37 slides from Paramount Resources Ltd. Class A's investor presentation, April 2015
Slide 1: Corporate Presentation April 2015
Corporate Presentation April 2015
Slide 2: Future Oriented Information
Future Oriented Information (See additional advisories at the end of this document) • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount" or the "Company"), including management's assessment of the Company's future plans and operations, this presentation contains
Slide 3: Corporate Profile
Corporate Profile Corporate Profile • Founded in 1974; IPO in 1978 • TSX: POU • Market Cap: 104.9 MM shares @ $32.00/share ~ $3.4 Billion • ~50% insider ownership • Net Debt (December 31, 2014): $1.5 Billion • 2015 Capital Guidance: $400 MM Low Risk/Repeatable Growth Operations focused on large-scal
Slide 4: Deep Basin Resource
Deep Basin Resource Paramount Acreage (gross): • 544 Sections Cretaceous Rights • 364 Sections Montney Rights • 249 Sections Duvernay Rights • Deep Basin liquids-rich gas resources in multiple stacked horizons • 40-160 Bcf/section DGIIP (1) • ~5+ Bcf EUR/Hz well (1) • >10 Tcf DGIIP + NGLs net to POU
Slide 5: Cretaceous Gas Resource
Cretaceous Gas Resource • Hz Dunvegan well at • Hz Falher well at Musreau Resthaven • Tested 16.4 MMcf/d(1) at • Tested 11.3 MMcf/d(1) at 20.8 MPa 6.2 MPa • IP: 12.0 MMcf/d • IP: 8.3 MMcf/d • Currently producing • Currently producing ~2.0 MMcf/d ~1.1 MMcf/d • Cost: $8.6 MM d/c/t • Cost: $8.3 MM d/c/
Slide 6: Cretaceous Economics
Cretaceous Economics Assumptions Capital: $7.0 MM horizontal well IP: 9.0 MMcf/d Natural Gas (raw): 4.9 Bcf Raw Condensate Gas Ratio: 17 Bbl/MMcf C2-C4 NGLs: 61 Bbl/MMcf Deep Cut Facility Economics : $2.75 AECO, US$55.00 WTI (Deep-Cut) NPV 10%: $2.5 MM IRR: 31% Payout (Months): 30 P/I: 1.7 6
Slide 7: Montney Gas Resource
Montney Gas Resource Liquids-rich Montney gas play Paramount holds ~315 net sections of Montney rights 2011/2012 program included 16 Hz Montney wells: tested 5.5-15.4 MMcf/d(1) Montney 2013 program: Drilled 15 wells; commenced drilling 25 additional wells off 3 pads in Musreau; participated
Slide 8: Montney Economics
Montney Economics Assumptions Capital: $10.0 MM horizontal well IP: 5.8 MMcf/d Natural Gas (raw): 3.0 Bcf Raw Condensate Gas Ratio (CGR): 150 Bbl/MMcf (50 Bbl/MMcf - 400 Bbl/MMcf) C2-C4 NGLs: 90 Bbl/MMcf Deep Cut Facility Economics @ $2.75 AECO, US$55.00 WTI (Deep Cut) NPV 10%: $7.7 MM IRR: 56% Payo
Slide 9: Montney Drilling/Completion Improvements
Montney Drilling/Completion Improvements • Pad drilling/pad layout • Bits/muds/motors • Well design: monobores/orientation/reservoir placement • Toe up/toe down: effects on production • Natural gas fueled rigs • Plug and perf/sliding sleeves • Cemented liners/open-hole packers (ECP’s) • Frac sizing/
Slide 10: Musreau
Musreau 2014: Drilled 24 (24 net) horizontal Montney wells Started drilling 15 (15 net) Montney wells on three pads Drilled 7 (6.3 net) horizontal Falher/Wilrich wells Drilled 2 (1.5 net) vertical wells to hold lands 2015: Drill 19 (19 net) horizontal Montney wells Drill 5 Cretaceous hor
Slide 11: Karr
