Bonterra Energy Corp. · TSX:BNE
Bonterra Energy — Investor Presentation (April 2023)
23 slides from Bonterra Energy's investor presentation, April 2023
Slide 1: Corporate Presentation April 2023
CORPORATE PRESENTATION TSX: BNE APR 2023 1
Slide 2: Corporate Snapshot
Corporate Snapshot Financial TSX: BNE Common Shares Outstanding MM 37 Insider Ownership % 15 2022 Average Production (1) boe/d 13,407 2022 Exit Production boe/d 12,850 2022 Oil and Liquids Weighting % 61 2022 Funds Flow $MM 186 2022 Exit Net Debt $MM 150 PEMBINA 2022 Exit Debt/EBITDA Ratio 0.8 & WIL
Slide 3: Strategic Pillars
Strategic Pillars Focused on Responsible Free Funds Flow Generation (1) 2023 Free Funds Debt Complementary Distribution Flow Generation Repayment Acquisitions Model ✓ Low Risk Drill Inventory ✓ $145 Million Bank Debt ✓ Cardium and other ✓ Target Low Net Debt Retirement in 2022 and Leverage Metrics ✓
Slide 4: Expansive Drilling Inventory
Expansive Drilling Inventory Pembina Cardium: Low-risk, highly economic undrilled locations Pembina & Willesden Green Lands by the Numbers 92% Operated Production 473 gross Sections of land (312 net) 295 net Booked locations 101 MBOE P+P Reserves 21 years Reserve Life Index (P+P) 4
Slide 5: Average BNE Cardium Economics
Average BNE Cardium Economics Cardium wells are repeatable, predictable and generate strong returns 200 Reserves per well (MBOE) 133 150 IP (12 months) (boe/d) 112 BOE/D 100 50 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 BNE Type Curve: Full Cycle Capital and Price Sensitivities
Slide 6: 2023 CAPEX Program
2023 CAPEX Program Cynthia West Pembina Keystone Carnwood 2023 CAPEX Program • $120 Million CAPEX • 53 Gross (43.8 Net) Wells • Gas Plant Expansion • 50% Activity in Q1 Blue Rose 14-28 Gas Plant Expansion 2023 Q1 Update Rapids Creek 100% WI • 22 Net Wells drilled 14 Mmcf/d Capacity • 14.2 Net Wells
Slide 7: Production and Activity Forecast
Production and Activity Forecast 2023 drill program of 44 Net wells is Q1 Weighted; Forecasting 10% Exit Growth Year over Year BASE 2021 CAPEX 2022 CAPEX 2023 CAPEX 16,000 14,000 12,000 10,000 BOE/D 8,000 6,000 4,000 2023 Guidance: 13,500 to 13,700 boe/d 2,000 - Jan-23 Feb-23 Mar-23 Apr-23 May-23 Ju
Slide 8: 2023 Forecasted Free Funds Flow Sensitivity
2023 Forecasted Free Funds Flow Sensitivity $167 Million Funds Flow and $41 Million of Free Funds Flow Forecasted in 2023 based on current strip (1) STRIP $70 FLAT $80 FLAT $90 FLAT WTI U$/bbl 75.49 70.00 80.00 90.00 FREE FUNDS FLOW SENSITIVITY REALIZED OIL $/bbl 95.73 85.11 98.63 112.14 REALIZED GA
Slide 9: Ongoing Debt Reduction Execution
Ongoing Debt Reduction Execution $200 Million Forecasted Net Debt reduction since Q1 2021 (1) (2) 330 150 130 (1) Price Assumptions: Refer to appendix for Flat WTI assumptions and February 27, 2023 Strip. (2) Trailing 12 Month EBITDA Please see the Advisories section at the back of the presentation
Slide 10: Successful Restructuring of Debt Capitalization
Successful Restructuring of Debt Capitalization Stable capital base, enhanced liquidity Debt Composition Bank Facility Liquidity BANK DEBT SUB DEBT DEBENTURE BANK DEBT LIQUIDITY % DRAWN 250 125 35% 12% 11% 0% 200 189 100 157 154 60 150 75 129 72 59 60 97 97 MM$C MM$C 100 59 110 50 90 86 38 50 81 25
Slide 11: Return of Capital Framework
Return of Capital Framework Intention to recommence a return of capital model in 2023 ➢Debt repayment Allocation of ➢Dividend Free Funds Flow ➢Production growth ➢Acquisitions Dividend ➢Minimal bank debt drawn Triggers ➢Debt/EBITDA(1) <0.8:1.0 ➢25% of Free Funds Flow Shareholder ➢Target yield of 5% R
Slide 12: Return of Capital Framework
