Paramount Resources Ltd. Class A · TSX:POU
Paramount Resources Ltd. Class A — Investor Presentation (November 2021)
32 slides from Paramount Resources Ltd. Class A's investor presentation, November 2021
Slide 1: Corporate Presentation November 2021
Corporate Presentation November 2021
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 plays • Founded in 1976 (IPO’d in 1978) Market Snapshot (TSX-POU) Guidance Summary 2021F 2022F 2023F(6) Shares Outstanding (MM) 135.0 Production (MBoe/d) ~82 90-94 97.5-102
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 ~23% of its midpoint 2022 forecast production to 1) Net debt reduction to ~$300MM provide greater FCF ce
Slide 5: Five-Year Outlook
Five-Year Outlook Material free cash flow generation provides funding for incremental shareholder returns and growth • Paramount is providing an initial outlook through to the end of 2026 to highlight its Illustrative Cumulative 2022-2026F Corporate Free Cash Flow free cash flow and production growt
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 Paramount’s flagship asset at Karr reached targeted plateau production of ~40,000 Boe/d in March 2021 • Actively began development in 2016 with 74 wells brought onstream to the end of October 2021 • 2022 activities include 14 drills, 16 completions and 16 wells to be bro
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) • The five-well 5-16 East pad was brought onstream in late October 1,50
Slide 9: Karr Performance
Karr Performance Wells exhibit strong returns and quick payouts Karr Well Performance by Program $80 2016/17 Program 2018 Program 2019 Program 2020 Program 2021 Program 8.0x 2.4x Avg/Well 2.7x Avg/Well 2.7x Avg/Well 4.1x Avg/Well 5.7x Avg/Well $70 7.0x $60 6.0x $50 5.0x $MM $40 4.0x $30 3.0x $20 2.0
Slide 10: Wapiti Activity and Production
Wapiti Activity and Production Paramount has accelerated 2021 development to advance the next major phase of growth at Wapiti • Development commenced in 2018 with 36 wells brought onstream to the end of October 2021 • 2022 activity includes 32 drills, 25 completions and 22 wells to be brought onstre
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) • In May, Paramount expanded its capital program to bring
Slide 12: Wapiti Performance
Wapiti Performance With recent well cost improvements, Wapiti wells are generating strong returns on invested capital Wapiti Well Performance by Program $60 6.0x 2018/19 Program 2019/20 Program 2020 Program 2021 Program 2.4x Avg/Well 2.6x Avg/Well 3.5x Avg/Well 4.4x Avg/Well $50 5.0x $40 4.0x $MM $3
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 • Paramount expects to realize capital cost efficiencies in its Duvernay plays at Kaybob and Willesden Green, similar to the gains achieved over the past 1
Slide 14: Kaybob Duvernay
Kaybob Duvernay Paramount controls a material and increasingly de-risked position in the Kaybob Duvernay Kaybob Duvernay Plans: • With Karr at plateau production and Wapiti on its way to achieving plateau production in 2023, the Company is now in a position to start methodically developing its Kaybo
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 next wedge of production growth for Paramount will come from the Kaybob North Duvernay play • Competitor activity continues to de-risk Paramount land • Activity has increased in 2021 and expect this 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 Assets have significant upside with a great deal of running room. Limited capital is currently being deployed • 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 t
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 • Early production rates at the two-well 4-7 pad brou
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 • Reduced year-over-year Scope 1 & 2 absolute • Foster a safety conscious culture with written 17% 0.4% emissions by 17% in 2020 policies and proc
Slide 20: Emission Reduction Initiative
Emission Reduction Initiative Paramount is evaluating 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 is low emission upg
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 and Convertible Debentures • Paramount has a $900 million financial-covenant based revolving bank credit facility (June 2024 maturity date) • Expandable to $1.0 billio
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) ~$230 million • F
Slide 23: Paramount Investment Attributes
Paramount Investment Attributes Paramount offers a unique investment proposition • 40+ year history of responsible energy development and environmental stewardship • Extensive portfolio of liquids-rich resource plays in the Montney and Duvernay • Risk-adjusted returns-focused capital allocation stra
Slide 24: Appendix
Paramount resources Itd.
Slide 25: Karr well performance summary
Appendix The following summarizes the performance of the wells at Karr Peak 30-Day (1) Cumulative (2) Wellhead Wellhead Shale Wellhead Wellhead Days on DCET Costs Total NGLs Gas CGR (3) Total NGLs Shale Gas CGR (3) Production ($MM) (Boe/d) (Bbl/d) (MMcf/d) (Bbl/MMcf) (MBoe) (MBbl) (Bcf) (Bbl/MMcf) 7
Slide 26: Wapiti well performance summary
Appendix The following summarizes the performance of the wells at Wapiti Peak 30-Day (1) Cumulative (2) 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 “Free cash flow” refers to adjusted funds flow less total capital expenditures and asset retirement obligation settlements. Free cash flow is used by management and investors to assess the amount of internally generated cash available to repay debt, reinvest in the business or return to s
Slide 31: Advisories
Advisories The Company forecasts that: • Fourth quarter 2021 sales volumes will average between 85,000 Boe/d and 86,500 Boe/d (55 percent shale gas and conventional natural gas combined, 39 percent light and medium crude oil, tight oil and condensate combined and 6 percent other NGLs) • 2021 annual
Slide 32: 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
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