Kelt Exploration Ltd. · TSX:KEL
Kelt Exploration — Investor Presentation (August 2024)
47 slides from Kelt Exploration's investor presentation, August 2024
Slide 1: Corporate Presentation August 2024
Corporate Presentation August 2024 KeltExploration.com David J. Wilson President & Chief Executive Officer Sadiq H. Lalani Vice President & Chief Financial Officer www.keltexploration.com 1
Slide 2: Why Invest in Kelt?
Why Invest in Kelt ? VALUE CREATION ● Kelt Exploration Ltd. (“Kelt” or the “Company”) focuses on value creation for shareholders over the long-term. ● The Company emphasizes low-cost land accumulation in resource-style plays with the potential for high rates of return on capital invested and rapid g
Slide 3: Capital Structure
Capital Structure ● Stock Exchange listing TSX ● Trading symbol KEL ● Market capitalization ( @ $5.73 effective Aug/2/2024 ) $ 1.1 billion ● 52-week stock trading range $ 5.00 – $ 8.16 ● Common shares issued 195.7 million ● Stock options ( 10.9 MM ) & RSUs ( 1.8 MM ) 12.7 million ( 6.5% ) → average
Slide 4: Insider Commitment
Insider Commitment Insider Purchases Offering / Market Purchases Date Shares (MM) Amount (MM) Price/share $ 13.9 MM Equity Private Placement Feb-2013 3.7 $ 8.7 $ 2.32 $ 94.4 MM Equity Private Placement Apr-2013 5.7 $ 31.5 $ 5.55 $ 92.0 MM Equity Private Placement Aug-2013 0.5 $ 4.0 $ 8.00 $ 19.6 MM
Slide 5: Capital Expenditures – Three Year Comparative
Capital Expenditures – Three Year Comparative 2024 2024 / ( $ millions ) 2022 2023 Forecast 2023 Drilling & Completions 191.0 193.2 213.0 10% Infrastructure: Equipment, Facilities, 122.7 85.8 92.0 7% Pipelines & Tangible Inventory Land, Seismic, Corporate Assets & Property 3.8 3.6 20.0 456% Acquisit
Slide 6: Drilling & Completions Program
Drilling & Completions Program 2022 2023 2024 Forecast Drills Gross / Net Wells Gross / Net Wells Gross / Net Wells Alberta 28 25.4 21 20.0 24 24.0 British Columbia 3 3.0 7 7.0 6 6.0 Total 31 28.4 28 27.0 30 30.0 2022 2023 2024 Forecast Completions Gross / Net Wells Gross / Net Wells Gross / Net Wel
Slide 7: Production – Three Year Comparative
Production – Three Year Comparative 2022 2023 2024 Forecast Product Mix Product Mix Product Mix Oil ( bbls/d ) 5,640 21% 7,979 26% 9,300 – 10,000 27% NGLs ( bbls/d ) [1] 4,049 15% 3,759 12% 3,700 – 4,000 11% Gas ( Mcf/d ) 105,280 64% 112,634 62% 126,000 – 132,000 62% Combined ( BOE/d ) 27,236 100% 3
Slide 8: 2023 Production and Operating Income – Product Mix
2023 Production and Operating Income – Product Mix Operating Operating Operating Production Production Income [3] Income Netback [3] ( BOE/d ) Split ( MM ) Split ( $/BOE ) Oil 7,979 26% $ 188.9 66% $ 64.84 NGLs: C5+ [1] 1,202 4% $ 29.7 10% $ 67.70 NGLs: C4 / C3 / C2 [2] 2,557 8% $ 10.9 4% $ 11.68 Ga
Slide 9: Commodity Prices – Three Year Comparative
Commodity Prices – Three Year Comparative ( CAD, unless otherwise specified ) 2022 2023 2024 Forecast WTI Crude Oil ( $/bbl ) [1] US $ 94.80 $ 123.42 US $ 77.63 $ 104.76 US $ 81.00 $ 110.80 MSW Crude Oil ( $/bbl ) [2] US $ 92.78 $ 120.79 US $ 74.40 $ 100.40 US $ 76.43 $ 104.55 NYMEX Henry Hub Natura
Slide 10: Gas Market Risk Management
Gas Market Risk Management GAS MARKET DIVERSIFICATION ● Kelt has taken a diversified approach to selling its natural gas in order to reduce exposure to single market risk. ● Estimated % of average gas sales in 2024 at each respective price hub is forecasted to be as follows: AECO 1% 21% Dawn 2% 34%
Slide 11: Gas Processing Arrangements
Gas Processing Arrangements GAS PLANT DIVERSIFICATION Kelt has entered into various agreements that provide the Company with the ability to increase its raw gas processing capacity over the next three years: ❖ WEMBLEY/PIPESTONE DIVISION: Kelt expects to increase firm service raw gas processing capac
Slide 12: Commodity Price Risk Management – Derivative Instruments (1 of 2)
