Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Investor Presentation (October 2019)
28 slides from Athabasca Oil's investor presentation, October 2019
Slide 1: Athabasca Oil Corporation – October 2019 Corporate Update
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING OCTOBER 2019 CORPORATE UPDATE
Slide 2: Athabasca – Premier Resource Exposure
ATHABASCA – PREMIER RESOURCE EXPOSURE LIGHT OIL ~40,000 boe/d THERMAL OIL MONTNEY 87% liquids ~$600MM EV ~$425MM Liquidity HANGINGSTONE 90 year 2P RLI 450 MMboe Proved 1,280 MMboe 2P LIGHT OIL CORNER DUVERNAY LEISMER Footnotes and additional information included in the back as endnotes 1 ATHABASCA O
Slide 3: Athabasca – The Transformation
ATHABASCA – THE TRANSFORMATION ~$400MM Light Oil $265MM Contingent surpasses infrastructure Bitumen 10,000 boe/d Royalty sale Low risk Resource development appraisal 2015 2016 2017 2018 2019 Strong Funding balance sheet not secured $486MM Light ~$560MM Balance sheet Corporate FCF outlook Leismer Oil
Slide 4: Canadian Heavy Oil Outlook
CANADIAN HEAVY OIL OUTLOOK WESTERN CANADIAN SELECT PRICING CURRENT LANDSCAPE $70 WTI/WCS Diff (US$/bbl) $50 o Government mandated curtailments have normalized WCS (C$/bbl) inventories and differential volatility $60 $40 WCS Diff (US$/bbl) WCS (C$/bbl) o Crude by rail remains a necessary bridge to pi
Slide 5: Thermal Oil Market Access & Risk Management
THERMAL OIL MARKET ACCESS & RISK MGMT THERMAL OIL EGRESS DIVERSIFYING SALES TO THE US GULF COAST Current Egress DILBIT SALES EXPOSURE (2020E) LT Egress o Capacity secured on Keystone open season AOC Thermal o 7,200 bbl/d commencing in 2020 at pipeline economics Hedged US Gulf Leases WCS Diff Coast o
Slide 6: Athabasca – Drive to Free Cash Flow
ATHABASCA – DRIVE TO FREE CASH FLOW PRODUCTION SUSTAINABLE PRODUCTION 50 Thermal Oil Light Oil o Low corporate sustaining capital 40 mboe/d 30 • ~$10/boe 20 o Flexible Light Oil development 10 0 o Operated liquids rich Montney 2018 2019 2020 o Duvernay funded through joint venture C CAPITAL 300 $MM
Slide 7: Athabasca – 2019 Outlook
ATHABASCA – 2019 OUTLOOK CORPORATE 2019 FUNDS FLOW OUTLOOK o Capital: $135MM WTI (US$) o Production: 37,500 – 40,000 boe/d (88% liquids) $55 $60 $65 $70 ‐$15.00 $150 $165 $185 $205 WCS Diff (US$) LIGHT OIL o Capital: $35MM net ‐$17.50 $140 $155 $175 $195 o Production: 10,000 – 11,000 boe/d (55% liqu
Slide 8: Athabasca – Differentiated Oil Exposure
ATHABASCA – DIFFERENTIATED OIL EXPOSURE PEER LEADING LIGHT OIL NETBACKS (Q2/19) $30 Liquids Weighted Netback (>40% liquids) COMPLEMENTARY ASSETS Gas Weighted Netback (>60% gas) $25 o Diversified operating income (35% LO & 65% TO) Operating Netbacks ($/boe) $20 o Top decile Light Oil netbacks ($28.75
Slide 9: Light Oil: Montney & Duvernay
LIGHT OIL MONTNEY & DUVERNAY
Slide 10: Placid Montney
PLACID MONTNEY PLACID ACTIVITY 16‐30 Pad HIGHLIGHTS – OPERATED 70%WI 7 DUCS 2‐5 Pad o 80,000 gross prospective acres Spud Sept • 200 well development inventory1 • $26.50/boe operating netback (H1/19) • 200 – 300 bbl/mmcf initial free liquids Wells ATH Montney Licensed Montney ACTIVITY OVERVIEW PLACI
Slide 11: Placid Montney – Strong Economics
PLACID MONTNEY – STRONG ECONOMICS PRODUCTION PLOT INTERNAL TYPE WELL PARAMETERS Rate Sales Gas C5+ liquids boe/d mmcf/d bbl/d % IP30 1,000 2.6 501 57% IP90 875 2.4 421 55% IP365 600 1.8 262 49% mboe bcf mbbl % EUR 675 2.2 246 45% ~25 bbl/mmcf plant recovered NGLs included in IPs & EURs CUMULATIVE CO
Slide 12: Kaybob Duvernay
KAYBOB DUVERNAY DUVERNAY HIGHLIGHTS JOINT VENTURE HIGHLIGHTS (30% WI) o Significant resource exposure (~210,000 acres) o Cash/carry structure minimizes financial exposure o Strong condensate yields (200 – 1,000 bbl/mmcf) o $1B gross 4 yr program; $75MM net to retain 30%WI o Royalty advantage (5% vs.
