Kelt Exploration Ltd. · TSX:KEL
Kelt Exploration — Investor Presentation (March 2016)
39 slides from Kelt Exploration's investor presentation, March 2016
Slide 1: Corporate Presentation
Corporate Presentation March 2016 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: Advisory Regarding Forward-Looking Statements
Advisory Regarding Forward-Looking Statements 2 Statements relating to “reserves” or “resources” are deemed to be forward-looking statements as they involve the implied assessment, based on current estimates and assumptions that the reserves and resources can be profitably produced in the future. Re
Slide 4: Why Invest in Kelt? Creating Value During Downturns
Why Invest in Kelt? 3 CREATING VALUE DURING DOWNTURNS The Kelt management team has a track record of creating shareholder value during downturns, previously in the 2008- 2009 period with Celtic Exploration Ltd., sold in February 2013 for $3.2 billion. Kelt focuses on long-term growth with emphas
Slide 5: Common Share Information
Common Share Information 4 • Stock Exchange listing TSX • Trading symbol KEL • Market capitalization ( @ Mar / 4 / 2016 ) $ 715 million • 52-week trading range $ 2.51 – $ 9.95 • Common shares issued 168.7 million • Stock options (6.5 MM) & RSUs (1.2 MM) 7.7 million ( 4.6% ) → average exercise price
Slide 6: Capital Expenditures
Capital Expenditures 5 2016 2016/15 ( $ millions ) 2014 2015 Forecast Change Drilling & Completions 188.6 100.9 37.0 - 63% Facilities, Equipment & 46.1 56.0 17.0 - 70% Pipeline Infrastructure Land, Seismic & Asset 21.6 26.1 11.0 - 58% Acquisitions [1] Sub-total 256.3 183.0 65.0 - 64% Corporate Acqui
Slide 7: Drilling Program
Drilling Program 6 Gross Net Average Notes: 2015 Wells Wells WI % [1] Alberta drilling prospects include: Alberta [1] 14 11.1 79% (a) Grande Prairie ( Pouce Coupe / Progress / Spirit River / La Glace ): - Montney British Columbia [2] 5 4.4 88% - Doig - Charlie Lake Total 19 15.5 82% - Halfway (b) Ka
Slide 8: Production Outlook
Production Outlook 7 2016 2016/15 2014 2015 Forecast Change Oil ( bbls/d ) 3,413 5,091 5,470 7% NGLs ( bbls/d ) 924 1,607 1,890 18% Gas ( mcf/d ) 50,516 71,272 81,840 15% Combined ( BOE/d ) 12,756 18,577 21,000 13% Per MM Shares ( BOE/d ) 105 120 124 3%
Slide 9: Production Growth (since inception)
Production Growth ( since inception ) 8 PRODUCTION ( BOE / d ) PRODUCTION PER MM SHARES ( BOE / d ) CAGR since 24,000 2013 = 74% 160 CAGR since 21,000 2013 = 33% 20,000 18,577 124 120 120 105 16,000 13,640 12,756 11,879 77 81 12,000 80 69 8,419 53 8,000 40 3,961 42 4,000 7,360 6,698 43 43 3,148 4,33
Slide 10: Commodity Prices
Commodity Prices 9 2016/15 ( CA $, unless otherwise specified ) 2014 2015 2016 (E) Change WTI Crude Oil ( USD/bbl ) [1] US $ 92.99 US $ 48.80 US $ 39.00 - 20% WTI Crude Oil ( CAD/bbl ) $ 102.49 $ 62.41 $ 53.43 - 14% NYMEX Natural Gas ( USD/mmBtu ) US $ 4.37 US $ 2.67 US $ 2.50 - 6% AECO 5A Natural G
Slide 11: Netbacks
Netbacks 10 2016/15 ( $ / BOE ) 2014 2015 2016 (E) Change Oil & gas revenue 46.11 26.45 24.44 - 8% Realized hedging gain ( loss ) ( 0.08 ) ( 0.12 ) - Royalties ( % of revenue ) ( 13.3% ) ( 10.6% ) ( 9.3% ) - 12% Transportation expense ( 2.30 ) ( 2.09 ) ( 2.64 ) + 26% Production expense ( 12.00 ) ( 1
Slide 12: Financial Outlook
Financial Outlook 11 2016 2016/15 2014 2015 Forecast Change Revenue, before royalties ( $ MM ) 214.7 179.3 187.9 + 5% Funds from operations ( $ MM ) [1] 115.7 56.5 55.0 - 3% Per share – diluted ( $/share ) 0.93 0.36 0.32 - 11% Capital expenditures ( $ MM ) [2] 423.9 496.4 65.0 - 87% Net debt, at yea
Slide 13: Product Mix
Product Mix 12 2016 (E) 2016 (E) Product Income Production Operating Split Split BOE/d Income ($MM) Oil 5,470 26% 50.2 72% NGLs 1,890 9% 6.3 9% Gas 81,840 65% 13.6 19% Combined 21,000 100% 70.1 100% G&A and interest expense ( 15.1 ) Funds from operations 55.0 Notes: [1] The 2016 forecasted NGLs prod
Slide 14: Core Areas
