Tourmaline Oil Corp. · TSX:TOU
Tourmaline Oil — Investor Day (February 2017)
95 slides from Tourmaline Oil's investor day presentation, Feb 28, 2017
Slide 1: Investor Day A
Investor Day A February 28, 2017
Slide 2: 1. Introduction
Tourmaline Oil Corp. Investor Day 1. INTRODUCTION 1
Slide 3: EP Growth Plan (Original Business Plan)
EP Growth Plan (Original Business Plan) Sept 2008 This is essentially the same business plan that was executed for Duvernay Oil Corp. (2001-2008) • Primary growth mechanism will be a conventional EP Program (including Resource plays). • Build 2-3 core EP areas during initial three years of operation
Slide 4: The Ever Changing EP Landscape
The Ever Changing EP Landscape Jan 2017 • The size, style, and life cycle of EP start-ups have changed considerably over the past 10 years. • BKP/DDV started life as event/well driven microcaps • TOU required scale rapidly, target was 20,000 boepd within 3-4 years • Exploration a much diminished por
Slide 5: Historical EP Performance
Historical EP Performance Feb 2017 Production Growth Per Share* Reserves Growth Per Share* 350 7 Production per Thousand Shares Reserves per Share (BOEs) 300 6 250 5 200 4 (BOEs) 150 3 100 2 50 1 0 0 2009 2010 2011 2012 2013 2014 2015 2016 2009 2010 2011 2012 2013 2014 2015 2016 2009-2015 Op Costs/B
Slide 6: TOU Positioning and Peer Group Analysis
TOU Positioning and Peer Group Analysis: TOU vs Canadian E&P Average – Production per Share Growth Production Per Share Growth 50% 350 45% 300 Production per Thousand Shares (BOE) 40% 35% 250 30% 200 CAGR % 25% 150 20% 15% 100 10% 50 5% 0% 0 2011 2012 2013 2014 2015 2016E TOU Production per debt-adj
Slide 7: Largest Canadian Gas Producers
Largest Canadian Gas Producers; 2015 & 2016 Feb 2017 Canadian WCSB Gas Production 2015A & 2016E** 1,700 1,600 2015A Natural Gas (MMcf/d) 1,500 2016E Natural Gas (MMcf/d) 1,400 2017E Natural Gas (MMcf/d) 1,300 1,200 Production (MMCF/D) 1,100 1,000 Tourmaline is currently producing 900 between 1.2 and
Slide 8: Current Status
Current Status Feb 2017 Production Overview 2017 average production forecast of 240,000-260,000 boepd (approx. 30% annual growth, range accounts for firm service interruptions) 2017 liquids production in excess of 40,000 bpd (oil, condensate, ngls) Current production 235,000 boepd Three Major
Slide 9: Alberta Deep Basin
Alberta Deep Basin Feb 2017 T65 R9 R7 R5 Current Production 155,000 -160,000 boepd Current Reserves 871.9 mmboe (Jan 1, 2017) T63 Tourmaline Land Base 3,000 gross sections Drilling Inventory 2,760 locations (vertical) TCPL Main Line (~1.5wells per section only) T61 Fir 6,252 hz locations Mus
Slide 10: Sunrise/Dawson NEBC Montney/Doig Development
Sunrise/Dawson NEBC Montney/Doig Development Feb 2017 Westcoast McMahon Gas Plant Current Prod. 250-270 mmcf/d 4,500-5,000 bopd (cond,ngls) Current Reserves 394.4 mmboe (Jan 1, 2017) Montney Drilling In excess of 2,100 horizontal Inventory* locations. Liquid rich Lower Turbidite horizon will add inc
Slide 11: Gundy Ck Acquisition / Northern Montney Complex
Gundy Ck Acquisition/ Northern Montney Complex Oct 2016 Gundy Current Production: 6,214 boepd (July) No of wells drilled: 25 No of potential locations: 1647 (100% TOU) Liquid content: 30-50 bbls/mmcf Northern Montney Complex post Gundy Transaction 197 gross sections (175 net) 2368 gross locations (2
Slide 12: Peace River High Complex
Peace River High Complex Charlie Lake Play Feb 2017 Earring 15-16 R. 10 R. 9 R.BOPD, IP90: 130 7 R. 5 1.7 MMSCF/D Peace River High Charlie Lake Play • 1,596 Horizontal Locations* along Regional Play Fairway Mulligan 4-13 Upper Trcl Pad Q3 2016 90 day production rates T. 83 • Current Reserves of 108.