Slide 13: Duvernay – Competitive Shale Play
DUVERNAY – COMPETITIVE SHALE PLAY UNIQUE EXPOSURE TO THE OIL WINDOW KAYBOB WEST & EAST OIL o Significant running room o ~170,000 acres; ~800 well inventory1 o Transitioning to development in select areas 16‐25 NORTHERN STEP‐OUT o Achieved $8 – 9MM well costs at Kaybob West KAYBOB WEST & EAST (26 WEL
Slide 14: Thermal Oil: Leismer & Hangingstone
THERMAL OIL LEISMER & HANGINGSTONE
Slide 15: Thermal Oil
THERMAL OIL LEISMER – TOP TIER OIL SANDS PROJECT REGIONAL MAP o ~20,000 bbl/d; ~3.5x SOR o 40,000 bbl/d AER approval Hangingstone o 675 mmbbl 2P reserves; 90 year 2P RLI o US$43 WTI operating breakeven HANGINGSTONE – LOW SUSTAINING CAPITAL o ~9,000 bbl/d; ~4.5x SOR o 177 mmbbl 2P reserves; 55 year 2
Slide 16: Thermal Oil – Leismer Activity
THERMAL OIL – LEISMER ACTIVITY HIGHLIGHTS o L7 sustaining pad • 1,250m laterals (50% longer) and flow control equipped • First steam in June with production expected in Q4/19 • >4,000 bbl/d pad production forecast • Steam debottleneck • Optimize field steam distribution and minimize downtime • Expan
Slide 17: Canadian Energy Can Make a Difference
CANADIAN ENERGY CAN MAKE A DIFFERENCE o The World Needs Canada’s Energy WORLD ENERGY MIX (2016 – 2040) o Energy Demand to grow by 27% by 2040 o ALL forms of energy are needed o Canada is a global leader in innovation & environmental stewardship o If Canadian Energy standards were applied across the
Slide 18: Supplemental Information
va Sane : SUPPLEMENTAL INFORMATION
Slide 19: Corporate Snapshot & Hedging
CORPORATE SNAPSHOT & HEDGING CAPITALIZATION OVERVIEW (ATH‐TSX) Basic Shares Outstanding 523 MM Market Capitalization ($0.70/sh) $366 MM Q2/19 Net Debt $240 MM Total Enterprise Value $607 MM Term Debt (9.875% due Feb 2022) US$450 MM Undrawn Reserve Based Facility $120 MM Funding Capacity / Liquidity
Slide 20: H1 2019 Highlights
H1 2019 HIGHLIGHTS CONTINUED STRONG FINANCIAL PERFORMANCE 36,568 boe/d $89MM Funds Flow 86% liquids $30MM Free Cash Flow ~$425MM liquidity Strong Netbacks $59MM Capex (net) $28.70/boe Light Oil 2019e ~2x D/CF @ $60 WTI 52% Thermal / 48% Light Oil $22.42/bbl Thermal Oil ATHABASCA OIL (TSX:ATH) Footno
Slide 21: Corporate Responsibility
CORPORATE RESPONSIBILITY We believe that strong performance in health, safety, and environment is essential to achieving our business goals and meeting the needs of stakeholders. We are focused on being a valued partner in local communities and industry programs while developing Alberta’s energy res
Slide 22: Corporate Responsibility – Environment
CORPORATE RESPONSIBILITY – ENVIRONMENT CORPORATE EMISSIONS INTENSITY GLOBAL EMISSIONS WATER RECYCLING RATES (2018) LIABILITY MANAGEMENT RATING 94% of Thermal Oil reservoir water recycled for steam generation Alberta Liability Management Rating (LMR) 16.0 ATHABASCA OIL (TSX:ATH) Sources: National Pol
Slide 23: Corporate Responsibility – Social
CORPORATE RESPONSIBILITY – SOCIAL SAFETY BENCHMARKING (2018) SAFETY 1.8 o 2018 Total Recordable Injury Frequency: 0.36 1.6 AOC has a strong track record of safe operations o Exemplary safety performance key to business results and 1.4 stakeholder needs 1.2 1.0 o Behavior Based Safety embedded in cul
Slide 24: Corporate Responsibility – Governance
CORPORATE RESPONSIBILITY – GOVERNANCE GOVERNANCE OVERVIEW o AOC’s Board is responsible for the stewardship of the Company and Independent Board and Chair (5 of 7) provides independent and effective leadership o Some key areas of oversight include: o Health, safety and environmental performance o Str
Slide 25: Management Team and Board
MANAGEMENT TEAM AND BOARD MANAGEMENT TEAM BOARD OF DIRECTORS Robert Broen, P.Eng. Ronald Eckhardt President & Chief Executive Officer Chair of the Board, member of the Reserves Committee Kim Anderson, CA Robert Broen, P.Eng. Chief Financial Officer President & Chief Executive Officer Angela Avery Br
Slide 26: Endnotes & Risk Management
ENDNOTES & RISK MANAGEMENT Slide Endnotes Multi‐year outlook price assumptions: 2018 H1 2019 H2 2019 2019e 2020e WTI US$/bbl $65.50 $57.36 $60.00 $58.47 $60.00 FX C$/US$ 0.77 0.75 0.77 0.76 0.75 Heavy Diff US$/bbl -$26.31 -$11.48 -$17.50 -$13.62 -$17.50 WCS C$/bbl $50.61 $61.21 $55.51 $59.22 $56.67
Slide 27: Reader Advisory
READER ADVISORY Forward Looking Statements This Presentation contains forward‐looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward‐looking information. The use of any of the words “anticipate”, “plan”, “
Slide 28: Athabasca Oil Corporation
ATHABASCA OIL CORPORATION