Kelt Exploration Ltd. · TSX:KEL
Kelt Exploration — Investor Presentation (April 2023)
47 slides from Kelt Exploration's investor presentation, April 2023
Slide 1: Corporate Presentation April 2023
Corporate Presentation April 2023 KeltExploration.com David J. Wilson President & Chief Executive Officer Sadiq H. Lalani Vice President & Chief Financial Officer www.keltexploration.com 1
Slide 2: Why Invest in Kelt?
Why Invest in Kelt ? VALUE CREATION ● Kelt Exploration Ltd. (“Kelt” or the “Company”) focuses on value creation for shareholders over the long-term. ● The Company emphasizes low-cost land accumulation in resource-style plays with the potential for high rates of return on capital invested and rapid g
Slide 3: Environment, Social and Governance (ESG)
Environment, Social and Governance ( ESG ) On February 17, 2022, Kelt released its second annual ESG Report as part of its ongoing commitment to health and safety, responsible and sustainable resource development, good governance practices and Environment community engagement. The ESG Report can be
Slide 4: Capital Structure
Capital Structure ● Stock Exchange listing TSX ● Trading symbol KEL ● Market capitalization ( @ $ 4.61 effective Mar/30/2023 ) $ 886 million ● 52-week stock trading range $ 4.29 – $ 8.32 ● Common shares issued 192.3 million ● Stock options ( 11.9 MM ) & RSUs ( 1.8 MM ) 13.7 million ( 7.1% ) → averag
Slide 5: Insider Commitment
Insider Commitment Insider Purchases Offering / Market Purchases Date Shares (MM) Amount (MM) Price/share $ 13.9 MM Equity Private Placement Feb-2013 3.7 $ 8.7 $ 2.32 $ 94.4 MM Equity Private Placement Apr-2013 5.7 $ 31.5 $ 5.55 $ 92.0 MM Equity Private Placement Aug-2013 0.5 $ 4.0 $ 8.00 $ 19.6 MM
Slide 6: Capital Expenditures – Three Year Comparative
Capital Expenditures – Three Year Comparative ( $ millions ) 2021 2022 2023 Forecast Drilling & Completions 123.5 191.0 195.0 Infrastructure: Equipment, Facilities, 95.7 122.7 70.0 Pipelines & Tangible Inventory [1] Land, Seismic, Corporate Assets & 3.3 6.4 20.0 Property Acquisitions Property Dispos
Slide 7: Drilling & Completions Program
Drilling & Completions Program 2021 2022 2023 Forecast Drills Gross / Net Wells Gross / Net Wells Gross / Net Wells Alberta 16 15.7 28 25.4 22 21.0 British Columbia 5 5.0 3 3.0 5 5.0 Total 21 20.7 31 28.4 27 26.0 2021 2022 2023 Forecast Completions Gross / Net Wells Gross / Net Wells Gross / Net Wel
Slide 8: Production – Three Year Comparative
Production – Three Year Comparative 2021 2022 2023 Forecast Oil ( bbls/d ) 4,692 22% 5,640 21% 6,950 – 7,650 23% NGLs ( bbls/d ) [1] 3,154 15% 4,049 15% 4,750 – 5,250 15% Gas ( Mcf/d ) 78,846 63% 105,280 64% 121,800 – 126,600 62% Combined ( BOE/d ) 20,987 100% 27,236 100% 32,000 – 34,000 100% Annual
Slide 9: Commodity Prices – Changes to 2023 Forecast Prices
Commodity Prices – Changes to 2023 Forecast Prices % Change in ( CAD, unless otherwise specified ) 2023 Budget 2023 Current Forecast CAD Prices WTI Crude Oil ( $/bbl ) US $ 78.00 $ 105.30 US $ 78.00 $ 103.82 ( 1% ) MSW Crude Oil ( $/bbl ) US $ 74.00 $ 99.90 US $ 74.93 $ 99.73 0% NYMEX Henry Hub Natu
Slide 10: Commodity Prices – Three Year Comparative
