Kelt Exploration Ltd. · TSX:KEL
Kelt Exploration — Investor Presentation (September 2014)
32 slides from Kelt Exploration's investor presentation, September 2014
Slide 1: Corporate Presentation
Corporate Presentation September 2014 David J. Wilson, President & Chief Executive Officer Sadiq H. Lalani, Vice President, Finance & Chief Financial Officer www.KeltExploration.com
Slide 2: Advisory Regarding Forward-Looking Statements
Advisory Regarding Forward-Looking Statements 1 Certain information with respect to Kelt Exploration Ltd. (“Kelt” or the “Company”) contained herein, including expectations, beliefs, plans, goals, objectives, assumptions, information and statements about future events, conditions, results of operati
Slide 3: Why Invest in Kelt?
Why Invest in Kelt? 2 For investors who want to be exposed to a growth oriented oil and gas exploration and development business plan – TRACK RECORD: the Kelt management team has a strong track record of building shareholder value, most recently with Celtic Exploration Ltd. – OPPORTUNITY DRIVEN: Kel
Slide 4: Common Share Information
Common Share Information 3 • Stock Exchange listing TSX • Trading symbol KEL • Market capitalization ( @ Sep/2/14 ) $ 1.7 billion • 52-week trading range $ 7.64 - $ 15.61 • Common shares issued 126.7 million • Restricted share units (RSUs) 1.7 million ( 1.3% ) • Stock options 3.7 million ( 2.9% ) →
Slide 5: Capital Expenditure Program
Capital Expenditure Program 4 ( $ millions ) 2013 Actual 2014 Forecast Change Drilling & Completions 84.2 209.0 + 148% Facilities, Equipment & 19.5 35.5 + 82% Pipeline Land & Seismic 16.0 31.0 + 94% Total E&D Expenditures 119.7 275.5 + 130% Acquisitions 209.4 172.5 - 18% Dispositions - ( 20.0 ) - To
Slide 6: 2014 Drilling Program
2014 Drilling Program 5 Gross Net D&C % Wells Wells ( MM ) Grande Prairie [1] 16 15.2 $ 90.5 44% Karr 7 6.8 $ 50.2 24% Inga / Fireweed [2] 10 4.1 $ 42.7 20% Other 4 3.7 $ 25.6 12% Total 37 29.8 $ 209.0 100% [1] Grande Prairie: Montney Gas = 7 (7.0); Montney Oil = 5 (5.0); Charlie Lake = 3 (3.0); Doi
Slide 7: Production Outlook
Production Outlook 6 2013 2014 2014 Actual Split Forecast Split Forecast Split (average) (average) (exit) Crude Oil ( bbls/d ) 516 13% 3,460 28% 4,960 32% NGLs ( bbls/d ) 297 7% 870 7% 1,150 8% Gas ( mcf/d ) 18,888 80% 47,520 65% 55,140 60% Combined ( BOE/d ) 3,961 12,250 15,300 Per MM Shares 53 100
Slide 8: Quarterly Production Growth
Quarterly Production Growth 7 ( BOE / d ) 20,000 Oil Gas + 326% 18,000 16,000 15,300 14,236 14,000 13,186 12,000 11,381 10,143 9,190 10,000 8,546 8,091 8,000 7,965 5,739 7,061 6,000 4,636 4,097 4,000 3,588 4,443 3,714 5,690 6,110 3,316 5,095 2,000 2,934 3,082 3,416 654 781 922 1,296 0 Mar 13 Q2 13 Q
Slide 9: Improving Profitability by Lowering Costs
Improving Profitability by Lowering Costs 8 – DRILLING: Kelt’s development properties are primarily resource in nature whereby in-fill drilling is conducted from multi-well pads resulting in economies of scale thereby reducing drilling costs per well. – COMPLETIONS: Kelt has recently moved to a comp
Slide 10: Protecting Profits Through Hedging
Protecting Profits Through Hedging 9 ( CA $ unless otherwise specified ) Period Quantity Fixed Price Sep/1/14 to 1,500 CA $ 101.51 WTI Crude Oil Dec/31/14 bbls/d per bbl [1] Sep/1/14 to 150 US $ 48.09 OPIS Conway Propane Dec/31/14 bbls/d per bbl [1] CA$101.51 was fixed at an equivalent USD WTI price
Slide 11: Commodity Prices