Commodity Price Risk Management – Derivative Instruments ( 1 of 2 ) Remaining Commodity Index Type Quantity Contract Price Term NYMEX−AECO Aug/2024 to 10,000 Natural Gas Financial Monthly AECO Basis calculated at 30% of the floating monthly NYMEX Henry Hub price Basis Differential Oct/2024 MMBtu/d N
Slide 13: Commodity Price Risk Management – Derivative Instruments (2 of 2)
Commodity Price Risk Management – Derivative Instruments ( 2 of 2 ) Remaining Commodity Index Type Quantity Contract Price Term Aug/2024 to 2,000 CAD $105.18 / bbl Crude Oil WTI Financial Sep/2024 bbls/d [ equivalent to USD $76.89 / bbl at a CAD/USD exchange rate of 1.3680 ] CAD/USD Aug/2024 to USD
Slide 14: Netbacks – Three Year Comparative
Netbacks – Three Year Comparative 2023 / 22 2024 2024 / 23 ( $ / BOE ) 2022 2023 change Forecast change Net realized price 59.54 43.01 ( 28% ) 42.40 ( 1% ) Realized hedging gain ( loss ) ( 5.68 ) 1.35 ─ ( 0.02 ) ( 101% ) Royalties ( % of net realized price ) ( 11.1% ) ( 12.3% ) 11% ( 13.8% ) 12% Tra
Slide 15: Financial Summary – Three Year Comparative
Financial Summary – Three Year Comparative 2024 2024/23 ( $ MM, unless otherwise specified ) 2022 2023 Forecast change P&NG sales 613.4 495.6 552.0 11% Adjusted funds from operations [1] 327.0 276.2 270.0 ( 2% ) AFFO per share – diluted ( $/share ) [1] 1.67 1.40 1.35 ( 4% ) Capital expenditures, net
Slide 16: ROACE – Three Year Comparative
ROACE – Three Year Comparative Return on average capital employed (ROACE) measures the efficiency of Kelt’s utilization of the capital that it employs. In this calculation, ROACE is defined as earnings for the period adjusted for interest expense and taxes as a percentage of the average capital empl
Slide 17: Reserves - Volumes
Reserves - Volumes ( MBOE ) Dec/31/2022 Dec/31/2023 Change Proved Developed Producing 61,062 71,081 16% Proved 192,073 256,584 34% Proved plus Probable 340,801 413,082 21% Oil & NGLs / Gas Mix 38% 62% 36% 64% ( MBOE ) PDP Proved P+P Reserve Additions, net 21,142 75,634 83,404 2023 Production 11,123
Slide 18: Reserves – Future Development Capital
Reserves – Future Development Capital Proved Reserves [1] P+P Reserves [1] December 31, 2023 FDC Net FDC Net ( $ MM ) Wells ( $ MM ) Wells Alberta Montney wells 1,343.2 170.7 1,676.2 214.7 B.C. Montney wells 212.9 27.0 396.6 50.0 Alberta Charlie Lake wells 161.6 28.2 250.5 45.4 Other expenditures [2
Slide 19: 2023 Finding, Development, Acquisition & Disposition Costs
2023 Finding, Development, Acquisition & Disposition Costs PDP Proved P+P ( $ M, unless otherwise specified ) Reserves Reserves Reserves Capital expenditures, net of dispositions 282,646 282,646 282,646 Change in FDC costs required to develop reserves ─ 558,245 422,973 Total capital costs 282,646 84
Slide 20: Net Asset Value
Net Asset Value Net Asset Value per Share Sproule’s Forecasted Future Commodity Prices December 31, 2023 $M $/share WTI NYMEX HH Exchange Proved reserves [2] 2,827,673 13.75 Crude Oil Natural Gas Rate (USD/bbl) (USD/MMBtu) (CAD / USD) Probable reserves [2] 1,687,701 8.21 2024 76.00 2.75 1.333 Undeve
Slide 21: Operating Divisions
Operating Divisions Oak/Flatrock ● Montney light oil/condensate-rich gas Pouce Coupe/Progress/Spirit River ● Montney light oil ● Montney and Doig gas Oak/Flatrock Pouce Coupe/ Progress/Spirit River ● Charlie Lake light oil Wembley/Pipestone Wembley/Pipestone Grande Cache ● Montney light oil/condensa
Slide 22: Operating Divisions – Summary of Reserves and Production
Operating Divisions – Summary of Reserves and Production Proved P+P 2023 2023 Production Reserves Reserves P+P Reserves [1] [2] Netback [3] Value [1] Value [1] Division BOE/d Oil/NGLs $/BOE $ MM $ MM MBOE Oil/NGLs Pouce Coupe/Progress/Spirit River 15,260 34% $ 24.87 768 1,266 113,247 25% Wembley/Pip
Slide 23: Kelt Land Fairway Land Holdings
Kelt Land Fairway R13 R11 R9 R7 R5 R3 R1W6 R24W5 94-A-14 94-A-15 94-A-16 T90 94-A-11 94-A-10 94-A-9 T88 T88 Land Holdings T86 Developed + Gross Net Net T86 Oak T84 Flatrock T84 Undeveloped Acres Acres Sections Fort St. John T82 T82 BC Montney 196,792 193,607 303 AB Montney 164,168 146,187 228 T80 T8
