Cardinal Energy Ltd. · TSX:CJ
Cardinal Energy — Investor Presentation (April 2017)
26 slides from Cardinal Energy's investor presentation, April 2017
Slide 1: Built to Last
BUILT TO LAST April 2017
Slide 2: Built to Last
Built to Last Low Risk Low Decline Strong Capital Efficiencies 2
Slide 3: Cardinal Profile
Cardinal Profile Shares Outstanding TSX: CJ Basic (post acquisition) 79.3MM Fully Diluted (excluding debentures) 82.9MM Annual Dividend ($/share) $0.42 2016 average production (boe/d) 14,611 2017 forecast average production (83% liquids) (boe/d) 16,800 – 17,300 Reserves (Mboe)(1)(2) Total Proved and
Slide 4: 2017 Guidance
2017 Guidance Operational 2017e(1) 2016 2015 Average WTI oil price $ 55 $ 43 $ 49 Average annual production (boe/d) 16,800 – 17,300 14,611 11,838 Development capital ($MM) $ 58 $ 41 $ 37 Corporate decline <15% <10% <10% Capital efficiency (drilling) $18,000 $9,000 $12,000 Production growth 15-18% 23
Slide 5: 2017 Capital Budget
2017 Capital Budget Total development capital $58MM 5
Slide 6: Sustainability Analysis
Sustainability Analysis Commodity Sensitivity (unhedged) Run Rate 17,000 boe/d WTI (USD) $/bbl 50.00 55.00 60.00 65.00 FX US$/C$ 0.74 0.74 0.74 0.74 WTI (CAD) $/bbl 67.56 74.32 81.08 87.84 WCS Differential $/bbl 19 19 19 19 Run Rate Adjusted Funds Flow $ MM 87 116 146 175 Capex $ MM 58 58 58 58 Divi
Slide 7: Disciplined Debt Management
Disciplined Debt Management Targeting net bank debt to adjusted funds flow of less than 1.0x Borrowing base $250MM Bank debt 2016 exit $61.3MM Facility $150MM 41% drawn 7
Slide 8: Risk Management Hedging
Risk Management Hedging 1. Natural gas - 7,333 gj/d at 2.45 for 2017 and 6,333 gj/d at $2.40 for 2018. 2. WCS differential - 6,500 bbl/d for 2017 at $18.87 and 833 bbl/d for 2018 at $19.75. 8
Slide 9: Reserves Growth
Reserves Growth 2016 F&D / FD&A Costs* Incl FDC ( $/BOE) F&D (E&D CAPEX) $5.80 FD&A (Total CAPEX, $7.26 Including acquisitions) F&D Operating Recycle Ratio 2.4 x 12.7 year P+P reserve life index** 13% year over year reserve growth Replaced 250% of 2016 production LONG-TERM RESERVES GROWTH *E&D
Slide 10: Reserve Comparison
Reserve Comparison 3,300 boed 4,825 boed 4,825 boed(1) Peer’s FDC is 4.8x 2017 forecast adjusted funds flow CJ’s FDC is 0.7x 2017 forecast adjusted funds flow 1,525 1,525boed boed(1) Proved Developed Producing Proved producing RLI, (yrs)(1) 8.5 RLI increase of 4% Y/Y on a PDP basis Proved Undevelope
Slide 11: FD&A costs
FD&A costs 3,300 boed 4,825 boed 4,825 boed(1) 1,525 1,525boed boed(1) 1,085/boed(1) 1,525 boed(1) 1,525 boed(1) 11
Slide 12: Reserve Summary
Reserve Summary Company WI Reserves Before Royalties MBOE Prov & PDP Proved Probable Probable 31-Dec-15 41,469 43,990 15,535 59,525 3,300 boed Extensions 1,361 1,233 425 1,657 Other Additions/Revisions 5,897 7,488 1,496 8,984 Acquisitions 2,030 2,081 569 2,650 Production (5,340) (5,340) - (5,340) 31
Slide 13: Production Growth and Capex
Production Growth and Capex Y/Y E&D Capital Production Production Y/Y PPS CAPEX Intensity Year (boe/d) Growth(1) Growth(1) ($MM)) ($/boe/d)(2) 2014 7,815 469% 58% 38 4,862 2015 11,838 51% 12% 37 3,126 2016 14,611 23% 4% 41 2,806 2017F 16,800 - 17,300 18% 6% 58 3,353 1. Production and production per
Slide 14: Operating Costs
