Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (May 2019)
32 slides from Journey Energy's investor presentation, May 2019
Slide 1: Corporate Presentation
TSX: JOY Corporate Presentation May, 2019 exploring new roads
Slide 2: Why Journey?
Why Journey? Why JOY Experienced management Skilled board of directors Team Acquire and develop mentality Experience in resource play development Control legacy under-developed conventional oil pools Business Balance acquisitions, drilling and secondary recovery Model Development of em
Slide 3: 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 4: Forward-Looking Statements and Financial Measures
Forward-Looking Statements and Financial Measures 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 Nation
Slide 5: Snapshot
Snapshot 9,400 boe/d balanced producer; 49% liquids(1) 16% corporate decline; interest in early stage oil resource play (funded by others for 2019) $0.84-$0.94/share funds flow; $33-37 million annual funds flow for 2019 $233 million enterprise value; <$24,000 boe/d 39.2 million shares @ $2.68/share;
Slide 6: Road Map for Value Creation
Road Map for Value Creation >165 gross sections of Duvernay lands concentrated in the oil window World Class World class partner with proven expertise Duvernay 37.5% WI in commercial development Encouraging test results; (PR: April 15, 2019) Infill drilling using new technology for existin
Slide 7: Growth in Funds Flow for 2019
Growth in Funds Flow for 2019(1) 2017 2018 2019 2019 Operating Highlights Actual Actual Guidance Q1 Actual Production Average (boe/d) 9,962 10,075 ~ 9,200 – 9,600 9,330 Oil and NGLs (%) 46% 47% 49% 48% Corporate Decline Rate (%) 17% 16% 16% 16% Reference Natural Gas AECO ($/MMBtu) $2.20 $1.54 $1.65
Slide 8: Funds Flow Sensitivity Based on 2019 Guidance
Funds Flow Sensitivity Based on 2019 Guidance WTI ($USD/bbl) Funds Flow ($millions) (Including Hedges) $50.00 $52.50 $55.00 $57.50 $60.00 $62.50 $65.00 $67.50 $70.00 $1.60 12.5 16.9 21.2 25.5 29.7 34.0 38.2 42.4 46.5 $1.70 13.6 18.0 22.3 26.6 30.9 35.2 39.3 43.5 47.6 AECO GAS ($/MCF) $1.80 14.8 19.1
Slide 9: Southern Core Area
Base – Core Areas Southern Core Area (5,300 boe/d; ~41% oil and NGLs(1) ) • Key properties at Skiff, Matziwin, Herronton and Countess Brooks Edmonton • Waterflood expansion, extensive Red Deer drilling upside • Impressive 2018 drilling program Calgary results • Low decline base production (1) Foreca
Slide 10: Base - 2018 YE Reserves Summary
Base - 2018 YE Reserves Summary Gross Company (WI) Reserves(1) Oil Gas NGLs Reserve Category Mboe RLI (Mbbl) (Bcf) (Mbbl) Proved Developed Producing 8,680 84.3 2,357 25,087 7.6 Total Proved 13,103 112.9 3,495 35,412 10.0 Proved + Probable Producing 11,908 112.9 2,978 33,710 9.8 Total Proved + Probab
Slide 11: Base - PDP Reserve Life Index
Base - PDP Reserve Life Index(1) 13 Peer Group Includes; AAV, ARX, BTE, BIR, BNP, BTR, CJ, CR, CPG, DEE, GXE, GXO, IPO, Lowest Declines JOY, KEL, LXE, NVA, OBE, PONY, PRQ, PEY, SRX, SGY, TVE, TOG, WCP, YGR 11 9 7 5 3 1 (1) PDP Reserve Life Index on this page is calculated by dividing PDP reserves at
Slide 12: Base – Lowering Corporate Decline
