Birchcliff Energy Ltd. · TSX:BIR
Birchcliff Energy — Investor Presentation (November 2024)
43 slides from Birchcliff Energy's investor presentation, November 2024
Slide 1: Corporate Presentation November 2024
Birchcliff’s 100% owned and operated Pouce Coupe Gas Plant CORPORATE PRESENTATION NOVEMBER 2024
Slide 2: Corporate Snapshot: Birchcliff Overview
CORPORATE SNAPSHOT BIRCHCLIFF OVERVIEW SELECT 2024 GUIDANCE(1) BIRCHCLIFF IS A DIVIDEND-PAYING, PURE ALBERTA MONTNEY/DOIG RESOURCE PLAY PRODUCER Average production 75,000 – 77,000 boe/d Adjusted funds flow(2) $230 million F&D capital expenditures $250 – $270 million Annual base dividend(3) $108 mill
Slide 3: Corporate Snapshot: Select Q3 2024 Results
CORPORATE SNAPSHOT SELECT Q3 2024 RESULTS Average production 75,403 boe/d Light oil (% of production) 2,129 bbls/d (3%) Condensate (% of production) 4,161 bbls/d (5%) NGLs (% of production) 6,541 bbls/d (9%) Natural gas (% of production) 375,428 Mcf/d (83%) $45.2 million(1) Adjusted funds flow $0.17
Slide 4: Why Invest in Birchcliff
CORPORATE SNAPSHOT WHY INVEST IN BIRCHCLIFF WORLD-CLASS ASSET BASE OPERATIONAL EXCELLENCE High-quality, multi-decade inventory in Pouce Executive and management teams with a proven Coupe and Gordondale. track record. Portfolio provides optionality, with a mix of low- Low cost through owning, operati
Slide 5: 2024 Outlook: Capital Program Details
2024 OUTLOOK CAPITAL PROGRAM DETAILS(1) 2024 F&D Capital Expenditures by Classification 2024 POUCE COUPE & GORDONDALE Classification Capital (millions) PAD LOCATIONS DCCET(2)(3) $195 – $200 2024 Capital Program Facilities and Infrastructure $15 – $20 2025 Capital Program Pre-Spend Pouce Coupe Gas Pl
Slide 6: Long-Term Contract Operating Agreement
LONG-TERM CONTRACT OPERATING AGREEMENT AGREEMENT EXPECTED TO REDUCE LONG-TERM OPERATING COSTS ▪ Birchcliff commenced contract operating the Gordondale Gas Plant on July 1, 2024. ▪ Optimization opportunities and the interconnectivity of the two C2+ assets are expected to drive lower operating costs,
Slide 7: Natural Gas Marketing and Diversification
2024 OUTLOOK NATURAL GAS MARKETING AND DIVERSIFICATION(1) Q4/24E NATURAL GAS MARKET EXPOSURE MARKETING HIGHLIGHTS ▪ Diversified portfolio engaged in physical and financial North American markets. Future West Coast ▪ Substantial firm transportation away from AECO into Dawn to capitalize on LNG Projec
Slide 8: Liquids Marketing
LIQUIDS MARKETING BIRCHCLIFF’S LPG DIVERSIFICATION PROVIDES EXPOSURE TO PREMIUM FAR EAST INDEX PRICING PROPANE (C3) BIRCHCLIFF PRODUCTION JAPAN/KOREA C2+ ▪ Birchcliff currently markets a portion of its propane at AltaGas’ (FEI) PRICED C3+ PRINCE RUPERT Ridley Island Propane Export Terminal in Britis
Slide 9: Five-Year Outlook
