Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (September 2017)
23 slides from Tamarack Valley Energy's investor presentation, September 2017
Slide 1: Predictable & Sustainable Per Share Growth
Predictable & Sustainable Per Share Growth SEPTEMBER 2017 TVE : TS X www.tamarackvalley.ca 1
Slide 2: Forward Looking Information
Forward Looking Information Certain information included in this presentation constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”,
Slide 3: Key Indicators Leading to Self Sustainability
Key Indicators Leading to Self Sustainability Decline Rate 2016: 38% 2017: 32-33% Quality & Inventory Capital Efficiency 7+ years of 1.5 yr. or 2013-2016: $22,000+ less payback 2017: ~$18,000 Sustainable Per Share Growth High CF Netback Clean Balance 2016: $17/boe Sheet H1/17: $19-20/boe 2017 exit <
Slide 4: Tamarack Valley – Key Strategic Guidelines
Tamarack Valley – Key Strategic Guidelines Key Strategy & Principles: Company Snapshot: • Growth company with a long term focus Corporate • Internal processes and skills to grow to a much Share price September 5, 2017 $2.46 larger size than current • Multi-play strategy ensures risk management Share
Slide 5: First Half 2017 Success – Delivering on Promises
First Half 2017 Success – Delivering on Promises What we said we would accomplish: What we accomplished: • 18,500-19,000 boe/d • 18,572 boe/d (1,070 boe/d curtailed due to third party downtime) • $75 mm capex • $83 million capex • Capital efficiencies of ~$19,000/boepd Capital efficiencies ~$18,000/
Slide 6: Key Financial Stats – Improving Year Over Year
Key Financial Stats – Improving Year Over Year 2016 Actuals 2017 Forecast YOY % Increase H1 2017 Actuals Average pricing $43.32/bbl WTI $49.25/bbl WTI 14% - Edm Par $51.69/bbl $60.00/bbl 16% $62.51/bbl AECO (monthly index) $2.00/GJ $2.45/GJ 23% $2.70/GJ Operating income ($/boe) $16.55 $21.50 – $22.5
Slide 7: Sustainability and 2018 Growth Sensitivities
Sustainability and 2018 Growth Sensitivities 2017E Forecast Maintenance Scenario Growth Scenario Oil (US$WTI) H2/17 @ $48.50 @ $45.00 @ $50.00 @ $50.00 FX (Cdn$/US$) H2/17 $0.80 $0.80 $0.80 $0.80 Oil (Cdn$WTI) H2/17 $57.70 $56.25 $62.50 $62.50 AECO (Cdn$/GJ) H2/17 $2.29 $2.55 $2.55 $2.55 Funds flow
Slide 8: Current Hedges (as at August 10, 2017)
Current Hedges (as at August 10, 2017) Term Hedge Type Volume Cdn Pricing July 1, 2017 to September 30, 2017 WTI fixed price 2,700 bbls/d Cdn $69.24/bbl H2 2017 average Cdn October 1, 2017 to December 31, 2017 WTI fixed price 2,600 bbls/d Cdn $71.52/bbl $70.36/bbl January 1, 2018 to March 31, 2018 W
Slide 9: Improving Capital Efficiency
Improving Capital Efficiency $60,000 60% 52% Capital Efficiency Closed Spur Acquisition Jan 11/17 $50,000 % Corp. Decline 50% $51,590 Capital Efficiency* ($boepd) Decline Rate (%) 37% Acquired 38% $40,000 Wilson Creek 40% Assets 34% 32% $30,000 30% $26,740 $20,000 $21,845 Acquired 20% $21,225 Redwat
Slide 10: First Half 2017 Summary
First Half 2017 Summary Q2 2017 Production BOE/D % Liquids Cardium oil 9,094 54% Viking oil 7,270 67% ALBERTA SASKATCHEWAN Penny oil 1,240 71% Other 1,732 37% Total 19,336 59% VIKING OIL Redwater H1/17 Capital Drills (net) Capex ($ millions) % CARDIUM OIL Edmonton Lloydminster Cardium oil 6.3 $28.9
Slide 11: Wilson Creek Cardium – Growth Through A Downturn
Wilson Creek Cardium – Growth Through A Downturn Closed PWT 9,000 acquisition 8,000 Closed Suncor 7,000 acquisition Production (boe/d) 6,000 5,000 4,000 3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 2014 2015 2016 H1 2017 Operating netback ($/boe) $43.32 $21.58 $1
Slide 12: 2-Mile Cardium Wells – Improving Capital Efficiencies
