Bonterra Energy Corp. · TSX:BNE
Bonterra Energy — Shareholder Meeting (2017)
22 slides from Bonterra Energy's shareholder meeting presentation, Jun 20, 2017
Slide 1: Bonterra Energy Corp. AGM
BONTERRA ENERGY CORP. AGM EFFICIENT SUSTAINABLE DISCIPLINED
Slide 2: Forward Looking Information
FORWARD LOOKING INFORMATION Certain statements contained in this Presentation include statements which contain words such as “anticipate”, “could”, “should”, “expect”, “seek”, “may”, “intend”, “likely”, “will”, “believe” and similar expressions, statements relating to matters that are not historical
Slide 3: Current Snapshot
CURRENT SNAPSHOT Common shares 33.3 mm outstanding Insider ownership 12% Current monthly dividend $0.10 per share Current annualized yield(1) 6.7% Oil and liquids weighting 71% Oil & Liquids Reserve life index (2P) 20 years Tax pools $502 mm Tax horizon 2018 2016 Exit Net Debt $354
Slide 4: Crude Oil Market
CRUDE OIL MARKET IEA suggests that in 1Q17 the oil market was almost balanced (0.1 mmb/d build) IEA 2017 oil demand growth forecasted to be 1.3 mmb/d Assuming OPEC status quo, IEA forecasts 2H-17 Demand > Supply by over 1.0 mmb/d Source: IEA Oil Market Report 3
Slide 5: Sustainability
SUSTAINABILITY Run Rate Production Assumption = 13,500 boepd WTI (USD) $/bbl 45.00 50.00 55.00 60.00 65.00 70.00 Differential (USD) $/bbl (3.00) (3.00) (3.50) (3.50) (4.00) (4.00) Foreign Exchange $USD/CAD 0.74 0.74 0.74 0.74 0.74 0.74 Quality Adjustment (CAD) $/bbl (3.25) (3.25) (3.25) (3.25) (3.25
Slide 6: Free Funds Flow
FREE FUNDS FLOW FREE FUNDS FLOW ALLOCATION OPTIONS 2017 Guidance Free Funds Flow Allocation ($91M) 1. Dividend 2. Debt Reduction Growth $14M Debt 3. Increase Capex Reduction $37M Dividend 4. Buy-Back Shares $40M 5. Acquisitions Present focus is to allocate Cash Surplus to reduce indebtedness 5
Slide 7: Dividend History
DIVIDEND HISTORY $160.00 Dividend EDM Light $140.00 $0.30 $120.00 Edmonton Light ($/bbl) $100.00 $0.20 Dividend ($/month) $80.00 $60.00 $0.10 $40.00 Cumulative Dividends Paid Per Share (1998 – 2017) : $41.28 $20.00 $- $0.00 Month Dividend is supported by a low-risk, low-decline asset base that offer
Slide 8: Shareholder Value: Production per Share
SHAREHOLDER VALUE Production per Share Production Profile (boe per share) 30% Natural Gas 0.109 0.119 0.124 0.147 0.150 0.140 0.140 70% Oil/NGLs 13,195 12,656 12,650 12,190 2010 2011 2012 2013 2014 2015 2016 Gross Production (boe per day) 6,703 Oil/Liquids 6,322 Natural Gas 5,628 4,994 4,218 4,346 3
Slide 9: Shareholder Value: Reserves per Share
SHAREHOLDER VALUE Reserves per Share Reserves Profile (boe per share) (Proved plus Probable) (Proved plus Probable) 29% Natural Gas 2.09 2.13 2.28 2.47 2.50 2.78 2.85 71% Oil/NGLs 94,905 90,621 80,248 2010 2011 2012 2013 2014 2015 2016 74,981 Gross Reserves (MBOE - Proved plus Probable – year over y
Slide 10: Production Forecast
PRODUCTION FORECAST Vertical Base Horizontal Base 2017 Capital Program 16,000 14,000 12,000 10,000 BOE/d 8,000 ~20% Corporate Base Decline Rate 6,000 4,000 2,000 0 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Month Less capital is required to maintain productio
Slide 11: Pembina Cardium Overview
PEMBINA CARDIUM OVERVIEW Majority of Bonterra land covers areas with large original-oil-in-place, offering significant potential to increase recovery factors resulting in sizable increases in reserves and production. ORIGINAL OIL IN PLACE PER SECTION RECOVERY FACTOR 0 to 5,000 Mbbl 0% 5,000 to 10,00
