34 slides from Paramount Resources Ltd. Class A's investor presentation, November 2022
Slide 1: Corporate Presentation
Corporate Presentation November 2022
Slide 2: Advisories
Advisories • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount", "PRL" or the "Company") and its future plans and operations, this presentation contains certain forward-looking information and statements. The projections, estimates and forecasts contained in suc
Slide 3: Corporate Overview
Corporate Overview Paramount has significant land positions in the most liquids-rich areas of the prolific Montney and Duvernay resource plays • Founded in 1976 (IPO’d in 1978) Market Snapshot (TSX-POU) Guidance Summary 2022F 2023F 2024F(7) Shares Outstanding (MM) 142.3 Production (MBoe/d) 90-91 105
Slide 4: Delivering on Free Cash Flow Priorities
Delivering on Free Cash Flow Priorities Paramount has achieved its net debt target of ~$300MM • Having achieved its net debt target, the Company's free cash flow priorities • The Company’s 2023 capital program and increased regular monthly dividend continue to be the maintenance of conservative leve
Slide 5: Building Sustainable Free Cash Flow for the Long-Term
Building Sustainable Free Cash Flow for the Long-Term A history of profitable asset development and production growth that drives material free cash flow generation Karr Production (Boe/d) • Paramount has a demonstrated track record of assembling material positions in key 60,000 50,000 resource play
Slide 6: Prudent Development of Inventory-Rich Opportunity Set
Prudent Development of Inventory-Rich Opportunity Set Paramount continues to allocate capital to its highest risk-adjusted return opportunities while maintaining balance sheet strength • Significant inventory of opportunities across Significant Asset Optionality & Value (2) Stage of Development Para
Slide 7: Karr Activity and Production
Karr Activity and Production Production from Paramount’s flagship asset at Karr is expected to grow to ~50,000 Boe/d in the second half of 2023 • Actively began development in 2016 with 86 wells brought onstream to the end of September 2022 • 2023 activities include 13 drills, 22 completions and 22
Slide 8: Karr Performance and Recent Highlights
Karr Performance and Recent Highlights Paramount’s Montney wells at Karr continue to perform strongly, resulting in improved deliverability Recent Highlights Cumulative Boe – Karr Wells Play Data – 3,000m Avg. Lateral Length (2) • Brought onstream the remaining five wells on the twelve-well 16- 1,60
Slide 9: Karr Performance
Karr Performance Wells exhibit strong returns and quick payouts Karr Well Performance $80 2016/17 Program 2018 Program 2019 Program 2020 Program 2021 Program 2022 Program 16.0x 2.9x Avg/Well 3.4x Avg/Well 3.2x Avg/Well 5.2x Avg/Well 7.3x Avg/Well 6.3x Avg/Well $70 14.0x $60 12.0x $50 10.0x $MM $40 8
Slide 10: Wapiti Activity and Production
Wapiti Activity and Production Achieved targeted plateau production of ~30,000 Boe/d in September one quarter ahead of schedule • Development commenced in 2018 with 58 wells brought onstream to the end of September 2022 • 2023 activity includes 21 drills, 15 completions and 13 wells to be brought on
Slide 11: Wapiti Performance and Recent Highlights
Wapiti Performance and Recent Highlights Lower cost monobores and the implementation of an optimized well completion have further enhanced Wapiti economics Recent Highlights Cumulative Boe – Wapiti Wells Play Data – 3,000m Avg. Lateral Length (3) 600 IP 365 (Boe/d) 847 • Record monthly sales volumes
Slide 12: Wapiti Performance
Wapiti Performance With improved performance, Wapiti wells are generating strong returns on invested capital Wapiti Well Performance $70 7.0x 2018/19 Program 2019/20 Program 2020 Program 2021 Program 2022 Program 2.2x Avg/Well 2.5x Avg/Well 4.5x Avg/Well 5.1x Avg/Well 4.9x Avg/Well $60 6.0x $50 5.0x
Slide 13: Grande Prairie Capital Efficiencies
Grande Prairie Capital Efficiencies Paramount remains relentlessly focused on continuous improvement • The Company continues to strive for further efficiencies while maintaining its focus on safety, integrity and long-term productivity of its assets • Efforts to offset inflationary pressures on DCET
Slide 14: Kaybob Duvernay
Kaybob Duvernay Paramount controls a material and de-risked position in the Kaybob Duvernay Kaybob Overview: • Large positions in key plays • ~192,000 net acres of Duvernay rights • ~260,000 net acres of Montney rights • Ownership in strategic facilities and pipeline infrastructure including: • 8-9
Slide 15: Kaybob Smoky Duvernay Overview
Kaybob Smoky Duvernay Overview Strong well results and the completion of the recently expanded facility are expected to drive FCF growth • The Kaybob Smoky Duvernay asset has been de-risked with competitor wells surrounding Paramount’s lands • Brought onstream four wells on the 10-35 pad in the thir
Slide 16: Kaybob North Duvernay Overview
Kaybob North Duvernay Overview The Kaybob North Duvernay play will contribute to the next material wedge of production growth over the coming years • The Company brought onstream the three-well 12-21 pad in the third quarter of 2022 • Two of the wells were drilled to a total lateral length of ~4,200