2-Mile Cardium Wells – Improving Capital Efficiencies Production Rate Over Time Production Rate Cumulative 800 800 55-60 Stages 75-80 Stages 700 700 110-120 Stages New Type Curve 600 600 Original Type Curve OIL PRODUCTION (BBLS/D) 500 500 Oil Rate (bbl/d) 400 400 300 300 200 200 100 100 0 0 0 2 4 MO
Slide 13: Veteran / Milton Viking Oil
Veteran / Milton Viking Oil 8,000 7,000 Closed Spur 6,000 Production (boe/d) 5,000 4,000 Redwater Viking 3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2015 2016 H1 2017 • 8+ years drilling inventory of 1.5 years Operating netback ($/boe) $25.48 $21.56 $26.15 payback or better base
Slide 14: TVE Veteran – Pressure Support Makes Viking Better
TVE Veteran – Pressure Support Makes Viking Better UPPER VIKING UPPER SST-THICKER, TIGHT PERMEABILITY HAMILTON LAKE HIGHER PERMEABILITY ZONE WATER FLOODED IN 80’S Q1/17 drills Q3/17 drills By drilling into the Viking and fracking Q1 infrastructure into the Hamilton Lake, wells benefit Q3 infrastruct
Slide 15: How Does TVE’s Veteran Compare to Industry Viking
How Does TVE’s Veteran Compare to Industry Viking TVE Wells vs. Sproule Consort Type Curves TVE Wells vs. Industry Viking Wells 100 35 Peer 1 2017 TVE Wells 140 90 Peer 2 Tier 3 Peer 3 30 80 Tier 4 120 Peer 4 Tier 5 Peer 5 70 Tier 6 25 Peer 6 100 Tier 7 2017 TVE Wells Oil Rate (bbl/d) Oil Rate (bbl/
Slide 16: Veteran Prod’n Performance vs. Acquisition Forecast
Veteran Prod’n Performance vs. Acquisition Forecast 4,500 Base Prod'n 4,000 2017 Drills - Oil 2017 Drills - Gas Acquisition Forecast 3,500 3,000 2,500 BOE/d 2,000 1,500 1,000 500 0 2017-01-05 2017-02-05 2017-03-05 2017-04-05 2017-05-05 2017-06-05 2017-07-05 2017-08-05 …2017 Veteran production has av
Slide 17: Quick Payback Drilling Inventory
Quick Payback Drilling Inventory (<1.5 years) August 2017 1,400 Current drilling inventory for Viking payouts of 3.0 years or less 1,179 1,200 Hatton approx. 1,500 locations Penny 1,046 Mannville 1,000 950 Quick Payback Drilling Inventory Cardium GLJ 2P Booked locations Payout 1.5 Years or Less 800
Slide 18: Summary
Summary Lever Off Strengths - Historical Operational Execution: • Delivered better than guided results on three major asset acquisitions over the past 3 years (Wilson Creek Cardium and Redwater Viking, Penny) • Delivering better than guided results on Spur Viking acquisition • Strategic infrastructu
Slide 19: Appendix
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Slide 20: Key 6 Month Objectives and Look-back
Key 6 Month Objectives and Look-back What we did in Objectives for What we said we would do H1 2017… H2 2017 … Averaged 18,872 boe/d (with 1,070 boe/d Average 18,500 – 19,000 boe/d H1/17 on $75 million Achieve production guidance by averaging curtailed due to third party downtime) on $83 capex resul
Slide 21: Viking Inventory Expansion – A Great Start
Viking Inventory Expansion – A Great Start Number Locations (Gross) 700 Total Lateral Length (km) 700 52 666 647 (35) 48 639 (16) 93 94 (75) 600 600 +9% +35% 506 (34) 500 (12) 37 500 400 400 300 300 200 200 100 100 72 other Viking locations unchanged 50 km other Viking locations unchanged 0 0 Acquis
Slide 22: Veteran Viking 2017 Drilling Program Performance
Veteran Viking 2017 Drilling Program Performance 300 Increased Pumping Equipment IP60 105 bbls/d H2/2017 Wells 58% increase to average average for H2/17 Veteran Field Average 250 production for wells that drills had pump upgrades Q1 Type Curve Q2 Type Curve To Be Optimized 200 Oil Production (bbls/d
Slide 23: Other Core Areas
Other Core Areas Wilson Creek Mannville Liquids Rich Gas Hatton Heavy Oil 700 800 600 700 600 Production (boe/d) 500 Production (boe/d) 500 400 400 300 300 200 200 100 100 0 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2014 2015 2016 2017 2016 H1 2017 2014 2015 201
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