Commodity Prices – Three Year Comparative ( CAD, unless otherwise specified ) 2021 2022 2023 Forecast WTI Crude Oil ( $/bbl ) [1] US $ 68.03 $ 85.31 US $ 94.80 $ 123.42 US $ 78.00 $ 103.82 MSW Crude Oil ( $/bbl ) [2] US $ 64.08 $ 80.29 US $ 92.78 $ 120.79 US $ 74.93 $ 99.73 NYMEX Henry Hub Natural G
Slide 11: Gas Market Risk Management
Gas Market Risk Management GAS MARKET DIVERSIFICATION ● Kelt has taken a diversified approach to selling its natural gas in order to reduce exposure to single market risk. ● Estimated % of average gas sales in 2023 at each respective price hub is forecasted to be as follows: AECO 2% 2% 14% 21% Dawn
Slide 12: Commodity Price Risk Management – Derivative Financial Instruments
Commodity Price Risk Management – Derivative Financial Instruments Remaining Commodity Index Term Quantity Contract Price NYMEX−AECO Apr/2023 to 40,000 NYMEX Minus USD $1.12 / MMBtu Natural Gas Basis Differential Jul/2023 MMBtu/d [ equivalent to CAD $1.49 / MMBtu at a CAD/USD exchange rate of 1.331
Slide 13: Netbacks – Three Year Comparative
Netbacks – Three Year Comparative 2023/22 ( $ / BOE ) 2021 2022 2023 Forecast change Net realized price 40.52 59.54 43.65 ( 27% ) Realized hedging gain ( loss ) ( 2.14 ) ( 5.68 ) 1.78 ─ Royalties ( % of net realized price ) ( 8.8% ) ( 11.1% ) ( 15.7% ) 41% Transportation expense ( 3.38 ) ( 3.06 ) (
Slide 14: Financial Summary – Three Year Comparative
Financial Summary – Three Year Comparative 2023/22 ( $ MM, unless otherwise specified ) 2021 2022 2023 Forecast change P&NG sales 316.8 613.4 530.0 ( 14% ) Adjusted funds from operations [1] 161.4 327.0 285.0 ( 13% ) AFFO per share – diluted ( $/share ) [1] 0.85 1.67 1.44 ( 14% ) Capital expenditure
Slide 15: Reserves - Volumes
Reserves - Volumes ( MBOE ) Dec/31/2021 Dec/31/2022 Change Proved Developed Producing 43,854 61,062 39% Proved 134,091 192,073 43% Proved plus Probable 254,149 340,801 34% Oil & NGLs / Gas Mix 41% 59% 38% 62% ( MBOE ) PDP Proved P+P Reserve Additions, net 27,138 67,912 96,582 2022 Production 9,930 9
Slide 16: Reserves – Future Development Capital
Reserves – Future Development Capital Proved Reserves P+P Reserves December 31, 2022 FDC Net FDC Net ( $ MM ) Wells ( $ MM ) Wells Alberta Montney wells 887.0 111.8 1,423.5 181.8 B.C. Montney wells 177.3 23.0 281.7 36.0 Alberta Charlie Lake wells 96.4 16.9 182.5 31.2 Other formations 24.8 7.1 108.4
Slide 17: 2022 Finding, Development, Acquisition & Disposition Costs
2022 Finding, Development, Acquisition & Disposition Costs PDP Proved P+P ( $ M, unless otherwise specified ) Reserves Reserves Reserves Capital expenditures, net of dispositions 317,540 317,540 317,540 Change in FDC costs required to develop reserves ( 1,427 ) 455,788 623,296 Total capital costs 31
Slide 18: Reserves - Values
Reserves - Values Net Asset Value per Share Sproule’s Forecasted Future Commodity Prices $M $ / share WTI NYMEX HH Exchange Crude Oil Natural Gas Rate ( USD/bbl ) ( USD/MMBtu ) ( CAD / USD ) P+P Reserves, NPV 10% BT [3] [4] 3,430,114 17.18 Undeveloped land 129,396 0.65 2023 86.00 5.00 1.333 Net debt
Slide 19: Operating Divisions
Operating Divisions Oak/Flatrock ● Montney light oil/condensate-rich gas Pouce Coupe/Progress/Spirit River ● Montney light oil ● Montney and Doig gas Oak/Flatrock Pouce Coupe/ Progress/Spirit River ● Charlie Lake light oil Wembley/Pipestone Wembley/Pipestone Grande Cache ● Montney light oil/condensa
