Bonterra Energy Corp. · TSX:BNE
Bonterra Energy — Shareholder Meeting (May 2014)
27 slides from Bonterra Energy's shareholder meeting presentation, May 2014
Slide 1: Bonterra Energy Corp. AGM 2014
BONTERRA ENERGY CORP. AGM 2014 YIELD GROWTH SUSTAINABILITY
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: Annual General Meeting 2014
ANNUAL GENERAL MEETING 2014 Our discussion today will consist of the following: • Shareholders rates of return (growth and yield) • Financial Results • Operations discussion and reasons why the Company has the ability to continue with shareholder value increases in future years 2
Slide 4: Rate of Return
RATE OF RETURN SUPERIOR LONG-TERM RETURNS TO SHAREHOLDERS Combined Share Price Dividend * Based on May 21, 2014 closing price of $56.82 $88.36 $56.82 $31.54 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 May-14 SHAREHOLDERS RATE OF RETURN 2013 Share price January 1, 2013
Slide 5: Past Five Year History
PAST FIVE YEAR HISTORY • Increased the monthly dividend from $0.12 to $0.29 • Increased the share price from $17.27 (Jan 1, 2009) to $56.82 (May 21, 2014) Plus $14.95 in dividends for a total return of 317% (63% / year) • Continue to have a much lower debt ratio to cash flow than most other companie
Slide 6: History of Dividend Growth
HISTORY OF DIVIDEND GROWTH $0.40 $0.35 $0.30 $0.29 $0.28 $0.26 $0.25 $0.24 $0.22 $0.21 $0.20 $0.18 $0.16 $0.16 $0.14 $0.15 $0.12 $0.10 $0.05 $- 5
Slide 7: Yield: Dividend Corporations
YIELD: DIVIDEND CORPORATIONS 9.00% Bonterra’s strengthened financial and operational position may provide additional yield contraction on a go forward basis 7.97% 8.04% 8.00% 6.91% 6.95% 7.00% 6.53% 6.30% 6.10% 5.93% 5.93% 6.00% 5.65% 5.18% 5.21% 5.00% 4.69% 4.00% 3.84% 3.63% 3.00% 2.00% 1.00% 0.00%
Slide 8: Current Snapshot
CURRENT SNAPSHOT CORPORATE PROFILE Shares outstanding 31.9 million Market capitalization $1.8 billion(2) Insider ownership 14% Current monthly dividend(1) $0.29 per share Current annualized yield(2) 6.1% Oil and liquids weighting 70% (6% liquids) Reserve life index (PDP) 7 years Reserve life index (
Slide 9: Financial Results
FINANCIAL RESULTS HIGHLIGHTS Q1 Year Year (000s except per share amounts) 2014 2013 2012 Funds Flow $54,414 $181,574 $80,429 Per share – basic $1.73 $6.01 $4.07 Payout ratio 50% 55% 77% Cash from other sources (3) $12,889 $32,903 $6,934 Cash Dividends per share $0.87 $3.33 $3.12 Average Daily Produc
Slide 10: Guidance
GUIDANCE OUTLOOK FIRST QUARTER YEAR 2013 (000s except per boe amounts) 2014 GUIDANCE 2014 ACTUAL Average production 12,400-12,700 boe/d 12,006 boe/d 12,190 boe/d Operating costs ~$13.00/boe $12.89/boe(2) $12.77/boe Corporate netbacks $41.33/boe(1) $50.37/boe $40.58/boe Funds flow from commodities $2
Slide 11: Production Forecast
PRODUCTION FORECAST Base Spartan HZ Capital Forecast 16,000 14,000 12,000 10,000 BOE/d 8,000 6,000 4,000 2,000 0 Month Note: Capital expenditures for 2015 and 2016 are not included in this chart 10
Slide 12: Cash Flow Sensitivities
CASH FLOW SENSITIVITIES Per Annum Cash Flow Sensitivity Analysis(1) (estimate for 2014) Cash Flow(3) Per Share(2) Change of U.S. $1.00 per barrel of oil and NGLs $2,528,000 $0.08 Change of Canadian $0.10 per MCF of natural gas $ 786,000 $0.02 Change of Canadian $0.01 / U.S.$ exchange rate $2,149,000
Slide 13: Increasing Shareholder Value: Production
INCREASING SHAREHOLDER VALUE Production per Share Production Profile (boe per share) 0.147 0.124 0.119 0.109 0.101 30% Natural Gas 70% Oil/NGLs 12,400- 12,700 12,190 2009 2010 2011 2012 2013 Gross Production (boe per day – year over year growth) 6,703 6,322 Oil/Liquids 5,628 Natural Gas 4,994 4,218
