Birchcliff Energy Ltd. · TSX:BIR
Birchcliff Energy — Investor Presentation (May 2022)
40 slides from Birchcliff Energy's investor presentation, May 2022
Slide 1: Corporate Presentation May 2022
CORPORATE PRESENTATION MAY 2022
Slide 2: Corporate Snapshot: Birchcliff Overview
CORPORATE SNAPSHOT BIRCHCLIFF OVERVIEW CORPORATE INFORMATION Share price (TSX:BIR) as at May 11, 2022 $9.37 per share BIRCHCLIFF IS A PURE PLAY MONTNEY/DOIG PRODUCER Shares outstanding as at May 11, 2022 ~265 million Market capitalization as at May 11, 2022 $2,483 million Total debt as at March 31,
Slide 3: Corporate Snapshot: Quarterly Results
CORPORATE SNAPSHOT QUARTERLY RESULTS SELECT Q1/22 RESULTS Average production 76,024 boe/d Light oil (% of production) 2,369 bbls/d (3%) Condensate (% of production) 4,796 bbls/d (6%) NGLs (% of production) 7,976 bbls/d (11%) Natural gas (% of production) 365 MMcf/d (80%) $184 million Adjusted funds
Slide 4: Why Invest in Birchcliff
CORPORATE SNAPSHOT WHY INVEST IN BIRCHCLIFF WORLD-CLASS ASSET BASE OPERATIONAL EXPERTISE Executive and management teams with a proven Focused, contiguous Montney land position track record Using scale to drive down costs and reduce Own, operate and control infrastructure environmental impact Multi-l
Slide 5: 2022 Outlook: Capital Program Details
2022 OUTLOOK CAPITAL PROGRAM DETAILS F&D Capital Expenditures by Classification 01-08 06-35 5 Montney D1 4 Montney D1 Classification Capital (millions) 1 Montney C 5 Montney D2 DCCET 4 Basal Pouce Coupe(1) $103 - $112 Doig/Upper Gordondale light (1) Montney oil offsetting Gordondale $35 - $38 (2) Bi
Slide 6: 2022 Outlook: Natural Gas Marketing
2022 OUTLOOK NATURAL GAS MARKETING AECO $6.69 ($0.06) ($0.45) $6.18 NO FIXED 18% PRICE COMMODITY 42% HEDGES Dawn $8.31 ($0.41) 3% ($1.31) $6.59 Alliance Pricing Hub $5.14 Forecasted Realized Sales Price at Hub (CDN$/GJ)(1) ($0.16) 37% ($0.43) Hedged Differential (CDN$/GJ)(1) $4.55 Estimated Fuel Cos
Slide 7: Five Year Plan: Production
FIVE YEAR PLAN(1) FOCUSED ON PROFITABILITY & SHAREHOLDER RETURNS PRODUCTION 100,000 95,000 Driving down per 90,000 90,000 90,000 86,000 unit costs while 85,000 78,000 - 81,000 remaining fully 80,000 80,000 exposed to 75,000 commodity prices 70,000 2022 2023 2024 2025 2026 Annual Average Production (
Slide 8: Five Year Plan: Free Funds Flow vs F&D Capex and Shareholder Returns
FIVE YEAR PLAN(1) FOCUSED ON PROFITABILITY & SHAREHOLDER RETURNS FREE FUNDS FLOW VS F&D SHAREHOLDER RETURNS CAPACITY CAPEX $1,000 $920- 940 $3.47 – $3.50 $3.55 $800 $/common share $3.00 $600 $635 $640 $2.50 $ millions $605 $2.28 $2.40 $2.42 $535 $2.00 $2.02 $400 $240- $1.50 260 $260 $255 $245 $225 $
Slide 9: Five Year Plan: Stress Testing Sustainable Dividend
FIVE YEAR PLAN(1) STRESS TESTING SUSTAINABLE DIVIDEND Dividend and F&D capital program funded over the Five Year Plan at US$70.00/bbl WTI and CDN$3.00/GJ AECO $900 $795 MM $800 2023 excess free funds flow(2) – $700 budgeted commodity pricing(3) $600 $ millions $500 $472 MM $472 MM 2023 adjusted fund
Slide 10: Birchcliff's Montney/Doig Resource Play
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY LOCATED IN THE HEART OF THE WORLD-CLASS MONTNEY Large focused land base with 404.8 net sections prospective for the Montney/Doig as at December 31, 2021. Birchcliff has a contiguous land block at Pouce Coupe and Gordondale of approximately 214.2 net sections.