Slide 13: Significant Recent EP Highlights
Significant Recent EP Highlights Feb 2017 Deep Basin • Minehead 16-15 Notikewin hz has averaged 29.7 mmcfpd over initial 60 days, cum gas prod of 2.20 bcf • Kakwa 12-35 Falher C hz has averaged 20.5 mmcfpd over initial 50 days, 26 bbls/mm condensate • Ansell 15-25 Falher C hz has averaged 11.3 mmcfp
Slide 14: Tourmaline Mid-Stream Assets
Tourmaline Mid-Stream Assets Feb 2017 The infrastructure skeleton in all three core operated complexes is now complete R. 15W6 R. 1W6 R. 15W5 Gundy Inga • 17 Working interest gas plants, 14 of which NE Alberta BC are 100% owned and operated Peace River High T85 • 15 compressor stations Charlie Lk Oi
Slide 15: Historical Reserves Summary
Historical Reserves Summary Feb 2017 Reserves (GLJ) Reserves 2012 2013 2014 2015 2016 2000 2012 2013 2014 2015 2016 (mmboe) (mmboe) (mmboe) (mmboe) (mmboe) PDP 91.9 122.3 177.8 263.2 352.1 1500 TP 249.2 316.5 472.3 644.1 859.2 2P 438.1 590.1 855.8 1108.3 1747.2 MMBOE 1000 2012 2013 2014 2015 2016 (/
Slide 16: Gas Development Location Inventory and Economics
Gas Development Location Inventory and Economics Feb 2017 AB Deep Basin Outer Foothills AB Deep Basin B.C. Montney Charlie Lake Vertical Vertical Horizontal Horizontal Horizontal Total Well Costs 3.7 5.25 4.40 2.90 2.7 (Drill, Case, Complete, $ Million) Average Reserves/Well (bcfe)* 2.5 5.5 5.5 6.1
Slide 17: Capital Cost Reduction Overview
Capital Cost Reduction Overview Dec 2016 Tourmaline drill and complete capital costs have been reduced by 30% since Q1 2015. A further 15% reduction was achieved with the 2H 2016 EP program. The Company estimates that 60-65% of drilling cost reductions and 50% of completion cost reductions are perfo
Slide 18: Continuous Cost Reduction Strategy
Continuous Cost Reduction Strategy Nov 2016 Operating Costs General and Administrative Costs $2.46 $8.00 $2.50 $7.00 $2.00 $6.34 $6.00 $/boe $1.50 $/boe $5.58 $1.29 $4.87 $1.02 $5.00 $1.00 $4.43 $4.35 $4.37 $0.79 $0.74 $0.60 $4.00 $0.45 $0.46 $3.46 $0.50 $3.00 $0.00 2010 2011 2012 2013 2014 2015 Q3
Slide 19: The EP Life Cycle
The EP Life Cycle • Select EP focus • Major • Infrastructure buildout • Full areas delineation • Full development of Development/ • Acquire drilling phase delineated assets Harvest in core assets/land • Asset • Continue delineation drilling areas • Modest initial consolidation, • Consolidate ‘winner
Slide 20: Shell Acquisition Overview
Shell Acquisition Overview Oct 2016 • A major step towards the ongoing plan to become Canada’s and one of North America’s largest, most efficient, lowest cost and profitable natural gas producers. • The acquisition provides a significant increase to Tourmaline's dominant Alberta Deep Basin position
Slide 21: Agenda
Agenda Investor’s Day 1. Introduction..................................................................................................................... Mike Rose 2. Reserves ...........................................................................................................................
