Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Corporate Update (October 2014)
36 slides from Athabasca Oil's corporate update, October 2014
Slide 1: Corporate Update
Corporate Update Light Oil - Kaybob October 2014 Thermal Oil - Hangingstone
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. The use of any of the words “anticipate,” “plan,” “continue,” “estim
Slide 3: Value Proposition
Value Proposition World Class Assets • 1,000+ well inventory in the Duvernay shale play at Kaybob • 80,000 bbls/d project potential at the Funding Hangingstone thermal asset Assets • Significant long-term optionality within a diverse portfolio (9 billion barrels of contingent resource*) Well Funded
Slide 4: How We Get There
How We Get There Guiding Principles Cash Flow Growth Balance Sheet Strength • Accelerate near-term cash flow • Capital and cost discipline • Focus on returns • Focus on core assets Delivering on Commitments Execution Excellence • Set achievable plans • Technical rigor drives investment • Deliver on
Slide 5: Financial Highlights, 2014 Budget and Outlook
Financial Highlights, 2014 Budget and Outlook Capitalization Highlights(1) Capital Expenditures / Funding in Place ($ MM) $1,200 Stock exchange listing TSX 1000 Trading symbol ATH 800 $675 >$600 52-week trading range $4.27 - $8.84 $/sh 600 $450-500 Basic shares outstanding 401.6 MM400 $445 $354 ~25%
Slide 6: Focused on our Core Assets
Focused on our Core Assets Light Oil: Kaybob Fort • $291 million 2014 budget McMurray • Four rigs active; 26 additional Duvernay wells by the end of 2015 • Duvernay primary target; Hangingstone 200,000 acres with the potential for 1,000+ wells • Ownership and operatorship in strategic infrastructure
Slide 7: Duvernay Overview
Kaybob drilling operation Duvernay Overview
Slide 8: The Duvernay is a World Class Resource
The Duvernay is a World Class Resource Select Select Unconventional Unconventional Plays Plays In In • Large in place resource North America North America World • High liquid content: 100 -1,000 bbls/mmcf free Class condensate Resource • Initial results compare favorably to the Eagle Ford • Proactiv
Slide 9: Industry Transitioning to Development
Industry Transitioning to Development AOC Drilling (4) AOC Drilled Duvernay (9) Licensed Duvernay (328) Drilled Duvernay (209) Athabasca Apache Chevron Hitic Shell Trilogy Shell Partial Farm In Xto Conoco Encana Talisman Other Apache Partial *As of October 10, 2014 8
Slide 10: Activity on the Upswing
Activity on the Upswing Industry transitioning to development • Majors are accelerating activity from the appraisal Eagle Ford to development stage • Forecasted 70% lift in spending Y/Y; 2015e $3.6 B vs. 2014e $2.1 B (RBC Rundle) Montney • 6 - 8 multi-well pads (Apache, Chevron, Encana, Shell); comp
Slide 11: Duvernay Activity Update
Duvernay Activity Update 14-33 Currently Drilling Nabors #82 4-29 S/C/Hz. On stream: June 16, 2014 30 day IP (restricted) – 615 boe/d (0.7 mmcf/d & 710 bbls/mmcf) 8-29 Hz. CTD – 41 mboe, 72% liquids On stream: June 21, 2014 30 day IP (restricted) – 784 boe/d (0.8 mmcf/d & 763 bbls/mmcf) CTD – 56 mbo
Slide 12: Liquids Yield is Driving Economics
Liquids Yield is Driving Economics Pressure (1,000 psi) 0 5 10 15 0 AOC Industry Depth (1,000 ft) 5 08-18 01-07 10 4-32 Pad 02-34 06-10 01-25 0.44 0.6 0.7 0.8 0.9 15 Under-Pressured Over-Pressured 0 - 50 50 - 250 250 - 550 550+ bbls/mmcf *Liquid yield is cum/cum for wells with > 3 months production.