Slide 11: Montney/Doig Hexastack
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG BIRCHCLIFF MONTNEY/DOIG HEXASTACK • Resource density: Stacked resource up to 300 metres thick. • Large areal extent: Extends over 50,000 square miles. • Exceptional “fracability”: Low clay content, low Poisson’s Ratio and high Young’s
Slide 12: Located in the Heart of the World-Class Montney
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG LOCATED IN THE HEART OF THE WORLD-CLASS MONTNEY May 2022 12
Slide 13: 2021 Capital Program
2021 CAPITAL PROGRAM MONTNEY/DOIG RESOURCE PLAY LOOKING BACK AT THE SUCCESSFUL 2021 CAPITAL PROGRAM 2021 Locations & Well Rates (IP60) 2021 Capital Program Major Themes • 2021 capital program was focused on low-risk drilling opportunities to generate free funds flow. • Majority of capital spent on D
Slide 14: Capital Expenditures Review
PROVEN TRACK RECORD D&C CONTINOUS PERFORMANCE OF CONTINUOUS IMPROVEMENT IMPROVEMENT CAPITAL EXPENDITURES REVIEW Historical + 2022E Drill, Complete, Equip/Well ($000) $5,200 $ thousands Top-tier capital expenditures performance driven by large pad development providing scale and efficiencies. 2022 dr
Slide 15: Pouce Coupe Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE OVERVIEW 2021 average production of 50,025 boe/d(1) with a natural gas weighting of 89%. Proven asset in development phase. Wells show high initial deliverability, low terminal decline and stable long-term production. Predictable results with impro
Slide 16: Pouce Coupe Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE TYPE CURVE(1) 4000 Rate of Return⁽²⁾ (%) WTI (US$/bbl) 3500 $70.00 $80.00 $90.00 $100.00 $4.00 212 240 269 300 (C$/GJ) AECO $5.00 265 296 328 362 3000 $6.00 321 355 389 426 Sales Gas Rate (Mcf/d) $7.00 378 414 451 490 2500 NPV 10%⁽²⁾ ($MM) 2000 WTI
Slide 17: Exceeding Expectations: 2022 Wells vs Tier 0 Type Curve
D&C CONTINOUS PERFORMANCE IMPROVEMENT EXCEEDING EXPECTATIONS 2022 WELLS VS. TIER 0 CAPPED TYPE CURVE The first pad of 2022 is significantly outperforming the Tier 0 capped type 13-29 Pad curve and continues to show sustained, flat production. Tier 0 Capped IP 30(1) IP 60(1) Average per well producti
Slide 18: Gordondale Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE OVERVIEW 2021 average production of 28,492 boe/d(1) with an oil & NGLs weighting of 37%. Strategic infrastructure. Low base production decline. Exploration success in the Montney C in 2021 added another commercial development interval to the Montney
Slide 19: Gordondale Drilling Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE DRILLING TYPE CURVE(1) D1 & D2 Halo High GOR - Rate of Return⁽²⁾ (%) D1 Halo Low GOR D1 & D2 Halo High GOR WTI (US$/bbl) 500 $70.00 $80.00 $90.00 $100.00 $4.00 183 214 246 280 (C$/GJ) 450 AECO $5.00 225 258 293 330 400 $6.00 268 304 341 380 $7.00 31
Slide 20: Focused on ESG Excellence: Environmental
CORPORATE RESPONSIBILITY FOCUSED ON ESG EXCELLENCE PEER EMISSIONS METRICS(1)(2)(3)(4)(5)(6) ENVIRONMENTAL 2,500,000 Producer GHG Emissions Metrics 0.050 Waste heat recovery units at the Pouce Coupe Gas Plant take the equivalent of 2,000,000 0.040 >5,000 cars off the road annually. Emissions Intensit
Slide 21: Focused on ESG Excellence: Social and Governance
CORPORATE RESPONSIBILITY FOCUSED ON ESG EXCELLENCE SOCIAL $4.25 million donated to more than 100 local community groups and organizations in the last 5 years. Continued partnerships with local communities through educational, cultural, and economic development initiatives. Major supporter of STARS A
Slide 22: Canadian West Coast LNG Opportunity
CANADIAN WEST COAST LNG OPPORTUNITY BIRCHCLIFF’S ACTIVE ROLE SUPPLYING THE WORLD WITH CLEAN LNG Environmental Benefits of Canadian LNG LNG is critical in the transition to a low-carbon economy, as it displaces higher carbon fuels like coal and oil and provides a backstop to intermittent renewables s
Slide 23: Appendix
BIRCHCLIFF ENERGY APPENDIX May 2022 23
Slide 24: Production History
PRODUCTION HISTORY SIGNIFICANT GROWTH SINCE INCEPTION 90,000 78,000 - 77,977 76,401 78,520 80,000 80,000 77,096 70,000 67,963 Average Production (boe/d) 60,000 49,236 50,000 38,950 40,000 33,734 30,000 25,829 22,802 20,000 18,136 13,079 10,148 11,216 10,000 6,711 5,368 2,793 0 2005 2006 2007 2008 20
Slide 25: Corporate Reserves
CORPORATE RESERVES CONSISTENT RESERVES VOLUME AND VALUE GROWTH 1,200,000 $7,000 PDP - Reserves On a per share basis PDP, TP 1,100,000 TP - Reserves and 2P reserves have 2P - Reserves increased at a compound $6,000 1,000,000 annual growth rate of 11%, PDP - NPV10⁽¹⁾ 16% and 16% per year since 900,000
Slide 26: Historical Profitability
HISTORICAL PROFITABILITY PROVEN TRACK RECORD AS A LOW COST PRODUCER Profitability Breakdown: 5 Year 2017 2018 2019 2020 2021 Average Average AECO (CDN$/GJ) $2.04 $1.42 $1.67 $2.11 $3.44 $2.14 Average WTI (US$/bbl) $50.95 $64.77 $57.03 $38.91 $68.70 $56.07 P&NG Revenue ($/Mcfe)(1)(2) $3.74 $3.68 $3.5