Slide 22: 2. Reserves
Tourmaline Oil Corp. Investor Day 2. RESERVES 1
Slide 23: Reserves: A Tourmaline Perspective
Reserves: A Tourmaline Perspective Feb 2017 • TOU Reservoir Engineering Team • Historical Reserves Growth and Area Distribution • 2016 YE Reserves Summary and Highlights • Key Components for a “Strong” Reserve Report • Type Wells • A&D Metrics – a reservoir engineer’s perspective 2
Slide 24: Historical Reserves Summary
Historical Reserves Summary Feb 2017 Reserves (GLJ) Reserves 2012 2013 2014 2015 2016 2000 2012 2013 2014 2015 2016 (mmboe) (mmboe) (mmboe) (mmboe) (mmboe) PDP 91.9 122.3 177.8 263.2 352.1 1500 TP 249.2 316.5 472.3 644.1 859.2 2P 438.1 590.1 855.8 1108.3 1747.2 MMBOE 1000 2012 2013 2014 2015 2016 (/
Slide 25: Current Reserve Distribution
4 Current Reserve Distribution Feb 2017 R. 11W6 R. 1W6 R. 15W5 Peace River High NE Alberta 125 BC Inga Total Natural Gas Reserve Base of 8.93 108.8 TCF, one of the largest in Canada. 100 Gundy T85 Peace River High 75 mmboe Mulligan/Earring 54.5 Sunrise-Dawson Charlie Lk Oil 50 108.8 mmboe 18.8 (0.30
Slide 26: 2016 Year-End Reserves
2016 Year-End Reserves Feb 2017 PDP TP TP+P 352 MMboe (13% Oil/NGL) 859 MMboe (15% Oil/NGL) 1,747 MMboe (15% Oil/NGL) $3.96 B BT-NPV10 $7.53 B BT-NPV10 $12.71 B BT-NPV10 2017 Prod = 169 mboed 2017 Prod = 253 mboed 2017 Prod = 272 mboed OpEx = $3.76/boe OpEx = $3.39/boe OpEx = $3.32/boe Unit Value =
Slide 27: 2016 Year-End Reserves
2016 Year-End Reserves Feb 2017 PDP 2P Undeveloped 6
Slide 28: 2016 Year-End Reserve Highlights
2016 Year-End Reserve Highlights Feb 2017 • P+P Reserves of 1.75 Bboe - growth of 64% (706 mmboe) before production, including acquisitions Since the beginning in 2008: - growth of 58% (638 mmboe) net of production, including acquisitions • TOU has produced 1.4 TCFe • PDP Reserves of 352 mmboe - gro
Slide 29: 2016 Year-End Reserve Highlights
2016 Year-End Reserve Highlights Feb 2017 • P+P BT-NPV10 growth of 54%, up to $12.7B from $8.3B • PDP BT-NPV10 growth of 40%, up to $4.0B from $2.8B • 2016 F&D including FDC change of $1.49/boe • F&D LOWER than previous year • FD&A slightly higher than previous year (+$0.05/boe) • 2016 FD&A includin
Slide 30: 2016 Year-End Reserve Highlights
2016 Year-End Reserve Highlights Feb 2017 • FDC increased 42% up to $6.4B (undisc.), with the addition of 596 net locations (623 gross @ 97% WI avg) • FDC/Well DECREASED 10% to $4.0 mm/Well as a result of continuing D&C efficiencies • 2P Undeveloped PIR-10% increased 13%, up to 1.53 from 1.35 (stron
Slide 31: Reserves Price Forecast Comparison
Reserves Price Forecast Comparison Feb 2017 • Time normalized comparison charts • Front-End price increase 2016-YE vs 2015-YE • Year 2 price cross-over for Gas • Year 3½ price cross-over for Oil Ultimately, effect on BT-NPV10 for reserves is immaterial compared to other factors: • Well performance •
Slide 32: Recipe for a Strong TP+P Reserve Report
Recipe for a Strong TP+P Reserve Report Feb 2017 “Growing sentiment in Investment Community that undeveloped reserves are becoming less and less valid, and hence are being discounted more heavily and in some cases even dismissed in company valuations” Tourmaline would however suggest that with the r
Slide 33: Deep Basin Edson WLRC HZ Type Well
Deep Basin Edson WLRC HZ – TYPE WELL Feb 2017 EDSON: WLRC HZ (5.5 BCF) AVG (mscfd) TYPE WELL WELL COUNT 20,000 60 Statistical Sample = 53 HZ EUR = 5.5 BCF raw Solid Economics = 942 mboe sales 18,000 = 5.65 BCFe sales HIGH IP = 12 mmscfd NGL = 6.5 bbl/mmscf 50 16,000 (85% Cond/C5+) CapEx = $3.2 MM Op
Slide 34: NEBC Doe Upper MNTN HZ Type Well
NEBC Doe Upper MNTN HZ – TYPE WELL Feb 2017 NE BC - DOE: Upper MNTN HZ (5.6 BCF) AVG (mscfd) TYPE WELL WELL COUNT 20,000 60 n (exponent) = 1.00 Statistical Sample = 49 HZ EUR = 5.6 BCF raw Solid Economics 18,000 = 1,018 mboe sales Yr-1 Decline = 72%/yr = 6.1 BCFe sales Yr-2 Decline = 42%/yr 50 Yr-3