Karr • Multi-zone potential, including Halfway, Montney sour and Gething, Bluesky, Falher sweet commingled gas • Current plant and gathering systems 40 MMcf/d; expanding by 40 MMcf/d in Q1 2016 2014: • Drilled 2 (1.0 net) horizontal Cretaceous wells • Drilled 10 (9.3 net) horizontal Montney wells wi
Slide 12: Deep Basin Processing Capacity
Deep Basin Processing Capacity Gross Net POU Potential Raw Gas Raw Gas Sales Capacity Capacity Volumes MMcf/d MMcf/d Boe/d (1) Musreau Deep Cut Facility 200 200 50,000 Musreau Refrig Plant 45 45 8,500 Smoky Deep Cut Facility 200 40 10,000 Karr Capacity 40 40 10,000 Other Musreau area capacity 64 18
Slide 13: Deep Basin Processing Capacity (1)
Deep Basin Processing Capacity (1) (1) Please refer to the heading “Deep Basin Processing Capacity” in the Advisories section for further information. 13
Slide 14: Full Capacity at Musreau
Full Capacity at Musreau Currently limited to 120 MMcf/d; 8,000 Bbl/d C2+ base capacity and stabilization capacity of 8,500 Bbl/d Liquids transportation Pembina HVP in-service LVP in-service Full Capacity at Musreau De-ethanization capacity Current 8,000 Bbl/d gross C2+ capacity Interrup
Slide 15: Musreau 8-13 Complex
Musreau 8-13 Complex October 13, 2014 15
Slide 16: Illustrative Deep-Cut - Montney Wells
Illustrative Deep-Cut - Montney Wells 200 MMcf/d x 23% Shrinkage = 154 MMcf/d Sales Gas (25,667 Boe/d) + 22,000 Bbl/d condensate + 18,000 Bbl/d NGLs Price Yield Bbl/MMcf Deep-Cut Sales Gas $2.75/Mcf 154 MMcf/d $423,500 Condensate $65.00/Bbl 110 22,000 Bbl/d $1,430,000 Butane $35.00/Bbl 12.5 2,500 Bb
Slide 17: Paramount Deep-Cut Montney - Illustrative Project Economics
Paramount Deep-Cut Montney - Illustrative Project Economics • Paramount’s shallow rights will add substantially to the RLI • Paramount has de-risked a substantial amount of its land base and thus could have the potential to add a series of refrigeration or deep cut plants • Simple Payout from free c
Slide 18: Pembina Peace Pipeline Expansion
Pembina Peace Pipeline Expansion Numbers provided by Pembina Pipelines LVP Capacity (Bbl/d) HVP Capacity (Bbl/d) In-Service Current 195,000 115,000 Phase 2 Expansion 55,000 20,000* 2015 Phase 3 Expansion 470,000** 2016/2017 Total 855,000 * By displacement onto 53,000 Bbl/d Pembina North Expansion *
Slide 19: Willesden Green
Willesden Green Duvernay Shale Play 64,452 (34,305 net) acres of land when earning complete(1) • Drilled and completed 2 Hz Duvernay wells to date: Well #1 flowed back ~12,200 Bbl of condensate and oil and ~11.0 MMcf of natural gas, brought on production Q4 2014; Cum production to Feb 15, 2015 is
Slide 20: Montney
Montney Valhalla: ~65 sections (~49 net) Montney/~67 sections (~34 net) Doig rights • Montney/Doig Play • 16 wells tied in at restricted rates (midstream constraints) • Montney wells tested 3.0 - 12.5 MMcf/d + NGLs/Condensate(1) • Doig wells tested 2.5 - 15 MMcf/d + NGLs/Condensate(1) • Evaluating l
Slide 21: Paramount Investments
Paramoumsrtt resources Itd. be ho Se a) — DF
Slide 22: Paramount Investments
Parzamournt resources Itd. am. trilogy Energy (TSX:TET) TRILOGY 19.1 MM shares Spun-out from Paramount in 2005 Market Cap: ~$1.0 billion 2014 production: 35,104 Boe/d Concentrated asset base, liquids-rich resource with multi -zone potential Key growth plays: Kaybob South Montney Gas, Kaybob Montney
Slide 23: Cavalier Energy Inc.
