Cardinal Energy Ltd. · TSX:CJ

Cardinal Energy — Investor Presentation (August 2015)

25 slides from Cardinal Energy's investor presentation, August 2015

  1. Slide 1: Built to Last

    e CARDINAL BUILT TO LAST August, 2015

  2. Slide 2: Built for Purpose

    Built for Purpose  Decline focused acquisitions  Low debt structure  Strong capital efficiency  Risk management 2 2

  3. Slide 3: Cardinal Energy Ltd. - Profile

    Cardinal Energy Ltd. - Profile Shares Outstanding (1): TSX: CJ • Basic 57,586,023 • Fully Diluted 60,083,835 Annual dividend ($/share): $0.84/share 2015 forecast average production (boe/d): 11,200 Q2 2015 average production 11,294 • % oil and NGLs 92% Reserves (Mboe) (2)(3) • Total Proved 32,078 • T

  4. Slide 4: Manage Debt

    Manage Debt  $62 million net debt at June 30, 2015  $150 million credit facility on a $300 million borrowing base  Significant undrawn liquidity  Corporate goal to maintain a ratio of less than 1.0 x net debt to cash flow from operations 4 4

  5. Slide 5: Debt to Cash Flow Ratio

    Debt to Cash Flow Ratio(1) 1. Source cite: FirstEnergy Capital (February 2015) 5 5

  6. Slide 6: Low Decline

    Low Decline 1. Source cite: FirstEnergy Capital (February 2015) 6

  7. Slide 7: Hedge Position

    Hedge Position  Cardinal has the following crude oil hedges in place: 1. Collars are expressed using the floor price 7 7

  8. Slide 8: Production Growth Per Share

    Production Growth Per Share 10,821 8

  9. Slide 9: Reserve Growth Per Share

    Reserve Growth Per Share $14.73 $10.73 10,821 1. Net present value before tax discounted at 10% (See advisory) 9

  10. Slide 10: Asset Characteristics

    Asset Characteristics  Base production decline rate approximately 10%  97% operated production  90% working interest  >92% oil weighted  Concentrated in “2 Core Areas”  Multi year drilling inventory 10 10

  11. Slide 11: Cardinal Asset Base

    Cardinal Asset Base  Solid Base of Oil Production from 2 Core Areas  Wainwright  Approximately 5,567 boe/d production for Q2 2015  Bantry  Approximately 5,727 boe/d production for Q2 2015  Both areas have extensive development drilling, consolidation and growth potential 11 11

  12. Slide 12: Wainwright

    Wainwright  Dominant land position with over 55 sections of land  Oil production under waterflood with less than 10% decline  98% operated, average 95% working interest  Multiyear drilling inventory in excess of 40 unbooked locations  Control key infrastructure  By pass uphole drilling targets

  13. Slide 13: Wainwright Drilling

    Wainwright Drilling  Average well cost $1.0 mm (estimated)  IP (365) < $40,000/flowing boe  Reserves 83 mboe(1)  F&D $12.05/boe(1)  Multiyear drilling inventory in excess of 30 Waseca locations  Only 2.5 net locations booked 1. Based on TPP reserves assigned by GLJ at year end 2014 13 13

  14. Slide 14: Wainwright Sparky Pools

    Wainwright Sparky Pools  Large OOIP (241 mmbbls)(1)  The Wainwright B pool is a model for the Wainwright Sparky Pools  Due to effective line drive water flood the recovery is 45% to date  Current 2P reserve bookings forecast a recovery factor (“RF“) of in excess of 50%  Manage the water floods

  15. Slide 15: Bantry

    Bantry  Dominant land position  The majority of base production is currently under waterflood with less than a 12% decline  97% operated, average 94% working interest oil production  Solid Glauc drilling results to date with over 80 unbooked locations identified  Control key infrastructure resu

  16. Slide 16: Bantry Glauc Type Curve Economics

    Bantry Glauc Type Curve Economics Type Drilled Curve results to SAL* date* D&C ($MM) $2.1 $2.1 Production, IP30 (boepd) 240 350 Production IP365 (boepd) estimate 140 200 Total P&P Reserves (Mboe) * 150 185 Year 1 Oil & NGLs (%) 92% 92% NPV BT10(1) ($MM) 2.2 3.3 Rate of Return (%) 78% 189% Payout (Ye

  17. Slide 17: Sensitivities

    Sensitivities Oil (USD WTI) $ 55.00 $ 65.00 $ 75.00 $ 85.00 WCS (CAD) $ 53.00 $ 62.50 $ 70.00 $ 78.00 FX (USD/CAD) 0.8 0.82 0.84 0.86 Aeco (CAD) $ 2.75 $ 2.75 $ 2.75 $ 2.75 Netback ($/boe) after risk management $ 26.50 $ 28.75 $ 31.25 $ 33.50 Average production target (boe/d) 11,200 11,200 11,200 11

  18. Slide 18: 2015 Q2 Results

    2015 Q2 Results 2015 2014 % change Operational Average production (boe/d) 11,294 6,501 74% Percentage of liquids 92% 89% 3% Development capital ($MM)(1) $11.3 $9.0 26% Financial Cashflow from operations ($MM) $29.9 $23.5 27% ‐per share (basic) $0.52 $0.62 ‐16% Total dividend ($MM) $12.1 $6.1 98% ‐pe

  19. Slide 19: 2015 Guidance

    2015 Guidance 2015e 2014 % change Operational Average production (boe/d) 11,200 7,815 43% Development capital ($MM)(1) $30 $36 ‐17% Financial Cashflow from operations ($MM)(2) $95 $95 ‐% ‐per share (basic) $1.67 $2.18 ‐23% Total dividend ($MM) $48 $33 45% ‐per share (basic) $0.84 $0.71 18% Total pay

  20. Slide 20: Potential Election Effects

    Potential Election Effects  Proposed Royalty Review  Corporate Tax Increase  Change to Environment Regulatory 20 20

  21. Slide 21: Track Record – Value Creation

    Track Record – Value Creation  Proven performance across commodities and throughout the cycle • Positive return on all equity issued in all companies Midway Energy Ltd. 2009-2012 AB - Cardium - Beaverhill Lake $118 Million - $550 Million Pilot Energy Ltd. 2004 - 2008 (Equity) (Sale Price) Sask. – B

  22. Slide 22: Corporate Information

    Corporate Information Corporate Headquarters: 600, 400 – 3rd Avenue S.W. Calgary, AB T2P 4H2 Bankers: ATB Financial CIBC World Markets Inc. RBC Dominion Securities Inc. Scotia Capital Inc. National Bank of Canada Auditors: KPMG LLP Legal: Burnet Duckworth & Palmer LLP Reserves: Sproule Associates Li

  23. Slide 23: Advisory

    Advisory Forward-looking Statements Certain information in this document contains forward-looking statements. These statements relate to future events or the Company's future performance. All information and statements contained herein that are not clearly historical in nature constitute forward loo

  24. Slide 24: Advisory

    Advisory Non-GAAP Measures Throughout this presentation the Company uses the terms “cash flow from operations”, “netback”, “net debt”, “free cash flow”, “simple payout ratio” and “total payout ratio”. These terms do not have a standardized prescribed meaning under GAAP and these measurements may not

  25. Slide 25: Advisory

    Advisory Drilling Locations This presentation discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Proved locations and probable locations are derived from the Company’s most recent independent reserves evaluation as prepared

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