Slide 35: Gundy MNTN HZ Type Wells
Gundy MNTN HZ Type Wells Feb 2017 Acquisition in Gundy added 383 net HZ to our 2P undeveloped inventory, with an average BT-NPV10 of $4.1 MM. The total overall Gundy inventory, including unbooked locations is estimated at 1,671 net HZ (< 25% booked) Gundy can essentially be split in 9 main developme
Slide 36: A&D Metrics
A&D Metrics Feb 2017 Tourmaline focuses on a number of key components when evaluating assets for Acquisition: 1. Reserves volumes/value • F&D consistent with TOU area/corporate? • Development well economics rank well with existing inventory portfolio? 2. Current production, opex and cashflow • $/boe
Slide 37: 3. Engineering & Well Operations
Tourmaline Oil Corp. Investor Day 3. ENGINEERING & WELL OPERATIONS 1
Slide 38: Cumulative TOU Wells Drilled
TOU Wells Drilled Cumulative Wells Drilled 2000 1800 Cumulative TOU Wells Drilled 894 Wells Drilled Since the Start of TOU as of February 15th 2017 1600 1400 1200 1000 800 600 400 200 0 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2018E 2019E Wells Drilled Per Year 600 406 343 400 271 180 196 150 2
Slide 39: Technology and Innovation
Technology and Innovation •Utilize latest technology in down hole motors and tools The Right Equipment •Use rig walking systems to reduce cycle times and Tourmaline currently operates one of create most value from pad sites the largest fleet of walking, high •Use state of the art control systems, li
Slide 40: Historical Drilling Performance: South Deep Basin
Historical Drilling Performance South Deep Basin Development Average Drill Days Average Drill Cost 35 $4.5 30 57% $4.0 49% Decrease Since 2013 Decrease Since 2013 $3.5 25 $3.0 20 $2.5 Days MM 15 $2.0 $1.5 10 $1.0 5 $0.5 0 $0.0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 4
Slide 41: Historical Drilling Performance: Peace River High
Historical Drilling Performance Peace River High Development Average Drill Days Average Drill Cost 20 $3.0 18 41% $2.5 36% Decrease Since 2013 16 Decrease Since 2013 14 $2.0 12 Days MM 10 $1.5 8 $1.0 6 4 $0.5 2 0 $0.0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 5
Slide 42: Historical Drilling Performance: NEBC
Historical Drilling Performance NEBC Development Average Drill Days $4 Average Drill Cost 20 18 55% 16 Decrease Since 2013 $3 57% Decrease Since 2013 14 12 MM $2 10 Days 8 6 $1 4 2 0 $- 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 6
Slide 43: Deep Basin Drilling Cost Projections
Deep Basin Drilling Cost Projections $6,000,000 $5,000,000 3 potential cost scenarios based on various service price recoveries $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 14/15 Cost 15/16 Cost 16/17 Cost 17/18 (25% Service Cost 17/18 (50% Service Price 17/18 (100% Service Recovery) Recovery) Pri
Slide 44: Peace River High Oil Drilling Cost Projections
Peace River High Oil Drilling Cost Projections $3,000,000 $2,500,000 3 potential cost scenarios based on various service price recoveries $2,000,000 $1,500,000 $1,000,000 $500,000 $- 14/15 Cost 15/16 Cost 16/17 Cost 17/18 (25% Service Cost 17/18 (50% Service Price 17/18 (100% Service Recovery) Recov
Slide 45: NEBC Basin Drilling Cost Projections
NEBC Basin Drilling Cost Projections $3,000,000 $2,500,000 3 potential cost scenarios based on various service price recoveries $2,000,000 $1,500,000 $1,000,000 $500,000 $- 14/15 Cost 15/16 Cost 16/17 Cost 17/18 (25% Service Cost 17/18 (50% Service Price 17/18 (100% Service Recovery) Recovery) Price
Slide 46: Historical Completions Performance
Historical Completions Performance Deep Basin - Completions Peace River High - Completions $3,000 $3,500 $2,500 47% $3,000 72% Decrease Since 2012 $2,500 Decrease Since 2012 $2,000 $2,000 $ 000 $ 000 $1,500 $1,500 $1,000 $1,000 $500 $500 $0 $0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 NEBC S
