Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Corporate Update (December 2014)
30 slides from Athabasca Oil's corporate update, December 2014
Slide 1: Corporate Update
Corporate Update Duvernay – Light Oil December 2014 Hangingstone – Thermal Oil
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 bbl/d project potential at the Funding Hangingstone thermal asset Assets • Significant long-term optionality within a diverse portfolio (9 billion barrels of contingent resource(1)) 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 and Initial 2015 Budget
Financial Highlights and Initial 2015 Budget Capitalization Highlights(1) Capital Expenditures / Funding in Place ($ MM) ~$1,300 Stock exchange listing TSX >$1,000 Q1/15 Trading symbol ATH 52-week trading range $2.36 - $8.84 $/sh $675 Basic shares outstanding 402.0 MM $445 $350 Full year Fully dilut
Slide 6: Focused on our Core Assets
Focused on our Core Assets Light Oil: Kaybob Fort • ~$167 million initial budget; McMurray predominately reflects operations until spring break-up • 11 Duvernay wells in the winter program Hangingstone • Significant flexibility to control the pace of development • Duvernay production growth to mater
Slide 7: Duvernay Overview
Duvernay Kaybob frac operation drilling 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 North America North America World • Large in place resource Class • High liquid content: 100 -1,000 bbl/MMcf free condensate Resource • Initial results compare favorably to the Eagle Ford • Proactive
Slide 9: Industry Transitioning to Development
Industry Transitioning to Development AOC Drilled Duvernay (9) Licensed Duvernay (361) Drilled Duvernay (231) Athabasca Apache Chevron Hitic Shell Trilogy Shell Partial Farm In Xto Conoco Encana Talisman Other Apache Partial 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 • Increased licensing activity by the majors a precursor for an uptick in spending Y/Y Montney • 6 - 8 multi-well pads (Apache, Chevron, Encana, Willesd
Slide 11: Duvernay Activity Update
Duvernay Activity Update 4-29 S/C/Hz. On stream: June 16, 2014 30 day IP (restricted) – 615 boe/d (0.7 MMcf/d & 710 bbl/MMcf) 8-29 Hz. CTD – 47 mboe, 71% liquids On stream: June 21, 2014 30 day IP (restricted) – 784 boe/d (0.8 MMcf/d & 763 bbl/MMcf) CTD – 67 mboe, 77% liquids 13-23 Vert./C 16-36 S/C
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+ bbl/MMcf *Liquid yield is cum/cum for wells with > 3 months production.
Slide 13: 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 14: 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 Duvern
Slide 15: Duvernay Growth Scenario
Duvernay Growth Scenario Potential for material production growth Duvernay Scenario - Daily Production 70,000 7 • Inventory of >1,000 wells; growth weighted to 60,000 6 high value liquids Production (boe/d) 50,000 5 • Timeline can be accelerated with a more Rig Count 40,000 4 aggressive rig ramp up
Slide 16: AOC Controls Strategic Infrastructure
AOC Controls Strategic Infrastructure Total Battery Capacity Gas Pipeline Oil Capacity 36,000 bbl/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 • Operatorshi
Slide 17: Hangingstone Overview
Hangingstone CPF Hangingstone Overview
Slide 18: Hangingstone Development
Hangingstone Development Resource Hangingstone Regional Development Map • 225 MMbbl reserves(1) • 782 MMbbl contingent resources(2) Fort McMurray Development • Project HS1 – 12,000 bbl/d • First Steam – expected end Q1 2015 • Project HS2A CPF • 8,000 bbl/d incremental debottleneck of HS1 • Project H
Slide 19: Efficient Delivery of First Thermal Project
Efficient Delivery of First Thermal Project $565 MM Cost Performance Incurred Remaining Spend Hangingstone Project 1(1) $532 MM $33 MM Progress 0% 100% Engineering Procurement Dilbit tanks – September 2014 Construction 87% D&C Overall 94% First Steam Actual Evaporator tower – September 2014 (1) Stat
Slide 20: Drilling and Reservoir Results to Date
Drilling and Reservoir Results to Date Application of Industry Best Practices ~ 5m of separation as per design • One delineation well per SAGD pair • High resolution 3D seismic • Integrated workflow providing optimal reservoir planning and drilling execution Drilling path and separation survey Use o
Slide 21: Development Profile
Development Profile Operations Cash Flow ($MM/year) 140 14,000 Approved – In Construction 120 12,000 Daily Production (bbl/d) 100 10,000 • Hangingstone Project 1 80 8,000 12,000 bbl/d 12,000 bbl/d • First steam end Q1 2015 60 12,000 bbl/d 6,000 • Plateau production 12,000 bbl/d in 2016 40 4,000 20 2
Slide 22: Other Assets
Saxon Battery Other Assets ATHABASCA ==] OIL CORPORATION
Slide 23: Development and Exploration Opportunities
Development and Exploration Opportunities Grosmont • 418 MMbbl(1) (AOC interest) • Apply recovery mechanisms being tested by industry Birch Slave Point Slave Point • 2.1 Bbbl(1) • > 675,000 acre land position • Validated oil production with 2013 pilot program Birch Grosmont Montney • Two-well apprai
Slide 24: Supplemental Information
Hangingstone Hangingstone CPF Project 1 Supplemental Information
Slide 25: Long-term Debt and Credit Facility Overview
Long-term Debt and Credit Facility Overview As at Sept. 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 26: 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 bbl/MMcf Approximately one township of Montney 1,600 Stabilized condensate yield 40 bbl/MMcf potential offsett
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, bbl/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, bbl/d) Rate (mcf/d, bbl/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 1,500 600
Slide 29: Management Team
Management Team Thomas Buchanan, FCA President & Chief Executive Officer Board of Directors • Over 30 years experience in the oil and natural gas sector, and currently Chairman of Spyglass Resources Corp. Thomas Buchanan, FCA • Formerly CEO of Spyglass Resources Corp. prior thereto, CEO of Chairman,
Slide 30: Corporate Office
Corporate Office 2000, 250 – 6 Ave SW, Calgary, Alberta, T2P 3H7 Telephone: 403-237-8227 Fax: 403-264-4640 www.atha.com