FIVE-YEAR OUTLOOK(1) DISCIPLINED PRODUCTION GROWTH AND CAPITAL INVESTMENT ENHANCES PROFITABILITY MAINTAIN STRONG DELIVER STABLE FULLY UTILIZE EXISTING KEY THEMES: BALANCE SHEET SHAREHOLDER RETURNS INFRASTRUCTURE F&D Capital Spending: $500 2024E – 2026E: $250 – $300 million 90,000 87,500 2027E – 2028
Slide 10: Focused on Stable Shareholder Returns
FOCUSED ON STABLE SHAREHOLDER RETURNS SIGNIFICANT COMMON SHARE DIVIDENDS DECLARED SINCE Q1 2017 CUMULATIVE COMMON SHARE DIVIDENDS(1) $500 Over $490 million in common share $400 dividends(1) declared since Q1 2017 $300 Focused on maintaining a strong balance sheet with an annual base dividend of $ mi
Slide 11: Corporate Reserves: Significant Intrinsic Value
CORPORATE RESERVES(1) SIGNIFICANT INTRINSIC VALUE RESERVES SUMMARY – AT DECEMBER 31, 2023 2023YE NET ASSET VALUE PER COMMON SHARE(2) $25.00 Proved Total $23.60 Total Developed Proved Plus Proved $20.00 Producing Probable $18.38 Reserves $15.00 220,536 691,886 993,897 $/share (Mboe) $10.00 NPV10 befo
Slide 12: Birchcliff's Montney/Doig Resource Play
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY LOCATED IN THE HEART OF THE WORLD-CLASS MONTNEY Large contiguous land blocks consisting of 375.8 net sections as at December 31, 2023, including the Pouce Coupe, Gordondale and Elmworth areas. Extensive Montney/Doig portfolio provides commodity cycle optimizat
Slide 13: Large Multi-Interval Land Position
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY LARGE MULTI-INTERVAL LAND POSITION NOVEMBER 2024 13
Slide 14: Upper and Lower Stack Development Opportunities
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY UPPER AND LOWER STACK DEVELOPMENT OPPORTUNITIES ▪ 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 Modulus. ▪
Slide 15: 2024 Capital Program Major Themes
2024 CAPITAL PROGRAM MONTNEY/DOIG RESOURCE PLAY MAJOR THEMES 2024 POUCE COUPE & GORDONDALE 2024 Capital Program Major Themes PAD LOCATIONS ▪ The program is focused on locations with high rate-of-return, attractive 2024 Program paybacks and strong capital efficiencies. 2025 Pre-spend ▪ Level-loaded p
Slide 16: 2024 Natural Gas Pads: Exceeding Expectations
2024 NATURAL GAS PADS: EXCEEDING EXPECTATIONS HIGH-RATE POUCE AND LIQUIDS-RICH GORDONDALE PADS VS. TIER 0 CAPPED TYPE CURVE(1) 04-30 Avg 2024 Avg 02-27 Avg 16-17 Avg Cumulative Raw Gas Rate (MMcf) Raw Gas Rate (Mcf/d) 04-30 Avg 2024 Avg 02-27 Avg Deloitte Tier 0 Capped 16-17 Avg Deloitte Tier 0 Capp
Slide 17: Pouce Coupe Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE OVERVIEW Q3 2024 average production of 52,851 boe/d(1), with a natural gas weighting of 92%. Pads brought onstream in 1H 2024 are exceeding internal estimates. Proven asset in development phase, with large, low-risk multi-decade drilling inventory.