Slide 47: Stimulation Metrics 2016-2017
Stimulation Metrics 2016-2017 Stage count Sand 29 1,600 28 1,400 28 1,200 Number of Stages 27 27 1,000 Tonnage 26 800 25 25 600 400 24 200 23 0 PRH NEBC DB PRH NEBC DB Average Hz Length and Measured Depth Fluid Volume 5,000 10,000 4,507 4,500 9,000 3,863 4,000 3,450 8,000 3,500 7,000 3,000 6,000 Met
Slide 48: Manufacturing Approach to Well Design and Stimulation
Manufacturing Approach to Well Design and Stimulation • Well design is standardized in each core development area lending to repeatability of operational execution • Open hole stimulation systems are utilized in each core area. • TOU has an extensive amount of completed wells utilizing this technolo
Slide 49: Well Construction Progression in South Deep Basin
Well Construction Progression in South Deep Basin from 2012 to 2017 South Deep Basin Cost Evolution 2012 to 2017 $8,000 $8,000 53% $7,000 $7,000 2013, $6,888 2012, $6,779 Decrease Since 2012 $6,000 $6,000 2014, $5,828 2015, $5,329 $5,000 $5,000 $4,000 $4,000 2016, $3,357 2017, $3,165 $3,000 $3,000 $
Slide 50: Well Construction Progression in NEBC South Montney
Well Construction Progression in NEBC South Montney from 2012 to 2017 South Montney Cost Evolution 2012 to 2017 $6,000 $6,000 2013, $5,678 2014, $5,335 $5,000 $5,000 2012, $4,465 49% 2015, $4,131 Decrease Since 2012 $4,000 $4,000 $3,000 $3,000 2016, $2,787 2017, $2,276 $2,000 $2,000 $1,000 $1,000 $0
Slide 51: Well Construction Progression in Peace River High Oil
Well Construction Progression in Peace River High Oil from 2012 to 2017 Peace River High Cost Evolution 2012 to 2017 $6,000 $6,000 2012, $5,238 $5,000 $5,000 2013, $4,436 54% $4,000 2014, $4,029 Decrease Since 2012 $4,000 2015, $3,473 $3,000 $3,000 2016, $2,458 2017, $2,399 $2,000 $2,000 $1,000 $1,0
Slide 52: Tourmaline Water Management
Tourmaline Water Management Objective Strategy • Use Tourmaline produced and flowback water Security of Supply • Divert fresh water to storage at times of abundance • Secure long term fresh water diversion licenses • Pipeline infrastructure reduces water moving costs and increases completion efficie
Slide 53: Alberta Deep Basin Water Management
Alberta Deep Basin Water Management • 100% of all water flowed back from completion operations is recycled • 43% of all water sourced for stimulation operations is recycled • 135,000m3 of fresh water storage across the asset base • TOU has the first and only produced water pond approved in Alberta –
Slide 54: BC Water Management
BC Water Management • 100% of all water flowed back from completion operations is recycled • 90% of all water sourced for stimulation operations is recycled • 187,000m3 of produced water storage capacity – 3 produced water ponds South Montney and 1 North Montney • 46 km of permanent pipeline infrast
Slide 55: Natural Gas Substitution in Operations
Natural Gas substitution in operations • Raw Natural Gas cost (Feb 2017) ~$0.10/DLE (Diesel Equivalent Liter) vs $0.69/L rack price for marked diesel • 12 Drilling Rigs and all BC completion operations use a combination of NG/Diesel • Drilling Rigs achieving ~40-50% displacement of diesel • 6.8M lit
Slide 56: Key Contractors to Tourmaline
Key Contractors to Tourmaline Drilling Completion 20
Slide 57: Alberta Deep Basin Development Pad
Alberta Deep Basin Development Pad Edson 4 to 6 well Pad development across TOU Deep Basin lands will save up to 500M per well drilled vs drilling conventional 1 to 2 well pads 21
Slide 58: Peace River High Development Pad
Peace River High Development Pad Easily accessible locations aid in logistics of the Peace River High operations 22
Slide 59: Peace River High Well Servicing