Slide 14: Increasing Shareholder Value: Reserves
INCREASING SHAREHOLDER VALUE Reserves per Share Reserves Profile (boe per share) (Proved plus Probable) (Proved plus Probable) 2.47 2.28 2.09 2.13 1.99 27% Natural Gas 73% Oil/NGLs 74,981 2009 2010 2011 2012 2013 Gross Reserves (MBOE - Proved plus Probable – year over year growth) 45,032 41,149 39,3
Slide 15: Cardium Lands
CARDIUM LANDS LAND • Average working interest – 77% • Bonterra operates 88.5% of its total production • Reserve life index (Proved) – 12 years • Reserve life index (P+P) – 17 years • Reserves (P+P) – 75.0 MBOE • Land position – 250.3 gross (193.7 net) sections • Booked locations – 219 gross (178.4 n
Slide 16: Pembina Cardium
PEMBINA CARDIUM ORIGINAL OIL IN PLACE PER SECTION RECOVERY FACTOR 0 to 5,000 Mbbl 0% 5,000 to 10,000 Mbbl 5% 10,000 to 20,000 Mbbl 10% 20,000 to 25,000 Mbbl 15% 25,000+ Mbbl 20% 25% KEY CHARACTERISTICS • Pembina is the largest conventional oilfield in Canada with more than 9.3 billion barrels of oil
Slide 17: Pembina Cardium Development
PEMBINA CARDIUM DEVELOPMENT CONVENTIONAL VERTICAL DEVELOPMENT • 4 vertical wells • Estimated ultimate oil recovery: 378,000 Bbl • Recovery factor: 3.3% 8 HZ WELLS* PER SECTION DEVELOPMENT • Estimated ultimate oil recovery: 1,178,000 Bbl • Recovery factor: 10.2% • Number of wells per section on prima
Slide 18: Operational Focus
OPERATIONAL FOCUS Infrastructure $14 Million Average Well Cost: $2.5 Million Equip Operated & Non- 10% Operated Well Costs $106 Million Drilling 42% Completion 48% 17
Slide 19: Drilling Innovation
DRILLING INNOVATION Spud to Rig Release Normalized to 3000m MD 20 15 DAYS 10 5 0 2008 2009 2010 2011 2012 2013 2014 YEAR • Transition from intermediate casing design to monobore design • Advances in bit technology 18
Slide 20: Completion Innovation
COMPLETION INNOVATION TRANSITION FROM OPEN HOLE TO CASED HOLE • Increased recovery • Accurate and even placement of fracs • Increased number of fracs per well. • Reduced costs per frac Packers Cemented $100,000 $90,000 $80,000 $70,000 $/stage $60,000 $50,000 $40,000 $30,000 $20,000 10 15 20 25 30 35
Slide 21: Pad Development
PAD DEVELOPMENT ADVANTAGES – ‘ASSEMBLY LINE’ DEVELOPMENT Concentration of activity that dramatically increases capital efficiencies and minimizes surface disturbance 20
Slide 22: Pad Development
PAD DEVELOPMENT 21
Slide 23: Pembina Cardium Development 2W5
PEMBINA CARDIUM DEVELOPMENT 13 12 11 10 9 8 7 6 5 4 3 2W5 51 50 49 48 47 46 45 44 22
Slide 24: Carnwood Area
CARNWOOD AREA Drilled Drilling To Be Drilled in 2014 Potential locations Sections: 38 gross (35 net); Locations (8 wells per section): 305 gross (280 net) 23
Slide 25: Average BNE Cardium Economics
AVERAGE BNE CARDIUM ECONOMICS BNE AVERAGE HZ METRICS 250.00 Total capital costs per well ($MM) 2.5 Reserves per well (MBOE) 175 BNE Avg Hz Carnwood HZ IP (1 month) (boe/d) 193 200.00 IP (12 months) (boe/d) 105 Internal rate of return (% BT) 171 Payout (years) 0.8 150.00 Recycle ratio 2.7 BOE/D Price
Slide 26: Why Invest in Bonterra?
WHY INVEST IN BONTERRA? QUALIFIED AND EXPERIENCED STAFF SUSTAINABLE FOCUS ON PER DIVIDEND SHARE GROWTH LARGE INVENTORY CONCENTRATED BONTERRA OF HIGH QUALITY ASSET BASE DRILL LOCATIONS FOCUS ON GOOD ACCESS TO TECHNOLOGICAL MARKETS INNOVATION STRONG BALANCE SHEET 25
Slide 27: Corporate Information
CORPORATE INFORMATION BOARD OF DIRECTORS BANKERS G. J. Drummond CIBC, Calgary, Alberta G. F. Fink Alberta Treasury Branch, Calgary, Alberta R. M. Jarock National Bank of Canada, Calgary, Alberta C. R. Jonsson TD Securities, Calgary, Alberta R. A. Tourigny J. P. Morgan, Calgary, Alberta HEAD OFFICE O