Slide 13: Improving Cost Trends
Improving Cost Trends Drilling Average Well Cost • Multi-well pads Complete Cost Drill Cost • Fit for purpose rigs 20 • Wellbore design • Bit optimization 15 • Experience D+C Cost ($MM) 10 Completions • Multi-well pads 5 • Frac fluid and volume optimization 0 • Sand type and procurement 2012 2013/20
Slide 14: Current Duvernay Well Economics are Compelling
Current Duvernay Well Economics are Compelling(1) 02/2-34-62-20W5 Initial Free Liquids Economic Sensitivity(2) 2,000 350 30 1,800 Cumulative Production (mboe) 300 01-25-62-25W5 1,600 25 102/02-34 Payout Production (boe/d) 1,400 250 NPV 10% ($MM) 20 1,200 Saxon/ Simonette 200 1,000 15 01-07-64-20W5 K
Slide 15: Defining the Duvernay Fairway
Defining the Duvernay Fairway Kaybob West Kaybob East Acreage – 52,000 ac Acreage – 113,000 ac Locations – 295 Locations – 640+ NPV/well $10 – $17 MM NPV/well $5 – $15 MM Saxon/Simonette Acreage – 53,000 ac Locations – 300 NPV/well $13 – $20 MM Athabasca Farm In AOC Drilled Duvernay (9) Licensed Duv
Slide 16: Material Near-Term Growth
Material Near-Term Growth Duvernay Projected Daily Production 70,000 7 Potential for production to exceed 60,000 6 50,000 boe/d in 5 years Production (boe/d) 50,000 5 • Inventory of > 1,000 wells Rig Count 40,000 4 • Growth weighted to high value liquids 30,000 3 • Timeline can be accelerated with m
Slide 17: AOC Controls Strategic Infrastructure
AOC Controls Strategic Infrastructure Total Battery Capacity Gas Pipeline Oil Capacity 36,000 bbls/d Up to Gas Capacity 84 mmcf/d, 180 mmcf/d Gas Capacity expandable to >130 mmcf/d Kaybob East AOC 91 km Pipeline Fort McMurray Kaybob West Saxon Keyera Simonette SemCAMS KA Placid EDMONTON • Operatorsh
Slide 18: Hangingstone Overview
Hangingstone CPF Hangingstone Overview
Slide 19: Hangingstone Development
Hangingstone Development Resource Hangingstone Regional Development Map (1) • 225 MMbbls reserves • 782 MMbbls contingent resources(2) Fort McMurray Development • Project HS1 – 12,000 bbls/d • First Steam – expected end Q1 2015 • Project HS2A CPF • 8,000 bbls/d incremental debottleneck of HS1 • Proj
Slide 20: Efficient Delivery of First Thermal Project
Efficient Delivery of First Thermal Project $565 MM Cost Performance Incurred Remaining Spend Hangingstone Project 1(1) $518 MM $47 MM Progress 0% 100% Engineering Procurement Dilbit tanks – September 2014 Construction 84% D&C Overall 93% First Steam Actual CPF – September 2014 (1) Status at the end
Slide 21: Drilling and Reservoir Results to Date
Drilling and Reservoir Results to Date Application of Industry Best Practices ~ 5m of separation as per design • One delineation well per SAGD pair • High resolution 3D seismic • Integrated workflow providing optimal reservoir planning and drilling execution Drilling path and separation survey Use o
Slide 22: Development Profile
Development Profile Operations Cash Flow ($MM/year) 140 14,000 Approved – In Construction 120 12,000 Daily Production (bbls/d) 100 10,000 • Hangingstone Project 1 80 8,000 12,000 bbls/d 12,000 bbl/d • First steam end Q1 2015 60 12,000 bbl/d 6,000 • Plateau production 12,000 bbls/d in 2016 40 4,000 2
Slide 23: Future Growth
Cal — ATHABASCA ==] OIL CORPORATION Future Growth
Slide 24: Development and Exploration Opportunities
Development and Exploration Opportunities Grosmont • 400 MMbbls(1) (AOC interest) • Apply recovery mechanisms being tested by industry Birch Slave Point Slave Point • 2.1 Bbbls(1) • > 675,000 acre land position • Potential of > 150,000 bbls/d • Validated oil production with 2013 pilot program Birch
Slide 25: Supplemental Information