Pararrtacust resources Itd Cavalier Energy Inc.
Slide 24: Cavalier Energy Inc.
Cavalier Energy Inc. Corporate Profile • Created in December 2011; experienced team led by CEO Dr. Will Roach • Paramount contributed its oilsands assets and seed capital to Cavalier • Funding at the Cavalier level will be via a combination of equity and debt • Assets retained as 100% WI within Cava
Slide 25: Hoole Grand Rapids - 1st Project
Hoole Grand Rapids - 1st Project Grand Rapids Reservoir Φ = 30 %, k = 1 to 4 D d = 250m, h ~ 20m, p = 1,500 kPa Viscosity = 200,000 to 2,000,000 cp McDaniel Best Estimate: DEBIP = 2.5 Billion Bbl(1) 80 wells drilled to date; 42 cored 93 Million Bbl Probable Undeveloped Reserves and 1,157
Slide 26: Liard Basin Shale Gas
Liard Basin Paramoumsrtt resources Itd. Shale Gas
Slide 27: Liard Basin
Liard Basin Besa River Shale Play • Drilled and completed b-40-I • Completion of d-57-D horizontal deferred as land earning completed • Completed drilling d-71-G • Spud c-37-D at La Biche • Liard Basin industry estimates(1): • 170-500 Bcf / section OGIP • ~20% expected recovery • ~34-100 Bcf sales g
Slide 28: MGM Energy
MGM Energy Mackenzie Delta • Land holdings ~ 300,000 (155,000 net) acres • Contingent Resources 473 Bcf (1) Central Mackenzie • Land holdings ~1,300,000 (725,000 net) acres • Nogha Contingent Resources 92 Bcf (1) Canol Resource Summary • Discovered Oil Initially-In-Place ("DOIIP") 625 MMBbl (2) • Un
Slide 29: Quarterly Operating Results
Quarterly Operating Results 29
Slide 30: Conventional Reserves
Conventional Reserves Columns may not add due to rounding. Conventional reserves only. Includes nominal amounts of estimated reserves in respect of Paramount's initial shale gas well at 30 Patry, B.C. Reserves evaluated by McDaniel &Associates Consultants Ltd. in accordance with National Instrument
Slide 31: Summary
Summary • Exposure to significant reserve opportunities – Kaybob Deep Basin: Cretaceous, Montney – Karr: Montney – Valhalla: Montney, Doig – Willesden Green: Duvernay – Birch: Montney • Significant asset value – Trilogy – MEG Energy – Cavalier Energy – Liard Shale Gas • Paramount continues to provid
Slide 32: Advisories Appendix
Paramoumsrtt resources Itd. Ce)
Slide 33: Advisories
Advisories Certain statements in this presentation constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "will", "expect", "plan", "intend", "propose", or simil
Slide 34: Advisories cont'd
Advisories cont’d Oil and Gas Measures and Definitions This presentation contains disclosure expressed as "Boe", "MBoe", "MMBoe, and "Boe/d". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency meas
Slide 35: Advisories cont'd
Advisories cont’d Pressure transient analyses and well-test interpretations have not been carried out for any of these wells and, as such, all data should be considered preliminary until such analyses or interpretations have been done. Liquids yields have not been included in the Musreau, Resthaven,
Slide 36: Advisories cont'd
Advisories cont’d "Contingent resources" are those quantities of bitumen resources estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are classified as resources rather than reserves due to one
Slide 37: Paramount Resources contact details
4700 Bankers Hall West 888 Third Street S.W. Calgary, Alberta Canada T2P 5C5 Telephone: (403) 290-3600 Facsimile: (403) 262-7994 www.paramountres.com