Peace River High Well Servicing Preparation for stimulation with service rig 23
Slide 60: South Montney Development Pad
South Montney Development Pad Six well pad in the South Montney being stimulated 24
Slide 61: Significantly Reduced Surface Impact of Pad Drilling
Significantly Reduced Surface Impact of Pad Drilling – South Montney 6 well Montney pad at Sunrise-Dawson NEBC. IP of 12,500 boepd, equivalent to a small intermediate company initially with minimal surface/agricultural impact. 25
Slide 62: 4. Land
Tourmaline Oil Corp. Investor Day 4. LAND 1
Slide 63: Core Operating Areas
Core Operating Areas Feb 2017 R. 11W6 R. 1W6 R. 15W5 Inga BC Montney Gas/Cond Gundy T85 Mulligan/Earring Acre Net Summary Gross Acres Acres Sunrise-Dawson Deep Basin 1,940,598 1,594,769 Peace River High Charlie Lk Oil BC Montney 243,377 189,230 T75 Sundown Peace River Spirit River 482,196 331,439 Hi
Slide 64: Land Picture: Challenges and Opportunities
Land Picture Challenges and Opportunities Feb 2017 Regulatory Evolving Political Regimes Regulatory Change Environmental Hurdles Expiries 98% of TOU Landbase Tenure Maintained in 2016 Liabilities Greater emphasis on historical wells Access Key Wildlife Landowner Consultation First Na
Slide 65: Tourmaline Total Land and Peer Comparison
Tourmaline Total Land and Peer Comparison Feb 2017 Western Canadian Gross Land Positions (Acres) R. 11W6 R. 1W6 R. 15W5 Inga BC Montney Gundy Gas/Cond 14,356,557 T85 Mulligan/Earring Sunrise- Dawson Peace River High 10,000,000 Charlie Lk Oil Sundown T75 9,000,000 Spirit River 8,000,000 Chinook T65 7
Slide 66: Buying Strategic Land Synergies
Buying Strategic Land Synergies Feb 2017 Gundy/Deep Basin Alberta Deep Basin November 2016 • Significant value creation through February 2016 309,120 Acres accretive synergetic acquisitions. 80,320 Acres 2016 Mapan • Buying land inventory Bergen August 2015 July 2015 216,916 Acres • Prior to Shell D
Slide 67: Yearly Core Operating Areas Lookback
Yearly Core Operating Areas Lookback Feb 2017 TOU Lands 2010 NE Alberta Inga TOU Lands 2011 BC Gundy TOU Lands 2012 TOU Lands 2013 TOU Lands 2014 Montney Mulligan/Earring TOU Lands 2015 Gas/Cond Sunrise-Dawson TOU Lands 2016-17 Spirit River Sundown Peace River High Charlie Lk Oil Land Positions (Gro
Slide 68: Montney Land and Corporate Acquisitions
Montney Land and Corporate Acquisitions Feb 2017 Tourmaline and the Development of N.E. Tourmaline Montney N.E. BC Acquisitions B.C. Montney play. • First Acquisition 25 Sections from the ($/Acres) $3,500 purchase of Pienza $3,000 • Latest Acquisition of ~100 Sections $2,500 • Today 380 Sections of
Slide 69: Montney Land and Corporate Acquisitions
Montney Land and Corporate Acquisitions Feb 2017 Transaction EV/boe/d EV/P+P Acquirer Target Transaction Value Land acres Price per Acre Type % Gas Date (C$/boe/d) (C$/boe) 1-Jan-17 Undisclosed Kelt (Karr) $ 100 MM 16,480 $ 6,067 Asset 50% $ 76,746 $ 7.9 1-Oct-16 Enerplus RMP (Ante Creek) $ 114 MM 6
Slide 70: Recent Permian Transactions
Recent Permian Transactions Feb 2017 Cost of Resource Cost of Resource Cost Production $/Acre Locations Implied ($/boe) ($/boe) Date Purchaser Seller ($US MM) Net Acres (boe/d) $/Boe/d $/Acre Adj. Added Loc/Section @1 mmboe/location @0.8 mmboe/location $MM/location 14-Dec-16 Callon Petroleum America
Slide 71: Montney vs Two Premiere USA Shale Plays
Acquisitions Montney Vs Two Premiere USA Shale Plays (Marcellus and Permian) Feb 2017 CDN Montney Deals Vs Two USA Shale Plays ($CAD/Acre)(1) $45,000 $40,000 $35,000 $30,000 CAD $ / Acres $25,000 $20,000 $15,000 $10,000 $5,000 $0 Montney Average Marcellus Average Permian Average CDN USA USA (1) US T
Slide 72: Deep Basin Land and Corporate Acquisitions