Slide 20: Kelt Land Fairway Land Holdings
Kelt Land Fairway R13 R11 R9 R7 R5 R3 R1W6 R24W5 94-A-14 94-A-15 94-A-16 T90 Land Holdings 94-A-11 94-A-10 94-A-9 T88 T88 Flatrock ( January 10, 2023 ) T86 T86 Oak Developed + Gross Net Net T84 Fort T84 Undeveloped Acres Acres Sections St. John T82 BC Montney 196,792 193,607 303 T82 T80 T80 Pouce Pr
Slide 21: Kelt Montney Framework
#2 kelt exploration Kelt Montney Framework i Oak / Flatrock ; Pouce Coupe Progress La Glace Pipestone / Wembley A! A A A A Diy = 1 . _ a Doig | Y Upper I Montney | 1 PT Middle 4 Montney a 7 _ : ‘ i 4 i Middle | | Montney I ion = ! Lower | D2MonineyH Montney i D1/Sexsmith ; a | Belloy ! Lower Montney
Slide 22: British Columbia Montney - Oak / Flatrock Division
British Columbia Montney - Oak / Flatrock Division 1-9 UM 8-16 UM 4-10 UM 02/8-16 UM 2-9 UM (sfc 13-12) 16-23 UM 3-9 UM (sfc 5-33) 14-24 UM (sfc 13-12) Montney Land Holdings 02/13-13 UM 16-6 MM 13-5 UM (sfc 13-12) Gross 191,742 acres ( 300 sections ) (sfc 5-31) T87 Net 190,470 acres ( 298 sections )
Slide 23: Oak Montney ─ Type Curve / Production Profile
Oak Montney ─ Type Curve / Production Profile Notes: ─ Sproule (December 31, 2022) Raw Gas Type Curve ▪▪▪ Mean Production from Nine producing Oak wells Most recent wells brought on production 23
Slide 24: Pioneering a Model for Sustainable Oil & Gas Development at Oak
Pioneering a Model for Sustainable Oil & Gas Development at Oak Kelt’s “Green” Initiatives for Sustainable Oil & Gas Development at Oak in British Columbia ELECTRONIC FLARE STACK* Annual CO2E reduction of Elimination of continuous pilot flare. 70 t 19,630 tonnes from initiatives supporting sustainab
Slide 25: Alberta Montney Lands
Alberta Montney Lands Alberta − Montney Land Holdings T80 Gross 169,928 acres ( 265 sections ) Net 150,667 acres ( 235 sections ) Pouce Pouce Coupe Coupe T78 POUCE COUPE WEST West ● High deliverability dry gas wells. Progress ● Wells that came on production in Q1 2021 at rates between 10-12 MMcf/d,
Slide 26: Pouce Coupe / Progress Division – Montney
Pouce Coupe / Progress Division – Montney Kelt Lands T82 Gas Plants NRM Fourth Creek T81 Gas Plant NRM Gordondale East Gas Plant Pouce T79 Pouce Coupe Coupe (oil-prone) West (gas-prone) Progress T77 Progress (oil-prone) Proven Productive Montney Horizons Kelt Future Exploratory Horizons within Core
Slide 27: Wembley / Pipestone / La Glace Division – Montney
Wembley / Pipestone / La Glace Division – Montney ( D1 / D3 ) 02/13-32 13-10 Montney Land Holdings (sfc 14-34) 1-35 13-18 (sfc 9-17) (sfc 12-19) T75 Gross 113,608 acres ( 177 sections ) 13-6 5-9 (sfc 11-31) (sfc 15-29) Net 109,659 acres ( 171 sections ) 1-36 (sfc 10-28) T74 Montney ( D3 ) Gas Type C
Slide 28: Wembley / Pipestone / La Glace Division – Infrastructure
Wembley / Pipestone / La Glace Division – Infrastructure Kelt 14-29 INFRASTRUCTURE Kelt 11-31 La Glace Facility Wembley (100% WI) T75 ● Ownership in extensive pipeline infrastructure and Facility (100% WI) minor interests in the Sexsmith ( 200 MMcf/d ) and Sexsmith Wembley ( 130 MMcf/d ) Gas Plants.
