Saturn Oil & Gas Inc. · TSX:SOIL
Saturn Oil & Gas — Investor Presentation (July 2022)
30 slides from Saturn Oil & Gas's investor presentation, July 2022
Slide 1: Corporate Presentation July 2022
July 2022 TSX-V: SOIL FSE: SMKA CORPORATE PRESENTATION
Slide 2: Saturn's Differentiated Growth Strategy
SATURN’S DIFFERENTIATED GROWTH STRATEGY 4,750% Production Growth in 18 months 1 Viking & Oxbow Acquisitions have TRANSFORMED SATURN 489 Booked Drilling Locations Cash flow from low decline, light oil production base funds YEARS OF GROWTH 400 Non-Producing Wells with Optimization Potential to Bring b
Slide 3: The Saskatchewan Advantage
THE SASKATCHEWAN ADVANTAGE 100% Saskatchewan, 95% Oil Weighted ▪ Two core operating areas offer diversification of light oil plays • Oxbow Asset: Low decline, high rates of return, growth focused area • Viking Asset: Resource play, repeatability, steady production & cash flow Attractive Royalty Regi
Slide 4: Viking Acquisition, July 2022
VIKING ACQUISITION, JULY 2022 $248M 4,000 boe/d 98% 1.8x Net Cash Price1 Net Production Added at Light Oil and NGLs Cash Flow Closing Date Attractive Transaction Metrics2 $275M Transaction Financing Mmboe $ / boe Recycle Ratio3 $200M Term debt with New York based family office Proved Developed Produ
Slide 5: 2022 Viking Acquisition Free Cash Generation
2022 VIKING ACQUISITION FREE CASH GENERATION Sustained Production Rates Provide Repeatable Development ▪ Predictable Resource Play: 138 (gross) booked drilling locations1 + expansion areas in a defined and deliverable production area (+53 existing booked locations) ▪ Sustainable Production: Targetin
Slide 6: Drilling Opportunities: Expanded Viking Asset
DRILLING OPPORTUNITIES: EXPANDED VIKING ASSET Viking Locations: Viking Average Well Type Curve1 53 at YE 2021 + 138 acquired YTD 2022(1) ▪ 3 wells drilled in Q3/2021 • Average IP30 = 66.7 bbl/d • $18,500 /bbl/d capital efficiency • 23 horizontal wells for remainder of 2022 • 35-40 horizontal wells p
Slide 7: SE Saskatchewan Oxbow Asset
SE SASKATCHEWAN OXBOW ASSET Growth Engine – Exploitation of Conventional Light Oil Pools Saturn Land Multi-Zone Light Oil Targets: Midale / Frobisher / Spearfish / Alida / Tilston ▪ Large land position – 290,000 net acres North ▪ Identified low-risk drilling opportunities Saturn drilled the best wel
Slide 8: Drilling Opportunities: Oxbow Asset
DRILLING OPPORTUNITIES: OXBOW ASSET Oxbow Locations: 242 Booked Locations at YE 2021 Oxbow Average Well Type Curve1 with Reserves1 ▪ 8 horizontal wells drilled in Dec ’21 – Feb ’22 • Average IP30 = 93.2 bbl/d, > 40% the 5-year industry average ▪ 26 horizontal wells for remainder of 2022 ▪ 40 horizon
Slide 9: Track Record of Successful Growth
TRACK RECORD OF SUCCESSFUL GROWTH VIKING AND OXBOW ASSETS DRIVE STRONG & SATURN HISTORY GROWING PRODUCTION VOLUMES 16,000 ~11,400 boe/d1 13,400 • 12,650 Target 14% Annual 2nd transformational acquisition - Viking Assets 14,000 Organic Growth2 2022 • ~4,000 boe/d production added 12,000 2022 Viking A
Slide 10: Incremental Growth Through Optimization
INCREMENTAL GROWTH THROUGH OPTIMIZATION Optimizing Oxbow Assets Provide Capital Efficient Production Adds 400+ NON-PRODUCING WELLS TO OPTIMIZE (1,100 PRODUCING WELLS) ▪ 3,500 bbls/d of workover potential identified on non-producing wells1 ▪ Target capital efficiencies of $5,000/bbl/d2 ▪ Activities i
Slide 11: Pro Forma 2022 & 2023 Guidance