Core Areas 13 Grande Prairie ( includes Pouce Coupe, Progress, Spirit River & La Glace ) : → Montney/Doig gas development → Montney light oil development → Charlie Lake light oil development → Halfway light oil development Inga / Fireweed / Stoddart Karr: Grande Prairie → Montney/Dunvegan light oil
Slide 15: Reserves
Reserves 14 DEC/31/2014 DEC/31/2014 DEC/31/2015 DEC/31/2015 ( $ MM ) ( MMBOE ) NPV 10% BT ( MMBOE ) NPV 10% BT Proved Developed 26.8 $ 404 33.8 $ 364 Producing Total Proved 61.1 $ 669 83.8 $ 661 Proved plus Probable 99.1 $ 1,072 150.5 $ 1,185 ( P+P ) Oil/NGLs ( P+P % ) 35% 36% Gas ( P+P% ) 65% 64% N
Slide 16: Land Holdings
Land Holdings 15 Gross Acres Net Acres Average WI Net Sections Developed 389,916 208,895 54% 326 Undeveloped 649,297 521,413 80% 815 Total 1,039,213 730,308 70% 1,141 Note: Growth in net land holdings since March 31, 2013: Date Net Acres Net Sections % Growth since Mar/31/2013 Mar/31/2013 107,997 16
Slide 17: Kelt Land Fairway
Kelt Land Fairway 16 Fireweed Inga Stoddart Fort St. John Progress Pouce Coupe Spirit River Valhalla / La Glace Grande Prairie Karr Kelt Lands British Columbia Alberta
Slide 18: Alberta Properties
Alberta Properties 17 PRODUCTION RESERVES Kelt Drills – Top Ten IP30 Wells (gross sales, BOE/d): Typical well EUR’s: (1) Karr 15-28-065-03W6 U.Montney 1,490 ( 79% oil ) (1) Pouce Coupe Doig/Montney Gas EUR = 1,380 MBOE ( 90% gas 10% oil ) (2) Pouce Coupe 14-25-077-13W6 L.Montney [a] 1,400 ( 95% gas
Slide 19: Pouce Coupe
Pouce Coupe 18 Targeting Montney Progress and Doig formations. Ownership in pipeline Halfway “O” Pool Unit 7.8% WI Pouce Coupe infrastructure, gas 8-18UMM 13-8 South Boundary “B” Unit #2 67.9% WI Operated compression and a 8-18 LMM LMM Progress Gas Plant 20% interest in the (20% WI) CNRL Progres
Slide 20: Pouce Coupe Montney Oil Type Curve
Pouce Coupe Montney Oil Type Curve 19 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Well Count Month 00/08-18-078-11W6/0 02/08-18-078-11W6/0 02/12-08-078-11W6/0 02/13-08-078-11W6/0 02/14-08-078-11W6/0 02/14-09-078-11W6/0 (CTD 6 mboe) (CTD 73 mboe) (CTD 65 mboe) (CTD 157 mboe) (CTD 1
Slide 21: Progress / Spirit River
Progress / Spirit River 20 PROGRESS: SPIRIT RIVER: • Targeting Montney and Halfway • 20 to 25 vertical up-hole re-completion formations. candidates in the Charlie Lake. Gamma Ray Density Porosity Worsley (O) Progress 14-14 Halfway (50%) 13-34 Y Gas Unit #1 15.9% WI Montney 15-13 (50%) Montney 14-33
Slide 22: Valhalla / La Glace
Valhalla / La Glace 21 Targeting the Montney formation. Ownership in pipeline Sexsmith infrastructure, oil Gas Plant (0.3% WI) battery and gas 13-33 compression. 2-28 Ownership interest (0.3%) in the Encana 1-19 Sexsmith 200 MMcf/d 3-28 Gas Plant. Kelt Lands Kelt Valhalla/La Glace 3,500 bopd +
Slide 23: La Glace Montney Type Curve
La Glace Montney Type Curve 22 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Well Count Month 00/02-28-074-08W6/0 00/03-28-074-08W6/0 00/13-33-074-08W6/0 (CTD 162 mboe) (CTD 33 mboe) (CTD 214 mboe)
Slide 24: Karr
Karr 23 LAND Montney Rights: 37.0 sections ( gross ) 16-8 (75%) 16-10 MM (75%) 35.8 sections ( net ) OPERATIONS 16-31 MM Pembina Pipeline Corporation announced the construction of a 15-28 16-28 4-2 30,000 bbl/d Karr Lateral pipeline and LACT Unit as part of its Phase 14-21 III pipeline expansion. Up
Slide 25: Karr Montney Type Curve
Karr Montney Type Curve 24 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Well Count Month 00/02-21-065-03W6/0 00/14-21-065-03W6/0 00/16-28-065-03W6/3 02/15-28-065-03W6/0 (CTD 91 mboe) (CTD 124 mboe) (CTD 489 mboe) (CTD 333 mboe) 00/04-02-066-03W6/3 00/16-08-066-03W6/2 02/16-31-065-0
Slide 26: British Columbia Properties
British Columbia Properties 25 PRODUCTION Slick-water Completions RESERVES IP30 (gross sales, BOE/d): Typical well EUR’s: (1) Inga 10-21-087-23W6 Doig 2,043 ( 27% gas ) (1) Inga/Fireweed Doig (2) Inga 03-33-087-23W6 Doig 1,326 ( 23% gas ) EUR = 930 MBOE ( 58% gas 42% oil ) (3) Inga 08-31-087-23W6 U.