Slide 29: Alberta Charlie Lake Lands
Alberta Charlie Lake Lands Alberta − Charlie Lake Land Holdings T80 Pouce Gross 121,280 acres ( 189 sections ) Coupe Net 88,447 acres ( 138 sections ) Progress Spirit River T78 Spirit River − Lower Charlie Lake Type Curve ( Sproule, December 31, 2022 ) 388 BOE/d Estimated sales – IP365 ( 53% Oil/NGL
Slide 30: Progress / Spirit River – Charlie Lake
Progress / Spirit River – Charlie Lake CHARLIE LAKE LAND HOLDINGS Spirit River 1-30 LCL T79 Gross: 27,840 acres ( 43 sections ) Progress (sfc 10-7) KEL 50% 1-25 LCL Net: 20,755 acres ( 32 sections ) 1-36 UCL 8-25 UCL 9-25 UCL (sfc 8-27) 2-22 LCL 1-22 LCL CHARLIE LAKE GEOLOGY (sfc 8-27) Gamma Ray Den
Slide 31: Future Considerations
Future Considerations ● The Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. ● The Company has amassed vast Montney acreage in new plays to complement its existing development Montney lands. ● The Company
Slide 32: Appendix
Appendix ● ESG – GHG Emissions ● ESG – Carbon Tax ● ESG – Corporate Governance ● Corporate Governance – Board of Directors ● Leadership – Management ● Abbreviations and Definitions ● Disclaimers 32
Slide 33: ESG – Greenhouse Gas Emissions
ESG – Greenhouse Gas Emissions Kelt supports innovative strategies, clean technology (including alternative energy and renewable energy), green products and utilizing lower emitting solutions to improve air quality by reducing greenhouse gas (“GHG”) emissions. Type of Emissions Units 2018 Emissions
Slide 34: ESG – Carbon Tax
ESG – Carbon Tax CARBON TAX ● FEDERAL ➢ The Federal carbon tax applies where a Province does not have a carbon pricing system that aligns with Federal benchmarks. ➢ The current carbon tax rate is $65/tonne; and proposing annual increases reaching $170/tonne by 2030. ● ALBERTA ➢ The Technology Innova
Slide 35: ESG – Corporate Governance
ESG – Corporate Governance Corporate Governance The following documents relating to the Company’s corporate governance matters are available on the internet at www.keltexploration.com: ● Advance Notice Policy ● Disclosure, Confidentiality and Trading Policy ● Articles of Incorporation, Amalgamation,
Slide 36: Corporate Governance - Board of Directors
Corporate Governance - Board of Directors Geri L. Greenall [ 2, 6, 10 ] William C. Guinan [ 9 ] Lead Director, Independent Board Chair, Independent Common shares 43,500 Common shares 1,154,459 Stock options 181,000 Stock options 126,000 Notes: RSUs 11,000 RSUs 11,000 [1] Chair, Audit Committee. 2022
Slide 37: Leadership - Officers
Leadership - Officers Douglas J. Errico David J. Wilson Sadiq H. Lalani Senior Vice President, Land President & Chief Executive Officer Vice President & Chief Financial Officer and Corporate Development Common shares 26,426,842 Common shares 1,800,338 Common shares 496,989 Stock options 1,181,500 St
Slide 38: Abbreviations and Definitions
Abbreviations and Definitions ACE the Chicago natural gas hub pricing point identified as the Alliance M thousand Chicago Exchange MM million AECO Alberta Energy Company “C” Meter Station of the Nova Gas Pipeline MSW Medium Sweet Blend System NGTL Nova Gas Transmission Limited AESO Alberta Electric
Slide 39: Disclaimer
Disclaimer Forward-Looking Statements Certain statements included in this corporate presentation (the “Presentation”) constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purp
Slide 40: Disclaimer
Disclaimer The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in this Presentation, and such variation may be material. The Company and its management believe that the FOFI has been prepared on a r
Slide 41: Disclaimer
Disclaimer Risks and Uncertainties Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the
Slide 42: Disclaimer
Disclaimer Oil and Gas Advisories Barrel of Oil Equivalent Presentation This Presentation contains various references to the abbreviation BOE which means barrels of oil equivalent. Where amounts are expressed on a BOE basis, natural gas volumes have been converted to oil equivalence at six thousand
Slide 43: Disclaimer
Disclaimer Reserves Unless otherwise specified, reserve estimates disclosed in this Presentation were prepared by Sproule Associates Limited (“Sproule”) in accordance with National Instrument 51- 101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and the Canadian Oil and Gas Evalua
Slide 44: Disclaimer
Disclaimer Financial Advisories All dollar amounts are referenced in Canadian dollars, except when otherwise noted. Refer to "Non-GAAP Measures and Other Financial Measures" in the Company’s Management’s Discussion and Analysis (“MD&A”) for a quantitative reconciliation of capital expenditures net o
Slide 45: Disclaimer
Disclaimer “Net asset value” is calculated by adding the present value of proved plus probable petroleum and natural gas reserves discounted at 10% before tax, undeveloped land value, proceeds from exercise of stock options, and net bank debt (surplus). “Net asset value per common share” is calculat
Slide 46: Disclaimer
Disclaimer Supplementary Financial Measures Production per common share: is calculated by dividing total production by the basic weighted average number of common shares outstanding, as determined in accordance with GAAP. NPV10% BT: the anticipated net present value of the future net cash flow befor
Slide 47: Corporate Presentation
Corporate Presentation KeltExploration.com Kelt Exploration Ltd. Suite 300, East Tower 311 – Sixth Avenue SW Calgary, Alberta Canada T2P 3H2 Phone: 403-294-0154 Fax: 403-291-0155 Website: www.KeltExploration.com 47
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