Commodity Prices 10 ( CA $, unless otherwise specified ) 2013 2014 (E) Change WTI Crude Oil ( USD/bbl ) [1] US $ 97.98 US $ 96.00 - 2% NYMEX Natural Gas ( USD/mmbtu ) US $ 3.67 US $ 4.40 + 20% AECO 5A Natural Gas ( CAD/GJ ) [2] $ 3.01 $ 4.35 + 45% Exchange Rate ( CAD/USD ) $ 1.030 $ 1.080 + 5% Kelt
Slide 12: Netbacks
Netbacks 11 ( $ / BOE ) 2013 2014 (E) Change Oil & gas revenue 32.27 48.61 + 51% Realized hedging gain ( loss ) ( 0.24 ) ( 0.25 ) - Royalties ( % of revenue ) ( 13.5% ) ( 13.8% ) + 2% Production & transportation exp. ( 10.69 ) ( 14.31 ) + 34% Operating netback [1] 16.97 27.34 + 61% G&A expense ( 1.1
Slide 13: Financial Outlook
Financial Outlook 12 2013 2014 (E) Change Oil & gas revenue, before royalties ( $ MM ) 46.3 216.2 + 367% Funds from operations ( $ MM ) [1] 23.7 117.5 + 396% Per share – diluted ( $/share ) 0.32 0.95 + 197% Debt, net of working capital, at y/e ( $ MM ) - 110.0 Debt to Funds from operations ratio - 0
Slide 14: Exit 2014 Forecast
Exit 2014 Forecast 13 Lower 2014 Forecasted Percent Commodity Commodity Difference Prices Prices Exit 2014 Production 15,300 BOE / d 15,300 BOE / d - ( 60% Gas & 40% Oil ) WTI Crude Oil price US $ 96.00 / bbl US $ 89.50 / bbl - 7% Exchange rate $ 1.0800 / USD $ 1.0800 / USD - AECO Natural Gas price
Slide 15: Core Areas
Core Areas 14 Grande Prairie ( includes Pouce Coupe, Spirit River & Valhalla / La Glace ) : → Montney/Doig gas development → Montney light oil development → Charlie Lake light oil development Inga / Fireweed → Halfway light oil development Karr: Grande Prairie → Montney light oil exploration/ Karr d
Slide 16: Land Holdings
Land Holdings 15 As at August 25, 2014 Gross Acres Net Acres Average WI Net Sections Developed 267,210 125,963 47% 196.8 Undeveloped 416,845 279,949 [1] 67% 437.4 Total 684,055 405,912 [2] 59% 634.2 [1] Net undeveloped land holdings has increased by 288% from 72,166 acres at March 31, 2013. [2] Tota
Slide 17: Reserves
Reserves 16 As at December 31, 2013 Crude Oil NGLs Gas Combined FDC Costs ( mbbls ) ( mbbls ) ( mmcf ) ( MBOE ) ( $M ) Proved Developed Producing 4,500 1,082 75,873 18,228 - Proved Developed Non- 180 28 966 369 1,327 producing Proved Undeveloped 1,990 1,531 78,857 16,664 218,273 Total Proved 6,670 2
Slide 18: Finding, Development & Acquisition (FD&A)
Finding, Development & Acquisition (FD&A) 17 As at December 31, 2013 Proved + Proved Probable 2013 capital expenditures, including value of assets conveyed from Celtic & FDC required to develop reserves ( $M ) 690,704 802,404 Reserve additions, net ( MBOE ) 36,705 60,643 FD&A cost ( $/BOE ) 18.82 13
Slide 19: Extensive Alberta Land Base
Extensive Alberta Land Base 18 Gordondale Operations Progress Spirit River Kelt has set up its main field Pouce Coupe operating base in the city of Grande Prairie, currently staffed with 20 Valhalla / full-time employees. La Glace Grande Alberta Land Holdings Prairie Gross: 566,398 acres ( 885 s
Slide 20: Grande Prairie
Grande Prairie 19 LAND Gross: 258,028 acres ( 403 sections ) Pouce Coupe Net: 152,667 acres ( 238 sections ) Progress Spirit River PRODUCTION Q2 2014 Production: 4,988 BOE/d ( 62% gas & 38% oil ) Valhalla / La Glace Top five IP 30 wells ( gross sales, BOE/d ): (1) Progress 100/04-16-077-09W6 Halfway
Slide 21: Pouce Coupe
Pouce Coupe 20 Targeting Montney (upper, Progress middle and lower) and Halfway “O” Pool Unit 7.8% WI Doig formations. Pouce Coupe Ownership in pipeline infrastructure, gas South Boundary “B” Unit #2 67.9% WI Operated CNRL Progress 140 MMcf/d compression and a 20% 8-18 15-3 14-8 Gas Plant (20% W