Return of Capital Framework Dividend Reinstatement forecasted in Q4 Targeting 25% of Free Funds Flow to be distributed to shareholders ( 3) WTI PRICE SCENARIO (1) USD/BBL $65.00 $75.00 $85.00 $95.00 ANNUAL DIVIDEND $/Year 0.36 0.51 0.66 0.78 (4) DIVIDEND YIELD (2) % 5% 8% 10% 12% FUNDS FLOW MM$C 131
Slide 13: Funds Flow Allocation Sensitivity
Funds Flow Allocation Sensitivity (1,2) Discretionary Free Funds Flow(2,3) will be directed to Sustainable Production Growth, Debt Retirement, Increasing Shareholder Returns & Acquisitions FUNDS FLOW ALLOCATION SENSITIVITY (MM$C) $65 WTI $75 WTI $85 WTI $95 WTI $26 $40 $59 $74 $80 $83 $14 $80 $73 $2
Slide 14: 2022 Reserves Summary
2022 Reserves Summary Reserve Category Oil (Mbbl) BOE (Mboe) NPV BT 10% (1) (millions) Proved Developed Producing 18,072 33,702 632,115 Proved Developed Non-Producing 2,403 3,799 55,799 Proved Undeveloped 22,699 43,201 468,029 Total Proved 43,174 80,702 1,155,943 Probable 10,400 19,788 325,745 Total
Slide 15: Net Asset Value Price Sensitivities
Net Asset Value Price Sensitivities Bonterra offers shareholders torque to oil and exposure to a significant low risk drill inventory YE2022 Net Asset Value Net Asset Value per share (@ Feb 27, 2023 Strip)(1,2) Flat Price Sensitivities(1,3) Proved Developed Producing Total Proved Total Proved + Prob
Slide 16: Strategy: Positioned for Success
Strategy: Positioned for Success Our proven track record has been built on a model of generating long-term, sustainable value through disciplined capital allocation aligned with prevailing commodity prices Insiders own ~15% Experienced & Aligned Management Predictable and long-life asset Free Funds
Slide 17: Appendix
Appendix 17
Slide 18: 2023 Guidance
2023 Guidance Delivering Modest Growth, Strengthening the Balance Sheet and Reinstituting Shareholder Returns SELECT 2023 GUIDANCE SUMMARY 2023 Average Daily Production: 13,500 – 13,700 boe/d 14,100-14,400 BOEPD Oil and NGL Weighting: 60% Production Forecast 2023 Exit 2023 Exit Production: 14,100 -
Slide 19: Risk Management
Risk Management • 30% Hedged • 9 months WEIGHTED AVERAGE OIL HEDGES FIXED Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 VOLUME bbl/d 500 - - - - - - - PRICE USD $/bbl 91.00 - - - - - - - COLLARS Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 VOLUME bbl/d 2,250 2,80
Slide 20: Appendix – Price Decks
Appendix – Price Decks Strip as at 02/27/2023 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 2023 2024 WTI USD $78.16 $76.78 $75.74 $75.74 $75.88 $75.86 $75.58 $75.28 $74.89 $74.43 $73.93 $73.66 $75.49 $71.29 DIFFERENTIAL USD -$3.07 -$3.81 -$1.50 -$1.30 -$1.30 -$
Slide 21: Forward Looking Information
Forward Looking Information Certain statements contained in this Presentation include statements which contain words such as “anticipate”, “could”, “should”, “expect”, “seek”, “may”, “intend”, “likely”, “will”, “believe” and similar expressions, statements relating to matters that are not historical
Slide 22: Forward Looking Information
Forward Looking Information USE OF NON-IFRS FINANCIAL MEASURES: Throughout this presentation the Company uses the terms “funds flow”, “free funds flow”, "net debt" and "field netback" to analyze operating performance, which are not standardized measures recognized under IFRS and do not have a standa
Slide 23: Corporate Information
Corporate Information OFFICERS BANKS Patrick G. Oliver President & CEO CIBC Robb D. Thompson CFO & Corporate Secretary Alberta Treasury Branches Adrian Neumann Chief Operating Officer Business Development Bank of Canada Brad A. Curtis Senior VP, Business Development DIRECTORS INDEPENDENT RESERVE ENG