Deep Basin Land and Corporate Acquisitions Feb 2017 Transaction Transaction EV/boe/d EV/P+P Date Acquiror Target Type Value % Gas (C$/boe/d) (C$/boe) Shell (Deep Basin & October 2016 Tourmaline Asset $1,369 85% $55,091 $2.89 Montney) June 2016 Bellatrix Grafton (Ferrier) Asset $29 79% $14,599 n/a Ju
Slide 73: Shell Acquisition Overview
Shell Acquisition Overview Feb 2017 • The asset is the original Duvernay Oil Corp. Deep Basin R. 11W6 R. 1W6 R. 15W5 position supplemented with incremental acreage by Shell. Inga BC Montney Gas/Cond (2008-2016) Gundy T85 • The asset was producing approximately 17,500 boepd in Sunrise-Dawson Mulligan
Slide 74: Alberta Deep Basin: Shell Deep Basin Assets
Alberta Deep Basin Shell Deep Basin Assets Oct. 2016 T65 R7 R5 Shell Acquisition 13-16-057-25-W5M 3 well Pad • Spudding 3rd Pad on Shell Deep Basin portion of asset T63 TCPL Main Line • Complete drilling 5 wells on 100% Shell Acquired Lands T61 Fir Musreau Leland • By optimizing existing wells and r
Slide 75: Gundy Ck Acquisition / Northern Montney Complex
Gundy Ck Acquisition/ Northern Montney Complex Oct. 2016 Northern Montney Complex post Gundy Transaction Blackswan A-a054-D Upper 6.7 mmcf/d; 130 bbls/d IP30 • Spudding the 1st well on a 9 well pad A-78-A to be fully completed end of July CNQ D-043-K Upper • 197 gross sections (175 net) 2.8 mmcf/d;
Slide 76: Alberta Deep Basin: Edson/Minehead Asset Acquisition
Alberta Deep Basin Edson/Minehead Asset Acquisition Feb 2017 R7 R5 What We Said T65 • Bought 4,500-5,000 boe/d T63 • Plan to grow to 7,500 boe/d TCPL Main Line T61 • 48 mmboe in new 2P reserves Fir Musreau Leland • Fully developed to 66 mmboe in 2P in next two years /Kakwa T59 Smoky Redirect volumes
Slide 77: 5. Geology
Tourmaline Oil Corp. Investor Day 5. GEOLOGY 1
Slide 78: Outline
Outline Feb 2017 Tourmaline Staff • Organizational chart of the Exploration team Development • Tourmaline 3 core areas • Active rigs • 2016 well results • TOU infrastructure/ midstream assets New EP Opportunities • Permeability Play Spectrum • TOU 3D seismic coverage • 3 new E&P plays and results Ex
Slide 79: Core Operating Areas
Core Operating Areas Feb 2017 R. 11W6 R. 1W6 R. 15W5 NE Alberta Inga BC Montney Gundy Gas/Cond T85 AB Deep Basin Sunrise-Dawson Mulligan/Earring Peace River High PRH Oil Charlie Lk Oil T75 Sundown Spirit River NEBC MNTN 894 Wells drilled by Tourmaline to date Chinook 271 Gross Wells Planned to Ridge
Slide 80: 3 Core De-risked Plays
3 Core De-risked Plays Feb 2017 R. 11W6 R. 1W6 R. 15W5 Top Alberta Other Oil Wells (Sept-Nov 2016) 80,000 Inga Gas Montney TOU Lands BOE (CTD) Gas/Cond 60,000 Liquids Gundy TOU Top AB Gas Wells T85 TOU Top Oil Wells 40,000 Sunrise-Dawson Mulligan/Earring TOU Top BC Wells 20,000 Gundy Top BC Wells 0
Slide 81: Tourmaline Mid-Stream Assets
Tourmaline Mid-Stream Assets Feb 2017 The infrastructure skeleton in all three core operated complexes is now complete R. 15W6 R. 1W6 R. 15W5 Gundy Inga • 17 Working interest gas plants, 14 of which NE Alberta BC are 100% owned and operated Peace River High T85 • 15 compressor stations Charlie Lk Oi
Slide 82: Resource Play Permeability Spectrum
Resource Play Permeability Spectrum Conventional “Tight Gas” Hybrid Pure Shale Sandstone Alberta Deep Basin/ Silt/Sand/Shale Plays Hoadley Plays Montney Duvernay/ Horn River/US Shale Plays Permeability 10-1000 md 0.01-1 md 0.001-0.1 md ~1.0 x 10-6 md Porosity 15-20% 5-10% 3-6% 0-3% Gas Storage Matri
Slide 83: New EP Opportunities
H New EP Opportunities Feb 2017 R13 R11 R9 R7 R5 R3 R1W6 R23 R21 R19 R17 R15 R13 R11 R9 R25 T87 T87 T85 Peace River High T85 T83 Lower Charlie Lake T83 Montney T81 Discovered 2015 T81 ~ 150-300 Locations Turbidite T79 AB Deep Basin T79 Discovered 2013 T77 T77 ~ 150-200 Locations T75 P T73 AB/NEBC T7
Slide 84: Brazeau Viking