Slide 27: British Columbia – Doig Lands
British Columbia – DOIG Lands 26 LAND Fireweed 16 MMcf/d Doig Rights: Compressor/ Facility (100% WI) Gross: 175 sections Net: 168 sections Fireweed OPERATIONS 16-25 New well ● Recent Doig wells completed using 13-15 slick-water fractures have shown very CNRL West Inga Stoddart encouraging results. S
Slide 28: BC Doig Type Curve
BC Doig Type Curve 27 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Well Count Month 00/02-28-087-23W6/0 00/03-33-087-23W6/0 00/10-21-087-23W6/0 00/13-15-088-23W6/2 (CTD 454 mboe) (CTD 287 mboe) (CTD 450 mboe) (CTD 44 mboe)
Slide 29: British Columbia – Montney Lands
British Columbia – MONTNEY Lands 28 LAND Montney Rights: c-26-A Gross: 163 sections (sfc: a-6-A) Net: 162 sections Fireweed OPERATIONS ● recent Montney wells completed using a-58-I c-85-I slick-water fractures have shown very (sfc: d-A79-I) (sfc: a-65-I) encouraging results with high IP30 rates comp
Slide 30: British Columbia – Middle Montney Isopach
British Columbia – MIDDLE MONTNEY Isopach 29 OPERATIONS ● Kelt has drilled its first horizontal Middle Montney well in BC located at 7-17 (surface 7-29) Fireweed ● The Inga 7-17 well had an IP 30 rate of 905 BOE/d (69% liquids) ● The thickness of the Middle Montney ‘C’ Unit on Kelt’s lands at Inga r
Slide 31: BC Upper Montney Type Curve
BC Upper Montney Type Curve 30 ( BOE / d ) TOTAL RAW PRODUCTION (Well Count) 5,000 Sproule 2P Well Count Month 00/08-31-087-23W6/0 00/A-058-I/094-A-12/0 00/C-085-I/094-A-12/0 02/C-026-A/094-A-13/0 (CTD 181 mboe) (CTD 38 mboe) (CTD 152 mboe) (CTD 192 mboe)
Slide 32: British Columbia – Baldonnel Lands
British Columbia – BALDONNEL Lands 31 LAND Birch Baldonnel Rights: Gross: 149 sections Baldonnel “C” Oil Pool (CTD 4.9 MM barrels of oil) Net: 138 sections OPERATIONS ● Oil exploration activity with plans to Fireweed drill initial well in 2017. ● Competitor activity at Stoddart offsetting Kelt lands
Slide 33: Net Asset Value
Net Asset Value 32 Dec/31 Dec/31 ( millions ) 2014 2015 P&NG Reserves, PV10% before tax (BT) 1,072.3 1,185.2 Decommissioning Obligations, PV10% BT [1] ( 12.8 ) ( 11.7 ) Undeveloped Land 103.2 168.7 Bank Debt, net of Working Capital ( 104.4 ) ( 212.1 ) Proceeds from exercise of Stock Options [2] 13.1
Slide 34: Future Considerations
Future Considerations 33 DRILLING INVENTORY: Kelt estimates that it has numerous years of drilling inventory on its existing lands to continue to grow the Company. BALANCE SHEET: Kelt maintains financial flexibility so that it can persevere during periods of declining commodity prices and pursue
Slide 35: Management
Management 34 David J. Wilson, President & CEO Sadiq H. Lalani, Vice President, Finance & CFO Douglas J. Errico, Vice President, Land Patrick Miles, Vice President, Exploration Douglas O. MacArthur, Vice President, Operations Alan G. Franks, Vice President, Production William C. Guinan, Corporate Se
Slide 36: Board of Directors
Board of Directors 35 Robert J. Dales Compensation (Chair), Nominating, Audit, Reserves William C. Guinan Chairman of the Board, HSE Eldon A. McIntyre Reserves (Chair), Nominating, Audit, Compensation Neil G. Sinclair Audit (Chair), Nominating (Chair), Compensation, HSE, Reserves David J. Wilson HSE
Slide 37: Oil and Gas Advisories
Oil and Gas Advisories 36 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 38: Financial Advisories
Financial Advisories 37 All dollar amounts are referenced in Canadian dollars, except when noted otherwise. This presentation contains the terms “funds from operations”, “operating income”, “operating netback”, “production per million shares”, “finding, development and acquisition cost” and “recycle
Slide 39: Corporate Presentation
Corporate Presentation March 2016 Suite 300, 311 – 6th Avenue SW Calgary, Alberta, Canada T2P 3H2 www.KeltExploration.com
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