Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (April 2023)
27 slides from Journey Energy's investor presentation, April 2023
Slide 1: Corporate Presentation
JOURNEY Corporate Presentation TSX: JOY OTCQX: JRNGF @AlexVergeJOY April, 2023
Slide 2: Journey Today Is…
Journey Today Is… Undergoing a transformational acquisition to become: A sustainably growing free cash flow generating business Unlocking value in under capitalized low decline assets Unhedged Uninterested in: Anything that does not create or preserve stakeholder value 2
Slide 3: April 2023
April 2023 12,500 - 13,000 boe/d (2023 Average) 54% liquids; 12,800 boe/d (exit) 56% liquids Strategic relationship with AIMCo; majority term debt provider and largest shareholder 12% corporate decline go forward; waterfloods and other low decline assets supports sustainability Forecast Adjusted Fun
Slide 4: 2023 Goals
2023 Goals Reduce leverage created by 2022 transformational acquisition Add Inventory in repeatable plays Advance power business Manage ARO Continue to execute on creative ways to expand our business Improve longer term corporate sustainability while satisfying near term obligations 4
Slide 5: Reserves Value 3 Consultants Average
Reserves 3 Consultants Average Value Pricing WTI Price ($US/bbl) $110 $105 $100 $95 2022 Actual $90 $85 $80 2023 Budget $75 $70 $65 $60 $55 $50 2022 2023 2024 2025 2026 2027 2028 2029 Jan 2022 WTI $US/bbl July 2022 WTI $US/bbl January 2023 WTI $US/bbl Recent pull back in commodity price impacts near
Slide 6: Corporate Growing Growth
Corporate GrowingGrowth our Base Returns Business in 2022 2020 2021 2022 2023 Operating Highlights Actual Actual Actual Forecast Production Average (boe/d) 8,379 8,004 9,800 – 10,000 12,500 – 13,000 Oil and NGLs (%) 46% 47% 49% 54% Corporate Decline Rate (%) 17% 14% 14% 12% Reference Prices Natural
Slide 7: Reserves Summary
December Base -–2020 Stable 31, YE 2021 2022 YEReserves Year End ReservesSummary Reserves Summary Company Gross (WI) Reserves(1) / Value (January 1, 2023 3 Consultants Pricing) Oil Gas NGLs NPV10 ($million) Reserve Category Mboe RLI FDC ($ million)(2) (Mbbl) (Bcf) (Mbbl) Before Tax (1) Proved Develo
Slide 8: Top Tier Growth in Net Asset Value Per Share
Top Tier Growth in Net Asset Value Per Share $14.35/share P+P Over 75% annual increase in Net Asset Value per Share over the past two years $8.44/share $8.19/share P+PDP P+P $6.77/share PDP JOY Shares March 23 $3.86/share $3.77/share P+PDP P+P $2.85/share PDP $0.86/share P+PDP -$0.05/share PDP Perio
Slide 9: GLJ Forecasted Edmonton Light Value
Reserves GLJ Forecasted Edmonton Light Value Price Reversing Trend Since January 2021 140.00 2015 130.00 2022 Actual 120.00 110.00 2017 2020 2023 MSW Price ($CDN/bbl) 100.00 90.00 2023 Budget 2022 2021 80.00 2021 70.00 60.00 50.00 40.00 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 203
Slide 10: New Acquisition Positions Journey Favorably in the Market
New Acquisition Positions Journey Favorably in the Market (Greater Scale, Increased Oil Weighting and Lower Declines) Increase pro forma production 45% High value waterflood/EOR oil pools enhance netbacks and sustainability Increases pro forma oil production by 70% and liquids weighting to 54% Modes
Slide 11: Attractive Acquisition Financing
Attractive Acquisition Financing $140,000,000 purchase price (May 1 Effective) $30,000,000 cash flow (May 1 – Close) $45,000,000 vendor take back (VTB) financing (10% interest rate) with scaled monthly repayments: Monthly WTI Payment Price $4,000,000/month >US$100/Bbl Price dependent $3,000,000/mont
Slide 12: Journey's power business is expanding from 4 MW to 35 MW by early 2024
Journey's power business is expanding from 4 MW to 35 MW by early 2024 Countess 4 MW on stream September 2020 Fuel gas supplied by long life natural gas (Countess field) Connected to Alberta power grid 2022 estimated operating income; $3.2 million Gas price equivalent of $10.63/mcf for 2022 Gilby 15
Slide 13: How to make a Low Decline even LOWER
How to make a Low Decline even LOWER 763 MM bbl on waterflood 40 MM bbl conventional 40 MM to JOY net barrels of 260 MM bbl future potential be delineated and flooded DOOIP by category for waterfloor 1.1 Billion net bbl of DOOIP 763 MM bbl 340 MM bbl convert 260 MM bbl future on waterflood/Polymer c
Slide 14: Strong Base! Even Stronger Value
Reserves Strong Base! Even Stronger Value Future Development Potential (As at December 31, 2022) Journey’s $276 million of P+P future development capital (FDC) is approximately $9.50/P+P boe 60% of Journey’s identified capital projects remain unbooked Journey’s P+P FDC adds $303 million of NPV@10%;
Slide 15: Post Acquisition Extensive Drilling Inventory; in Existing Pools!