Brazeau Viking Feb 2017 R. 17 R. 16 R. 15 R. 14 R. 13W5 A A T. 47 Legend Tourmaline Lands Tourmaline Viking HZ 2016 A A A “A” Pool Location Tourmaline Viking HZ 2017 A A Inventory: 30 Tourmaline Viking HZ 2015 A A A A A Tourmaline Other Wells A A A A A A T. 46 Vertical Type Log A A Viking Pool A A A
Slide 85: Top Alberta Other Oil Wells (Sept-Nov 2016)
Boe (CTD) TOU/Exshaw Lower Charlie Lake TOU/Exshaw Upper Charlie Lake 0 10,000 30,000 40,000 50,000 60,000 70,000 80,000 20,000 Exshaw 16-14-077-08W6 Boulder 08-08-047-14W5 Tourmaline 04-13-083-08W6 Exshaw 06-01-078-07W6 Tourmaline 05-13-083-08W6 Granite 10-24-003-17W4 Tourmaline 14-23-078-07W6 NEP
Slide 86: Montney Turbidite
Montney Turbidite Feb 2017 BC AB A05-05 and D05-05 were drilled based on gas response from offset verticals and successful drills in the Sundown area. NEBC Montney Turbidte Play End of Test Rates: • 29 HZ wells drilled A05-05 234 e3m3/d gas • Future Locations 165-200 89m3/d condensate (gross) D05-05
Slide 87: Is Exploration Over?
Is Exploration Over? Feb 2017 • Worldwide oil and gas discoveries in 2016 dropped below 1940’s levels • 2016 offshore liquids discoveries of 2.3 billion boe were 90% below 2010 levels • Reserve replacement by Majors in 2016 approached only 10% of annual production Challenges/Objectives • The ‘market
Slide 88: Tourmaline Deep Exploration Opportunities
H Tourmaline Deep Exploration Opportunities Feb 2017 R13 R11 R9 R7 R5 R3 R1W6 R23 R21 R19 R17 R15 R13 R11 R9 R25 T87 N.E. B.C and Spirit River T87 T85 Mulligan/Earring T85 Halfway, Doig, Belloy MontneySunrise-Dawson T83 Peace River High Kiskatinaw, Wabamun, and T83 Gas/Cond T81 Charlie Lk Granite Wa
Slide 89: Exploration Summary
Exploration Summary Feb 2017 Tourmaline Staff • Tourmaline has a balance of experienced and youthful geotechnical staff • By running lean with minimal reporting each geoscientist takes ownership of his/her own areas Development • Tourmaline has fully de-risked it’s 3 core areas. • Spirit River Forma
Slide 90: Schedule A: Drilling Locations
Schedule A DRILLING LOCATIONS Estimated Drilling Inventory This news release discloses drilling locations in four categories: (i) proved undeveloped locations; (ii) probable undeveloped locations; (iii) unbooked locations; and (iv) an aggregate total of (i), (ii) and (iii). Of the 14,713 undrilled l
Slide 91: Schedule A continued
Schedule A continued Deep Basin Vertical well count : Approximately 2,746 gross prospective sections at approximately 1.5 wells per section minus 10% for areas that are inaccessible or limited by spacing requirements minus approximately 888 existing wells. Includes 450 locations in the Outer Foothil
Slide 92: Schedule B
Schedule B Prospective locations are unbooked locations that are not included in inventory. Unbooked locations are internal estimates based on the Company's prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review.
Slide 93: Forward Looking Information
Forward Looking Information Certain information contained in this presentation constitutes forward-looking information within the meaning of applicable securities laws. This information relates to future events or the Company's future performance. All information other than information of historical
Slide 94: Forward Looking Information
Forward Looking Information With respect to forward-looking information contained in this presentation, assumptions have been made regarding, among other things: future crude oil and natural gas prices; future interests rates and currency exchange rates; the Company's ability to obtain qualified sta
Slide 95: Forward Looking Statement Advisories
Forward Looking Statement Advisories Oil and Gas Advisories Certain crude oil and natural gas liquids ("NGLs") volumes have been converted to millions of cubic feet equivalent ("mmcfe") or thousands of cubic feet equivalent ("mcfe") on the basis of one barrel ("bbl" of crude oil or NGLs to six thous