Slide 17: Willesden Green Duvernay Overview
Willesden Green Duvernay Overview Paramount is increasing development activities in its recently consolidated ~250,000 net acre core Duvernay area Despite being restricted by facility constraints, • Development plans include the staged construction of incremental processing capacity average gross 30
Slide 18: Environmental, Social and Governance ("ESG")
Environmental, Social and Governance (“ESG”) Paramount prides itself in delivering value to all stakeholders in a responsible manner Environmental Social • Released 2022 ESG report on August 3, 2022 • Fosters a safety conscious culture with written 27% 27% • Participated in the 2022 CDP Climate Chan
Slide 19: Credit Facility and Risk Management
Credit Facility and Risk Management Paramount has an active market risk diversification and risk management strategy Credit Facility • Paramount has a $1.0 billion financial covenant based revolving credit facility (May 2026 maturity) • Expandable to $1.25 billion pursuant to an accordion feature (s
Slide 20: Strategic and Long-Term Investments
Strategic and Long-Term Investments Paramount is unique in that it holds strategic positions in a number of public and private entities Summary of Investments & Other Assets Fox Drilling Cavalier Energy Inc. Investments in Public Companies (1) ~$380 million Wholly owned by Paramount Wholly owned by
Slide 21: Paramount Investment Attributes
Paramount Investment Attributes Paramount offers a unique investment proposition • 40+ year history of responsible energy development and environmental stewardship • Extensive portfolio of liquids-rich resource plays in the Montney and Duvernay • Proven track record of building large, contiguous lan
Slide 22: Appendix
Paramount resources Itd. Appendix
Slide 23: Other Duvernay and Montney Assets at Kaybob
Other Duvernay and Montney Assets at Kaybob Despite limited capital being currently deployed, assets have significant upside and running room • 40 (gross) full field development locations (~38% assigned • 26 full field development locations (~54% assigned reserves • 84 full field development locatio
Slide 24: Potential Emission Reduction Initiative
Potential Emission Reduction Initiative Paramount continues to evaluate a zero/ultra-low emissions power generation, CCUS and EOR project • Paramount has engaged an outside engineering firm and is working with Clean Energy Systems Inc. (“CES”) to assess the opportunity for an ultra- Compressed CO2 i
Slide 25: Appendix: Karr well performance
Appendix The following summarizes the performance of the wells at Karr (1) (2) Peak 30-Day Cumulative Wellhead Wellhead Wellhead Wellhead (3) (3) Days on DCET Costs Total NGLs Shale Gas CGR Total NGLs Shale Gas CGR Production ($MM) (Boe/d) (Bbl/d) (MMcf/d) (Bbl/MMcf) (MBoe) (MBbl) (Bcf) (Bbl/MMcf) 1
Slide 26: Appendix: Wapiti well performance
Appendix The following summarizes the performance of the wells at Wapiti Peak 30-Day (1) Cumulative (2) Wellhead Wellhead Wellhead Wellhead (3) (3) Days on DCET Costs Total NGLs Shale Gas CGR Total NGLs Shale Gas CGR Production ($MM) (Boe/d) (Bbl/d) (MMcf/d) (Bbl/MMcf) (MBoe) (MBbl) (Bcf) (Bbl/MMcf)
Slide 27: Advisories
Paramount resources Itd. Advisories
Slide 28: Advisories
Advisories Forward-Looking Information 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", "
Slide 29: Advisories
Advisories In addition, there are risks that may result in the Company changing, suspending or discontinuing its monthly dividend program, including changes to free cash flow, operating results, capital requirements, financial position, market conditions or corporate strategy and the need to comply
Slide 30: Advisories
Advisories F&D capital is a measure used in determining F&D costs and is comprised of capital expenditures (the most directly comparable measure disclosed in the Company’s primary financial statements) for the year excluding corporate expenditures plus the change from the prior year in estimated fut
Slide 31: Advisories
Advisories Lifetime netback divided by DCET by well is calculated by dividing the actual netback (a non-GAAP financial measure) for a well to August 31, 2022 plus the forecast total proved plus probable netback over the remaining life of each well as calculated by management consistent with the fore
Slide 32: Advisories: Product Type Information
Advisories Product Type Information Below is a complete breakdown of sales volumes for applicable periods by the specific product types of shale gas, conventional natural gas, NGLs, tight oil and light and medium crude oil. Numbers may not add due to rounding. Total Company Q3 2022 2021 Shale gas (M
Slide 33: Advisories: Reserves Data
Advisories Reserves Data Reserves data set forth in this presentation is based upon an evaluation of the Company’s reserves prepared by McDaniel & Associates Consultants Ltd. (“McDaniel”) dated March 1, 2022 and effective December 31, 2021 (the “McDaniel Report”). The price forecast used in the McDa
Slide 34: Paramount Resources Ltd. contact details
Paramount Resources Ltd. 2800 – 421 7 Avenue S.W. Calgary, Alberta Canada T2P-4K9 Telephone: 403.290.3600 www.paramountres.com