Slide 22: Spirit River
Spirit River 21 Charlie Lake Gamma Ray Density Porosity Worsley (O) 13-34 Y 13-33 J (Upper) Progress Halfway Gas Unit #1 15.9% WI J (Lower) 15-5 R Spirit River Charlie Lake E & M Unit 81.6% WI Operated F D Kelt Lands Unit Outline M E 2014 Drilling Plans: 45 30 15 0 -15 3 gross ( 3.0 net ) wells
Slide 23: Valhalla / La Glace
Valhalla / La Glace 22 Kelt completed a $165 MM acquisition at Valhalla/La Glace in July 2014, Encana adding approximately Sexsmith 200 MMcf/d 11.7 MM BOE (70% oil) of 13-33 Gas Plant (0.3% WI) 2P reserves [1] (with $60.7 Drilling MM in FDC). Targetting the Montney 1-19 Drilled formation. Owne
Slide 24: Karr
Karr 23 LAND Gross: 30,240 acres ( 47 sections ) * Net: 29,056 acres ( 45 sections ) * 13-26 16-10 Completed * 37 sections ( 35 net ) with Montney rights Drilled (75%) OPERATIONS 16-8 Q2 2014 Production: 1,755 BOE/d Tested (75%) ( 43% oil & 57% gas ) 15-28 4-2 Producing Tested Top three IP 30 wells
Slide 25: Grande Cache / Chicken
Grande Cache / Chicken 24 Narraway 135 MMcf/d Gas Plant LAND (7% WI) Gross: 141,120 acres ( 220 sections ) Net: 95,885 acres ( 150 sections ) OPERATIONS Q2 2014 Production: 2,650 BOE/d ( 97% gas & 3% oil ) 2014 Drilling Plans: Copton 25 MMcf/d 2 gross ( 2.0 net ) wells ( new Gas Plant (30% WI) explo
Slide 26: Inga / Fireweed (British Columbia)
Inga / Fireweed ( British Columbia ) 25 Fireweed 16 MMcf/d LAND Compressor/ Facility (50% WI) Gross: 117,657 acres ( 183 sections ) Net: 48,937 acres ( 76 sections ) OPERATIONS Q2 2014 Production: 1,988 BOE/d ( 66% gas & 34% oil ) Inga 28 MMcf/d Compressor/ Top five IP 30 wells Facility (40% WI) ( g
Slide 27: Future Considerations
Future Considerations 26 – DRILLING INVENTORY: Kelt estimates that it has numerous years of drilling inventory on its existing lands to continue to grow the Company. – STRONG BALANCE SHEET: Kelt maintains financial flexibility so that it can pursue new opportunities as they arise. – NATURAL GAS PRIC
Slide 28: Management
Management 27 David J. Wilson, President & CEO Sadiq H. Lalani, Vice President, Finance & CFO Douglas J. Errico, Vice President, Land Alan G. Franks, Vice President, Production Douglas O. MacArthur, Vice President, Operations Patrick Miles, Vice President, Exploration William C. Guinan, Corporate Se
Slide 29: Board of Directors
Board of Directors 28 Robert J. Dales Compensation (Chair), Nominating, Audit, Reserves William C. Guinan Chairman, Nominating (Chair), HSE Eldon A. McIntyre Reserves (Chair), Nominating, Audit, Compensation Neil G. Sinclair Audit (Chair), Compensation, HSE, Reserves David J. Wilson HSE (Chair)
Slide 30: Oil and Gas Advisories
Oil and Gas Advisories 29 Barrel of oil equivalent (“BOE”) amounts may be misleading, particularly if used in isolation. A BOE conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel. This conversion ratio of six thousand cubic feet of nat
Slide 31: Financial Advisories
Financial Advisories 30 All dollar amounts are referenced in Canadian dollars, except when noted otherwise. This presentation contains the terms “funds from operations”, “operating netback”, “production per share”, “finding, development and acquisition cost” and “recycle ratio” which do not have a s
Slide 32: Corporate Presentation
Corporate Presentation September 2014 Suite 300, 311 – 6th Avenue SW Calgary, Alberta, Canada T2P 3H2 www.KeltExploration.com
Kelt Exploration — Investor Presentation (September 2014) on 6ix