Base – Lowering Corporate Decline Put another 310 MMbbls of OOIP on waterflood 75 MM conventional 385 MM on waterflood 60 MM to be delineated & flooded 250 MM to be flooded JOY net barrels of OOIP by category 770 MM net barrels of OOIP(1) 385 MMbbls 385 MMbbls convert many of 310 MMbbls on waterfloo
Slide 13: Base – Enterprise Value as a % of NPV
Base – Enterprise Value as a % of NPV(1) 2018 Year End Enterprise Value as a % of PDP NPV @ 10% 250% Less Expensive More Expensive 200% 150% 100% 50% 0% Peer Group Includes; AAV, ARX, BTE, BIR, BNP, BTR, CJ, CR, CPG, DEE, GXE, GXO, IPO, JOY, KEL, LXE, NVA, OBE, PONY, PRQ, PEY, SRX, SGY, TVE, TOG, WC
Slide 14: Conventional - Economic Plays
Conventional - Economic Plays World class JV partner selected DUVERNAY Unbooked and Forecast 7 well tests by year end 2019 CONVENTIONAL Now Tested No reserve value assigned BASE Duvernay Optionality on funding for 20 well early Resource development phase $3.61/P+P boe FDC is lower than the
Slide 15: Conventional - 2018 Half Cycle Results
Conventional - 2018 Half Cycle Results Skiff – Sawtooth Drilling and Waterflood Development Drilled 8 HZ wells in 2018: $17.2 million for DCET and 1 water injector conversion ($425k in 2019) Total IP30: 2,016 boe/d (65% oil and NGLs); $8.5k/boe/d, ~$8 million 2018 incremental operating income
Slide 16: Conventional – Below Average Bookings; Above Average Returns
Conventional – Below Average Bookings; Above Average Returns Reserve Report FDC per 2P BOE of Reserves(1) 10 Most Booked 8 6 Least Booked 4 2 0 Peer Group Includes; AAV, ARX, BTE, BIR, BNP, BTR, CJ, CR, CPG, DEE, GXE, GXO, IPO, JOY, KEL, LXE, NVA, OBE, PONY, PRQ, PEY, SRX, SGY, TVE, TOG, WCP, YGR Gr
Slide 17: Conventional – 25 Years of Drilling
Conventional – 25 Years of Drilling Booked Projects(3) $207 million in Capital Waterflood Journey’s inventory includes over $500 million in booked(3) and Other HZ & Vertical Horizontal unbooked(2) conventional oil projects Oil Multi-Stage Oil Gas Journey has identified 224 gross (212 net)(1) hor
Slide 18: Conventional - Remaining Resource
Conventional - Remaining Resource(2) 770 MM net barrels of OOIP(1)(2) 82.1% of oil left behind 13.5% produced to date 1.8% unbooked inventory 2.6% booked inventory Oil left behind becomes 4.4% remains Target Resource Booked & Unbooked 17.7% ultimate recovery Journey can double 2P oil reserves by r
Slide 19: Duvernay - Emerging World Class Resource
Duvernay - Emerging World Class Resource Initiate commercial development (JOY 37.5% WI) 2020 Initial 2 yrs of operations: max. 10 wells/yr & Option to take 5% GORR on 100% of production instead of WI (initial 2 yrs) Beyond Continue to add land and capture resource Forecast 7 wells to be te
Slide 20: Duvernay – Accelerating Activity Levels
Duvernay – Accelerating Activity Levels Accelerating Industry Activity offsetting JV Land Dramatic increase in activity since Q2 2018 • 15 wells on production delineating the Oil Trend • 18 more wells licensed or drilling Appraisal Programs underway on adjacent Lands • Repsol: 5 wells drilled, 4
Slide 21: Duvernay – World Class Partner Kiwetinohk Resources Corp.
