Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (August 2020)
24 slides from Journey Energy's investor presentation, August 2020
Slide 1: Corporate Presentation
TSX: JOY Corporate Presentation August, 2020 exploring new roads
Slide 2: Snapshot
Snapshot 8,400 boe/d balanced producer; 46% liquids(1) 17% corporate decline; interest in early stage oil resource play (funded by others for near term) $142 million enterprise value; <$18,000 boe/d 43.1 million shares @ $0.35/share; $15 million market cap $77 million credit facility ($74 million dr
Slide 3: Advisories
Advisories FORWARD-LOOKING STATEMENTS AND FINANCIAL MEASURES This presentation contains “forward-looking statements” including estimates of future production, cash flows and reserves, business plans for drilling and exploration, the estimated amounts and timing of capital expenditures, the assumptio
Slide 4: Advisories (con’t)
Advisories (con’t) OIL AND GAS ADVISORY The crude oil, natural gas and natural gas liquid reserves and related future net revenue of Journey presented herein were evaluated by GLJ, Journey’s independent reserves evaluators, in accordance with the requirements of National Instrument 51-101 (“NI 51-10
Slide 5: Advisories (cont’d)
Advisories (cont’d) OIL AND GAS ADVISORY (Continued) Initial Production Rates: References herein to average 30-day initial production rates (IP30) and other short-term production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at wh
Slide 6: Why Journey? World Class Duvernay
Why Journey? Why JOY >150 gross sections of Duvernay lands concentrated in the oil window World Class World class partner with proven expertise Duvernay 37.5% WI in commercial development Basin leading performance from three wells Control of ~755 net million bbls of DOIIP(1) with ~13% reco
Slide 7: Manage Spending with Funds Flow for 2020
Manage Spending with Funds Flow for 2020 2017 2018 2019 2020 Operating Highlights Actual Actual Actual H1 Actual Production Average (boe/d) 9,962 10,075 9,372 8,567 Oil and NGLs (%) 46% 47% 48% 46% Corporate Decline Rate (%) 17% 16% 16% 17% Reference Natural Gas AECO ($/MMBtu) $2.20 $1.54 $1.80 $2.0
Slide 8: Southern Core Area
Base – Core Areas Southern Core Area (4,300 boe/d; ~36% oil and NGLs(1) ) • Key properties at Skiff, Matziwin, Herronton and Countess Brooks Edmonton • Waterflood expansion, extensive Red Deer drilling upside • Low decline base production Calgary (1) Field estimate of current production 8
Slide 9: Base - 2019 YE Reserves Summary
Base - 2019 YE Reserves Summary Gross Company (WI) Reserves(1) Oil Gas NGLs Reserve Category Mboe RLI (Mbbl) (Bcf) (Mbbl) Proved Developed Producing 8,603 75.5 2,306 23,494 7.2 Total Proved 13,521 99.2 3,368 33,422 9.6 Proved + Probable Producing 11,550 104.0 2,837 31,717 9.4 Total Proved + Probable
Slide 10: Conventional - Economic Plays
Conventional - Economic Plays World class JV partner DUVERNAY Tested Option well phase completed by summer 2020 CONVENTIONAL Duvernay Optionality on funding for 20 well early BASE Resource development phase $3.58/P+P boe FDC(3) is lower than the average of our peer group Low Journey’s inve
Slide 11: Conventional – 25 Years of Drilling
Conventional – 25 Years of Drilling Booked Conventional(3) $194 million in Capital Journey’s inventory includes 194 gross (182 net)(1)(2) horizontal Waterflood oil locations Other HZ & Vertical Horizontal Oil Multi-Stage Only 33% of these locations are booked(2) in our 2019 reserve Oil report Ga
Slide 12: Duvernay - Emerging World Class Resource
Duvernay - Emerging World Class Resource Initiate commercial development (JOY 37.5% WI) Initial 2 yrs of joint operations: max. 10 wells/yr 2021 During initial 2 yr phase, per well option to & participate at 37.5% WI or take 5% NCGORR on 100% of production Beyond Continue to add land and cap
Slide 13: 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 5% NCGORR on 100% of production Phase Attractive single digit initial Lessor Royalties KRC pays
Slide 14: Duvernay – Oil Fairway Defined and Sweet Spot Captured
Duvernay – Oil Fairway Defined and Sweet Spot Captured Emerging East Shale Duvernay Sweetspots (>200 bbl/d Oil Peak Rate) Widespread Journey 50-100% Owned Infrastructure West Shale Basin Westerdale Sub basin 3 JV wells top tier performers in the East Shale Basin East Shale Basin Duvernay Oil Sweet
Slide 15: Duvernay – JV Wells Among East Basin Leaders
Duvernay – JV Wells Among East Basin Leaders Source: Journey and Geoscout 15
Slide 16: Duvernay – Resource Captured
Duvernay – Resource Captured Resource Characterization Thick Duvernay Shale Reservoir widespread over JV block Thick and consistent reservoir rock in a light oil hydrocarbon fairway; Oil sweet spot is expanding with additional drilling Reservoir sweet spot extends South and North of JV block,
Slide 17: 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 17
Slide 18: Hedging
Hedging Oil Contracts Contract Volume Reference Contract Price Term Type bbls/d Price S/bbl Diff swap 500 WTI/USD (6.50) Calendar 2020 Swap 500 WTI/CAD 74.25 January to September 2020 Collar 500 WTI/CAD 66.00 – 81.00 Calendar 2020 Call 500 WTI/CAD 87.00 (prem $1.45) April to December 2020 Diff swap
Slide 19: Finding, Development & Acquisition Costs
Finding, Development & Acquisition Costs For the years ending December 31, 2017 to December 31, 2019(1) 2017 2018 2019 (3 Yr) Acquisitions and Divestiture Capital ($millions) $33.3 $(5.1) $(0.3) $27.9 Exploration and Development Capital ($millions) $32.2 $31.7 $19.8 $83.7 Total Capital Expenditures
Slide 20: Improving Recovery in our Legacy Oil Pools
Improving Recovery in our Legacy Oil Pools $65 CAD/bbl EDM Light Sweet, $55 CAD/bbl WCS, $1.55/MMbtu AECO, No Inflation HZ Drilling Economics(1) Crystal Cherhill Matziwin Herronton Drilling Metric HZ Viking HZ Banff HZ Regional Glauconite HZ Elkton Capital Cost ($millions) $2.7 $1.8 $2.0 $2.6 Ultima
Slide 21: 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 5 4.5 9 7.4 Westerose Cherhill Banff 6 5.4 2 1.8 Crystal Viking 6 6 28 27.9 Central Remainder 7 5.5 4 2.5 Total Central Region 24 21.4 43 39.6
Slide 22: 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 14 14.0 21 20.0 Skiff Sawtooth 15 15.0 16 15.9 Countess / Glauconite, 6 4.0 25 24.0 Brooks Sunburst, Pekisko Herronton Elkton 5 4.9 25 23.1 To
Slide 23: Board of Directors - Strong Governance
Board of Directors - Strong Governance Howard Crone Chairman of the Board – Director of Cequence Energy Ltd. and Karve Energy Inc. Also a member of Journey’s Audit, Reserves and Compensation/Governance committees Dana Laustsen Reserves Committee Chair – Independent businessman, former Executive Vice
Slide 24: Experienced Management Team
Experienced Management Team Alex G. Verge, P.Eng., M.Eng. President and Chief Executive Officer, and Director – Over 37 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