Paramount Resources Ltd. Class A · TSX:POU
Paramount Resources Ltd. Class A — Investor Presentation (March 2022)
34 slides from Paramount Resources Ltd. Class A's investor presentation, March 2022
Slide 1: Corporate Presentation March 2022
Corporate Presentation March 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(6) Shares Outstanding (MM) 141.0 91-95 98.5-103.5 • Significant insi
Slide 4: Free Cash Flow Generation and Debt Reduction
Free Cash Flow Generation and Debt Reduction Paramount expects to achieve its net debt target of ~$300MM by Q3 2022 • Paramount is prioritizing free cash flow as follows: • The Company has hedged ~33% of its midpoint 2022 forecast production to 1) Net debt reduction to ~$300MM provide greater FCF ce
Slide 5: Reserves and Five-Year Outlook
Reserves and Five-Year Outlook Material free cash flow generation for incremental shareholder returns and growth • In 2021, Paramount increased proved developed producing (“PDP”), total proved • Paramount has updated its previously disclosed 5-year outlook through to the end of (“TP”) and proved plu
Slide 6: Prudent Development of Inventory-Rich Opportunity Set
Prudent Development of Inventory-Rich Opportunity Set Paramount is allocating capital based on risk and return of opportunities while maintaining its balance sheet strength • Significant inventory of opportunities across Paramount's Significant Asset Optionality & Value (1) Stage of Development land
Slide 7: Karr Activity and Production
Karr Activity and Production Production from Paramount’s flagship asset at Karr is expected to grow to ~45,000 Boe/d (midpoint) in H2 2022 • Actively began development in 2016 with 74 wells brought onstream to the end of December 2021 • 2022 activities include 12 drills, 16 completions and 16 wells
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 (4) • Closed a highly complementary acquisition at Karr in Q1 2022 for Type
Slide 9: Karr Performance
Karr Performance Wells exhibit strong returns and quick payouts Karr Well Performance $100 2016/17 Program 2018 Program 2019 Program 2020 Program 2021 Program 10.0x 2.5x Avg/Well 3.0x Avg/Well 2.8x Avg/Well 4.5x Avg/Well 6.3x Avg/Well $90 9.0x $80 8.0x $70 7.0x $60 6.0x $MM $50 5.0x $40 4.0x $30 3.0
Slide 10: Wapiti Activity and Production
Wapiti Activity and Production Paramount is advancing the next major phase of growth at Wapiti and expects year-end 2022 production of ~27,000 Boe/d • Development commenced in 2018 with 39 wells brought onstream to the end of December 2021 • 2022 activity includes 32 drills, 25 completions and 23 we
Slide 11: Wapiti Performance and Recent Highlights
Wapiti Performance and Recent Highlights Lower DCET costs 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) 856 • Acquired complimentary and adjac
Slide 12: Wapiti Performance
Wapiti Performance With recent well cost improvements, Wapiti wells are generating strong returns on invested capital Wapiti Well Performance $60 6.0x 2018/19 Program 2019/20 Program 2020 Program 2021 Program 2.0x Avg/Well 2.2x Avg/Well 3.8x Avg/Well 4.3x Avg/Well $50 5.0x $40 4.0x $MM $30 3.0x $20
Slide 13: Grande Prairie Capital Efficiencies
Grande Prairie Capital Efficiencies Paramount’s focus on continuous improvement has resulted in consistently lower well costs at Karr and Wapiti • The Company continues to strive for lower costs while maintaining its focus on safety, integrity and long-term productivity of its assets • Recent effort
Slide 14: Kaybob Duvernay
Kaybob Duvernay Paramount controls a material and increasingly de-risked position in the Kaybob Duvernay Kaybob Duvernay Plans: • With significant cash flow generation from Karr and Wapiti, the Company is now in a position to start methodically developing its Kaybob Duvernay assets • Development of
Slide 15: Kaybob Smoky Duvernay Overview
Kaybob Smoky Duvernay Overview A competitive cost structure at Smoky coupled with targeted capital efficiencies are expected to drive FCF growth • The Kaybob Smoky Duvernay asset has been de-risked with competitor wells surrounding Paramount’s lands • Plans for 2022 include the expansion of the Comp
Slide 16: Kaybob North Duvernay Overview
Kaybob North Duvernay Overview The Kaybob North Duvernay play will contribute to the next wedge of production growth for Paramount • Competitor activity continues to de-risk Paramount land • Activity increased in 2021 and is expected to continue into 2022+ • In 2022, the Company plans to drill the r
Slide 17: 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 • In 2019, the Company brought on production 5 (2.5 net) • Enhanced oil recovery pilot project will be expanded in 2022 • Plans for 2022 include the completio
Slide 18: Central Willesden Green Duvernay Overview
Central Willesden Green Duvernay Overview Material, contiguous Duvernay land position at Willesden Green with strong results from most recent wells One well drilled to a lateral length of ~4,000m and a total MD of ~7,400m (longest horizontal well • Production rates from the two-well 4-7 pad brought
Slide 19: 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 • Participated in the 2021 CDP Climate Change • Foster a safety conscious culture with written 17% 0.4% Survey and received a score of “B” policie
Slide 20: 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 21: 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 $900 million financial-covenant based revolving bank credit facility (June 2024 maturity date) • Expandable to $1.0 billion with accordion feature (s
Slide 22: 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 Liard Basin Wholly owned by Paramount Besa River Shale Play Investments in Public Companies (1) ~$300 million • F
Slide 23: Paramount Investment Attributes
Paramount Investment Attributes Paramount offers a unique investment proposition • 40+ year history of responsible energy development and environmental stewardship • Extensive portfolio of liquids-rich resource plays in the Montney and Duvernay • Risk-adjusted returns-focused capital allocation stra
Slide 24: Appendix
Paramount resources Itd. Appendix
Slide 25: Appendix: Karr Well Performance
Appendix The following summarizes the performance of the wells at Karr (1) (2) Peak 30-Day Cumulative Wellhead Wellhead Shale Wellhead Wellhead (3) (3) Days on DCET Costs Total NGLs Gas CGR Total NGLs Shale Gas CGR Production ($MM) (Boe/d) (Bbl/d) (MMcf/d) (Bbl/MMcf) (MBoe) (MBbl) (Bcf) (Bbl/MMcf) 5
Slide 26: Appendix: Wapiti Well Performance
Appendix The following summarizes the performance of the wells at Wapiti (1) (2) Peak 30-Day Cumulative Wellhead Wellhead Wellhead Days on DCET Costs Total Wellhead NGLs Shale Gas CGR (3) Total NGLs Shale Gas CGR (3) 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 December 31, 2021 plus the forecast remaining netback for the well as at December 31, 2021 as evaluated in the McDaniel Report by the DCET costs for the well.
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. Central Alberta and Other Total Grande
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
Paramount Resources Ltd. 2800 – 421 7 Avenue S.W. Calgary, Alberta Canada T2P-4K9 Telephone: 403.290.3600 www.paramountres.com
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