Duvernay – World Class Partner Kiwetinohk Resources Corp. JV WI: KRC 62.5% / JOY 37.5% Initial 2 yr. Joint Wells: 10 wells/yr. max. Development Per well option to participate at 37.5% WI or take Phase 5% GORR on 100% of production Attractive single digit initial Lessor Royalties Five Well
Slide 22: Duvernay – Encouraging Results on Journey Lands
Duvernay – Encouraging Results on Journey Lands Joint Venture Lands & Journey Infrastructure Test Results - Two Well Commitment Phase (1) JOY 43.3% ownership in Gilby 1-4 Gas Plant Commitment Well 102/16-15-042-03W5/00 102/15-31-042-03W5/00 JOY 50-100% ownership in Gas Gathering System April 13-15 (
Slide 23: Duvernay – Resource Capture
Duvernay – Resource Capture 8-16 Vertical Strat for 11-2 hz New Vertical Well at 8-16 First Duvernay well penetration in Twp 42-4W5 Duvernay wireline logs corroborate mapping and geological model Porosity at 8-16 higher than 6-28 and slightly thicker overall 8-16 significantly enhances delin
Slide 24: Duvernay - Potential Commercial Development
Duvernay - Potential Commercial Development Horizontal Well Potential: Economic Assumptions Price Forecast: $70 EDM Light, $1.60/MMbtu flat Initial GOR: 1,800 scf/bbl raw, NGL yield: 50 bbls/MMcf raw Royalties: 2/3 Crown, 1/3 Freehold Peak IP 30 (1)Ultimate Recovery (2)NPV @10% (1) Oil Rate Oi
Slide 25: Appendix- Content
Appendix- Content Hedging Finding, Development and Acquisition Costs Drilling inventory Central Region Central Region Edmonton South Region Red Deer Calgary South Region Strong Governance Experienced Management 25
Slide 26: Hedging
Hedging Oil Contracts Volume Strike Type Pricing point Term bbls/d $ per bbl (CDN) Swap 500 WCS CDN $64.00CDN April 1, 2019 to June 30, 2019 Call 1,500 WTI NYMEX $73.00USD April 1, 2019 to June 30, 2020 Collar 500 WTI NYMEX $77-$84.15CDN July 1, 2019 to December 31, 2019 Swap 500 WCS CDN $74.75CDN M
Slide 27: Finding, Development & Acquisition Costs
Finding, Development & Acquisition Costs For the years ending December 31, 2016 to December 31, 2018 2016 2017 2018 (3 Yr) Acquisitions and Divestiture Capital ($millions) $(9.3) $33.3 $(5.1) $18.8 Exploration and Development Capital ($millions) $16.3 $32.2 $31.7 $80.3 Total Capital Expenditures ($m
Slide 28: Improving Recovery in our Legacy Oil Pools
Improving Recovery in our Legacy Oil Pools $65 CAD/bbl EDM Light Sweet, $55 CAD/bbl WCS, $1.55/MMbtu AECO, No Inflation HZ Drilling Economics(1) Crystal Cherhill Matziwin Herronton Drilling Metric HZ Viking HZ Banff HZ Regional Glauconite HZ Elkton Capital Cost ($MM) $2.7 $1.8 $2.0 $2.6 Ultimate Rec
Slide 29: Central Region Conventional
Central Region Conventional Horizontal Oil Well Drilling Locations(2) Booked(1) Unbooked(3) Property Formations Gross Net Gross Net Poplar Creek/ Belly River, Cardium, 5 4.5 14 13.3 Westerose Banff Cherhill Banff 6 5.4 1 0.9 Crystal Viking 4 4 30 29.5 Central Remainder 7 5.5 4 2.5 Total Central Regi
Slide 30: South Region Conventional
South Region Conventional Horizontal Oil Well Drilling Locations(1) Booked(2) Unbooked(3) Property Formations Gross Net Gross Net Matziwin Glauconite, Colony 20 20.0 21 20.0 Skiff Sawtooth 15 15.0 19 18.9 Countess / Brooks Glauconite, Sunburst, Pekisko 6 4.0 26 24.5 Herronton Elkton 5 4.9 41 39.0 To
Slide 31: Board of Directors - Strong Governance
Board of Directors - Strong Governance Howard Crone Chairman of the Board – Executive Vice President of Cequence Energy Ltd.; Director of Cequence Energy Ltd. and Karve Energy Inc. Glenn Hamilton Audit Committee Chair – Independent businessman, former Senior Vice President and Chief Financial Office
Slide 32: Experienced Management Team
Experienced Management Team Alex G. Verge, P.Eng., M.Eng. President and Chief Executive Officer, and Director – Over 35 years of experience: Seven years as Director of Journey (six as CEO), President and CEO of NuVista Energy, VP Engineering at Bonavista, and senior positions at Poco Petroleums, Ris