Slide 24: Kelt Montney Framework
Kelt Montney Framework Oak / Flatrock Pouce Coupe Progress La Glace Pipestone / Wembley Proven Productive Montney Horizons Kelt Future Exploratory Horizons within Core Areas Area Oak Pouce Coupe West Progress La Glace Pipestone / Wembley Primary Montney Target Upper and D4 Lower, D1 and D2 D1 D3 D3
Slide 25: British Columbia Montney - Oak / Flatrock Division
British Columbia Montney - Oak / Flatrock Division 8-16 14-2 02/8-16 (sfc 11-26) 1-9, 4-10, 2-9, (sfc 13-12) (DUC) 3-9, 3-10, 2-10. 16-23, 14-24 Montney Land Holdings 02/2-10, 02/3-9 (sfc 13-12) (sfc 5-33) 02/13-13 (sfc 13-12) Gross 191,742 acres ( 300 sections ) T87 Net 190,470 acres ( 298 sections
Slide 26: Alberta Montney Lands
Alberta Montney Lands Alberta − Montney Land Holdings 49 sections T80 Gross 164,168 acres ( 256 sections ) Net 146,187 acres ( 228 sections ) Pouce Pouce Coupe Coupe T78 POUCE COUPE WEST West ● High deliverability dry gas wells. Progress ● Wells typically come on production at rates between 10-12 MM
Slide 27: Pouce Coupe / Progress Division – Montney
Pouce Coupe / Progress Division – Montney Kelt Lands T82 NRM Fourth Creek Gas Plants Gas Plant T81 NRM Gordondale East Gas Plant Pouce T79 Pouce Coupe Coupe (oil-prone) West (gas-prone) Progress T77 Progress (oil-prone) Proven Productive Montney Horizons Kelt Future Exploratory Horizons within Core
Slide 28: Wembley / Pipestone / La Glace Division – Montney
Wembley / Pipestone / La Glace Division – Montney 2024 Development Program: 02/13-32 14-2 pad → 6 wells 13-10 14-9 pad → 5 wells Montney Land Holdings (sfc 14-34) 14-26 → 3 wells 1-35 13-18 (sfc 9-17) (sfc 12-19) 5-9 T75 Gross 114,088 acres ( 178 sections ) 13-6 (sfc 15-29) (sfc 11-31) Net 110,139 a
Slide 29: Wembley / Pipestone / La Glace Division – Infrastructure
Wembley / Pipestone / La Glace Division – Infrastructure Proposed third-party pipeline construction will T77 INFRASTRUCTURE connect with Kelt’s existing gas gathering system at Pouce Coupe / Progress, providing the Company with additional gas processing flexibility. ● Ownership in extensive pipeline
Slide 30: Alberta Charlie Lake Lands
Alberta Charlie Lake Lands Alberta − Charlie Lake Land Holdings T80 Gross 131,040 acres ( 205 sections ) Net 87,667 acres ( 137 sections ) Pouce Coupe Progress Spirit River Spirit River – Lower Charlie Lake T78 EUR – Single FDC Well ( Sproule, December 31, 2023 ) Oil / NGLs 310,000 bbls 49% Gas 1.9
Slide 31: Progress / Spirit River – Charlie Lake
Progress / Spirit River – Charlie Lake CHARLIE LAKE LAND HOLDINGS Spirit T79 Gross: 27,680 acres ( 43 sections ) 1-30 LCL River Net: 20,959 acres ( 33 sections ) (sfc 10-7) KEL 50% 1-25 LCL Kelt 14-6 1-36 UCL 8-25 UCL Spirit River 9-25 UCL (sfc 8-27) Facility 2-22 LCL (100% WI) 1-22 LCL CHARLIE LAKE
Slide 32: Pouce Coupe – Charlie Lake
Pouce Coupe – Charlie Lake 13-7 (sfc 12-9) Kelt 8-33 Pouce Coupe North CHARLIE LAKE LAND HOLDINGS Facility T81 (99% WI) Gross: 62,240 acres ( 97 sections ) Net: 41,440 acres ( 65 sections ) Pouce 16-6 Coupe (sfc 8-1) North T80 CHARLIE LAKE ACTIVITY 2-1 (sfc 13-33) ● Recently acquired lands in a new
Slide 33: Wembley / Pipestone – Charlie Lake
Wembley / Pipestone – Charlie Lake CHARLIE LAKE LAND HOLDINGS T74 Gross: 22,880 acres ( 36 sections ) Net: 16,134 acres ( 25 sections ) CHARLIE LAKE ACTIVITY Wembley / T73 ● Charlie Lake lands overlapping Kelt’s Montney 1-24 Pipestone development play at Wembley/Pipestone. (sfc 16-26) KEL = 60% ● Ad
Slide 34: Future Considerations
Future Considerations ● The Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. ● The Company has amassed vast Montney acreage in new plays to complement its existing development Montney lands. ● The Company
Slide 35: Corporate Governance - Board of Directors