Slide 27: Preferred Share Details: Series A
PREFERRED SHARE DETAILS SERIES A PERPETUAL PREFERRED SHARES Preferred Share Details Series A Number of Shares 2,000,000 Issue Date August 8, 2012 TSX Trading Symbol BIR.PR.A Issue / Par Price $25.00 per share Quarterly Dividend $0.523375 per share Yield on Par Price 8.374% Redeemable by Holder No Bi
Slide 28: Preferred Share Details: Series C
PREFERRED SHARE DETAILS SERIES C PREFERRED SHARES Preferred Share Details Series C Number of Shares 1,528,619 Issue Date June 14, 2013 TSX Trading Symbol BIR.PR.C Issue / Par Price $25.00 per share Quarterly Dividend $0.4375 per share Yield at Issue 7.0% June 30, 2020 and each quarter Redeemable by
Slide 29: Corporate Information
CORPORATE INFORMATION EXECUTIVE DIRECTORS BANK SYNDICATE Jeff Tonken Jeff Tonken The Bank of Nova Scotia Chief Executive Officer and Chairman of the Board Chief Executive Officer and Chairman of the Board HSBC Bank Canada National Bank of Canada Christopher Carlsen Dennis Dawson Canadian Imperial Ba
Slide 30: Corporate Information: Management Team
CORPORATE INFORMATION MANAGEMENT TEAM HEAD OFFICE Gates Aurigemma Jeff Rogers Suite 1000, 600 – 3rd Avenue S.W. Manager, General Accounting Facilities Manager Calgary, Alberta T2P 0G5 Phone: 403-261-6401 Jesse Doenz Randy Rousson Controller and Investor Relations Manager Drilling and Completions Man
Slide 31: Advisories: Definitions
ADVISORIES DEFINITIONS Gordondale Gas Plant AltaGas’ deep-cut sour gas processing facility in Gordondale Deloitte Deloitte LLP, independent qualified reserves evaluator Pouce Coupe Gas Plant Birchcliff’s 100% owned and operated natural gas plant located in the Pouce Coupe area of Alberta ABBREVIATIO
Slide 32: Advisories: Non-GAAP and Other Financial Measures
ADVISORIES NON-GAAP AND OTHER FINANCIAL MEASURES This presentation uses various “non-GAAP financial measures”, “non-GAAP ratios”, “supplementary financial measures” and “capital management measures” (as such terms are defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disc
Slide 33: Advisories: Profit
ADVISORIES Profit Birchcliff defines “profit” as the amount, if any, during the relevant period by which petroleum and natural gas revenue resulting from production exceeds the sum of: (i) PDP F&D costs (i.e. the costs of replacing production excluding acquisitions and dispositions) and (ii) total c
Slide 34: Advisories: Profit Margin
ADVISORIES Profit Margin Birchcliff calculates “profit margin” as profit for the period divided by petroleum and natural gas revenue for the period. Management believes that profit margin assists management and investors in assessing Birchcliff’s profitability. Supplementary Financial Measures The s
Slide 35: Advisories: Presentation of Oil and Gas Reserves
ADVISORIES PRESENTATION OF OIL AND GAS RESERVES Certain terms used herein are defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), CSA Staff Notice 51-324 Revised Glossary to NI 51-101 - Standards of Disclosure for Oil and Gas Activities (“CSA Sta
Slide 36: Advisories: F&D Costs
ADVISORIES With respect to F&D costs: • F&D costs for PDP, proved or proved plus probable reserves, as the case may be, are calculated by taking the sum of: (i) exploration and development costs (F&D capital expenditures) incurred in the period; and (ii) where appropriate, the change during the peri
Slide 37: Advisories: Forward-Looking Information
ADVISORIES FORWARD-LOOKING INFORMATION Certain statements contained in this presentation constitute forward‐looking statements and forward-looking information (collectively referred to as “ forward‐looking statements”) within the meaning of applicable Canadian securities laws. The forward-looking st
Slide 38: Advisories: Forward-Looking Assumptions
ADVISORIES • With respect to Birchcliff’s production guidance for 2022, such guidance assumes that: the Corporation’s capital program will be carried out as currently contemplated; no unexpected outages occur in the infrastructure that Birchcliff relies on to produce its wells and that any transport
Slide 39: Advisories: Risks and Uncertainties
ADVISORIES Birchcliff’s actual results, performance or achievements could differ materially from those anticipated in the forward-looking statements as a result of both known and unknown risks and uncertainties including, but not limited to: the risks posed by pandemics (including COVID-19), epidemi
Slide 40: Advisories: Forward-Looking Statements Qualification
ADVISORIES The forward-looking statements contained in this presentation are expressly qualified by the foregoing cautionary statements. The forward-looking statements contained herein are made as of the date of this presentation. Unless required by applicable laws, Birchcliff does not undertake any