scale 8” Diluent Line HANGINGSTONE CHEECHAM Tank Farms LEISMER 12” Dilbit Line 150mbbl Dilbit 40mbbl Dilbit 150mbbl Diluent 100mbbl Dilbit 6mbbl Diluent 10mbbl Diluent Egress optionality Keyera South Cheecham IPL Truck & Rail Terminal Polaris Enbr
Slide 21: Management Team and Board
MANAGEMENT TEAM AND BOARD MANAGEMENT TEAM BOARD OF DIRECTORS Robert Broen, P.Eng. Ronald Eckhardt President & Chief Executive Officer Chair of the Board, member of the Reserves Committee Kim Anderson, CA Robert Broen, P.Eng. Chief Financial Officer President & Chief Executive Officer Angela Avery Br
Slide 22: Endnotes & Risk Management
ENDNOTES & RISK MANAGEMENT Slide Endnotes Multi-year outlook price assumptions: 2018 H1 2019 H2 2019 2019e 2020e WTI US$/bbl $65.50 $57.36 $60.00 $58.47 $60.00 FX C$/US$ 0.77 0.75 0.77 0.76 0.75 Heavy Diff US$/bbl -$26.31 -$11.48 -$17.50 -$13.62 -$17.50 WCS C$/bbl $50.61 $61.21 $55.51 $59.22 $56.67
Slide 23: The World Needs More Canadian Energy
THE WORLD NEEDS MORE CANADIAN ENERGY o Energy education gaining momentum across the country o The World Needs Canada’s Energy o World Demand estimated to grow by 27% by 2040 (source: EIA) o ALL forms of energy needed including Oil & Gas o Canada is a Global leader in innovation and environmental ste
Slide 24: Reader Advisory
READER ADVISORY Forward Looking Statements 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”, “
Slide 25: Athabasca Oil Corporation
ATHABASCA OIL CORPORATION