Slide 18: Pouce Coupe Deloitte Tier 0 Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE DELOITTE TIER 0 TYPE CURVE(1) 4,000 Rate of Return (%) WTI (US$/bbl) 3,500 $70.00 $80.00 $90.00 $100.00 $2.00 103 122 142 163 (C$/GJ) AECO 3,000 $3.00 143 164 187 212 $4.00 185 209 235 262 Sales Gas Rate (Mcf/d) $5.00 230 257 284 314 2,500 NPV10 ($
Slide 19: Gordondale Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE OVERVIEW Q3 2024 average production of 22,480 boe/d(1), with a liquids weighting of 38%. Low decline base production requires less incremental wells to keep infrastructure full. Strategic infrastructure with deep-cut liquids recovery and blending fa
Slide 20: 2024 Light Oil Pad: Strong Production
2024 LIGHT OIL PAD: STRONG PRODUCTION GORDONDALE 1-10 PAD VS. HALO OIL TYPE CURVE(1) 01-10 Avg Halo Oil Type Curve Cumulative Raw HCL Rate (Mbbl) Raw HCL Rate (bbls/d) 01-10 Avg Halo Oil Type Curve Producing days Producing days 1) Deloitte 2P type curve as at December 31, 2023. See “Advisories – Pre
Slide 21: Gordondale Deloitte Low GOR Halo Oil Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE DELOITTE LOW GOR HALO OIL TYPE CURVE(1) 500 Rate of Return (%) WTI (US$/bbl) 450 $70.00 $80.00 $90.00 $100.00 400 $2.00 152 196 243 295 (C$/GJ) AECO $3.00 176 222 272 327 350 $4.00 199 248 301 358 $5.00 223 275 329 389 Oil Rate (bbl/d) 300 NPV10 ($M
Slide 22: Elmworth Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY ELMWORTH OVERVIEW Elmworth land block includes approximately 140 net contiguous sections of prolific Montney/Doig inventory. As part of Birchcliff’s future growth plans for Elmworth, it has initiated the formal planning for a proposed 100% owned and operated n
Slide 23: Canadian West Coast LNG Opportunity
CANADIAN WEST COAST LNG OPPORTUNITY(1) WESTERN CANADIAN LNG LANDSCAPE Canada West Coast & US LNG Capacity Ksi Lisims LNG (Floating) 12 MTPA (1.7 Bcf/d) 32 Environmental Assessment (“EA”) Phase 30 United States Incremental 28 LNG Canada Phase 2 Cedar LNG (Floating) 26 3 MTPA (0.4 Bcf/d) Positive Fina
Slide 24: Birchcliff's Active Role in Supplying the World with LNG
CANADIAN WEST COAST LNG OPPORTUNITY BIRCHCLIFF’S ACTIVE ROLE IN SUPPLYING THE WORLD WITH LNG BIRCHCLIFF IS A FOUNDING MEMBER OF ROCKIES LNG PARTNERS. Rockies LNG is collaborating with the Nisga’a Nation, a modern treaty Nation in British Columbia, and Western LNG, an experienced LNG developer, to de
Slide 25: Corporate Responsibility: Focus on ESG
CORPORATE RESPONSIBILITY FOCUS ON ESG SOCIAL Major supporter of STARS Air Ambulance and the United Way of Calgary, raising more than $4 million for the organizations. In 2023, Birchcliff participated in over 30 engagement sessions with local indigenous communities, invested approximately $50,000 in
Slide 26: Appendix
BIRCHCLIFF ENERGY APPENDIX NOVEMBER 2024 26
Slide 27: Production History
PRODUCTION HISTORY SIGNIFICANT GROWTH SINCE INCEPTION 90,000 In recent years, Birchcliff prioritized its balance sheet 80,000 and shareholder returns over growth 77,977 76,401 78,520 75,000 – 76,000 – 79,000 77,096 76,925 75,699 77,000 70,000 67,963 Average Production (boe/d) 60,000 49,236 50,000 38
Slide 28: Corporate Reserves: Significant Reserves Volumes and Value
CORPORATE RESERVES(1) SIGNIFICANT RESERVES VOLUMES AND VALUE 1,200,000 $9,000 PDP Reserves Significant reserves growth since 1,100,000 1P Reserves inception $8,000 2P Reserves 1,000,000 PDP NPV10 Focused on converting deep $7,000 900,000 1P NPV10 inventory of 1P and 2P reserves 2P NPV10 to PDP reser
Slide 29: Historical Profitability
HISTORICAL PROFITABILITY PROVEN TRACK RECORD AS A LOW-COST PRODUCER 3-YEAR F&D OPERATING NETBACK PDP RECYCLE RATIOS(1) F&D Operating Netback PDP Recycle Ratios 4.0x 3.5x 3.7x 3.0x 3.2x 2.5x 2.5x 2.0x 1.5x 1.0x 1.1x 0.5x 0.0x 2021 2022 2023 3-Yr Avg Corporate F&D Costs (incl. FDC)(2) & Operating Netb
Slide 30: Significant Drilling Inventory: Pouce Coupe & Gordondale
SIGNIFICANT DRILLING INVENTORY: POUCE COUPE & GORDONDALE DECADES OF LOW-RISK BOOKED INVENTORY BEYOND FIVE-YEAR OUTLOOK(1) 5-Year Outlook (2024 – 2028) Future Years Total 2P Booked Locations 170 – 180 wells 30 wells/yr going forward 23 years of 2P locations(2) Production growth Maintain 87,500 boe/d