Post Acquisition Extensive Drilling Inventory; in Existing Pools! Journey has identified 311 (273 net) horizontal drilling opportunities Drilling Locations(1) % Booked(2) in Total(1) Reserve Report Region Gross Net South 166 148 45% Central 145 125 38% Total 311 273 41% Unbooked Projects $334MM in C
Slide 16: But Wait! There's Still More To Come
But Wait! There’s Still More To Come 1.1 Billion net barrels of DOOIP 3.0% of booked recovery 85.0% of oil left behind Ultimate 12.0% recovered to date Recovery 15.0% ultimate recovery Oil left behind becomes Target Resource Journey can double our P+P oil reserves by recovering 3.9% more of the oil
Slide 17: Value of Inventory Appreciates with Pricing
Value of Inventory Appreciates with Pricing Comparative Economics Versus Oil Price - IRR% 300 Matziwin HZ (MSW) AECO $4.00/MMbtu Crystal HZ (MSW) 250 Cherhill HZ (MSW) Westerose HZ (MSW) Skiff 2 HZ WF Pattern (WCS) 200 Medicine Hat HZ (WCS) 150 IRR % 100 50 0 $70/bbl WCS, $80/bbl EDM $80/bbl WCS, $9
Slide 18: Journey Has Over Years of Drilling Inventory, Let's Get After It!
Journey Has Over 15 Years of Drilling Inventory, Let’s Get After It! Comparative Economics Versus Oil Price - Payout (Years) 4.5 Skiff 2 HZ WF Pattern (WCS) 4.0 AECO $4.00/MMbtu Westerose HZ (MSW) Cherhill HZ (MSW) 3.5 Crystal HZ (MSW) Matziwin HZ (MSW) 3.0 Medicine Hat HZ (WCS) Payout Years 2.5 2.0
Slide 19: In 2023, Journey Could…
In 2023, Journey Could… … at $75 US/bbl WTI Pricing Pay off $33 million of its outstanding debt Add power projects with combined NPVs of $80-$100 million… … resulting in a material increase in Net Asset Value per Share … at $85 US/bbl WTI pricing Grow production 5%-10% from current levels 19
Slide 20: Energized and Engaged Team
Energized and Engaged Team Alex G. Verge, P.Eng., M.Eng. President and Chief Executive Officer, and Director – Previously President and CEO of NuVista Energy, VP Engineering at Bonavista, and senior positions at Poco Petroleums, Rising Resources, Shell, and Gulf. Gerry N. Gilewicz, CPA, CMA Chief Fi
Slide 21: Directors – Strong Governance
Directors – Strong Governance Craig Hansen Chairman of the Board – Independent businessman, Former President and Chief Executive Officer of Zargon Oil & Gas Ltd. and its predecessor, Zargon Energy Trust. Thomas Mullane Reserves Committee Chair – Independent businessman and former President and Chief
Slide 22: Appendix
Appendix 22
Slide 23: Environmental
Environment, Social and Governance Environmental Journey is striving to reduce direct emissions intensity from year end 2022 levels for scope 1 and 2 emissions. We chose this time period for this target to focus on new reductions rather than accounting for reductions already achieved. We reuse 99.9%
Slide 24: Social
Environment, Social and Governance (Continued) Social Journey takes pride in maintaining its operations with the highest of standards and ensures its suppliers of goods and services do so as well. Journey operates in nine key areas in the province of Alberta and is very active in the communities in
Slide 25: Governance
Environment, Social and Governance (Continued) Governance In recognition of the key role that sustainability plays in our business, Journey has mandated that the Board of Directors (the “Board”) take an active role in evaluating our corporate sustainability strategy, improving our risk management pr
Slide 26: Forward-Looking Statements and Financial Measures
Forward-Looking Statements and Financial Measures This presentation contains “forward-looking statements” including estimates of future production, cash flows and reserves, business plans for drilling and exploration, the estimated amounts and timing of capital expenditures, the assumptions upon whi
Slide 27: Oil and Gas Advisory
Oil and Gas Advisory The crude oil, natural gas and natural gas liquid reserves and related future net revenue of Journey presented herein were evaluated by GLJ, Journey’s independent reserves evaluators, in accordance with the requirements of National Instrument 51-101 (“NI 51-101”) and the Canadia