PRO FORMA 2022 & 2023 GUIDANCE1 Directing Excess Cash Flow to Accelerate Near-Term Growth + H2/22 capital expenditures: $55M 1st full year • Q4/22 average production of 12,400 boe/d Pro Forma 2022 and 2023 Guidance including Viking acquisition • $106M of cash flow, for FCF of $52M in H2 2022 2023 Oi
Slide 12: Saturn's 3-Year Plan
SATURN’S 3-YEAR PLAN Cash Flow to Fund Capex, Repay all Debt and Generate Additional Free Cash Flow Cashflow anticipated to fund capex, repay all debt and generate $100M in incremental Highlights of Three Year Plan: $1,000 FCF in excess of proforma market cap ▪ Investing ~50% of cash flow to CAPEX a
Slide 13: Peer Comparison: Q1 2022
PEER COMPARISON: Q1 2022 Q1 2022 Oil & NGL % of Production Q1 2022 Operating Netback1 2023e EV/DACF2 Average 3.1x Saturn has High Oil Weighted Production, High Netbacks and a Compelling Valuation 1) Based on Q1 2022 Operating Field Netbacks, prior to Hedging Adjustment, General and Administrative an
Slide 14: Corporate Profile – TSX.V: SOIL FSE: SMKA
CORPORATE PROFILE – TSX.V: SOIL FSE: SMKA FINANCIALs (Pro Forma Equity Offering) Conservative Balance Sheet Management Shares Outstanding (Basic) 59.7M ▪ 50% of cash flow directed to debt repayment Options (avg. exercise $2.50) 2.0M • Net debt ~ $183M by year end 2022 Warrants (consolidated) 40.8M O
Slide 15: Corporate Information
CORPORATE INFORMATION CONTACT US Kevin Smith Corporate Headquarters VP Corporate Development Suite 1000 - 207 9 Ave SW +1 (587) 392-7900 Calgary, Alberta, T2P 1K3 info@saturnoil.com Canada Website www.saturnoil.com ANALYST COVERAGE Beacon Securities Limited, Canada Kirk Wilson | kwilson@beaconsecuri
Slide 16: Appendix
APPENDIX TSXV: SOIL I FSE: SMKA 16 16
Slide 17: Management
MANAGEMENT • Former CFO and founding partner of Axiom Group John Jeffrey • Strong background in operations and finance with successful track record executing large international engineering and environmental projects Chief Executive Officer • MBA majoring in Finance from University of Saskatchewan,
Slide 18: Directors
DIRECTORS • For 40 years, worked in the communications tower construction and ownership industry, in field construction, design engineering and management Calvin J. Payne • Former Co-founder and CEO of WesTower Communications, which was founded in 1990 and IPO’d on AMEX in 1997; In 2003, led team to
Slide 19: Oxbow Asset – Southeast Saskatchewan (North)
OXBOW ASSET – SOUTHEAST SASKATCHEWAN Oxbow North Operating Area – Recent Drilling Activity Spearfish/Frob-Alida/Tiston Reservoir Parameters Anova - Frobisher Crescent Point - Manor Aldon - Tilston Triland - Tilston T9 Manor Queensdale Fertile-Antler 102/01-21-006-04W2 101/14-12-007-02W1 101/09-34-00
Slide 20: Oxbow Asset – Southeast Saskatchewan (South)
OXBOW ASSET – SOUTHEAST SASKATCHEWAN Oxbow South Operating Area – Recent Drilling Activity Midale/Frobisher Reservoir Parameters Whitecap - Frobisher 101/13-17-004-01W2 T5 Parameter Units Midale Frobisher IP 90 Oil: 109 bbl/d Adonai- Frobisher RR: February 2020 101/06-08-003-33W1/00 IP 90 Oil: 156 b
Slide 21: Viking Asset – 300+ Net Sections of Land
VIKING ASSET – 300+ NET SECTIONS OF LAND 4,500 boe/d of Sustainable Production with Repeatable Development Opportunities Viking Light Oil Asset Base in West-Central Saskatchewan Parameter Units Viking Vertical Depth meters 700-750 Net Pay meters 4.5 Avg. Porosity % 20 Permeability mD 0.1 – 1.0 Est.