Corporate Governance - Board of Directors William C. Guinan [ 8, 9 ] Jennifer J. Haskey [ 2, 6, 10 ] Board Chair, Independent Director, Independent Common shares 1,154,459 Common shares Nil Stock options 104,000 Stock options 45,000 Notes: RSUs 13,300 RSUs 10,800 [1] Chair, Audit Committee. 2023 Dir
Slide 36: Leadership - Officers
Leadership - Officers Douglas J. Errico David J. Wilson Sadiq H. Lalani Senior Vice President, Land President & Chief Executive Officer Vice President & Chief Financial Officer and Corporate Development Common shares 26,658,092 Common shares 1,850,071 Common shares 506,778 Stock options 1,261,500 St
Slide 37: Abbreviations and Definitions
Abbreviations and Definitions ACE the Chicago natural gas hub pricing point identified as the Alliance M thousand Chicago Exchange MM million AECO Alberta Energy Company “C” Meter Station of the Nova Gas Pipeline MSW Medium Sweet Blend System NGTL Nova Gas Transmission Limited AESO Alberta Electric
Slide 38: Disclaimer
Disclaimer Forward-Looking Statements Certain statements included in this corporate presentation (the “Presentation”) constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purp
Slide 39: Disclaimer
Disclaimer Future Oriented Financial Information This Presentation contains Future Oriented Financial Information (“FOFI”) within the meaning of applicable securities laws. The FOFI has been prepared by Kelt’s management to provide an outlook of the Company's activities and results. The FOFI has bee
Slide 40: Disclaimer
Disclaimer In addition to other factors and assumptions which may be identified in this Presentation, assumptions have been made regarding, among other things: commodity prices; the accuracy of geological and geophysical data and its interpretations of that data; estimated decline rates; the impact
Slide 41: Disclaimer
Disclaimer No Obligation to Update The forward looking statements or information contained in this Presentation are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward looking statements or information, whether as a result of new information,
Slide 42: Disclaimer
Disclaimer Reserves Unless otherwise specified, reserve estimates disclosed in this Presentation were prepared by Sproule Associates Limited (“Sproule”) in accordance with National Instrument 51- 101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and the Canadian Oil and Gas Evalua
Slide 43: Disclaimer
Disclaimer Financial Advisories All dollar amounts are referenced in Canadian dollars, except when otherwise noted. Refer to "Non-GAAP Measures and Other Financial Measures" in the Company’s Management’s Discussion and Analysis (“MD&A”) for a quantitative reconciliation of capital expenditures net o
Slide 44: Disclaimer
Disclaimer “Capital expenditures, before A&D” and “Capital expenditures, net of A&D” are non-GAAP measures the Company uses to monitor its investment in exploration and evaluation, investment in property plant and equipment, and net investment in acquisition and disposition activities. The most dire
Slide 45: Disclaimer
Disclaimer Capital Management Measures Funds from operations and adjusted funds from operations Management considers funds from operations and adjusted funds from operations key capital management measures as it demonstrates the Company’s ability to meet its financial obligations and cash flow avail
Slide 46: Disclaimer
Disclaimer Supplementary Financial Measures Production per common share: is calculated by dividing total production by the basic weighted average number of common shares outstanding, in accordance with GAAP. NPV10% BT: the anticipated net present value of the future net cash flow before taxes and af
Slide 47: Corporate Presentation
Corporate Presentation KeltExploration.com Kelt Exploration Ltd. Suite 300, East Tower 311 – Sixth Avenue SW Calgary, Alberta Canada T2P 3H2 Phone: 403-294-0154 Fax: 403-291-0155 Website: www.KeltExploration.com 47
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