Slide 12: Concentrated Asset Base
CONCENTRATED ASSET BASE CARDIUM LANDS Average working interest – 76% Cynthia Bonterra operates 88.5% of its total West Keystone production Pembina Reserve life index (P+P) – 20 years Carnwood Blue Rapids Rose Creek Reserves (P+P) – 94.9 MBOE Land position – 311 gross (206 net) sections B
Slide 13: Average BNE Cardium Economics
AVERAGE BNE CARDIUM ECONOMICS BNE TYPE CURVE – PREDICTABLE AND REPEATABLE 300.00 250.00 Reserves per well (MBOE) 165 200.00 IP (1 month) (boe/d) 255 BOE/D 150.00 IP (12 months) (boe/d) 125 100.00 50.00 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Month BNE TYPE CURVE – PRICE AND
Slide 14: Cardium Locations
CARDIUM LOCATIONS SIGNIFICANT CARDIUM INVENTORY Total Inventory * Booked Locations 2017 Program Area Name Avg WI% Gross Net Gross Net Gross Net ROSE CREEK 97.20% 242 235 32 30 4 4 KEYSTONE 94.80% 175 166 94 91 0 0 CARNWOOD 88.80% 149 132 55 54 26 25 WEST PEMBINA 95.00% 100 95 31 29 5 4 BLUE RAPIDS 8
Slide 15: Drilling & Completion Innovation
DRILLING & COMPLETION INNOVATION Total Drill & Complete Cost Per Well 1 mile horizontal 3,000 2,500 D&C COST $MM 2,000 Forecast 1,500 1,000 500 0 2012 2013 2014 2015 2016 2017 Drill Complete MONOBORE DESIGN CEMENTED COMPLETIONS SERVICE COST REDUCTIONS 14
Slide 16: High Quality Reserve Base
HIGH QUALITY RESERVE BASE Grand Total Reserves – 95 Million boe 10% NPV – Total $1.36 billion Probable Probable 22% Proved 23% Developed Proved Producing Developed Proved Producing 43% Undeveloped 54% Proved Undeveloped 23% 35% Percent Proved to Total Reserves Proved Probable 100% 90% 80% 70% 60% 50
Slide 17: Low-Cost Reserve Additions
LOW-COST RESERVE ADDITIONS IMPROVING CAPITAL EFFICIENCIES FD&A Costs per BOE, Incl. FDC 1P FD&A 2P FD&A $25.00 22.67 Year over Year, Bonterra is more efficient at replacing its reserve base $20.00 18.90 42% reduction in 1P FD&A from 2014 to 2016 $15.00 $/boe 11.52 11.60 10.87 9.93 $10.00 56% r
Slide 18: Commitment to Cost Control
COMMITMENT TO COST CONTROL DECLINING ALL-IN COSTS PER BOE $30.00 All-In costs less than $20.00 per boe $27.01 $25.24 $25.21 $25.00 30% reduction in All-In costs from 2012 to 2016 $19.00 $18.98 $20.00 30% reduction in Operating Costs from $/BOE $15.00 2012 to 2016 $10.00 45% reduction in Gene
Slide 19: Carnwood Area
CARNWOOD AREA Drilled Potential Drilling locations Sections: 41 gross (37 net); Locations (6 to 8 wells per section): ~206 gross (190 net) 18
Slide 20: Pembina Cardium Development
PEMBINA CARDIUM DEVELOPMENT R6W5 CONVENTIONAL VERTICAL DEVELOPMENT Estimated ultimate oil recovery: 196,000 Bbl Recovery factor: ~4% HORIZONTAL DEVELOPMENT: PRIMARY DEPLETION Estimated horizontal ultimate oil recovery: 264,000 Bbl (~90 Mbbl/ hz well) Recovery factor: ~9% (including verticals
Slide 21: Pembina Cardium Development: Horizontal Waterflood Pilot
PEMBINA CARDIUM DEVELOPMENT HORIZONTAL WATERFLOOD PILOT Primary vs. Waterflood Horizontal Production Horizontal Primary Horizontal Waterflood 1000 Start of injection 100 Based on production and numerical reservoir simulation RF = 15% BOPD RF = 9% 10 Recovery Factor = 3.2% 1 6% Recovery Factor increa
Slide 22: Focus on Fundamentals
FOCUS ON FUNDAMENTALS SUSTAINABLE YIELD Low Corporate Decline ~20% Corporate Base Decline Rate All-in costs (royalties, operating costs, G&A, and interest Low Cost Producer expense) of less than $20 per boe (US$15 per boe) DISCIPLINED GROWTH Light Oil focused. Pembina and Willesden Green Areas a