Slide 22: Net Asset Value
NET ASSET VALUE Saturn Shares are Backed with Solid Asset Value1 Long Life Assets Generate Strong Cash Flows ▪ 15.4-year P+P Reserve Life Index (RLI)2 ▪ Full exercise of warrants and options provides $139.7M in proceeds (average exercise price $3.27 / share) ▪ Total Proved FD NAV = $5.91 / share Nat
Slide 23: Corporate Profile – Share Structure
CORPORATE PROFILE – TSX.V: SOIL FSE: SMKA Share Structure Trading Summary, Q2 2022 Basic Millions Shares Outstanding 59.7 Consolidated Strike Options & Warrants Expiry Date Proceeds ($M) Millions Price Options and RSUs 2.0 Various $2.50 4.9 Warrants Tranche 1 (SOIL.WT)1 13.4 June 4, 2023 $3.20 42.9
Slide 24: Marketing & Risk Management
MARKETING & RISK MANAGEMENT Locked-in Economics Provides Security for Debt Repayment WTI Hedged as % of Oil & NGL Production Highest Average % of Liquids Average Oil Period Volume (b/d) Production1 Price (USD) 2022 H2 7,777 72% $78.49 2023 6,674 52% $69.80 2024 5,556 39% $62.73 2025 4,620 30% $64.32
Slide 25: Marketing & Risk Management: Hedging Summary
MARKETING & RISK MANAGEMENT Hedging Summary as of July 1, 2022 Volume Period Derivative Reference Price 1,391 bbl/d H2 2022 Swap WTI USD 105.29 1,391 bbl/d H2 2022 Collar WTI USD 100.00-109.75 2,366 bbl/d H2 2022 Swap MSW Differential USD (4.45) New Hedging with Viking 2,282 bbl/d 2023 Swap WTI USD
Slide 26: Saturn Overview
SATURN OVERVIEW 95% Oil Weighted Production Base and Pursuing Multiple Opportunities For Growth OPTIMIZING Quality Proven Meaningful Existing DRILLING GROWTH SHAREHOLDER Production INVENTORY STRATEGY VALUE Creation Low-cost production adds Positioned in two of the most Recent transformational Foreca
Slide 27: Disclaimer - Cautionary Statements
DISCLAIMER - CAUTIONARY STATEMENTS This presentation is for informational purposes only and is not intended as a solicitation or offering of securities of Saturn Oil & Gas Inc. (“Saturn” or the Company") in any jurisdiction. The material presented is not intended to modify, qualify, supplement or am
Slide 28: Disclaimer - Oil and Gas Advisories
DISCLAIMER - OIL AND GAS ADVISORIES Information Regarding Disclosure on Oil and Gas Operational Information and Non-IFRS Measures In this presentation and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position and cash flow. These
Slide 29: Disclaimer - Oil and Gas Advisories
DISCLAIMER - OIL AND GAS ADVISORIES Supplemental Information Regarding Corporate Reserves 1 Reserve Assumptions – Reserve evaluation calculations are based on data and expected Natural future production volumes as provided by third party independent evaluators: 1) Saturn’s Light & Heavy Natural Gas
Slide 30: Disclaimer - Oil and Gas Advisories
DISCLAIMER - OIL AND GAS ADVISORIES Reserve Assumptions (Continued) Price Saskatchewan “Un-booked drilling locations” are based on Saturn’s review of its current land assets, Assumptions(3) Canadian Light Avg. Natural Edmonton geological and reservoir parameters that support potential economic devel