Operating Costs oe ENERGY LTD. $30.00 5 ; $120.00 OPERATING COSTS VS WTI $29.00 + $28.00 - + $100.00 $27.00 - $26.00 - $25.00 - $24.00 +4 mmm Operating Costs ($/boe) $23.00 - —WwTl (USD) + $60.00 ($/boe) $22.00 ~ wT (USD) $21.00 ~ $20.00 - $19.00 ~ $18.00 - + $40.00 : + $20.00 $15.00 r T r r T S- $1
Slide 15: Core Operating Areas
Core Operating Areas Solid Base of Oil Production 2016 Average 2017 Budgeted Production Production North (Slave Lake) 3,600 boe/d 5,300 - 5,400 boe/d Central (Wainwright) 5,200 boe/d 5,600 – 5,700 boe/d South (Bantry) 5,800 boe/d 5,900-6,200 boe/d 15
Slide 16: North
North Comprises the Mitsue Gilwood unit and approximately 1,200 Boe/d of non operated (primarily 5,300 – 5,400 boe/d 75% working interest) production Light sweet 41˚ API oil Existing infrastructure and land sets up half cycle economics Inventory in excess of 90 locations 16
Slide 17: Mitsue Gilwood Unit
Mitsue Gilwood Unit Stabilizing reservoir without drilling Water flood management Well reactivations Increasing total fluid Increasing oil and gas rates Result ~2MMboe of reserves in 8% 9% 2016 3 new drills on production in Q2, 2017 17
Slide 18: Central
Central Area growth thru tuck-in acquisitions By pass uphole oil drilling targets 40 unbooked drilling locations First 2 Waseca wells to be drilled in 2017 Waseca Drilling(1) CAPEX $1.2 MM 5,600 – 5,700 Payout 1.3 Years boe/d Capital Efficiencies $21,000 F&D Costs $10/boe EUR 119 mbbl IP 365
Slide 19: Wainwright Decline
Wainwright Decline No new drilling Less than 5% decline Result ~4MMboe of reserves in 2016 19
Slide 20: Bantry Type Curve
Bantry Type Curve Drill Economics* Capex $1.8 MM Payout 1.0 yrs Capital $11,000 Efficiency F&D $12.00 EUR 150 mbbl IP365 163 boe/d * Based on Sproule YE 2016 prices. 20
Slide 21: 2017 – 2018 Strategy
2017 – 2018 Strategy 1. Build Cash Flow Base Organic growth A&D if Accretive on all metrics 2. Begin transition to longer life oil projects 3. Build on drilling inventory 4. Reduce debt and ARO obligations 21
Slide 22: Corporate Information
Corporate Information Corporate Headquarters Cardinal Energy Ltd. 600, 400 – 3rd Avenue S.W. Calgary, AB T2P 4H2 Bankers ATB Financial CIBC World Markets Inc. RBC Dominion Securities Inc. Scotia Capital Inc. National Bank of Canada Auditors KPMG LLP Legal Burnet Duckworth & Palmer LLP Reserves Sprou
Slide 23: Analyst Coverage
Analyst Coverage Firm Analyst Phone Email BMO Nesbitt Burns Ray Kwan 403-515-1500 Ray.kwan@bmo.com Canaccord Genuity Corp. Sam Roach 403-691-7809 sroach@canaccordgenuity.com Clarus Securities Inc. Robert Pare 403-767-0823 rpare@clarussecurities.com FirstEnergy Capital Corp. Cody Kwong 403-262-0600 c
Slide 24: Advisory
Advisory Forward-looking Statements This presentation contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to the Cardinal's plans and other aspects of Cardinal's anticipated future
Slide 25: Advisory
Advisory This presentation contains future-oriented financial information and financial outlook information (collectively, "FOFI") about our prospective results of operations, cash flows, payout ratio and components thereof, all of which are subject to the same assumptions, risk factors, limitations
Slide 26: Advisory
Advisory Advisory Regarding Oil and Gas Information The crude oil, natural gas and natural gas liquid reserves and related future net revenue of Cardinal presented herein were evaluated by Sproule Associates Limited ("Sproule") and GLJ Petroleum Consultants (“GLJ“), Cardinal's independent reserves e