Hangingstone Project 1 Supplemental Information
Slide 26: Long-term Debt and Credit Facility Overview
Long-term Debt and Credit Facility Overview As at June 30, 2014 Undrawn Credit Facilities ($ MM, Cdn) Interest Rate Pre-payment Terms Cdn $125 MM senior secured revolving credit facility due 2017 $125 ~ 5% Pre-payable without penalty 2015 – 102% US $50 MM senior secured term loan LIBOR + 7.25% 2016
Slide 27: Duvernay 4-32 Pad Initial Production
Duvernay 4-32 Pad Initial Production 77 day 8-29-64-20W5 69 day 4-29-64-20W5 soak period (on-strike orientation) soak period (north-south orientation) 2,000 4,000 2,000 4,000 TEST POST SOAK T POST SOAK E S 1,800 3,600 1,800 T 3,600 1,600 3,200 1,600 3,200 1,400 2,800 1,400 2,800 Rate (mcf/d, bbls/d)
Slide 28: Duvernay 1-7 and 1-25 Initial Production
Duvernay 1-7 and 1-25 Initial Production 1-7-64-20W5 1-25-62-25W5 2,000 4,000 4,000 8,000 1,800 3,600 7,200 3,500 1,600 3,200 6,400 3,000 1,400 2,800 5,600 Rate (mcf/d, bbls/d) Rate (mcf/d, bbls/d) 2,500 Pressure (psi) Pressure (psi) 1,200 2,400 4,800 1,000 2,000 2,000 4,000 800 1,600 3,200 1,500 60
Slide 29: Completions are Key to Commercial Success
Completions are Key to Commercial Success Casing Bowl: 279 mm x 245 mm x 34.5 MPa 20,000 80 Production Normalized to Proppant Placed 18,000 72 16,000 64 Cumulative BOE per 100 Tons 102/02-34-62-20W5 Casing size – 9 5/8” 14,000 56 12,000 48 Well count 10,000 40 Intermediate Casing 8,000 100/08-18-64-
Slide 30: Montney Appraisal, Leading to Development
Montney Appraisal, Leading to Development Placid Montney Development Plan AOC Kaybob Region Montney Rights Simonette Placid Bigstone AOC Placid Type Curve 1,800 Initial condensate yield 100 bbls/mmcf Approximately one township of Montney 1,600 Stabilized condensate yield 40 bbls/mmcf potential offse
Slide 31: Application of Proven Best Practices
Application of Proven Best Practices Delineation & seismic data Reservoir management Workflow integration Thermal Oil Development Lifecycle Experienced operations teams Lifecycle planning Construction execution best practices Flexible designs Use of experienced contractors 30
Slide 32: Dover West Sands, Poised for Development
Dover West Sands, Poised for Development Development • 87 MMbbls reserves(1) • 2,766 MMbbls contingent resource(2) Dover West • Asset planned to be developed in multiple Road projects to a capacity > 275,000 bbls/d • Processing facilities planned to be a duplication of Hangingstone design Dover West
Slide 33: Dover West Carbonate: The Next Big Resource Play
Dover West Carbonate: The Next Big Resource Play Opportunity Dover West TAGD Facility • 16,800 MMbbls of bitumen in place(1) in the Leduc carbonate reef (> 100 meter net pay) Dover West Road • 3,001 MMbbls contingent resource(2) based on SAGD Fort • Asset planned to be developed in multiple phases t
Slide 34: Management Team
Management Team Thomas Buchanan, FCA Board of Directors President & Chief Executive Officer • Over 30 years experience in the oil and natural gas sector, and Thomas Buchanan, FCA currently Chairman of Spyglass Resources Corp. Chairman, President & Chief Executive Officer • Formerly CEO of Spyglass R
Slide 35: Management Team
Management Team Robert Bowie, MBA Anne Schenkenberger, B.Sc., LLB Vice-President, Corporate Development Vice-President, Legal & Corporate Secretary • Joined Athabasca Oil Corporation in 2010 and is Vice- • Joined Athabasca Oil Corporation in 2008 and is Vice- President, Corporate Development Preside
Slide 36: Corporate Office
Corporate Office 2000, 250 – 6 Ave SW, Calgary, Alberta, T2P 3H7 Telephone: 403-237-8227 Fax: 403-264-4640 www.atha.com