Slide 31: Corporate Information
CORPORATE INFORMATION EXECUTIVE TEAM DIRECTORS AUDITORS Chris Carlsen Jeff Tonken KPMG LLP, President and Chief Executive Officer Chairman of the Board Chartered Professional Accountants Calgary, Alberta Bruno Geremia Dennis Dawson Executive Vice President and Chief Financial Officer Independent Lea
Slide 32: Corporate Information
CORPORATE INFORMATION MANAGEMENT TEAM HEAD OFFICE Gates Aurigemma Tam Nguyen Suite 1000, 600 – 3rd Avenue S.W. Manager, General Accounting Manager of Marketing Calgary, Alberta T2P 0G5 Phone: 403-261-6401 Jordon Cheung Landon Poffenroth Drilling Manager Montney Asset Manager SPIRIT RIVER OFFICE Jess
Slide 33: Advisories: Definitions
ADVISORIES DEFINITIONS “Deloitte” means Deloitte, independent qualified reserves evaluator. “Gordondale Gas Plant” means the deep-cut gas processing facility owned by AltaGas located in the Gordondale area of Alberta. “COGE Handbook” means the Canadian Oil and Gas Evaluation Handbook maintained by t
Slide 34: 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”, and “capital management measures” (as such terms are defined in NI 52-112), which are described in further detail below. Non-GAAP Financial Measures NI 52-112 defines a n
Slide 35: Advisories: Effective Total Natural Gas Sales
ADVISORIES Effective Total Natural Gas Sales Birchcliff defines “effective total natural gas sales” as the aggregate of the effective sales amount received in each natural gas market. Management believes that disclosing the effective sales for natural gas assists management and investors in assessin
Slide 36: Advisories: Non-GAAP Ratios
ADVISORIES Non-GAAP Ratios NI 52-112 defines a non-GAAP ratio as a financial measure that: (i) is in the form of a ratio, fraction, percentage or similar representation; (ii) has a non-GAAP financial measure as one or more of its components; and (iii) is not disclosed in the financial statements of
Slide 37: Advisories: Total Debt
ADVISORIES Total Debt Birchcliff calculates “total debt” as the amount outstanding under the Corporation’s revolving term credit facilities plus working capital deficit (less working capital surplus) plus the fair value of the current asset portion of financial instruments less the fair value of the
Slide 38: Advisories: Currency and Conversions
ADVISORIES CURRENCY Unless otherwise indicated, all dollar amounts are expressed in Canadian dollars, all references to “$” and “CDN$” are to Canadian dollars and all references to “US$” are to United States dollars. BOE AND MCFE CONVERSIONS Boe amounts have been calculated by using the conversion r
Slide 39: Advisories: Production
ADVISORIES PRODUCTION With respect to the disclosure of Birchcliff’s production contained in this presentation: (i) references to “light oil” mean “light crude oil and medium crude oil” as such term is defined in NI 51-101; (ii) references to “liquids” mean “light crude oil and medium crude oil” and
Slide 40: Advisories: Forward-Looking Statements
ADVISORIES • the information set forth on the slides “2024 Outlook – Capital Program Details”, “2024 Capital Program – Major Themes” and elsewhere in this presentation as it relates to Birchcliff’s capital program and its exploration, production and development activities and the timing thereof, inc
Slide 41: Advisories: Guidance Assumptions
ADVISORIES • With respect to Birchcliff’s 2024 guidance (as updated on August 14, 2024), such guidance assumes the following commodity prices and exchange rate: an average WTI price of US$79.05/bbl; an average WTI-MSW differential of CDN$6.95/bbl; an average AECO price of CDN$1.75/GJ; an average Daw
Slide 42: 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: general economic, market and business conditions which wil
Slide 43: Advisories
ADVISORIES Management has included the above summary of assumptions and risks related to forward-looking statements provided in this presentation in order to provide readers with a more complete perspective on Birchcliff’s future operations and management’s current expectations relating to Birchclif
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